US: non-lawyer ownership will chip away at professionalism, claims GCs

Any form of non-lawyer ownership of law firms is bad for clients, nine leading general counsel have claimed.

The group of US-based in-house lawyers said they also detected no great interest in or need for non-lawyer ownership.

In a letter to the American Bar Association’s Ethics 20/20 Commission – which is currently considering whether to recommend the introduction of a form of legal disciplinary practice in the US – the nine said the proposal “opens the door to arrangements that make the practice of law more like other businesses and less like the distinct profession it has always been”.

Though the commission has already ruled out more radical moves towards external ownership, they said “even a limited permission for non-lawyer ownership will make subsequent debates about matters of degree, not principle”.

The nine are the general counsel of Cisco Systems, Dow Chemical, DuPont, GE, IBM, Intel, PPG Industries, Verizon Communications and Xylem.

They said supporters of reform have not made the case for it: “Our tenures as general counsel have given us no reason to believe that our business clients will be better served by a legal profession that is open to non-lawyer ownership. Quite the contrary, we fear that the inevitable chipping away at the profession’s professionalism ultimately will do a disservice not just to the business clients we serve, but to all clients who seek the trusted and confidential advice of counsel.

“And our discussions with other lawyers and in-house counsel have revealed no great interest in or need for non-lawyer ownership, let alone any groundswell of support for such a change.”

They argued that any non-lawyer ownership will undermine the lawyer-client relationship, including confidentiality, especially as they are not officers of the court.

They acknowledged that in recent years there has been “a thirst for profits that has led to the increasing conglomeration of law firms and the disregard of what were once sacrosanct conflict rules”. Given that this has “already enhanced the influence of business concerns on the practice of law, we are deeply troubled by a proposed change that would only further undermine the tradition that law is a profession rather than a business.

“Taking a step that will encourage a firm’s partners to place an even higher premium on profit and wealth can only exacerbate a problem that is already threatening lawyers’ sense of professionalism.”

“Even under the more limited form that the ABA is considering, non-lawyer investment cannot help but inject outside concerns into a partnership’s calculations. It changes a firm from a group of like-minded attorneys zealously pursuing their clients’ interests, into a group with inherently mixed motives and responsibilities, where some partners have a professional duty to the client’s interests and others do not.

“It is not hard to imagine that non-lawyer partners might place considerations of economic gain ahead of a client’s interests. That is not a criticism of those who seek profit. It is simply a recognition of the reality that our profession often mandates conduct and practices that are not profit maximising or optimising.”

 

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