Large law firms prime candidates for deregulation ... The big corporate question: stay in-house or go external? ... Getting millions of dollars of legal work done for $150,000 ... Tulkinghorn thinks large law firms are less ethical than small ones
On August 21 two expert US economists suggested in the Wall Street Journal that is was Time to Deregulate the Practice of Law.
They wrote that:
"Supporters of occupational licensing to restrict the number of lawyers in the US are wrong to assert that deregulation would unleash a wave of unscrupulous or incompetent new entrants into the profession."
They went on to explain why.
The article refers a new book : First Thing We Do, Let's Deregulate All the Lawyers. (Click on the "Sample Chapter" to read Chapter 1.)
The only tricky area would be courtroom advocacy.
There are lots of crackpots who would love to blather away in courtrooms, and they'd do it for free and be quite unstoppable, so we probably need licensing systems for advocates (although some Scandinavian countries seem to manage without).
Richard Abel and Philip Lewis wrote, in their book Lawyers in Society: The Civil Law World, that generally in the non-English speaking world:
"Advocacy is the core of the private practitioners' monopoly, vigorously defended against intruders. Indeed, countries like Germany, France, Italy, and Venezuela compel litigants to retain a qualified advocate in most matters, prohibiting self-representation. Because civil lawyers have chosen to defend the core of advocacy while surrendering the periphery of advice, powerful competitors have occupied the latter realm."
Licensed courtroom advocates would NOT, however, have a monopoly on drawing up litigation documents.
Their "entitlements" would be restricted to speaking in court. Their ranks would include, for example, law students and social workers who could satisfy the licensing authorities that they would behave responsibly, and judges would have the power to dish out "discipline" when required.
If need be, people who draw up legal documents (including court documents) could be licensed, but not before unlicensed competition had been tried out.
Of course, the current legal profession could not be allowed anywhere near the new proposed deregulatory legislation or else we would end up with what California got when it created Licensed Document Assistants.
This is a list of what paralegals and LDA's can and can't do.
Lawyers evidently hobbled the concept from the beginning:
"If you do not understand your legal rights or need advice on your matter, consult an attorney before you direct the LDA to complete your documents."
Top level lawyer union managementThe deregulation of the preparation of "legal documents" is the key to deregulation of the profession, but first one must split off courtroom advocacy work from all the other "legal" work that lawyers do.
Those who run lawyer unions know only too well that the bulk of their work is not closely associated with courtroom advocacy.
However, they also know that if one is to have a monopoly on doing it, one must pretend that it is associated. Hence the Law Council of Australia's Policy Statement On The Reservation Of Legal Work For Lawyers, which is an absolute masterpiece of chicanery.
It takes courtroom advocacy and then stacks all the other stuff on top, creating a giant inverted pyramid:
"4. The core areas of legal work should (a) relate to appearances in court and matters incidental to that right, such as ..."
Here follows a list which ropes in:
" ... the drawing, filling up or preparing an instrument or other document for fee or reward ..."
In case that is not enough, under 4(b) (ii) anyone who "creates, regulates or affects rights between parties (or purports to do so)" for reward has done "core legal work".
If someone pays you to go down to the corner store to buy a lollipop and you do so, you have, according to the Law Council, done "core legal work".
Should've hired a lawyer.
Having given themselves monopolies on whatever they want to do, and backed them up with UPL (unauthorised practice of law) laws, lawyers then have to differentiate themselves from all other business people.
So, vague and contradictory ethics (and lots of them) are said to create lawyers who are "professionals" sozzled with "professionalism", as is also their "work product".
Can clients opt out of the ethics? Well yes, and lots of clients do reach such an arrangement with their lawyers, but officially, no.
Correct design for large law firm office buildingsGraduate lawyers considering what firm to work for should (and sometimes do) take into account the real ethics (i.e. as actually practised) of prospective employers. (See, A Career Choice Critique of Legal Ethics Theory.)
Now consider large law firms. Their monopolies are based on their advocacy work if one follows the LCA reasoning.
However, they do not do much courtroom advocacy, relatively speaking. Indeed, in the UK and here, "litigation is a relatively small part of most large law firms' work".
That was 1995. Last year it was reported that litigation lawyers ...
"have been waiting in the wings for a while for their time in the sun ... litigation now accounts for 18 percent of overall turnover (£232.2m) at Freshfields Bruckhaus Deringer."
Most of that would be paperwork, not courtroom advocacy.
So what about ethics? US law professor Kimberley Kirkland says :
[Robert Jackall, author of 'Moral Mazes'] concludes that in large corporations "morality becomes indistinguishable from the quest for one's own survival and advantage." This is precisely what appears to be happening in large law firms. …..This suggests that the organizational logic at work in large law firms is, in significant respects, a function of their bureaucratic structures. …John Feerick, former Dean of the Fordham University School of Law, recently defined integrity in the practice of law as '[s]taying with your principles . . . holding on to who you are and being yourself at all times as best you can ... not giving up your principles in order to promote yourself'. According to the logic of the large law firm, however, acting with integrity, as John Feerick defines it, may be professional suicide."
The lack of large firm ethics has been mentioned (diplomatically) in the UK.
"It is suggested that the polarised profession ... has now fully emerged in the UK, with significant implications for professional ethics. Firms serving influential clients and operating in the corporate sector have a strong commercial-entrepreneurial ethos, whereas those firms serving the individual, non-influential clients and markets are seeking to retain a traditional professionalism rooted in the idea of public service."
If large firms are not practising much courtroom advocacy or ethics, and if, for example, properly constituted LDAs could do the bulk of their work, then perhaps large firms are good value for money?
No way. The Australian Financial Review reported on June 3:
"Peter Rees QC, the global legal director of petrochemicals giant Royal Dutch Shell, who was appointed in May this year ... said he had been 'utterly amazed' at how much legal work Shell kept in the family. Giving the example of a five-year gas to liquids project in Qatar, which cost Shell 'tens of billions of dollars in capital expenditure' but only $150,000 in legal outlay, Mr Rees said Shell had cut its legal budget by a third in the three years before he joined the company, 'mostly by reducing external counsel spend on transaction work'."
Large law firms would charge millions for handling deals worth "tens of billions".
Published the same year as the ABA report on Rekindling Lawyer ProfessionalismBasically all the clients have to do is to watch a few deals being done, and thus learn how to do them with their own, in-house teams.
Here's Peter Rees being interviewed (skip to 3mins 18secs where he discusses using in-house v out-house lawyers).
All that's left to justify large law firm monopolies is "professionalism". Learned articles on this "subject" litter the pages of law journals.
In 1986 an American Bar Association committee issued a report: In the Spirit of Public Service : A Blueprint for the Rekindling of Lawyer Professionalism.
The report asked: "Has our profession abandoned principle for profit, professionalism for commercialism?"
It recommended that to increase the amount of professionalism going on, all segments of the legal profession should ...
"Resist the temptation to make the acquisition of wealth a primary goal of law practice [and] encourage innovative methods which simplify and make less expensive the rendering of legal services."
It is possible that some US lawyers took the recommendation to heart, because, also in 1986, Emily Rodda published her book.
One can be confident that most lawyers who work in the large law firm segment were not flying about. They would have stayed working closely with their corporate clients and their personnel.
Staying close to the corporate client
Why should lawyers have monopolies on sticking their snouts into various corporate client troughs?
It's time to give market forces a chance.
For example, Shell could hire out its in-house legal team.