Lawyers make lots of money and being an attorney is a notoriously (potentially) lucrative career.? Sophisticated investors can quickly identify profitable industries and help companies become even more profitable.? It?s not always about profits as we?ve seen companies like Twitter launched with investor money.? But investing in law firms has always been against the rules.
Jacoby & Meyers wants to change that.? They are a well known law firm and are suing for the right to take on investors in law firms that are not lawyers themselves.? Many are worried about such a change, rightfully saying:
The reason behind the rule, which holds in every jurisdiction but Washington, D.C., is simple: a fear that attorneys might be coerced by outside investors into unethical behavior and would be prone to put profits over client interests.
It makes perfect sense then.? The attorney should be focused on the client, and having to answer to investors can create conflicts.? But that conflict already exists.? Law firms are not non-profits.? Partners own the firm and get the profits.? The idea that simply because an investor is a lawyer this problem doesn?t exist now is preposterous.
However I do understand the concern, but you have to wonder where the line is when it comes to investing and the client/customer relationship.? Should we be allowed to invest in private security forces contracted as an army?? We can.? Likewise, should we be able to invest in hospitals?? Hospitals treat sick people, help people recover from injury, and are? a staple of many towns.? If we could invest in hospitals, there would be a serious conflict between the duty to treat and the duty to return profits to shareholders.
Thank goodness we can?t invest in hospitals.? Because if we could invest in hospitals but not law firms, it would look really weird.
Oh yeah, we can.
In my opinion, if we can invest in hospitals and defense contractors, we should be able to invest in lawyers too.? But that doesn?t mean we should.? There are many examples of hospitals screwing patients, and the Blackwater scandals in Iraq are still being sorted out.? Perhaps we shouldn?t be allowed to invest in these types of companies as it might create more problems than it solves.? From my perspective, it really doesn?t matter all that much.? But there should be consistency.? If the general public has no problems with investors in hospitals, I doubt there is too much trouble to be had with investors in law firms.
Image: Navin75
categories: business, investing????Source: http://weakonomics.com/2011/05/23/investing-in-lawyers/
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