Section

Rule 5.4 protects incumbents

We think Rule 5.4 protects incumbents more than it protects clients and should be liberalized: licensing, supervision and named accountability can secure the independence it guards without keeping capital out. Arizona, Utah and England and Wales are the proof of concept, though Utah is now pulling back. But the rules bind firms today: where a state’s version of Rule 5.4 applies, an AI-native firm must be owned by lawyers, must not share its legal fees with the technology company beside it, and must not let that company direct or regulate its lawyers’ professional judgment. We argue to change the rules, never to evade them.