The State Bar of Wisconsin’s Multidis-ciplinary Practice Committee has decided that it won’t advocate for a particular viewpoint on the question of whether, and under what circumstances, the Supreme Court of Wisconsin should permit economic partnerships between lawyers and nonlawyers.Instead, it chose June 12 to define the subject and survey current attorney ethical restrictions in the state, determining which rules would have to be changed before MDPs could be permitted.The committee, chaired by Milwaukee lawyer Thomas L. Shriner Jr. of Foley & Lardner, began its work in January. Several months later, the 24-member group has submitted its 21-page report, which identified seven Supreme Court Rules that would have to be re-examined, should MDPs be allowed. The report also made five recommendations to the State Bar Board of Governors for its upcoming meeting. The American Bar Association (ABA) created its Commission on Multidiscipli-nary Practice in August 1998, which recommended last summer that the Model Rules of Professional Conduct be amended to allow lawyers to share fees with nonlawyers, “subject to certain safeguards.” But in August of last year, the ABA’s House of Delegates did not accept that recommendation, calling for further study of the issue.State Bar President Leonard L. Loeb expressed concerns about multidisciplinary practice to the State Bar Board of Governors last September, prior to appointing the bar’s MDP Committee.
Committee won’t usurp governors
Among the initial conclusions of Wis-consin’s committee, according to its newly completed report, was that, “(T)he level of awareness within the State Bar of what the MDP debate is all about is very low, not only among Bar members generally, but even among those active in the Bar.” The report stated that the committee doubted that it could have reached a unanimous view on the bottom line issues — but that’s not why it opted for a descriptive, rather than prescriptive, approach. “Rather, the Committee concluded that MDPs and the issues that they raise are not intuitive concepts. For this reason, we determined that the Committee’s time and energies were better spent on education than in attempting to make the fine judgment calls required for legislative proposals.”The group also noted that its composition does not constitute a representative cross-section of either the state or the State Bar.“The committee does not wish to usurp the Board of Governors’ right to decide how it wishes to shape the debate on whether or not to authorize MDPs, and this sense of deference, too, counsels education rather than advocacy at this time,” the report stated.It additionally concluded that the definitions of “the practice of law” and “unauthorized practice” in Wisconsin’s unauthorized practice statute, Sec. 757.30, are unclear. That law calls for local district attorneys to prosecute those who engage in unauthorized practice.After polling 20 district attorneys, as well as the Wisconsin Department of Justice, the committee found that prosecutions under the statute were rare. These prosecutions typically focused upon nonlawyers who passed themselves off as lawyers — rather than at “otherwise competent professionals, such as insurance agents or accountants, for providing estate planning services, tax advice or other such services that lawyers also provide.”
MDP impact upon rules
SCR 5.4, “Professional Independence of a Lawyer,” currently prohibits the sharing of fees between lawyers and nonlawyers. The rule “is directly and unavoidably incomparable with any well-developed form of MDP and would have to be repealed or amended in material respects,” the committee wrote.Among the other ethics rules that the committee said would need reconsideration, if they were to co-exist with MDPs, are:lSCR 20:1.2 Scope of Representation. The rule would have to be revised to require that there be a clear understanding between the lawyers and nonlawyers in an MDP regarding the lawyers’ ethical restrictions. The committee wrote, “(N)onlawyer members of MDPs must, in matters affecting the ultimate outcome of the representation, when conflicts arise between the desires of the MDP and the desires of the clients, be disabled from interfering with the primacy of the clients’ needs.”lSCR 20.1.5 Fees. Attorneys currently must charge “reasonable” fees under this rule. It follows, the committee reasoned, that the nonlawyers of an MDP would also have to abide by the rule — as well as attorney ethics opinions on the topic. These provide that lawyers cannot charge the same rate for clerical tasks as tasks involving legal skills, lawyers may not bill for normal office expenses unless the client specifically agrees to it and so on.lSCR 20:1.6 Confidentiality of Information. The rule would likely be revised so that clients of MDPs would have to be informed about the likelihood of disclosure to nonlawyers of information relating to the representation and the potential loss of the attorney-client privilege, the report urged.lSCR 20.1.7-20:1.10 Conflicts of Interest. The current rules, broadly speaking, prohibit the representation of a client where there is a conflict of interest with another client or a former client. They also impute conflicts from one member of a firm to all members/employees of the firm. According to the committee, the rules would have to be amended to apply to all members of an MDP — or no members of the MDP. lSCR 20.2.1 Advisor. Lawyers are currently required to offer “independent” advice. This might be problematic where a lawyer, under the operating procedures of an MDP, must refer a client to a partner accountant or other professional, the committee observed. lSCR 20.5.1-20.5.3 Supervisory Functions. Under the present rule, a lawyer subordinate to another lawyer doesn’t violate the ethics code if he or she acts in accordance with a supervisory lawyer’s reasonable resolution of an arguable question of professional duty, the committee reminded. Clarification would be needed for when a lawyer is subordinate in an MDP to a nonlawyer, rather than a lawyer.
The committee concluded its report with a series of recommendations to the Board of Governors, including to publish and distribute its report, or a summary of it, to all bar members, and to foster a discussion on the topic by posting links on the bar’s Web site to significant studies, reports and other relevant information.The governors also must decide if its own discussion would focus on the issue from the perspective of lawyers as a profession, or if it “should seek to discern a wider public policy,” the report stated.It added that, after the State Bar membership has informed itself on the topic, then the governors must channel that knowledge, involving the State Bar sections, local and specialty bars, and other interested groups. The bar should additionally keep the discussion of unauthorized practice, and whether Sec. 757.30 should be amended, within the confines of the MDP debate.Finally, the report posited that the Board of Governors must discuss and ultimately adopt a position — or decline to take one — for the State Bar of Wisconsin, recognizing that the Wisconsin Supreme Court and potentially the state Legislature will have the final word, not the ABA.