Wednesday, November 14, 2007

Consulting Law Firms

I've been writing about the legal profession for some time now, but usually without a view to monetizing this activity as a consultant. I am an academic and love the freedom that brings. It also means I don't have to think too hard about my own business case: it virtually operates by default.

Occasionally I receive calls and emails asking for advice and information. Mostly, if I can, I give it. If it is a government department, then it has to pay and that goes through the university books. That usually involves a sustained research project.

The other calls, however, are for answers to specific problems. The first call was from a law firm in Kentucky--I was at Indiana University--that was about to experience succession jitters. The firm had been established by a pater familias and run by his fiat. All the junior partners did as they were told. Their problem was that when the founder said he was leaving, none of them knew how to practise democracy. Self-government was an enigma. My task was to talk them through basic principles. And it was fun.

Today I had an unusual one: a call from the Midlands from a corporate law firm that wants to establish an office in New York. Although it does large deals, the firm is in a different league to the usual foreign law firm that opens in New York. The question was how to do it. Should it open as a foreign legal consultant? Join the New York Bar? Hire US-qualified attorneys? The one thing it didn't want to do was form an alliance with another New York law firm. Of course, much of the decision making revolves around whether the firm wants an office for American clients interested in investing in the UK and/or wants an office for UK clients who want to invest in the US. Is establishing an office--admittedly an expensive enterprise--the best way to achieve these ends for your clients, real and potential?

I did this for free. But should I continue to do so? Maybe I should say, "Look, I'm a consultant. Time is money! You gotta pay me if you want me. I'm in business!" I don't know. At one point, during my PhD in Chicago, I considered an offer from a law firm. My thinking went like this: law firm--interesting work, lots of money, lots of billable hours, enslaved to clients. Academic work: interesting work, no money worth speaking of, most time my own, enslaved to me (except when I say yes to another request to contribute an article, damn).

Well, I'm an academic, but maybe a little consulting would be nice.

Tuesday, November 13, 2007

Pakistan--The Shame Continues

If Musharraf is being leaned on by the US, and the poodle UK, he's conceding ground very, very grudgingly. He is still defending his coup d'etat, which is essentially indefensible. The press are chained. People arrested for protesting his dictatorial actions are still in prison. And the Supreme Court remains emasculated.

Musharraf, although he will run elections in January now, won't reinstate the Supreme Court or the other judges who have refused to take the illegitimate oath of allegiance. Iftikhar Chaudhry is under house arrest and probably whatever concessions Musharraf might be forced to make, he will resist reinstating Chaudhry. Because Chaudhry has focussed attention on the core illegality of Musharraf's reign, that he can't be both commander in chief and head of government simultaneously. The constitution forbids it and Chaudhry won't let him or the people of Pakistan or the world forget it.

Now Musharraf wants the newly-reconstructed Supreme Court to sanction his status until the election, whereas he is supposed to give up his military status if he wants to contest the election.

The rule of law is vacant here. I hope the Commonwealth has the cojones to do something about it.

Chaudry should be nominated for the Nobel Peace Prize for his courageous defence of Pakistan's human rights and fledgling democracy. Members of international courts are eligible to submit nominations for the Peace Prize. Now is a chance to honour one of your own.


Tuesday, November 06, 2007

Who Defends the Rule of Law?

The pictures of lawyers being beaten by police in Pakistan is both terrible and laudatory. General Musharraf's coup d'etat is a blatant attempt to undermine the rule of law. And that is one of the very few things that keeps us sane and free. Get rid of it and we have nothing. That is why I am ashamed that the US and UK governments still support Musharraf. In the battle over public opinion they have lost the plot. If the only way an alleged "war on terror" can be fought is by succumbing to arbitrary abuses of power, then we were defeated long ago.

This is the second time the chief justice of the Pakistan Supreme Court, Iftikhar Muhammad Chaudhry, has been illicitly removed from the court. The general couldn't face the court's likely decision to remove him from the electoral race because he holds civilian and military positions which the constitution forbids.

I admire the judges who are refusing to take their "new" oaths of allegiance and the lawyers who are taking to the streets. They are true heroes. And they are taking serious risks to their lives, physically and spiritually. How many lawyers in the US or UK would come out in defence of the rule of law? Could we imagine the American Bar Association or the Law Society or the Bar Council urging its members to strike and rebel? Hardly.

There aren't many cause lawyers around here, but almost every lawyer in Pakistan is one.

Friday, November 02, 2007

Will We Ever See the London Approach Again?

In days gone by the Bank of England knew how to step in and help ailing banks. The London Approach came to the fore in the 1970s when the secondary bank market faced collapse. The Bank was able to work with other banks to organize rescues and bailouts. No direct interference occurred but suasion and negotiation were mobilized to forge action.

Northern Rock has shown how the system can no longer respond quickly or effectively. The tri-partite system of regulation shared between the Bank of England, the Financial Services Authority and the Treasury has eviscerated the capability of the Bank to move quickly and quietly. Indeed, Mervyn King, the Bank's governor, remarked to the Treasury Select Committee that his hands were tied by inconvenient pieces of legislation.

Instead, we now see the London Approach being applied by other countries. The Federal Reserve showed how it could be used when Long Term Capital Management imploded in 1998. And it has encouraged the banks to support the Superfund to buy distressed debt. Germany was able to galvanize its banks and central bank to assist IKB and Sachsen LB when they were threatened by their exposure to the US subprime mortgage debacle. Even the European Central Bank could offer liquidity to its markets without struggle.

While the US and Germany have offered succour to their ailing banks, the UK is bereft of any means to ameliorate a worsening financial situation. Now the Bank of England is reconsidering its position and may relax its rules on collateral, which sounds like it wants to return to the old days of the London Approach. But as its chief economist, Charlie Bean, said, there are too many known unknowns and unknown unknowns around at the moment for that to occur. Moreover, it would require the Treasury to reconfigure the rules around bank supervision. If the FSA can't really do it, perhaps the Bank should.