The MDP response
12 March 2001
The Office of Fair Trading (OFT) report is the beginning of a process, not the end. The Law Society of England and Wales has already started down the road towards greater liberalisation of the legal profession, but what is now very clear is that the Government is going to be staring hard over its shoulder as it does so. The OFT has given the profession not more than a year to make progress or face further action. And this is no idle threat - the OFT has considerable powers under the 1998 Competition Act to enforce its will.
Credit must be given to the Law Society for starting to take the necessary steps. Its counterpart in Scotland is now faced with a real dilemma, since it would appear appropriate that what applies to England and Wales should apply to Scotland and Northern Ireland. In both countries, there has been opposition to multidisciplinary partnerships (MDPs), yet the prospect of clients in both countries seeing their English competitors use services that they themselves are denied could leave a sour taste in their mouths.
Let us also not forget that what applies to Scotland and Northern Ireland equally applies across Europe. The predominantly City firms have brought intense competition to many legal practices in Europe, and the revolution that has hit the German market in less than two years has echoes in France, The Netherlands, Spain and other countries. From the point of view of a traditional domestic law firm in France, for example, the idea that the English law firms will soon have the ability to widen the range of services they are able to provide to their clients through the MDP approach is nothing short of disastrous.
For those firms to compete on equal terms, they need to lobby their own bars to demand the same range of powers.
On a global stage, the impact of the OFT report should not be underestimated. Many bars in the US are considering MDPs, and the US law firms are major competitors to the English firms in many markets around the world. Those US firms will be loath to see their English counterparts acquire rights that they saw put down by the American Bar Association. While they might not be complaining overtly as yet, and we may well see a lot of denials, all it takes is one or two high-profile linkages between a legal practice and another form of professional adviser, for the US market to start moving towards the MDP model.
To many international clients and new businesses, artificial barriers between professions are either not understood or not desired. Increasingly, clients see business issues as "problems" for which they require "solutions". The fact that the solution may require expertise in law, accountancy, tax, employment consulting or systems building is irrelevant to such clients. They are also concerned that using a multiplicity of advisers not only increases the cost and time taken to deal with a matter, but also opens up an area of risk, because no professional takes responsibility for the whole matter. Important issues may therefore fall between the cracks and leave the client exposed.
Multidisciplinary teams can actually help ensure that clients are fully protected. This is the beginning, not the end. n
Tony Williams is the worldwide managing partner of Andersen Legal, the legal arm of accountancy firm Arthur Andersen