Walks like a duck, quacks like a duck

"A general counsel should never talk like a lawyer, or think like one."  I came across a debate on this statement on Twitter a little while back.  One of the more perceptive responses to the Twitter discussion came from UCL’s Professor Richard Moorhead, who queried what would become of a profession “… if being effective in your job is predicated on being something you're not”.  My contribution to the debate was that a general counsel should indeed never talk like a lawyer - but that while a GC should always be ready to think like a lawyer, there would certainly be times when not thinking like a lawyer would be appropriate; and as I have thought about the issue since, I have identified the key to both the thought and the talk pieces as being that they support the legal agenda rather than betray it.  

So, why should a GC – for that matter, any in-house lawyer - never talk like a lawyer?  I don't think any of us take “talking like a lawyer” simply to mean using language like "heretofore", or ‘mutatis mutandis” or any words eiusdem generis.  While using these in a commercial context is guaranteed to provoke references to quills and parchment if not worse, there is a good deal of less obviously legal language which nonetheless divides us from those we advise. 

Private practice lawyers – which most of us in-house types have been – talk of clients all the time.  I don’t see why they shouldn’t, their clients are all individuals or organisations external to the firm and with whom they have a commercial relationship. There’s no reason why the firm couldn’t describe them as a customer.  I think however that in-house lawyers should be much more discriminating in their use of the word "client" – even when qualified as “internal client”.  There are times when the "client" word needs to be used expressly (“attorney-client privilege” being perhaps the most obvious).  And there are times when the in-house lawyer must be very conscious of the relationship held with colleagues as a client (in the context of the professional conduct obligations that lawyers have towards those they advise), even if they do not use this particular c-word expressly.  But outside these circumstances, I try to avoid using the word.  Using it suggests a sense that the in-house lawyer and the business colleague are in a relationship defined by a contract – a supplier – customer relationship.  This sends all the wrong messages and worse, drives unhelpful behaviours (not just on the lawyers’ part).  In an arms’ length, professional services relationship, the adviser goes where the client directs; in a mature in-house environment, the adviser goes where the employer needs them to go, whether that is where the people with whom the lawyer interacts directs them to go there or not. 

I also advocate great care in using the word “business” (granted this is more of an issue for lawyers in commercial organisations although I dare say similar issues are experienced by those in third or public sector organisations).  I am always alarmed to see "business" used to describe a separate organisational grouping from the lawyers (as in "the lawyers need to get closer to the business").  The insidious nature of this usage is that it tends to suggest that the in-house lawyers have a different status from their business colleagues – something that can only undermine their credibility and influence within the organisation.  In short, if the lawyers aren't part of the business, then they've no business being in the organisation.  In-house lawyers should always keep their language consistent and inclusive in this respect, and be ready to challenge those in the rest of the business who do not.

So what of "not thinking like a lawyer"?  As indicated above, I don’t think this is a universally helpful approach.  In fact I'm of the view that the way in which lawyers are taught to think often brings a valuable and distinct perspective to the issues faced by an organisation.  However, where a pure legal thought process disadvantages an organisation is where the legal analysis is not in balance with other perspectives.  Many a successful business strategy is legal and offends no third party’s rights (so is, legally, unobjectionable), but looks illogical (so offends the legal mind).  An example from way back in my past – I worked for a company which issued petrol cards.  if a customer lost a card, my company assumed the risk of fraudulent purchases once they were told of the loss.  So why in the pre-internet age did my company only notify petrol stations once a fortnight of “hot” (lost / stolen) cards (and thereby assume the risk of fraudulent spend in the intervening period)?  This offended my logical legal mind – until it was explained to me that in most fortnightly cycles the cost of mailing out lists of “hot” cards far exceeded the illicit spend.  It was cheaper – and so more effective, to take the occasional hit of fraudulent spend than it was to prevent its occurrence.

My own view on how lawyers should think is that they should always be ready to look at matters through a legal lens.  For a start, no one else will take this perspective, and failing to do so both exposes the organisation to a level of compliance risk which may otherwise go unheeded, and fails to make the most of the style of thinking that lawyers bring to the party.  But by thinking only in this vein, lawyers risk isolating themselves from their colleagues whose thinking patterns take them through different analyses, with as unhelpful an outcome as if they used some of the language decisions I referred to above.  Looking at matters through a business or operational prism best enables lawyers to make their advice resonant, so the skill of being able to put the legal hat to one side when looking at an issue – and then pick it up and wear it again – is one hallmark of an effective lawyer (in-house or private practice).

I’ll conclude with an anecdote from an even earlier point in my career, as a private practice lawyer.  A client (correct usage, this time) turned up for our firm’s advice – he’d just bought a company and needed help with the statutory books.  Evidence of the company purchase wasn’t a carefully negotiated sale and purchase agreement.  It wasn’t even a share transfer form.  It comprised two documents - a purchase order and a receipted invoice for the shares.  Looking at one another in disbelief, the responsible partner and I gently took our client through all the usual concepts of warranties and indemnities, due diligence and the like.  Twelve months on and the casual attention that both our client and the sellers gave to resolving these legal niceties meant that our deal still was not done (even though the client was happily running the acquired business).  Looking at one another in disbelief, the responsible partner and I surveyed the wreckage, took off our lawyers’ thinking caps and put on our businessmen’s hats.  And doing so we thought that perhaps the client was, despite all the lack of formality and the things that would need to be done to perfect his title to the shares, more right than we were.  Sometimes it doesn’t pay to think like a lawyer.

Being a good client

There seems always to be an awful lot of (often awful) discussion about the engagement of external law firms by in-house teams.  Most of it concerns the charging model adopted by law firms.  However, rather than contributing yet another piece on the iniquities and inefficiencies of the hourly rate, the mythology of alternative fee arrangements and what a bad business model all those millionaires in law firms operate, I want to look at some more qualitative aspects of the in-house / out-house relationship.

It’s tempting to look at this relationship as an antithetical one, a power struggle between an in-house team trying to assert dominance over the external lawyers and the external lawyers trying to find multiple ways to retain and grow their relationship with their client - through, over and behind the backs of the in-house team.  Seeing the in-house / external law firm relationship purely in terms of power struggles and fee battles however misses some important points.

One of the most important skills in the general counsel role is that of blending the mix of internal and external resources for the benefit of their organisation.  The business’s experience of using these external lawyers (style of engagement, performance and, yes, cost) all reflect on the GC.  Handle them wisely and it enhances the GC’s standing, but poor experiences will have the opposite effect.  Given the impact that good, bad and indifferent experiences of external lawyers can have on the standing of the in-house team, it’s surprising however how little attention can be focussed on the non-financial aspects of the relationship.

I’m not sure that nearly enough focus is given to the art of giving instructions, in particular,  to the challenge of telling someone outside your organisation everything they need to know about your organisation in order to be able to advise you properly.  It’s sometimes quite hard to bring to mind all of the factors affecting a particular matter which you as the in-house lawyer might take for granted if handling the matter yourself.  But it’s very important to do so - any of these factors has the capacity to make what would otherwise be totally apposite advice useless.  One of the cited benefits of using the same law firms for all or a good proportion of an organisation’s legal needs is that the firm “knows our business”.  There’s some merit in that view, of course, but the reality is that the law firm in question has a number of lawyers who will be familiar with a number of characteristics of the client - there’s no guarantee that lawyers new to the account will absorb these characteristics by some form of institutional osmosis any more than there is a guarantee that a lawyer accustomed to advising the business in one area will understand other areas to the same level.  This latter point was brought home to me a few years ago when I was handling a cross-border group reorganisation.  I asked our go-to employment lawyer to look at HR aspects of the transaction and was somewhat surprised to receive a well-constructed but useless piece of advice; it was predicated on an entirely incorrect set of assumptions about how our business was structured outside the UK (hitherto, his field of engagement with us).  Of course, he was wrong not to have verified these assumptions before he started, but equally if I had spent a bit longer briefing him on the position, we would have been right first time.  As it was, I had to do some hasty scurrying around in order to get the advice directed to the correct facts and to meet our timetable, so I reaped my own whirlwind.  Lesson learned for future application - don’t assume the firm knows all they need to know, no matter how familiar you think they are with your organisation.

On that occasion the error the law firm made was one that could be corrected easily and one for which in some sense I was culpable.  But like most of us I’ve experienced legal advice that was not so easy to put right and for which the law firm was wholly culpable.  The mistake I made the first time I encountered a law firm providing poor advice was to set out a well-reasoned, proportionate and measured statement of what we felt had gone wrong.  As a communication its contents were unobjectionable, but I had failed to appreciate that by putting it in writing, I had engaged the firm’s formal complaints handling procedure, as our relationship partner explained in pained tones, and as a result, I had inadvertently limited his freedom of action in addressing our concerns.  Again we were able to retrieve the situation, but I had made the situation more difficult than it needed to have been.  I have been fortunate to have experienced few problems with law firms since, but my approach since has always been to speak off the record first so that the person I am dealing with has maximum flexibility in putting matters right.  All organisations err from time to time, a mark of a good organisation is how it put things right, and I have found that indicating I know this produces much better results than taking a more aggressive approach.  Another lesson learned - law firms make mistakes, it’s not just generous but it’s wise to give them the widest flexibility to fix them.

Taking account of the individual situation of lawyers in law firms can also be applied for positive reasons, and to lawyers at all levels in the firm.  An example of this occurred when I was working on a cross-border acquisition; I was told by the lead partner that they would have the due diligence report on our target on my desk by 9 a.m. on Monday morning.  While I was impatient to read it, I knew both that I did not really need to see it until later in the week, and that the consequence of getting it to me by that time would mean a weekend in the office for some of the firm’s junior lawyers.  So I said I wouldn’t read it until Tuesday, whenever they sent it (a little white lie), and that I wanted the team to have a break over the weekend.  The juniors duly got their break, and knowing they had done so was all the payback I required.  As it happened, the deal changed shape a month later, meaning that those same juniors had to out in some heavy and late hours for me - something they were highly motivated to do because of the break I’d cut them previously.  Lesson learned - law firms are made up of human beings and a little thought for their welfare can reap dividends.

None of these examples is earth-shattering, but they all underpin the point that relationships with external lawyers aren’t all about the bill.  Relationships with the internal team aren’t conducted on that basis, treating the external law firm in such a narrow way limits their contribution and, in the end, only serves to undermine the general counsel.

When enough's enough

It's not our fault, it's the way we're trained.  Or at least it's tempting to see it that way.  The typical training process for a lawyer includes the “beasting”; having their documents savaged by a partner and rewritten several times until they are free from blemish, even blemishes invented by the partner for the purpose.  We are trained to leave no stone unturned, to produce articles of impeccable craftsmanship.  There are sound reasons for this approach to training, of course.  Not the least of these is that when the hapless trainees graduate to advising on mission-critical matters, it is essential to have acquired the sort of rigorous approach which will save them from making mission-critical mistakes.  The obvious downside of this approach to training is that it leads the trained lawyer to a Pavlovian instinct to take a kitchen-sink approach to all matters, irrespective of their importance.  Even if this instinct is resisted it still gnaws away in the back of their minds.  

I often have conversations with (mostly junior) in-house lawyers about the difficulties they face with workloads, turnaround times and the like.  Developing these conversations further, at the heart of their issue is a real quandary in knowing how much time to spend on a matter - or at least in feeling confident in spending less time on the issue than they might if they were back as a trainee.  They don't need me to tell them that a photocopier lease doesn't merit as much time as a £100m contract (so I don't tell them that!).  But having the courage to give the photocopier lease merely the five minute flick it merits is hard - what if they overlook something, what will their boss / the business think?  In these conversations I end up sharing one or both of a couple of perspectives.  

The first perspective is that law is more like chess than it is like maths.  In maths there is only one right answer, and if your answer isn't that answer, your answer isn’t nearly right, it’s wrong.  In chess there is no such single truth, the requirement is to be more right than your opponent - "sufficiently right".  In law, "sufficiently right” means being as right as the situation demands.  Most business decisions are not made as a result of analysing every piece of information to the point where they are totally right.  Instead they are made with only a partial knowledge of the facts.  Businessmen guess, as if they didn't guess they'd never act in time.  Businessmen likewise expect their lawyers to form judgments on less than a complete view of the facts, and to give that judgment without rehearsing each of the nuances, factors and assumptions which underpin it.  They just expect them to be close enough and then to move on to the next thing.   

The other perspective I share is the observation that most organisations in the UK don't have in-house lawyers, and most of the time they don't go to outside lawyers either.  Whisper this e'er so quiet lest the idea catches on, but therefore most of the entities in the UK conduct most of their activities without legal advice, and yet the sun still rises in the East each morning.  So an in-house lawyer spending half an hour with an average contract will spot the main issues it contains and thereby place their employer in a better position than these heretical organisations that do not use lawyers.  Taking this approach, a sort of "up from nil" (what extra value can I give my employer by spending 30 minutes on this?) rather than "down from 100" (what dare I leave out?) approach, gives the new in-house lawyer a more accommodating reference point for their work, and one closer to the way their business colleagues work.  Most businesses would rather have their lawyers do ten things a day sufficiently right instead of five things completely right.

A little while back I was impressed to listen to a savvy, well-known and well-respected senior lawyer explain that he was once asked to look after a construction project.  The file was dauntingly thick. and concerned a project visible from his office window.  Reasoning that if work was taking place there was no problem requiring his contribution, he decided not to open the threatening file unless he saw work at a standstill.  Work never stopped and any issues were resolved on site.  The file remained unopened and our lawyer focused his time on other issues where his attention would make a difference.  That might be an extreme example, but it very probably echoed the CEO's approach to the project and it does bear out the point that life can go on without lawyers.

All in-house lawyers will, of course, be deeply thorough when the occasion demands; what makes a good one is giving less critical matters less critical attention in order to free up their time and energy for those occasions.  They know when enough is enough.  And in the hope that I've put my view across, I'll deem that enough from me. 

Taxing times

Benjamin Franklin wrote that, "In this world nothing can be said to be certain, except death and taxes".  But the world of tax is increasingly less certain, especially if the recent controversy about the tax payment practices of Starbucks and others is anything to go by.

Observing Margaret Hodge and the Public Accounts Committee attempt to grapple with international corporate tax is a bit like watching a man tie his shoelaces while wearing boxing gloves; clumsy and ill-informed.  The only difference is that watching the man with the boxing gloves is amusing.

My anguish doesn't derive from what the PAC are trying to do in challenging the way global corporates organise their tax affairs - I want multi-billion pound international organisations to pay their fair share of tax.  And I do have more than a little disquiet at the fact that Starbucks can tell its investors that its UK organisation is highly profitable at the same time as continuing to post tax losses.  But having spent a number of years working in a global corporate, some of that time in the tax-intensive environment of cross-border corporate reorganisation, I think I've gained a level of practical insight and experience in the area.  And I despair at the PAC's handling of the issue.

One of the complaints made by the PAC is about the fees Starbucks UK pays its group companies for use of intellectual property (brands) and commodities in its supply chain (coffee beans). Tax systems globally say that when one company supplies a group company with goods or services cross-border, the commercial arrangements for those supplies must be at arms' length (and tax computations will be made as if they were at arms' length even if the reality is different).  This stops companies from making supplies to each other at unrealistic rates - without it, company A in a low tax country could say sell coffee beans to a sister company B in a high tax country at an artificially high price - profit goes up in low tax country A and goes down in high tax country B, so the group as a whole pays less tax.  

So by stopping this kind of practice, tax treatment of so called "transfer pricing" is a good thing.  You'd therefore expect Starbucks UK to pay a fair market price for its coffee beans and have no different tax treatment just because its supplier is in common ownership.  Of course an inter-group supply contract lacks a measure of bargaining tension compared with a true arms' length arrangement (although anyone who says it lacks any tension clearly hasn't worked in a global company; inter-necine doesn't cover it).  But that isn't evidence that the system is broken, it's evidence that the individual arrangements need scrutiny, which is part of the normal routine of tax inspection.

The idea behind a brand levy is that if the parent company has incurred lots of expenditure acquiring a brand, registering trade marks and building up goodwill in the brand through advertising, the subsidiary company should pay its fair contribution towards these costs, as it has benefitted from them through higher sales locally.  (Why else go to Starbucks if it isn't for the brand experience?  Other coffees are available.)  So if the subsidiary company doesn't pay a brand fee at all it will have received all of these benefits without paying, which is not what you would get between two unrelated companies operating at arms' length - and so its parent company could be taxed as if it had received whatever level of fee its tax authorities think is appropriate.  The concept of a brand fee seems difficult to argue with - every franchise business is predicated on it - if Starbucks UK were wholly independent of the rest of Starbucks it would expect to pay a licence fee to Starbucks for the use of the brand.

So again the issue here isn't one of principle but of application.  How high should the brand fee be?  The added element here is that, while the coffee beans can only be supplied from the country where they are physically warehoused / roasted / processed, the bundle of intellectual property rights behind a brand can be moved around more easily.  So controversy arises where the intellectual property ownership is placed offshore in a low tax country in order that the brand payments all land up somewhere convenient.  I'm not sure whether that is a case of the corporations' being villainous or simply taking advantage of some countries' willingness to offer low tax regimes (red carpets for wealthy French businessmen, anyone?). And it doesn't make any difference to the UK tax take in any event.

So it is certainly true that differences in international tax rates provide opportunities for international groups to use standard transfer pricing approaches to influence where they pay tax and as a result how much.  But I am not convinced that the PAC has picked on the right target in the corporations rather than examining either the global system or at least the UK legislative approach.

Just as companies compete with each other, so of course do countries by offering different tax treatment - sometimes offering favourable treatment to companies and sometimes treating them as a captive target.  If anything I've found individual countries' particular approaches to tax caused more difficulties than opportunities. Designing corporate restructures in such a way as not to trigger a payment for some long-lost tax event is a bit like one of those fairground games where you have to guide a steel loop around a wavy wire without touching it, only the real life version came with more headaches and to the detriment of running a business as a commercial enterprise creating jobs and returns for investors.  Given the prevalence of snakes in the tax world it is hardly surprising that corporates should look out for ladders.

But perhaps my biggest issue with the PAC and the like is that they assume that companies are free to throw away money which would otherwise be available to plough back into the business or return to investors, by declining to use appropriate and available tax structures.  In fact any directors who did so might be in breach of their fiduciary duties and of their statutory duties (under s170 Companies Act, the so-called "six pack").  That section lists the factors which the directors must consider when making decisions about the company - employees, suppliers, shareholders - environment and the community even - but nothing about the taxman.  So if it is now so important to parliament that the taxman gets a fair crack of the whip, why didn't parliament write this into s170?  It would have been easy to write in a seventh factor (even if a "seven pack" isn't quite as ripped a concept as a "six pack") obliging the directors to take into account an obligation to pay taxes fairly; it wouldn't have placed paying tax first but it would have put it on an equal footing with all other considerations.

We might expect the UK in due course to follow a number of other leading economies in adopting a general law prohibiting certain types of avoidance. The advisory panel on the General Anti-Abuse Rule appointed following the Aaronson enquiry is looking at just this issue.  And if there is a legal requirement to adopt or avoid a course of action, the directors will be free from criticism by following it (although I still think there is a role for an amended s170 if only to provide balance in those cases which are not prohibited by any new Anti-Abuse Rule but are still marginal).  But I doubt this new Rule can represent a silver bullet; the devil in group tax lies in the detail, and the question of whether Starbucks UK pays too much for its coffee beans, or should be allowed to deduct brand royalties paid to a Dutch company, will always be one of fact.  Facts and politicians make occasional peace with one another and the PAC does seem to have been somewhat selective with its facts on this issue.

So much for taxes.  I really don't want to think about the PAC engaging with death...

Alchemy on the banks of the Cam

This is a tale of alchemy practised in Cambridge's sylvan groves of academe, but first, let  me take you to a nearby pub on the banks of the River Cam.  In a corner of a bar stands a former soldier who is now an MP, who is with the Chef de Mission for the UK London 2012 Paralympic team, and they are listening to a young lawyer talking about their challenges having newly arrived at a global bank.  In another corner, a judge and the President-elect of the Scottish Law Society are listening to another lawyer who is working as a sole lawyer in her first in-house job.  Two more lawyers new to in-house life are chatting with a general counsel about their experiences.

But away from alcohol and back to alchemy.  The transition from private practice lawyer to successful in-house lawyer can be a very challenging one.  Our colleagues don't understand us; they compare us with the external lawyers they work with; we struggle with the impossible situations we get put in; and we never quite get around to planning our careers - plus a host of other challenges some specific to us and our organisations and some more general.  When I started my in-house journey more than 20 years ago I was lucky to have as my first boss someone who understood some of these things and gave me some guidance in addressing them; some of the other answers came to me over the following years; others remain work in progress.

It would have been great to have had access to resources that would have helped me get to grips with these issues at the start of my in-house career.  So my participation as a Wise Owl in the recent LBCambridge event for in-house lawyers gave rise to some rueful reflection on what might have been, as well as excitement at what might yet be, for me personally as well as the delegates and other participants in the event.

The aim of the LBCambridge event - to help equip in-house lawyers (especially those whose time in-house has been relatively short) with some of the non-legal skills which operating in-house requires - is unusual but not unique.  The way in which it sets about it, so far as I can tell, is unique.  And the experience which delegates and other participants alike undergo is certainly unique in my experience.

Starting on a Sunday evening, what seems like a week's worth of ideas, discussion, presentation and formation of long-term relationships are packed into two and half Tardis-like days.  More alchemy.  The concept is simple; the talent, experience and insights of the delegates themselves are immense resources, so these should be discovered and nourished over the course of the event.  The discovery and nourishment process is enabled by LBC Wise Counsel's CEO, Paul Gilbert, playing the role of alchemist-in-chief, always making the most of his considerable knowledge and thought as a former GC and now legal management consultant.  Inviting trouble, or so it seemed, he invited the tables to come up with their most knotty issues for him to address in the morning.

Time for metaphorical refreshment - so back to the pub.  As well as providing a practical place for liquid refreshment each evening during the event, it provides a place where delegates can meet the presenters and Wise Owls on equal terms - creating an ease of dialogue between them which then infuses the event itself.  The Wise Owls - among them the judge and the President-elect of the Scottish Law Society as well as others including me - play a facilitative role in the group discussions which take place throughout the event.  In this they are joined by representatives of Irwin Mitchell, Riverview Law and Lexis Nexis, all of whom help to make the event possible but use their presence at the event to share wisdom rather than seeking business.  Having the Wise Owls involved helps to ensure that the debate on each table involves all participants as well as providing opportunities for delegates to meet and discuss issues with senior lawyers outside their organisation - both during the event and afterwards.

The course of the event is shaped by various interventions from presenters which then inform the ensuing table discussions.  These include the former soldier and the Chef de Mission.  The former soldier is Col. Bob Stewart whose description of his time leading the UN forces in early 1990s Bosnia is a harrowing account of the best and worst of humanity - but also an account of how planning strategies learned in the classrooms of Sandhurst helped him tackle the complex problems he faced there and in other theatres, and how these strategies can be used in the workplace.  The Paralympic Chef de Mission, Craig Hunter, also led the England Commonwealth team in Delhi - relating the challenges he faced personally and as a leader and the techniques he used to face up to both categories.  In addition contributions are made by Nick Hardie (FTSE 100 CFO on how to read financial statements as a narrative), David Amos (from a boutique executive search company, on operating in the boardroom and how to manage your career choices) and Charles Grimes (a team and personal development coach, who led a highly interactive review of how different styles of operation and influence all contribute to successful teams, but at the same time how those differences create tension and misunderstanding if not recognised and valued). 

All of these contributions are shaped by Paul Gilbert, whose deep experience in the legal sector acts as a cohesive influence on the whole proceedings.  And somehow - order out of chaos in the alchemist's laboratory - he takes the different issues from Sunday evening and first thing on Monday morning presents a fluent, structured, deep-diving set of insights on each one; an hour of thought leadership worth the fee alone.

The end of these exhausting days sees something akin to a community of the unfairly advantaged emerge among the delegates, Wise Owls, sponsors and presenters.   I've yet to meet anyone from any section of this community who didn't feel empowered by the experience of LBCambridge, but perhaps the greatest achievement which the event makes is to do so not by adding anything specific to the delegates' talents, but by giving them the wherewithal to find those talents within themselves.  Something which mere alchemy can't achieve.

Are ABS so Fab?

We've all heard a lot about Alternative Business Structures (ABSs) lately, mostly which law firms and commercial organisations have succeeded in navigating through the thicket of registration requirements with the SRA and the uses to which they are putting their newly authorised vehicles.  I have seen little comment suggesting that the development of the ABS (and the concomitant opportunity for non-lawyers to invest in the legal services market) is a bad thing, so I was interested to read the views of IBM's General Counsel, Robert C. Weber, on the issue.  His article is at http://www.managingpartner.com/opinion/business-strategy/uk-lawyers-and-firms-should-resist-lure-outside-investment.  Although a subscription is required to read the whole article, I think that the main tenets of his argument (that the introduction of non-lawyer funding re-characterises law firm clients as consumers, and that the commercial drivers behind non-lawyer ownership are apt to impair the client interest first duty within the attorney-client relationship) are visible from the "teaser" part of the article on the public side of the paywall.

Despite spending 15 years working with Fujitsu, one of IBM's larger competitors, and so developing an instinctive view that anything coming out of IBM was wrong on principle, I thought this was a good challenge worth exploring.   Is Robert Weber's a lone voice of reason or simply a failure to get with the programme?

I'd like to start with the financials.  The concern about letting non-lawyers take an ownership stake in a law firm using an ABS is that they will drive the behaviour of the legal advisers using different parameters from lawyers' parameters - in particular that they will put commercial imperatives ahead of serving the interests of the client.  I've a measure of sympathy with the concern - but an over-zealous approach to billing is not a phenomenon which I've never seen before.   

The recent interest in an apparent case of bill-padding at DLA Piper's US operation illustrates this further.  The email comments between DLA Piper lawyers ("... [  ] ... is in full 'churn that bill, baby!' mode. That bill shall know no limits.") imply that, for them at least, placing the financial imperative for their organisation ahead of the client's needs was instinctive behaviour.  (And I don't think anyone would suggest for a moment that DLA Piper is anything other than a highly reputable firm.)  The fervent interest in City law firm's PEP figures every year further reinforces the fundamental point - law firms are owned and managed by people many (most?) of whom are highly interested in making money, and lots of it.  Who knew?

So, can non-lawyers introduce a still more venal approach to legal services provision?  I'm tempted to say that the "churn that bill, baby" example doesn't leave much more room for enhanced venality.  More seriously, while certainly a venture capitalist will have certain financial targets to attain during its period of ownership of the law firm - and an eye to a successful exit - I am not convinced these are incompatible with excellent client service.  If anything excellent client service reinforces financial success, and vice versa.  I've fired a law firm because it gave advice (on the prospects of a litigation) which I accept may simply have been misguided, rather than deliberately given in order to encourage my company to invest money in them to fight the case, but either way I was not about to give them a second chance to do the same. 

Moreover, taking examples from other service industries, I know that well-motivated employees and wised-up organisations invest substantial effort and money in client care.   I was working at Fujitsu at the same time as the 7 July atrocity in London - Fujitsu employees and those of other organisations were back in the affected areas and underground stations as soon as possible; not because there was extra money in it, but because they were highly inclined as professionals to do the best job they could to help out.  So I don't think that client-led service is incompatible with good financial returns for the service provider.  Indeed, especially in those cases where ABS businesses are owned by organisations with experience of providing service in other areas, the client experience may well be enhanced through the application of techniques and technologies borrowed from those other industries.  Part of that borrowed experience will respect the fact that excellent client service is closely associated with excellent financial performance.  Lawyers may be distinctive in that they owe duties to the court alongside their duties to the client, and they may have specific obligations to their clients which other service providers do not have (confidentiality and privilege for example), but the necessity to place clients' interests as paramount is a business imperative which is not unique to the legal profession.

There is no substitute for experience, and only future experience will tell us if the introduction of money and expertise from outside the legal profession and into alternative business structures delivers all of the benefits that we hope for.   Perhaps it is because I am an optimist, or perhaps it is because I come from client-led service backgrounds which address this, but I expect that it will.