After reading in the New York Times about how well law firms are making out in the bad times, the thought of taking the plunge on some law firm shares came to mind.
But there don’t appear to be any publicly-traded law firms because
It’s against the rules, for one. Ethical rules i.e., the American Bar Association Model Rule 5.4 prohibit firms from selling equity shares in law firms to non-lawyers. Specifically, it says that a lawyer shall not share legal fees with a non-lawyer. The problem legal ethics types wrestle with is that as a public company, a law firm would have a potential conflict between its duty of loyalty to its clients and its duty of loyalty to its shareholders. Another reason: Lawyers also vigilantly protect the attorney-client privilege, and many fear that by being a public company, a law firm could risk divulging client confidences.
Ok, but at least one lawyer thinks it’s possible. “I would be surprised if in my lifetime we didn’t see a law firm go public,” says Greenberg Traurig’s Leslie Corwin, who advises law firms on business issues. “And I hope I’m around to do the deal.”
“But consider, Goldman Sachs, a ridiculously successful partnership-turned-public company that is very much in the business of servicing clients and protecting their confidences,” wrote Peter Lattman in his “Law Blog” on WSJ, dated March 30, 2007.
Great Britain’s law firms may go public in 2011 and, “[e]ventually, this is a trend that will make its way across the pond to the United States, home of some of the world’s largest and most successful law firms.”
Down Under, the first publicly-traded law firm of Slater & Gordon Limited is trading on the Australian Securities Exchange.
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How sweet it would be for equity partners to cash out in one shot. I am reminded of the Blackstone Group IPO. It is rumored Schwarzman still wipes his tushy with a handful of crisp $100 bills every day. It’s good to be King. Finally, the heads of the biggest law firms can sit on toilets made of solid gold, just like their Wall Street clients. Justice and equality are the goal of all great revolutions, right? Yeah, all truly great revolutions also require that a few eggs must be broken, or clueless investors relieved of their wealth, but whatever dude.
Anyway, I am all in favor of bringing more flesh into the proverbial butcher shop. Corporations and other such artificial persons are, as we all know, the ideal mechanism to fleece willing investors. In fact, I can already see eyes glazing over on p.2 of the 20,000 page prospectus. No risk of anyone except maybe a one-eyed freak getting to the part where the CEO is absolved of all liability and is assured a $100,000,000,000 golden parachute should the company fail.
In fact, why am I diddling about here when what I should be doing is getting an IPO together? Bye.
Start a bank.
If you want to see how you too can create your very own control fraud, read this article on what happened in Iceland. 3 banks made loans worth 7x Iceland’s GDP, mostly to bank shareholders and parliment. The owner of one bank that went tits up had an outstanding personal loan of $500 million. With a straight face, he said the bank was happy to have him as a customer.
Broken eggs, indeed.
If you want to change the attitude of congress toward business have publicly traded law firms. Overnight the law suits would change from attacking free market principles to supporting free market principles. Today lawyers make their money by attacking the free market. If tomorrow they make their money from the free market they would begin to look through the other end of the glass.
Good luck getting the Good-Ol-Boys Club known as the ABA relinquish equity control over their profession. I’m getting ready to take my Professional Responsibility exam today, and the one lesson that I’ve learned is that they are short-sighted protectionists that can’t have anyone that hasn’t been indoctrinated making money or decisions outside their officially sanctioned bounds.
Every ABA rule is focused around socializing the risks of being a lawyer, capriciously restricting entrepreneurial legal competition and collectivizing the behaviors of any rouge lawyer into the public perception of all lawyers. I hardly could imagine the amount of unethical and self destructing behavior that would develop if, say, the parcel drivers of the myriad companies were forced into membership into a single ‘drivers association’, instead of the current model of each firm policing the behaviors of their own employees. The ABA model sets up inherent professional conflicts of interest because of the protectionism, where “doing the right thing” is put in conflict with “doing the profitable thing”.
Increased competition and open ownership of law firms would do great things to reduce these abuses, but the head honchos and entrenched beneficiaries of the current system might have to suffer to get there – so we wont see it happen until other factors come into play (like a push for independent bar agencies or independent courts).
And why should my tax dollars pay for research that benefits private airline companies ?
Maybe they should pay for their own research, after all they’re making billions a year in revenues?
And since it was mostly European airlines that suffered from this, maybe they should pay for the larger portion of the research. Why should Americans pay to keep European Airlines in business…
The constitution never gave the Federal government the enumerated powers to do 90% of the things
they do now, why let them steal more of our income…….
We could test engines for reliability under volcanic conditions — and we certainly should not get on planes that aren’t air-worthy under unexpected conditions. But what’s with all this crazed globetrotting anyway? If we want to hang out in Europe, we should just move there. Why should Americans want to leave America? Don’t they love it after all? Or is it one of those, “Oh, I love you, but I’m still looking to see if I can do a little better,” kind of things?
Jolene Maloney
it makes sense , . not bad after all. . .
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Chad Wuertz
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Chad Wuertz
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