Oral Testimony of Elisabet Fura-Sandström,
president of the Swedish Bar Association
Before the American Bar Association
Commission on Multidisciplinary Practice
August 8, 1999
The next speaker was the president of the Swedish Bar Association, Elisabet Fura-Sandström, a partner in a Stockholm law firm. The Swedish Bar represents 3,400 Swedish lawyers. Ms. Fura-Sandström is also head of the Swedish delegation to the CCBE (Council of the Bars of the European Union), former president of the International Association of Young Lawyers, a member of the supervisory board of accountants in Sweden, and a member of the ABA. (She is also an honorary member of the ABA Young Lawyers Division, as she understands one never loses this membership.)
She first addressed concerns regarding the Report and then presented her experience in Sweden on the issue. She thought the Report was comprehensive, and very ambitious and impressive considering the short time the Commission had. She said she was in a fairly good position to judge because she has served on the CCBE committee for MDPs for a couple of years and has taken a particular interest in the issue as a member of both the boards of the Swedish Bar and of the Supervisory Board of Accountants (the government agency for accountants). She has studied the MDP reports and position papers from the CCBE, the IBA, the UIA, the Law Society of England and Wales and the Danish Bar Associations. The one feature these papers all have in common is that they focus on and describe the lawyers perspective. Although other professions have been mentioned, all reports talk about accountants, and she said the accountants are very active and have been good lobbyists. In Europe the accountants have been working nationally and globally through their federation and have positioned themselves very well before the WTO negotiations. In Sweden a parliamentary committee has recently proposed new legislation for accountants that allows auditors to engage in a much wider range of commercial activities than is admitted today. It would take away, from the accountants point of view, most obstacles to enter into MDPs with lawyers or other professionals. The legislation suggests use of Chinese walls. The European Commissions preliminary view on the issue is extremely cautious and non-committal in its wording. Several competition authorities in Europe have shown an interest in the MDP issue. There has been at least one court case, initiated in the Netherlands, where the competition authority has sued the Bar claiming that the ethical rules imposed on lawyers are stopping them from sharing profits with others, an obstacle to free competition and a violation of the Rome Treaty. She suggested that colleagues of the Dutch Bar Association might speak about the court case later. Its being followed closely by the entire legal community in Europe. Since the judicial result will have an impact all over Europe, the CCBE was considering entering into the proceedings.
She presented her concerns regarding the Report in the form of questions. Where are the clients? What do the clients think? Will the creation of MDPs be beneficial for them? Will the MDPs provide better services at lower prices? Who speaks for the client, potential clients and existing clients? Are the 56 witnesses who appeared before the Commission really representative? How were they chosen? What is the reaction of the judges to the Commissions proposal that gives them a new role, if she understands it correctly, of supervisors of the MDPs? Are the courts competent to perform this role? Will the courts be provided with the necessary resources, human and financial? Its suggested that the certification fee will provide the financing, but has the Commission tried to estimate the costs? In her opinion the support of the courts will be essential to making the proposed system work. What if the courts refuse? That is, how will the system work in real life?
She then spoke of the Swedish experience. The Swedish Bar Association has taken a very firm stand against MDPs. In September 1997 five members of the Bar informed the Board of the Bar that they had entered into a partnership with accountants and created a new firm. This prompted a quick reaction from the Board that stated it had no intention of allowing corporations to jeopardize the independence of a lawyer or create such a perception. Further, they found that the choice of denomination of the new firm, KPMG Valin Law Firm Inc., was detrimental to the legal profession as it set aside the essential principle of independence. After reviewing the agreement between the parties, the Board found that the lawyers had put themselves in such a position of dependence that, if the corporation were to continue without alterations or modifications, the lawyers could not remain members of the Bar. She noted the important difference between the U.S. and Swedish lawyer licensure systems, as there is no monopoly for lawyers in Sweden (anyone is allowed to practice law) and there is no such thing as the unauthorized practice of law. However, membership of the Swedish Bar Association is compulsory for anyone who holds him or herself out as an advocate or attorney at law. The Swedish lawyers ended the matter by deciding to terminate their corporation with the auditors. She assured the Commission that the decision of the Board was widely debated and criticized both within the profession and outside. She concluded by asking the rhetorical question, What does she think about MDPs? She thought she could answer by quoting Groucho Marx, who when asked what he thought about sex said, I think it is definitely here to stay. She thinks the same thing about MDPs. This is her personal opinion, not necessarily reflecting that of the Swedish Bar. The situation develops very quickly and it is crucial, at the moment, that lawyers monitor this evolution. Lawyers mustnt leave the door open to various initiatives by other regulatory bodies, competitors, or government agencies. Time is of the essence.