Taking Stock of Taking Stock

71 Pages Posted: 6 Oct 2009

See all articles by Poonam Puri

Poonam Puri

York University - Osgoode Law School

Date Written: November 7, 2002

Abstract

This Article critically analyzes the practice of lawyers taking equity in their clients as compensation for legal services. First, it explains that equity billing can provide significant private benefits to law firms and clients, and can also provide indirect public benefits. Second, it argues that equity billing can be usefully analogized to contingency fee arrangements. Third, it addresses ethical issues raised by equity billing. The Article concludes that a case cannot be made for prohibiting equity billing or capping the amount of equity that a lawyer can take in a client, and that the most appropriate form of regulation is heightened disclosure of equity billing arrangements, coupled with the pre-existing regime of ethical rules and fiduciary principles.

Keywords: Equity billing, Silicon valley law firms, taking stock, financial risk, bearing risk

Suggested Citation

Puri, Poonam, Taking Stock of Taking Stock (November 7, 2002). Cornell Law Review, Vol. 87, No. 99, pp. 109-157, 2001, Available at SSRN: https://ssrn.com/abstract=1427827

Poonam Puri (Contact Author)

York University - Osgoode Law School ( email )

4700 Keele Street
Toronto, Ontario M3J 1P3
Canada

HOME PAGE: http://www.osgoode.yorku.ca/faculty/Puri_Poonam.html

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