By Faye A. Silas
While the American Bar Association Commission on Multidisciplinary Practice has spoken through its report and recommendation to the House of Delegates, state and local bar associations are taking their time to evaluate the issue for themselves.The Florida Bar, New York State Bar Association, New York County Lawyers’ Association and the Association of the Bar of the City of New York have already issued reports on the complex and controversial issue of whether lawyers should be permitted to form partnerships with other nonlawyer professionals. However, a majority of bars have not had a chance to study the issue in depth, nor the newly released ABA report. Several have only recently appointed committees to do just that.
The ABA report and recommendation, released June 8 by the Commission on Multidisciplinary Practice, was debated on Aug. 10 during the House of Delegates’ meeting in Atlanta. The report recommends that lawyers be given authority to form partnerships with other professions. Among other recommendations, it calls for relaxing ethics rules to permit fee sharing between lawyers and others in the MDP, and calls for ethics rules to apply to the MDP.
However, the general consensus about the ABA report among a sizable number of bars was this: Defer action on the report until the issue can be studied further.
After several hours of debate, the policy-making ABA House of Delegates did just that by approving an amended resolution from The Florida Bar that called for further study of the issue.
The approved resolution states: "The Florida Bar through its Board of Governors urges that the American Bar Association make no change, addition or amendment to the Model Rules of Professional Conduct unless and until additional study demonstrates that such changes will further the public interest without sacrificing or compromising lawyer independence and the legal profession’s tradition of loyalty to clients."
Like Florida and many other bars, the Ohio State bar Association agreed.
". . . . adequate time should be allotted to state and local bar associations to carefully and deliberately review the "Commission’s" report and convey any comments and recommendation to their ABA delegates to the ABA House of Delegates," wrote John Petzold, then president of the Ohio State Bar Association in a July 8 letter to state and local officials across the country. "To rush this process along at the state and local level after the "Commission" took almost ten months to do its work would be a disservice to all lawyers and as importantly to the clients we serve. It is important that we get it right the first time." That letter and the request for deferral were sent to ABA leaders in July.
The ABA Commission on Multidisciplinary Practice plans to hold additional public hearings and meetings with professional groups, and may present another report to the House of Delegates by next year’s annual meeting.
In the meantime, a number of bar associations have started to examine the issue of multidisciplinary practice. As noted, bars in New York and Florida have issued reports, while continuing to study the issue, while others--among them Colorado, Connecticut, Georgia, Illinois, Maine, Ohio, Pennsylvania, Philadelphia, West Virginia and Wyoming--have formed study committees. Still others--Chicago, Dallas, Indiana--expect to analyze the issue within their leadership this fall.
In their reports, the New York County Lawyers Association and Association of the Bar of the City of New York raise specific, serious questions about MDP, but generally favor the concept, with exceptions. However, the leadership of the New York State Bar Association and The Florida Bar oppose it. New York State Bar Association
After receiving a report from its Special Committee on Multi-Disciplinary Practice and the Legal Profession, the New York State Bar Association House of Delegates in June passed a resolution opposing changes to existing regulations that prohibit lawyers from practicing law in multidisciplinary practices in the absence of data showing that changes would be in the best interest of clients. It also encourages the bar to study the issue further, if necessary.
The resolution states: ". . . the Association hereby urges that studies such as those recommended by the Special Committee be undertaken by appropriate groups within the Association, and further authorizes the officers to take such steps as they deem warranted to facilitate such studies; and it is further resolved, that the NYSBA opposes any changes in existing regulations prohibiting attorneys from practicing law in MDPs, in the absence of a sufficient demonstration that such changes are in the best interest of clients and society and do not undermine or dilute the integrity of the delivery of legal services by the legal profession."
Explains state bar President Thomas Rice: "The core issue is about a client’s right to independent legal counsel and a lawyer’s obligation to provide legal services unencumbered by the conflicting interests of others. The assurance of client confidentiality and sound, independent legal counsel are fundamental and paramount. Proposals aimed at furthering the business expansion plans of entities concerned more with the bottom line than a client’s right to zealous and effective legal advocacy are unacceptable."
The committee was appointed in July 1998 by then bar President James Moore, and included current and former representatives of "Big Five" accounting firms. While stating the need for additional study and outlining issues that must addressed, the report said the committee neither embraced nor rejected MDP, noting that it would not be prudent to make recommendations without further study.
"We have concluded that multi-disciplinary practice cannot be implemented without significant changes to statutes and ethical rules which have governed the legal profession for many years. Although it may be decided ultimately that some or all of these changes are appropriate, the issues they present are of such monumental importance to the legal profession that they should not be undertaken without careful study. Clearly, ethical rules which have served the legal profession well for many years should not be changed unless it is clear that widespread and substantial benefits would result from the changes."
The committee recommended further study that included the following: The nature and extent of the demand and need for MDP. Further information about the intentions of other professions. An evaluation of risks created by changing statutes and ethical rules to provide for MDP, and availability of safeguards to reduce any risks. Possible antitrust and trade regulation issues.
The committee’s evaluation includes a model in which each profession that may be part of the MDP may govern the conduct of its own professionals.
Since the report was issued and the House of Delegates’ action, Rice of Melville, N.Y., has appointed a 12-member committee to further study the history of MDP, the governance of lawyers, and the issue of independence of the legal profession. The new committee is chaired by former ABA President Robert MacCrate of New York City.
Rice says the factor motivating businesses, such as accountants, to pursue MDPs is business expansion and profit. Angered by comments from a ranking official of PricewaterhouseCoopers, one of the Big Five accounting firms, who suggested in an article that since Europe has embraced MDPs, they are inevitable in the United States, Rice says this conclusion is not necessarily accurate.
"The idea of one-stop shopping has been used to align the public into thinking this is a reflection of an inevitable evolution of the market place," Rice says. "There is nothing inevitable about MDP. The more they (public) understand it, the less they will like it."
N. Y. County Lawyers’ Association
New York County Lawyers’ Association President Stephen Hoffman in April appointed a committee to study the MDP issue and comment on the ABA report. On June 14, the Special Committee on MDP released its assessment, which favors lawyer-controlled MDPs, but opposes the ABA commission recommendation to allow those that are not controlled by lawyers.
"Modest extensions of current practice may be of assistance to the bar in an era of increased competition. We are in favor of such limited changes because they do not threaten the lawyer’s traditional advocacy role or the lawyer’s fiduciary obligations. Thus, we support lawyer controlled MDPs," states the county bar’s report.
At this point, the report gives guidance to the bar’s representatives in the ABA House of Delegates, and the committee further hopes to determine the level of interest in MDP among county bar members. However, apart from the Big Five accounting firms, "there’s no groundswell of interest" among lawyers in the MDP concept, says Hoffman of New York City. Still, that interest by the accounting firms makes these professionals a "force to be reckoned with," he adds.
"There is nothing wrong with studying this when it’s just getting started. That gives you time to consider it in a reasoned manner," Hoffman says.
If any city is to witness the formation of multidisciplinary practices, it is New York, says Hoffman, because of the number of lawyers and the diversity of business interests. The bar’s next step is to gather more input from other bar associations in the county and possibly hold hearings this fall. The county bar has 8,500 members that represent mostly small and medium-size law firms. New York City bar
The Executive Committee of the 22,000-member Association of the Bar of the City of New York issued a statement of position on MDP July 20. An MDP analysis should do three things, according to the statement: examine the benefit to consumers of legal services; assess the organizational form it should take and controls necessary; and the review compatibility of rules and values of the legal profession with other professions that may be involved in an MDP.
"That discussion will be followed by our conclusion that MDPs may offer substantial benefits to consumers of legal services and should be permitted under certain defined conditions, but that under no circumstances should an MDP be allowed to provide audit and legal services to the same client," the statement read. "Many of the technological forces that are leading to more applications of MDP will only increase, not abate. We believe the legal profession should find constructive ways to adapt to these forces, while preserving our highest traditions, rather than trying vainly to deny these forces or to hold them back."
The Executive Committee favors the MDP concept only if it "respect(s) and preserve(s) the core values of the legal profession--independence of judgment, loyalty to the client, preservation of confidences, competence, avoiding improper solicitation, and support for pro bono legal services and improving the legal system."
"The legal profession should sit down and compare standards of conduct and value . . . to see if they are compatible," says bar President Michael Cooper. "Rather than lobbing 16-inch shells . . . . the bar should sit down and talk (with other professional disciplines likely to be interested in MDPs)."
Three bar entities--the Committee on Professional Responsibility, the Task Force on Multidisciplinary Practice of the bar’s Council on International Affairs, and a special committee of the Executive Committee--studied the MDP issue before giving its feedback to the Executive Committee. Those discussions involved lawyer members, not representatives from other disciplines. As with other bars, the statement also called for the ABA House of Delegates to defer action on its report pending further study.
The Florida Bar
The Florida Bar’s Special Committee on Ancillary Business issued an oral report to the Board of Directors in March, recommending that a board-level committee be appointed to further study MDP. The special committee, appointed two years ago and chaired by Martin Garcia of Tampa, reviewed a large quantity of material, held a public hearing and discussed the issue with members attending the All-Bar Conference in February. In his oral report, Garcia told the board that during the committee’s investigatory stage, it concluded that nonlawyer businesses in Florida are providing legal services once provided only by lawyers, and that lawyers are involved in ancillary businesses beyond law practice.
Consequently, the committee recommended three areas for further study:
Change ethics rules to permit fee sharing with nonlawyers. Favored by those who support MDP and ancillary business concepts. Step up enforcement of unlicensed practice of law regulations. Favored by those who oppose MDPs. Amend ethics rules to permit multidisciplinary practice, but without fee sharing. Favored by those who anticipate greater ancillary business practices in the future, but who want to retain professional independence. The board committee was appointed by then President Howard Coker of Jacksonville and directed to study these issues. In the meantime, the board approved a resolution that asked the ABA House to defer action.
"We have a concern that the ABA proposal is much too narrow. There are concerns about encroachment by accounting firms. We, in The Florida Bar, don’t believe you can consider multidisciplinary practice, ancillary business and unlicenced practice of law separately. They’re not independent," Garcia says.
The author is the editor of Bar Leader.
