Louisiana lawyer suspended for submitting false billable hours because he believed his partnership status required them

Hello everyone and welcome to this Ethics Alert which will discuss the recent Louisiana Supreme Court Opinion suspending a lawyer for 30 months with all but one (1) year deferred for false billable hours that he believed were necessary to maintain his partnership position and “in an effort to make himself look better on paper each month.”   The disciplinary case is:  In re: Kenneth Todd Wallace, Case No. 2017-B-0525.  The disciplinary opinion is dated September 22, 2017 and is here:  http://www.lasc.org/opinions/2017/17B0525.OPN.pdf

According to the opinion, the lawyer “joined the law firm of Liskow & Lewis as an associate attorney in 1998. After his promotion to shareholder in 2005, he served as the firm’s hiring partner and head of recruiting. He also chaired the firm’s diversity committee as the firm’s first minority recruiting and retention partner. In 2012, respondent was elected to the firm’s board of directors and served as the board’s junior director through April 2015.”

The lawyer stated that he made the false billing entries because he was concerned that his correct billable hours (along with an insufficient number of clients) were not adequate for a partner with his status.  “When his practice began to decline, (the lawyer) gave in to his own internal pressures and began to submit false time on a dismissed contingency fee matter, and eventually other matters, in an effort to make himself look better on paper each month.”

After the law firm became aware of his false billing in some client matters, the lawyer assisted the firm in conducting a full investigation.  The firm’s investigation showed that, between 2012 through 2015, the lawyer submitted 428 billing entries that the firm believed were “certainly false” and another 220 entries that the firm believed could be false or inflated; however, the law firm concluded that none of the false billing entries adversely affected any of the firm’s clients.

The lawyer had received $85,000.00 in merit bonuses between 2012 through 2015 and the firm concluded he would have received some or all of the bonuses even if he had not inflated his billable hours. The lawyer had also spent significant time with his firm management and committee responsibilities and had also met or exceeded billable targets during the years in question.  The lawyer resigned from the firm in 2015 and gave up his available bonus.

The disciplinary opinion imposed a 30 month suspension with all but one-year deferred.  The suspension was also made retroactive to January 2016, when the lawyer had been suspended on an interim basis pending the outcome of the matter.

Bottom line:  This is a very clear and unfortunate example of a lawyer who most likely destroyed his legal career after succumbing to the stress and pressure of a law partner’s need for large billable hours and a large number of clients (book of business).  I would imagine that, if asked, this lawyer would tell you that it was not worth it.

Disclaimer:  this e-mail is not an advertisement, does not contain any legal advice, and does not create an attorney/client relationship and the comments herein should not be relied upon by anyone who reads it.

Joseph A. Corsmeier, Esquire

Law Office of Joseph A. Corsmeier, P.A.

29605 U.S. Highway 19 N. Suite 150

Clearwater, Florida 33761

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

Joseph Corsmeier

about.me/corsmeierethicsblogs

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Filed under Attorney discipline, Attorney Ethics, Attorney misrepresentation, fraud, joe corsmeier, Joseph Corsmeier, Lawyer discipline, Lawyer discipline false client billings, Lawyer ethics, Lawyer Ethics and Professionalism, Lawyer false statements, Lawyer sanctions, Lawyers false billings discipline

Federal district judge dismisses lawsuit alleging that the North Carolina’s regulation of UPL is unconstitutional

Hello everyone and welcome to this Ethics Alert which will discuss the recent opinion of a federal district judge in North Carolina dismissing a non-profit corporation’s claims that the state’s UPL statute is unconstitutional.  The case is: Capital Associated Industries Inc. v. Josh Stein et al., Case No. 1:15-cv-00083 (U.S. District Court, Middle District of North Carolina).  The September 19, 2017 order and opinion is here: http://www.abajournal.com/images/main_images/NCBar.pdf

A corporation called Capital Associated Industries Inc. (CAI) filed the lawsuit after the North Carolina State Bar issued a proposed ethics opinion which found that CAI’s plan to provide legal services would constitute unlawful UPL.

According to the order and opinion of U.S. District Judge Loretta Biggs, CAI is a non-profit (and non-legal) corporation which provides human resources services to members, who pay annual dues. The corporation proposed to provide employment-related legal advice through its own lawyers as part of its membership services. It also proposed charging a separate fee of $195.00 an hour for other legal services, including drafting employment agreements and potential representation before the Equal Employment Opportunity Commission.

CAI argued that North Carolina’s UPL Statutes, as applied to them, “violate CAI’s right to substantive due process because the statutes are not rationally related to any legitimate governmental interest.  The State Bar responds that the NC UPL Statutes “are rationally related to North Carolina’s interest in avoiding potential ‘conflicts of interest and loyalty,’ as well as its interest in avoiding the ‘impairment of attorney independence.’”

The order and opinion held that the statute was sufficiently related to the government’s interest in avoiding potential conflicts of interest and loyalty, and in avoiding the impairment of attorney independence.  “North Carolina could rationally decide that nonlawyers would be more likely than lawyers to encourage the attorneys whom they supervise to violate the ethical canons that govern the legal profession.”

CAI also argued that the UPL Statutes “violate the freedom of speech guaranteed by the First Amendment, as applied to its proposed provision of legal services.  Specifically, CAI argues that the UPL Statutes restrict CAI’s speech on the basis of its content; that the UPL Statutes prohibit CAI from speaking on the basis of its corporate identity; and that this restriction on its speech cannot survive strict scrutiny.  The State Bar argues that the UPL Statutes operate as permissible regulation of a profession and not a restriction on speech that is entitled to First Amendment protection.”

The order and opinion stated that the UPL statute is not subject to strict First Amendment scrutiny since CAI’s proposed communications with members on employee legal questions are professional speech.  “The Fourth Circuit has held that under the professional speech doctrine, ‘a state’s regulation of a profession raises no First Amendment problem where it amounts to ‘generally applicable licensing provisions’ affecting those who practice the profession.’”  Pursuant to same, CAI “has no First Amendment right to advertise legal services since its right to provide such services is unlawful under the (UPL) statutes.”   According to media reports, CAI’s attorney has stated that the organization will appeal to the Fourth Circuit Court of Appeals.

Bottom line:  This opinion appears to strengthen the regulation of UPL by state Bars such as the North Carolina Bar.  The opinion also analyzes the constitutional scrutiny that applies in cases involving the regulation of professional speech “where it amounts to ‘generally applicable licensing provisions’ affecting those who practice the profession.”

Disclaimer:  this e-mail is not an advertisement, does not contain any legal advice, and does not create an attorney/client relationship and the comments herein should not be relied upon by anyone who reads it.

Joseph A. Corsmeier, Esquire

Law Office of Joseph A. Corsmeier, P.A.

29605 U.S. Highway 19 N. Suite 150

Clearwater, Florida 33761

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

Joseph Corsmeier

about.me/corsmeierethicsblogs

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Filed under joe corsmeier, Joseph Corsmeier, U.S. Constitution and UPL regulation- professional speech and application of UPL rules, Unauthorized practice of law, Unlicensed practice of law, UPL and professional speech, UPL North Carolina federal judge opinion on regulation of UPL

Four south Florida lawyers arrested for involvement for illegal personal injury solicitation and provider kickbacks

Hello everyone and welcome to this Ethics Alert which will discuss the recent arrests of four south Florida lawyers who are  alleged to have improperly and illegally obtained personal injury victims as clients and referred them to health care facilities which then paid them cash for the referrals.

According to media articles and criminal charging documents, four south Florida lawyers have been charged with crimes  ranging from money laundering to organized fraud and patient brokering.  The lawyers are Steven Slootsky, whose record Bar address is in Boca Raton, and Adam Hurtig, Mark Spatz, and Vincent Pravato, whose record Bar addresses are in Fort Lauderdale.  The lawyers were arrested on or about September 6, 2017.

The lawyers are alleged to have improperly and illegally obtained personal injury victims as clients and referred them to health care facilities which paid cash to the lawyers for the referrals.  According to arrest records, the lawyers allegedly paid runners from towing companies and body shops to improperly solicit victims of motor vehicle accidents.  Those individuals were allegedly then referred to clinics for medical treatment and the clinics would illegally pay for the referrals.

The arrest report states that the lawyers “were actively involved in illegal patient brokering and the unlawful solicitation of motor-vehicle accident victims throughout South Florida…after the patient was brokered to the health care facility, the facility was then able to begin treatment and bill the auto insurance companies for claims covered by the PIP benefits, which resulted in fraud on the insurance companies.”

It is illegal under federal law for a doctor, clinic, or other health care provider to pay for patient referrals and for a “patient broker” to receive kickbacks for sending patients to a health care provider.  It is also a violation of the Florida Bar Rules for an agent of a lawyer to improperly solicit a client, for a lawyer to pay non-lawyers and clinics for referrals, and for the lawyer to receive payment or a fee based upon an improper solicitation.  Of course, it is certainly a violation of the Florida Bar Rules to commit a crime.

Bottom line: I have heard anecdotally that these activities have been occurring in south Florida for many years (and potentially throughout our entire state, particularly in urban areas).  These lawyers are certainly presumed innocent unless and until they are proven guilty; however, if the allegations are shown to be true, this is an extremely unfortunate blight on the legal profession.  On the other hand, this could potentially discourage others from doing (or continuing to do) this in the future.

Be careful out there.     Disclaimer:  this e-mail is not an advertisement, does not contain any legal advice, and does not create an attorney/client relationship and the comments herein should not be relied upon by anyone who reads it.

Joseph A. Corsmeier, Esquire

Law Office of Joseph A. Corsmeier, P.A.

29605 U.S. Highway 19 N. Suite 150

Clearwater, Florida 33761

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

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Four south Florida lawyers arrested for involvement for illegal personal injury solicitation and provider kickbacks

Hello everyone and welcome to this Ethics Alert which will discuss the recent arrests of four south Florida lawyers who are  alleged to have improperly and illegally obtained personal injury victims as clients and referred them to health care facilities which then paid them cash for the referrals.

According to media articles and criminal charging documents, four south Florida lawyers have been charged with crimes  ranging from money laundering to organized fraud and patient brokering.  The lawyers are Steven Slootsky, whose record Bar address is in Boca Raton, and Adam Hurtig, Mark Spatz, and Vincent Pravato, whose record Bar addresses are in Fort Lauderdale.  The lawyers were arrested on or about September 6, 2017.

The lawyers are alleged to have improperly and illegally obtained personal injury victims as clients and referred them to health care facilities which paid cash to the lawyers for the referrals.  According to arrest records, the lawyers allegedly paid runners from towing companies and body shops to improperly solicit victims of motor vehicle accidents.  Those individuals were allegedly then referred to clinics for medical treatment and the clinics would illegally pay for the referrals.

The arrest report states that the lawyers “were actively involved in illegal patient brokering and the unlawful solicitation of motor-vehicle accident victims throughout South Florida…after the patient was brokered to the health care facility, the facility was then able to begin treatment and bill the auto insurance companies for claims covered by the PIP benefits, which resulted in fraud on the insurance companies.”

It is illegal under federal law for a doctor, clinic, or other health care provider to pay for patient referrals and for a “patient broker” to receive kickbacks for sending patients to a health care provider.  It is also a violation of the Florida Bar Rules for an agent of a lawyer to improperly solicit a client, for a lawyer to pay non-lawyers and clinics for referrals, and for the lawyer to receive payment or a fee based upon an improper solicitation.  Of course, it is certainly a violation of the Florida Bar Rules to commit a crime.

Bottom line: I have heard anecdotally that these activities have been occurring in south Florida for many years (and potentially throughout our entire state, particularly in urban areas).  These lawyers are certainly presumed innocent unless and until they are proven guilty; however, if the allegations are shown to be true, this is an extremely unfortunate blight on the legal profession.  On the other hand, this could potentially discourage others from doing (or continuing to do) this in the future.

Be careful out there.     Disclaimer:  this e-mail is not an advertisement, does not contain any legal advice, and does not create an attorney/client relationship and the comments herein should not be relied upon by anyone who reads it.

Joseph A. Corsmeier, Esquire

Law Office of Joseph A. Corsmeier, P.A.

29605 U.S. Highway 19 N. Suite 150

Clearwater, Florida 33761

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

Joseph Corsmeier

about.me/corsmeierethicsblogs

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Filed under Attorney Ethics, dishonesty, Fee sharing with non-lawyer owned firms, Florida Lawyer Ethics and Professionalism, Florida lawyer ethics nonlawyer compensation, fraud, joe corsmeier, Joseph Corsmeier, Lawyer criminal conduct, Lawyer criminal conduct - kickbacks on referrals, Lawyer criminal kickbacks, Lawyer discipline, Lawyer ethics, Lawyer Ethics and Professionalism, lawyer fee splitting, lawyer illegal personal injury solicitation and provider kickbacks, Lawyer improper solicitation through non-lawyers

Virginia lawyer previously suspended after disrupting CLE seminar suspended for 5 years on new candor violations

Hello everyone and welcome to this Ethics Alert which will discuss the recent 5 year suspension of a Virginia lawyer who was previously suspended for 6 months in 2015 for disrupting a CLE seminar and suspended for 3 years in 2016 when he failed to undergo treatment required pursuant to the 2015 suspension.  The 6 month suspension Order dated March 27, 2015 is here: http://www.vsb.org/docs/Hartke-050615.pdf and the 3 year suspension Order dated October 27, 2016 is here: http://www.vsb.org/docs/Hartke-110416.pdf.

According to the Virginia State Bar website, “on August 25, 2017, the Virginia State Bar Disciplinary Board suspended Wayne Richard Hartke’s license to practice law for five years effective October 27, 2019, for violating professional rules that govern candor toward the tribunal.  The suspension will be consecutive to a three-year suspension issued on October 27, 2016.”

According to the March 27, 2015 Disciplinary Board Order, the lawyer was intoxicated and disruptive at a Continuing Legal Education program.  Witnesses at the CLE seminar said that the lawyer was sleeping and loudly snoring during the morning session and then yelling at the video screen during the afternoon session.  A witness also said he smelled of alcohol and had a bottle of liquor with him at the seminar.  The lawyer was led from the seminar room by another person attending the seminar.

The lawyer was suspended for six months for that CLE disruption and for “failing to correct misrepresentations that he made to the Virginia State Bar during the disciplinary proceedings”.  The Order also required him to enroll in a two-year treatment and monitoring program stated that any notice of noncompliance would result in an order to show why his license should not be suspended for an additional three years.  According to the October 27, 2016 disciplinary Order, the lawyer failed to comply with the terms of the 2015 Order.  He also failed to show up for the disciplinary hearing.  The Disciplinary Board found that the violation was proven and suspended the lawyer for three (3) years, effective October 27, 2016.

The lawyer had previously been reprimanded in 2010 after settling a legal malpractice lawsuit which alleged that he failed to protect the interests of the members of the board of directors of a corporate client.  He was reprimanded again in 2011 when he was held in contempt and served 10-day jail sentence after his blood alcohol content was found to be .127 during a court appearance.

Bottom line:  According to the facts set forth in the disciplinary Orders, this lawyer has some serious and ongoing issues with both alcohol and candor.  The ultimate result was a 5 year suspension effective October 27, 2019 after he completes his current 3 year suspension and, unless that suspension is modified, it will continue until October 27, 2024.

Be careful out there.

Disclaimer:  this e-mail is not an advertisement, does not contain any legal advice, and does not create an attorney/client relationship and the comments herein should not be relied upon by anyone who reads it.

Joseph A. Corsmeier, Esquire

Law Office of Joseph A. Corsmeier, P.A.

29605 U.S. Highway 19 N. Suite 150

Clearwater, Florida 33761

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

Leave a comment

Filed under Attorney discipline, Attorney Ethics, Attorney misrepresentation, dishonesty, joe corsmeier, Joseph Corsmeier, Lawyer discipline, Lawyer discipline sanctions for failure to appear at hearing, Lawyer ethics, Lawyer Ethics and Professionalism, Lawyer false statements, Lawyer false statements in response to Bar complaint, Lawyer false testimony, Lawyer sanctions, Lawyer sanctions alcohol and substance abuse, Lawyer violation of court order, Lawyer wilful failure to comply with court order