Multidisciplinary Business Planning Firms: Expanding the Regulatory Tent Without Creating a Circus

Students studying business planning in an American law school should be told up front that a twenty-first century transactional lawyer rarely encounters a truly simple business transaction. Legal educators acknowledge the need to emphasize the complex, multidisciplinary nature of advising modern business clients. Law students must be introduced to the reality that transactional attorneys routinely collaborate with accountants, engineers, and other types of specialists and consultants to properly identify issues and address their clients\u27 needs. Businesses - particularly firms comprised of entrepreneurs on tight budgets in terms of both time and money - benefit greatly when relevant information is accurately and efficiently communicated to the requisite team of advisors, and primary responsibility for each pertinent issue is assigned to the most qualified team member. The value of services delivered to business clients is further enhanced if all team members have a meaningful understanding of at least the basic elements of the issues being handled, as well as the vocabulary and problem-solving techniques employed by each trade or profession involved. A uniquely effective approach to providing high quality service might take the form of an interdisciplinary business planning firm, owned and controlled by a group of knowledgeable parties that are willing to share risks and rewards, abide by ethical rules designed to protect the public, learn from each other, and deliver coordinated advice to firm clients. Law students - educated on both the importance of collaborative efforts among service providers and the long-recognized advantages of pooling resources and sharing profits in a business organization - might, therefore, be surprised to learn that the formation of such a fully integrated, multidisciplinary partnership (MDP) violates rules governing the conduct of attorneys in virtually every state. The existing rules require service providers to pursue more cumbersome (and less entrepreneurial) mechanisms for the delivery of interdisciplinary services. These rules also encourage lawyers in nonlegal professional services firms to claim that they are not providing legal services in order to avoid what has been called the regulatory tent under which lawyers ordinarily practice. Proposals to remove existing obstacles to the formation and maintenance of fully integrated MDPs have been the subject of heated debate in the legal profession and legal academia for approximately the last six years. Attention to the MDP issues has been fueled to some extent by developments in other countries that have accepted at least some forms of multidisciplinary practice, or are studying proposals to do so. Approximately four years ago the American Bar Association\u27s (ABA) House of Delegates summarily rejected the recommendations of the ABA\u27s Commission on Multidisciplinary Practice (MDP Commission), which would have facilitated the formation and regulation of at least some forms of fully integrated MDPs in the United States. Despite the ABA\u27s adoption of Resolution 10F in July 2000, many states have continued to consider modification of their rules to permit these firms. Thus far none have implemented such modifications. Over the last few years, the ABA, the courts, and the bar associations of many states have also been revisiting existing definitions of the practice of law, as those definitions are used in rules prohibiting the unauthorized practice of law (UPL). At the same time, UPL issues have been involved in several areas, including studies of possible reform of rules governing multi-jurisdictional practice (MJP) by lawyers licensed in one or more jurisdictions who seek to work on matters in jurisdictions in which they are not licensed; law firms\u27 provision of ancillary, that is nonlegal services; and the regulation of legal software or e-commerce. One commonly expressed goal of these projects is to provide more affordable, readily accessible professional services to underserved segments of the public. This Article will focus primarily on one such constituency - entrepreneurs endeavoring to start, sustain, or grow businesses. Representing a large segment of the United States economy, entrepreneurs, especially those involved in small firm businesses, have a distinct need for the coordinated delivery of legal counsel and other services. Unfortunately, there is reason to believe that many entrepreneurs are failing to get adequate advice on legal matters. At the same time, many others are customarily using an inordinate amount of their resources to pay the separate fees of lawyers and other professionals who are failing to achieve the communication and other efficiencies that might result if they were members of a single firm. This Article posits that fully integrated MDPs among lawyers, accountants and other nonlawyers (such as, for example, financial planners, engineers, business consultants, and insurance specialists), with a business planning and transaction implementation focus, would not only provide high quality, cost-effective services to their clients, but also help ensure that all of the service providers follow ethical rules designed to protect the public. In support of that conclusion, the analysis herein expands on arguments derived from the rich body of literature surrounding the MDP Commission\u27s work and subsequent MDP debate, and draws on more recent lessons from ill-fated UPL initiatives as they relate to competence in the delivery of interdisciplinary services. The discussion below also emphasizes several practical aspects of transactional work and the sharing of risks and rewards in a business organization to demonstrate the feasibility of a regulatory structure under which participants in a fully integrated business planning MDP would have incentives to abide by appropriate standards of conduct in the delivery of services to their clients. To provide context for these propositions, Part I summarizes the principal policy arguments that have characterized the MDP debate, including a description of conflicting views as to the extent to which MDPs might erode core values of the legal profession. Part II describes a hypothetical business formation scenario, as an example of a common situation in which the services of a business planning firm owned and operated by qualified lawyers and nonlawyers might be tremendously valuable. Part III then examines existing obstacles to the operation of such a firm, taking into account recent efforts to better define the practice of law, and addressing attorney conduct rules that continue to preclude the formation of fully integrated MDPs. That examination reveals that in business planning and transactional work, where the lines between legal and nonlegal work are often quite blurry, there are no compelling reasons to retain a system that grants to firms owned or controlled exclusively by lawyers a monopoly on the delivery of the arguably legal services involved. Finally, Part IV suggests specific elements of a regulatory framework that are designed to permit fully integrated business planning MDPs to operate in a manner - adaptable to other types of multidisciplinary firms as well - that would elevate substance over form to both serve clients more efficiently and preserve core values of the legal profession that are in the public interest