Multi-disciplinary partnerships (MDPs) have become an increasingly common structure for professional services firms in England and Wales. By combining expertise from different disciplines, such as law, accountancy, and consulting, MDPs can provide clients with comprehensive solutions under a single organisational umbrella. However, the integration of multiple professional practices raises complex ethical and legal issues, particularly around conflicts of interest.
This article explores the challenges of conflicts of interest in MDPs, the legal and regulatory framework, and practical strategies for managing and mitigating these risks.
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Conflicts of interest in multi-disciplinary partnerships
Multi-disciplinary partnerships (MDPs) have become an increasingly common structure for professional services firms in England and Wales. By combining expertise from different disciplines, such as law, accountancy, and consulting, MDPs can provide clients with comprehensive solutions under a single organisational umbrella. However, the integration of multiple professional practices raises complex ethical and legal issues, particularly around conflicts of interest.
At Blackstone Solicitors, we advise firms operating across England and Wales on governance, regulatory compliance, and risk management. This article explores the challenges of conflicts of interest in MDPs, the legal and regulatory framework, and practical strategies for managing and mitigating these risks.
Understanding conflicts of interest in MDPs
What constitutes a conflict of interest?
A conflict of interest arises when a professional’s duty to one client or partner is, or may be, compromised by competing obligations to another client, partner, or the firm itself. In MDPs, these situations can be particularly complex due to:
- The presence of multiple disciplines under one roof
- Overlapping client bases across different services
- Potential for confidential information to be used inappropriately
Conflicts can be actual, potential, or perceived, and all three forms can carry regulatory and reputational risks.
Why MDPs are especially vulnerable
Unlike single-discipline firms, MDPs often encounter scenarios where legal, financial, or consulting interests intersect. Examples include:
- Acting for two related clients in different capacities, such as advising a company on a corporate transaction while providing tax planning for the same company’s owners
- Representing a client in a dispute where another arm of the firm has previously provided advisory services to the opposing party
- Sharing resources or staff across disciplines, which may create inadvertent access to confidential information
These overlaps create situations where professional independence and duty of loyalty can be challenged.
Legal and regulatory framework
Solicitors Regulation Authority (SRA) rules
For law firms or legal arms within an MDP, the SRA Code of Conduct imposes strict obligations to avoid conflicts of interest. Key requirements include:
- Acting in the best interests of each client without compromise
- Identifying and managing conflicts both before and during engagement
- Maintaining client confidentiality at all times
- Avoiding situations that may impair independent judgement
Failing to comply with these rules can result in professional disciplinary action, reputational harm, and potential civil liability.
Other professional standards
Other disciplines within MDPs, such as accountancy or consulting, have similar obligations under their respective regulatory bodies. For instance:
- The ICAEW and ACCA impose duties regarding integrity, objectivity, and professional behaviour
- Management consulting and advisory standards emphasise independence and avoidance of conflicting interests
MDPs must reconcile these overlapping regulatory frameworks to ensure full compliance across all disciplines.
Cross-discipline challenges
A particular challenge in MDPs is that the conflict rules applicable to one profession may differ from those of another. Legal professionals may be subject to stricter rules regarding client confidentiality than consultants or accountants. Ensuring consistent policies across the partnership is therefore essential to prevent breaches.
Identifying conflicts of interest
Systems and processes
Effective conflict management begins with robust systems for identifying potential conflicts. These may include:
- Maintaining centralised client and matter registers
- Screening procedures before accepting new clients or engagements
- Regular updates and reviews of existing client relationships
- Cross-discipline training for staff to recognise potential conflicts
Early detection
Early identification is critical. Conflicts are easier to manage if detected before engagement, rather than once work has commenced or sensitive information has been shared. Proactive screening can prevent ethical breaches, disputes, and regulatory scrutiny.
Types of conflicts
MDPs commonly face:
- Direct conflicts: Representing two clients with opposing interests
- Indirect conflicts: Acting for clients with overlapping commercial or personal interests
- Institutional conflicts: When one discipline’s services could compromise another’s independence or judgement
Understanding the nuances of these conflicts is key to developing effective management strategies.
Managing and mitigating conflicts
Conflict checks
Before accepting a new engagement, firms should conduct a thorough conflict check, including:
- Reviewing client registers across all disciplines
- Identifying connections between clients, partners, and staff
- Assessing the likelihood of confidential information being relevant or accessible
These checks should be documented to demonstrate compliance with regulatory obligations.
Informed consent
Where a conflict exists but can be managed, obtaining informed consent from affected clients may be appropriate. This requires:
- Full disclosure of the nature and potential impact of the conflict
- Clients’ agreement in writing to proceed under managed conditions
- Ongoing monitoring to ensure that consent remains valid throughout the engagement
Informed consent does not eliminate the need for vigilance but can provide a framework for risk management.
Information barriers
Also known as “Chinese walls,” these measures prevent confidential information from being shared across teams or disciplines. Effective barriers include:
- Restricting access to files, systems, and communications
- Separate physical workspaces or secure IT systems
- Clear internal policies and training on confidentiality obligations
Information barriers are particularly important where shared resources or overlapping staff could otherwise lead to inadvertent disclosure.
Internal governance
MDPs should implement governance structures to manage conflicts centrally. This may involve:
- Conflict committees to assess and approve engagements
- Partner or board oversight of sensitive matters
- Regular audits and compliance reviews
Centralised oversight ensures consistency and mitigates the risk of ad hoc decision-making that could compromise professional standards.
Documentation and record-keeping
Documenting all decisions, approvals, and steps taken to manage conflicts is essential. This serves as:
- Evidence of compliance in case of regulatory scrutiny
- A reference for future conflict assessments
- A mechanism to monitor and review internal policies
Thorough record-keeping demonstrates a commitment to ethical practice and transparency.
Training and culture
Staff awareness
Conflicts of interest are not limited to senior partners. All staff must understand:
- How to recognise potential conflicts
- The importance of reporting concerns promptly
- Procedures for escalation and review
Training programmes tailored to the MDP’s structure and disciplines help embed a culture of compliance.
Promoting an ethical culture
Ethical culture is critical in multi-disciplinary environments. Encouraging openness, transparency, and accountability ensures that conflicts are identified and managed effectively. Partners should lead by example, reinforcing professional duties and expectations.
Consequences of mismanaged conflicts
Failure to manage conflicts of interest can have serious repercussions, including:
- Regulatory sanctions, fines, or disciplinary action
- Reputational damage, loss of client trust, and negative publicity
- Civil claims from clients alleging breach of duty or negligence
- Internal disputes among partners or disciplines
These consequences highlight the importance of proactive and systematic conflict management.
Conclusion
Conflicts of interest are an inherent challenge in multi-disciplinary partnerships. The integration of legal, accounting, consulting, and other professional services increases the likelihood of overlapping obligations and competing interests.
Proactive management requires:
- Robust identification and screening systems
- Clear governance and documentation procedures
- Informed client consent where appropriate
- Effective information barriers and staff training
- A culture of transparency and ethical practice
For MDPs in England and Wales, addressing conflicts of interest is not just a regulatory obligation; it is essential to protect clients, maintain professional integrity, and preserve the partnership’s reputation.
By adopting comprehensive strategies for conflict management, firms can leverage the advantages of a multi-disciplinary structure while minimising risk and ensuring ethical, compliant operations.
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Disclaimer: This article provides general information only and does not constitute legal advice on any individual circumstances.
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