Leader - Audit peril as MDPs arrive at last
Multi-disciplinary practices have come back onto the agenda with a bang.
After years of listening to senior partners in big firms extolling the merits of having lawyers around the partnership table, the MDP is close to becoming a reality. The Law Society is expected to vote this summer to lift its bar on solicitors going into partnerships with non-lawyers, the last major obstacle to MDPs.
But just as the cheering was about to start, Stephen Fiamma, the UK head of international law firm Jones Day, has spoiled the party. At a top-level seminar he said MDPs should not be allowed to conduct audits. The only way to avoid massive conflicts of interest, according to Fiamma, was to make the audit firm entirely independent of the MDP.
This is an interesting argument, not so much because of what it says about the future of the profession but because of its implications right now. What difference do a few lawyers in the boardroom make?
Three of the Big Five already own law firms and of the remaining two, one already has strong links to a law firm and the other is planning to acquire one. So, if Fiamma is right, the serious conflicts of interest already exist.
Whether such apocalyptic warnings are justified or not, MDPs will change the professional world forever. It is time accountants woke up to the implications before it is too late.