France and Alternative Structures: Putting the Pieces Together

Let’s put together the pieces from the previous posts. Today in France:

  • Legaltech companies have worked together with representatives of the various legal professions to prepare a “Charter of Ethics.” Intended for signature by legaltech companies, this 7-page Charter describes the ethical principles that signatories will apply to their activities, the means by which they will maintain data security, and the service levels they will provide to their clients. Regardless of how “successful” the Charter ultimately proves to be (and however “success” might be defined), the document is a form of general recognition and acceptance of legaltech companies as well as first step in regulating them.
  • The members of the various legal professions will very soon be allowed to join together not only with each other but also with certified accountants (experts comptables) in order to practice from the same company (referred to as SPEs). These structures will allow such professionals to serve the needs of their clients in a more seamless and holistic manner. It is true that, today, the range of professionals allowed to form such companies is relatively limited. Nevertheless these companies are a first form of fully integrated multidisciplinary practices. Once a variety of questions regarding the coordination (if not eventual harmonization) of varying ethical rules are addressed, little will stand in the way of allowing the members of other regulated professions (such as doctors and architects) to join, as a next step, and then members of previously unregulated professions (IT, marketing, finance, social work,…) after that.
  • Lawyers are now allowed to form, be a shareholder of, and practice with almost any form of commercial company, not just the forms of company reserved for professional services. Further, they can form, be shareholders of, and practice with an unlimited number of any such commercial companies (including SPEs). Finally, lawyers as individuals as well as any of those companies can now carry out “commercial” activities (that is, offer non-legal goods and services together with legal ones), albeit within certain limits.
  • The February 2017 Haeri Report recommends that law firms be allowed to open their share capital to nonlawyers (specifically, to persons who are not members of one of France’s regulated legal professions), provided that nonlawyers remain minority shareholders.

This is the seventh in a series of eight posts relating to France. Links to the other seven in the series are provided below.

Some of these changes (perhaps for some readers, all of them), considered alone, might appear unremarkable. Legaltech companies can volunteer to conform to certain ethical and conduct rules, without any way to ascertain their conformity and without any established penalty if they fail to conform? That’s nice. Lawyers and other legal professionals can practice together with accountants? Haven’t they already been doing that? Lawyers can use a wider range of forms of company and a lawyer can be a shareholder of and work with more than one company at a time? Those restrictions were difficult to justify and were regularly breached, anyway. Lawyers can offer “commercial” services in connection with legal ones? Well, setting aside that we still don’t have a complete understanding of just what that means, haven’t lawyers been doing that already, through publishing, teaching/training, and subletting office space? And nonlawyer minority share ownership? Who cares? Few took advantage of the possibility in New South Wales or the District of Columbia – why should it work better in France?

That’s one way to look at it.

Here is another: When these changes are considered as a whole, they constitute real and concerted steps towards the adoption of alternative structures. The Charter is a first step towards bringing “legaltech” under the umbrella of regulation, and of expanding the regulation of lawyers (and the other legal professionals) to the broader category of the regulation of legal services. SPEs are a first step towards bringing different kinds of professional service providers – legal and non-legal – together in the same structure to offer holistic services to the same clientele. Freeing up lawyers to participate in variety of different kinds of companies and to offer “commercial” services together with legal ones are first steps towards enlarging the concept of “practicing law” – the first steps towards allowing lawyers and other legal professionals to develop a much larger variety of business models, potentially quite different from the “professional consultancy”/”solution shop” model of the traditional law firm. And allowing for minority nonlawyer ownership of law firms might be just a preliminary phase in ultimately allowing for majority nonlawyer ownership.

They say that the first step is the hardest. Once France has taken these first steps, the next ones will surely follow: previously unregulated legaltech professionals, having demonstrated the willingness as well as ability to respect ethical rules, will be allowed to fully participate in regulated SPEs alongside other kinds of professionals. SPEs and law firms, having demonstrated the ability to operate a limited number of different business models in an ethical manner, will be allowed to experiment with an even greater variety. Nonlawyers, having demonstrated they are “safe” as minority shareholders, will be allowed to become majority. The end result will be structures – whatever they end up being called – that can be easily compared to the alternative business structures (ABSs) of England & Wales and the incorporated legal practices (ILPs) of Australia.

That is, in the end, the French will get there. They’ll do it in their own special French way.

In the next post I’ll ask the question: why is France succeeding while the US continues to fail?

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Links to the other seven posts in this series:

  1. There’s Something About France
  2. A Big Happy (French) Family
  3. A Little More Liberté
  4. France’s Haeri Report on the Future of the Legal Profession: Intro
  5. France’s Haeri Report and Alternative Structures (1 of 2): Je t’taime un peu
  6. France’s Haeri Report and Alternative Structures (2 of 2): Je t’aime, moi non plus
  7. France and Alternative Structures: Putting the Pieces Together
  8. Alternative Structures: Why is France Succeeding While the US Continues to Fail?

All eight posts, regrouped, can be viewed at this link: Regroup of posts on France

2 thoughts on “France and Alternative Structures: Putting the Pieces Together”

    1. Hello! Thank you for your interest and for your questions. I am not aware, unfortunately, of an English translation of the Haeri Report. Is there a specific subject area (or areas) that interest you in particular? If so, perhaps I could help you to understand in more detail how the report addresses those subject area(s).

      I’ve regrouped all seven posts at this link: http://notjustforlawyers.com/regroup-france/. I’ll add the eighth post there as soon as it is up on the blog.

      I hope this is helpful. Thanks again for your interest and your questions.

      Laura

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