What Happens When You Quit the Maw of the Accounting Firms? It Depends on Tax Codes...

I was struck by an article in The Lawyer based on its annual European 100. (Don't rush, it costs nearly £600.)

The two top European law firms are Garrigues in Spain and FIDAL in France. Both law firms posted revenues of over €300m. Apart from that law firms in most of Europe face the same difficulties as elsewhere with declining partnerships, frozen hiring, etc.

What is of interest here is that both firms were hooked into accounting firms for a long time. FIDAL was part of KPMG and was essentially a tax practice. Tax is still a big part of its remit now. FIDAL left the KPMG network in 2002 and became independent. Some of KPMG's literature still shows a strong connection between the two.

It would be fair to say that prior to 2002 FIDAL was not awarded much distinction as a law firm, French or otherwise, but since then it appears to have thrived. It is a French firm with no international offices.

With Garrigues it was different. The firm always had a reputation as being a key Spanish law firm but in 1997 it merged with Arthur Andersen. This both shocked the legal world--why would a successful firm merge with a giant squid of a global accounting firm?--and then surprised them more when it went on to be successful in the merger. According to Garrigues' history its billing rose 130% and headcount doubled from 500 to 1,000. Clearly 2002 was a fateful year as Enron killed Arthur Andersen and Garrigues reverted to being a law firm alone again.

One enlightening item in the Garrigues history, tucked away, is that in 2005 it established a network of tax firms. It also internationalized in a big way--Latin America and Asia.

Certainly there is life--robust at that--after quitting the maw of the giant accounting firms. Both Garrigues and FIDAL prove that. But perhaps the crucial element is tax. Both are major players in tax advice across borders. They have invested huge resources in this area.

After attending the Tax and Reputation Conference at KCL yesterday, I've come to see just how important tax advice is for companies. Add to this the US Senate Permanent Subcommittee on Investigations accusing Apple of avoiding billions of dollars in tax by offshoring itself to Ireland (Apple's response here), the UK Public Accounts Committee taking Google, Amazon and Starbucks to task over unethically limiting its UK tax exposure, and we see that tax planning is at the core of business transactions. As cross-border business multiplies, the demands for tax accountants and lawyers grows considerably. Both the UK and the US have made corporate tax so complex that it is hard for any but an expert to understand and interpret the codes. It's a goldmine for "creative compliance".

So both Garrigues and FIDAL benefit from our desire to make the world a complicated and complex place. "Zen and the Art of Tax Planning" won't be appearing on Amazon yet, but if it did I'm sure they would donate free copies to Margaret Hodge and her colleagues on the Public Accounts Committee.

What Happens When You Quit the Maw of the Accounting Firms? It Depends on Tax Codes...

London in Colour in 1927!

Wonderful little film of London in 1927 filmed in colour. You can't help being struck by how black London was--the buildings are filthy but then how much smoke was being belched into the air. There were, as it says, 4,000 buses charging around.

The contrast between the well-dressed spaciousness of the West End compared to the congestion of the East End is stark. If the camera man had gone further east than Petticoat Lane, I'm sure it would have been worse.

A real little gem!

London in Colour in 1927!

The Transformation of Irish Legal Services

The picture above is from an Irish crime TV show about a journalist chasing stories of corruption, paedophilia, societal neglect and more. Within the throes of the recession Ireland is going through deep changes. The press is full of corruption scandals, billionaires going bankrupt, and, not least, the Irish legal profession facing its biggest ever challenges.

Two years ago I went to Dublin to speak at a conference about the new Irish Legal Services Bill proposed by the Troika. For the Irish legal profession it was dire. Last week I was back in Dublin at UCD to talk again about the Irish Legal Services Bill. We're not quite there yet.

The Bill is expected to be passed into law later this year. In the ensuing two years there has been much discussion between the Justice minister and the profession with some give and take on both sides. Fundamentally there will be a single external regulator, the majority of which will be non-lawyer with the authority to deal with more or less everything to do with lawyers.

To say the Irish legal profession is still in denial would be true although there is more acceptance than there was two years ago. When I talked about the changes happening in the UK with increasing numbers of alternative business structures, more consolidation in the personal injury sector, take overs of law firms, Co-op growing by 3,000, and to cap it with a picture of Eddie Stobart's trucks (but no barristers with his logo) there was fear.

As one barrister put it "A country the size of Birmingham's population spread over the geographical area of Scotland has a tiny profession which can't afford to disappear." He was concerned about the Bar. A Law Society representative wondered about lawyers in rural areas who could go out of business leaving people without access to lawyers. Having Richard Susskind on hand to talk about technology helped there, I think...

When the act comes into law, it will be interesting to see who is appointed to the regulatory authority and what they do. One of their roles, like the Legal Services Board, is to do research on legal services. I applaud that because it's necessary.

More can be read about the conference here in the Irish Independent newspaper.

As I've said before, let a thousand flowers bloom for Ireland is about to go through a Maoist revolution.

The Transformation of Irish Legal Services

Response to the Responses....The Cab Arrives at Its Destination...

(thanks to flickr)

Here's my response to the responses by the Bar Council and the Bar Standards Board to our report on the cab rank rule. Working my way through 120 pages of their reaction to our report has been beyond a labour of love.

See below for all relevant links to reports and responses.

I doubt we've heard the last of this. And the offer for a debate on the issue is still open.

Response to the Responses....The Cab Arrives at Its Destination...

Institutional Bridging: How Large Law Firms Engage in Globalization

(thanks to gizmag, proposed bridge over Pearl River)

I've just posted a new paper to SSRN titled "Institutional Bridging: How Large Law Firms Engage in Globalization". It's for a symposium put together by the Boston College Law Review and the Boston College International & Comparative Law Review on Filling Power Vacuums in the New Global Legal Order.

The abstract reads: This article introduces the "Born Global" concept into the discussion of law firms and lawyers. Born Global firms are companies that globalize at an accelerated rate. This article illustrates that English and American law firms are the precursors to Born Global companies and highlights how the common law has facilitated this process. It also demonstrates, through modern case studies, how lawyers and the common law continue to have a globalizing effect in the business world. Last, the article argues that the disparity between UK and US law firms created by the the UK Legal Services Act 2007 may create an opportunity for the UK law firms to truly break out ahead of their US counterparts.

(PS. my favourite bridge is the Ponte Vecchio....

(thanks to collegelifestyles.org)

Institutional Bridging: How Large Law Firms Engage in Globalization

Longest Taxi Ride in History!

(London-Sydney by Black Cab, thanks to www.motorhomeplanet.co.uk)

I've finally written my response to the responses to the Flood-Hviid report on the Cab Rank Rule of the Bar Council by Sir Sydney Kentridge QC and the Bar Standards Board by Michael McLaren QC, Craig Ulyatt and Christopher Knowles. (Sorry for that long sentence but you should see their responses!) I had to fit this in between visits to Boston and Miami.

I hope to publish it soon. But I will point out a few things. Our report was 46 pages long, which included a fair chunk of theory, a comprehensive literature review, and the results of fieldwork. Kentridge came in at concise 30 pages in his response. Most of what he has to say is based on assertion and his beliefs. There was no new evidence, only a reiteration of the standard supporting case for the cab rank rule.

The McLaren, Ulyatt, Knowles response for the BSB astonished us when it landed in our mailboxes at nearly twice the length of our original report--87 pages! This is the longest peer review in history. Given our report cost around £21,000, I wonder what theirs must have cost? They gave their time free apparently, so they subsidized their regulator.

Their report--"A fresh view"--gives us some interesting information about the cab rank rule from around the world but, again, reiterates the same old views. So hardly fresh--over ripe perhaps? There's no evidence to support any of their claims, other than statements confirming their rectitude. It's all rather defensive on their part.

What is omitted from these responses is any analysis or critique about the Bar's methods for avoiding the cab rank rule in relation to direct access clients or why it doesn't apply in the case of publicly funded criminal and family cases ("undeemed").

What I would like to do is offer to debate these issues with the Bar whether its the authors of the responses or others. I can't be fairer than that.

Longest Taxi Ride in History!

This is a natural consequence of Law Without Walls......

(thanks to New Yorker)

This is a natural consequence of Law Without Walls......

Life With Law

(This is the second event and for more information about the first look here) 

Life With Law: Second in reflective series of events encourages lawyers to change how they think about time 

Lawyers On Demand continues its series of reflective events aimed at ‘the thinking lawyer’ – bypassing the usual professional development themes to explore the real issues that underpin the reality of working in the law today.

Its second event providing inspiration and ideas on working life is being held on 17 April 2013. It focuses on turning lawyers’ usual (rather conflicted) relationship with time on its head and looks at how they can make time work for them.

Whilst the Life With Law events are the brainchild of alternative legal service providers Lawyers On Demand, these events are intended to be a general forum for lawyers to reflect on how they work best, however they choose to practice.

Simon Harper, Co-Founder of Lawyers On Demand, points out that: "From training, lawyers work in an environment where they are required to record their time every six minutes - resulting in a rather unusual take on time management. This free event is for any lawyer who wants to take back time and make it work better for their teams and for themselves."

Who: Guest speakers for this second event include Radio 4 presenter and author of Time Warped Claudia Hammond and BBC columnist, TED speaker, broadcaster and author Tom Chatfield.

What: Life With Law is a series of free talks offering inspiration and ideas for living a good, happy and satisfying life while practising law. The second event, How To Make Time Work For You, includes guest talks on 'Making time in the digital age' and 'How we perceive and control our time'.

When: 6.30pm, Wednesday 17th April 2013

Where: BLP, The Auditorium, Adelaide House, London Bridge, London, EC4R 9HA

Why: Feedback from the successful first event in the series proved that lawyers, though good at helping their clients, aren’t always so good at managing their own lives – or at helping their team to manage theirs. Life With Law provides a forum for lawyers to find inspiration, featuring some of the best speakers to help lawyers reflect and then make their ideas happen. The first event in the series, Finding Your Path & Making Things Happen, attracted over 100 lawyers to hear guest talks on ‘The surprising science of better decision making’ and ‘Discovering the life that you want’. 

In a world where work-life balance has become meaningless, Life With Law is about lawyers finding time to reflect and making mindful choices in their daily working lives. For more information go to www.lifewithlaw.com or follow @lifewithlaw on Twitter.

Life With Law

Flagging down cabs or Booking a limo? The Australian View

(thanks to paulickreport: note that colours are of Australian horse 'Black Caviar')

For all the furore about the cab rank rule, including Sir Sydney Kentridge's passing reference on "Desert Island Discs", we forget that it isn't always just about obnoxious individuals but often about venal and obnoxious corporations. It's an aspect the Bar prefers to ignore.

The McCabe Centre for Law and Cancer held an event on the cab rank rule in February focussing on the role of lawyers and big tobacco. Jonathan Liberman, the director, has written a post on this which is worth reading. His post is here.

This is how it starts:

At every stage, lawyers played an absolutely central role in the creation and perpetuation of the Enterprise and the implementation of its fraudulent schemes. They devised and coordinated both national and international strategy; they directed scientists as to what research they should and should not undertake; they vetted scientific research papers and reports as well as public relations materials to ensure that the interests of the Enterprise would be protected; they identified “friendly” scientific witnesses, subsidized them with grants from the Center for Tobacco Research and the Center for Indoor Air Research, paid them enormous fees, and often hid the relationship between those witnesses and the industry; and they devised and carried out document destruction policies and took shelter behind baseless assertions of the attorney client privilege.

What a sad and disquieting chapter in the history of an honorable and often courageous profession

Judge Gladys Kessler in US v Philip Morris USA et al (17 August 2006)

Over 1 million Australians have died prematurely as a result of tobacco use since 1950. Globally, the World Health Organization (WHO) estimates that the annual death toll from tobacco is 6 million, and rising, increasingly concentrated in low- and middle-income countries. It estimates that a staggering 1 billion people could die as a result of tobacco use this century.

As Judge Kessler observed of US tobacco lawyers – observations that resonate globally – lawyers have not played just a bit part in this story. They have not simply provided their services to tobacco companies defending legal challenges relating to past conduct. Lawyers – both in-house and external – have played, and continue to play, a central role in the tobacco industry’s day-to-day production and marketing of its lethal and addictive products. And they have acted, and continue to act, for the tobacco industry in suing (in the tobacco industry’s inimitable litigation-as-warfare style) and threatening to sue governments over interventions that are designed to reduce the death, disease and social costs caused by the industry and its products. For these reasons, the McCabe Centre / Cancer Council Victoria choose not to engage with law firms that choose to act for the tobacco industry.

But the position appears somewhat more complicated with respect to barristers in Australia and other jurisdictions in which the so-called ‘cab rank rule’ operates. Under the cab rank rule, a barrister should not refuse a brief on the basis of the objectionableness of a potential client’s behaviour or character.

The remainder of the post is here.

Flagging down cabs or Booking a limo? The Australian View