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Lawyers and Accountants 2019 -
[2]—Relationship MDP (R-MDO)
A more sophisticated concept is the relationship model where a group of independent professional service
providers themselves create a permanent entity to act as the intermediary between them, i.e. a relationship
multidisciplinary organization. Even though the MDO is easy to conceive, the American Bar Association
Commission on Multidisciplinary Practices did not mention or discuss it.152
Today there are many networks of professional firms in a single profession that provide access to resources
at the other member firms. While the firms are independent, they cooperate to provide services to clients.
In some cases, these networks function semi-autonomously. In others, they provide back-office services to
the members.153 The R-MDO, because it contains more members, could provide, as necessary, a similar range
of services that the home offices of the Big 5 provide their other offices.
The real benefit is economic since professional service firms require managing large numbers of people.
There is a disproportionate increase in the bureaucracy as the number of locations increase. The fundamental
benefit of membership in the MDO is that the client receives the services, but the member firms are not
confronted with the daunting task of managing large numbers of professionals in remote jurisdictions. They
do not have to harmonize salaries and benefits among the professionals since each member does this
independently?
The R-MDO model takes the American Bar Association’s ad hoc model, which is based upon individual
networking, four steps further:
First, systematic relationships are formed in the context of multi-professional and multi-service organization
rather than being created on an ad hoc basis. Since the object is true one-stop shopping, the number of
professional groups could be substantially more than those that would be brought in-house by the Big S. This
is because the profitability of each member unit is independent. In addition, professional services could be
extended vertically so that the R-MDO could service different markets, such as consumers and businesses.
Second, the referral base of the professionals is extended geometrically. Because lawyers are competitors,
networking, despite collegiality, may be somewhat restricted. Building coalitions is difficult because others
at the firm may practice in the same area or have different relationships with lawyers at other firms. In an
MDO the vast majority of the professional are not lawyers and therefore not competitors. They are not
reluctant to make referrals of their clients.
Third, unlike existing networks that are common in the legal profession, the foundation for the R-MDO would
be to extend scope and depth of the traditional organization using new technologies. The objective is to
create the maximum number of relationships between the professionals in each of the disciplines.
152 An MDO is similar to Model 1, as described by the American Bar Association’s Commission on Multidisciplinary Practices, except it is organizations
that work together, rather than individual professionals. “Model 1: The Cooperative Model": This model retains the status quo. There would be no
changes to Model Rule 5.4. The prohibitions against fee sharing and partnerships with non-lawyers would continue. Lawyers would be free to employ
non-lawyer professionals on their staffs to assist them in advising clients. Lawyers could work with non-lawyer professionals whom they directly retain
or who are retained by the client. To the extent that the non-lawyer professionals are employed, retained, or associated with a lawyer, the partners
in a law firm and any lawyer having direct supervisory authority over a non-lawyer professional would have to take steps "to ensure that the person’s
conduct is compatible with the professional obligations of the lawyer,” especially with respect to the obligation not to disclose information relating
to the representation and the protection of work product.” American Bar Association Commission on Multidisciplinary Practices - Final Report,
Appendix C, Reporter’s Notes (July 2000). The major difference, however, is that it presumes that the lawyer is responsible for the entire transaction
when in fact the legal aspects may be relatively minor. Stratton, ABA Voted No MDP: But What About “Virtual” MDPs, 85 Tax Notes 1122-1124 (Nov.
29, 1999).
153 The Commercial Law Affiliates (CLA) provides marketing support for its members.
57
[2]—Relationship MDP (R-MDO)
A more sophisticated concept is the relationship model where a group of independent professional service
providers themselves create a permanent entity to act as the intermediary between them, i.e. a relationship
multidisciplinary organization. Even though the MDO is easy to conceive, the American Bar Association
Commission on Multidisciplinary Practices did not mention or discuss it.152
Today there are many networks of professional firms in a single profession that provide access to resources
at the other member firms. While the firms are independent, they cooperate to provide services to clients.
In some cases, these networks function semi-autonomously. In others, they provide back-office services to
the members.153 The R-MDO, because it contains more members, could provide, as necessary, a similar range
of services that the home offices of the Big 5 provide their other offices.
The real benefit is economic since professional service firms require managing large numbers of people.
There is a disproportionate increase in the bureaucracy as the number of locations increase. The fundamental
benefit of membership in the MDO is that the client receives the services, but the member firms are not
confronted with the daunting task of managing large numbers of professionals in remote jurisdictions. They
do not have to harmonize salaries and benefits among the professionals since each member does this
independently?
The R-MDO model takes the American Bar Association’s ad hoc model, which is based upon individual
networking, four steps further:
First, systematic relationships are formed in the context of multi-professional and multi-service organization
rather than being created on an ad hoc basis. Since the object is true one-stop shopping, the number of
professional groups could be substantially more than those that would be brought in-house by the Big S. This
is because the profitability of each member unit is independent. In addition, professional services could be
extended vertically so that the R-MDO could service different markets, such as consumers and businesses.
Second, the referral base of the professionals is extended geometrically. Because lawyers are competitors,
networking, despite collegiality, may be somewhat restricted. Building coalitions is difficult because others
at the firm may practice in the same area or have different relationships with lawyers at other firms. In an
MDO the vast majority of the professional are not lawyers and therefore not competitors. They are not
reluctant to make referrals of their clients.
Third, unlike existing networks that are common in the legal profession, the foundation for the R-MDO would
be to extend scope and depth of the traditional organization using new technologies. The objective is to
create the maximum number of relationships between the professionals in each of the disciplines.
152 An MDO is similar to Model 1, as described by the American Bar Association’s Commission on Multidisciplinary Practices, except it is organizations
that work together, rather than individual professionals. “Model 1: The Cooperative Model": This model retains the status quo. There would be no
changes to Model Rule 5.4. The prohibitions against fee sharing and partnerships with non-lawyers would continue. Lawyers would be free to employ
non-lawyer professionals on their staffs to assist them in advising clients. Lawyers could work with non-lawyer professionals whom they directly retain
or who are retained by the client. To the extent that the non-lawyer professionals are employed, retained, or associated with a lawyer, the partners
in a law firm and any lawyer having direct supervisory authority over a non-lawyer professional would have to take steps "to ensure that the person’s
conduct is compatible with the professional obligations of the lawyer,” especially with respect to the obligation not to disclose information relating
to the representation and the protection of work product.” American Bar Association Commission on Multidisciplinary Practices - Final Report,
Appendix C, Reporter’s Notes (July 2000). The major difference, however, is that it presumes that the lawyer is responsible for the entire transaction
when in fact the legal aspects may be relatively minor. Stratton, ABA Voted No MDP: But What About “Virtual” MDPs, 85 Tax Notes 1122-1124 (Nov.
29, 1999).
153 The Commercial Law Affiliates (CLA) provides marketing support for its members.
57
