As of August 2021, Singular Law Group, PLLC is a proud new Arizona Alternative Business Structure (ABS) license holder, operating as a Traditional Law Firm. We are now in the process of ramping up our delivery of legal services (and mediation) to the under-served in Arizona.
As one of the first ABS license holders in Arizona, many have asked about our journey. Our application process started in February of this year based on my January conversation with Allen Rodriguez. Allen asked if I knew anyone who was a lawyer in Arizona who might be interested in the compliance role. He wanted to create an ABS law firm that would offer a wide range of legal services to individuals and businesses with a focus on the Hispanic population and the 80% currently not served by the existing legal services.
For those not familiar with the ABS concept, here is the link to the Arizona legislation that gave Professionals who Aren’t Lawyers (PALs) the ability to invest in and run firms or companies that deliver legal services. Please note that PAL is a new term created here at SLG for the now retired, and somewhat demeaning, “non-lawyer” moniker.
Arizona has not followed the trial or sandbox approach for ABS like other states, such as Utah. Instead there is a Committee on Alternative Business Structures who recommends to the Arizona Supreme Court, who in turn issues ABS licenses that are only subject to annual renewal.
The Arizona Supreme Court laid out the following regulatory objectives for all ABS applicants:
Protecting and promoting the public interest.
Promoting access to legal services.
Encouraging an independent, strong, diverse, and effective legal profession.
Advancing the administration of justice and rule of law; and
Promoting and maintaining adherence to professional principles.
Chicken and Egg
One fundamental question is how to set up the entity as an ABS, with PAL owners, prior to being granted an actual ABS license. While the application states that the entity does not have to formed at the time of filing, based on our experience that would likely slow down the process. During our review, we were asked for the SLG governance documents. Therefore, we had to engage a business lawyer to prepare a draft PLLC agreement that was both in accordance with and included references to the ABS rules, even before we had our license. Of course, we could not execute that agreement until after the license was granted and Allen was allowed ownership in a law firm (shoutout to Juliet Peters of Framework Legal for our comprehensive Operating Agreement).
Today, as I went to find the link for the ABS forms, there is an exciting update – the forms are now online! As we followed the pdf and hard copy approach, I wished for an online process and it appears to now exist here. The process could be further streamlined by removing some of the redundancy with fillable pdfs and perhaps have only one form to populate for each person. In my case, I had to fill in and notarize three separate forms as the compliance lawyer and authorized person (both as an individual and company).
The division staff are extremely helpful and open and asked for feedback on the process which was very encouraging. There is an annual ABS license renewal process, but it has been discussed at the Committee that this will be simplified in comparison to the initial application.
I was interviewed as part of the process, but Allen was not. The questions centered around ownership of SLG and then our respective other companies, ONE400 for Allen and Traklight for me. These queries centered on influence or control over SLG’s processes and legal services with a view to protect the public.
When I listened in to a couple of ABS Committee meetings, potential ABS firm leaders were asked about the amount of time that would be devoted to business and also about outside business interests. As an aside, the ABS must disclose ownership greater than 10%, which is interesting because the significant influence level in corporate world is considered to be 20%.
A final note, all licenses are being issued with the provision that the compliance lawyer conduct semi-annual audits to ensure that the policies, processes, and operations of the firm comply with the statutes and ethical rules.
Tips for Applicants:
Contact the Licensing Division Staff as they are very helpful.
Review the past committee minutes and agendas here.
Attend a committee meeting.
Use the regulatory objectives to guide your application.
Use separate documents to outline your business objectives and information.
Map out your processes with respect to conflict checks and PAL involvement with potential clients, particularly around signing up clients.
Understand your level of involvement and commitment.
Prepare a brief overview of your vision for the ABS committee meeting where you are allowed to say a few words at the time that your application is considered.
If you are interested in SLG and want to learn more, reach out on Twitter @maryjuetten.