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{{a|design| | {{a|design| {{image|Secret agent problem|png|A special agent’s problem, yesterday}}}}{{dpn|/ˈeɪʤənsi ˈprɒbləm /|n}} | ||
{{image|Secret agent problem|png|A special agent’s problem, yesterday}}}}{{dpn|/ˈeɪʤənsi ˈprɒbləm /|n}} | |||
The intrinsic [[conflict of interest]] any [[agent]] faces that, as long as it gets its [[commission]], it doesn’t really care a hill of beans what its [[principal]] gets, however much it might protest to the contrary. | The intrinsic [[conflict of interest]] any [[agent]] faces that, as long as it gets its [[commission]], it doesn’t really care a hill of beans what its [[principal]] gets, however much it might protest to the contrary. | ||
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Any one of its agents is charged with protecting the principal’s interests, but two overriding considerations will inevitably take priority: (i) their wish to protect and perpetuate their own role ''as'' agent, and its accompanying income stream — their need to ''persuade the principal that their role is needed'' whether or not it ''is'' needed — no turkey votes for Christmas; and (ii) their wish to not ''fuck up'' — to demonstrate that not only is the role necessary but ''I am the best person to carry out that role''. | Any one of its agents is charged with protecting the principal’s interests, but two overriding considerations will inevitably take priority: (i) their wish to protect and perpetuate their own role ''as'' agent, and its accompanying income stream — their need to ''persuade the principal that their role is needed'' whether or not it ''is'' needed — no turkey votes for Christmas; and (ii) their wish to not ''fuck up'' — to demonstrate that not only is the role necessary but ''I am the best person to carry out that role''. | ||
==Big law and the agency problem== | |||
Just one can make the case that humans did not domesticate wheat so much as wheat domesticated humans,<ref>A {{author|Yuval Noah Harari}} ''bon mot'' that owes something to {{author|Richard Dawkins}}’ idea of the [[extended phenotype]], we feel.</ref> so might one argue that [[investment bank]]s did not cultivate [[big law]] firms as much as [[big law]] — oh, okay, and [[big consultancy]] — cultivated the investment banks. Our [[IB GC genealogy]] refers. | Just one can make the case that humans did not domesticate wheat so much as wheat domesticated humans,<ref>A {{author|Yuval Noah Harari}} ''bon mot'' that owes something to {{author|Richard Dawkins}}’ idea of the [[extended phenotype]], we feel.</ref> so might one argue that [[investment bank]]s did not cultivate [[big law]] firms as much as [[big law]] — oh, okay, and [[big consultancy]] — cultivated the investment banks. Our [[IB GC genealogy]] refers. | ||
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Above that threshold, this no longer holds: there is a hazy interregnum where lawyers know they can be paid handsomely, indefinitely, for carrying on an argument that most likely will never get to court, let alone final adjudication. | Above that threshold, this no longer holds: there is a hazy interregnum where lawyers know they can be paid handsomely, indefinitely, for carrying on an argument that most likely will never get to court, let alone final adjudication. | ||
===Service providers=== | ====Service providers==== | ||
Especially where you are dealing with investment banks as corporate service providers, you may see this sort of clause: | Especially where you are dealing with investment banks as corporate service providers, you may see this sort of clause: | ||
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But if the advice turns out to be wrong and the agent can disclaim its own liability, then the lawyers it instructed — for whom the client is probably paying — don’t acquire any liability in the first place. ''But that’s why you pay lawyers'': so they can cover the agent’s sorry arse if their advice turns out to be wrong and their client — you, kind sir — goes on the warpath. | But if the advice turns out to be wrong and the agent can disclaim its own liability, then the lawyers it instructed — for whom the client is probably paying — don’t acquire any liability in the first place. ''But that’s why you pay lawyers'': so they can cover the agent’s sorry arse if their advice turns out to be wrong and their client — you, kind sir — goes on the warpath. | ||
==Legal industry transformation and the agency problem== | |||
The JC humbly submits that any plan to revolutionise the legal industry that does not account for the [[agency problem]] ''will fail''. | |||
Everyone who purports to speak for a corporation does so in a way that, above all else, does not prejudice {{sex|his}} own agency with the corporation. | |||
This puts our old friend the [[drills and holes]] conundrum into perspective: it is true that a corporation desires quick, cheap and effective legal services. In many cases, it does not need ''any'' legal services ''at all'' — it could get by not just with cheaper, less fulsome legal protections, but with ''no legal protections at all''. What percentage of legal agreements are ever litigated? | |||
But it is hard for an inanimate pile of papers filed at companies registry to have that sort of insight. It relies on its ''agents'' to arrive at that conclusion on its behalf. But who, amongst the byzantine control structure that those very agents have constructed to help it make decisions of that sort — its [[inhouse counsel]], [[outhouse counsel]], credit risk management, document [[negotiators]], client [[onboarding]] team, [[compliance]] or [[internal audit]] — who of these people would ever say that? And even if one did, would {{sex|he}} not be shut down by the consensus of the others?<ref>Those who don’t believe me should try proposing that you don’t need [[cross default]] in trading agreements. You will get bilateral consensus on this, in private conversations, from almost everyone; no-one will say it in public.</ref> | |||
{{Sa}} | {{Sa}} | ||