Should There Be a National Bar?
The Interests of Smaller Firms
I have written many times about my belief that too many state bar associations, particularly those with mandatory membership, are not as committed as they should be to serving the interests of smaller firms and sole practitioners that are the great bulk of their members. Whether the issue is limits on lawyer advertising, mandatory malpractice insurance disclosure, barriers to selling a practice, or other concerns, bar association rules too often seem to impose unnecessary cost and restrictions on small firm lawyers in a misguided zeal to "do good" for the public.
Regulatory Code for Larger Firms
It appears, however, that bigger firms have their complaints, too. As reported in the ABA Journal, a group of 23 of the country's largest law firms proposed to the ABA Commission on Ethics 20/20 that large firms need their own national regulatory code on issues such as conflicts of interest, liability and lawyer mobility. "The rules imposed by the separate states are primarily designed to protect individual consumers of legal services," these firms asserted. "The strictures and presumptions they impose do not work well when applied to relationships between large commercial enterprises and their outside counsel."
The Role of Congress
The ABA Commission, not surprisingly, was skeptical if not hostile, and the only other body that could act on this issue is Congress. It is clear that Congress can affect the bar, as it attempted to do in the debt collection area by making lawyers subject to the Fair Collection Practices Act. However, Congress would likely be unwilling or unable to disband 50 state bar organizations, particularly when the states themselves would be hostile. I believe the issue of states' rights would be far more powerful than any voice from the business or legal communities in the House of Representatives, and in the Senate the issue would be dead on arrival.
That's not to say that fundamental governance change is impossible. For example, as law firms have grown larger, they need additional capital, which is best raised in the capital markets - which would mean non-lawyer ownership of firms, now prohibited by the Code and once seen as highly unlikely.
What are States Doing?
But the states themselves have begun to move on the issue. The District of Columbia permits non-lawyers to own 25% interest in a law firm, and North Carolina has a bill before its Senate that would allow 49% non-lawyer ownership.
Could this issue cause the break up of the mandatory (integrated) bar structure into state licensing agencies on the one hand and voluntary bar associations on the other hand - with the latter being the home of sole and small firm practitioners? The answer, as the song says, may be "blowin' in the wind ..."
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