Should I start an ABS law firm?

Should I Start an ABS Law Firm?

The legal landscape is shifting—and if you’re an entrepreneurial attorney or a savvy businessperson with legal industry aspirations, you may be wondering whether now is the time to start an Alternative Business Structure (ABS) law firm. With Arizona, Utah, and a few others paving the way by allowing non-lawyer ownership and fee sharing, ABS law firms are opening new doors for innovation, access to capital, and scalable legal services.

But is it the right move for you?

In this post, we’ll explore what an ABS law firm is, who should consider starting one, the pros and cons, the startup process, and some real-world use cases. By the end, you’ll have a clear roadmap—and if you’re serious about exploring this path, you can book a free consult with me here to talk through your idea.

What Is an ABS Law Firm?

An Alternative Business Structure (ABS) is a legal entity that provides legal services but is not exclusively owned by licensed attorneys. In jurisdictions like Arizona and Utah, regulators have created a framework where non-lawyers can have an ownership stake or play a leadership role in law firms.

This opens the door to law firms:

Being funded by venture capital.
Partnering with tech or media companies.
Sharing profits with non-attorney founders, marketers, or business developers.

The goal? To improve access to justice and encourage innovation in legal delivery.

Why Consider Starting an ABS Law Firm?

1. You Want to Scale Beyond a Traditional Law Practice

If you’re a lawyer with big visions—whether it’s building a tech-enabled legal platform, a national brand, or a subscription-based legal product—an ABS allows you to collaborate and share profits with the right partners.

2. You’re a Non-Lawyer With Legal Industry Ambitions

ABS structures are the perfect on-ramp for founders, operators, and investors who see opportunity in the legal sector but are barred from ownership under traditional rules.

3. You’re Already Running a Business With Legal Components

Do you own an accounting firm, real estate business, or compliance startup and want to add legal services under the same umbrella? An ABS can create one integrated brand and revenue stream.

Want to brainstorm whether your current business can be paired with legal services under an ABS? Book a discovery call and let’s map it out.

Pros and Cons of an ABS Law Firm

✅ Pros

Access to Capital: Raise money like any other business.
Profit Sharing With Non-Lawyers: Incentivize business developers, marketers, or tech partners.
Innovative Business Models: Subscription services, productized legal offerings, or SaaS + legal bundles.
Brand Building: Run your law firm like a startup or consumer-facing business.

❌ Cons

Regulatory Oversight: Arizona requires licensure and ongoing reporting.
Higher Compliance Standards: You’ll need policies for confidentiality, conflicts, and ethics.
Lawyer Liability Still Exists: Even in an ABS, malpractice and ethical rules still apply.
Cost to Set Up: Expect legal fees and application fees upfront.

What Does the ABS Startup Process Look Like?

Here’s a high-level breakdown of how to start an ABS in Arizona (the most advanced ABS state):

Step 1: Create Your Business Model

Decide on legal service offerings.
Identify your partners, tech stack, and target market.

Step 2: Form Your Entity

Usually an LLC or PLLC.
Draft operating agreement with ABS-compliant language.

Step 3: File ABS Application With State Bar of Arizona

Include disclosures, background checks, ownership structure, and compliance plans.
Pay application fees (currently $6,000–$8,000+).

Step 4: Implement Compliance Procedures

Appoint a Compliance Lawyer and Designated Principal.
Create policies on client confidentiality, conflicts of interest, etc.

Step 5: Go Live

Once approved, you’re free to operate just like a traditional law firm—with broader ownership and profit-sharing flexibility.

Pro tip: If this feels overwhelming, I can walk you through the application and startup process. Schedule a time to chat.

Real-World ABS Law Firm Models

✨ Legal + Media Brand

A lawyer and influencer partner to launch a lifestyle-forward brand offering subscription legal content and direct services.

✨ Legal Tech Startup + Law Firm Hybrid

A founder with a background in automation and AI partners with a lawyer to build a SaaS platform bundled with lawyer-on-demand services.

✨ Accounting Firm With Built-In Legal Department

An accounting firm expands its services by creating an ABS to offer estate planning, tax law, and business legal services.

✨ Dental Support Organization + Legal

A DSO creates an ABS law firm to offer contract review, compliance, and HR support to dentists inside the DSO.

Curious whether your idea could work as an ABS? Book a free consult and I’ll give you honest feedback.

Common Questions About ABS Law Firms

Can I Be a Passive Investor in an ABS?

Yes. Arizona’s rules allow for passive investment, though you’ll need to pass a character and fitness review.

Do I Have to Live in Arizona to Start One?

No. You can live anywhere—but your ABS will need to be registered in Arizona and meet Arizona’s oversight and licensing requirements.

Is the ABS Structure Permanent?

No. You can convert to or from a traditional firm structure later. But there are tax and regulatory considerations to plan for.

What Are the Ethics Rules for ABS Firms?

ABS law firms must follow all traditional rules of professional conduct—plus additional obligations specific to ABS oversight, like annual reporting.

Is It Worth It?

An ABS law firm is not for everyone. But if you:

Want to scale and brand a firm differently
Are comfortable with startup risk
Have trusted partners or investors ready
Are building tech or systems around legal delivery

…then an ABS may be the best-kept secret to building the next-gen law firm.

Whether you’re a licensed attorney, entrepreneur, or industry disruptor, I’d love to hear what you’re building.

Click here to book a call and let’s map out whether an ABS is the right move for you.

Final Thoughts

The legal profession is entering a new era. For those who are ready to innovate, collaborate, and invest in legal services in a bold new way, ABS law firms are a powerful tool. They’re not just a workaround—they’re the future.

If you’re considering starting one, don’t go it alone. I’ve helped launch several ABS firms and guided founders through everything from ownership structuring to compliance systems. Let’s talk about your vision and make it real.

Disclaimer: This blog post is for educational purposes only and does not constitute legal advice.

MASTERS LAW GROUP