Thursday, July 2, 2009
In a lengthy and interesting decision, the Louisiana Supreme Court suspended three law firm partners for six months with three months stayed. The firm had represented the complainant in complex commercial matters since 1985. In 1996, the firm and client executed a revision of a 1992 retainer agreement.
The 1996 agreement was the subject of the disciplinary proceedings. The court found that the "highly unusual [fee] arrangement" created a conflict of interest that violated Rules 1.7(b) and 1.8(a). Even if the fee agreement was fair and reasonable, the firm did not advise the client to seek advice from independent counsel. The court also concluded that the client's business acumen was no substitute for otherwise complying with business transactions with a client provisions of the Rule. Further, the firm's submission of 922 pages of billing document did not establish compliance with the record-keeping obligations of Rule 1.15(b); rather, the submissions made an "utter mockery" of accounting requirements. The firm also violated Rule 1.16(d) in its withdrawal from representation.
A dissent would find no violations ans would not suspend for the violations found by the majority. According to the dissent, the 1996 agreement provided benefits and positive incentives for both the client and the law firm.