Interesting interview with IBM's GC regarding non-lawyer ownership of firms

He's against it. Big time.  The interview is here.

Comments

[Andrew Perlman]

In my view, the interview conflates two very different forms of nonlawyer ownership: (1) outside passive ownership/investment and (2) ownership by nonlawyers who actively participate in the delivery of legal services to the firm's clients. Mr. Weber's objections (at least in the interview) really only apply to the former, which the ABA Commission on Ethics 20/20 has already ruled out. The Commission's discussion draft, which focuses only on the latter option, is here: http://www.americanbar.org/content/dam/aba/administrative/ethics_2020/20111202-ethics2020-discussion_draft-alps.authcheckdam.pdf

[John Steeleq]

Andy, you're right that his double-barreled indictment is directed at the former, and it could make a nice reading -- short and to the point, with the counter-arguments posed in the questions -- when a PR class covers the rules of financial independence. David, thanks for linking to that.

[Doug Richmond]

With all due respect, Mr. Weber conflates nothing. When asked about the Ethics 20/20 Commission's limited approach to outside ownership, he answered: "Only the most naive think that limited ownership is where it will stop." He then went on to briefly elaborate.

[David Cameron Carr]

Weber sees 20/20 as the camel's nose peeking under the tent. He is right.

[Andrew Perlman]

The only objection that I see in the interview to the Commission's specific discussion draft is the slippery slope argument. IBM's GC basically says, "The present position may be a sound one, and it may be good public policy. But if we allow this, then some other proposal will come along later that will go well beyond this one (like outside passive investment) and cause all sorts of mischief."

If this type of reasoning were persuasive, we'd rarely have progress in any area of the law. There is always a more radical version of any proposal that could be problematic if it were adopted in the future. Why can't we simply debate the Commission's actual discussion draft and decide whether it makes good sense? If it does, support it. If some other more radical idea is floated by some other ABA Commission in the future that doesn't make sense, oppose that one.

[Doug Richmond]

I agree that we should ultimately debate the Commission's actual discussion draft and decide whether it makes good sense. I don't think IBM's GC is as charitably inclined toward the draft position as you do, but he is clearly staring at what he sees as a slippery slope. For a variety of reasons, I don't think this is a slippery slope; the present draft position is unsupported and unsupportable without ever starting down the slope. That discussion will come.

[Andrew Perlman]

I strongly encourage anyone who has views on the Commission's actual discussion draft to submit comments to the Commission by the end of February. Comments should be submitted to Natalia Vera at natalia.vera@americanbar.org.

To be clear, the phrase "discussion draft" is intentional. The Commission has not yet decided whether to make a formal proposal on Rule 5.4, so it will consider very seriously the comments that are received by the deadline.

[Rick Underwood]

I find this trend disturbing. First LLPs and LLCs and now non-lawyer investors. Fortunately, I am old enough (WHERE ARE MY HEART PILLS?) not to care all that much anymore. Is that wrong?