 An Update
by Basil R Hobbs
The Law Society of BC’s Working Group on Multi-Disciplinary Practice headed by Peter Ramsay, QC has been considering policy issues about Multi-Disciplinary Partnership (MDP) including issues of corporate structure and control, confidentiality, solicitor-client privilege, conflict of interest, liability insurance, unauthorized practice, professional independence, trust funds, marketing, fee reviews, custodianships and practice reviews.
In October 1999, the Law Society approved in principle the relaxation of the prohibitions on fee splitting to permit multi-disciplinary practices, subject to the adoption of a regulatory scheme that protects the core values of the profession. It then decided to participate with the Federation of Law Societies in the preparation of model rules for lawyer participation in multi-disciplinary practices in time for consideration at the Federation’s mid winter meeting in February 2000. Draft Model Rules for Multi-Disciplinary Practices were prepared in January 2000 by the Federation and are currently being reviewed by the Working Group on Multi-Disciplinary Practice.
The Law Society considered whether it should regulate individual lawyers practising in MDPs or the MDP entities themselves and in March 2000 determined that it should regulate MDPs through its jurisdiction over individual lawyers.
The Law Society is considering some options for regulation of MDPs. One option is that compliance with rules is the only requirement lawyers practising with an MDP must meet. Another option is that lawyers practising with an MDP must devise methods of complying with MDP rules and satisfy the Law Society that the methods are adequate, in order to receive a license.
There are also options being considered for the ownership of MDPs.
The first option is the “wide open” model, in which lawyers would be permitted to associate themselves in partnership and share fees with any person carrying on any other business or professions, and non-lawyers, whether partners or not, would be permitted to contribute to the capitalization of the corporate entity and share in the profits;
The second option is the “unrestricted partner” model, in which lawyers would be permitted to associate themselves in partnerships and share fees with any other person carrying on any other business or profession, but equity investment by non-partners would not be permitted; and
Yet another option is the “professional partner” model, in which lawyers would be permitted to associate themselves in partnership and share fees with the other self-governing professionals but would not be permitted to do so with non-professionals.
With respect to the scope of activities an MDP would be permitted to engage in, there are a few options to consider. Firstly, there could be a “legal services only model”. In this model, an MDP in which lawyers participate could only provide services to clients that are the practice of law or that support or supplement the practice of law. Another model would have no restriction on services. In this model an MDP in which lawyers participate could provide any services to clients that its members are competent and licensed to perform.
Two options the Law Society is considering with respect to control of an MDP are firstly, that lawyers must control MDP, and secondly that there would be no restrictions on control of the MDP. Currently, the Law Societies of Upper Canada and New South Wales require MDP’s permitted by their rules to remain under the control of lawyers.
If you have any questions about MDPs or about the Multi-Disciplinary Practice Committee, please contact Basil Hobbs at 250.753.3477.
MDP Debate
While the Law Societies of Upper Canada and New South Wales champion MDPs remaining under the control of lawyers, the Canadian Bar Association Report of the International Practice of Law Committee on Multi-Disciplinary Practices and the Legal Profession [1999 p.31] disagrees. It states that, with some exceptions, “the Committee believes that law societies should not require that MDPs limit the services they provide to those of a legal nature, or that they be controlled by lawyers. Lawyers should be able to offer their services in any business entity delivering any services, so long as those services confirm with applicable regulatory or other legal requirements.”
Where do you stand on MDPs? Please share your opinion with an MDP Committee Co-Chair, Basil Hobbs 250.253.3477 or Carman Overholt 604.631.1203.
Basil R Hobbs is the co-chair of the Multi-Disciplinary Practice Committee.
This article was published in the April 2000 issue of BarTalk. © 2000 The Canadian Bar Association. All rights reserved. |
