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If you're talking about the US, can you please post a cite of these laws? I've recently become interested in historical business law because I've read in passin

If you're talking about the US, can you please post a cite of these laws? I've recently become interested in historical business law because I've read in passing one theory proposed that the massive US centralization of urban populations and the concomitant cost of living inflation is due in large part to US business domicile and operations laws that were repealed in the 80's-90's. That is, supposedly there were laws that for all practical purposes limited the size and centralization of US companies (hence my interest was piqued when you posted about laws limiting law firm sizes via ownership structuring permissions) by limiting specific aspects of their operations to within a declared domicile state. I know that happened to banking, but the original poster claimed it was for nearly all US businesses. But I can no longer find that discussion nor the relevant laws, and I'm hoping trawling your cite(s) might lead me to them.

vineyardmike 5y ago
Unfortunately I don’t have any good citations just IRL lawyer friends. Should be easy to google the rules though. IANAL but The rule is basically that law firms can only be owned by lawyers. The idea being (i think) that lawyers have a legal responsibility to their clients and that’s be corrupted via existence of shareholders (or, shareholders without legal responsibility too). Regarding your theory, I think it’s bunk. There has been a consistent trend to centralized big companies throughout American capitalism long before the 80s. Just look at the history of GE. In fact, the growth of index funds actually indicates a shift away from big corps (or at least big corps with disparate business groups) because investors can pick and choose markets better without relying on conglomerates to do that for them. But it should be obvious that massive urban centers are not due to US laws… because we have 1k+ years of cities before that with good documentation of life and laws in those cities.
- dragonwriter 5y ago
  The “general" rule here is Rule 5.4 of the ABA model rules [0], though the actual rules in a particular jurisdiction (state) may be different since the model rules are not the actual rules of any State. Note that this doesn't actually prohibit any particular structure (well, implicitly it prohibits publicly traded corporations), it just prohibits non-lawyers from being stockholders (if a corp) or partners in a law firm or (except as part of an employee compensation within a law firm) having a claim on revenue generated by lawyers through the practice of law. [0] https://www.americanbar.org/groups/professional_responsibility/publications/model_rules_of_professional_conduct/rule_5_4_professional_independence_of_a_lawyer/ https://www.americanbar.org/groups/professional_responsibili...

vineyardmike 5y ago

Unfortunately I don’t have any good citations just IRL lawyer friends. Should be easy to google the rules though. IANAL but The rule is basically that law firms can only be owned by lawyers. The idea being (i think) that lawyers have a legal responsibility to their clients and that’s be corrupted via existence of shareholders (or, shareholders without legal responsibility too). Regarding your theory, I think it’s bunk. There has been a consistent trend to centralized big companies throughout American capitalism long before the 80s. Just look at the history of GE. In fact, the growth of index funds actually indicates a shift away from big corps (or at least big corps with disparate business groups) because investors can pick and choose markets better without relying on conglomerates to do that for them. But it should be obvious that massive urban centers are not due to US laws… because we have 1k+ years of cities before that with good documentation of life and laws in those cities.

dragonwriter 5y ago
The “general" rule here is Rule 5.4 of the ABA model rules [0], though the actual rules in a particular jurisdiction (state) may be different since the model rules are not the actual rules of any State. Note that this doesn't actually prohibit any particular structure (well, implicitly it prohibits publicly traded corporations), it just prohibits non-lawyers from being stockholders (if a corp) or partners in a law firm or (except as part of an employee compensation within a law firm) having a claim on revenue generated by lawyers through the practice of law. [0] https://www.americanbar.org/groups/professional_responsibility/publications/model_rules_of_professional_conduct/rule_5_4_professional_independence_of_a_lawyer/ https://www.americanbar.org/groups/professional_responsibili...