Protecting the Profession Through the Pen: A Proposal for Liberalizing ABA Model Rule of Professional Conduct 5.4 to Allow Multidisciplinary Firms

Multidisciplinar y Firms Candace M. Groth Follow this and additional works at: http://digitalcommons.hamline.edu/hlr Part of the Ethics and Professional Responsibility Commons Recommended Citation - Article 6 PROTECTING THE PROFESSION THROUGH THE PEN: A PROPOSAL FOR LIBERALIZING ABA MODEL RULE OF PROFESSIONAL CONDUCT 5.4 TO ALLOW MULTIDISCIPLINARY FIRMS I. II. INTRODUCTION HISTORY A. PRE-1983 MODEL RULES OF PROFESSIONAL CONDUCT B. THE MODEL RULES OF PROFESSIONAL CONDUCT: RULE 5.4 AND THE KUTAK COMMISSION C. THE ABA COMMISSION ON MULTIDISCIPLINARY PRACTICE AND THE COMMISSION ON ETHICS 20/20: MISSED OPPORTUNITIES FOR LIBERALIZATION D. CURRENT MODEL RULE 5.4 E. A WORD ON THE BUSINESS-PROFESSION DICHOTOMY III. MULTIDISCIPLINARY PRACTICE AND ALTERNATIVE DISCIPLINARY STRUCTURES A. MODELS WITHOUT A FORMAL BUSINESS STRUCTURE CHANGE 1. COOPERATION OR “STATUS QUO” MODEL 2. ANCILLARY BUSINESS SERVICES MODEL AND CONTRACT/ JOINT VENTURE MODELS B. MODELS PERMITTING NONLAWYER PARTNERSHIP AND PASSIVE INVESTMENT 1. THE KUTAK COMMISSION MODEL RULE a. INTERFERENCE WITH INDEPENDENT PROFESSIONAL JUDGMENT b. APPLICATION OF THE RULES OF PROFESSIONAL CONDUCT WITHIN A MULTIDISCIPLINARY PRACTICE c. THE BUSINESS-PROFESSION DICHOTOMY REVISITED 2. BRITISH STATUTORY ACTION C. MODELS PERMITTING ONLY NONLAWYER PARTNERSHIP 1. THE COMMAND AND CONTROL MODEL (D.C. RULE 5.4) 2. THE COMMISSION ON ETHICS 20/20 MODEL 565 566 * J.D., summa cum laude, 2014, Hamline University School of Law. I want to thank my family and Matthew Kolodoski for their support throughout the writing process. I would also like to thank Susan Hackett for providing the initial spark for this article. [Vol. 37:565 592 592 596 601 602 566 IV. THE CONSUMER-COMMERCIAL-CONTRACTUAL MODEL (CCC MODEL) A. THE CCC MODEL: PREMISE AND TEXT B. THE CCC MODEL ADDRESSES MANY ETHICAL AND PRACTICAL PROBLEMS WITH MULTIDISCIPLINARY PRACTICES AND PAST PROPOSED RULES 5.4 C. CHALLENGES WITH ADOPTING THE CCC MODEL V. CONCLUSION I. INTRODUCTION Lawyers have lost their monopoly, and perhaps even their majority market share, of the provision of legal services. In the past, lawyers performed all legal and law-related services.1 However, in the modern economy, that role is rapidly disintegrating. Accountants and enrolled agents can now offer federal tax services, including some forms of legal representation, to the general public.2 Legal service providers, who provide document discovery and low cost bulk legal-related services to companies and law firms, now provide business clients with litigation support, document review, predictive coding, and business consulting at a fraction of the cost of traditional law firms.3 These legal service providers include Robert Half Legal, Pangea3, and Special Counsel. Some legal service providers, usually called legal process outsourcers, contract with entities outside the United States to outsource legal services.4 In search of novel, business process management and efficiency-driven services, corporate clients are deserting traditional law firms, or cutting back on “legal services,” in droves.5 Commentators argue that American state-based prohibitions on lawyers partnering with nonlawyers are a major factor behind the market 2014] 567 changes, particularly increased competition by foreign law firms who can partner with nonlawyers.6 These concerns and the 2008 recession have encouraged the American Bar Association (ABA) to revisit the issue of multidisciplinary practices and alternative law practice structures (ALPSs). A multidisciplinary practice (MDP) is “[a] fee-sharing association of lawyers and nonlawyers in a firm that delivers both legal and non-legal services.”7 ALPSs, in contrast, refer to business structures that have both lawyer and nonlawyer partners, but only deliver legal services.8 A law firm, on the other hand is “a lawyer or lawyers in a law partnership, Professional Corporation, sole proprietorship or other association authorized to practice law; or lawyers employed in a legal services organization or the legal department of a corporation or other organization.”9 The term “law firm” will only be used throughout this article to refer to an entity completely composed of lawyers engaged in the practice of law. Alternative Business Structures is the term used in the United Kingdom for multidisciplinary practice structures permitted by the Legal Services Act 2007. The Legal Services Act permits business structures that engage in legal and non-legal services with certain restrictions.10 This article argues that, contrary to assertions by some legal practitioners, state rules of professional conduct based on ABA Model Rule of Professional Conduct 5.4 (Model Rule 5.4) may be liberalized to allow multidisciplinary practices, without undermining lawyer professionalism, confidentiality, or the professional independence of judgment.11 Furthermore, 103–07. 6 7 practice”). 8 Zahorsky & Henderson, supra note 3; Dzienkowski & Per (...truncated)