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You have to admire the American Bar Association for its bluster. Barely a year ago, an ABA commission had endorsed multidisciplinary practice — lawyers practicing law in partnership with nonlawyers. But critics won a reprieve, calling for further study. And in July, citing its “core values,” the ABA passed a resolution at its annual convention urging states to prosecute “the practice of law by entities other than law firms.” At the very least, this crackdown ignores the plain fact that MDPs are already all around us. Exhibit A: all the lawyers who now perform quasi-legal services at the Big Five accounting firms. “Do you try to tell 5,000 to 6,000 lawyers that they have to discontinue what they are doing for a living?” asks Altman Weil Inc.’s Ward Bower, who has been studying the Big Five’s steady creep toward the practice of law for 15 years. The ABA may be legitimately concerned about core values, and not merely a threat to its turf, but Bower has a point — it has asked states to swim against a strong current. Worse, it has asked states to plunge into the water without even waiting for a public outcry against MDP. The result: a series of empty gestures — or worse. Our predictions: � The bar will trip on step one. A necessary precursor to prosecuting MDPs is to define clearly what is the practice of law, and what is not. One problem: That’s never actually been done, consistently or well. States’ current definitions, if any, are circular — the practice of law is that which lawyers do — or so broad as to be virtually unworkable. Big Five firms steadfastly maintain that their lawyers do not practice law, and, given the lack of a firm definition, it is hard to argue with them. � It will be difficult to cure this problem. All agree that representing clients in court is the stuff of lawyering, but it gets fuzzy after that. Take the preparation of legal documents. Presumably, this should be left to lawyers working in law firms, but nonlawyers and lawyers in MDPs regularly draft documents with legal import, such as employee benefits plans, trusts, and wills. And forget trying to decide what types of legal advice are the exclusive province of lawyers. Consulting firms provide litigation support; they establish corporate procedures for resolving employment disputes; and they advise clients about tax, intellectual property, and literary rights, to name just a few topics. � The courts could lend a hand in sharpening these definitions, but a case-by-case attack will yield a patchwork. Plus, not many judges will be keen on expansively defining the practice of law, as it could invite public derision that they are merely protecting lawyer turf. “It is not realistic for anyone to expect the court, the third branch of government, to enforce … a broad definition of the practice of law,” says Texas Supreme Court justice Craig Enoch. “The public wouldn’t stand for [it].” � States will strike out against the Big Five. For argument’s sake, assume that certain states think they know the unauthorized practice of law when they see it, and they proceed to go after MDPs. It’s doubtful, to say the least, that any state will then bag one of the Big Five accounting firms. State bar authorities are barely able to handle their run-of-the-mill disciplinary docket, such as case-running and lawyers who don’t return phone calls. To take after multinational corporate giants like Ernst & Young or Arthur Andersen, regulators would need a sizable funding boost. And that’s not likely, considering lawyers are still deeply divided over MDP. The ABA voted resoundingly against MDP, and the majority of states that have taken up the issue are anti-MDP, but that is mainly litigators talking. Business lawyers, who are not as prominent in bar leadership ranks, are more pro-MDP and tend to believe that markets, not bars, should shape the delivery of legal services. � Instead of taking on a Big Five firm for the alleged unauthorized practice of law (UPL), states could instead pursue a Big Five lawyer, individually, for violating the rule against lawyers sharing fees with nonlawyers. Such a disciplinary proceeding, as opposed to a UPL prosecution against a firm, would be handled administratively and thus not be as costly, at least initially. In this arena, state bar regulators have significant leverage. Says Thomas Rice, immediate past president of the New York State Bar Association: “The mere fact of [a lawyer's] lack of cooperation is violative of the rules.” But any salvo fired against the Big Five, whether a single lawyer or the whole enchilada, will meet with serious resistance, says James McCauley, ethics counsel for the Virginia State Bar. In a disciplinary proceeding, he points out, a defendant could appeal an adverse decision to state court or try to remove the case to federal court, alleging, say, a violation of antitrust laws. “Anyway you crack the egg,” McCauley says, “it will spill all over you.” � Legislatures will intervene. Even if a state bar, against all odds, could get a court to rule against a Big Five firm, the prosecution would likely be derailed. Significant UPL prosecutions often find their way to a state legislature. The most recent, high-profile example of this is the Texas bar’s UPL initiative against Parsons Technology, Inc., a publisher of legal self-help software. In 1999 a federal judge enjoined Parsons from selling its products, but he was trumped by the Texas legislature, which promptly put self-help publishers back in the legal game. If legislators will meddle in UPL on behalf of a small publisher, imagine the political groundswell a Big Five firm could create. State practice-of-law definitions are often broad, but they are also replete with exemptions — safe harbors carved out for nonlawyers who have petitioned courts and legislatures for relief, explains Lynda Shely, director of lawyer ethics for the State Bar of Arizona and chair of the ABA Standing Committee on Client Protection. “When courts really tick off an entire industry,” she says, “that is when the legislature gets involved.” In Arizona and Virginia, for example, courts ruled that only lawyers could prepare real estate closing documents, but realtors’ lobbies persuaded legislators to reverse the rulings. � Most likely, legislators will continue to be hostile toward state bars that go on the offensive against MDPs. After all, core values just don’t have much resonance beyond the bar. “[The general public] want their services faster, cheaper, and better,” says Lynne Liberato, president of the State Bar of Texas, “and it is counterintuitive to a nonlawyer to say you can’t have one-stop shopping.” � The Big Five won’t be deterred. The end result of the ABA’s vote against MDPs is a promised crackdown that will be anything but coherent and widespread. Thus it will be easy to ignore. Want proof? The Big Five show no signs of rushing to lobby at the state level. “We have taken the view that this is a decision that lawyers need to make themselves,” says Joe Petito, a Pricewaterhouse-Coopers partner in the government and professional affairs division. “We aren’t engaged in any activity to undermine the ABA.” Adds Bower, of Altman Weil: “The Big Five are likely to protect their position legally when challenged, and this isn’t a challenge.” Nor will the potential crackdown against MDPs do anything to dampen the Big Five’s law-practice flirtation. “Even with the ABA’s vote,” says Jeffrey Peck, managing director of the office of government affairs for Arthur Andersen, “the number of lawyers who want to come to work for Arthur Andersen will continue to expand and grow as it does every week.” Right now, the Big Five have more important things on their minds, namely the Securities and Exchange Commission, which is proposing to ban accounting firms from furnishing many consulting and legal services to audit clients. Surrounded by two regulatory forces — the ABA and the SEC — the Big Five suddenly seem like the last great champions of the free market. The ABA, meanwhile, by embracing a regulatory approach to MDP, may be inviting regulation of a sort it doesn’t want: legislative scrutiny. Enforcement authority over the unauthorized practice of law is split in the country: In some states the executive branch prosecutes UPL, while in others it is left to courts and the state bar. The risk for a bar is that a legislature will view an offensive against MDP as naked turf-mongering and an invitation to take over the regulation of who should practice law in the state. What price core values?

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