Honesty is the best policy

Oh, the misplaced arrogance of Norton Rose. For those of you who’ve missed it so far, there’s been a row between the firm and the fourth estate about whether the firm’s published financials are accurate. Norton Rose has adjusted this year’s revenue figure from £210m to £205m, while the turnover figures for the last couple of years have been revealed to be… er… optimistic.

Norton Rose’s management is now suddenly claiming that the numbers provided for the last couple of years have been “guideline figures” only. What a fabulous euphemism. For guideline, read: wrong. Knowingly wrong, it would seem.

But the reason Norton Rose’s reaction is so breathtaking actually has nothing to with the figures themselves. It’s encapsulated by London managing partner Deirdre Walker’s comment last week, echoing her boss Peter Martyr. She asserted: “We’re a private business and keep our financial affairs private. That’s the way we operate.”

So how come Norton Rose pretended for several years that it was revealing the information? Martyr and Walker now appear to be saying that, despite pretending to embrace transparency, they are actually under no obligation to be honest to the outside world.

Some might argue that Martyr and Walker are right. Partnerships have no obligation as such to disclose their financial results. But neither are law firms compelled to do pro bono work, for example, or indeed to behave like proper businesses at all. But most grown-up law firms do so because they recognise that it’s the only way to behave in a competitive market. It’s ethical and it makes good commercial sense.

Most sensible law firms recognise that a certain level of disclosure is entirely part of City life. If you want to play at being a proper business, then a degree of transparency about financial information is part of that. Clients want to know they’re instructing a well-managed firm, where information is not held as a yah-boo-sucks commodity. Potential laterals might want to think twice before believing any Norton Rose figures as well.

What else, then, is a Norton Rose ‘guideline’? Can we now believe Martyr’s insistence earlier this year that he isn’t interested in a US merger? Or his assertion that many of the partners who left this year were managed out? Does that mean that Norton Rose will only adopt a culture of honesty once the limited-liability partnership accounts are filed?
It’s not a great advertisement for an organisation. This is a reputational test – and Norton Rose is failing.