MDPs get cautious approval from law society in Canada

The Law Society of Upper Canada, which covers the financial capital Toronto, has lifted a long-standing ban on lawyers and accountants forming multidisciplinary partnerships (MDPs).

But the decision – which comes just as the Law Society of England and Wales is about to release a consultation paper on the issue – holds lawyers responsible for any breaches of conflict of interest or client confidentiality by non-lawyers within the MDP.

The ruling means that Ernst & Young can continue its links with captive Toronto firm Donahue & Associates. But it will now have to prove that its lawyers and accountants work independently.

Deloitte & Touche will also have to take note of the ruling in its feasibility study into setting up an associated law firm in the city.

Other non-lawyers, such as patent and trade mark agents and paralegals, can also now enter into partnership with lawyers.

The society's change of heart came after an 18-month study into the pros and cons of MDPs.

Robert Armstrong, co-chairman of the committee conducting the study and a litigation partner at Toronto-firm Tory Tory DesLauriers & Binnington, said the erosion of client confidentiality and conflicts of interests in an MDP were the main concerns of the committee.

The report also examined the business and professional arguments for and against so-called “one-stop-shopping” and found that there was no demand for such a service from sophisticated or unsophisticated users of legal services.

Armstrong referred to the one-stop-shop phenomenon as a “marketing stratagem” of the Big Five.

“Lawyers are becoming more cost effective and more conscious of adding value,” he said. “But I don't see why they can't continue to do it within law firms.”