Law 360

By Seth Laver | February 7, 2025, 1:57 PM EST · Listen to article Your browser does not support the audio element. Seth Laver In a novel move, Big Four accounting firm KPMG LLP has taken the first step in seeking to own and operate a law firm in the U.S. Although permitted in other countries, the U.S. generally prohibits nonlawyers from law firm ownership. In 2020, Utah and Arizona became the first states to relax that standard, thereby opening the possibility of what is apparently on the horizon. Online legal providers were the first to act, and now, accounting firms have entered the fold. There are roughly 1.3 million attorneys in the U.S. Competition is considerable, and attorneys strive to develop a brand, a client base and some way to set ourselves apart from the rest of the pack. That pack has exclusively consisted of other members of the bar who have met the specific requirements necessary to practice law under the American Bar Association‘s Model Rules of Professional Conduct, which govern attorneys. Those rules prohibit nonlawyers from owning law firms in the U.S. due to ethical concerns regarding conflict-of-interest principles.[1] A far cry from regulating attorneys, enforcing and supervising the practice of law by nonattorneys could prove challenging. Attorney oversight or, more to the point, the supervision of the practice of law, is of paramount concern not only to control and guide the practice of law, but the governing rules also help foster a sense of trust and transparency between practitioners and the public. Whether it be an accountant, an attorney, or anyone — or anything — in between, we must collectively ensure that the ethical and procedural rules governing the practice of law apply uniformly and fairly, and with an eye toward the client’s best interests. Rule 5.4, titled “Professional Independence of a Lawyer,” generally prohibits an attorney or firm from sharing fees with a nonlawyer, and it prohibits an attorney from forming “a partnership with a nonlawyer if any of the activities of the partnership consist of the practice of law.”[2] The stated goal of the rule is to “protect the lawyer’s professional independence of judgment.”[3] As Stephen P. Younger, past president of the New York State Bar Association, wrote in a 2022 Yale Law Journal article, The restrictions imposed by the Rule aim to address the concern that if non-lawyers, who are not bound by the Rules of Professional Conduct, have a financial interest in a lawyer’s profits, they might prioritize profit over the duties the lawyer owes to clients and adversely influence a lawyer’s conduct.[4] In most jurisdictions, law school graduates are ineligible for admission to the bar without passing a bar exam. Attorneys must take continued education courses, some geared specifically to conflicts of interest and the rules governing the duties afforded to clients. The cost of violating those rules can be incredibly severe, including disbarment. According to Younger, the applicable governing bodies may face difficulties in ensuring that “nonlawyers would uphold the same ethical duties if they were allowed to be involved in providing legal services.”[5] The regulation of educated and trained attorneys is no easy task, but it may ultimately prove less demanding than enforcing those rules against those without that level of legal training and experience. On the other hand, proponents of the recent reforms disagree with the traditional restrictions of Rule 5.4. In 2020, amid its efforts to abandon Rule 5.4, the Arizona task force responsible for the amendments said in a statement that it was driven by “an ethical obligation to assure that legal services are available to the public and that if the rules stand in the way of making those services available, the rules should change.”[6] According to recent studies, a disproportionate number of Americans cannot effectively engage the legal profession. Reportedly, nearly 80% of the 20 million civil cases filed in state courts each year involve at least one unrepresented party,[7] and more than half of small businesses facing a legal issue cannot engage counsel.[8] While there are many causes contributing to this wide justice gap, there is a growing academic consensus that the strict regulations limiting who may provide legal services and how those services may be funded are a major driver.[9] Enter Utah and Arizona, which have been leaders in changing law firm ownership structures and the delivery of legal services. For its part, in August 2020, the Arizona Supreme Court voted on “far-reaching changes that could transform the public’s access to legal services.”[10] According to Arizona Supreme Court Chief Justice Robert Brutinel, the goal of the amendments was to “improve access to justice and to encourage innovation in the delivery of legal services.” By way of its reforms, Arizona now permits nonlawyer “legal paraprofessionals” to provide limited legal services to clients, including court appearances. Moreover, Arizona rescinded the traditional Rule 5.4 ban on nonlawyer ownership of a law firm or fee-sharing. In its place, Arizona enacted a regulatory framework to license alternative business structures. Arizona has reportedly approved more than 100 alternative business structures, including legal services and staffing companies such as LegalZoom, as well as large personal injury firms partially owned by nonlawyers. Similarly, Utah initiated a program in 2020 to allow nontraditional legal businesses to operate under eased rules with oversight. Reportedly, KPMG Law US’ recent application to the Arizona Supreme Court comprised the first overture by an accounting firm to take advantage of these laws. A court committee is considering the application and whether to provide the required licensure. According to a Reuters article, KPMG said it would lean “on [its] network and technology to provide compliance and contract-related services and other outsourced legal work in the United States.” We can expect considerable debate and potential pushback. Notably, the ABA House of Delegates reaffirmed its commitment to Rule 5.4 and overwhelmingly passed a resolution stating that any modification to the rule, as drafted, is “inconsistent with the core values of the legal profession.” The ABA encouraged states to “innovate and to experiment” to improve

By Marco Poggio | February 7, 2025, 7:01 PM EST · Listen to article Your browser does not support the audio element. Sateesh Nori For many New York City tenants, prodding landlords to make repairs in their apartments can be an uphill battle, often involving long wait times and navigating complex legal procedures with limited access to legal assistance. To address these challenges, housing attorney and New York University School of Law professor Sateesh Nori developed Roxanne AI, an artificial intelligence-powered chatbot designed to provide tenants with actionable legal information about their rights when it comes to repairs and housing conditions. Roxanne AI, which Nori said is the first chatbot addressing repairs created in New York, was launched in early January as a collaborative project between the NYU law school, the nonprofit Housing Court Answers, and Australian legal tech company Josef Legal. The chatbot, which uses an AI technology called retrieval-augmented generation, or RAG, is specifically trained to guide tenants through the legal process of getting necessary repairs, from heating and hot water issues to mold and lead paint concerns. By offering narrowly tailored advice, Roxanne AI seeks to fill a crucial gap in the city’s housing legal landscape, where the right to counsel existing in eviction cases does not extend to those involving repairs. The chatbot has already been used thousands of times, and early feedback suggests that users are finding it easy to use — and that it’s accurate. “We had a housing court judge last week tell us, ‘I tried 100 ways to get a bad answer from it, and it never gave me a bad answer,’” Nori told Law360. Nori and his team designed Roxanne AI to prevent “hallucinations” and to only provide information within the scope of its knowledge base. The project has drawn attention from legal aid organizations, the New York court system, and even the state attorney general’s office, all of whom are interested in how AI might help bridge the access to justice gap. Here, Nori talks about how he came up with the idea for the chatbot, the issues it seeks to address, and its potential in giving ordinary citizens more access to the legal system. This interview has been edited for length and clarity. What is Roxanne AI? The chatbot is called Roxanne AI, and it is geared towards tenants in New York City who need repairs made in their apartment, and it is the first of its kind in New York that caters directly to consumers. So that’s a big deal. We launched it with no funding from any outside sources. It’s a group of volunteers from three organizations. One is myself and NYU Law School. [The second one] is a local nonprofit called Housing Court Answers, which has a staff of 15 people and a budget of about $1 million. They answer a hotline every day from tenants who have problems in housing court. They get about 200 calls a day. The third organization is a company founded in Australia called Josef Legal. They provide no-code solutions to law firms and corporations. Recently, they built a product called Josef Q, which is an AI RAG bot, an LLM that is fed a knowledge base of information and then can retrieve that information and answer questions in natural language. Roxanne AI draws from a knowledge base that has been fed into it by its developers to provide members of the public legal information on housing repairs in just a few steps. How did you build Roxanne AI? Two years ago, I thought it would be great if we could build a chatbot powered by AI that could address concerns that tenants have. So the first question was, what type of problems would we address? We thought about eviction and rent issues, but we decided against that, because if a chatbot makes a mistake, we didn’t want to risk somebody getting evicted. The technology is rather new, and we didn’t want to sink the entire enterprise by engaging in something that’s risky. So we picked the topic of repairs and this is important for a number of reasons. Number one, it’s very hard for tenants to get help when they’re facing repairs or poor conditions in New York City. Although there is a right to counsel for tenants who are facing eviction, that right doesn’t apply in cases in which the tenants are fighting for basic needs like heat and hot water, working elevators, fighting against lead paint and mold. If tenants are to seek help, they either have to call a hotline like Housing Court Answers and wait 45 minutes to an hour to speak to somebody; or they have to travel to a courthouse or legal services office and sometimes wait for three to four hours before they are seen, only to be turned away in most cases because they’re not facing eviction. So we introduced the topic of repairs. I matched up Josef Legal with Housing Court Answers. We built a team of about five people, and that team worked for 13 months to build a knowledge base for all the information we could find about repairs in New York City — we included articles, statutes, training, materials, know-your-rights guides and so on — to be fed into Josef Q and then get vectorized, which is the way that large language models process data. And then, we built a little model that we tested thousands of times. We asked many, many questions, and there were a number of goals. Number one, we didn’t want the bot to hallucinate. So if the question from a user is outside the scope of repairs, we trained the bot to say, “I don’t know.” That’s a really big feature of the bot. We don’t want the bot to venture outside of its expertise. Second, we tried to ask questions in as many ways as possible, so that the bot would pick up the intention, the nuance, the varying use of

By Tom Zanki ( February 7, 2025, 8:44 PM EST) — Special purpose acquisition companies are once again asserting their presence in the capital markets and M&A landscape, forming new vehicles at the highest pace in three years — albeit in leaner form than in the last cycle, when many deals ended in busts…. Law360 is on it, so you are, too. A Law360 subscription puts you at the center of fast-moving legal issues, trends and developments so you can act with speed and confidence. Over 200 articles are published daily across more than 60 topics, industries, practice areas and jurisdictions. A Law360 subscription includes features such as Daily newsletters Expert analysis Mobile app Advanced search Judge information Real-time alerts 450K+ searchable archived articles And more! Experience Law360 today with a free 7-day trial. source

The government has struggled to keep up with artificial intelligence’s furious pace, but while an overbroad federal attempt to adopt a more unified approach to regulating AI poses its own risks, so does the current environment of regulatory uncertainty, say attorneys at Covington. source

By Greg Lamm ( February 7, 2025, 8:50 PM EST) — A Washington federal jury on Friday awarded nearly $25 million to a class of players who said they were injured by game developer High 5 Games’ social casino-style mobile apps that targeted gambling addicts as “whales.”… Law360 is on it, so you are, too. A Law360 subscription puts you at the center of fast-moving legal issues, trends and developments so you can act with speed and confidence. Over 200 articles are published daily across more than 60 topics, industries, practice areas and jurisdictions. A Law360 subscription includes features such as Daily newsletters Expert analysis Mobile app Advanced search Judge information Real-time alerts 450K+ searchable archived articles And more! Experience Law360 today with a free 7-day trial. source

By David Steele ( February 7, 2025, 5:59 PM EST) — In this week’s Off The Bench, the NCAA changes course to accommodate a presidential ban on transgender women athletes, Shohei Ohtani’s former interpreter is sentenced for his gambling-driven embezzlement, and women’s soccer players get restitution for abuse at the hands of their coaches and teams…. Law360 is on it, so you are, too. A Law360 subscription puts you at the center of fast-moving legal issues, trends and developments so you can act with speed and confidence. Over 200 articles are published daily across more than 60 topics, industries, practice areas and jurisdictions. A Law360 subscription includes features such as Daily newsletters Expert analysis Mobile app Advanced search Judge information Real-time alerts 450K+ searchable archived articles And more! Experience Law360 today with a free 7-day trial. source

By Max Kutner · February 7, 2025, 5:15 PM EST In the coming week, attorneys should watch for oral arguments at the Ninth Circuit regarding journalists’ attempt to seek federal contractor pay data from the U.S. Department of Labor. Here’s a… To view the full article, register now. source

By Al Barbarino ( February 7, 2025, 4:31 PM EST) — Activist investment firm Elliott Investment Management said Friday it has amassed a more than $1.5 billion stake in Aspen Technology, stating that AspenTech’s plan to sell off its remaining shares for $7.2 billion to global technology company Emerson undervalues the business…. Law360 is on it, so you are, too. A Law360 subscription puts you at the center of fast-moving legal issues, trends and developments so you can act with speed and confidence. Over 200 articles are published daily across more than 60 topics, industries, practice areas and jurisdictions. A Law360 subscription includes features such as Daily newsletters Expert analysis Mobile app Advanced search Judge information Real-time alerts 450K+ searchable archived articles And more! Experience Law360 today with a free 7-day trial. source

By Nadia Dreid ( February 6, 2025, 7:35 PM EST) — An Ohio church has come out on top in its battle to be awarded the rights to launch a low power FM station in its neck of the woods after the group it was up against was accused of knowingly listing a manager’s dead grandmother on a license renewal application…. Law360 is on it, so you are, too. A Law360 subscription puts you at the center of fast-moving legal issues, trends and developments so you can act with speed and confidence. Over 200 articles are published daily across more than 60 topics, industries, practice areas and jurisdictions. A Law360 subscription includes features such as Daily newsletters Expert analysis Mobile app Advanced search Judge information Real-time alerts 450K+ searchable archived articles And more! Experience Law360 today with a free 7-day trial. source

By Andrea Keckley ( February 7, 2025, 7:15 PM EST) — A Texas federal judge has denied Apple’s request to relocate Oregon startup Proxense LLC’s patent suit against it, saying the case “would not be clearly more convenient to try in the Northern District of California.”… Law360 is on it, so you are, too. A Law360 subscription puts you at the center of fast-moving legal issues, trends and developments so you can act with speed and confidence. Over 200 articles are published daily across more than 60 topics, industries, practice areas and jurisdictions. A Law360 subscription includes features such as Daily newsletters Expert analysis Mobile app Advanced search Judge information Real-time alerts 450K+ searchable archived articles And more! Experience Law360 today with a free 7-day trial. source