16 November, 2005

A Difficult, Sad and Unnecessary Decision...

Within the next few weeks I will have to decide whether or not to leave the attorneys profession. I have informed my staff members of the various risks and benefits involved in staying in as well as leaving the profession. For the younger and more idealistic lawyers in our firm it is obviously a dramatic choice. They studied to be attorneys. Its not a new issue. Our firm has been struggling with the choice for almost two years now. But the risks and more so, the lost opportunities have just become to big to ignore any more. I am particularly guilty for having postponed a final decision. I guess I always hoped that I will open the newspaper one morning and read that the Minister decided to implement the Legal Practitioners Act. Her various public statements that it was imminent only served to give us false hope. My open letter to the Minister and her deputy (http://www.buys.co.za/downloads/openletter.pdf) was an act of final desperation. Two weeks since, we have not even received an acknowledgement of receipt. Not a word from the Minister of the Law Societies. Maybe her time is taken up by the racist fight between the Cape Bar and the judges of the Cape High Court... Admittedly a much more serious issue than the future of the attorneys profession. So, why will I probably leave the attorneys profession (and take my firm with me)? Let me explain. Buys Inc. Attorneys was established in January 2001 as one of the first law firms in South Africa to specialist exclusively in information technology law (“IT law”); IT law is a very recent area of expertise, mainly driven by the increased use of technologies such as the Internet for communication, business, entertainment and, unfortunately, criminal activity; Since the Internet is borderliness, electronic environment, we have no long standing set of precedents to apply and had to develop new and unique legal services to address the growing requirements and risks of our clients; The difference between IT law and more traditional fields of expertise is so significant that our firm currently provide none if the legal services that are reserved for attorneys[1], for example: the preferred method of dispute resolution is through online arbitration and litigation is the exception rather than the rule. In the few instances where we had to institute proceedings in a local court, woutsourcinged it to one or more advocates; The risks, sphere of application and benefits of pro-active action, care to IT law, are new and unknown to the local market. Before we can even consider providing our unique cocktail of legal services, we have to inform and convince clients of the related dangers and risks. For example, while most of our clients would not blink at spending millions to cover insurance against natural disasters, they would frown upon spending a considerable smaller amount to protect themselves against hackers and other electronic dangers such as viruses anspherere. Our success therefore, largely depends on extremely creative and successful marketing activities. Since we cannot afford full-page newspaper advertisements, prestigious marketing agencies and similar forms of traditional advertising, we focus on cost-effective electronic marketing campaigns conducted by ourselves. Our website is the biggest in Africa and was recently selected by Financial Mail as one of the Top 50 websites in South Africa (click here to view our website). We also established the South African ICT Law Blog (click here to view) and distribute a weekly newsletter in electronic format to a growing subscriber base (click here to view our most recent newsletter). However, these attempts at informing our clients and the public about IT law may (depending on your interpretation) breach one or more of the anti-touting provisions of the Law Societies – we operate under a constant risk of being classified as “unprofessionaldishonorableable” and subject to disciplinary action; Today, the legal services we offer differ significantly from whose offered by more traditional law firms and requires a specialistslised set of skills, knowledge and experience; Neither legal studies at local universities nor the practical admission examinations provided for in section 14 of the Attorneys Act[2] prepare student and newcomers to the profession to practice in the field of IT law; As a result, we have to provide the uniquespecialistslised training in-house; In 2003 we employed a very competent woman to open and operate a branch office in Johannesburg and since her employment, she gained significant experience, knowledge and expertise in the field of IT law. However, since she holds a BIuris legal qualification from the University of South Africa she does not qualify to become a partner or director of our firm and even suffers the disgrace of being disqualified from carrying a business card or appearing on our letterhead because of the publicity rules of the Law Societies; Since the legal services we provide are generally delivered and implemented through the use of custom developed software applications, we employed a full time IT manager since the start of 2004. He not only succeeded in automating our firm’s daily operations, but also enabled us to provide clients with secure communications and documents to protect their confidential information and intellectual property rights. To claim that he is the central pillar on which our success is based, would be an under statement. But as with our Johannesburg lady, he can never be a director of our firm, may not be show on our letterhead and may not carry a business card. We can’t even provide him with a share incentive scheme, since these are all prohibited by the provisions of the Attorneys Act and the Law Society rules; Our unique field of expertise resulted in the fact that we provide legal services to some of South Africa’s biggest corporates and public organisations such as Telkom, SAA, SARS, DBSA, Department of Justice, Cell C, Citibank, the SABC, the IDC and others. These organisations, for obvious reasons, demand the highest standards of corporate governance from ourselves and we attribute much of our time, resources and energy into compliance with the provisions of the King II Report on Corporate Governance. One of the main suggestions in the King II Report is the appointment of non-executive directors to our board. The corporate governance benefits of such directors include higher standards of risk management, legal compliance and business continuity. Notwithstanding the fact that an ex-judge and a high qualified e-commerce personality agreed to join our board, such attempts to improve our governance are yet again prohibited by the provisions of the Attorneys Act and the Law Society Rules; In addition to the above, most government tenders we are qualified to apply for, demand high BEE credentials from ourselves. Yet again, our attempts to involve previously disadvantaged persons in our management and control are frustrated by the Attorneys Act and the Law Society Rules; To improve our service delivery and ensure that we remain competitive in this fast changing environment we are in the process of developing and testing legal artificial intelligence applications and so-called virtual in-house lawyers. To finalise and roll these technologies out into the South African market requires rather substantial financial investment. Since our only assets intangible, securing financial assistance from local banks are impossible, for all practical reasons. Although we can proceed without such assistance, the result would be that our technological developments might only be ready in a matter of years, rather than months. Despite various investors that indicated their willingness and ability to invest in our firm, such investment is yet again prohibited by the Attorneys Act and the Law Society Rules; As stated above, many of our legal solutions are implemented through the use of proprietary third party software applications such as our email legal notice that is implemented by a company called XXXX and our workplace policies that are implemented with the Policy Distribution Manager developed by TSS. During the last few months we also co-operated with a local software development agency, Swist Group Technologies to enable us to provide a software application that totally automates a client’s compliance with the onerous provisions of the new Regulation of Interception of Communications Act 70 of 2002. Notwithstanding the obvious benefits to our clients and the industry at large, we are prohibited to conclude co-operation agreements with these software companies and cannot share our directly related fees or commissions with them; In our field of expertise, traditional law firms are not our competitors. Rather, we compete with international law firms, so-called virtual law firms and legal consultancies that escape the anti-competitive restrictions we are subject to; As a result of the onerous regulatory environment in which we operate, we cannot: Effectively compete with our competitors; Effectively market our services and inform our clients and the public about IT law; Properly reward or create proper incentives our key employees, nor allow them to share in the risks and benefits of our firm; We cannot publicise the names of our key employees on our newsletter and provide them with business cards; Implement the required procedures to ensure good corporate governance; Secure BEE ownership or management; Secure much needed financial investment; and Conclude partnerships or fee sharing arrangements with software companies.’ To escape the abovementioned restrictions and liberate our firm to achieve its full potential we can either establish a so-called legal consultancy as a company or close corporation or simply leave the attorneys profession and operate fully as legal consultants, corporate legal advisors or “IT lawyers”. However, such alternatives involve a re-branding exercise and loss of our current goodwill and regulation. Our tentative client surveys in this regard, also showed that implementation of any of these alternatives will result in general confusion. As Clem Druker rightly pointed out in a recent De Rebus article, these alternatives amount to nothing more but “leading a double life”;[3] In 2004 Buys Inc. Attorneys was selected as one of the Top 300 companies in South Africa – the first law firm of our size and age to receive such a high honour. In November 2004 our MD was selected as one of the top three technology directors in Africa. In April 2005 we were selected as one of a very small number of African law firms to join the prestigious Gerson Lehrman Law Council in Washington DC. We were also recently selected as one of the 2005 Top 100 Technology Companies in Southern Africa. All these awards resulted from passionate and committed and uninterrupted hard work – late nights and full weekends. We believe that we are good for the legal profession and that we are doing pioneering work to prepare the South African law and the attorney’s profession for the future (click here to visit our website). Nobody will benefit from our desperate last-resort decision to leave the profession for good. [1] High Court appearance, appointment of candidate attorneys, notarial work, conveyancing, drafting of wills, administration of estates, drafting of sale of land agreements, drafting memoranda of association, drafting partnership agreements and preparation of court documents [2] 53 of 1979 [3] Druker C, “Leading a double life”, De Rebus, October 2003

3 Comments:

Anonymous Anonymous said...

Just do it. Stop being a lawyer firm and become a company, or a legal consultant firm. It is not as if you will ever appear in court anyway! Stop moaning and do it - nobody likes a whiner.

You can do it.

17 November, 2005  
Blogger Reinhardt Buys said...

Hi "You Cab Do It",

Yes, nobody likes a whiner. But we decided to only leave the profession once all other alternatives have been exhausted. If you consider our concerns as whining, tough shit. Deal with it.

Other attorneys considered whiners in their time included Mandela and Gandi.

I will never even try to suggest that our little issues can compare with those that Mandela and Gandi fought for. But it shows you that a little bit of whining can turn out to make the world a better place for all of us.

17 November, 2005  
Anonymous Anonymous said...

Touchie. A bit narcissistic perhaps?

Good whining, and good luck 'ol chap.

22 November, 2005  

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