Rest in Peace, MDP :::

Rest in Peace, MDP ::: An article by New York State Bar Association president (and Proskauer Rose partner) Steven Krane explores the lessons that the legal profession can learn from the Enron debacle.
Krane’s logic goes this way: Enron had Andersen as an auditor, and Enron had Andersen as a consultant. Andersen’s consulting business necessarily influenced its audit business, to the ultimate detriment of the accounting profession, the client, and the business community at large. Surely the same slippery slope will exist for law firms if non-lawyers will have any influence over decisions made by lawyers?
Here’s the issue: today, American Bar Association ethics rules prohibit law firms from having non-lawyers as partners. Those ethics rules are grounded on the premise that non-lawyers “(those not inculcated in the culture and morals of the legal profession) will have the power to dictate the way in which law is practiced and legal clients are served” (Krane’s words).
I’m not sure I buy this. I’m a lawyer (the non-practicing kind; I work for a software company not as a lawyer but as an executive), but I see this logic as a not-so-subtle insult to non-lawyers. I’ve long felt that non-lawyers could be just as effective at looking out for the clients’ best interest… professionals of all stripes (consultants, bankers, etc.) do this every day in other markets.
Furthermore, the lack of equity interest among non-lawyers in the firm has a destructive effect on the caliber of people the firm can attract. When your IT, marketing, and staff don’t have a financial interest in the firm’s long-term success, they’re less likely to stick around. (Staff turn-over at law firms is ridiculously high. While equity ownership isn’t the only reason, it’s certainly a contributing factor.) By restricting “ownership” to only those with law degrees, firms reserve the key stakeholder roles to lawyers – who are then also expected to be technology and marketing experts in addition to billing 2000+ hours a year.
This doesn’t make sense, does it? Krane’s arguing from the client’s perspective – that their interests could ultimately be subverted by a profit-hungry non-lawyer not bound by the same ethical obligations as the lawyers. That’s no doubt a concern, but there’s a flip side to that concern: the failure of many law firms to structure themselves as a business – which limits their ability to truly align their services with the needs of their clients.
What do you think? If you’re a non-lawyer, do you want to buy legal services from a consulting company? Would you be concerned that the non-lawyer consultants would exploit your situation in pursuit of the almighty dollar?

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