October 05, 2011

Summary of the Testimony of James R. Silkenat - Center for Professional Responsibility

Summary of the Testimony of James R. Silkenat

Before the Multidisciplinary Practice Commission

James R. Silkenat, Chair of the Task Force on International Legal Services of the Association of the Bar of the City of New York, reported on the June 1988 conference sponsored by the Ordre des Avocats a la Cour de Paris and the Association of the Bar of the City of New York on Multidisciplinary Legal Practice: Opportunities and Challenges for the Future. He welcomed the Commission’s non-adversarial view of the MDP issue and its client protection orientation. He thinks that the same set of ethical rules should apply to all persons delivering legal services, whether as employees of law firms, accounting firms or companies. The question of when one is "practicing law" is material and the question of whether other ethical rules would work better should also be asked. He thinks financial relationship is the right test to use in examining the relationship between a lawyer and the larger institution of which he or she is a part, since ownership criteria are too easy to get around.

Questioned regarding the problems with MDPs, Mr. Silkenat responded that it is too early to tell but that they have been successful financially in France. The law firms affiliated with accounting firms in Paris have been queried regarding confidentiality and how management deals with conflict issues. Regarding the demand for one-stop shopping, he said that most sophisticated general counsels in large corporations would say that they would pick and choose the people they want to handle various aspects of matters, but over time they are likely to consider and try a one-stop approach. He can’t imagine that the audit function in multidisciplinary firms will be segregated into a separate entity, since the firm will not unbundle tasks. Mr. Wander was told that whether there is potential for growth in MDPs would be determined by what happens in the U.S., where such firms have already arguably nibbled at the edges of the ethics rules in regard to the confidentiality issue for tax advice. Ms. Katz was told that accountants seem ready to discuss the issue of whether ethics rules matter. Judge Friedman was told that lawyers and accountants would probably be unable to agree on ‘core values’ since they frequently have divergent interests. Professor Haddon asked what should be the Commission’s concerns regarding protection of client interests and Mr. Silkenat responded: 1) ease of administration, 2) assurances that client interests are argued forcefully and effectively in lawsuits and negotiation of business transactions, and 3) cost.