Commission on Multidisciplinary Practice
Remarks delivered by L. Kent Abney
at the open hearing held in Cleveland, Ohio
in conjunction with the fall meeting of
the ABA General Practice, Solo and Small Firm Section
Let me begin by saying thank you. Not just for the opportunity to weigh in on this very important issue, but most importantly, to you and your fellow commission members, for the great service you have done and continue to do for all lawyers, both current and future. The sacrifices that you have made financially in giving of your time, a lawyer’s most precious business asset, and personally in the loss of free time with family and friends, to spend the time with fellow attorneys, some of whom take personal shots at you and your commission members without knowing all or even any of the facts on this issue, represents the Hallmark of the Legal Profession, service to clients and to your fellow attorneys. You do us all a great service.
This issue of lawyers operating outside of the traditional law firms has been around for a long time. In my own case, I have been an attorney for 23 years, as well as a CPA for 27 years. My first 6 years in practice were as a CPA with Price Waterhouse, now Price Waterhouse Coopers, in the audit and tax department. I spent 4 years attending Loyola Law school at night, but still managed to participate in most law school activities, including editor of the Law Review. After a brief one year stint in practice in a small firm in New Orleans, I went to NYU School of Law and received an LLM in Taxation. Upon completion, I went to Shreveport, Louisiana and began a boutique law firm focused on tax law, estate planning and probate and business law issues. Over the 10 years I managed the firm we grew to 15 attorneys. In 1989, I was invited to join Equitable by its President, to manage and operate a high end insurance planning practice. For the past 10 years, I have worked closely with attorneys, CPAs and related professionals to represent our clients and their best interests with the highest level of expertise and integrity.
I have had the personal pleasure and challenge to help move our large and successful enterprise into the financial planning arena, partially because of market demand, our clients wanted it, and mostly because I and others like me know it is a better way to deliver critical and much needed financial planning advice, and estate planning advice to our clients on a more independent and trustworthy basis.
MDP- it has not just now become an issue. Twenty years ago as a tax attorney I was offered fees, commissions and other forms of payment for my recommendations to clients which led to financial asset sales. I said no then, although many said yes, because it was not ethical under our disciplinary rules and full disclosure had not been made to the client. In the years since it has become very clear that the market wants the attorney closely involved in this planning process and wants to hold the attorney accountable. Thus, we should certainly be properly compensated.
Will our ethics suffer? Will we be pressured by non-lawyer CEO’s, CFO’s, shareholders and the like? No more so now, than then. As Richard Matthews, General Counsel for the AICPA, said yesterday, most of what is being called MDP is being done very successfully and very ethically today by attorneys in all areas of business. The major concerns are that we are not fully identifying the attorneys, properly regulating their activities and they are not able to provide needed services to their clients for appropriate compensation under the present practice rules.
Will some mistakes be made? Of course. But this is not some slippery slope from which the legal profession and all lawyers will slide into eventual doom. What we do wrong, we will correct; hopefully, by administrative procedures or regulations. But make no mistake, not all lawyers, in fact, not even most lawyers will become MDP’s. And those lawyers who do not will vigilantly watch those that do and when mistakes are made, they will properly represent their aggrieved clients as they always have, against a brethren in the bar, officer of the court, in a civil or where necessary, criminal lawsuit. Approval of the Commission’s recommendations will not end lawyering as we now know it. Rather, it will allow attorneys, properly schooled on independence and screened on ethics, to respond to the very challenging and exciting needs presented by the extended success of this American Capitalist Experiment, which has led to longevity of our people beyond anything imagined just 50 years ago and accumulated wealth beyond belief only 20-25 years ago. The market demands this help. We must not shy away because others will find a way to respond without us. Sure we may think, as attorneys, that the response will be inadequate, but the market will continue to demand excellence until it is achieved.
Attorneys can not sit this one out. We must take a leadership role. It is our opportunity, but most importantly, it is our duty, it is our obligation to represent our clients and to work to see that these new arrangements are properly implemented into modern society. We cannot do that from the sidelines heaving stones and fearing CPAs or other professionals. We should establish the MDP as a practice model, not the only practice model; but rather one that ethically, professionally and efficiently responds to our clients needs. The sooner, the better, I believe.