Legal Access For All

New York, May 18, 2011 – Jacoby & Meyers Law Offices LLP has filed a landmark suit in U.S. District Court in three states that seeks to change the landscape of the business of law by overturning state regulations that impede the ability of law firms to raise capital and compete in today’s global marketplace. Three federal court actions were commenced today with filings in New York, Connecticut and New Jersey. Additional filings in other states are expected to follow soon.

“This suit is all about giving the public, especially the lower and middle classes, access to affordable, quality legal representation,” said Andrew Finkelstein, managing partner of Jacoby & Meyers. “Our ability to raise the capital necessary to pay for improvements in technology and infrastructure and to hire additional personnel to serve the public is severely restricted by an out-dated Rule of Professional Conduct.”

Rule 5.4 of the Rules of Professional Conduct in New York, Connecticut and New Jersey restricts a lawyer from practicing “with or in the form of an entity authorized to practice law for profit, if…a non-lawyer owns any interest therein.” Rule 5.4 thus prevents Jacoby & Meyers and others licensed to practice law in the respective states from raising capital in exchange for an equity stake in the law firm if that financing comes from any source other than another lawyer.

“As a result,” the Complaint states, “critical sources of funding are unavailable to a majority of lawyers… which dramatically impedes access to legal services for those otherwise unable to afford them.”

The Complaints were filed in

• United States District Court for the Southern District of New York against the Presiding Justices of the First, Second, Third and Fourth Departments of the Appellate Division of the Supreme Court of the State of New York, the sitting justices responsible for implementing and enforcing Rule 5.4

• United States District Court for the District of Connecticut against the Judges of the Connecticut Superior Court, who approved and adopted the Rules of Professional Conduct, which govern the conduct of attorneys licensed to practice law in the State of Connecticut.

• United States District Court for the District of New Jersey against the Justices of the Supreme Court of New Jersey, who approved and adopted the Rules of Professional Conduct, which govern the conduct of attorneys licensed to practice law in the State of New Jersey.

Jacoby & Meyers is being represented in the suits by attorneys David J. Meiselman, James R. Denlea and Jeffrey I. Carton of White Plains, NY-based Meiselman, Denlea, Packman, Carton & Eberz, P.C.

“It cannot credibly be disputed that advancements in technology, the proliferation of on-line business, and outsourcing to global markets are having a profound effect on the practice of law in the 21st Century and on lawyers’ ability to ensure that quality legal services remain available for all,” the Complaint alleges. “It is axiomatic that access to capital ensures access to the civil justice system, particularly for those disenfranchised or otherwise challenged by difficult socio-economic constraints.”

“The present system,” the lawsuit contends, “perpetuates economic inequity at every level of practice. The small practice does not have access to the capital markets that the Wall Street firms have and the Wall Street firms do not have access to the funding sources that firms in the U.K. and Australia have.” Both the United Kingdom and Australia allow non-lawyers to hold equity ownership in law firms.

As the Complaint makes clear, “(b)y this action, Jacoby & Meyers seeks to free itself of the shackles that currently encumber its ability to raise outside financing and to ensure that American law firms are able to compete on the global stage.”

“Because no compelling legal argument or public policy rationale exists to prevent lawyers from raising capital in the same manner as any other business,” the Complaint declares, “Jacoby & Meyers seeks to enjoin the enforcement of Rule 5.4 against it (and other law firms) as a violation of the Judiciary Law; the separation of powers; the void for vagueness doctrine; the Due Process Clause of the Fourteenth Amendment to the United States Constitution; the Equal Protection Clause to the Fourteenth Amendment to the United States Constitution, and the Freedoms of Speech and Association provisions of the First Amendment to the United States Constitution.

The suit also seeks to enjoin enforcement of Rule 5.4 as an excessive burden on the flow of interstate commerce in violation of the United States Constitution’s “dormant” Commerce Clause, and a regulatory taking without compensation proscribed by the Fourteenth Amendment to the United States Constitution.

“No legitimate rationale exists to prevent non-lawyers from owning equity in a law firm,” said Mr. Finkelstein. “The time has come to permit non-lawyers to invest in law firms in the United States.”
Jacoby & Meyers, recognized as a pioneer of legal reform, has been America’s most familiar full-service law firm for more than 30 years, helping clients and families obtain assistance in our legal system. It is Jacoby & Meyers’ goal to make lawyers and the legal system more accessible and affordable for every American. Since its inception in 1972, Jacoby & Meyers has grown to become one of the largest, best known, and most innovative firms in the country. Jacoby & Meyers, based in New York, has 11 offices throughout the State – Manhattan, The Bronx, Hempstead, Kingston, Middletown, New Windsor, Newburgh, Port Jervis, Queens, Spring Valley, Staten Island and Wappingers Falls, as well as offices in New Haven, CT and Newark, NJ.
Meiselman, Denlea, Packman, Carton & Eberz is one of the nation’s premiere litigation boutiques. It is comprised of seasoned lawyers who have successfully tried cases in both state and federal courts at the highest levels throughout the United States. The Firm is well-known for its efforts prosecuting and defending high profile, significant matters. Messrs. Meiselman, Denlea and Carton have each been recognized by their peers as New York “Super Lawyers,” an honor they share with three of their fellow partners.