Friday, March 17, 2017
Mr. Beaver graduated from the University of Alberta Law School in 1993 as the gold medalist in his class. He articled at a leading criminal law firm in Edmonton and then stayed to practice for approximately 10 years. He and some associates from that firm left to form their own firm. They took with them a paralegal, J.B., who figured prominently in the hearing.
Beaver continued to practice mostly criminal law at the highest level in Edmonton. In addition to his practice, he was a sessional lecturer at the University of Alberta Law School.
Associate lawyers came and went from Mr. Beaver’s firm and from time to time there were approximately 6 junior and senior associates employed in the practice, plus clerical and paralegal staff. The practice, according to Mr. Beaver and substantiated by accounting records, was financially and professionally successful. There were name changes, but in 2015 it was called Beaver Leebody and Associates. The Committee will refer to Mr. Beaver’s firm as “the firm” or “BLA” throughout this report.
The operation of the BLA practice was not modest in its financial expenditure. The members of the firm would often have meals or drinks together at the firm’s expense and there was evidence of a firm-sponsored trip to an all-inclusive holiday resort. While the expenditures could not be described as exorbitant, they certainly contributed to the financial outlays of the BLA practice which, as noted, were completely controlled and monitored by Mr. Beaver.
The accounting records of the firm show expenses for some luxury goods being passed through to the firm by way of firm credit cards (for example, trips, airfare, jewelry, personal furniture and other personal expenses). This may not be unusual or improper as long as it was properly accounted for, and credited appropriately to firm expense and personal draws. Most importantly, there must be actual profit from the firm to pay for such expenses, which there was not.
The Globe & Mail told the story of a fall from grace
By May of 2015, it seemed like he had it all. He was, at 46, an accomplished lawyer who headed his own busy firm in downtown Edmonton, a hip space with exposed brick walls and modern furniture. It was in Beaver House, a historic building that happened to share his name, and which, when the space came open, seemed almost like fate. He worked with an impressive cadre of lawyers who believed deeply in the work and were arguing important cases at all levels of court. He taught criminal-trial procedure, evidence, and advanced criminal evidence, a class he developed, at the University of Alberta. He was social and generous, and some friends and colleagues thought of him as a legal genius. But at the same time, what he had built was on the brink of collapse.
In fact, there had been growing concern about Mr. Beaver within his firm for some time.
He’d been around the office far less, coming in late and some days not at all. He’d left his common-law wife (who had been a lawyer at the firm until her stroke) for another woman the previous summer, and his new girlfriend had become a fixture at the office, and at university and legal events.
There were questions about his behaviour and judgment, fuelled by his relationship with the much younger woman who went by the nickname Sugar Lips, and by their gushing social-media posts and unabashed displays of public affection.
There had been sexual behaviour between them in the office that some of his colleagues felt was inappropriate, and the tattoos he got for her – a large portrait of her on his arm, a series of words inked onto his chest – became common knowledge. From lovers’ tiffs to lustful displays of affection, their romance played out openly at legal functions and on social media as the staid legal community looked on in wonder.
They married in April, 2015. A month later, their baby was born. There were serious complications at the end of the pregnancy, and with Mr. Beaver spending his days at the hospital, problems that had been simmering at the firm finally rose to a head.
On a Sunday in late May, 2015, the same day Mr. Beaver’s wife and newborn were discharged from hospital, two lawyers from the firm met with his assistant, Jackie Bawol, to talk about a possible intervention. The lawyers were increasingly concerned about Mr. Beaver’s behaviour and about the stress it appeared to be putting on Ms. Bawol, who was crying at work and seemed almost on the verge of a breakdown.
At a meeting in her backyard, Ms. Bawol revealed the problems were beyond what they imagined. Sobbing and nearly hysterical, she said cheques had been bouncing, and there wasn’t enough money to pay the firm’s wages and bills at the end of the month. She said Mr. Beaver had been taking money from the firm’s trust fund for months. There was no money left.
That night, three lawyers from the firm called Mr. Beaver to a meeting in the office boardroom and angrily confronted him with the allegations he had drained the trust fund. He didn’t deny it.
From the sanction order
The facts disclose a significant misappropriation, arguably amongst the most serious. The Committee found that:
- Mr. Beaver misappropriated from his clients’ funds, both within and outside of his firm’s trust accounts, a substantial amount of money, over $300,000.
- The misappropriations were more than a technical misappropriation as they included the use of funds for Mr. Beaver’s personal benefit.
- The misappropriations continued for a substantial period of time.
- The misappropriations were covered up in Mr. Beaver’s trust account by fictional accounting entries.
- The covering up, together with acknowledgements made to Mr. Beaver’s paralegal, indicated dishonest intent and the knowledge of the dishonesty.
- The targets of the misappropriations included clients of Mr. Beaver, his associates and staff.
- The targets of the misappropriations included particularly vulnerable people, including disabled people and children.
- Mr. Beaver only self-reported after being confronted by his associates.
- A failure to act with integrity was common throughout the combined citations...
The Committee does not accept that misappropriations of this magnitude are mitigated by an otherwise unblemished 20 year career. Indeed a 20 year career of practicing at a high level could just as properly lead to a conclusion that Mr. Beaver, of all practitioners, ought to have known how far he had strayed. The central importance of integrity in the profession, the necessity for propriety and an accurate set of books when dealing with other people’s money, and the requirement of compliance with trust accounting rules is no secret. The concepts are routinely taught at law schools, form part of the bar admission process, and are central in every iteration of the evolving Code of Conduct. Lawyers who misappropriate are regularly disciplined and the results of those hearings and sanctions are publicly available.
The fact that the misconduct was confined to one year is not seen in this case to be mitigating either. Any period of misappropriation ends with being caught, in this case by being forced into self-reporting by his associates. Mr. Beaver’s declarations to his paralegal and his associates before the reporting lead to a conclusion that he would have continued the behaviour if he could have found a way to replenish the trust accounts sufficiently to make it another month or months.
The misappropriations did occur at a time of personal high stress for Mr. Beaver, a perfect storm of financial, personal and medical issues. The Committee members can be personally empathetic for this difficult time. But the stressors of Mr. Beaver’s years of 2014 and 2015, downturns in the financial success of a practice, marital breakup and re-partnering, and the mortality of a loved family member are all part of the predictable demographic transitions of a modern long life. These transitions must be managed by us all with a view to fulfilling our obligations of integrity, notwithstanding the sometimes difficult reality of a horrible year (“…to the ends of the earth…. “as per Bolton).
Beaver did make a self-report (albeit after his associates forced the issue), gave several long and detailed statements to Law Society investigators, admitted some responsibilities in the Agreed Statement and generally accepted facts and responsibility in his testimony before the Committee in a forthright and non-evasive way. Further, Mr. Beaver gave a comprehensive statement of apology in the submission phase of the sanctioning hearing.
The Committee considers Mr. Beaver’s acceptance of underlying facts and responsibility as adequate under the circumstances, but certainly less than enthusiastic. Mr. Beaver did make some admissions of fact and responsibility in the Agreed Statement but they were economical. The Committee accepts without reservation that Mr. Beaver has the right to put the Law Society to the proof of its case and finds no particular fault with his handling of the investigation and hearing. In the end, the reporting and conduct of these matters is a neutral factor in the Committee’s considerations, neither aggravating nor mitigating.
The offer for future restitution seemed on its face a genuine offer, although no restitution had been yet made. The Committee finds the lack of present restitution and offer of potential future restitution to be similarly neutral.
A well written and thought out analysis of the situation.
My recent exposure to Canadian disciplinary cases persuades me that we in the U.S. could learn from the measured and professional approach of the hearing panels. (Mike Frisch)