From Club to Market: The Evolving Role of Business Lawyers

Abstract:     
The traditional protection against undesirable legal representation is the attorney's independence from the client backed by the threat of withdrawal. That protection, however, has eroded as the legal services market evolved from club to competitive forms of organization. The problems of reduced lawyer independence have come to the fore as a result of the share market bubble of 1995-2000 and corporate scandals that to one degree or another were related to the bubble economy: Enron, WorldCom, Adelphia, and HealthSouth being prime examples. If counsel had exercised a higher degree of independence, some of the harms might have been mitigated or avoided. Having identified the transition from club to competitive organization and the bubble economy as two principal economic developments that have impacted attorney independence, this paper addressed several proposals for reform: up-the-ladder reporting, noisy withdrawal, enhanced permission to reveal client confidences, and changes in the self-identity of the profession. An awareness of the background economic developments provides helpful insights into the policy arguments for and against these proposed changes.

Number of Pages in PDF File: 83

Accepted Paper Series