Magic circle law firm: Difference between revisions

The rate of increase in [[charge-out rates]] and, yea, even law firm revenues, has been so steady as to draw comparisons with the performance of Fairfield Sentry’s investment in [[Madoff|Madoff Securities]]. No-one tell Harry Markopolos.

But it is not just the steady increase in [[charge-out rates]] which has the feel of a conjuring trick about it. The Magic Circle’s showpiece is surely how it can make personal responsibility disappear without a trace, simply by waving a [[legal opinion]] at it. The lion’s share of the economic interactions that precipitated the dot-com bust, the Russian crisis, [[Enron]]’s collapse, the credit crunch, [[Bernard Madoff]]’s gargantuan fraud, the [[global financial crisis]], the London Whale, WireCard, 1MDB —all of these will have been done under the watchful eye and diligent documentary assistance of law firms, not one of which has sustained so much as a claim on its professional indemnity insurance policy as far we has been widely reported.

Now it is no part of the [[JC]]’s intention to suggest complicity, neglect or even carelessness on the part of these law firms — they are peopled by tireless, astute and upright people, to be sure — but it is to wonder about [[Causation|cause]] and [[Correlation|effect]].

For, if every phase of [[Lehman]]’s overreach and eventual collapse can have been accompanied by expensively rendered, diligently composed and conscientiously delivered [[legal advice]], and no part of that advice can be faulted, its recipient might pause to wonder what ''good'' it did — and, for that matter, ''does'', even when provided to firms which are ''not'' in present danger of imploding.  

The goods it does, of course, is not to the company’s bottom line, but the bottoms of its responsible risk managers. No-one got fired for hiring [[Linklaters]], much less for relying on its legal advice, after all.