Technology is having an ever deepening impact on the practice of law and the sustainability of traditional practice and law firm models, with mobile devices, DIY legal forms and software tools online, outsourcing and off-shoring of routine legal services, increasing practice complexity and specialization, and fewer true borders between regulatory regimes which significantly increases the possibility of malpractice claims, UPL, and other liability exposures.
In light of the present and persistent economic malaise and recurrent trends in boom and bust legal hiring, a serious argument can be made for the grouping of related and complementary (including with counter-cyclical balancing) legal practice areas so as to better protect the long-term prospects of business/management side law firms; some of which – Coudert Brothers LLP (2006), Heller Ehrman (2008), Thelen LLP (2009), Howrey LLP (2011), and Dewey & LeBoeuf (2012) – are no longer with us.
As set in alphabetical order, a sampling of practice area group environments (forgive me if I missed yours) in a global corporate legal industry still valued at $100 billion/p.a.,[1] might include:
(1) Biotechnology, Intellectual Property, Technology, Entertainment, and Sports Laws (BITES);
(2) Corporate, Commercial, Advertising, Marketing, Publication, Promotion, and Sponsorship Laws (CAMPS);
(3) Crisis Counseling, and Document Disposition and e-Discovery Evidentiary Compliance (CCDE);
(4) Cybersecurity, Cloud, e-Commerce, and Outsourcing Practices (CCEO);
(5) Communications, Healthcare, Insurance, Privacy, and Data Protection Laws (CHIPDP);
(6) Complex Litigation on the Environment, Climate, Criminality and Torts (CLECT);
(7) Energy, Natural Resources, Emissions, Water, and Climate Change Law (ENREWC);
(8) Fashion, Fabric-ware, Immigration, Labor and Employment, and Benefits Laws (FILE-B);
(9) Government Lobbying and International Relations Law (GLIR);
(10) Indigenous Governance and Laws (IGL);
(11) International Organizations and Not-for-Profit Laws (IONP);
(12) Mergers, Acquisitions, Banking, Securities, and Securitization Laws (MABS);
(13) Manufacturing, Retail, and Consumer goods Laws (MARC);
(14) Municipal, Electoral, and Local Governance Laws (MELG);
(15) Medicine, Implantable Device, Drink, Agriculture, Food, and Supplements Laws (MIDAFS);
(16) Private Equity, Government Contracts, and Venture Capital Syndication and Counseling (PEGVC);
(17) Procurement; International Trade and Customs; Competition; and Constitutional Law, Civil Rights, and Human Rights Law (PITCH);
(18) Permitting, Real Estate, Leasing, and Franchising Practices (PRELF);
(19) Restructuring, Insolvency, Funding of Distressed Entities, and ADR (RIFDEA);
(20) Partnership, Venture, and Small Business Formation and Counseling (PVSBFC);
(21) Trusts and Estates, Education, Disability and Elder Laws (TEDE);
(22) Transportation, Regulatory, Utilities, National Security, and Construction Laws (TRUNC).
This represents one way to put some proper comparability and commonsense competition (not based on ever diminishing fees in cutthroat price competition) into legal service offerings, and also have partners and practitioners cluster for their mutual synergies and sustainability against the individually-experienced valleys of unpredictable business cycles, and the better service of their clients with tangible enhanced value in-PAGE depth. Due to the strict fiscal discipline and focus on sustainability over growth[2] that this proposed system would impose, each PAGE might:
(a) Keep ¼ of what it brings in on its book of business as pure profit (that it will distribute amongst its own partners, associates, and dedicated staff as it sees fit);
(b) Apportion ¼ for its own PAGE “initial” overhead and business development pool;
(c) Send another ¼ off to account for the firm-wide “residual” overhead and recruiting pool (from which each PAGE will then be able to draw in some pre-set or floating formula);
(d) Have to then relegate the last ¼ to debt service, first; anything left over going into the residual overhead and recruiting pool, as the secondary option. From this, leaders of all PAGE will jointly decide whether and to what extent they can free funds for reversion to PAGEs – whether by quantum of contribution, or lockstep in true equity.
These proportions are not set in stone, and firms will remain free to tweak them as they see best. Each PAGE will also have to set budgets in advance and submit projections to the firm. Of course, some contrarians and “elitists” will look to further distinguish themselves by avoiding a PAGE system or rearranging themes. But, PAGE is already here, partly, as some global firms prefer “partnerships of partnerships” with significant business and budgetary autonomy. However, time will always tell, and in the full light of day, whether or not the elitists were right!
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Author:
Ekundayo George is a sociologist and a lawyer, with over a decade of legal experience including business law and counseling (business formation, outsourcing, commercial leasing, healthcare privacy, Cloud applications, and Cybersecurity); diverse litigation, as well as ADR; and regulatory practice (planning and zoning, environmental controls, landlord and tenant, and GRC – governance, risk, and compliance investigations, audits, and counseling in both Canada and the United States). He is licensed to practice law in Ontario, Canada, as well as in New York, New Jersey, and Washington, D.C., in the United States of America (U.S.A.). See: http://www.ogalaws.com
He is an experienced strategic and management consultant; sourcing, managing, and delivering on high stakes, strategic projects with multiple stakeholders and multidisciplinary teams. See: http://www.simprime-ca.com
Being a business owner who has taken courses in management, organizational behaviour, and micro-organizational behaviour, Mr. George is also a writer, tweeter and blogger (as time permits), and a published author in Environmental Law and Policy (National Security aspects).
Hyperlinks to external sites are provided to readers of this blog as a courtesy and convenience, only, and no warranty is made or responsibility assumed by either or both of George Law Offices and Strategic IMPRIME Consulting & Advisory, Inc. (“S’imprime-ça”), in whole or in part for their content, or their accuracy, or their availability.
This article does not constitute legal advice or create any lawyer-client relationship.
[1] Jennifer Smith. Survey Says Post-Recession Shifts Are Here to Stay. Published on blogs.wsj.com, May 16, 2012. Online: >http://blogs.wsj.com/law/2012/05/16/brave-new-world-legal-edition-survey-says-post-recession-shifts-here-to-stay/?mod=WSJBlog<
[2] Edward Tan, JD. Why the BigLaw Business Model Should Be Put to Sleep. Published on blogs.findlaw.com, June 21, 2012. Online: >http://blogs.findlaw.com/greedy_associates/2012/06/why-the-biglaw-business-model-should-be-put-to-sleep.html<
ISSUES:
The practice of law is quickly running into a very big problem. More and more national and sub-national jurisdictions are passing laws regarding e-Commerce that have an impact on business entities organized outside, and individuals residing outside, their physical boundaries, but that also do business in, have a defined nexus with, or travel through or over their sovereign territory. While it is important to know the laws of the place where one “intends” to do business or travel, it may be helpful and even advisable, to know the laws of the place where one “might” do business or find oneself physically (through emergency landings and layovers), or virtually through no fault of one’s own (in the case of a data breach, or an online defamation matter, or through the workings of a social medium, as the result of some “User-generated Legality Issue”, a.k.a. “an UgLI”).
In addition, regulatory authorities are developing a growing habit of commencing and continuing to conclusion, multiple and separate actions against the same defendant or group of defendants and based upon the same facts or confluence of circumstances, sometimes in the same venue and sometimes in different venues, or cooperatively against multiple jurisdictions. When the government with unlimited resources refuses to forbear or stay itself, or a court find that any stay of proceedings which could save the defendants time and money is not necessary, or not in the public interest, or not contemplated by law, then it immediately becomes necessary for sometimes very many lawyers to do the same or similar things, very many and expensive times.[1]
Unfortunately, licenses for the practice of law are issued by each specific jurisdiction of practice, and often after checks, long study, and success on a Bar Examination. Hence, in effect, advising on or interpreting the laws of a jurisdiction or a place where one is not licensed, can be deemed to be the Unauthorized Practice of Law (UPL), with sanctions up to and including disbarment.
How does a lawyer, who is not a part of a 1,000+ lawyer firm with global offices, provide effective and professional and complete advice and counsel to clients without: (a) engaging in unauthorized practice of law; (b) inviting a malpractice claim for lack of care or thoroughness in the giving of that advice; or (c) losing clients by advising that they engage legal counsel in every jurisdiction in which they may be organized or authorized to do business, to or through which their products or services may be transported, or within which a person impacted by a data breach may need to be notified in accordance with the applicable law of that jurisdiction?
Undoubtedly, many lawyers do give the advice to go and get advice, despite the prohibitive costs. Also, and verifiably, many lawyers already speak on the laws applicable in jurisdictions where they are not licensed, especially at seminars on professionalism, ethics, and best practices; and they may well be doing the same with their clients – with, no doubt, the caveat to seek a licensed practitioner in the appropriate jurisdiction and practice area for a clear and complete treatment.
QUESTIONS:
This current and increasingly urgent situation raises at least 10 (“ten”) very interesting, and yet long-neglected questions, for Law Societies and Bar Associations, worldwide, to try to answer.
1. Is the cost of full legal and regulatory compliance while doing international business, or even while engaging in limited e-Commerce, becoming prohibitive for the small and medium-sized business in (or across, to, or through) any or every jurisdiction?
2. Are lawyers being forced to choose between practicing exclusively locally, or potentially engaging in the Unauthorized Practice of Law by rendering proper advice and counsel?
3. Is it time for lawyers running into this issue, to state and contract that any and all information they provide that regards a jurisdiction other than their own, is rendered for general information purposes, only, and not intended or to be deemed or accepted or construed, as actionable legal advice or counsel? What will this do to lawyer usefulness?
4. How is it (and is it fair over question 5, below), that transactional lawyers cannot freely draft agreements governed by the laws of jurisdictions where they are not licensed, even if those laws are understood in great detail through studies and consultations, and other familiarization, without UPL allegations and sanctions?
5. How is it (and is it fair over question 4, above), that litigators presenting supporting caselaw and distinguishing conflicting caselaw of jurisdictions where they are not licensed to practice law, in their arguments before senior Judges and seasoned legal practitioners of courts and tribunals and in papers submitted, are not subject to wholesale UPL allegations and sanctions?
6. Are litigators favored with an unfair competitive advantage under the current system?
7. Is the continued licensing of lawyers by separate and distinct jurisdictions, an undue restraint on the trade and practice and profession of law, that can be subjected to a Competition Review or an Antitrust challenge in any court or tribunal of competent jurisdiction?
8. Are the very large law firms operating under the current model open to challenge for unduly restraining the trade and practice and profession of law, by the chilling protection of the Unauthorized Practice of Law (UPL) allegation, to the extent that they may be: (a) forcibly broken-up; (b) mandated to make their services available to businesses at more affordable rates; or (c) required to enter into consulting or associative arrangements, also at affordable rates, with smaller firms and individual lawyers (subject to appropriate conflict checks), in order to make the multijurisdictional practice that is increasingly essential for the rendering of effective and ethical legal advice and counsel, available to a wider section of the Bar(s) and Law Societies to which they belong?
9. Has the time come to consider the issuance of a Multijurisdictional Law License, or a Multijurisdictional Practice Certificate (whether across states or provinces in a Nation State, or by practice area in a Nation or economic region – such as:
a. Outsourcing;
b. Privacy Laws;
c. Cloud Computing;
d. Social Media practice;
e. International Trade Laws;
f. Legal and Regulatory Compliance;
g. Data Breach Notification Protocols;
h. International Law (Laws of War, Laws of Space, Laws of the Sea, Laws of International Organizations, International Environmental Laws, and so forth);
or by practice area across economic or geographic regions, or in some combination that includes one or more of these options), in order to provide a Safe Harbor for lawyers with clients who travel widely, or who are engaged in e-Commerce or International Trade or other International operations that require legal counsel to be well-versed, well-respected, and not constantly in and out of hearings defending themselves against UPL charges?
10. How much would it cost and where would the received moneys go? What would be the pre-qualifications for such a Multijurisdictional Law License (M.L.L.) or Multijurisdictional Practice Certificate (M.P.C.), prior licensing in 2 (“two”) or more jurisdictions, multilingual abilities, a number of years of practice, a demonstrated need in the lawyer’s client base, or other factor(s)?
ANSWERS??
There are precedents for most if not all issues and acts considered in the above questions. However, it remains to be seen where we go, and whether it is steps forward or steps backwards – if and when one or more of the Bar Associations and/or Law Societies willing to take the lead in this area, acts boldly, before the test cases start-a-coming, and at a ridiculously rapid pace.
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Author:
Ekundayo George is a Sociologist, Lawyer, and Strategic Consultant, with experience in business law and counseling, diverse litigation, and regulatory practice. He is licensed to practice and has practiced, in Ontario, Canada, as well as multiple states of the United States of America (U.S.A.); and he has published in Environmental Law and Policy (National Security aspects).
Hyperlinks to external sites are provided as a courtesy and convenience, only, and no warranty is made or responsibility assumed for their content, accuracy, or availability.
This article is intended and presented for general information purposes and is not intended or construed or to be read, as constituting legal advice or creating any lawyer-client relationship.
[1] See e.g. Jonathan Stempel, Top cop: SEC may not delay civil cases. Reuters.com. Published in Business & Financial News, Breaking US & International News, on Tuesday, May 4, 2010. Available at: http://www.reuters.com/assets/print?aid=USTRE6434GY20100504
See also David Smyth, Siemens Executives Face Parallel FCPA Proceedings. Brooks, Pierce, McLendon, Humphrey & Leonard, L.L.P. Posted on December 15, 2011. Available at: http://www.secmiscellany.com/2011/12/15/siemens-executives-face-parallel-fcpa-proceedings/
See also Daniel Matzkin, AON settles FCPA enforcement actions with DOJ, SEC. Squire Sanders. Posted on December 21, 2011. Available at: http://www.anticorruptionblog.com/foreign-corrupt-practices-act/aon-settles-fcpa-enforcement-actions-with-doj-sec/
But see contra Pinsent Masons LLP. EU competition regulators agree guidelines for cross-border cooperation. Published on November 10, 2011. Available at: http://www.out-law.com/en/articles/2011/november/eu-competition-regulators-agree-guidelines-for-cross-border-cooperation/
Ogalaws 