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Mixing Lawyers and Accountants
A last minute amendment preserved the rule.
Fifteen years later, ownership of law firms in the U.S. is still limited to lawyers, but the issue is more complicated. Big Five accounting firms such as Arthur Andersen - which is becoming one of the largest law firms in Europe, where ownership is unrestricted - are adding lawyers to their staffs to beef up overall services, even as questions remain as to what legal services can be provided outside of law firms. Meanwhile, a counter-trend has developed: Enticed by the business opportunities of blending legal and other services, law firms are adding business development and advisory services, including accounting, to their client offerings.
Both trends have left state and national bar associations uncertain about the boundaries of the legal profession, and Florida is likely to play a prominent role in the debate. A Florida Bar committee led by Tampa lawyer and businessman Martin Garcia is working to sort out the facts and potential conflicts that surround subsidiary businesses and services offered by law firms.
Meanwhile, Sherwin Simmons, who heads the tax department at Miami's Steel Hector & Davis, chairs a 12-member commission of the American Bar Association that will study the territory being staked out by accounting firms. "Our job is to determine how this development impacts on the public and on the Bar and how that impact should be addressed," says Simmons. "We're not involved in a turf war."
Questions facing Simmons' group include: Exactly what services can a lawyer working for an accounting firm provide under Bar rules and state laws that define the unlicensed practice of law? Those rules and laws prohibit, for example, corporate lawyers from practicing law on behalf of anyone outside their corporations. Accountants are prohibited from practicing law at all. But it's tough to agree on exactly when lawyers who work for an accounting firm are giving legal advice and when they're contributing to a package of services.
Some believe the time has come to acknowledge a broader role for lawyers, to accommodate clients who want streamlined services. "What I envision is the opportunity to provide a full range of services to clients - one-stop shopping," says Richard I. Miller, a lawyer who serves as general counsel to the American Institute of Certified Public Accountants in New York City. "The feeling in the accounting industry is not only that it's inevitable, but that it's good business and it's good for our clients."
Others fear a Pandora's box of consequences, however, from jeopardizing attorney-client privilege to erosion of the Bar's independence. Often protection of lawyer-client communications is waived when information is shared with a third party. Only 15 states, including Florida, recognize a similar privilege between accountants and their clients. The threat to the Bar arises if changes in the legal profession encourage efforts to take regulation of lawyers away from the Bar and the courts and hand it over to the Legislature. If lawyers are going to act like accountants, the argument goes, couldn't the state regulate them, too?
"I'm concerned because I believe the legal profession has a peculiar public role in its social compact with the public and the government," says Vanderbilt University law professor Harold Levinson. Responsibilities such as protecting civil rights, representing unpopular causes, providing legal aid to those who can't afford it and keeping government in check make it impossible to frame the debate as a simple business proposition, says Levinson, also a certified public accountant. He believes such responsibilities could be diluted by blurring the line between the practice of law and other professions. "If that happens," he says, "society would be the loser."
Miller disagrees. He says arguments about the sanctity of lawyer-client relations and legal profession ethics are insulting in their implication that accountants have no similar obligations. And he believes any problems with conflicts of interest or confidentiality could be worked out: "If fair-minded people want this to happen, the rules will be adjusted in the public interest."
