Minutes

April 13, 2000

In attendance: Mike Blackburn – Co-chair, Val Antczak, Brent Armstrong, George Harris, Mark Lehman & Toby Brown.

I Mike Blackburn welcomed members and asked for comments on the min7tes of the January 27, 2000 meeting and the March 9, 2000 meeting. Theses minutes were approved.

II Mike gave an update on the Task Force’s charge per his conversation with Charles R. Brown. Our updated charge includes: 1) To make recommendations, if any, on which forms of MDP make sense. 2) To make recommendations, if any, for changes to the Rules of Professional Conduct.

Mike then resumed discussion on the contract model. He proposed that this should be viewed as a flexible model, with multiple possible versions. To summarize the contract model, Mike proposed that this model consists of some combination of the following:

1) Two or more professions contracting

2) Contract

a. A series of contracts, or

b. One core contract.

3) Referrals

a. Non-exclusive, with preferred referrals

b. Exclusive, with opt outs for conflicts, etc.

4) Common advertising

5) Office Space - shared or not

6) Employees – shared or not

7) Fees – not split

Val Antczak noted that ‘non-exclusive’ arrangements, in reality become ‘exclusive’ and thus independence is compromised. He also noted that referrals many times are made to those most recent in a person’s memory. Discussion followed on the fact that liability becomes the ultimate referral guide for lawyers.

Toby posed the question of whether the deepest contract model is ‘ethical?’ George Harris noted that the rules have not yet been defined well enough to answer this question. Brent Armstrong commented that unless the entities involved in the contract share at the ‘bottom line’ it is not a partnership and therefore would be ethical under the rules. George noted that the real question is whether this model would impact the independence of judgment of a lawyer.

Val suggested a baseline rewrite of the rules as the best approach. Modifications of the current rules will only further confuse Bar members as to what their options are. Mark Lehman commented that political realties will likely prevent such an approach. Val remarked that we should either recommend direct changes or admit to our inability as a profession to change.

Mark suggested two concurrent approaches:

1) Establish approval for contract model MDPs.

2) Move to rewrite the rules

George suggested that the Task Force seems to be moving towards consensus on allowing MDPs. He then asked whether the Bar prosecutes 5.4 violations. Toby understands that the Bar does not usually pursue such violations, but instead adds such charges to other violations.

Toby then noted one ethical concern not yet addressed – advertising. Val commented that perhaps all advertising rules should be repealed, in part due to arbitrary enforcement. He continued commenting that the rules must be changed to gain acceptance by the legal community. Otherwise debate will continue without action. George added that a ‘clean slate’ should be established and lawyer responsibilities redefined.

Toby summarized the discussion as follows:

1) The contract model of MDPs should be allowed.

2) The Rules of Professional Conduct should be rewritten to reflect the current realities of legal practice. This rewrite should include new, redefined client protections

Mike added that ‘professional judgment’ should be at the core of these protections.

Mark commented on the difference between a referral and the acceptance. Acceptance is where liability is created. He also noted that malpractice insurance companies will likely define a lot of these outcomes. Mark also remarked about client sophistication. Even though less sophisticated clients have less knowledge about purchasing legal services, typically their legal issues are less complex. Mark believes the new approaches the Task Force is contemplating, will allow lawyers to better serve clients, especially those in the middle class.

Mike suggested the Task Force examine each criteria for a contract model MDP and note whether it is currently acceptable. In response to that idea, Val propose some language for the Task Force to consider. The language is:

Lawyers are free to enter into whatever commercial or contractual relationships with other persons or entities (professionals?) (for referrals?), and for the acceptance of those referrals, so long as it does not supercede the lawyer’s duty to exercise their independent professional judgment with respect to a specific matter (and so long as fees on referred matters are not shared).

Mark suggested adding language about advertising. Brent suggested adding language indicating “employment” as a type of contractual relationship. It was decided to leave the statement with general language and consider treating it as a rule modification recommendation of the Task Force.

Mark suggested we proceed in small steps. First we get Bar approval for the contract model MDP. Then we begin a rewrite of the rules, moving methodically through them. The desired result being rules that are dynamic and meet future requirements. Val added that the Task Force should propose specific rule language changes to the rules.

III Mike Blackburn asked about making assignments for moving forward with this agenda. George volunteered to go through the Rules and categorize Rule issues. Mike will then make assignments based on these categories. George will work to have the issues outlined within a week. Assignments will follow.

IV Toby mentioned two recent news items. First, Ernst & Young sold its consulting business to a German company. Mike added that the SEC is pushing the rest of the Big 5 to follow suit. Toby also noted a presentation at the ABA Techshow on a website called “DeskTop Lawyer.” This site provides divorce law tools directly to clients. It now commands 6% of the divorce law market in the UK and will be rolled out soon in the U.S. This presentation has raised concerns about this market threat to lawyers. An article on this appeared in the Law News Network.

VI Meeting concluded at 9:00 a.m.

The Next Meeting is set for:

May 4, 2000, 7:30 to 9:30 a.m.

Utah Law & Justice Center

(Bagels will be served)

Last Update: 09/04/02