Stephanie Sontag, President San Diego County Bar Association Re: Multidisciplinary Practice - Center for Professional Responsibility

May 12, 2000

Mr. Arthur Garwin, Staff Counsel
Commission on Multidisciplinary Practice
541 North Fairbanks Court
Chicago, IL 60611

Re: Multidisciplinary Practice

Dear Mr. Garwin:

On behalf of the San Diego County Bar Association ("the Association"), I respectfully submit the following response to the Commission’s most recent draft Recommendation related to Multidisciplinary Practice.

The position of this Association can be summarily stated. We endorse the Draft Recommendation, provided it is amended as set forth in the attachment to this letter. Before discussing our position, we address two preliminary matters.

First, this Association recognizes that the Commission has labored extraordinarily in its study of the issues presented by multidisciplinary practice. We are grateful for the efforts of each member of the Commission. Second, we note that the American Bar Association House of Delegates, in response to the Commission’s previous proposal, resolved that the Model Rules ought not to be changed to accommodate multidisciplinary practice "unless and until further 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." If the Draft Recommendation is put forward unaccompanied by such a demonstration, the House of Delegates justifiably might assert that the Commission has ignored its plain mandate. That aside, we have responded to the Draft Recommendation as written, and we have prepared additional provisions, the addition of which is needed to secure our endorsement of the proposal. Those additional provisions are enclosed.

We begin with Paragraph 2. To this Association’s way of thinking, there can be no change to the Model Rules of Professional Conduct which compromises public protection, or which in any way undermines the core values of the legal profession. The Commission has stated this as a given, and we do so as well.

Given that, Paragraph 1 becomes innocuous. If, pursuant to Paragraph 2, core values will not be compromised, then we see no reason to oppose Paragraph 1. We note, however, that reconciliation of Paragraphs 1 and 2 will not be easy. We await the Commission’s guidance in proposing how that might be done, and until a satisfactory method of reconciliation is set forth, we remain unconvinced that it is possible.

We agree to Paragraph 3 to the extent it merely recommends that both the letter and the spirit of the rules of professional responsibility should be enforced by the appropriate regulatory bodies. To eliminate confusion as to the intended meaning, we suggest that the word "existing" be changed to "applicable."

Paragraph 4 is acceptable as written. Any suggestion to the contrary would have condemned the proposal.

In this Association’s view, however, the Draft Recommendation must go a bit further. Accordingly, we respectfully submit additional provisions to be included within the recommendation that would be required before this Association would endorse its adoption by the House of Delegates.

First, we have added language (as our Paragraph 5) which brings more specificity to the regulation issue. Among our concerns is the importance of self-funding. We believe it makes sense for those choosing to engage in multidisciplinary practices, and perhaps indirectly, those seeking to avail themselves of one, to bear the financial burden of their regulation. While our proposal toward regulation is vague, consistent with the provisions of the Draft Recommendation, we expect that any Model Rule regarding regulation will incorporate the concepts of Paragraph 14 of the Commission’s Recommendation to the House of Delegates in the summer of 1999. 1

We also propose (as our Paragraph 6) requiring any modification of the Rules to apply a profession-by-profession approach to multidisciplinary practice. Our interests are two-fold. First, the introduction of multidisciplinary practice may well prove to be one of the most significant changes in the American practice of law in recent decades. There is little precedent to guide us, and regardless of the diligence with which we study the concept, the nature and extent of the consequences may only be surmised, at best. Indeed, insofar as multidisciplinary practice constitutes an experiment, it may fail entirely. Rather than open the floodgates, we believe an incremental approach is more appropriate tot he magnitude of the undertaking. Isolated mistakes are more readily mitigated than those of widespread ramification.

Second, more than a few professions have been suggested as desirable partners for combination with lawyers in a multidisciplinary practice. Because the roles, philosophies and ethical practices of those professions are different, the issues raised by their participation in a multidisciplinary practice are different. For example, it may be that the core values of the legal profession are more susceptible of preservation when a lawyer partners with an advocacy-flavored professional, such as a tax accountant or financial planner, than with an objectivity-flavored professional, such as an audit accountant or appraiser. Indeed, it may prove entirely impractical to design an ethically sound multidisciplinary practice that includes a member of

certain professions, even if their members meet the general definition of "nonlawyer professional." Rather than pursue a uniform rule, we believe it wiser to focus on the practical realities of implementation one profession at a time.

Please advise should you wish the Association to expand upon these issues. Otherwise, we thank you for the opportunity to take part in the drafting and adoption process on this important issue.

Very truly yours,

Stephanie Sontag, President
San Diego County Bar Association


1This Association will actually be looking to extend the reach of former Paragraph 14 beyond its stated reach, not only to MDPs "not controlled by lawyers," but to all MDPs.

The referenced paragraph, Paragraph 14 of the Commission's prior report, read as follows:

"As a condition of permitting a lawyer to engage in the practice of law in an MDP not controlled by lawyers, the MDP should be required to give the highest court with authority to regulate the legal profession in each jurisdiction in which the MDP is engaged in the delivery of legal services (the "court"), a written undertaking, signed by the chief executive officer (or similar official) and the board of directors (or similar body), that:

    (A) it will not directly or indirectly interfere with a lawyer's exercise of independent judgment on behalf of a client;

    (B) it will establish, maintain and enforce procedures designed to protect a lawyer's exercise of independent judgment on behalf of a client from interference by the MDP, any member of the MDP, or any person or entity controlled by the MDP;

    (C) it will establish, maintain and enforce procedures to protect a lawyer's professional obligation to segregate client funds:

    (D) the members of the MDP delivering or assisting in the delivery of legal services will abide by the rules of professional conduct;

    (E) it will respect the unique role of the lawyer in society as an officer of the legal system, a representative of clients and a public citizen having special responsibility for the administration of justice.  This undertaking should acknowledge that lawyers in any MDP have the same special obligations to render voluntary pro bono publico legal service as lawyers practicing solo or in law firms;

    (F) it will annually review the procedures established in subsection (B) and amend them as needed to ensure their effectiveness; and annually certify its compliance with subsections (A)-(F) and provide a copy of the certification to each lawyer in the MDP;

    (G) it will annually file a signed and verified copy of the certificate described in subsecution (F) with the court, along with relevant information about each lawyer who is a member of the MDP;

    (H) it will permit the court to review and conduct an administrative audit of the MDP, as each such authority deems appropriate, to determine and assure compliance with subsections (A)-(G); and

    (I) it will bear the cost of the administrative audit for MDPs described in subparagraph (H) through the payment of an annual certification fee."







[SDCBA Additions in Bold Print]

RESOLVED, that the American Bar Association amend the Model Rules of Professional Conduct consistent with the following principles:

1. Lawyer should be permitted to share fees and join with nonlawyer professionals in a practice that delivers both legal and nonlegal professional services (Multidisciplinary Practice), provided that the lawyers have the control and authority necessary to assure lawyer independence in the rendering of legal services. "Nonlawyer professionals" means members of recognized professions or other disciplines that are governed by ethical standards.

2. This Recommendation must be implemented in a manner that protects the public and preserves the core values of the legal profession, including competence, independence of professional judgment, protection of confidential client information, loyalty to the client through the avoidance of conflicts of interest, and pro; bono publico obligations.

3. To protect the public interest, regulatory authorities should enforce applicable rules and adopt such additional enforcement procedures as are needed to implement the principles identified in this Recommendation.

4. This Recommendation does not alter the prohibition on nonlawyers delivering legal services and the obligations of all lawyers to observe the rules of professional conduct. Nor does it authorize passive investment in a Multidisciplinary Practice.

5. Rules permitting Multidisciplinary Practices should be adopted which provide for self-funded regulation.

6. Before a lawyer joins a Multidisciplinary Practice with a member of any nonlawyer profession: (A) That lawyer’s regulatory authority should identify the ethical issues raised by that particular combination; (B) The rules of professional conduct governing legal practice should be modified as appropriate; and (C) The rules governing the ethical conduct of that nonlawyer profession should be modified as necessary for consistency with those of the legal profession.