Thursday, December 21, 2006
The Louisiana Supreme Court dismissed ethics charges against an attorney who also is a stockbroker. The attorney rented office space to another lawyer who represented an elderly woman who had substantial assets. The woman sought a greater return on her funds and consulted with the lawyer-stockbroker, who entered into an agreement that was not reduced to writing. The agreement provided that the lawyer would retain a portion of the funds (that were held in his escrow account) and pay a monthly amount to the woman. The woman later obtained new counsel, discharged the lawyer and sued for her losses, resulting in a substantial settlement.
The woman filed ethics charges. The attorney contested the allegations based on the defense that his conduct was as a stockbroker not an attorney. The hearing committee bought the defense but was overruled by the Disciplinary Board, which was in turn overruled by the Supreme Court, which dismissed all charges. The court found that the putative client had no reasonable basis to believe that the accused was her lawyer. Rather, investment services were not the practice of law. The court "recognize[d] there can be a potential for confusion when an attorney wears a multitude of hats." Given the age and vulnerability of the "client" (who had died and did not testify in the bar case) and the absence of a written agreement, perhaps the confusion should have been held against the lawyer.
When a member of the bar purports to act in a non-lawyer capacity, it should be that lawyer's burden to clearly advise that lawyer ethics rules will not protect the person he is working for. [Mike Frisch]