Wednesday, April 7, 2021

Suspensions For Aiding Unauthorized Practice

Eighteen month suspensions of two attorneys have been ordered by the New York Appellate Division for the First Judicial Department for employing a suspended attorney as a "paralegal"

On April 29, 2014, this Court suspended attorney Eric Gonchar for nine months, effective May 29, 2014, for maintaining a side practice of law for 11 years without his firm's knowledge in contravention of his terms of employment and failing to include the income derived therefrom (118 AD3d 1 [1st Dept 2014]). Respondents' law firm employed Gonchar as a paralegal while Gonchar was suspended and for a period of over two years. In 2015, we denied Gonchar's motion for reinstatement, and on October 5, 2018, we disbarred Gonchar for violating the terms of his suspension by continuing to hold himself out as an attorney and engaging in the unauthorized practice of law while employed by respondents' firm, finding that he "gave substantive legal advice on real estate matters to attorneys at the law firm . . . and a nonattorney employee in flagrant violation of our suspension order and Judiciary Law §§ 478 and 486" (166 AD3d 91, 92-93 [1st Dept 2018], lv denied 32 NY3d 914 [2019])...

Gonchar, like the attorneys in Brandes and the other cases cited above, operated as a "paralegal" dispensing advice through the intermediaries of attorneys who interacted directly with clients. He drafted legal documents and was admittedly possessed of superior legal knowledge regarding case matters — indeed, he had brought many of his client matters with him to respondents' firm. Gonchar "functioned as a senior attorney. . . by the exercise of his experience and acumen. . . not his services as a paralegal, [and] made major contributions to the resolution of many of the firm's cases," as noted by the AGC. The conclusion is inescapable that he was engaged in the unauthorized practice of law and that respondents aided and abetted him in the unauthorized practice of law.

Respondents' claim that they believed Gonchar could act as a paralegal so long as he did not interact with anyone outside the firm is not credible in light of the precedent; their claims are moreover undermined by the misleading job description they prepared specifically for purposes of Gonchar applying for reinstatement to the bar, and the fact that they failed to consult outside ethics counsel before hiring Gonchar.

Sanction

The Referee's sanction recommendation that respondents be publicly censured should be disaffirmed and both respondents should be suspended from the practice of law for 18 months (see Matter of Sishodia, 154 AD3d 123 [1st Dept 2017]). Our order made explicit that Gonchar was prohibited from practicing law in any form including giving legal advice or opinions to "another." It is difficult to see how respondents, both experienced attorneys, failed to appreciate the import of the order or credibly believed that the work Gonchar performed over a 2½ year period did not rise to the level of unauthorized practice of law. They, moreover, prepared a misleading job description the purpose of which could be none other than insulating them from liability, indicating that they well understood the repercussions of Gonchar engaging in unauthorized practice.

Accordingly, the AGC's motions with respect to respondents to confirm in part and disaffirm in part are granted to the extent of sustaining charges 1-3 and 8 in full and dismissing charges 4-7; disaffirming the Referee's liability finding dismissing charge 9, and instead, sustaining that charge; disaffirming the sanction recommendation of public censure and suspending respondents from the practice of law in the State of New York for a period of 18 months and until further order of this Court. Respondents' cross motions should be denied in their entirety.

(Mike Frisch)

https://lawprofessors.typepad.com/legal_profession/2021/04/eighteen-month-suspensions-of-two-attorneys-have-been-ordered-by-the-new-york-appellate-division-for-the-first-judicial-depar.html

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