Ready or not, here they come: Why the ABA should amend the model rules to accomodate multidisciplinary practices

Washington and Lee Law Review, Summer 2000 by Johnson, Bradley G

I. Introduction

However, large professional firms are not the only ones interested in MDPs.12 Small firm partnership possibilities include estate planning, financial planning, juvenile defense work, and family counseling.13

After the Commission on MDPs made its recommendation in June 1999, the accounting firm of Ernst & Young further focused national attention on the issue of MDPs by launching the Washington, D.C.-based law firm of McKee Nelson Ernst & Young.14 The creation of this new law-accounting firm was possible because the District of Columbia Bar Rules, which unlike the Model Rules of Professional Conduct, allow fee sharing between lawyers and nonlawyers as long as the sole purpose of the entity is to provide legal services.15 Washington, D.C. is currently the only jurisdiction in the United States that allows lawyers to enter into MDPs.16

the ABA, the House of Delegates debated the Commission on MDPs' new recommendation and adopted a recommendation urging each jurisdiction to maintain the prohibition on partnerships and fee sharing between lawyers and nonlawyers.23 The House of Delegates also dissolved the Commission on MDPs.24 However, the ABA's refusal to amend the Model Rules does not resolve the controversy surrounding MDPs. "This profoundly anti-experimental stance may only encourage MDP supporters to leave the fractious ABA on the sidelines while they pursue legalization elsewhere."25

recounts attempts by two jurisdictions to reject the traditional prohibition on MDPs.29 Parts IV and V examine the traditional arguments for and against maintaining the prohibition on MDPs.30 Part VI describes the Commission on MDPs' original recommendation to the ABA House of Delegates.31 Part VII analyzes the Commission on MDPs' original recommendation in light of the traditional arguments against MDPs and recommends a number of changes to the Model Rules to accommodate MDPs and protect the "core values" of the legal profession.32 Finally, Part VIII concludes that the ABA should make the recommended changes to the Model Rules in order to provide state bar associations with some guidance.33

II. History and Development of the Prohibition on MDPs

business consists of the practice of law."37 However, even at this early point, there were strong objections to the new canons prohibiting MDPs.38 Despite these objections to the new canons, the ABA Committee on Professional Ethics and Grievances consistently interpreted Canons 33, 34, and 35 to prohibit "any business association between lawyers and nonlawyers that offered legal services."39

In 1977, the ABA established the Commission on the Evaluation of Professional Standards to consider the rules governing the practice of law and to recommend any necessary changes.45 This commission became known as the Kutak Commission, named after its chairman, Robert J. Kutak.46 The Kutak Commission rejected the view espoused in the Canons of Professional Ethics and the Model Code that the ABA should prohibit lawyers from entering into partnerships with nonlawyers.47 The Kutak Commission attacked various bases for the traditional prohibition on partnerships between lawyers and nonlawyers, including the belief that these partnerships impede professional judgment and invite the unauthorized practice of law.

Kutak Commission's position argued that large companies like Sears and Montgomery Ward would drive many traditional law firms out of business and that nonlawyer influence on lawyers would impede lawyers' professional judgment.50 Opponents also were concerned that nonlawyer influence would force lawyers to compromise professionalism to achieve economic goals and that the proposal would have an uncertain effect on the legal profession in general.51 These objections prevailed, and the House of Delegates passed a version of Rule 5.4(a) that expressed the Model Rules' prohibition against MDPS.52

lawyer who is not a client of the lawyer may not control or interfere with the professional judgment of the lawyer.57 Finally, Rule 5.4(d) lists situations in which the Model Rules prohibit a lawyer from forming a professional corporation or association for the purpose of practicing law.58 Thus, Model Rule 5.4 preserves the prohibition against partnerships between lawyers and nonlawyers that was seen first in Canons 33, 34, and 35 ofthe Canons of Professional Ethics59 and continued in the Model Code.60

The majority of states have adopted the Model Rules, either in their entirety or in significant part.61 Additionally, many of the states that have not adopted the Model Rules have adopted modified versions of the Model Code.62 In fact, all United States jurisdictions, with the exception of the District of Columbia, have adopted ethical guidelines that are consistent with the ABA's prohibition against MDPs.63

III. Jurisdictional Attempts to Reject the Traditional Prohibition Against MPs

to enter into MDPs.64 The District of Columbia successfully amended its bar rules to allow the formation of MDPs, but only whr the sole purpose of the MDP is to provide legal services.63 North Dakota also considered amending its ethical regulations to allow partnerships between lawyers and nonlawyers.66 However, the North Dakota Supreme Court balked at the proposed change.67