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[L]awyers are special people. We're not like accountants. We're not like MBAs and deal-doers and investment bankers. We're fiduciaries. We're in the Constitution.
We're officers of the court. And we hold in trust the very fabric of this society. It has been lawyers who have kept the playing fields level, who have kept people
honest in the marketplace, and who have stood between the individual and the abuse of authority for 200 years and contributed to the success of this great American
experiment . . . . And so I get real nervous when somebody suggests that we blend this profession into a business unit as a profit center for a company controlled
by non-lawyers.1
I love this statement because it succinctly embodies everything that is wrong with Multidisciplinary Practices ("MDPs"). I strongly disagree with the
conclusion of the Utah State Bar Multidisciplinary Task Force Report, which contends that we should protect our core values by embracing MDPs, because this is our
only opportunity to regulate the delivery of legal services to the public.2 The Task Force, in my opinion, seized on the fact that since some MDPs are beginning to take root, even in Utah, we have no choice but to embrace them before we all lose our livelihood. Applying this same logic, we should abandon all speed limits and drug laws because speeding and drug use have already taken root here.
I should admit that the ideas and thoughts in this article are not entirely my own. I have relied heavily on the work of other attorneys who are much wiser than
myself, namely Lawrence J. Fox and Gary T. Johnson.3 Nevertheless, I would like to highlight some of the most significant problems and dangers of MDPs.
Lawyers and Accountants Don't Mix. There are no obvious synergies between most legal work and most accounting work. Lawyers are ethically bound to advocate a
client's interests and hold information obtained from the client in the strictest confidence. In contrast, the core value of an attest function of an accounting
firm is, by definition, the public disclosure of material information. Accountants are ethically bound to exercise skepticism in dealing with client's management
and must show allegiance to the public by disclosing the client's damaging confidential information. "Attorneys have an ethical duty to represent zealously
the interests of their private clients, and it is impossible to reconcile this role as a private advocate with the duty accountants and auditors owe to the
investing public."4 Does anyone honestly believe that lawyers will function best in an organization in which individual professions each march to the beat of their own ethical drummers?
Independence is the Key. The independence of practicing lawyers is essential, and no reform of the rules should permit lawyers to report to non-lawyer supervisors.
The best possible structure is one where each lawyer answers only to other lawyers within a firm controlled by lawyers. Compliance with the professional rules
requires mutual reinforcement, peer support, and a clear institutional message. Many of the specialties included in today's professional services firms are not
directly subject to any kind of professional code or standards.
Rule 5.4's prohibition on sharing fees with non-lawyers embodies the only prohibition that is likely to be effective in maintaining our professional independence.
Follow the money and you will follow the power. Follow the power and you will know who is in control. And as soon as the power rests with non-lawyers, who are not
trained in, not dedicated to, and not subject to discipline for our ethical principles, you will see the independence of this profession fall away.
If you don't believe that, just consider the following three examples in recent history.
¥After the medical profession relaxed the rules on physicians working for non-physicians, many physicians now find themselves as supplicants who have to request
permission from others, who decide which medicine to prescribe, which procedures to allow, and how long patients may remain in the hospital.
¥Lawyers hired by insurance companies to represent the insured are often told when they can take depositions, whether they can engage an expert, and what motions
they can file.5
¥Whether lawyers will lose their professional independence under MDPs is not a matter of speculation. The Big Five accounting firms have already revealed their
attitude toward the precious commodity that we call being a lawyer. These firms have hired thousands of lawyers in the United States, not to practice law, but to
practice tax or investigations or mergers and acquisitions - all the while touting these individuals as lawyers in their advertising, and bringing in clients to
view their bar admission plaques proudly displayed on their walls. The Big Five will not seek to preserve the core values of lawyers; they will instead seek to
destroy any ethical rules that stand in their path.6
Confidentiality is a Core Value. Just when a legal client may most want to preserve a confidence, lawyers working at an MDP may be compelled to disclose it, running
directly afoul of one of our most cherished professional values. A waiver of confidentiality at the beginning of representation is not a cure, because a lawyer's
duty of confidentiality is not waiveable for the benefit of the lawyer, and a prospective waiver would be arguably void since it could never be "knowing and
intelligent." In order to be effective at what we do, clients must know that the attorney-client relationship is sacrosanct. To place a lawyer in a trap
between a duty to his client, and a duty to his non-lawyer auditing masters, creates an impossible dilemma that will only result in second-rate legal services and
a compromise of ethical principles.
Loyalty is a Core Value. Accounting firms do not recognize, address, or otherwise care about conflicts of interest. In a recent case outside of Utah, it was
discovered immediately before trial that the same Big Five accounting firm had been auditing one party for ten years, yet was providing litigation assistance to
the opposing party in the case. The Big Five firm defended this conduct by arguing that different personnel were involved with each engagement.7 There are no true "firewalls" at any law or accounting firm. The Task Force proposed to amend Rule 1.10 (Imputed Disqualification) to provide for "adequate firm screening procedures from imparting . . . any material information to the firm."8 I find the word "screen" ironically apt, because it refers to an item we install in the spring to let in light, air and sound.
The truth is that the only protection against the misuse of information is the integrity and diligence of the individuals involved. Imagine, for a moment, the least
ethical lawyer you know telling you, "Don't worry. We have erected a screen." The Big Five are requesting that we destroy our "antiquated notions of
loyalty" and embrace their more "enlightened views" on this topic. So long as lawyers hold themselves out as one firm, tout to their clients the
vast resources of their far-flung offices and the ability to call anyone in any office to assist with their representation, then it is the firm - not the
individual - that must deliver complete loyalty to the client. Not one of the ethical rules at stake is designed to protect lawyers - they were drafted to protect
clients, and they should remain in place to protect clients.
What will happen in a situation when an MDP lawyer has represented a client for two years, only to be told that the MDP is now going to represent the opposing party
in an unrelated accounting matter? Does the client take her chances and accept the fact that the MDP is now working for the other side, or does she fire the firm
and waste the fees, time and learning curve of her lawyer, only to look for another firm to represent her? Lawyers today provide clients with real choices. We
disclose all potential conflicts, and the client has the choice as to whether or not we take on new representation. This is real choice and reflects a truly
enlightened system in which the client is in control.
Why should Utah jump out ahead of the rest of the nation to become one of the first states to officially embrace MDPs? Do we really want to be the state making all
of the mistakes from which other states learn? The Supreme Court of Utah should leave unchanged the rules dealing with the core values of our profession. We should
retain lawyer control of firms because this type of independence is the best safeguard of our core values. That being said, I have no objection to a future task
force considering whether anything else might be necessary to better equip law firms to serve their clients and to remain independent. The time has come, however,
for the Utah State Bar to draw some lines and defend them. These lines are not just anti-competitive vestiges of a by-gone era, they are policies that affirm the
value to the public of an independent legal profession, one whose identity to the public is unmistakable.
The independence of our profession has significant institutional value for our American society. Each one of us is an officer of the court. We are each licensed
with the power to start lawsuits, subpoena witnesses, and stand between our clients and the awesome power of the state. We are charged with defending the
independence of the judiciary, accepting court appointments, recommending discipline of our own, and working to improve laws and legal institutions. What will
happen to these values when we all work for others in for-profit enterprises? MDPs are just a benign way of describing the destruction of everything lawyers should
and must stand for.
Footnotes
1.
Comments of Jack Dunbar of Mississippi in the ABA House of Delegates, 1999, as quoted by Gary T. Johnson, Written Testimony to the ABA Commission on Multidisciplinary Practice (October 8, 1999) (available at www.abanet.org/cpr/johnson.html).
2.
Utah State Bar Multidisciplinary Task Force Report, 19 (November 1, 2000) (available at www.utahbar.org/sites/mdp/html /mdp_task_force_report.html). It is noteworthy that the Task Force was co-chaired by an accountant.
3.
See Johnson, supra n. 1; Lawrence J. Fox, "You've Got the Soul of the Profession In Your Hands," Written Remarks before the Commission on Multidisciplinary Practice (available at www.abanet.org/cpr/fox1.html).
4. Comments of SEC Commissioner Norman S. Johnson, as quoted by Gary T. Johnson, supra n.1.
5.
Some have argued that there is no difference between MDPs and corporations hiring in-house counsel. Nothing could be further from the truth. An in-house lawyer deals with no conflicts of interest (she only has one client), has no need to compromise her client's confidentiality, and represents a cost - not a profit center - for her employer. Lawyers employed by an MDP must deal with all of the issues associated with imputation, confidentiality and independence of professional judgment. Corporations hire in-house counsel to represent only the corporation.
6.
The Big Five, of necessity, would have to ignore our ethical mandate on conflicts of interest because they are so big, and because they perform services for such a vast array of individuals, companies, and organizations.
7. See Fox, supra n.3.
8. Utah State Bar Multidisciplinary Task Force Report, Attachment A at 9.
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