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The debate over whether to allow Multidisciplinary Practices ("MDPs")2 to exist as legitimate entities under our rules of professional conduct centers around the question of whether our profession can maintain its core values (e.g. independent judgment, confidentiality, attorney-client privilege, loyalty to clients and competence) while permitting the convenience and competitive advantages created by permitting lawyers to practice alongside, and share fees with, nonlawyers. The opponents of MDPs generally believe that this is not possible, and that our core values will be seriously compromised in such an arrangement. As a proponent of allowing MDPs to exist, I believe the profession can police the conduct of lawyers in and out of MDPs, at least as well as it does now, and ensure that these core values and the interests of the public are protected while allowing MDPs to exist. Call me an optimist, but I also believe that the benefits of MDPs will make the risks associated with them worthwhile. Finally, I agree with those who look around the state of our profession and see the seeds of MDPs already sown, and predict that trying to stop them from growing will ultimately prove futile and damaging to the profession.
Most MDP opponents see something else when they look at our profession today. They see a situation where our core values are protected and they see no reason to
tamper with the current formula. I question, however, whether the non-MDP status quo these opponents see exists in actual fact, or only in their minds. Let me use
the example of my own practice: as corporate attorney for Sinclair Oil Corporation, I am, in essence, in a three lawyer firm which is totally owned by non-lawyers.
Though this is not a true MDP, the pressures of nonlawyer control of lawyers which MDP opponents fear will compromise a lawyer's independent judgment exist in my
practice and the practice of countless other in-house and government attorneys. Thus, the barbarians are already at the gate. Does my relationship as an employee
of a corporation controlled by nonlawyers affect my ability to provide independent analysis and advice, even when that analysis or advice is contrary to the
corporate desires or financial incentives? It better not. As soon as it does I have lost the thing that is of greatest value to the corporation in having me here,
and its management will rightfully ask me to leave.
I think this same principle will protect the interests of clients of MDPs. Every MDP will know that every client can "shop around" and seek second and
third opinions from other lawyers in and out of MDPs. The first time a client feels that his lawyer has lost the ability to provide independent analysis or has
otherwise stopped serving the client's best interests, that MDP will have lost that client. It's the client relationships that lawyers have that will be the very
reason why MDPs will want to exist. An MDP that allows those client relationships to deteriorate or be subordinated to other interests will lose its most valuable
asset, and will rightfully fail in the marketplace. I say we give MDPs that chance, to stand or fall by competition in the marketplace, rather than try to continue
to restrict them by fiat.
The same principle may be applied to questions about conflicts of interest in MDPs. There is no reason why we cannot hold attorneys in MDPs to the same standard
governing conflicts of interest to which we currently hold attorneys in existing firms. There is nothing magic, in my mind, about the current structure of lawyers'
practices that makes them more likely to protect against conflicts of interest than the potential structure of an MDP, made up of lawyers and other professionals.
Currently, lawyers guard against conflicts of interest because if they do not, they may be sanctioned and they will lose clients. Guarding against conflicts of
interest may be a new standard of loyalty for the accountants or other professionals in an MDP to deal with, but if they want to practice with lawyers, it will be
part of the price. If an MDP fails to meet this standard, it (or the lawyers within it) may be sanctioned, but more importantly, the MDP will lose clients. The
marketplace, just as much as the threat of sanctions, will drive MDPs to avoid conflicts and protect the client's interests, just as law firms do now.
I do share some of the MDP opponents' concerns about whether our core values will be sufficiently protected in MPDs, but these concerns are outweighed by the
following: (1) I feel the current situation is not as pure and idyllic as we often imagine it to be (for evidence of this, just turn to the Discipline Corner in
this Bar Journal). (2) Just as we must have systems in place to protect the public in today's marketplace, we can design systems to protect against the fears we
have about MDPs without sacrificing the value that MDPs will provide to both lawyers seeking employment opportunities and clients seeking convenient and
professional places in which to purchase professional services. (3) While the current situation is not perfect, I think the parade of horribles we often fear when
we talk about MDPs may be much worse in theory than in practice. It is not too much of an oversimplification to state that the debate about MDPs is a battle
between the optimists and the pessimists, and (4) while no one can predict the future, I am optimistic about our ability to meet the challenges posed by MDPs, and
I would rather make the attempt than see us sit on our sandcastle and watch the tide rise.
The benefits of MDPs are far from imaginary. The most fundamental principles of economics suggest great economic benefits to allowing MDPs. Many attorneys,
especially those just graduating from law school, will be happy to have the additional options for employment that MDPs will make available. Certainly partners and
members of existing firms will have more flexibility and more options for generating revenue if MDPs are permitted. The additional opportunities presented by MDPs
will provide greater competition for existing associates and, presumably, the higher demand will increase salaries. Clients are certainly benefited by increased
competition that results in lower overall fees for legal services. Should we bar the door to these new opportunities for both attorneys and clients simply out of
fear that we don't have the ethical wherewithal to withstand the pressures inherent in this new environment? Is it fair to our profession and to the public to let
these fears foreclose the opportunities that MDPs may bring? Can we be successful in preventing MDPs even if we try?
These questions deserve honest evaluation. We cannot ignore the economic interests of attorneys and clients in order to couch this debate in purely ethical terms.
If we do so we will only increase the perception that the bar is out of touch and irrelevant, or even that we are engaging in simple protectionism and disguising
it as an ethical issue. If there is no compelling reason to believe that we cannot manage the ethical challenges presented by MDPs, then we ought to allow them and
mandate a structure for them which will protect the public and our core values. Whether the structure suggested by the Utah Task Force accomplishes that can be the
subject of further discussion, but when balanced against the potential benefits and the growing inevitability of MDPs, I believe we have no choice but to accept
them and find the proper way to regulate them. As the Utah Bar's MDP Task Force concluded, "MDPs are a market-driven phenomenon." The market forces
pushing for MDPs will not go away just because we are squeamish about them, nor are these market forces driven by some malevolent power. They exist because MDPs
have important benefits in the marketplace which we cannot ignore.
In addition, though we talk a lot in this debate about protecting the client's interests, we never seem to talk about the client's interest in making his or her own
choice about where to purchase legal services. This smacks of a self-interested and somewhat smug paternalism. If we require full disclosure about the nature of
MDPs, can we really say that clients are so naive or so helpless that they cannot factor these concerns into their decisions about where to take their legal
problems? The majority of legal dollars spent in this country are spent by corporations with very sophisticated ways of analyzing how to spend their money. Do they
really need to be protected in this way by the bar? I would suggest that if MDPs are as inherently dangerous and unethical as their opponents claim they will
expire for lack of business within a year of inception without any action by the bar.
Moreover, an examination of the history of our ethical rules shows a relatively short time period in which we have prohibited MDPs.3 When the rule was adopted, many questioned whether it was necessary even then. If we dispense with the rule now, we may not know for certain for some time whether it was a good rule or a bad one, but we will at least have taken the opportunity presented to us to be the designers of the building in which those seeking legal services in the future will be shopping. If we fail to seize this opportunity, we will cede our role as designers to the forces of chaos. The debate over MDPs ought to continue, but on balance we ought to welcome the opportunities and challenges presented by MDPs, and order the future legal landscape in a way that best protects our values, rather than hide from this opportunity and have the landscape shoveled over us.
Footnotes
1.
The title of this article was suggested by an e-mail I received from an attorney commenting on the subject of MDPs who referred to MDP opponents as "backward thinking luddites who like to stand in front of moving trains." While the rhetoric may be harsh the metaphor is apt. There are numerous examples of MDPs already in existence outside the United States, where ethical rules, for the most part, have never prohibited them. Even in the United States, including Utah, there are entities forming that push the MDP envelope. See, Report of ABA Commission on Multidisciplinary Practice, 2-4; Utah State Bar Multidisciplinary Practice Task Force Report, p. 2.
2.
A Multidisciplinary Practice, or MDP, is defined as an organization or association that includes lawyers and nonlawyers and has as one, but not all, of its purposes the delivery of legal services to a client or clients other than itself. Report of ABA Commission on Multidisciplinary Practice p. 1.
3. Utah State Bar Multidisciplinary Practice Task Force Report, pp. 5-6.
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