The Minnesota State Bar Association has asked the state Supreme Court to allow attorneys to partner with other professions such as accountants. Multi-disciplinary practices - MDPs - have been controversial. Critics have argued such partnerships would compromise the independence of the legal profession because they'd intermingle different codes of ethics. The request takes on even greater significance given the concern over Arthur Andersen's roles as both accountant and consultant at Enron.
The American Bar Association's House of Delegates voted in July 2000 against allowing lawyers to partner with other professions. The reason: among attorney's core values are independence of judgement, loyalty to the client and confidentiality; values that may not exist or exist to the same degree in other professions.
But the vote at the ABA's national meeting didn't carry much weight; many state bars - including Minnesota's - have asked their state supreme courts to change the rules allow lawyers to partner with other professions.
Steve Nelson, a former member of the ABA's commission on MDPs and a partner at Dorsey and Whitney in Minneapolis says such partnerships offer one-stop shopping for clients. He says that's particularly convenient for clients who live in smaller towns who can't afford big law firms or accounting firms.
He says Minnesota's plan also has built-in safeguards. "Minnesota has adopted... a proposal that would permit MDPs, subject to a requirement that lawyers control the firm and are able to control the giving of legal advice. By and large, they've accepted the rationale and need for MDPs as a means of delivering legal services particularly in the many rural areas that Minnesota has where these services are not as available as they should be," Nelson says.
The reason behind keeping attorneys separate from other professions was to keep non-lawyers from influencing clients on legal matters, according to Philadelphia attorney Lawrence Fox.
Fox, a former chairman of the ABA's Committee on Ethics and Professional Responsibility, is opposed to MDPs. Fox says questions about whether Arthur Andersen had a conflict of interest by serving both as an auditor and consultant to Enron shows why professions should work separately.
"I feel like exhibit A has now developed why we shouldn't be mixing professional firms and I think the public may now understand why the profession of public accounting and auditing should be independent from the firm where the work is being done. And it's my hope, that by analogy people will recognize why it's critical lawyers not be engaged in other enterprises," Fox says.
Lawyers owe their loyalty to their clients and must keep information confidential; certified public accountants generally owe their loyalty to the public.
Minneapolis CPA John Edson says as a result, MDPs aren't for every firm or every client. He says there's a big difference between the national accounting firms like Arthur Andersen, which may serve publicly-held companies like Enron, and Edson's local firm, which serves smaller privately-held businesses.
"Our clients are far more dependent on us. We spend a lot more time helping them gather the information to help them run their business. There's a big benefit to law firms and CPAs working together in estate planning area, corporate documents; there's no room for litigation services because of the issue of client confidentiality," says Edson. "But in the tax area, that doesn't exist in the same manner."
In its petition to the Minnesota Supreme Court, the state bar association says there's broad support in Minnesota for the concept of MDPs. It says such partnerships would expand opportunities to serve the interests of both clients and the legal profession. The Minnesota Supreme Court has not yet set a date for a public hearing or written comment on the issue of MDPs.More Information