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The All-Purpose Bar
By Elizabeth Stawicki
July 6, 1999
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Attorneys have long touted a code of ethics they say rises above other professions such as accounting or banking. That code includes a rule that bans them from entering into partnerships with other professions.

But now a commission of the American Bar Association wants to scrap that century-old rule; an action some critics say strikes at the very heart of the legal profession's independence.

RIGHT NOW THE ONLY PEOPLE that own law firms are lawyers. But under the Bar's proposal, non-lawyer professionals including accountants and financial planners could acquire law practices by bringing lawyers into their partnerships.

That scares Larry Fox of Philadelphia's Drinker, Biddle and Reath. He's also former chair of the American Bar Association's Committee on Ethics and Professional Responsibility. Fox says the reason behind the rule is to protect clients from influence on legal matters from non-lawyers.

For More Information
See the ABA's background paper.

Read the ABA's full report to its delegates on the subject.
Fox: The profession is a little bit like the priesthood and there are obligations that are placed on lawyers. We've got pro-bono responsibility to provide services for the indigent, we've got obligations of confidentiality that are unique, we've got an attorney client privilege that's right up there with the priest penitent privilege, we've got duties of loyalty to our clients that are extremely important and almost sacred.
But Steve Nelson, an attorney at Minneapolis' Dorsey and Whitney and a member of the ABA's Commission on Multidisciplinary Practice says there are safeguards built into the rule change that would protect clients. He says the profession needs to change with the times offer clients more options.
Nelson: The fact is: life has gotten more complicated, law has gotten more intertwined with other disciplines. And there's no question that the intellectual premise that the world is more interdisciplinary is a correct one. And it is also clear that people in many cases do prefer to have someone who can provide a complete service as opposed to saying here's the legal answer to your question but you'll have to ask someone else how to value this business.
The most interest in partnering with lawyers comes from accountants. The so-called big five international accounting firms are looking to acquire law firms in order to offer one-stop shopping for their clients. Greg Swinehart of Deloitte and Touche, believes some clients would save money if accountants and lawyers worked together.
Swinehart: Let's assume you're a large multi-national company based in the Twin Cities whether that be 3M or Honeywell or Cargill. They have operations all over the world and to the extent that they can go to one service provider for a broad array of services, that reduces the transaction costs for them, reduces the number of communications that have to occur. Our profession and the other big 5 have worked hard to provide global seamless service to our multi-national clients. I believe that the legal profession could benefit from that as well.
The Bar Commission's report said a lawyer working with a non-lawyer would remain bound by rules of professional conduct - particularly those of confidentiality and loyalty. But Attorney Larry Fox is not swayed.
Fox: Money is power and if all the lawyers end up working for non-lawyers and if the law business becomes just another profit center in a practice that includes accounting, investments and insurance, the power will reside in the people who run the enterprise regardless of what rules we have and those people will be running enterprises are not schooled in, not sensitive to or not responsible for our rules.
Georgetown legal scholar David Luban says attorneys will lose their uniqueness under the proposed rule change.
Luban: This is a major change in the practice of the way can be organized because the distinctiveness of lawyers against CPA's, against tax accountants, against bankers, financial advisors, it begins to be lost. They become all-purpose business transaction engineers.
Dudley Ryan, who's a CPA in St Paul and also an attorney, says the business landscape is rapidly changing. He predicts the professional services industry and law will soon look like one big entity.
Ryan: If you look at American Express, Larson and Weisher - who I work for - or a law firm, we're going to look a lot alike in the end. And I think it's going to be harder to differentiate who does what because we're all going to be competitors. To the extent that the entities providing the services become larger, I think the personal customization could be lost for the individual consumer. At the same time, what we've found and what the studies show is that consumers would rather one-stop shop than go to a lot of different places to fulfill their needs.
Switzerland is the only country that permits such partnerships. Many foreign countries have similar rules against lawyers sharing fees with non-lawyers but those rules are often skirted. The U.K. is considering lifting its ban officially. UCLA law professor Richard Abel.
Abel: These developments are occurring throughout much of the advanced capitalist world. There are striking exceptions which is Japan which has a very different legal system, very different legal profession, but throughout western Europe and the Anglophone world I expect these developments to occur very rapidly.
Delegates to the A.B.A. convention vote on the proposed rule change in August. But the Bar can only make a recommendation. Even though that recommendation carries weight, each state supreme court must make the final decision. The head of the Minnesota Bar says he'll convene a group to study the issue in early September.