November 17, 2005
Law firms Cobbled by Rules Rooted in the Past
The environment for law firms has been turning upside down for some time now. Law firm clients consider themselves a customer and the law firm as a vendor. The slow, comfortable days as a fraternal profession are fading. In its place, are the demands on being a business. But law firms are at a disadvantage. They are cobbled by ethics rules and state laws that put them at a disadvantage by denying them the normal business attributes enjoyed by the rest of the business world.
Rules complicate and limit the doing-business-as, name options making branding more difficult. Advertising is a murky activity that can place the firm in trouble. Can a law firm accumulate goodwill? Does it have value that can be sold as a going concern? Can it protect itself from the unfair competition of a departing partner? Must the “paramount concern” for law firm clients (who always have the ultimate right of choice) void the normal rights of business owners to transfer their goodwill or protect their business from inappropriate actions of others?
I suppose the problem goes beyond the issue of “paramount concern” for the client and may rest on the difference between the interests of “law firms” as a business versus the interest of the individual attorneys. But with increasing globalization, the American firm may well become at risk without more accommodation of their modern business status.
I don’t have the answers, but I know that having one foot in the competitive business world and one in the increasingly dim past puts the modern firm at risk.
Comments are welcome.
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Filed under Operations by Tom Collins