Friday, October 10, 2008

No Misconduct In Liens To Secure Fees

A very interesting hearing officer report just filed in Arizona directs that ethics charges be dismissed in a case where the attorney had been charged with violating ethics rules and state statutes "by taking liens against client's real property to secure her attorney's fees in three [marriage] dissolution matters..." In each matter, she had consulted with her law partner and then husband in arranging the liens. After attempts to reach a consent disposition of the disciplinary charges failed, the lawyer denied the misconduct and a merits hearing was held.

The evidence established that all three clients had difficulty keeping current on their bills and that the lawyer was faced with either withdrawing or trying to get security for her fees. The bar claimed that the liens violated the business transactions with client rule; the attorney contended that the matters were governed by a different rule that permitted liens "authorized by law."

The attorney called as her expert witness the former (and long time) Director of Lawyer Ethics for the State Bar, who testified that she had advised bar members that such liens were permissible. The hearing officer noted that "while it is true that [the attorney] may not have spoken to [the former Director] and received advice from her, and further that there is a disclaimer regarding advice from Ethics Counsel, that's not the point. The point is that for years the State Bar has told attorneys that these liens are permissible." The bar thus had an obligation to make the legal community aware of its interpretation of the rules. The attorney had been "open, forthright and candid about her actions, and she made her decisions after consulting with more senior and more experienced members of the bar and making reasonable efforts to check the rules to assure that liens were allowable."

I assume that the bar may (but should not) seek a review of the dismissal. They might not in light of the hearing officer's observation that "why [the attorney's] partner and then husband was not similarly charged was never explained." (Mike Frisch)

http://lawprofessors.typepad.com/legal_profession/2008/10/an-very-interes.html

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