Legal Services Market Overview
The global legal services market is valued at ~$1.1 trillion in 2026 and is expected to grow at a ~4.6 – 5.1% CAGR, reaching ~$1.5 trillion by 2035. North America is the largest regional market, representing ~40% of global revenue, supported by regulatory complexity, cross-border advisory needs, and sustained litigation activity.
Legal services can be segmented into seven distinct practice areas based on client type, go-to-market model, and revenue structure:
Sources: Thomson Reuters
The Evolution of Legal ABS/MSO Platforms
Historically, U.S. law firms have been restricted to lawyer-only ownership. While certain U.S. states, most notably Arizona, have begun relaxing these rules, the regulatory landscape remains highly fragmented. Current approaches vary by state and include Alternative Business Structures (ABS), regulatory sandboxes, MSO-based structures, and other limited exceptions permitting non-lawyer participation or investment under defined conditions.
ABS enables true equity ownership in law practices, but is geographically constrained, while MSOs are the primary scalable U.S. model, generating returns via contracted economics rather than ownership.
Regulatory sandboxes (e.g. Utah) act as a limited testing ground for ABS-like innovation but remain narrow and not yet scalable nationally.
Sources: California Assembly Bill 93, Bloomberg Law, ABA Journal, DC Bar, Greenberg Traurig
State-by-state Landscape
Arizona
In 2021, Arizona eliminated its version of Model Rule 5.4 and expressly permitted nonlawyers to hold economic ownership and decision-making authority in law firms through an ABS framework
Utah
In 2020, Utah launched a pilot regulatory “sandbox” permitting nonlawyer ownership of law firms and relaxing certain unauthorized practice of law restrictions
D.C.
Under D.C.’s version of Model Rule 5.4, outside investment in law firms is permitted if the firm solely provides legal services, nonlawyer owners comply with D.C. Rules of Professional Conduct, and attorneys with managerial authority remain accountable for nonlawyer owners’ conduct
Puerto Rico
In 2025, Puerto Rico adopted new ethical rules permitting nonlawyers to own up to 49% of a law firm, provided the firm is operated by attorneys licensed in Puerto Rico. The rule is subject to reassessment after three years
California
In 2025, California enacted legislation prohibiting attorneys from sharing fees with out-of-state ABS-affiliated attorneys unless specific criteria are met. However, the legislation continues to permit MSO structures that comply with prescribed regulatory requirements
Washington, Indiana, and Minnesota
Washington, Indiana, and Minnesota are reportedly considering Utah-style regulatory sandboxes.