Oral Testimony of Dan Brennan - Center for Professional Responsibility

Oral Testimony of Dan Brennan QC,

Chairman of the General Council of the Bar of England and Wales

Before the American Bar Association

Commission on Multidisciplinary Practice

August 8, 1999
Atlanta, Georgia

Dan Brennan QC, Chairman of the General Council of the Bar of England and Wales, spoke next to the Commission. He hopes the Commission realizes that the rest of the world is watching this debate. What American decides on this question will have momentous impact on every other legal system in the world. He confessed to being a true believer in that the English Bar stands by a strict policy of not entering into MDPs. This is for two reasons. One is the Bar's professional rules require independent referral and solo practitioners, secondly because of the 'cab rank' rule which requires a barrister to take any case from any client for any cause, good, bad or morally questionable. This is considered of such immense importance that any change that endangers that access to the Bar by the public must be looked at with immense care before it is adopted. He presented a simple exposition of a Law Society statement of policy. An independent legal profession has an important democratic function in any state to defend individual liberties. The profession, therefore, should generally remain separate from business. He asked the rhetorical question, 'Which other professional who is actually providing legal services through accounting firms has such an objective?' His answer was 'I think none.' He raised four points. 1) Dollars - the annual revenue of PricewaterhouseCoopers for the last year was $15 billion dollars. Multiply that by five and translate that into a marketplace in which these players combine with lawyers.  He said to persuade him that lawyers could therein maintain their independence he would need a lot of persuasion. When the Commission's proposal issued, the English newspapers described the Big Five's   reaction as ecstatic.

They said it was great news. He wondered how many American lawyers were ecstatic. 2) Is the Commission's recommendation going to produce better value for the client? He recounted that the chief executive of one of England's major savings and loan companies said he was convinced there would be no savings for the client. Any savings there might be would show up in overhead and that would end up as a component of the profit margin. There is no evidence that the Big Money players who want to get into this market are going to produce a cheaper product. Last year Commercial Lawyer, an English legal journal, conducted an MDP survey and the vast majority of the companies that responded indicated they wanted objectivity and personal service and did not wish to instruct an MDP. The Commission's own summary said there is no empirical data available on client wishes. The Commission heard from individuals, consumer groups and the Big Five, but the witnesses produced no data. He urged a reliable and consistent data exercise to show the real feelings of consumers about this change. 3) Justice - the Commission could produce a plethora of overdone guidelines but the Barrister questioned whether they would work. Picking up the question to the last speaker, what is the evidence that in-house counsel are any less ethical, he said there is none. However, he reminded the audience of Ralph Nader's book, No Contest, in which Nader emphasized the tremendous pressure that is placed on corporate lawyers who are not in-house and asked the Commission to equate that same pressure to an employee and tell him there is no risk. If there is a risk, is it worth running? Conflict of interest is to be coupled with every other protection for the client; there should never be inadvertent leakage of client information. With the multi-national Big Five how can there be a guarantee of no leakage? Without mentioning it by name he raised the Prince Jefri of Brunei case, decided last December by the House of Lords (the U.K.'s Supreme Court), where the House of Lords concluded that the test of Chinese Walls had to be a realistic one. Chinese Walls don't depend on the assertion of the service provider that its system works; they depend on what the client thinks. The House of Lords concluded that KPMG's litigation support division had a Chinese wall system that did not work; they wanted real separation and no chance of content leakage. Its success should be determined by the client, not the professional. Barrister Brennan invited the Commission to investigate whether the Big Five are in a position to set up screen systems to the satisfaction of U.S. courts as they were required to do in the U. K. 4) Profession.

The Bar Council has two concerns. 

First, an executed MDP would produce a legal services market that would intellectually equate to the financial services market because of its size and power. This has resulted in the U.K. in the very strictest regulation of that sector of the market through the financial services regulators. It is anticipated that if an MDP is developed there will be a risk of state regulation. He conjectured - today, standards; tomorrow, terms; the day after, price. He hoped that they all agreed that self-regulation is at the heart of the profession. Second, MDPs have a divisive effect on the profession. There is a real tension between commercial lawyers and those in other forms of legal activity and, most of the time, it is a healthy tension. But with the anti-MDP proponents continually questioning the structure's merit and whether it will work, he asked how the legal profession was going to produce corporate lawyers, MDPs, public lawyers in the traditional sense and small town MDPs and is that divided profession the one they to which they want to belong? Lastly does the MDP exists to serve the community, to do pro bono work, to protect the citizen against the state and the multi-national? This is considered to be so important that the Commission was invited to test its proposals in three ways. One, outside the Big Five what is the evidence that society really wants MDPs.

Two, what is the effect going to be on the profession if what is produced is regulation that distinguishes one lawyer from another, pursuing the same profession.

Third, what is the reaction going to be if, after decades of the law, lawyers lose the confidence of the public because they put the almighty pound and dollar first? Lawyers must preserve their standing as society deserves it and they have a duty to work for that standing in society.

"I started off by saying I was a true believer, but I am not so much a believer that I can't change my mind. And if the time came when society wanted it, regulation was feasible, and it would work, then I might be persuaded.  I am not persuaded that this is the time. I invite you from the ABA to think again before you come to the final decision."