The Arizona Supreme Court has allowed alternative legal service provider Elevate and its affiliate law firm ElevateNext to merge to create the state’s first law company to be owned by non-lawyers. 

The combined company, Elevate, is the first of its kind to receive an alternative business structure (ABS) licence in Arizona, which is currently the only state that allows law firms to operate under alternative ownership structures that include non-lawyers. 

Arizona first scrapped American Bar Association rule 5.4, which prohibits fee sharing and ownership in a law firm by non-attorneys, in 2020 and proceeded to approve ABS licence applications for several other businesses including Radix Professional Services and KWP Estate Planning in 2021. 

Elevate claimed in a statement the move makes it the first non-lawyer-owned law company, LPO, or ALSP in the country with an integrated law firm. 

Liam Brown, Elevate chairman and CEO, added: “This ABS allows us to offer these sophisticated consumers of legal services lawyer-led capabilities alongside our technology and services solutions.”

Brown added that law firms often turn to Elevate as a “strategic partner” to offer their clients an “effective alternative” to the Big Four, who have been ramping up their legal arms in recent years. 

ElevateNext was first set up in 2018 by Big Law alumni and Valorem Law Group founders Nicole Auerbach and Patrick Lamb in Chicago to work alongside Elevate as a lower cost ‘one-stop-shop’ for clients looking for an alternative option to traditional legal service provision. 

Auerbach said: “Our customers come to us for help with problems that typically require some element of legal advice but are best solved by integrating that expertise with legal operations, technology and services at scale.”

By adopting a single structure, Auerbach said Elevate customers will gain access to an option they “previously lacked” by using “a single company for all ‘run the company’ work that requires practising lawyers at the helm or in the mix”.

Arizona is not the only state to tangle with the restrictions of rule 5.4, with others including California, Florida, North Carolina and Michigan all currently mulling a change to the rule that could increase access to justice by making legal services cheaper and more widely available. Utah, meanwhile, took a different approach to circling the rule by allowing businesses to participate in a ‘regulatory sandbox’ programme that has admitted nearly 30 entities since 2020, according to Reuters.