President's Message

Will You Be Replaced by a Cognitor?

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.

Wisconsin Lawyer