Thursday, May 19, 2011

Should Non-Lawyers Own Law Firms?

Over at Above the Law, Elie Mystal argues that it makes sense for non-lawyers to be able to own law firms. I think he is absolutely right. Law firms would be much more efficient if they were run by actual business people. Therefore, the idea that they should only be run by lawyers is not quite right.

As far as the professional responsibility idea that lawyers could not possibly remain ethical if they worked in a firm run by non-lawyers, that just does not make sense. In-house counsel work for non-lawyers, and they usually remain ethical. Government lawyers might find that they can be fired by a non-lawyer, depending on the credentials of their boss, and they still usually remain ethical.

A junior associate working for a law firm, in contrast, might not be ethical despite working for a lawyer or set of lawyers who own the firm. Indeed, such a lawyer might even find that they are encouraged by their superiors to do unethical things, despite the fact that their superiors are also lawyers. It is ultimately the junior lawyer's responsibility to resist in such situations.

Ultimately, it is the responsibility of every lawyer, regardless of their position in the food chain, to maintain their own ethics. The idea that if a law firm were owned by a non-lawyer that this would be inherently corrupting is simply insulting. It is no different than when a very important client, another lawyer, or a company you work for and that you depend on economically demands that you do something unethical. As an individual, every lawyer must exercise his or her own professional judgment and refuse to do anything that is unethical. The idea that lawyers are so ethically weak that they would somehow succumb to unprofessional pressure if they, heaven forbid, worked in a law firm run by non-lawyers is actually an insult to the entire profession and the individual lawyers in it.

Ultimately, the people most hurt by the backwards restrictions on the ownership of law firms are consumers who end up being priced out of the market for legal services altogether due to the high prices that result due to inefficiencies that arise because lawyers are running law firms. It actually is a major injustice.

So I agree with Elie here. It is time for the profession to change its ways, move into the 21st century, and embrace maximally efficient business practices. That means that law firms owned by lawyers who chose to get a J.D. rather than an M.B.A. should have to face competition from law firms owned fully or in part by non-lawyers. And you know what, I really wouldn't be surprised if such law firms delivered the same or better quality for less.

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