|son to the commission, called the recommendation forward-looking.
"We really haven't got a right to stand in the way of innovative legal delivery
systems," she said. "This is a newer way of doing it. It may have problems, but
we've built in safeguards."
State Bar President Raymond Marshall acknowledged the
changing nature of the legal profession and said attorneys must be prepared to meet the
demands of a new age of practice.
"We should try to get ahead of the curve as much as we can and try to shape this
issue to benefit our profession," Marshall said.
MDPs provide clients with a mix of professional services that could include financial,
legal, consulting and others in a kind of "one-stop shopping." They are common
in Europe, particularly France, Germany and Belgium, and often are run by accountants and
Wrestling with regulation
International bar associations as well as American bars have wrestled with the issue of
how to regulate attorneys working for an MDP.
Major international accounting firms have moved aggressively toward offering integrated
professional services under one roof and have hired lawyers as members of their teams,
although they maintain that those lawyers are not practicing law. Several of the Big Five
accounting firms in the U.S. already employ hundreds of attorneys.
Opponents of MDPs argue that rules and restrictions are necessary to preserve a
lawyer's independent professional judgment and to protect client rights of confidentiality
and loyalty. Some legal groups believe MDPs represent a threat to the legal profession by
unlicensed outsiders and could lead to the unauthorized practice of law.
But backers of the multidisciplinary approach, including consumer groups, contend that
clients of legal services would like additional options, including MDPs, from which to
choose when considering their legal needs. They argue that restrictions on
lawyer/non-lawyer partnerships and sharing of legal fees are outdated, and that regulation
of MDPs can be framed in such a way as to protect independent professional judgment,
confidentiality and the duty of loyalty.
Many lawyers, particularly solo or small firm practitioners, have expressed interest in
establishing practices which offer coordinated services as a means of responding to
changes in the professional services marketplace.
Attorneys already work closely with accountants, bankers, engineers, scientists and
other professionals in many areas of practice.
Consumer advocates foresee situations in which a home buyer could approach a business
which provides a real estate agent, an attorney, a banker and a tax expert. Individuals
seeking a divorce could find an attorney, a counselor and a financial planner under the
Key to the ABA commission's recommendations is the preservation of three core attorney
values: professional judgment, protection of confidential client information, and
avoidance of conflicting loyalties.
An MDP would be defined as a partnership, professional corporation or other association
of lawyers and non-lawyers that include among its purposes the delivery of legal services.
Non-lawyers would not be permitted to give legal advice.
If U.S. attorneys were allowed to practice in firms with non-lawyers, the MDP could
provide legal services to clients if it meets certain safeguards, including:
MDPs providing legal services would be subject to
the same conflict-of-interest rules that apply in a law firm. The lawyer would be required
to treat each MDP client as his or her own for conflict-of-interest purposes.
Multidisciplinary practices would be subject to
regulation by the highest court in each jurisdiction in which the practice operates. State
supreme courts would establish and enforce procedures designed to protect a lawyer's
independent judgment from encroachment by the MDP.
Lawyers who practice in an MDP would be bound by
the same ethical rules that govern all attorneys.
Ownership of an MDP would be restricted to persons
actually working in the practice. Passive investment would be prohibited.
If a lawyer and a non-lawyer working in an MDP
both serve the same client, the lawyer would be required to protect confidential
information, while the non-lawyer might have a legal responsibility to disclose that same
information. The lawyer would have to ensure that a client understands these differing
Therese Stewart, president of the Bar Association of San Francisco, which had opposed a
rule change, said the ABA commission attempted to address BASF's concerns about lawyers'
professional obligations if they work for an MDP.
Placing MDPs under the jurisdiction of a court which would have the power to
essentially revoke its legal license is a "creative" way to deal with possible
ethical breaches, Stewart said. "It's helpful, but whether it's sufficient is another
Jim Conran, former director of the California Department of Consumer Affairs and now
head of Consumers First, said the commission took a prudent approach to the MDP issue
which he believes will result in a win-win situation for lawyers and consumers: lawyers
will continue to be regulated and consumers will be protected.
"The marketplace has changed considerably and we need to provide the public with
the services they want and need," he said.
Even if the commission's recommendations are adopted by the ABA, ethics experts in each
state would then consider whether to adopt them. California does not typically follow the
ABA lead, and its rules often impose higher standards on attorneys and require greater
protection of clients. Any change would likely undergo lengthy scrutiny.