Innovation Upside-Down With Mitch Kowalski

Why can’t we all be more like Australia, was Mitch Kowalski’s opening salvo as he hosted a CBA Futures Initiative Twitterchat on Tuesday.

“What’s in their water to allow them to be so innovative?”

Australia, Kowalski noted in a blog post ahead of the Twitterchat, pioneered outside intervention in law firms, which has been allowed since 2001, and is also the home of the first publicly-listed law firm, Slater and Gordon.

“Why do those who raise the unsubstantiated issue that outside investment will erode the core values of Canada lawyers, ignore the fact that nothing of the sort has happened in the 13 years that ABS has been permitted in Australia?” Kowalski asks. “Surely 13 years is robust enough experience to clearly show that ABSs do not repeal the rule of law nor herald the decline of civilized society, nor decimate any of the values and ethics of the legal profession.”

“Given the success (or at least non-tragedy) of Australian and U.K. example, it’s hard to find non-protectionist reasons NOT to do ABS,” said Sarah Glassmeyer, the Director of Content Development for CALI, the Center for Computer-Assisted Legal Instruction in the U.S.

John Vincent Rider, who bills himself as a senior business leader and manager on his Twitter page, says ABS is a must, “and the sooner the better. Non-law firms are eating our lunch every single day.”

Let’s not get carried away, though.

“ABS isn’t a panacea, it’s just another way of organizing and operating,” says Garry Wise, a lawyer specializing in family and employment law. Just like anything else it will have its strengths and weaknesses, its winners and losers.

Another participant suggested that one strength of the corporate model would be a focus on long-term results, rather than the focus on short-term interests in the partnership model.

“The key is that partnerships can’t raise the capital an ABS can, so forced short-term,” added Colin Cameron, a management consultant in Vancouver, though Jason Morris, counsel for Round Table Law, pointed out that the corporate model can also become mired in short-term concerns about share prices and quarterly profits.

“Exactly!” said Lesley Midzain, principal at Evergreen law in Vancouver. “Can be same traps as exist in partnerships today.”

She warns that it would be difficult to superimpose the corporate model on an existing partnership – and that all concerned would have to be wary of the corporate goal of maximizing shareholder value.

Joshua Lenon, the lawyer-in-residence for Clio Legal Software, says outside management can work and be effective in the partnership model – it works in non-profits now, he said.

“It’s pretty clear the sky won’t fall with ABS – and whether we like it or not, change is upon us,” says Wise.

“ABS will not be inherently more democratic or fairer to teams. It will be corporate. And the focus will likely be increasingly on bottom line, not ‘sharing the riches.’”

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