Canadian Lawyer

BY PHILIP SLAYTON LEGAL ETHICS What's the problem? Lawyers really shouldn't be worried about non-lawyers investing in or owning law firms. It is the future and already working in other jurisdictions. non-lawyers to hire lawyers to sell legal advice to the public. The Clementi reforms also permit multidisciplinary practices. In Australia, this is old news. I s there an ethical reason why non-lawyers should be prevent- ed from investing in a law firm, even owning it outright? Is there ethical danger if a lawyer sell- ing his services to the general public is employed by a non-lawyer? I don't think there's a problem with these arrangements, but some members of the legal profession disagree. They fear that lawyers working for non-lawyers would lead to a loss of professionalism and collapse of standards. They ignore (or dispute) the access to justice benefits that might accrue to a general public deprived of adequate legal services. One problem with the discussion is that several different possibilities are jum- bled together in a confusing way. Are multidisciplinary practices okay? That's where lawyers are in partnership with non-legal professionals, typically accoun- tants. Should law firms be allowed to go public, i.e., sell shares to any member of the public who wants to buy them? Is it a good idea to let lawyers employed by a corporation, say a supermarket chain, offer their services to the public? "Get your legal advice in aisle 3, next to the frozen lamb chops." England recently enthusiastically sorted these issues. Sir David Clementi, a out distinguished businessman, was asked by the British government to review regula- tion of the legal profession in England and Wales. One of the recommendations in his 2004 report was that companies or individuals outside the legal profession be allowed to own and manage a law practice. The new U.K. Legal Services Act, which came into effect last October, adopted the idea and allows law firms to operate with- in so-called "alternative business struc- tures." ABSs include flotation on the stock exchange and the "Tesco law" (named after the big U.K. supermarket chain) that allows 18 FEBRUA R Y 2012 www. CANADIAN Lawyermag.com Multidisciplinary practices have been allowed in New South Wales, the principal Australian jurisdiction, since 1994; now all Australian states permit them. In 2007, Slater & Gordon, a middle-rank firm spe- cializing in personal injury litigation, was listed on the Australian Stock Exchange, and was the first law firm in the world to become a public company (current Australian Prime Minister Julia Gillard was once an S&G partner). This was made pos- sible by New South Wales' Legal Profession (Incorporated Legal Practices) Act, which came into force in 2001. Another Australian law firm, Integrated Legal Holdings, has since followed suit, and no doubt more will be along. Curiously, the largest investor in Slater & Gordon appears to be Calgary- based Mawer Global Equity Fund, whose president, Michael Mezei, used to be a Toronto corporate lawyer. Since Slater & Gordon was listed on the stock exchange, its revenue has more than tripled. In the United States, the American Bar Association has rejected out-of-hand law firms becoming publicly traded and has also kiboshed the concept of multi- disciplinary practices. This position was recently restated in a December 2011 draft paper released by the ABA Commission on Ethics. It is not clear what is behind the ABA's puzzling and retrograde stance. Some American lawyers apparently worry about non-lawyer equity holders pushing lawyers to chase profits at the expense of sound professional conduct. They worry about solicitor-client confidentiality. They fret about lawyers being beholden to duShaN milic

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