COVID-19’s Lesson for Managing Legal Risk: Tough Times Demand that You Cut to the Chase (Part 1 of 3)

THE POINT

Wall Street Journal, Saturday / Sunday, April 11-12, 2020, commenting on New York State’s response to COVID-19’s demands on its healthcare system:

” … New York’s biggest force multiplier has been regulatory relief.”

DISCUSSION

I invite your attention to my recent series: “‘Ethics’ Rules Shape the Legal Services Market: To Protect Clients? Or to Protect Lawyers from Unwanted Competition?” (here, here, here, here, and here).

As a practicing business lawyer — with a 12-year hiatus during which I was a general manager and executive (i.e., not practicing law) at Whirlpool and then GE — I concluded a long time ago that legal-services-market “ethics” rules have little to do with protecting clients, and a lot to do with protecting lawyers from unwanted competition.   

Last Saturday (April 11, 2020) the Wall Street Journal (subscription required) featured the following editorial: “Doctors Without State Borders: Governors are easing rules on caregivers , and it’s long overdue”.

In detailing New York Governor Andrew Cuomo’s decisive actions at North America’s epicenter of the Coronavirus, the editorial concluded:

New York’s biggest force multiplier has been regulatory relief …

Last month Mr. Cuomo allowed medical personnel licensed anywhere in the country to practice in the state without a New York license. The Governor also expanded ‘scope of practice’ rules to allow nurse practitioners, physician assistants and nurse anesthesiologists to perform jobs they’ve been trained to do without supervision from a higher-trained professional.

“These rules protect state medical licensing boards, not public health, and they make health care less efficient. During medical emergencies they can be deadly.”

 …

In the face of COVID-19’s medical emergency, serious decision-makers have acknowledged the fiction and pretense behind rules governing the medical profession that purport to be about professional competence.

Rules ostensibly designed to protect medical patients, but that often just cut them off from help they desperately need.

But, even amidst emergency demands on the medical system, self-interested physician push-back persists:

” … Florida Gov. Ron DeSantis last month signed legislation allowing primary-care nurse practitioners and advanced practice registered nurses to operate independently. Another law would let pharmacists test and treat common ailments like the flu and strep throat.

“The Florida Medical Association claimed the bills would cause sick people to seek treatment ‘by individuals not trained to practice medicine’.

“But advanced registered nurses receive years of specialized training and can treat uncomplicated illnesses at lower costs than doctors. Doctors should be grateful the legislation frees them for more complicated cases.”

Unlike the medical emergency created by COVID-19, conventional law firms’ and conventional in-house counsel’s failure to focus on preventing legal problems, and their acceptance of waste embedded in the legal profession’s business model aren’t likely to kill anyone.

But these two persisting failures of the legal profession undercut a lawyer’s primary usefulness to a business enterprise: The successful and efficient management of risk.

Meanwhile, protectionist professional guilds in medicine and in law double-down on self-interest over against the needs of their patients and clients in their defense of the indefensible.

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