Tag Archives: Bar ethics rules

Virginia Supreme Court makes revisions to lawyer advertising rules which streamline the rules and reduce their number

Hello everyone and welcome to this Ethics Alert which will discuss the recent Virginia Supreme Court opinion which adopted revisions to the Virginia Bar Rules which streamline the lawyer advertising rules and reduce the number of rules.  The Virginia Supreme Court opinion is here: http://www.courts.state.va.us/courts/scv/amendments/part_6_sect_ii_para_7_1_thru_7_5.pdf.  The revised Virginia advertising rules become effective on July 1, 2017.

On April 17, 2017, the Virginia Supreme Court adopted lawyer advertising rules which streamline and reduce the number of rules and should make it easier for Virginia lawyers to market their services without risking disciplinary charges.  Virginia became the first jurisdiction to adopt the revisions recommended by the Association of Professional Responsibility Lawyers (APRL) and later adopted by the American Bar Association (ABA).

The revisions reduce Virginia Bar Rule 7.1 (communications concerning lawyer’s services) to a single paragraph prohibiting false or misleading communications.  The revisions also eliminate Rule 7.4 (communicating fields of practice and certification) and Rule 7.5 (lawyer and law firm names).  Those subjects are addressed in the comments to revised Rule 7.1.

Revised Rule 7.3 (solicitation) incorporates some new language from the APRL’s proposal, but does not incorporate the blanket prohibition against in-person solicitation which is set forth in ABA Model Rule 7.3 and APRL’s draft Rule 7.3.

Some of the rules were not revised or deleted.  Rule 7.3 still requires any advertising materials to have the disclaimer “ADVERTISING MATERIAL” unless the recipient is a lawyer or family member, has had a personal or prior professional relationship with the attorney, has had prior contact with the attorney, or if the materials are pursuant to a court-ordered class action notification.

Bottom line:  These revised Virginia Bar advertising rules substantially streamline and reduce the number of rules.  This appears to be a trend and we will see whether (or when) other jurisdictions follow.  Stay tuned…

…and 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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Lawyer’s ethical duties and responsibilities when a represented person requests a second opinion

Hello everyone and welcome to this Ethics Alert which will discuss the lawyer’s ethical duties and responsibilities when a represented person contacts the lawyer to obtain a second opinion.  Although a lawyer is permitted to render a second opinion to a represented person who initiates the contact with the lawyer, there are important ethical and practical issues which should be considered before the lawyer agrees to do so.

A threshold issue is whether a second opinion would be an improper communication with a person represented by counsel.  In 2002, the ABA added a sentence to paragraph 4 of the Comment to Model Rule 4.2 which makes it clear that lawyers can provide second opinions if the lawyer is not representing another individual in the same matter.  Model Rule 4.2 has been adopted in substantial form by most jurisdictions, including Florida.  The Comment states:

(4) This Rule does not prohibit communication with a represented person, or an employee or agent of such a person, concerning matters outside the representation. For example, the existence of a controversy between a government agency and a private party, or between two organizations, does not prohibit a lawyer for either from communicating with nonlawyer representatives of the other regarding a separate matter. Nor does this Rule preclude communication with a represented person who is seeking advice from a lawyer who is not otherwise representing a client in the matter.

Florida Bar Ethics Opinion 02-5 (March 3, 2013, rev. August 24, 2011) discusses types of information a lawyer can give to an individual who is seeking a second opinion as well as potential solicitation.  The opinion states that, a lawyer may provide information about the lawyer’s availability and qualifications when contacted by an individual and if the information is requested.

The opinion concludes:

… a lawyer may provide a second opinion to a person who is represented by counsel at the person’s request. In providing the second opinion, the lawyer must give competent advice, and in doing so should carefully consider any limitations with which the lawyer is faced. Rule 4-1.1, Rules Regulating The Florida Bar. The lawyer should scrupulously avoid improperly soliciting the person. The lawyer may discuss what services the lawyer would be able to provide if the represented person requests not merely a second opinion, but also information about the lawyer’s availability and qualifications. Whether or not particular communications between the lawyer and the represented person might be considered tortious interference with an existing lawyer-client relationship is a legal question, outside the scope of an ethics opinion.

As is stated in the above ethics opinion, before giving a second opinion, the lawyer should consider whether he or she can competently render the opinion.  In order to be competent, the lawyer might need to review the client’s file, which may only be available through the client’s current lawyer.

South Carolina Bar Opinion 97-07 (1997) states:

…A lawyer may discuss a pending legal matter with a client who is represented by another attorney. If the client is seeking a second opinion based on a subjective opinion rendered by the client’s attorney, the lawyer should carefully consider the basis of the advice of the client’s attorney and may be required to consult with the client’s attorney in order to give competent legal advice. If so, the lawyer should advise the client accordingly prior to giving any opinion or advice.

A lawyer who provides a second opinion is also creating an attorney/client relationship and attorney/client confidentiality would apply.  The scope of confidentiality is extremely broad and includes all information related to the representation, including the fact that the client came to the lawyer for a consultation; therefore, the lawyer would not be able to contact the person’s current lawyer, unless the client consents or there is an exception to the confidentiality rule.

Oregon State Bar Opinion 2005-81 (Revised 2014) states:

A lawyer may provide a second opinion to a potential client regarding the quality of work done by another lawyer. The lawyer may not inform the other lawyer of the client’s request unless the client consents or another exception to the duty of confidentiality is applicable.

Bottom line:  It is not unethical for a lawyer to provide a second opinion; however, there are important ethical and practical issues that a lawyer should consider before agreeing to do so.

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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Lawyer ethics and positional conflicts of interest

Hello everyone and welcome to this Ethics Alert which will discuss lawyer ethics and positional conflicts.   Although this may not be common in a typical lawyer’s practice, all lawyers should be aware of the potential ethical issues which may arise from taking opposing legal positions on behalf of 2 or more clients.

ABA Formal Opinion 93-377

ABA Standing Committee on Ethics and Professional Responsibility Formal Opinion 93-377- Positional Conflicts (issued in 1993) reviewed ethical issues when a lawyer represents one client in a matter in which the client’s interests regarding a substantive legal issue are directly adverse to a position the lawyer (or law firm) is advocating on behalf of another client on the same or similar issue.  Formal Opinion 93-377 is attached.

The opinion states that “…(a)rguing a position on behalf of one client that is adverse to a position that the lawyer, or her firm, is arguing on behalf of another current client raises a number of concerns. For example, if both cases are being argued in the same court, will the impact of the lawyer’s advocacy be diluted in the eyes of the judge(s)?  Will the first decision rendered be persuasive (or even binding) precedent with respect to the other case, thus impairing the lawyer’s effectiveness–and, if so, can the lawyer (or firm) avoid favoring one client over the other in the ‘race’ to be first? And will one or the other of the clients become concerned that the law firm it has employed may have divided loyalties?”

The opinion also reviewed the 1993 Model Rule 1.7 Conflict of Interest: General Rule as it existed before the ABA Ethics 2000 Commission recommended revisions to the Model Rules.  The opinion refers to paragraph (9) of the Comment to Rule 1.7 which stated as follows:

“A lawyer may represent parties having antagonistic positions on a legal question that has arisen in different cases, unless representation of either client would be adversely affected. Thus, it is ordinarily not improper to assert such positions in cases pending in different trial courts, but it may be improper to do so in cases pending at the same time in an appellate court.”

The opinion noted that representing two clients in different trial courts while advocating opposing sides of the same issue could also be a conflict of interest under Rule 1.7 just as if both matters were pending in the same appeals court.  A decision in a trial court could influence the outcome of a second matter in another trial court, and a decision in an appeals court could have an adverse effect on a matter pending in a trial court matter.

With regard to matters pending in the same jurisdiction, the opinion stated:

“The Committee is therefore of the opinion that if the two matters are being litigated in the same jurisdiction, and there is a substantial risk that the law firm’s representation of one client will create a legal precedent, even if not binding, which is likely materially to undercut the legal position being urged on behalf of the other client, the lawyer should either refuse to accept the second representation or (if otherwise permissible) withdraw from the first, unless both clients consent after full disclosure of the potential ramifications of the lawyer continuing to handle both matters.” (footnote omitted).

If the matters are not being litigated in the same jurisdiction, the opinion provides several questions a lawyer should consider, including the relative importance of the positional conflict issue and the likelihood that it may affect the outcome of one or both of the cases, the extent to which a decision in one case might influence the decision in the other and the extent to which the lawyer ‘s independent professional judgment may be affected if he or she changes advocacy or tactics in one case to minimize any adverse effects on the client in the other case.

The ABA Ethics 2000 Commission deleted paragraph (9) to the comments to Rule 1.7, and replaced it with current paragraph (24) which states:

“Ordinarily a lawyer may take inconsistent legal positions in different tribunals at different times on behalf of different clients. The mere fact that advocating a legal position on behalf of one client might create precedent adverse to the interests of a client represented by the lawyer in an unrelated matter does not create a conflict of interest. A conflict of interest exists, however, if there is a significant risk that a lawyer’s action on behalf of one client will materially limit the lawyer’s effectiveness in representing another client in a different case…Factors relevant in determining whether the clients need to be advised of the risk include: where the cases are pending, whether the issue is substantive or procedural, the temporal relationship between the matters, the significance of the issue to the immediate and long-term interests of the clients involved and the clients’ reasonable expectations in retaining the lawyer. If there is significant risk of material limitation, then absent informed consent of the affected clients, the lawyer must refuse one of the representations or withdraw from one or both matters.”

The Restatement of the Law Governing Lawyers also considered this issue and, in comment f §128 (2000), states that a lawyer “ordinarily may take inconsistent legal positions in different courts at different times”; however, “a conflict is presented when there is a substantial risk that a lawyer’s action in (one matter) will materially and adversely affect another client in (a second matter).”

Florida Bar Rules 

The Florida Bar has not issued an ethics opinion addressing positional conflicts; however, the Comment to Florida Bar Rule 4-1.7 is identical to the 1993 paragraph 9 of the Comment to Model Rule 1.7 and states as follows:

Conflicts in litigation 

A lawyer may represent parties having antagonistic positions on a legal question that has arisen in different cases, unless representation of either client would be adversely affected. Thus, it is ordinarily not improper to assert such positions in cases pending in different trial courts, but it may be improper to do so in cases pending at the same time in an appellate court.

State Bar Rules and Ethics Opinions 

Some state ethics opinions have considered this issue.

Oregon Ethics Opinion 2007-177 (2007) states that a lawyer may not represent a client in a matter requiring the lawyer to contend for something that he or she must contend against on behalf of another client in another matter if the outcome of one matter is highly likely to affect the outcome of the other.  The ethics opinion is here:  https://www.osbar.org/_docs/ethics/2007-177.pdf

Maine Ethics Opinion 155 (1997) – Arguing Different Sides of Same Legal Issue in Unrelated Cases addresses that state’s conflicts of interest rules in its analysis.  The ethics opinion is here:  http://www.mebaroverseers.org/attorney_services/opinion.html?id=89688

“…Although we conclude that an “issue conflict” standing alone is not a conflict within the meaning of Bar Rule 3.4(b), we note that counsel has an obligation to both clients under Rule 3.6(a)(1) to employ “reasonable care and skill” and to “employ the lawyer’s best judgment” in the representation of her clients. In light of this rule, an attorney must be mindful of the possibility that contemporaneously arguing opposite sides of the same issue before the same judge or panel of judges could impair her effectiveness on behalf of both clients, thereby arguably violating Rule 3.6(a)(1). It is not possible to define all the circumstances in which this rule might be implicated, since it will depend on the particular facts and circumstances.”

The Maine Rules of Professional Conduct were revised in 2009 and that state’s version Comment to Rule 1.7 is now similar to ABA paragraph 24.

District of Columbia Ethics Opinion 265 (1996) states:  “When a lawyer is asked to represent an entity that takes positions on matters of law in a subject area in which the lawyer practices regularly on behalf of other clients, the lawyer may not, without the informed consent of all affected parties, accept simultaneous representation of both clients where such representation creates a substantial risk that representation of one client will adversely affect the representation of the other.” The ethics opinion is here:  https://www.dcbar.org/bar-resources/legal-ethics/opinions/opinion265.cfm

Bottom line:  If the lawyer is considering taking a position for one client which is directly adverse to a position the lawyer (or law firm) is taking for another client on the same or similar issue, the lawyer must consider the potential conflict of interest and act accordingly.

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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Filed under ABA formal opinions, Attorney Ethics, joe corsmeier, Joseph Corsmeier, Lawyer conflict of interest, Lawyer ethics, Lawyer Ethics and Professionalism, Lawyer ethics opinions, Lawyer ethics positional conflicts of interest, positional conflicts

West Virginia lawyer suspended for 2 years for, inter alia, twice billing over 24 hours in one day

Hello everyone and welcome to this Ethics Alert which will discuss the recent West Virginia Supreme Court opinion which suspended a lawyer for 2 years for, inter alia, billing for over 24 hours in one day on two occasions.   The case is West Virginia Lawyer Disciplinary Board v. Michael P. Cooke, SC No. 15-1243 April 20, 2017).  The Supreme Court’s opinion is here:  http://www.courtswv.gov/supreme-court/docs/spring2017/15-1243.pdf

According to the opinion, “during the time period of January 21, 2014, through September 18, 2014, Cooke billed more than fifteen hours a day on thirty-seven different days. On five of those days, he billed in excess of twenty hours and on two of those days, he billed greater than twenty-four hours. Cooke maintains that during that period of time he was billing the time of the contract attorneys working for him, as well as his own.  However, per Cooke’s own testimony, this would have occurred for only some portion of the time period at issue inasmuch as his ‘full-time’ contract attorney quit in late-March, leaving only the part-time contract attorney, who likewise quit at some point later that year.”

“Moreover, during this time period, Cooke contends that he was suffering from diagnosed ‘low testosterone’ which caused him to sleep between ten and sixteen hours a day; medical records introduced into evidence do in fact support such a diagnosis in June, 2014. Cooke maintains that this fatigue continued throughout the time frame in which the guardian ad litem matter was ‘pending’ and continued until November, 2014.”

“Cooke’s extraordinary overbilling was not only intentional and pervasive within the time period at issue, but long-standing. Given the state of the public fisc, the actual injury to the taxpayers of the State of West Virginia is all too real. As the Supreme Court of Ohio stated, overbilling the state for representing indigent clients ‘exploit[s] an already overburdened system designed to aid the poorest members of our society and lessen[s] public confidence in the legal profession and compromise[s] its integrity.’ Holland, 835 N.E.2d at 366. Cooke’s misconduct in that regard, therefore, profoundly affects the public, the legal system, and the profession.

“Moreover, while the bulk of the foregoing discussion has been dedicated to Cooke’s overbilling to PDS, by no means does this Court intend to minimize the seriousness of Cooke’s other violations. In particular, Cooke’s failure to timely file a guardian ad litem brief with this Court in an abuse and neglect matter is not only violative of the Rules of Professional Conduct, but in complete disregard of the countless warnings issued by this Court regarding the appellate obligations of guardians ad litem…”

“Therefore, giving Cooke the benefit of every doubt, this purported fatigue and reduced working capacity would have existed from approximately February until November, 2014—the exact time period under scrutiny for overbilling. Per Cooke’s own testimony, therefore, during this time there would have been between only eight and fourteen hours of the day in which he could even be awake to perform work.”

After summarizing West Virginia cases and standards, the opinion stated the following:

“In view of the foregoing, we find that Cooke’s misconduct warrants a two-year suspension from the practice of law. Cooke’s defrauding of the State through overbilling, gross mishandling of a client matter and funds, his dereliction of duty to his infant clients as a guardian ad litem—all of which is compounded by his unrelenting pattern of unresponsiveness and empty reassurances of remediation—plainly justify this degree of discipline.”  The disciplinary hearing panel had recommended a three month suspension and the Office of Disciplinary Counsel recommended a suspension of 18 months.

Bottom line: This lawyer was found to have engaged in serious and excessive overbilling and the opinion found that the overbilling was “intentional and pervasive”.  Among other things, he claimed in mitigation that he had low testosterone “which caused him to sleep between ten and sixteen hours a day.”   The lawyer was suspended for 2 years for this serious misconduct.

Be careful out there.

As always, if you have any questions about this Ethics Alert or need assistance, analysis, and guidance regarding ethics, risk management, or other issues, please do not hesitate to contact me.

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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New Jersey lawyer receives censure for neglecting client matters, failing to communicate with clients, and fraud and dishonesty

Hello everyone and welcome to this Ethics Alert which will discuss the recent New Jersey Supreme Court Order which adopted the findings of the New Jersey Disciplinary Review Board and censured a lawyer for neglecting client matters, failing to communicate with clients, and engaging in conduct involving fraud or dishonesty.  The case is In The Matter of John R. Dusinberre, D-37 September Term 2015 078531 (Supreme Court of New Jersey April 5, 2017).  The New Jersey Supreme Court Order is here:  http://drblookupportal.judiciary.state.nj.us/DocumentHandler.ashx?document_id=1082216 and the Disciplinary Board (DRB) Decision dated November 9, 2016 is here:  http://drblookupportal.judiciary.state.nj.us/DocumentHandler.ashx?document_id=1077667

According to the DRB Decision, the lawyer was charged with violating Bar rules in four separate matters:

“In the first matter, respondent represented Anthony Domenick and 407-409 Summer Associates, LLC for a Paterson condominium development known as ‘Sandy Hill at Summer Street.’ The terms of the representation called for respondent to file a public offering statement (POS) with the New Jersey Division of Community Affairs (DCA) and to record a master deed in the county clerk’s office. Respondent told his client that he had filed the POS with the DCA and furnished him with a copy of a November 12, 2007 POS carrying registration number ‘04368.’ Respondent stipulated that he never filed a POS with the DCA. Rather, he had fabricated the POS and created a fictitious registration number; the DCA had never assigned a registration number to the Sandy Hill project. Although respondent also failed to record the master deed, he either informed his client, or led him to believe, that he had done so.

“In a second matter, respondent represented a client identified only as ‘Mr. Cerquirra’ and ‘88 St. Francis LLC’ regarding a condominium development project at 88 St. Francis Street in Newark. The representation required respondent to register the project with the DCA and to obtain a registration order. Respondent informed the client that he had obtained a registration order for the project from the DCA. He also gave the client an October 27, 2008 letter, purportedly from DCA’s Manager of the Planned Real Estate Department, Stewart P. Pallonis. Enclosed with that letter was an order of registration from the DCA carrying registration number 04487, and signed ‘Stewart P. Pallonis.’  In fact, respondent never registered the 88 St. Francis Street project with the DCA. Rather, he had fabricated both the Pallonis letter and the registration order, signing Pallonis’ name to both documents before giving them to the client.

“In a third matter, respondent represented Sterling Properties (Sterling) for a Cedar Knolls condominium project known as ‘Viera at Hanover.’ The representation required respondent to register the project with the DCA, but he failed to do so. Respondent, nevertheless, led Sterling to believe that he had registered the project with the DCA, knowing that he had not done so. In reliance on respondent’s false information, Sterling went forward with the project.

“In a fourth matter, respondent represented Sterling for another condominium project in Piscataway. That representation, too, required respondent to register the project with the DCA. Again, respondent failed to do so. Respondent led Sterling to believe that the Piscataway project, too, was registered with the DCA, knowing that it was not. Relying on respondent’s statements, Sterling proceeded with the development project.”

“During respondent’s entire thirty-four-year career at MSLD, he reported to Barry Mandelbaum, the managing attorney, and twelve years his senior. Respondent described Mandelbaum as a “benevolent despot” and a “mentor.” Respondent was never “encouraged” to generate business for the firm. Rather, he tended to work on legal matters that Mandelbaum generated.

“Respondent described his relationship with Mandelbaum as a stressful one. Mandelbaum would berate respondent publicly, place notes on respondent’s door about perceived failings, and subject him to ‘105 decibel,’ public ‘dress downs,’ all of which were extremely embarrassing.

“As the law firm grew larger, younger attorneys became partners. By the mid-2000s, some of those partners had come to expect respondent to complete work on projects that they had generated, placing additional pressure on respondent to perform.

“Several years before respondent engaged in the within misconduct, MSLD established an executive committee to manage the law firm. Respondent perceived that the new arrangement rewarded some of the younger, income-generating attorneys, at his expense. Feeling exposed, he became “terrified” about losing his job. At that juncture, he grew even more reliant on Mandelbaum for protection:

So my desire and drive to please him became extremely strong. And I can’t tell you the number of times when I would have an issue with a client, I would hear the client five minutes later on the phone with Barry and then I would hear Barry’s footsteps stomping down the hall to basically dress me down or yell at me and to confront me, or whatever it might be very publicly.

And it was extremely upsetting and got to the point where I went from a lawyer who loved to go to work every day to a lawyer who dreaded pulling into the parking lot of my law firm, counting whose cars were in to try and decide whose work I should be doing that day so that I wouldn’t get yelled at or — or, you know, almost — I almost use the word bullied, although I’m an adult and was an adult at the time, and it’s a hard concept to have, but it’s the desperate situation I found myself in. (T20-10 to T21-2.)

“Worried about being ‘kicked out’ of MSLD, respondent felt tremendous pressure to complete tasks on time, according to schedules that other attorneys prepared for him. Also pressing was the fear that, because he was over sixty years old and had never been in another legal setting, he could not strike out on his own.”

The DRB Decision also found that the lawyer had no prior discipline, expressed remorse for his misconduct, and paid former clients, the firm and the DCA hundreds of thousands of dollars as restitution.  The DRB recommended a censure (which is a stronger sanction than a reprimand in New Jersey).  The New Jersey Supreme Court adopted that sanction and censured the lawyer.

Bottom line:  This case is unusual, to say the least.  Although the lawyer provided significant mitigation (including the serious “berating” by a supervising partner and “cracking under the pressure” of the partner’s criticism), his underlying misconduct, including his multiple false statements to clients, neglecting client matters and failing to communicate, would appear to be serious enough to merit a suspension, notwithstanding the mitigation that he provided.  The lawyer was in his 50’s and 60’s when the misconduct occurred. One could certainly conclude that the lawyer’s testimony about the “pressure” of the practice was somewhat of an excuse and not an explanation.

As always, if you have any questions about this Ethics Alert or need assistance, analysis, and guidance regarding ethics, risk management, or other issues, please do not hesitate to contact me.

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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Lawyer receives 1 year suspension in New York and Oregon for, inter alia, falsely claiming completion of CLE

Hello everyone and welcome to this Ethics Alert which will discuss the recent New York appellate court opinion suspending a New York lawyer for one year on a reciprocal basis after he was suspended by the Oregon Supreme Court for one year for making false representations regarding his completion of the required Oregon CLE and providing false testimony.  The New York case is: Matter of Joseph R. Sanchez, 017 NY Slip Op 01869 (Appellate Division, Second Department March 15, 2017) and the New York opinion is here:  http://www.nycourts.gov/reporter/3dseries/2017/2017_01869.htm.  The Oregon disciplinary board opinion is here:  http://www.osbar.org/_docs/dbreport/dbr29.pdf

The lawyer was admitted to practice in both New York and Oregon.  He was required to complete 45 CLE hours for the 2009 to 2011 Oregon reporting period and he purchased on-line CLE courses.  Two days later, he certified to the Oregon Bar that he had completed the required 45 hours of CLE although he had not previously completed any CLE for that reporting period.

After receiving the lawyer’s certification, the Oregon Bar’s CLE administrator asked him how he was able to watch 48 hours of CLE courses in about one day.  The lawyer responded by providing copies of his CLE completion certificates.  He later provided “evasive, incomplete and/or untruthful” answers under oath. The panel also found that the lawyer made the misrepresentations knowingly and intentionally.

According to the New York opinion:

“The trial panel found the respondent’s overall testimony lacking in credibility:

(The lawyer’s) testimony was inconsistent with his prior writings, including an affidavit he prepared and signed under oath in 2012. The testimony he provided at the hearing was inconsistent with the testimony he previously provided at his deposition in this matter on September 3, 2014, which was also provided under oath. The [respondent] presented facts during his testimony that he had never presented before, notwithstanding having had multiple opportunities to have done so during the course of the [Oregon] Bar’s investigation. Put simply, the panel finds that the [respondent’s] testimony was untruthful. Lastly, the panel finds that the [respondent] made his misrepresentations knowingly and intentionally. The [respondent] was provided multiple opportunities to explain how he could have possibly fit 48 hours of work into a shorter (and potentially significantly shorter) period of time and each time he failed to do so. It is clear he changed the facts over time, [and] added explanations’ when prior ones were not accepted, with each subsequent explanation less plausible than the prior.”

The trial panel concluded that the respondent violated his duty to the public and to the legal profession when he intentionally and knowingly misrepresented to both Lawline and the Oregon Bar the fact that he had attended and successfully completed the CLE courses he had purchased.”

Based upon the reciprocal Oregon discipline (and the facts), the New York opinion suspended the lawyer from the practice of law for one year, beginning on April 14, 2017.  He was also required to “furnish satisfactory proof that during the period of suspension he (1) refrained from practicing or attempting to practice law, (2) fully complied with this order and with the terms and provisions of the written rules governing the conduct of disbarred and suspended attorneys (see 22 NYCRR 1240.15), (3) complied with the applicable continuing legal education requirements of 22 NYCRR 691.11(a), and (4) otherwise properly conducted himself.”

Bottom line:  It should certainly should go without saying that lawyers must never provide false information to the Bar (or at any other time); however, this lawyer apparently very blatantly believed that he could pass under the Bar radar in making the false representations.  He compounded the misconduct by providing “inconsistent testimony” that as “lacking in credibility.”  Not only is this conduct completely unethical, but lawyers should never assume that the Bar will fail to detect false representations such as these.

As always, if you have any questions about this Ethics Alert or need assistance, analysis, and guidance regarding ethics, risk management, or other issues, please do not hesitate to contact me.              

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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Ethical issues and requirements for lawyers in compensating nonlawyer employees

Hello everyone and welcome to this Ethics Alert which will discuss the ethical considerations for lawyers when compensating non-lawyer employees.  State Bar disciplinary rules, including Florida Bar Rule 4-5.4(a), prohibit lawyers from sharing legal fees with nonlawyers.  The Comment to the Florida Bar Rule states, “The provisions of this rule express traditional limitations on sharing fees.  These limitations are to protect the lawyer’s professional independence of judgment….”  Notwithstanding this prohibition, the Bar rules provide for exceptions.

Florida Bar Rule 4-5.4(a)(4) states that “bonuses may be paid to nonlawyer employees for work performed, and may be based on their extraordinary efforts on a particular case or over a specified time period. Bonus payments shall not be based on cases or clients brought to the lawyer or law firm by the actions of the nonlawyer. A lawyer shall not provide a bonus payment that is calculated as a percentage of legal fees received by the lawyer or law firm…”

In Florida Bar Ethics Op. 02-1 (1/11/02), the lawyer requested an ethics opinion regarding the following question:  “May I bonus a non-lawyer employee based on the number of hours the non-lawyer employee has worked on a case for a particular client?”  The lawyer stated that “I would like to bonus my employees based on their own productivity. I would not be utilizing any portion of the fees received by me for that purpose.”

The opinion concluded:

“Based on the rules and opinion, the inquiring attorney may pay the legal assistant a bonus based on the legal assistant’s extraordinary efforts on a particular case or over a specific period of time. While the number of hours the legal assistant works on a particular case or over a specific period of time is one of several factors that can be considered in determining a bonus for the legal assistant, it is not the sole factor to be considered. It must be remembered that the rule allows a bonus to be paid to a nonlawyer based on “extraordinary efforts” either in a particular case or over a specific time period. A bonus which is solely calculated on the number of hours incurred by the legal assistant on the matter is tantamount to a finding that every single hour incurred was an “extraordinary effort”, and such a finding is very unlikely to be true. Therefore, unless every single hour incurred by the legal assistant was a truly extraordinary effort, it would be impermissible for the inquiring attorney to pay a bonus to his legal assistant calculated in the manner the inquiring attorney has proposed. However, the number of hours incurred by the legal assistant on the particular matter or over a specified time period may be considered by the lawyer as one of the factors in determining the legal assistant’s bonus.” (emphasis added). 

Florida Bar Rule 4-5.4 (b) – Qualified Pension Plans, states that a “lawyer or law firm may include nonlawyer employees in a qualified pension, profit-sharing, or retirement plan, even though the lawyer’s or law firm’s contribution to the plan is based in whole or in part on a profit-sharing arrangement.”

ABA Model Rule 5.4(a)(3) states that: “A lawyer or law firm may include nonlawyer employees in a compensation or retirement plan, even though the plan is based in whole or in part on a profit sharing arrangement…”  ABA Informal Opinion 1440 also states that a compensation plan proposed for an office administrator which relates to the net profits and business performance of the firm and not to the receipt of particular fees does not violate the model rules.

Other state bar opinions address when nonlawyers can participate in such compensation plans.  New York State Bar Assoc. Ethics Op. 887 (2011) states that a law firm may pay a marketing employee a bonus based on the firm’s profits, the profits of a department, or as a percentage of the marketer’s salary; however, the bonus cannot be based on referrals of specific legal matters or on firm profits that come from cases that the marketer brought to the firm.  District of Columbia Ethics Op. 322 (2004) states that a nonlawyer employee may not be paid a bonus based on fees the firm receives from a specific case or series of related cases, but may be paid a bonus contingent upon the firm’s overall profitability.

Unless there is an exception, lawyers are prohibited from paying nonlawyers a bonus that is based on the referral of specific clients to the firm.  Florida Bar Rule 4-1.17(b) -Payment for Referrals- states that a lawyer “may not give anything of value to a person for recommending the lawyer’s services, except that a lawyer may pay the reasonable cost of advertising permitted by these rules, may pay the usual charges of a lawyer referral service, lawyer directory or other legal service organization, and may purchase a law practice in accordance with rule 4-1.17.”

A lawyer cannot circumvent the Rule by providing non-monetary “gifts” to nonlawyer employees.  Such gifts would most likely be considered to be something “of value” under Florida Bar Rule 4-1.17(b) and would therefore by prohibited under that rule as well. The key issue is whether something “of value” is exchanged for future referrals.

Examples include: Maryland Ethics Op. 2000-35 (2001)- lawyers who participate as panelists in seminars offered by accounting and financial services company, in exchange for referrals, could be interpreted as giving “something of value” to accounting firm; Pennsylvania Bar Association in Op. 2005-81- a lawyer may not give a nonlawyer employee a paid day off for referring a new client to the firm; and Connecticut Informal Ethics Op. 92-24 (1992)- a lawyer may not give indirect benefits, including gifts, to a client who made referrals to a lawyer.

Bottom line:  Lawyers must be aware of the Bar rules governing compensation to non-lawyers in order to fully comply with the rules and avoid an unintentional failure to comply.

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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