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therefore also exists in networks or associations apparently being dedicated to only one discipline.
The commonalities are differentiated by the very nature of the professions. Law firms employ
solicitors eventually pleading in court, admitted to bars and subject to ethical standards of their
respective national or state bars. Clients benefit from a series of long-established principles, such
as privilege, but also the essential factor of independence. The nature of the legal business is not
as recurring and perpetual as that of an accounting firm.
Accounting firms need to ensure independence when it comes to audits of their clients.19
Statutes have led accounting firms organised in networks or associations to choose which type of
transnational organisation they want to be affiliated with, having to bear the consequences of, for
example, additional global independence checks in the case of being part of an integrated network.
Liability matters have evolved in the accounting profession over the last few decades, leading from
the unlimited liability of partnerships and their partners to limited liability through the type of
partnership chosen after the 1989 and 2006 U.K. Companies Acts.
The 8th EU Company Law Directive on the Statutory Audit, Directive 2006/43/EC ensures
a more accurate view of the transnational networks and associations of accounting firms but also
of TOPS. Ultimately, the expectations of clients of accounting firms and third parties are the
accuracy of the provided audit report, which leaves very little room for interpretation, provided
that the information submitted by the respective company and its directors is accurate. On the other
hand, legal representation of course also needs to be handled with utmost professionalism, but the
outcome also is conditioned by a variety of external factors and is, alas, less of a commodity.
Nevertheless, the main pillars of the professions are the independence for accountants and the lack
of any conflicts of interest for lawyers. Clients should be sure of the loyalty of lawyers — it is the
most important of all fiduciary duties the lawyer owes to his client.20
The legislator has tried to ensure that accounting firm networks and associations are what
they seem and no longer have the potential to mislead clients by alleging a global presence as a
multinational group while in fact being a franchise or a loose cooperation of independent legal
entities owned by separate persons. The rationale of regulation is embedded in the public interest,
in particular, in audits of public companies. The potential damage a law firm or a law firm network
could cause to a client is not fully perceived.
The financial collapse of a public company because of poor audit services without a doubt
would have a major impact, but the collapse of a global law firm or a single branded global law
firm network would certainly have a severe negative impact on their clients, too. The question of
whether a global law firm is a safer option than a network of independent firms cannot clearly be
answered, as the totality of the needs of a client must be taken into consideration — if there are
ongoing mandates, specific ones, in various jurisdictions, in specific disciplines or just randomly.
It is, however, alarming that the Swiss Verein law firm imbroglio has systematically evolved over
the past decades, starting with the inclusion of Swiss Vereins in law firm rankings.
Several cases of conflicts of interest underline the considerable lack of care and disregard
of client loyalty; future ones should be addressed and sanctioned accordingly. The accounting
profession has found a potentially viable way forward with the “network” definition and therefore
an approach that better safeguards concepts of independence and ultimately the necessary ethical
19 See, e.g., in the U.K.: APB ES (Ethical Standard) 1, produced by the Auditing Practices Board, part of the Financial Reporting Council (FRC).
The FRC regulates and oversees the accountancy profession in the U.K. It is responsible for the implementation of codes and standards to which
auditors in the U.K. adhere. The EU Statutory Audit Directives are implemented mainly by the Companies Act 2006 and the Statutory Auditors
and Third Country Auditors Regulations 2007.
20 Lawrence Fox, The Gang of Thirty-Three: Taking the Wrecking Ball to Client Loyalty, 121 YALE L. J. (2012); see also Strickland v. Washington,
466 U.S. 668, 692 (1984).
141
The commonalities are differentiated by the very nature of the professions. Law firms employ
solicitors eventually pleading in court, admitted to bars and subject to ethical standards of their
respective national or state bars. Clients benefit from a series of long-established principles, such
as privilege, but also the essential factor of independence. The nature of the legal business is not
as recurring and perpetual as that of an accounting firm.
Accounting firms need to ensure independence when it comes to audits of their clients.19
Statutes have led accounting firms organised in networks or associations to choose which type of
transnational organisation they want to be affiliated with, having to bear the consequences of, for
example, additional global independence checks in the case of being part of an integrated network.
Liability matters have evolved in the accounting profession over the last few decades, leading from
the unlimited liability of partnerships and their partners to limited liability through the type of
partnership chosen after the 1989 and 2006 U.K. Companies Acts.
The 8th EU Company Law Directive on the Statutory Audit, Directive 2006/43/EC ensures
a more accurate view of the transnational networks and associations of accounting firms but also
of TOPS. Ultimately, the expectations of clients of accounting firms and third parties are the
accuracy of the provided audit report, which leaves very little room for interpretation, provided
that the information submitted by the respective company and its directors is accurate. On the other
hand, legal representation of course also needs to be handled with utmost professionalism, but the
outcome also is conditioned by a variety of external factors and is, alas, less of a commodity.
Nevertheless, the main pillars of the professions are the independence for accountants and the lack
of any conflicts of interest for lawyers. Clients should be sure of the loyalty of lawyers — it is the
most important of all fiduciary duties the lawyer owes to his client.20
The legislator has tried to ensure that accounting firm networks and associations are what
they seem and no longer have the potential to mislead clients by alleging a global presence as a
multinational group while in fact being a franchise or a loose cooperation of independent legal
entities owned by separate persons. The rationale of regulation is embedded in the public interest,
in particular, in audits of public companies. The potential damage a law firm or a law firm network
could cause to a client is not fully perceived.
The financial collapse of a public company because of poor audit services without a doubt
would have a major impact, but the collapse of a global law firm or a single branded global law
firm network would certainly have a severe negative impact on their clients, too. The question of
whether a global law firm is a safer option than a network of independent firms cannot clearly be
answered, as the totality of the needs of a client must be taken into consideration — if there are
ongoing mandates, specific ones, in various jurisdictions, in specific disciplines or just randomly.
It is, however, alarming that the Swiss Verein law firm imbroglio has systematically evolved over
the past decades, starting with the inclusion of Swiss Vereins in law firm rankings.
Several cases of conflicts of interest underline the considerable lack of care and disregard
of client loyalty; future ones should be addressed and sanctioned accordingly. The accounting
profession has found a potentially viable way forward with the “network” definition and therefore
an approach that better safeguards concepts of independence and ultimately the necessary ethical
19 See, e.g., in the U.K.: APB ES (Ethical Standard) 1, produced by the Auditing Practices Board, part of the Financial Reporting Council (FRC).
The FRC regulates and oversees the accountancy profession in the U.K. It is responsible for the implementation of codes and standards to which
auditors in the U.K. adhere. The EU Statutory Audit Directives are implemented mainly by the Companies Act 2006 and the Statutory Auditors
and Third Country Auditors Regulations 2007.
20 Lawrence Fox, The Gang of Thirty-Three: Taking the Wrecking Ball to Client Loyalty, 121 YALE L. J. (2012); see also Strickland v. Washington,
466 U.S. 668, 692 (1984).
141
