October 05, 2011

Michael L. Prigoff Re: ABA Commission on Multidisciplinary Practice - Center for Professional Responsibility


January 24, 2000

Arthur Garwin, Esq.
Center for Professional Responsibility
American Bar Association
541 North Fairbanks Court
Chicago, IL 60611-3314

Re:  ABA Commission on Multidisciplinary Practice

Dear Mr. Garwin:

Please consider this letter as comments in response to the Commission's Updated Background and Informational Report and Request for Comments posted as of December 15, 1999 ("Updated Report").

Although there is much with which I take issue in the Updated Report, I am unable to take the time at present to detail all of my concerns.  However, I do wish to comment briefly on that portion of the Updated Report that deals with professional Independence.  The Commission writes:

"The most common concern expressed about MDPs is that working in such a practice setting will inevitably lead to the erosion of a lawyer's professional independence.  This concern is highly selective, however.   It ignores other practice settings in which the problem is more frequent and may be more severe.  Among these settings are full time employment by a single client (e.g., in-house corporate counsel, lawyers employed by a union providing services organization under the direction of a nonlawyer board), employment an an associate under the direction of a nonlawyer board), employment as an associate under the direction of a partner (see Rule 5.2, allowing a subordinate lawyer to take direction from a supervisory lawyer regarding difficult ethical issues), and membership in a partnership in which difficult ethical  issues are frequently resolved by a managing partner or an executive committee and in which compensation is dependent on billings (e.g., whether to take a new matter in the face of a possible conflict of interest or to disclose alleged client fraud)."

I do not agree that the "problem" is either more prevalent or more severe in these contexts than it is in MDPs.  In fact, there are a number of factors that distinguish these contexts and make them less likely to interfere with professional independence than is the case with MDPs.  I will discuss each of the situations seriatim.

In-house counsel:

While employed by a single client, these lawyers have no divided loyalty.  All of their work is for the benefit of their employer.  Moreover, if there is any weakening of professional independence ( i.e., by virtue of  lawyers being unwilling to tell the client what it doesn't want to hear), any adverse effect is limited to that client, generally sophisticated enough to protect itself from that eventuality ( e.g., by bringing in outside counsel to review in-house staff).

Union-hired lawyers:

While lawyers hired by a union are often representing many individual clients, they (like in-house counsel) are subject to the RPCs which govern representation of an entity and employees/members of that entity.   Accordingly, there should not occur situations where such lawyers are engaged to perform legal services where the interests of their individual clients conflict with the union that employs them.

Legal services lawyers:

While such lawyers work for organizations run by boards of directors which may include non-lawyers, those non-lawyers are, for the most part, representatives of the client population of the organization.  Moreover, the lawyers in such organizations are all directly supervised by other lawyers, not by non-lawyers, and the chances for client conflicts, given the nature of the type of work engaged in, is exceedingly small.

Subordinate lawyer in law firm

Lawyer in parnership:

In both of these situations, the subordinate lawyer who receives direction from a partner or other lawyer in the firm, or the lawyer who receives direction from a committee of a law firm, are each part of a "team" of lawyers in their resprective firms, all of whom are responsible to comply with, and who can be disciplined for violation of, the RPCs.  In sum, there is virtually no difference between this situation and that of a sole practitioner who is faced with clients with competing interests and who has to decline some engagements in order to maintain professional independence, or who has to decide to disclose client fraud and risk jeopardizing a lucrative relationship.

The essential difference between each of these situations and that of an MPD controlled by non-lawyers is that in the latter situation legal clients of the MDP can be prejudiced by having the professional independence of their lawyers limited by the concerns of non-lawyers, or by those of other legal and non-legal clients of the MDP, i.e., by persons who are not neither specifically trained in legal ehtics nor subject to the extensive regulation of such matters by RPCs.

It does not particularly concern me if General Motors or some other corporation compromises the professional independence of its own in-house lawyers, even to the point that it does not receive the independent advice that it should.  If it does, it is getting what it deserves, and readily has the means to protect itself from such an eventuality.  However, if a legal client of an MDP does not receive independent advice because its interests are adverse to a larger non-legal client of the MDP and the non-lawyers who control the MDP improperly direct the MDP-employed lawyer's exercise of judgement, as I believe is likely to occur on a frequent basis, then the threat to the public is very real.  Moreover, under the Commission's original proposal, as I understand it, there was no effective regulation of the individual non-lawyers involved in such restrictions on professional independence, nor would there be any effective regulation of the MDP entity involved, provided that it pledged that such restrictions would not occur. 1

Given these factors, I believe that there exists good reason to maintain the current distinctions contained in RPC 5.4 and related rules.

I appreciate the Commission's consideration of these views.

Very truly yours,

Michael L. Prigoff


1We should all keep in mind that these "pledges" would be made by many of the same firms that presently are facilitating (and attempting to disguise) the ongoing violations of RPC 5.4 by their lawyer-employees.