All together now?
4 January 1997
17 October 2013
28 May 2013
20 December 2013
12 August 2013
10 March 2014
A survey conducted by The Law Society's Research and Policy Planning Unit last year revealed that over one third of law firms had formally considered the issue of multi-disciplinary practices (MDPs) and that more than 70 per cent of those were in favour of the concept. The Labour Party is committed to legalising MDPs, should it form the next government. The time is ripe for serious debate about the whole issue of MDPs.
The problem is that the level of thinking on this issue appears to be universally shallow - even among many of those who are actively involved in embryonic MDPs.
It can be argued that the concept is not entirely new. Various forms of mixed-disciplinary working have been attempted with varying degrees of success. Scottish law firms have successfully operated property agencies whereas attempts at the same thing in England have generally failed.
More recent initiatives such as law firms engaging stockbrokers within their financial services operations; employing chemists and engineers in intellectual property departments; or even the establishment more than 10 years ago by Clifford Turner (as it then was) of its New Bridge Street Consultants; all are examples of the concept, albeit mostly falling short of partnership.
Some of these may, nevertheless, provide useful indicators of where the mixed disciplinary approach to professional practice may have a role to play, as well as some of the problems that are likely to be encountered, should it be further developed.
The impact of the Garrett & Co/Arthur Andersen and Arnheim & Co/Price Waterhouse link-ups and recent moves by Coopers & Lybrand have yet to be quantified.
On the face of it, it is difficult to reconcile the concept of "one-stop" shopping, whether it be for goods or services, with an increasingly sophisticated and discerning consumer-oriented marketplace, the two greatest demands of which would seem to be for wider (rather than narrower) choice of supplier on the one hand, and higher levels of concentrated expertise (rather than dilution) on the other.
This aspect of the consumer-oriented society may be exemplified by the growth of "shops within shops", that is, franchising, within department stores, so far as goods are concerned, and the growth in the number of highly successful small "niche" practices within the legal profession. The risk element of all business initiatives is greatly heightened if they do not reflect the needs of the marketplace. In discussions with the business community, it is difficult to find businessmen who believe that the MDP (as currently perceived) will better serve their needs although it is undoubtedly arousing curiosity and even concern as manifested by the interest being shown in it by the World Trade Organisation.
At a time when both business and personal clients have become aware that no single law firm, however large, can be best, or even truly expert in every field of law (hence the picking out of experts and using different firms for different projects), it seems that the credibility of the MDP will be even more suspect. Is the concept, therefore, essentially flawed?
Maybe the early initiatives have been driven more by the perceived needs of the professional rather than of the client. It is notable that, to date, all the initiatives appear to have come from the accounting profession - could this be promoted as a defensive move against the increasingly less profitable auditing business or against the fear of future legislation designed to ban a single firm from providing other forms of advice to a client for whom they are statutory auditors?
Whatever the answer, MDPs have serious professional implications that have not been fully explored yet. What are the implications for the legal profession's independence? What about the concept of privilege, conflicts of interest both external and internal; how will differing professional standards be reconciled? What are the implications for professional indemnity insurance?
There are real risks that standards, freedom of choice and the protection of the public will be compromised, and the opportunity for fraudulent practices increased. MDPs will need to be carefully regulated - but by whom?
Maybe an MDP should be required to be incorporated, but under new legislation and a new form of entity created expressly for the purpose. It seems inevitable that some aspects of essential regulation will necessitate legislation but how can that be handled on an international basis, given that most of the current initiatives involve cross-border elements and plans?
More to the point is the analysis of where and how the MDP might eventually make a real impact. There are two principal areas.
First, one can see the attraction of one-stop professional service shopping for new business - be it local or a new foreign inward investment - where knowledge of the local professional marketplace is not well developed, but the need for rapid advice from a number of technical sources is established. A large section of the private client market would also fall in to this category. As such clients develop, however, there is a real risk that they will also seek out pockets of expertise to serve their requirements which may ultimately weaken their dependence on the MDP. There is plenty of evidence of waning loyalty, even to a single law firm, as clients become more aware of their own needs.
If, however, this could be a fertile area for the development of the MDP it is, perhaps, surprising that the early initiatives have not come from the high street firms, particularly bearing in mind the pressures that they have been working under for the past few years and the need they have to bring some creative thinking to their future prosperity - or even survival.
It is worth bearing in mind that when we talk about MDPs we are not simply talking about lawyers and accountants: actuaries, stockbrokers, surveyors, patent agents, doctors and engineers could also form part of the picture.
There will need to be a fundamental re-alignment within an MDP whereby the organisation will have to become wholly focused on the market/industrial sector. This will involve abandoning traditional internal structures reflecting professional and technical skills.
Each market sector in an MDP would be likely to have an entirely different range of technical and professional skills arrived at, maybe, organically or through mergers relevant to or affecting only one area of the total practice. Only in this way will an MDP stand a chance of attracting the largest and most lucrative businesses as clients.
The inevitable conclusions are:
this development is still immature;
it is misleading to think of MDPs as involving only lawyers and accountants - they are simply the initiators;
if MDPs are to have a permanent role to play in delivering relevant professional services to the marketplace there will have to be a total re-alignment of the traditional perception of the professional firm.
In essence, the formula would be a wider range of professional skills being provided to a far more focused or defined marketplace;
the MDP will have to have a depth of both professional/ technical skills and market knowledge that is very rarely found today;
there will have to be regulation and legislation, both national and international, on a substantial and complex scale to provide a structure for the MDP.
To succeed, this development demands a degree of dynamism and flexibility from the legal profession. Without that committment the concept could turn out to be a mere delusion or even worse - a temporary and wasteful diversion from grasping the nettle of responding more accurately to the needs of the marketplace.