Inside the Legal Profession: Trisha Rich on the Surging Interest in MSOs and ABSs

Legal ethics attorney Trisha Rich was featured on The Future Is Bright podcast to talk about increased interest in management service organizations (MSOs) and alternative business structures (ABSs) throughout the legal industry. Ms. Rich opened the episode by laying the regulatory groundwork for lawyers by outlining Rule of Professional Conduct 5.4, which prohibits nonlawyer ownership of law firms as well as fee-sharing between lawyers and nonlawyers. She then explained how Rule 5.4 shapes modern law firm ownership structures and outlined the strict regulations around ABSs in Arizona – which removed Rule 5.4 from its own rules of professional conduct in 2021, thus allowing nonlawyer ownership – such as the requirement to keep a compliance lawyer on staff. Ms. Rich also distinguished an ABS from an MSO, the latter of which has more geographic flexibility but more limits around ownership and management. The episode went on to cover historical precedents, such as professional employer organizations (PEOs), as well as new pressures shaping the current MSO boom, from expectations for talent to use of artificial intelligence (AI) technology to the push for stronger business models. It also addressed questions about business strategy, the push for scale, private equity's interest in the legal services space and how to balance modernization with protecting the legal profession.

Duration: 35:51