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Revisiting the hot-button issue of multi-disciplinary practice, the New York State Bar Association on Saturday proposed amendments to the disciplinary rules that would allow attorneys to enter into side-by-side strategic business alliances with non-lawyers while continuing the ban on fee-sharing. The proposed ethics rule modifications endorsed by the State Bar’s policy-making body, the House of Delegates, reflects a compromise reached last summer between practitioners who favor a wholesale ban on business relationships between lawyers and non-lawyers, and those who would open the door widely to attorney alliances with accountants and other professionals. What it would do is allow lawyers to conduct or own non-legal businesses and engage in contractual relationships that include allocations of costs and expenses. But it stops short of approving fee-sharing or giving non-lawyers financial control over lawyers. Also at Saturday’s House of Delegates meeting, the Bar Association: � Approved a 2001 budget that anticipates $20.2 million in income and $19.5 million in spending. � Received a preliminary report from the Special Committee on Public Trust and Confidence in the Legal System. The report will be finalized and submitted for formal consideration at the annual meeting in January. � Adopted “Fundamental Concepts Concerning Government Lawyers and Government Interests.” The concepts, presented by the Committee on Attorneys in Public Service, are designed to encourage involvement by government lawyers in bar association activities. � Amended the Lawyer Referral and Information Service Plan (LRIS) to enumerate the circumstances under which an attorney can be denied admission to a referral panel or removed from a panel. � Supported a proposed amendment to Section 5-3.2 of the Estates, Powers and Trusts Law to include a non-marital child as an afterborn of his or her father when paternity has been established. The proposed new disciplinary rules stem from a bellwether report, “Preserving the Core Values of the American Legal Profession,” which was drafted after the American Bar Association in 1999 floated a proposal in which the traditional wall of separation between attorney/non-attorney alliances would have largely been shattered. Robert MacCrate, former president of both the State Bar and the ABA and chairman of the committee that studied the issue, urged the New York organization to take a national leadership role. It did so with the so-called MacCrate Committee report. On Saturday, the House of Delegates unanimously approved a package of new disciplinary rules and ethical considerations that will now be transmitted to the Appellate Divisions. ADDRESSING RISKS “I think this goes a long way toward giving lawyers the ability to provide clients with coordinated legal and non-legal services, to the extent that clients want that sort of coordination, without having a risk that the non-lawyers in this scenario will have any measure of control over the way in which lawyers practice law,” said Steven C. Krane, president-elect of the State Bar and a member of the MacCrate Committee. Krane, of Proskauer Rose in Manhattan, said the Bar’s action on Saturday was designed to recognize the emergence of a new business trend, while simultaneously ensuring that traditional professional principles are not compromised. “It has been a difficult debate, and passions run deeply,” Krane said. “There are a lot of strongly held views about the nature of the legal profession, and whether the principles of confidentiality and conflict of interest and independent professional judgment are important.” While the House of Delegates would permit lawyer/non-lawyer alliances, it would also mandate new educational requirements and establish enforceable rules of ethical conduct for professionals providing services in contractual conjunction with attorneys. In addition, the Bar would require that lawyers exercise “special care” in advertising or otherwise promoting their qualifications to provide non-legal services. Those provisions were included to minimize the conflicts of interest, and perceptions of conflicts of interest, that may arise when an attorney’s business interests and duty to the client are not necessarily parallel. 2001 BUDGET On the budget, the bulk of the income would come from membership dues ($8.8 million) and continuing legal education ($5.5 million). Major expenses include $13.2 million to the operation of committees and $7.4 million for salaries and fringe benefits. Continuing legal education continues to yield substantial revenues, and the Bar Association’s audio and video offerings are generating far more than anticipated. For the 2000 budget, for example, the Bar expected to take in $250,000 for audio and $70,000 for video, but receipts are running ahead of expectations. Now, officials are projecting that audio will yield $1.2 million in income for this year while video brings in $243,000. Those higher revenue streams are reflected in the 2001 budget. FAITH IN THE PROFESSION The preliminary report from the Special Committee on Public Trust and Confidence in the Legal System addresses five main topics: bias, prejudice and access to justice; the need for a user-friendly court system; legal and judicial ethics; the juror experience and court facilities; and public understanding and media portrayal of the legal system. Among the proposals are statewide sensitivity training for judges and court staff, increased compensation for assigned counsel under Article 18-B of the County Law, restructuring the court system to consist of one branch with local jurisdiction and another with statewide jurisdiction, increased compensation for jurors in town and village courts, continued confidentiality of disciplinary proceedings, reform of the Rockefeller Drugs Laws and requiring town and village justices to be lawyers. “The Fundamental Concepts Concerning Government Lawyers and Government Interests” arose out of the recognition that a large percentage of public service attorneys do not belong to any bar association, partially because their employers discourage such participation on ethics and public interest grounds. On Saturday, the Executive Committee adopted five concepts, based on an American Bar Association model, to encourage government lawyers to become active in bar associations. Those concepts are: it is in the interest of government that lawyers participate in bar-sponsored activities; government lawyers may hold leadership positions in professional organizations; government lawyers can use indirect support services for association activities that are in the interest of the government; government lawyers may encourage colleagues to become involved in professional association activities; government lawyers can accept benefits such as dues discounts and fee waivers for Continuing Legal Education. DISCIPLINE AND REFERRAL The LRIS amendments resulted from the Committee on Lawyer Referral Services consensus that more specific language is needed to detail the circumstances under which a panel attorney can be removed, and to provide clear due process protections. Under the amended rules, a lawyer will be automatically removed from a panel or denied membership because of suspension or disbarment, conviction of a felony, failure to maintain liability insurance or failure to pay the LRIS membership fee. In addition, an attorney can face suspension or removal for repeated rejections of referrals without good cause, repeated client complaints, failure to cooperate in an investigation resulting from a client complaint or engaging in conduct that is harmful to the interests, objectives or reputation of the LRIS. The new rules allow for a temporary suspension upon written notice and provide an opportunity for the participating attorney to appeal to the Executive Committee. NON-MARITAL CHILDREN The proposed amendment to the Estates, Powers and Trusts Law (EPTL) was advanced by the Trusts and Estates Law Section to reduce litigation expenses and protect non-marital children. It was sparked by a pair of Surrogate’s Courts decisions, one in New York County and another in Nassau County. In re Estate of Walsh, Nassau County Surrogate C. Raymond Radigan acknowledged that the “legislative intent of EPTL Section 5-3.2 and EPTL Section 4-1.2 might allow a non-marital child born and acknowledged as the child of a decedent after the execution of a will to be treated as an afterborn child.” However, in that first impression 1998 case, Radigan held that there was no relief for the offspring because she conceded that her father was aware of his paternity prior to executing a will. About a year later, New York County Surrogate Renee R. Roth held In re Estate of Wilkins that a non-marital child who establishes his or her status pursuant to the EPTL can inherit as an afterborn. Roth said that while the issue had not been addressed statutorily, the trend in the law was to treat non-marital children in pari materia (statutes relating to same subject-matter, must be construed together) with children born within a marriage. The proposed amendment would give statutory authority to the holdings and commentary of Judges Radigan and Roth. Also Saturday, the Bar’s Committee on Justice and the Community bestowed its 2000 Justice Award for “bravery and personal courage” on State Trooper Edward J. Maracek of Troop D in Oneida. Maracek was cited for his conduct in pursuing an armed felon.

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