Multistate Professional Responsibility Examination (MPRE)Regulation of the Legal ProfessionHard
Attorney Mark, licensed in State C, is approached by a friend, a licensed Certified Public Accountant (CPA) in State C, who proposes a business arrangement. The CPA suggests they form a 'Financial and Legal Advisory Services' joint venture, where clients would receive both accounting and legal advice from a single entity. The CPA would handle all financial aspects, and Attorney Mark would handle all legal aspects, with profits shared equally. Is this arrangement permissible under the Model Rules of Professional Conduct?
- AYes, as long as Attorney Mark ensures his legal services are provided in accordance with professional standards.
- BYes, if both the CPA and Attorney Mark fully disclose the nature of the arrangement to clients and obtain their informed consent.
- CNo, because lawyers are generally prohibited from forming partnerships with non-lawyers if any of the activities constitute the practice of law.
- DNo, because sharing profits with a non-lawyer is strictly forbidden under all circumstances.
Show answer & explanationAnswer & explanation
Correct answer: C. No, because lawyers are generally prohibited from forming partnerships with non-lawyers if any of the activities constitute the practice of law.
Model Rule 5.4 generally prohibits lawyers from forming partnerships with non-lawyers if any of the partnership's activities constitute the practice of law, and from sharing legal fees with non-lawyers, to protect the lawyer's professional independence of judgment.
Why the other options are wrong
- A. Adherence to professional standards for legal services does not overcome the prohibition against multidisciplinary partnerships.
- B. Client consent and disclosure do not waive the ethical prohibition against multidisciplinary partnerships where legal services are offered.
- D. While sharing legal fees with non-lawyers is generally forbidden, there are limited exceptions (e.g., death benefits to a lawyer's estate, compensation for non-lawyer employees based on profit-sharing plans). However, this specific scenario involves a partnership and fee sharing for legal work, which is prohibited.
Prohibition on Multidisciplinary Practice (MDP)
Lawyers are generally prohibited from forming partnerships with non-lawyers if any of the activities of the partnership constitute the practice of law, to preserve the lawyer's professional independence.
- Aims to protect professional independence and client interests.
- Prevents non-lawyers from having control over a lawyer's professional judgment.
- Also prohibits sharing legal fees with non-lawyers (with limited exceptions).
Memory trick: Independence: Your judgment is yours, not theirs.