Written Testimony Of David A. Swankin

President, Citizen Advocacy Center

MARCH 24, 1999

 It is my pleasure to submit this written testimony for consideration by the ABA's Commission on Multidisciplinary Practice, as you undertake your most important task. I am pleased that the American Bar Association is reviewing its Model Rules as they pertain to multidisciplinary practices. As a public interest attorney who has spent his entire career working on consumer issues, I hope that some of the thoughts I express will assist the Commission in determining what changes it will recommend.

I am president of the Citizen Advocacy Center (CAC), a unique support program for the thousands of public members who serve on health care regulatory boards and governing bodies as representatives of the consumer interest. Whether appointed by governors to serve on regulatory boards, or selected by private sector institutions and agencies to serve on boards or advisory panels, public members are typically in the minority and are usually without the resources and technical support available to their counterparts from professional and business communities. CAC is a not-for-profit 501(c)(3) organization created in 1994 to serve the public interest by providing research, training, technical support, and networking opportunities to help public members make their contributions informed, effective and significant.

Most of my time these days is devoted to the work of CAC. But I also continue to practice law in the Washington, DC, law firm of Swankin & Turner, which my partner (James Turner) and I founded in 1973. Over the years we have represented numerous consumer organizations on a variety of matters. The establishment of the law firm followed a career in the Federal government, much of which was devoted to consumer protection and consumer information and education activities. In December 1963, when President Lyndon B. Johnson appointed Esther Peterson as the country's first Special Assistant for Consumer Affairs, he also created the President's Committee on Consumer Interests (PCCI). I served as the first Executive Director of PCCI, which in the 1970s changed its name to the White House Office of Consumer Affairs. I also served as Executive Secretary to the Consumer Advisory Council, a national advisory committee established to advise both the President's Special Assistant and the PCCI. The mandate to both the PCCI and the Advisory Council was to "examine and provide advice to the Government on issues of broad economic policy, on Government programs protecting consumer needs, and on needed improvements in the flow of consumer research material to the public; this Consumers' Council will also give interested individuals and organizations a voice in these matters." After I left the Federal government in 1969, and before Mr. Turner and I founded Swankin & Turner, I worked for Consumer's Union (publisher of Consumer Reports) in Washington, DC, before CU established a Washington office. My job was to advise CU on how the nation's most respected consumer organization could have its voice heard on policies affecting consumers.

Thus, for the better part of 36 years, in a variety of settings, public and private, I have involved myself in a broad spectrum of consumer issues, an alphabet soup including automobile safety, consumer credit, health, insurance, medical devices, nutritional labeling, solar energy, and many others.

Over the years, I have found it remains useful to test consumer issues against the widely recognized consumer rights first articulated by President John F. Kennedy in 1962, when he sent Congress a Message on Consumer Interests. That Message contained a proclamation of basic consumer rights:

"The right to safety -- to be protected against the marketing of goods which are hazardous to health or life."

"The right to be informed -- to be protected against fraudulent, deceitful, or grossly misleading information, advertising, labeling, or other practices, and to be given the facts needed to make an informed choice."

"The right to choose -- to be assured, wherever possible, access to a variety of products and services at competitive prices; and in those industries in which competition is not workable and Government regulation is substituted, an assurance of satisfaction, quality and service at fair prices."

"The right to be heard -- to be assured that consumer interests will recieve full and sympathetic consideration in the formulation of government policy, and fair and expeditious treatment in its administrative tribunals."

These consumer rights have been endorsed in one form or another by every President since John Kennedy. In the 1970s, a fifth consumer right was added, the right to redress. This right assures consumers that their marketplace grievances will be considered and dealt with fairly.

Let me share with the Commission an analysis of the multidisciplinary practice issue in the context of the applicable consumer rights. Four of the five rights -- all but the right to product safety -- apply here.

The Right to Choose

Of all the consumer rights, this is perhaps the most applicable and important. This right means that consumers should be able to choose legal services from whatever provider, in whatever business setting, without arbitrary restrictions. The current Model Rule violates this basic right to choose because it prohibits lawyers from practicing in multidisciplinary practices. With all due respect to tradition, I don't think the limitation can be justified.

Why shouldn't consumers facing a divorce be able to do business with a single firm consisting of financial advisers, tax planners, child psychologists, grief therapists and lawyers?

Why shouldn't consumers buying or selling a house be able to do business with a single firm consisting of mortgage lenders, realtors, home inspectors, title searchers, tax planners, and lawyers?

Why shouldn't consumers be able to do business with a single firm consisting of financial planners, tax experts, insurance experts, auctioneers, property evaluators, and lawyers after a death in the family requires an estate to be disposed of in a manner most advantageous to the client?

The three main reasons offered by those who support the current restrictions do not hold up under close scrutiny.

First, it is alleged that relaxation of the rule would destroy the attorney-client privilege. I ask, why would it? Lawyers can mark all communications, papers, and other files as "privileged and confidential," as they do now, regardless of the business setting.
Lawyers can and do write separate retainer letters, can and do prepare separate billings, can and could take whatever other steps are necessary to protect the privilege. There is no inherent reason that would lead one to conclude that the attorney-client privilege is jeopardized per se because of the form and composition of a business entity.

Second, it is alleged that conflicts of interest would arise in a multidisciplinary practice. I ask, why should they? Conflicts of interest are avoided by a number of methods, including full disclosure of other relationships by an individual and by a firm. Conflicts can be avoided by refusal to accept a client. I can think of no valid reason that conflict of interest issues couldn't, shouldn't, and wouldn't be resolved exactly as they are today. Only the monitoring mechanisms might differ. But even today they differ. Our small firm of fewer than 10 attorneys has a relatively easy monitoring job to assure there are no conflicts than does a firm of many hundreds of attorneys. So monitoring cannot be used as a justification for restricting multidisciplinary practice.

Finally, it is alleged that the independence and professional integrity of an attorney would be compromised. Again I ask,
why would it be? Lawyers cannot now be professionally supervised by non-lawyers. It is nonsense to say that an attorney's professional independence would per se be compromised because he or she in a business partnership with non-lawyers. Would one allege that in a multi-disciplinary practice composed of different types of healthcare professionals (doctors, advanced practice nurses, physical therapists, and acupuncturists, for example) the doctor's professional independence is jeopardized?

If the consumer's basic right to choose among service providers continues to be limited as it is today, it is consumers who will suffer. I find it chilling that those who would retain the current restrictions do so in the name of consumer protection, when quite the opposite is the case.

The Right To Be Informed

The right to be informed is often paired with the right to choose, so that together they result in consumer choice that is informed. Informed choice is of course a legal concept with legal meaning and consequences. But it is also used in its lay sense to measure whether a particular policy is pro-consumer. In a marketplace dedicated to consumer sovereignty, where consumers "vote with their dollars," informed choice is an indispensable commodity.

If the Model Rules are changed to do away with the current restrictions against multidisciplinary practices, informed choice will not be harmed in any way. Should there be disclosure of the "economic" arrangements governing a multidisciplinary practice? No consumer or consumer advocate is likely to oppose any truthful disclosure. But what is it that needs to be disclosed? Is it the fact that non-lawyers are partners with lawyers in a practice? Is it the way the partners share economic benefits? Do we now inform consumers how much if any of their case is handled by paralegals? By senior partners? Should we?

I submit that there are no special issues surrounding consumers' right to be informed that are posed merely by the shape of the economic entity where the attorney practices law. Earlier in this testimony, under the "right to choose," I discuss the use of disclosures to alert consumers to potential, real, or perceived conflicts of interest. As stated in that discussion, disclosure is often the only remedy needed to deal with conflicts of interest.

The bottom line is that the right to be informed will not be compromised by opening up the Model Rules to allow multidisciplinary practice. To the contrary, it could be argued that the current restrictive rules harm both the right to choose and the right to be informed. I have no survey data in hand, but it would surprise me if consumers, generally, were aware of the current practice restrictions. It is a hidden rule -- attorneys know about it because they are bound by it. But consumers don't know about the restrictions, and if they did, many would ask why are they present? Unless those who support the restrictions could make a valid case in support of the restrictions, the public would not support them.

Fully informed consumers are empowered consumers. When a consumer is in need of an attorney , what they are interested in is quality, cost, and access, not artificial barriers.

Would quality be compromised by allowing multidisciplinary practice? The answer is no.

Would cost be affected? If affected at all, it would lower costs, both because of increased competition and increased internal economies.

Would access be affected? If affected at all, it should increase access because it will increase availability, and increase ease of access by allowing consumers to choose "one-stop" establishments if they so choose.

The Right to Redress

To some consumer advocates this consumer right is the most important of them all. It assures that aggrieved consumers have the right to have their grievances and complaints addressed in a fair manner.

How should one apply the right to redress to the issue at hand? Well, to listen to those who would retain the status quo, dire consequences are lurking if consumers can receive legal services from multidisciplinary practices. As stated earlier in this testimony, it is alleged that the attorney-client privilege is in jeopardy; that the professional independence of attorneys who work in multidisciplinary practices could be impaired, and that conflicts of interest will abound.

First, I disagree that any of these dire consequences is a likely consequence of a revised rule allowing multidisciplinary practice. But suppose, for the sake of argument, that a consumer did have a grievance or complaint in one of these areas. Would such a consumer have a remedy? The answer is obvious -- he or she would have the exact same remedy available regardless of the nature of the economic enterprise where the complaint arose. Bar Association discipline committees have and will continue to receive complaints about unethical, incompetent, or otherwise flawed conduct and/or services by their attorneys. Grievances and complaints should be, are, and would be investigated, regardless of the setting in which the complaint arose. Outcomes should be, are, and would be based on the substantive merits of the complaint, not on the institutional arrangements in which they arose. So the right to redress is not, nor should it ever be tied to the shape of an economic arrangement. Bad acts and bad actors are the issue, not business arrangements. Were it ever to be otherwise, the ABA, every attorney, and most importantly the citizens of this country would have a very serious problem on their hands. The bottom line, again, is that this consumer right to redress cannot be used to justify the current restrictions.

The Right To Be Heard

The final right to be considered is the right to be heard. Read narrowly, it is limited in its application to government decision-making, since it asserts that consumer interests will receive full and sympathetic consideration in the formulation of Government policy (emphasis added). Personally, I have always thought it important to expand this right to include private organizations, such as the American Bar Association, whose policies most certainly impact on public policy.

Let me congratulate the ABA and specifically this distinguished committee, for listening to me and other consumer spokespersons who have come before you, in person or through the submission of written statements. For example, I know you have received testimony from HALT, An Organization of Americans for Legal Reform, who have strongly urged you to remove the restrictions on lawyers practicing with non-lawyers.

HALT is widely respected throughout the consumer advocacy community, and it should come as no surprise that they call for a new rule in this area. In fact, every organization I know of that has a track record as a consumer protection body is on the same side of the issue -- get rid of the restrictions.

So again, that you for the opportunity to express our opinions. We hope you will hear them, and will understand how strongly we feel about removing the current artificial barriers to consumer choice.

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