§ 7-209 Alternative Business Structures

A. Definitions. “Alternative business structure” (“ABS”) is a business entity that includes nonlawyers who have an economic interest or Decision-making Authority in the firm and provides legal services in accord with Supreme Court Rules 31 and 31.1(c). “Authorized Person” means a person possessing:

1. A direct economic interest in the ABS equal to or more than 25 percent of all economic interests in the ABS; or

2. The legal right to exercise Decision-making Authority on behalf of the ABS. Examples may include: a sole proprietor of a sole proprietorship, a manager of a limited liability company, an officer of a corporation, a general partner of a general or limited partnership, or a person possessing comparable rights by operation of law or by agreement. “Compliance Lawyer” means an active member of the State Bar of Arizona in good standing who, pursuant to Supreme Court Rule 42, ER 5.3(d) and subsection (G)(3)(b) of this section, is responsible for ensuring compliance with the rules governing ABSs, Supreme Court Rule 42, and the regulatory requirements of this section. “Decision-making Authority” in an ABS means the authority, by operation of law or by agreement, to directly or indirectly:

1. Legally bind the ABS;

2. Control or participate in the management or affairs of the ABS; or

3. Substantially influence the management, policies, or operations of the ABS. “Director” means the administrative director of the courts or the director’s designee. “Direct economic interest” means (1) a share of a corporation’s stock, a capital or profits interest in a partnership or limited liability company, or a similar ownership interest in any other form of entity, or (2) a right to receive payments for providing to or on behalf of the entity management services, property, or the use of property (including software and other intangible personal property) that is based, in whole or in part, on the firm’s gross revenue or profits or any portion thereof. Notwithstanding the foregoing, “economic interest” does not mean a) employment-based compensation pursuant to a plan qualified under the Internal Revenue Code of 1986, as hereafter may be amended, or any successor rule, or discretionary bonuses paid to employees or b) debt financing where the lender does not have any decision-making authority or actual ownership interest in the firm. “Inactive” means a licensee who, upon notification to the Committee, voluntarily decides not to deliver legal services for a specified period of time and is not the subject of any pending disciplinary action. “Person” means an individual, business corporation, nonprofit corporation, partnership, limited partnership, limited liability company, general cooperative association, limited cooperative association, unincorporated nonprofit association, statutory trust, business trust, common-law business trust, estate, trust, association, joint venture, public corporation, or government or governmental subdivision, agency or instrumentality, or any other legal or commercial entity.

B. Applicability. This section governs the administration, licensing and regulation of ABSs, and is read with the supreme court rules governing the practice of law.

C. Purpose. This section is intended to result in the effective administration of the ABS licensing program and for the protection of the public in accordance with all applicable statutes, ACJA sections, and court rules.

D. Administration

1. Role and Responsibilities of the Supreme Court. The supreme court is authorized to regulate the practice of law as a function of its responsibility to administer an integrated judiciary, pursuant to article VI, §§ 1 and 3 of the Arizona Constitution.

2. Establishment and Administration of Fund. The state treasurer shall establish an Alternative Business Structures Fund consisting of monies received for licensure fees, costs, and civil penalties. The Administrative Office of the Courts shall administer the fund and shall receive and expend monies from the fund for ABS program operations, including disciplinary operations by the State Bar of Arizona.

3. Role and Responsibilities of the Director. As designated by article VI, § 7 of the Arizona Constitution, the director:

b. Must:

(1) Develop policies and procedures in conformity with this section;

(2) Appoint and supervise all Division staff;

(3) Approve or disapprove all budgetary matters;

(4) Ensure implementation of the applicable laws and this section; and

(5) Develop policies and procedures regarding the processing of applications for licensing by Division staff.

b. May:

(1) Direct Division staff to investigate alleged acts of misconduct or violations in relation to initial licensure, renewal of a license or licensure after a period of revocation;

(2) Refer a complaint to the State Bar of Arizona; and

(3) Initiate a compliance audit of a license holder to determine if the license holder is in compliance with statutes, court rules, administrative orders, court orders, local rules, the ACJA, and any other legal or ethical requirement relating to the license holder’s ABS license. The following provisions apply to audits:

(a) Timeframes. The director must develop timeframes and procedures for Division staff conducting compliance audits.

(b) Confidentiality.

(i) Working papers associated with the compliance audit maintained by Division staff are not public records and are not subject to disclosure, except to court staff in connection with their official duties, the State Bar of Arizona, the attorney general, county attorney, public regulatory entities, or law enforcement agencies.

(ii) Upon completion of an audit the final report issued to the affected party is a public record subject to public inspection.

(c) Subpoena. The director may subpoena witnesses or documentary evidence, administer oaths, and examine under oath any individual relative to the audit.

(d) Referral. The director may refer the audited license holder to the State Bar of Arizona for investigation of alleged acts of misconduct or violations of statutes, court rules, administrative orders, court orders, local rules, the ACJA, and any other legal or ethical requirement relating to the license holder’s ABS license.

(e) Violations or Noncompliance. Willful violation of or willful noncompliance with an order of the director regarding the audit, or willful noncompliance with a corrective action plan resulting from an audit, may result in an order directing the license holder to comply. The director may forward a copy of the order or report to the superior court and request the superior court issue an order to require the appearance of a person or business, compliance with the director’s order, or both. The superior court may treat the failure to obey the order as contempt of court and may impose penalties as though the license holder had disobeyed an order issued by the superior court.

4. Role and Responsibilities of Division Staff.

a. The director must designate the Division director and other Division staff to assist in the administration of the ABS licensing program pursuant to article VI, § 7 of the Arizona Constitution.

b. Division staff must:

(1) Submit completed applicant fingerprint cards and applicable fees to the Arizona Department of Public Safety, in accordance with A.R.S. § 41-1750 and Public Law 92-544, pursuant to subsection (E)(1)(c);

(2) Make recommendations to the Committee on all application and licensing matters and any other matters regarding applicants and license holders;

(3) Provide updates to the Committee on program activities;

(4) Maintain a list of license holders and post the list on the applicable website and make the list available to the public;

(5) Conduct compliance audits and monitoring as required by subsection 4(c) below; and

(6) Conduct pre-licensure investigations of allegations of acts of misconduct or violations of the statutes, court rules, or the applicable sections of the ACJA by applicants or Authorized Persons and report the findings to the Committee.

(7) Submit a quarterly report to the court and the State Bar of Arizona of current license holders.

c. Compliance Audit

(1) On an annual basis, staff may conduct a compliance audit of ABSs in a number determined by the Director. ABSs to be audited may be randomly chosen by staff or may be selected due to particular concerns that have come to the attention of staff.

(2) Any ABS selected for audit must complete and return, within twenty (20) days of request, the ABS audit form, the contents of which are to be developed and determined by the Committee. The form must require supporting documentation, including, but not limited to, all semi-annual compliance reports prepared by the ABSs Compliance Lawyer. The ABS and Compliance Lawyer are both responsible for timely, accurately, and fully responding to the compliance audit and any follow- up questions or requests for additional information from Division staff.

(3) Findings by Division staff of minor violations subject to remediation may be resolved by the ABS providing Division staff with evidence of correction approved by staff. Substantial or pervasive violations will be referred to the State Bar of Arizona for any necessary action.

(4) Failure to comply with these audit requirements is grounds for separate discipline and will be referred to the State Bar of Arizona for any necessary action.

5. Role and Responsibilities of Committee on Alternative Business Structures.

a. Appointment of Members. Pursuant to Rule 33.1, the court must appoint members to initial varying terms of one, two, and three years to encourage continuity of the Committee. Other appointment details are contained in Supreme Court Rule 33.1(a)(2) and (3). The members will assist Division staff in the recruitment of Committee members.

b. Duties of the Committee. In addition to Supreme Court Rule 33.1(a)(4) – (6) and (b):

(1) The Committee must:

(a) Make recommendations to the supreme court or the Arizona Judicial Council regarding rules, policies, and procedures for regulating ABSs, including: (i) applicant qualifications; (ii) fees; (iii) a code of conduct; and (iv) any other matter pertaining to ABSs.

(b) Recommend whether to license an applicant for initial licensure;

(c) Examine applications for the addition of an Authorized Person and change of Compliance Lawyer after initial licensure and grant or deny the addition or change;

(d) Examine license renewal applications and grant or deny renewal; and

(e) Order a summary suspension of a license.

(2) The Committee may:

(a) Hold interviews of applicants regarding initial licensure; and

(b) Hold interviews of license holders regarding renewal of licensure.

d. In addition to the requirements of subsection (D), and except as otherwise provided herein, Committee members must abide by ACJA § 7-201(I)(2) through (7).

e. On or before April 1 of each year the Committee must file a report with the supreme court describing the status of the ABS program. The report must include, but is not limited to, the following information:

(1) The number of applications granted and declined during the previous calendar year;

(2) The number of licensed ABSs as of December 31 of the previous calendar year;

(3) The number of charges filed against ABSs and ABS Compliance Lawyers during the previous calendar year and the nature of the charge(s);

(4) The number of complaints initiated by the State Bar of Arizona during the previous calendar year and the nature of the complaint;

(5) Discipline imposed during the previous calendar year, the nature of conduct leading to the discipline and the discipline imposed; and

(6) Recommendations concerning modification or improvements to the ABS program.

f. The State Bar of Arizona must provide the Committee with the following information:

(1) On a calendar quarter basis:

(a) The number of charges filed against ABSs during the previous calendar quarter and the nature of the charge;

(b) The number of complaints initiated by the State Bar of Arizona during the previous calendar quarter and the nature of the complaint; and

(c) Discipline imposed during the previous calendar quarter, the nature of the conduct leading to the discipline and the discipline imposed.

(2) On or before January 31, on an annual basis:

(a) The number of licensed ABSs as of December 31st ; and

(b) Recommendations concerning modifications or improvements to the ABS program.

(3) Such other information as the Committee may request to prepare the report described in section (D)(5)(e) herein.

6. Role and Responsibility of the State Bar of Arizona. The State Bar of Arizona is responsible for receiving, processing, investigating, seeking interim suspension of, and prosecuting disciplinary matters against ABSs and an ABS’s members, and must carry out this responsibility according to supreme court rules and this code section.

7. Computation of Time. For the purposes of this section, the computation of days pursuant to Rule 6(a), Rules of Civil Procedure is calculated as follows:

(1) Day of the Event Excluded. Exclude the day of the act, event, or default that begins the period.

(2) Exclusions if the Deadline is Less Than 11 Days. Exclude intermediate Saturdays, Sundays, and legal holidays if the period is less than 11 days.

(3) Last Day. Include the last day of the period unless it is a Saturday, Sunday, or legal holiday. When the last day is excluded, the period runs until the next day that is not a Saturday, Sunday, or legal holiday.

(4) Next Day. The “next day” is determined by continuing to count forward when the period is measured after an event and backward when measured before an event.

E. Licensure.

1. Application for Initial Licensure.

a. Purposes. An applicant must demonstrate how its licensure will advance one or more of the following:

(1) Access to legal services.

(2) Innovation in the delivery of legal services for a specified purpose.

(3) Investment capital to support the delivery of legal services.

(4) Equity ownership by: (a) related persons (as defined in Arizona Supreme Court Rule 42, ER 1.8(c)) of firm lawyers; (b) nonlawyers in management positions providing key business, operational, or administrative support to a law firm; or (c) other nonlawyer law firm employees.

(5) Multidisciplinary ownership for purposes of providing coordinated delivery of both legal and non-legal client services.

b. Forms. An applicant, including all Authorized Persons, must apply for licensure on approved forms and file them with Division staff.

c. Application Processing.

(1) Division staff will conduct a preliminary review of the submitted application and determine if the application is deficient, the required supporting documents are deficient, fees are deficient, or a combination of these requirements are deficient.

(2) Division staff will advise the applicant of the deficiencies.

(3) The applicant will provide the information and a written response to correct or explain the deficiencies, or otherwise remedy the defects in the application, supporting documents or fees.

(4) Division staff may require the applicant to provide additional information or an explanation reasonably necessary to determine if the applicant meets the required qualifications specified in this section.

(5) Upon receipt of a complete application, Division staff may conduct a personal credit review and review records regarding an application for initial licensure, consistent with the policies and procedures developed by the Director.

(6) The applicant must notify Division staff of any changes relevant to the application for licensure within five days of the change.

(7) Upon a final review of the application, Division staff must prepare and forward to the Committee a written recommendation regarding the applicant’s qualifications and eligibility for licensure.

(8) Division staff must advise the Committee in any written recommendation regarding licensure of an applicant, of any complaints alleging acts of misconduct or violations of statute, court rules or order, or this section, if the allegations occurred during the time the applicant held an active license and were received after the applicant’s licensure expired.

(9) Division staff’s written recommendation to the Committee must note any deficiencies in the application. A deficient application for initial licensure is lacking one or more of the following requirements:

(a) An explanation or correction of any deficiencies, pursuant to (E)(1)(a)(4);

(b) Payment of all appropriate fees, pursuant to (E)(1)(d); or

(c) Necessary information or documents to complete a criminal background check, including a readable fingerprint cardor affidavit in lieuof a fingerprint card, pursuant to (E)(1)(e).

(10) The Committee, upon review of the Division staff recommendation, may request an informal interview with an applicant, pursuant to subsection (D)(5)(c)(2)(a), to establish if:

(a) Additional information is needed to determine if the applicant meets all qualifications in this section;

(b) An explanation of the information provided by the applicant is needed to determine if the applicant meets all qualifications in this section; or

(c) Any complaints, regarding allegations of misconduct or violations of the statutes, court rules, or applicable sections of the ACJA, received after the applicant’s original licensure expired, require investigation by Division staff pursuant to subsection (E)(1)(a)(4).

d. Fees. An application must be accompanied by the applicable, nonrefundable initial fee payable to the Arizona Supreme Court in the amount specified in (J).

e. Fingerprinting. If required, an Authorized Person must submit with the application, a full set of fingerprints, with the fee established by law, for the purpose of obtaining a state and federal criminal records check. An application submitted without a fingerprint card, if required, is deficient.

(1) The Authorized Person must provide a readable and complete fingerprint card. The Authorized Person must pay any costs attributable to the original fingerprinting or subsequent re-fingerprinting due to unreadable fingerprints and any fees required for the submission or resubmission of fingerprints.

(2) If after two attempts, the FBI determines the fingerprints provided are not readable, the Authorized Person must submit a written statement, under oath, that the Authorized Person has not been arrested, charged, indicted, convicted of or pled guilty to any felony or misdemeanor, other than as disclosed on the application.

(3) Division staff must submit completed fingerprint cards and the applicable fees to the Arizona Department of Public Safety, pursuant to A.R.S. § 41-1750, Public Law 92-544, and subsection (D)(4)(b)(1).

2. Committee Responsibilities.

a. Pursuant to Supreme Court Rule 33.1(b), the Committee must:

(1) Consider the following regulatory objectives: (a) protecting and promoting the public interest; (b) promoting access to legal services; (c) advancing the administration of justice and the rule of law; (d) encouraging an independent, strong, diverse, and effective legal profession; and (e) promoting and maintaining adherence to professional principles.

(2) Consider the foregoing regulatory objectives in light of the Supreme Court’s jurisdiction given that licensure is sought in Arizona. See Ariz. R. Sup. Ct. 31(a). Licensure must, at least in part, further the regulatory objectives for persons located in Arizona.

(3) Ensure that lawyers practicing law with an ABS are or will be, at least in part, providing legal services to persons.

(4) Ensure whether an applicant has adequate governance structures and policies in place to ensure: (a) lawyers providing legal services to consumers act with independence consistent with the lawyers’ professional responsibilities; (b) the ABS maintains proper standards of work; (c) the lawyer makes decisions in the best interest of clients; (d) confidentiality consistent with Supreme Court Rule 42 is maintained; and (e) any other business policies or procedures do not interfere with a lawyers’ duties and responsibilities to clients.

b. The Committee must confirm the applicant’s purpose under (E)(1)(a).

c. The Committee must consider whether the applicant or any Authorized Person:

(1) Has committed material misrepresentation, omission, fraud, dishonesty, or corruption in the application form;

(2) Has committed any act constituting material misrepresentation, omission, fraud, dishonesty, or corruption in business or financial matters;

(3) Has engaged in conduct evidencing that they are incompetent or a possible source of injury or loss to the public;

(4) Has a conviction by final judgment of a felony, regardless of whether civil rights have been restored;

(5) Has a conviction by final judgment of a misdemeanor if the crime has a reasonable relationship to the practice of law or the delivery of legal services to be provided by the ABS, regardless of whether civil rights have been restored;

(6) Has been disbarred from, or denied admission to, the practice of law or the equivalent of disbarment or denial in this state or any other jurisdiction;

(7) Is currently suspended from the practice of law in this state or any jurisdiction;

(8) Has received any denial, revocation, suspension, or disciplinary action of any professional or occupational license or certificate;

(9) Has received any censure, probation, or other disciplinary action of any professional or occupational license or certificate by any other licensing or regulatory body if the underlying conduct is deemed by the Commission to be relevant to licensure under this section;

(10) Has received a termination, suspension, probation, or any other disciplinary action regarding past employment if the underlying conduct is deemed by the Commission to be relevant to licensure under this section;

(11) Has been found civilly liable in an action involving misrepresentation, material omission, fraud, misappropriation, theft, or conversion;

(12) Is currently on probation or parole for any criminal offense;

(13) Has violated any decision, order, or rule issued by a professional regulatory body;

(14) Has violated any order of a court, judicial officer, administrative tribunal, or the Committee;

(15) Has made a false or misleading statement or verification in support of an application for licensure filed by another person;

(16) Has made a false or misleading oral or written statement to Division staff or the Committee;

(17) Failed to disclose information on the application as determined through a subsequent background investigation;

(18) Failed to respond or furnish relevant information in the applicant’s control or reasonably available to the applicant in response to a requested of Division staff or the Committee; or

(19) Has a record of involvement in conduct constituting dishonesty or fraud by a business, its officers, directors, or employees.

d. When reviewing information concerning any misdemeanor or felony conviction, the Committee may consider:

(1) The individual’s age at the time of the conviction;

(2) The individual’s experience and general level of sophistication at the time of the pertinent conduct and conviction;

(3) The degree of violence, injury or property damage and the cumulative effect of the conduct;

(4) The individual’s level of disregard of ethical or professional obligations;

(5) The reliability of the information regarding the conduct;

(6) Whether the individual’s conduct involved fraud, deceit, or dishonesty and resulted in harm to others;

(7) The recency of the conviction;

(8) Any evidence of post-conviction rehabilitation or positive social contributions offered by the applicant;

(9) The relationship of the conviction to the purpose of licensure;

(10) The relationship of the conviction to the practice of law or the delivery of legal services to be provided by the ABS;

(11) The individual’s candor during the application process;

(12) The applicant’s or Authorized Person’s overall qualifications for licensure weighed against the conviction.

e. Committee Recommendation. After due consideration:

(1) If the Committee determines that the applicant has demonstrated satisfaction of the regulatory objectives of Supreme Court Rule 33.1(b)(1) and (E)(2)(a); adequate governance structures and policies under Supreme Court Rule 33.1(b)(2); that its application is consistent with (E)(1)(a); the absence of the (E)(2)(c) and (d) considerations; and compliance with the requirements of this section, section 7-201, and any other requirements established by the supreme court, the Committee must recommend that the supreme court approve the application.

(2) If the Committee determines that the applicant has not demonstrated satisfaction of the regulatory objectives of Supreme Court Rule 33.1(b)(1); adequate governance structures and policies under Supreme Court Rule 33.1(b)(2); that its application is consistent with (E)(1)(a); the existence of one or more considerations under (E)(2)(c) and (d); and compliance with the requirements of this section, section 7-201, and any other requirements established by the supreme court, the Committee must recommend that the supreme court deny the application.

f. The Committee’s recommendation to deny an application must state the factors the Committee found in support of its recommendation.

g. Notification of Licensure. Upon the supreme court’s order approving a license, Division staff must promptly notify qualified applicants of licensure in writing. Each qualified ABS will receive a document evidencing licensure, stating the applicant’s name, date of licensure, license number, and expiration date of the license. Each license will expire as provided in (F)(1).

h. License Status. All licenses are valid until expired, voluntarily surrendered, suspended or revoked.

i. Denial of Initial License. Upon the Committee’s decision to recommend that the supreme court deny licensure:

(1) Division staff must notify the applicant, including all Authorized Persons, of the Committee’s decision. The notice must state:

(a) The reasons for the Committee’s recommendation of denial;

(b) That the Committee’s decision to recommend that the supreme court deny licensure is not effective until expiration of the deadline for requesting a hearing under subsection (E)(2)(i);

(c) The date on which Division staff mails the notice of denial; and

(d) The right of the applicant to a hearing, under subsection (E)(2)(i).

(2) The Division staff must provide the notice in writing and must send the notice within 10 days after the Committee’s decision.

j. Request for Hearing. An applicant is entitled to a hearing on the decision to recommend denial of licensure if the disciplinary clerk receives a written request for a hearing within 15 days after Division staff mails the notice of denial. The request for hearing must contain the information required by 7-201(H)(13). If no request for hearing is filed, the Committee’s recommendation of denial is filed with the supreme court, foreclosing an applicant, including any Authorized Person’s, opportunity to respond under Supreme Court Rule 33.1(a)(6).

k. Hearing. The applicant is the moving party at the hearing and has the burden of proof. The provisions of 7-201(H)(14) through (22)(a) and (b) govern the procedures related to the hearing. The disciplinary clerk must distribute the hearing officer recommendation report issued under 7-201(H)(22)(a) to all parties and the Committee in the manner provided under 7-201(H)(22)(c).

l. Rehearing. Any aggrieved party may request a rehearing by filing a written request with the hearing officer and the disciplinary clerk within 15 days after the disciplinary clerk’s distribution of the hearing officer’s recommendation. If no request for rehearing is filed, the Committee will consider the hearing officer’s recommendation under (E)(2)(m).

(1) The request for rehearing must state one or more of the grounds listed in Rule 59, Arizona Rules of Civil Procedure. Any other party may file a response within 10 days of the filing of the request for rehearing with an additional 5 days allowed for response if the request for rehearing was served by mail. No reply in support of the request may be filed.

(2) The hearing officer must issue an order granting or denying the request, in whole or in part, within 10 days of the response deadline. Distribution of the order is governed by 7-201(H)(22)(c).

(3) If rehearing is granted, the disciplinary clerk must distribute the hearing officer recommendation report on rehearing in the manner provided under 7- 201(H)(22)(c).

m. Committee consideration of hearing officer recommendation. Following receipt of the hearing officer’s recommendation report after a hearing or rehearing, the Committee must either:

(1) Accept, reject, or modify the hearing officer’s recommendation report, in whole or in part, as the Committee’s recommendation, direct Division staff to provide notice in the manner required under (E)(2)(i), and file the Committee’s recommendation with the supreme court; or

(2) Issue an order remanding all or part of the matter to the hearing officer, identifying the issues remanded, and requiring the hearing officer to issue a recommendation report on remand. Following receipt of the hearing officer’s recommendation on remand, the Committee must accept, reject, or modify the hearing officer’s recommendation report on remand as the Committee’s recommendation and file the Committee’s recommendation with the supreme court.

n. Response to recommendation to deny. An applicant, including any Authorized Person, affected by any denial recommendation of the Committee filed with the supreme court may respond as provided in Supreme Court Rule 33.1(a)(6), except as provided in subsection (E)(2)(l).

o. An applicant denied licensure by a final decision of the supreme court may reapply for licensure under (E) if:

(a) It has been twelve months since the final decision by the supreme court;

(b) The applicant:

(i) Addresses the issues resulting in the Committee’s recommendation of denial or the supreme court’s decision to deny;

(ii) Demonstrates acceptance of responsibility for the conduct leading to the denial; and

(iii) Demonstrates that satisfaction of the regulatory objectives of Supreme Court Rule 33.1(b)(1); adequate governance structures and policies under Supreme Court Rule 33.1(b)(2); how its licensure will advance one or more of the purposes under (E)(1)(a); the absence of the (E)(2)(c) and (d) considerations; and compliance with the requirements of this section, section 7-201, and any other requirements established by the supreme court.

(c) In determining whether the applicant has satisfied (E)(2)(o)(2), the Committee must conduct an informal interview with the applicant no later than 60 days after the applicant has submitted a complete application and has responded to requests for information by Division staff.

3. Time Frames for Licensure.

a. The director must develop time frames for the processing of applications by Division staff, pursuant to subsection (D)(3)(a)(5).

b. An applicant must respond timely to requests for information from Division staff pertaining to the applicant’s application. Unless the applicant can show good cause as to why the Committee should grant additional time, the Committee shall not approve any applicant unless the applicant successfully completes all requirements within 90 days from the date Division staff received the original initial application for licensure.

c. If an applicant needs additional time to comply with Division staff requests or to complete the application process within the time frames specified in this subsection, the applicant must file a written request for an extension with Division staff. The request must state the reasons for additional time to comply with time frames and licensure requirements. The applicant must file the request for additional time to complete the initial application at a minimum, 10 days prior to the 90-day deadline, unless the applicant makes a showing of good cause. Failure to complete the application process or file a written request for an extension of time within this time period shall nullify and void the original application and supporting documents, including fingerprints and fees.

d. Division staff must forward the written request for an extension of time to the Committee at the next scheduled Committee meeting.

e. If the applicant fails to meet the 90-day deadline or is not granted additional time by the Committee to complete the initial licensure process, the applicant is considered a new applicant. The applicant must submit a new application including a fingerprint card and fees.

4. Records of Applicants for Licensure and License Holders is governed by the provisions of Supreme Court Rule 123, except as otherwise provided in Arizona Rules of Court. Division staff must retain applicant and license holder records for a period of five years from the last activity in the record. Division staff must take appropriate methods to ensure the confidentiality of any destroyed records.

5. Unlawful Use of Designation or Abbreviation.

a. An ABS who has received a license is authorized to utilize the designation of “Arizona licensed” in connection with their title or name and may use any appropriate abbreviation connected with this licensure. No other business may assume or use the title, designation, or abbreviation, or any other title, designation, sign or card, the use of which is reasonably likely to induce others to believe the business holds a valid ABS license issued by the Arizona Supreme Court. The license holder must not sell, transfer, or assign its license to any other business.

b. The Committee, upon completion of an investigation may issue a cease and desist order. A hearing officer or a superior court judge, upon petition by the Committee, may enter an order for an individual or business to immediately cease and desist conduct constituting engagement as an ABS without the required license.

6. Voluntary Surrender. A license holder in good standing may surrender its license to the Committee. However, the surrender is not valid until accepted by the Committee. The Committee or Division staff may require additional information reasonably necessary to determine if the license holder has violated any provision of the statutes, court rules, and this section. The surrender does not prevent the commencement of subsequent discipline proceedings for any conduct of the surrendered license holder occurring prior to the surrender.

a. Division staff must present the surrendered license to the Committee at the next available Committee meeting after receiving notice of the surrender. Upon the Committee’s acceptance of the voluntary surrender, Division staff must designate the license of the license holder as a “surrendered license holder in good standing.” Division staff must notify the license holder in writing within 10 days after the Committee’s acceptance of the surrender.

b. The Committee must not accept the surrender if there is a complaint pending against the license holder.

c. The Committee must, within 90 days of the receipt of the surrendered license by Division staff, either accept the surrender or, based upon the recommendations of Division staff, await the outcome of the pending disciplinary proceedings. If the supreme court, hearing panel or presiding disciplinary judge subsequently imposes a sanction upon the license of the surrendered license holder, Division staff must change the status of the license holder from “surrendered license holder in good standing” to that of an ABS so disciplined.

d. An ABS who is granted voluntary surrender must comply with the requirements of subsections (H)(4)-(6).

7. Inactive Status

a. A licensee that seeks inactive status, shall submit a written notice to the Committee. The inactive ABS shall not engage in the practice of law including pro bono or for a fee or other compensation while on inactive status and shall not present themselves as an ABS.

b. Upon application and payment of any applicable fee required by the applicable section of the ACJA, to transfer from inactive to active status, the Committee may require the inactive licensee to demonstrate it remains in compliance with the applicable ACJA sections and all other requirements for licensure.

c. If the applicant meets the requirements of this subsection to the satisfaction of the Committee, the Committee shall return the licensee to active status. Division staff shall change the status from “inactive” to “active” and notify the licensee of the Committee’s decision within ten days.

F. Renewal of Licensure.

1. Expiration Date. Licenses expire at midnight of the day two years after the supreme court’s order approving the license, except as otherwise provided in this section. All licenses are valid until the expiration, voluntary surrender, suspension, or revocation of the license becomes effective.

2. Application. A license holder is responsible for applying for a renewal license. The license holder applying for renewal of licensure must do so on the form provided by Division staff. Renewal applications must be submitted within 90 days before the expiration date to allow sufficient time for processing the renewal application.

a. When a license holder has filed a timely and complete renewal application, the existing license does not expire until the administrative process for review of the renewal application has been completed.

b. When a license holder requests to file an untimely renewal application, the Division director may process the untimely application and recommend to the Committee to renew a license if the untimely renewal applicant demonstrates to the Division director good cause for the untimely filing. In addition, the following apply:

(1) The applicant must submit a complete renewal application, submit any other documentation requested by Division staff to verify the grounds for the good cause exception requested, and have no unpaid annual fees or late fees.

(2) The applicant must not provide legal services:

(a) Until the director decides in writing based on good cause to process the application; or

(b) If the director decides not to process the untimely application, until an initial application is processed, and the applicant is granted a license renewal pursuant to this section.

c. When a timely renewal application is denied, the existing licensure does not expire until the last day for seeking a hearing on the denial decision pursuant to subsection (E)(2)(d)(5); or if a hearing is requested, until the final decision is made on an appeal of the denial by the Committee pursuant to ACJA § 7-201(H)(25).

d. The Committee may request an informal interview with the applicant for renewal, pursuant to subsection (D)(5)(c)(2)(b), to establish if additional information or an explanation of the information provided by the applicant is needed to determine if the applicant continues to meet the qualifications for licensure in this section.

e. The license of a license holder who does not supply a complete renewal application in the specified time and manner to Division staff expires as of the expiration date. Division staff must treat any renewal application received after the expiration date as a new application, except when the license holder requests to file an untimely renewal application pursuant to (F)(2)(b).

3. Additional Information. Before renewal of licensure, Division staff may require additional information reasonably necessary to determine if the applicant continues to meet the qualifications specified in this section, which may include:

a. Background information, pursuant to subsection (E)(1)(a); and

c. Fingerprinting pursuant to subsection (E)(1)(e).

4. Decision Regarding Renewal.

a. The Committee may renew a license if the license holder: (1) meets all requirements for renewal as specified in this section; (2) has submitted a complete renewal application and responds to Division staff’s requests for additional information; (3) has paid the annual fee and any late fee assessments owed under (J)(5); and (4) meets the regulatory objectives of Supreme Court Rule 33.1(b)(1); has adequate governance structures and policies under Supreme Court Rule 33.1(b)(2); its licensure is consistent with its purpose under (E)(1)(a); the (E)(2)(c) and (d) considerations are absent; and it is in compliance with the requirements of this section, relevant sections of 7-201, and any other requirements established by the supreme court.

b. Division staff will promptly notify the applicant in writing of the Committee’s decision on the applicant’s license renewal application. Each renewed applicant must receive evidence of renewal of licensure stating the applicant’s name, date of licensure renewal, license number, and expiration date.

c. The Committee may deny renewal of licensure for any of the reasons stated in subsection (E)(2)(c). Division staff must promptly notify the applicant, in writing, within 10 days of the Committee’s decision to deny renewal of licensure. The notice must include the Committee’s reasons for the denial of renewal of licensure and the right of the applicant to a hearing, pursuant to subsection (F)(4)(d).

d. An applicant is entitled to a hearing, on the decision to deny renewal of licensure if the disciplinary clerk receives a written request for a hearing within fifteen days after the date of the notice of denial. The applicant is the moving party at the hearing and has the burden of proof. The provisions of ACJA § 7-201(H)(12) through (23) and (H)(25) through (27) apply regarding procedures for hearing and appeal.

G. Role and Responsibilities of Licensed Alternative Business Structures and Compliance Lawyers.

1. Initial Licensure. In addition to the requirements of subsection (E)(1), each applicant for licensure as an ABS must meet the following requirements:

a. Submit completed applications for the ABS and each Authorized Person.

b. Submit a prescribed indemnification statement and conflict of interest statement signed by each Authorized Person.

d. Fully disclose all relationships to any parent company or organization, and currently paid or unpaid officers, directors, owners, and boards of directors, and any and all company subsidiary dba’s operating in any state.

d. Declare a statutory agent in Arizona.

e. Obtain any necessary federal and state tax identification numbers as required by law.

f. Appoint a Designated Principal with whom Division staff may communicate on any administrative, procedural, or operational issues.

g. Submit articles of incorporation and letters of good standing from the Arizona Corporation Commission or otherwise demonstrate authorization to do business in the State of Arizona.

h. Demonstrate the business meets objectives identified in Supreme Court Rule 33.1(b) and subsection (E)(2)(a) herein.

i. Submit the prescribed acknowledgement form that the ABS and its members are subject to the regulatory and discipline authority as set forth in the supreme court rules and this section.

j. Insurance Disclosure

(1) Each ABS must certify to the State Bar of Arizona on an annual form prescribed by the State Bar of Arizona on or before February 1 of each year whether the ABS is currently covered by professional liability insurance. Each ABS who reports being covered by professional liability insurance must notify the State Bar of Arizona in writing within 30 days if the insurance policy providing coverage lapses, is no longer in effect, or terminates for any reason. An ABS that acquires professional liability insurance after February 1 must advise the State Bar of Arizona of the change of status in coverage.

(2) The State Bar of Arizona must make the information submitted by ABSs pursuant to this rule available to the public on its website as soon as practicable after receiving the information.

(3) Any ABS who fails to comply with this section in a timely fashion may be summarily suspended by the Committee on Alternative Business Structures. Supplying false information in complying with the requirements of this section shall subject the ABS to appropriate disciplinary action.

2. Roles and Responsibilities of ABSs. Each ABS must:

a. Adhere to the Rules of Arizona Supreme Court and the standards in the code of conduct in (K).

b. Maintain a statutory agent in Arizona.

c. Maintain an active Arizona licensed Lawyer in good standing at all times.

d. Notify Division staff within 30 days of any change in Designated Principal, Compliance Lawyer, or other Authorized Person; the contact details of any Designated Principal, Compliance Lawyers, or other Authorized Person; (E)(1)(a) purpose; or any other required database information. The Designated Principal of the ABS must notify Division staff of changes through the ABS regulation email system or in writing, utilizing the form or online portal provided by Division staff. A change in (E)(1)(a) purpose is not effective without Committee approval.

e. Maintain the confidentiality of all records regarding any person receiving legal services.

f. Any ABS that ceases doing business must adhere to the requirements of (H)(4) through (6).

3. Compliance Lawyer. Each ABS must designate a Compliance Lawyer whose qualifications and responsibilities are as follows:

a. Qualifications. The Compliance Lawyer must:

(1) Meet the requirements of Supreme Court Rule 31.1(a)(1);

(2) Be a manager, employee, or independent contractor associated with the ABS and have Decision-making Authority;

(3) Consent to the designation to serve as Compliance Lawyer for no more than three entities;

(4) Not have been disbarred or subject to disciplinary suspension in any jurisdiction during the past 10 years;

(5) Not have been Reprimanded or Admonished in any jurisdiction, or be subject to the foreign jurisdiction’s equivalent of such, in the past 5 years; and

(6) Possess the capacity, competence, credentials, and experience to supervise the firm and ensure that ethical obligations, protection of the public, and standards of professionalism are adhered to.

b. Responsibilities. The Compliance Lawyer must take all reasonable steps to:

(1) Proactively and persistently ensure that the ABS, its lawyers, and Authorized Persons comply with the Arizona Rules of Professional Conduct and the ACJA, and independently and actively supervise the firm;

(2) Ensure that the practice of law is only provided by persons authorized to do so and in compliance with the Arizona Supreme Court Rules;

(3) Ensure that any lawyer or other service provider involved in the delivery of legal services complies with the Arizona Rules of Professional Conduct;

(4) Ensure that a prompt report is made to the State Bar of Arizona of any facts or matters reasonably believed to be a substantial breach of the regulatory requirements of this code or the ethical and professional obligations of lawyers or nonlawyers;

(5) Ensure that the State Bar of Arizona is promptly informed of any fact or matter that reasonably should be brought to its attention in order that it may investigate whether a breach of regulatory requirements of this code or the ethical and professional obligations of nonlawyers;

(6) Notify Division staff and the State Bar of Arizona in writing within 30 days when the Compliance Lawyer has ceased to be the Compliance Lawyer for the ABS;

(7) Notify Division staff and the Committee within 30 days of any disciplinary sanction imposed against the Compliance Lawyer or the ABS; and

(8) Conduct semi-annual compliance audits to review the firm’s internal policies and procedures to ensure compliance with Arizona Supreme Court Rule 33.1, ACJA § 7-209, and at the completion of each audit, prepare and retain a written report of the findings.

c. Violations. Any Compliance Lawyer who fails to comply with this section, including any failure to report any facts or matters reasonably believed to amount to a substantial breach of the regulatory requirements of this code or the ethical and professional obligations of lawyers, in addition to other possible sanctions, may be suspended on an interim basis pursuant to Rule 61, Rules of Supreme Court.

H. Discipline.

1. Rules. The supreme court rules governing complaints, investigations, and disciplinary proceedings against Arizona licensed attorneys apply to ABSs and their members, except as otherwise stated in this section.

2. Sanctions. Misconduct by an ABS or its members is grounds for imposition of one or more of the following types of sanctions:

a. Revocation. Revocation of an ABS’s license may be imposed by judgment and order entered by the supreme court, a hearing panel, or the presiding disciplinary judge. Any order of revocation must state a fixed period of time a license is revoked before an ABS can seek re-licensure.

b. Suspension. Suspension of an ABS may by imposed by judgment and order entered by the supreme court, a hearing panel, or the presiding disciplinary judge for an appropriate fixed period of time not to exceed 3 years. Suspension of an ABS license prohibits the ABS from accepting new legal services clients and requires notification pursuant to subsection (H)(4). An order of the supreme court, a hearing panel, or the presiding disciplinary judge may specify additional restrictions on the activities of an ABS during the term of suspension. An ABS whose activities are suspended remains suspended until the court enters an order reinstating the ABS to its full business capacity in Arizona or upon order of the presiding disciplinary judge pursuant to subsection (E)(8)(b).

c. Reprimand. A reprimand may be imposed by judgment and order entered by the supreme court, a hearing panel, or the presiding disciplinary judge.

d. Admonition. An admonition may be imposed by judgment and order entered by the supreme court, a hearing panel, the presiding disciplinary judge, or the Attorney Discipline Probable Cause Committee.

e. Probation. Probation may be imposed by judgment and order entered by the supreme court, a hearing panel, the presiding disciplinary judge, or the Attorney Discipline Probable Cause Committee as follows:

(1) Probation must be imposed for a specified period not in excess of two years but may be renewed for an additional two-year period.

(2) Probation may be imposed only in those cases in which there is little likelihood that the respondent ABS or its members will harm the public during the period of probation and the conditions of probation can be adequately supervised. The conditions of probation must be stated in writing, must be specific, understandable, and enforceable and may include restitution, disgorgement, and assessment of costs and expenses.

(3) The presiding disciplinary judge may appoint a monitor to supervise the ABS during a period of probation. The cost of the monitor must be paid by the ABS.

(4) The monitor must report to the State Bar of Arizona, which is responsible for supervising the respondent ABS during the probationary period. Bar counsel must report material violations of the terms of probation to the presiding disciplinary judge by filing a notice of noncompliance with the disciplinary clerk and serving respondent with a copy of the notice. The notice of noncompliance must include verification or separate affidavit upon personal knowledge stating sufficient facts to support the allegations of material violations of the terms of probation. Respondent has 10 days after service of the notice to file a response. Upon filing the notice of noncompliance, the presiding disciplinary judge may (a) issue an order declining to proceed with the notice; (b) issue an order setting the matter for status conference; or (c) issue an order setting a hearing within 30 days to determine if the terms of probation have been violated and if an additional sanction should be imposed. In a probation violation hearing, the State Bar of Arizona must prove a violation by preponderance of the evidence. At the end of the probation term, bar counsel must prepare and forward a notice to the presiding disciplinary judge regarding the respondent’s completion or non-completion of the imposed terms.

f. Monetary Penalties. The supreme court, a hearing panel, or the presiding disciplinary judge may order the license holder to pay any of the following monetary obligations:

(1) Restitution or refund (disgorgement) may be ordered to persons financially injured, including reimbursement to the State Bar Client Protection Fund. Restitution or refund and the amount thereof must be proven by a preponderance of the evidence;

(2) A civil fine in an amount not to exceed $1,000,000. Civil fines collected pursuant to this section shall be deposited in the Alternative Business Structure Fund.

g. Assessment of Costs and Expenses. An assessment of costs and expenses related to disciplinary proceedings shall be imposed upon an ABS pursuant to Supreme Court Rule 60(d).

3. Enforcement. Execution and other post-judgment remedies is governed by Supreme Court Rule 60(d).

4. Notice to Clients and Adverse Parties. Within 10 days after the date of an order or judgment issued by the presiding disciplinary judge, a hearing panel, or the supreme court imposing discipline and sanctions, or the date of surrender of license, an ABS whose license was revoked or suspended or who has surrendered its license, must notify the following persons by registered or certified mail, return receipt requested, of the order of judgment or surrender, and of the fact that the ABS is disqualified from providing legal services after the effective date of same:

a. All legal services clients represented by ABS legal service providers in pending matters;

b. Any co-counsel in pending matters;

c. Any opposing counsel in pending matters, or in the absence of such counsel, the adverse parties; and

d. Each court or tribunal in which the ABS’s legal service providers have any pending matter, whether the matter is active or inactive.

5. Duty to Withdraw. In the case of a suspension for longer than 60 days, or a suspension of 90 days or less when any client does not consent to the association of counsel, and in all cases of revocation of licensure, it is the responsibility of the assigned lawyer in the ABS to move in the court or agency in which any proceeding is pending for leave to withdraw in the event the client does not obtain substitute counsel before the effective date of the suspension or revocation.

6. Return of Client Property. Respondent must deliver to all clients being represented in pending legal matters any papers or other property to which they are entitled and must notify them, and any counsel representing them, of a suitable time and place where the papers and other property may be obtained, calling attention to any urgency for obtaining the papers or other property. The respondent must deliver all files and records in pending legal matters to the client, notwithstanding any claim of outstanding payment for services.

7. Effective Date of Order; Pending Matters. Judgments imposing suspension or revocation are effective 30 days after entry, unless the presiding disciplinary judge, hearing panel, or the supreme court specifies an earlier date. Judgments and orders imposing other sanctions are effective immediately upon entry. Respondent, after entry of a judgment of revocation or suspension, must not provide legal services, except that during the period between entry and the effective date of the order, respondent may complete on behalf of any client all matters that were pending on the entry date. If a judgment or order permits the ABS to provide legal services under supervision of the State Bar of Arizona, respondent may only provide those services allowed by the judgment or order. Respondent must refund any part of fees paid in advance which have not been earned.

8. Affidavit Filed with Presiding Disciplinary Judge and Court. Within 10 days after the effective date of the judgment of revocation or suspension, respondent must file with the disciplinary clerk and with the supreme court an affidavit showing:

a. Respondent has fully complied with the provisions of the order and with this section;

b. An agent of record and other addresses where communications may thereafter be directed; and

c. Respondent has served a copy of such affidavit upon bar counsel.

9. Duty to Maintain Records. An ABS whose license has been revoked or suspended must keep and maintain records constituting proof of compliance with this section. Proof of compliance, which must include copies of the notice sent pursuant to subsection (H)(4) and signed returned receipts, must be provided to the Chief Bar Counsel of the State Bar of Arizona. Proof of compliance is a condition precedent to any application for reinstatement or licensing.

10. Contempt. Failure to comply with the provisions of this section may be punishable by contempt.

I. Reinstatement after Suspension or Revocation. An ABS license holder whose license was suspended or revoked by the supreme court may apply for reinstatement under the following conditions:

1. If an ABS’s license has been revoked the ABS may, after a period of 5 years, apply for reinstatement of licensure in accordance with the requirements of Rule 64(d) Ariz. R. Sup. Ct.

2. An ABS whose license has been suspended for six months or less may apply for reinstatement no sooner than 10 days before the expiration of the period of suspension by complying with requirements and process of Rule 64(e)(2) Ariz. R. Sup. Ct.

3. An ABS whose license has been suspended for more than six months may apply for reinstatement no sooner than 90 days prior to the expiration of the period of suspension set forth in the judgment but may not be reinstated until the full period of suspension has been served. An applicant for reinstatement must comply with the requirements and process of Rule 64(e)(1) Ariz. R. Sup. Ct.

4. Reinstatement Proceedings. Reinstatement hearings are governed by Supreme Court Rule 65(b).

J. Fee Schedule.

1. Classification. For purposes of this fee schedule, an ABS is classified as one of the following:

a. “Nonprofit ABS” means an ABS that is a domestic or foreign nonprofit corporation in good standing that is authorized to conduct business in this state.

b. “Equity ABS” means an ABS created and operated solely as a means of providing for law firm ownership to those persons listed in (E)(1)(a)(4).

c. “Regular ABS” means an ABS that is not exclusively a Nonprofit or Equity ABS.

2. Initial Application; Reinstatement Application. The following fees must be paid on submission of an application for initial licensure or reinstatement:

a. Nonprofit ABS $ 3,000.00

b. Equity ABS $ 4,500.00

c. Regular ABS $ 9,000.00

3. Annual Fee. Each year, no later than the anniversary of the date of the supreme court’s order approving its license, an ABS must pay the applicable annual fee:

a. Nonprofit ABS $ 2,000.00

b. Equity ABS $ 3,000.00

c. Regular ABS $ 6,000.00

d. Renewal Late Fee Per Day $300.00

4. Investigation Fees. If the cost of the investigation associated with an initial application or renewal application exceeds $1,500, or requires more than 80 hours of division staff time to complete, the applicant must also pay the actual investigation costs in excess of $1,500 and division staff time in excess of 80 hours at $100 per hour.

5. Late Fee; An ABS will be assessed a fee of $300.00 for each day that the annual fee remains unpaid for no more than 10 days. If the annual fee and late fees remain unpaid for more than 10 days, an ABS is subject to administrative suspension of its license by the Director until the outstanding fees are paid. During the period of administrative suspension, the ABS may not perform legal services.

6. Good Cause Extension. No later than the date on which the annual fee is due, an ABS may request a good cause extension of the annual fee payment deadline. The request must specify the reason good cause exists for an extension and the length of the requested extension. Division staff may request documentation to verify the grounds for the requested good cause extension. The division director will determine whether good cause exists and whether to grant an extension of time. No late fee will be assessed for any day included within an extension of time granted by the division director.

7. Public Record Request Per Page for Photocopies $ 0.50

8. Certificate of Correctness of Copy of Record $18.00

9. Addition of Authorized Person/Entity, Compliance Lawyer, Designated Principal, or adding a DBA (after initial licensure) $250.00

10. Change in Purposes Under (E)(1)(a) $250.00

K. Code of Conduct. The following code of conduct describes the expectations and standards that an ABS is expected to maintain as a provider of legal services. A failure to meet these standards or a breach of regulatory requirements are grounds for disciplinary action against an ABS itself, or its non-lawyer members, who each have the same responsibility for ensuring ethical legal services for clients. Members of an ABS who are members of the State Bar of Arizona bear the responsibility of the ethical and professional obligations of the profession as well as the standards stated herein. An individual failure or breach may warrant action itself or as a pattern of conduct.

1. Code of Conduct for ABS’s. In addition to the requirements of subsection (G)(2), each ABS and its Authorized Persons must adhere to the following minimum standards of conduct.

a. Must not allow the legal representation of clients, if the representation involves a conflict of interest as governed by Supreme Court Rule 42, ERs 1.7, 1.8, 1.9, 1.10, 1.11, 1.13 and 1.18.

b. Must not take any action or engage in activity that interferes with the professional independence of lawyers or others authorized to provide legal services.

c. Must ensure that legal services are delivered with reasonable diligence and promptness.

d. Must not take an action or engage in any activity that misleads or attempts to mislead a client, a court, or others, either by the ABS’s own acts or omissions, or those of its members or employees, or by allowing or being complicit in the acts or omissions of others.

e. Must maintain effective governance structures, arrangements, systems, and controls to ensure:

(1) Compliance with the requirements of supreme court rules and this section; and

(2) Managers, economic interest holders, decision-makers, employees, or anyone employed, associated with, or engaged do not cause or substantially contribute to a breach of the ethical rules of Supreme Court Rule 42 or this section.

f. Must maintain records to demonstrate compliance with its obligations under the supreme court rules and this section.

g. Must monitor financial stability and business viability. When an ABS becomes aware it will cease to operate, it must affect an orderly wind-down of business activities and comply with the requirements for surrender of an ABS license in this section.

h. Must monitor and manage all material risks to the business, including those which arise from connected businesses or connected services.

i. Must hold property of legal services clients separate from the property of the ABS. The requirements of Supreme Court Rules 42, ER 1.15 and Rule 43 are applicable to all legal services-related client property.

j. An ABS, its members and employees must cooperate with the Administrative Office of Courts, Committee on Alternative Business Structures, the State Bar of Arizona, the presiding disciplinary judge, and any court who oversees and investigates concerns related to its delivery of legal services.

k. Must respond promptly to the Administrative Office of Courts, Committee on Alternative Business Structures, the State Bar of Arizona, the presiding disciplinary judge, and the supreme court and provide full and accurate information and documentation in response to any request or investigation.

l. Must not attempt to prevent any person from providing information or documents in response to any request or investigation.

m. Must act promptly to take any remedial action requested by the State Bar of Arizona, the Administrative Office of Courts, the presiding disciplinary judge, and the supreme court.

n. Must assure that all Authorized Persons and employees, in matters pertaining to legal services, perform all duties and functions in the manner ethically required of a lawyer pursuant to Supreme Court Rule 42.

2. Code of Conduct for Authorized Persons, Managers, Economic Interest Holders, and Decision-Makers. An Authorized Person, including any manager, economic interest holder, or decision-maker in an ABS is individually responsible for compliance by the ABS with this code of conduct. Failures or breaches of this responsibility may subject any Authorized Person, including any manager, economic interest holder, or decision-maker of an ABS to discipline.

3. Code of Conduct for Compliance Lawyers. In addition to the requirements of subsection (G)(3)(b) and Supreme Court Rule 42, a Compliance Lawyer is responsible individually for compliance by the ABS and Authorized Persons, including any managers, economic interest holders, or decision-makers of the ABS, with this code of conduct. Failures or breaches of this responsibility may subject a Compliance Lawyer to discipline.

4. As to matters involving legal services, in the event of a conflict between this code of conduct, Supreme Court Rule 42, and other professional codes of conduct (e.g., AICPA Code of Professional Conduct), this code of conduct and Rule 42 govern. Adopted by Administrative Order No. 2020-173, effective January 1, 2021. Amended by Administrative Order 2020-223, effective December 23, 2020. Amended by Administrative Order 2022-12, effective January 19, 2022. Amended by Administrative Order 2022-81, effective July 13, 2022. Amended by Administrative Order No. 2024-175, effective August 29, 2024. Amended by Administrative Order No. 2025-59; effective March 19, 2025. Amended by Administrative Order No. 2025-138; effective June 25, 2025. Amended by Administrative Order No. 2025-227, effective December 22, 2025. Amended by Administrative Order No. 2026-31, effective March 18, 2026.