Legal Profession Blog

Return to Practice

I suspect that there may be a widespread public perception that the disbarment of a lawyer is permanent. In the vast majority of states, disbarment is in fact a five-year suspension from practice with the opportunity to thereafter seek reinstatement. The District of Columbia Court of Appeals today ordered, here, the reinstatement of an attorney who had consented to disbarment in 1993 after misappropriating $76,000 from two estates that he served as court-appointed guardian. His practice had experienced a "reduction in work" and he was found to have only intended to "borrow" the entrusted funds. He repaid $65,000, with the balance paid by sureties. 

The report attached to the case sets out the standards applied in reinstatement cases and the analysis of each factor. The Court adopted the Board and Bar Counsel's recommendation for return to practice, finding that "sustained and strenuous efforts [by the disbarred lawyer] justify the recommendation."  [Mike Frisch]

Save May 8 For Boston Bar's CLE on Legal Ethics

If you are planning a trip to Boston around Tuesday, May 8 (as I suspect Jeff is, about then, just after Jazz Fest in New Orleans), or live there, one trip to plan may be the local bar association's 3-hr. program on "Ethics and Professional Liability."  It's part of this save-the-date announcement for all sorts of CLEs the bar offers in '07.  [Alan Childress]

Nakazato, Ramseyer & Rasmusen on Japan's Legal Profession: Stratification and Incomes

Posted by Alan Childress

Minoru Nakazato (U. of Tokyo, Law), Mark Ramseyer (Harvard Law [pictured right]), and Eric Rasmusen (Ind.-Bloomington, Dept. of Bus., Econ. & Pub. Pol'y [below]) have posted on SSRN their comparative and empirical study of the Japanese legal profession: "The Industrial Organization of the Japanese Bar: Levels and Determinants of Attorney Incomes."  [And my earlier post is here on significant changes in bar admission, and counting lawyers, in Japan over the past two years.]  In 1999, Ramseyer and Nakazato published the book, Japanese Law:  An Economic Approach [pictured left, since I cannot find Nakazato's photo anywhere].

An easier-to-access version of the new article, in very legible PDF form, is also found here from Harvard's Olin Center website.  Here is their SSRN abstract:

Using micro-level data (from tax records) on attorney incomes in 2004, we reconstruct the industrial organization of the Japanese legal services industry. These data suggest a bifurcated bar. The most talented would-be lawyers (those with the highest opportunity costs) pass the bar-exam equivalent on one of their first tries or abandon the effort. If they pass, they then opt for careers in Tokyo that involve complex litigation and business transactions. The work places a premium on their talent, and from it they earn appropriately high incomes.

The less talented face lower opportunity costs, and willingly spend many years studying for the exam.  If they eventually pass, they tend to forego the many amenities available to professional families in Tokyo and disproportionately opt for careers in the under-lawyered provinces. There, they earn monopoly rents not available in the far more competitive Tokyo market.

Earlier this month, the three posted elsewhere on SSRN an empirical paper on executive compensation in Japan (considering total income, executives earn far less than their U.S. analogs).  Its abstract is below the fold and the paper is linked here in a handier PDF version.

The abstract to "Executive Compensation in Japan: Estimating Levels and Determinants from Tax Records" is:

Most studies of executive compensation have data on pay, but not on total income. Studies of executives in Japan do not even have good data on pay. Although we too lack direct data on Japanese salaries, from income tax filings we compile data on total executive incomes, and from financial records obtain some indication of which executives have substantial investment income. We find that Japanese executives earn far less than U.S. executives -- holding firm size constant, about one-third the pay of their U.S. peers. Using tobit regression analysis, we further confirm that executive pay in Japan depends on firm size, with an elasticity of .24, but not on accounting profitability or stock returns. Corporate governance variables such as board composition have little or no effect on executive compensation, except that firms with large lead shareholders do appear to pay less.

Which Schools Make Ethical And Competent Lawyers? Not In USN&WR

Posted by Alan Childress
That's the question asked by Chapman's Tom Bell over at MoneyLaw, in "Law School Rankings as if the Public Mattered."  He can't answer the question, since those are not data with which the ABA readily correlates its recently-collected malpractice and bar discipline statistics (which he helpfully links).  But it's a question worth asking -- even acknowledging the difficulty of measuring ethicalness and competence, and the coarseness of the proxies one might use (as Tom adds here in comments). 

And of course it's not part of typical law school ranking systems.  Tom Bell knows ranking systems:  previously he meticulously examined the U.S. News & World Report process and offered these meaningful reforms.  Even with the factors it purports to measure, it fails considerably: 

I discovered that almost no safeguards exist to correct or prevent such errors. I think it fair to say that, but for my peculiar obsession with the USN&WR rankings, nobody would have noticed the errors I've documented. That won't do. We cannot rely on one nutty professor to keep the rankings honest.

Until his newly suggested scoring factors are known or approximated, or if you "find that lack of interest [by law school ranking sources] troubling," Tom thinks one thing to do is support the tax-exempt HALT, a legal-profession-watchdog group (also watching the disciplining bar institutions and processes) on which we previously posted here.  As Mike Frisch commented then, "HALT performs a most useful public service in its attempts to bring scrutiny to bar discipline.  Unfortunately, it is very difficult for outsiders to know how truly bad a system may be." 

Tom Bell's addendum is that outsiders can't truly assess law schools' most fundamental performances either--until the institutional production of ethical, competent lawyers is part of the ratings calculus.

Reality TV and the MPRE - Episode 4 - Buying a House

Posted by Jeff Lipshaw

We have what in Massachusetts nee Freedonia is called an "accepted offer" on a house.  I was going to post something on the classic libertarian-caveat emptor-full employment for lawyers-1700s vintage way it seemed to me residential real estate deals were closed in Massachusetts (at least if I believe my real estate agent, Max Remax).  But then I thought, who am I to judge?  To quote from Richard Ford's recent great addition to the Frank Bascombe trilogy, The Lay of the Land (no joke, this is at page 122 of the hardcover, and I think it is the answer to every dilemma in my life):  "Perhaps you had to go to Harvard to understand this.  I went to Michigan."  (I should note this may also be the answer to my relationship with my wife who did go to Harvard.)

Instead it seemed to me an opportunity for a little MPRE training, on the Law of the Land (note the multi-leveled entendres here). (Disclaimer:  the author is merely an MPRE trainee himself, as noted previously.  He makes no representation or warranty that the following made-up examples do in fact represent how the NCBE would interpret the sample questions, although he has undertaken the exercise both in a serious and humorous vein.)

So here we go:

1.  Jeff Lipshaw, a member in good standing of the bar in the states of Michigan and Indiana (also the 6th and 10th Circuit Courts of Appeal, the Eastern District of Michigan, and the United States Supreme Court), plans to take a job in Massachusetts, and goes about making an offer to purchase a home.  His real estate agent, Max Remax, tells him that he will be getting a quitclaim deed, and that he, the buyer, is responsible for insuring the title.  This is contrary to Lipshaw's experience in his home states, where seller is responsible for delivering a warranty deed, as well as a title policy under which the buyer is the beneficiary.  Lipshaw is confused.  Should he hire a Massachusetts lawyer?

(a)  No, because he will likely be joining Max's synagogue and so he can trust Max.

(b)  Yes, because he will likely be joining Max's synagogue and so he can't trust Max.

(c)  Yes, because a lawyer who represents himself has a fool for a client.

(d)  Yes, because he has recognized the limits of his competence.

Answer:  d.  Rule 1.1 of the MPRE states "A lawyer shall provide competent representation to a client. Competent representation requires the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation."  The comment states: "In determining whether a lawyer employs the requisite knowledge and skill in a particular matter, relevant factors include the relative complexity and specialized nature of the matter, the lawyer's general experience, the lawyer's training and experience in the field in question, the preparation and study the lawyer is able to give the matter and whether it is feasible to refer the matter to, or associate or consult with, a lawyer of established competence in the field in question."  Lipshaw recalls that, even in his licensed jurisdictions, he probably hacked up his own purchase agreements.  Plus, it is obvious that the local customs are designed to ensure that one always refers the matter to a Massachusetts lawyer with established competence.  Many MPRE examinees are fooled by (a) or (b).  The main problem here is not professional responsibility, but the fact that a fellow temple member will know how much you paid for your house, for purposes of "fair share" dues and your Campaign contribution.

More sample MPRE questions after the fold.

 

2.  Assume in the previous question that Lipshaw decides to go it alone and not to retain a Massachusetts lawyer.  May he do so?

(a)  Yes, because his wife would kill him if he screwed it up.

(b) No, because all of the lawyers in Massachusetts are tapped out from making political contributions to either Ted Kennedy or Mitt Romney.

(c) Yes, because he has not opened an office in Massachusetts or otherwise held himself out as licensed to practice in Massachusetts.

(d)  No, because he is not licensed to practice in Massachusetts, and there is no exception for a pro hac vice appearance merely to mess up your own home purchase.

Answer:  (c).  This is an example of the bar examiners messing with your head.  Even though (c) is not a perfect answer, it is the best of this sorry lot.  Rule 5.5(b) of the MPRE states:

A lawyer who is not admitted to practice in this jurisdiction shall not:

(1) except as authorized by these Rules or other law, establish an office or other systematic and continuous presence in this jurisdiction for the practice of law; or

(2) hold out to the public or otherwise represent that the lawyer is admitted to practice law in this jurisdiction.

The trick here is that Lipshaw is acting pro se, and none of the exceptions for multi-jurisdictional practice really apply, because this does not relate to another matter pending in a jurisdiction in which Lipshaw is licensed, nor does there appear to be a rule on acting pro se.  Certainly a non-lawyer could do her own deal without a lawyer, even if that is ill-advised.  Nevertheless, (c) is the best answer because the rule does not create a blanket prohibition against any unlicensed practice of law in the jurisdiction.  Subpart (a) of Rule 5.5 says that a lawyer may not practice law in another jurisdiction in violation of the rules of that jurisdiction (or assist another in doing so).  So we must still look for a rule that applies or does not apply.  Because Lipshaw is not establishing an office or systematic and continuous presence in Massachusetts for the practice of law, nor is he holding himself out to the public, he will not be in violation of the rule.  Nevertheless, he has been thoroughly freaked out by what Max Remax told him, and has called in his law school roommate who is a big cheese partner at a big time Boston law firm to help out, which would also cure any unauthorized practice issues under subpart (c).

EXAM TIP: Note this question gets at the heart of the oft-debated question whether one can pass the exam merely by answering the "second-most ethical" question (Wendel's book says no; Childress told me yes, but he may have been messing with me because he thinks I am an anal Type-A crazy person.)  Answer (d) would likely snag the unprepared person who answers with the most ethical-sounding response.

3.  Lipshaw sent his lovely and talented wife out to Boston, and for the fourth time in their marriage, she made a decision on a house without his seeing it live before they signed the offer document.  When Lipshaw's law school roommate decides to help in the transaction, is there anything he should consider?

(a)  No, because this is an example of a '90s kind of guy swallowing his testosterone-induced control mania in the interest of marital harmony.

(b)  No, because big time Boston law firms can do small time residential real estate transactions in their sleep, with one hand tied behind their back.

(c)  Yes, because Lipshaw snored back in the squalid room in Crothers Hall at Stanford.

(d)  Yes, because it may be that Lipshaw is a client with diminished capacity.

Answer:  (d).  This is another question in which the examinee needs to use the process of elimination to reach the best, not the perfect, answer.  Answer (a) can be eliminated because empirical legal scholars have demonstrated that there is no correlation between testosterone levels and marital harmony.  Answer (c) can be eliminated because Lipshaw denies having snored.  Answer (b) is tempting because most partners in big time Boston law firms could have been law professors if they had wanted.

But the correct answer is (d).  Rule 1.14(a) states: "When a client's capacity to make adequately considered decisions in connection with a representation is diminished, whether because of minority, mental impairment or for some other reason, the lawyer shall, as far as reasonably possible, maintain a normal client-lawyer relationship with the client."  Lipshaw's actions may indicate diminished capacity, but not presumptively so.  Accordingly, law school roomie may continue with a normal lawyer-client relationship.  If, however, Lipshaw is at risk of substantial physical, financial or other harm unless action is taken and cannot adequately act in his own interest, roomie is authorized under subpart (b) to "take reasonably necessary protective action, including consulting with individuals or entities that have the ability to take action to protect the client and, in appropriate cases, seeking the appointment of a guardian ad litem, conservator or guardian."

Disclaimer:  if you haven't already figured it out, the citations to the MPRE are accurate, and the answers may even be instructive as a learning device, but this is PARODY.

 

Colorado Bar's Roadshow CLEs on Preventing Legal Malpractice, Etc.

Posted by Alan Childress

The Colorado Bar Association's annual "Preventing Legal Malpractice" seminar earns four credits (all ethics hours) and is offered live in these locations: 1/25 and again 2/7 in Denver, 1/26 in Colorado Springs, and 2/9 in Grand Junction.  Webcasts are 1/25 and 2/7.  Here is the brochure in PDF.

All three cities offer a video replay Dec. 29 of "The All New Ethics Revue," a musical-comedy ethics program on which we posted details earlier.

Programs on Criminal Law Ethics and on Bankruptcy Ethics were blizzarded out Dec. 20 and will be rescheduled.  Watch this page for new dates.

Mediation Ethics in California: No DQ For Joint Representation

"A California appeals court has held that a party in mediation cannot disqualify a lawyer who jointly represents two other parties with different interests," summarizes Ben Cowgill here in his Legal Ethics Newsletter, and links the opinion helpfully.

More than anything, the decision to reverse the trial court's order of disqualification in this context came down to standing--the lack of an ability to complain by the party having no affected confidentiality interest.  The Court of Appeal said:  "We have identified no ethical consideration that would mandate application of a mediation-disqualification rule whenever parties who knowingly consent to joint representation participate in mediation, particularly where the Legislature expressed no such intent."  [Alan Childress]

Ruling Anticipated in Request to Declare SOX Delegation Unconstitutional

A U.S. District Judge in D.C. is pondering a ruling that could find unconstitutional Sarbanes-Oxley's creation and use of a "public company accounting oversight board."  The Dec. 26 story here from Donna Block of The Deal via Law.com.  Judge James Robertson heard arguments on Dec. 21 and assured the parties he would rule "as soon as I can."  [Alan Childress]

Lipshaw on Business Acquisition Half-Truths

Posted by Jeff Lipshaw

Some time earlier this year I posted a short essay, developed from a blog conversation among Gordon Smith, Frank Snyder, and me, about contractual disclaimers of truth-telling and reliance.  Larry Ribstein was kind enough to comment on it over at Ideoblog.  Since then I have given several talks about it (as has been noted, I am about to move on to my next gig, and as has further been noted elsewhere, you can't get move on to your next gig without giving a job talk).  As job talks are really just faculty colloquia on training wheels, it turns out I have gotten immeasurably valuable comments, corrections, brickbats, Bronx cheers, well-aimed tomatoes (you say tomahtoes), and other affects of opprobrium and praise. 

I have now substantially redrafted and converted the essay into an article, now renamed (slightly) Of Fine Lines, Blunt Instruments and Half-Truths:  Business Acquisition Agreements and the Right to Lie, which is available on SSRN.  While it still discusses (in even more gory detail) the Abry case that was the source of the original blog discussion, I had the good fortune of the new book by Ian Ayres & Gregory Klass, Insincere Promises, being published in the interim, and that provides a nice complement and, I think, support to my thesis.  Here is the abstract:

In this article, I expand upon a happy coincidence (for scholars) in reconciling the overlap between contract and fraud. Both the recent book by Ian Ayres and Gregory Klass and the Delaware Court of Chancery in Abry Partners Acquisition V, L.P. v. F& W Acquisition, LLC addressed the issue of promissory fraud – the making of a contract as to which the promisor had no intention of performing. Each treatment, however, in focusing on fraudulent affirmative representations, falls short of (a) recognizing the fundamental aspect of deceptive promising in a complex deal, namely the half-truth, (b) articulating an appropriate doctrinal principle to address it, or (c) capturing the social and linguistic context that makes the deceptive half-truth so insidious. 

The archetypal facts in Abry frame the issue. When the parties to a business acquisition agreement purport to limit the buyer's reliance to those representations and warranties set forth in the agreement, just what obligations of truth-telling have the parties contractually released? We need to grapple with the inter-relationship of law, language, mutual understanding, and trust. The language of the law (and the contract) is a blunt instrument by which to map to track the subtle fine lines of a complex agreement. I will contend that there is a kind of special arrogance in the illusion onto which lawyers hold – that the uncertainties and contingencies of the world are in their power to be controlled, and to the winner of the battle of words go the spoils. The correct doctrinal result is to presume in the transactional speech acts (including the contract), as we do in everyday life, a default of truth-telling, to permit the parties freely to contract around the rule, but to require narrow construction of the exceptions and disclaimers.

I know it's not that time of the year just yet, but if you happen to be a law review editor reading this and want to save me some trouble (and forking over the ExpressO fees), feel free to give me a shout.

* The picture is of a book of cartoons entitled Treasures of Half-Truth, by Pat Bagley, the editorial cartoonist for the Salt Lake Tribune.  You can see the original the book at SignatureBooks.com.