Wednesday, May 12, 2010

Moonlighting

The Illinois Review Board has proposed a one-year suspension of an attorney found to have violated fiduciary obligations to his law firms by "moonlighting." The Review Board concluded:

The Hearing Board found that the Respondent breached his fiduciary duty to Altheimer & Gray and Holland & Knight by depriving them of the opportunity to provide legal services to, and to earn income from, his moonlighting clients. He engaged in deceitful conduct over a long period of time, in order to earn income from the practice of law in breach of his duties to his employers. He engaged in dishonesty by failing to disclose his outside practice to the firms, by making misrepresentations on his employment application to Holland & Knight, by submitting altered copies of tax returns, and according to the majority of the panel, by exporting documents to his home, rather than following the firm’s procedure.

We affirm the Hearing Board’s findings. We are particularly troubled by the Respondent’s dishonesty concerning Holland & Knight. Respondent willfully altered his tax returns with an intent to deceive the law firm. He signed his employment application representing that its contents were accurate when he knew that they were not. In signing the employment agreement, the Respondent agreed that he would not "undertake or continue any representation except in accordance with [Holland & Knight’s] practices and procedures," which included that unless the firm approved otherwise, "all compensation for services of every kind rendered by a firm lawyer….shall be deemed income of the firm." He signed the agreement while fully intending to continue his moonlighting practice. The Respondent does not appear to be remorseful for this misconduct. He apparently does not view his dishonesty as a violation of the professional rules, as he argues that the proceedings should be dismissed.

As to sanction:

After consideration of all the circumstances, we conclude that a suspension of one year is appropriate in this case. Unlike the situation in Vano, we find no indication that probation is appropriate here. It would serve no purpose. The Respondent’s conduct was deliberate and not the type of activity that would be remedied through supervision. Additionally, and unlike the situation in Vano, there was no ambiguity as to what was required of the Respondent in this case. In Vano, the aggrieved law firm allowed, as part of a settlement, the entry of a summary judgment order against it which stipulated that the agreement governing Vano’s obligation could "be interpreted" so as to make Vano’s conduct innocent.

(Mike Frisch)

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