Times - 20.08.2010

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An article in the law section of Thursday’s Times highlights the problems that City firms that accept external investment could have in Europe and the US.

Though the scepticism of the Council of Bars and Law Societies of Europe (CCBE) and American Bar Association about alternative business structures (ABSs) is nothing new, the article ramps up the worries that City firms no doubt have by quoting CCBE president José-María Davo-Fernández predicting that if a City firm with offices around the Continent accepts external capital, the matter will end up in the European Court of Justice.

The article says the CCBE’s argument centres around article 11 of the Lawyers Rights of Establishment Directive, which stipulates that member states have the power to ban from their jurisdictions any law firm that is not completely lawyer-run, if it were deemed contrary to public policy to allow them to operate.

“Bar authorities and governments in several member states oppose external investment, saying that injections of outside capital are likely to put lawyers under intolerable commercial pressure that will divert them from an historical ethical duty to the rule of law.” (Due to the paywall, we cannot provide a link.)

The Times: Thursday August 19 2010

by Jonathan Ames