The rise of the lawyer

Earlier this year, I received an invitation to write the epilogue for a book called New Suits: Appetite for Disruption in the Legal World, by Michele DeStefano (founder of the groundbreaking Law Without Walls program based at the University of Miami Law School) and Guenther Dobrauz-Saldapenna (partner and leader of PwC Legal Switzerland and leader of PwC’s global legal tech efforts). New Suits is an enormously ambitious and illuminating exploration of the frontiers of technology-powered legal practice, especially for large enterprise clients and their outside counsel, and I highly recommend that you read it.

Soon to be a major motion picture. Well, no.

Of course, I’m no technology expert, and I felt supremely unqualified to say anything useful about the impact of blockchain, AI, RegTech, and so on. But I thought that lawyers who read New Suits, especially newly called lawyers or law students, might reach the end of the book feeling a little overwhelmed by the scale of change facing them, and wondering whether the legal world of the future would in any way resemble the one they had already entered — and if that world would need, want, or even welcome lawyers.

So I wrote what was essentially a message to those lawyers, to explain what all the forthcoming changes would mean for them, what the new legal world was going to demand of them, and what they should feel both empowered and required to demand in return. With the kind permission of the authors, and with a few small edits, here is that lengthy but heartfelt message. 

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As I was preparing to write this epilogue, an email alert flashed across my screen with a message from a legal technology company. It announced itself in breathless terms: “AI has once again triumphed over a human lawyer.” (The task in question was the screening of a non-disclosure agreement.)

What an appropriate starting gun for this undertaking. The book you’ve just completed has catalogued in amazing detail the changes rippling along the foundations of the legal market worldwide, the technology that’s rewriting the rulebook for practising law, and the market forces that are fundamentally changing the nature of legal demand. Enterprise legal services — that sector of the market devoted to the legal needs of large companies, corporations, institutions, and governments — will never be the same again.

Yet it’s worth pausing to think about the deeper implications of that message. Why does it say “triumphed”? Who’s rooting for the machine here, and why are they rooting against the human? What benefit is being created by the application of this new technology — and who will ultimately reap that benefit? Are we celebrating because a human lawyer will be liberated from drudge work and assigned to deliver wise counsel to sophisticated clients? Or is it perhaps more likely that that lawyer will instead be liberated from a steady paycheque, and that fewer rather than more opportunities for human judgement will result?

We live in an age when the ultimate goal of many corporate activities is to “enhance shareholder value,” a phrase that has become a mantra not just for corporate boards, but also for the equity shareholders of large law firms. But you know, not everyone out there is a shareholder, and not everyone is seeing their value enhanced.

There are some who instead characterize our era as “late capitalism,” and who suggest that we’re entering the decline phase of one system and the gradual emergence of something else, something new. Is either of these opinions correct? What mantras should we be adopting for an enterprise legal market populated by blockchain, digitization, smart contracts, and Reg/Sup/PropTech? What is the real purpose of lawyers in the intelligent machine age?

For lawyers, these are not academic questions, and we should not act as if they are. If you’re a lawyer whose career trajectory is likely to carry you up to or past the midpoint of this century, I believe these questions are vital for you to contemplate. The answers you come up with will determine not just the sort of work you find yourself doing, but also the ultimate ends towards which your efforts will lead you, your clients, and everyone else. This epilogue is intended to help you through that contemplation.

To my way of thinking, there are three critical considerations for you, the 21st-century lawyer, to ponder during this process of discernment — three factors that merit at least as much time and bandwidth as any other. These concepts are “System,” “Service,” and “Self.” Here are my thoughts on each.

1. System

Now and for the foreseeable future, enterprise legal services will be created and delivered primarily through systems. For our purposes, we can define a “system” as an organized structure of interrelated and interdependent methods, procedures and routines, created to carry out an activity or solve a problem. If that concept interests or even thrills you, you’re going to love this line of work. If it puzzles or bores you, you might have a problem.

The reason we’re talking about systems is that we are long past the point where enterprise legal needs can be fulfilled by individual lawyers, sequentially and in single file, working in longhand and billing by the hour. As this book has made clear, both the sheer scale and the growing complexity of companies’ legal and compliance challenges require equally scaled and complex solutions. Enterprise clients compete in high-pressure environments and operate within unforgiving timeframes. They cannot be served in the same way you would serve a family business or a private client.

That’s going to have a profound impact on the types of people who will be drawn to this sector of the legal market. Systems analysts, software coders, design thinkers, and engineers of all kinds will be a natural fit for enterprise legal. People who can grasp the big picture of what the client needs, who can envision processes and flowcharts and logic statements that generate solutions to those needs, and who can build and maintain robust frameworks to contain and run those solutions rapidly, repeatedly, and reliably — those will be the architects and superstars of the enterprise legal market.

If you feel that the foregoing characteristics don’t describe you, then it’s possible that your legal destiny lies in a different direction. But don’t walk away yet! Because it’s also possible, and maybe even likely, that there is a place for you in the enterprise legal market — an important place, in fact.

Analysts and coders and engineers can capture the big-picture needs of a major enterprise client, and they can design and build astonishingly complex systems to meet those needs. But there’s still a role for human judgment here, because no matter how inspired and intricate a system might be, there are two questions that must constantly be asked about it:

  1. Is the system doing what it’s supposed to do?
  2. Is what the system is supposed to do actually the right thing to do?

To be clear, many engineers and software architects have not only the skills required to envision and build effective systems, but also the talent required to monitor, scrutinize, and judge those systems. But not all of them do. The “how” of a system is not the same as the “why” of a system, and both of these inquiries need to be made of, and met by, a legal system on a regular basis. We’ll want to have different people with different skill sets making those inquiries.

Legal systems also age and atrophy and degrade over time. Minuscule errors crawl inside and inaudibly misdirect the intended flow of data or invisibly unravel the logics underlying the processes. Since we can’t see or hear the initial errors, we need to watch the results, over and over again, and ask ourselves whether our incredible machines are delivering their intended solutions and client outcomes. That will require the attention of people who:

  • can detect patterns within a system and find emerging variations therein,
  • have built strong relationships with clients that allow them to understand their goals and priorities, and
  • can integrate these two bodies of knowledge into an effective system assessment regime.

Those are lawyer skills, and they will be needed in the enterprise legal market. But there’s more; there’s also the need to ask whether a system that’s doing what it was built to do is achieving what it ought to be doing.

It’s a delightfully complex system. What’s it for again?

A powerful and widespread misconception is that if a machine or a system is generating results, those results are necessarily good and trustworthy, because the machine or system is unbiased and objective. You’ve probably heard someone cite the results of some automated process or other as proof in an argument or to defend a political position: “It’s all math, and the numbers don’t lie.”

But it’s not all math, of course, and it never has been. There are already countless examples of how sexism and racism is baked into algorithms and processes by programmers who don’t believe they themselves are sexist or racist, but whose experiences and biases inevitably guide their “objective” decisions.

This problem will become worse as machine learning and data-driven decision-making spreads to judicial, regulatory, and administrative systems (especially for poorer individuals who can’t afford customized assistance). A system that performs exactly as it’s designed, but that keeps rejecting valid compensation claims from people with non-Anglicized surnames, is a bad system. But will anyone notice?

The future of law, especially enterprise legal services, is without any doubt systemic. But systems need people to run them, to remedy them, and to remind everyone else that we build systems to serve people’s interests. And that brings us to our next point.

2. Service

The law is a service profession. Both historically and etymologically, the very notion of “profession” is grounded in service towards others for the greater good. If you’re a lawyer, your central purpose is to serve other people and make things better for them — principally your clients, but not exclusively, and not to the intentional detriment of others.

Now, if you’re engaged (or you plan to engage) in the enterprise legal market, where you’re working for corporations and institutions and governments, you might think the foregoing homily doesn’t apply to you. That kind of thing is for lawyers in family law, or wills and estates, or criminal defence — “People Law,” as it’s been described. Your job, by contrast, is to help grow shareholder value, or improve brand penetration, or eliminate unwanted efficiencies. You don’t serve people so much as you serve productivity. Right?

Well, you can answer that question for yourself. But if I might suggest something for your consideration: No matter how massive and global your clients, no matter how complex and high-value the transactions, no matter how sophisticated and AI-driven the systems you’re using, it’s all People Law. Shareholders are people. Employees are people. Individuals whose lives are irrevocably altered by enterprise legal decisions are people. And you’re not allowed to conveniently overlook them in pursuit of your legal duties.

I don’t think it’s deeply controversial to note that in many parts of the world, perhaps including the place where you’re reading this book, the quality of both private lives and public infrastructure has deteriorated throughout the last few decades. In a world where capital outperforms labour by a widening margin, the rewards of ever-greater productivity are shared by an ever-smaller number of people. Many influential individuals seem to believe that economic productivity should be society’s highest goal. They’ve forgotten that both private corporations and public institutions were created in order to make people’s lives better. They were built to serve us, not the other way around.

I have some news for you, and you can decide if it’s good or bad news: One of your functions, as a lawyer for the people who’ve forgotten this truth, is to remind them of it.

When a corporation or an institution repeatedly crosses the line of acceptable conduct and ends up ruining itself and others, a question that invariably arises in the aftermath is: “Where were the lawyers?” The answer, in most cases, is that the lawyers were either helping to facilitate the client’s actions on its road to ruin, or were studiously looking the other way, having persuaded themselves that it wasn’t their job to challenge the sustainability or wisdom or even morality of their client’s decisions. That the role of a lawyer is to make happen what the client decides should happen. That their job is to serve power, not speak truth to it.

That is the wrong conclusion to reach. It’s wrong because it flies in the face of a lawyer’s ultimate duty, which is not to his or her client but to the rule of law and the courts. It’s wrong because it surgically removes ethical and societal factors from the lawyer’s consideration, transforming the lawyer into a rote enforcer or a random subroutine in the larger system of productivity. And it’s wrong because many people, both inside and outside the corridors of power, can sense when something the client is doing isn’t quite right, and they will look to see what the lawyers are doing — and if the lawyers are simply sitting quietly with their heads down, then that’s what they’ll do as well. People follow our lead in murky ethical situations, whether we want them to or not.

You think maybe a good lawyer could have made a difference at some point?

I’m not talking merely about the obvious kinds of scandal and self-dealing, which make even the most battle-hardened lawyer pause and think things over. I’m talking about the unexamined assumption that if the client wants to do something in order to enhance shareholder value, that is the highest and ultimately the only goal worth considering, regardless of the human or social or environmental consequences.

This challenge is made even greater by the rise of systems in the enterprise legal space. It’s easier to call out bad behaviour by an individual than it is to call out bad programming in a system that “objectively” issues eviction notices to the most vulnerable members of the community. There is a role for the lawyer of a commercial client to flag the negative social consequences of the enterprise’s activities, to bring them to the attention of the client’s leaders and insist that they look closely at the human costs of those activities. Maybe the lawyer’s duties extend no farther than that. But they certainly do not extend any less.

Believe me when I tell you that enabling or tolerating socially corrosive activities is the most pernicious trap into which an enterprise lawyer can fall. And it is especially dangerous because it disguises itself as “service to the client,” a salve to your conscience and a False North to your moral compass.

So you need to remember, throughout your life as a 21st-century enterprise lawyer, that if you silently endorse or willingly enable a client to advance its own interests through harm to others or to the obviously greater good, you are losing your way. And as we’ll discuss in the next section, you are also in danger of losing yourself.

3. Self

Early in my career as a legal magazine editor, I wrote in an editorial that the most important person in your law practice was your client. Shortly afterwards, I received a letter from a health and wellness expert who took exception to that idea. The most important person in your law practice, he said, is you. Upon reflection, I’ve come to believe he was right.

It’s easy to overlook this fact — and at times, it can even seem noble to do so. Haven’t I just finished saying that the ultimate role of a lawyer is to serve others? Doesn’t this suggest that a lawyer should strive to diminish herself or himself, to substitute the good of others for the good of ourselves? That seems like it should be an attractive notion to a serving profession.

But self-diminishment and self-negation have proven to be destructive in all walks of life, and especially so in service-oriented professions like medicine and the law. What we need instead is a more fully developed sense of how we should regard our selves, and where we should place our selves, within the dynamic array of needs and priorities of the 21st-century lawyer.

Technology makes this goal more important, not less. The very first promise of the machines we build has been that they will make our lives better — that they will save us time and energy, allowing us to devote these precious resources to enhancing our freedom, leisure, and personal advancement. Raise your hand if you feel like technology has gifted you abundantly with these assets. Raise your other hand if you look forward to the rollout of a new technology in your office and how much you’ll enjoy the extra time it will provide you.

The truth, of course, is that even those technologies that really do save us time and effort rarely do so to our benefit, but rather to the benefit of our employers. Think of all the amazing technologies that have arrived in the law over the last couple of decades, from document automation to contract drafting to e-discovery: Have lawyers enjoyed a windfall of unallocated hours and clear horizons with which to better ourselves and those around us, or to engage in more fulfilling and higher-value endeavours? Or have those “freed-up” hours been immediately captured by others and filled with ever more work, all in service of “greater productivity”? Especially if you work for an employer who measures your productivity in hours billed, and for whom “freed-up time for you” is the last thing they want?

Machine learning and artificial intelligence are going to amplify and accelerate these trends and concerns. Remember that email from the legal tech company I quoted at the start: “AI has once again triumphed over a human lawyer.” Guess who the human lawyer in this story is.

So long as the prevailing philosophy of the corporate world is to prioritize profits over people, it’s going to be your responsibility to look out for yourself — and to look out for your self. There are two areas in particular where you need to focus your efforts.

One is the broad category of your health and wellness. You have to safeguard and strengthen them both. Previous generations of lawyers failed to do that, and they left countless unhappy lives, broken marriages, emotional breakdowns, and substance addictions in their wake. Quite possibly you were raised in a home afflicted by these ills; if not, you almost certainly know someone who was.

Now it’s your turn to run this gauntlet — but you can do better. You can reject the proposition that your highest or only function is to be a cog in someone else’s machine, to forever be on call for those who pay your wages, or to substitute your client’s judgment for your own on a daily basis. You can instead assert that your physical health, mental wellness, and emotional stability have value, apart from and above your work. You can invest in your health the way previous generations invested in CLEs and association memberships. This will pay off throughout the course of your legal career and your life.

But there’s another way in which tending to your self will be important: In understanding and applying your own unique value proposition as a lawyer.

The ironic effect of the rise of automation and systems in the law is that lawyers’ human qualities will actually become more important to employers and clients. Job interviews in the near future are likely to feature the question, “What can you do that our machines can’t?” Previous generations of lawyers shared a common set of basic skills that are now being automated and systematized, which means that from now on, a lawyer’s personal distinctiveness will be more valuable than ever. Your unique humanity will be your best selling point.

In a sense, this challenge will also be the great opportunity for your generation of lawyers. You’ll be able to re-engineer the blueprint, or reformat the DNA, of what it means to be a lawyer. But be warned: As systems and software proliferate, you will constantly be tempted to serve the machines that were created to serve us, to prioritize productivity over people.

You’ll have to resist and reject that temptation. You’ll have to lead the evolution of the lawyer’s role back towards the enforcement of positive social norms, the enshrinement and protection of personal dignity, and the pursuit of service to the improvement of lives. That leadership might be the greatest legacy of the 21st-century legal careers that you will build.

Conclusion

One final thought as we close this book. The greatest responsibility of being a lawyer is that what you do and say matters to many people, far beyond those who pay you for your services. It also happens to be a lawyer’s greatest privilege. That’s always been true of the legal profession, but the clarity of that truth will be especially evident in the 2020s, 2030s, 2040s and 2050s — throughout your legal career.

So here’s what I’d very much like you to remember: What you do matters. Who you are matters. When you speak out, it has an impact. When you fall silent, that has an impact too. Do not let yourself get lost in the noise and complexity of the machine; do not lose sight of the primacy and power of true service; do not lose who you are, and who you could be, amid the upheaval and disruption to come. Out of this chaos, you can forge new meaning and greater purpose. Out of the end of one era in the legal profession’s history, you can launch the start of another.

Your time is nearly here. The rise of the machines is almost over. Now it’s time for the rise of the lawyer.

You’re up.

The moral issue here

“I’m not worried about the moral issue here,” said Gordon Caplan, the co-chair of AmLaw 100 law firm Wilkie Farr, according to transcripts of wiretaps in the college admission scandal that you’re already starting to forget about. Mr. Caplan was concerned that if his daughter “was caught …she’d be finished,” and that her faked ACT score should not be set “too high” and therefore not be credible. Beyond that, all we know from the transcripts about Mr. Caplan’s ethical qualms is that “to be honest, it feels a little weird. But.”

That’s the line that stays with me, right through the “But” at the end. I want to tell you why, and I especially want to tell you if you’re a law student or a new lawyer, because it is extraordinarily important that you understand what’s going on here.

Mr. Caplan, who’s been placed on a leave of absence by his tight-lipped firm, was just one of dozens of rich, high-powered individuals now under indictment for bribery and mail fraud and such. I’m less interested in the two actresses who were arrested, however, than I am in the titans of industry who felt not just pressured to cheat their children’s way into prestigious colleges, but also strangely entitled to do so. Here’s a lengthier excerpt from the conversation between Mr. Caplan and the cooperating witness (the owner of the business running the con) who recorded him: [Emphasis added]

CW-1: What happened is, all the wealthy families that figured out that if I get my kid tested and they get extended time, they can do better on the test. So most of these kids don’t even have issues, but they’re getting time. The playing field is not fair.
CAPLAN: No, it’s not. I mean this is, to be honest, it feels a little weird. But.
CW-1: I know it does. I know it does. But when she gets the score and we have choices, you’re gonna be saying, okay, I’ll take all my kids, we’re gonna do the same thing. (laughing)
CAPLAN: Yeah, I will.

What the witness is telling Mr. Caplan here is that most of the rich-kid college applicants with various learning challenges who require extra testing time and accommodation — they don’t really have such challenges. It’s all a scam, you know. Political correctness run amok, everybody gets to have a disability of some kind these days, yada yada. And see, Gordon, all the rich people are taking advantage of this. They’re getting their kids bogus certifications that allow them to cut in line in front of you. Everyone’s doing it, Gordon. Everyone else is already cheating the colleges. All you’re really doing is evening the score.

Let’s set aside for a moment that the co-chair of a firm where the average partner earned $2,969,000 in 2018 can consider himself not one of “the wealthy families,” or the sheer irony that one of the richer and more powerful people in the profession really believes that the playing field is tilted against him. What’s really important to appreciate, I think, is that two things are happening here:

  1. Person A is telling Person B a series of lies.
  2. Person B wants to believe they’re not lies.

“It takes two to lie, Marge,” Homer Simpson once told his wife. “One to lie, and one to listen.” It’s a hilarious line, yes, but you know what else? It’s true. The effectiveness of a lie is directly proportional to the credulity of the person who hears it, and most people aren’t credulous because they’re stupid. I guarantee you the co-chair of an AmLaw 100 firm isn’t stupid. They’re credulous because they choose to be.

Most people believe the lies they’re told because they want the lies to be true. They want the world they live in to operate according to a series of principles and practices that make sense to them, confirming their suspicions, fulfilling their deepest wishes, and absolving them of blame for how they feel and what they do.

Lay it out, Leonard.

All the rich and powerful people who allegedly consented to participate in these crimes did so because they wanted to believe the justification that was offered to them. “You’re not really cheating. You’re just fighting back, refusing to be a sucker anymore while everyone else cheats to get ahead of you.” How intoxicating that is. How sweet and reassuring and vindicating. How interesting that it’s invariably people already overstuffed with money and power and privilege who’ll pay anything to buy that lie.

So why does any of this matter to lawyers, especially to young lawyers? Because of that one line I quoted.

“I mean this is, to be honest, it feels a little weird. But.”

Do you recognize that sound? That’s the sound of a person’s conscience, a lawyer’s conscience, struggling to make its voice heard.

This one apparently can’t muster much more than a twinge of doubt, a feeling of discomfort, a nagging sense of this isn’t right and I shouldn’t be doing it. It lasts for only a second, though, because the next word fatally undermines it. But. Yeah, I know, at some fundamental level, this is wrong. But.

It doesn’t matter what rationalization or justification follows the But, because at this point, it’s all over. The battle has been abandoned. If the next word out of his mouth had been So or Therefore, Mr. Caplan’s life would have gone in a very different direction.

You need to be able to recognize the sound of your own conscience. You need to listen to what it’s telling you, and not wave it aside with a But or an Anyway or a Nevertheless. You might be sitting there, fresh out of law school, saying, “No problem, I’m ready for whatever the practice of law wants to throw at me, I’ll stand my ground.” And I’m here to tell you, you have no idea what’s coming. You have no idea of the forces you’re up against. You don’t appreciate just how badly compromised the legal profession and law firm culture already are.

Does the name Ralph Kayser ring a bell with you? Probably not. Back in 2014, Mr. Kayser approached 16 lawyers at the most prestigious law firms in Manhattan as a representative of a government official in a mineral-rich African country who wanted to transfer a large amount of “facilitation money” into the United States without anyone from his country noticing it. You couldn’t have said “money laundering” any more clearly if you’d used a megaphone.

None of the lawyers took Mr. Kayser on as a client, but according to the ABA Journal, 15 of the 16 — including the then-president of the ABA itself — “offered advice on how [Kayser] could buy pricey Manhattan real estate without revealing his identity.” Here are some of their responses:

  • “So we have to scrub it at the beginning, if we can, or scrub it at the intermediary location that I mentioned.”
  • “We could provide you with the list of countries where the banking systems require less detail on ownership or source of funds.”
  • “And you don’t have to declare to bank authorities where the money comes from.”
  • “When I get money from my other clients, it always comes in with some strange name on it. I don’t even ask.”
  • “They don’t send lawyers to jail, because we run the country … We’re still members of a privileged class in this country.”

I want to pause here and remind you that the people saying these things are legal aristocracy. They are some of the finest lawyers at the most famous law firms in the richest legal profession in the world. Breathless articles are written when they change the firms they work at.

Mr. Kayser, as it turned out, was a plant — an operative from global NGO Global Witness who wanted to show just how easily such an obviously dubious offer could be entertained by the aristocracy of the US legal profession. Mission, as they say, accomplished. And even the one lawyer who rejected Kayser’s advances out of hand, Jeffrey Herrmann, was revealing in his dismissal. “This ain’t for me,” he said, “my standards are higher” — but left unspoken in his reply was the acknowledgement, “But it’ll be for someone else, whose standards aren’t.”

In his feature article for The Atlantic, “How Kleptocracy Came to America,” Franklin Foer made the following cutting observations about what the Kayser incident demonstrated:

“Global Witness conducted its experiment to point out BigLaw’s complicity in the spread of kleptocracy. But the footage also provides primary anthropology of an American elite. A profession like law has highly developed ethical codes, yet those codes appear to have receded in recent years. Even the most prestigious firms find themselves fretful about the survival of their high-priced business model, which was profoundly rattled by the 2008 financial crisis and the corporate cost-cutting that followed. Greedy impulses have surely always existed within the white-shoe world, but the sense of Darwinian struggle and the norms of a global elite have eroded boundaries. The same partners who shed underachieving colleagues more ruthlessly than they used to also seem primed to adopt a more permissive attitude toward clients whom they might once have rejected.”

Rip the privilege away from a privileged person and you create a very dangerous individual. Do the same thing to a profession steeped in rankings and prestige and money, where aspiration to elitism is held to be a virtue, and you create an extremely hazardous moral environment.

If you’re about to enter that environment, or if you’ve recently entered it, then I’m also here to tell you: Hold on to yourself. The ground is sticky and the slopes are slippery. You will be told various lies, and you need to know that they’re lies and not wish they were true. Here are some of them:

  1. “Everybody’s doing it.” No, they are not. I say to my teenage daughter, “There’s nothing in this world that everyone does. People can’t even agree on what kind of shampoo to use. If somebody tells you that ‘everyone’s doing it,’ that’s because they need the comfort and support of your co-conspiracy in questionable behaviour.” And she rolls her eyes and says, “I know, Dad.” But not everyone does. Not even in the AmLaw 100.
  2. “That’s how it’s done around here.” You can overestimate your daily billables count, you can order the secretary to work after you leave, you can gossip about a client in the coffeeshop, because that’s what the senior lawyers do all the time. While that last part might be true (frequently it is), the inference — local custom or firm culture supersedes ethical rules or moral dictates — is a lie. But you will find it an unbelievably hard one to resist.
  3. “The big clients deserve what they get.” I had lawyer friends at the start of our careers tell me sincerely that it was alright to file a false insurance claim because insurers were massive and rich and would never miss the money and probably cheated their policyholders anyway. The same logic fuels rampant overbilling on big corporate files every day. It’s a lie. Cheating a cheater doesn’t make you Robin Hood. It makes you a crook.
  4. “You work hard and you’ve earned a little something.” You know who works hard? The person who vacuums up the dinner you spilled at your desk, then goes on to work an overnight shift to support her kids while you go home to bed. And if she was ever so much as caught taking office supplies home with her, she’d be fired on the spot. And rightly so. And so should you be, for whatever quiet “perk” you talk yourself into “earning.”
  5. “It’ll look bad if you don’t go along.” If you don’t go along to the strip joint with the client. Don’t go along with the jokes about the new temp. Don’t go along with the senior partner’s temper tantrums. Don’t go along with the pressure to “review” that client memo for a few extra hours. You’re making the rest of them look bad when you don’t go along. But maybe, just maybe, that’s their problem, not yours.

Nobody is going to push you to soft-pedal potential money-laundering on your first day. That’s not how it works. It works by wearing down your defences on the smallest things, the littlest corners cut, the slightest concessions made. “Indeed, the safest road to Hell is the gradual one,” wrote Screwtape, “the gentle slope, soft underfoot, without sudden turnings, without milestones, without signposts.”

Wisdom from the other Mr. Keyzer.

You’ll be told to be practical, be realistic, to grow up already. If you listen, if you decide you want the lies to be true, then eventually you won’t need to be pressured to have a polite, informative conversation with a scoundrel about money laundering. You’ll do it yourself, naturally, without a second thought. And one day you’ll find yourself on the phone, saying that a certain proposition makes you, to be honest, feel a little weird, but.

This is not just for people in BigLaw. This is for everyone in every size law firm or law department, anywhere in the world. Your time will come. Your standards will be tested. Your loyalty or pragmatism or intelligence will be questioned. And you will feel such reluctance, such disinclination, to be the glaring exception. You will want to believe all the rationalizations offered to you. You will want the lies to be true because it’s easier that way. You will even find words like I’m not worried about the moral issue here on the tip of your tongue.

When (not if) that day comes, pause and listen for that voice. It’s the one that’s whispering, This isn’t right and I shouldn’t be doing it. Listen to it, consider what it has to say, take it seriously. And if you find, as is usually the case, that the voice has a point, then do not allow the next word out of your mouth to be But. Do not undercut your conscience when it’s come through for you at crunch time. Make the next thing you say be So or Therefore or It’s not for me, my standards are higher.

You’re a lawyer. Even if nobody else around you seems ready to live up to that privilege, make sure you do. Your conscience deserves it. Your profession needs it. And your career might hang on it.

The ethics of innovation

Earlier this year, a legal periodical called me up and asked my opinion of third-party litigation financing. As you might know, my view of this particular innovation (detailed here on three previous occasions) is not a wildly enthusiastic one, and I said as much, at some length. Shortly after the article was published, I was contacted by a representative of a litigation financing company, who invited me for coffee to discuss the industry and exchange some facts and opinions about it. Since I’m partial to new perspectives and sworn to coffee, I agreed.

In the event, two people from the company met me at the local Starbucks, and we had what I think was a good conversation. They were sincere, well-informed and reasonable, and I came away more favourably disposed towards their company, given what they described as their careful evaluation of the kinds of cases they take on. I learned some things I didn’t know (for example, litigation financing emerged in Australia, where contingency fees remain prohibited). They shared my views on the shortcomings of our present litigation system and they cared about improving access to justice, so there was certainly common ground between us. (You can see the “But” coming, I’m sure.)

But, for all that, I don’t think either side managed to persuade the other towards its perspective, and I suspect much of that was down to the irreconcilably opposed premises with which we approached the subject. I have a baseline aversion towards the encouragement of litigation, as I think we should do what we can to discourage it; they believed legitimate cases should have the chance to be aired before the courts. I have philosophical and ethical objections to disinterested third parties financially supporting private litigation in exchange for a share of the proceeds; they did not. I feel that the proliferation of third-party litigation financing would put an end once and for all to public funding of access to legal services, as governments would come to say that “the private sector can address that”; they said the type of commercial cases they support wouldn’t be eligible for public funding. So while our talk was cordial and informative, there was probably never much chance our minds would meet.

But as we were gathering up our cups to leave, a thought occurred to me (much like Oscar Wilde, I often think too late of smart things to say). Over the course of our conversation, my interlocutors had consistently referred to litigation financing as a way to “level the playing field” between impecunious plaintiffs and rich defendants. And of course, that’s a powerful concept, and who could argue with it? But something about it had been nagging at me, and I finally figured out what it was.

“What would happen,” I asked them as we stood to leave, “if third-party litigation financing was used not to level the playing field between two unequal parties, but specifically and intentionally to imbalance the playing field between two otherwise equal parties? Is there any reason it couldn’t be used for that purpose?” If we’d had another hour, we might have taken that thought in interesting directions, but time was pressing and we didn’t have the chance to explore it further.

A few weeks after this conversation, a man named Terry Bollea won a defamation and invasion of privacy lawsuit in Florida against a company owned by a man named Nick Denton. You might know the case better as Hulk Hogan’s $140 million verdict against Gawker for publishing sex-tape footage featuring Hogan in 2012. What became apparent soon after the verdict was that Silicon Valley billionaire Peter Thiel had financed the litigation as part of a feud stemming from Gawker’s outing of Thiel as gay in 2007. “It’s less about revenge and more about specific deterrence,” Thiel told The New York Times. Denton has since declared bankruptcy and Gawker has shut down.

I know it's hard to believe, kids, but Charlie Sheen was once a bankable movie star.

I know it’s hard to believe, kids, but Charlie Sheen was once a bankable movie star.

Now, there’s a lot to unpack here. I’m pretty much the last person who’ll defend the kind of “journalism” practised by Gawker, especially in its later years, when it seemed to lose any sense of what it was trying to accomplish beyond embarrassing people (I’m inclined towards Jeff Jarvis’s views on that subject). But it’s hard to escape the reality that a billionaire used the courts to kill a publication, not in a case that personally involved him, but in a case to which he had no connection other than sharing the plaintiff’s animus towards the defendant. There wasn’t even a financial return behind the “investment”: Thiel has been quite clear in interviews that Gawker’s destruction was not a side effect of the litigation, but its purpose. (And Thiel is now helping launch a litigation finance company himself.)

If you have any kind of rooting interest in a free press unafraid to uncover important things about powerful people and institutions, the Gawker case should thoroughly unsettle you. Gawker makes an easy villain; but suppose a local paper is pressing a powerful property developer a little too hard, or an online industry watchdog learns about a history of sexual exploitation by a major celebrity. Or go beyond media: if incredibly wealthy people can pursue personal vendettas by leveraging our dysfunctional litigation system to ruin someone’s life, and succeed, then I think we’ve completely lost sight of why we even have a litigation system in the first place.

But my larger point is this: we need to remember that every innovation is a double-edged sword, with the potential to do a lot of good and at least as much harm. We’ve always understood and accepted this in theory, but now we have to grapple with two additional, very practical considerations.

The first is that when considering any new innovation, no matter how highly sung its praises, we always have to ask ourselves: “What if bad people use it? What if reckless people use it? What if it were put to its least valuable and most destructive uses?” Because the worst case is going to happen — in law just as in the world at large. And we have to decide if, and to what degree, we’re morally ready to live with the consequences of that worst-case scenario — especially because we won’t always be the ones on whom those consequences will be visited.

I’m not looking to make litigation financing companies wear the goat horns for Thiel’s perversion of the justice system (from which they’ve striven to distance themselves). But I’d like to think the Gawker case would give the industry serious pause, and encourage it to reflect on whether it really is helping “turn the courts into casinos,” as its critics charge. If the industry chooses not to do that, then it will have missed a major opportunity and created significant future risk, not just for itself, but for a whole lot of other people.

And the second consideration is that innovation in the legal market has now progressed to the point that, in addition to principled arguments on these subjects, we now also have access to test cases. We can now start to see what the real thing looks like, and it’s not always pretty.

I don’t think most people in the litigation finance industry foresaw the Gawker case or would welcome it if they had, but there it is all the same. I doubt most of us who supported the ability of law firms to seek public financing foresaw or welcomed the smoking wreck of Slater & Gordon, but there it is all the same. I wrote, in that linked article, that the lesson to be drawn from Slater & Gordon’s catastrophic flameout is not to ban non-lawyer ownership, but to closely and carefully study its example. Conduct a thorough examination of both the first great success and first great disaster of public ownership, and learn whatever lessons are necessary to help the next firm to try this innovation get it right. I think we need to adopt that approach across the legal innovation spectrum.

I believe that selling shares in law firms should be allowed, because the ethical challenges have so far proven manageable (Slater & Gordon’s failure was caused by a business error, not an ethical one), and because law firms will need access to deeper pools of cash than partnership equity alone can provide. I also think that third-party litigation financing should be strongly discouraged, because at the end of the day, it’s really just an investment vehicle whose operating principle (give everyone equal access to enough cash to pay lawyers and continue litigating) would permanently entrench in the legal system its worst fault, the paramount and perpetual indispensability of money to any hope of obtaining justice.

Now,  I could be right or I could be wrong about both these things. I’ve had the arguments before and I’ll surely have them again. But we don’t have to debate this only in theory anymore. Let’s look at what’s actually happening and make whatever adjustments that honest and serious reflection demands.

I’m willing to take that approach to public financing of law firms after Slater & Gordon. I hope advocates for third-party litigation financing are willing to take that approach following Gawker. And I’d like to urge you, regardless of the legal innovation you favour, to do the same. “What’s the worst that can happen?” That line is usually read as a joke. Ask yourself that question in all seriousness — and in all seriousness, answer it.

Law firm ownership and lawyer independence

Malcolm Mercer, who’s been a driving force in the debate around legal service regulation changes in Canada, wrote a terrific post at Slaw titled “A Different Take on ABS – Proponents and Opponents Both Miss the Point.” Malcolm’s post galvanized a lively exchange in the comments section, to which I was drawn and compelled to add some thoughts on two separate but related aspects of legal market liberalization: (a) the affordability and accessibility of legal services, and (b) lawyer ethics, professionalism and independence.

I’ve already written about accessibility elsewhere at Law21, and you can refer to my comments on Malcolm’s article for more. But I thought I’d expand here in some more detail on the second point: the impact of regulatory change on lawyers’ professional conduct. The spectre of “non-lawyers” owning equity in law firms has led some practitioners to express grave concerns about the survival of our ethical standards, and about the wisdom of allowing “non-lawyers” to deliver legal services at all. I think that before we can dive too deeply into these questions, we need to step back and look at the bigger picture first.

Generations ago, lawyers were granted the privilege (not the right) of self-regulation. Using the powers assigned to us through that privilege, we developed, published, and strictly enforce on ourselves several behavioural codes that we refer to collectively as “legal ethics.” (For clarity, “ethics” here refers to explicit normative standards of conduct, rather than the more colloquial sense of “moral behaviour.”) Among the standards we enforce through ethical codes are:

  • service above all to the courts and the rule of law,
  • complete confidentiality of client information,
  • loyalty to client interests, as expressed through conflicts rules, and
  • independence of our counsel from outside influence.

These rules are meant to guarantee to clients and to society generally that we serve the greater good and advance the interests of our clients without partiality. They’re part of the quid pro quo of self-governance: we hold ourselves to very high standards so that no one else feels compelled to step in and hold us to theirs. Nobody, in the continuing debate over liberalization of law firm ownership rules, contends that these standards and goals are obsolete or unnecessary. (Indeed, in the multi-player market that’s coming our way, our ethical standards will nicely double as a competitive advantage.)

Lawyers tend to raise two ethical objections to the changes in legal regulation that have occurred in Australia and Great Britain and that have been proposed in the CBA’s Futures Report. The first is that “non-lawyers” are not bound by lawyers’ ethical standards, and therefore the risk is too great that their clients’ interests will not be protected and may even be abused. The second is that allowing “non-lawyers” to own equity in a law firm fatally compromises our duty of loyalty to the courts and to our clients, because the lawyer will be bound by an additional, higher duty to advance the interests of these “non-lawyer” shareholders. Let’s look at these objections in turn.

1. “Non-lawyer” unfitness: There is, to begin with, a strong case to be made that “non-lawyers” are fully capable of conducting themselves with the integrity and impartiality we expect from lawyers, not least because exploiting or abusing one’s customers is a terrible way to run a business and a good way to wind up in jail. I’ve written before about the specious and self-serving nature of the “non-lawyer” category into which lawyers place everyone in the world except us. But let’s assume, just for argument’s sake, that “non-lawyers” will pose a genuine risk to their clients’ and customers’ interests.

It’s not entirely clear to me why this would be something that should concern the legal profession. Those who hire “non-lawyers,” in the multi-participant legal market of the near future, are not our clients, and we owe them no professional duties. Nor are we their parents or guardians. They’ll have made a choice to hire someone who isn’t a lawyer, and they can reap both the rewards and consequences of that choice. Fundamentally, it’s none of our business.

Lawyers have been granted the privilege of regulating ourselves; nobody, however, has ever granted us the privilege or assigned us the duty to regulate anyone else. (With two exceptions: independent paralegals in Ontario and limited license legal technicians in Washington State.) In almost all cases, law societies, state bars, and other regulatory bodies are not directed in their founding documents to “protect the public.” They are directed to “govern the legal profession in the public interest.” Those are two different mandates. If someone wants to hire a “non-lawyer,” and the “non-lawyer” accepts the engagement, it seems to me that that’s their business, not ours.

2. Corruption of lawyer ethics. This objection, on its face at least, has more merit. It’s reasonable to be concerned that the presence of “non-lawyers” in the ownership structure of law firms could pose a threat to our duties to clients and our independence from outside interests. Even a small risk in this area should be taken seriously, because of the enormous importance of lawyer independence to our professional existence and to the rule of law. But simply because this risk is real and serious doesn’t automatically mean that identifying it is enough to end the discussion. If it’s a risk, let’s look at whether and how it can be managed.  [do_widget id=”text-7″ title=false]

We should isolate, for this discussion, the operation of in-house or public-sector law departments, which very clearly are owned and operated by “non-lawyers.” We’re concerned here with the private bar, providing services to lay clients for whom we assume (though not always correctly) a low level of sophistication. The principles at play in these workplaces are not fully applicable to this conversation — although it’s at least helpful to note that the mere presence of “non-lawyers” in the ownership and financial structure of their “clients” has not been fatal to the independence of these lawyers. “Non-lawyer” status is not an airborne disease.

As it happens, we have an example of a large, multi-national law firm with “non-lawyer” equity owners: Slater & Gordon. If you review the firm’s initial public offering prospectus, you’ll find that among the “risks” disclosed to potential share-buyers was their tertiary position in the firm’s loyalties: the courts first, clients second, shareholders third. Those who buy stock in Slater & Gordon acknowledge and accept that, unlike other businesses where “shareholder value” is (perversely, in my opinion) the only objective, investing in a law firm means accepting a much-reduced level of influence and importance.

I’m not aware of any ethical difficulties Slater & Gordon has experienced, or any accusations that have been made by clients or judges, that public ownership of the firm has corrupted its lawyers’ professional duties or harmed their clients’ interests. The emergence or revelation of such problems or accusations could indeed pose a serious challenge to advocates of “non-lawyer” ownership. But equally, the absence of such problems or accusations, over a period of several years, in two different countries, ought to be factor in the discussion as well.

It seems to me that whether a law firm is owned by lawyers, by “non-lawyers,” or by Martians, the lawyers in the firm still operate under the auspices of lawyer regulation. (Under “entity-based” regulation, which is already in place in Australia and the UK and appears to be coming to Nova Scotia, the firm itself will be bound as well.) If a  regulated lawyer breaks a professional standard, for whatever reason, she will be investigated and punished. Whether her cheques are signed by the managing partner lawyer or by a corporate payroll employee, she is still on the hook for what she does and doesn’t do to advance her clients’ interests and serve the rule of law. There will be no exception granted to a law firm owned in whole or in part by “non-lawyers”; if anything, I expect that ethical scrutiny of such a firm would be several degrees more intense than for lawyer-owned firms.

Now, it might be objected that the influence of a “non-lawyer” equity owner would be more subtle and pervasive than that. The “non-lawyer” would not directly order a lawyer to drop a case or reveal a client confidence on the record; instead, he or she would influence, by their very presence and through various innocuous but well-timed remarks, that perhaps the firm should pursue a different course or be more open about a client’s position. I have two responses to this objection.

First, if we’re now guarding against invisible, inaudible, and theoretical risks to lawyer independence — “this might happen and there’d be no way to prove that it didn’t” — then I think we can concede that the clear and present danger of this risk is not readily apparent. We’re now moving out of the zone of probability, which is a fair and legitimate battleground, to one of possibility, which is unanswerable: no one can ever prove that something undetectable will never happen. And secondly, the assumption at the heart of this objection is the same as the the one above: that “non-lawyers” are less trustworthy, less honourable, and more mercenary than lawyers are — and conversely, that lawyers have more integrity, character, and selflessness than “non-lawyers” do.  I don’t find this line of reasoning especially sound or especially attractive.

As I’ve already noted, I’m not dismissing out of hand the risks posed by regulatory overhaul to lawyer independence: the concern is legitimate, and the stakes for the legal profession are stratospherically high. The case for either side of the debate is not so slam-dunk obvious that further discussion is unnecessary. We should continue to engage on these issues. But let’s engage on probabilities, not possibilities; evidence, not worries; what we know and can reasonably, sensibly anticipate, rather than on what we fear. The right answer is out there. Let’s go find it.

Jordan Furlong is a lawyer, consultant, and legal industry analyst who forecasts the impact of the changing legal market on lawyers, clients, and legal organizations. He has delivered dozens of addresses to law firms, state bars, law societies, law schools, judges, and many others throughout the United States and Canada on the evolution of the legal services marketplace.

The trusted advisor

My collection of prized possessions is extremely small — the feature item is probably a ticket stub from Game 6 of the 1993 World Series (Joe Carter’s home run off Mitch Williams). Among that narrow collection, you’ll find a personally inscribed copy of David Maister’s last book, Strategy and the Fat Smoker, and if your passion is making the legal services marketplace better for both lawyers and clients (as mine is), you’ll understand why. A remarkable number of very successful lawyers and law firm leaders have a copy of one of David’s groundbreaking books, such as True Professionalism or Managing the Professional Services Firm or The Trusted Advisor (co-authored with Charles H. Green and Robert M. Galford), on their bookshelves. His status in law practice management circles can fairly be called institutional, and unfortunately for us, the new year has brought word of the institution’s closure: David is retiring from consulting, speaking and writing on professional service delivery.

My own interactions with David Maister have been only glancing — he contributed a fine article to a College of Law Practice Management e-zine on innovation that I edited in 2006, and he generously gave me a credit in his last book for some very slight suggestions I contributed. But his influence on me and his impact on a generation of legal professionals have been profound — not only through his practical guidance and his contributions to a rational law practice business model, but for the principles he constantly advanced as essential to excellent professional service. David exhorted lawyers and accountants to stay true to the highest standards of trustworthiness and ethics and to focus relentlessly on serving the client’s best interests. Continue Reading

E-document ethics and the rise of regulation

It’s been a great week for conversations with Law21 readers, because I’ve also had a terrific correspondence with John Gillies, head of Practice Support at Cassels Brock in Toronto. John brought to my attention an opinion issued this past summer by the New York City Bar Association regarding lawyers’ ethical obligations to retain and provide clients with relevant electronic documents.

The obligations set out in the opinion, while not unreasonable in any broad sense, set a markedly higher standard of conduct than many firms are currently maintaining. I think they’re noteworthy for two reasons: one, because firms with offices in New York (which include many global giants) are now bound by these standards (which could well become the de facto standard in other jurisdictions); and two, because we’re going to see a lot more of this: regulation of lawyers’ conduct regarding their work and their clients.

The NYC Bar asked itself the following questions:

What ethical obligations does a lawyer have to retain e-mails and other electronic documents relating to a representation? Does a lawyer need client permission before deleting e-mails or other electronic documents relating to the representation? When a client requests that a lawyer provide documents relating to the representation, may the lawyer charge the client for the costs associated with retrieving e-mails and other electronic documents from accessible and inaccessible storage media?

Read the whole opinion for the complete answer — it’s not long — but the gist is that standards that currently apply to storage and access of paper documents apply equally to e-documents. That might sound like common sense, but think about the impact. The electronic documentation that any given client matter produces is massive: emails to clients and colleagues, draft versions of memos, timekeeping records, Blackberry messages, and so on. If you printed out every e-document and added it to the case file (and please don’t), that file would be about ten times higher.

Here are some highlights of the opinion’s specifics (emphasis added throughout): Continue Reading

Conflicts and the law of unintended consequences

The Recorder reports this morning on the rising number of law firm requests that clients sign broad advance waivers (or blanket waivers) that would allow the firms to act against those clients on future unrelated matters. Firms, looking to maximize the amount of business they can take on, are trying everything they can think of to get around conflict of interest rules. Clients, reasonably enough, won’t sign anything that could impair their interests down the road if they can help it.

Clients’ responses to these requests vary according to the size and leverage of both firm and client. Large clients routinely blow them off, because they can — the lawyers need their business more than the clients need these particular lawyers. Smaller clients have less leverage, so if they want to hire big firms, they pretty much have to live by the terms those firms dictate. I can see a couple of trends emerging from this, neither of which is good for large firms and both of which reflect the unintended consequences of size.

First, when a firm is so big that it has to go begging for the right to sue the client in future, the client will correctly diagnose this as a vulnerability that can be exploited. Instead of simply refusing these requests, clients will start calculating just how much (or little) they actually risk by granting such a waiver, and how much the firm has to gain by it. The client might then say to the firm, “Sure, we’ll grant you the waiver — and in return, you’ll knock 15% off all your fees and pick up the costs of a new extranet system.” Large firms’ vulnerability to conflicts is going to cost them at the bargaining table. Continue Reading

Lawsuit investment and the limits of innovation

As you probably know by now, I’m a big fan of innovation in the law. But there’s good innovation and there’s bad innovation, and what’s emerging in the litigation field in the US and the UK looks to me like it belongs in the latter category.

LegalWeek reports that UK hedge funds are lining up to provide funding for lawsuits. This idea in itself isn’t breaking news: several US companies, often backed by massive hedge funds, already provide financing for plaintiffs in personal injury suits — and arguably, contingency fee arrangements in class actions accomplish the same end, providing funding in return for a piece of the expected damages award. Hedge fund investments in plaintiffs’ lawsuits has recently spread to the UK. But this newest British development contains a twist: the investors are looking to finance the defendant.

Here’s how LegalWeek‘s Editor’s Blog explains it:

The investor is likely to be a hedge fund or special situations fund looking to make high-risk investments. The investor gets a fee or premium and effectively offers to fund a substantial chunk of the defendants’ liability. The attraction for defendants is hedging and managing their exposure, despite higher upfront costs. And by introducing an outside investor that will look at a legal opinion to gauge the merits and risks of the claim, a company can effectively put a ‘market price’ on their litigation risk.

The concept of a market in plaintiffs’ lawsuits has its supporters, who contend that the benefits include creating a more level playing field between plaintiffs and defendants and bringing market-driven risk assessments to evaluate lawsuits’ chance of success. Opponents cite concerns about champerty and maintenance, though it seems to me these prohibitions have not been pursued enthusiastically by governing bodies and have lost some of their force over time (lawsuit investors argue that they’re not instigating lawsuits, which is forbidden, but financing suits already underway, which seems a distinction bordering on the specious).

There are access-to-justice arguments in favour of allowing plaintiffs to seek financial backing to bring a claim and sharing the rewards with those who do so, and reasonable people can differ on this. But when defendants start looking for investors as well, I start getting worried. Continue Reading

Professionalism revived

If you’re interested, here’s a version of the remarks I delivered this morning at the Chief Justice’s Colloquium on Professionalism here in Ottawa. Many thanks again to the organizers for inviting me to speak!

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When we talk about professionalism, we can start getting bogged down, because it’s a word that means a lot of different things to different people. Now, in my case, I’m an editor, I’m an English major, I’m basically a word geek – I gave up Scrabble for Lent, if that helps put it in perspective. So to prepare for this event, I did what word geeks do: I went out and looked up “professionalism” in the dictionary. And what I found there was that the Latin root of “professional” is profiteri.

Profiteri has two components: pro, which means “forth,” and fateri, which means “confess.” Taken together, they mean “to announce a belief.” It has religious roots – its original use was to bind yourself, publicly, by a vow or oath, to a vocation or higher purpose. When the word began to filter into wider use, it was applied to occupations, but only to those that involved the same sort of considerations as religious vows: service, selflessness, higher purpose – generally, making things better for others. Originally, only three occupations qualified as professions: ministry or theology, of course; medicine; and law.

So when we talk about traditional standards of professionalism, it’s important we remember we’re not talking about excellence, or good manners, or “total quality management” – or at least, not primarily about that kind of thing. We’re talking about serving the interests of others, prioritizing them above ours for a greater cause.

For a while now, we’ve been talking about a decline in professionalism in the law, or the loss of professionalism. And generally, these discussions have tended to center around things like uncivil behaviour by lawyers, or an unseemly focus on money, or a lack of proper respect for the court, that sort of thing.And it’s good that we’re looking at these things, because they’re real problems, and some of them are serious. But to my mind, they’re really all symptoms – they’re not the underlying disease. There’s a bigger cause behind these effects. Continue Reading

Conflicts for “sophisticated clients”

When Clifford Chance General Counsel Chris Perrin talks about conflicts of interest, lawyers pay attention. The man whom the Financial Times calls the “czar” of conflicts has been working on the subject for nearly a decade, most recently as chair of the City of London Law Society’s Committee on Professional Rules and Regulation. It’s in that capacity that he has now called for a “significant widening of client conflict rules,” according to a story in today’s edition of The Lawyer:

Currently the rules permit law firms to act on conflicting instructions only where the clients share a common interest and consent or where two clients are competing for the same asset, such as in an auction sale. “In addition to these two exceptions,” proposed Perrin, “there should be a wider exception to be used by sophisticated clients, which would enable them to waive conflict in any circumstances.”

Perrin argued that if two sophisticated clients want to get a deal done and both have historically used the same firm, it is impeding their desire to get the transaction done to prevent them from using that firm. And if both parties are happy that a firm will look after both their interests, he said, there is no reason why it should not. The proposed definition of ‘sophisticated clients’ would include clients, which have received independent legal advice or which have in-house legal departments and the exception would not apply in litigation matters.

This rang a bell with me, and sent me off into National‘s archives to find an article published in the March/April 2004 issue (not online, unfortunately) about a proposed change to the Law Society of British Columbia’s professional conduct handbook. Proposed Rule 6.3.1 would have enabled lawyers to act against current “sophisticated” clients without their consent if (a) the matters are substantially unrelated and (b) the lawyer has no confidential information that might reasonably affect the other representation. (The law society’s contemporary bulletin on the subject provides more information.) Continue Reading