Commenting on the Teapot Dome scandal, a young Richard Nixon said: "When I grow up, I want to be an honest lawyer so that things like that can't happen." In fact, Watergate demonstrated that lawyers could do good things. The spectacle became a television phenomenon in which the special prosecutors were the good guys who pursued the corrupt president.
In recent years, however, the public's perception of the legal profession has diminished on both sides of the Atlantic. In 1998, 31,672 members of the public complained about their solicitors. Backbench MPs frequently push for regulatory changes and increased competition. It would not be entirely unfair to use the adjectives greedy, pompous, corrupt, sexist, snobbish and incompetent in depicting at least some elements of the profession.
Added to these problems is the background of globalisation. The march of the Big Five accountancy firms is symbolic. The professional services conglomerates now offer services in practically every sphere of commercial advice. Pure audit, the staple 10 years ago, is perceived as a loss leader, a means to devour more lucrative prizes. The one-stop shops offer tax, management consultancy, IT, corporate finance, and increasingly legal products in a quest to dominate the global professional services marketplace. Globalisation is rapidly seeing the turreted fences around fragmented national markets dismantled in favour of the fierce arena of a seamless global market, in which massive corporations compete for dominance. Unlike the other issues facing the profession, like legal aid and regulation, it is something that cannot be affected by lobbying national government. There is no reason why the legal, or indeed any, industry should escape the fate that has befallen many others already.
What exactly does this mean? All that is certain is that the stakes are enormous. At the top end of the market the fees earned by accountants, investment bankers and lawyers advising on mergers and acquisitions are at record levels. The fees for professional advice on a $100bn-plus acquisition, for instance, may run into many hundreds of millions. Mammoth companies spend more than small change on legal advice each year. When government investigators attempt to break them up for abusing their monopolies, they spend even more.
Similar principles permeate the high street. But here, many traditional lawyers' tasks seem to be threatened with extinction. The lifting of the monopoly on conveyance has led to cut-price specialists offering services at around half the cost of those offered by solicitors. In a world economy where competition reigns supreme, how is the lawyer to meet the challenge thrown down by the bean-counters and other interlopers? Where is the boundary between professionalism and business? Is there a boundary at all? Is there a role for the ethical lawyer? Will commercial pressures aggravate the problems?
In the City, in particular, pressures to perform in an already crowded marketplace have been enhanced by the arrival of more American firms. The Americans work longer hours, pay higher wages, and despite the view shared by some that they are only here to satisfy the chauvinistic tendencies of some of the US multinationals resident in London, are after a much bigger slice of the international pie. With their arrival, the prospect emerges that the methods employed by our cousins will find favour here.
For most American lawyers the word "billing" is sacred mantra that is ingrained on the psyche during formative years. Stateside, extraordinary competitiveness requires that economics drives law to such an extent that its status as a profession is questionable. Such observations could present a depressing picture of the future of the profession.
But are big business and ethics necessarily mutually exclusive? The answer is no. In fact, now is as good a time as any to be an ethical lawyer. We live in an age dominated by image and brand names. Ethics is as marketable, if not more marketable, than anything else. People are willing to pay for environmentally friendly washing-up liquid, so why not charge them extra for ethically friendly legal services?
Some members of the legal profession argue that the ethics of accountants and lawyers differ. On this basis, they say the profession should retain its traditional monopoly. Certainly, there has been a string of high-profile auditing scandals in recent times, culminating in the investigation of the entire US auditing profession. These have done nothing to enhance the credentials of the Big Five. However, lawyers have had their share of scandals, especially during the recession.
Let accountants offer legal advice. Unless the service is up to scratch, then within two or three years, their legal operations will fold and they will retreat. Conglomerates have under-performed in the past. Why should they work in the professional services sector? What evidence is there to suggest that a Big Five firm will be able to build a credible legal practice within the timescale or budget currently envisaged? Is a Big Five accountant in, say, San Francisco, really going to be able to offer his client better and more cost-effective legal advice in, say, a specialist London derivatives market than a niche player endowed with local knowledge? It is unlikely. If they fail, then it presents a public relations opportunity for the legal professional. Even if it does work out, there is no reason why ethics should suffer.
The large players can hardly afford any more scandals. In purely economic terms the cost of staying out of trouble, acting ethically and competently, and not cutting corners is less than the reverse. Rather than lose markets, opportunities will be created for lawyers. Just as accountants have set their sights on law, lawyers might choose to enter lucrative areas in IT and corporate finance. As society and the global economy become more complex, increasingly rewarding and challenging areas of law will evolve. If traditional tasks are eroded at the other end of the market, that is a price worth paying.
Henry Longfellow wrote: "It takes less time to do something right than to explain why you did it wrong." Successful business people know the wisdom of this statement. As law becomes increasingly commercialised, the winners will be those who get their ethics right.Reuse content