Multi-disciplinary partnerships - the debate continues

The debate over multi-disciplinary partnerships (MDPs) has been going on for years and is set to run for many more to come.

But the arguments are well-worn now and developments in recent months have done little to clarify how things are shaping up.

In the US and Scotland, for example, lawyers have reaffirmed their opposition; but in England and Wales and Canada, the mood is far more pro-MDP.

The Law Society's MDPs working party's long-term goal is that 'solicitors should be allowed to provide any legal service through any medium to anyone, while still providing the necessary safeguards to protect the public interest'.

To bring about MDPs in the UK, primary legislation is needed.

However, the working party has identified two 'interim models' which can be done without this - one allowing non-solicitors to become minority partners in a law firm and the other allowing linked partnerships, such as Garretts and Arthur Andersen, to share fees.

The key issue is independence.

The Society is looking at whether this means the ability to give independent advice or has a broader meaning to include commercial agreements between law firms and other businesses.

Others have already decided that independence should be total.

The International Bar Association (IBA) is always a good bell-wether of opinion, and at its biennial conference in Amsterdam last month, it once again pulled back from confrontation on this issue.

When setting its policy two years ago, an initially very hostile resolution was heavily amended and ended up taking no position either way on MDPs.

The IBA's policy is simply that in the event of a country allowing MDPs, it should regulate individual lawyers within them - rather than the MDP itself, crucially - to ensure that the core values of the legal profession are upheld.

There were attempts in Amsterdam to harden this and cast MDPs as 'a material threat' to core values.

Once again, the IBA council rejected this.

But the MDPs argument is moving out of the control of lawyers; it is outside authorities which matter - they were introduced in New South Wales in Australia not on the lawyers' say-so, but on the state government's.

On the anti-MDP side, the single most important contribution to the US debate came in a letter from the Securities and Exchange Commission, which said its independence rules 'prohibit an auditor from certifying the financial statements of a client with which his firm also has an attorney-client relationship'.

This supports the view that the contrasting duties lawyers and accountants have - one to their client, the other to the wider public - make their combination in a single practice incompatible.

However, in the UK the Office of Fair Trading, in its investigation of competition in the professions, is looking at MDPs from the standpoint of a long-time supporter.

Another factor is the World Trade Organisation (WTO), which will shortly begin its investigation of lawyers' cross-border practice rules.

The WTO works on the basis that any MDP ban would have to be the minimum regulation required to meet justified policy objectives, such as avoiding conflicts and retaining confidentiality.

The indications are that a total ban is too much regulation.

And then there is the European Court of Justice.

At some point in the next six months, it will consider an appeal against the Dutch Bar's ban on MDPs brought by Big Five accountants Arthur Andersen and PricewaterhouseCoopers.

At first instance, a Dutch court upheld the ban, saying that, even if it is a restriction on the free provision of services, it is justified in the public interest because the independence of lawyers is essential to the administration of justice.

The court found the ban proportionate, pointing out that it does not prohibit co-operation between lawyers and accountants.

But if the European court disagrees, then the MDP revolution will truly begin and no amount of wailing from either side of the Atlantic will stop it.

Neil Rose