(Reuters) - Flexible legal talent company Axiom opened up its own Arizona-based law firm on Monday, becoming the latest company to take advantage of loosened lawyer regulations to start a new legal business in the state.
Axiom leaders said the firm, Axiom Advice & Counsel, will incorporate new technologies and adopt a staffing and compensation model that allows it to keep costs down for corporate clients. The firm is targeting a range of clients, including small companies without in-house legal teams.
Regulatory changes in Arizona beginning in 2020 eliminated a rule that barred people who are not lawyers from having an economic interest in law firms, paving the way for Axiom to launch the new firm.
Arizona is on the leading edge of U.S. states beginning to adopt similar changes, with the stated goal of expanding access to legal services and enabling innovation. Utah authorized a "sandbox" program to allow businesses to experiment with new legal business models and services in 2020.
Removing barriers to non-lawyer law firm ownership and fee splitting is still controversial, however, and efforts to change such rules in other states have stalled or been blocked. Critics resisting the change cite professional ethics concerns, including worries that client protections might be undermined by loosening traditional rules.
Axiom, an on-demand legal talent company founded in 2000, employs nearly 7,000 lawyers globally who work with corporate legal departments. The company spun off two other business lines into separate entities in 2019.
Catherine Kemnitz, Axiom's chief strategy and development officer, said the company's Arizona launch means Axiom can finally deliver legal advice directly to clients.
The company has long provided lawyers through its legal staffing business, but "it could not take that last step of being really in the front of the delivery of the legal services" until now, Kemnitz said.
The Arizona Supreme Court approved the Axiom unit to operate as an "alternative business structure" in May, according to a court order. LegalZoom Inc and Elevate Services Inc, two big legal services companies, have taken a similar route by gaining licenses for subsidiaries or affiliates to practice law. Other smaller approved entities offer a variety of legal services.
Axiom said its law firm will operate independently, with local lawyer Matthew Levine as its managing partner. Levine was most recently co-managing and co-founding member of Scottsdale-based commercial law firm Titus Brueckner & Levine.
The firm will initially advise on corporate law in areas including real estate, labor and employment, mergers and acquisitions and privacy, the company said.
It is looking to hire between 20 and 40 Arizona-admitted partners over the next few years, Kemnitz said.
Kemnitz said the firm will not require a minimum number of billable hours from its attorneys and differs from traditional law firms that rely on high-fee billing junior lawyers, which Axiom believes will make it more cost-efficient for clients.
The firm is incorporated as an LLC, operating as a subsidiary of Delaware registered company Axiom Global Inc, according to its Arizona application documents. It will be financed through Axiom Global.
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