April 9, 2009
No Duty To Supervise In California?
Courtesy of Legal Ethics Forum, here is a link to a statement describing the basis for criminal charges against a former employee of the California State Bar alleging embezzlement of over $675,000 from Bar funds. According to the affidavit, the accused was responsible for managing the Bar's real estate and had kept two sets of books. The scheme unraveled in the wake of a payment from a commercial tenant named Caboodle Cartridge.
When things like this happen on the watch of a practicing lawyer, sanctions for failure to supervise a non-lawyer employee may be imposed for violation of the state's version of Model Rule 5.3. A quick review of California's ethics rules did not reveal to me any comparable rule governing the conduct of members of the California Bar.
Update: here's a link to an analysis of supervisory duties in California from the Cornell Law library. (Mike Frisch)
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LEF's John Steele of the great state of California would know for sure and I hope he weighs in here or there, but I think there is a lesser duty to supervise (in the sense that it is not so much a reasonableness standard as one of intent or recklessness) but still some duty to supervise non-lawyers that is read into the general duty of competence. Sort of like how you have to be competent and give competent services and that means not ignoring subordinates.
I wonder how that would play out with this Bar situation, which is not really about competent representation of a client. But anyway I think there is considered to be a duty to supervise in the California code but that it is not quite as explicit or easily violated as the MR. I SHOULD know this, since I am licensed there, but I do have confidence that John or David M would know.
Posted by: Alan Childress | Apr 9, 2009 7:47:09 AM
Sadly, we don't have a specific rule on supervisors/subordinates, although the Rules Revision Commission will someday adopt MR-based rules. As noted below, the duty is part of the discussion within the rules.
First, it's not clear to me that this was a situation constituting the practice of law such that the discipline rules apply. The State Bar of California is a public corporation acting as an arm of the California Supreme Court. It bought the 180 Howard building to make some money on the side. There was no client involved, nor any practice of law. So, does the alleged failure to supervise fall within the rules law at all?
Assuming the CRPC apply, there is a duty to supervise recognized within the basic rule on competence (3-110(A)), and the discussion following the rule is basic a string cite regarding the duty to supervise.
In the discipline context, there is a long line of case law holding that shoddy supervision may be deemed "willful" and therefore disciplined. The Vapnek treatise has cites at 11-2, 9-3, and elsewhere.
For how the State Bar actually handle such cases as a matter of prosecutorial discretion and norms, it would be best to hear from one of our respondents counsel here in the Golden State. (Given the length of the embezzlement and the lack of good procedures it seems to me that the State Bar would discipline if this were the practice of law,and the case law would support a finding of willfulness based upon the inadequacies of the procedures even if no supervisor had bad intent.) It's fair to say that on the listserv yesterday and today the messages are smoking and one might conclude that "the sky is black with chickens coming home to roost."
Posted by: John Steele | Apr 9, 2009 9:39:52 AM