Even the reader acquainted only at the most cursory level with my
perspective on the increasingly professionalized management of law
firms would know I endorse that trend wholeheartedly. The
question du jour is whether I endorse it without reservation.
Prompting this soul-searching is Sidley-Austin’s highly publicized
run-in with the EEOC over demoting 32 partners in 1999—all
over 40—in order, as the management committee put it, to provide
"greater opportunity for younger lawyers down the road." The
EEOC’s position is that Sidley’s "hyper-centralised" management under
which partners almost never voted on anything means the demotees
were mere "employees" and thus subject to anti-discrimination law. Sidley-Austin
retorts that they were, obviously, "partners" sharing in profit and
loss and contributing capital, and thus outside the scope of anti-age
(anti-sex, anti-race, anti-religion, etc.) discrimination law.
As Professor Bob Hillman of UC/Davis Law School, an expert on partnership
law, puts it to the FT,
"This is a big one." Not only law firms, but accounting
firms as well may be deemed partnerships in name only if the EEOC
prevails. As a securities lawyer and not a partnership or agency
lawyer, I have no opinion on whether Sidley or the EEOC has the better
of it, but it does present me with a dilemma.
Simply put, as a champion of professional management, I strongly
favor decisive, centralized, strategically focused executive bodies. Not
for me the New England town hall model of interminable discussion
in search of consensus. (If you doubt me, just look down one
post.) But the more "hyper-centralised" management is, the
more disenfranchised the rank and file partners are, which has a
whiff of inhumanity to it and which—worse from the economic
perspective—may leave their incentives mis-aligned with the
firm’s long-term best interests.
On the other hand, we as a
civilized society have developed certain protections against the
ruder depradations which an omnipotent management can visit upon
its underlings, anti-discrimination law primary among them. Would
I deprive these neutered partners of even that protection?
In other words, in for a dime, in for a dollar. If I have
the courage of my (pro-professional management) convictions, do I
also think Sidley should lose this case?
Yes. I think they "should." But, as my first-year
Property professor unforgettably screamed at a naive compatriot of
mine, "FAIR?!?! What’s ‘FAIR’ have to do with it?"
