Utah State Bar
Multidisciplinary (MDP) Task Force
Minutes

December 2, 1999

In attendance: Mike Blackburn – Co-chair, Ray Westergard – Co-chair, Brent Armstrong, Cindy Crass, George Harris, Mark Lehman, Jane Marquardt & Toby Brown.

I Mike Blackburn asked Toby Brown, as the Bar staff liaison, to  serve as a Reporter for the Task Force.  He agreed.  Cindy Crass agreed to serve  as a back up in Toby's absence.

II Mike Blackburn gave a brief review of the November 11, 1999 meeting.  Based on that last meeting he framed the Task Force Charge as:

A) Propose a response to the ABA MDP Commission Report

B) Propose any rule changes

C) Publicize the issue of MDP and educate the membership on it.

D) Recommend methods for lawyers to stay competitive.

Mike commented how the prior discussion was quite broad and  proposed two topics to cover at this meeting to focus the dialogue.  The two  topics/questions proposed:

A) Is a contractual Model for an MDP ethical under the current rules?

B) Are lawyers in 'non-law firm' roles (e.g. at accounting firms), practicing within the current rules?

Once these two questions are addressed then we can tie the discussion to the future of MDPs.

 Is the Contract Model possible?  Initial discussion focused on what is the contract model.  It was decided to treat this model as a  formal referral arrangement, but not as a co-located arrangement.  Cindy commented on the need to disclose these relationships to clients when making referrals.  Discussion followed on the potential economic pressures and possible infringement on a lawyer's independence of judgment.  Mike made the point on the need for complete disclosure for these circumstances.  George Harris commented that informal referral relationships sometimes create economic pressures as  well, but a contract relationship definitely crosses a line.  Mark Lehman noted  that the volume of referrals also might determine when the line is crossed.

 Ray Westergard noted that if safeguards are put in place for disclosure and other issues, it might disproportionally impact the solo/small firm lawyers.   Cindy noted that safeguards should be enforceable, or they will have no meaning.  George noted that malpractice liability may be the ultimate  enforcement and that Bar resources can not support broad enforcement.  It was generally agreed that the current rules allow contractual MDPs, but the Task Force may want to recommend guidelines for lawyers in these situations

Toby gave a synopsis of possible recommendations based on the  discussion:

A) Referral arrangements should be non-exclusive or have an  exception "when professional judgment requires otherwise."

B) Lawyers should disclose these relationships to clients when making referrals and include information on the nature of the relationship.

C) The lawyer's duty to the client must prevail when making  referrals.

D) A client must approve the release of any information from the lawyer to the referral source.

Mark talked about defining a threshold for when a referral arrangement becomes a 'contract' situation.  The discussion pointed to relying on the "lawyer's judgment" in deciding where this threshold is for a given circumstance.

The Task Force concluded that the rules of professional conduct probably do  not exclude formal referral arrangements or contractual MDPs.  Mike proposed the  concept of an "Independence of Judgment Test" for lawyers.  Essentially lawyers should decide if there is a risk of a referral relationship damaging a lawyer's  duty of loyalty to the client.  This 'test' would be difficult to enforce.  George pointed out that such restrictions might actually harm the client, by limiting their access to services.

Mike proposed that instead of altering current rules, the Bar might add  commentary that clarifies ethical responsibilities in contractual MDPs.  He also  proposed that the Bar give tools to lawyers for contract MDP situations.   Perhaps the Bar could develop and make available model forms for:

 Referral Contracts,

 Client Disclosure Statements.

III Question Number 2 was discussed: Are lawyers who provide  'consulting' services in non-lawyer companies violating the ethical rules?   Two examples of this situation were described. 

George mentioned that insurance companies are essentially 'buying' defense counsel firms.  Once this happens, insurance company staff attorneys represent customers of the insurance company.  Clients have counsel who are  working for an organization with an inherent conflict.

Cindy mentioned that in her role as counsel within a bank trust department,  pressures are mounting for her to provide services directly to clients.

 It was generally agreed that when a lawyer in one of these  organizations provides legal services, they are violating the rules of  professional conduct.  It was also decided that these activities have been going  on for some time now and have not been prosecuted.  It was also decided that the  vague definition of the practice of law makes any efforts to stop this behavior  problematic.

 Mark suggested a possible approach; 1) remove ethical rules that prohibit MDPs, 2) then hold the organizations providing these services to the same  malpractice standards as lawyers.  Liability and litigation would then become a  market check on service standards.  George suggested this might provide regulation through liability. The discussion ended there due to time constraints.

IV The next meeting was set for 7:30 a.m. on January 6, 1999.

V The Meeting concluded at 9:30 a.m.

The Next Meeting is set for:

January 6, 1999, 7:30 to 9:30 a.m.

Utah Law & Justice Center

Last Update: 09/04/02