By Ataguba S. Aboje, Esq

As the Nigerian Bar Association (NBA) prepares to usher in new leadership, a critical issue remains conspicuously absent from the candidates’ manifestos and campaign rhetoric—an omission that strikes at the very heart of our profession’s future. The past, current and incoming NBA leadership seem oblivious to this remarkable issue that has been overlooked in the previous and current discourse: the urgent need to reform the ownership structures of legal practices in Nigeria.

The silence on this crucial topic is not merely an oversight; it represents a fundamental gap in our vision for the future of legal practice in our country. As we stand at a crossroads, with technology reshaping industries and globalization redefining business landscapes, the Nigerian legal profession risks being left behind, tethered to outdated structures that no longer serve our best interests.

Having carefully reviewed the manifestos of the contending aspirants, I watched with growing trepidation as each candidate outlined their vision for the NBA without broaching the critical subject of scaling our practice through a fundamental reassessment of how the business of law is conducted. This oversight is not merely a missed opportunity; it is a failure to address the very foundation upon which the future of Nigerian legal practice will be built or broken.

The Nigerian legal profession’s fundamental practices and structures largely preserved since the colonial era can be traced back to the common law and the statutes of general application which were in force in England on January 1, 1900, and subsequently became applicable in Nigeria. This historical legacy has created a deeply entrenched system that has resisted significant structural changes for over a century. While this continuity has maintained certain standards and principles, it has also resulted in a professional landscape that appears almost frozen in time, particularly in terms of its organizational and operational models. This adherence to colonial-era structures is especially evident in the realm of law firm ownership and management, where practices reminiscent of 19th-century England continue to dictate the parameters of legal practice in 21st-century Nigeria. At the heart of this antiquated system lies a restrictive ownership model that confines the ownership of legal practices solely to licensed lawyers. This approach, once considered a safeguard of professional integrity, now threatens to become an anchor, dragging the entire profession into obsolescence in an increasingly dynamic global landscape.

The current ownership structure, enshrined in the Rules of Professional Conduct (RPC) and other regulations, reflects a bygone era when legal practice was viewed as a noble calling insulated from business realities. However, in today’s complex, interconnected world, this model is not just outdated—it’s potentially harmful to the very people it aims to serve.

In the rapidly evolving landscape of global legal services, the legal practice in Nigeria finds itself at a crossroads. While jurisdictions worldwide are embracing innovative ownership structures to enhance competitiveness and service delivery, Nigeria’s legal profession remains tethered to traditional models. This stagnation is not merely a result of resistance to change but is deeply rooted in a web of regulatory provisions that effectively prohibit non-lawyer involvement in legal practice ownership. These consequential regulations inhibit the reform of ownership in Nigerian legal practices, and the consequential impact on the profession’s growth and relevance.

The Rules of Professional Conduct (RPC) for Legal Practitioners 2023 form the cornerstone of restrictions on non-lawyer involvement in legal practice. Three provisions, in particular, create significant barriers:

a) Rule 3(1)(c) and 55: Prohibition on Fee-Sharing
The provision stating that “a lawyer shall not share legal fees with a non-lawyer except as provided in Rule 53” effectively precludes any form of profit-sharing arrangement with a non-lawyer. For instance, a firms cannot incentivize non-lawyer staff with profit-sharing arrangements except it is a retirement plan or create performance-based compensation structures that include all key contributors to the firm’s success. This rule, while intended to maintain professional independence, severely limits access to investors, external capital and expertise that could drive innovation and expansion.

b) Rule 5(1): Prohibition of Non-lawyers from Ownership of Law firms
This rule provides “a lawyer shall not form a partnership with a non-lawyer or with a lawyer who is not admitted to practice law in Nigeria, if any of the activities of the partnership consists of the practice of law” effectively erecting a prohibition on non-lawyer partnerships and multidisciplinary practices.

The Companies and Allied Matters Act (CAMA) 2020, while modernizing Nigerian corporate law, fails to address the unique needs of legal practice ownership. The Act’s provisions for various business structures are rendered moot for law firms when read in conjunction with the Legal Practitioners Act (LPA) and RPC. This misalignment between corporate law and professional regulations creates a significant obstacle for legal practices seeking to adopt more flexible and competitive business models.

Most Nigerian states operate Partnership Laws based on the English Partnership Act of 1890 may be applicable to law firms but these antiquated laws, when combined with the LPA and RPC, create a restrictive environment that limits legal partnerships to lawyers only. This framework is ill-equipped to address the complexities of modern legal practice and global competition, hindering the formation of multidisciplinary partnerships that could offer more comprehensive services to clients.

While not statutory, the Nigerian Bar Association (NBA) Constitution plays a crucial role in shaping the profession’s ethos. By reinforcing the principles laid out in the LPA and RPC and emphasizing the maintenance of the profession’s independence and integrity, the NBA Constitution inadvertently contributes to a conservative interpretation of professional rules. This can create resistance to reforms that might be perceived as threatening traditional notions of legal practice.

By clinging to these archaic restrictions, the Nigerian legal sector inadvertently stifles innovation, limits access to justice, and hampers its own growth. In an age where legal tech startups are revolutionizing service delivery and multidisciplinary practices are becoming the norm globally, Nigeria’s legal profession risks being left behind, trapped in a time warp of its own making.

The limitations of the traditional ownership model are starkly illustrated by the persistent issue of inadequate remuneration of lawyer by their employers. This problem was quantifiably demonstrated in 2022 through the NBA Remuneration Committee Report, initiated by then-NBA President Olumide Akpata. The comprehensive survey, which included over 6,000 respondents across all geo-political zones, revealed a troubling financial landscape within the profession. A staggering 33% of lawyers in Nigeria earn between N20,000 to N70,000 monthly, while another 23% have no fixed salary. Only 18% of lawyers earn above N150,000 monthly. Most concerningly, those in the lowest income bracket are predominantly young lawyers with 0-4 years post-call experience. These findings underscore the financial constraints faced by law firms operating under the current restrictive model, which limits their ability to generate sufficient revenue to offer competitive salaries. In response to this crisis, the current NBA President, Mr. Yakubu Chonoko Maikyau, OON, SAN, established Remuneration Committees across all NBA branches on May 24, 2024, tasked with enforcing the Legal Practitioners Remuneration (for Business, Legal Service and Representation) Order, 2023. However, it is my view that these committees, while well-intentioned, are addressing symptoms rather than the root cause. The fundamental issue lies in the outdated ownership structures that restrict law firms’ ability to access capital, scale operations, and compete effectively in a changing market. Without addressing these structural limitations, efforts to improve remuneration are likely to yield limited results, as firms will continue to struggle with the financial constraints imposed by the current regulatory framework. This is not merely a symptom of economic challenges, but a direct consequence of the restrictive business structures that dominate the legal landscape. The current model, which limits ownership primarily to sole proprietorships and poorly funded partnerships, creates a self-perpetuating cycle of financial constraint.

Another downside of the current ownership structures in Nigerian legal practice is its detrimental impact on succession planning and firm longevity. The restrictive model, which limits ownership to legally qualified individuals, often results in the demise of law firms following the death or retirement of the principal owner. This creates a landscape where institutional knowledge, client relationships, and hard-earned reputations are lost, rather than preserved and built upon over generations. Unlike jurisdictions with more flexible ownership structures, Nigeria struggles to produce law firms with multi-generational staying power. While firms like Slaughter and May (founded 1889), Freshfields Bruckhaus Deringer (tracing its roots to 1743), and Cravath, Swaine & Moore (established 1819) in the UK and US have operated for well over a century, few Nigerian firms can boast of a 40–60-year lifespan, let alone multiple generations. This lack of continuity not only affects the firms themselves but also deprives the Nigerian legal sector of the depth of expertise and institutional memory that comes with long-standing practices. The inability to bring in non-lawyer partners severely limits the options for succession planning, often leaving firms vulnerable to dissolution when key partners depart or pass away.

Moreover, the inability to sustain practices across generations hampers the creation and preservation of generational wealth within the legal community. This interruption in wealth building limits the profession’s capacity to invest in its own future, whether through funding legal education, supporting pro bono initiatives, or driving technological innovations in legal practice. Consequently, the Nigerian legal sector is deprived of the deep-rooted expertise, refined processes, and financial stability that characterize well-established legal institutions in other jurisdictions. This systemic shortcoming not only undermines the profession’s ability to compete globally but also hinders its capacity to effectively serve the evolving needs of Nigerian society and contribute substantively to the nation’s legal and economic development.

Reforming the ownership structure of legal practices in Nigeria is not just about modernizing the profession; it’s about creating a more sustainable and rewarding ecosystem for all stakeholders, from junior associates to senior partners, and from small local firms to large multi-service practices.

Drawing on international examples, I will demonstrate and give you examples how countries that have embraced more inclusive ownership models have seen their legal sectors flourish, becoming more innovative, accessible, and competitive. It’s crucial to understand that advocating for change is not about dismantling the core values of the legal profession. Rather, it’s about adapting to ensure those values remain relevant and impactful in a rapidly changing world.

Nigeria’s legal system, rooted in English common law, has long mirrored the traditional structures of its colonial predecessor. However, while jurisdictions like the United Kingdom, Australia, and certain U.S. states have evolved their legal practice ownership models, Nigeria remains tethered to outdated structures.

For example, the United Kingdom’s Legal Services Act 2007 introduced Alternative Business Structures (ABS), allowing non-lawyers to own and invest in law firms. This revolutionary change has transformed the UK legal landscape. Here are a few examples of firms utilizing ABS in the UK and Australia, along with highlights of their structure, net worth, global coverage, staff strength, and ranking respectively:

a) DWF Group plc https://dwfgroup.com/
Structure: UK’s largest listed law firm (London Stock Exchange) https://www.artificiallawyer.com/2022/01/24/listed-law-firms-beyond-the-hype/

Net worth: Approximately £380 million (as of 2023)

Global coverage: 31 offices across 15 countries

Staff strength: Over 4,000 employees

Ranking: Top 20 UK law firm by revenue

b) Gateley Plc https://gateleyplc.com/
Structure: First UK commercial law firm to go public (2015) https://www.cnbc.com/2015/05/12/gateley-becomes-first-law-firm-to-join-uk-stock-market.html

Net worth: Market capitalization of £300 million (as of 2023)

Coverage: 11 offices across the UK

Staff strength: Over 1,000 employees

Ranking: Top 50 UK law firm by revenue

Australia has allowed non-lawyer ownership of law firms since the 1990s, with reforms culminating in the Legal Profession Uniform Law 2015.

Example of firms utilizing ABS in Australia:

Slater and Gordon https://www.slatergordon.com.au/

Structure: First law firm in the world to go public (2007) https://www.wsj.com/articles/BL-LB-3846

Net worth: AUD 150 million (approximate market capitalization)

Coverage: Offices across Australia and previously in the UK

Staff strength: Over 800 employees

Ranking: One of Australia’s largest consumer law firms

While the United States has generally maintained a more conservative stance on reforming law firm ownership structures, a growing movement for change is emerging at the state level. Notably, Arizona and Utah have taken pioneering steps to modernize their legal practice frameworks. Arizona led the charge with the implementation of Arizona Supreme Court Rule 31.1, effective January 1, 2021. This groundbreaking rule allows for non-lawyer ownership of law firms and permits legal paraprofessionals to provide limited legal services. Similarly, Utah introduced its own innovative approach through the Utah Supreme Court Standing Order No. 15 in August 2020. This order established a regulatory sandbox, allowing for experimentation with new legal service models, including those involving non-lawyer ownership and investment. These bold initiatives reflect a recognition of the changing landscape of legal services and the need for greater flexibility in practice structures.

These firms with alternative structures like DWF and Slater and Gordon have accessed public markets, significantly increasing their financial capacity for expansion and innovation. They are able to rapidly expand internationally, enhancing their ability to serve multinational clients and are at the forefront of legal tech innovation, leveraging their diverse ownership structures to create diverse teams that are comfortable across jurisdictions. These firms have shown increased competitiveness, both in traditional legal services and in emerging areas like legal tech and consulting.

Drawing from a wealth of experience spanning nearly two decades at the helm of a law firm in Nigeria, coupled with the unique cross-jurisdictional perspective afforded by my qualification to practice in both Nigeria and England and Wales, I have gained invaluable insights into the stark contrasts between legal practice models. This dual qualification has provided me with a firsthand view of how different regulatory frameworks shape the legal landscape in diverse jurisdictions. The ability to navigate and compare the intricacies of legal practice in a more liberalized market like England and Wales against the more traditional structure in Nigeria has been eye-opening and has led me to a sobering realization: the current restrictive ownership model in Nigeria is not just a challenge, but a self-imposed limitation on our profession’s potential. This model, once intended to safeguard our integrity, has become a constraining force, hindering our ability to evolve, innovate, and compete in an increasingly global legal market. The stark reality is that our adherence to this outdated structure is akin to a self-inflicted wound, one that impedes our growth, stifles our creativity, and ultimately undermines our capacity to serve our clients and society effectively. Even the most successful Nigerian law firms cannot compete on the same level as their international counterparts who have adopted Alternative Business Structures (ABS). This disparity is not a reflection of the quality of legal talent or expertise in Nigeria, but rather a direct consequence of the self-inflicted structural limitations imposed on the business of law. The firms with ABS, as analysed earlier, benefit from immense advantages: access to public capital markets, ability to attract top-tier management and technology experts as equity partners, and the flexibility to rapidly scale and innovate. These benefits translate into staggering differences in financial resources, global reach, technological capabilities, and service diversification. While Nigerian firms have demonstrated remarkable resilience and ingenuity in the face of these constraints, the reality is that they are competing in a global legal market with one hand tied behind their back. While acknowledging that traditional ownership structures continue to coexist in these model jurisdictions, it’s crucial to recognize the transformative impact that Alternative Business Structures (ABS) have had on their legal landscapes. These jurisdictions have not wholesale abandoned traditional models but have instead created a dynamic, diverse ecosystem where both conventional and innovative structures thrive side by side. The result is a legal market that offers a spectrum of practice models, from traditional partnerships to publicly traded law firms and multidisciplinary practices. This flexibility has enabled the legal profession in these jurisdictions to respond more effectively to client needs, embrace technological advancements, and attract diverse talent and investment. The success of this hybrid approach underscores the potential for Nigeria to implement reforms that respect its legal traditions while opening doors to innovation and growth, ultimately creating a more robust, competitive, and client-centric legal services market.

The successful implementation of Alternative Business Structures (ABS) across various professional sectors offers a compelling case for reforming legal practice ownership in Nigeria. Professions ranging from healthcare to engineering have embraced ABS models, demonstrating that non-professional ownership, under proper regulatory oversight, can drive innovation, improve service delivery, and attract crucial investment without compromising professional standards or ethics.

Consider the following few examples:

Healthcare: Hospitals and clinics owned by non-medical entities have attracted substantial capital for advanced medical equipment and facilities.
Engineering: Construction and design firms with diverse ownership have scaled operations and competed globally.
Pharmacy: Chain pharmacies, often owned by non-pharmacists, have improved accessibility and efficiency in medication distribution.
Crucially, these professions maintain high standards through rigorous regulatory oversight:

Licensing and Accreditation: Strict licensing requirements ensure that only qualified professionals practice, regardless of ownership structure.
Ethical Guidelines: Professional bodies establish and enforce ethical guidelines that all practitioners must adhere to.
Continuous Oversight: Regular audits and inspections maintain quality control and ensure compliance with professional standards.
Continuing Education: Mandatory continuing education programs keep professionals up to date with the latest developments in their fields.
The legal profession in Nigeria could adopt a similar ABS model, where non-lawyer ownership is permitted but with safeguards to ensure that professional obligations are not compromised while maintaining strong regulatory oversight. This approach could unlock numerous benefits:

Increased Investment: Attracting external capital to modernize law firms and invest in legal technology.
Improved Business Acumen: Bringing in management expertise to enhance operational efficiency and strategic planning.
Interdisciplinary Collaboration: Facilitating the creation of multidisciplinary practices that can offer comprehensive solutions to complex client needs.
Global Competitiveness: Enabling Nigerian law firms to scale up and compete more effectively in the international legal services market.
Innovation in Service Delivery: Encouraging new approaches to legal service provision, potentially improving access to justice.
Talent Retention: Creating more dynamic and diverse career paths within the legal sector, potentially reducing brain drain.
By learning from the successful ABS models across various professions, the Nigerian legal sector can evolve its ownership structures while upholding its core values and professional standards. This evolution is not about diluting the essence of legal practice, but about enhancing its capacity to serve clients, society, and the cause of justice in an increasingly complex and interconnected world.

The success of alternative business structures in the UK, Australia, and parts of the US demonstrates the potential benefits of reforming legal practice ownership. These jurisdictions have shown that it’s possible to maintain professional standards and ethics while fostering innovation, growth, and improved service delivery.

To modernize Nigerian legal practice ownership structures, I respectfully propose the following reforms:

Amend the Rules of Professional Conduct (RPC):
Modify Rules 3(1)(c) and 55 to allow fee-sharing with non-lawyer investors under regulated conditions.
Revise Rules 5(1) to permit partnerships, multidisciplinary practices while maintaining ethical safeguards.
Update the Legal Practitioners Act (LPA):
Introduce provisions for Alternative Business Structures (ABS), similar to the UK model.
Establish a regulatory framework for non-lawyer ownership, management and investment in law firms.
Align the Companies and Allied Matters Act (CAMA) with legal practice needs:
Create specific provisions for law firm incorporation that accommodate non-lawyer ownership.
Develop guidelines for transparency and accountability in ABS law firms.
Develop Ethical Safeguards:
Institute mandatory ethics training for non-lawyer owners.
Establish clear lines of professional responsibility and accountability.
Implementation of these reforms would require collaboration between the NBA, lawmakers, and regulatory bodies. A joint committee could be formed to draft necessary legislative changes and oversee the reform process.

The benefits of reforming legal practice ownership structures in Nigeria are far-reaching and transformative. By embracing change, the profession can catalyse significant economic growth within the sector, unlocking new investment opportunities and fostering job creation. This shift would drive innovation and accelerate the adoption of legal technology, enhancing efficiency and expanding access to justice for all Nigerians. Moreover, reformed ownership structures would empower Nigerian law firms to compete more effectively on the global stage, attracting international clients and fully participating in complex cross-border transactions. This increased competitiveness would help stem the tide of talent loss, retaining top legal minds within Nigeria and reducing the brain drain that has long plagued the profession. Perhaps most importantly, the emergence of multidisciplinary practices would enable firms to offer more comprehensive, sophisticated services to clients, particularly in cutting-edge areas such as fintech, data management, energy, and international trade. In essence, reforming ownership structures is not just about modernizing the legal profession; it’s about positioning Nigeria’s legal sector as a dynamic, innovative force in the global legal landscape, capable of meeting the evolving needs of clients in an increasingly interconnected world.

The current regulatory framework in Nigeria, while designed to protect the integrity of the legal profession, has become a significant impediment to its growth and evolution. A thoughtful and comprehensive reform of these regulations is not just desirable but essential for the Nigerian legal profession to thrive in the 21st century. The challenge lies in crafting reforms that preserve ethical standards and professional independence while unlocking the potential for innovation, growth, and enhanced service delivery in the Nigerian legal sector.

The writer can be reached at:

email: [email protected]

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