We reported a couple of weeks ago that judicial commentators were criticising the corporate billable unit. Well, the chorus of condemnation directed at the profiteering of major law firms became a little louder on 4/6 when the AFR reported that:

I WANT ALL OF THE CHEESE

Victorian Chief Justice, Marilyn Warren, is concerned that mounting commercial pressures may be causing lawyers to forget their primary duty to the court. These include alliances between firms, incorporation, firms listing on the stock exchange, the use of litigation funders and the current national profession reforms with a focus on consumer rights.

…Warren told an ethics forum recently that firms have become ruthless money-making machines that force out experienced partners as young as 50 while young lawyers “are actively pursued or recruited”, only to be “exploited by the firm as reflected in their high attrition rates, especially young women…In the middle of the law firms are the associates, senior associates and prospective partners struggling to meet the profit demands of the modern practice… Their incentive for unfailing, relentless commitment to the firm’s profit is that they too may be made a partner, one day.”

Chief Justice Warren then went on to tie these comments into her appraisal of the recently released draft bill to create a nationally regulated legal profession:

…national profession reforms could diminish lawyers’ primary ethical duties to the court, because they were so consumer focused… “external regulation may be welcome but it must not come at the expense of the traditional role of the profession… [the proposed national reforms] do not, unfortunately, rise to the occasion”.

Warrem CJ’s comments are likely to come as a direct slap in the face to Mallesons Chief Executive Partner Robert Milliner, who also heads the Large Law Firm Group - the primary body calling for national legal regulation. Milliner told the ALB recently in respect of the draft reforms:

“The primary driver is to promote efficiency and uniformity in the regulation of the national legal profession. There is a desire to ensure that the regulatory framework facilitates the provision of best practice at the best price and in a consistent way right around Australia.”

We don’t blame you if you just spat your coffee over your computer screen. We sure did! Mr Robert Milliner… concerned to see that a regulatory framework exists that facilitates the provision of best practice at the best price. Like the Chief Justice, we smell a rat. A corporate rat!

If you had forgotten, let us remind you that Mallesons reported revenue that was $58million higher than its nearest competitor last financial year. Each equity partner reportedly took home between $1,400,000.00 and $1,600,000.00. Incredibly, Mallesons managed this remarkable profit feat despite having apparently less employees than its two nearest competitors in terms of revenue.

To join the dots for you all, we think this means two things:

1. the Chief Justice’s comments about corporate law firms (let’s use Mallesons as an example) being “money-making machines” are correct; and
2. People, including the Chief Justice, should be dubious of Robert Milliner when he professes concern that laws be introduced in order to facilitate the provision of best practice at the best price when the current state of the profession has enabled him to amass such an incredible reported profit take.

We’ve taken it upon ourselves to create a very rough, and slightly less dubious, draft bill of reforms that we think Mallesons could implement to achieve “best practice at the best price”:

• Charge less money for legal services. This will mean clients get a “better price”. Possibly the “best price”;
• Give consideration to whether “best practice” occurs at 3am, or on weekends. Or at 3am on weekends.

Can you think of any corporate rat reforms? Please tell us in the comments below.

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