Are any law firms public corporations? I forsee a FLOOD of litigation in the coming decades…everybody from McDonalds (fast food), to PHILIPS (suntanning booth lamps), to Wllards (coffins) is going to face tons of lawsuits. And, because in the USA you are no longer responsible for your own actions, just about anybody selling goods or services is “fair game” for lawsuits.
So, I would like to get in on this coming bonanza…are there any publicly0traded law firms that i can invest in? Seems to me that litigation will become more and more a factor in american life…after all, if you become fat and unhealthy because McD’s sold you big macs for decades, you should be able to sue them for damages.
Also, with “junk science” proliferation, I can see a ahole new era of profitable employment for law firms…it only seesm fair that the public should be able to share in this!
In general, no. And because of a ethical practice rule that forbids non-attorney ownership of a law firm or supervision of attorney practice, I suspect the answer is almost universally ‘no’.
- Rick
I agree with Bricker but I would add this. There may be considerations regarding fee splitting with non-licensed persons involved. And that is forbidden.
Cite, please.
Bricker, (or any of our other lawyers), what is the difference between having a publicly traded law firm and having a legal team offered by a consulting firm such as Navigant Consulting out of Chicago?
To add on to the above (with which I agree), another consideration is that a law firm is a labor intensive business, not a cash intensive business, so they simply don’t need to raise a bunch of money on the open market. Now, plaintiff’s firms DO need cash, but not enough to justify the expense of going public.
tomndebb, consulting firms do a lot of things that are law-related (like giving tax advice, and–even closer–representing clients in tax controversies before the IRS), and many have lots of lawyers on staff, but they don’t actually represent clients as attornies or do actual legal work. I’m not sure exactly what you’re asking, but a legal team “offered” by a consulting firm would be a group of lawyers that are referred by and don’t work for the consulting firm.
This is an issue that is subject to a lot of debate (although less now than a few years ago). Looking very briefly at the link tom provided, it seems that the Navigant people are consulting on whatever suits their clients may be involved in – they’re not actually practicing law. I admit the distinction is a fine one, and perhaps nonexistent in all but the most formal sense.
The reason this isn’t quite such a big deal as it was a few years ago is that it was the accounting firms that were hiring a ton of lawyers and were trying to enable these lawyers to practice. However, after Arthur Andersen, the accounting firms are on the defensive and are less interested in expanding their scope than they once were.
–Cliffy
In reading the Navigant Consulting link Tom provided I don’t get the impression they are offering legal services directly to clients as such, but are essentially offering to give expensive strategy and tactics advice to corporate lawyers and their clients who may be in over their heads on specific technical issues, and I’m sure there is reams of paperwork that is signed specifically defining the relationship as extra-legal.
This Navigant “In the news” link gives a practical snapshot of what they do.
As Bricker mentioned, there are ethics rules that prevent non-lawyers from owning law firms (this would include “privately-held” firms as well as publicly traded firms). Practically speaking, the disclosure requirements for public companies would be directly opposed to the confidentiality obligations and privilege rights of lawyers.
Also, again speaking practically, I had long heard that “law firms, accounting firms and investment banking firms will never go public because all they have is human capital.” As someone else mentioned, this means that there are not very many hard assets and that the brains can walk out the door any time, making investors very nervous. Investment banks, however, have gone public (even the ones, like Goldman Sachs, not affiliated with banks) and have tried to address the issue with long-term employment contracts with non-compete clauses. Accounting firms have not gone public and probably will not because they face similar ethics issues with the need for audit independence, professionalism and confidentiality. The consulting arms of the accounting firms, however, can and have gone public as separate entities.
Lawyers employed by consulting firms should be lawyers for the consulting firms only–no atorney/client relationship between the consultant’s employed lawyers and the consulting firm’s client should be created by their participation in the consulting process.
It’d be kinda tricky to become a partner in a firm if it wasn’t a partnership…
Although I heard (can’t remember where, don’t have a cite, Google’s no help) that Tower Snow was talking about taking Brobeck Phleger and Harrison public. Of course now that (1) Snow went to Clifford Chance, and (2) Brobeck dissolved, there is not much talk of that.
I have no idea how he was planning to get around the ethical rules against attorneys sharing revenues with non-lawyers.
Some law firms are corporations rather than partnerships. The owners are then shareholders rather than partners, although many lawyers informally use the generic term “partner” even for a shareholder, even though it is technically inaccurate.
But while some law firms are corporations, none of them (as far as I know) are publicly traded, and I doubt that any state’s ethical rules would even allow a publicly traded law firm. Several states in the 1980s and 1990s invented new corporate forms, such as “professional corporations” and limited-liability companies, of which law firms took advantage. None of these forms is publicly traded: they were basically invented in order to bring the benefits of limited corporate liability to entities, such as law firms, that had formerly operated as partnerships.
Since others have ably answered the question of why there are no publicly traded law firms, I’ll take a shot at your underlying question. If you want to get “a piece of the action,” maybe you should be looking for companies that provide services to lawyers. Professional experts come to mind immediately, as do litigation graphics design firms. One that you might not think of immediately is secure records storage.
I have no idea whether any of the above are traded publicly, but I can’t think of any ethical reasons why they wouldn’t be.
Potential conflict of interest betwen duties as an officer of the court and maximizing return for shareholders.
“Potential conflict of interest betwen duties as an officer of the court and maximizing return for shareholders.”
Why would there be any larger conflict of interest there than in the conflict between officer of the court and maximizing return for partners?
I think a bigger issue is conflict of interest between clients and shareholders. Can you imagine, each time you take on a new client, having to go through the list of shareholders? And what happens if somes shares are sold to the opposing side? That would be an interesting tactic. Losing a court case? Launch a hostile takeover of opposing counsel. This is just a huge can of worms that should be welded as tightly shut as possible.
Perhaps you should consider reading the post before you respond. Professional experts, litigation graphics designers, and secure records storage companies are not officers of the court. Therefore, none of them would have the conflict of interest you describe.
I’m sorry - now that I’ve eaten, that looks a bit snarky. My apologies.