Girling: 'Firms should sell shares'

Law Society president Tony Girling and senior Chancery Lane staff have called for measures to allow law firms to raise cash by selling shares on the stock market in a bid to compete with accountancy firms.

Girling promoted the idea at the American Bar Association's Orlando conference.

But many of the international Bar leaders reacted angrily, saying it would lead to a loss of independence for lawyers.

The new president also told his continental counterparts that he had moved from being opposed to multi-disciplinary partnerships to recognising solicitors had to change direction.

The Labour Party, committed to allowing MDPs, was likely to gain power at the next election and solicitors had to accept reality, he said.

Frederik Heemskerk, secretary general of the Dutch Bar, said: “From being opposed to MDPs, it now seems Girling wants to allow them.

“All the Bars on the continent are united against the idea. We can understand the argument about Labour, but this idea about raising equity capital, it's simply not credible.”

At a public round table session, Bar leaders warned of the loss of lawyers' independence to either accountant partners or private venture capitalists.

Sam Okuzeto, president of the Ghana Bar Association, who has been imprisoned for his criticism of the Ghanian government, warned it was important for the rule of law that lawyers were independent. “That means financial independence too,” he said.

In June, the Law Society initiated a review of its rules prohibiting MDPs after a Labour Party pledge to allow them. The society officially says it has “an open mind” on the issue but senior officers such as John Randall, director of professional standards, appear to have convinced Girling that it would be sensible to relax the rules.

Randall made an impassioned speech at an earlier session at the ABA on competitive threats, calling for rules to allow law firms to raise equity capital as the best way to “take on the vast resources of the accountancy firms”.

Alison Crawley, Law Society head of professional ethics, said: “Many firms have massive overdrafts and banks are telling them to restructure business. What is the difference between a bank telling you that and a venture capitalist? We could make sure that the shares available would not include voting rights, so venture capitalists could not influence the independence of legal advice.”

Dibb Lupton Broomhead director of finance and administration David Liddle said: “If we were to incorporate, we would see the ability to raise capital from outside sources as a considerable attraction.”