AmLaw's Arguing Ethics? Please...

Paul Weiss and Reed Smith now find themselves dragged into a sordid saga that reeks more of Enron than ethics. An SEC whistleblower alleges that Sofie Biosciences, a Los Angeles biotech company, engaged in fraud - and that these AmLaw stalwarts helped sweep the mess neatly under the mahogany table.

According to the complaint, Sofie’s executives were accused of inflating valuations and misleading investors about the company’s prospects. Instead of sunlight disinfecting the situation, the whistleblower says Paul Weiss and Reed Smith orchestrated a strategic blackout. Emails went missing. Internal reports were buried. Investors were left with smoke and mirrors while the attorneys pocketed princely fees for their part in the performance.

This is not some pipsqueak allegation.

We are talking about accusations of a coordinated cover-up, the kind of chicanery that erodes trust in both markets and the legal profession.

And yet these are the very firms that routinely climb onto soapboxes to declaim against the dangers of ABS models. Supposedly, allowing non-lawyer investment in law firms would send “ethics” into freefall. Really? If ABS is a threat to the profession’s integrity, then what exactly do you call billing millions while helping a biotech client hide fraud from regulators? A masterclass in morality?

The truth is that Small to Mid-Law firms do not have the luxury of such duplicity. Their reputations are fragile, their client base too precious to risk. They live and die by integrity. Contrast that with the gilded arrogance of AmLaw aristocrats who trade on brand power, believing they can obfuscate forever with privilege logs and procedural prestidigitation.

If you want to talk about who’s really a threat to ethics, look past the Arizona ABS experiment and cast your gaze on the cavernous conference rooms of Paul Weiss and Reed Smith. The hypocrisy is almost Shakespearean: the Pharisees of BigLaw preaching purity while allegedly practicing perfidy.

Frederick Shelton is a Consultant to law firms and lawyers on ABS and virtual law firm models, Legal M&A and MSO's and legal AI. He can be reached at fs@sheltonsteele.com