Remember that law school professor who told us about the law being a jealous mistress? All of the very proud and idealistic notions of the law being a profession, not something unclean, like, well, business?
Times have changed, and there seems to be growing interest in allowing nonlawyers to own limited stakes in US firms, something which is already allowed amongst our common law brethren in the UK and Australia. Solicitors are now able to team up with insurers and other businesses as well as having outside investors. In Australia, a pi firm was able to float a public offering, and that is now old news as it happened seven years ago! Recently, the UK has allowed a company owning a chain of grocery stores to offer legal advice…are we far off from having Walmart providing legal counsel? Can you imagine Target offering the special Robert Shapiro line of legal counseling at a pop-up store at Christmastime?
Opponents offer the very valid concern that non-lawyer partners could force the forsaking of obligations to clients for the maximization of profits. (Who could ever imagine that happening in our society?!?) Current ethics rules bar most U.S. lawyers from sharing profits with non-lawyers, with the theory being that non-lawyers are not subject to the same rules of conduct, and could inappropriately influence lawyers’ judgments or otherwise adversely affect the ethical obligations of client loyalty and confidentiality. New York lawyers can’t practice in the state if they are part of a British firm with non-lawyer owners, However, the DC bar voted in the 1980s to let nonlawyers hold financial interests in law firms. I wonder how many DC firms have taken advantage of this and how it is working for them.
For now, BigLAw firms are seemingly not concerning themselves much with the non-lawyer ownership issue, as they can get capital from their partners or banks, but wouldn’t it be interesting for a highly-profitable firm to be allowed to sell shares on a stock exchange? How much more money would a partner be able to make under such circumstances? Are we far away from a Big Law ipo?
Clearly smaller firms find the idea attractive. Remember when Jacoby & Meyers filed suits challenging ethics rules prohibiting out side investment in law firms? The suits were dismissed, but is this an idea, like so many others, that starts with refusal, then slowly erodes into reluctant acceptance to unfettered endorsement?
So, are we a profession or a business? Nowadays, we have to be both, and it will be interesting to see for whom I will be a legal recruiter in the future.