Big Six Accounting Firms Shop Worldwide for Law Firms: Why Multi-Discipline Practices Should Be Permitted In The United States
Fordham International Law Journal
Copyright c 1997 by the authors. Fordham International Law Journal is produced by The
Berkeley Electronic Press (bepress). http://ir.lawnet.fordham.edu/ilj
Big Six Accounting Firms Shop Worldwide for
Law Firms: Why Multi-Discipline Practices
Should Be Permitted In The United States
This Note explores the controversy surrounding MDPs. Part I surveys the legal activities of
the Big Six accounting firms. Part I then analyzes the current U.S. ethics rules governing law firm
ownership, examines proposed U.S. ethics rules that were never adopted, and discusses other U.S.
ethics rules related to the practice of MDPs. In addition, Part I studies England’s treatment of law
firm ownership and MDPs. Finally, Part I offers other reasons for the restrictive rules governing
law firm ownership. Part II investigates the arguments in favor of and against MDPs. Part III
argues that the current ethics rules permit lawyers to face problems similar to those encountered
by lawyers practicing in MDPs. This Note concludes that MDPs should be permitted in the United
BIG SIX ACCOUNTING FIRMS SHOP WORLDWIDE FOR
LAW FIRMS: WHY MULTI-DISCIPLINE PRACTICES
SHOULD BE PERMITTED IN THE
I don't like the idea of fighting the accountants at the rules
barricades. We should match them - and best them - with
service, quality, and performance, and not by throwing a lot
of monopolistic "professional" rules at them to squelch
innovation and evolution .... So let's give credit where credit is
due. It sounds like the bean counters are outcompeting us
and outinnovating us. Let's look for lessons, and see what we
can learn. 1
In recent years, the Big Six 2 accounting firms ("Big Six")
have moved into the legal services market by establishing,
acquiring, or forming ties with law firms around the world.3 In
coun* J.D. Candidate, 1998, Fordham University. The author would like to thank
Professor Mary C. Daly for her contribution.
1. See The Big Six Horns In, AM. LAw., Dec. 1996, at 36 (quoting partner with
U.S.based law firm Lucash, Gesmer & Updegrove discussing how large law firms can
compete with Big Six accounting firms).
2. See The 1997 Accounting Today Top 100 Tax and Accounting Firms, ACCT. TODAY,
Mar. 17-Apr. 6, 1997, at 25 (demonstrating that Big Six refers to six accounting firms
with highest revenues per year). The Big Six accounting firms are Arthur Andersen
L.L.P. ("Andersen"), Coopers & Lybrand L.L.P. ("Coopers"), Deloitte & Touche L.L.P.
("Deloitte & Touche"), Ernst & Young L.L.P. ("Ernst & Young"), KPMG Peat Marwick
L.L.P. ("KPMG"), and Price Waterhouse L.L.P. ("Price Waterhouse"). Id. The Big Six,
however, may soon be reduced to the Big Four: on September 18, 1997 Coopers and
Price Waterhouse announced that they plan to merge following approval by the firms'
partners. See Elizabeth MacDonald & Joann S. Lublin, Coopers and Price Waterhouse to
Merge: Biggest Accounting Firm to Result, But PartnersMay Not Go Along, WALL ST. J.,Sept.
19, 1997, at A3 (discussing Coopers-Price Waterhouse proposed merger). Ernst &
Young and KPMG also recently announced that they will merge if approved by the
firms' partners. See Elizabeth MacDonald, Ernst & Young To Merge with KPMG: Deal Seals
Transformationof Accounting Industry Into One-Stop Providers,WALL ST. J.,Oct. 20, 1997, at
A3 (discussing Ernst & Young-KPMG proposed merger).
3. See John E. Morris, London Bracesfor the Big Six Invasion, AM. LAw., Dec. 1996, at
5 (noting that Big Six firms have "assaulted" legal markets in Europe and in rest of
world). Among other locations, Price Waterhouse operates a law firm in the United
Kingdom and has a network of associated law firms in Europe. See Hooman Bassirian,
Dutch Court Blocks Big Six MDP Plans as Coopers Falters, AccT. AGE, Feb. 20, 1997, at 2
(explaining Price Waterhouse "operates" law firm in United Kingdom); Chris Klein,
tries4 that prohibit multi-discipline practices5 ("MDPs"), the Big
Six have been successful in developing legal practices by
entering into cooperation agreements and alliances with and forming
networks of' law firms to circumvent the restriction.6 In some
countries7 accounting firms dominate the, legal practice,' while
in other countries9 accounting firms must focus their legal work
in the tax area because local bar associations place
insurmountable restrictions on the practice of law by accounting firms and
other organizations owned by nonlawyers.1 ° Overall, the Big
6. See, e.g.E,mily Barker, More AccountingFirmsEye The UK. Legal Market, Am.LAW.,
Apr. 1996, at 13 (discussing Price Waterhouse's relationship with associated law firm in
England); Bassirian, supra note 3, at 2 (explaining Andersen "operates" law firm in
England and Andersen reached agreement with Amsterdam bar association to open law
firm in Netherlands); Deloitte & Touche In Deal, supra note 3 (noting Deloitte & Touche
formed close alliance with Dutch law firm); Larry Smith, One Stop Shopping to the Nth
Degree... Toronto the Latest Tell Tale Sign of Big-6 Legal Ambitions, COUNSEL, July 7, 1997,
at 2, 3 [hereinafter Smith, One Stop Shopping] (noting that Canadian law firm recently
entered into close arrangement with Ernst & Young).
7. See Klein, supra note 3, at Al (revealing that particularly in France and Spain
accounting firms dominate legal realm). For example, in Spain, where MDPs are not
prohibited, five of the top ten law firms in revenues for 1996 were Big Six's legal arms.
SeeJavier Sans Roig, Spain, in LAw WITHOUT FRONTIERS, supranote 4, at 125, 139
(examining Spanish rules governing MDPs); Ferguson, supra note 3, at 38, 39 (analyzing
Spanish law firms' 1996 revenues). In France, where MDPs also are permitted, the
largest law firm is a Big Six firm's tax and legal division. SeeJacques Buhart, France, in
LAw WITHOUT FRONTIERS, supra note 4, at 74, 80 (discussing French regulations
governing MDPs); Dillon & Griffiths, supranote 3, at 26 (revealing that KPMG's legal and
tax division in France is country's largest law firm according to firm's public relations
8. See Klein, supranote 3, at Al (describing accounting firms' activities in France
and Spain). In France, in 1996 six of the ten largest law firms were law departments of
accounting firms. See id. Andersen boasts that through its affiliated law firms, it is the
largest legal services provider on the European continent. See Morris, supra note 3, at 5.
9. See, e.g.S,mith, One Stop Shopping, supranote 6, at 3 (explaining in United States
MDPs are not permitted).
10. See Klein, supra note 3, at Al (explaining accounting firms' legal work mainly
focuses on tax law because local bar associations restrict accounting firms' law
activities); see, e.g.S,mith, One Stop Shopping, supra note 6, at 3 (explaining in United States
accounting firms cannot practice law or own law firms because MDPs are generally
prohibited). In the United States, the Agency Practice Act of 1965 ("Agency Practice
Act") permits nonlawyers to engage in tax practice so long as they are qualified as
certified public accountants ("CPA"). See Agency Practice Act of 1965, 5 U.S.C. § 500(c);
(1997) (stating that "[a]n individual who is duly qualified to practice as a certified
public accountant ...may represent a person before the Internal Revenue Service of the
Treasury Department."); see also Levinson, supra note 5, at 240 & n.19 (examining
Agency Practice Act). In addition, the Agency Practice Act authorizes government
agencies to permit nonlawyers to practice before them. See 5 U.S.C. § 500(d) (1)
(stating that "[t]his section does not ... grant or deny to an individual . . . the right to
appear for or represent a person before an agency or in an agency proceeding.");
Levinson, supra, at 240 n.19 (analyzing Agency Practice Act). The Internal Revenue
Service "is responsible for administering and enforcing the internal revenue laws, except
those relating to alcohol, tobacco, firearms, explosives, and wagering." See BLACK'S LAW
DICTIONARY 564 (abr. 6th ed. 1990) (defining Internal Revenue Service).
Six's law practices have taken a considerable amount of work
from traditional law firms.1 1 Although the competition from
accounting firms is relatively new for law firms,' 2 the intensity of
the competition will likely increase over time as accounting
firms' law departments increasingly compete for legal work.1 3
According to one commentator, the controversy surrounding
law firm diversification will define the practice of law in the
United States for the next century. 14
Accounting firms became visible legal service providers in
Europe in the tax field because European law firms emphasized
litigation"5 and, thus, neglected to perform tax work. 6
According to one person involved in the debate over MDPs,
lawyer-accountant combinations in Europe may be inevitable because
European clients traditionally have viewed professional services as
interrelated, expecting that one set of professionals will meet
their needs and making little distinction between services
pro11. See Klein, supra note 3, at Al (discussing competition between accounting
firms and law firms for legal work). Multinational accounting firms primarily provide
advice on countries' tax laws, though they have increasingly advised on laws governing
other subjects. See Richard L. Abel, TransnationalLaw Practice,44 CASE W. REs. L. REv.
737, 762 (1994).
12. See Klein, supra note 3, at Al (commenting on competition between
accounting firms and law firms).
13. See id.' (revealing results of survey). One commentator notes that "[n]ew legal
business is increasingly being snapped up by international accounting firms" such as
Price Waterhouse, Andersen, and KPMG. Id. A principal of a Pennsylvania, U.S.-based
management consultancy firm believes that the Big Six "present a significant threat to
law firm practices - a threat that has yet to pierce the consciousness of many lawyers."
See Ward Bower, The New Competition: Time ForA Wake-Up Call?, AM. LAw., Oct. 1994, at
23. At least one commentator warns that Ontario's prohibition of MDPs is similar to
the prohibition in U.S. jurisdictions: "If a Big-[Six] ... firm can tiptoe through the
regulatory tulips in Toronto, it's not hard to imagine them soon getting around similar
bar impediments in the [United States] ... as well." Smith, One Stop Shopping, supra
note 6, at 3. An English reporter notes that "[t]hroughout... [London's] legal
community, the realisation has dawned within the last week or two that there can be no
possibility of mistaking the seriousness with which the big... [London] accountancy
outfits intend to tackle legal services." Edward Fennell, Birth of the Mega-Biz?, TIMES
(London), May 20, 1997, available in LEXIS, NEWS Library, TXTNWS File. One
commentator believes that the Big Six's "master plan is to conquer the world first, then
return home to the U[nited] S[tates]." The Big Six HornsIn, AM. LAw., Dec. 1996, at 36.
14. See Gary A. Munneke, Dances with Nonlawyers: A New Perspective on Law Firm
Diversification, 61 FORD m L. REv. 559, 560 (1992) (commenting on debate over law firm
15. See Abel, supra note 11, at 747 (discussing accounting firms' entry into legal
16. See id. (explaining European lawyers were slow to develop tax practices because
they emphasized litigation).
vided by accountants and those provided by lawyers. 7 In
addition, the legal market is attractive to accounting firms because it
is larger than the tax market and there are strong synergies
between tax, corporate finance, and law.18
In the United States, the Disciplinary Rules 9 ("DR") in the
American Bar Association's 2° ("ABA") Model Code of
Professional Responsibility21 ("Model Code") and the ABA's Model
Rules of Professional Conduct2 2 ("Model Rules"), which have
been adopted by the majority of states in some form, 2 3 have
pre17. See Larry Smith, New Adversaries: Big-6 Accounting Firms Encroach Foreign Legal
Turf, COUNSEL, Mar. 6, 1995, at 5-6 [hereinafter Smith, New Adversaries] (noting that
Price Waterhouse's vice chairman of litigation support's view).
18. See All the Rage, supra note 3, at 11 (describing accounting firms' attraction to
legal market). The Big Six should effectively sell any legal services they provide because
have thousands of employees worldwide; they are leaders in the use of
technology; they make significant investments in research and development. The Big
Six enjoy brand name recognition. They invest multiples of what law firms
spend on advertising, and have years of experience in marketing intangible
professional services to individuals and businesses of means.
Bower, supra note 13, at 23.
19. See MODEL CODE OF PROFESSIONAL RESPONSIBILITY Pmbl. and Prelim. Statement
(1981) [hereinafter MODEL CODE] (describing Disciplinary Rules). The Model Code of
Professional Responsibility's ("Model Code") Preamble and Preliminary Statement
explains that "[t]he Disciplinary Rules ...are mandatory in character. The Disciplinary
Rules state the minimum level of conduct below which no lawyer can fall without being
subject to disciplinary action." Id.
20. See GEOFFREY C. HAZARD, JR. ET AL., THE LAW AND ETHICS OF LAWYERING 912 (2d
ed. 1994) (describing American Bar Association). The American Bar Association
("ABA") is a voluntary, private organization of lawyers that controls its own
membership, governs its affairs, and is not accountable to any public body for action the ABA
might take on organizational or policy matters. Id. The ABA, in addition, "has long
been recognized as the leading national organization of lawyers, and it has succeeded
in convincing state courts, state legislatures, federal courts and federal agencies to
adopt some form of its model codes, giving the codes, as so adopted, the effect of law."
Id. at 13.
21. See id. (describing Model Code). The Model Code was adopted by the ABA in
1969 as a model code of regulation of the conduct of lawyers. See id. (discussing Model
22. See id. at 15 (discussing Model Rules of Professional Conduct). The Model
Rules of Professional Conduct ("Model Rules") were adopted by the ABA in 1983 to
replace the Model Code. Id.
23. See id. at 13-16 (discussing adoption of Model Code and Model Rules by U.S.
jurisdictions). The Model Code was adopted by almost every state and by most federal
courts. Id. at 13. As of August 1993, the Model Rules were adopted in some form by 36
states and the District of Columbia while other states retained their versions of the
Model Code. Id. at 15. The federal courts, including the Supreme Court, cite the
Model Code and Model Rules as authority in decisions concerning lawyers' professional
conduct. Id. at 16.
vented nonlawyers from providing legal services,2 4 have limited
the association of lawyers with nonlawyers,25 and have controlled
lawyers' nonlegal services. 26 The rules prohibiting
lawyer-nonlawyer combinations from practicing law were implemented to
guard against several potential ethics problems. 27 The
restrictions in the Model Rules and Model Code have survived despite
several years of discussions by state bar committees concerning
multiprofessional offices. 28 Only Washington, D.C., through
24. See MODEL RULES OF PROFESSIONAL CONDUCT Rule 5.4 (1996) [hereinafter
MODEL RULES] (fee-sharing, lawyer-nonlawyer partnership, and independent
professional judgment); MODEL CODE, supra note 19, DR 3-102(A) (fee-sharing); id. DRs
3103(A), 5-107(C) (lawyer-nonlawyer partnership); id. DR 5-107(B) (independent
professional judgment); see also Munneke, supra note 14, at 566 (noting that in United
States combination of ABA's Model Rules and DRs have "kept nonlawyers from
providing legal services"). The ABA has consistently opposed lay investment in law practices.
See David A. Kaplan, Want to Invest in a Law Firm?; Ethics Change in Works, NAT'L L.J.,Jan.
16, 1987, at I (describing ABA's position).
25. See MODEL RULES, supra note 24, Rule 1.6 (confidentiality); id. Rule 1.7
(conflicts of interest); id. Rule 2.1 (independent professional judgment); id. Rule 5.4
(feesharing, lawyer-nonlawyer partnership, and independent professional judgment); id.
Rule 5.5 (unauthorized practice of law); id. Rule 5.7 (law-related services); id. Rule 7.2
(advertising); id. Rule 7.3 (client solicitation); MODEL CODE, supra note 19, DR
2101(A) (advertising); id. DR 2-103(A), (B) (client solicitation); id. DR 3-101 (A)
(unauthorized practice of law); id. DR 3-102(A) (fee-sharing); id. DR 3-103(A), 5-107(C)
(lawyer-nonlawyer partnership); id. DR 4-101 (confidentiality); id. DR 5-101 (A), 5-104(B)
(conflicts of interest); id. DR 5-107(B) (independent professional judgment).
Commentators agree that ethics rules have prevented lawyers and nonlawyers from entering
into joint business ventures to provide legal services. Munneke, supra note 14, at 566;
HARRYJ. HAYNSWORTH, MARKETING AND LEGAL ETHICS: THE RULES AND RISKS 120 (rev.
ed. 1990); Thomas R. Andrews, Nonlawyers in the Business ofLaw: Does the One Who Has the
Gold Really Make the Rules?, 40 HASTINGS L.J. 577, 616, 622 (1989).
26. See MODEL RULES, supra note 24, Rule 5.7 (law-related services); see also
Munneke, supra note 14, at 566 (stating that in United States combination of ABA's Model
Rules and DRs in Model Code have kept lawyers out of nonlegal activities). Under
current rules, law firms cannot themselves offer both legal and nonlegal services, except
where the nonlegal services are ancillary to the practice of law. See Munneke, supra, at
573 (discussing ancillary businesses). Law firms may, however, operate subsidiaries to
provide the nonlegal services. See id. (discussing ancillary activities under current
27. See 1 GEOFFREY C. HAZARDJR. & W. WILLIAM HODES, THE LAW OF LAWYERING: A
HANDBOOK ON THE MODEL RULES OF PROFESSIONAL CONDUCT 470-71 (1985)
(explaining lawyer-nonlawyer law partnerships potentially create problems of unauthorized
practice of law and interference with lawyers' professional judgment and with
confidentiality and client solicitation).
28. See Munneke, supra note 14, at 573 n.71 (explaining although
multiprofessional offices have been discussed for several years, chilling effect of ethics rules has
prevented widespread experimentation with concept). At least one commentator
notes, however, that the restrictive "regulations are now giving way to more permissive
Washington, D.C. Rules of Professional ("D.C.
Rules") Rule 5.4, permits nonlawyers to become partners in
organizations that provide legal services, 3° so long as certain
requirements are followed. 31 Nevertheless, true multiprofessional
offices remain infeasible despite the appeal of organizations that
can solve complex problems.12
In England, the Law Society of England and Wales'3 3 ("Law
Society") Solicitors' Practice Rules34 ("Solicitors' Rules") forbid
solicitors 35 from practicing law in partnership with non-solicitors
through a rule forbidding solicitors from sharing legal fees with
non-solicitors3. This prohibition prevents MDPs from being
formed in England.3 7 Prior to 1990, England had a statutory ban
rules governing joint lawyer-nonlawyer ventures, and [that] such activities appear to be
evolving with or without the imprimatur of the organized bar." Id. at 566.
29. See WASHINGTON, D.C. RULES OF PROFESSIONAL CONDUCT Scope (1997)
[hereinafter D.C. RULES] (explaining Washington, D.C. Rules of Professional Conduct ("D.C.
Rules") provide basis for invoking disciplinary process against lawyers governed by D.C.
Rules who fail to comply with obligation or prohibition imposed by Rule).
30. See PracticeGuide - Partnershipwith Non-Lawyers, Laws. Man. on Prof. Conduct
(ABA/BNA) No. 91, 401 (1995), available in Westlaw, ABA-BNA database [hereinafter
Partnershipwith Non-Lawyers] (noting that Washington, D.C. is only U.S. jurisdiction that
permits lawyers to join nonlawyers in partnerships or professional associations that
practice law). Members of the ethics committee in Washington, D.C. believe the Model
Rules are anticompetitive and cannot be defended. See Kaplan, supra note 24, at 1
(reporting on Washington, D.C. Rules of Professional Conduct Rule 5.4).
31. See D.C. RULES, supra note 29, Rule 5.4 (listing requirements for lawyers and
nonlawyers to combine to practice law in Washington, D.C.).
32. See Munneke, supranote 14, at 573 (explaining present U.S. regulatory scheme
does not permit true multiprofessional offices despite fundamental appeal of "concept
of holistic problem solving centers").
33. See FRANCES SILVERMAN, HANDBOOK OF PROFESSIONAL CONDUCT FOR SOLICITORS
111-12 (2d ed. 1992) (describing Law Society of England and Wales). The Law Society
of England and Wales ("Law Society"), formed by Royal Charter in 1825, is the
governing body of the solicitors' profession and has the power promulgate rules and
regulations governing the training and admission of solicitors, regulating practicing
certificates, and controlling the conduct of professional practice and discipline. See id.
(defining Law Society).
34. See Solicitors Act, 1974, ch. 47, § 31 (Eng.) [hereinafter Solicitors Act]
(granting Law Society authority to promulgate Solicitors' Practice Rules ("Solicitors' Rules")
to regulate professional practice and conduct and discipline of solicitors).
35. See BLACK'S LAw DICTIONARY, supranote 10, at 969 (defining English solicitors).
Solicitors, in England, are attorneys who may practice in the Bankruptcy Court, county
courts, petty sessions, certain proceedings in the Crown Court, most inferior courts,
and in chambers of the Supreme Court. Id.
36. See SOLICITORS' PRACTICE RULES Rule 7(1) (1990) [hereinafter SOLICITORS'
RULES] (governing fee-sharing).
37. SeeJolyon Patten, UK: In the Mix, POST MAG., Dec. 19, 1996, at 27 (explaining
on MDPs, 3 8 but in 1990 England enacted the Courts and Legal
Services Act 39 which repealed the statutory ban on MDPs.4 0 The
Law Society, however, has maintained the ban on
solicitor-nonsolicitor partnerships.4 1
This Note explores the controversy surrounding MDPs.
Part I surveys the legal activities of the Big Six accounting firms.
Part I then analyzes the current U.S. ethics rules governing law
firm ownership, examines proposed U.S. ethics rules that were
never adopted, and discusses other U.S. ethics rules related to
the practice of MDPs. In addition, Part I studies England's
treatment of law firm ownership and MDPs. Finally, Part I offers
other reasons for the restrictive rules governing law firm
ownership. Part II investigates the arguments in favor of and against
MDPs. Part III argues that the current ethics rules permit
lawyers to face problems similar to those encountered by lawyers
practicing in MDPs. This Note concludes that MDPs should be
permitted in the United States.
I. CURRENT PRACTICES OF THE BIG SIX AND ETHICS RULES
The United States and England prohibit MDPs.12 The
ethics rules governing law firm ownership adopted by the majority
of jurisdictions in the United States prevent, and numerous
other ethics rules obstruct, lawyers and nonlawyers from
entering into partnerships that practice law.43 Similarly, ethics rules
in England do not permit solicitors to practice law with
nonlawyers.4 4 Despite the restrictions in England, the Big Six accounting
firms have entered the legal services market in England as they
have in other countries, through arrangements that circumvent
the rules.4 5
A. Current Legal Activities of the Big Six
The Big Six provide legal services in countries throughout
the world. 46 Price Waterhouse L.L.P. 47 ("Price Waterhouse"),
for example, operates a law firm in the United Kingdom called
Arnheim & Co. 48 ("Arnheim") and has a network of law firms in
Europe with 250 attorneys collectively.4 9 Price Waterhouse's
European legal practice performs tax work, 50 as well as work in
commercial agreements, 51 mergers and acquisitions, 52 and
capital markets, 5 3 areas traditionally handled by law firms. 54 The
head of Price Waterhouse's European Union 55 law unit recently
expressed that Price Waterhouse intends to expand and
pete with traditional law firms.5 6
Arthur Andersen L.L.P. 5 7 ("Andersen") operates a legal
practice in the United Kingdom called Garrett & Co.5 8
("Garrett") with offices in seven cities, 9 including London, Reading,
and Leeds, England6 ° and in 1995 opened an office in
Manchester, England, that competes with other law firms for
high-profile corporate work. 6 1 In only three years, Garrett hired
130 fee-earners6 2 and has successfully recruited lawyers that
practice banking,6 3 intellectual property, 64 and real estate 65 from
another English firm.66 Garrett's recruiting activities demonstrate
Andersen's drive to provide a wide range of services.67 Garrett
such as assistant solicitors, legal executives, clerks, and trainee solicitors. See SILVERMAN,
supra note 33, at 177 (defining fee-earners).
63. See Smith, New Adversaries, supra note 17, at 7 (examining Garrett's practice
64. See id. (describing Garrett's practice areas).
65. See id. (analyzing Garrett's practice areas).
66. See id. (describing Garrett's recruiting activities).
67. See id. (explaining Garrett's recruiting is indicative of Andersen's full-service
strategy). A senior partner with England-based law firm Allen & Overy believes that
although Garrett is not yet a threat to top firms, they will be: "Arthur Andersen never
does anything in a half-assed way. I keep saying to my guys, you have to keep your eye
has continued to progress toward competing with established
law firms for sophisticated corporate work,6" handling major
transactions. 69 In the Netherlands, Andersen has entered into a
unique agreement with the Amsterdam bar association
permitting Andersen to establish a law practice under the name
Wouters Advocaten.7 ° In Spain, Andersen's legal arm, Andersen
ALT, 7 ' recently merged with a Spanish law firm to form J & A
Garrigues Andersen y Cia.72
In 1992, Andersen acquired the Paris office of
Englandbased law firm S.G. Archibald, 7 thus obtaining a developed
corporate and intellectual property practice to complement its tax
in the rearview mirror.... Once they've established themselves, they're going to look
at the big-ticket stuff." Morris, supra note 3, at 5.
68. See Smith, New Adversaries, supra note 17, at 7 (noting that Garrett seems to
have already progressed towards becoming "top-of-the-market" law firm). Garrett's
head explained: "Looking forward three years, there's no doubt that... [Garrett will]
be handling major M[ergers] & A[cquisitions] transactions." See Morris, supra note 3,
at 5 (quoting Garrett's head).
69. See Smith, New Adversaries, supra note 17, at 7 (noting that Garrett was part of
major transactions when firm represented party in bankruptcy transaction and Boston,
U.S.-based client in acquisition of English-based company). Among other work, Garrett
represents U.S.-based Microsoft Corporation and Japan-based Sony Corporation in
intellectual property matters like commercial contracts and licensing and has represented
British Airways plc and Dresser Industries, Inc., in acquisitions, has had a lead role in
the privatization of certain English bus companies, has formed funds to invest in Egypt
and India, and conducts compensation and benefits work for a number of large English
companies. See Morris, supra note 3, at 5 (discussing Garrett managing partner's
description of firm's high-profile work).
70. See Bassirian, supra note 3, at 2 (examining Andersen managing partner for
Netherlands' description of firm's law practice in Netherlands); Andersen Appeals Dutch
MDP Ban, LAWYER, May 27, 1997, at 5 (describing Andersen's legal activities in
Holland). Upon an attempt to open a second Wouters Advocaten Netherlands office in
Rotterdam, however, Rotterdam's bar association refused to grant permission and the
Dutch bar association, Nederlandse Ordre Van Advocaten ("NOVA"), supported the
local bar's decision. See Bassirian, supra, at 2 (discussing Andersen's legal activities in
71. See Ferguson, supra note 3, at 38 (discussing Andersen ALT).
72. See id. at 38-39 (noting that merger occurred in January 1997). J & A Garrigues
Andersen y Cia is the largest law firm in Spain with 505 lawyers and 17 offices
throughout Spain. See id. at 39, 40 (describing size ofJ & A Garrigues Andersen y Cia). The
firm is part of Andersen's worldwide network of law firms and practices in the areas of
tax, corporate law, litigation, labor relations, administrative law, oil and gas, mines,
telecommunications, environment, and maritime law. See Law Firms in Spain, INT'L FIN. L.
RFv., Oct. 1996, at 41, 45 (describingJ & A Garrigues Andersen y Cia's practice).
73. See Klein, supra note 3, at Al (describing Andersen's take over of S.G.
Archibald's Paris office). The firm's name became Archibald Andersen Association
d'Avocats ("Archibald Andersen"). See id. (discussing Andersen's take-over of
S.G.Archibald's Paris office).
work. 74 The firm eventually grew from approximately fifty
lawyers before the acquisition 7 5 to over 240 attorneys in 1996.76
Coopers & Lybrand L.L.P. 77 ("Coopers") also moved into
the law firm arena when, in February 1997, the accounting firm
established a law firm in the United Kingdom named Tite &
Lewis 78 and transferred thirty staff into the new law firm. 79
Before establishing the law firm, Coopers had a tax and legal
unit that practiced specialized corporate tax and finance-related
KPMG Peat Marwick L.L.P.8 1 ("KPMG") has a large legal
and tax division in France named KPMG Fidal Peat International
("KPMG Fidal").8 2 In 1991, KPMG Fidal had 760 lawyers83 in
130 offices throughout France,8 4 that practiced a variety of legal
and tax work on behalf of small and medium-sized French
companies.8 5 That same year, sixty-one percent of KPMG Fidal's
74. See id. (discussing Archibald Andersen's practice). Andersen's partner in
charge of the Paris office explained that Archibald Andersen "provide [s] all the typical
services of a business law firm" and added that Archibald Andersen could "combine
various services for... (its] clients in a global manner, with the same quality everywhere
in the world." See id. (quoting Andersen's partner in charge of the firm's Paris office).
75. See Smith, New Adversaries, supra note 17, at 6 (analyzing S.G. Archibald's Paris
76. See Klein, supra note 3, at Al (noting Archibald Andersen's size).
77. See supra note 2 (discussing Coopers).
78. See All the Rage, supra note 3, at 11 (describing Coopers' legal activities in
United Kingdom); Top ManchesterAccountant, supra note 3, at 8 (same). The
arrangement between Coopers and Tite & Lewis permits Tite & Lewis to receive work from
Coopers' existing clients and Coopers to gain clients through Tite & Lewis. See Fennell,
supra note 13 (describing arrangement between Tite & Lewis and Coopers).
79. See Top Manchester Accountant, supra note 3, at 8 (quoting Coopers
work was tax-related and thirty-nine percent legal.86 KPMG
Fidal's legal work included mergers and acquisitions,
restructurings, joint ventures, and routine contract work. 7 Today, KPMG
Fidal is the largest law firm in Europe. 8 KPMG also recently
formed an alliance in Sweden with new law firm KPMG Wahlin
Deloitte & Touche L.L.P. 90 ("Deloitte & Touche") has been
active in the Dutch legal market. 1 In February 1997, Deloitte &
Touche formed a close alliance with Dutch law firm Van Anken
Knuppe Damstra ("AKD").2 Deloitte & Touche is seeking
alliances with more Dutch law firms to establish a national network
of law firms.9"
Ernst & Young L.L.P.9 4 ("Ernst & Young") has several
cooperation agreements9 5 with Dutch law firms9 6 and has legal
practices in Switzerland, Spain, Germany, and France.9 7 Ernst &
Young, in addition, has links to a Canadian law firm9 8 and,
according to a commentator, is preparing to establish an MDP in
Canada in case the prohibition against MDPs is lifted.9 9 Ernst &
Young is also deciding whether to establish a legal practice in the
B. Ethics Rules GoverningMDPs
Numerous Model Rules and Model Code provisions govern
the association between lawyers and nonlawyers.' 0 1 The majority
of U.S. jurisdictions have adopted the Model Rules or Model
Code provisions forbidding law partnerships between lawyers
and nonlawyers 1 0 2 One jurisdiction, however, permits
lawyernonlawyer law partnerships under certain circumstances 10 3 while
another jurisdiction had a similar rule rejected by its supreme
court.1 °4 In England, the government in the past prevented
solicitors from practicing in MDPs. 10 5 Despite the law's repeal, the
Law Society's Solicitors' Rules generally continue to forbid
MDPs1 06 by not permitting solicitors to share legal fees with
1. Discussion of U.S. Rules Governing Law Firm Ownership
The Model Rules and Model Code prohibit MDPs. l 0' The
District of Columbia is the only U.S. jurisdiction that permits
lawyers and nonlawyers to enter into partnerships to, or share
ownership of, other organizational forms that provide legal
services, when certain requirements are satisfied.' 0 9 North Dakota
considered a rule to permit lawyers to practice law in association
with nonlawyers, but the proposal was rejected by the state's
Supreme Court. 110
a. The Majority Rule
In the United States, the Model Rules and the Model Code
prohibit nonlawyers from holding an ownership interest in legal
practices.' All United States jurisdictions, except the District of
Columbia, have adopted the ABA's position.1 ' 2 The Model
Code forbids a lawyer from entering into a partnership with a
nonlawyer if the partnership intends to practice law.11 3 In
addition, the Model Code does not permit a lawyer to practice in an
organization authorized to practice law for a profit if a
nonlawyer holds a financial interest in the organization, a nonlawyer is
an officer of the organization, or a nonlawyer has the right to
direct a lawyer's professional judgment." 4
The provisions in the Model Rules governing the
interac108. See supra note 24 (listing Model Rules and Model Code provisions that
prevent lawyers and nonlawyers from forming MDPs).
109. See supra note 3.0 and accompanying text (discussing lawyer-nonlawyer
combinations in Washington, D.C.).
110. See supra note 104 and accompanying text (discussing North Dakota's
111. MODEL RULES, supra note 24, Rule 5.4; MODEL CODE, supra 19, DRs 3-102(A),
3-103(A), 5-107(B), 5-107(C).
112. See Andrews, supra note 25, at 597 (stating that "ABA rules governing the
association of lawyers and nonlawyers effectively have been made the governing law,
either directly or indirectly, in most states")
113. MODEL CODE, supra note 19, DR 3-103. DR 3-103(A) states: "A lawyer shall
not form a partnership with a non-lawyer if any of the activities of the partnership
consist of the practice of law." Id.
114. Id. DR 5-107(C). DR 5-107(C) provides:
(C) A lawyer shall not practice with or in the form of a professional
corporation or association authorized to practice law for a profit, if:
(1) A non-lawyer owns any interest therein, except that a fiduciary
representative of the estate of a lawyer may hold the stock or interest of the
lawyer for a reasonable time during administration;
(2) A non-lawyer is a corporate director or officer thereof; or
tion between lawyers and nonlawyers are substantially identical
to the applicable Model Code disciplinary rules.1 15 Model Rule
5.4 prohibits lawyers from sharing fees for legal services and
forming partnerships to provide legal services with
nonlawyers.1 16 In addition, Model Rule 5.4 forbids lawyers from
practicing law in an organization practicing for profit if a nonlawyer
owns an interest, is a corporate officer, or has the right to direct
lawyers' professional judgment." 7
Model Rule 5.4 preserves the prohibitions against law firm
ownership by nonlawyers first codified in the 1928 addition-of
Canons 33118 and 34119 to the 1908 ABA Canons of Professional
(3) A non-lawyer has the right to direct or control the professional
judgment of a lawyer.
115. See MODEL RULES, supra note 24, Rule 5.4 Model Code comparison
(describing Model Rule 5.4 as substantially identical to Model Code DR 3-102(A), DR 3-103(A),
DR 5-107(B), and DR 5-107(C)).
116. Id. Rule 5.4. Model Rule 5.4 states in part:
(a) A lawyer or law firm shall not share legal fees with a nonlawyer, except
(2) a nonlawyer is a corporate director or officer thereof; or
(3) a nonlawyer has the right to direct or control the professional
judgment of a lawyer.
118. CANONS OF PROFESSIONAL ETHICS Canon 33 (1928). Canon 33 provides:
In the formation of partnerships for the practice of law, no person shall be
admitted or held out as a practitioner or member who is not a member of the
Ethics 120 and continued in the Model Code. 12 ' The Model Code
Ethical Considerations 122 ("EC") explain that lawyers should not
practice law in association with a nonlawyer because lawyers
should not assist or encourage nonlawyers to practice law. 123
The comment to Model Rule 5.4 adds that the limitations
expressed in the rule serve to protect lawyers' independent
professional judgment.1 24 The ABA elected to prohibit nonlawyers
from managing legal service providers because the ABA
presumed nonlawyer managers or owners would be tempted more
than lawyers to interfere with the professional relationships of
employed lawyers when profitable to do so. 125
Nevertheless, the Model Rules recognize that legal advice
often involves extralegal elements.1 26 Model Rule 2.1 permits
legal profession duly authorized to practice, and amenable to professional
Partnerships between lawyers and members of other professions or
nonprofessional persons should not be formed or permitted where any part of the
partnership's employment consists of the practice of law.
119. Id. Canon 34. Canon 34 warns that "[n]o division of fees for legal services is
proper, except with another lawyer, based upon a division of service or responsibility."
120. See HAZARD, JR. ET AL., supra note 20, at 13 (explaining Canons of Professional
Ethics were adopted in 1908 by ABA as model code for regulating conduct of lawyers).
121. See MODEL CODE, supra note 19, DRs 3-102(A), 3-103(A), 5-107(B), 5-107(C)
(preserving prohibition of law partnerships between lawyers and nonlawyers); MODEL
RULES, supra note 24, Rule 5.4 Model Code comparison (describing Model Rule 5.4 as
substantially identical to Model Code provisions governing lawyer-nonlawyer
combinations). The comment to D.C. Rule 5.4 notes that "[t]raditionally, the canons of legal
ethics and disciplinary rules prohibited lawyers from practicing law in a partnership
that includes nonlawyers or in any other organization where a nonlawyer is a
shareholder, director, or officer." D.C. RULES, supra note 29, Rule 5.4 cmt.
122. See MODEL CODE, supranote 19, Pmbl. and Prelim. Statement (discussing
Ethical Considerations). The Model Code Preamble and Preliminary Statement explains:
The Ethical Considerations are aspirational in character and represent
the objectives towards which every member of the profession should strive.
They constitute a body of principles upon which the lawyer can rely for
guidance in many specific situations.
lawyers to consider moral, economic, social, political, and other
factors, when relevant to clients' needs. 127 The Model Code also
recognizes that lawyers may consider additional extralegal
factors and advises that lawyers may advise clients beyond legal
b. The Minority Rule
Washington, D.C. remains the only jurisdiction in the
United States that has not fully adopted the ABA's restrictive
position on law firm ownership. 129 The Washington, D.C. Rules of
Professional Conduct allow nonlawyer professionals to work with
lawyers in providing legal services without restricting the
nonlawyer to the role of employee.13 ° D.C. Rule 5.4 allows a nonlawyer
a lawyer may refer not only to law but to other considerations such as moral, economic,
social and political factors, that may be relevant to the client's situation"); Munneke,
supra note 14, at 561 n.7 (explaining Model Rule 2.1 acknowledges that "legal advice
incorporates extralegal elements[,] . . . that legal problems are seldom purely legal
problems, and that the resolution of complex issues usually requires more than purely
legal advice"). At least one Federal judge has noted that "the complexities of modem
existence prevent attorneys from effectively handling clients' affairs without the help of
others." United States v. Kovel, 296 F.2d 918, 921 (2d Cir. 1961) (Friendly, J.).
127. MODEL RULES, supra note 24, Rule 2.1. Model Rule 2.1 states that "in
rendering advice, a lawyer may refer not only to law but to other considerations such as moral,
economic, social and political factors, that may be relevant to tie client's situation." Id.
The comment to Model Rule 2.1 adds:
Matters that go beyond strictly legal questions may also be in the domain
of another profession. Family matters can involve problems within the
professional competence of psychiatry, clinical psychology or social work; business
matters can involve problems within the competence of the accounting
profession or of financial specialists. Where consultation with a professional in
another field in itself something a competent lawyer would recommend, the
lawyer should make such a recommendation. At the same time, a lawyer's advice
at its best often consists of recommending a course of action in the face of
conflicting recommendations of experts.
Id. Rule 2.1 cmt.
128. See MODEL CODE, supra note 19, EC 7-8 (stating that "[a]dvice of a lawyer to
his client need not be confined to purely legal considerations").
129. See supranote 30 (examining U.S. jurisdictions' rules governing law firm
ownership); D.C. RULES, supranote 29, Rule 5.4 (stating that nonlawyers may have financial
interest in organization that provides legal services under certain circumstances).
130. See D.C. RULES, supra note 29, Rule 5.4(b) ("A lawyer may practice law in a
partnership or other form of organization in which a financial interest is held or
managerial authority is exercised by an individual nonlawyer who performs professional
services which assist the organization in providing legal services to clients .... "). The
comment to D.C. Rule 5.4 states:
[T] he purpose of liberalizing the rules regarding the possession of a financial
interest or the exercise of management authority by a nonlawyer is to permit
Rules governing the sharing of fees received for legal
services between lawyers and nonlawyers affect MDPs. 25 4 Model Rule
5.4 generally prohibits lawyers from sharing fees for legal
services with nonlawyers. 25 5 The Model Code also generally
prohibits a lawyer or law firm from sharing legal fees with a nonlawyer,
except in specified situations. 25 61 One commentator, however,
does not believe that fee-sharing with nonlawyers impairs the
independence of the law firm and urges that f'ee-sharing be
permitted so long as nonlawyers are not given equity interest or a
managerial role in the law firm.2 5 7
United States state bar associations have influenced development of broad definition of
practice of law, leaving narrow scope of activity for nonlawyers).
254. See, e.g., MODEL RULES, supra note 24, Rule 5.4(a) (prohibiting fee-sharing
between lawyers and nonlawyers).
255. Id. Model Rule 5.4(a) states:
A lawyer or law firm shall not share legal fees with a nonlawyer, except that:
(1) an agreement by a lawyer with the lawyer's firm, partner, or
associate may provide for the payment of money, over a reasonable period
of time after the lawyer's death, to the lawyer's estate or to one or
more specified persons;
(2) a lawyer who purchases the practice of a deceased, disabled, or
disappeared lawyer may, pursuant to the provisions of Rule 1.17, pay to
the estate or other representative of that lawyer the agreed-upon
purchase price; and
(3) a lawyer or law firm may include nonlawyer employees in a
compensation or retirement plan, even though the plan is based in whole or
in part on a profit-sharing arrangement.
256. See MODEL CODE, supra note 19, DR 3-102(A) (governing sharing of legal
fees). DR 3-102(A) generally provides:
257. Levinson, supra note 5, at 241. Professor Levinson adds that "the existing
rules tend.., to discourage the employment of nonlawyer experts by prohibiting
lawyers from sharing fees with nonlawyers." Id.
g. Law Firm
Finally, ethics rules addressing the management of law firms
by nonlawyers impact MDPs as Model Rule 5.4(d) forbids lawyers
from practicing in organizations that have nonlawyer corporate
directors or officers, or that give nonlawyers the right to direct
or control lawyers' professional judgment. 258 The Model Code
has the same restrictions as the Model Rules. 259
are designed to prevent nonlawyers from interfering with
lawyers' professional judgment.26 0 Despite these restrictions, some
law firms that recognize the value of professional management
have hired nonlawyers as office managers. 261' The nonlawyer
office managers' authority, however, is limited by the ethical
involvement. 26 2
warns that nonlawyer managers inevitably obtain control over
important firm policy decisions. 2 63
3. Discussion of England's Rules Governing Law Firm
Ownership and MDPs
In Great Britain, the Law Society's Solicitors' Rules Rule 7
does not permit solicitors to practice law in partnership with
non-solicitors.2 64 Solicitors' Rules Rule 7 prevents practitioners
from forming MDPs by governing the sharing of fees.26 5 Rule 7
generally prohibits solicitors from sharing their professional fees
with non-solicitors. 26 6
The Law Society's Rules, however, permit
258. MODEL RULES, supra note 24, Rule 5.4(d).
259. See MODEL CODE, supra note 19, DR 5-107(c); (governing law firm
260. See Andrews, supra note 25, at 629 (describing reason for restriction).
261. See id. at 628 (discussing law firm management by nonlawyers).
262. See id. at 629 (explaining Model Rule 5.4(d) limits nonlawyer office
managers' scope of management). The restrictions on law firm management by nonlawyers
seem to "preclude a nonlawyer from having any real authority over decisions that
matter to the firm's financial well-being." Id.
263. Munneke, supranote 14, at 573. Professor Munneke warns that control over
law firms' policy decisions "may constitute control over the lawyers' independent
professional judgment." Id.
264. See SILVER.N, supra note 33, at 130 (stating that "[a] solicitor is not
permitted to practice in partnership with a person who is not a solicitor[;] ... [t]o do so would
involve the solicitor in a breach of Rule 7 Solicitors' Practice Rules 1990"); Godfrey &
Damerell, supranote 4, at 72 (explaining professional rules promulgated by Law Society
do not permit MDPs).
265. SoulICToRs' RULES, supra note 36, Rule 7(1).
266. See id. (governing sharing of legal fees); SILVERMAN, supra note 33, at 75
(explaining Solicitors' Rules Rule 7 "prevents a solicitor from entering into partnership
solicitors to establish profit-sharing schemes for employees.2 6 7
In 1990, section sixty-six of the Courts and Legal Services
Act2 68 repealed section thirty-nine of the Solicitors Act 1974,269
which had prohibited MDPs by forbidding solicitors from acting
as agents for unqualified persons.2 70 The Courts and Legal
Services Act, in addition, transferred rulemaking authority in this
area to the Law Society. 271 Under the Courts and Legal Services
do any other act enabling an unqualified person to appear, act or
practise in any respect as a solicitor in any action or in any matter in
(4) For the avoidance of doubt it is hereby declared that in subsection (1)
references to an unqualified person include references to a body
Solicitors Act § 39. An 'unqualified person' is someone who does not meet the
qualifications of section 1 Solicitors Act 1974, which states: "No person shall be qualified to act
as a solicitor unless - (a) he has been admitted as a solicitor, and (b) his name is on
the roll, and (c) he has in force a certificate issued by the Society... authorising him to
practise as a solicitor . . . ." Solicitors Act § 1.
271. See Courts and Legal Services Act § 66(2) (transferring authority to Law
Society); David Waller, Growing Places, LEGAL Bus., July/Aug. 1991, 15, 17 (stating that
Act, therefore, the Law Society is authorized to promulgate rules
that permit solicitors to enter into partnerships with
non-solicitors.27 2 Despite the permissive Courts and Legal Services Act,
the Law Society has not eliminated the ban on MDPs.2 73 As a
result of the Law Society's restrictions, in England solicitors may
not enter into partnerships with accountants, insurers, or other
professionals to provide services. 2 74 The restriction persists
despite a number of solicitors favoring rules that would permit
The Law Society and some solicitors oppose MDPs on the
grounds that MDPs are not in the public interest.2 76 The
restriction was created to protect clients and consumers of legal
service*s. 227 7 Solicitors' Rules Rule 7 is intended to preserve solicitors'
Courts and Legal Services Act allowed Law Society to set its own rules). Section 66(2)
of the Courts and Legal Services Act states: "Nothing in subsection (1) prevents the Law
Society making rules which prohibit solicitors from entering into any unincorporated
association with persons who are not solicitors, or restrict the circumstances in which
they may do so." Id. The Lord Chancellor, involved in enacting the Courts and Legal
Services Act, while addressing the Law Society's authority to eliminate the ban on
MDPs, explained: "We are not encouraging the Law Society in any way but merely
making clear that it has this power and that it is for the Society to decide in its professional
judgment to decide what is right ...." See Way Clearedfor MDPs, L. Soc'Y's GAZETTE,
Feb. 7, 1990, at 7 (quoting Lord Chancellor's remarks that Courts and Legal Services
Act authorizes Law Society to eliminate prohibition against MDPs).
272. See SILVERMAN, supra note 33, at 131 (noting that section 66 of Courts and
Legal Services Act permits Law Society to make rules that allow solicitors to enter into
unincorporated association with non-solicitors). Similar provisions authorize the
governing bodies for notaries and barristers to promulgate rules that allow notaries and
barristers to enter into unincorporated association with non-notaries and
non-barristers, respectively. See Courts and Legal Services Act §§ 66(4)-(6).
273. See SILVERMAN, supra note 33, at 131 (explaining Courts and Legal Services
Act section 66 "has not yet been brought into force"); Waller, supra note 271, at 17
(noting that Law Society has continued prohibiting MDPs).
274. See Patten, supra note 37, at 27 (discussing Law Society's prohibition of
275. See Godfrey & Damerell, supra note 4,at 73 (revealing that recent survey
indicated that 54% of solicitors who responded to survey favored relaxation of ban on
MDPs). The solicitors in favor of relaxing the ban on MDPs thought it "advantageous
to obtain under the same roof the services of other professionals such as accountants,
surveyors, barristers, patent agents and foreign lawyers." Id. Another recent survey of
579 law firms by the Law Society revealed that more than a third of the firms surveyed
had discussed the issue of MDPs at the partnership level and over 70% of those firms
were in favor of MDPs. See Editorial, MDP-minded, L. Soc'v's GUARDIAN GAZETTE, Dec.
13, 1996, at 15 [hereinafter MDP-Minded] (detailing results of Law Society survey on
276. See Frank E. Maher, Practisingin Partnership,L. Soc'v's GAZETTE, Sept. 18,
1991, at 2 (examining opposition to MDPs).
277. See A Full Quota of Challenge and Excitement: President'sAddress to the 1988
Naindependence and to sustain their ability to offer their clients
impartial advice. 2 78 The prohibition against MDPs, in addition,
continues because of concerns involving the solicitor-client
relationship, conflicts of interests, legal privilege, and the practice of
law by unqualified persons. 279 The Government, however,
eliminated the statutory ban on MDPs with the Courts and Legal
Services Act because there no longer existed strong public interest
justifications for the restriction. 28 0 Furthermore, at least one
commentator asserts that the opposition from the legal
profession is generated by fear. 2 1
In May 1991, Great Britain's Department of Trade and
Industry proposed lifting the ban on partnerships of more than
twenty people.2 8 2 At least one commentator and some members
of accounting firms believe the Law Society is on the verge of
allowing MDPs.2 s 3 If the Law Society fails to relax the rules
prohibiting MDPs, the Law Society may have to prove to the
Government that the restrictions are not anticompetitive. 2 4 The
Law Society established a steering group to address the concerns
tional Conference, L. Soc'Y's GAZETTE, Oct. 20, 1988, at 2 (quoting president of Law
Society saying that debate over MDPs "is an issue of client and consumer protection").
278. See Godfrey & Damerell, supra note 4, at 73 (revealing purposes behind
Rule(7)); SiLVERMAN, supra note 33, at 131 ("The existence of this prohibition stems
from the profession's concern to maintain the independence of solicitors.").
279. See SILVERMAN, supra note 33, at 131 (analyzing reasons ban on MDPs has
continued in England).
280. See Green Papers- Legal Profession Faces Radical Revamp: Work, Education and
Organization, L. Soc'v's GAzEicrr, Feb. 1, 1989, at 4 [hereinafter Legal Profession Faces
Radical Revamp] (explaining Green Paper argues that "[t]here are no strong public
interest reasons justifying such restrictions any longer.").
281. See Maher, supranote 276, at 2 (discussing motives behind lawyers' opposition
282. See Waller, supra note 271, at 17 (discussing Department of Trade and
Industry's proposal to permit partnerships of more than twenty people to form MDPs).
283. See, e.g. All the Rage, supra note 3, at 11 (noting that with "the previously
obstructive Law Society about to relent, multi-disciplinary partnerships may well be the
coming thing for some enterprising accountants."); Bassirian, supra note 3, at 2
(explaining Big Six firms have begun recruiting lawyers directly out of school "in
anticipation of possible changes to current rules barring MDPs.").
284. See Legal Profession FacesRadicalRevamp, supranote 280, at 4 (explaining Lord
Chancellor's green paper provides that once statutory restriction against MDPs has
been removed Law Society must satisfy competition authority that remaining
restrictions are "not unnecessarily anti-competitive."); Waller, supra note 271, at 17
(explaining "in due course .. . [the Law Society] will have to satisfy the government that the
rules are not anticompetitive.").
surrounding MDPs. 28 5 In 1996, the Law Society began reviewing
the feasibility of MDPs and their implications on control,
confidentiality, and conflicts of interest. 28 6
C. Another Reason For ProhibitingMDPs
Jurisdictions adopted restrictive rules governing law firm
ownership and MDPs to preserve the independent judgment of
lawyers by preventing nonlawyer influences on members of the
bar.2 87 At least one commentator notes, however, that these
rules were not only intended to prevent lay persons and other
professionals from influencing lawyers, but also to bar
nonlawyers from usurping lawyers' work.28 8 Other commentators
believe that restrictive rules aimed at nonlawyers exist to protect
lawyers' economic interests. 289 In fact, some commentators
assert that the ABA excludes nonlawyers from the legal profession
altogether as a form of economic protectionism. 29 ° This
justifi285. See Bassirian, supra note 3, at 2 (discussing Law Society's special steering
group on MDPs).
286. See MDP-Minded, supra note 275, at 15 (discussing review of potential
problems with MDPs).
287. See Kenneth S. Kilimnik, Lawyers Abroad: New Rules for Practicein a
GlobalEconomy, 12 DICK. J. INT'L L. 269, 319 (1994) (analyzing purpose of rules prohibiting lawyers
from forming partnerships to practice law with nonlawyers).
288. See id. (noting additional motives behind rules prohibiting lawyers from
forming partnerships with nonlawyers to practice law).
289. See, e.g., Deborah L. Rhode, Policing the ProfessionalMonopoly: A Constitutional
and EmpiricalAnalysis of UnauthorizedPracticeProhibitions, 34 STAN. L. REv. 1, 3 (1981)
(questioning bar's stated motive of protecting public behind bar's campaign against
unauthorized practice of law); Kaplan, supra note 24, at 1 (explaining Professor Hazard
believes that real purpose of ABA Model Rule on lay investment is to "insulate the small
law firm from competition for legal services."); Levinson, supra note 5, at 233 ("The
motivation for preserving the domain of the [legal] profession may be, in part, the
profession's concern for its own well-being and survival .... ."). By 1976, 96% of U.S.
states' bar associations had developed unauthorized practice committees to monitor the
activities of nonlegal ventures and to ensure such ventures did not encroach on the
domain of practicing lawyers. See Rhode, supra, at 15 (examining unauthorized
practice of law restrictions); Munneke, supra note 14, at 562 & n.14 (explaining
unauthorized practice committees were created to monitor activities of nonlegal organizations
that "have encroached upon the domain of practicing lawyers" and that ABA
formulated "Statement of Principles" describing numerous nonlegal professions' permissible
activities in relation to legal activities "to ensure that nonlawyers did not practice law").
These committees, however, have fallen into disfavor because of legal setbacks, antitrust
concerns, and "the increasingly unclear distinction between the practice of law and the
pursuit of related fields[,]" and in their wake, "a more laissez-faire, free market
environment has evolved." Munneke, supra, at 563-64.
290. See, e.g., Andrews, supranote 25, at 616 (explaining "economic protectionism
often can be read between the lines of the justifications given for excluding nonlawyers
cation surfaced during the debates surrounding the Kutak
Commission's proposals for Model Rule 5.4.291 The official legislative
history of the rules, however, does not mention economic
protectionism as a reason for rejecting the Kutak Commission's
Commentators frequently explain that the Big Six's legal
activities increase competition for traditional law firms.29 3 Several
lawyers openly fear the increased competition that the repeal of
restrictive ownership rules would create.2 9 4 For example, in
response to a proposed Hong Kong law permitting MDPs, a
partner of a U.S.-based law firm's Hong Kong office explained that
lawyers in Hong Kong fear the proposed law because the entry of
accounting firms in the legal services market threatens to usurp
from the business of law."). Professors Hazard and Hodes identify economic
protectionism as the hidden and illegitimate rationale behind the canons excluding
nonlawyers from the legal profession. See HAZARD, JR. & HODES, supra note 27, at 471 (analyzing
reasons for prohibition against nonlawyer partners in law firms).
291. See Andrews, supra note 25, at 616 (analyzing debates concerning Model Rule
forbidding nonlawyers from forming partnerships with lawyers). One ABA delegate,
during the debates, asked: "How will you explain to the sole practitioner who finds
himself with competition with [sic] Sears why you voted for this? How will you explain
to the man in the mid-size firm who is being put out of business by the (B] ig [Six] ...
firms?" Id. (citing Unedited Transcript of ABA House of Delegates Session 28, at 48-49
(Feb. 8, 1983)) (quoting Al Conant).
292. See THE LEGISLATIVE HISTORY OF THE MODEL RULES: THEIR DEVELOPMENT IN
THE ABA HOUSE OF DELEGATES 160 (1987) (stating legislative history of Model Rule
5.4); see also Andrews, supra note 25, at 616 n.208 (examining legislative history of
293. See, e.g., Smith, New Adversaries, supra note 17, at 6 (explaining Big Six legal
practices impose competitive burdens on traditional law firms worldwide because of
their size). For example, some commentators believe KPMG Fidal cannot be ignored
because of its size, its presence throughout France, and its affiliations with KPMG's
international network. Dillon & Griffiths, supra note 3, at 27. KPMG Fidal competes
with French and Anglo-American law firms and with the legal divisions of other Big Six
accounting firms and may eventually dominate them according to Dillon and Griffiths.
See id. (adding that "[KPMG] Fidal may be a slumbering giant - poised to awaken to its
own enormous potential"). A partner of an England-based law firm's Paris office warns
that KPMG Fidal's size, organizational structure, and combination of different
professions makes it a threat to traditional law firms. See id. at 27-28 (citing partner of
England-based law firm Clifford Chance's Paris office).
294. See, e.g., Klein, supranote 3, atAl (noting reactions of several practitioners to
permitting MDPs). One professor notes that European lawyers resent the Big Six's
practice of law because of the competition it provides. Abel, supra note 11, at 747. In
England, the chairman of the National Committee of the Young Solicitors Group stated
that opposition to Big Six entering the legal arena from solicitors "is doubtless
generated by fear." Maher, supra note 276, at 2.
law firms' less sophisticated work. 295 A partner of another
U.S.based law firm added that accounting firms would likely expand
their practice to high-end transactions.29 6 At least one legal
expert believes that accountants are already stealing high-end legal
business from law firms. 29 7 The expert adds that the Big Six
accounting firms are moving toward a legal practice that in the
future may compete with the top U.S. law firms. 298
II. ISSUES REGARDING MDPS: PROS AND CONS
It is generally accepted that lawyers often require a number
of services to represent clients. 29 9 Lawyers, however, have
debated the form of practices that lawyers may establish to best
provide these services3. 0° One side asserts that MDPs should be
per295. See Klein, supra note 3, at Al (quoting partner of Cleveland, U.S.-based law
firm Jones, Day, Reavis & Pogue's Hong Kong). The Jones, Day, Reavis & Pogue
partner observed that the proposal to permit MDPs in Hong Kong "strikes terror in the
hearts of lawyers ... [because] [i]t attacks our bread and butter. The fear is that
accounting firms would take away lower-end business, without which most law firms can't
296. See id. (revealing that partner of U.S.-based law firm White & Case is worried
because he has "never known anyone but Woolworth's that's entered at the low end of
the market and stayed there"). A senior partner with U.S.-based law firm Shearman &
Sterling acknowledged that the Big Six accounting firms can give law firms competition
in any given deal. See Smith, New Adversaries, supra note 17, at 7 (citing Shearman &
Sterling senior partner).
297. See Smith, New Adversaries, supra note 17, at 7 (citing Texas, U.S.-based
consultant to lawyers and accountants). The consultant explained that "clients [in Europe]
used to divide up pieces of a deal between a Davis Polk [& Wardwell, a U.S.-based law
firm,] and a Price Waterhouse[,] . . . [n]ow they're giving a little more to Price
Waterhouse. Someday they may give it all to Price Waterhouse." Id.
298. See id. (citing Texas, U.S.-based consultant to lawyers and accountants).
299. See supra note 126 (recognizing that lawyers generally require additional
services to assist clients); see also David Lauter, 'Outsiders' Who Work For Firms; Using
NonLawyers, NAT'L L.J., Feb. 6, 1984, at 1 (stating that "law is increasingly multi-disciplinary
... requiring a range of services to represent a client. Economists[,] ... [accountants,
lobbyists, and engineers] ... were always brought in on an ad hoc basis, but if you're an
integral part of the firm, it adds another dimension"); Waller, supra note 271, at 17
(explaining England's Department of Trade and Industry acknowledged that MDPs
"might help the large professional practices meet the increasing demand from their
clients for a wider range of specialised services and enable them to recruit and retain
the necessary staff to provide these services"). The head of Andersen's English law firm,
Garrett, asserts that clients' positive response to Garrett's association with Andersen
confirms that many client want "integrated, multidisciplinary business-advice services."
See Fennell, supra note 13 (citing head of Garrett).
300. See, e.g., supra notes 143-55 and accompanying text (examining debate
surrounding law firm ownership by nonlawyers).
mitted because MDPs offer a variety of benefits to clients. 30 1
Opponents of MDPs respond that combining legal services with
other activities would detrimentally affect the legal profession
and the general public.3 °2
Proponents of MDPs argue that MDPs benefit clients
because the ability to retain an organization whose staff can handle
all of the legal and extralegal issues involved in a client's
representation increases efficiency.30 3 The proponents argue that
MDPs cause clients to need only one firm and, thus, reduce
clients' costs because there is only one company to instruct,
communication between members of the same firm is better, there is
a better liaison between advisors, and projects are
At least one opponent of MDPs argues that achieving an
efficient market for legal services creates a problem.30 ' The
opponent argues that an efficient market for legal services would
redistribute nonlegal and legal personnel into the most profitable
practice area and geographical location.30 6 This would create a
shortage of legal services in less profitable areas3. 7
301. See, e.g., Patten, supra note 37, at 27 (facilitate efficiency of legal services);
Munneke, supra note 14, at 568 (benefit law firms); Nigel Page, Taxing Times: Quality vs
Quantity?,LEGAL Bus., July/Aug. 1991, at 18, 21 (foster client comfort and confidence).
An Arnold & Porter partner explained that MDPs could combine the talents of people
from different professions and "have as their mission the broader goal of problem
solving." Fitzpatrick, supra note 176, at 465. Mr. Fitzpatrick added the result would be an
organization that best supported clients' overall needs. Id.
302. See, e.g., Levinson, supra note 5, at 243, 247 (fee increases); id. (pressure to
refer work to other members of MDP ("intra-firm referrals")); id. at 242, 247
(professional independence); id. (conflicts of interest); id. (confidentiality); Maher, supra note
276, at 2 (attorney-client privilege); Levinson, supra, at 242, 247 (distract lawyers from
practice of law); Dillon & Griffiths, supra note 3, at 29 (stifle creative and innovative
303. See Patten, supra note 37, at 27 (discussing arguments made by proponents of
MDPs that MDPs are more efficient than traditional law firms).
304. See id. (describing proponents of MDPs' arguments that MDPs are efficient).
305. See Levinson, supra note 5, at 243, 247 (warning of problems with efficient
legal services market).
307. See id. (explaining efficient legal market creates risk of shortages of legal
service providers in less profitable practice and geographical areas).
B. Effects of Competition
Proponents of MDPs assert that, generally, any rules
limiting access to the domestic legal market will result in higher
prices and less services."30 Government regulation of legal
services typically produces a cartel3 0 9 in the domestic legal services
market,3 10 thereby increasing consumer prices and reducing
services as compared to the prices and services in competitive
markets.3 1 I At least one commentator argues that Model Rule
5.4's prohibition of MDPs harms consumers of legal services by
suppressing competition in the supply of services and thereby
increasing the price for the services.3 12 Additionally, some
pro308. See MichaelJ. Chapman & PaulJ. Tauber, Note, LiberalizingInternationalTrade
in Legal Services: A Proposalfor an Annex on Legal Services Under the General Agreement on
Trade in Services, 16 MICH. J. INT'L L. 941, 955 (1995) (describing effects of government
regulation on market activities). Chapman & Tauber explain that
[t]he most visible effect of governmental regulation of legal services is that it
typically results in the establishment of a cartel in the domestic legal services
market .... In cartelized markets, prices paid by consumers tend to be higher
and fewer goods or services tend to be provided than in competitive markets.
Id. at 954 (footnotes omitted). A study of the deregulation of legal services in housing
conveyances in Great Britain revealed the potential benefits of ending cartels in legal
The study demonstrated that price discrimination became more difficult and
costs to consumers decreased by about one-third as competition increased. In
addition, the authors suggested that the quality of service increased at all price
levels due to deregulation. Although the study was narrow in scope, it is
important evidence that both commercial entities and individuals could benefit
substantially from the increased competition in the legal services industry.
Id. at 955 (footnotes omitted). A cartel is a group of sellers of a product who join
together to control the product's production, sale, and price in the hope of obtaining
the advantages of a monopoly. See WILLIAM J. BAUMOL & ALAN S. BLINDER, ECONOMICS,
PRINCIPAL AND POLICY. MICROECONOMICs 235 (4th ed. 1988) (defining cartel). A
monopoly is "an industry in which there is only one supplier of a product for which there
are no close substitutes, and in which it is very hard or impossible for another firm to
coexist." BAUMOL & BLINDER, supranote 308, at 214. With respect to lawyers, a
monopoly is "the exclusive right of lawyers to do for the public those things that have been
legislatively or judicially defined as 'the practice of law'.... " See Barlow F. Christensen,
The UnauthorizedPracticeof Law: Do Good Fences Really Make Good Neighbors-or Even Good
Sense?, 1980 Am. B. FOUND. REs. J. 159, 160 (1980) (discussing unauthorized practice of
309. See supra note 308 (defining cartel).
310. See Chapman & Tauber, supra note 308, at 954 (noting governmental
regulation of legal services usually results in cartelizing domestic legal services market).
311. See id. (comparing cartelized markets to competitive markets).
312. See Stephen Gillers, What We Talked About W4hen We Talked About Ethics: A
Critical View of the Model Rules, 46 OHIO ST. L.J. 243, 268 (1985) (stating that Model Rule 5.4
"suppresses competition on the supply side. The fewer the consumer alternatives, the
more lawyer-employers can charge for their employees's time").
ponents of MDPs suggest that the legal services market would
benefit from the increased competition and investment that
would result from allowing banks, retailers, and insurance
companies to expand into legal services."' Liberalizing law firm
ownership rules and the increased competition that would result
would enable lawyers to seek the most efficient organizational
structure in which to provide legal services.3 1 4 One
commentator believes that such changes might actually help law firms
survive in the future.3 1
Opponents of MDPs argue that if the U.S. legal services
market was opened to MDPs, the Big Six would immediately
dominate because of their advantage in size, diversity, resources,
and client base.31 6 Some commentators assert that the Big Six
domination would reduce the number of MDPs consumers
could choose from as the size of the consumers' projects
increases because only the Big Six would have the size and
resources to handle large projects. 31 7 The opponents argue that
the resulting Big Six MDPs' oligopoly1 8 would undermine any
efficiency gained from economies of scale 319 achieved by the Big
Six MDPs 32 0 and, thus, lead to fee increases.3 2 ' At least one MDP
313. See HAZARD, JR. ET AL., supra note 20, at 982 (revealing arguments made by
proponents of MDPs surrounding effects of MDPs). One commentator added: "We
have long thought that many of the strictures that the 'establishment' arm of the [legal]
profession placed were stifling - not only to the growth of legal practices, but also to
the delivery of legal services to consumers." Editorial, What Now, the Dow?, NAT'L L.J.,
Jan. 19, 1987, at 12.
314. See Munneke, supra note 14, at 568 (explaining that "a removal of the
economic restrictions resulting from the current rules could allow lawyers to compete
more effectively in the free market environment of today's business world.").
315. See id. (discussing' effects on law firms of liberalizing law firm ownership
rules). Removing the current law firm ownership restrictions "might actually help law
firms survive in the coming decades." Id.
316. See Patten, supra note 37, at 27 (discussing potential advantages of Big Six
317. See id. (analyzing problem of decreasing choice with large projects); see also
Levinson, supra note 5, at 243, 247 (stating that MDPs create risk that "the market...
will concentrate nonlegal as well as legal services in a small mmber of large firms.").
318. See BAUMOL & BLINDER, supra note 308, at 233 (defining oligopoly). An
oligopoly is "a market dominated by a few sellers at least several of which are large enough
relative to the total market to be able to influence the market price." Id.
319. See id. at 295 (defining economies of scale). Economies of scale "are savings
that are acquired through increases in quantities produced." Id.
320. See Patten, supra note 37, at 27 (noting that "[t]he theoretical economies of
scale may be offset by a quasi-monopolistic tendency to increase prices.").
321. See Levinson, supra note 5, at 243, 247 (warning that concentrating work
among small number of large firms would lead to fee increases).
opponent, moreover, notes that larger firms are not necessarily
less costly because of their elevated fixed costs. 3 2 2
C. Pressures and Quality Control
Opponents of MDPs assert that consumers' freedom to
obtain the best services would be curtailed by MDPs because
consumers would be pressured by MDPs to choose a single firm to
provide a variety of services.323 The opponents argue that this
presents problems because an MDP may deliver top service in
one area but not in others, thereby causing a client to receive
great services in some areas but not in other areas.324
Opponents of MDPs also assert that in MDPs there is pressure to use
nonlawyer personnel when advising clients even when
unnecessary and to bill the client for the nonlegal services because of the
financial commitment MDPs make to the nonlawyer
personnel.325 Opponents of MDPs further argue that large, global
firms raise quality control problems because work would be
automatically referred to other members of the practice, despite the
possibility that there are better qualified professionals at other
firms to better handle that work.326 For example, a former
Coopers partner explained that Coopers' audit unit in France
would strongly suggest to clients that they work with Coopers'
inhouse tax and legal division in France, and that this was
problematic because Coopers in France was not always the best in a
Proponents of MDPs note, however, that MDP clients always
retain the freedom to choose different counsel from another
MDP or a traditional law firm. 28 The proponents also assert
322. See Patten, supra note 37, at 27 (discussing large firms). A fixed cost is "the
cost of the inputs which the firm needs to produce any output at all." See BAUMOL &
BLINDER, supra note 308, at 122 (defining fixed cost).
323. See Patten, supra note 37, at 27 (explaining MDP clients will be pressured to
be serviced by MDP in all areas MDP practices).
324. See id. (noting that "any given company may be stronger in some aspects of its
business than others, especially at particular times, and the client will be obliged to take
the rough with the smooth.").
325. See, e.g., Levinson, supra note 5, at 242, 247 (discussing pressures in MDPs).
326. See Page, supra note 301, at 21-22 (explaining worldwide accounting firms
obliged to refer work to their offices in other jurisdictions though they may not be best
in that jurisdiction); Dillon & Griffiths, supra note 3, at 29-30 (discussing pressure to
refer work intra-firm).
327. See Dillon & Griffiths, supra note 3, at 29-30 (citing former Coopers partner).
328. See, e.g., id. at 30
(explaining KPMG Fidal client Meridien Group only used
that the pressure to refer work intra-firm does not necessarily
exist. 329 Another proponent of MDPs argues that any internal
pressure to refer work intra-firm that does exist in Big Six firms
may not be as great as some opponents of MDPs believe because
the Big Six are not global partnerships but merely individual
partnerships in each jurisdiction so they are not necessarily
obligated to refer work to their counterparts in other
jurisdictions. 3 ° Moreover, the same concern over pressure to refer
work intra-firm currently exists within law firms. 3 3 A partner in
one department of a firm, such as the corporate department, is
not restricted by ethics rules from advising a client to award its
other legal business, such as litigation work, to the firm's
litigation department if the litigation department can handle the
work. 3 2
firm for routine legal matters, while retaining a competitor for complex matters and
that "no sensible client would really pay for the services of lawyers that couldn't do the
329. See, e.g., id. at 28 (analyzing pressure to refer work intra-firm). For example, a
KPMG Fidal partner explained that KPMG Fidal "functions entirely separately from its
auditing counterpart and that there is no overt - or even subtle - pressure from the
auditing side to do things in a particular way." See id. (citing KPMG Fidal partner). A
consultant for professional services firms noted that although the majority of MDPs
advise clients to use other services of the firm, "remarkably, few of these firms (if any)
have made cross-selling a normal part of daily behavior. Individuals are more likely to
focus on improving the profitability of their own group than on assisting other groups
to penetrate 'their' clientele." David H. Maister, Creating the Collaborative Firm, AM.
LAW., Oct. 1991, at 31.
330. See Page, supra note 301, at 21 (analyzing structure of Big Six). A tax partner
with England-based law firm Linklaters & Paines maintains that "clients are becoming
more aware: ... they realize that global networks are not necessarily a real asset." Id. A
member of England-based law firm Slaughter and May's tax department continues:
Size does not matter .... My experience would be that the large accountancy
firms are very useful for a large international group setting up, for example,
leasing operations in Europe, when a generalised overview of the position in a
number ofjurisdictions is needed. But if you are working on a major
international deal, you need to be able to go [sic] the people who have the best
expertise to do that particular job.
Id. at 21-22.
331. See In the Hot Seat, LEGAL Bus., July/Aug. 1991, 38, 39 (citing accountant and
barrister partner of England-based accounting firm Brebner Allen & Trapp).
332. See id. (discussing intra-firm referrals in law firms). The accountant and
barrister partner of Brebner Allen & Trapp opined that "no commercial law partner will
say to a client that he should take his litigation to another firm instead of to his own
litigation partner." See id. (citing Brebner Allen & Trapp partner).
D. Familiarityand Comfort
Proponents of MDPs state that MDPs nurture client comfort
and confidence with legal representationY 3 Big Six accounting
firms maintain that their worldwide offices enable them to satisfy
the needs of multinational corporate and financial business
consulting clients." 4 The accountants continue that a Big Six firm's
client involved in deals in countries where that Big Six firm has a
presence, will be confident and comfortable with the knowledge
that the Big Six firm's personnel familiar to the client's
accountant will be assisting with transactions and will be confident
because the work will not be referred to someone the accountant
does not know. 33 5
E. Distractionfrom the Practice of Law, ProfessionalIndependence,
Conflicts of Interest, and the Attorney-Client Privilege
Opponents of MDPs argue that MDPs introduce problems
with the independence of lawyers, conflicts of interest,3 3 6 and
the attorney-client privilege, 7 and that MDPs generally distract
333. See Page, supra note 301, at 21 (discussing feelings of consumers of MDPs
334. See id. (explaining "accountants argue that their worldwide offices equip
them to service the needs of the emerging multinational corporate and financial
players"). Messrs. Tite, and Lewis, partners of Tite & Lewis, note that the largest corporate
clients want global services and that Coopers "can already provide them on a scale
bigger than the largest... [London] law firms can offer and that is where the accountants
have the edge." See Fennell, supra note 13 (quoting Messrs. Tite and Lewis).
335. See Page, supra note 301, at 21 (citing Price Waterhouse tax partner). A tax
partner of Price Waterhouse in England believes the accounting firm's international
presence is advantageous because, for example, prospective clients making acquisitions
in Italy and Hong Kong will be at ease because they will be referred to Price
Waterhouse partners in those jurisdictions and they will not have to refer work to
someone unfamiliar to their accountant. See id. (citing Price Waterhouse tax partner). A
commentator notes that" [t] here can be no doubt of the significant clout which [Price
Waterhouse's worldwide presence] gives them in pitching for multinational clients." Id.
336. See Top ManchesterAccountant, supra note 3, at 8 (according to managing
partner of England-based accounting firm Clark Whitehill, "[t]he supermarket approach
will quite clearly hit dedicated legal firms and introduce all sorts of questions about
independence and conflicts of interest."); All the Rage, supra note 3, at 11 (citing U.S.
Securities and Exchange Commission's severe guidelines on auditor/lawyer
independence as proof of conflicts of interest resulting from combining accounting and legal
337. See Maher, supra note 276, at 2 (discussing MDPs' implications on
lawyers from the practice of law. 3 8 First, an opponent of MDPs
notes that MDPs jeopardize confidentiality and give rise to
conflicts of interest because nonlawyers in MDPs are not governed
by lawyers' ethics standards. 9 In addition, another
commentator believes that professionals of the same firm may resist
criticizing each others' performance, while attorneys practicing
separately from professionals in other fields would be more likely to
disclose to the client their criticism of the other professional's
work.34 ° Furthermore, a commentator argues that MDPs pose a
risk that nonlawyers will unduly influence the firm in several
matters that require lawyer independence.3 4 1 First, nonlawyers
may influence decisions regarding law firm management, such
as whether to accept certain clients.34 2 Second, nonlawyers may
influence decisions concerning the firm's participation in the
activities of the legal profession, such as commenting on proposed
new rules of ethics. 43 Finally, nonlawyers may unduly influence
decisions affecting the performance of the public role of
lawyers,3 44 such as bringing legal issues to society's attention,
initiating law reforms, and confronting governmental arbitrariness.3 4 5
Moreover, opponents of MDPs argue that the enormous size of
Big Six accounting firms limits the kind of work they may
perform because of conflicts. 3 46 Opponents also argue that MDPs
338. See Levinson, supra note 5, at 242, 247 (commenting on distraction to lawyers
caused by nonlegal services).
340. See Patten, supra note 37, at 27 (asking whether "members of the same firm
would be just as willing to criticise inadequate performance by one part of the
multidisciplinary team as outsiders[,]" while under the current rules "experienced solicitors
may draw a client's attention to concern over some aspect of an accountant's
performance and vice versa.").
341. Levinson, supra note 5, at 242, 247.
342. See id. (explaining risk that nonlawyers in MDPs will "unduly influence"
lawrelated decisions, such as whether to accept unpopular clients).
343. See id. (noting potential influence of nonlawyers over decisions regarding
participation in activities of legal profession).
344. See id. (discussing public role of legal profession).
345. See id. at 236 (offering examples of lawyers' public role).
346. See Smith, New Adversaries, supranote 17, at 11 (discussing conflicts of interest
in Big Six). Mr. Smith states:
The Big-Six are also naturally limited by their enormous size in the kind of
work they can do. ... [M]ajor transactions as well as litigation generate what
could be unmanageable conflict problems. That's why . . . [sophisticated]
transactions like [Mergers and Acquisitions] seem more practicable in the
context of a law firm that has hundreds, not thousands, of partners and
are problematic because criminal clients may reveal their cases
to non-attorneys instead of lawyers, and thus lose the
attorneyclient privilege.3 47 Finally, at least one opponent of MDPs fears
that lawyers in MDPs would be distracted from the practice of
law and thus jeopardize lawyers' competence and diligence. 4 8
A practitioner responds that conflicts will not arise because
the legal profession and the accounting profession each must
follow specified regulations.3 4 9 In addition, a professor notes
that many of the potential attacks on professional independence
are already faced by lawyers that are employed by corporations
and other organizations that do not offer legal services.35 °
Another proponent of MDPs explains that criminal clients today
may enter a traditional law firm and reveal their cases to
nonlawyers such as clerks, and thus lose the attorney-client
F. Innovative Services
Opponents of MDPs also assert that combining law firms
and accounting firms stifles creative and innovative legal and tax
347. See Maher, supranote 276, at 2 (describing attorney-client privilege issues
348. Levinson, supra note 5, at 242, 247.
349. See Dillon & Griffiths, supra note 3, at 28 (citing President of KPMG Fidal).
The President of KPMG Fidal instructs that although KPMG Fidal has a number ofjoint
clients with KPMG, conflicts do not arise because the legal profession and the
accounting profession each must follow specified regulations. See id. (citing President of KPMG
350. See Kaplan, supra note 24, at I (quoting Professor Geoffrey C. Hazard, Jr.).
Professor Hazard states: "The ostensible justification for the ABA's rule [forbidding
nonlawyers from owning law firms] has been as a prophylactic to prevent lawyers being
supervised by non-lawyers. But given that that can happen in a corporate law
department and in other permissible forms, it's not a very coherent rule." See id. (quoting
Professor Hazard). Model Rule 1.13 generally governs the responsibilities of lawyers
employed by organizations. MODEL RULES, supra note 24, Rule 1.13. Although the
Model Code does not have a specific DR aimed at lawyers employed by organizations,
EC 5-18 offers general principles that lawyers employed by organizations should follow.
See id. Rule 1.13 Model Code Comparison (examining Model Code provisions directed
at lawyers employed by organizations).
351. See Maher, supra note 276, at 2 (comparing MDPs to law firms). Mr. Maher
observes that concerns that nonlawyers in MDPs may create problems for the
attorneyclient privilege are no different from nonlawyer personnel in law firms, because a client
may speak with a solicitor's clerk who is not a solicitor but who sees clients as an agent
of the solicitor." Id.
approaches.35 2 For example, auditors are careful to avoid
mistakes and, thus, are unlikely to encourage tax or legal personnel
to develop innovative solutions.3 53 Clients of one Big Six MDP,
however, state that the firm develops innovative solutions when
III. UNITED STATES JURISDICTIONS SHOULD PERMIT MDPS
Commentators, practitioners, and others involved in the
debate over MDPs assert either that the prohibition against MDPs
should be preserved, that the prohibition should be modified to
permit regulated MDPs, or that MDPs should be permitted and
that there is no need to regulate the association between lawyers
and nonlawyers. 5 Based on the evidence and arguments
surrounding the debate over MDPs, all U.S. jurisdictions should
permit regulated MDPs. The practices under the present ethics
rules, the evidence strongly indicating that current restrictions
are in part a form of economic protectionism, and the
developments in England support the arguments of MDP proponents.
The arguments advanced by the opponents of MDPs, instead,
are generally undermined by current practices.
A. Practices Under the Present U.S. Ethics Rules Support
The ban on MDPs should be removed in the United States
because the current U.S. ethics rules, the Model Rules, and the
Model Code permit lawyers to face many of the ethical
challenges that MDP opponents argue will plague MDPs. First, the
current rules permit lawyers to own ancillary businesses although
ancillary businesses interfere with lawyers' ability to fulfill
profes352. See, e.g., Dillon & Griffiths, supra note 3, at 29 (noting that several of KPMG
Fidal's competitors "assert that the relationship with the accountancy firm is also bound
to stifle creative or more innovative approaches to the legal or tax practice.").
353. See id. (describing auditors' lack of innovativeness). Auditors are unlikely to
encourage cutting-edge solutions by the legal or tax team working with them." Id.
354. See id. (noting that several of KPMG Fidal's clients are "satisfied that [KPMG]
Fidal is suggesting innovative solutions when appropriate."). The executive vice
president of finance for hotel industry Meridien Group explained that "[t]he partner we
work with [at KPMG Fidal] knows us very well, and he knows we like creative
propositions." Id. KPMG Fidal's literature states: "[KPMG] Fidal offers a dynamic and creative
way of looking at problems which is productive for the company." See id. (quoting from
KPMG Fidal brochure).
355. See Abel, supra note 11, at 763 (outlining views on MDPs).
sional obligations, give rise to problems with confidentiality,
conflicts of interest, interference with lawyers' professional
judgment, nonlawyer influence or control of law firms, and pressure
on clients.3 56 Second, the Model Rules and Model Code permit
lawyers to serve on the boards of directors of clients and to
transact business with clients although these activities challenge
lawyers' independent judgment and create dangerous conflicts of
interest.3 5 7 Finally, the current ethics rules arguably permit
lawyers to practice law in organizational structures that are very
similar to MDPs and that raise the same ethical challenges for
lawyers. For example, under the ethics rules a law firm and an
accounting firm may enter into an office-sharing arrangement,
where the legal and nonlegal activities are independently owned
and operated but the law firm shares office space with the
accounting firm. 358 The law firm may primarily practice business
planning matters while the accounting firm employs a number
of certified accountants and engages in audit services. Although
each firm operates under its own lease, they may share an
overlapping management team that provides common support
services such as word processing, reception, and billing.3 51 Under
the Model Rules and Model Code there would probably be no
ethical violations if the law firm and the accounting firm
informally refer clients to each other, or if the law firm uses
accountants employed by the accounting firm as experts in its cases.160
Similarly, the law firm is permitted under the Model Rules and
Model Code to hold an economic or controlling interest in the
accounting group as long as the law firm does not violate any
ethical rules, particularly those covering dealings with
nonlawyers.36 1 In addition, the law firm would be permitted to hire the
accountants as employees of the firm to do work in conjunction
356. See supra notes 181-230 and accompanying text (analyzing debate
surrounding ancillary businesses).
357. See supra notes 234-36 and accompanying text (discussing lawyer-client
business transactions and lawyer service on clients' boards of directors). Professor Hazard
notes that lawyers serving on the boards of directors of corporations represented by the
lawyer's firm or lawyers conducting business transactions with clients, raise "equal or
greater interference" with independent professional judgment than ancillary
businesses. HAZARD, JR. ET AL., supra note 20, at 985.
358. See Munneke, supra note 14, at 573 (discussing office-sharing arrangements).
359. See id. (discussing office-sharing arrangements).
360. See id. (analyzing office-sharing arrangements under Model Rules and Model
Code provisions governing referrals).
361. See id. at 572-73 (commenting on lawyer ownership of other businesses).
with the firm's cases, and could even share profits with the
accountants through qualified pension or profit sharing plans.3 6 2
Because these arrangements are permissible under the U.S.
ethics rules although they closely resemble MDPs, the ban on MDPs
should be removed.
B. OtherEvidence Supports MDP Proponents
Multi-discipline practices should be permitted in the United
States because many of the problems that opponents of MDPs
argue will occur with MDPs, can be undermined. First, generally
today, only the larger law firms have the size and resources to
handle large projects. This directly undermines the argument
made by MDP opponents that the Big Six MDPs would dominate
legal practice and, thus, reduce the number of firms for
consumers to choose from as the size of consumers' projects increase
because only the Big Six MDPs would .have the size and
resources to handle large projects.363 In addition, the law firms
that now handle large projects would be capable of competing
with the Big Six MDPs for large projects. Furthermore, the
increased competition could trigger modifications in law firms
that would permit them to compete more effectively in the free
market environment of today's world and offer consumers lower
rates.3 6 4 Second, pressure to refer work intra-firm already exists
in law firms and, in some instances, may not exist or be as strong
as believed in MDPs.365 Third, MDPs should not be banned
simply because Big Six MDPs may stifle innovative legal approaches.
Not only is this argument limited to MDPs with large numbers of
accountants, but at least one Big Six firm's client has noted that
the firm's legal department develops innovative legal
362. See id. at 573 (analyzing Model Rules and Model Code provisions governing
363. See supra note 317 and accompanying text (discussing effects of Big Six's size
364. See supra notes 313-14 and accompanying text (examining benefits to law
firms of increased competition).
365. See supra notes 329-32 and accompanying text (discussing pressure for
366. See supra note 354 and accompanying text (revealing reaction of KPMG Fidal
C. Nonlawyers may Practice Tax Law
The prohibition against MDPs should be removed because
nonlawyers are already permitted to advise clients in certain
practice areas. Certified Public Accountants can represent
clients before the Internal Revenue Service and other government
agencies may permit nonlawyers to practice before them. 67
Permitting nonlawyers to practice law, although only in limited
circumstances, is potentially more dangerous to the public than
allowing MDPs, yet it is permitted.
D. Current Rules Protect Lawyers' Economic Interests
Multi-discipline practices should be permitted because the
inconsistencies in the Model Rules and Model Code and the
comments of practitioners and commentators strongly support
the proposition that a major reason for the prohibitive rules
today is to protect lawyers' economic interests. 6 Many
practitioners fear the competition that Big Six firms would provide if
permitted to practice law. 6 9 The Big Six, however, cannot
dominate unless consumers shift their business to Big Six MDPs.
Consumers probably will not shift their business until the Big
Six's legal services are well regarded. Indeed, the Big Six MDPs
may never gain enough competence to attract clients away from
established law firms.
Model Rule 5.7, permitting lawyers to compete with
businesses through ancillary businesses, and the double standard of
enforcement of the rule are representative of the evidence that
supports the accusation of economic protectionism. Although
lawyers may own ancillary businesses that offer nonlegal services
in conjunction with the practice of law, nonlawyers are not
allowed to participate in the legal profession as financial
367. See supra note 10 (noting that federal law permits CPAs to practice before
Internal Revenue Service and permits government agencies to allow other nonlawyers
to represent clients before agency).
368. See supra notes 288-98 (examining whether U.S. ethics rules protect lawyers'
369. See supra notes 293-98 and accompanying text (noting lawyers' fears of
370. See supra notes 111, 205-07 and accompanying text (discussing rules
governing ancillary businesses and law firm ownership).
E. England Eliminated the Statutory Ban on MDPs Because it No
Longer Served the PublicInterest
United States jurisdictions should follow the English
government and permit MDPs. Although the Law Society has
maintained the restriction against MDPs,37 1 the English government
eliminated the statutory ban in 1990 because it believes there are
no longer any strong public interest reasons for the
restrictions.3 7 2 In addition, the Law Society is expected to have to
prove that the restriction is not anticompetitive, 373 a
demonstration that continues to become more difficult for U.S.
jurisdictions to make as the practice of law increases in complexity.
E. MDPs Can be Regulated Under Several Schemes
Multi-disciplines practices in the United States could
operate under the current regulatory structure or under a new
scheme. Under the current regulatory program, Model Rule 5.4
could be modified to permit MDPs and to impose liability on
lawyers for the unethical conduct of nonlawyer-members of the
firm, as Washington, D.C.'s Rules of Professional Conduct Rule
5.4 stipulates.3 74 Alternatively, professional nonlawyer owners of
MDPs could be made to face the loss of their professional license
for violations of legal ethics code or their own profession's ethics
codes.375 Enacting such rules, however, would require the action
of every U.S. jurisdiction.
The second option would be to create a new regulatory
scheme to govern MDPs. An independent regulatory body for
MDPs, composed of members from different professions, could
attempt to promulgate an ethics code for MDPs, binding
anyone, lawyer or nonlawyer, with a financial interest in an MDP.
This option, however, would take a significant amount of time to
371. See supra note 41 (discussing Law Society's rules).
372. See supra note 280 and accompanying text (giving English government's
reason for eliminating statutory prohibition against MDPs).
373. See supra note 284 and accompanying text (discussing Law Society's
continued ban on MDPs).
374. See supra note 141 and accompanying text (examining liability under D.C.
Rule 5.4(b) (3)).
375. See, e.g. Maher, supra note 276, at 2 (detailing plan to regulate MDPs that
would make professionals answerable to their own professional body "for not only their
own professional standards but those of their partners").
Today, it is widely accepted that legal matters often contain
extralegal elements. In addition, clients increasingly seek
multiple professional services from one source. The ABA Canons of
Professional Ethics' prohibition against nonlawyer ownership of
law firms justifiably protected the independence of lawyers.
Similar provisions in the Model Code and Model Rules were
generally defended on the basis that nonlawyer involvement in law
firms created problems with conflicts of interest, confidentiality,
and client solicitation and threatened the autonomy of the legal
profession. At the end of the twentieth century, however, the
prohibition, preserved in the Model Rules and Model Code, in
large part serves the interests of the legal profession and not the
public. As the work that lawyers confront has steadily grown in
sophistication over time, both lawyers' and clients' needs have
changed. Preserving the century-old restriction does not satisfy
lawyers' or clients' needs. As the legal profession enters a new
century, it is pivotal that ethics guidelines prohibiting nonlawyer
ownership of legal service providers give way to provisions
permitting and regulating MDPs so that U.S. firms may best serve
clients and compete with foreign firms.
45. See supra note 6 and accompanying text (describing accounting firms' legal activities in countries that prohibit MDPs) .
46. See supra note 3 (detailing legal practices of Big Six) .
47. See supra note 2 (discussing Price Waterhouse) .
48. See All the Rage, supra note 3, at 11 (describing Price Waterhouse's legal activities in United Kingdom); Bassirian, supranote 3, at 2 (same); Top ManchesterAccountant, supra note 3, at 8 (same). Arnheim & Co. ("Arnheim"), an affiliate of Price Waterhouse, is part of the accounting firm's network of European law firms, and shares office space and referrals with Price Waterhouse. See Barker, supra note 6, at 13 (describing Arnheim's relationship with Price Waterhouse) . In 1996 , Arnheim had only six lawyers . See Morris, supra note 3 , at 5 (describing Arnheim). Arnheim, however, plans to expand to 20 attorneys by 1998 and to 50 by 2001 . See Barker, supra,at 13 (discussing Arnheim's future plans ).
49. See Klein, supranote 3, at Al ( discussing Price Waterhouse's network of lawyers in Europe); see also Barker, supra note 6, at 13 (noting that Price Waterhouse's European law firm network consisted of 19 law firms in 1996 ).
50. See Klein, supra note 3 , at Al ( citing head of Price Waterhouse's European Union law unit in Brussels, Belgium).
51. See id. (citing head of Price Waterhouse's European Union law unit in Brussels, Belgium).
52. Id .
53. Id .
54. See Morris, supra note 3, at 5 (revealing that Price Waterhouse's head of its European legal affiliates notes that legal affiliates are obtaining work that American and English law firms might otherwise have performed) . According to Price Waterhouse's head of European legal affiliates, the legal affiliates work on investments into Eastern Europe, loan and financial documentation for international banks in Spain, insurance policy documentation, and privatizations. See id. (describing work performed by Price Waterhouse's European legal affiliates ).
55. Treaty on European Union, Feb. 7 , 1992 , O.J. C 224/1 ( 1992 ), [ 1992 ] 1 C.M.L.R. 719 , 31 I.L.M. 247 (amending Treaty Establishing the European Economic Community , Mar. 25 , 1957 , 298 U.N.T.S. 11 , 1973 Gr. Brit. T.S. No. 1 ( Cmd . 5179 - 1I ), as amended by Single European Act , OJ. L 169/1 ( 1987 ), [ 1987 ] 2 C.M.L.R. 741 , in TREATIES ESTABLISHING THE EUROPEAN COMMUNITIES (EC Off'l Pub . Off . 1987 )).
56. See Klein, supra note 3 , at Al ( quoting head of Price Waterhouse's European Union law unit). The head of Price Waterhouse's European Union law unit revealed: "Right now we're not a threat [to law firms], but the avowed intent is different." Id. Price Waterhouse's head of European legal affiliates added that Price Waterhouse is interested in competing with law firms for top work and that Price Waterhouse is "not aiming for the middle ground .... " See Morris, supra note 3, at 5 (revealing Price Waterhouse's plans according to head of Price Waterhouse's European legal affiliates) . According to a law firm and accounting firm consultant, accounting firms have already moved towards handling complex legal work and where European "clients used to divide up pieces of a deal between a Davis Polk [& Wardwell, a U.S.-based law firm,] and a Price Waterhouse . . . [n] ow they're giving a litfle more to Price Waterhouse . . . [and that] [s]omeday they may give it all to Price Waterhouse." See Smith, New Adversaries, supra note 17, at 7 (quoting Texas, U.S.-based consultant who works with law firms and accounting firms).
57. See supra note 2 (discussing Andersen) .
58. See Bassirian, supra note 3, at 2 (discussing Garrett & Co. ("Garrett" )); Patten, supra note 37, at 27 (same); Patrick Wilkins, Surprise Defections By Tax Lawyers Threaten Coopers'LawAspirations,ACCT . AGE, Oct. 17 , 1996 , at 1 (same).
59. See Barker, supra note 6 , at 13 ( discussing Garrett's size) .
60. See Smith , New Adversaries, supra note 17, at 6 (describing Garrett's offices) .
61. See Top ManchesterAccountant, supra note 3, at 8 (revealing activities of Garrett's Manchester, England office ).
62. See Wilkins, supra note 58 , at 1 (analyzing Garrett's size) . Fee-earners are law firms' staff members who have client contact and whose work earns money for the firm ,
80. See Wilkins, supranote 58 , at 1 (adding that Coopers' pioneering tax and legal unit conducted highly specialized corporate tax and finance-related work).
81. See supra note 2 (discussing KPMG) .
82. See Dillon & Griffiths, supra note 3, at 26 (discussing KPMG's legal and tax activities in France). Fidal began as an independent organization in 1945 when it spun off from French accounting firm Fiduciare de France. See id. Fidal then joined accounting network Klynveld Main Gordeler ("KMG") in 1979 and KMG merged with accounting firm Peat Marwick in 1987 . See Abel, supra note 11 , at 783 ( describing formation of KPMG Peat Marwick). Following the merger between KMG and Peat Marwick, Fidal became KPMG Fidal Peat International ("KPMG Fidal" ). See Dillon & Griffiths , supra, at 26 ( discussing KPMG Fidal ) .
83. See Dillon & Griffiths, supra note 3, at 26 (describing KPMG Fidal's size) .
84. See id. (noting that KPMG Fidal's offices are located throughout France, from major cities like Paris to provincial towns such as Blois in Loire Valley) .
85. See id. (explaining KPMG Fidal's offices handle wide variety of legal and tax work for thousands of small and medium sized French companies ).
86. See id. at 30 (examining KPMG Fidal's practice) .
87. See id. at 30-31 (describing KPMG Fidal's practice) .
88. See id. at 26 (explaining KPMG Fidal's public relations officer considers KPMG Fidal largest law firm on European Continent) . Many practitioners, however, do not consider KPMG Fidal a law firm . See id. at 26 ( adding that KPMG Fidal management is bemused by those who suggest that Fidal is not "real" law firm) . In response, a partner of U.S.-based law firm Baker & McKenzie described KPMG Fidal as a competitor. See id. at 26 (examining debate over whether KPMG Fidal is law firm) . Commentators note that although the majority of KPMG Fidal's competitors "dismiss [KPMG] Fidal out of hand, typically in snobbish terms[,] ... no one seems willing to count [KPMG] Fidal out . " Id. at 27.
89. See New Swedish KPMG-Linked FirmFaces BarLimits , INT'L FIN. L. REV ., Oct . 1997 , at 5-6 (explaining new Swedish law firm is member of KPMG-aligned international network of law firms and has cooperation agreement with KPMG).
90. See supra note 2 (discussing Deloitte & Touche) .
91. See Deloitte & Touche in Deal, supra note 3 (explaining Deloitte & Touche formed close alliance with Dutch law firm and is "seeking links with a further two or three law firms to establish a national network").
92. See id. (commenting on alliance between Deloitte & Touche and Dutch firm of lawyers and notaries, Van Anken Knuppe Damstra ("AKD")). The terms of the alliance comply with the Netherlands' strict rules governing the independence of accountants and tax advisors . See id. (discussing alliance).
93. See id. (discussing Deloitte & Touche's plans) .
94. See supra note 2 (discussing Ernst & Young) .
95. See Dutch Veto ' One-Stop Shops', supra note 3, at 8 (discussing Ernst & Young's cooperation agreements) . According to the chairman of Ernst & Young's tax group, under the cooperation agreement there is "pooling" of some profits, but the tax firm remains independent of the accounting firm . Id.
96. See id. (analyzing Ernst & Young's alliance with Dutch law firms Van Benthem & Keulem and Banning Van Kemenade & Holland).
97. See Accountants on the Brink, supra note 3, at 7 (discussing Ernst & Young's legal activities in Europe) .
98. See Smith , One Stop Shopping, supranote 6, at 3 (noting Toronto, Canada-based law firm Donahue & Associates became part of Ernst &Young in January 1997 ); E&YIn One-Stop Shop Threat, supra note 3 , at 5 (same).
99. E&Y In One-Stop Shop Threat, supra note 3 , at 5.
100. See Accountants on the Brink, supra note 3, at 7 (explaining Ernst & Young spokeswoman stated that firm is still deciding whether to establish law practice in United Kingdom); Barker, supra note 6, at 13 (noting that Ernst & Young is close to opening law firm in England) .
101. See supra notes 25 , 26 (discussing ethics rules governing lawyer-nonlawyer combinations).
102. See Partnershipwith Non-Lawyers, supranote 30 (examining rules governing lawyer-nonlawyer combinations in U.S. jurisdictions ).
103. See supra note 30 and accompanying text (discussing D.C. Rule permitting MDPs) .
104. See THOMAS D. MORGAN & RONALD D. ROTUNDA, PROBLEMS AND MATERIALS ON PROFESSIONAL RESPONSIBILUTY 538 (6th ed. 1995 ) (explaining North Dakota Supreme Court rejected rule similar to D.C. Rule 5.4).
105. See supranote 38 and accompanying text (noting English government's prohibition against MDPs) .
106. See supra note 38 and accompanying text (discussing MDPs in England) .
107. See supra note 41 and accompanying text (discussing Law Society's rule prohibiting fee-sharing) .
123. See id. EC 3-8 (commenting on lawyer-nonlawyer law partnerships). EC 3-8 states that "[s]ince a lawyer should not aid or encourage a layman to practice law, he should not practice law in association with a layman. ..." Id.
124. MODEL RULES , supra note 24, Rule 5 .4 cmt.
125. See HAZARD , JR . ET AL., supra note 20 , at 982-83 (examining ABA's motive for restricting lawyer-nonlawyer combinations) . Model Rule 5 . 4 assumes that the threat of influence of a nonlawyer manager over lawyers in the same organization "is so serious that a prophylactic rule prohibiting lay management is necessary." Id.
126. See MODEL RULES , supra note 24, Rule 2 . 1 (stating that "[i]n rendering advice,