Document Type

Working Paper

Publication Date

7-29-2019

SSRN Discipline

Legal Scholarship Network; Law School Research Papers - Legal Studies; Corporate Governance Network; Law & Society eJournals; LSN Subject Matter eJournals; Criminal Justice Research Network; Political Science Network

Abstract

In business and in competition value exists in striking first Accountants the socalled hawks of the professional world have made the first move In September 2017 the global accounting giant PwC opened a law firm in Washington DC called ILC Legal ILC Legal not only provides legal services on nondomestic matters but also acts as a multidisciplinary provider "MDP" and offers other professional services such as taxplanning business consulting and marketing throughout its 90country network In June 2018 Deloitte quickly followed suit the second of the Big Four accounting firms to enter the US MDP market partnering with a US immigration law firm in San Francisco With accountants now having the "first mover" advantage the legal profession must respond brbrRestricting any competitive response are the legal profession's current ethical rules Two weaknesses in the legal profession's integrity system"”the selfregulatory market monopoly over legal services and the ethical treatment of all lawyering acts under a unified profession of law"”have restricted collaborative innovations between lawyers and nonlawyers No more pronounced are larger impacts of these weaknesses to the overall competitiveness of the legal profession than when viewed through the exemplar of Model Rule of Professional Conduct Rule 54 which protects the professional independence of a lawyer through prohibiting nonlawyer ownership of law firms This rule has not stopped accountants however from hiring lawyers en masse to deliver legal services to their business and tax clients nor has the rule stopped enterprising lawyers from collaborating with nonlawyer professionals in an attempt to keep pace and to provide more holistic and comprehensive legal services to clients brbrThis Article calls for recognition and regulation of MDPs because the legal profession must now overcome the accountants' first mover advantages Despite this initial competitive setback the legal profession is also now in a position to leverage its current selfregulatory monopoly over legal services to market a higher quality ABA and state ethics board accredited MDP services to clients This Article then proposes a regulatory framework for recognizing and regulating MDPs based on a classification scheme which categorizes MDPs based on the potential risk that the ownership and control structure could undermine a lawyer's independent judgment This novel classification scheme categorizes MDPs as either white gray or black market law firms depending on the percentage of nonlawyer majority ownership and control of the MDP Based on those categories this Article argues that we should revise Rule 54 to allow for unlimited associational forms between lawyers and nonlawyer professionals but prohibit lawyers from providing legal services in black market MDPs or MDPs which are majority owned and controlled by nonlawyers "ƒ

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