10/27/14

Stop it with the Stupid Rules

Ryan has previously waxed poetic about how some mandatory bars are imposing odd and counterproductive ethics rules and opinions.

This topic resurfaced for me recently as I have been asked to present to a futures committee of a mandatory bar in November. They are wanting me to give them a picture of all that is going on with pricing, legal project management and numerous other developments in the market.

This is an opportunity to share my thoughts in a neutral environment - where I can speak quite freely. I had been giving some thought to how to best utilize such an opportunity. My mind wandered through various subjects and how I can best educate them on the realities of this changing market. My mind then shifted to what can a bar do to help its members. A lot of this thinking was around how the bar can provide resources to help its members do better pricing and bring efficiencies to their practices.

And then it hit me: Those Stupid Rules.

Oh opportunity.

Having previously worked for a mandatory bar, I have more knowledge than I care to on how ethics rules and opinions are generated. The core question at the base of every issues is "Could a client be harmed?" or some variation on that theme. On the surface this sounds perfectly reasonable, since protecting the public is part of a mandatory bar's charge. In practice however, based on lawyers' risk averse natures, this unit of measure is usually taken to an extreme.

Take for example Ryan's target; the Texas Bar Ethics Opinion 642. I can predict how the discussion went around this issue. The core question was: Could a client mistake someone with an "officer" title working at a law firm to be a lawyer? At the extreme the answer is: Yes. Someone, somewhere could make that judgement. And if that's the case, there is a concern that using those titles could be interpreted as holding oneself out as a lawyer. And we all know the danger in that. (For normal people out there, the danger is that someone might pay this 'non-lawyer' for legal advice.) Given that string of logic, it makes perfect sense to issue an ethics opinion prohibiting law firms from using that title.

Back in reality - this type of rule actually inhibits a law firm's ability to better serve its clients. Professional CIOs, CFOs, CMOs and others bring an expertise that adds to the abilities of firms and lawyers to serve their clients. Inhibiting the ability of firms to attract such talent is running in the wrong direction.

The straw that pushed me over the edge (metaphor blender engaged) to write this post was visiting a law firm's web site and seeing the words "This is an Advertisement" prominently displayed on their homepage. Of course they felt compelled to include this since some ethics rule requires it.

Seriously?

I know - I know. Someone, somewhere might confuse a website as legal advice. Right.

So ... mandatory bars, here's my top recommendation. Stop it with the stupid rules. They are not protecting clients. They are doing the exact opposite. Restrictions on advertising limit the information avilable to clients about the value and need for legal services. So in addition to asking "could a client be harmed" ask some follow up questions, like: Will these restrictions hurt clients? If clients are not aware of the value of estate planning, will they be harmed? Not only is the answer yes, but last check 50% of adults in the US do not have wills in place. Enough said.

1974 was 40 years ago. Try implementing some rules suited for today or better yet, tomorrow.

Rant Complete (for now).

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5 comments:

Anonymous said...

Opinion 642 may be extreme (and it might be wrong), but not for the reasons stated. The problem is not a non-lawyer C-level executive being perceived as a lawyer. The ethical challenge is a C-level non-lawyer (who is motivated by profit rather than ethics or the clients' needs) exerting control over a lawyer of any rank. As lawyers, we have long been prohibited from relinquishing our professional judgment, and, if we did, we would have a completely different system -- one where a client's needs might be sacrificed for the firm's bottom line and one that would probably allow capital investment and other non-lawyer involvement. Perhaps we should have a different system (goodness knows and as Ryan rhymed, there are very few lawyers who can run a business), but that is a different conversation for a different day. Regardless, it does not make it a "stupid" rule.

Steve said...

I disagree. It is a stupid rule. Law firms that have 10s or 100s of millions of dollars in revenue are businesses and have certain business functions due to the nature of the multi-disciplinarian, multi-tiered, multi-district, structure of these businesses. These are not solo/small firms that are simply scaled to a higher number of lawyers.

Conflicts, records, HR, Accounting, IT, Library, Marketing are completely are different animals once you've hit a certain size. Trying to install rules meant for firms of under 10 lawyers to firms with 100s (1,000s) of lawyers is stupid. In addition, Law Firms are not members of a bar association, individual lawyers are. The rules are meant to protect the client from misdeeds by individual lawyers. To say that any CFO, CMO, CIO, CXO tells a lawyer how to best represent a client's legal issue is ludicrous. However, a CFO, CMO, CIO, CXO may be the very best person to explain to a lawyer how a client's rates are too low, or a client's risk-exposure is too high, or a client's work prevents the firm from representing others that have legal needs, and can be more profitable. Lawyers in law firms may serve the individual needs of their clients based on their own individual skills as a lawyer, but lawyers that are part of a larger law firm environment are not independent contractors that can simply run the business side any way they want. The rule is at best misguided, but most likely a very stupid thing to enact.

Anonymous said...

Steve, this appears to conflate the issues. The rule regarding professional judgment and independence has been around a long time, and most people would agree that it is a good rule. The question is how you preserve the ethical standard while acknowledging the business needs of a firm (of any size). How do you maximize non-lawyers' contributions to the business success of the firm without sacrificing or even calling into question our professional duty to our clients? It is doable, even under the current rules. So, the Texas INTERPRETATION of the rule may be extreme and wrong and, perhaps, stupid. However, as I said, the rule itself is not "stupid," even if it is debatable. I wouldn't fret too much, though. For reasons far beyond ethics, you will see more and more lawyers moving into these business roles anyway.

Toby Brown said...

I join Steve in disagreement. The Opinion does not prohibit "C" titles, it prohibits the use of the terms "Officer" and Principal." Law firms can still employ non-lawyers in C-level roles, they just can't use those titles because they imply "control."

I would think "Chief" would have been a better target. But since that was not the question asked ....

Family lawyer said...

Are lawyers not capable of using their ethical judgement to ensure that people in these positions do not possess undue influence over their clients. At some point we have to stop punishing the group for the mistakes of a few.

 

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