MDPs May Be Dead After Enron/Andersen, But Subsidiary Businesses Thrive

While some commentators believe that the Enron and Arthur Andersen affair that came to light in 2001 is responsible for the demise of multidisciplinary practices (MDPs), the notion of law firms engaging in MDPs lost most of its momentum during the American Bar Association (ABA) debate of 1999 and 2000. Enron and Andersen weakened whatever support remained for MDPs after the ABA defeat, during which MDP opponents raised legitimate concerns. But Enron and Andersen did not derail all models in which law firms successfully provide nonlegal services. In fact, the law-related services ancillary business model (as referred to by the ABA's Commission on Multidisciplinary Practice) is much more relevant post-Enron. Ancillary businesses, or subsidiary businesses as they are referred to at the authors' law firm of Bingham McCutchen LLP, are not MDPs. When structured and managed in compliance with fundamental principles and regulations, subsidiary businesses give progressive law firms the ability to deliver a comprehensive bundle of integrated services in response to client needs .