Ancillary businesses - an economic opportunity or an ethical dilemma threatening our profession?

• Author: Coker, Howard C.
• Position: Multidisciplinary law practices - Editorial

One of the biggest challenges facing the Bar today is regulating the unlicensed practice of law. We allocate more resources to this effort than ever before. We continue to experience an increase in nonlawyers who are rendering law-related services, which some lawyers fear may pose an economic threat to our profession. Some lawyers believe the solution to this problem is to compete with these nonlawyers by broadening the scope of legal services through engaging in ancillary businesses. Such activity, however, implicates certain ethical issues and poses a threat to the independence of our profession.

Over the past several years we have seen the accounting profession increase the scope of its services to include services that were traditionally viewed as law-related. For example, accounting firms now offer services in the form of financial planning, litigation support, alternative dispute resolution, and international tax planning. Some of these activities may constitute the unlicensed practice of law, while others may not.

On an international level, accounting firms have recently been acquiring law firms on an aggressive basis. KPMG acquired the largest law firm in France and is reportedly practicing law in nine other European countries. Price Waterhouse employs over 300 lawyers in Europe. Deloitte & Touche is likewise practicing law in several of the European countries. Arthur Andersen reportedly employs 1,500 lawyers worldwide, which would make it"the second largest law firm" in the world.

No U.S. law firm has yet been merged into or acquired by a nonlaw firm entity. (Such an event is currently unlikely, because most jurisdictions prohibit lawyers from sharing legal fees with nonlawyers.) There is at least one law firm, however, which has formed a "strategic alliance" with an accounting firm. Some are concerned that this may be the beginning of the trend we are seeing internationally of law firms being consolidated into accounting firms. The fear is that our profession may go by the way of the medical profession, i.e., if nonlawyers can control legal services, like HMOs control medical services, then we will lose our professional independence.

Some lawyers feel that the only salvation to this encroachment is for law firms to become multi-disciplinary professional service providers by expanding into ancillary businesses. In other words, some lawyers feel that if you can't beat them, then you should...