It’s rare that I venture outside the gaming world, but I did want to take a moment to offer a comment on Professor Larry Ribstein’s comments on the future of so-called ‘big law.’ While I, on the base level, agree that certain elements of the model are going to have to change going forward (else we see a new renaissance of mid-law and boutique law, which wouldn’t necessarily be a bad thing), I think the ultimate solution is one that was briefly visited almost a decade ago before being unfortunately derailed by Enron.
I am, of course, referring to the US following in the footsteps of so many other countries and allowing lawyers and accountants to operate under the same roof. While Professor Ribstein does make mention of this possibility, I think it’s far more probable than a shareholder model for law firms. For those unfamiliar, in many other countries, the big four accounting firms also have significant numbers of transactional attorneys on staff. In fact, the numbers in those groups dwarf anything big law has in the US. Despite this cooperation, none of the great ethical fears cited for keeping accountants and lawyers separate have come to pass. And there was a time when the wheels were beginning to turn in that direction in the US, but Enron was the basic cause for the demise of that movement. However, the current economic climate may be the stimulus to get that back on track.
In my view, should that happen, we would have an un-bundling of transactional practices and litigation practices. Transactions would be handled by accounting firms of varying sizes, and even mid-market accounting firms would likely add legal services to their menu. Law firms would, at that point, be litigation shops. In short, if you were involved in a lawsuit, you would visit a law firm. Otherwise, you would be looking for an accounting firm, whether you’re forming an entity, involved in a merger, working on compliance with government regulations, or filing for IP protections.
Much of the reason for the divisions would be conflict based. By only acting in transactions, the conflict concerns aren’t as great nor as complex as those on the litigation side. Anyone who has been in a firm of any size knows how conflicts can drive all sorts of wedges into firms. Second, transactional work can be more easily converted to billing in flat or graduated fees. It’s more difficult to divorce litigation from the billable hour.
[Via ABA Journal]