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American Bar Association Clears Way For Firms To Expand Practices

The door has opened to the possibility that lawyers may soon occupy offices down the hall from real estate brokers, accountants, business consultants and other service professionals.

The reason? The court-imposed ethics rules that prohibit lawyers from partnering with other professionals are being chipped away.

A commission of the American Bar Association this week urged changing the bar's rules of professional conduct to allow fee-sharing between lawyers and professionals working in other disciplines, known as "multidisciplinary practices."

Many accounting firms, particularly the Big Five, are already offering multiple services to businesses seeking advice on legal, business and strategic planning matters.

"The benefits are that law firms would be able to compete with the accounting firms in the business of multidisciplinary practice, which we are not able to do because of laws barring fees shared with non-lawyers," said Gilda Tuoni Russell in Boston, who is the deputy loss prevention partner in charge of conflicts of interest at 850-lawyer Holland & Knight LLP.

But the proposed rules changes have some lawyers up in arms. Opponents decry what they see as an erosion of the legal institution's ethics and standards, which clients rely upon when seeking advice, they say.

"I think there are substantial problems with conflict-of-interest and confusion on the part of a client/customer in knowing when they walk through the door what is going to be protected by the lawyer-client relationship," said Roy Hammer, a partner at Boston law firm Hemenway & Barnes. Hammer is a member of the ABA's 520 member House of Delegates.

The House of Delegates will vote upon the ABA commission's proposal at the organization's annual meeting in Atlanta in August.

Multidisciplinary practice is common in Europe and is allowed in Washington, D.C., to the extent that non-lawyers are allowed to work in law firms.

"I think it's being driven by competitive pressures as much as anything else," said Henry Dinger, a partner at Goodwin, Procter & Hoar LLP, Boston's largest law firm.

Even if the ABA adopts the rules change, each state's court system must make the changes at the state level.

Dinger, who is also chair of the state Supreme Judicial Court's standing advisory committee on rules of professional conduct, said the Bay State's highest court is not likely to adopt such a drastic change outright. A more likely scenario would include a bar organization such as the Boston Bar Association, which has formed a committee to study the issue requesting formally that the rules be adopted.

"The chances of this being adopted in Massachusetts anytime soon is very rare," said John Whitlock, a partner at Boston's Palmer & Dodge LLP. "Things just don't happen that fast."

© Boston Business Journal. June 11, 1999.
Reprinted with permission. All Rights reserved.