By George A. Riemer
The Board of Governors has asked every OSB committee and section chair and every local bar association president to lead a discussion within their respective groups on the issue of multidisciplinary practice (MDP) in the upcoming months. The board has asked each group to submit a brief report on its discussions, conclusions, observations or suggestions to the state bar by July 1, 2000. To aid in the discussion of this issue by all bar members, I have set forth below the background information provided the foregoing individuals (sans attachments and reporting form).
Oregon’s Disciplinary Rules
Oregon lawyers cannot presently divide legal fees with nonlawyers, except in very limited circumstances. See DR 3-102, below.
(A) 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 or firm members 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 undertakes to complete unfinished legal business of a deceased lawyer may pay to the estate of the deceased lawyer that proportion of the total compensation which fairly represents the services rendered by the deceased lawyer.
(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.
Oregon lawyers cannot form partnerships with nonlawyers if any of the activities of the partnership consist of the practice of law. See DR 3-103(A), below.
(A) A lawyer shall not form a partnership with a nonlawyer if any of the activities of the partnership consist of the practice of law.
A similar prohibition applies to professional corporations and associations. See DR 5-108(D), below.
'(D) 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 nonlawyer 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 nonlawyer is a corporate director or officer thereof, except as authorized by law; or
(3) A nonlawyer has the right to direct or control the professional judgment of a lawyer.'
Other rules could be implicated depending on the path taken concerning MDP. Changes to the bar’s disciplinary rules on client confidences and conflicts could be involved.
A final report of the ABA MDP Commission is now available. See www.abanet.org/cpr/multicom.html.
ABA Model Rules of Professional Conduct
The ABA Model Rules of Professional Conduct contain provisions similar to Oregon’s disciplinary rules as set forth above. The ABA’s rules of professional conduct have no force and effect unless and until adopted by a state, territory or possession of the United States. The lawyer disciplinary agencies of those jurisdictions enforce their lawyer disciplinary rules.
The ABA’s House of Delegates must approve amendments to the ABA’s model rules before they become official policy of the ABA.
The ABA appointed a Multidisciplinary Practice Commission in 1998. The commission has developed a tremendous record of information on this issue and has issued a number of reports and recommendations. Its latest recommendation is that the ABA House of Delegates consider the adoption of the following resolution:
RESOLVED, that the American Bar Association amend the Model Rules of Professional Conduct consistent with the following principles:
1. Lawyers should be permitted to share fees and join with nonlawyer professionals in a practice that delivers both legal and nonlegal professional services (Multidisciplinary Practice), provided that the lawyers have the control and authority necessary to assure lawyer independence in the rendering of legal services. 'Nonlawyer professionals' means members of recognized professions or other disciplines that are governed by ethical standards.
2. This Recommendation must be implemented in a manner that protects the public and preserves the core values of the legal profession, including competence, independence of professional judgment, protection of confidential client information, loyalty to the client through the avoidance of conflicts of interest, and pro bono publico obligations.
3. To protect the public interest, regulatory authorities should enforce existing rules and adopt such additional enforcement procedures as are needed to implement the principles identified in this Recommendation.
4. This Recommendation does not alter the prohibition on nonlawyers delivering legal services and the obligations of all lawyers to observe the rules of professional conduct. Nor does it authorize passive investment in a Multidisciplinary Practice.
It appears the ABA Multidisciplinary Practice Commission is proposing that the ABA House of Delegates consider this resolution at its meeting in New York City in July 2000. State bars and other groups are just now beginning to decide what positions they will take on this resolution when it is presented to the ABA House of Delegates (either in July or at some later date). Whatever action the ABA House of Delegates takes on the foregoing resolution, the decision whether to amend Oregon’s disciplinary rules to permit multidisciplinary practices in this state is up to the Oregon State Bar Board of Governors, the OSB House of Delegates and the Oregon Supreme Court.
Review of MDP Issue by Oregon State Bar
The Board of Governors, the board’s strategic planning committee, bar staff and other bar groups, including committees and sections, have been studying the MDP issue. At this juncture the OSB may wish to formalize a structure to study and decide what action, if any, the state bar should take in this area. One possible structure for the further consideration of this issue is a discussion forum at the 2000 House of Delegates meeting, perhaps with information or position statements prepared by interested bar groups and members being made available to the delegates before the HOD meeting in September. The discussion forum would be for the purpose of educating House members and interested bar members on the various issues surrounding the MDP topic and to perhaps get a sense of the ultimate policy making body of the OSB whether the state bar should pursue consideration of those issues and the topic in general at this time.
While by no means a comprehensive list of the issues surrounding the MDP topic, here are a few of the major ones:
1. What, exactly, is intended by permitting lawyers to participate in multidisciplinary practices? Should there be limitations placed on the professional or trade groups with which lawyers can associate to engage in the practice of law and other activities under one roof? Should MDPs be allowed only if they are lawyer-controlled?
2. What happens to the attorney-client privilege in each authorized form of MDP?
3. What happens to the bar’s conflict of interest rules in each authorized form of MDP?
4. What type of fee sharing and profit sharing arrangements should be permitted?
5. For each type of permitted MDP, what would the benefits be for the public?
6. For each type of permitted MDP, what protections would the public be giving up?
7. For each type of permitted MDP, what regulations would need to be adopted to protect the independent professional judgment of lawyers regarding the legal advice they provide their clients?
8. Are there other legal service delivery options which the OSB could adopt to address the needs sought to be addressed by the establishment of MDPs which would provide the public greater benefits or expose the public to fewer risks?
The articles distributed to bar committee and section chairs and local bar presidents on the MDP issue are available if you would like to receive a copy. Please feel free to call me at (503) 620-0222, ext. 405 to get them. In addition, the ABA web site (www.abanet.org) contains a great deal of information regarding MDP. The ABA MDP Commission site is www.abanet.org/cpr/multicom.html.
Stay tuned for further discussion of and action on this important issue. If you have a comment, concern or suggestion you would like to share with the state bar on the MDP issue, please participate in the upcoming bar committee, section and local bar discussions or write to us here at the Oregon State Bar Center.
George Riemer is general counsel of the Oregon State Bar. He can be reached at 5200 S.W. Meadows Road, Lake Oswego, Ore. 97035; phone: (503) 620-0222, ext. 405; e-mail: email@example.com.