The vote, taken this summer at the ABA annual meeting in New York, shocked those who expected at least a delay in final determination of the issue. Instead, the ABA House of Delegates issued an outright prohibition, and discharged the commission that had been assembled to study the MDP phenomenon -- and that had issued a report, recommending ethics-rules changes to permit fee-splitting between attorneys and nonlawyers, that essentially was rejected by the ABA vote.

With the ABA commission out of the picture, the issue is tossed to state bar associations that, unlike the ABA, promulgate regulatory rules by which attorneys actually are bound. Many states have formed committees to study MDPs, which are partnerships between attorneys and nonlawyers, such as accountants, consultants, financial advisors, environmental engineers and public-relations professionals.

The ABA vote undoubtedly carries substantial weight with the state bars. Nevertheless, of the 10 state-bar committees that have completed their studies, eight have recommended approval of MDPs. The state bars have yet to pass on their committees' recommendations, but many lawyers, in effect, already work in MDPs in all but name all over the country.

Here's Your Hat; What's Your Hurry?
Many law firms wish to offer full partnerships to their nonlawyer colleagues without going through the accounting sleight-of-hand of paying them salaries and bonuses equivalent to partnership shares. The ABA, however, voted against amending its rules barring fee-splitting with nonlawyers, citing potential conflicts of interest and client-confidentiality issues.

Mr. Schaller responded to the ABA's characterization of MDPs as "threats to the core values of the legal profession." He noted that these threats already exist, and that the bar puts itself at a competitive disadvantage if it refuses to accommodate itself to clients' needs for integrated approaches to multifaceted problems. The answer, he said, is full disclosure to clients and heightened attention to ethical standards.

Mr. Schaller dissected the process that culminated in the ABA vote. "First, they disbanded the MDP commission -- their own commission," he said. Then, incoming ABA President Martha Barnett moved to table the issue until more states had studied MDPs, but her motion was defeated. "It was, 'Here's your hat; what's your hurry?'" said Mr. Schaller. "It reminded me of a Will Rogers saying: 'For every question, there is a simple, easy -- and wrong -- answer.'"

Mr. Schaller asserted that the ABA should take a leadership role in developing approaches to ensure that MDPs, which indeed are here to stay, do no damage to the profession's core values. "You don't advance the debate by declaring MDPs anathemas and refusing to discuss the issue anymore," he said.

Marketers in the Middle
In the wake of the ABA vote, the topic of luncheon convened by the Mid-Atlantic Chapter of the Law Marketing Association -- a gathering that, by chance, had been postponed to Aug. 17, after the ABA annual meeting -- became all the more topical. It was titled, "MDPs -- The Future? What to Expect and What to Do Now!" What, indeed.

Law marketers are working in an environment in which the Big Five accounting firms spend exponentially more than law firms to promote their practices. As an increasing number of lawyers join the major accounting firms, and as the Big Five absorb entire law firms in Europe, MDPs present novel challenges not only for lawyers, but for legal marketers as well.

The law firm marketers are supposed to make lawyers' phones ring, and are very much part of process of satisfying the firms' clients -- an increasing number of whom are seeking "one-stop shopping" for an array of legal and related needs. And the law marketers frequently wage an uphill battle in convincing lawyers to focus on competing with the Big Five.

Donna L.G. Shaft, a speaker at the MDP seminar, has worked with lawyers in marketing and practice development for more than 15 years. She recalled that "a partner at PricewaterhouseCoopers said to me, 'We view law firms as competitors. But lawyers only make it legal. Accountants make it profitable.'"

She joined Mr. Schaller in criticizing the ABA response to competition from accountants. "The response has been legalistic. Lawyers look to the ABA for direction." The ABA is relying on procedural rules to ban expanded practices with nonlawyers, she argued, "rather than expanding the practices" to meet client demand.

Big-Time Bean-Counting
Ms. Shaft remembered one general counsel's observation that, as compared with the dazzling orchestra of services offered by accounting firms, law firms offer their clients a single note. She insisted that this must change, and encouraged law marketers to educate lawyers about the changing business environment.

She then posed the big question: "Can independent owner-operated firms, run for the benefit of partners, survive?" Even the largest law firms lack the resources to compete head-to-head with giant accounting and consulting firms.

Ms. Shaft recited staggering statistics. Arthur Andersen employs 61,000 people, offers legal services in 27 countries, and earned $7.1 billion in revenues last year. Deloitte & Touche employs 82,000 people -- 1000 of them attorneys -- in 130 nations. PWC earned $1.5 billion in revenues; half its European offices offer legal services. Each accounting firm spends between $15 million and $75 million dollars on marketing and branding.

The most aggressive law firm, by contrast, may spend 1% of gross revenue on promotional efforts. The largest law firm, Baker & McKenzie, numbers about 1,000 lawyers, and Skadden, Arps, Slate, Meagher & Flom -- perhaps the most aggressive revenue generator -- earned $1 billion for the first time just last year.

The Nonlawyer View
One nonlawyer member of the audience, John L. Malanchuk, COO of Harbour Consulting, LLC, attended the event to understand the issue from the lawyers’ perspective. His company is a wholly owned subsidiary of Washington, D.C.’s Swidler Berlin Shereff Friedman LLP. The law firm and Harbour are working as an MDP, although they are careful not to share fees as they advise clients on air quality compliance and chemical issues. “No attorneys work for me -- we’re very careful,” he emphasized.

Mr. Malanchuk believes that a full-fledged MDP arrangement is imminent, however. “It has to happen -- that’s the future,” he declared. He flies up to the law firm’s New York office to work with the attorneys there. He seems hardly affected by the fact that New York still strictly bars partnerships between lawyers and nonlawyers. “I do the same thing in both places,” he said.

Indeed, the main cultural difference between working for a law firm and working for a consulting firm has little to do with protection of client confidentiality or the ethics issues cited by MDP opponents. Rather, the principal distinction merely is one of size. His last job was with an engineering consulting firm of 7,000 people. He sees the change not in client service, but in job satisfaction. “I moved from a supertanker to a rowboat,” he said. “I prefer the rowboat.”

As law firms come to grips with their role as small fish in the big pond of global business, their marketers have their work cut out for them. Of course, so do advocates of MDPs. “Someone will simply open an MDP and wait to be challenged in court,” predicted Mr. Schaller. In the ensuing litigation, the lawyers will have the home turf, but the battle will have many of them, and their marketers, siding with the accountants.

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