The events at Enron and the impact they had on the Andersen organisation were truly amazing. Never had a professional services organisation of such size, breadth and, until then, reputation, disintegrated so quickly. For Andersen Legal, the growing legal arm of Andersen, the events were cataclysmic. From being the ninth-largest legal business by turnover in 2001, with a limited but rapidly growing reputation, it was suddenly gone.

So does this spell the end of the multi-disciplinary partnership (MDP) movement, which has been making so much noise in recent years? Events of the past year are clearly a setback, but the issues, that created a demand for MDPs in the first place, have not gone away.

The law firms linked to the big accounting firms will clearly need to take stock. The Sarbanes-Oxley Act in the US; the increasing ring fencing of audit by the client so that non-audit services are not purchased from the same organisation; and the impact of the collapse of the most successful of the audit-linked law firms – Andersen Legal – will inevitably take their toll.

The irony is that the Andersen Legal firms had no involvement with Enron and whatever the detractors of MDPs may argue, there is no evidence that the judgment of lawyers in the audit-linked firms has ever been impaired by the connection. However, as so often, perception is reality and it would be a brave general counsel or CEO who would now instruct a law firm connected to his or his auditors on a significant transaction.

It is not a credible answer for the auditors to say 'don't worry, our firm only audits 25% of the market, you still have 75% to play for'. The quarter of the market where the firm has the best contacts is off limits. Conflict rules will prevent you suing or acting against such clients. The key point of contact provided by the auditors will be lost. Inevitably this will have an impact on the quality and reputation of the lawyers prepared to join or stay in such law firms. The financial performance of such firms will suffer just at a time when the sponsoring organisation is itself feeling the effects of the financial downturn. It is therefore hardly surprising that the English-based audit-linked law firms are struggling this year.

The auditors keep looking at the 'problem' through the wrong end of the telescope. They identify the issues as a problem with consulting, legal, HR, corporate finance and even now some areas of tax. They fail to recognise that audit will be increasingly strictly regulated. Audit will be subject to strict independence rules. Audit has become a commodity-priced business. Audit carries with it nuclear levels of risk. While the 'big four' remain audit dominated rather than broader professional service firms, this tension will prevail and they will fail to address the inevitable, spin-off audit.

For the lawyers in such an environment it is unlikely that they will be able to move out of the lower and mid-tier work that they are currently doing. Indeed, during the next two years they risk a declining presence especially in the more mature markets such as England and Germany. They will need to stabilise and redefine their position in the market and their lawyer and client base. Then, if the conflicts with audit are successfully dealt with, they can restart the long, hard process of re-establishing their position in the legal market.

But away from the big four, MDPs, albeit clearly controlled by lawyers, could develop. The larger international firms are increasingly receptive to recruiting other professionals in areas where there are clear business synergies and professional standards.

Back in the late 1980s Clifford Chance effectively had a non-lawyer partner who was a share schemes specialist. Of course he was not formally a partner, he was a partner in a parallel partnership, which just happened to produce for him the equivalent income as a Clifford Chance partner. In the late 1990s Clifford Chance in Moscow hired a partner from the then Price Waterhouse as a 'partner'. He was a specialist on financial institutions tax but not a lawyer so he became a 'director of tax'. Would the firm have collapsed if both had been real partners in Clifford Chance?

Law firms increasingly have economists, forensic accountants, lobbyists and others with direct fee earning roles on their staff. But the best of these are often put off joining by the absence of real partner status.

Law firms have an opportunity to seize the initiative. Given the falling profitability and liability issues facing the big four, the law firms have an opportunity to reassert their positioning in a number of key markets, including complex tax work, employee benefits, fraud investigations and insolvency. They can hire the best out of the big four. In tax they could confirm the lawyers' role as advisers' to complex transactions and relegate the accountants to compliance work. But to get and keep the best, real partnership status will be needed. Unfortunately, it appears unlikely that most law firms and their regulators will have the courage and vision to grasp this opportunity.

Tony Williams is a consultant to law firms, operating as Jomati. He is the former worldwide managing partner of Andersen Legal and was managing partner of Clifford Chance from 1997-2000.