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A federal district court in New York has ruled that New York's Rule of Professional Conduct 5.4 prohibiting nonlawyer ownership of law firms does not violate the First or Fourteenth Amendments or the Commerce Clause of the U.S. Constitution. New York's Rule 5.4 is substantially similar to Illinois'. Aside from the Constitutional arguments, plaintiffs argued that the infusion of capital from nonlawyer investors was required in order to maintain their commitment to providing low cost legal services to the economically challenged. In a sharply worded opinion, the Court rejected Plaintiffs' arguments on a number of factual and legal grounds as well as recognizing New York's "significant interest in assuring and maintaining high standards of conduct of attorneys engaged in practice."
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