Tales of Two Regimes for Regulating Limited Liability Law Firms in the U.S. and Australia: Client Protection and Risk Management Lessons

Abstract

This essay contrasts the regimes that allow limited liability partnerships in the US and fully incorporated legal practices in Australia. The essay argues that Australia has taken advantage of an opportunity to develop innovative and necessary regulation of law firm ethical infrastructure with the introduction of incorporated legal practices, but the United States has not yet adequately addressed the consumer and ethical risks of limited liability partnerships. This essay raises the issue of whether Australia’s requirement that incorporated law firms should implement “appropriate management systems” to ensure ethical conduct is a model that could fruitfully be applied to all law firms.

Keywords: limited liability partnership, legal profession, incorporated law firm

JEL Classification: K19