69 J. Kan. Bar Assn. March, 1 (2000). A PROFESSION ON THE THRESHOLD: THE BAR CONSIDERS MULTIPLE DISCIPLINE PRACTICES.

• Author: By J. Nick Badgerow

Kansas Bar Journals

Volume 69.

69 J. Kan. Bar Assn. March, 1 (2000).

A PROFESSION ON THE THRESHOLD: THE BAR CONSIDERS MULTIPLE DISCIPLINE PRACTICES

Journal of the Kansas Bar Association Vol. 69, March, 2000 A PROFESSION ON THE THRESHOLD: THE BAR CONSIDERS MULTIPLE DISCIPLINE PRACTICES By J. Nick Badgerow I. INTRODUCTION AND OVERVIEW

The Big Five [accounting firms] want to practice law rather generally, including tax law of course, and not just the aspects of federal tax law that they have always practiced. They want to absorb law firms within their accounting firms outright or in partnership with lawyers. Where the accounting firms absorb or own the law firms, it will, of course, be the CPAs who will dominate the firms by both their numbers and power. The lawyers will be under the control of the Big Five's lay owners and managers who will stand between them and their clients, people in control who too often have shown that they are unfettered and unimpressed by the legal profession's standards of professional conduct and its aspirations and traditions, including the important one that calls on lawyers to speak out and work for law reform and the improvement of the legal system.(fn1)

The subject of multiple discipline professional practices has been the subject of some debate over the past ten years. As Professor Wolfram indicates, many large accounting firms are already incorporating large law firm practices into their own, by employing large numbers of lawyers in-house, and offering a wide range of technical, accounting, legal and even litigation services to their clients. See, Peoplefeeders v. Commissioner,(fn2) (legal department of large accounting firm permitted to represent taxpayer in complex tax dispute with Government).

Currently, these firms - especially the Big Five, including Price Waterhouse Coopers LLP, Arthur Andersen, KPMG Peat Marwick, Ernst & Young, and Deloitte Touche Tohmatsu - are branching out beyond traditional accounting. They're aiming to be one-stop shops for their corporate clients, offering a full range of consulting services on taxes, computer systems, employee benefits, human resources . . . and legal matters. They are doing things corporations used to hire law firms to do, such as giving advice on mergers and acquisitions, personnel problems, and expert witness preparation.(fn3)

Now, perhaps in recognition of this tide of events, and perhaps to exert whatever pressure might remain, the American Bar Association has a Commission which has studied the issue for over a year.(fn4)

In August 1998, Phillip Anderson, then-President of the ABA, set up a Commission on Multidisciplinary Practice to study and report on the issue. The Commission heard some 60 hours of testimony from 56 witnesses, as well as written and oral communications from numerous others, including: United States and foreign lawyers, consumer advocates, accounting firms, law professors, ABA representatives, ethics counsel from American and foreign bar associations, small businesses, and in-house corporate counsel.

The result of that study was a recommendation presented to the ABA House of Delegates at the August 1999 Annual Meeting.(fn5) Significant debate led to the tabling of the MDP's proposal, which called for the changing of several of the rules of professional conduct applicable to lawyers, in order to facilitate the blurring of the lines between lawyers and other professionals.(fn6) The Delegates voted 304 to 98 to approve a resolution against changes in the Model Rules of Professional Conduct, pending further study, to avoid "sacrificing or compromising lawyer independence or the legal profession's loyalty to clients."(fn7)

Incoming ABA President, William G. Paul of Oklahoma City, (announcing the postponement of a decision on MDP) breathed an audible sigh of relief:

[T]his may well be the most important issue the legal profession has faced in many, many years. . . It is so important that we need more time to listen to one another and review what we have learned. . . . in the end it is client needs and client interests that will determine the outcome.(fn8)

The present plan is for the Commission to conduct additional hearings and to visit with professional organizations around the country; to re-examine its recommendations; and to submit a new report at the August 2000 Annual Meeting of the ABA. Thus, the Commission is charged with the task of re-examining a subject when it thought that its examination was already complete.

The purpose of this article is to examine the ABA Commission's recommendations, and to explore its impact on the practice of law as a profession.

2. WHAT IS "MULTIDISCIPLINARY" PRACTICE?

   According to the ABA Commission's report and recommendation, a multidisciplinary practice ("MDP") is one which includes lawyers and other professionals in a single entity, providing a range of services, including legal services, so that clients can get all of their needs met (at least in particular categories) under a single roof.(fn9) The recommendation defines an MDP as follows:

   A partnership, professional corporation, or other association or entity that includes lawyers and non-lawyers and has as one, but not all, of its purposes the delivery of legal services to a client(s) other than the MDP itself or that holds itself out to the public as providing non-legal, as well as legal, services. It includes an arrangement by which a law firm joins with one or more other professional firms to provide services, including legal services, and there is a direct or indirect sharing of profits as part of the arrangement.(fn10)

   The Commission provides several examples of an MDP for illustration:

   A lawyer, a social worker and a certified financial planner form an MDP to provide legal and non-legal services in counseling older clients about estate planning, nursing home care and living wills.

   A law firm combines with an accounting firm to provide both legal, auditing and accounting services in connection with ensuring clients' compliance with law and audit regulations.

   A lawyer joins an investigator in a firm that provides criminal investigative and legal services.

   According to the ABA, multiple discipline practice has been successfully used outside of the United States in various forms for a number of years.

   The ABA Commission reported its conclusion as follows:

   The commission has concluded that it is possible to satisfy the interests of clients and lawyers by providing the option of an MDP without compromising the core values of the legal profession that are essential for the protection of clients and the proper maintenance of the client-lawyer relationship.(fn11)

   The Report adds that the legal profession "should not permit existing rules to unnecessarily inhibit the development of new structures for the more effective delivery of services and better public access to the legal system." At least, the Commission does not recommend that non-lawyers be permitted to deliver legal services.

   But, the Commission does propose several significant changes to the Model Rules of Professional Conduct.(fn12) Of course, these changes would directly impact codes of professional responsibility in the various states, the Restatement of the Law Governing Lawyers (currently being debated and drafted), the ABA's own, ongoing Ethics 2000 initiative, and the common law.

3. THE CHANGES PROPOSED.

   If the Commission's...