Arizona’s ABS Framework — and What It Requires
Arizona is one of a small number of jurisdictions in the United States that permits Alternative Business Structures — law firms with non-lawyer ownership, external investment, or multidisciplinary practices. Arizona’s ABS rules, adopted by the Arizona Supreme Court, represent a significant innovation in how legal services can be structured and delivered.
Operating an ABS entity is not without obligation. The Arizona Supreme Court requires ABS law firms to maintain ongoing regulatory compliance, including governance requirements, ethics obligations, risk management protocols, and regular reporting. Leon Silver serves as Compliance Counsel for Arizona ABS entities, providing the experienced regulatory guidance these firms need to operate lawfully and effectively.
ABS Compliance Services
Why This Matters
Non-compliance with ABS regulatory requirements exposes firms to sanctions, loss of ABS status, and professional liability. Because the ABS framework is new and evolving, many firms lack internal expertise to manage compliance on their own. As one of Arizona’s experienced ABS Compliance Counsels, Leon Silver provides the proactive guidance that allows these firms to focus on delivering legal services while staying on the right side of their regulatory obligations.
Contact SilverCain
Phone: +1-602-726-1244| Email: info@silvercain.com | 3101 N. Central Avenue, Suite 1410, Phoenix, AZ 85012
An ABS is a law firm that is permitted to have non-lawyer owners, investors, or partners — something that is prohibited under the traditional rules governing law firms in most U.S. states. Arizona's ABS rules, adopted in 2021, allow innovative legal service providers to access outside capital and operate multidisciplinary practices in ways that traditional law firm rules would not permit. ABS entities must apply for and maintain approval from the Arizona Supreme Court.
Any law firm or legal services entity that has been approved or is seeking approval to operate as an ABS under Arizona's rules should have experienced Compliance Counsel. The regulatory obligations are ongoing — not just at the point of initial application — and include regular reporting, governance requirements, ethics compliance, and risk management obligations that require specialized knowledge to manage properly.
Failure to maintain compliance with Arizona Supreme Court ABS requirements can result in sanctions, fines, suspension of ABS status, and other disciplinary consequences. Because the ABS framework is relatively new and actively enforced, firms that operate without experienced compliance guidance face significant regulatory risk.
As of 2025, a small number of jurisdictions have adopted ABS-style rules, including Utah (which has a similar regulatory sandbox program) and a few other states with pilot programs. Arizona's rules are among the most developed in the country. If you are considering an ABS structure outside Arizona, we can advise on the current landscape and assist with navigation of applicable requirements.
Yes. Non-lawyer owners and investors in ABS firms share in the compliance obligations of the entity and need to understand those obligations before committing capital. We advise prospective investors on the regulatory framework, the ongoing obligations they will assume, and the governance structures required to maintain ABS status.
