Oral Testimony of Leo Jordon, August 1999 - Center for Professional Responsibility

Oral Testimony of Leo Jordon,
Past Chair of the Tort and Insurance Practice Section and a Member of the House of Delegates,
Before the American Bar Association
Commission on Multidisciplinary Practice

August 8, 1999
Atlanta, Georgia

The Commission next heard from Leo Jordon, past chair of the Tort and Insurance Practice Section and a member of the House of Delegates. The Section has over 30,000 members. He thanked the Commission for the work it had undertaken and the opportunity to seek some understanding of the issues at a hearing. The Section’s questions relate to its type of practice that encompasses plaintiff, personal injury lawyers, and defense counsel as well as insurance companies and other financial service organizations. At this point these practitioners do not recognize that the concept of MDP has been client-driven. That is, the clients that they work with on a day to day basis have not insisted on this type of one-stop shopping so the Section members question the origination of the concept and whether it is ultimately client-driven. He related an episode that had occurred to him not long ago. He was in a conference room with about 10 -15 lawyers and hadn't realized that the other law firm had a small public affairs subsidiary, some members of which were also in the room. As the discussion went on it became clear that there were nonlawyers in the room and it had a major negative impact on the discussion. The discussion was not in any sense complete because the question arose immediately as to how confidential the discussion was. The concept of what is confidential communication is of extreme importance to the profession. There are other questions. Would a personal injury law firm be permitted to establish a truly full-service MDP? What, in fact, would be a full-service personal injury law firm? Would a law firm specializing in financial planning be permitted to associate with a life insurance agent to facilitate one stop shopping? Would the profits of the MDP encompass the commission of the insurance agency and would that put undue influence on the client? TIPS honestly does not know the answer to these questions and needs time to reflect on the effect and long term implications of an MDP. With these thoughts in mind TIPS will support deferral within the House and hopes additional time will give them an opportunity to come back and have a more enlightened response to some very important developments.

Dean Powell asked if TIPS might use its resources to draft proposed ethical provisions with respect to the questions the Section asked and Mr. Jordan said they would be delighted to have that opportunity. Steve Nelson commented that the Commission has wrestled with an issue raised by a number of other speakers. It’s the epistemological question - how do we know what the clients want? The Commission hasn’t just made an assumption: there is a resolution of the American Corporate Council Association very strongly in favor of MDPs (indicating they wouldn’t necessarily all use MDPs but they feel they should have that choice); representatives of consumer groups have made a very strong argument that it is in their client’s interest, something their clients want; and the Association of the Bar of the City of New York issued what he considers a very thoughtful paper that comments that it can’t be proved what clients will actually use or want unless it actually exists. He said it would be very helpful if TIPS could assist the Commission in figuring out a better way of evaluating that critical question. Mr. Jordan responded that the Section Council the day before had set up a well-balanced group that includes court representation as well as plaintiff and defense lawyers (he commented that the plaintiff lawyers represent individuals) who will try to do a balanced and objective study. To demonstrate that the MDP Commission included people who were users of legal services, Herb Wander raised the point that there are two members of the Commission who were corporate counsel at the time they were appointed, Bob Mundheim (Salomon Brothers) and Roberta Katz (Netscape) and they indicate they would like to have the choice. He thought a number of comments the Commission had heard fail to consider the model where the lawyer could either remain a traditional law firm and assure loyalty, independence and competence, or the lawyer could choose to be in a multidisciplinary firm and the privilege may not be as rock solid because nonlawyers are a part of the practice and some benefits may be lost, but the firm can provide more efficient and global services. Why not let the client choose? He hopes TIPS will consider that model. Mr. Jordan said that the real interest is whether the client is in the position of having informed consent. Mr. Wander referenced the new definition of ‘informed consent’ being used by Ethics 2000 and said it is very hard to say that a multinational corporation with a large General Counsel staff isn’t capable of informed consent. He thinks, based on the comments received, that there are ways of ensuring plain English information is given to the clients so they can make that judgment. To counter the suggestion that the Commission heard handpicked client representatives, Reporter Daly asked those who were aware of client representatives who had differing views to encourage them to come forward.

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