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Are Lawyers Special?

January 3, 2012

Corporate Counsel magazine recently interviewed Robert Weber, General Counsel at IBM, on the question of whether non-lawyers should be allowed an ownership stake in law firms. At present, in many countries, they are not – but this principle has been eroded in the UK and Australia and is now under review in the US.

Mr. Weber opposes change to the current rules, which also include the legal profession being self-regulating. He believes that allowing non-lawyers to take a stake in a law firm is just the thin end of the wedge and that this will be to the detriment of client interests.

The argument against change is nicely summarized in Wikipedia: “The rule was created in order to prevent conflicts of interest. In the adversarial system of justice, a lawyer has a duty to be a zealous and loyal advocate on behalf of the client, and also has a duty to not bill the client excessively. Also, as an officer of the court, a lawyer has a duty to be honest and to not file frivolous cases or raise frivolous defenses. A lawyer working as a shareholder-employee of a publicly traded law firm would be strongly tempted to evaluate decisions in terms of their effect on the stock price and the shareholders, which would directly conflict with the lawyer’s duties to the client and to the courts.”

Mr Weber adds to this with the observation that “The very nature of being an attorney is that you’re an agent to someone” and cites this as a reason why lawyers act exclusively in their client’s interests.

This discussion raises some important issues. For example, to what extent can a professional body be self-regulating and still act in the wider public interest? To what extent does the legal profession hide behind its proclaimed role of ‘agent’ in order to avoid accountability for its actions? And even if law firms are somehow ‘special’, should similar principles continue to apply to in-house counsel?

There is no question that many lawyers are people of great principle and high ethical standards. Yet there is also no doubt that many are driven by financial reward (the legal profession is among the world’s highest paid). It is hard to swallow this concept of ‘agency’ when lawyers today are so active in promoting litigation – patent trawling, class-action lawsuits and active encouragement for personal injury claims being obvious examples. And I observe many in-house legal teams seeking either to expand their role, or to crush others who might be seen as a form of competition (contract and commercial management groups being an obvious target).

Skepticism about the legal profession is perhaps partly due to the way it dominates the field of politics. For example, according to the Wall Street Journal, 60% of US Senators are lawyers. The School of Human Rights Research in The Netherlands has explored this issue and finds a similar dominance in many other countries. It comments that lawyers and politicians are among the “least trusted groups of people, as the large number of jokes at their expense will attest, and this may be at the root of some of the public cynicism towards politics in North America and elsewhere. Although ethical conduct is considered central to both professions, they both seem to exhibit a higher than normal rate of professional misconduct and breach of trust, in the public perception if not in reality. For many lawyers and politicians, the point is to win at all costs – in trying to win on behalf of their client, or in trying to get elected, they often seem to push aside their convictions or sense of right and wrong in favour of expediency. Much of the vitriol directed at lawyers and politicians is directed at their rhetorical flair – they are good at selling things and telling people what they want to hear.”

A recent survey published by the Law Society Journal in the UK showed that only 47% of people trust lawyers to tell the truth. I believe this is largely due to the perception that lawyers are more driven by personal rewards than they are by professional principles. The American History blog sums it up well in reminding us of one of the fundamental rules of the Law Society: “When acting as an advocate, a lawyer shall not knowingly assist or permit the client to do anything that the lawyer considers to be dishonest or dishonourable.”

Confidence in the rule of law depends on a system that is transparent and fair. A problem with any profession having a monopoly in its field is that it has a strong incentive to maximize complexity and to increase client dependency. This also extends into the question of how broad the role of lawyers should be. It seems to me that if they want ‘special treatment’ because of the importance of their legal role, they must also be clear about its boundaries and remain removed from broader questions of business judgment and management.


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