Many business people and attorneys have long seen a need for multidisciplinary practices ("MDP"), where clients could obtain complementary services - e.g., accounting, financial planning - along with legal counsel. Under MDP arrangements, a client who needs the services of an attorney, accountant and financial planner would contract with a multi-disciplinary team that could offer substantial cost savings and better services.

Attorneys have always worked with members of other professions as needed. For example, corporate mergers and acquisitions require that attorneys and accountants work together to find the most appropriate structure from both a legal and accounting perspective. Until recently, however, formal MDP arrangements were prohibited by bar association rules throughout the United States. The result for the client is separate billing and separate learning curves for each service provider.

On July 24, 2001, the New York State Bar (the largest state bar) became the first to adopt rules allowing the formation of contractual business affiliations between lawyers and nonlegal service providers. We believe it is only a matter of time before California and other states follow suit.

The New York rules take effect November 1, 2001 and apply to all lawyers who provide nonlegal services if the client believes the nonlegal services are the subject of an attorney-client relationship. Some specific provisions of these rules are:

  • Nonlegal service providers may not direct or regulate the professional judgment of the lawyer or law firm concerning a legal service;

  • Nonlegal service providers can not have managerial control of the practice of law or share legal fees;

  • The lawyer or law firm must disclose its contractual relationship with any nonlegal professional before the client is referred to such nonlegal professional; and

  • Clients must give informed written consent.

We will apprise our clients of any MDP developments in California.

 

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