The European Court of Justice ruled on February 21 that the Dutch Bar’s ban on MDPs was valid. This ruling is yet another implication of the Enron debacle, as Europe has traditionally been more friendly towards lawyer/non-lawyer partnerships than the U.S. (See my 1/29 post which discussed the possible implications of the MDP debate in the U.S. in light of the Enron situation, and this appendix at Everett Gaskins Hancock & Stevens’ web site discussing the differences between international approaches to MDPs and US approaches). If the ECJ ruling is any indication, it would appear that the weathervane has turned. Most dramatic will be the impact on Andersen Legal (their press release from last week criticizing the ruling is here), PWC (see a press release from 1999 on this issue from PWC’s site here), and the other organizations who employ legions of lawyers in addition to the accountants, auditors and others who make up the other core businesses.
I still think that MDPs are the right direction for the services profession. Markets, not regulation will ultimately determine what protections are afforded to clients. The patronizing view that the bar associations take towards the clients (“Only we can protect you!”) seems ridiculous. Yet the issue isn’t getting any attention outside the profession.