The Canadian Bar Association is running through its CBA Legal Futures Initiative which ostensibly looks at allowing outside investment into law firms, the so-called, Alternative Business Structure (ABS). This initiative should be of interest to all lawyers, but most particularly to younger lawyers, as it may determine the course of their careers – perhaps for the worst.
Younger lawyers should take note of the behaviour of the CBA and various law societies in the late 1990’s and the early 2000’s around Multi-Disciplinary Practices (because of backward-thinking individuals in the CBA and in provincial law societies, MDPs have been regulated into obscurity). That behaviour, shameful as it was, may give some insight into how the current discussion around ABS may end up in this country. I recommend two academic papers from the United States which comment unfavourably upon the behaviour and arguments of the CBA and Canadian law societies on the MDP matter. You can read them here and here.
It should be kept in mind that the CBA is “the essential ally and advocate of all members of the legal profession; it is the voice for all members of the profession and its primary purpose is to serve its members… a leading edge organization committed to enhancing the …. commercial interests of a diverse membership….” In essence the CBA is a lobby group that is created “to promote the interests of the members of The Canadian Bar Association.”
All of this is well and good – except it hardly positions CBA as unbiased in connection with initiatives like ABS, which so clearly pit the interests of the public against the commercial interests of lawyers. It’s like asking the American public to accept a study on guns and public safety commissioned by the National Rifle Association.
It is clear that more and more ordinary Canadians are unable to afford legal services. The Chief Justice of the Supreme Court of Canada, the Governor General and judges across the country have told us this for years. But the profession has done nothing to change the way it delivers legal services to address this concern. We remain wedded to a 19th century business model based solely on the rationale, “that is the way lawyers always operate.”
The drive for change in UK came from a determination that there was a lack of access to justice. This lack of access was due to the high cost of legal services. The high cost of legal services was due to a lack of real competition. It was thought that the best way to open up competition was through allowing new players to invest in existing law firms, or allowing them to create new law firms. The infusion of new and unlimited capital would foster investment in innovations that would then drive down costs. Lower legal costs would allow more of the public to have access to justice.
Not surprisingly I share the UK view.
The CBA initiative however, raises some disturbing issues.
The ABS discussion started by the CBA continually anchors around the wrong issues and asks the wrong questions. In so doing, the bias of the CBA against ABS is very apparent.
Consider the following two very "leading" questions that the CBA asks:
Do alternative business models reduce cost at expense of quality of legal services?
Can a non-legal organization run a law firm?
From these questions we can deduce that the CBA is anchored around the belief that the current model provides adequate access to justice for all Canadians, that lower legal fees always result in inferior quality, and that the current model always produces quality legal services. We know this is false.
We can also deduce that the CBA is anchored around the belief that the current 200 year-old model provides unlimited innovative opportunities to deliver legal services to Canadians (we just have to wait until some bright lawyer figures them out), and that lawyers are the only people on the planet who have the ability (despite no business training/experience whatsoever) to operate a law firm. We know that this is also false.
Finally we can deduce that the CBA is anchored around the belief that the current model is the best for no reason other than because the model is now in existence. As McLuhan said, the CBA “looks at the future through a rear-view mirror.”
We already see Canadians voting with their feet – telling us that the current model no longer adequately serves their needs. There are a growing number of self-represented litigants as well as the advent of online do-it-yourself services for Wills and Incorporations for the SME market. At the higher end of the market, the rise of in-house counsel and the use of legal process outsourcers demonstrates that clients are no longer willing to pay high costs associated with the inefficiencies of the traditional model.
It has often been said that ABS must be unequivocally proven to improve access to justice before it should be adopted. This is such a silly argument. The current model of legal practice did not have such a hurdle put in front of it, it happened organically. There were no studies done to determine if the current model was the absolute best way to deliver legal services. To anchor around an archaic structure that occurred by historical accident is illogical.
Furthermore, lawyers are being misled when we are told that the liberalization of business structures results in the loss of legal independence or a loss of "core values." I have seen no evidence of that in the UK or Australia. And keep in mind that Australia has allowed outside investment for at least ten years. It is also the height of arrogance to suggest that non-lawyers are inherently unethical, but the magical oath that lawyers take transforms us into the most pure of ethical beings.
There are thousands of in-house lawyers around the world who routinely balance professional/ethical obligations with shareholder demands. Whereas we have seen hundreds of “independent” lawyers across Canada breach their ethical and professional obligations every year. In other words, running her own "independent"business in no way makes a lawyer more ethical than a lawyer working for outside investors. In fact, the opposite may be true.
More importantly, why should anyone tell a bright young lawyer with a new idea on how to deliver legal services that she can't do it? If our profession is to be independent then we should also be given independence in how we structure ourselves to deliver legal services in the public interest. As long as lawyers perform services in accordance with their professional and ethical obligations, no one has the right to restrict how that business is structured or operated – that is the hallmark of independence.
Finally, should the CBA deliberately slow down or block new business models, the profession will have to deal with the inevitable public relations fallout. Clearly such a decision will be seen as a move to protect the interests of lawyers at the expense of the public.
And when it is so perceived, will obstructing change be the first step toward the loss of self-regulation?
How will the OBA’s controversial new public relations efforts be damaged when the public perceives lawyers to be more interested in protecting their incomes/lifestyles than looking after the public interest?
The real question for the legal profession is: “Do we want to do this, or do we want to have it done to us?” Because the profession is fooling itself if it believes that it can remain an island in a sea of change that is moving across other jurisdictions. In the end it will not be up to the profession to determine if change will happen – all the profession can do is slow down the rate of change.
So the real questions that the CBA should be asking are the following:
Do we want to be perceived as forward-thinking professionals willing and able to change/adapt for the good of the public interest?
Or an old boys' club bent on protecting our turf?
Did we all go to law school for the former, or the latter?
And why are lawyers so afraid of competition, anyway?
Will the CBA commit the same mistakes as it did with MDP and suggest an ABS model that is a farce, or make a bold step to invigorate the profession?