Volume 18, Number 1
January/February 2001

Multidisciplinary Practice

Our Profession is not for sale

By Robert L. Ostertag

It isn’t as if the accounting profession had come to us a decade ago suggesting that since our two professions have so much in common—clients, client problems, and educational and professional backgrounds—it might be appropriate for us to consider doing together, under one multidisciplinary organizational structure, what we now do separately. That mutually cooperative study approach would have represented the high road. But that’s not what happened. To understand what did happen, and to understand also what multidisciplinary practice (MDP) really is about as some seek to impose it on our profession, we must first understand who its proponents are, what they want, and why they want it.

MDP as proposed to us is really a misnomer. Is there anyone in the practice of law who does not incorporate the cooperative services of doctors, engineers, environmentalists, insurance adjusters, accountants, and experts of all kinds into his or her representation of clients? That is a real multidisciplinary practice.

It is not the accounting profession at large that has attempted to impose any form of MDP on us. Rather, it is the "Big 5" accounting firms that have sought to impose on us their unique form of multidisciplinary practice. Starting a decade or so ago, as an integral part of a worldwide effort, the Big 5 put together what apparently was intended to be a monetary war chest of millions of dollars to do battle with America’s organized bar. They told us their clients were clamoring for "one-stop shopping"—a claim they have never been able to prove when challenged to do so. Truth be known, such a clamor has never existed. Until recently, the battle has unilaterally been fought, with virtually no resistance and no effort by the organized bar even to recognize its existence—something like the German blitzkrieg through the European lowlands in the early ’40s.

Big 5 Goals

What exactly do the Big 5 accounting firms want? They want to be able, without the benefit of licensure, to provide the legal services to their clients that they cannot now provide so that they may truthfully be the full-service consulting firms they advertise themselves as being, but are not. Having met with a modicum of early success in similar efforts in Europe and elsewhere, they understood full well that America would be the toughest nut to crack because our legal system differs markedly from those elsewhere, even Great Britain. But they have proceeded nevertheless, openly and aggressively, to attempt to provide legal services without the benefit of licensure, challenging us along the way to do something about it. One might expect the American Bar Association to have alerted and defended our profession. Shamefully, it did not.

The Big 5 are very aggressive. Over the years, they have made no bones about what they want and how they expect to achieve it. To date, as a group, they have retained the employed services of about 4,000 American lawyers. Why? Obviously, to provide legal services, for that is what lawyers do. For whom? Well, not likely their respective employers, for even the Big 5 collectively don’t need 4,000 lawyers to represent them. Rather clearly, they were hired to provide legal services directly or indirectly for their employers’ clients—something that is proscribed by our various codes of professional responsibility.

The Big 5 deny, of course, that they are practicing law. They claim they are doing something else, like practicing tax. But accountants are already permitted to practice tax; they don’t need lawyers to do that. The ABA Commission on Multidisciplinary Practice asserted in its original report that these many lawyers were, in fact, simply misrepresenting what they do despite the various codes of professional responsibility to which they are subject. Again, an open challenge—this time by our own colleagues.

In New York, at least, the names of two of the Big 5 accounting firms mysteriously appeared as law firms in the 1999 edition of the New York Lawyers Diary and Manual, again without the benefit of licensure. The New York Lawyers Diary and Manual is New York State’s primary legal directory. Another of the Big 5 accounting firms, also without the benefit of licensure, was found to have advertised its legal services to clients in the New York Times and the Wall Street Journal. If the 4,000 or so Big 5 accounting firms’ lawyers are not improperly practicing law on behalf of their employers’ clients, but their Big 5 firms are offering legal services to those clients as they boldly advertise, then who within those firms is providing such services? I know of no place in America where accountants may practice law without the benefit of admission to the bar. The Big 5 seemingly don’t care.

Just Another Profit Center

The director of global legal services (get that?) for one Big 5 accounting firm boasted a while back that he will achieve a $1 billion legal practice for his firm within five years, and that "the fools" (meaning you and me) may laugh at him now, but nothing can stop him. The legal services arm of another Big 5 firm reported revenues for fiscal 1999 of about $480 million.

The Big 5 do not think of the practice of law in the same principled vein that you and I do. They have been heard to describe it variously as "management consulting," "a professional service industry," "a business line," "just another profit center," and "merely an add-on service" to their already existing consulting service.

Why do the Big 5 accounting firms want to practice law? Well, you know, money. Yours. Mine. Your clients’. My clients’. Money from wherever, so long as it’s money—for them, of course. And they want to control the revenue flow by subordinating your and my client services to their bottom-line needs. They want us to work for them. They want to control our service to their clients, irrespective of the fact that that is not what lawyers are about or what our society expects of our legal profession. Our clients obviously expect us to be solely responsible to them as we always have been and must always be. The Big 5, on the other hand, want us simply to be another "add-on service" to their multifaceted consulting business for the benefit of their bottom line. Why should we care about their bottom line?

Lawyers have, among others, three core values built into our Codes of Professional Responsibility that the Big 5 want us to eliminate—our total independence from outside influence in the representation of our clients, our undivided loyalty toward our clients, and our obligation to maintain their confidences and secrets. Accountants have no such values that are similarly directed. To the extent that their services are at all subject to their own code, their independence is directed away from their clients and toward the public. Unlike us, at least in their auditing function, their loyalty must necessarily be to the public, not to their clients. Unlike us, they have no immunity from the obligation not to divulge their clients’ confidences and secrets even when required by the court, especially when they act in their ancillary capacity as merely business consultants and advisors to their clients.

Accountants are not subject to our codes of professional responsibility, except to the extent that they may be employees of law firms with the same obligations of confidentiality to which all other attorneys’ employees and their lawyer employers are subject. Nor do accountants want to be subject to our codes. Nor, indeed, are they willing, or even able, to conform their own codes of professional conduct to ours. Why should they be? How, then, can we possibly reconcile those contradictions? Given their very existence, how can we lawyers operate with accountants as equals, or as our superiors, within the kind of multidisciplinary practice setting that they seek to impose on us? Only, say the Big 5, by our elimination of our core values to meet their demands.

ABA House of Delegates Did Not Capitulate

The American Bar Association’s MDP Commission proposed initially that we succumb to the Big 5 in light of what it perceived was a fait accompli. I refer to that as the Neville Chamberlain approach. It proposed the adoption of MDP, but suggested along the way that such firms would best be controlled by lawyers. A funny thing soon thereafter happened on the way to the Forum. The American Institute of Certified Public Accountants (AICPA) communicated its written thanks to the Commission for addressing the issue, but noted that such an arrangement was not exactly what its constituents had in mind. Of course not. They weren’t looking to us for compromise. They expected capitulation in the face of their exceedingly large war chest and the already existing incursion of the Big 5 into the practice of law.

Happily, the ABA House of Delegates has since decisively rejected the Commission’s proposal and has dismantled the Commission itself, something the ABA leadership, despite several emphatic signals from the House, couldn’t bring itself to do. Yet the leadership of the Association still, to this day, finances an MDP-sympathetic forum group whose function is to travel the nation "debating" the substantive merits of MDP without ever asserting any intent on the part of the ABA’s leadership to implement the House’s loudly stated policy in opposition to it.

MDP, as it now appears, is not going well in Europe. It faces litigation on the Continent. In England, having largely been foiled in their attempts to buy up the large firms, the Big 5, or those of them that remain there, have now turned their attention to mid-sized firms. Guess who’s next? One recent British survey disclosed that after five years of MDP experience, 85 percent of responding corporate financial officers were hostile to MDP, and only 3 percent favored it. What were their complaints? Lack of lawyer independence, inability to obtain objective legal advice, conflicts of interest that Chinese walls could not protect against, a lack of synergy between lawyers and accountants, and (note this one) the high fees of accountants.

Representatives of bars from across Europe testified before the American Bar Association’s Commission, pleading for the ABA to reject MDP. It isn’t working in Europe, they told the Commission, and the only hope of stopping it in its tracks lay here in the United States.

Fiduciaries v. Public Watchdogs

We lawyers are the "fiduciaries" of our clients—a relationship imbued with their ultimate trust and confidence. Sir Francis Bacon observed that "[the] greatest trust between [people] is the trust of giving counsel" (Bacon, "Of Counsel," Essays of Francis Bacon, at 181 (1846); see, e.g., Matter of Cooperman, 83 N.Y. 2d 465 (1994)). We are also necessary and active participants in the very existence and operation of our third branch of government. Accountants, on the other hand, are described as "the public’s watchdog" ( United States v. Young, 465 U.S. 805 (1984)). Their newfound consulting independence from their auditing function doesn’t change that purpose-in-being.

Our respective necessary functions on behalf of clients and American society are diametrically opposed. If accountant-controlled MDP firms are to function on behalf of their clients, but subject always to the need to divulge, how may we express our loyalty to those clients, or provide independent advice to them, free of the fear of disclosure?

Conversely, if lawyer-controlled MDP firms are to function solely on behalf of our clients, how may accountants meet their publicly directed obligations when called upon to do so, without infringing on our own client-directed core values? How can lawyers function for their clients when their independence and loyalty are necessarily to be divided between their responsibilities to clients and their responsibilities to their accountant partners or employers? The blending of such opposites involves the very great and frequent potential for divided interests on the part of lawyers—something we cannot abide.

Ongoing Fight

Bar associations throughout the nation have studied and debated the MDP issue for many months now. Overwhelmingly, they have rejected the concept on its substantive merits alone, without reference, even, to the Big 5’s outrageous modus operandi and their nefarious self-serving purpose. But the battle is merely beginning, and we dare not forget who they are and what they are about. They really don’t care what we do. They are moving forward, persistently daring us—the "fools"—to stop them.

The MDP proposal that is currently before our profession eminates from the wrong source (the Big 5). It seeks the wrong purpose (the embellishment of their bottom line), and it brings about the wrong result (the compromise of our core values). Simply stated, this profession of ours, which is indispensable to the very operation of our government, and which is so much a part of our democratic institutions, is not and cannot be for sale—not to the Big 5, not to anyone. Not now, not ever.


Robert L. Ostertag is a small firm practitioner in Poughkeepsie, New York. He has served as a member of the ABA General Practice Section’s Council, as a member of the ABA House of Delegates, and as a charter member of the ABA Standing Committee on Solo and Small Firm Practitioners.

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