REGULARS

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 other non-attorneys.

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 They argue that restrictions on lawyer/non-lawyer partnerships and sharing of legal fees are outdated, and that regulation of MDPs can be framed in such a way as to protect independent professional judgment, confidentiality and the duty of loyalty.

Coordinated services

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 same roof.

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.

Safeguards

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 responsibilities.

BASF concerns

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 question."

Consumer interests

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.