Professional Issues

ABA Urges One-Stop Shopping

The legal profession is one step closer to allowing lawyers to partner and share profits with nonlawyers, such as CPAs. A special commission of the American Bar Association has recommended that the law profession rewrite its rules of conduct to allow fee-sharing between lawyers and other owners of multidisciplinary practices. If adopted by the ABA and state bar associations, these revisions would pave the way for one-stop-shopping companies offering customers legal and accounting services under one roof.

Multidisciplinary practices are the norm in Europe where international accounting firms, such as Arthur Andersen and KPMG, provide legal services, including litigation. However, court-imposed rules of conduct in the United States prohibit mixed-professional partnerships. So, although CPA firms are among the largest employers of attorneys in the United States, lawyers working in the U.S.-based firms can offer clients only consulting and tax advice.

These restrictions would be altered under the commission's recommendations for revising the ABA Model Rules of Professional Conduct. "These changes would allow clients more options in where they obtain legal services and lawyers more choices in how they serve clients," said Sherwin P. Simmons of Miami, chairman of the ABA commission on multidisciplinary practice. Along with allowing lawyers and nonlawyers to share fees, the commission suggests certain safeguards be put in place to ensure independence and protect professional judgment--applying legal ethics rules to all multidisciplinary practices and subjecting them to court regulation, for example.

"This is the beginning of an evolution in the merging of the two professions," said Gary S. Shamis, partner of Saltz Shamis & Goldfarb Inc. in Cleveland and chairman of the AICPA management of an accounting practice committee. "This is what the marketplace wants."

Shamis predicts that large multidisciplinary practices will offer legal services matching the new services provided by CPA firms, such as personal financial planning, estate planning and the creation of wills. "These changes, good or bad, are inevitable," said Shamis. He said his firm was approached in the last six months by two regional law firms trying to position themselves for the future.

To many, the ABA commission's report simply endorses what is already happening in the marketplace. Stanley H. Freundlich, managing partner of David Berdon & Co. in New York City, said his firm has brokered large mergers and real estate transactions with other law firms--hiring law firms when necessary and, in turn, being hired by other firms. "We have been charging our own fees and working with law firms for one client for years," said Freundlich.  

Not everyone supports the change

The commission's recommendations were presented to the ABA house of delegates in August. Many state bar associations ask that a decision on the report be deferred to give their members more time to examine the proposals. Stuart A. Hoberman, shareholder and member of the board of Wilentz, Goldman and Spitzer, a Woodbridge, New Jersey, law firm, and chairman of the New Jersey state bar commission on multidisciplinary practice, told the JofA that the state bar voted against the ABA commission's recommendations. "We were concerned with the conflict-of-interest and independence issues that were raised by the commission's report," said Hoberman. "We felt the ABA report raised more issues than it resolved and it could be more harmful than helpful to the consumer."

Hoberman is most concerned about protecting a client's confidential information and the potential conflict of loyalties that could occur in a multidisciplinary practice. Freundlich agrees that independence issues will be a concern if lawyers and CPAs share a partnership, especially for attest clients. "One solution is to set up an indepen dent attest practice, not unlike what currently is being done by consolidator companies, such as American Express and HRB Business Services," said Freundlich.

Freundlich believes the independence issues will be solved and multidisciplinary practices will eventually be ratified. "It's a marketplace decision," said Freundlich. "Clients are looking for companies that can fulfill all their needs--and that includes legal, accounting, general business and tax work, as well as serving as a trusted adviser."

Copies of the commission's report are available online at .

Low Pay a Sore Point With CPAs

A recent survey, A Look at Accountants' Job Satisfaction, found many CPAs are dissatisfied with their jobs because of current compensation levels. Public practitioners were the most displeased, but CPAs in industry and not-for-profit organizations complained about inadequate wages as well.

CPAs in industry, in addition to their concerns about money, felt they were less fulfilled in their jobs than their counterparts in public practice, according to the study.

"The CPAs reported significant unfulfilled needs in all categories," said one of the study's three authors, Joyce A. Strawser, PhD, of Seton Hall University. "Compensation created the greatest dissatisfaction and was followed closely by perceived deficiencies in self-actualization (fulfillment through personal growth and development) and security."

James C. Flagg, CPA, PhD, and Sarah A. Holmes, CPA, PhD, both professors at Texas A&M University, conducted the study with Strawser. They surveyed 920 CPAs to measure how well the CPAs felt their career needs were being met.

Based on their findings, the authors predicted "the profession's difficulties in recruiting and retaining quality practitioners are likely to continue unless employers take action to increase job satisfaction." The authors offered employers these recommendations:

  • Increase levels of compensation for all CPAs.
  • Encourage CPAs to be proactive in planning their careers.
  • Implement a mentoring system with those who can support and advise less experienced employees.
  • Encourage employees to participate in volunteer work and professional organizations to increase their sense of accomplishment.
  • Do timely and detailed evaluations of employees to increase their perception of job security.
  • Create a work environment in which employees feel valued.
  • Reduce abusive work practices, such as excessive overtime.
  • Limit unrealistic employee expectations by being honest about the nature and demands of the job.  


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