Introduction I. Problem One: The Disciplinary Perspective--Neglect, Poor Client Communication and Improper Management of Client Funds II. Problem Two: Ethical Infrastructure and Improving Business Systems A. Regulatory System Incentives to Create Ethical Infrastructure B. Improved Decision-Making C. Market and Competitive Forces That Encourage Ethical Infrastructure III. Problem Three: The Inability to Match the Surplus of Lawyers with Unmet Legal Needs Conclusion: The Law-Business Dichotomy Revisited I'm not accusing lawyers of having the morals of the marketplace. (1)
In 1916, Julius Henry Cohen produced a readable and thoughtful book with the provocative title of The Law: Business or Profession? (2) He describes a legal profession and society in flux, confronted with some very familiar challenges, including the pressures of the market, the increased specialization of lawyers, and changing social conditions such as a large influx of immigrants. (3) The facts he marshals could be rewoven to tell many different stories. (4)
Cohen chose to flame a dichotomy that has continued for over 100 years: is law a business or a profession? In his 1916 work, Cohen gives some credit to businesses that strive to enhance the professionalism and ethics of theft business enterprises, (5) but it becomes clear that business is the lower standard of the marketplace, less constrained--or unconstrained--by other social or professional concerns. (6)
For the purposes of this Article, I will use the word "professionalism" to capture these additional social and professional concerns, the particular obligations that lawyers owe to their clients and society: fiduciary obligations to clients, adherence to core values such as confidentiality and maintaining confidences, and an understanding of the lawyer's role to both support and improve our system of justice and to use best efforts to address unmet legal needs. Unfortunately, the rhetorical device of framing the question as "profession versus business," thereby characterizing the two as inherently inconsistent concepts, seriously impairs our ability to address some of the central challenges to lawyers fulfilling these important values and indeed contributes to these failings. This framing of profession versus business disparages the business aspects of legal services that are essential to implementing our professional obligations.
I will focus on three current professionalism challenges in the U.S. legal profession: (i) the problem of neglect, poor client communication, and poor management of client funds; (ii) the need to improve the ethical infrastructures in practice settings to enhance both routine practice and ethical decision-making when lawyers confront ethical challenges; and (iii) the challenge of providing legal services to the poor and working class. For each, it turns out that improving adherence to core values requires not just training lawyers to internalize a model of professionalism, (7) and a continuing commitment to self-regulation in some form, but also implementing improved business practices. In other words, a significant part of our failures as a profession are business failures. These failures occur at the individual, firm, and market levels, and at each level we need to consider the business structures that enhance or impair improved practices.
Business--good business--is not the enemy of lawyers but an important tool to implement our service profession. (8) We need to have a sharper and richer discussion of the business perspective of professional practice, without apologies, if we want to improve the professional practice of U.S. lawyers. (9) In addition, a stronger interdisciplinary conversation with the field of business ethics would help break down the stereotype of business as an amoral, or immoral, enterprise. We must envision business as both a partner and a tool to achieve our larger social goals. (10)
PROBLEM ONE: THE DISCIPLINARY PERSPECTIVE--NEGLECT, POOR CLIENT COMMUNICATION AND IMPROPER MANAGEMENT OF CLIENT FUNDS
The legal profession embraces the idea of competent representation, the opening requirement set out in ABA Model Rule of Professional Conduct 1.1. (11) Implementing competent representation requires diligence and communication. (12) Yet the largest category of the disciplinary actions nationwide, roughly thirty percent, deals with issues of competence, diligence and failure to communicate with the client. (13) The next most common basis for disciplinary action is mismanagement of client property or funds, which account for roughly twelve percent. (14) Some of the mishandling of client funds comes from venality and outright theft. But quite a bit comes from poor business practices, such as commingling client and office funds. (15)
It does not take much analysis to identify that more than a third of the disciplinary actions against lawyers involve some aspect of business failure. (16) Of course these are deeply intertwined with other issues, such as substance abuse, depression, and adult attention deficit disorder. (17) Whatever the causes, the inability of some lawyers to implement a fundamental and sound business principle of service and competence is the most common problem for clients. (18)
To deal with this professionalism failure, the organized bar has taken a multi-tiered approach. All states now have lawyer assistance programs to address alcohol and drug abuse, which is a significant source of client neglect. (19) The alcohol and drug initiatives have grown to include a range of lawyer wellness issues, such as efforts to assist lawyers confronted with compassion fatigue, compulsive behaviors, depression, stress, and suicide. (20) As programs expand they increasingly provide services relating to cognitive impairments, aging, financial, marital, and career issues. (21)
Professor Fred Zacharias courageously articulated the inherent tension of providing confidential assistance to lawyers suffering from drug and alcohol problems and the goals of client protection. (22) The clients are typically not the focus of the initial assistance. (23) Benefits hopefully flow to future clients. (24)
At the same time we have seen a growth of lawyer assistance programs, we have also seen an increasing focus on law practice management. In 1974, the ABA created the Law Practice Management Section to assist lawyers in the business of law, recognizing that good business models are needed to "make the legal services delivery team more effective, competent, ethical, and responsive to the needs of clients and the public." (25) Their Solo and Small Firm Resource Center is aimed at the practice setting with a disproportionately large number of complaints to the bar. (26) Literature from the practicing bar addresses this topic, and even the academics are getting into the discussion. (27) Consulting practices also advise firms on improving business practices. (28)
These initiatives have hit the law schools. Many law schools provide information on lawyer assistance programs before students even enter the legal profession. (29) The increasing attention to skills training in U.S. law schools should include, in the words of the 1991 MacCrate Report, "organization and management of legal work." (30) Good texts have emerged to introduce students to the business of lawyering and have supported the growth of law practice management courses. (31) By 2007, 61 law schools offered some course in law practice management (at least according to the law school's' websites). (32) In 2010, 107 individuals listed themselves as law office management teachers, including legal ethics leaders such as Thomas Shaffer, David Wilkins, Steven Hobbs, Gary Munneke, Clark Cunningham, and Debra Moss Curtis. (33) The growth of law practice management gives students who will move quickly into their own solo or small firm practice the tools to act in a professional manner. (34) Given the anticipated increase in recent graduates hanging up their own shingles, such programs will become increasingly important. (35)
In addition to lawyer assistance programs and law practice management emphasis, the bars have implemented programs that directly or indirectly assist the lawyer in improving their business practices. (36) Some bars have initiated early intervention programs to take client complaints and divert them to focus on problem solving and prevention, rather than discipline. (37) This provides a remedy for the current client and assists the lawyer in improving business practices to prevent future failures. As part of professionalism initiatives, other states have embraced the transition to practice and mentoring programs to assist lawyers in improved business practices. (38)
Despite all these efforts, issues of neglect, communication, and poor financial accounting continue to be common problems. From discussions with other professional responsibility professors, and a review of legal ethics textbooks, it appears that those who teach legal ethics spend little time on these issues in a traditional professional responsibility course because these are obvious and clear obligations. (39) This is what Julius Cohen recognized as the disconnect between the ideals of the profession and the conduct of its members--that is, the gap between theory and practice. (40) While Cohen accurately asserts that inadequate moral training might explain some of the gap, (41) moral training does not appear to be the issue in this category of problems. These problems occur because at the implementation stage lawyers have trouble with the fundamental business aspects of our service profession. This leads to questions of how the systems and structures in which the lawyer functions might reduce this category of problems.
PROBLEM TWO: ETHICAL INFRASTRUCTURE AND IMPROVING BUSINESS SYSTEMS
Over the last twenty years we have seen increased attention to the need for improving the ethical infrastructure...