Utah is pulling back on a four-year-old experiment that allowed alternative legal service models, forcing nearly 30 businesses and law firms to shut down or exit the program. Meanwhile, neighboring Arizona is welcoming an influx of new legal ventures, including a groundbreaking law firm launched by accounting giant KPMG.
The Utah Supreme Court has tightened restrictions on its legal industry reform pilot, now requiring participants to demonstrate they serve “currently underserved” Utah consumers. Companies that merely allowed profit-sharing between lawyers and non-lawyers or had non-lawyers employing attorneys no longer qualify. These changes have prompted at least 27 participants to withdraw or face termination, according to court officials.
Among the departures is Rocket Lawyer, a major online legal services provider that had joined the program in 2020. As Utah imposed new restrictions, the company shifted its focus to Arizona, where it was recently approved under the state’s more welcoming policies.
A Tale of Two States
Utah and Arizona have been at the forefront of efforts to modernize legal service regulations, allowing non-traditional players to enter the field. Proponents argue these changes reduce costs, spur innovation, and expand access to legal help. However, resistance remains strong, particularly in states like California, where concerns over ethical risks and business competition have stalled similar efforts.
Critics worry that non-lawyer ownership of legal businesses could undermine professional standards or shift business away from traditional law firms. Others see the opposition as an effort to stifle competition.
Utah Supreme Court Justice Diana Hagen defended the state’s decision to scale back its initiative, stating that companies participating solely to enable non-lawyer ownership or profit-sharing “show less promise” in improving access to justice. A court letter last year also pointed to some participants misusing their authorization for marketing advantages or providing legal services through non-Utah-licensed attorneys.
Despite the program’s contraction, some participants remain—particularly those leveraging technology to reduce consumer costs or offering specialized services in areas like medical debt and domestic violence.
Arizona’s Expanding Market
While Utah pulls back, Arizona is forging ahead. Since implementing its reforms in 2021, the state has approved over 100 alternative legal businesses, including major players like LegalZoom and Axiom. Personal injury firms with non-lawyer ownership have also taken root.
KPMG’s newly approved law firm marks a significant milestone, making it the first of the Big Four accounting firms to establish a legal practice in the U.S. Arizona officials say interest in the program remains high, continuing to draw new entrants.
Legal industry observers suggest that Utah’s stricter focus on underserved communities aligns with its original access-to-justice goals, but Arizona’s approach is demonstrating how reforms can also create a broader, more dynamic legal marketplace.
