From WSJ Law Blog:
Weber, who spoke with Law Blog Tuesday, said the idea is gaining purchase for the wrong reasons: Firms are looking for interest-free capital in tough economic times.
“I don’t know if I’d call it greed, but it’s in the greed ball park,” he said. “When the world was such that lawyers were able to raises their rates 5%, 6%, 10% a year…and profits per partner at big firms and small were outpacing the GDP, you didn’t hear about this.”
He said the profession has grown more selfish in recent years and less focused on clients, which, in turn, has given the idea of outside ownership room to grow.
“Now it’s not ‘I’m doing something good for society and my clients’ — it’s ‘How far can I push things to maximize my personal potential,’” he said. “All you need to do is open the paper and read about groups of partners jumping from one firm to another. The notion of partnership has degraded at these mega law firms.”
Greedy lawyers? Imagine that! This must be a new thing, really. Weber next talks about the rules of professional conduct, and the self-policing of the profession:
The purpose of the rules of professional conduct for lawyers is to protect the integrity of the attorney-client relationship and guide decision-making based on the client’s best interest, Weber said.
“Lawyers have a separate set of rules and that are used as a defense of the profession policing itself. Once we get to the point that we start behaving like any other business, then I would take the position that we are forfeiting our right to self-regulation,” Weber said.
The ABA proposal imposes limitations on outside ownership to guard against conflicts. Nonlawyers could own stakes in law firms, but lawyers would still have to maintain a controlling financial interest and voting rights in the firm, and nonlawyers couldn’t have their own clients or offer nonlegal services to clients.
Weber said that was no assurance.
Weber notes–whether he realizes it or not–where the legal profession is largely headed.
We’ve got a real incrementalism problem right now,” Weber said. “I can tell you the way of the world is that incrementally those protections will begin to go away and nonlawyers will have more and more say, and this profession will have given up not only our independence but our rightful differentiation from a business.”
In any even, GCs of large companies seem to be on board with Weber.
Weber told Law Blog he has broached the issue with about 10 general counsel from large institutions. “I can’t say I’ve had one of them argue me on this,” he said.
Weber said he hasn’t started building a coalition against the proposal, but he promised he would if it starts to gain enough support.
“When I see something like this that I think is fundamentally at odds with what has made this profession special, and I see that it comes at a time of economic hardship, it gives me real concern,” he said.