New York Times article asks whether professionals “offer the same protection against corporate misconduct that they once did”
In this opinion article for the New York Times, Mark Everson, a former commissioner of the US Internal Revenue Service, suggests that 30 or 40 years ago, investors and regulators could rely on lawyers and accountants to “provide a check on corporate risk-taking”, but now – driven by the desire for greater partner earnings – “lawyers and accountants who were once the proud pillars of our financial system have become the happy architects of its circumvention”.
“When my father finished Harvard Law School in 1948, he went to work at one of the best law firms in New York. It was an era in which top-end legal work for the nation’s biggest companies was handled by a limited number of firms that drew their entering lawyers from a handful of schools. But that didn’t mean instant prosperity for the new attorney. Earning $3,600 a year, my dad shared a two-bedroom apartment in Greenwich Village with three classmates. At the time a United States District Court judge was paid a salary of $15,000. Today, a judge’s salary has gone up slightly more than tenfold, a bit more than the increase in inflation. A new lawyer at the firm where my father worked, however, is pulling down well over 40 times what my dad first earned.
Recent decades have seen a new model take root: a business plan tied to partner earnings. Obviously, to pay employees more and to increase partner pay to its present, staggering levels, billings needed to grow. Perhaps today’s approach to fee generation by leading law firms was best stated in a recent Wall Street Journal article about partners billing over $1,000 per hour. Said one such lawyer, “The underlying principle is if you can get it, get it.” Imagine a doctor saying that, for attribution, about an organ transplant.”
Mr Everson’s article is more polemic than argument – there was no shortage of corporate misfeasance in the 1970s – but he does evidence a particularly strong dislike of tax lawyers.
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