SOLICITORS' VIEWS ON MDPSLaw Society research in February 1997, involving a sample of 675 solicitors, showed that:-- 14% of the 72% of respondents who expected major changes in the organisation of private practice in the next five years predicted there would be MDPs.-- 22% of solicitors in firms with 11 or more partners expected to see MDPs compared with 3% of sole practitioners.-- 35% of solicitors thought that firms would become MDPs and that the numbers of such firms would increase and 24% said they believed this strongly.

Fifty one percent thought the Law Society shouldsupport such a change.MIKE YUILLE EXAMINES LABOUR'S PLANS FOR MDPS AND COMPARES THE SITUATION IN BRITAIN TO THAT FACED BY FOREIGN LAW FIRMSMulti-disciplinary partnerships (MDPs) could well be a reality for solicitors by next year, eight years after the the Courts and Legal Services Act (1990) made them a possibility.

Other professional bodies have regularly lobbied the Law Society to allow MDPs, as well as the Office of Fair Trading (OFT), which favours such a move.

And the Labour party, when in opposition, threatened to refer the matter to the Monopolies and Mergers Commission.

Now, although the Lord Chancellor's Department says it has 'no current plans' to force the issue, the Law Society is reviewing the feasibility of MDPs and it is now arguably a question of when, rather than if, the change is made.The Law Society's standards and guidance committee is examining how MDPs involving solicitors could be made to work, and a special steering group is due to report to the Law Society's Council in December.

Alison Crawley, head of ethics at the Society, and the person leading the MDP project team, says: 'Once the rules actually change, there could be a snowball effect.

Those who are currently poised will presumably merge fairly quickly.

If there is a sufficient number of them, it might give a boost to other firms to take on non-solicitors.'The first task has been to look at what other types of MDP exist.

'We found that in the UK, very few other professions have restrictions except doctors and solicitors,' says Ms Crawley.

The Institute of Chartered Accountants for England and Wales (ICAE&W) issued practice notes on MDPs back in the 1970s and since then, firms have freely taken non-accountants into partnership.

Similar guidance has been issued by the Royal Institution of Chartered Surveyors.

Many solicitors have close relationships with estate agents and independent financial advi sors, sometimes sharing rented property.

And since the Copyright, Designs and Patents Act 1988, the Chartered Institute of Patent Agents (CIPA) has been waving a green flag for MDPs.

Each body's rules are intended to be flexible enough to suit the various partnership arrangements.

Restrictions on use of the chartered title -- the ICAE&W requires all partners in a firm to be accountants before it can use the term, while the CIPA requires at least 25% to be patent agents -- is not a commercial obstacle.None of the Big Six accountancy firms has suffered by dropping the title.

Rules in other chartered professions, whether for engineers, town planners, or even architects, offer similar flexibility.

The Law Society, however, has until now argued that solicitors are a special case.

Since the Courts and Legal Services Act removed any statutory block on MDPs, only the solicitors' practice rules have stood in the way by preventing fee-sharing with non-solicitors and restricting the work of solicitor employees.

But Margaret Bloom, the OFT's director of competition policy, has referred publicly to a growing frustration over the obstacles posed by the solicitors' professional rules.

Addressing a lawyers' conference in July, she argued that MDPs involving solicitors were even in the national commercial interest: 'If a major UK law firm and a major UK accountancy firm can join together to sell a good product in Poland, why should we put sand in the wheels to prevent them doing so?'Solicitors are warming to the idea, and in research recently conducted by the Law Society, a majority showed support.

That has not always been the case, as many lawyers once feared expansionist accountancy firms would swamp law firms in mass takeovers.But solicitors' concerns are now not so much focused on the dangers involved in allowing solicitor MDPs, but on the threats that exist if they continue to be banned.

This is because Big Six accountancy firms are developing their own international networks of law firms.

The MDP scene in Europe, is 'messy,' says Ms Crawley -- something the accountants are discovering.

In Belgium and Luxembourg, while accountants can set up their own law firms, they are not allowed to publicise the link.

Price Waterhouse and Ernst & Young have even taken the Dutch Bar to court over its rules, and are now negotiating a solution.Three of the Big Six so far have committed themselves to developing a UK legal arm via carefully framed associations with law firms.

Arthur Andersen has Garrett & Co, Price Waterhouse (PW) has Arnheim & Co, and Coopers & Lybrand has Tite & Lewis.

But it has not stopped there.

Last month, Andersens added a substantial legal practice, Dundas & Wilson, to its fold.The arrangements allow them to field their own multi-disciplinary teams at the drop of a hat.

But fully fledged MDPs are still the goal, says Christopher Tite.

'Our vision is that if and when the rules change, we hope we would be able to form an MDP with Coopers & Lybrand,' he says.

Tite & Lewis may also merge with Coopers & Lybrand's European law firms, where local rules allow.

The 45-lawyer firm plans to grow sufficiently fast in the next three years to be able to compete internationally with other City law firms, and it is taking on solicitors from the top ten firms almost every week.A gamble it may be, but the ace in the hole is Coopers & Lybrand's planned merger with Price Waterhouse, which could see Mr Tite's target achieved much sooner.

'We are having merger discussions with Arnheims.

Combined with recruitment this would push us in to the top 100, ' says Mr Tite.Coopers, PW and Arthur Andersen are lined up to be big legal players in the next decade, and others, including Ernst & Young and KPMG, whose merger plans were announced last week, and Deloitte & Touche, may follow.

This could spell trouble for medium-sized law firms.

'If there is a demand for the services we can deliver, that might lead to a shake-up in market share.

Medium-sized firms may have to re-focus.

The next five years will be quite dynamic,' says Mr Tite.

Giles Henderson, senior partner at Slaughter & May, says: 'A senior partner at one of the Big Six told me recently that [the accountants'] ambitions on the legal front are not in competition with us, but with the notch just below us.'Ian Terry, managing partner at Freshfields, agrees: 'Not all law firms are competing in the same market.' But Mr Henderson warns: 'You should never be complacent.

We recognise that we must keep on our toes to deal with competition.'Moving to MDPs may require a leap of faith from solicitors, as many have not believed their clients want MDPs.

But as Ms Bloom said, when noting in July the growing demand for them: 'We shall never know what the customers want unless we give them the choice.'TIM WEEKES TALKS TO SOLICITORS AT LAW FIRMS ALLIED TO BIG SIX ACCOUNTANTS AND ASSESSES A DIFFERENT STYLE OF PRACTISINGIn the most apocalyptic vision, the traditional big law firm will have ceased to exist in 25 years time, swallowed up by global mega-businesses bearing brand names such as KPMG and Arthur Andersen.Even if that prospect seems unrealistic, there is no doubt that a new crop of associate law firms backed by the accountancy giants is now competing successfully with big City firms.

The oldest of these -- Arthur Andersen-associated firm Garretts -- has recently taken on its first trainees.

Does this mean the legal profession is going to be invaded by a new breed of solicitor more in tune with the attitudes and culture of the accountancy profession than of the law? Judging by the evidence from young solicitors already exposed to the multi-disciplinary culture, it is clear that working alongside accountants, tax professionals and management consultants is seen as a career opportunity, and not a threat to the status of the legal profession.Sylvie Watts, who was promoted to partner at Garretts in September, says a multi-disciplinary way of working makes particular sense for her as a specialist in executive remuneration and employee benefits.

She says her working life as a Garretts solicitor is more productive because the firm has access to Arthur Andersen experts in areas such as financial performance measurement and comparative data.'This is professional back-up that is difficult for a traditional law firm to offer,' she says.

But this new, multi-disciplinary way of working is not necessarily the prime attraction of these associate firms.

For instance, newly qualified solicitor Elizabeth Goodrich says she was persuaded to join Price Waterhouse associate firm Arnheim & Co in September by the vibrant atmosphere of a fast-growing firm rather than the multi-disciplinary environment it offered.'I liked the idea of a firm that was interested in promoting its people and building a team of top-quality lawyers,' Ms Goodrich says.

'Because it is new, Arnheims needs people who are self-motivated rather than the foot soldiers that the established firms need.'Jeff McGeachie, a Garretts lawyer for slightly longer than two years and now a senior manager, says appreciation of the benefits of multi-disciplinary working comes after joining the firm rather than before.

But Andersens' distinctive corporate outlook -- quite different from that of any big law firm -- was a strong draw.

'One of the things Garretts takes from Andersens is a much more open culture, something I was enormously impressed with,' Mr McGeachie says.

His colleague Chris Sawyer, two years qualified, says he enjoys the absence of a 'partners versus the rest' management approach.

'You feel that decisions are taken in the long-term interests of the whole organisation rather than the short-term interests of the partners,' he says.Ms Watts confirms the importance of the long-term business ambitions of the employer.

She says it was refreshing to hear at an induction course at Andersens' global training centre in Chicago that she and her colleagues were 'holding the Andersens business in trust for the future'.

Ms Watts adds: 'When you have come from a law firm where you felt the partners were not even aware that they were taking decisions that would be important in ten or 15 years time, that is very impressive.'Firms such as Arnheim & Co and Garretts are able to offer their employees the best of two normally contradictory worlds: they are still relatively small, so each person can feel the impact of their own work on the growth of the firm; and they are backed by the resources of enormous accountancy firms, allowing them to grow much faster than normal legal start-ups.Clearly, this attracts solicitors who like a business challenge.

As Ms Goodrich says, the reaction of her peers at her previous firm when she said she was joining Arnheim & Co was that 'they liked the idea, but thought multi-disciplinary firms were in uncharted waters, and they wanted to see how it went'.

Similarly, Mr McGeachie says Garretts has a culture 'in which people of an entrepreneurial nature will thrive.

Andersens will give you the means to develop legal services and products that are innovative.'But while these young solicitors get a buzz from working in a growing firm, others have formed a link with accountants for its own sake.

Patrick Hurd, sole principal of London firm Wycombe Hurd, recently announced he was associating with Hughes Allen, a mid-sized accountancy firm.

Mr Hurd maintains there are many countries, such as Italy, in which lawyers and accountants work together much more freely than in the UK, and that clients like the approach.

Since much of his work is international, he wants to offer his clients a similar kind of service.

He admits there is a cultural, as well as a regulatory, barrier preventing UK solicitors moving to multi-disciplinary partnerships, but says: 'I got my taste for working with accountants during a spell working on a consultancy basis with [accountants] Pannell Kerr Forster in Jersey.'While all these solicitors have taken a decision that marks them out from their peers, they do not want to lose their legal culture to the accountancy world.

When asked whether they worked for Garretts or Andersens, all the Garretts solicitors interviewed said Garretts without hesitation.

They also harbour no ambitions to become part of the senior management of Andersens, focusing instead on building the legal practice.This is interesting evidence of the extent to which the legal practice remains semi-detached from Andersens, not just in law but also in the minds of those who work there.

Any similar group of Andersens accountants would surely admit to ambitions to reach senior management within the wider organisation.That might change as the first batch of Garretts trainees comes through.

What is certai n is that solicitors feel able to work on multi-disciplinary teams, and to call on expertise within accountancy firms, without compromising their identity as lawyers.

The professions are not -- or not yet -- seeing solicitors turn into legally-trained accountants.THE RULES ON MDPSThere are several existing road blocks on the route to multi-disciplinary partnerships.

Initially, at least two of the solicitors' practice rules would have to be amended, even if only slightly:Practice rule 1 which covers in general terms the solicitor's independence and integrity.Practice rule 7 which covers fee sharing.

It says a solicitor shall not share or agree to share his or her professional fees with any person except: a practising solicitor; a practising foreign lawyer; the solicitor's bona fide employee; or a retired partner or predecessor of the solicitor.There are also common law questions of client privilege and confidentiality which would have to be addressed, possibly inlegislation.Lastly, there is the matter of regulation.

The Law Society has said it would want to be able to ensure that 'unsuitable people' do not remain in a partnership.

In other words, to make sure that it can regulate in thepublic interest over non-solicitor members of a MDP.The Society's standards and guidance committee is scheduled to report to the Council in December on how MDPs would work in practice.

It is likely that the Society will consult the profession again on the issue sometime during the first half of 1998.