CTLA asks to join Jacoby & Meyers v. Judges of the Superior Court: Argues that lawyer self regulation is at risk

CTLA’s principal argument against  Jacoby & Meyers’ bid to have a federal court judge enjoin enforcement of the state court rule barring non-lawyer investment in law firms is that allowing non-lawyers to own law firms would spell the end of lawyer self-regulation ” by creating a class of persons [non-lawyer investors / owners]  who would be in a position to control legal practices and yet would not fall under the authority of the Rules.”  In other words,  non-lawyer investors / owners would “incentivize” “their” lawyers to bring in money to the firm never mind the Rules. (Sound familiar?)   CTLA argues that the grievance process currently protects PI clients (one hopes this argument is off the mark; and that what protects PI clients is lawyer self-regulation), but that the grievance process would be of no use against unscrupulous non-lawyer investors / owners.  (But the grievance process would  still provide “protection” against lawyer misconduct. And then there might be malpractice insurance.  How would insurance companies underwrite malpractice risks for firms owned by non-lawyers?)  If allowed to join the case as an amici, CTLA will surely develop their arguments, which are important.

For CTLA’s Memorandum In Support of its Motion for Permission to Join as Amicus Curiae click here.

CBA files Motion to Participate in Jacoby & Myers v. Judges of the Superior Court

Representing the CBA, Bill Clendenen of Clendenen & Shea in New Haven,  filed the motion on September 13.  A copy of the motion (to which is attached a copy of The Constitution of the Connecticut Bar Association, Inc. is attached) can be found here. This is a good development for two reasons:  first,  if the Court grants the motion it means that Connecticut lawyers who object to the plaintiff’s attempt to bypass the normal rule making process for the Rules of Professional Conduct in Connecticut will be represented and second because Bill Clendenen, who once, together with Dave Lesser, headed the Law Reform Section of the New Haven Legal Assistance Association, is a first rate litigator.

The litigation of this case is likely to be very expensive.  Who is going to pay for it?  This would be a good time for lawyers who do not belong to the CBA to join. The CBA is an integral part of the legal profession in Connecticut.  It is hard to imagine what the profession would be like with the CBA and local bar associations.  To one extent or another every lawyer who is licensed to practice in Connecticut benefits from work of the CBA and local bar associations.  Lawyers who choose not to join may have their reasons but they nonetheless benefit from the CBA and local bar associations.  Now would be a good time to  pay one’s fair share by joining the CBA and one’s local bar association.  While some lawyers ask “what’s in it for me?” a better question is “how can I contribute to the profession?”  Among the good answers is this one: join the CBA and your local bar association.  To join the CBA click here .  For information about local and specialty bar associations click here.

UPDATE:  Judge Droney granted the CBA’s Motion To Participate on September 14th, 2011.

Jacoby & Myers offers free representation to all CT attorneys – Thank you, but I’d prefer not.

In their action asking the Connecticut Federal District Court to enjoin the Judges of the Connecticut Superior Court from enforcing the rule prohibiting non-lawyer investment in law firms, Jacoby & Myers wish to speak for all lawyers licensed to practice in Connecticut.  I would prefer they not speak for me.  I do not wish to be part of the class.

Quite apart from the question of whether non-lawyer investment in law firms is a good or bad thing for clients, there is the question of process.  There is a rule making process for amending the Rules of Professional Conduct.  That process typicaly involves amendment to the ABA’s Model Rules of Professional Conduct, which are not binding unless, until and to the extent that they are adopted by individual States.  ABA Commission on Ethics 20/20 has been studying and gathering information on legal ethics issues relating to globalization and technology.  Non-lawyer investment in law firms is one of the issues the Commission is studying.  There is a rule making process of changing the Rules of Professional Conduct.  That process is better suited to addressing the many issues relating to Rule 5.4, something which, I think, the Jacoby & Meyers complaint implicitly concedes, see Paragraph 32 of the complaint which provides:

32. Indeed, providing ethical, competent representation and making a profit are not mutually exclusive propositions. Law firms have been doing that forcenturies. And the recent experiences of Australia and the United Kingdom provide a panoply of regulatory safeguards that can be implemented to ensure that outside11Case 3:11-cv-00817-CFD Document 1 Filed 05/18/11 Page 12 of 22 investors do not interfere with attorneys’ professional obligations. Whether regulating law firms with outside investors through independent licensing bodies, imposing restrictions on the amount of equity interest non-lawyers can hold, or requiring a legalpractice with non-lawyer owners to appoint a legal director responsible for themanagement, oversight and compliance of lawyers’ professional obligations, there are innumerable ways in which to ensure that a lawyer’s professional “independenceof judgment” remains resolute.

Paragraph 32 describes ways in which non-lawyer investment could be structured to preserve lawyer independence.  But, of course, the relief Jacoby & Meyers seeks includes none of those safeguards.  The Jacoby & Meyers complaint seeks injunctive relief from a federal court barring the state court from enforcing 5.4, which would result in no holds barred investment in law firms even, presumably, total ownership by non-lawyers, which, could, in my view, signal the end of the legal profession.

Jacoby & Meyers v. Judges of the Superior Court: more questions, part 2

Paragraph 1 of the complaint reads in part: “This action seeks to redress an antiquated, “ethical” proscription which is impeding law firms’ ability to compete in today’s global marketplace and restricting the public’s access to affordable, quality representation.” To paraphrase it, the purpose of the action is to rid the profession and the pubic of an old rule that is making it impossible for US lawyers to compete in the global market place and is keeping the cost of legal services artificially high. ( If there is such a rule, surely it is time to get rid of it. More on that later).  It will be interesting to see what proof the plaintiffs’ offer that, for example, there is global competition among law firms to provide legal services to the lower, working and middle classes.”  I know of none.  In fact, is there even a global marketplace for licensed lawyers to provide legal services to the lower, working and middle classes?  There is a growing global marketplace for legal services for multinational companies but that, according to the complaint, is not the customer base Jacoby & Meyers exists to serve.  The evidence will be interesting, or maybe paragraph 1 has little substantive value.   Maybe the global competition that Jacoby & Meyers is facing is not from lawyers and law firms at all.  Maybe the competition is from non-lawyers like Legal Zoom that presumably can operate from anywhere in the world anonymously, through slick websites and fill in the blank forms assembled virtually anywhere and sent to the customer completely filled in all for an attractive price.  Maybe the Jacoby & Meyers lawsuit is meant to enable Jacoby & Meyers to compete with non-lawyers who claim not to offer legal services but who are targeting customers for legal services.

 

Jacoby & Meyers v. The Judges of the Connecticut Superior Court: some questions part 1

“Jacoby & Meyers has been the pioneer and vanguard  of ensuring the availability of quality legal services at a reasonable cost to those most in need of it – the lower, working and middle classes. Unfortunately, however, Jacoby & Meyers’ ability to raise the capital necessary to pay for improvements in technology and infrastructure and to expand its offices and hire additional personnel, is severely restricted by an out-dated Rule of Professional Conduct.” Complaint paragraph 1.

Why would an investor invest in a law firm that serves the lower, working and middle classes?  How much revenue can a law firm reasonably expect to generate by providing legal services at a reasonable cost to  the lower, working and middle classes?

One can imagine investors willing to invest in high value contingency fee cases.  They already do in the form of litigation funding operations.  But other than contingency, litigation, including class action litigation, which can generate enormous legal fees, it is hard – at least for me – to see why any informed, reasonably prudent, arms length investor would chose to invest in any firm, much less one that is, admirably to be sure, devoted to serving the lower, working and middles classes.

And, given the way our contingent fee rules work, there it is hard to imagine anyone – regardless of how poor they may be – who can not “afford” to have a contingent fee case brought on their behalf.  There is no shortage of talented contingent fee lawyers and law firms in this county.

It may well be that Jacoby & Meyers has a plan to develop a technology platform like the one Legal Zoom employs, which, as everyone who reads Legal Zoom’s fine print knows, does not engage in the practice of law.  Rather it engages in what is apparently  highly effective advertising offering at reasonable prices that which “the lower, working and middle classes” …. can not otherwise afford, namely to have the law on their side.

If you want to glimpse factors that are influencing the future of the legal profession read the Jacoby & Meyers’ complaint and follow the work of Ethics Commission 20/20, and, please, stay tuned here at For Connecticut Lawyers.