The Washington firm of Howrey & Simon yesterday confirmed that it will become the first law firm in the country to make a non-lawyer a partner, a move that some lawyers fear will lead to an erosion of professional standards if it is copied by others.
The action follows years of sometimes bitter national debate in the legal community about whether non-lawyer partners would uphold the profession's rules governing conflicts of interest and client confidentiality. Partners of law firms have more responsibilities and greater access to confidential client data than other employees at the firms.
Howrey & Simon's designation of Abe Isenberg, its top financial official, as a partner is a reaction to the highly competitive business of law. Firms with hundreds of lawyers and millions of dollars in profits increasingly have relied upon non-lawyer experts to advise them on cases and help them run the business, legal experts said.
In addition, law firms have branched into nonlegal areas, creating profitable subsidiary businesses staffed by non-lawyers that provide clients with a range of consulting services. Howrey & Simon has subsidiaries in economics and accounting.
Ralph J. Savarese, managing partner at Howrey & Simon, said Isenberg "has been a major contributor to the law firm and its well-being. ... We wanted to have him participate in the risks, burdens, responsibilities and rewards of the law firm. We've believed for some time that we need to recruit top professionals in management and make them part of our team."
Isenberg, a certified public accountant who will become the first non-lawyer to get a share of partner's profits at Howrey & Simon, was on vacation and could not be reached for comment.
At least 20 District firms already have subsidiary groups in areas such as economics and lobbying in which non-lawyers work with attorneys on client matters. Isenberg deals only with internal firm matters and does not work directly with clients, as subsidiary groups often do. Thus, naming Isenberg is less controversial than making a member of a subsidiary group a partner, Savarese said.
However, lawyers at other D.C. firms said they expect that a firm will soon take the bigger leap of making partners of non-lawyers who also work on client matters.
D.C. law firms employ non-lawyers who are physicians, accountants, economists and scientists who advise them on client matters, as well as the more typical non-lawyer lobbyists and management gurus.
The D.C. Court of Appeals on March 1 adopted a new rule that will allow non-lawyers in District firms to become partners as of Jan. 1. The rule, the only one of its kind, is narrowly written to avoid problems with the profession's code of conduct by making non-lawyer partners subject to the same conflict-of-interest and confidentiality rules as lawyers. Lawyers at the firms will be responsible for seeing that non-lawyers abide by the rules.
North Dakota is the only other jurisdiction that has considered such a rule. It was rejected there.
Lawyers and bar groups across the country are monitoring the effects of the District's rule and whether there will be a rush by Washington law firms to make partners of employees who are not attorneys, giving them a portion of the firm's profits and a role in its management.
"Everybody will be enormously interested in what happens in Washington," said Cornelia Tuite, assistant ethics counsel for the American Bar Association (ABA).
Lawyers are considered self-regulating professionals now. In most jurisdictions, the courts are the final arbiters of legal codes of professional responsibility. But many attorneys fear that Congress or state legislatures or agencies such as the Federal Trade Commission might become involved if non-lawyers get closer to the practice of law.
"Some are worried that the profession of law will become the business of law and may become regulated very extensively by the legislative branch," said Tuite. The ABA is working on a special report concerning the ethical issues of non-lawyers as partners that will be presented in February.
Dennis J. Block, a member of the ABA panel studying the issue and an attorney at the New York firm of Weil, Gotshal & Manges, said he believes that having non-lawyers as partners raises serious ethical problems, particularly if partners come from areas of nonlegal services such as financial consulting. "Confidentiality, confusion and conflicts truly blossom in that area," said Block. " ... Ultimately, it's not good for the firm." Savarese disagreed. "The task of managing a law firm isn't any less daunting than managing a major corporation," he said.
Savarese added that because law firms need to attract top people who are not lawyers in a number of areas, the lure of a partnership becomes more important.
While some managers of D.C. firms who asked not to be identified said they were considering naming non-lawyers as partners, others expressed a note of caution."We'll let the dust settle a little bit before we do it," said Richard E. Wiley of the D.C. firm of Wiley, Rein & Fielding.