Thursday, October 19, 2006

An Altruistic Theft

by Mike Frisch

Those who have read my article evaluating the District of Columbia attorney discipline system in the Georgetown Journal of Legal Ethics know that I have serious concerns that attorneys who violate ethics rules receive treatment that is far too lenient. A recent example of this unfortunate trend is a hearing committee report in In re Hewitt, Bar Docket No. 374-04, decided on September 21, 2006. The report is not available in electronic form, but is a public document that can be obtained from the Board on Professional Responsibility, 202-638-4290.

The case involves misappropriation, a lawyer term thay means theft of entrusted funds. The attorney had been appointed as conservator for a person unable to care for himself. The attorney had control of the ward's assets, including a banking account. For a period of years, all went well, with the lawyer performing the work and being paid by seeking and obtaining court approval, as required by statute. In 2001, The attorney filed a petition for court approval of his fees, but did not bother to wait for it, removing over $2000 on the day the petition was filed. His excuse was his concern that the ward would lose Medicaid eligibility for having too many assets if he did not take money for himself.

The Probate Court denied the petition for fees, finding that the lawyer's activities were "not legal in nature nor compensible as attorney's fees." The lawyer claimed not to have received the order and thereafter failed to file a required account that would have disclosed what he had done. Over a year later, the attorney responded to a court order to show cause why he should be removed, claimed he then learned that the court denied his request for compensation and repaid the money.

The hearing commitee questioned the court's authority to deny compensation (which is the court's job by law and statute), believed every aspect of the lawyer's story, criticized Bar Counsel (always a good reason to be lenient) and suggested that the attorney had taken and used the ward's money for over a year due to a sincere desire to act in the ward's best interests. It also seemed to think that a single theft was no big deal. They recommend probation.

Ah, self-regulation! It's great for lawyers.

Ethics, Frisch, Professional Responsibility | Permalink

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Adding my own 2 cents worth here, but I think Mike would agree and his Georgetown article illustrates it, this is a phenomenon that is not limited to just DC's bar disciplinary structure. I recall his illustration last week of the Hawai'i court finding bar questions too instrusive. Anyway, this "altruistic theft" is a nice example, Mike, and makes me wonder how it is that taking an advance on client money (slammed all the time in the regular world, in cases we all teach from various casebooks) is somehow more understandable when the client is incompetent, or how the attorney did not know it is strictly forbidden. --Alan

Posted by: Alan Childress | Oct 19, 2006 9:51:20 AM

Alan is correct that this issue is a problem in many if not most self-regulatory lawyer systems. One would think that a helpless ward of the court would be entitled to the greatest degree of protection against lawyer self-help.

Posted by: Mike Frisch | Oct 19, 2006 10:25:33 AM

That is truly disturbing.

Posted by: Chris | Jan 11, 2008 1:57:16 PM

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