Page 14 - Multidisciplinary Organizatons - Law and Accounting
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because it is able to grow globally to be truly local in every jurisdiction. Beginning with the best firms and
companies, it can rapidly set world standards for services.
Many ethical issues discussed in this treatise can be resolved without changing the existing rules. For
example, the R-MDO could grow to represent all possible clients without conflicts of interest since those
conflicts are confined to the participating entities.36 On the other hand, there are some issues that are
similar to those found in in-house controlled MDPs. For example, location is largely irrelevant;
professionals will be even more tempted to advise in jurisdictions where they are not licensed.
§ 14.05 Rules and Enforcement — Interests of the Parties
In the introductory part of this chapter, two hypothetical WSG, were described. How do they measure
ethically?
The traditional rules that govern lawyers, accountants and other professionals are based upon concepts
grounded in relationships between clients and professionals. They are not generally based upon the
relationship between the client and a law37 relationship with a directory. Using communications tools like
the Internet, without separate organizations like WSG and PSI, does not create issues that have not been
dealt with in other chapters.38
The standard issues raised in Chapter One and throughout this treatise can easily be dealt with because
of the independent nature of the participating professionals, firms and companies in the MDO. MDOs,
absent fee splitting, are consistent with the both the ABA and AICPA rules that regulate the individual
professional since there are p changes in the professional relationships with clients. Confidentiality is
maintained when there is an attorney/accountant/client relationship established because actual cases are
handled separate and apart from the MDO. The MDO is consistent with the conflicts of interest rules since
the entities retain their independence from each other. Fee sharing, prohibited by the ABA rules, is not
an issue even if there is a central billing system because the function would be bookkeeping rather than
fee sharing.
However, WSG and PSI may create other ethical concerns, such as the unlicensed practice of a profession,
multi-jurisdictional practice, professional referral fees, advertising and others.
[1]—Unauthorized Practice of Law by an Association
As was set out in the opening example, John pays a fee to PSI each year in order to have access not only
to the resources but also to receive referrals from other members with whom he works on cases. He also
knows that 30% of the fee goes to marketing the organization to consumers and small businesses. WSG’s
principal purpose is to allow Judy and leading professional firms to gain access to resources and network
with other professionals, but also to market WSG as an alternative to the Big 5 MDPs. Over 50% of WSG’s
budget is dedicated to internal and external marketing. Is PSI or WSG practicing law?
36 Provided that the members are independent organizations with no obligation to refer business to each other, there is no confidential
information shared among all of the members. Though transactions are individual in nature, there is no reason why members could not represent
all clients and even clients with interests in the same matter.
37 Under ABA Model Rule 1.7, the confidences of each attorney in a law firm are imputed to the other attorneys. This does not mean that the firm
is regulated; it is simply the conduit for the imputation of conflicts.
38 For a general discussion of the traditional rules as applied to the Internet, see Fishkin and Thomason, The Wild West Frontier (No Ethics
Immunity for Use of the Internet), 26 San Fran. Att. 14 (4) (April/May 2000).
companies, it can rapidly set world standards for services.
Many ethical issues discussed in this treatise can be resolved without changing the existing rules. For
example, the R-MDO could grow to represent all possible clients without conflicts of interest since those
conflicts are confined to the participating entities.36 On the other hand, there are some issues that are
similar to those found in in-house controlled MDPs. For example, location is largely irrelevant;
professionals will be even more tempted to advise in jurisdictions where they are not licensed.
§ 14.05 Rules and Enforcement — Interests of the Parties
In the introductory part of this chapter, two hypothetical WSG, were described. How do they measure
ethically?
The traditional rules that govern lawyers, accountants and other professionals are based upon concepts
grounded in relationships between clients and professionals. They are not generally based upon the
relationship between the client and a law37 relationship with a directory. Using communications tools like
the Internet, without separate organizations like WSG and PSI, does not create issues that have not been
dealt with in other chapters.38
The standard issues raised in Chapter One and throughout this treatise can easily be dealt with because
of the independent nature of the participating professionals, firms and companies in the MDO. MDOs,
absent fee splitting, are consistent with the both the ABA and AICPA rules that regulate the individual
professional since there are p changes in the professional relationships with clients. Confidentiality is
maintained when there is an attorney/accountant/client relationship established because actual cases are
handled separate and apart from the MDO. The MDO is consistent with the conflicts of interest rules since
the entities retain their independence from each other. Fee sharing, prohibited by the ABA rules, is not
an issue even if there is a central billing system because the function would be bookkeeping rather than
fee sharing.
However, WSG and PSI may create other ethical concerns, such as the unlicensed practice of a profession,
multi-jurisdictional practice, professional referral fees, advertising and others.
[1]—Unauthorized Practice of Law by an Association
As was set out in the opening example, John pays a fee to PSI each year in order to have access not only
to the resources but also to receive referrals from other members with whom he works on cases. He also
knows that 30% of the fee goes to marketing the organization to consumers and small businesses. WSG’s
principal purpose is to allow Judy and leading professional firms to gain access to resources and network
with other professionals, but also to market WSG as an alternative to the Big 5 MDPs. Over 50% of WSG’s
budget is dedicated to internal and external marketing. Is PSI or WSG practicing law?
36 Provided that the members are independent organizations with no obligation to refer business to each other, there is no confidential
information shared among all of the members. Though transactions are individual in nature, there is no reason why members could not represent
all clients and even clients with interests in the same matter.
37 Under ABA Model Rule 1.7, the confidences of each attorney in a law firm are imputed to the other attorneys. This does not mean that the firm
is regulated; it is simply the conduit for the imputation of conflicts.
38 For a general discussion of the traditional rules as applied to the Internet, see Fishkin and Thomason, The Wild West Frontier (No Ethics
Immunity for Use of the Internet), 26 San Fran. Att. 14 (4) (April/May 2000).
