Governance Issues in the Multidisciplinary Corporate Practice Firm
54 Pages Posted: 27 Jun 2011
Date Written: 2000
It has become an accepted fact that the issue of, "multidisciplinary practice," is the, "most important issue facing the legal profession today." Study committees have been and will be formed and report diverse conclusions. It now appears that reform and change will proceed in halting steps. In practical terms, however, the revolution in legal services known as, "MDP," is already here, at least as it relates to the corporate practice firm, albeit not in the form of the fully-integrated professional services firm. The real questions relate to how to harness this phenomenon in a manner that protects the public and preserves the core values of the legal profession, including competence, independence of professional judgment, protection of confidential client information, and loyalty to the client through the avoidance of conflicts of interest.
As discussed in this article, given the inevitability of some form of multidisciplinary corporate practice, the most basic and important issues in this area concern the ownership and control of MDPs. I suggest that interested legal professionals devote considerable time and energy not merely to continuing discussions and debate over the propriety of multidisciplinary practice, but to actually preparing for and responding to the reality of it. Because multidisciplinary practice is actively being pursued as an alternative to traditional legal practice in the United States, an effective framework or guidelines for regulation and governance of MDPs must be created. The issues surrounding multidisciplinary practice are not intractable; the reaction of certain members and groups within the profession to multidisciplinary practice, however, has been.
This article explores the use of several corporate governance concepts, including means of separating ownership from control, the retention of independent directors and the employment of oversight committees, in creating a workable framework for MDPs. In Part II, the article traces the development of the business, legal and regulatory landscape to the present, including the recent activities of the ABA Commission on Multidisciplinary Practice and the House of Delegates, the actions of the Securities and Exchange Commission, and the states. In Part III, the article explores the use of corporate governance concepts and devices as a practical, partial solution to the MDP issue.
Keywords: Multidisciplinary practice, governance, fiduciary duties, ethics
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