Not that it comes as any surprise, given the financial pressures many lawyers face and their facile ability to rationalize why that which puts money in their pocket isn’t evil at all, but still, it’s a shocker.  Via the Turk at New York Personal Injury Law Blog, the forward-thinking State of North Carolina has a bill before its legislature to allow non-lawyers to own law firms.

The proposal has some limitations designed to  address concerns. 

The bill introduced March 9 by Fletcher Hartsell, a Republican and lawyer, would allow non-lawyers to buy up to 49% of a firm, leaving it in control of licensed attorneys. (It came to my attention via AmLaw.) The bill, which would also allow outside investors to buy into accounting firms, includes language designed to prevent non-lawyers from interfering with the relationships between attorneys and their clients. Non-lawyer shareholders would be barred from interfering “with the exercise of professional judgment by licensed attorneys,” and in the case of a dispute among lawyers, shareholders and clients it shall be resolved according to the following schedule:

1. The duty to the Court shall prevail over all other duties.

2. The duty to the client shall prevail over the duty to shareholders

 That language is designed to allay concerns that lawyers would answer to investors instead of their own clients, or the courts of which they are considered officers.

Well that seems clear enough, ignore the people who are pumping money into your law firm because the rules say the client comes first.  What could go wrong with that?

As ethics expert and legal blogger Larry Ribstein put it here, far more eloquently than I could:

The rules are purportedly based on the notion that nonlawyer owners insufficiently imbued with professional standards would transform law firms from citadels of altruism into profit-hungry businesses.

Ribstein argues these rules are anachronistic and “limit the market for legal skills.” Instead of watching Goldman Sachs lure away the best lawyers with offers of higher pay, he suggests, why not let Goldman buy the whole firm and run it with the same attention to the bottom line as it applies to investment banking?

No doubt that’s because of the deep concern for altruistic Goldman Sachs demonstrates in the management of its own business.  Just ask  Sergey Aleynikov about Goldman Sachs’ concern for others.

Granted, law firms want to make a profit, and in the eyes of many are already “profit-hungry businesses.”  But if so, then why is there a need to change the rules? The fact remains that law firms, even Biglaw, tempers its hunger with substantial pro bono activities.  Whether you want to call it noblesse oblige or marketing, it happens.

As Eric the Turk points out, however, the interests of non-lawyer investors won’t be subject to the rules constraining lawyers in his niche, personal injury.

When the disciplinary committee comes a callin’, they will profess to be shocked, just shocked, at how their firms’ names were given to potential clients.

Let me show you how this works in the real world. This past weekend there was a horrific bus crash in the Bronx that killed 15 people. And attorneys are prohibited under New York’s 30-day anti-solicitation rules from approaching any of the injured victims or next of kin.

So how can lawyers work around this? By using marketing firms to launder their ethics.

And that’s how ethics are circumvents now, by those so inclined.  Add non-lawyer owners to the mix, and it slides downhill fast.  After all, the non-lawyers don’t report to the managing partner.  They aren’t subject to the nasty stares of the disciplinary committee.  Non-lawyers can thumb their noses at legal ethics, and make sure that they do everything necessary to make sure the bottom line is profit.

It’s no stretch to see how this could play out in criminal law, where guarantees of outcome could be sold like commodities futures.  How much does a winning witness cost these days?  And what is the price of silence for that poor crime victim?

Ribstein’s focus on the bottom line, and what he sees as the “brain drain” of lawyers from practice to profit, is bolstered by his couching his views in pejorative language, “citadels of altruism.”  It’s true that law has fallen off the wagon of being a profession with a fundamental obligation toward serving clients, but is the proper response to run as far away from the wagon as possible?  In the view of some, well, that’s absolutely how they see it.  Abandon all hope and do whatever it takes to cash in.

On the other hand, the assumption that the brain drain is a bad thing may be very short-sighted.  We’re awash in hungry lawyers as law schools keep churning out more than society can absorb.  Law schools need to fill chairs as academic profit centers and to keep their lawprofs’ Ferraris adequately serviced.  The ABA sees no problem.  Ever. 

Young lawyers (with massive loans to repay, as we’re perpetually reminded) demand their right to make money.  They are entitled, therefore,to anything that offers the promise of making money.  And as I’m told, it’s only  curmudgeons like me (and Mark Herrmann) who are standing in the way of their getting rich by throwing roadblocks like excellence, client service and ethics in their face.

The underlying problem, which cash-obsessed lawyers fail to recognize, is that they never should have been lawyers at all.  It’s hard to practice law.  Being a professional requires sacrifice, dedication to someone other than yourself.  it’s fine that some people don’t have a feel for such things, but then they have no business being lawyers.  Let the brain drain happen, and let’s rid the ranks of the legal profession of those who elevate profit over dedication to their clients.  They never should have been lawyers to begin with, and their loss is not only a non-problem, but a benefit to those who remain.

Whether the future of law firms is in equity, debt or just a return to the practice of law rather than praying at the alter of profit, is a question on the table these days.  Those who argue that the traditions of a profession are archaic relics of a dead society, and who simultaneously lust for lucre, should take their expensive educations and put it to good use.  Just not as lawyers. 

Let investors buy up firms of lawyers, who do anything but practice law.  Let them enjoy each other’s company and make fun of us curmudgeons.  We can take it.

And with that in mind, some song for thought.