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At its yearly meeting this week, the American Bar Association’s House of Delegates will tackle the highly charged question of whether lawyers and non-lawyers should be allowed to become partners in multidisciplinary practices. After nearly a full year of rancorous debate, there appears to be growing sentiment within the ABA’s leadership to continue the ban on MDPs. On Friday, the association’s Board of Governors met and voted to recommend that the House of Delegates reject changing the ethical rules to allow MDPs. Instead, the board voted in favor of a joint proposal put forward by New York, New Jersey and Illinois that prohibits MDPs, but continues to allow lawyers and non-lawyers to work side-by-side, on the condition that nonlawyers have no control over the attorneys. The board also voted in favor of proposals by Florida and Ohio rejecting MDPs. “It is clear that the momentum is moving in favor of the ‘MacCrate report,’ ” said former New York State Bar Association president Thomas Rice, referring to the State Bar’s 388-page report that recommended not to allow MDPs. The 532-member House of Delegates will meet Monday and Tuesday. The debate about MDPs is expected to begin at 10 a.m. Tuesday, though the ABA’s calendar committee had not formally scheduled an exact time for the debate when the Law Journal went to press. A press conference scheduled for Monday morning was cancelled at the last minute, both because delegates were expected to be caucusing on Friday and because the issue is still “fluid,” according to an ABA spokeswoman. No matter how the House of Delegates votes, whether MDPs are allowed will be ultimately decided by the individual state legislatures. Last summer, the ABA’s committee on multidisciplinary practice stunned the profession with a proposal to amend the ethical rules by allowing lawyers and non-lawyers to work together, sharing fees and profits, provided that lawyers control the legal work. The proposal was tabled until this summer’s meeting so that the states could study the issue. The same committee, chaired by Sherwin Simmons of Miami’s Steel Hector & Davis, is again proposing to change the rules to allow MDPs. New York, Illinois and New Jersey have taken the opposite position. Late last month, the three states issued a joint proposal calling for a ban on MDPs. The proposal recommends that the ABA adopt the position that “permitting the sharing of legal fees with non-lawyers or permitting ownership and control of the practice by nonlawyers threatens the core values of the legal profession.” Ohio and Florida also have separate proposals on the agenda opposing MDPs. There is also a proposal to table the vote on MDPs until next year. Resolutions can be filed at any time before the delegates meet, so additional proposals might still be possible. Robert MacCrate, former president of the ABA and New York State Bar Association, had made a proposal earlier this spring — known as the MacCrate report — that opposed MDPs and advocated ancillary businesses and alliances as an alternative. In New York, lawyers are already allowed to provide nonlegal services to clients through ancillary businesses. However, in a recent behind-the-scenes maneuver, the New York State Bar Association withdrew the MacCrate report in favor of the joint report with New Jersey and Illinois. The ABA’s proposal last summer triggered heated discussions within the profession. Proponents of MDPs typically argue that clients demand the one-stop shopping efficiencies that full-service professional firms would provide. The written report issued by Mr. Simmons concludes that “the legal profession must take a proactive role” to changes within the business world. Allowing MDPs, the report continues, “opens up new avenues of service to clients, responds to the suggestions of consumer advocates, and provides new opportunities for lawyers.” Those opposed to MDPs argue that lawyers are in danger of losing their professional independence if they practice law in a setting where they answer to non-lawyers. Much of the debate has ended up centering around the five largest accounting firms, all of which currently employ lawyers. In Europe, where MDPs are allowed, the accounting firms have substantial legal practices; in America, although the “Big 5″ accounting firms have thousands of lawyers on their payrolls, they are theoretically prohibited from practicing law. Some see the ABA’s recommendation in favor of MDPs as nothing less than capitulation to a hostile takeover by the accounting firms. Speaking Friday morning at a seminar on MDPs, Robert Ostertag of Poughkeepsie’s Ostertag & O’Leary likened the pro-MDP recommendation to “appeasement in the face of what looked like a fait accompli.” Mr. Ostertag added that the proposal “emanates from the wrong source, for the wrong purpose.” The factions opposed to MDP also argue that attorneys and other professionals have different obligations regarding client confidentiality. For instance, there are times when accountants are obligated to disclose information that lawyers would generally keep secret. Pro-MDP voices say that the rules can be drafted so that lawyers can work in partnership with non-lawyers and still adhere to traditional ethical strictures, including preserving client confidences. Since last summer, the states that have either voted against MDPs or appear to be leaning that way include Florida, Illinois, Kansas, Kentucky, Nebraska, New Jersey, New York, Ohio, Tennessee, Texas and West Virginia. The pro-MDP states appear to be Arizona, Maine, Minnesota and Utah. Most of the remaining states are still studying the issue or have been unable to agree on a position. Bar groups in New York City and Philadelphia have tended to favor MDPs to a greater extent than their statewide counterparts. In New York, the Association of the Bar of the City of New York and New York County Lawyers’ Association supported lawyers being allowed to partner with non-lawyers under certain circumstances. Likewise in Pennsylvania, the Philadelphia Bar Association approved a resolution allowing MDPs, as long as they are controlled by lawyers, but that state’s bar has so far rejected MDPs. Visit Law.com’s ABA 2000 Convention Coverage

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