AN ECONOMIC CRISIS IS A TERRIBLE THING TO WASTE: REFORMING THE BUSINESS OF LAW FOR A SUSTAINABLE AND COMPETITIVE FUTURE

In this comment, the author analyzes how the current economic crisis has exposed many of the vulnerabilities of the conventional business model for law firms. After years of unprecedented but unsustainable growth, large law firms are stagnating, shrinking, or even disappearing entirely. The author aims to link the crippled state of the legal profession with the traditional prohibition on external investment in law firms. Cut off from investor capital, law firms are forced to rely on perilous amounts of debt and inefficient business practices in order to simply survive. The author proposes a system in which law firms can access an outside pool of capital as publicly traded partnerships, while adopting more formal ethical structures that protect professional standards and prevent possible conflicts of interest. The US legal profession should take advantage of an ongoing paradigm shift to emerge from the crisis with liberalized business structures that allow firms to build sustainable, competitive practices that deliver more efficient services to their clients.