The NYT on non-lawyer-financed law firms

Larry Ribstein —  31 October 2011

The NYT has finally caught onto non-lawyer financing of law firms, and specifically the possibility of Wal-Mart lawyers, now being ushered in by England’s new Legal Services Act. As the article notes, “[s]uch a move could upend the industry’s stiff adherence to the partnership system in favor of full-fledged corporations that have access to the capital markets.” I’ve been there for awhile.

The traditionalists quoted in the article evidently are still hoping they can stop the train by holding out their arms and yelling “stop.” They claim that non-lawyer-owned firms won’t be ethically responsible.  They don’t seem to wonder why law firms should differ from all the other non-worker-cooperatives out there.  Or they somehow imagine

that the lawyers “who currently own law firms are not motivated by profit,” said Ken Fowlie, the executive director of Slater & Gordon, an Australian law firm that was the first in the world to become a publicly traded company.

As for the risk that consumers will harmed:

Consumers may gravitate toward a particular retailer for legal services because “they know what the brand stands for and what they’re going to get,” said Stephen Mayson, the director of the Legal Services Institute in England.

The best comment in the article is the last one:

 “The more sophisticated firms, the ones that will thrive in the future, they have become very much aware of what this new situation presents,” said Silvia Hodges, who teaches law firm management at Fordham Law School. “To say or to assume that the status quo is going to prevail and that we’re not going to have any changes, that doesn’t make any sense.”

I believe that non-lawyer-owned law firms are only the first step toward a new market that may bear little resemblance to conventional law practice.  In the less regulated world of the future, much of what Wal-Mart lawyers can do will be done by machines in a new legal information market.

Larry Ribstein


Professor of Law, University of Illinois College of Law

2 responses to The NYT on non-lawyer-financed law firms


    Professor Ribstein, I’d like to hear your thoughts on which tasks you think computers will handle over, say, the next 20 years. I’m becoming less convinced that they are going to be able to take on significant chunks of work.

    Here’s my guess, with a focus on litigation since that’s what I do: they will be able to do document review (apparently they can do this already) and will make legal research much more efficient. But I don’t think they will be able to write briefs, take depositions, prepare or examine witnesses, or talk to clients. In other words, computers will be able to do a lot of the work that is currently done by junior associates. But the stuff that is handled by more senior attorneys (mid-level associates through partners) will not be automated.

    What does this mean for the legal industry? Litigation will shift from biglaw firms that depend on leverage to boutique-y firms with lower associate:partner ratios. That hardly means that the legal industry will die, but it does mean lower profits for partners and fewer associate jobs.


    The idea of allowing nonlawyer ownership of law firms has been around for a long time. Hopefully, the legal profession will finally get on board and implement. For a relatively early work on the subject, see my Note from law school. Bernard S. Sharfman, Modifying Model Rule 5.4 to Allow for Minority Ownership of Law Firms by NonLawyers, GEORGETOWN JOURNAL OF LEGAL ETHICS, Vol. 13, No. 3, pp. 477-498 (Spring 2000).