We’re obviously talking about the high-minded ideals of the profession, and not the day-to-day reality of a sole practitioner trying to balance the books, but lawyers historically don’t like to think of themselves as being part of the rough and tumble of the business world.
The fear is that lawyers who are worried about the business end of the business will be distracted from their higher purpose – how do you preserve justice when at the same time you need to promote shareholders’ interests?
This sort of philosophical rhetoric is really the purview of big firms with separate accounting departments. For others, the argument is already moot. Small and solo practitioners have always had to have a hand in the business end of their firms, and scrappy startups are remodelling the foundations of legal business strategy.
In the aftermath of the global economic downturn, legal professionals have by necessity adopted more business-type strategies, paid more attention to their bottom lines and found internal efficiencies to meet new targets. They’re following the business model by shedding less- or non-productive staff, freezing hiring, adopting project management techniques and automating and outsourcing routine functions to less expensive jurisdictions.
Those less expensive jurisdictions include legal professionals with an entrepreneurial bent who are finding new ways to perform old tasks, cutting through the inefficiencies of traditional legal practice to reveal a streamlined core. They tend to see the current regulatory structure as stifling to innovators such as themselves – it hinders their ability, among other things, to raise the venture capital that will allow them to translate their thoughts into action.
The CBA’s Legal Futures Initiative has found the idea of alternative business structures to be “a point of significant contention within the consultation,” according to an interim report on the consultation. “Most participants understood that they notionally provided opportunities for better business practices, but there was no agreement on the impact that ABS would have on lawyers’ professionalism,” the report says.
The Law Society of Upper Canada recently launched its own inquiry into the question – one of the first North American regulators to do so.
Alternative business structures have been a fact of life for some time in Australia and the U.K., and some point out that lawyers there haven’t abandoned their ethical principles to pad shareholders’ pockets.
There seems to be no doubt that change of some sort is called for. The question is whether the rules can be rewritten in such a way as to allow for innovation while at the same time preserving the legal profession’s higher principles.