Report

Report

The Illinois State Bar Association, the New Jersey State Bar Association, and the New York State Bar Association offer the foregoing Recommendation as a comprehensive response by the American Bar Association to the issue of multidisciplinary practice. Our goal is to bring the debate on the subject of multidisciplinary practice to a close by adopting a statement of principles, charging the Standing Committee on Ethics and Professional Responsibility and Ethics 2000 with the task of filling in a regulatory gap in one area, making various recommendations to jurisdictions and discharging the Commission on Multidisciplinary Practice with the Association’s thanks. In offering a comprehensive response, the Recommendation draws on reports and draft reports from a number of entities, each of which offers valuable insights.

While we recommend the adoption of a statement of principles and state that multidisciplinary practice in the form of permitting the sharing of legal fees with non-lawyers or permitting ownership and control of the practice of law by nonlawyers threatens the core values of the legal profession, we also believe that the Association must take into account related developments and the insights gained by those who have studied the issue. If we simply issue a ringing endorsement of the independence of the legal profession, then we open ourselves up as an Association to the criticism that we have not addressed the issue as a whole. That would be a disservice to the profession and to the public, when we have learned so much about multidisciplinary practice in its various manifestations since the creation of the Commission in August 1998.

In particular, the Recommendation draws heavily upon the insights gained and the positions adopted by the commission appointed by the New York State Bar Association and headed by former ABA President Robert MacCrate. Its report (the "MacCrate Report")(1) is the most comprehensive examination in the United States of multidisciplinary practice. It exhaustively surveys developments in other jurisdictions and considers multidisciplinary practice within the context of trends within the U.S. legal profession and the economy.

One of the most important insights of the MacCrate Report concerns the need for safeguards regarding the provision of legal services by law firms in arrangements with separate nonlegal professional services firms ("side-by-side" arrangements). Side-by-side arrangements generally are permitted under current rules, and various "strategic alliances" and other ad hoc and systematic arrangements have been announced between law firms and other professional firms. As the MacCrate Report so effectively demonstrates, the core values of the profession are at risk if side-by-side arrangements result in any ownership in or supervisory right by nonlawyers over the practice of law. Accordingly, the sponsors believe that the Model Rules of Professional Conduct should be amended to make this explicit, and in that connection the Standing Committee on Ethics and Professional Responsibility and the Commission on Evaluation of the Rules of Professional Conduct (Ethics 2000) should undertake a review of the safeguards required for strategic alliances and other contractual relationships with nonlegal professional service providers to be consistent with the core values of the profession. We commend to their attention the work of the MacCrate Report on this topic, including the draft rules included therein.

The Recommendation makes one significant departure from the MacCrate Report, as it originally was issued. The MacCrate Report permits ancillary businesses by lawyers and law firms, so long as safeguards are in place to prevent the ownership or control of the practice of law by nonlawyers. The question of ancillary business, however, has been widely debated. Some jurisdictions permit lawyers to offer ancillary businesses, while most do not. We do not believe that the debate over multidisciplinary practice should reopen the question of ancillary business. For that reason, we commend the safeguards proposed by the MacCrate Report to the jurisdictions that permit ancillary business, but take no position on the question of whether to permit ancillary business.

One technical change from the MacCrate Report is the reference in paragraph 6 to the practice of law by "entities other than law firms". The intent of this reference is to use the existing definition of ?law firm? contained in the Model Rules of Professional Conduct ("a lawyer or lawyers in a private firm, lawyers employed in the legal department of a corporation or other organization and lawyers employed in a legal services organization"). The original MacCrate Report had referred to a specific New York statutory provision.

Finally, in bringing the debate regarding multidisciplinary practice to a close, we would discharge the Commission with our gratitude. The members and staff of the Commission have given generously of their time during the almost two years of its existence. The Commission provided a forum where all advocates, pro or con, could be heard, encouraged study by others, engaged the academy along with the bench and the bar, and developed new methods for conducting a national and international debate through its very informative website. The Commission deserves our heartfelt thanks, but with the adoption of a comprehensive response to multidisciplinary practice contained in the Recommendation, the work of the Commission will be completed.

 

Cheryl I. Niro
President, Illinois State Bar Association

Barry D. Epstein
President, New Jersey State Bar Association

Paul Michael Hassett
President, New York State Bar Association

June 2000

 

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(1) The MacCrate Report was adopted and approved by the House of Delegates of the New York State Bar Association on June 24, 2000, and is available on the Association’s website at http://www.nysba.org/media/newsreleases/2000/mdp.html . It is also contained in the Report accompanying Recommendation 100 currently calendared for this meeting of the House.

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