Oral Testimony of Mike Apicella,
Before the American Bar Association
Commission on Multidisciplinary Practice
October 9, 1999
Mike Apicella, an attorney from Cleveland, Ohio, was the next speaker. He has been a member of the ABA House of Delegates since 1983, thus he was in Atlanta to hear the MDP debate. He presented his interpretation of the three MDP votes at the Annual Meeting. The first vote defeated Report 109 because it essentially was thought to be a referral of the issue back to the Commission to fine tune its proposal for resubmission at a subsequent meeting. The second vote, based on Florida Resolution 10B as amended, passed by about the same 2/3 majority as tallied the defeat of the first resolution. The sentiment of the second vote was that the assembly was voting for ‘no change’. If additional study by any group, not just the Commission, identified a need to offer legal services through a multidisciplinary practice that group would come back and demonstrate that the core values of the profession would not thereby be compromised or sacrificed. The third vote, on a California resolution that would essentially send the issue back to the Commission, was again defeated by a 2/3 vote. If he had learned anything in 45 years of practice it was that 2/3 of that body was rejecting MDPs as presented. There was much debate. The first concern, an obvious one, is the loss of independence. In order not to be disingenuous he said that if MDPs are for one stop shopping that the marketplace demands it apparently is the marketplace of large corporations, large and powerful groups. This was obviously started and funded by the Big Five. He provided a little bit of background by saying he’s a first generation lawyer. One of the many reasons his parents had come to America was for the independence, ‘to be a free man’, as they had been raised in a country run by wealth and aristocracy. This was the concept he had - and his father had - when he became a lawyer; it was not to go out in the marketplace and make a lot of money. (And he’s been told by the deans of law schools that there are still young people who are not motivated solely by the bottom line.) If the American legal system is based on the public good (and shame on lawyers if this is only lip service), he asked what is the public good that comes from one stop shopping? It helps these huge organizations with great power. Don’t lawyers and the people who work for MDPs have to lose independence? Need an example? – look at the doctors in the HMOs. The HMOs look to the bottom line. Now multiple friends of his who are doctors - good physicians of 30, 40, 50 years – are quitting, just out and out quitting, because their independence is gone, controlled by a 22 year old, perhaps with a degree (a nursing degree), but some not so well qualified. To satisfy the marketplace it is clear lawyers must lose their independence. Undivided loyalty – that’s been the great thing of the American lawyer. When a client comes in and confides to a lawyer, the lawyer is loyal, does whatever he or she can for the client. The attorney-client privilege codifies confidential communication in Ohio. If a lawyer works for a nonlawyer clearly the bottom line has to be very important. Would the lawyer then have undivided loyalty to his or her client? Could anyone say there would be undivided loyalty to the client or is the loyalty to the bottom line? What’s the effect on the delivery of legal services? One of the things that bothers him about this issue is that all the talk about the Big Five and MDPs contemplates lawyers and accountants. Yet his recollection of constitutional law and equal protection tells him what has to be down the line in the development of MDPs. It’s not just lawyers and accountants – it’s accountants and anybody. Now everybody calls themselves professionals, notwithstanding that his concept of a professional is a person of learning, a learned person who is subject to strong ethical rules. Will delivery of legal services remain the same? Even in an MDP controlled by lawyers the lawyer has to deal with his nonlawyer partners. Is he or she going to give up major clients because the lawyer can’t strictly follow the disciplinary rules as they now exist, particularly with respect to conflict of interest? Let’s talk about protection of the public, protection of individual rights. The great pride of the legal profession has to be that throughout the history of lawyering in this country lawyers, at great risk to themselves and to their economic well being, have stood up for unpopular causes. Is anybody going to suggest that if a lawyer in an MDP had to risk the bottom line to protect an unpopular cause - to defend some individual against a big corporation of great influence, or a large union or a government agency – that he or she is going to stand up and protect the public’s rights against the bottom line. That’s the issue in all this. One of the things American attorneys do and should brag about, he thinks, is that American lawyers are unique in this country in standing up for the benefit of the public when it is very detrimental to their own well-being to do so. Regarding safeguarding the sanctity of client confidences, MDPs necessarily say the firms will build firewalls. He thinks it’s naïve and just contrary to his 69 years of life and 45 years of experience to suggest that if a major MDP client has a very great interest and the boss man, particularly if he is a nonlawyer, needs to know certain things he isn’t going to find them out from his employee-lawyer. And how do you subject a nonlawyer to the regulatory powers of the court? Will nonlawyers sign some kind of document? What about the cost of policing an MDP, who’s going to pay for that? Lawyers pay the cost of policing themselves but he doesn’t think nonlawyers will do that. He thinks major disciplinary problems are going to develop when there are violations of the code or model rules by a nonlawyer, for instance the unauthorized practice of law. Who will blow the whistle on the nonlawyer – his lawyer partner who then subjects himself to discipline? How does enforcement work when the lawyer is engaged in the unauthorized practice of law? Is the likely defense ‘I wasn’t working as a lawyer, I was working as a consultant?’ He offered as an example the case, Cleveland Bar Association v. Misch (82 OS3rd 256, 1998) that he co-counseled with his partner, where an out-of-state attorney working out of an Ohio law firm as a consultant was permanently enjoined from the practice of law in Ohio. Mr. Apicella wanted to suggest likely problems such as, at what point does the lawyer in an MDP say ‘I’m not a lawyer when I’m doing this, I’m a consultant and therefore not subject to the disciplinary rules.’ Conflict of interest is going to be the bottom line. How can it be suggested that there not be conflicts of interest with a large MDP organization or even a small one? If accountants and lawyers can form partnerships can’t it be envisioned that K-Mart will set the lawyer up in the back of the store (with the lawyer turning over certain of his or her funds) to provide the customer with a will for $19.95 on Monday or a trust agreement for $29.95 on Wednesday? Is that where the legal profession is going? What bothers him most is that once this change occurs, it’s irreversible. Having essentially destroyed or grossly modified the lawyer disciplinary rules, can the profession in three, four, five years say ‘whoops, this is not working?!’ Lawyers will not longer be a learned profession working for the benefit of the public; they’ll be a bunch of businessmen worried about the bottom line, giving lip service to some disciplinary rules that are violated daily with impunity, certainly through the cocoon of an MDP. He talked about how the ABA spent a half million dollars in the early 80s on PR and that the state bar is talking about spending big bucks on PR as if lawyers were to be sold to the public like Chevrolet cars – "the public isn’t that gullible, let me tell you." When people see that lawyers’ motivation is the bottom line a lawyer’s reputation will be like Humpty Dumpty, and lawyers will never be viewed as other than businessmen. Despite the negative media lawyers individually still have the trust and confidence of their clients, "aren’t we going to erode the trust and confidence of that client when we’re a member of an MDP?"
The Chair asked Mr. Apicella if he would feel differently if the recommendation related only to lawyer-controlled MDPs? Mr. Apicella said lawyer-control would not change his opinion of MDPs because nonlawyers are essentially being used for referral. When the economic life of the MDP depends on the referrals brought in by the nonlawyer partners he doesn’t think the lawyer can behave independently; the lawyer must compromise. He said one of the great joys of being an independent small firm practitioner is that he doesn’t have to compromise. When he was in-house counsel he did not compromise and almost got fired a couple of times, but at least he had undivided loyalty to his client, the corporation. If he is a member of an MDP where do his loyalties lie – to his client, to his nonlawyer partners? - loyalties necessarily have to be divided. Sure, a lawyer-controlled MDP is better than one run by some accountant, where the lawyer’s livelihood depends on the accountant’s good graces, but it is not better than what exists today.
Kent Abney took the microphone to bring to Mr. Apicella’s attention that what is being discussed is simply a practice model, not the only practice model, just one practice model. If MDP lawyers mess up, "is there any doubt in anybody’s mind that attorneys like you will hold them accountable? Do you really believe that the public thinks that lawyers aren’t greedy, fee conscious, and bottom line oriented today? This gives some lawyers a better way to deliver appropriate legal services to their clients. What’s wrong with that?" Mr. Apicella said he would back into the answer. He said if one listens to the media the public thinks lawyers are a bunch of greedy characters; however, if one reads the studies most people think that their own lawyer is at least a good person and is to be trusted. In talking about another way to deliver legal services his concern is that MDPs are going to open the door to unauthorized practice of law by nonlawyers hiding behind the firm’s lawyers. He has been a member, as well as chair, of a grievance committee for about 15 to 20 years. "Lawyers don’t have any trouble blowing the whistle on each other, I’ll tell you, but I think in an MDP they will. They will because it really is going to have a great effect on their bottom line." Grievance committees, he explained, have trouble going after lawyers who violate the disciplinary rules and work in large firms because there is a cocoon built around them, it’s harder to get at them. (On the other hand the discipline process gets at the individual lawyer pretty well as he or she doesn’t have any defenses built around them.) Even today establishing probable cause pursuant to the due process requirements of lawyer discipline is not an easy case to make. The effect of an MDP on lawyer independence or undivided loyalty can only be surmised as the change in legal services delivery would take lawyers and the public from a known system to an unknown one. He thinks the effect will be negative. He raised the question, who wants MDPs? He said he has never heard that his clients want one-stop service (for instance, he is very upfront in telling his clients he doesn’t do taxes and they should contact their CPA). "What’s the benefit to anybody, to the public, what’s the benefit to anybody besides the bottom line of having one stop service? I have not heard this hue and cry; I have not heard this groundswell of the public. I don’t think it exists."