On the heels of my posting earlier this week about my failure to understand how the Axiom law firm backed by the Axiom tech company is something that complies with California’s ethics rules (much less ethics rules in other states besides D.C. that are based on the Model Rules should it attempt to expand as it plans), news comes now at the end of the week that one of the Big 4 accounting firms is launching its first law firm in the United States.
As this ABA Journal story explains, PwC is opening ILC Legal but, importantly for my discussion purposes, it is doing so in D.C. As noted when I discussed the Axiom deal, D.C. is currently the only U.S. jurisdiction that permits the kind of non-lawyer ownership in a law firm that is prohibited everywhere else in the country. Now, interestingly, the PwC spokesperson quoted in the story indicates that isn’t the reason D.C. was picked. There may be many more details in the AmLaw story referenced by the ABA Journal but I am not a subscriber to that publication so I can’t get to it to read. Not sure what details could be in there though that would change the fact that I’m skeptical that any structural separation PwC may have come up with for this law firm will comport with any ethics rules other than D.C.’s at this moment in time.
In my Axiom post, I asked readers to envision whether if a bank were doing what the tech company was doing, anyone would have any qualms at all about saying that it didn’t appear to comply in any way with the pertinent ethics rules. I could just have easily used an accounting firm as an example instead of a bank.
So, bottom line for this Friday is, whatever your reaction might be to the PwC news (assuming it is one of concern), you ought to have the same – and even stronger — reaction to the Axiom situation. Axiom isn’t even starting in D.C. where it could arguably be compliant.
(And, thanks to David Carr – a California ethics attorney – for the comment he posted to my earlier story with some further thoughts about the situation in California for Axiom. Boiled down though, those thoughts seem to me to indicate that Axiom’s approach doesn’t comply with California’s rules as I suspected and that their only hope is that their own clients won’t complain about them and, apparently, that if anyone else does it won’t gain any traction with regulators.)