Thursday, August 29, 2013

Why Should Lobbyists Fear Transparency Especially If They Are Lawyers?

I read Leibovich's book last week while I was on holiday. It both fascinated and horrified me. Although it's about Washington DC, it is also about London politics as it is now. Notice I don't say British politics, because following Leibovich's thesis this is a purely metropolitan issue in which the provinces (sticks) neither count nor even exist.

Leibovich details how everyone who comes to Washington is assimilated into the organism that is politics-lobbying-consulting-business. The Obama set were opposed to lobbying and special interests and made a big fuss about it. Before long Obama associates were spinning through the revolving door to capture book deals, TV commentator slots, and lucrative positions as lobbyists. While the US was reeling from the recession, Washington DC--This Town--basked in champagne receptions and endless valet parking, courtesy of the lobbying industry.

In a series of deft pen portraits Leibovich describes how politicians believe it their right to earn some serious money as lobbyists after having put in so many years of service in Congress. Maybe venal is too light a term for these blood-sucking parasites that infest the body politic. But they're here and they won't go away.

Of course it isn't much different in the UK. We now have a full-time political class that steps from university into jobs with think tanks to then become SPADS (special advisers to politicians) with the promise of a parliamentary seat at the end of it. All of our current leaders, David Cameron, David Milliband and Nick Clegg followed this route. And all of them will cash in when they step down. Just watch The Thick of It to get the idea.

Look at Tony Blair, a man on a global peace mission who won't refuse to work for any dictator. Who can be fairer than that? As a lawyer, he's trained to separate out difficult associations and he is also imbued with the ideals of the cab rank rule.

This came to mind when I read that City lawyers object to being registered for their lobbying activities. The City of London Law Society (which represents the big firms) claimed the consequences of registration would be burdensome and force them to breach client confidentiality. Their own codes of conduct were sufficient to regulate their behaviour in this field. Indeed, they provide much help in the legislative process:
The CLLS committee said lawyers play a vital role in testing the practicality of legislation and would feel inhibited from engaging with policymakers if proposed laws are passed.
Somehow these arguments aren't that persuasive. City lawyers have been lobbying government since at least the nineteenth century, if not before. Who is good at it and has access to the right quarters is well-known among lobbyists' users. Lawyers lobby just as other groups lobby and should be subject to the same conditions as other lobbyists. That includes registration. And regarding confidentiality, clients will have to rethink how they want to use their lawyer-lobbyists. I doubt there will be much difference.

Leibovich writes how when threatened with registration, lobbyists reclassified themselves as consultants. Apart from titles nothing tangible seemed to change.

I don't think City lawyers have made a strong case here. They will have to sign up like everyone else.


Saturday, August 10, 2013

How to Escape the Rigours of Excessive Regulation in the US Legal Profession

(thanks to

My apologies for recent radio silence in the blogosphere. It's partly due to putting the finishing touches to a book, What Do Lawyers Do? An Ethnography of a Corporate Law Firm, due out from Quid Pro Books soon.

Jacoby & Meyers has announced that it's opening in the UK. This firm was a pioneer in providing standardized services to middle-class clients in a distributed network. Taking advantage of the relaxation on lawyer advertising in the 1970s, Jacoby opened lots of offices around the US. The firm developed a hub and spoke approach that had general lawyers in storefronts and specialists and computer resources at centralized locations. By 2010 Jacoby was spending over $10 million on TV advertising.

There is an excellent study of the firm and others in Jerry Van Hoy's Franchise Law Firms and the Transformation of Personal Legal Services (1997).

One of Jacoby & Meyers' aims has been to take in external investment. Unfortunately, it's an American law firm not English. US rules won't permit this. Gillian Hadfield has written expressively in "Legal Barriers to Innovation" why US rules stifle innovation and creativity in US law firms and the profession and will put US law firms at a competitive disadvantage with UK and Australian law firms.

Because of these barriers Jacoby launched a series of cases against state bars in New York, New Jersey and Connecticut. The New York case has made it through the first appeal after dismissal. Jacoby wants to overturn the ban on nonlawyer ownership, which will be a tough fight.

The UK with the Legal Services Act 2007 and alternative business structures (ABS) offers an exit route. Jacoby has linked up with MJ Hudson, a boutique finance law firm. Hudson has declared it wants to become an ABS and Jacoby wants external capital.

It's a slightly odd alliance since Jacoby is a personal client firm and MJ Hudson is a corporate client firm, but certainly Hudson must have access to many clients who are looking for investment opportunities. Both shy away from traditional billing preferring to use fixed fees and both believe in the corporate identity rather than the conventional partnership route.

If the tie up happens then Jacoby & Meyers will have further arguments with the New York State Bar (NYSBA) which recently opined against these kinds of linkages. The NYSBA realizes that access to justice is declining in light of budget cuts (see Expanding Access to Justice in New York State [2009]). Chief Judge Lippman is calling for retired lawyers to offer pro bono hours for unmet legal need. But all of this is short termist with no expectation of radically altering the situation.

It might be time for New York to rethink its opposition to externally owned legal services providers if they could open up services.