Going Big
August 2008
Remember when Wal-Mart first came on the scene? I always thought it was odd that you could buy mayonnaise and tires in the same aisle. Whether it is major financial institutions or cable and phone companies, it's all about being big. Let's get as much as we can from one stop, one mouse-click. In the legal field we have the merger of one practice into another. This of course isn't a recent trend. Mergers have been going on since, well, before the Cubs last won the big one. We all know what a long, long time that is. That seems to be changing in other sectors. In recent years -- let's say since the White Sox WON THE WORLD SERIES (damn caps button keeps sticking) -- "bigness" has come through the combinations of different fields/services/products under one roof or one parent.
How would that work with our field?
It would fall under the phrase "multi-disciplinary practice group" or MDP. These are defined as businesses that offer both legal and non-legal services, such as law and accounting services. The Illinois Rules of Professional Conduct have certain prohibitions on this:
"A lawyer or law firm cannot a) share legal fees with a non-lawyer (with a few exceptions); b) form a partnership with a non-lawyer if any of the activities of the partnership consist of the practice of law; c) permit a person who employs the lawyer to direct the lawyer's professional judgment in rendering legal services; and/or d) practice in a firm owned in any part by a non-lawyer, where a non-lawyer is a corporate director or officer, or where a non-lawyer has the right to control the professional judgment of a lawyer." Illinois Rules of Professional Conduct, Rule 5.4
It's basically a way of keeping those non-lawyers out of our world.
Back in March 2000, the ABA Commission on Multidisciplinary Practice recommended letting them in.
Specifically, the commission asked that the ABA amend its Model Rules of Professional Conduct to permit MDPs. The ABA rejected that proposal, perhaps knowing that if you let one of those non-lawyers in you pretty much poison the well.
From a practical standpoint, most firms have no desire to enter a world beyond the practice of law. Many, quite defensibly, feel that a lawyer's duty is serving the legal needs of his client and that running a business venture with different goals would interfere with that duty.
Owning an ancillary business may be easier to digest.
There are firms, big and small, that own other businesses but comply perfectly with the ethical canons. The other business does not control the decision making of the lawyers in any way and the legal fees are not shared with the nons.
One example comes right to you on your television screen, as Robert Shapiro of OJ fame tells us about the company he founded, called Legalzoom.com. That captivating ad makes consumers want to leap off the couch and dive into preparation of a new will, or better yet, a really cool trust.
Other firms have found new business coming from the procrastinating lawyer/consumer who is desperately seeking a quick CLE fix. These firms are selling DVDs and CDs, which provide all the CLE credit required for one low fee. They even take a charge card. Let's see, very little overhead, continue your practice without interruption, and the money comes in from the retail side of the firm. Not bad.
Closer to the edge are businesses like Boston Law Collaborative (Bostonlawcollaborative.com). This is a multidisciplinary firm that provides dispute resolution, legal advice and representation, and multidisciplinary practices of psychology, finance, workplace consulting, and consulting/training for lawyers. There is no fee-sharing with non-lawyers and, importantly, no governance by non-lawyers over lawyers. If they did, they'd have to be beheaded.
Is there a trend starting, or are these exceptions?
There are a few factors that might contribute toward more business associations regardless of whether it would ever amount to enough to be called a trend.
1) Advances in technology, which make operating an ancillary business more manageable, especially those related to the legal field (Legalzoom, computerized trial presentations, etc).
2) Demands by consumers for "one-stop" service, even in the legal field.
3) Expansion of law-related businesses. For example, the growth in mediation services has been tremendous over the past 10 years.
4) The ability -- apparently -- to have a multidisciplinary "business" that do provide lawyer services while staying within the ethical guidelines.
5) The possibility that any, all, or many other factors in a rapidly changing society prompt reconsideration of the ethical guidelines on multidisciplinary practice. It isn't beyond the realm, given that there was a recommendation to allow this eight years ago and it is permitted in Europe.
One thing is for certain -- any change in our field would be verrrry slow. That's where we differ from the nons, for better or worse.
But you never know. This could be the start of something big. dheilmann@clausen.com
