Tennessee Supreme Court Denies Private Equity Ownership of Law Firms

The Tennessee Supreme Court has rejected a rule change that would have allowed private equity companies to own law firms, blocking one avenue that insurance groups have warned could lead to more litigation, more high-dollar jury awards and higher defense costs.

After reviewing comments from stakeholders, “the Court has not identified sufficient need or support for reforms related to non-lawyer ownership of law firms or fee-sharing with non-lawyers,” the court wrote in its October order. “The Court may revisit this topic in the future as additional data regarding the success of these reforms becomes available.”

For more information on Management Services Organizations, Non-Lawyer Capital, Rule 5.4, and the MSO Workaround, check out AIM’s on demand webinar on this topic.