4 ms·

Maybe because law firms aren't managed by MBAs.

by bogzz 1y ago

RhysabOweyn 1y ago
For now... some states are beginning to change their laws to allow non-lawyers to own law firms. https://www.wsj.com/articles/kpmg-wants-to-be-the-first-accounting-giant-to-own-a-u-s-law-firm-heres-why-224949f2 https://www.wsj.com/articles/kpmg-wants-to-be-the-first-acco...
- echelon 1y ago
  Why shouldn't a law firm be owned by non-lawyers? That limitation seems ridiculous. Hospitals are owned by non-doctors. Engineering firms are owned by non-engineers. Sometimes it works, sometimes it doesn't. Sometimes the ones that fail are owned by the practitioners and the ones that succeed are led by former outsiders. Toymaking companies are owned by adults, gynecology practices can be owned by men, wheelchair companies can be owned by those who can walk, record labels can be owned by non-vocalists, etc. Most sports teams... Why should lawyers get special treatment? If someone is a good operator, that's orthogonal. Most ICs are not good at leadership, logistics, product, long term vision, etc. or at least not everything that a well-rounded CEO or owner might be. While hiring leadership from within the ranks works, it's not a necessary condition for success.
  - bigfatkitten 1y ago
    It’s because there are financial and other accountability requirements unique to law firms (dealing with trust money etc) that are tied directly to the legal professional obligations of the person in charge of the firm.
  - CPLX 1y ago
    Because lawyers occupy a quasi-public role in our legal system. They aren’t entirely separate from the system itself. The legal system depends on the enforcement of ethics and responsibility in a way that might be incompatible with a purely profit motive. This point is arguable of course. On one hand legal services are expensive and often inaccessible for many. On the other hand more aggressive competition and consolidation has absolutely ruined society in a couple situations, medicine being the obvious example. So there’s more than one point of view on this.
    - abdullahkhalids 1y ago
      Bits About Money says similar things about banks: "A recurring theme of this column is that banks are privately funded public infrastructure." [1]. So laws around them are quite strict and different from regular companies. [1] https://www.bitsaboutmoney.com/archive/why-is-that-bank-branch-there/ https://www.bitsaboutmoney.com/archive/why-is-that-bank-bran...
  - tomrod 1y ago
    How many things have private equity ruined? Now imagine you are given less than judicious representation by the only law firm in town.
    - morkalork 1y ago
      This is a whole thing with pharmacies not owned by pharmacists, veterinarian clinics not owned by vets, dental clinics not owned by dentists and yes, people have noticed the perversion of incentives.
  - jltsiren 1y ago
    Attorneys have a special status before the law. In particular, an attorney is legally required to act in the client's legitimate interests. If there is another person in the organization above the attorney and that person is also an attorney, the same requirement extends to them. But if that person is a random MBA or shareholder, they have no such obligation, which creates a conflict of interest. Other true professions have similar but lesser requirements. Some leadership positions in a hospital require an MD. Not because the MD makes you a better leader, but because the position involves making medical decisions. In an engineering company, some decisions must be made by a civil engineer. And so on. The requirements for attorneys are stricter, because the law is a special case before the law. While other fields exist within the system, the law is the system itself.
    - echelon 1y ago
      That makes a lot of sense. Thanks!
  - const_cast 1y ago
    > Sometimes it works, sometimes it doesn't. A lot of time it doesn't work, but more importantly, when it doesn't work the people who pay really can't tell. Law and medicine are very complex and ultimately are near total trust industries. When I go to the hospital I relinquish complete control to a bunch of people I don't know. Often literally - I could be under general anesthesia and couldn't fix the problem myself even if I wanted. If the healthcare outcomes are worse in pursuit of a small increase in profit, I, the consumer, wouldn't know. There's so many corners to cut and I think a lot of them you could cut with only a small loss in quality. Probably nobody would notice.
hengheng 1y ago
Or because bad légal documents become obvious immediately, while bad code has a 2-3 year incubation period.
- i_am_jl 1y ago
  I am not understanding the joke.
  - arcanemachiner 1y ago
    They're saying that the language in such a document could be read and discovered almost immediately, whereas the logic bomb sitting inside a bunch of poorly written code may take years before it finally explodes.
    - i_am_jl 1y ago
      ...while ignoring that flaws in legal documents are not always immediately obvious, and bugs in code are not always difficult to discover.
- bigfatkitten 1y ago
  Not always. Contracts for example sometimes contain landmines that lay undiscovered for a decade or more. A key difference is that law is an actual profession. It has qualification, continuing professional development and licensing requirements, and personal consequences for getting it wrong. None of these things are true for software development.
- margalabargala 1y ago
  I would argue they are pretty similar. It's not hard for a bad clause in a contract to get overlooked at first and then become a problem years later. Example: https://www.nbcnews.com/news/us-news/think-commas-don-t-matter-omitting-one-cost-maine-dairy-n847151 https://www.nbcnews.com/news/us-news/think-commas-don-t-matt...
- CPLX 1y ago
  I’m pretty fluent in both worlds and they are actually highly equivalent on this one specific point. In both cases it looks perfect and it works right up until it doesn’t, usually for the same reason, entering an unanticipated state.
bigfatkitten 1y ago
They are run by partners laser focused on making money, just over a longer time horizon than private equity would be. Equity partners have most of their own wealth tied to the firm. Grads are cheap. Partners can dangle the future senior associate/partner carrot over the head of a hopeful junior for many years while that junior brings in money that goes into the partners’ pockets. The junior brings in more money as they grow professionally.
neilv 1y ago
Also, a law firm partner worked all their way up as as a lawyer, but a tech company CEO probably didn't work all their way up as a software engineer (and may have never been one)? (Understanding of the role, empathy for it, and a bit invested in thinking of the role as valuable.)

Maybe because law firms aren't managed by MBAs.

by bogzz 1y ago

Maybe because law firms aren't managed by MBAs.

For now... some states are beginning to change their laws to allow non-lawyers to own law firms. https://www.wsj.com/articles/kpmg-wants-to-be-the-first-accounting-giant-to-own-a-u-s-law-firm-heres-why-224949f2 https://www.wsj.com/articles/kpmg-wants-to-be-the-first-acco...

echelon 1y ago
Why shouldn't a law firm be owned by non-lawyers? That limitation seems ridiculous. Hospitals are owned by non-doctors. Engineering firms are owned by non-engineers. Sometimes it works, sometimes it doesn't. Sometimes the ones that fail are owned by the practitioners and the ones that succeed are led by former outsiders. Toymaking companies are owned by adults, gynecology practices can be owned by men, wheelchair companies can be owned by those who can walk, record labels can be owned by non-vocalists, etc. Most sports teams... Why should lawyers get special treatment? If someone is a good operator, that's orthogonal. Most ICs are not good at leadership, logistics, product, long term vision, etc. or at least not everything that a well-rounded CEO or owner might be. While hiring leadership from within the ranks works, it's not a necessary condition for success.
- bigfatkitten 1y ago
  It’s because there are financial and other accountability requirements unique to law firms (dealing with trust money etc) that are tied directly to the legal professional obligations of the person in charge of the firm.
- CPLX 1y ago
  Because lawyers occupy a quasi-public role in our legal system. They aren’t entirely separate from the system itself. The legal system depends on the enforcement of ethics and responsibility in a way that might be incompatible with a purely profit motive. This point is arguable of course. On one hand legal services are expensive and often inaccessible for many. On the other hand more aggressive competition and consolidation has absolutely ruined society in a couple situations, medicine being the obvious example. So there’s more than one point of view on this.
  - abdullahkhalids 1y ago
    Bits About Money says similar things about banks: "A recurring theme of this column is that banks are privately funded public infrastructure." [1]. So laws around them are quite strict and different from regular companies. [1] https://www.bitsaboutmoney.com/archive/why-is-that-bank-branch-there/ https://www.bitsaboutmoney.com/archive/why-is-that-bank-bran...
- tomrod 1y ago
  How many things have private equity ruined? Now imagine you are given less than judicious representation by the only law firm in town.
  - morkalork 1y ago
    This is a whole thing with pharmacies not owned by pharmacists, veterinarian clinics not owned by vets, dental clinics not owned by dentists and yes, people have noticed the perversion of incentives.
- jltsiren 1y ago
  Attorneys have a special status before the law. In particular, an attorney is legally required to act in the client's legitimate interests. If there is another person in the organization above the attorney and that person is also an attorney, the same requirement extends to them. But if that person is a random MBA or shareholder, they have no such obligation, which creates a conflict of interest. Other true professions have similar but lesser requirements. Some leadership positions in a hospital require an MD. Not because the MD makes you a better leader, but because the position involves making medical decisions. In an engineering company, some decisions must be made by a civil engineer. And so on. The requirements for attorneys are stricter, because the law is a special case before the law. While other fields exist within the system, the law is the system itself.
  - echelon 1y ago
    That makes a lot of sense. Thanks!
- const_cast 1y ago
  > Sometimes it works, sometimes it doesn't. A lot of time it doesn't work, but more importantly, when it doesn't work the people who pay really can't tell. Law and medicine are very complex and ultimately are near total trust industries. When I go to the hospital I relinquish complete control to a bunch of people I don't know. Often literally - I could be under general anesthesia and couldn't fix the problem myself even if I wanted. If the healthcare outcomes are worse in pursuit of a small increase in profit, I, the consumer, wouldn't know. There's so many corners to cut and I think a lot of them you could cut with only a small loss in quality. Probably nobody would notice.

hengheng 1y ago

Or because bad légal documents become obvious immediately, while bad code has a 2-3 year incubation period.

i_am_jl 1y ago
I am not understanding the joke.
- arcanemachiner 1y ago
  They're saying that the language in such a document could be read and discovered almost immediately, whereas the logic bomb sitting inside a bunch of poorly written code may take years before it finally explodes.
  - i_am_jl 1y ago
    ...while ignoring that flaws in legal documents are not always immediately obvious, and bugs in code are not always difficult to discover.
bigfatkitten 1y ago
Not always. Contracts for example sometimes contain landmines that lay undiscovered for a decade or more. A key difference is that law is an actual profession. It has qualification, continuing professional development and licensing requirements, and personal consequences for getting it wrong. None of these things are true for software development.
margalabargala 1y ago
I would argue they are pretty similar. It's not hard for a bad clause in a contract to get overlooked at first and then become a problem years later. Example: https://www.nbcnews.com/news/us-news/think-commas-don-t-matter-omitting-one-cost-maine-dairy-n847151 https://www.nbcnews.com/news/us-news/think-commas-don-t-matt...
CPLX 1y ago
I’m pretty fluent in both worlds and they are actually highly equivalent on this one specific point. In both cases it looks perfect and it works right up until it doesn’t, usually for the same reason, entering an unanticipated state.

bigfatkitten 1y ago

They are run by partners laser focused on making money, just over a longer time horizon than private equity would be. Equity partners have most of their own wealth tied to the firm. Grads are cheap. Partners can dangle the future senior associate/partner carrot over the head of a hopeful junior for many years while that junior brings in money that goes into the partners’ pockets. The junior brings in more money as they grow professionally.

neilv 1y ago

Also, a law firm partner worked all their way up as as a lawyer, but a tech company CEO probably didn't work all their way up as a software engineer (and may have never been one)? (Understanding of the role, empathy for it, and a bit invested in thinking of the role as valuable.)