Wednesday, November 14, 2007

The Most Important Rule

The special nature of Rule 1.15--and the consequences of knowing and intentional misuse of client funds--is at the heart of a recent decision of the Maryland Court of Appeals. The case appears to involve garden variety misconduct but at second glance may generate some sympathy for the lawyer. He had practiced honorably for many years until 2003, with a practice that focused on tax and estate matters. In 2003, he experienced severe cash-flow problems, primarily as a result of an inability to collect over $150,000 in fees for his services in connection with failed bankruptcy reorganization plans. At the time, he was paying college tuition for two children.

His response was to rob Peter to pay Paul from entrusted funds. He was able to pull this off for two years until a bounced escrow check put him on Bar Counsel's radar screen. His initial response was to submit doctored records to conceal the misconduct. He admitted the misconduct in the disciplinary proceedings. The circuit judge who heard the case found the following mitigating factors: no financial harm to any client, all obligations met in a timely manner, no intent to defraud, extensive pro bono activities and sincere remorse.

Bar Counsel sought disbarment; the lawyer proposed an indefinite suspension. The court imposed disbarment: even if the lawyer lacked criminal intent, the conduct was knowing and intentional. The mitigating factors are not sufficient to avoid the ultimate sanction. (Mike Frisch)

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Comments

Under the facts of the case the result feels harsh but probably is the right result. A copy of the decision should be given to every lawyer with access to client's funds.

Posted by: W.R. Chambers | Nov 14, 2007 2:25:55 PM

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