Posted Aug 13, 2007 10:25 pm CDT
Of course it can’t happen yet. But senior partners at big U.S. law firms are talking about the possibility that they will one day be allowed to be have nonattorney shareholders, as Australia already permits and the United Kingdom is expected to allow within a few years.
Otherwise, major American law firms likely will be at a competitive disadvantage with foreign counterparts able to tap into large pools of nonattorney investor money, reports the Philadelphia Inquirer.
“If a magic-circle firm were to … go public and have access to the deep pool of capital, they could use it to build their practices in New York, and the first thing you would hear out of the mouths of managing partners is ‘we need a level playing field,’ ” says Bruce MacEwen, referring to a possible march on Manhattan by a full battalion of attorneys from London’s most elite major law firms. He is a law firm consultant based in New York.
At present, legal ethics rules prohibit nonattorneys from having an ownership interest in U.S. law firms, and it doesn’t appear likely that this will change anytime soon, as the ABA Journal reported last month.
However, British law firms are expected to allow nonattorney investors by 2010, as discussed in an ABAJournal.com post. And the first Australian firm to do so, Melbourne-based Slater & Gordon, a personal injury firm, seems to be growing by leaps and bounds, with the help of millions in investor capital, as ABAJournal.com noted earlier.
“I know I wouldn’t invest in a law firm. I think it’s so dependent on the quality of partners that it would be a risky investment,” Robert E. Wilson tells the ABA Journal. He is managing partner of Haynes and Boone, a 450-attorney law firm in Dallas. “But I think it could be great for the profession, bringing a more entrepreneurial attitude.”