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Harland Koops
Since the late 1970s and the early 1980s the growth of large law firms has been a remarkable feature of economic life. This growth has been fuelled by a number of factors. Firstly, the profession increased its profit orientation so that economies of scale became critical. Secondly, these firms developed in a fashion that mirrored the growth of large companies. A significant feature of this development was illustrated by the growth in domination by a small handful of companies over an ever-widening segment of the economy. A third factor was the shift in the Australian economy towards a greater role for financial services, value-added manufacturing, information technology and other indicia of a more sophisticated economy as compared to the previous predominance of primary industry.
A number of facts and figures illustrate the economic significance of these large law firms. Major law firms now dominate the market for commercial legal services throughout Australia, with the top 20 firms accounting for around 80 percent of the market for commercial legal services. The top 20 law firms earned fee revenue in excess of $2.5 billion in the 1999 financial year. Major law firms employ thousands of personnel. The top six law firms would each have between 500 and 1,000 lawyers working in them.
Undoubtedly, there are tensions within major law firms between commercial motivations and the practice of law as a profession. One of the main features of this tension is the loss of a sense of the role of law in a democratic society - beyond the rights and obligations of commercial parties. Perhaps, when law and economic life was not conducted on such a vast scale, it was easier to maintain a sense of the law that had more to do with the individual. This smaller scale may have afforded greater protection of the rights of the individual and may well have been more attentive to the redressing of wrongs.
Moreover, it is likely that the smaller scale better enabled lawyers to stay in touch with the law as ordinary citizens experience it.
I have never known legal practice in that way. When I started practicing law 12 years ago the transformation of the economy was well under way and commercial law practices in the city were getting bigger and more commercial. I have been at Henry Davis York for almost 10 years and since my arrival the firm has more than doubled in size.
Pro bono work is often seen as an antidote to the contradiction between commercial motivations and the practice of law as a profession. In response to this conflict the major law firms do significant amounts of pro bono work.
Most pro bono work is of marginal significance at best. It tends to be misguided by a concern about "access to justice" rather than the justice system as a whole. We need to look closely at what we want to deliver in terms of justice and ask ourselves whether getting access to it is of any real value. Roderick MacDonald, the president of the Law of Commission of Canada, recently said at a conference about pro bono work:
I once believed that achieving access to justice was essentially a matter of removing barriers to courts, such as cost, delay and complexity. Now I no longer see the objective in purely structural terms. Rather, the challenge runs much deeper. It is to rethink our attitudes about what law in a modern pluralistic society actually comprises.
Pro bono work is basically reactive or defensive and it is an individualised approach that proceeds on a case-by-case basis. The present push by the government for greater pro bono work and less reliance on publicly funded structures underscores the problems with this approach.
In my view, the most effective legal work undertaken for the underprivileged or marginalised sections of society is done in large publicly funded public interest law centres by dedicated, full-time and well-paid professionals. This is preferable to commercial lawyers with good hearts doing pro bono work when they can fit it in between billable hours. Well-funded centres can focus on structural justice problems and public policy issues. They can develop focused and politicised approaches to problems in the legal system at large in addition to taking on cases. Moreover, certainly in the case of major law firms, there is a larger and more useful role to play in using their professional standing and political influence to advocate reform.
A corollary of the emergence of major law firms is the growth of the power and influence beyond the confines of legal practice. In the area of law reform, economic policy and regulation, tax law and social policy, the major firms have significant influence. The government frequently seeks the expertise and input of these lawyers in areas of significant economic and social policy. Lawyers from major law firms have assisted the federal government through the reform process of the Corporations Law as part of the government's drive to make Australia more attractive for foreign investment.
The links between major law firms and their clients are very strong. Client relationship partners spend a great deal of time at their client's offices advising them on general matters, large transactions that are being managed and on the progress of complex litigation. Law firms frequently have lawyers seconded to clients to improve their compliance systems and to train in-house legal staff as well as to manage legal matters directly from within the company. Major law firms help large clients in their global affairs with international mergers and acquisitions, capital raisings, worldwide intellectual property protection and cross border litigation and enforcement of judgments. A law firm's relationship with their major clients is often seen as something of a partnership in business. Frequently, the client and firm fortunes are closely tied and their relationship may span decades. My firm, for example, has been acting for a major bank since the 1950s. Furthermore, with the size and income of the major law firms it is obvious that they are major commercial enterprises in their own right with a significant role in the economy.
So the question arises: why should major law firms have a social conscience? Given their close ties to the commercial epicentre of the economy, their role as large businesses in themselves and given their privilege and status, the possession of a social conscience does not seem to be a necessary condition of corporate life.
The answer, in short, is: because our system is a liberal democracy based upon the rule of law. Lawyers, even in large firms, and I would say even more so in large firms, have a particular responsibility for the defence and protection of the principles and values of that system. Essential in that system is the function and role of democratic rights. A "social conscience" has a particular significance for lawyers and in the common law tradition - it must signify a concern for the rights and freedoms of the individual and the institutions that enshrine and protect them.
I go into court every day to conduct matters which are disputes between large corporations. It is sometimes easy to take for granted that you go into a court. You take for granted that your dispute is determined according to settled laws. You take for granted that the judge will act independently and that he or she is not taking orders from the government. You assume that the laws will be applied equally to all who call in aid the court's jurisdiction. Of course, as we all know, this was not always the case. Indeed, a well-developed system of laws and institutions, which are underpinned by democratic notions of fairness and equality, is a relatively modern phenomenon when viewed in an historical perspective. The responsibility of lawyers for preserving and advancing this liberal democratic system is a legacy passed down to us through the centuries.
I was recently reading a history of the English civil war and came across the text of the speech delivered to the parliament by the great English lawyer and MP, John Pym, when he attacked the King's chief adviser, Stafford. This is what Pym said to the parliament 360 years ago:
The law is the boundary, the measure, betwixt the King’s prerogative and the people’s liberty; whilst these move in their own orbs, they are a support and a security to one another; the prerogative a cover and defence to the liberty of the people, and the people by their liberty are enabled to be a foundation to the prerogative; but if these bounds be so removed, that they enter into contestation and conflict, one of these mischiefs must ensue: If the prerogative of the King overwhelm the liberty of the people, it will be turned to tyranny; if liberty undermine the prerogative; it will grow into anarchy... It is the end of government, that virtue should be cherished and vice suppressed; but where this arbitrary and unlimited power is set up, a way is open not only of the security, but for the advancement and encouragement of evil. It is the end of government that all accidents and events, all counsel's and designs, should be improved to the public good; but arbitrary power is disposed to the maintenance of itself.[1]
Pym spoke for the conscience not only of the common lawyers but also for a good part of the whole nation when he attacked the arbitrary power. His speech rings down the corridors of history and still speaks to us as lawyers in our particular political context. His words possess a startling directness and relevance.
In Pym’s time the threat of arbitrary power came from kings. Today the threat comes from the state. Lawyers, by virtue of their profession, hold a special place in a democratic system and we carry a heavy responsibility to protect and pass on the fragile vessel which democracy is to the next generation. I believe it is with these considerations that we find the imperative for major law firms to have a social conscience.
Recently in Australia many public issues have brought the question of democratic rights to the fore of our collective attention. One such matter has been mandatory sentencing. The Northern Territory's mandatory sentencing laws were an abhorrent example of an attack on democratic principles. Not only were they profoundly immoral but they also drove a stake through the principle of the separation of powers. By removing all power from the court to deal with cases on their merits the law struck at the separation of courts and parliament. Moreover, it struck at the independence of the judiciary.
Under the regime of mandatory sentencing, the police decide effectively who to send to gaol because it is in the charging that all power in reality is vested. We are all familiar with examples of how these laws have operated in practice to send people to prison for very minor property offences. On a number of occasions, magistrates, bound by these provisions, have stated that in sending people to prison they have only done so by virtue of the mandatory sentencing laws. Last year, the NSW Chief Justice James Spigelman said:
The continued existence of sentencing discretion is an essential component of the fairness of our criminal justice system. A Northern Territory Supreme Court Judge, Justice Kearney, wrote to the Northern Territory Chief Minister arguing that mandatory sentencing regimes could lead to a loss of public confidence in both parliament and the judiciary.
There are mandatory sentencing requirements in Western Australia where dozens of children are imprisoned for minor theft because of those laws. The home of mandatory sentencing is the United States. In the United States many judges have resigned because of mandatory sentencing and 50 US federal judges, of a total 650 throughout the country, have refused to sit on drug cases involving such laws.
Of course, there is another aspect to the mandatory sentencing issue that is more social than legal. This social aspect seeks to understand why a young person must live in such terrible poverty that he or she cannot provide for his or her own needs without resorting to stealing. This is just as unacceptable in a civilised and wealthy country as the law that sentences such a person to gaol for minor property theft.
A related issue on the question of mandatory sentencing is the sheer number of people being sent to prison throughout the country and the massive increase in the prison population over the past 10 years. New South Wales has 2.5 times the number of women in prison as Holland, a country with a similar population to ours. Aboriginal women account for 20 percent of the total women prison population - 10 times their representation in the general population. I have mentioned these figures concerning women because the NSW Government is proposing to open a large new prison complex for women near Windsor and there has been considerable opposition from public interest groups and women’s groups to the construction of a new prison.
Professor Tony Vinson's inquiry into prisons some years ago found that Sydney's poorest suburbs accounted for 30 percent of the total Sydney prison population. Obviously, these facts show that much more than the operation of the legal system is at work here.
I do not wish to discuss the John Laws case in any detail. However, in this context I will say that in my opinion it was quite appropriate that Mr. Laws was not sent to gaol.[2] The same reluctance to send Mr. Laws to gaol should be displayed in far more criminal cases that judges deal with every day. In my view it is not so much a matter of Mr. Laws being treated like everyone else. Rather, I believe everyone should be treated in the same way as Mr. Laws.
Another recent example going to the core of a democratic system is a piece of legislation passed in Federal parliament recently called the Defence Legislation Amendment (Aid to Civilian Authorities) Act 2000. This legislation purports to codify the procedures of a callout of Australian troops to deal with so-called "domestic violence". It was rammed through parliament in time for the world economic forum in Melbourne in September 2000. The legislation had solid bipartisan support. The Senate passed it 46 votes to 10. Ironically, opposition to the legislation came from Tasmanian Green, Bob Brown, a One Nation MP and eight Democrats. Under this legislation, three people - the Prime Minister, the Defence Minister and the Attorney General - can mobilise Australian troops "to assist police as a last resort" to protect "Commonwealth interests" against terrorist activity or "domestic violence" without consulting the States or even telling them. This can be done in order to deal with industrial disputes, unarmed protest and civilian disobedience.
Five times, between 1912 and 1928, various State governments asked Canberra for troops to quell violence; there was the general strike in Queensland, conscription referendum disturbances in Tasmania, a wharf strike in Western Australia, a police strike in Victoria and a further wharf strike in Adelaide. All requests were denied - although troops were provided to guard Federal buildings in Melbourne during the 1923 police strike. As far as I am aware, at no other time has a State requested troops. Furthermore, since 1903 the Commonwealth called out troops of its own initiative on two occasions: Papua New Guinea in 1971 and after the Hilton bomb blast in 1978 during the meeting of Commonwealth Heads of Government Meeting (CHOGM). In neither case were troops involved in violence.
Under this legislation enormous power has been aggregated in the hands of three people. They may use the army against civilian protestors in circumstances subject to broad interpretation. There is no check on this power such as review by parliament or any other process. Even the States cannot object. For that reason, I think, it is likely that the Act is unconstitutional because Section 119 of the Constitution requires an application from a State government. But in any event, it has all the hallmarks of dictatorial power more akin to government by junta than a parliamentary democracy.
This Act seriously undermines the right of peaceful protest. An amendment proposed by Senator Brown, which stated “[p]rovided always that the defence force shall not be called out against peaceful protest or civil disobedience” was rejected. It is quite plain that the Act possesses a significant scope to be abused and used against the democratic rights of ordinary citizens. It could well have been used in the Patricks wharf dispute or the S11 protest in Melbourne. Interestingly, the legislation, which has potentially profound implications for democratic rule in this country, received little attention in the press or debate in legal circles.
Another area of serious concern to lawyers with a social conscience has been a contraction of individual legal rights. Individual legal rights have been eroded in many areas of the law. This has been done in the name of law and order and justified by claims to greater efficiency, budgetary constraint and market interest. There have been significant curtailments of common law rights in the area of workers compensation, motor vehicle accidents and the liability of employers for negligence in the workplace. Avenues of appeal and review have diminished in the area of Administrative Law. In particular, this has had an adverse impact upon immigration and social security matters. The Family Court is a shambles, with massive cuts to its counselling and alternative dispute resolution capabilities under the present government. In Criminal Law, there has been a statutory onslaught over many years against ancient protections afforded to an accused by the common law. Committal proceedings have been effectively abolished. Dock statements have been eliminated. The removal of this right has produced a great prejudice to the provision of a fair trial for an innocent, inarticulate and poor defendant. In the area of Criminal Law, in particular, it appears that government policy is increasingly dictated by talkback radio and vote pulling at election time. The championing of democratic principles or a concern to address the social causes of crime are alien motivations. I have already mentioned the deplorable state of the prison system.
Yet, notwithstanding all these developments, governments appear to have no hesitation in spending vast sums of money on reforming the tax system, the Corporations Law system, the legal framework for mergers and acquisitions, banking, media and telecommunications and other areas in an endeavour to facilitate commercial life. Perhaps this focus is attributed to the reality that the users of those parts of the legal system are powerful corporations rather than ordinary citizens. It seems to me that a two-tier system is increasingly emerging due to the government’s preoccupation with the interests of the corporate elite. This is producing a polarisation reflective of profound social evolution underway in Australia, that is, Australia’s integration into the global economic system. This system is characterised by the increasing domination of economic and social life by vast transnational corporations. A vigorous accessible legal system, which upholds the democratic rights of individuals, is the underpinning of a genuine democracy. There is a serious danger to our democratic system. This danger is revealed by the erosion of our democratic principles by the economics of laissez-faire, which increasingly holds sway in the legal sphere.
This leads me to a further and final major social issue that must be concern to all lawyers - the growth of inequality in Australia that has taken place simultaneously with economic rationalisation and globalisation. Last year I went on a weekend retreat with my partners. We had an outside consultant with us and discussion ranged over a number of issues. At one point, the consultant wanted us to get away from issues concerning our firm and talk about general issues which concerned us about Australia and where our country was heading. He prepared a list of the issues that concerned each of us the most. Amongst those matters two ranked very highly: the growth of inequality and the rise of the One Nation party.
I have little doubt that the growth of inequality and the rise of the One Nation party are related developments. Perhaps they are the two sides of the one coin. The success of the One Nation party appears to be coinciding with the emergence of two nations within society: an affluent layer at the top which has been able to benefit from restructuring and globalisation and a burgeoning working poor and middle class which has lost out in the process of economic transformation. Most reports seem to indicate quite clearly that the standard of living for the vast majority has been stagnant since about 1983. I have no doubt that the consequences of this reality are increased social conflict and antagonism and profound erosion in confidence in society's institutions. These circumstances produce a mood of despair and desperation within society, which fuels the politics of organisations like One Nation. Liberal democratic principles are the casualties of this malaise.
We in the major law firms need to consider seriously the social and political landscape. If we are to take ourselves seriously as a foundation of support for the liberal democratic principles that underlie our social system then we should exert our influence in the area of social policy to make sure Australian society does not slide into the political malaise which is the product of great social inequality and despair.
If I can venture momentarily into the territory of political science, a subject in which I have no qualifications, I would emphasise the belief that a healthy democracy requires the active participation of millions of people. Modern democracy is a mass political phenomenon. If, through the process of economic development, the broad middle social layer which constitutes the social support of a democratic system is obliterated and becomes alienated from the institutions of liberal democracy then the future of our system as we know it becomes problematic. Certainly, we who benefit so directly from our system of the rule of law must assume some significant responsibility for the future political repercussions of this growing social divide.
I hope that by some of these examples I have been able to highlight challenges that are being thrown out to our liberal democratic framework. Major law firms are uniquely placed to meet these challenges. Our social conscience should direct us to move our power and influence to protect against encroachment upon the democratic foundations of our society.
[1] SR Brett, John Pym, 1583-1643: The Statesman of the Puritan Revolution, John Murray, London, 1940 at 172.
[2] R v Laws [2000] NSWSC 885 (5 September 2000)
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