Comment: Why US law firms fail the Shark Tank Test

Charles Christian writes… I was having a discussion with a US contact last week about the differences between the protectionist environment within which US law firms still operate and the more liberal, post-LSA regime we have in the UK. And then it came to me: the Shark Tank Test!
Last weekend saw the screening of the first episode in the latest Shark Tank series on ABC. This is a hugely popular show – the US equivalent of Dragon’s Den in the UK – with exactly the same format except for a different presenter and panel of millionaire entrepreneurs/investors.
On Shark Tank, one of the most popular “Sharks” is Mark Cuban (pictured here sitting through what he later described as the worst pitch ever) whereas in the UK one of the most popular “Dragons” was James Caan, who has since left the show. Two years ago James Caan made an investment (he is only one of several investors) in the UK law firms Knights LLP. To-date Mark Cuban has not made any investments in US law firms. More to the point, even if Mark Cuban wanted to invest in a US law firm, he is not legally permitted to do so. And that, in a nutshell, explains why the UK legal industry is leaving US law firms about 20 years behind in terms of their business management methods.