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.

Judge orders new trial because of ineffective assistance of counsel

Last Monday, a Florida judge took the rare step of ordering a new trial on his own, saying the defense attorney did not render effective assistance and didn't adequately prepare for trial. In his order, the judge stated that "[t]he defendant, through no fault of his own, did not receive a fair and impartial trial." The St Petersberg Times has the full story here.

New trial for whistleblower

The New Jersey Supreme Court on Tuesday ordered a new trial for a former PaineWebber in-house attorney who claimed she was fired for complaining to supervisors about allegedly unethical conflicts of interest in the legal department. Law.com has the full story here.

New Jersey Supreme Court holds "super lawyer" ads are OK

The Legal Ethics Forum reports today that the the New Jersey Supreme Court has vacated on constitutional grounds an opinion of the state's Committee on Attorney Advertising that had concluded that ads touting a lawyer's listing in the Super Lawyers publication are "likely to create an unjustified expectation as to results" and, thus, impermissible. Here is a link to the Legal Ethics Forum story, which has links to other related posts.

Lawyers representing Guantanamo detainees, the new chic?

In a Wall Street Journal column titled "Gitmo Lawyers are the Latest in Radical Chic," William McGurn, laments the fact that so many private lawyers have stepped up to represent detainees while the Department of Justice lawyers are so overworked.

I am sorry, but anyone who claims that representing detainees is "chic" should read Jesselyn Radack's article "A Blacklist real face" published in The National Law Journal, February 19, 2007, in which se recounts her experience as a Gitmo lawyer and in which she concludes:

"I was blacklisted for years. Navy judge advocate general lawyer Charles Swift won a favorable ruling from the U.S. Supreme Court on behalf of a Guantánamo detainee he was appointed to represent, then was denied a promotion that ended his military career. The government threatened to investigate civilian attorney Clive Stafford Smith, making the wild accusation that he suggested that his Guantánamo client commit suicide. And DOJ is forcing out several U.S. attorneys from their jobs for political reasons. I am Exhibit 1 as to what can happen when the government paints the 500 volunteer Guantánamo lawyers, and the firms that employ them, as somehow supporting terrorism."

Pro Bono

Perhaps as a response to arguments against mandatory pro bono, in 2006 the Illinois Supreme Court amended Rule 756 of the Rules on Admission and Discipline of Attorneys to require attorneys to report the amount of pro bono work performed every year. Attorneys are not obligated to perform pro bono work, but if they do, they are obligated to report it. This approach was first adopted in 1992 by the Florida Supreme Court and is now also used in Maryland, Nevada and Mississippi. The idea behind this approach is the hope that attorneys will get more involved in pro bono activities when they see that others are. It seemed to work very well during the first 8 years in Florida where the plan resulted in an initial dramatic increase in participation in pro bono services and in an apparent higher level of commitment by lawyers to pro bono work. See, Pro Bono in 2000, The Nat’l Law J., December 25, 2000, p. A-11.

Unfortunately, things have apparently remained the same since then. A new study commissioned by the Florida Supreme Court shows that the number of Florida attorneys donating their time to pro bono work has remained stagnant since 2000. During the same period, Florida pro bono programs such as legal aid reported a 30% decline in the number of attorneys who volunteered through their agencies. See the full story here.

I have always argued that the benefits of the reporting requirement are lost unless there is a also an element of publicity attached to it. Requiring lawyers to report will not result in more commitment to pro bono unless the results are publicized and celebrated by the bar associations. I hope the Illinois project generates more attention to the need for lawyers to provide pro bono services, or at least to contribute to organizations that do.

Misconduct, or, in this case, not misconduct of the day

Mike Frisch of the Legal Profession Blog reports today that the Arizona Disciplinary Commission, by a 5-4 vote, approved the dismissal of ethics charges in a case where the attorney had (1) gone to a police station for an interview wearing a t-shirt that declared "Let the f***ing begin" (2) called a prosecutor an "unethical piece of trash" and (3) arranged for a subscription to Modern Drunkard magazine to be sent to a prosecutor's office due to his concern about the quality of the magazine choices in the waiting room. The hearing officer found the behavior inappropriate but not in violation of ethics rules. The dissenters would have imposed an informal reprimand.

Miconduct of the day

The ABAJournal.com reports on two cases today:

1. A Florida attorney who worked as a title agent has been convicted by a federal jury in Fort Lauderdale of preparing real estate closing documents that helped another man defraud lenders. Full story available here.

2. A Massachusetts defense lawyer is accused of calling witnesses against his clients and telling them the district attorney didn’t need their testimony. Full story available here.

Should attorney have to pay restituion after filing for bankruptcy?

Here is an interesting case decided today by the Ohio Supreme Court. A lawyer accepted a case he was clearly not qualified to handle. He was incompetent in handling it and given his failure to adequately respond to motions for summary judgment, the case was dismissed. The client then sued for legal malpractice and obtained judgment in his favor. However, the client was unable to collect on the judgment because the lawyer had failed to notify his insurance carrier, who then asserted its right to deny coverage. The client was also unable to collect from the lawyer because the lawyer avoided the judgment by declaring bankruptcy and securing a discharge.

The Ohio Supreme Court found that the lawyer acted out of self-interest, harmed a vulnerable client, and failed to make restitution. It recognized that a number of courts in other jurisdictions have ordered restitution to a client as a condition of a disciplined attorney’s reinstatement to practice, notwithstanding a discharge in bankruptcy of the underlying debt. However, it also noted an older case in Ohio which held that the bankruptcy discharge prevents the court from ordering restitution. Following this precendent, the Court concludes:

"Ordering respondent to pay restitution would further respondent’s rehabilitation, . . . but . . . we do not order it here. To safeguard the public and deter other unseasoned lawyers from unsupervised practice in areas in which they have insufficient legal expertise, we suspend respondent from the practice of law in Ohio for two years and order a stay of the last 18 months on the condition that respondent completes an 18-month probation, monitored by an [appointed] attorney . . . During the probation, respondent shall, in addition to the other requirements of that rule, accept only cases within his experience level or arrange for competent co-counsel."

In a separate opinion, one of the Justices argued the precendent case is wrong and that the attorney should be required to pay restitution as a condition to reinstating his law license. Finally, in another separate opinion, another Justice argued for stricter penalties. The full text of the (not yet officially published) opinion is available here.

Sanction For Prosecutorial Misconduct

A hearing board in Illinois has recommended a 30 day suspension of the State's Attorney of Wayne County for ethical violations in a criminal prosecution. The full text of the recommendation, including a summary of the hearing, is available here. The board found:

In this case, the Respondent not only failed to disclose information favorable to the defendant in pre-trial discovery, but he also failed to correct false testimony during trial, and then he made false statements in closing argument. The Respondent's misconduct pertained to the credibility of a crucial witness and, thus, deprived the defendant of a fair trial. The Respondent made it appear to the jury that Brian Asher had no self serving motive to testify on behalf of the State when, in fact, Asher had entered into an agreement with and had received a benefit from the State. Asher was permitted to pled guilty to a Class 4 felony, and a Class 1 felony charge against him was dismissed; Asher's sentencing hearing was continued until after Sutton's trial and Asher was to receive a maximum sentence of no greater than three years if he cooperated with law enforcement officials, which included the Respondent; and Asher was released on his own recognizance following his guilty plea and agreement to cooperate. In fact, at Asher's sentencing hearing, the Respondent recommended a sentence of "30 months of probation," and pointed out that Asher had cooperated by testifying at Sutton's trial. The jury was entitled to know about "any understanding or agreement" the Respondent had with Asher but the Respondent's conduct kept this important information from the jury and improperly enhanced the credibility of Asher. One board member favored a censure rather than suspension.

Originally posted by Mike Frisch on Legal Profession Blog

New ABA Ethics Opinion about law firms' ethics counsel

A new American Bar Association ethics opinion issued today explores the growing trend of law firms to designate a member or a committee as an ethics consultant for members of the firm, and discusses how lawyers may resolve conflicts between their confidentiality obligations and their potential obligation to report lawyer misconduct. This press release provides a summary of the opinion. The full text of the opinion is available here.

New FDIC Rule Averts IOLTA Trouble

Marcia Coyle of the National Law Journal reports:

The Federal Deposit Insurance Corp. has announced that, effective immediately, client funds deposited in Interest on Lawyer Trust Accounts -- regardless of amount -- are eligible for full deposit insurance coverage under the Temporary Liquidity Guarantee Program through Dec. 31, 2009.

The American Bar Association, state and federal lawmakers, community and consumer groups, law firms and individual lawyers had mounted a nationwide campaign to persuade the FDIC to include IOLTA funds in the expanded insurance program. . . . .

ABA President H. Thomas Wells Jr. said that if the FDIC had failed to expand full coverage for IOLTA, lawyers would have had to consider abandoning IOLTA for fully insured, noninterest-bearing accounts or moving IOLTA funds from community banks to the larger "too big to fail" banks. "Abandoning IOLTA would have been catastrophic for IOLTA programs in all 50 states, which provide funding for legal aid for the poor," said Wells. "Moving the accounts to larger banks would have defeated the FDIC's purpose in creating the TLGP."

See the full story here.

Former Detroit Mayor fights to keep his law license

Ex-Detroit Mayor Kwame Kilpatrick is fighting to remain a lawyer from behind bars. The National Law Journal reports that one of Kilpatrick's attorneys filed papers Monday with the Michigan Attorney Discipline Board, asking it to set aside a judge's order revoking Kilpatrick's law license. See the full story here.