For years, US lawyers did not understand what all the fuss was about.

Europeans would attend the American Bar Association (ABA) annual conference each August, tell them what terrible things the accountants were doing at home, explain what a huge issue multi-disciplinary partnerships (MDPs) was, and warn that the US would be next.

The ABA took no notice.Until this year.

The 1998 ABA conference in Toronto was the MDPs conference.

All of a sudden, US lawyers, including new ABA president Phil Anderson, could talk about nothing else, especially the high-level commission he has formed to investigate MDPs.Mr Anderson said: 'The central question to address is the protection of clients and the public interest.

There is vigorous competition among the Bar, and competition from other sources is to be expected and welcomed if ethical standards are met.

Competition makes us better.'The emergence of the MDP issue in the US is a reflection of how large is has become globally.

The Big Five accountancy firms -- or professional services firms as they prefer to be known -- have made huge strides in Europe and Australasia, and are turning their attention to the US.

In 1997, Arthur Andersen recruited more lawyers in the US than any law firm.

The Texas state Bar brought a legal action against Arthur Anderson over the alleged unauthorised practice of law, but has recently dropped it.

Globally, half of the ten largest law firms in the world are accountant-led.One major incentive was news that the US House of Representatives had passed a bill giving accountants lawyer-like rights to client confidentiality before the Internal Revenue Service.

The bill is now awaiting a hearing in the Senate.

The main argument used by opponents of MDPs is that lawyers' duties of privilege and confidentiality conflict directly with accountants' duty to disclose wrongdoing they have uncovered.

This was the reasoning a Dutch court used last year in rejecting the accountants' attempt to overturn the local MDP ban.

But if this distinction disappears, then this argument falls.The ABA commission will draw on the experience of other countries, including Canada, where the Law Society of Upper Canada is on the verge of allowing a form of MDP.

In Europe, J&A Garrigues, Spain's largest firm, was taken over by Arthur Andersen last year, while the French, Belgian, Dutch, Swedish and Norwegian Bars have fought desperately to hold the Big Five at bay.

The Paris Bar recently gave up and now backs MDPs if the lawyers involved swear on oath of independence from the accountancy arm.

MDPs are allowed in the Australian state of New South Wales on the basis that lawy ers retain control, although speaking in Toronto, Brett Walker, president of the Law Council of Australia, said a country-wide relaxation of restrictions on MDPs was likely.

The New Zealand Law Society is also investigating MDPs, while the country's Commerce Commission is looking at whether the MDP ban is anti-competitive.England and Wales is a big target, although the accountants' confidence will have been knocked by the collapse of the merger between Garretts, Arthur Andersen's associated law firm, and City firm Wilde Sapte.

But the firms associated with Price Waterhouse (Arnheim & Co) and Coopers & Lybrand (Tite & Lewis) will merge next month following their associated firms' merger and could then seek to merge with an existing firm.

KPMG is said to be talking to several firms, and Ernst & Young is actively seeking a partner.

Larry Taman, head of Ernst & Young's global legal practice, told the Gazette that the Wilde Sapte outcome made him consider how, not whether, to merge.There is a growing feeling that MDPs represent a future that can only be regulated, rather than avoided.

So compromise is in the air, involving structures that keep the law firms, at least on their face, independent.

The Dutch Bar is on the verge of reaching an agreement with three of the Big Five that would see their lawyers form an MDP with their tax lawyers (a separate profession in Holland), while the tax lawyers form a parallel MDP with the accountants.

The International Bar Association's conference in Vancouver later this month should adopt a policy saying that if MDPs are allowed in a country, they should be regulated so as to 'eliminate the risk of undermining the lawyer's independence, giving rise to conflicting interests, and eroding confidentiality and client privilege'.Possible safeguards include: requiring disclosure of how the co-operation between lawyers and non-lawyers is affected and how their interests are represented; the submission of the entire MDP -- including non-lawyers -- to the legal profession's authority; giving 'clear notice' to clients about the problems of MDPs; precise rules on avoiding conflicts of interest, such as banning the combination of auditing services with legal services; and rules setting out the maximum degree of non-lawyers' ownership or voting control.But while MDPs are still widely banned -- usually on the basis that lawyers may not share fees with non-lawyers -- the independent law firms set up in association with accountants try to get around the restrictions.

The usual method is a 'service agreement' with the parent firm, which sees the law firm handing over large sums of money.Later this year, the Law Society will issue a consultation seeking views on various forms of MDPs, ranging from allowing solicitors to work in MDPs controlled by non-lawyers, to just permitting law firms to accept outside investment from non-lawyers without handing over any control.

President Michael Mathews has publicly stated his support for relaxing the MDP ban.But Toronto also saw the emergence of the next step beyond accountants moving into law, with news that American Express had added New York-based Goldstein Golub Kessler -- the largest single office firm of accountants in the US -- to a string of other acquisitions of accountants.It raised the alarming prospect of corporations buying law firms.

Top US legal management consultant Brad Hildebrandt told the Gazette that consolidation in the finance industry would make corporations having law firm subsidiaries 'logical'.

ABA president Phil Anderson noted: 'If accounting firms can practise law, any business entity can do so.' Mr Mathews said he would be 'more concerned' about corporations owning law firms than accountants.

'I would rather start with other professionals,' he said, because it meant there was a professional body to complain to.Legal services? That will do nicely.