Wednesday, 17 October 2012

Postcard from Portugal

I'm just back from an interesting trip to Portugal. It was my first visit to the country, and I found it to be a charming, likeable place – and not just because of the glorious weather.

From our base at The Oitavos Hotel, near Cascais, my wife Susanne and I enjoyed a cycle ride to the beautiful beach of Guincho, some great swimming and a couple of whistle-stop tours of Lisbon and Sintra. Both are quite wonderful places, though our two days of downtime wasn't enough to do them justice. What was clear to me, though, was the remarkable courtesy of the Portuguese people. It's a quality that's ever so slightly tinged with melancholy (witness the tradition of fado music), but the Portuguese sensibility – putting a premium on good manners, warmness, and welcome – is undoubtedly very attractive.

I was in Portugal for a conference hosted by the New York State Bar Association in Lisbon. It focused on various legal issues but my role was to speak about Alternative Business Structures (ABSs) in the UK. This I did at a plenary session last Saturday morning, chaired by Kenneth G. Standard of New York firm Epstein Becker & Green. Ken was an impressive character. Able and charismatic, he managed the session very well and also, via initiatives like a breakfast meeting for attendees, ensured that the session was effective and productive.

It was interesting to encounter the American view on outside ownership of law firms. As with so much of American life, debates take place on a federal level. Often, consensus isn't across the board; it's more a case of each state having its own view. When it comes to law firms being taken over, or invested in, by non-legal businesses, there did, though, seem to be a consensus. With the exception of the District of Columbia, the American view is hostile to outside ownership. There's a great deal of nervousness about the possible compromise of professional standards, independence and ethics. The worry is that the primacy of the clients’ interests will be sacrificed in favour of shareholder value.

As regular readers of this blog will know, I am  open minded but sceptical about ABSs and outside ownership too. However, as one or two participants, speaking from the floor, observed, to try and resist the influx of outside interests is rather like King Canute's attempt to quell the sea. The tide of change is on its way; as one American attorney said, we'd better get used to it.

That said, I think it's salutary to remember what brought about change in the UK. The ABS regime is a direct consequence of the reforms proposed by Sir David Clementi. Those reforms – which include the enactment of the Legal Services Act 2007 and the creation of  the Legal Services Board came about because of the perception that the provision of legal services in Britain was byzantine, fragmented and failing. There was a perception that the legal profession had become protectionist and restrictive. The public was not getting the profession it deserved.

Reform has arrived here in Britain, and although I have sympathy with the nervousness of my American and Portuguese counterparts I believe that their resistance to change can only be justified if what they are seeking to preserve is beyond reproach. Thus, in the same way that here we must insist that strictly ethical behaviour and principles underpin ABSs, so too must overseas lawyers look squarely at their profession and be satisfied that they act, at all times, not just in accordance with the law but ethically and professionally too. Only in this way can they - and we here in Britain, where change is not just in the air but on the ground - ensure that he who pays the piper doesn't call a discordant, morally dubious tune.

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