Bankruptcy for a Lawyer, “Chapter 11” for the State Bar

A Lawyer and Partner, and Also Bankrupt – NYTimes.com. A sad but unfortunately emblematic story that captures where we at in the most human terms.  Members of my lawyer cohort like Mr.  Owens caught the big wave thirty years ago, a wave now breaking on the shore, depositing dazed surfers all over the rocks.  My law school classmates in 1983 thought that the only acceptable fate was finishing in the top 10% and going to work for a big firm with the expectation of making partner in seven years.  It seems so quaint now, as if we were talking about the hopes and expectations of the Lost Generation in 1920’s Paris.   For them, the world moved on, and so it has with us. 

As I noted in a prior post (The Great Perpetual Motion Public Protection Machine), Prof. William Henderson gave a presentation to the State Bar Board of Trustees that outlined some of the ways the world has moved on and some of the ways businesses that provide legal services have moved on.  Afterwards, in a colloquy with Staff, I expressed the view that our ethics rules were obsolete with respect to these new business models.  Staff replied with a reference to the Ten Commandments.  I didn’t quite understand it at the time but later I figured he had meant that the ethics rules are like moral rules, eternal principles that don’t change with the economic winds.  I wondered then just how much of the import of Prof. Henderson’s presentation really penetrated.

Or perhaps they understand all too well and see themselves standing against the barbarians at the gates.  It’s a romantic notion that I have seen in discipline staff, including myself.  On a practical level, the State Bar understands that the coming decade will see an actual contraction in the number of lawyers and they are already calculating how that will effect their future revenues.  But I don’t think we know how big that contraction will be. Ultimately, the State Bar will have to re-invent (or in bankruptcy terms, re-organize; see 11 USC section 1101, et seq.) itself as a regulator of legal service providers, traditional lawyers and non-traditional providers alike.  It is already exploring the idea of limited licenses and has recently been given authority to collect civil monetary penalties for the unauthorized practice of law now codified as Bus. & Prof Code section 6126.8.  As the lawyer discipline caseload shrinks, you can expect that the State Bar will be devoting more of its resources to filing civil UPL actions under section 6126.3 now that it can recover money through them.

The short term response will be professional retrenchment.  Government agencies typically aren’t nimble enough to get out in front of change, only react to it.  But surely some forward thinkers at the State Bar are looking at the long term need for a complete Chapter 11, and going where the rest of the English speaking world is headed?

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