Top Legal Ethics Stories of the Year

Legal Ethics Forum has posted its Top 10 Legal Ethics Stories of the year. The full article is available here.

Wake up call for our students

The Maryland Court of Appeals recently denied bar admission to an applicant who failed to promptly update his application with information concerning an arrest for DUI and related offenses that had occurred after he had filed his initial application but prior to being sworn in. The court found that his "purported intent to ultimately reveal" the information was irrelevant. The opinion is available here.

Originally posted in Legal Profession blog.

Michigan Supreme Court rules non refundable fees are OK

Professor Larry Dubin of University of Detroit Mercy Law School has an opinion piece in Detroit News.com on the recent Michigan Supreme Court decision overturning a Attorney Discipline Board order imposing discipline for failure to return an unearned fee. Dubin states:

Does Supreme Court give lawyers a license to steal?
Larry Dubin

A client hires a lawyer for representation in a divorce. The lawyer presents a written fee agreement in which the client agrees to pay a minimum, nonrefundable retainer fee of $4,000. This amount is also to be credited against the charges for future legal services at the rate of $195 per hour.

Shortly after hiring the lawyer and paying the fee, the client informs the lawyer that she and her husband have reconciled; there is no further need for representation. The client demands that the lawyer return the unearned portion of the retainer.

These are the facts that were recently presented to the Michigan Supreme Court in the case of Grievance Administrator v. Patricia Cooper. How it decided the case will hurt consumers and the image of the legal profession.

Cooper refused to refund the entire unearned portion of the $4,000 retainer, so she was accused of professional misconduct. The Michigan Attorney Discipline Board held that she did commit misconduct.

The board's decision protected the interests of the client and was supported by the lawyer's noncompliance with the ethics rules promulgated by the Michigan Supreme Court. Under these rules, a client has the absolute right to discharge the services of a lawyer at any time and for any reason. In this case, the reason was reconciliation, but in another case the reason might be a lack of trust in the lawyer.

Whatever the reason, a client's termination of a lawyer's services is not viewed under the law as a breach of contract. The public policy of permitting a client to discharge a lawyer for any reason is necessary to preserve the client's trust toward the lawyer.

Also, the ethics rules require the lawyer to place the money for future services into a client trust account. The funds cannot be withdrawn unless actually earned. In other words, the money remains the property of the client until some service is performed. And when a client discharges a lawyer, the attorney must refund the client.

The Attorney Discipline Board made the correct decision because the lawyer, Patricia Cooper, had not earned the entire retainer fee by performing sufficient hours of legal services.
Cooper appealed to the Michigan Supreme Court, which, in a brief order, summarily stated, "As written, the agreement clearly and unambiguously provided that the respondent (Cooper) was retained to represent the client and that the minimum fee was incurred upon execution of the agreement regardless of whether the representation was terminated by the client before the billings at the stated hourly rate...."

The court concluded that the lawyer had the right to keep the unearned portion of the retainer because the contract stated the retainer as a minimum fee.

The Supreme Court's holding in this case makes new law that favors the rights of lawyers to keep money from clients even for services that they don't perform. The decision will create a financial disincentive for clients to exercise their right to fire lawyers or discontinue services because they can't recoup their money to hire a new lawyer.

This decision ushers in a new era that is very hostile to the interests of clients. Under this court ruling, the funds paid to a lawyer for future services will not be returned even when unearned as long as the lawyer slips in the term "nonrefundable" and "minimum fee" in the agreement.
This decision is likely to increase the number of grievances against lawyers and the cynicism that many members of the public will have toward lawyers. Consumers will feel cheated by lawyers being able to keep their money without performing the agreed-upon legal services.

Critics of lawyers sometimes state that a lawyer has a license to steal. The Attorney Discipline Board's ruling challenged that cynical notion by holding that a contract provision written by a lawyer cannot negate an attorney's ethical duties to a client. The Michigan Supreme Court decision unfortunately creates public cynicism toward lawyers.

I hope the Michigan Supreme Court will reconsider its decision in light of the adverse consequences consumers will experience.

Sanctions for sending paralegal to court

Yesterday, the Disciplinary Review Board in New Jersey imposed sanctions on a lawyer who who sent his paralegal to a court hearing. At the hearing, the paralegal identified herself as a lawyer. Law.com has more on the story here.

I often hear students mention that the lawyers they clerk for send them to court for simple motion calls. I think students should be very careful with this kind of thing. it is a dangerous situation for both the lawyer and the student/law clerk. Going to court to file something is one thing, but making an appearance before the court is quite another. Unless the student has a special license that allows him or her to do so and is supervised by a lawyer or clinical professor, the student would be engaging in unauthorized practice of law.

How not to practice law

Legal Profession Blog reports on a new case, which should be added to Prof. Bernabe's list of examples of how not to practice law:

The North Dakota Supreme Court disbarred an attorney who charged a "nonrefundable" fee and failed to perform the services, practiced while suspended for nonpayment of bar dues, mishandled a number of cases, made false statements to a client and did not respond to the disciplinary charges. The case In the Matter of Karlsen and order of the Court can be found here.

When I say "don't lie", I mean it!

During a trial for first-degree murder in a drive-by shooting, defense attorney Bobbi Berry persuaded the trial judge to exclude evidence the client had a history of gun use and domestic violence. Knowing of this history, the attorney then proceeded to tell the jury during closing arguments that her client was a "mild-mannered person who handled his problems not in a violent sort of way.” As a result, the Arizona Supreme Court hearing officer is recommending censure and a year of probation. The Tucson Citizen has more on the story, as does the ABA Journal.

How not to practice law: ignore the Court's orders

When I say "don't do it," I mean it! This is something I say to my 4 year old son all the time. It bugs me when I tell him "don't do X" and he then proceeds to do it.

It's a good thing my boy is not an attorney because such conduct can get him arrested!

The ABA Journal reports today that Lawyer Damon Rossi of Prescott, Arizona was arrested at his home, a day after he asked the detention officers if he could give his client a piece of candy, then ignored their answer when they said he could not do it. The County Sheriff's Office indicated "The concern we have is that no contraband should be passed to an inmate. That's the rule. We don't know what's in it. If we allow attorneys to feed our inmates it would be a security issue. They get fed three squares a day and we don't feed them in court."

Case vs. Kuehne dismissed

Law.com reports: "In a ruling hailed as a victory by defense lawyers, a federal judge on Monday dismissed a money laundering conspiracy charge against a prominent attorney accused of illegal dealings with a Colombian drug lord. The issue was whether $5.2 million transferred from Colombia to the accounts of attorney Ben Kuehne were exempt from criminal prosecution because they were essentially legal fees. Kuehne's lawyers and defense attorneys' groups argued that the conspiracy charge against him violated the U.S. Constitution's Sixth Amendment guarantee that a person charged with a crime has a right to a lawyer. U.S. District Judge Marcia Cooke agreed, rejecting the U.S. Justice Department's contention that the payments were not necessary for the defense of Colombian drug baron Fabio Ochoa, who was eventually convicted and sentenced to prison. "If I were to construe the statutory exemption as the government suggests, the exemption for such transactions would amount to no exemption at all," Cooke said." Full story here.

Is there commingling if the attorney does not have client funds in the client trust account?

The California Bar Journal reports that an attorney was disbarred for creating an escrow account in his nephew's name in order to shield assets from creditors. The court found the attorney had commingled personal funds in his client trust account even though the account actually never held client funds and he used it only to deposit and withdraw funds for personal and business purposes. Legal Profession Blog has more on the story.

More on the decision re "super lawyers"

Yesterday I posted that the New Jersey Supreme Court vacated an opinion that had declared certain types of ads impermissible. See here. Today, Law.com has this story on the same subject.