The NYT on non-lawyer-financed law firms

Cite this Article
Larry Ribstein, The NYT on non-lawyer-financed law firms, Truth on the Market (October 31, 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.