President's Message
Will You Be Replaced by a Cognitor?
Cognitors may soon join
independent paralegals, financial planners, bankers, CPAs, and others who
are giving legal advice and over whom the bar has no control.
by Gary L. Bakke
I SUSPECT THAT MOST READERS have never heard the term "cognitor." When
I first read it last month, it sounded to me like something I may have
rummaged for at the junkyard to fix my friend's '37 Chevy. But that's
not it. It won't replace anything in a '37 Chevy, but it may replace some
'01 lawyers.
Cognitor is the proposed name for a new professional designation that
would recognize the holder's ability to provide a range of professional
services, from accounting to business law. As I understand it, the cognitors
may include, but aren't limited to, lawyers and CPAs. According to the
draft proposal, approved by the American Institute of Certified Public
Accountants (AICPA) last year, a candidate for cognitor must have an "acceptable"
level of higher education in a field recognized by the credentials body,
at least five years' work experience, and letters of recommendation.
A consortium of four international accounting associations, including
the AICPA, is promoting this global business credential. Apparently, the
effort has been quietly in the works for more than two years. An article
in the February ABA Journal says, "News of the accountants' plans appears
to have caught leaders of the organized bar off guard." I'd classify that
as an understatement.
The same article predicts that the first such credential will be awarded
in 2002, and that four years from now, 700,000 people worldwide will have
earned the right to call themselves "cognitors."
Robert Minto Jr. of Missoula, Mont., a frequent lecturer on changes facing
the profession, says lawyers are likely to respond to the cognitor news
in two different ways. MDP supporters are likely to say, "I told you so."
MDP opponents are apt to say that any lawyer who goes into practice with
an accountant should be disbarred. My take, consistent with Minto's, is
that wishful thinking won't prevent lawyers from practicing with nonlawyers.
"The legal profession has failed or refused to recognize that we are
no longer driving the train. The public is. They can now choose where
to get their legal services, and they have found that they can get a lot
of what they want from nonlawyers, often at a lower cost," Minto says.
Cognitors may soon join independent paralegals, financial planners, bankers,
CPAs, and others who are giving legal advice and over whom the bar has
no control. Does anyone really believe that the organized bar has the
ability to abort the impending birth of cognitors? By what process could
the Wisconsin Supreme Court effectively oversee a cognitor in Beloit who
gives legal advice to a Wisconsin corporation? How about a cognitor in
South Beloit, Ill.? What about one from Grand Cayman? Cairo?
The world is rapidly changing. We must respond to the new reality. More
importantly, we need to maintain realistic controls and standards on our
profession to protect the public interest. However, if we collectively
remain in the posture of having our heads buried in the sand, we are not
in a very good position to protect the public, and we make an enticing
target for our competitors.
So far, litigators are protected from "outside competition." Court rules
prevent nonlawyers from representing clients in court, although that protection
is not absolute. Licensed tax practitioners can litigate in Tax Court
and some are now advocating nonlawyer guardians ad litem in Wisconsin.
For our nonlitigation clients, it is clear that businesses and individuals
will increasingly turn to nonlawyers for legal advice. As lawyers, we
have only one avenue of response - we must provide a better and more cost-effective
service. If we don't, we're history.
Some of my colleagues argue that we don't really need multidisciplinary
practices. They believe that if we enact Model Rule 5.7, which allows
law firms to own ancillary businesses, now called "law-related services,"
we can compete. Wisconsin has not adopted 5.7. (We do have SCR 20:5.7,
which is the rule that authorizes and controls the use of LLCs and LLPs
by law firms. This should not be confused with the ABA Model Rule 5.7
regarding ownership of ancillary businesses.) Some argue that adoption
of 5.7 would allow multidisciplinary practice without the ethical ballast
that sank MDPs. Some see little more than a semantic difference between
the two.
Of the 24 states that have taken a position on MDPs, 10 have come down
in favor. Michigan could become the first to implement its plan and already
may have made that landmark decision by press time. Arizona, Minnesota,
and Colorado are among those working in that direction. Those who predicted
that the ABA's anti-MDP stance would result in a balkanization of the
rules in the various jurisdictions are seeing their prediction validated
sooner than I would have guessed.
At its May 5 meeting, immediately following the Annual Convention in
Lake Geneva, the State Bar Board of Governors will vote on the broad,
multi-part resolution (reprinted at page 50), a portion of which states
in part:
"BE IT RESOLVED that the Board of Governors of the State Bar of Wisconsin,
on behalf of its members, adopt the following policies for improvement
of the delivery of legal services:
"Supports multidisciplinary practice by attorneys and other professionals
with the ability of sharing of fees for such services, management and
supervision of attorneys, other professional or lay managers, by entities,
which may be owned by attorneys, other professionals, investors or any
combination of the same."
Because the Wisconsin Supreme Court enacts the Rules, passage of the
resolution by the board would only be a start. If passed, the Bar could
begin the process of petitioning the court to amend SCR Chapter 20. Although
the Bar will have important input into the court process, we are not the
only constituency to be heard. There will be months, if not years, of
debate yet to come about the details of any amendments. The ultimate issue
will be service to the public.
There are many respected professionals who counsel us to go slowly, study
carefully, and preserve our core values. I value their opinions and agree
with their advice. However, there is a difference between careful study
and professional paralysis. This is already the most widely studied and
debated professional issue in my memory. It has been analyzed on both
a national and state level for more than three years. Wisconsin has studied
it. Almost every other bar association and jurisdiction in the country
has studied it. The ABA has held public hearings. The Wisconsin Lawyer
has published articles and opinions about it. WisBar has thousands of
pages of national and international studies and positions available at
the click of a mouse.
Our board has demonstrated a commitment to continue to study before taking
action on this landmark issue. It has mandated that the Bar hold regional
roundtable informational meetings this spring to communicate with membership
(see the schedule on page 17) and has allocated hours of board meeting
time to debate the issues. We are confronted with difficult and important
issues. Careful study is necessary, but it would be irresponsible for
us to sit by idly and allow the marketplace to determine the future of
the legal profession without the participation of the organized bar.
John C. Treadnick, vice chair of the ABA Law Practice Management Section,
says, "There is nothing the ABA House of Delegates can do to stem the
tide. The market forces are so powerful, it's mind-boggling." I agree.
The legal profession cannot successfully alter the course that the marketplace
has set. But we can respond, and we must.
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