Monday, November 6, 2006

Excusable Theft: Part Two

by Mike Frisch

The assault on integrity in the District of Columbia bar discipline system continues unabated with a hearing committee report (not available in electronic format) in In re Herbst, Bar Docket No. 290-01 (HC Eight July 12, 2006). The lawyer had accepted a personal injury case and then forgot about it, entrusting the matter to a staff member who settled the case without the client's authority and embezzled the proceeds. When the lawyer discovered this two years later (the client had obtained new counsel who had filed suit), he restored the settlement funds but again allowed the balance to dip below the amount owed (we call this misappropriation or lawyer theft). The hearing committee found serious incompetence, failure to communicate with the clients, failure to supervise employees and negligent misappropriation, but decided that a real sanction was not called for.

The reason? The lawyer suffers from a mild case of attention deficit hyperactivity disorder and had other "stressors" in his life. The sanction? Probation! The chair of the panel that authored this report has been rewarded by promotion to the Board on Professional Responsibility. Presumably the next mitigation case in D.C. will find that the theft was understandable and excusable because the lawyer really needed the money.

Note: Maryland gave the lawyer a reprimand in the same case.

[Update:  See a correction here.]

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Comments

Mike, I take the ADHD factor more seriously than you do but come out the same place (assuming your reported facts, as I do). For example, if someone showed me that they had a certain situation or diagnosis that led to specific errors that in the future can be corrected and processed-through, I'd be inclined to let them try to practice under those new processes and protections, all else being equal. But I don't read these facts as "all else equal." We take poor accounting procedures (the most benign way of stating it), whatever its root, very seriously. I think the lawyer's second act was worse than his first, so even taking into account (and treating as genuine) his personal situation, I'd have given a stiffer sanction. -Alan

Posted by: | Nov 6, 2006 9:18:35 AM

Alan's comment is a valid one-- I do think conditions like ADHD can explain and mitigate neglect and failure to keep records. Here, I view the conduct in letting the balance in escrow drop as intentional, unlike the hearing committee, and believe that misuse of entrusted funds needs special and unforgiving enforcement rules.

Posted by: Mike Frisch | Nov 6, 2006 9:48:57 AM

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