Thursday, April 12, 2018

Former Dorsey & Whitney Non-Equity Partner Disbarred

The Washington State Supreme Court has disbarred an attorney for theft from her law firm

Placide was admitted to the practice of law in 1999. In November 2006, Placide joined the law firm of Dorsey & Whitney LLP as a "non-equity" partner with base yearly compensation of $225,000. Decision Papers (DP) at 51 (Hr'g Officer's Am. Findings of Fact, Conclusions of Law, & Recommendation (AFFCLR)). Placide's practice emphasized labor and employment law and immigration law. Dorsey had a firm policy stating that all compensation received by Dorsey partners, associates, or other attorneys was property of the firm...

Placide knew of these policies and agreed to comply with them by signing the offer of employment letter. For several years prior to 2011 and while a partner at Dorsey, she represented individual immigration clients who hired her personally (outside clients) and who paid her directly. She failed to disclose the existence of these clients to Dorsey. Placide attempted to conduct conflict checks, but those attempts were "wholly inadequate." DP at 53 (AFFCLR). She retained the funds she received as compensation from her outside clients instead of turning them over to Dorsey. She represented outside clients on a flat fee basis, with fees and expenses paid in advance, Placide's engagement letters or agreements with outside clients failed to include the language required by RPC 1.5(f)(2) in order to designate such fees as the lawyer's property on receipt. She failed to deposit funds she received from outside clients in a trust account as required by RPC 1.5(f) and RPC 1.15A(c)(2); she did not have an interest on lawyer's trust account and either retained or deposited into a personal bank account all such payments. On at least one occasion, Placide was unable to refund unearned fees to a client because she failed to deposit and hold those funds in a trust account.

Placide occasionally used Dorsey's office space, equipment, e-mail, letterhead, and the time and labor of Dorsey employees when working on outside client matters. She attempted to conceal her representation of outside clients while at Dorsey. In November 2011, Dorsey representatives learned about Placide's outside clients. Dorsey's internal investigation revealed that Placide had received more than $56,700 in fees from outside clients. At a November 8, 2011 meeting with Dorsey representatives, Placide repeatedly denied representing outside clients. Each time the Dorsey administrators presented Placide with an e-mail or other document that showed her contact with outside clients, she would admit to representing that client, but no others. Placide claims that "under the pressure of the moment some of her statements were inaccurate but denies there was any intent to deceive." Opening Br. of Appellant at 4-5.

Dorsey terminated its relationship with Placide around November 14, 2011. The separation agreement shows that Placide agreed to repay Dorsey $50,923 by December 30, 2012, a sum that included $56,700 in fees that Placide received from outside clients and also certain benefits that Placide had already received from Dorsey, less any November partnership income already paid to Placide. Dorsey filed an ethics complaint against Placide, alleging that Placide operated her off-the-books practice from Dorsey's Seattle office, made significant efforts to hide the practice from others in the office, was dishonest, and violated trust account procedures for unearned fees.

She had been looking for employment with another firm

Prior to November 2011, and while still a partner at Dorsey, Placide was in contact with the law firm of Ogletree, Deakins, Nash, Smoak & Stewart regarding potentially leaving Dorsey and joining Ogletree.

And

Dorsey notified Ogletree that it had filed an ethics complaint against Placide. When Ogletree's general counsel contacted Placide to discuss the Dorsey ethics complaint, Placide repeatedly lied, stating that Dorsey had approved her representation of outside clients and that Dorsey terminated her because it became aware of the discussions with Ogletree regarding potential employment.

The court

We agree with ODC and conclude that Placide's retention of fees from outside clients, regardless of whether those clients intended to pay them directly to her, constitutes "theft" as defined by RCW 9A.56.020(l)(a)...

The hearing officer's determination that Placide repeatedly and insistently lied to Dorsey and Ogletree representatives when asked about the extent of her legal services for outside clients, as well as the amount of fees she received for those services, is supported by substantial evidence in the record. Such evidence includes testimony by Dorsey representatives Kenneth Jorgensen, Michael Droke, and Kelli Kohout, and Ogletree representatives Charles Baldwin and Christopher Mixon, that amply supports the hearing officer's conclusions. At both meetings, when firm representatives confronted Placide with an e-mail or other document that showed her contact with outside clients, she would admit to representing that client, but no others, essentially, as the hearing officer concluded, repeatedly and insistently lying about the extent of her off-the-books practice and the amount of fees received.

Placide's alternative explanation that she was flustered and pressured in these surprise meetings is an alternative explanation at best and a continued effort to mislead at worst.

The Bar has a rule precluding evidence of calls to the Ethics Hotline, which the court here sustained

There is no dispute that the rule is directly applicable to Placide's proposed testimony and that the hearing officer was obligated to follow it. The question of the rule's constitutionality appears to be an issue of first impression, reviewed de novo. In re Disciplinary Proceeding Against King, 168 Wn.2d 888, 232 P.3d 1095 (2010). We conclude that the application of APR 19(e)(5) does not violate Placide's constitutional rights and consequently uphold the decision by the hearing officer to exclude the testimony...

Placide was not prevented from presenting any and all evidence or testimony regarding her state of mind in 2012, but only that evidence which the WSBA would have had no opportunity to verify or counter. The evidence of Placide's ethics inquiry was therefore correctly excluded by the hearing officer.

Sanction

we agree with ODC that the correct legal standard is ABA Standards std. 5.11(a), which provides that disbarment is the presumptive sanction when "a lawyer engages in serious criminal conduct a necessary element of which includes .. . misappropriation, or theft."

Justice Johnson authored the unanimous opinion. (Mike Frisch)

https://lawprofessors.typepad.com/legal_profession/2018/04/the-washington-state-supreme-court-has-disbarred-an-attorney-placide-was-admitted-to-the-practice-of-law-in-1999-in-novembe.html

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