Taken from Asuntos Legales
Today, the legal profession is one of the largest and most sophisticated industries in the professional services market.
What began as a protected, exclusive profession, sustained by the reputation of individual lawyers who practiced the liberal profession par excellence, now attracts outside capital, converts litigation into financial assets and is organized as a global business of growing scale. In this context, the real question is whether firms are prepared to sustain the cohesion of their partnership and a shared vision when financial complexity and market pressures reach levels for which the original model was not designed.
The partnership structure emerged to solve precisely this dilemma: balancing the autonomy of each partner, which builds its reputation and client portfolio individually, with the need to protect the common brand and operate under a clear strategy. This internal pact, reinforced by the figure of the lead partner as primus inter pares, has been key for trust and cohesion to survive the tensions of internal competition. However, pressure from external factors (such as the entry of private investors, litigation funding and the accelerated adoption of technology) is putting this collegial architecture of power to the test.
Today, it is not enough to have technical talent. Litigation has become so costly and complex that external funding has become a structural part of the legal business. Litigation funds, alternative legal service providers and so-called hybrid structures, such as ABSs (Alternative Business Structures, a regulated model that allows firms to share ownership, investment and management with non-lawyer professionals such as investors, consultants or accountants), already allow firms in other jurisdictions to open their capital to external players, which completely changes the rules of the competitive game. This openness promises liquidity and scale, but it also forces partners to adapt to new demands for financial control, profitability metrics and a risk culture that contrasts with the current culture of the law firm.
What is seldom clearly stated is that this change is not only economic. It is also cultural. For decades, many lawyers chose this profession precisely because they understood it as a space different from pure business, more linked to social trust and stability of rules. Partnership, as an internal pact, was based on shared reputation and on the conviction that control should remain within those who practice law. The arrival of external capital forces us to redefine these balances and professionalize management, but doing it badly generates the opposite effect: imported structures are imitated without adapting, generating internal rejection. Organizational literature calls this phenomenon institutional isomorphism: copying the form of a business model without assimilating its substance or its culture.
At this point, the figure of the primus inter pares remains essential. He is not an obstacle to modernizing the firm, but the guardian of consistency between capital openness, financial discipline and a culture of trust between partners. The lead partner legitimized by his peers has the responsibility to ensure that the professionalization of management is real, that the firm opens up only when it knows what it is doing it for, and that each new structure supports the collective reputation. Accepting outside capital should not be a knee-jerk reaction. The maturity of a partnership is measured by its ability to integrate external know-how when it adds value – technology, scalability, diversification – and to reject it when it only adds stress without adding value.
The real dilemma is not whether or not to open up to private investment. It is whether the organization understands that money alone does not buy cohesion, purpose or strategic vision. An investor who does not bring capabilities that the firm cannot generate internally becomes a risk to trust. And trust remains a firm’s main intangible, more difficult to scale than any cash flow.
In our region, where many firms still operate with closed models and informal leadership, this question is more relevant than ever. Collective reputation can be strengthened with external support, but it is never replaced. Governing that frontier well is today the most important task for any partnership that aspires to survive in an industry that is no longer a protected trade, but a global business that demands vision, cohesion and leadership among equals.
Antonio Gómez Montoya
Black Swan Consultoría.