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
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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
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* 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.
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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
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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)