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Bruce MacEwen: It’s Time to Abolish the Role of the State Bar

Posted Oct 15, 2009 7:00 PM CDT
By Bruce MacEwen

Bruce MacEwen

Where are you admitted to practice?The answer is instinctive: New York, California, Washington, DC, Texas, etc.

This is medieval.

And I don’t mean that (only) in the pejorative sense; I mean it in the historic sense of the feudal system which governed most of European society in the middle ages, weaving together land, service, and social structure into one over-arching structure that few questioned.

How different is our system of regulation-by-jurisdiction? And how antiquated is it, in the era of 24/7 online connectivity, the Web’s genius at “collaboration at a distance,” and, most importantly, globe-spanning law firms and clients?

Years ago, and even though I’m based in New York (not exactly an embarrassing backwater), I decided that my business cards no longer needed to be cluttered with a real-world, street-city-zip-code, address. I can count on the fingers of one hand people who have noticed it. This is not where the world has headed, it’s where the world has arrived.

Where are you admitted? Why on earth should that matter?

Why, for that matter, should it even be a question with an answer? Shouldn’t we be admitted to practice “in the United States?” (“In the EU?”) Do our clients care? Only, I would suggest, to the extent that they want the freedom to call on the best of us in New York, California, D.C., London, Hong Kong, and wherever else it might come in handy for them.

Take this a step farther: Why should law firms be subject to the jurisdiction of the state bar wherever they happen to have an office? If Amazon can choose to be headquartered in Seattle, but can also choose to be incorporated in Delaware, and does business—remind me, where again does Amazon “do business”?—why shouldn’t law firms enjoy the same benefits?

As a card-carrying capitalist, I believe in the virtues of states competing amongst themselves to provide favorable business environments for purposes of their choosing. Delaware has famously done it for incorporating the Fortune 500, South Dakota for credit card processors, and Nevada for gaming companies (and, time was, divorcees).

Why not incite competition among states for law firm LLC/LLP incorporations? Let firms—and their individual practitioners—choose what jurisdiction they wish to be subject to. Perhaps New York or California, or Wyoming, would decide to grant its lawyers US-wide practice rights. Full faith and credit clause, anyone?

Does this call for abolishing the role of state bar associations? Precisely. Beyond the role of attempting to perpetuate outmoded notions of territorial guild societies, what is their role? (I told you this harked back to feudalism.)

Isn’t it time, in our BlackBerry/iPhone/WiFi/time zone-irrelevant world, to be able to choose where our firms are “incorporated” and where we are “admitted to practice?”

And isn’t that a pan-national world? How antiquated can 51 separate jurisdictions be? The clock, we can hope, is ticking.

Bruce MacEwen, who blogs at Adam Smith, Esq., is a lawyer and consultant to law firms on strategic and economic issues. MacEwen writes, speaks and consults on the economics of law firms, covering such topics as strategy, leadership, globalization, M&A, finance, compensation, cultural considerations, and partnership structures. In 2008, Adam Smith joined into a strategic alliance with Altman-Weil and Jomati Consultants.

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