NY Bar introduces MDP regulations

New York beats rest of the US to meet ABA recommendations; MDPs get go-ahead but must adhere to strict guidelines

The New York State Bar Association has broken new ground and become the first in the country to regulate multidisciplinary partnerships (MDPs).
The move puts it ahead of not only the rest of the US, but also of the UK in terms of legislation governing the roles of lawyers in MDPs.
Last year, the American Bar Association adopted a resolution recommending that every state revisit and revise rules governing relationships between lawyers and other professionals. New York was the first to do so.
Existing rules do not stop lawyers from having ancillary business ventures or from entering into some forms of strategic alliances with non-lawyer professionals. Now, though, there will be strict guidelines for lawyers who enter into such relationships.
The new rules come into effect on 1 November.
In a statement, the president of the New York State Bar Steven Krane said: “Throughout the nationwide debate on multidisciplinary partnerships, we’ve been maintaining that lawyers can provide clients with the purported benefits of coordinated professional services without giving the non-lawyer professionals any say, directly or indirectly, in the way the lawyers practise law.
“We hope that these rules are recognised and accepted as a reasoned solution to the MDP debate, and ultimately become the standard nationwide.”
Mark Lewis, chairman of Ernst & Young’s associated law firm Tite & Lewis, said: “New York has really stolen the march on other bar associations and, I think, on London.
“This is a hugely symbolic move forward – when you look at our ambitions, we’ll have an easier time promoting our relationship with Ernst & Young to the New York State Bar, and they’ll sanction our kind of operation.”
Tite & Lewis plans to become the first accountancy-tied law firm in New York when its Washington DC associated law firm McKee Nelson opens there later this year.
A non-lawyer can have no control over the manner in which the lawyer or law firm practises law.

The new rules
A non-lawyer can have no control over the manner in which the lawyer or law firm practises law.

A lawyer who refers a client to a non-lawyer with whom the lawyer has a contractual relationship, or who themself receives a referral from a non-lawyer, will have to provide the client with a written Statement of Client’s Rights in Cooperative Business Arrangements and obtain a client’s written consent for the referral.

A non-lawyer cannot own or have an investment interest in a law practice, or have any managerial or supervisory power over the practice.

Lawyers and non-lawyers may not share legal fees.

Lawyers cannot give any financial or other tangible benefit for receiving or giving referrals to or from non-lawyers.