Friday, April 15, 2016
The Kansas Supreme Court has issued a published censure of a criminal defense attorney for his handling of an advanced fee and subsequent withdrawal from the representation.
The court quoted the hearing panel findings
A lawyer may charge a flat fee to a client for a specific task to be undertaken. When the flat fee is paid to the lawyer, it must be deposited into the lawyer's trust account and the fee cannot be withdrawn until it is earned. Since a flat fee is not earned until completion of the task, the entire flat fee must remain in the lawyer's trust account until that task is completed unless the lawyer and client otherwise agree to partial withdrawals based upon the amount earned for completion of specified subtasks. KRPC 1.15(a).
The respondent failed to deposit the flat fee received from C.B. into his trust account. Because the respondent failed to deposit unearned fees into his trust account, the hearing panel concludes the respondent violated KRPC 1.15(a)
The court decided an important issue on the powers of the hearing panel but declined to give an advisory opinion on advanced fees; rather, the court found adequate guidance in its approval of the findings of misconduct.
The only remaining issue before us is the appropriate discipline for respondent's violations. At the panel hearing, at which the respondent appeared, the Disciplinary Administrator representative recommended published censure. The respondent requested informal admonition. The Hearing Panel ultimately recommended published censure, but it also "recommend[ed] certain conditions be attached to the respondent's published censure." Despite the permissive, nonbinding tone established by the panel's use of the word "recommend," it then directed the respondent to perform certain tasks within specified time limits:
"First, the hearing panel directs the respondent to permit the auditor employed by the disciplinary administrator's office to conduct a trust account audit within 90 days of the date of this report. Second, the hearing panel directs the respondent to submit written policies regarding time records and fee agreements which are in compliance with the Kansas Rules of Professional Conduct to the disciplinary administrator's office for approval within 30 days of the date of this report. Finally, the hearing panel directs the respondent to pay his client $5,650 within 30 days of the date of this report."
These directions were not permissive or nonbinding. Rather, they conveyed clearly nonnegotiable requirements of behavior, and the deadlines for that behavior to occur were likely to ripen long before respondent's case reached its oral argument date before this court. This is, in fact, exactly what occurred. The panel's Final Hearing Report bears a date of September 16, 2015, while this court heard oral argument on March 1, 2016—well after the longest of the panel's specified time limits—90 days—expired.
Although neither respondent nor his counsel contested the panel's "conditions" or the power of the panel to impose or enforce them, by the time the parties reached oral argument before this court, there was evident lack of unanimity on whether respondent had complied to the greatest extent possible. In particular, the representative of the Disciplinary Administrator challenged the nature and completeness of documents respondent had supplied to facilitate the required audit. As a result of what she viewed as less-than-enthusiastic embrace of the panel's directions, she sought a sanction more severe than the published censure she had sought at the panel hearing, i.e., a 60-day suspension with a requirement of a reinstatement hearing.
Respondent's counsel resisted this effort to raise the stakes in this case and implored us to provide definitive guidance, particularly for the criminal defense bar, on how to account for flat fees and other advanced fees within ethical boundaries. Although prompted to do so by questions from several members of the court, respondent's counsel did not take issue with the panel's power or authority to order his client to fulfill certain requirements pending oral argument before this court; nor did he challenge the appropriateness of the Disciplinary Administrator's office seeking more serious sanctions at oral argument because of perceived deficiencies in respondents' compliance with interim panel orders. Also in response to questions from the bench, the representative of the Disciplinary Administrator stated that she had relied on her interpretation of several earlier disciplinary cases for the proposition that a hearing panel was empowered to suggest or require a course of action to be followed by a respondent between the panel hearing and Supreme Court oral argument and that this court would consider the respondent's resulting behavior in deciding discipline. She also appeared to favor more extensive ethical guidance from this court for lawyers who accepted flat or other advanced fees.
We decline counsels' invitation to issue what we believe would be an advisory opinion on ethical accounting for flat fees and other advanced fees. Having adopted the panel's findings and conclusions, we have already done what is necessary on that subject in this case. We must, however, address the question of whether a disciplinary hearing panel may issue mandatory directives to respondents—directives to be ignored or treated casually at their peril. Certain of our prior cases may have been less than clear on this point, and on whether the court will look favorably upon the Disciplinary Administrator's recommendation of a more severe sanction as a result of what it regards as noncompliance with such directives...It is time for a course clarification, if not correction.
Simply put, our current Kansas Supreme Court Rules do not permit a disciplinary hearing panel to impose discipline or to require or enforce any conditions attached it—not between a panel hearing and oral argument to this court or at any other time...
All of this being said, we do not mean to discourage respondents from taking corrective or rehabilitative actions between their disciplinary hearings and their oral arguments in the Supreme Court. Indeed, such actions may appropriately be considered by us when we decide discipline, because they may be indicative of a respondent's acceptance of responsibility and/or remorse. We have previously remarked that respondents should keep us and the Disciplinary Administrator's office informed of any such actions by way of affidavit submitted before oral argument.
The court warned
We also hasten to add that there is one type of situation in which the court will certainly consider post-disciplinary hearing misbehavior by a respondent without additional factfinding in a remanded or new disciplinary proceeding. That situation arises when a respondent has been provided notice of the oral argument setting for his or her case and nevertheless fails to appear. In such a case, the violation of KRPC has occurred before the eyes of the court, see Kansas Supreme Court Rule 212(d), (e)(5) (respondent shall appear before the court), and no further factfinding below is necessary to preserve the respondent's right to due process. The court may impose discipline more severe than that recommended by the panel or Disciplinary Administrator as a result of the new violation, with or without a recommendation to do so.
Are there other jurisdictions where an attorney facing bar discipline must appear for the oral argument or face negative consequences?
If you watch the oral arguments in Kansas bar cases, you will note that the attorney regularly addresses the court personally (after counsel's remarks if represented) and answers the court's questions.
Is that practice unique to Kansas?
I certainly have not seen a respondent address the court in D.C. unless acting as pro se counsel.
Oral argument is linked here. (Mike Frisch)