**NOT FOR PUBLICATION**
NOT TO BE REPRODUCED OR QUOTED WITHOUT AUTHORITY OF THE BOARD OF GOVERNORS
OF THE AMERICAN BAR ASSOCIATION
REPORTS 109, 10B AND 10C
ROBERT J. GREY, JR.: Thank you. (applause) Congratulations. Ladies and gentlemen, I'm going to take a special order that has been scheduled for 10:00 at this particular time. I'm going to ask the members who are presenting multidisciplinary practice to come to the well of the House. And those who have filed salmon slips with regard to Report 109. Take just a moment to allow them to assemble. Members of the House, if you would please take your seat. Ladies and gentlemen, we are going to begin the discussion of Report 109. I would ask that you please take your seat, so that we might do this in an orderly manner. And that you will be able to give your full attention to those who will be presenting argument in favor and in opposition to Report 109 on multidisciplinary practice. The Chair recognizes the Chairman of the Commission on Multidisciplinary Practice, for an opening statement of 15 minutes, to be shared with President of the Association, Philip Anderson. The Chair recognizes Sherwin Simmons. (applause)
SHERWIN P. SIMMONS: Mr. Chair, good morning. We've had a very busy and exciting week, haven't we? I never thought I would be entertainment chairman. A year ago, when President Anderson appointed this Commission, he gave us three charges. The charges were to investigate the development of multidisciplinary practice around the world, to determine if any changes in the Model Rules of the American Bar Association should be made in light of that investigation, and report to this House at this meeting. During the ensuing months, we heard testimony from over 56 witnesses and had over 60 hours of live testimony. We received dozens of communications from bar associations, interested members of this Association, members of the public, members of various multidisciplinary practice entities from around the world, and from employees of personal service organizations in the United States.
ROBERT J. GREY, JR.: Excuse me, Mr. Simmons. Would you put a motion before the House, please?
SHERWIN P. SIMMONS: Oh, forgot that.
ROBERT J. GREY, JR.: That's okay. (laughter)
SHERWIN P. SIMMONS: I move 109.
ROBERT J. GREY, JR.: It's been moved and seconded. Please continue.
SHERWIN P. SIMMONS: Alright. When we came before you in February, we presented to you a background paper, which has now been reproduced on our Web site, which reflects up until then our investigation of multidisciplinary practice around the world. Since February, we have had additional investigation. And we have learned that multidisciplinary practice entities between lawyers and non-lawyers exist in a variety of formats in Western Europe. They are developing in Canada. They exist in some parts of Australia. And they exist de facto in the United States. They are led by the Big Five accounting firms, but by no means are the Big Five the only non-lawyer entities fostering multidisciplinary practices with lawyers. There are a variety of industry groups which may not have set out to provide legal services, but which as an incident to their own growth are acquiring accounting firms which necessarily have lawyers in them. I refer to American Express, H&R Block, Century Business Systems, and a variety of other consolidators like Century Business Systems. Regional, state and local accounting firms are employing lawyers. Financial institutions and insurance companies and a whole variety of other entities are employing lawyers. Now, what are these lawyers doing? Well, they're providing consulting services. Consulting services in tax, in mergers and acquisitions, in business transactions, in human resources and employment law and all of its ramifications. They're providing consulting services in intellectual property, in environmental law, in real estate transactions, in telecommunications, in media and entertainment, in health care, in construction, in insurance, and a variety of pre-trial preparation and support activities, including evaluation of evidence, assistance in the preparation of witnesses, preparation of drafts of interrogatories and questions for depositions. Everything short of going to court, yet for tax matters, they're going to the Tax Court and trying cases. They are providing arbitration and mediation services. And I can go on. But there's very little that we do, except go to court and state and federal court, that these existing multidisciplinary personal service firms do not provide consulting services. Now, if you look at the consulting services, they look remarkably like the practice of law. Our colleagues who were with us on Friday privately, if they will, will confess to you they're doing on Monday what they did on Friday, except they're not keeping time sheets, which seems to be a very important difference to them. They are, as best we can tell, providing legal services. But yet, not one bar association, not one court has raised the issue of whether these lawyers are in compliance with the Model Rules, the State Rules, the District Rules, particularly 5.4. No UPL action has been taken, as best we can tell, against any of these personal service firms. Some were started, but have been dropped. We learned, too, that while it would appear that the Big Five are the persons and entities leading the charge in the United States for the ability to provide legal services in a multidisciplinary setting, we learned that there is client interest for this opportunity. Who much client interest, we're unable to quantify. But we are satisfied that there is some client interest, particularly in some corporations. But we were told by consumer groups that their constituencies would like to have the opportunity to have access to legal services through non-traditional personal service organizations, particularly through accounting firms. You will hear later this morning that there is an interest in the bar for this opportunity. Not from the Wall Street firms or the Beltway firms, but from small firms and solo practitioners of whom there are more than 400,000 in the United States. Their representatives have said to us, "We'd like to have a shot at putting together a multidisciplinary practice. We can expand our services to our clients. And perhaps we can generate a bit more take home income for ourselves." So after hearing all this, and believe me, we came together. There were 14 of us, including two Board liaisons. We must have had more than 14 different opinions. Some of us held more than one opinion on the same issue. We changed our mind, each one of us, a dozen or more times. We concluded finally that we should present to you a set of principles by which the Model Rules should be amended to reflect the development of these personal service entities. To reflect the changes in the practice of law, the globalization of the economy. We thought, can we do this in a way which will protect the public, so that the public, which is now using these personal service firms, will know who's giving them legal advice and what to expect. Because now if they're getting consulting services from these firms, they don't know whether they're getting it from lawyers or not, and they do not have any assurance that they will have the independence of judgment, attorney/client privilege, law of the confidentiality, and of course, the benefit of the conflict rules. So we decided, well, maybe we can craft a set of principles which would provide that protection. We set out, too, to say, "Can we do this without jeopardizing the core values of the profession?", the ones I've just mentioned. And we think we can. We finally said there are our colleagues at these personal service firms that are not playing by the rules anymore, or would not appear to be playing by the rules. And they really ought to be brought back under the regulatory tent. So we offer you principles that we think would result in these goals. We didn't recommend any change to any of the unauthorized practice of law rules. We didn't recommend any change in any rules except 5.4. We didn't suggest that non-lawyers should practice law. And we did not permit any passive investment, so Wal-Mart could not have its own legal services if our rules are -- if the principles are followed in the rules. Since the report has been issued, we have received much comment. We have learned a lot. We have been asked for more time. We have had a very informative week. It is for that reason we have asked, and I will at the end of the discussion, move for deferral. We want to have another shot at this. We want to have more input from you. We've gotten a lot this week. But we want some more. And we're going to go back. We're going to go back and start again, and see what we can do. Our goal is simple. Whatever recommendations we make to you will be to protect the public and the core values of the profession. Mr. Chair, I yield to President Anderson.
ROBERT J. GREY, JR.: Thank you. (applause) Mr. President, you have two minutes and 32 seconds.
PHILIP S. ANDERSON: Okay. Thank you very much.
ROBERT J. GREY, JR.: Thank you.
PHILIP S. ANDERSON: And I think I can do it in that period of time. Thank you very much. This is a big issue. It deserves our considered attention. The response of, "I don't like it," is not going to make it go away. The response of, "I don't like the idea of multidisciplinary practice," does not mean it will disappear. I don't like it either. But it's here. And it's going to stay here. And the question is, what do we do about it? How we handle it will determine the future of our profession. If you choose to ignore the issue, you're making a decision. Our obligation to the profession and our obligation to our constituencies require us to give the attention to this issue that we would give to the preparation of a major lawsuit, or to preparing for the closing of a major transaction. It deserves your attention. The report deserves your attention. The issue deserves your attention. The immediate visceral response simply is not fair to the profession and everyone's initial response is, of course, I don't like this. The press has asked me questions about whether or not this wouldn't affect competition for international business. That misses the point. Multidisciplinary practice is going on right now. I see the real threat, in addition to the threat to the public, to the mid-level law firms that are representing the banks and the corporations with repetitive filing requirements. They can be wiped out. This is going on now. We must do something about it. Someone will write the rules. The lawyers should write the rules. This report requires all lawyers everywhere, wherever they're practicing, to play by the same rules, the rules that we have already written. Take time to study this issue. Read the report. Read some of the materials supporting the report. I am confident that the lawyers in America can come to a reasoned conclusion on how we should handle this. But we've got to start now. And we've got to work together. And we've got to work hard. Thank you very much, Mr. Grey. (applause)
ROBERT J. GREY, JR.: Thank you. The opposition has 15 minutes. The presenters will be Larry J. Fox of Pennsylvania, and Jack Curtin, Past President of this Association. Larry Fox.
LAWRENCE J. FOX: Thank you, Mr. Chair. I had a nightmare and I want to share it with you. Five years from now, we were at the meeting of the National Association of Multidisciplinary Professionals. The keynote speaker was Sandy Wile of Citigroup Law. The MDP Award for that year went to Tom Delay, for his innovative bringing together of exterminating and legal services in one entity. (applause) There was no American Bar Association anymore, but the lawyers were a section of the MDP association. And Bob Stein was the director of that section. I walked around the halls, looking for programs on pro bono and the independence of the profession, childrens rights, all in vain. But what I did find were programs on how to steer your legal clients to your insurance subsidiary and medicine, the next MDP frontier. And the lawyers, the lawyers section, led by their chair, was petitioning the MDP association to permit them to form a union, just like the American Medical Association did this year. And then I awoke from that dream. And I realized I had one more chance. I had appeared before the MDP Commission. I had pleaded with them to defend the values of our profession, the way we know they should be defended. And I had failed. But like a good litigator, the beginning of every successful appeal is disaster in the court below. And that's what I had. And so I came to you with my appeal. So may it please the court, the issue before you is 5.4. It says that we shall not share fees with non-lawyers. I wish we could come up with a better way of describing that rule. But it is not a turf protection rule. We know it has nothing to do with money. But it has everything to do with who controls the lawyers. And you can erect all the rules in the world. And write all the books in the world and have all the commentary in the world. It is who controls the money that will control the process. And 5.4 is our bulwark, because as long as lawyers work for lawyers delivering legal services to third parties, we know we are protected. And how do we know that 5.4 is so important? Let us look at the evidence. First, look at our friends in the medical profession. Ten, twelve years ago, they had the same rule. And they abandoned the rule. And they could sell their practices. And some of us, like me, were jealous when some of my friends sold their practices for $1 million or more. Suddenly capitalizing their practices. I wish I could have done that, I thought to myself. But you talk to those physicians today and you will find out that they have compromised everything. They now have to call some high school clerk to find out whether they can prescribe a particular medication, whether they can do a procedure, whether their patients can receive the care they're entitled to. Oh, maybe the doctors are different. Look what's happening to lawyers who are hired by insurance companies to defend the insured. The insurance companies are getting involved in that, in the intersection between the client and the lawyer and lawyers now have to call up claims agents and ask for permission to take depositions and ask for permission to hire expert witnesses. But the best evidence, ladies and gentlemen, of why we need 5.4 is to look what happened when our lawyer colleagues went to work at the accounting firms. Five thousand of them are engaging in civil disobedience. Five thousand of them have erected the disingenuous argument that they are not practicing law, they are practicing tax, they are practicing mergers and acquisitions, they are practicing ERISA, they are practicing investigations, they are practicing pre-trial preparation. But it's worse than just violating 5.4, because you could say, "Okay. That's okay." They are violating Rule 1.7 on conflicts of interest, because no accounting firm imputes conflicts from one professional to another. They are violating Rule 1.6 on confidentiality by writing their clients in advance and saying that those clients waive their entitlement to confidentiality, to the extent that the accounting firm has an attest function obligation to the public to disclose. They are violating our rules against non-competes by signing non-competes when they go to work. They are violating our rule on limiting liability. And where is the demand? The demand is in the suppliers. It is not in the demanders. All of us know that corporate counsel in America, corporate counsel in America today are choosing lawyers, not law firms. They won't one stop shop at Drinker, Biddle & Wreath, let alone one stop shop with me. And suddenly, they want one stop shopping for all of their services? I say no. The MDP Commission has worked hard. They've worked long. And we owe them a great debt of gratitude for what they have done. Because they have teed up a very important issue. But they have come up with a proposal where an MDP, owned by non-lawyers, where the lawyers own not one share of stock, not one partnership interest, will certify to the Supreme Court of each state that the lawyers in that entity have complied with the Rules of Professional Conduct. How would they know? And why would they care? And if you listen to the owners, the future owners of MDPs that employ lawyers, they want to destroy our rules on conflicts of interest. What else is wrong with this? If we are just part of financial service firms, department stores for financial services, we will lose our ability to self regulate, because we will look just like insurance companies. We will look just like stock brokerage firms. We will look just like all of the other financial service providers that are not self regulated. And our profession will just become another service provider. And that is not what we are. So I say to you, ladies and gentlemen of the House, let us leave here today with the accomplishment of three points. One, let us affirm 5.4 and be proud of it, and recognize how it is a bulwark to protect our clients and protect us from the interference from non-lawyers. Two, let us condemn the civil disobedience of our colleagues and not let their civil disobedience be the trigger for our action. And three, let us charge our Commission with coming up with creative ways for lawyers to work with non-lawyers, without us owning them, and without them owning us. I say to you that all the services in the world can be delivered effectively, including law services, without compromising 5.4. (applause) Judd Best told me that he thought I was defending the buggy whip in an age of the automobile. I say to you, that is not the case. We are not defending inventions. We are defending values. The President of the ABA stood before you yesterday and said, "Let us not circle the wagons." I say to you that is precisely what we are going to do. We are going to circle the wagons. But we're going to circle the wagons around loyalty to clients, confidentiality, client autonomy and lawyer independence. And I'm going to be proud to circle those wagons around that. I thank you for the honor of being able to discuss this. And I yield the floor to the former President of the ABA, Jack Curtin. (applause)
ROBERT J. GREY, JR.: Mr. Curtain.
JOHN L. CURTIN, JR.: Chair, ladies and gentlemen of the House, to pick up a reference to the time of Julius Caesar, in the remarks of the President-Elect about crossing the rubicon, I come not to bury this resolution and this report, but to praise it. But in a limited fashion. I support the action that will be taken later to postpone indefinitely this resolution. So the praise is for a wake up call, a wake up call to all of us. MDP is a significant issue, not just in the United States. But as the Chairman has said, elsewhere in the world. And surely, it is one of the most important issues to confront the bar in recent years. It is a significant issue for our clients. It is a significant issue for the justice system. It is a significant issue for the public at large. The Commission had an outstanding membership and has worked long and hard to present this report to the House. But, of course, even the Commission and President Anderson does not suggest that we adopt this report. And I speak, therefore, in opposition to the only motion on the floor at the moment, the motion to adopt. President Anderson has said that the report will be improved by exposure to the bar. And I certainly agree. The issues are complex. The resolution itself covers three pages, to say nothing of the extensive report. The resolution is a sea change. It implicates the core values of our profession. Indeed, as Mr. Fox has indicated, it raises the question of whether we still have a profession at all, if the resolution is adopted. At least a profession in any sense that we have recently known it, in the true sense of the word. (end of tape 2, side 1) We ignore it at our peril. If we do not address the issues raised by that report, others will do it for us. And a basic point may be in order at this time. Remember the resolution seeks to amend the Model Rules. We, as the House of Delegates, do not create rules binding on lawyers throughout America. We know that the Model Rules require action by states jurisdictions, before they have any binding effect. And the implications, if you think about it, of widely varying rules relating to multidistrict practice in a wide variety of states is staggering. We need much more input and critical analysis than has been available to us in the limited time, since the issuance of the report. So may I suggest that the states have a special role in the effort to address these issues. New York has created a commission to conduct a comprehensive study of MDP, under the chairmanship of former President Robert McCray. (applause) I would hope that other states and bar associations will follow suit, and conduct their study of these issues. The Commission has worked hard and has provided us with a wake up call and has earned the right to continue its hearings and continue to refine its approach to this issue. We have been hearing the issue of public trust and confidence from others, including the Attorney General. I Chair the Coalition of Justice. Public trust and confidence is on our beat. We need to be sure that the public has confidence that we have addressed this issue properly. When we finally vote on this issue, we must get it right. (applause)
ROBERT J. GREY, JR.: Thank you, Mr. Curtain. The Chair recognizes Carolyn Lamm, Delegate at Large, from the District of Columbia, to speak in favor of 109.
CAROLYN B. LAMM: When I and many of the other Commission members started on the Commission, I must say that we probably approached it much the same as Mr. Fox does. But the more we learned and the more we analyzed, the more we came to the conclusion that others have uttered before, "Houston, we have a problem." As Mr. Fox admits, there are over 5,000 lawyers with bar memberships and law degrees doing something, but not practicing law, in all kinds of non-traditional settings with the Big Five. And they tell us they're not practicing law, they're offering environmental services. They're offering litigation support services and all kinds of other services. And they're certainly not complying with any of the wonderful core values that Mr. Fox enumerated. Indeed, what the Commission offers is a solution. And that solution requires a lawyer, no matter where they practice or how they practice, to adhere to the Code of Professional Responsibility. And it imposes on the lawyer the responsibility to ensure that any others offering services, legal services in connection with that lawyer, adhere to the Code of Professional Responsibility. (applause) The other remarkable thing that we've seen, I think, is that clients go to these people and they expect that they're receiving legal services. They expect confidentiality in their communications. They expect loyalty that is not conflicting interest, represented by the same firm. And they expect independent judgment to be exercised on their behalf. I'm not sure, and I don't think that they're getting those things. And I think that each of us, as bar presidents, as bar regulators, have a responsibility to ensure the public that that's exactly what they're getting. None of the lawyers, as Mr. Fox refers to them, those engaged in civil disobedience, are complying with the Rules of Professional Conduct. And those of us who compete with those persons, offering whatever consulting services they're offering, are all in compliance with the Code of Professional Conduct, that our competitors are not. And there isn't any bar association that's prosecuting disciplinary actions against them. The UPL laws aren't being enforced against them. Texas tried, but Texas dropped both proceedings. The Commission approach recognizes the evolution of what's occurred in the marketplace for legal services. And the Commission has made a proposal that we regulate the lawyer, no matter where the lawyer is. We've imposed safeguards that include an annual report, audit, sanctions and require the courts to enforce them. It envisions system safeguards that the MDPs would have to pay for. It doesn't permit the unauthorized practice of law. Indeed, it prohibits it. It's a good start for study and debate. And I encourage each of you to approach it with the same careful analysis that you approach any complex, difficult legal problem. And let us all come together to find a solution. (applause)
ROBERT J. GREY, JR.: The Chair recognizes Cheryl Niro, a delegate from the Illinois State Bar, to speak in opposition to 109.
CHERYL NIRO: Thank you, Mr. Chair. With great respect and regard for the members of the Commission and the extensive work that they have done, I stand here before you as a representative of the Illinois State Bar Association, 36,000 voluntary members, to focus on some of the inadequacies of the Commission's report. Acknowledging that the constituency of the Illinois State Bar has a very strong voice, made up of small and solo firm practitioners who have expressed their concerns that contrary to any argument that has expressed that this is a good move for small and solo practitioners, it presents rather a grave threat to their existence, on main streets across Illinois and across the nation. Clients, consumers of legal services, especially unsophisticated clients, will not likely appreciate that they could be trading the total dedication, confidentiality and highest ethical standards of an independent lawyer, if they choose instead to go to the shared business offices of a real estate broker, an accountant and a lawyer. The great likelihood in that case is that not only may this unsophisticated client receive compromised legal representation, but that shared business office may very well put the solo or the small firm practitioner down the street out of business. So that citizens in that community will not have the choice to make in the future, which makes this not only an issue of the lawyers receiving an ability to provide uncompromised services, but it's an access to justice issue for those consumers, an access to real justice. Moreover, there's simply no evidence that consumers at any level desire that legal services be delivered in this way. There is no evidence that legal services will be less costly, more efficient or create any greater quality in an MDP. There is also no evidence that lawyers who work in those offices will be in a position to ensure that those they work with will be in compliance with our ethical rules. It is the strong preference of the members of the Illinois State Bar Association to act more aggressively on this issue, as an unauthorized practice of law issue. We have created a task force on multidisciplinary proceedings. The Chair of the Commission perhaps rightly commented that no bar associations are acting on the actions of attorneys working in alternative settings. The ISBA has put an attorney on staff to coordinate and enforce UPL. And we are definitely on the road to taking action. (applause) At the hearing of the Commission yesterday, we also heard something about the argument that this is an inevitable practice that will continue in the United States. And we heard representatives from England, Wales, Canada, France, Sweden and the European Union of Bar Associations. To summarize their testimony briefly, it's that this doesn't work and that they certainly do not desire the continuation of multidisciplinary practices on their shores. All of those testifying seemed to suggest that the Commission's report suggests more questions than answers, certainly in the areas of ethical obligations and to the potential harm to our clients. It is also fair to say that they called for leadership of this body, of the American Bar Association. They are asking us to take action in a strong and positive way, so that they may be armed with the statements and the action that we take to tackle the very difficult and troubling issues that they face with MDPs in their nations. Yesterday, our President spoke very proudly and rightly so about his successful conference on the independence of the judiciary, acknowledging the direct and fundamental connection between the independence of our judiciary and the liberty our citizens enjoy, which is indeed the unique contribution of our great nation to the world order. The independence of the legal profession is equally fundamental to the American system and plays an essential and necessary role in our position in this world. As we move into the next millennium--.
ROBERT J. GREY, JR.: Ms. Niro, thank you.
CHERYL NIRO: Thank you. (applause)
ROBERT J. GREY, JR.: The Chair recognizes Lynda Shely, Director of Ethics, State Bar of Arizona, to speak in favor of 109.
LYNDA C. SHELY: Good morning and thank you. As the Director of Ethics for our State Bar of Arizona, my comments this morning are my own, however, not those of the State Bar of Arizona, because our Bar has not yet had the opportunity to evaluate the Commission's recommendations. As the Director of Ethics for our State Bar, I'm the ethics hotline. I receive about 8,000 calls a year from our bar members, trying to resolve ethical dilemmas. Of those calls, about 50 to 100 are from solo or small firm practitioners, who are asking MDP questions. Frequently, they indicate that their clients have actually asked about the availability of multiprofessional services from one firm. Of course, under our existing version of the Model Rules of Professional Conduct, they can't form a partnership or other professional firm with another professional. Most of the lawyers who hear that answer are a little bit frustrated, but they abide by the rule. Some of the lawyers, however, ask a question, whether that means that they will be required to resign their membership in the bar, to be able to form that partnership. And they will then call themselves business consultants, and not lawyers. That one question suggests that there should be consideration of the Commission's recommendations, because we all know that lawyers have the integrity and professional fortitude to uphold our core ethical values, as long as they don't have to pretend that they're not practicing law. I thank you and I yield the floor to Larry Ramirez. (applause)
ROBERT J. GREY, JR.: The rules do not permit the splitting of discussion after the presenters. So Mr. Ramirez, I'll recognize you in the order in which your salmon slip appears. I'll now recognize Thomas O. Rice, New York State Bar Association, to speak in opposition of 109.
THOMAS O. RICE: Mr. Chairman, it is my intention to remind those of us present of what it is precisely we are confronted with. We need to recognize that the MDP phenomenon is the result of a brilliantly executed strategic global business plan, to expand the business interest of commercial enterprises. More particularly, I think it would be instructive if we were to recall the comments this past year, this past June, of the Director of Legal Global Services at Price Waterhouse Coopers. Mr. Paul Dunbar was quoted as saying that in the goal of achieving his $1 billion legal practice within the next five years, "The fools may laugh at me now, but nothing can stop me." The Washington Legal Foundation, the noted proponent of the public interest and friend of the profession, speaks in terms of how it is that the attorneys must stop being process oriented, but rather should be results oriented. It is exactly that lack of understanding of what it is to be a lawyer and to practice law that is most disturbing. For if we should ever be uninterested in the process, in due process, we shall be at risk of losing the very heart and soul of what it is to be a professional. But our friends at the Washington Legal Foundation are not simply stopping at suggesting how it is we should practice law. Rather, they recommend that we ought now to take advantage of the opportunities that MDP presents. And it is perhaps most accurately summarized as to what those opportunities are that a British Labor Member of Parliament had said this past July, "The aim of an MDP is to expand profits, rather than protect the public interest and examine companies." Somewhat more lightheartedly, a columnist in the Boston Herald suggests that some of us feel that urging MDP, one of those ideas is to get either on the bus or under it. I, for one, am one of those who believe that I am not intending to get on the bus, just to get crushed by a freight train. And let us remember that MDP is precisely that. It's a freight train. It's a commercial enterprise, ladened with all the luggage of a business. And it is not simply a freight train. It is a train that is on a course for inevitable wreck and disaster. And when the inevitable disaster occurs, let not be counted among the casualties, let not there be among the body count the independence of our profession. The law is a treasured legacy. The bar is heir to that legacy. And we attorneys are custodians of that inheritance. It is our awesome privilege to preserve that bequest as we received it, autonomous, passionate and committed to the public interest. The solutions we forge today will paint the picture of what our profession is to become and what our legacy will be. Let then our bequest to the next generation of attorneys and to society be an independent profession, improved but undiminished, free and unfettered, respected and renewed. Thank you very much. (applause)
ROBERT J. GREY, JR.: Thank you. The Chair recognizes Larry Ramirez, Chair of the General Practice and Solo Small Firm Section, from New Mexico, to speak in favor of 109. Mr. Ramirez.
LARRY RAMIREZ: Mr. Grey. It's my pleasure to address this body as my last official act as Chair of the Section. In this regard, I had the occasion when this multidisciplinary practice issue arose, to create a committee or task force within the Section to study this issue. The committee issued its recommendations to the Council of the General Practice Section, indicating that they felt, it was their conclusion that a modification of Rule 5.4 would be appropriate, to allow fee sharing, and that that would be beneficial to solo and small firm practitioners in this country. In that regard, the Council of the General Practice Section adopted a resolution, which was presented to the Commission on Multidisciplinary Practice at the Commission's meeting in Los Angeles. And that report or that resolution is referenced in the report at endnote 46, if you would like to review it. We believe that this is an issue that will require further study. In fact, we're planning on conducting hearings at our meeting in Cleveland in the fall. But in that regard, I also echo the sentiments of President-Elect Barnett, who indicated that this is an issue that is of great importance to the profession and to the approximate two-thirds of this profession's members who are solo and small firm practitioners. The focus had been on the larger firms. I've received hundreds of phone calls over the last several months in my position as Chair. And I have to kind of echo Linda's comments. Those comments are running about two to one in favor of being able to form a multidisciplinary practice. And I appreciate the opportunity to address this body on behalf of my Section. Thank you. (applause)
ROBERT J. GREY, JR.: Thank you. The Chair recognizes Diane Yu of the National Asian Pacific Bar Association, from the State of Missouri, to speak against 109. Ms. Yu.
DIANE YU: Thank you very much. It's an honor to be here and speak in opposition to 109. I come before you in my individual capacity, at the request of the opponents to 109 who wanted to get a corporate perspective, insofar as I'm Associate General Counsel for Monsanto. And also at the request of the General Counsel of Monsanto Company, Bill Ide, former President of this Association. Robert F. Kennedy once quipped that his views on birth control were distorted by the fact that he was the seventh of nine children. And by the same token, my role currently as in house counsel is instructive in terms of my reaction to and the reaction of many corporate in house counsel to this particular proposal. Contrary to what some may believe is true, a number of corporations throughout the United States are deeply concerned and disturbed about the multidisciplinary practice trend. Although I know in the materials that the reporters on the Commission presented to you, there is reference to the American Corporate Counsel Resolution with respect to MDP. I am a member of that Board of the American Corporate Counsel Association. I participated in the discussion and debate, helped draft the resolution that was passed. And I think it's informative for you to know that the correct and full text of the resolution of ACCA is found at footnote 58 in your materials, at C34 of Report 109. And it is not an absolute, unqualified, blanket support for this proposal. It couldn't have been, because ACCA passed that resolution in February, before it saw the full text and merely wanted to indicate that there was certainly some interest in following this issue. And there was some support for the idea of multidisciplinary practice to some extent and to some level. But since it was at that point clearly unknown where the Commission would come out, the full text is important for you to keep in mind. And I'd like to read it to you. "The American Corporate Counsel Association supports a broader range of choice for clients to select from service providers capable of formulating comprehensive solutions which address not only the legal aspect of their problems, but various other facets as well. Subject to resolving important issues of ethics and professionalism in the best interest of the client and the public, such a broader range of choice could include multidisciplinary practices, wherein lawyers are affiliated with non-lawyers." It was absolutely critical to the Board of ACCA that those ethical and professionalism issues be adequately and properly addressed before the full and blanket approval for this concept would be referenced. And as the reporters and the objections to report have indicated, there are many questions about whether or not the Commission has adequately addressed all of those issues. I'm here to tell you not all corporations want one stop shopping. We want expertise. We want experience. We want the best lawyers for the job. And we want undivided loyalty. That is far more important to us than one stop shopping. (applause) And I think that we do need to give this a great deal of thought. We know that the elephant is in the bedroom. We are not flatterous society people. We do think, however, in its present form, that too many issues related to ethics and professionalism have not been adequately addressed. And we therefore think this could be a multirisk practice and not multidisciplinary. Thank you very much. (applause)
ROBERT J. GREY, JR.: Thank you. The Chair recognizes Jamie Gorelick, Delegate from the D.C. Bar, to speak in favor of 109.
JAMIE S. GORELICK: I have appeared before this House as a litigator, as a government lawyer, and now I'm here as a corporate client. And I'm a corporate client who uses a lot of lawyers, many of whom are in this room, and who also uses multidisciplinary practices, particularly from one of the Big Five accounting firms. I have a tremendous pride in my profession. I believe that lawyers provide the best possible advice, are the greatest counselors. All I want to say though is that there are many, many problems now that benefit tremendously from a multidisciplinary approach. They are problems that are increasingly complex, in the areas of human resources, in tax planning, in business transactions, where we use, I use a multidisciplinary practice. I would like to have that choice. I would like to have the ability to look to one person, to bring together a team of people to address an issue that crosses the boundaries between law and one or more other disciplines. And I know that my colleagues in the corporate arena agree with me, because we talk about using those kinds of practices. Now, I'm not going to comment on the particulars of the proposal. And I understand that many of the proponents of the proposal do believe that we need further consideration in this body in the interests of protecting the values of our profession. But I really encourage this House to find a way to offer clients, whether they are corporate clients or individual clients, that choice. And I tell you that if we do not do that as a profession, the needs of clients, both large and small, will prevail. And those needs are for the ability to bring together a team to look at a problem holistically. Now lawyers, in my view, can lead that inquiry into what rules should apply, and how those offerings of a multidisciplinary approach can be made. Or they can follow. I believe that we should lead. And I think the report that we have before us is a good beginning point for that debate. And I would urge this body in the interest of your clients to consider carefully the recommendations and to come up with a way to offer clients a choice. Thank you. (applause)
ROBERT J. GREY, JR.: Thank you. The Chair recognizes Stephen Zack, State Delegate from Florida, to speak in opposition. Mr. Zack?
STEPHEN N. ZACK: Thank you, Mr. Chair, Delegates. Thank you for the privilege of speaking with you. Many of you know of the long and successful history of the Florida Bar in fighting lawyer advertising. Ten years ago, we were told when we started that fight that it was going to be expensive. That the courts will decide it. It's already here. Don't do anything. And, of course, the ABA had its aspirational standards of lawyer advertising, which was our greatest obstacle in winning that war. Does this sound familiar? Will Rogers once said that when you're getting chased out of town, get to the front and call it a parade. And when I hear there's nothing we can do, I think about that parade. But if history has taught us anything, it is that at times, you must stand your ground and say, "No, I won't go." (applause) I am prepared to vote today, one way or another, on this resolution. But, in fact, it may be deferred. I recognize people are in favor of voting and of deferral. I do suggest that if, in fact, it is deferred, that each of you look favorably at Florida's 10B Resolution, which says more that it is deferred, it gives reasons. And there can be no doubt that our membership is confused. It has suffered an extreme whiplash. Why? It's obvious. A year ago, what were they told? We're going to fight them on the beaches. We're going to fight them house to house. We will never give up. This is the most important issue of our time. And then they're told, we are prepared to embrace MDP. We all agree we should have been studying this earlier. And reality is that it may be too little and too late to do anything, no matter what we do or when we do it. However, I urge you that whatever we decide to do, we align ourselves with other public interest groups and explain to the public, we, the ABA and those groups interested in the public's right to an ethical profession. That we explain in the clearest terms possible the adverse effects MDP can have on the independence of our profession and its ethical standards. I ask each of you to answer this question. How do you enforce the ethical standards of two different professions, with two different standards, when the same person is seamlessly wearing both hats? I urge this Association to immediately advocate, which is what we should do best, and inform the public about the paradigm shift that will occur in the public's right to expect and demand unwavering loyalty, free from any taint of self dealing or conflicts of interest, if in fact, MDP becomes a reality. I'd end by saying that reality is often what you believe it to be. And more important, what we decide to make it. Thank you, Mr. Chair. (applause)
ROBERT J. GREY, JR.: The Chair recognizes Steven Nelson, a member of the Commission from Minnesota, to speak in favor of 109. Mr. Nelson?
STEVEN CRAIG NELSON: Thank you, Mr. Chair, ladies and gentlemen of the House. It has been my privilege to serve for the last three years as the American Bar Association's representative to the Council of the International Bar Association. And the International Bar Association, as well as many of the bars around the world, have been totally preoccupied with the issue we discuss today. The reason they have been preoccupied is that MDPs are happening in a good deal of Europe and in other parts of the world, Australia, in Canada now, and so on. And the bar has been, as you can well imagine, quite concerned about dealing with that. And it's been said earlier today that they don't like it. Certainly it's true that they don't like it. But the reaction of the bars has been this is something that is not avoidable. We can't stop it. Governments will not support us in efforts to prevent that activity, because it's regarded as restrictive, unduly restrictive. What we need to do is regulate the lawyers who are involved in those businesses. And that is precisely the thrust of our recommendation to you. At the outset of our discussions, I had the same reaction that Carolyn Lamm has described, which is probably very close to what Larry Fox has said. I'm a great admirer of Larry Fox. I've enjoyed his rhetoric, he is a very skillful advocate. And my heart, in many ways, is with Larry's position. My head has wound up in a different place, as a result of a journey I have taken through some 60 hours of live testimony, including Larry's very able presentations. And through hundreds of pages of documentary submissions. I can't ignore what I have learned in that process. One of the things in which I firmly believe, and I'm a traditionalist and a conservative at heart, but I share the view that was once expressed by Edmond Burke, the great British political philosopher, that conservatism means being able to adjust the form as necessary, to preserve the lasting values. And it is on the lasting values that we have focused and that we have attempted to find ways to strengthen and preserve in the context of a situation that is changing in ways we cannot control. President Anderson asked us to consider only the interest of clients and the interest of the public in our deliberations. And that is what we did. This Commission consisted of a very tough minded group of lawyers, Judge Paul Friedman from the District of Columbia, Federal Judge. Justice Carl Bradford from Maine. A number of private practitioners of various firms. Academics with extremely strong credentials in the area of professional ethics. Very different perspectives, but we all had to be persuaded. We had to be persuaded there is a need. And we had to be persuaded that there is a way to protect the core values and still meet that need. And we were so persuaded and we acted unanimously. Some have said that our findings in certain areas have been supported. There is no evidence, they say, of this or that or the other. Well, I submit that if they want to take the time to go through all those pages of testimony, of submissions and the summaries of the testimony which are on the Commission's Web site, readily available, you will find there the evidence. Now, is it evidence of exactly how these things would work? Of course not. As the Association of the Bar of the City of New York has ably put it, you can't have concrete evidence that one thing or another will happen until you actually have the possibility for it to happen. And, of course, as of now, that can't happen. So we've had to draw inferences, like all good lawyers and judges have to do, from the circumstantial evidence that we have had. And the circumstantial evidence has told us several things. First, the Corporate Counsels Association that has just been referred to indicated there was an interest. There was an interest in having this service. Sure, they said it's important to resolve these difficult issues of ethics and so on. We think we've done that. But the interest is there. Now, they have since the report came out given us a further resolution, indicating concerns that our report is too restrictive. That it will prevent MDPs from really developing their full potential. And I think our answer is, we think we've gone as far as we can in the direction of MDPs, while protecting the values in which we all deeply believe. Is this report and recommendation perfect? No. Can it be improved? Absolutely. But I think, ladies and gentlemen, we are on the right track. Thank you very much. (applause)
ROBERT J. GREY, JR.: The Chair recognizes Ramón Mullerat from Spain, privileges of the floor, to speak in opposition to Report 109.
RAMÓN MULLERAT: Mr. Chairman, it is a great honor and privilege for me, as a Spanish lawyer and foreign lawyer in this country, to address this important assembly. I hope it will not be considered as an improper interference in the jurisdiction which is not my jurisdiction. But I can tell you that bearing in mind the leadership position of the American Bar Association, whatever the American Bar Association decides is going to have a global influence. And it will be very difficult for many smaller bars than yours to take a different position. That is why I believe that what we are discussing here today, what you are discussing here today is not a problem relating specifically to the United States, but it will have a global repercussion immediately. I would like to say that the situation in Europe is very diverse and there is a great concern among the bar leaders and among all the lawyers. The Council of the Bars and Law Societies of the European Community in 1993 declaration, made by unanimous vote of all the member states, banned the multidisciplinary practices because it considered that it could prejudice the legal profession and the interest of the public. At present, the 15 member states, all the national bars and local bars are taking very different positions. Some countries have accepted it. The majority of countries are against. Some countries have not decided yet, but are starting, like yourselves, the position. So the situation is very complex. There is a lot of different positions. But an extraordinary preoccupation, because everybody understands that this is the most important problem that the legal profession of the world is facing. I would like to say very briefly that the reasons that the CCB took to oppose multidisciplinary partnerships are the following. Number one, the European Bar said that it was very, very important to obtain all sorts of cooperations with all the professions. We lawyers, we need to cooperate with all the professions as much as possible. But one thing is to cooperate, and the other is enter into partnership and share fees and share secrets and share activities with other professions. The first reason was independence. We believe that the independence is the quintessence of the legal profession. It is not just a duty. It is the principle of principles of the profession. And most of the legal ethical rules derive from independence. There was an Italian jurist who said, "Only where the lawyers are independent, the judges can be impartial." The control of a firm of lawyers by non-lawyers will be contrary to independence of lawyers. The second reason was legal privilege. The attorney/client privilege is fundamental right and duty of the lawyers and it is one of the pillars of democracy. If a lawyer goes into partnership with an auditor with different duties, it is difficult for a client to give confidential information, because the lawyer will treat the confidential information as confidential, whereas the auditor has the obligation to denounce any irregularities. And people will rely on his report to make their investments. And finally, the conflict of interest. Lawyers and auditors need to be independent. But auditors need to be impartial, like judges. Auditors are the judges of the accounts. Whereas lawyers, we are advocates. We are lawyers of one party. We are partial. We are independent, but partial. So nobody would accept that a lawyer and a judge would go into partnership, because the lawyer is the advocate of one party, and the judge needs to be impartial. So the same incompatibility that we find in legal terms we would find between lawyers and auditors. We are worried that if the MDPs were approved, that could represent the split of the profession between commercial lawyers and individual law lawyers. And this is a big threat. And therefore, we believe in Europe that we need to preserve the essence of the profession, or as you say, the core values of this profession, in the interest of the public. Thank you very much. (applause)
ROBERT J. GREY, JR.: The Chair recognizes Jim Holden, Section of Taxation, from the District of Columbia, to speak in favor of 109. Mr. Holden.
JAMES P. HOLDEN: Mr. Chair, fellow delegates, I am a delegate from the Section of Taxation, which is proud to be a co-sponsor of Resolution Number 109. Some of you who listen to this debate might conclude that it's about non-lawyers. I submit that is not the case. This is a debate about lawyers. It is a debate about a particular subset of lawyers. Those are lawyers who are practicing today in firms, professional service firms, that are controlled by non-lawyers. They are practicing today and they will practice in even greater numbers tomorrow. This subset of lawyers is practicing law without regard to the standards of our profession. And you may say, "How do they get away with that?" They get away with that by simply saying, "We are not practicing law." A simple declarative sentence, "We are not practicing law." And you may ask, "How does that particular mantra excuse them from the standards of our profession?" And the answer to that is the fact that the Rules of Professional Responsibility do not contain a definition of the practice of law. Resolution 109 would correct that situation. It calls upon the organized bar to include a broad definition of the practice of law in the Rules of Professional Responsibility. It would say to this subset of lawyers that concerns us, "You are practicing law. And if you practice law, you must observe the standards of our profession." The standards that protect the core values of the profession, confidentiality, loyalty and independence of lawyer judgment. In addition to this direct message to this subset of lawyers, there is another message. And that is... (end of tape 2, side 2) ***...The thrust of 109 is therefore directed at lawyers, lawyers who practice in firms controlled by non-lawyers. It says you may not practice law in this fashion, unless you follow the standards of your profession. And it says you may not do this in a firm that's controlled by non-lawyers, unless that firm maintains an environment that is conducive to the preservation of those core values. Resolution 109 would not permit non-lawyers to practice law. It would not permit passive ownership of law firms. Resolution 109 does permit lawyers greater flexibility in establishing relationships with non-lawyers. It meets the stated desire of small firm lawyers to have that degree of flexibility. It would protect the core values of the profession as it does that. If the organized bar does not address this issue, others will address it. This practice of law is going on today. It will be larger tomorrow than it is today. The other forces will seek to assure that this situation continues and the bar will lose the opportunity to say, "We are going to impose our standards on those people who practice law, regardless of where they do so." We should address this question.
ROBERT J. GREY, JR.: Thank you. (applause) The Chair recognizes the Immediate Past President of the Association, Jerome Shestack from Pennsylvania, to speak in opposition to 109. Mr. President.
JEROME J. SHESTACK: Mr. Chair, members of the House, this is the first time I've had occasion to address this House since I had the honor of serving as your President. And I'm sorry it has to be an occasion when I oppose a report from a Commission who's members I highly respect. In the last few years, I felt very good about the ABA. I thought that we were getting away from issues that were non-germane and we were focusing on professionalism, ethics, competence, learning, civility, obligations to the justice system and pro bono service, values that our dear to our profession, and which reflect the honor of the calling of the law. This year, we're told that the most important issue in our decade, in our century is multidisciplinary practice. And what does that mean? Why is it the most important issue? More important than legal services. More important than racial diversity. More important than independence of the judges. I suspect if this report becomes our Model Rule, then most of you will be members of some multipractice accounting firm and those issues I just recited won't be important at all. Now, we know that in Spain an accounting firm acquired a law firm, and they did so in France. And that there's encroachment of accounting firms on unauthorized practice and they're hiring more and more lawyers. So what do we do? You say, "Well, we can't beat them. Let's legalize unauthorized practice of law," in fancy words. We can't beat them, so let's encourage them. Let's join them. And we're told that it won't hurt the values of our profession. Will it make our service better or more bottom line oriented? You know the answer to that. Will it mean that we will embrace our ethical standards better or that they will become more lax? Will it mean that independence will be preserved or that it will be abandoned and subject to some non-lawyer manager? Will it mean that conflicts will be shunned or that they will be circumvented? Will it mean that pro bono service is part of our tradition or that we will be apathetic to it? We are told that this will come and that we can't stop it. I'm reminded of the words of Solsonetsan, who once said, "It may be that there is evil in this world. It may even be that it will prevail. But let it not be with my complicity." I don't want to enter this next century known as those who have driven nails in the coffin of professionalism. Martha Barnett, in that brilliant speech this morning, talked of her aspirations for a century of justice. Century of justice indeed. Are we to be known as a century of one stop shopping? Are we to be known as a century of the demise of professionalism? It's a clever name, this multidisciplinary practice. A more appropriate name would be multi-laxity of discipline legal practice. That is not the legacy that I hope to take with my profession into the 20th Century. Thank you. (applause)
ROBERT J. GREY, JR.: The Chair recognizes Sheila Birnbaum, from the City New York City Bar. Miss Birnbaum.
SHEILA L. BIRNBAUM: Thank you. We all understand that the issue before us is a momentous one, both for the profession and the public. We all appear to have a very visceral reaction to this issue. But it is time for us to use both our hearts and our minds. The Association of the Bar has agreed in principle with many of the recommendations of the Commission. But they are going to ask this House to defer determining whether this should be voted up or down today. The state and local bar associations and other interested parties need sufficient time to consider and comment on these recommendations. The Commission acknowledged that detailed empirical data is not available. However, the Commission needs to gather more empirical evidence concerning MDPs. The New York State Bar Association is going to enter into a process in which it tries to gather some of this empirical evidence. The Commission should try to do the same thing. The Commission needs to explore the European experience in more depth, even though it has already explored it. I think we all agree in this room that the focus here should be on preserving the core values of the profession. These values we all know, the independence of the lawyer, loyalty to the client, avoidance of conflicts of interest, preserving clients' confidence and maintaining the independence of the judiciary, and providing pro bono work for the poor. Many of the concerns raised by the opponents are real. The legal profession, however, must find constructive and creative ways to deal with these issues. It will not go away. The ABA and the Commission must engage in a dialogue with its members, the state bar associations, the local bar associations, as well as those professional groups who may become part of these MDPs. If lawyers are to influence the debate, and they must influence the debate, the ABA must take a leading role. The work of the Commission must continue expeditiously, with considerable input from state and local bar association and other interested groups. Lawyers must and can find the solution to this complex, difficult issue. We cannot put our heads in the sand. Or what will happen to us is what happened to the doctors. All views, I believe, will be considered by the Commission, those pro and con again. And this is the beginning of the debate. But we must take the lead and we, the Association of the Bar, will ask you at some point to defer this for further study and a further report. Thank you. (applause)
ROBERT J. GREY, JR.: Thank you. The Chair recognizes Jack Dunbar, State Delegate from Mississippi, to speak in opposition to 109. Mr. Dunbar?
JACK DUNBAR: Thank you, Mr. Chair. I, too, do not support 109 for a number of reasons, most of which have already been addressed by other speakers. I won't repeat those in the interest of time. But I would like to share with you one thought. As Martha Barnett said this morning, lawyers are special people. We're not like accountants. We're not like MBAs and deal doers and investment bankers. We're fiduciaries. We're in the Constitution. We're officers of the court. And we hold in trust the very fabric of this society. It has been lawyers who have kept the playing fields level, who have kept people honest in the marketplace, and who have stood between the individual and the abuse of authority for 200 years, and contributed to the success of this great American experiment, its prosperity, and now the envy of the whole world. And so I get real, real nervous when somebody suggests that we blend this profession into a business unit as a profit center for a company controlled by non-lawyers. And I suggest this House should be nervous also. Not too many years ago, you and I in this House solemnly adopted Goal 11 of our mission statement. We took a vow at that time that we would maintain an independent legal profession, because we believed that it was fundamental to a free society. We were absolutely correct then. And we would be absolutely correct now to reaffirm that principle by rejecting this report. (applause)
ROBERT J. GREY, JR.: The Chair is of the opinion that the House has received full debate on this matter. (applause) We are close to the time for a special order. Before we get into the next round of discussion on this matter, I am going to call on the Chair of Rules and Calendar for a special order.
HARRIET E. MIERS: Mr. Chair, I move that we lay on the table the debate of Report 109 until such time as we have completed the special order at 11:30.
ROBERT J. GREY, JR.: It's been moved and seconded to delay 109 on the table. All in favor, say aye. Opposed, no. It's moved.
ROBERT J. GREY, JR.: Congratulations, President Paul. Ladies and gentlemen of the House, I'm going to ask your indulgence and for you to bear with me. Here's where we are. 109 is properly before the House again. We have only a few minutes before the hour of 12:00. We have a wonderful luncheon planned, with the Gavel Awards, the Honorable Griffin Bell is there. Many of you have tickets. Oh, I'm sorry. Judy Woodruff is the main speaker, my apologies, Mr. President. I'll get that right. And in deference to a very important affair of the Association, I want to make sure that we adjourn at 12:00 and that we reconvene at 2:00, to take up the important matter of this House in Report 109. What I'm going to do is ask you to allow me to continue with 109, with one additional speaker on each side, at which time I will make some administrative announcements. We will recess the House, adjourn the House for lunch, and reconvene at 2:00. There are a number of complex motions that the Chair has been offered in response to 109. There are negotiations that are going on among the parties with regard to 109. In deference to their hard work and in light of the fact that I don't want us to bifurcate this discussion and leave us in a quandary as to what exactly it is we did and didn't do, I'm going to ask you to allow me to take up all those motions after lunch. So 109, I recognize Esther Lardent, a Member of the Board of Governors from the District of Columbia, to speak in favor of 109. Governor Lardent?
ESTHER F.LARDENT: Thank you, Mr. Chairman. Members of the House, I'm in the unenviable position of standing between this House and lunch, so I will be brief. I rise in support of 109 because, to me, this is a vitally important issue, not just for lawyers, but for our clients and for access to justice. For all of my legal career and life in the law, I have worked to provide legal services for poor and moderate income persons, and to support pro bono services. It has been said that there is no indication that those clients and those individuals seeking assistance want any change in the way that we perform our work for them. I beg to differ. Several years ago, I led an effort of this Association to survey low and moderate income persons, to find out how they use the legal system and why, more importantly, they didn't use that system. What we discovered was shocking and disturbing. We found that 70 percent of low income persons with a critical problem that could be resolved in the legal system failed to use the system. We found that 60 percent of moderate income persons who had a vitally important problem also failed to use the system. We asked them why. Cost was certainly a factor. Lack of understanding that the law could help was a factor. But also was a factor was the fact that they didn't think that seeing a lawyer would help. Why not? We live in a complex environment, with complex problems. And I hope that we have sufficient humility to understand that our skills as lawyers are often only one aspect of that problem. In the world that I work in, the world of legal services, one of the most exciting developments is what Jamie Goreleck spoke of as holistic service. We are not working as lawyers, with doctors, with social workers, and other professionals because we recognize that addressing only the legal element of those clients' problems is not enough. We must work with our colleagues in other disciplines to address their problems. Change is difficult. And as lawyers, we are trained to distrust change. But I believe in the greatness of this House and in this profession. And I believe that we can address the needs of those clients. This is not simply a corporate Big Five issue. This is an issue of millions and millions and millions of people who need our help and are not currently taking advantage of it and receiving it. And I believe that we can do so while preserving the values of loyalty, confidentiality, independence, and yes, pro bono service. This report will be reviewed more closely. And as we do so, and as this House further debates, I know that we will in our work not simply talk about ourselves. As Larry Fox has said, not simply talk about fees. We will talk about the greater good of the public and the American people. Thank you. (applause)
ROBERT J. GREY, JR.: Thank you. The Chair recognizes Les Jacobs, State Delegate from Ohio. Mr. Jacobs?
LESLIE W. JACOBS: Mr. Chair, as I watched the Oklahoma delegation escorting Bill Paul down, I was straining to see if I could find Joe Stamper. (laughter) In Atlers, Oklahoma, they understand this problem. One of my responsibilities has been to supervise the Brussels, Belgium office of our firm. It consists entirely of Belgian lawyers. I can tell you from spending many hours there and with them that they and their colleagues around Europe all admire the American legal system. And they regret that they failed to follow our model more quickly. They would be the first to tell you, as you've already heard from one spokesman that Europe is not a desirable model, and it need not be a forecast of inevitability. The Commission's concept of a multidisciplinary practice envisions non-lawyer businesses offering legal services along with various types of pure commerce. It's true that accounting firms are doing that aggressively on the continent, effectively blending all forms of consulting. What we overlook too quickly is that the historic antecedents for European law are in marked contrast to our own. This is one of the explanations why the accelerated erosion of professionalism has occurred first in Europe. And it's a warning to us not to follow suit. Civil legal systems, which most of us have never studied at all, are fundamentally not founded on advocacy. More importantly, civil law systems are not entrusted exclusively to the bar. Instead, the responsibilities that lawyers in the United States have for the operation of our system of law are allocated among multiple professions in Europe. And there's never been a comparable concept to the unauthorized practice of law. In a typical European country, for example, outside the U.K., the formation of a corporation, conveyancing of real property, wills, many types of contracts, other legal transactions are delegated by law to notaries, not notary publics, as you are used to seeing, but a completely different form of quasi-government official who's responsibility it is to certify the legality and sufficiency of the documentation. A role that in this country is played by lawyers' opinion letters. Similarly, many of the functions of in house counsel are assigned by law to statutory auditors in civil countries. These are not accountants performing financial auditing, as we know it. Rather, they are people who play an independent role of assuring that the corporation is being organized and operated in accordance with law. Not only do these other categories of people perform their duties that are comparable to lawyers' duties in the United States, there is a long tradition of law firms offering accounting services in Europe. So it's no surprise that there has never been a prohibition on non-lawyers providing legal services, except for court appearances. That's in marked contrast to what we know as the independence of the bar. I have often thought to myself that lawyers represent clients in the legal system, but we also represent the legal system to clients. And that's the main difference. Clients are results oriented. I have never met a lawyer who is actually as bad as his client wants him to be. (laughter) The point of the independence of the bar is that we have a duty to resist those kinds of commercial urges, even resist them with our clients. A lawyer is not obligated to represent everyone. He should be selective. A lawyer cannot deceive a tribunal in order to get a result. A lawyer cannot contact the client of another lawyer, in order to get something done efficiently--.
ROBERT J. GREY, JR.: Thank you, Mr. Jacobs.
LESLIE W. JACOBS: Thank you. (applause)
ROBERT J. GREY, JR.: The Chair will advise the House that he is holding salmon slips in favor of 109 from Sharon Stevens, General Practice Solo and Small Firm Section from Oregon; Sheila Hollis from the Environmental Energy and Resources Section, of Washington, D.C.; Blake Tartt, these are in opposition to 109, Blake Tartt, State Delegate from Texas; John Berry, National Organization of Bar Council, Arizona; Gary Johnson, Illinois, privileges of the House; Tim Hopkins, State Delegate, Idaho; Tim Birchey, Illinois State Bar Delegate; Saul Wolf, New Jersey State Bar; Anthony Vittal, State Bar, California; Michael Prigoff, State Bar Association Delegate, New Jersey. (end of tape 3, side 1)
ROBERT J. GREY, JR.: Will the delegates please take their seats? Will the delegates please take their seats? Delegates, please take their seats. I would like to announce the election results for Delegate at Large before we resume the calendar. The winners of the Delegate at Large election, as you know, are the top six vote getters. The winners are Judy Perry Martinez. (applause) Christopher L. Griffin. (applause) Kenneth E. Young. (applause) George S. Fraza. (applause) Charles M. Thompson. (applause) And Estelle H. Rogers. (applause) If you recall, there was a special rule adopted with regard to Report 109. The House has heard, in the opinion of the Chair, a full debate. No motions were to be entertained until such time as the Chair of the Commission could be recognized for the purposes of a motion to defer. The Chair recognizes Sherwin Simmons, Chairman of the Commission of Multidisciplinary Practices, for the purpose of a motion.
SHERWIN P. SIMMONS: Thank you, Mr. Chair. I move that 109 be deferred indefinitely. Do I have a moment to say a word or two?
ROBERT J. GREY, JR.: Well, you do, if you would allow me a moment to clarify?
SHERWIN P. SIMMONS: Certainly.
ROBERT J. GREY, JR.: A motion to defer under our rules is not in order. The correct motion is a motion to postpone indefinitely. The reason that a motion to defer cannot be made is because we do not meet more than -- we meet longer than a quarter between our sessions. And under Roberts Rules of Order, if that is the case, then the only motion that will lie is a motion to postpone indefinitely. If you would correct your motion, the Chair will allow you to proceed.
SHERWIN P. SIMMONS: Be happy to. I move to postpone indefinitely.
ROBERT J. GREY, JR.: It's been moved and seconded that 109 be postponed indefinitely. Mr. Simmons?
SHERWIN P. SIMMONS: I do not propose to extend my remarks. I would simply say this. If this comes back to the Commission, which we will then go out and do everything we can to respond to what we've heard here, what we've heard before we got here, and what we will continue to hear in the future. We will send our representatives to as many bar associations that care to have us. We will have hearings. And we will come back to you and report. I had hoped it would be in February. That was aspirational. I'm now concerned that July may be aspirational. But we'll come back to you just as soon as we can. The other thing that concerns us is that the people who are pushing MDRs with lawyers haven't called a time out. If anything, they are rushing ahead. So there's no standstill while we talk. This is an important issue. But I think it ought to be deferred. Thank you. (applause)
ROBERT J. GREY, JR.: Thank you, Mr. Simmons. The Chair recognizes Ben Hill, a member of the Board of Governors from Florida, for the purposes of a motion. Governor Hill?
BENJAMIN H. HILL III: Thank you, Mr. Chair. I move on behalf of the Florida Delegation that we substitute for Resolution 109, Resolution 10-B, as 10-B has been amended. And if you all will please turn to 10-B, I'll describe the amendment to you in 10-B.
ROBERT J. GREY, JR.: It's been moved and seconded. Mr. Hill? Governor Hill?
BENJAMIN H. HILL III: The amendment to 10-B would strike the words on the third line which read, after the word until, "extensive and well reasoned analysis," and substitute for those words, the words "additional study." And if you'll permit me, then I'll read you the resolution. "Resolved that the American Bar Association make no change, addition or amendment to the Model Rules of Professional Conduct which permits a lawyer to offer legal services through a multidisciplinary practice, unless and until additional study demonstrates that such changes will further the public interest, without sacrificing or compromising lawyer independence and the legal profession's tradition of loyalty to clients." The purpose of this substitute motion is to respond to, I believe, each of the speakers, be they pro or con, on Resolution 109, that recognizes the existence of a perceived, at least, problem. And says that this body, that this House is making no change to our disciplinary rules, unless and until additional study. So the second part of this is until additional study. And by that, we contemplate that that study would not only include additional work from the Commission, but the study would include work to be done by bar associations, sections and any other identifiable entity within the ABA. And in the third part of this resolution, which we think accommodates all of the speakers, is that no change will be made until considering the public interest and no change will be made without sacrificing or compromising -- that will compromise or sacrifice lawyer independence and the legal profession's tradition of loyalty to clients. I submit to you that this resolution is consistent with those that have concerns about 109 on all sides. And that this House would do well to adopt this position. Thank you.
ROBERT J. GREY, JR.: Point of order. For what purpose does the delegate rise?
FROM THE FLOOR: To direct a question to Mr. Hill.
ROBERT J. GREY, JR.: Mr. Hill, would you entertain the question?
BENJAMIN H. HILL III: Yes.
FROM THE FLOOR: By whom would this study be made in your motion?
BENJAMIN H. HILL III: It is contemplated in this motion that this study would be made not only by the Commission, but by the various state bars and sections and every other entity that exists in this Association. It's not intended to limit it to a study only by the Commission.
FROM THE FLOOR: That's fine.
ROBERT J. GREY, JR.: Thank you, Governor Hill. The Chair recognizes A.P. Carlton, a Past Chair of this Association from North Carolina, for the purposes of a motion. Mr. Carlton?
ALFRED P. CARLTON, JR.: Thank you, Mr. Chair. Mr. Chair, fellow members, I rise to move a motion to refer or commit Report 109 to the Commission on Multidisciplinary Practice, with the specific directive that they continue to examine the issue of multidisciplinary practice and develop a report with recommendations for consideration by this House.
ROBERT J. GREY, JR.: It's been moved and seconded. Mr. Carlton?
ALFRED P. CARLTON, JR.: The motion, if I might speak to the procedural stance for a moment, the motion is to refer or commit because at this time, the report is on the House agenda, and therefore is the property of the House. And the motion to commit or refer would commit it and refer it back to the Commission. Mr. Chair, there's a delegate at microphone 7, I believe.
ROBERT J. GREY, JR.: For what purpose does the delegate rise at microphone 7?
LESLIE W. JACOBS: Les Jacobs, State Delegate from Ohio. Could we have a ruling from the Chair as to whether a motion to refer or commit is in order while there is a prior motion pending to amend?
ROBERT J. GREY, JR.: You may. It is in order.
ALFRED P. CARLTON, JR.: Thank you.
ROBERT J. GREY, JR.: It's the call of the Chair. You may proceed. You might refer to page 166 of Roberts Rules of Order.
LESLIE W. JACOBS: We're committing. The amended motion or the original?
ROBERT J. GREY, JR.: 109, Report Number 109.
LESLIE W. JACOBS: Without the amendment that's now pending?
ROBERT J. GREY, JR.: Yes. Mr. Carlton?
ALFRED P. CARLTON, JR.: Thank you, Mr. Chair. There's no need to throw the baby out with the bath water or put unnecessary restrictions on further study. I think this debate has had its purpose. It has informed us and it has informed the members of the Commission that they probably overshot the runway on their first attempt. But I think they want to continue and I think we want them to continue. I think they will consult as they go forward with the Standing Committee on Ethics and Professional Responsibility and Ethics 2000. Thus, the proposal we will look for will be a report with recommendations before this House at some future date. But, with no amendments to the rules, and a policy blueprint for us to follow as we go forward. So after letting them know what we think, let's let them deliberate some more. They are not restricted to who they listen to and none of the entities in this Association and none of the state and local bars are restricted from studying the matter, either. They, the Commission, are our informed experts. And we have an investment in them. We should ask them to take another shot at it. My motion would have the effect of accomplishing just that. And I solicit your support for the motion. Thank you very much. (applause)
ROBERT J. GREY, JR.: Thank you, Mr. Carlton. The Chair recognizes Ben Hill, a member of the Board of Governors from Florida, to speak in opposition. Governor Hill?
BENJAMIN H. HILL III: Mr. Chair, just very briefly, I would oppose, and I think Florida would oppose this motion to refer, so that we can vote on the motion which is on the screen. The big difference between the motion to refer and the motion that's on the screen is the motion to refer simply gives it back to the Commission for further study. What the motion on the screen does and what the motion to substitute does is it says and it announces to the world that there has been and will be no change to our rules. There has been no change. (applause) Secondly, it says it goes back for additional study. And the study that is contemplated is not just a study by the Commission, but it is a study by everybody in this room and every interested entity within the Bar Association. And third, it really defines the parameters of what I believe this body and our profession are concerned with. It simply states that we are concerned by what President Paul said this morning are the core values of our profession. And so it says, let's go back and let's study. Let's go back and if we need to make a change, let's make certain that the change that we make is a change that is consistent with the public interest and with the core values of our profession. I think the motion to refer doesn't go far enough. I would urge you to defeat the motion to defer and pass the resolution that's on the screen. Thank you. (applause)
ROBERT J. GREY, JR.: The Chair recognizes Barbara Mendel Mayden, representative of the Business Law Section from Tennessee, to speak in favor.
BARBARA MENDEL MAYDEN: Thank you, Mr. Chair. In the words of whatever movie that is that we all forgot, "The whole world is watching," or at least our profession is watching. And we must be very sure that the message that we send is that we are proceeding very, very carefully. We all recognize that this issue represents what could be a sea change for our profession. Prior to this meeting, the public heard a hew and cry from our state and local bars, an appropriate hew and cry, that this issue is too important to take on precipitously. And as my friend, Sheila Birnbaum, said this morning, procedures are being set up all over the country to hear from members of our profession, to hear from the public on this issue. Those concerned with whether the profession would compromise these core values urged caution, that we proceed with care. And we should proceed with care and demonstrate to the public and to our profession that we are not acting precipitously, pro or con. Thoughtful consideration, thoughtful debate. The motion on the screen has loaded words. Acceptance of this motion will demonstrate that we will proceed in a thoughtful, deliberative manner, in wording with baggage, without predetermined result. We should refer back to the Commission and give all other entities at the same time opportunity to reflect. Only in this way, when we reconvene in February to debate this issue again, will any result, pro or con, be greeted with credibility by our profession, which is watching. Thank you very much. (applause)
ROBERT J. GREY, JR.: The Chair recognizes Lawrence J. Fox, Pennsylvania Bar Association, to speak in opposition to the motion. Mr. Fox?
LAWRENCE J. FOX: I speak in opposition to this motion and in favor of the other motion that is on your screen. The loaded words and the baggage that you find on the screen are the words of our ethics code. They are the words of our principles. They are the baggage of our responsibility to our clients. They are our commitment to our independence. I think this House would not be in order and reflect its view if we did not pass a resolution today that made it quite clear that this House was not looking for a compromise of 5.4, or any of the other core values. Rather, we're looking for imagination to preserve those rules and figure out if we really need to come up with a new structure to deliver joint services, we can do so without economic intermingling. I urge you to defeat this motion and urge you to pass this next one.
ROBERT J. GREY, JR.: Question is called. All those in favor of calling the question, say aye. Opposed, no. The question has been called. I think we're going to do the electronic voting. I'll tell you. This is on the motion to commit. This is Mr. Carlton's motion to refer or to commit. All those who want to refer or to commit, press yes. Those opposed, press no. The delegates have voted. The voting is closed. Motion fails. (applause) We are back to the substitute motion. Question has been called. All in favor of calling the ques -- I have a -- the delegate at (laughter) microphone 8, for what purpose does the delegate rise?
FROM THE FLOOR: I had a question.
ROBERT J. GREY, JR.: Question.
FROM THE FLOOR: As I understand it, we have 10-B, which is proposed to replace 109?
ROBERT J. GREY, JR.: Correct.
FROM THE FLOOR: But I also note that we have 10-C, which in my view is a more balanced statement of what is intended in 10-B. How do we address 10-C? Should we vote down, you know, I guess the question is, if we vote down 10-B, and we go back to 109, do we then move to substitute 10-C for 109? That's the question.
ROBERT J. GREY, JR.: It's a good question. (laughter) Let me tell you what the order will be. We will vote -- the question has been called on 10-B. Depending on the outcome of 10-B, you will have an opportunity to make a decision of what you would like to do with regard to the next item, which is either another motion or we will be back to the motion to defer or to postpone indefinitely. So I think the question is a little premature right now, because we don't know the outcome of this particular vote. If the delegate would just hold on for a minute, we'll see where we are.
FROM THE FLOOR: Thank you.
ROBERT J. GREY, JR.: Quite welcome.
SETH ROSNER: Mr. Chair, Seth Rosner, Governor from New York. Point of inquiry of Governor Hill.
ROBERT J. GREY, JR.: Mr. Hill, would you entertain a question? Governor Hill? Point of information.
SETH ROSNER: If I am reading your revised recommendation correctly, there is no implication in that, that the Association's Commission need wait for its own recommendation back to this House until all of those entities have concluded their investigations, inquiries and recommendations. If that is so, it seems to me there is very little substantive difference between what Florida proposes and what the Commission's motion to postpone indefinitely is asking.
BENJAMIN H. HILL III: The intent of the motion was not to prescribe who goes first. The intent of the motion was to make a statement by this body for the three principles that I outlined, as I discussed the motion. That there has been no change. There will not be a change without further study. And the study can be among any group and that any change that comes back is going to recognize, as Larry Fox has said, the core values of the profession. And I believe that that makes a positive statement, whereas the motion of the Commission just simply says send it back for more study.
SETH ROSNER: I'm in agreement with that, but if I'm correct then, there is no need for the Commission to hold back on its own activities and report back to the House?
BENJAMIN H. HILL III: I think the Commission, like any other entity, can continue to study this matter before it comes back to the House.
SETH ROSNER: Thank you, sir.
ROBERT J. GREY, JR.: Question has been called. All in favor of the question, say aye. All opposed, no. The ayes have it. The vote will be on whether to -- no, I take that back. The right to close is with Governor Hill, if he chooses. He waives the right to close. All those in favor of substituting 10-B, press yes. Those opposed, press no. We're substituting 10-B for Report 109. All the delegates have voted. The voting is closed. 10-B is adopted. (applause) The substitution is in order, has been -- prevails. And now 10-B is before the House. I have a motion -- I have a salmon slip for a motion. Question, the gentleman, the delegate who asked the question about 10-C, is that resolved?
FROM THE FLOOR: I would like to make a motion--.
ROBERT J. GREY, JR.: Just a moment. Is the delegate who asked the question about 10-C? There he is.
FROM THE FLOOR: The short answer is yes. Reading the tea leaves, I don't see that C is going to prevail in a substitution with B. So I'm satisfied. Thank you.
ROBERT J. GREY, JR.: Quite welcome.
FROM THE FLOOR: I would move the substitution of 10-C for 10-B.
ROBERT J. GREY, JR.: Is there a second? It's been moved and seconded that 10-C be substituted for 10-B. Question has been called. In favor of the question, say aye. Opposed, no. Aye's have it. The question is whether the House will substitute 10-C for 10-B. All in favor of substituting 10-C for 10-B, vote yes. Those opposed, vote no. All delegates have voted. The voting is closed. Motion fails. (applause) The question before the House is whether to adopt 10-B. Question has been called. All in favor of calling the question, say aye. Opposed, no. Those in favor of adopting 10-B, press yes. Those opposed, press no. All delegates having voted, the voting is closed. 10-B is adopted. (applause) The Chairman of the Commission would like to make one announcement with regard to information about 10-B.
SHERWIN P. SIMMONS: We have been asked if there will be a transcript of the discussion this morning regarding the MDPs. There will be. There are two transcripts, in fact. There's one that's an official transcript that takes some time to get prepared. There will be a less formal transcript, less official transcript. That will be placed on our Web site just as soon as it can be prepared. So I encourage you to read it. We'd love to hear from you. Thank you very much. (applause)
ROBERT J. GREY, JR.: Ladies and gentlemen of the House, there are a number of other resolutions that are similar. You've heard of a substitution being made with regard to one. There are others that follow. I'm going to ask the proponents of their desire to waive any introduction of those to the House. If they choose to do so, they are welcome to do so. Let me take them in order. 10-C was moved as a substitute, but failed. But 10-C is still a recommendation before you. The proponent is Ed Kallgren, California State Delegate. Mr. Kallgren, what is your desire?
EDWARD E. KALLGREN: Thank you, Mr. Chair, I appreciate the able advocacy on behalf of our motion, which I agree was better worded than 10-B, but accomplishes the same thing. And in our--.
ROBERT J. GREY, JR.: Would you like to make a motion?
EDWARD E. KALLGREN: Therefore, we would like to withdraw 10-C for that reason. I call to the attention of everybody, the Commission, which has already seen it, and each of you has on your table the analysis of the Commission's recommendation, which is included with our materials. I think it's pertinent. It is preliminary and we will be doing more work on the matter. Thank you very much, Mr. Chair.
ROBERT J. GREY, JR.: Thank you, Mr. Kallgren. (applause) 10-C is withdrawn.