Regular readers know that I’ve written periodically about the so-called "Clementi" reforms scheduled to take effect next year in the UK which would permit public ownership of, and investment in, law firms, as well as permitting diversified multidisciplinary firms combining, for example, lawyers with management consultants with accountants with financial planners with investment bankers. I’m not being facetious to say that I wish the US had managed to beat the UK to the punch on this.
So it is with great pleasure that I can announce that the Georgetown Law Center for the Study of the Legal Profession will be hosting a symposium next April 17 and 18, 2008, titled "The Future of the Global Law Firm," which is actually about the prospects for precisely this type of reform in the US.
The impetus for this conference began with my proposing the concept of a derivative security, roughly reflecting a law firm’s valuation, that might comply with existing ethical proscriptions against ownership of law firms by non-lawyers. I shared this concept with Prof. Mitt Regan of Georgetown and Prof. Larry Ribstein of the University of Illinois College of Law, two of the most highly-qualified individuals I can think of to critique and extend my notion.
The conversation evolved into a paper just published today by Georgetown Law entitled Law Firms, Ethics, and Equity Capital: A Conversation.
Here’s how the Georgetown site describes the paper:
"The paper consists of correspondence among Professor Regan; Bruce MacEwen, an expert on law firm economics and editor of the online publication Adam Smith, Esq. ; and Professor Larry Ribstein of the University of Illinois Law School, an expert on partnership law. Current ethics rules in every state forbid any non-lawyers from having an ownership interest in a law firm. Beginning with an inquiry by Mr. MacEwen, the participants in the exchange first discuss whether these rules would permit firms to sell financial instruments such as derivatives whose value is based on the firms’ profitability. The discussants then move on to the broader subject of the arguments for and against allowing firms to raise money in the stock market.
"Mr. MacEwen and Professor Ribstein generally support permitting firms to attract equity investors. Professor Regan is more ambivalent, but says that participating in the exchange made him appreciate that the question is far closer than most people realize.
“Going through this analysis forces us to consider basic assumptions about the roles that lawyers play in society, and how their ability to play those roles might be strengthened or threatened by equity ownership,” says Regan. “There are some surprising possibilities if we consider the issue with an open mind.” The aim of the paper is to encourage the profession to take this approach, and to lay the groundwork for a wide-ranging discussion about the future."
As I’ve said in personal communication with some of you, I strongly believe this is a timely and profoundly important conversation for our profession and our industry to have, and I am gratified to have played a very small part in occasioning it in at least one venue.
The importance of these issues to our profession in the 21st Century demands that our approach not be determined by inertia, free-floating (and in my opinion, irrational) fear, or an undue reverence for tradition.
So let the conversation begin.
I will of course continue to cover this pivotal discussion between now and Georgetown in April 2008, and beyond.
If you can’t make the conference (attendance is, under current plans, by invitation only), you know where to read all about it.
Update: I learned that those of you who subscribe to my monthly newsletter—to whom I sent a separate notice of this event—may have been confused by a mis-addressing error: The emails went to the correct subscriber list, but didn’t use the right salutation and greeting, so they appeared to be addressed to someone else.
File this under "Don’t you just love technology?"
Unbeknownst to me until it was too late, the database had suffered a hiccup, offsetting the names matched to the email addresses by one row. So you now know the identity of the individual immediately beneath you in the database. My own copy was addressed to my mother-in-law.
