Lawyer convicted for helping client/husband conduct gang activities from prison

A lawyer who years ago got in trouble when she was caught on tape engaging in sexual contact with a client in a room for attorneys to meet with defendants in police custody, has now been convicted after admitting that she had helped her husband, a client whom she married while he was in prison, conduct gang activities from prison by providing money and information to others at his direction.  Go here for more on this story.

Why was this judge not disbarred?

Yesterday, the Michigan Supreme Court issued an opinion (available here) removing from the bench a judge who was in the news some time ago after it was discovered that he "texted" a shirtless photo of himself to a courtroom bailiff and that he had sex in his chambers with a complaining witness in a child-support case.  The court found that (1) the conduct was clearly prejudicial to the administration of justice, (2) that the conduct exposed the legal profession or the court to contempt, censure, or reproach, (3) that the judge engaged in conduct that was contrary to justice, ethics, honesty, or good morals, (4) that he testified falsely under oath, (5) that he failed to maintain high standards of conduct so that the integrity and independence of the judiciary may be preserved, (6) that he failed to avoid all impropriety and appearance of impropriety, (7) that he failed to promote public confidence in the integrity and impartiality of the judiciary, (8) that he allowed sexual relationship to influence his judicial conduct or judgment, (9) that he failed to be faithful to the law, (10) that he engaged in ex parte communications, and (11) that he failed to disqualify himself when he should have.

As a sanction, the court removed the judge from the bench and, if the judge is reelected as a judge in November, suspended him for six years.

Sounds like a pretty substantial suspension; but it really isn't.  Essentially, the sanction is a way to prevent the judge from running for the position again.  Were he to get elected, he would not be allowed to serve because he would be suspended without pay.  But the suspension does not apply if he is not elected.  So what is the judge to do?  Simple.  Not run for re-election and continue to practice law.  Wait. What? Wasn't he suspended?  No.  He was suspended from the bench.  Not from the practice of law.

I don't understand why the sanction was so lenient.  I think the judge should have been disbarred.  Or at the very least, suspended from the practice of law.

UPDATE (3/29/14):  One of my readers e-mailed me to let me know that in Michigan, to disbar a judge removed from office, a separate disciplinary proceeding needs to be filed by the Attorney Grievance Commission.  So, that explains that.  I still would have liked to have seen the court take a stance on the issue, though.  I would have liked to have seen the court say that such a grievance should be filed.  This is not necessary and I assume the Commission might take on the case anyway, but it never hurts to have a state Supreme Court remind lawyers in the jurisdiction that misconduct should not be tolerated.

Illinois Appellate Court imposes sanctions for frivolous appeal

As you know, attorneys have a duty not to pursue frivolous claims, a principle that appears both in the rules of professional conduct and the rules of civil procedure (usually identified as Rule 11).

Today, the Illinois Court of Appeals reminds us that there are other rules that hold the same principle as to appellate practice. In a case called Fraser v. Jackson (available here), the court found a party and their lawyer should be sanctioned for pursuing a frivolous appeal.  Quoting an older case, the court stated

We find that this appeal, viewed as a whole, was frivolous, that it was taken for an improper purpose, and that it was filed specifically to harass and to cause unnecessary delay and needlessly increase the cost of litigation. We choose to impose sanctions for this conduct, finding that cases like this drain valuable resources intended to benefit those who accept the social contract of living under a law-based system of government

The sanctions will have to be paid by both the client and the lawyer.

Illinois Appellate Court issues opinion on splitting fee agreements

Just over a week ago, the Illinois Appellate Court, First District, issued an opinion addressing two important issues related to fee splitting (or sharing) agreements:  (1) whether attorneys can enforce fee-splitting agreements if they have not strictly complied with Rule of Professional Conduct 1.5(e), even if they can claim they "substantially complied" with the rule and (2) whether a lawyer accused of reneging on such an agreement can raise the non compliance with Rule 1.5(e) as a contractual defense where it was his own conduct that allegedly caused or contributed to a violation of the rule.  The court says NO to the first question but YES to the second one.  The case is called Fohrman & Assocs., Ltd. v. Marc D. Alberts, P.C., and it is available here.

As to the first issue, the court holds that lawyers' fee-splitting or referral agreements are unenforceable if the contracting attorneys do not strictly comply with the ethics rule that requires each lawyer to ensure that the clients are informed in writing about the basis for the arrangement—including the exact split in fees and the division of the lawyers' responsibilities.

I understand saying that the conduct is contrary to the rules if it does not follow the rule.  In other words, I understand saying that a lawyer can be disciplined for not following the rule.  That should be obvious and makes sense.

But the issue here is not about misconduct or discipline, it is about the validity of a contract.  For this reason, I am not so sure I like the result of the case, particularly the answer to the second question.

In deciding that an attorney could raise the non compliance of the rule as a defense even when that attorney had arguably caused the non compliance, the court stated that "we ... reject an argument that the referral agreement should be enforced because of defendants' alleged "nefarious" conduct. ... In doing so, we do not condone any alleged misconduct or encourage unfairness in relationships between attorneys. We uphold the Rules' interest in protecting clients above the interests of attorneys in recovering fees."

Taking this position, the court may not be condoning the misconduct, but it is allowing the attorney who allegedly engaged in it to get away with it.  And, more importantly, the reason it states to do so does not make sense.  The court says it is deciding the case this way because it is best to protect the interests of the clients "above" the interests of the attorneys in recovering fees.  Here is the problem with this:  enforcing the agreement would not affect the interests of the clients at all; the only interest affected is the interest of one of the attorneys.

Take the typical splitting fee agreement for example:  Lawyer A refers a case to Lawyer B.  Lawyer B agrees to take the case on a contingency of 1/3 of the recovery and agrees with Lawyer A to share that fee.  According to the agreement, Lawyer A would get 1/3 of the 1/3 Lawyer B gets out the eventual recovery.  Now assume that Lawyer B dupes Lawyer A into believing that Lawyer A has done everything he needed to do for the agreement to be valid.  [I am not saying this is what happened in the real case; this is a hypothetical].  Continue to assume that even though Lawyer B told Lawyer A the agreement is in order, the agreement does not strictly comply with the Rule 1.5(e). Months later, the case settles for $9,000.  Lawyer B gets the check and gives the client $6,000, and keeps the $3,000 that corresponds to his fee.  Lawyer A then calls Lawyer B asking him to share the fee as promised.  Lawyer B refuses and they end up in court arguing over it.

Here is the important part:  the client has been satisfied and is out of the picture.  He does not care what happens next.  His rights have been well taken care of.  The fight that ensues is between the attorneys and if they want to fight over it for years to come, that's their business.  The client is not involved and couldn't care less.  He has his money and has moved on.

The question for the court relates to the right of Lawyer A to be able to recover the fee he negotiated with Lawyer B.  Would it be fair to allow Lawyer B to deny Lawyer A his share of the fee because Lawyer A did not comply with the rule if it is true that the reason that happened was because of Lawyer's B's assurances to Lawyer A?  I don't think so.

As a contractual matter, it seems to me there were two more equitable solutions to the problem presented by the case in Illinois.  First, it could be held that even though the conduct was in violation of the rules, the contract should be enforced between the parties (the lawyers) and then refer the matter of the misconduct to the authorities.  In the alternative, the court could have adopted a view used in other jurisdictions that have decided that when lawyers from different firms agree to jointly represent a client, they enter into a “joint venture” or an “ad hoc partnership” in which the lawyers implicitly agreed to share profits or losses equally regardless of whether one attorney provides more labor or skill than the other.  As a contract interpretation matter, wouldn't either one of these be a more equitable solution to the problem?

Is a claim for breach of fiduciary duty a torts claim or a contracts claim?

As you probably know, a cause of action against a lawyer for "breach of fiduciary duty" is different than a cause of action for malpractice.  The latter is clearly a cause of action in tort which requires the plaintiff to meet the elements of a negligence claim.  The former, however, is different and, in fact, sometimes allows a plaintiff to state a claim under circumstances where a claim for malpractice will not be recognized.  See Tante v. Herring  453 S.E.2d 686 (Ga. 1994) for an example of this.

Having said this, then is a cause of action for breach of fiduciary duty not a torts claim?  If not, what type of claim is it?  A claim for breach of contract, perhaps?  I imagine there are cases out there that have addressed this question, but I have not done the research to determine what seems to be the majority view on this.

What I can tell you today is that there is a new case on the subject and that it holds the claim is a torts claim.  Interestingly, the holding worked in favor of the defendant because the statute of limitations just happened to be shorter for torts claims.

As reported in the Legal Profession Blog, the Connecticut Supreme Court concluded that "the plaintiff’s allegations sound in tort rather than in breach of contract, and, as a consequence, the plaintiff’s claim is barred by the three year statute of limitations applicable to tort claims."

The case is called Meyers v. Livingston and you care read it here.

Colorado amends comment to Rules of Professional Conduct to deal with concerns about providing legal advice regarding marijuana

Because many aspects of the use of marijuana and the marijuana industry violate federal law, there is some debate as to whether counseling clients about legal matters related to state legalized marijuana would be a violation of the rule that bans an attorney from helping a client commit a crime. In response to these concerns, the Colorado Supreme Court has adopted a new Comment to Rule 1.2, which says that a lawyer "may counsel a client regarding the validity, scope, and meaning of Colorado constitution article XVIII, secs. 14 & 16 and may assist a client in conduct that the lawyer reasonably believes is permitted by these constitutional provisions and the statutes, regulations, orders, and other state or local provisions implementing them. In these circumstances, the lawyer shall also advise the client regarding related federal law and policy." Prof. Andrew Perlman shares his views on the issue at the Legal Ethics Forum.

Is financing your law practice through "crowdfunding" ethical?

Can an attorney accept a loan from a private lender if the attorney must commit to pay it back by agreeing to grant the lender a certain percentage of the attorney's earnings for a number of years? This is a new issue raised by a new form of funding known as "crowdfunding." I must confess I don't know much about it, but I think it presents an interesting question for lawyers.

Starting a law practice can be difficult under any circumstances, and it becomes even more difficult when you consider a bad economy and student debt. So what can a lawyer do? Crowdfunding offers a source of funds that is different from traditional loans. In a traditional loan situation, the lender will recover the loan by charging a set amount per month (including interest). Crowdfunding allows you to raise capital in exchange for a portion of your future income. In essence, through some crowdfunding websites, you can ask people to give you money and then promise to give them a share of your earnings.

Is this just like the TV show "The Shark Tank" , but online and with "investors" who are just every day people? Would it be unethical for a lawyer to go on the TV show The Shark Tank and ask for money in exchange for a share of the law firm the lawyer wants to create? Assuming "the shark" is not a lawyer, it sounds to me a strong argument can be made the answer is yes because the end result would be that the shark would become a partner in the law firm.

Is crowdfunding different? This blogger says no. He argues that agreeing to the terms of a crowdfunding funding agreement would constitute a violation of rules against fee splitting with non lawyers. On the other hand, My Shingle argues crowdfunding is different and should not be considered to be a violation of the rules.

UPDATE August 19, 2015:  New York State Bar Association issues opinion on whether using crowdfunding is ethical.  Go here for the story and links.

Project on Government Oversight report on department of justice attorneys' misconduct

Long time readers of this blog know that I have posted many stories on prosecutorial misconduct and that I have been critical of the Department of Justice's approach to misconduct by federal prosecutors.  I have also criticized the practice of many judges who refuse to disclose the names of prosecutors who engage in misconduct while they have no problem disclosing the names of other lawyers.

Now comes news of a very disturbing report that supports my concerns.  The Project on Government Oversight (POGO) has published a disturbing report that concludes that the Department of Justice has been concealing hundreds of ethical violations by its prosecutors.  According to the POGO website,

An internal affairs office at the Justice Department has found that, over the last decade, hundreds of federal prosecutors and other Justice employees violated rules, laws, or ethical standards governing their work. The violations include instances in which attorneys who have a duty to uphold justice have, according to the internal affairs office, misled courts, withheld evidence that could have helped defendants, abused prosecutorial and investigative power, and violated constitutional rights. From fiscal year 2002 through fiscal year 2013, the Justice Department’s Office of Professional Responsibility (OPR) documented more than 650 infractions, according to a Project On Government Oversight review of data obtained through the Freedom of Information Act and from OPR reports.In the majority of the matters—more than 400—OPR categorized the violations as being at the more severe end of the scale: recklessness or intentional misconduct, as distinct from error or poor judgment.

The report itself is available here, and there is more analysis of it here.  The Legal Ethics Forum has more here and Seeking Justice has a comment here.

Is there something wrong with offering unpaid internships in a law firm?

I don't think there is anything illegal or unethical about offering unpaid internships in a law firm.  However, the fact you can do something does not necessarily mean you should do it.  Go here for a short post arguing that lawyers should not offer unpaid internships.

Article about prosecutorial misconduct in North Carolina

Here is a new article on the latest prosecutorial misconduct scandal in North Carolina.

Maryland Disbars Attorney For Accusing Judges of Misconduct in Emails. Was it justified?

Disbarring the Critics is reporting that in late February, the Maryland Court of Appeals disbarred a long-time Maryland attorney for alleging in emails that several Maryland judges had engaged in misconduct. The decision, Attorney Grievance Commission v. Frost, is available here.

Disbarring the Critics has a long comment on the case here, in which it concludes: "Make no mistake about it, the the justices on Maryland's highest court were not taking the action they did to protect the public, but were instead acting to protect their colleagues from what they believed to be unfair criticism by Frost. Undoubtedly those judges also know that the Frost case will be a warning shot to let other Maryland attorneys know that if they dare to criticize a judge publicly or privately they can be targeted for discipline."

Former rapper turned lawyer's ad goes viral

Just when we thought we had seen the worst attorney ad of the year during the Super Bowl (see here and here), in comes an internet commercial for a lawyer in the Pittsburgh area.  You can watch it below.  It speaks for itself.  But to give you a hint of how it has been received, here is a quote from the blog Res Ipsa Loquitur: "The advertisement is clearly tongue-in-cheek but in the end I find it less than comical. Muessig [the lawyer] promises to help felons get back to crime and proclaims that he “think like a criminal.” It fulfills the worst stereotypes of criminal defense lawyers as felons are shown committing crimes and saying “Thanks, Dan.” Muessig may have a skill for thinking like a criminal but he clearly has yet to master the talent of thinking like a lawyer."  You should read the full comment here.

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Tom Loftus, spokesman for the Allegheny County Bar Association, said he found the ad "insulting to Pittsburgh lawyers and lawyers across the country, who take great pride in their profession."  Without more, of course, that is not enough to justify the state to ban the ad or to discipline the lawyer.  In the end, the issue here is not whether the state has the authority to intervene, but whether it is really a good idea for the lawyer to engage in this type of campaign. Just because you have the right to do something does not mean you should do it.  For more comments on the ad go here, here and here and check out the short video below.

Controversial Supreme Court decision on asset forfeiture and access to legal services

About two weeks ago. the Supreme Court decided a case that has important implications on a criminal defendant's access to legal representation.  The case is called Kaley v. US and the opinion is available here.  You can also find links to the lower court's opinion and many other documents in the case here.

An editor of the SCOTUS blog summarizes the facts as follows:  "In 2007, Kerri Kaley and her husband, Brian, were indicted on charges arising from a plan to steal and then re-sell prescription medical devices. Based on the indictment, the federal government also got a restraining order to freeze their assets. The Kaleys asked the district court to lift the asset freeze so that they could pay their lawyers: although they did not dispute that the frozen assets could be traced to the conduct for which they were indicted, they argued that the charges against them were “baseless.” Both the district court and the U.S. Court of Appeals for the Eleventh Circuit denied the request, holding that it was prohibited because the Kaleys had no right to a hearing to challenge the grand jury’s determination that there was probable cause to support the charges against them. This morning a divided Supreme Court agreed, preserving a frequently used tool in the government’s arsenal for prosecuting crimes."  This author's analysis of the case is available here.

In the days that followed the announcement of the decision a number of very critical reviews have been published.  The White Collar Crime Prof Blog, for example, concludes that

The opinion, written by Justice Kagan, exalts the inviolability of the grand jury and demonstrates a naive misunderstanding of (or lack of concern about) the reality of its role in the determination of probable cause, ignores the presumption of innocence, and denigrates the importance of independent defense counsel in the criminal justice system. It tilts the playing field of justice in the government's favor by giving the government, in some cases, the option to deprive the defendant of the counsel he has selected or intends to select. [You can read the full comment here.]

Likewise, Simple Justice states:

In considering the Court’s adherence to beloved legal fictions, one of which is that a grand jury indictment conclusively proves the existence of probable cause to believe that a crime occurred and the defendants committed the crime, the majority reduced the issue before it to an absurdity. What about the presumption of innocence? What about the right to counsel of choice? What about the constraints of forfeiture to the proceeds of crime?  [You can read the full comment here.]

CT Law Tribune article on prosecutorial misconduct

Here is a link to a good article in the Connecticut Law Tribune about prosecutorial misconduct.

Florida Supreme Court rules illegal immigrants can't be admitted to practice

As you probably remember, back in January the California Supreme Court issued a long awaited decision holding that an undocumented immigrant should be allowed to practice law. Go here, here and here for older posts on the case, including a link to the oral argument.

A similar case had been making its way through the courts in Florida and today the Supreme Court issued its decision reaching the exact opposite result, holding "that unauthorized immigrants are ineligible for admission to the Florida Bar." Thus, applicants are required to demonstrate that they are legally present in the United States.  One of the judges concurred "reluctantly."  Go here for a copy of the opinion.  The Legal Profession Blog has more.

New York changes its regulations on contingency fees

Eric Turkewitz, of the NY Personal Injury Law Blog, reports on an amendment to the New York rule that describes how contingency fees should be calculated.

UPDATE on the proposed amendments to the Florida rules

Earlier today I posted a comment about proposed changes to the rules in Florida.  See here.  I just received the proposed new text and here are my comments.

First, the rule will use the following definitions:

(A) Retainer. A retainer is a sum of money paid to a lawyer to guarantee the lawyer's future availability. A retainer is not payment for past legal services and is not payment for future services. 

(B) Flat Fee. A flat fee is a sum of money paid to a lawyer for all legal services to be provided in the representation. A flat fee may be termed "non-refundable."  

(C) Advance Fee. An advanced fee is a sum of money paid to the lawyer against which the lawyer will bill the client as legal services are provided.

The choice of words is interesting.  The proposal is using the word "retainer" to mean what other jurisdictions call a "classic retainer" while it is using the words "advance fee" to define what others call a "security retainer."

The Comment to the rule explains the analysis related to the issue of whether a fee can be non refundable:

     A lawyer may require advance payment of a fee but is obliged to return any unearned portion. . . . A lawyer is not, however, required to return retainers that, pursuant to an agreement with a client, are not refundable. A nonrefundable retainer or nonrefundable flat fee is the property of the lawyer and should not be held in trust. If a client gives the lawyer a negotiable instrument that represents both an advance on costs plus either a nonrefundable retainer or a nonrefundable flat fee, the entire amount should be deposited into the lawyer's trust account, then the portion representing the earned nonrefundable retainer or nonrefundable flat fee should be withdrawn within a reasonable time. An advance fee must be held in trust until it is earned. Nonrefundable fees are, as all fees, subject to the prohibition against excessive fees.

Although I am not totally convinced the language used in the definitions is the best, as I said in my previous post, I think the analysis this proposal is much better than the one offered in many of the cases that have been decided on this issue.

Florida Bar of Governors proposed amendment to clarify the concept of flat fees and retainers

I have often complained about the confused state of the law as it relates to the notion of non refundable "flat fees" which in many jurisdictions converts the flat fees into security retainers.   Go here for an example of the problem and here and here for more.

Into this mess, now comes the Florida Bar Board of Governors which has proposed an amendment to Florida's Rule 4-1.5.  The amendment states that non refundable fees are considered earned on receipt and must not be placed in lawyers’ trust accounts.  I have not seen the exact language of the proposal (I requested a copy here).  However, I can say that I think saying that non refundable fees are earned on receipt seems like a good idea, but only as long as the total amount of the fee remains reasonable, which is the accepted standard to evaluate any fee's ethical validity.

According to Lawyers Ethics Alerts, the proposed language in the comment to the rule provides: “A nonrefundable retainer or nonrefundable flat fee is the property of the lawyer and should not be held in trust. If a client gives the lawyer a negotiable instrument that represents both an advance on costs plus either a nonrefundable retainer or a nonrefundable flat fee, the entire amount should be deposited into the lawyer’s trust account, then the portion representing the earned nonrefundable retainer or nonrefundable flat fee should be withdrawn within a reasonable time. An advance fee must be held in trust until it is earned. Nonrefundable fees are, as all fees, subject to the prohibition against excessive fees.”

Client Red Flag Bingo

As all practicing lawyers know, it is important to listen carefully to prospective clients.  It is important to understand their concerns, the details of their concerns and what it is they want us (the lawyers) to do for them.  It is also important to determine if they can be "problem clients."  That's right, "problem clients."  We all know them and often we don't realize they are a problem until it is too late.  But there are many ways to pick up on the signs early on.  There are a few obvious red flags we can learn to spot quickly.  

My favorite is the client who begins an interview by complaining (or, worse, insulting) their former lawyers.  Red Flag!  That idiot lawyer who did not know what he or she was doing the prospective client is complaining about could be you some day.  

Learning to recognize the signs of a problem has always been part of the learning curve of all new lawyers, but now there's help.  Thanks to this wonderful chart prepared by L. Maxwell Taylor and discussed over at MyShingle.com, you too can learn to spot the reg flags.  Read the chart carefully and keep it handy.  Fill a spot during an interview and you will know how to handle it.  Fill more and you are warned.  Fill a full row, and you should probably consider asking the client to Go!