Wednesday, September 21, 2011

Outside Ownership of Law Firms? IBM General Counsel Weighs In

While the UK moves forward implementing “alternative business structures,” that will allow outside ownership of law firms, Robert Webber, SVP for legal and regulatory affairs and general counsel at IBM argues against the US following suit in an interesting piece published in Businessweek. "Law Firms Should Spurn Outside Investments." He doesn't pull any punches:
  • "Imagine discovering that the law firm you hired to defend your company... is partly owned by private investors... [who] have financial stakes in the company that is suing you — and perhaps even stakes in the law firm representing your adversary."
  • "It’s a troubling omen of the legal profession’s direction. Most of all, it’s worrisome for clients, whose own interests may take a backseat to the lawyers’ search for additional capital."
  • "These proposals open the door to ethical risks that will work to the detriment of corporate and private individuals and the overall way we conduct business in this country. They could compromise a lawyer’s obligation to protect confidential information and cause conflicts of interest between the lawyer and clients or outside financiers. These outside funders could influence a lawyer’s behavior or even the outcome of a case."
  • "The past few years have seen the legal profession repeatedly putting money first. Conflict-of-interest rules are weakening, making it easier for lawyers to switch firms mid-dispute."

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