Legal Profession Blog

Lawyer, Don't Represent Thyself

The South Dakota Supreme Court denied unconditional reinstatement to an attorney who had been conditionally reinstated several years ago. The original disciplinary matter had its genesis in a campaign for judicial office in which the attorney had engaged in unprofessional behavior in attacks on his opponent. The Disciplinary Board had recommended a censure in that matter, but the lawyer's conduct in oral argument so concerned the court that an indefinite suspension was imposed. After conditional reinstatement, the lawyer handled a trial pro se in which the trial judge expressed concerns about his competence. Here, the court rejected the recommendation for full reinstatement because the board had failed to adequately consider the views of the trial judge. Continuing supervision of the lawyer's practice is "vitally needed." (Mike Frisch)

Theory of Relativity

A recent judicial ethics opinion from Florida states that a judge who has relatives employed by the sheriff's office is not disqualified from cases where employees of that office are witnesses. However, the judge may not sit in cases in which a relative is actively involved in the investigation or litigation. (Mike Frisch)

Tom Roberts of Weil Gotshal on the Buyout Market

Last March, I mentioned my friend Tom Roberts (right), the lead partner in corporate and M&A at Weil, Gotshal & Manges in New York.  Tom's comments are featured in this week's Time in connection with the tailing off of the hottest buyout cycle in history.  Says Tom:  "There has never been a buyout market that has been this frothy.  [It] looks like it's at the top."

I now understand why he has not returned my calls for two years.

[Jeff Lipshaw]

A Second Chance

An attorney admitted only in Louisiana brought a personal injury action in Mississippi. The pleadings listed a local counsel who never appeared. After the attorney had conducted several depositions, opposing counsel checked his bar status and moved to strike all pleadings (which, if granted, would apparently amount to dismissal with prejudice, as the statute of limitations had run). The attorney brought in active local counsel but did not seek pro hac admission. The trial court granted the motion to strike.

On appeal, the Mississippi Supreme Court reversed and remanded the case, finding the sanction for unauthorized practice to be unduly harsh. The court also directed the trial court to consider referring the matter to the Louisiana bar for investigation. A pointed dissent suggests that the case is as simple as the ABCs.

General Counsel Sanctioned

The Lawyers' Manual on Professional Conduct reports an interesting recent decision of the Oregon Supreme Court. The lawyer accused of misconduct was general counsel to a company that "designs and manufactures thermal imaging and stabilized camera systems for military and government use." He also had management responsibility for the export licensing process.

The lawyer was "one of several corporate executives who signed a management representation letter confirming...certain facts relating to [the company's] 1998 business activities." The company's revenues were significantly overstated. The key disputed issue in the bar case was his mental state when the letter was signed.

The court analyzed the evidence regarding his mental state and found that "the accused was not a lone actor...[b]ut the others involved were not lawyers" and that his "role was a significant one, and the choice he made to sign the management representation letter containing material false statements is the type of conduct that significantly erodes public confidence in the intregrity of the legal profession." A 120 day suspension was imposed. (Mike Frisch)

A Bad Idea

A recent decision of the Minnesota Supreme Court ordered disbarment of an attorney convicted of attempted theft by swindle. A referee had recommended indefinite suspension with the possibility of reinstatement after two years.

The attorney had represented a client in at least 30 matters. Over the years, the client had suggested bribery as a potential solution to legal problems. The client was charged after a search found cocaine and marked bills in his home. The client owed the lawyer over $5,000 in fees and the lawyer devised a creative collection method--he told the client he needed cash to bribe an unnamed police official to fix the case. The client went to the police, and the requested payment was made to the lawyer, who was promptly busted.

The court's majority rejected  imposition of supervised probation, as the lawyer's actions "effectively reinforced the client's cynical view of the legal system." There are two dissents calling for a lesser sanction. Justice Page notes that the lawyer "has served a segment of the population generally underrepresented in legal matters..."(Mike Frisch)

No Big Deal

As a former bar prosecutor, I have some experience in reading hearing panel reports absolving the accused lawyer of the charged violations. The findings often follow a pattern exemplified by a hearing board report filed yesterday in Illinois.

The attorney was accused of violating Rule 8.4(c)(dishonesty). He was employed by a school board and was concerned he might lose the job if a certain slate of candidates were elected. He arranged for and funded a videotape critical of the candidates. He paid for media distribution. He made "false  and misleading" statements on required forms (concealing his involvement) and misled an inquiring reporter. Charged with violations of election laws, he was found by the State Board of Elections to "have committed all the [election law] violations charged...with the intent to deceive the voters..." The findings were affirmed on appeal.

The Hearing Board invokes the "high level of certainty" needed to sustain a disciplinary charge. Noting the accused's motive to retain employment, and the willful election law violations, the board found that he "would benefit little by falsifying election disclosure forms." Further, "we find it reasonable for the Respondent to believe, at the time, that he was not violating the Election Code..." The board opines that election officials do not consider such violations "very serious."

Then, the inevitable hand-wringing: "Although we find that the charges were not proven by clear and convincing evidence, we do not mean to condone the overall conduct of the Respondent. He displayed a lackadasical attitude in preparing and filing election disclosure forms...the lack of good judgment does not necessarily consitute ethical misconduct."

At least they didn't attack the motives and professionalism of the bar prosecutor. Sometimes they do. (Mike Frisch)

Chutzpah Award

This is not a legal profession case, but it is worth a mention. The New York Appellate Division, Third Department reversed a trial court order denying summary judgment to a defendant in a negligence case. Seems the plaintiff, a 15 year old, trespassed onto defendant's property and jumped off a 50 foot cliff into a lake. It was alleged that the fence she had snuck through "was maintained in an improper fashion" and there were no warning signs about the danger of jumping off the cliff.

The court held: "Even if the defendant were somehow negligent in maintaining its premises, it has no duty to warn of any dangerous condition respecting a jump from the cliff into the lake, as the danger of jumping off a 50-foot cliff and into a lake is open and obvious and readily ascertainable by the use of one's senses." (Mike Frisch)

No Privity But May Sue For Malpractice

The Ohio Supreme Court issued a decision today that "allowed surviving family members' malpractice suit to proceed against attorneys who had represented the deceased family matriarch [of a family owned newspaper] in a stock transfer before her death." The suing family members cannot establish privity required for standing to sue for legal malpractice but "may pursue malpractice claims based on allegations of bad faith or collusion by the attorneys in the matter." The decision, reversing and affirming in part the lower court, was unanimous.

The court's summary of the decision, with link to the opinion, is here. (Mike Frisch)

A Lot Of Trouble For One Ticket

A single traffic ticket led to two judicial discipline cases against South Carolina magistrates and a one-year consent suspension of a lawyer employed by the Office of the Attorney General. The South Carolina Supreme Court accepted the consent disposition in a recent order. The attorney, who had been admitted in 2003, stipulated to a number of violations involving improper advice and conflicts of interest. One of the rules violated prohibits conduct that "pollutes the administration of justice."

The judicial misconduct cases are linked here (one of 11 counts of alleged misconduct) and here (magistrate also convicted of domestic violence; 60 day suspension).

There have been quite of few of these "magistrate misconduct" cases in South Carolina. One involved a magistrate who had falsely claimed to have attended a required CLE seminar. Another magistrate was removed from office by consent for engaging in adultery with two court employees, one of whom he had promoted prior to the onset of the relationship and later married. (Mike Frisch)

Duty To Supervise

The New York State Bar Association Committee on Professional Ethics has recently opined as follows:

"The New York office of a multi-state firm may be managed by an associate or of-counsel attorney who is admitted in New York, and supervised by an out-of-state partner who is licensed in another state. The law firm is responsible for establishing procedures to ensure that the New York attorney complies with New York's disciplinary rules."

The full text of the opinion is linked here. (Mike Frisch)

Mother-In-Law

A Florida attorney was retained to represent a mother in a case involving unpaid child support. The father had allegedly "fraudulently transferred stock to his mother" to circumvent his obligations. The mother-in-law hired counsel to represent her interests.

The mother-in-law had a personal assistant who approached the mother directly regarding a possible settlement. At his client's request, the lawyer drafted the proposal, but "had no expectation that the documents he drafted would be returned to him executed." To his suprise, the personal assistant returned the proposal bearing the mother-in-law's purported signature.

The lawyer had legitimate reasons to doubt that the mother-in-law's signature was genuine. The personal assistant had been "accused of stealing the mother-in-law's automobile" and had sought the lawyer's services in that matter. The lawyer did not inform opposing counsel of the executed agreement until it was presented at a hearing. The lawyer informed the court that he did not have independant corrorobation of the signature. Although the mother-in-law denied she had signed, the agreement was enforced and still stands.

The Florida Bar bought ethics charges. The attorney contended that his concerns regarding authenticity justified withholding the agreement from opposing counsel. The Florida Supreme Court held that "this was not his decision to make." The attorney had "deliberately and knowingly concealed the agreement from opposing counsel because he did not want counsel involved" (quoting the referee's report). The attorney was found to have concealed evidence and engaged in dishonest conduct. A 91 day suspension was imposed. (Mike  Frisch)

Conflicts, Third Party Payment and the ABA

Posted by Allison Hayward

My colleague Ron Rotunda (you owe it to yourselves to click the link) has alerted me to an effort that others here might find of interest.  A group of ethics experts is seeking signatories for an ABA Standing Committee on Ethics and Professional Responsibility opinion request regarding the practice of negotiating attorney's fees in settlements with defendants.  Interested individuals should contact Lester Brickman at Benjamin N. Cardozo School of Law, brickman -at- yu -dot- edu. A link to the web page with the full document is here.

Here's an excerpt from the draft request (which in total runs 30 pages) - after the jump.

This excerpt from the draft letter's introduction should give readers a sense for the project:

A troubling practice, whereby attorneys in contingency fee representations are negotiating their fees directly with settling defendants, is occurring with increasing frequency and on an increasing scale.   The potential ethical improprieties of this practice -- one that has now become commonplace in mass tort contingency fee representations  -- are clear and considerable, as are the consequences of its continuation.  As a result, we believe that the Standing Committee’s attention to this matter is warranted. We write this letter in two capacities. 

First, we write as members of the Bar concerned with maintaining the integrity of the fiduciary relationship between attorneys and clients that is essential for an effective and meaningful adversarial legal system in this country.  We strongly believe, and ethics norms and rules mandate, that it is the obligation of every attorney, wherever and to the extent possible, to avoid conflicts of interest that undermine the fiduciary relationship between attorneys and clients and undermine the public’s confidence in and respect for our profession. 

Secondly, we write as and on behalf of taxpayers and citizens from whom substantial funds have been taken, in the amount of more than $10 billion in the tobacco cases alone, through a process that both in appearance and substance exemplifies the dangers inherent when claimants’ counsel negotiate their fee payments with their adversaries’ principals.  We submit that the Model Rules call for a per se ban on the practice; in the alternative, we believe that the Rules require steps that will ameliorate and eliminate its most ethically problematic dangers.

Regarding the practice, we present the following propositions for the Committee’s consideration:

Proposition 1: In the absence of statutory authority, attorneys who seek recovery on behalf of clients or classes and negotiate for the direct payment of their fees by defendant adverse parties and/or their counsel do so in what, at a minimum, is a presumptive but rebuttable violation of their fiduciary duty to their clients; more preferably, such practice should be deemed per se unethical.

Proposition 2: In the absence of a per se ban against such agreements, attorneys should submit a reviewable, written submission to their clients demonstrating that no practicable alternative form of fee payment was available and that, in practice and in fact, counsel had been faithful to their clients’ interests at the expense of their own. 

Proposition 3: Any provision in such agreements that in any way limits, insulates or precludes judicial or ethics-based review of the propriety of the fees should be per se unethical.

Proposition 4: More specifically:  Any provision in such agreements that in any way compromises the right of the clients or classes to recover fees deemed excessive or unethical by such review, including without being limited to provisions that make reductions of fees negotiated between defendants and plaintiffs’ attorneys payable to the defendants, should be per se unethical .

Proposition 5: More specifically:  Any provision in such agreements that in any way makes the validity or enforceability of the agreements contingent on the payment of the fees negotiated between defendants and plaintiffs’ attorneys should be per se unethical.

Proposition 6: More specifically:  All such agreements should be expressed in terms of a single settlement sum payable to the plaintiffs from which the plaintiffs’ attorney fees are to be deducted.

"Soon-To-Be-Earned" Fees

The Commission on Practice of the Montana Supreme Court dismissed a series of ethics charges against an attorney, finding insufficient evidence of any violation. On the appeal of the Office Of Disciplinary Counsel, the Supreme Court reversed the dismissal and remanded for a sanction recommendation. The lawyer had represented an elderly client in a series of matters. In one matter, the attorney "transmogrified" a $125 hourly fee into a contingency fee, which paid him over $121,000 for a matter that the Bar's expert testified was a simple process that justified a fee of no more than $2,500. The fee was deemed excessive.

The attorney also had failed to escrow advanced fees. The court rejected the following claim: "[The attorney] seems to argue, and the Commission seems to accept, that a third category exists for soon-to-be-earned fees...[that] may be deposited directly into a lawyer's operating account." Fees are either earned or unearned, and the unearned variety must be escrowed. (Mike Frisch)

Former Employee Interviews

A discount brokerage firm entered into an agreement with a manufacturer of financial software to create and operate an Internet brokerage service. The deal went south and litigation ensued. A senior officer of the brokerage firm who was a major player in the events at issue then took a leave of absence from the firm "to negotiate the terms of his impending seperation and eventual termination."

After the senior officer was terminated, the attorneys for the software manufacturer interviewed him without the knowledge of opposing counsel. The employee was cautioned not to disclose privileged or confidential information. The interview focused on the facts of the case.

When opposing counsel learned of the interview, a motion to disqualify was filed and granted by the New York Supreme Court. The Appellate Division reversed. The Court of Appeals affirmed. The court's opinion in the Niesig case "makes it clear that ex parte interviews of an adversary's former employee are neither unethical or legally prohibited." Here, the admonition to avoid disclosure of protected information, which the former officer stated he understood, made disqualification unwarranted. (Mike Frisch)

Disciplinary Charges Against Prosecutor

The Illinois ARDC has recently filed charges against the former elected State's Attorney of Jo Daviess County. According to the allegations, the prosecutor "personally prosecuted the majority of criminal felony cases in the county" and had been an assistant state's attorney for 13 years. The charges, in the main, involve improper closing arguments in five cases, as well as improper impeachment of defense witnesses in one case. Only one of the five convictions was reversed for prosecutorial misconduct, although the prosecutor's arguments in the other cases were criticized on appeal.

Some highlights:

"There is something about 80 to 90 percent of Defendants do in this country and that is be honest, forthright. They go into the courtroom and they plead guilty."

"Now, like a rat in a maze [defendant] made several poor attempts to [objection overruled] exploit meaningless perceived technicalities to try and escape responsibility for this crime."

"Because of Pinocchio over here [the victim] has to go through with this nightmare."

"[a]s State's Attorney, I have the absolute power, right and duty to dismiss a case if I have any inkling whatsoever that this guy didn't do it...I got this case and it was not a dog to me."

And from a case where the defendant was charged with aggravated reckless homicide in which his brother had died:

"I 'm disgusted with drunk drivers...[the defendant] told us he's some hillbilly from Stockton...He doesn't have the decency to lay his brother's soul to rest...How could you dishonor and disgrace your own flesh and blood like that?"

This case is worth keeping an eye on as it is unusual to see a prosecutor charged in a disciplinary case with improper arguments in so many cases. (Mike Frisch)

Unreasonable Fee?

A law firm was retained to represent a minor who was a passenger in a car hit by a drunk driver. She lost her unborn child as a result. The minor and her father signed a contingent fee agreement that set the fee at 1/3 of amounts recovered and provided for a lien on discharge. The insurer offered policy limits to settle. The firm was then discharged and asserted the lien against the insurer. The firm sued the former client and obtained summary judgment.

On appeal, the Nebraska Supreme Court reversed. The firm did not establish that the fee was reasonable under ethical standards. The fee contact, standing alone, did not establish that the firm had in fact earned 1/3 of the settlement offer. On remand, the law firm bears the burden of proof on the reasonableness of the fee. The firm must prove: the existence and terms of the fee contract, that required disclosures were made to the client and the actual extent and value of the legal services.  (Mike Frisch)

Improvident Disqualification

A woman who suffers from Alzheimer's disease married her "longtime friend" while a petition for conservatorship filed by her brother was pending in the District of Columbia. She denied that she was incapacitated and hired a law firm to assist her in objecting to the conservatorship and in transferring assets. The probate court appointed a lawyer to represent her and investigate claims that the law firm had a conflict in that it had been hired by the friend/husband. The appointed lawyer moved to disqualify the law firm, which was granted by the trial court. The probate court also appointed another lawyer to serve as guardian.

On appeal, the D.C. Court of Appeals vacated the order removing the law firm and appointing the guardian over the woman's objections. "The [probate] court's decision to override [the woman's] expressed wish to be cared for by her husband...was flawed because it was based on unproven accusations and suspicions rather than on actual findings of impropriety or conflict of interest."  The probate court must make an informed, not speculative, judgment based on the best interests of the ward. Retained counsel cannot be removed absent an evidentiary hearing that establishes a basis to disqualify. (Mike Frisch)

Constitutional Confrontation, Disciplinary Consequences?

A recent post by John Dean discusses the possibility of a constitutional confrontation over the refusal of former White House counsel Harriet Miers to respond to a subpoena from Congress. One question that struck me is the potential disciplinary issues raised by her conduct. Mr. Dean suggests that the prospect of criminal prosecution is unlikely, so bar provisions that require or permit discipline for a conviction will likely never be invoked.

Several disciplinary rules may be implicated. Rule 3.1 prohibits an attorney from asserting a frivolous position, but recognizes that a lawyer may permissibly test the bounds of the law. Rule 1.6 applies a duty of confidentiality to the benefit of a former client, but that duty is trumped by adherence to law and court order. Rule 8.4 provides, in pertinent part, that a lawyer not engage in criminal conduct and refrain from conduct prejudicial to the administration of justice. On the state of the public record, is there a basis for a bar investigation?

Interestingly, the question appears to be one governed by the law of the District of Columbia. Ms. Miers is an active member of the D. C. bar and the conduct at issue took place in the District of  Columbia. D.C.'s Rule 8.5(b) would thus control for choice of law purposes and apply D.C. ethics rules and standards. In D.C., Bar Counsel is required to conduct a confidential investigation where the apparent facts, if true, may warrant discipline. The information may come from any source. During my time at Bar Counsel, many investigations had a genesis in information from the news as opposed to a formally submitted victim complaint.

A failure to respond to a congressional subpoena would seem to satisfy the low threshold standard required for an investigation. Given that the lawyer here is following the client's instruction regarding the assertion of privilege, discipline will likely not even be seriously considered unless and until there is a contempt citation and all appeals are exhausted, and if the refusal to respond persists in the face of an order to disclose. (Mike Frisch)

"Indignantly Submitted"

A criminal defense lawyer who became frustrated with the handling of a continuance request filed a motion that characterized the proceedings as a "criminal court fiasco" and signed the pleading "Indignantly submitted." At the hearing on the motion, he said that he would "jam these pleadings down the throat of the record as much as I feel I need to." The outburst got the attorney a contempt citation and locked up for an hour. He apologized and moved to withdraw.

The Illinois Hearing Board recommends that the attorney be censured. (MIke Frisch)