Discussion Groups / English Usage / January 2010

I'm very confused.  You said that people in such professions "are not
permitted to work for (for-profit) corporations".  These people are.
Do you mean that people self-employed in these professions aren't
allowed to also work for for-profit companies?

"Learned professionals" is one subset of "exempt".  It's also the only
place I've heard the term (or anything similar) used, which is why I
asked if you could point to a definition.

There are restrictions on the ownership of law firms in the US; those
are set by the American Bar Association, but the distinction is not
generally that (as stated upthread) "members of the 'learned
professions' are not permitted to work for (for-profit) corporations,
but they may work for non-profits, and they may be members of
partnerships".

The distinction on who may own legal companies, not whether they're
allowed to be for-profit corporations.

Publicly owned corporations are generally required to operate with the
interests of their shareholders in mind, first and foremost--they can
even be held legally liable if they take actions that knowingly
decrease shareholder value because of adherence to other ethical
standards (or for any other reason).  In practice there's a fair bit
of leeway; if a corporate officer reasonably believes that an action
is in the long-term interest of shareholders (e.g. by improving the
corporate image and helping long-term profitability), it's generally
defensible even if it hurts the shareholders in the short-term.  But
the broad rule is that a public company is obliged to act with its
shareholder's interests as its primary reason for decision making.

Lawyers (by which I mean those admitted to the bar) are generally
required to act with their clients' interests in mind first, alongside
several bar association-mandated ethical guidelines and a certain
amount of pro-bono work strongly encouraged.

The ABA views those motivations as potentially in conflict, so law
firms in US states* are not allowed to be publicly held--they're often
required to be entirely owned by members of the bar (ie lawyers), who
are in theory committed to supporting the professional ethical
guidelines, clients' interests, etc.

That doesn't mean that a law firm can't be a for-profit corporation,
but it can't be publicly held or traded.  In practice, the majority of
large firms are partnerships, but they certainly can, in general, be
for-profit corporations so long as they're owned by barred lawyers.

It's possible that CA has separate rules preventing for-profit law
firms, but I'm not convinced that's the case.

I think that the UK and many other areas also have (or had until
recently) a similar prohibition on publicly-held law firms.

Lawyers can, of course, work as counsel for publicly held companies--
Microsoft or whoever else can hire lawyers, who are then employees of
the public for-profit company, but are not holding themselves out for
public practice.  Their obligation as an employee of the firm to help
the firm itself is not viewed by bar associations as being a conflict
of interests, and hence is allowed.

*"US states" is intentionally phrased that way; whether by intention
or accident, I believe that publicly held law firms are allowed in
Washington, DC and other non-state areas of the USA.