Summary of the Testimony of Karen D. Powell - Center for Professional Responsibility

Summary of the Testimony of Karen D. Powell
Before the Multidisciplinary Practice Commission

The next witness was Karen D. Powell of Petrillo & Powell, a Washington D.C. boutique law firm operating primarily in the area of government contracts. She noted that state and local bars have not been active in enforcing unauthorized practice rules with respect to large dollar business transactions and, instead, have tended to focus on unauthorized practice by individuals and on how unauthorized practice rules affect individuals' access to the legal system. She asked the Commission to consider the potential for economic harm to clients, in evaluating whether current unauthorized practice rules are serving the 'public interest'. Included within the concept of economic harm should be the costs to clients when their advisors commit errors due to ignorance or lack of legal training.

Ms. Powell then discussed the extent to which U.S. accounting and consulting firms are already actively engaging in the practice of public contract law. Ms. Powell referred to several instances in her experience where accountants had made significant errors in interpreting and applying the law and regulations applicable to Government contractors. In this context, she noted that the government has criminalized many of the types of disputes and errors (through use of the False Claims and False Statements Act) which occur between contractors and the Government. As a result, errors in interpreting the law can expose clients to criminal penalties and prosecutions. To illustrate faulty advice and practice she read from an AT&T Tax and Business Services newsletter that cited out-of-date law. She also mentioned an instance where a consultant failed to inform a client that cost proposal work done by the consultant was required to be delivered to the Government pursuant to the Truth in Negotiation Act. In conclusion, she questioned whether the extensive associate membership of accountants and consultants in the ABA Section of Public Contract Law was undermining the Section's mission of serving the legal profession.

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