Summary of the Testimony of Michel Gout - Center for Professional Responsibility

Summary of the Testimony of Michel Gout

Before the Multidisciplinary Practice Commission

Michel Gout, president of the CCBA (Council of the Bars and Law Societies of the European Union) spoke next. In some member EU states, such as France, lawyers have a monopoly over giving legal advice while in others, such as the United Kingdom, Finland or Germany, anyone can give legal advice but only certain professionals can call themselves solicitors. Thus, in many instances accounting firms can provide legal advice. The Establishment Directive (98/5) at Article 11 regulates joint practices. Under these provisions multidisciplinary practice capability cannot be exported to a host state. Thus, if a host state prevents multidisciplinary practice, it may similarly prevent a lawyer from practicing there in his capacity as a member or representative of a firm that, in its home state, includes nonlawyers who 1) hold all or part of its capital, or 2) use its name, or 3) exercise decisionmaking power ( de facto or de jure). (Article 11.5) In Finland there is no monopoly on the practice of law (or the practice of auditing) but a member of the Bar registered as such cannot, in practical terms, be part of a multidisciplinary practice. Although at present an Austrian lawyer cannot partner with a nonlawyer, there is discussion about allowing such partnerships with patent agents, notaries, tax advisors and accountants. In Italy the firm name must mention the names and titles of all the partners; however, nonlawyers cannot be included. This restriction is likely to change. Although the law in Spain specifies that lawyers cannot practice in concert with an activity that is incompatible with professional independence multidisciplinary practice firms exist de facto. The District Court decision of Arthur Andersen v. Nederlandse Orde van Advocaten (7 February 1997), which upheld the lower court decision in favor of NOVA, led to negotiations between the parties that have broken down. Further court proceedings are moving forward. The president of the Law Society of England and Wales asks not whether, but how, multidisciplinary practice will exist. In France, before 1991, avocats co-existed with conseil juridiques with the latter bearing the same name as the accounting firms. Despite the requirement of a name change by 1996 there have been none and these firms, now run by avocats, bear accounting firm names.

As of 29 November 1996, the CCBE had officially reaffirmed its opposition to multidisciplinary partnerships between lawyers and non-lawyers. However, a preliminary (second) draft of a new CCBE position on the subject is being circulated for the Lyon meeting in two weeks and it is more favorable to multidisciplinary practice. It generally forbids fee-splitting; however, it allows integrated forms of co-operation between lawyers and nonlawyer professionals as long as the lawyer assures confidentiality and independence - notably conflicts avoidance, use of name and factual or legal control. Generally, observance of each profession’s ethical code of conduct is urged.

In response to questions, Mr. Gout admitted that multidisciplinary firms have not respected transparency. He noted the disagreement between the Paris Bar and the French Provincial Bars as the Big Five firms in France do not want accountants and lawyers in the same partnership in order to safeguard against the loss of clients because of conflicts. Germany was identified as the country most advanced in law and policy in the multidisciplinary practice area.