General Practice, Solo & Small Firm DivisionMagazine
Volume 15, Number 3
Breaking News !
Rules Change Urged to Allow Lawyers to Partner with Other Professionals
In a sharp break with existing U.S. law, a special ABA commission unanimously recommended on June 8, 1999, that lawyers be allowed to partner with professionals from other disciplines.
The commission urged changing the ABA Model Rules of Professional Conduct to allow fee-sharing between lawyers and other owners of multidisciplinary practices, commonly known as MDPs, and to apply legal ethics rules to the MDPs and subject them to court regulation.
The commission cited independence of professional judgment, protection of confidential client information, and avoidance of conflicting loyalties as core values that exist to protect the public and that are essential to preserving client-lawyer relationships.
The recommendations noted that ethics rules governing lawyers would be imputed to non-lawyer members of the MDPs, and would require each MDP to annually certify to the highest court in every jurisdiction where it functions that it complies with specific obligations placed on lawyers. The commission recommended limiting ownership interest in the partnership to working members of the MDP.
Specifically, the commission said:
• The legal profession should maintain professional conduct rules that protect its core values, but do not unnecessarily inhibit development of new structures to deliver legal services that are more offer better public access to the legal system.
• MDPs would be defined as partnerships, professional corporations, or other associations or entities of lawyers and non-lawyers that include among their purposes delivery of legal services to one or more clients other than the entities themselves. Lawyers should be permitted to share fees with non-lawyers only in the context of MDPs.
• Allowing lawyers to deliver legal services from MDPs would not change the prohibition against non-lawyers delivering legal services.
• A lawyer in an MDP should remain bound by rules of professional conduct, particularly those relating to confidentiality and loyalty, and could not defend charges of misconduct by citing orders from a non-lawyer supervisor.
• All professional conduct rules applicable to a law firm, expressly including prohibitions on conflicts of interest among clients, should also apply to an MDP.
• All MDP clients should be treated as lawyers’ clients in determining if there are conflicting interests among clients and in imputing knowledge about any client to other members of the firm.
• When a lawyer and a non-lawyer in an MDP are both serving the same client on unrelated matters, the non-lawyer may have legal obligations to disclose information that the lawyer would be required to treat as confidential. In that circumstance, the lawyer must make reasonable efforts to ensure the client understands the differing obligations, and that courts would not protect confidences shared with the non-lawyer.
• When a lawyer and a non-lawyer in an MDP are both serving a client on related matters, the lawyer should make reasonable efforts to ensure the non-lawyer conforms to legal professional ethics, as in protecting confidential information.
• An MDP could not avoid regulation under lawyer standards by describing legal services rendered by a lawyer in the MDP as something other than legal service.
MDPs would be required to certify to the highest court of each jurisdiction in which the MDP performs services that:
• The MDP will not interfere with lawyers’ exercise of professional judgment;
• The MDP will enforce procedures to protect the lawyers’ exercise of professional judgment;
• The members of the MDP will abide by legal ethics rules when delivering services to a client, any portion of which would be considered practicing law if done by a lawyer in any other setting;
• The MDP will respect the unique role of lawyers in society as officers of the legal system and as having special responsibilities for the administration of justice, including rendering pro bono legal services;
• The MDP will annually review its procedures, amend them as needed, and provide each lawyer in the MDP with a copy of the certificate;
• The MDP will permit the highest court in each jurisdiction in which it serves clients to conduct an administrative audit at will;
• MDPs would bear the cost of regulation through an annual certification fee.
The commission will receive comment on the proposals in a public hearing to be held 2 to 5 p.m. August 8 in the Hyatt Regency Hotel in Atlanta, and present the recommendations to the ABA House of Delegates, the association’s policy-making body, when it convenes August 9 and 10 during the ABA Annual Meeting.
The commission’s report is available at www.abanet.org/cpr/multicom.html.