MDP a no go for now

November 14, 2002

By Michelle Behnke
Michelle A. Behnke Law Offices, Madison.

The State Bar Board of Governors took up the issue of Multidisciplinary Practice (MDP) at its Nov. 8 meeting. MDP was also a major issue at the September meeting. The vote was divided by the three components of the MDP Commission Final Report: (1) MDP practice (2) unauthorized practice of law (UPL), and (3) ancillary business.

MDP. By a split vote, the MDP Commission report recommended that the Wisconsin Rules of Professional Conduct be amended to permit lawyers to participate in multi-disciplinary practice firms. The commission report recommended certain restrictions to multidisciplinary practice including majority ownership by lawyers, restrictions on those professionals with whom attorneys can practice, and regulations that would require compliance with the Rules of Professional Conduct by all members of the MDP firm. The commission report provides both the pro and con positions on MDPs. Those in favor of MDPs cite coordinated services for clients and efficient delivery of those services. Those who support MDP also argue that the Rules of Professional Conduct can be crafted in such a way to safeguard client confidentiality. The commission report notes that MDPs already exist in the form of law firms that employ nonlawyers such as lobbyists, accountants, and engineers. The major difference in the proponent's proposal is that these nonlawyers would be permitted to become partners/shareholders within law firms, if desired. The commission report suggests that business lawyers may be more likely to utilize MDP firms, but also notes that MDP firms would be desired by other practice areas such as family law and real estate.

The con portion of commission report listed erosion of professional independence, compromise of confidentiality of attorney-client communications, and increased conflicts of interest as essential lawyer values that would be eroded by permitting MDPs. Those who oppose MDPs question whether the push for MDPs is financially motivated by those outside the profession. Opponents also question whether the current business climate, in light of the Enron debacle weighs in favor of maintaining the status quo. Opponents question, "what is the clearly identified problem that MDPs will solve?"

The Board of Governors voted down the MDP Commission recommendation. The clear sentiment was "not now." After the motion to approve MDPs failed, a motion was made to bring the issue up for report at the November 2003 Board of Governors meeting. The sentiment seemed to be that MDPs are an issue to be watched and studied, but the time for full acceptance and implantation is not now.

UPL. The commission report with respect to UPL statute was less controversial. The commission concluded that the current provisions in the Wisconsin Statutes on unauthorized practice of law are ineffective and ambiguous. The commission recommended redefining the practice of law to accurately reflect the unique skills of persons trained in the law. While trying to more clearly define the practice of law, the commission recognized that certain professional activities are conducted by persons who are not licensed to practice law and those activities should be permitted to continue.

The real question on UPL is enforcement. The majority position of the report suggests that once the ambiguity of the criminal statute has been cured, prosecutors (DA's) might be more willing to enforce the statute. The majority portion of the report also recommended a civil cause of action in the event of pecuniary loss.

The minority portion of the report expressed concern that after the fact enforcement was not sufficient or effective. The con position recommended the creation of a Wisconsin Supreme Court office charged with authority to bring legal action, seek contempt, or injunctive relief against those engaged in the unauthorized practice of law. The Consumer Protection Committee also weighed in and raised concerns about enforcement.

The Board of Governors voted to petition the Wisconsin Supreme Court to appoint a committee to review and propose rule changes to address the issue of unauthorized practice of law.

Ancillary business. The final area of the commission's report addressed ancillary businesses. The commission's report recommends that the Wisconsin Rules of Professional Conduct be amended to more clearly permit lawyers to sell or provide law-related products or services through an ancillary business. Again, the commission set forth some limitations on ancillary business, including the requirement that the ancillary business be a separate entity distinct from the law firm, the ancillary business not actually provide legal services, and notice be given to customers that the products and services being obtained are not legal services and do not create an attorney-client relationship.

This issue was also deferred. The Board of Governors voted to refer this issue to the Supreme Court committee charged with reviewing SCR Chapter 20.