Imagine Apple owned your law firm. Conference rooms would be full of attorneys on their iPhone 4s, not the Blackberry Bold, and paralegals would be trading in yellow legal pads for iPads.
The best part—aside from a shiny Macbook Air—would be Apple’s fiscal 2010 fourth quarter revenue of $20.34 billion and net quarterly profit of $4.31 billion. In today’s economy, the capital markets and investment Apple could offer a law firm would have immense implications in terms of future revenue streams and attracting new clients. Certainly internal management structures would be streamlined to match Apple’s own aggressive management strategy.
These days, it’s already difficult to identify a quote as coming from a firm equity partner or the Apple CEO:
“It’s not about fooling people, and it’s not about convincing people that they want something they don’t. We figure out what we want. And I think we’re pretty good at having the right discipline to think through whether a lot of other people are going to want it, too. That’s what we get paid to do.”
Even still, adopting Apple’s (and Steve Job’s) management style would definitely come as a great relief to lawyers amid the recent layoffs. “We’ve had one of these before, when the dot-com bubble burst. What I told our company was that we were just going to invest our way through the downturn, that we weren’t going to lay off people, that we’d taken a tremendous amount of effort to get them into [the company] in the first place—the last thing we were going to do is lay them off.”
Emulating Apple’s management style has merit. But, the reality is, thanks to recent lawsuits, Apple may actually be able to own your firm sometime soon.
On Wednesday, the WSJ reports, Jacoby & Meyers Law Offices LLP filed three suits challenging state laws in New York, New Jersey and Connecticut that prohibit non-attorneys from owning stakes in law firms. With the exception of Washington, D.C., this ban originates from ethics rules established by State supreme courts, aiming to eliminate the conflict between profit-based principles of business and legal priorities of serving clients’ interests first and foremost.
Jacoby & Meyers maintain that a restriction on firm ownership “perpetuates economic inequity” because “small [legal] practice [do] not have access to the capital markets that the Wall Street [law] firms have.”
Clearly there would be consequences and complications to a change in the law. A fear exists that with private company ownership of or investment in a law firm, attorney-client privilege would be compromised.
At the same time, many feel the restriction is just another boys-club ban created by lawyers aiming to preserve a level of elitism within the industry. “There is this idea of fraternity [in law]—if we allow nonlawyers to be members of our club, we are no longer special,” said Stephen Gillers who is a professor at New York University School of Law. Specializing in legal ethics, Gillers laments, “This is a deep and abiding sentiment of the American Bar.”
However, if there can be private hospitals or schools—with arguably equal levels of ethics concerns—is the ban on private ownership of law firms unconstitutional? Managing Partner of Jacoby & Meyers, Andrew Finkelstein, would answer, “yes.”
“There is no legitimate rationale that exists to prevent nonlawyers from owning equity in law firms,” said Finkelstein. “The rule unconstitutionally restricts interstate commerce by limiting attorneys’ ability to act like any other business in the United States.”
So, there’s only one question left. What color iPad would you get?