Overreaching on attorney fees. Plaintiff’s lawyers do it too.

There are always a variety of ways that examples of overreaching by attorneys on fees manage to push into the legal news. Recently, I wrote about one example involving hourly billing. More often than not, overreaching under that system is what makes the news.

It is not the only way that attorneys overreach on fees though. It is done by plaintiff’s lawyers as well.

Today’s post is about a very recent disciplinary decision issued by the Tennessee Supreme Court that publicly censures a lawyer for overreaching in connection with a contingent fee agreement. It is a case that confirms a point I have raised with a number of lawyers over the years but for which I never had ready authority – other than the rules themselves – to back up my point. Now, I’ve got this decision in Moore v. BPR to help convince folks who need convincing.

At its core, this case explains the limits on the ability of a plaintiff’s attorney to try to guard against what happens if their client rejects the attorney’s advice on whether to accept a settlement offer. There do, in fact, have to be limits on the ability to hedge against that because the ethics rules establish explicitly that the decision whether to settle a civil case or not is the client’s decision. RPC 1.2(a).

The rules clearly allow a lawyer who wishes to withdraw from representing a client over a disagreement about whether to settle a case to pursue withdrawal as long as they can justify it under one or more provisions of RPC 1.16(b). The law in Tennessee also permits such an attorney, if they do withdraw, to assert a lien as authorized by statute and pursuant to either the terms of their contract or, perhaps, depending on how things turn out for payment in the form of quantum meruit.

What the rules simply do not let a lawyer do is what happened in this new Tennessee Supreme Court case — include a term in the contract with the client that says that, if the client rejects a settlement that the lawyer advises should be accepted, then the lawyer becomes entitled – as a matter of contract – to a fee of x% of the settlement offer being rejected.

And, it does not matter what x equals in that last sentence. However, the nature of the overreach is certainly easier to spot when x happens to equal the original contingent fee percentage as was the case here.

As the Court explains, such a provision is not only antithetical to RPC 1.2(a) because of how much it undermines the right of the client as to settlement but it also takes a situation that is already difficult to balance with questions of conflicts and makes it untenable. Such a provision creates a severe conflict of interest for the lawyer at the moment the other side makes a settlement offer.

You can read the full opinion here. As a bonus, this case is also a primer for those who do disciplinary defense on the potential diminishing returns involved in pursuing appeals from public censures given that the rules prohibit a hearing panel who concludes that discipline should be imposed from imposing any discipline less serious than a public censure.

Thus, any attorney who seeks to appeal from a public censure imposed by a hearing panel has to understand that victory on appeal can only be obtained through a reversal in the nature of complete exoneration on the allegations of disciplinary violations. Far too many attorneys who represent themselves or who dabble in disciplinary defense often fail to understand that dynamic.

When you’re right, you’re right. Even when you’re Right.

I’ve written a bit in the past about the differences between unified bars, like what exists in North Carolina, and voluntary state bar associations such as what we have in Tennessee. (If you are uninterested in clicking on either of those links, as a refresher, the fundamental difference is that unified bars require that anyone who is licensed to practice in the state is a member of the state bar association.)

Among the biggest differences are the risks attendant for unified bars when they take various actions, including issuing ethics opinions, that they are treated as a government entity.

A case working its way through the Texas courts emphasizes another of those risks – the risk that engaging in efforts that bar leadership may believe to be in the best interest of society will be challenged by members of the mandatory bar association on First Amendment grounds.

Those risks have been made starker by the 2018 ruling of the United States Supreme Court in Janus v. AFSCME.

Texas is a state with an unified bar and exactly such a lawsuit has been brought by Texas lawyers over the State Bar of Texas having programs involving diversity initiatives, access to justice, and programs seeking to prevent the deportation of immigrants. This matter came back into the legal news this week because the Attorney General of Texas has taken the somewhat unusual step of filing an amicus brief to side with the lawyers rather than with the government agency under fire.

You can read the Texas AG’s amicus brief here. But, in sum, the argument it makes is that the funding of speech and policies with which one disagrees using bar dues you are required to pay is coerced speech and, in light of what Janus has said about that, is a violation of the First Amendment.

Now, long-time readers of this space will know I’m not much of a fan of the current Texas Attorney General, and I have little doubt that this particular elected official would never have gotten involved in this fashion if the State Bar of Texas had been taking positions more in keeping with his personal politics. (For what it is worth, my own biases had me thinking that even before I read the part of the ABA Journal article pointing out that one of the plaintiffs to whom the AG is lending his support is a conservative group with a PAC that has donated hundreds of thousands of dollars to past campaigns of the AG as well as his wife who happens to be a state senator).

But none of that changes the ultimate fact here that – because of the downsides attendant with the unified bar structure – he’s probably on the side that has the stronger arguments under the First Amendment issue as interpreted by Janus, at least as to the hot-button issue of immigration reform. (I think it is much tougher sledding to claim that fighting for access to justice is not a core regulatory purpose of a bar association sufficient to satisfy exacting First Amendment scrutiny.)

This latest development in the Texas litigation is also further proof, in my opinion, that the voluntary bar association model used by Tennessee is such a vastly better approach overall.

The TBA has repeatedly been able to take positions that I personally view are on the right side of history on a variety of issues with the only risk being that if it somehow gets viewed as too political by someone who disagrees with what it is advocating for then it might lose that lawyer as a member. I would imagine, most of the time, people don’t decide to quit because, on the whole, our voluntary bar association is a worthwhile thing to be part of.

For example, I’m not at all pleased that the TBA has invited (and I’m presuming is paying) Ken Starr to come speak at its upcoming annual convention. I think Starr ought to be treated as persona non grata for a variety of reasons. His most recent hypocrisy regarding attacks on the contents of the Mueller Report as “too detailed” is just the latest example. His utter failure to do the right thing in his time at Baylor is likely, by far, the biggest reason I wish the TBA wouldn’t want him to be any part of any of its programming.

I’m disappointed, but I’m not going to quit my membership over it. I will simply refuse to attend the convention as my small act of demonstrating my distaste with the decision.

But, most importantly, I could never sue about the fact that my dues are being used to fund such an invitation because we’re not an unified bar. If we were, then under Janus I might just have a claim and that’s not at all a good thing for bar associations to have to deal with.

Disbarrment time in D.C.?

Today’s a pretty big day for the future of democracy in the United States. Not just because it is Law Day, but because Law Day is being commemorated pretty ironically as the man with a very checkered past currently serving as the Attorney General of the United States testifies to Congress about why he didn’t mean the things he said to get the job and why, apparently, the current occupant of the White House should be free to obstruct justice if he is frustrated.

A couple of weeks ago, I wrote about a rare situation in which a corporation sued its former GC for what was essentially a legal malpractice claim and mentioned that, if nothing else, it served as a good reminder for lawyers who represent organizations that it is the entity, and not the CEO or its other officers, that are the client.

Many moons ago when I thought that Jeff Sessions might end up being the worst AG we were going to get under the current administration I wrote about the fact that the AG always needs to remember that the President is not the client.

The fact that we now have an AG who appears to be even worse is certainly proof of the small and meaningless nature of my voice, but also still more proof of how important the distinction between who is the client and who is not should be.

Of course, as an exchange with Atrios that I’ve had today on Twitter bears out, rampant lying by the person who is arguably the most prominent lawyer in the nation is – in addition to being an existential threat to democracy in this instance – not a good look for our profession as a whole.

So, happy Law Day, I guess.

Friday follow up: undo the good and just leave the bad.

So, not quite six weeks ago, I wrote about a development from Tennessee that was something of a mixed bag.

Our Board of Professional Responsibility put out a proposed Formal Ethics Opinion for public comment that, in my opinion, was not a good opinion fraught with quite a number of significant flaws. (If you missed that post, you can check it out here.)

The substance of the draft was the bad part of the bag. But, for the first time under a new policy, the Board actually put a draft opinion out publicly for comment prior to formally adopting it. That, of course, was the good stuff in the bag.

Presumably, the Board’s rationale for putting the draft FEO out for comment was to give itself an opportunity to receive feedback before making a final decision about whether to issue the opinion as-is or at all or in some revised form. As the prior post indicated, the deadline for the submission of public comments was April 10.

Cut to earlier this week on April 23. That was the date that the Board put out the Spring 2019 edition of Board Notes. It is a semi-annual publication which is a collection of a lot of things, including reports on discipline, statistics about the handling and processing of cases, articles about rule changes or other items of interest, and occasionally formal ethics opinions that have been adopted since the prior issue of Board Notes.

But while Board Notes is a valuable resource, it is something that most folks only receive by way of an email and that a significant number of people pay no attention to whatsoever. (So, in a lot of ways, it is like this blog, except for the receiving it by email part.)

Without any fanfare or explanation, Formal Ethics Opinion 2019-F-167 was included in Board Notes. That was how Tennessee lawyers had the chance to first learn that the draft FEO put out for public comment had now been adopted. (Actually, if you received but have deleted the email, or if as is pretty statistically likely you are not a Tennessee lawyer, you can always go here at the Board’s website to read issues of Board Notes.)

If you are a diligent reader of all of the links, you will see that Formal Ethics Opinion 2019-F-167 has been adopted without change from its draft form.

Now, perhaps the Board received overwhelmingly positive feedback from the bar on the draft opinion and so felt confident that it got it right. Or maybe it received very little feedback about the draft opinion and decided it probably got it right and no one really cared either way.

At this point, it is impossible to know because there is nowhere on the BPR website or anywhere else that the bar (or the public) can go to presently to see what public comments were received about the opinion.

I happen to know that the Board received at least one comment – a negative one – and that it came from lawyers who actually do focus their practice on defending products liability cases because they shared a copy of the comment they sent in with me. The substance of their concerns made me feel a lot better about the thoughts I shared because they were able to more cogently point out the nature of the evidence that actually does matter in a products liability case. (They also happened to be lawyers who practice in other offices of my law firm, which I mention for the purposes of transparency.)

Perhaps, ultimately, the Board will make the comments received on the draft FEO publicly available somewhere. I hope so. Otherwise, if there won’t be transparency in terms of the bar’s reaction to proposed opinions, then there really isn’t much positive about even putting them out for comment in the first place.

In fact, there is real institutional downside for the Board in leaving members of the bar wondering whether the Board does not actually care about evaluating the feedback it receives on its proposed opinions.

If the Board isn’t going to make the comments it receives available for the bar to read, then it likely should not go to the trouble of putting drafts out for comment in the first place.

If the Board simply intends to plow forward with draft opinions regardless of perceived flaws, then it definitely should just scrap the whole endeavor.

Rarer than rare

I could try to open this post with references to song lyrics from either Toad the Wet Sprocket or Arctic Monkeys, but, either way, I’d likely lose most of you from the jump. (I could also try to claim knowledge of the Glenn Miller song that uses the exact phrase but while I may look it I’m just not old enough to know that reference.)

So, instead, we’ll go straight into the situation referenced by the title of the post. I’ve written in the past about the rare nature of instances of departures from law firms actually resulting in litigation and the rare nature of law firms suing other law firms over advertising practices. But what we discuss today is much rarer than either of those things, a corporation filing suit against its former general counsel for what is the equivalent of a claim for legal malpractice .

In the last few weeks there has been discussion in the legal press of a $70 million lawsuit filed by Hertz against three of its former high-level executives. One of those three defendants is Hertz’s former General Counsel. (He was also an EVP and Secretary but the lawsuit focuses only on his status as General Counsel so we shall do the same.)

So, what’s the deal? Well, Hertz has had some trouble over the years with the SEC where it ended up having to restate its financials for fiscal years 2011, 2012, and 2013. The restatement filing was made with the SEC in 2015 and amounted to a $231 million reduction in Hertz’s net income. The restatement was attributed to “material weaknesses” in Hertz’s internal controls which the lawsuit is claiming were either caused or made worse by the mismanagement of the company by the three defendants being sued, including the former General Counsel.

If you want to read a good summary treatment of the suit, you can grab one here or here. It certainly details a story of significant corporate turmoil and upheaval and paints a very unflattering picture of the former CEO (who is one of the three named defendants) and his management style. If you are interested in reading the full lawsuit filed in federal court in New Jersey, you can get it here.

If you want to get a clear flavor of the kinds of allegations involved without getting fully into the weeds – and in particular the almost “ride-along” nature of the case against the General Counsel – paragraph 6 of the Complaint is a pretty good landing point. (Frissora was the CEO; Douglas was the CFO; and Zimmerman is the General Counsel in question.)

Upon learning that Hertz might miss a financial target, Frissora would demand mandatory team-wide calls and continuous weekend meetings, and would repeatedly berate subordinates who did not come up with a sufficient number of “paradigm-busting” accounting strategies to fill the gaps between Hertz’s actual and expected performance, accusing them of not being team players if they would not play his game. Defendants Douglas and Zimmerman – Frissora’s right-hand subordinates who were entrusted with effectuating his orders — failed to stop, effectively counterbalance, or otherwise offset or report to Hertz’s board of directors . . . Frissora’s inappropriately forceful tone, in breach of their duties owed to Hertz.

The suit seeks to claw-back somewhere in the neighborhood of $70 million in incentive-based payments that were made to the three including significant amounts of money paid to each on their way out the door after they resigned and the financial problems had become known – payments that the lawsuit itself tags with the shorthand reference “Golden Parachutes.”

Paragraph 21 of the Complaint goes into the most details in terms of the allegations against the General Counsel. It does not, of course, reference the ethical duties that a lawyer to an organizational entity owed under RPC 1.13 but, at its heart, the dynamic that is discussed in that rule in most jurisdictions is exactly what this lawsuit is all about: the allegation that if Zimmerman wasn’t able to stop Frissora from engaging in wrongdoing he should have informed the Board of Directors of Hertz about what was going on.

Based on not much more than a very surface-level read, it is an extremely interesting story where I’d love to learn what the other side of it looks like. Given how rare this kind of lawsuit is, it would not be at all surprising for it to get resolved in a way that does not end up shedding light on whether the former general counsel’s story is one where he’s joined at the hip with the former CEO in a belief that everyone was trying to do the best thing for Hertz or if his story is one in which he wasn’t comfortable with what was going on but didn’t think he could rock any boats or somewhere in between. (One note of curiosity about the litigation and the dynamic, one of the two articles linked above goes into details about how the defendants in the New Jersey federal court suit have become plaintiffs in a suit filed in Delaware to seek to make Hertz pay them for the costs incurred in defending the suit Hertz has brought.)

At this point at least, and regardless of how any of it plays out further, the situation offers a ready highlight for lawyers who represent entities, and particularly in-house counsel, about how important it is to always remember that it is the entity that is the client – and not any particular officer – and how big the stakes can be when it comes to trying to figure out whether the person giving you instructions is acting in the best interest of that entity or not.

Not breaking: Dentons didn’t have to say “aloha” to Hawai’i

Well, at least not the goodbye, “aloha.” They can still say the other one as much as they want.

So, you probably have seen a headline somewhere in your online surfing about this wacky issue litigated before the Hawai’i Supreme Court. But, just in case you didn’t, here’s all that I think you need to know about it.

Dentons, who has featured here a few times before, would appear to be the world’s largest law firm at present. Back in 2018, it swallowed up a Hawai’i law firm. Since then it has had lawyers in its firm practicing law in Hawai’i. Not the stuff so far of an interesting story.

In one of the pieces of litigation its lawyers have been handling in Hawai’i, they filed a motion to seek pro hac vice admission on behalf of a non-Dentons lawyer licensed in California. The opposing party opposed the pro hac motion not on the basis of any problem with the California lawyer, but on grounds that Dentons was engaged in the unauthorized practice of law. Why? Is a question you, dear reader, might ask. Well, because not every lawyer at Dentons is licensed in Hawai’i.

Sounds like a crazy argument doesn’t it?

It actually was a crazy argument, but it was an argument supported by a slightly-messed up court rule. You can read the entirety of the 21-page opinion resolving the situation here.

The short version of what you’d find if you had the time to read that 21-page opinion is that it is true that Hawai’i used to have extremely restrictive and parochial rules preventing anyone who was not a Hawai’i-licensed lawyer from serving as a partner in a law firm in Hawai’i.

Believe it or not, those restrictions were a part of Hawai’i’s ethics rules until 1981. Beginning with changes starting in 1981, those restrictions were lifted and modified. A number of places in the present ethics rules in Hawai’i clearly indicate that it must be true that a multi-state law firm can have offices in Hawai’i. (One of them is Hawai’i’s RPC 7.5 about letterhead. This marks the first time in history I’ve found an ethics rule about letterhead to have been a helpful part of a state’s ethics rules.) But there was still one Hawai’i rule, not in the ethics rules but a different Hawai’i Supreme Court rule that had potentially problematic language if you were part of a multi-state law firm — Haw. Sup. Ct. R. 6 “Lawyer’s Professional Business Organizations.”

Specifically, Section (d)(1) of that rule provided that “[s]hares or interests in a lawyers’ professional business organization may be owned only by a lawyers’ professional business organization or by one or more persons licensed to practice law in this state by this court….”

Sometimes it only takes the slimmest of reeds for a certain kind of lawyer to be willing to make what otherwise seems like an outrageously foolhardy argument on behalf of a client. Turned out that the lawyer opposing Dentons in this case was, at least for a short period of time, that kind of lawyer. (NB: If you are looking for further proof of any pet theories you have about living in a simulation, the lawyer’s surname is (no kidding) Bickerton and, according to this article from a publication in Hawai’i he had the chutzpah to actually call one of Dentons’ arguments a “dumb ass argument.”)

The Hawai’i Supreme Court was able to dispose of this issue, and avoid having to address serious constitutional questions that would have arisen had Bickerton’s client’s rule interpretation been given merit, by explaining that the rule in question had been superseded by implication.

The court also ended its opinion by addressing any concerns that might be raised over the possibility that attorneys not licensed in Hawai’i could direct the conduct of Hawai’i lawyers without being subject to the jurisdiction of the disciplinary authorities in Hawai’i. It did so by referencing case law that (thankfully) concluded that Oregon general counsel for an Oregon company was not engaged in unauthorized practice in Hawai’i by assisting from Oregon and being actively involved with local Hawai’i counsel.

That portion of the opinion seems only to have been necessary because Hawai’i is still operating with an antiquated version of RPC 5.5 in place. While the Hawai’i Supreme Court has these issues in the front of its mind, it really ought to give some thought to adopting a version of ABA Model Rule 5.5 to make things a bit easier over there.

Until then, Me ka aloha pumehana.

You take the good, you take the bad…

You take them both and there you have … the news about Tenn. Formal Ethics Opinion 2019-F-167 (draft).

First, the good. I cannot give sincere and strong enough kudos to the Tennessee BPR for implementing a new policy to release draft Formal Ethics Opinions to the public for comment before deciding to actually adopt and issue them. That is a wonderful development for Tennessee lawyers and should ultimately lead to Tennessee having some of the best and most helpful ethics opinions of any state in the nation.

Now, the bad. 2019-F-167 in draft form ain’t one. This proposed FEO is yet another one seeking to weigh in on the topic of what kinds of provisions in settlement agreements might run afoul of a lawyer’s obligations under RPC 5.6 not to agree to restrictions on their practice as part of resolving a client matter. This time the underlying question is a provision in the settlement of an automobile products liability case that would require destruction of the allegedly defective vehicle.

The summary of the BPR’s conclusion is: “It is improper for an attorney to propose or accept a provision in a settlement agreement, in a products liability case, that requires destruction of the subject vehicle alleged to be defective if that action will restrict the attorney’s representation of other clients.”

Working from high-level problems first all the way down to problems at the level of details, here (for what it is worth) is what is wrong with this draft opinion:

  • The original intention of the rule, RPC 5.6, is to prevent an attorney from being put in a position where they have to agree that they will never again be adverse to someone as a condition for settling a particular client’s case. That is a policy decision made to try to protect the public’s general right to counsel despite the fact that the ethics rules (RPC 1.2) expressly provide that whether or not to settle a case is, and has to be, the ultimate decision of the client and not the lawyer. Every step down paths that are more remote from the original purpose of the restriction is one more step to making the rule tilt in the wrong direction of putting the lawyer’s future interests ahead of the current client’s right to settle their case.
  • Opinions that interpret a rule that says ” don’t do X” but that offer a conclusion of this other thing Y is wrong if Y also manages to “do X” aren’t all that helpful unless you provide really insightful guidance about when something would or would not also manage to “do X.” If you cannot articulate what things would or would not in a way that is, as a practical matter, helpful, then maybe you shouldn’t be issuing an opinion on the question.
  • The opinion goes to great lengths to explain how important the future possession of an arguably defective automobile is for the lawyer/firm making the inquiry and, in so doing, makes the following assertion as if it was the gospel truth: “The most compelling evidence when establishing the existence of a defect in a vehicle is the existence of other similar incidents.” But, it’s not. I’m not an expert in products liability litigation, though I have handled some cases over the years (admittedly, always on the defense side). If I need to prove that a particular vehicle that caused some particular person harm, then I need to prove that particular vehicle was defective. I don’t have to prove that any other vehicle at any other time was defective. Just that one. But also… that one. If I prove that other vehicles in other situations were defective and caused harm to other people, that isn’t actually going to correlate in any direct fashion to whether this particular vehicle that caused this particular harm was defective.
  • After doing that, the opinion explains a lot about the ways that the firm goes about purchasing the vehicle to have possession of it and talks about how “[i]t is the firm’s practice at the end of the case to request from the client that the firm be allowed to retain ownership and possession of the vehicle.” It does not, at any point in the opinion, provide any guidance on whether the firm has to comply with RPC 1.8(a) – business transaction with a client – in doing so; nor does it discuss whether such a policy on that firm’s part is a problem under RPC 1.8(i) – not acquiring a proprietary interest in a cause of action or subject matter of litigation that the lawyer is handling for a client.
  • The opinion does contain a discussion of RPC 3.4(a) and concerns of spoliation but makes another statement as if it were gospel truth that is actually simply not even close to 100% correct: “Clearly, in the context of a product liability case, the alleged defective product is key evidence in other current or subsequent cases of a similar defect.” It is bordering on irresponsible to put the imprimatur of the BPR on a position that the destruction of a particular physical piece of evidence at the conclusion of a particular piece of litigation would clearly put a lawyer at risk of being accused of spoliation of evidence in some future piece of litigation that does not yet even exist.
  • The opinion includes a discussion about the firm’s right to retain file materials and how that is important in terms of the ability to defend themselves in a subsequent legal malpractice action. That is a good issue to address. However, the sentence: “Without the ability to review the most important piece of evidence in the underlying products liability suit, the law firm would be left essentially defenseless if a former client brought a professional malpractice claim.” is another one of those bridge-too-far moments. The firm will have and retain copies of its expert reports from inspections of the vehicle and can even have and retain copious photographic and video evidence of the vehicle. There are many ways that it can satisfy its need to protect itself without having to have possession of the actual vehicle.
  • The opinion then ends with the BPR taking it upon itself to declare that the “ability for plaintiffs’ firms to act as industry watchdogs is both good public policy and was specifically addressed as a vested responsibility during Congress’s enactment of the Federal Motor Vehicle Safety Standards. It doesn’t seem wise to me for the BPR to be in the business of taking positions on public policy issues that are not absolutely necessary in order to provide guidance under the ethics rules. This doesn’t seem like that kind of situation, but, as the opinion cross-references, the BPR already did that with this exact same language in Formal Ethics Op. 2018-F-166, so the horse is already out of that particular barn.

So, I would say that this one needs to go back into the shop for some much needed repairs if not taken off the street altogether.

Speaking of which, the opinion’s reference to the firm’s willingness to assure the settling defendant that the vehicle will not be placed back on the road is actually the key point of all of this. The only real reason – to my knowledge – that a defendant ever seeks to include a destruction provision in settlement is a matter of safety in terms of making certain that the same vehicle does not go back in use to put anyone else at risk of harm and, of course, to put the defendant at risk of not having to get sued again over the same defective item injuring a different person. If the assurance that is offered to be provided by the firm can be done in a manner that is actually enforceable, then that should always likely suffice to resolve the situation. An re-drafted opinion that puts more emphasis on that and that spots other issues that could create problems with an eye toward getting to the right practical result would certainly seem more like helpful guidance than this draft.

The deadline for submitting public comments to the BPR on this opinion, should you be so inclined, is April 10, 2019. The document immediately below provides instructions on how you can do that.

Discipline for entities? Not the answer to any relevant future questions.

It appears somehow that life and practice left me with nothing to post for more than a week now. If I have any readers left, today’s post will be a relatively quick one.

I managed to write a couple ofposts now about one topic that was covered at the APRL mid-year meeting in Las Vegas earlier this year. In keeping with the spirit of not having things that happen in Vegas stay in Vegas this time around, Jayne Reardon a Chicago lawyer who participated in a different panel discussion has put out a new post about the topic of law firm (or entity) regulation over at the Illinois Supreme Court Commission on Professionalism blog, 2Civility. You can read it here.

Now, I do not disagree that aspects of the trend of entity regulation that is taking place with respect to law firms in other countries may have some utility here in the states IF we were to remove barriers to how lawyers and people without law licenses could work together to practice law. Until that happens, it simply isn’t something that is helpful to addressing actual issues. And particularly not if the focus is on discipline.

As the article does acknowledge, the disciplinary rules already provide a means for having members of management and partners in law firms on the hook for discipline in certain circumstances through RPC 5.1. I consider that tool to be more than enough regulation from the disciplinary side of things for many of the examples that Jayne offers in her article to be addressed.

That being said, I absolutely agree that if we could start to see movement toward a more proactive system — like the PMBR course that Jayne discusses that is being implemented in Illinois – then I’d be all for exploring how to move toward a regulatory framework that looks more toward regulation of the entities in which many lawyers practice than merely targeting individual attorneys for discipline.

But, we don’t. We live in a world in which individual attorneys get targeted for discipline. So, today, I’d suggest we all take some time to listen to what this recently disbarred attorney has to say today.

Lying about everything is an awful way to go about life.

So, I am rapidly approach the 4th anniversary of this blog and this is the very first time I have had a post sharing exactly the same title as an earlier post.

Interestingly (at least to me), that earlier post with that title was written on Groundhog’s Day 2 years ago. The title for this post seemed a fitting title because … well, I think it will be clear when we launch into this – but also referencing back to that older post and it having been a Groundhog’s Day themed post also is pretty appropriate because the pathological nature of the lying of this Chicago lawyer has something of a deja vu sort of feel when compared to the lying of that Michigan lawyer from the prior post.

You’ve probably already read about this story but, if not, this is your window into the story of this Chicago lawyer who has been lying off and on about having cancer for more than a decade, who has lied about having a son, and even lied about the son he never had also having the same kind of cancer that he doesn’t have but has lied about having.

The repeated lying about having leiomyosarcoma, including falsely claiming that his pretend son had the same thing, grabbed the headlines but there were at least two other karma-tempting whoppers over the years, including: Lying to his firm that he had retained an expert but that the expert couldn’t work because his daughter had been hit by a car; and lying about having to attend a funeral in Montreal to get a court extension

There really is not an awful lot I can add to the obvious reasons why this kind of tale of a lawyer going beyond the pale in terms of what they were willing to lie about, and how often they apparently were willing to lie about it, is so disturbing.

One disturbing aspect of the situation is that his lawyer, in an answer filed in the disciplinary proceedings, has said that he came up with the cancer lie because he was actually suffering from depression in 2005 and was afraid to admit to suffering from a mental illness at the time when he was applying to law school. As someone who believes strongly in the fact that our profession needs to do much better about the topic of wellness and who readily recognizes that our profession needs to do all we can to help reduce the stigma surrounding mental health issues in our profession, I’d really like to believe that explanation and be more sympathetic, but when you lie about the really big stuff it is hard not to think that you are lying about your reason for lying.

I particularly have a hard time with achieving a sympathetic point of view after reading this piece of the pleadings in the disciplinary case about this kind of false statement made nearly 11 years after applying to law school:

64. On July 25, 2016 at 9:45 a.m. Respondent sent an email to AUSA Brock, and copied to AUSA Hancock, the following message related to Respondent’s purported reason for requesting an extension to complete discovery in the Harris case: “Yes, all went well. Thanks so much for asking. He has leiomyosarcoma, a form of stomach cancer, and had to have a small portion of his stomach and GI tract removed. It sounds terrible but apparently it is a rare but also highly treatable disease. My fiance and 1 have fostered kids on and off for the last 5 or so years. The only downside is that these incredible kids are often in this situation in the first place because they have one or more serious illnesses/conditions. I normally wouldn’t share such personal information but I really do feel so grateful for yours and Gina’s support last week and think it’s important that you know what it actually meant to me.”

Answer: Admit

65. Respondent’s statements to AUSAs Brock and Hancock, as set forth in paragraph 64, that his son’s surgery went well, that Respondent’s son had leiomyosarcoma which required surgery to remove a small portion of his stomach and GI tract, and that Respondent and his fiance [sic] had fostered children for the last five years were false.

Answer: Admit

66. Respondent knew his statements to AUSAs Brock and Hancock, that his son’s surgery went well, that Respondent’s son had leiomyosarcoma which required surgery to remove a small portion of his stomach and GI tract, and that Respondent and his fiance [sic] had fostered children for the last five years, as set forth in paragraph 64, were false because Respondent had no child or foster child, therefore no diagnosis of leiomyosarcoma, and no surgery.

Answer: Admit

But the part of this whole thing that really grabbed me by the proverbial lapels and piqued my interest was the original set of circumstances that led to the lawyer coming up with the lie that he had cancer. You see cancer was the story offered to explain to The University of Chicago Law School why this future lawyer only scored a 158 on the LSAT.

Wait for it.

I only scored 160 on the LSAT. It never dawned on me that I was even supposed to be disappointed in that result, much less that I should have tried to lie about having cancer to explain the poor performance.

But, 160 is two points higher than 158; also, I wasn’t applying to the University of Chicago Law School. So, apples and oranges I guess.

If you want to read the entirety of the latest amended disciplinary complaint against Vincenzo Field, you can get it here.

Crowdfunding for attorney fees? Yes, but no.

So, since about early December of last year I’ve been trying to find a way to write about a really good, quite practical (albeit practical about a very niche situation) D.C. ethics from November 2018. The D.C. Opinion, Ethics Opinion 375, addresses the idea of using crowdfunding platforms as an ethical way for a client to afford otherwise unaffordable attorney fees.

It is easy to get in the right mindset to elaborate on why an ethics opinion is bad. I have had a hard time getting into writing about Opinion 375 because, truth be told, it is hard to write something that feels useful and interesting about a well-done ethics opinion.

But I’m writing about it today because, thankfully, along came a West Virginia disciplinary case with a development that makes this so much easier to discuss.

First, let’s get you up to speed on the D.C. opinion — “Ethical Considerations of Crowdfunding.” Now, of the various mechanisms that exist online for crowdfunding, the D.C. opinion focuses only on donation-based crowdfunding platforms — things like Go Fund Me rather than other kinds of platforms that bring large groups together to fund things in exchange for an equity stake or something similar.

The summary that starts out the opinion is largely all you really need to know about it:

Lawyers are generally free to represent clients who pay for legal services through crowdfunding. The ethical implications of crowdfunding a legal representation vary depending on the lawyer’s level of involvement in the crowdfunding. When the client directs the crowdfunding and the lawyer is merely aware of it, the lawyer incurs no specific ethical obligations although the lawyer should consider the potential risks associated with receipt of such funds and may counsel the client on the wisdom of publicly sharing confidential information. When the lawyer directs the crowdfunding, the lawyer must comply with the Rules governing a lawyer’s receipt of money from third parties. Further, a lawyer who directs the crowdfunding should be cognizant of ethical obligations regarding fee agreements, communications with donors, and the management of the funds raised.

Now, if you want to troll the depths (the D.C. Bar managed to list off 11 different ethical rules that were applicable to the situation), there is more than five pages of analysis to be had in the full opinion.

All in all, it’s well done and practical advice to address what is a particularly modern variation on the question of third parties paying a client’s fees.

So, crowdfunding is a viable option for clients to pay a lawyer … but … there are certain ways it can’t. be. used. For one thing, it can’t be used by a lawyer to get clients in the first place.

And that point brings us to West Virginia. Were I more of a delusional sort, I’d think this story was fabricated into existence Truman Show style just for my benefit. In terms of trying to appeal to me, this story has everything … (and you have to say this next part in the voice of Bill Hader’s “Stefon” character from SNL): it has a lawyer with the same name as a lawyer at a prominent firm in Memphis; the West Virginia lawyer started practicing law essentially exactly when I did [1999]; the West Virginia lawyer was serving as a treasurer [I’m the treasurer for two organizations at the moment] for a local soccer organization [ask me about soccer, I dare you, I won’t stop talking], and West Virginia’s Chief Disciplinary Counsel actually recused from the case because they are a soccer official.

Now, this West Virginia lawyer’s story isn’t really a story about Go Fund Me. Where the lawyer really went afoul of his ethical obligations was something he did long before he tried to use Go Fund Me in exactly the wrong sort of way, but that piece was the headline grabber for at least one West Virginia media outlet that wrote: “Charleston attorney suspended for 3.5 years after offering legal advice for Go Fund Me money.”

This lawyer’s original – and much more significant — transgression was that the lawyer embezzled about $12,000 from the soccer organization’s account by transferring those funds to his personal checking account. After he was confronted about his theft, he resigned from the treasurer position and repaid the money in three installment payments.

He self-reported his violation [which would have been, at minimum, a violation of West Virginia’s RPC 8.4(c) and probably (b)) and then was fired from his employment when his employer learned about the theft from the soccer organization.

After that, he tried setting up a Go Fund Me page to raise money to help him transition from being a lawyer employed at a firm to being a sole practitioner. What he offered, however, was that those who donated to the Go Fund Me would receive free legal services in exchange.

The West Virginia bar cited that conduct as being a violation of the rules against soliciting clients. The lawyer denied ever receiving any funds as a result of the Go Fund Me account in question and contended that he did not realize he had actually made it publicly-viewable.

An article in The ABA Journal online also emphasizes some of the aspects in which the Go Fund Me appeal itself was supported with false and misleading statements:

The fundraising appeal said the move was based on a decision to help children.
“After nearly 20 years of practicing law, I have finally found what I was meant to be doing,” the appeal said. “I have transitioned from an insurance defense practice to becoming a sole practitioner representing individuals and families. My primary focus is helping children who have been abused and/or neglected.”
Glover went on to say that his employer asked him to leave immediately after learning of his plans to go solo. “Given the short notice, I was not able to build up my savings, and I am now struggling to meet my personal expenses,” he wrote.
“It is my intention to return any gifts once my income become steady, and I will be happy to offer free legal advice (if I can) to my benefactors as well.”

That piece of this story is a very good reminder that, no matter the platform, rules patterned after ABA Model Rule 7.1 make it a disciplinary infraction for a lawyer to make statements about themselves or their services that are false or misleading.