Legal Definitions - multidisciplinary practice

A multidisciplinary practice (MDP) refers to a business structure where legal professionals, such as lawyers, join forces with non-legal professionals, like accountants, consultants, or financial advisors, within the same firm. In an MDP, the firm would offer both legal services and other professional services under one roof, often sharing fees generated from these combined services.

However, in many jurisdictions, including the United States, professional ethics rules for lawyers generally prohibit such arrangements. These rules are designed to protect client confidentiality, prevent conflicts of interest, and ensure lawyers maintain independent professional judgment, free from influence by non-lawyers who may have different professional obligations or business interests. Specifically, lawyers are typically barred from sharing legal fees with non-lawyers, forming partnerships with non-lawyers for the practice of law, or allowing non-lawyers to have an ownership interest in or direct their professional legal judgment within a law firm.

Here are some examples illustrating what would constitute a multidisciplinary practice:

• Example 1: Integrated Financial and Legal Planning

  Imagine a law firm specializing in estate planning decides to hire certified financial planners (CFPs) and tax accountants as full-time employees. The firm plans to offer clients not only legal advice on wills and trusts but also financial planning and tax preparation services, with all professionals sharing in the overall profits generated by the firm. This arrangement would be considered an MDP because lawyers are sharing fees and potentially control within the same entity with non-legal professionals (CFPs, accountants) to provide both legal and non-legal services. Such a structure is generally prohibited by legal ethics rules to ensure the lawyers' independent judgment is not compromised by the financial interests of the non-legal professionals.

• Example 2: Business Consulting Firm Offering Legal Services

  Consider a large management consulting firm that advises corporations on strategy and operations. This firm contemplates bringing in a team of corporate lawyers to provide in-house legal advice on mergers, acquisitions, and regulatory compliance directly to their consulting clients. The lawyers would be salaried employees, and their work would contribute to the firm's overall revenue, which is shared among all partners, including non-lawyer consultants. This arrangement constitutes an MDP because non-lawyer partners (the consultants) would have an ownership interest in a firm that provides legal services, and the lawyers would be sharing fees (indirectly through salary and firm profits) with non-lawyers. This violates rules designed to ensure lawyers' independence and prevent non-lawyers from influencing legal advice.

• Example 3: Real Estate Brokerage with In-House Legal Closings

  A successful real estate brokerage firm proposes to hire a licensed attorney to handle all property closings and legal document preparation for their clients directly within the brokerage. The attorney would be paid a percentage of each commission earned by the real estate agents for transactions where they also handled the legal closing. This scenario is an MDP because the attorney would be sharing legal fees (a percentage of the commission) with non-lawyers (the real estate agents and brokerage firm). It also involves a non-lawyer entity having an interest in the provision of legal services, which is generally prohibited to prevent conflicts of interest and maintain the lawyer's independent professional judgment.