Wake Up ABA: CPA-Attorney Partnerships Are Coming.

• Author: McBRIDE, GARY R.
• Position: American Bar Association, certified public accountants - Brief Article

Is a partnership with a lawyer in your accounting practice's future? The American Bar Association says no, but it's wrong.

California's Business and Professions Code Sec. 5079 allows CPAs to partner with lawyers and share fees. However, ABA Model Rule 5.4 prohibits lawyers from sharing legal fees and being co-owners in a law practice with nonlawyers.

Recently, for the second consecutive year, the ABA House of Delegates voted overwhelmingly (314-106) to reject its Commission on Multidisciplinary Practice's recommendations that would allow fee sharing and partnering with nonlawyers. The vote also dissolved the commission.

One anti-MDP delegate, analogizing to the medical profession's "patients' bill of rights," identified the ABA Model Rules as "our clients' bill of rights." An ironic analogy since the house ignored clients' concerns. The commission had gathered a mountain of evidence that demonstrated solid client support for MDPs. In fact, not once did a client urge the commission to maintain the status quo.

Consumer groups voiced support for "one-stop shopping" as a "time and cost efficient option for addressing complex needs." They also stressed that MDPs would allow more consumers to satisfy unmet legal needs. The belief is that an increased number of middle-income individuals would obtain legal advice if it was available through a lawyer in an MDP, which already was providing them with services. In effect, the marketplace is shouting for MDPs.

MDPs CURRENTLY EXIST

The house of delegates essentially rejected the fully integrated MDP model in which a single firm delivers seamless legal and nonlegal services, i.e., a firm owned by a practicing lawyer and a CPA. The existing model permits ancillary business ownership by law firms as long as legal services are not provided.

Numerous law firms have embraced this model, and most opt to conduct the ancillary nonlegal business through a separate entity. Duane, Morris & Hecksher LLP, a law firm with offices in 11 states, including California, is more direct. DM&H's tax accounting department provides services such as accounting, management advisory and financial planning. The tax accounting department's director is a CPA.

De facto lawyer-accountant MDPs are well known within accounting firms, particularly the Big Five. Lawyers in U.S. accounting firms (more than 5,000 according to the MDP Commission) perform tax accounting or consulting services. Such lawyers may be employees or owners, but cannot...