Practice Tips, by Dave Bilinsky, Practice Management Advisor
Come together right now over me...
Lyrics and music by Lennon/McCartney
Multi-disciplinary practice (MDP) has been allowed in British Columbia for about half a year now (see Rules 2-23.1 to 2-23.12). Despite concerns that allowing non-lawyers to be partners in a law firm would open the floodgates, at the time of writing of this column, no applications for MDPs have been received by the Law Society. However, there have been many inquiries about MDPs and the benefits they offer to lawyers, and several people have requested the information packages. For that reason, this column outlines some of the benefits, requirements and conditions of an MDP in BC.
What is an MDP?
Law Society Rule 1 defines an MDP as follows:
“multi-disciplinary practice” or “MDP” means a partnership, including a limited liability partnership or a partnership of law corporations, that is owned by at least one lawyer or law corporation and at least one individual non-lawyer or professional corporation that is not a law corporation, and that provides to the public legal services supported or supplemented by the services of another profession, trade or occupation;
An MDP allows a non-lawyer to have an ownership interest in an entity that carries on the practice of law along with the practice of the other non-lawyer professional. Some of the possibilities that an MDP offers are:
- An accountant teams up with a lawyer to provide:
- corporate and business planning advice (resulting in an entity that can be a one-stop shop to establish and advise a new or existing business from both a legal and a financial management perspective); or
- estate and tax planning advice (resulting in an entity that can draw wills, inter vivos and family trusts as well as provide tax and estate planning advice).
- A mortgage broker, real estate agent, insurance broker and lawyer join forces to provide a complete solution to purchasing, financing, insuring and selling real estate.
- An engineer, architect and lawyer combine to provide real estate development services.
- A family counsellor and lawyer go into business to provide family law counselling and divorce services.
So the question is, how do a lawyer and another professional work together under our regulations to operate an MDP?
The application process
You must complete an application to practise law in an MDP in accordance with Rule 2-23.3. This includes paying the application fee and the investigation fee (for the non-lawyer member) and submitting copies of the proposed partnership agreement.
You must ensure that the non-lawyer partner provides no services to the public except those that support or supplement the practice of law under the supervision of a lawyer. You must further ensure that:
- privileged and confidential information is protected (Rule 2-23.8);
- conflicts of interest are prevented (Rule 2-23.9);
- every member of the MDP has liability insurance (Rule 2-23.10);
- trust accounts and trust records are maintained (Rule 2-23.11); and
- all non-lawyer members agree to the conditions set out in Rule 2-23.2.
After the MDP is established, you will have to notify the Law Society if:
- a lawyer ceases to practise in an MDP;
- a new member of the MDP is proposed;
- a member of the MDP ceases to be a member of the MDP, or ceases to be involved in the management or delivery of services of the MDP; or
- there is any change in the partnership agreement or other contract that affects the terms under which members participate in the MDP.
If a new non-lawyer proposes to join the MDP, you must notify the Law Society and pay the investigation fee (Rule 2-23.5).
The Law Society can cancel permission for a lawyer to practise in an MDP, if the lawyer is not complying with Rules 2-23.1 to 2-23.12.
The lawyer member of an MDP must also ensure that all non-lawyer members of the MDP:
- practise their profession, trade or occupation with appropriate skill, judgment and competence (Rule 2-23.7(2)(a));
- comply with the Act, Rules and Handbook, including conflict of interest provisions;
- provide no services to the public except those that support or supplement the practice of law by the MDP and under the supervision of a lawyer,
- maintain liability insurance.
Trust funds received by the MDP must be handled in accordance with Rule 2-23.11, and the MDP must maintain its trust account and trust accounting system in accordance with Part 3, Division 7 of the Rules.
Lawyer members of an MDP must report annually to the Law Society regarding compliance with these requirements (Rule 2-23.12).
Like most changes, the MDP rules are still very new and unfamiliar. It is anticipated that, as lawyers (and non-lawyers) get accustomed to the provisions, there will be applications made and approvals given to proposed MDP members to come together.