Shimkonicity (shim-ko-nis-a-tee)

When I first read some reporting about this decision from Ohio involving the indefinite suspension of a lawyer, I expected it to come across very much as an obvious case of a lawyer’s third strike leading to a steep punishment. But, the coming together of so many things with respect to this lawyer’s situation actually offers quite a story from which a lot of lawyers can learn a few things (or at least be reminded of some things they already knew). Thus, showing my age again, I’ve gone with The Police album rip-off title for this post.

So, yes, at the straightforward level, if you read this opinion, you will digest the story of a lawyer getting hit with his third strike. About nine years ago, Mr. Shimko engaged in some financial chicanery with some clients leading to a public censure in Ohio that was imposed as reciprocal discipline after Arizona had first done the same. Three years or so after that, he received a one-year suspension (but it was all stayed so he continued to practice) for disparaging a judge. Now, he’s received an indefinite suspension after he appealed a recommended two-year suspension for charging an excessive fee to a client and then unnecessarily disclosing confidential information about the client in connection with suing the client for the excessive fee amount (along with a bit of unsavory threatening to disclose the information in order to try to get the client to settle).

Most of his story is routine stuff that all lawyers know (or should know) they should not do. The last seven-or-so-pages of the opinion also offer a tangible example of why trying to throw every potential appellate argument into a mix — particularly in a disciplinary case — is not a very good strategy. But along the way, there are two real teachable nuggets here of things that a surprising number of lawyers sometimes don’t know, and there is also one big topic that the Court simply fails to mention which also is pretty important (and which it could have used to further skewer the lawyer’s scattershot allegations of error on appeal.)

Much the way my son tackles fast food; first we will tackle the nuggets:

Nugget #1: You just can’t bill your clients for time you spend drafting what amounts to your engagement letter. If it is a good engagement letter, you are substantially creating it for your own benefit and protection. At most, it is documentation that is partially being created for the client’s benefit. Don’t try to charge the client for that time.

Nugget #2: There is a second-level of consideration when a lawyer is proceeding under a self-defense exception to restrictions on the disclosure of confidential information. Not only do you have to be able to demonstrate that one of the specific exceptions under RPC 1.6(b) can be satisfied, which you can do if you are trying to pursue payment from the client as an example. But you also have to remember that the disclosures you make need to be no more than is reasonably necessary AND in a lot of circumstances you still have to make efforts to try to limit the number of people to whom the disclosure is made. The comments to RPC 1.6 lay out guidance about this in most jurisdictions in a very clear and helpful fashion. If you are litigating a fee dispute with a client, even though you can disclose confidential information to the Court in order to prevail on your claim or defeat the claim of your client/former client, you may very well have to also seek the entry of a protective order to try to prevent the information you are disclosing from becoming fully available to the public.

And the thing that was missing? Any discussion by the Court of why this Ohio lawyer’s arguments about how he was entitled to do what he did because the client was committing insurance fraud using his services are very hard to reconcile with one or two other ethics rules in Ohio (and elsewhere) – RPC 3.3 and RPC 4.1.

If the lawyer’s version of events regarding what the client had told him in advance of the examination under oath was to be believed, then under RPC 4.1 what the lawyer was required to do, at minimum, was to withdraw from the representation so as not to assist with the fraud. If representing someone in a pending insurance dispute during an examination under oath is somehow treated as a representation to a tribunal under Ohio law (which I would suspect is not the case), then RPC 3.3 in Ohio — patterned after the Model Rule — would have required the lawyer to speak up during the EUO about what was happening not after the fact.

The Court likely didn’t address those issues because it did not need to since the earlier rulings had found the lawyer’s assertions not to be credible, but even a footnote highlighting this issue for lawyers might have been a worthwhile piece of dicta.

A modest proposal (about NYC Bar Op. 2019-5)

I have made a living (well not actually a living since no one compensates me in any form of currency, whether crypto or otherwise, for my writings here) writing about problematic ethics opinions. July 11, 2019 brings what might be the most practically useless ethics opinion ever released. If it were only just practically useless, then it might not be worth writing about. But it adds into the mix the fact that it appears, without discussion, to significantly expand the scope of the rule being interpreted as well.

It comes from the New York City Bar, and it addresses cryptocurrency. Well, that’s not fair exactly. Nebraska opinion 17-03 which I wrote about almost two years ago can be described as an ethics opinion that addresses cryptocurrency. This opinion from the New York City Bar addresses a highly speculative question related to cryptocurrency. It asks “what if…a lawyer entered into an agreement with a client that would require the client to pay the lawyer in cryptocurrency?” Not kidding. That is literally the overriding premise. Now, admittedly, Memphis is a long way from New York City, but is this really a potential fee contract provision with relevance to more than a handful of lawyers?

If it is relevant to you, then you could go read the full opinion at this link. Before you decide whether that is how you wish to spend your time though, here is an excerpt from the opinion that literally identifies the three variations of possible fee agreements it considers:

  1. The lawyer agrees to provide legal services for a flat fee of X units of cryptocurrency, or for an hourly fee of Y units of cryptocurrency.
  2. The lawyer agrees to provide legal services at an hourly rate of $X dollars to be paid in cryptocurrency.
  3. The lawyer agrees to provide legal services at an hourly rate of $X dollars, which the client may, but need not, pay in cryptocurrency in an amount equivalent to U.S. Dollars at the time of payment.

If those questions cry out to you as needing answers, then by all means do go read the full opinion.

But, if those questions don’t sound like they are relevant to you and your practice (and the opinion itself even acknowledges that the first scenario is “perhaps-unrealistic” and the second scenario is only “perhaps more realistic”), then here’s my modest proposal.

Let’s pretend that NYC Bar Op. 2019-5 starts at roughly p. 12 and just includes the rest…. because (1) those four pages of analysis are a pretty good overview of how you work through RPC 1.8 in most jurisdictions in order to evaluate the business transaction with a client issue, and (2) it reminds the reader of the two significant ways that New York’s version of RPC 1.8(a) differs from the ABA Model Rule.

New York’s version differs from the ABA Model by making the scope of its RPC 1.8(a) less broad in two different ways. It mandates that the rule only applies to transactions where the lawyer and client have “differing interests” in the transaction and where the client expects the lawyer to be exercising professional judgment on behalf of the client.

Nevertheless, the last four pages of the opinion give sound guidance of what a lawyer has to be concerned about with respect to a business transaction with a client:

First, the lawyer must ensure that the transaction is “fair and reasonable to the client” and must disclose the terms of the transaction in writing and “in a manner that can be reasonably understood by the client.”

[snip]

Second, the lawyer must advise the client, in writing, about the desirability of seeking separate counsel and must then give the client a reasonable opportunity to consult separate counsel.

[snip]

Third, the client must understand and agree to “the essential terms of the transaction, and the lawyer’s role in the transaction, including whether the lawyer is representing the client in the transaction.”

One added benefit of my modest proposal is that it will also avoid the Pandora’s Box this opinion appears to wish to open. As long as the full version of this opinion exists, then lawyers will need to pay very close attention to what happens on page 4. That is when the opinion blithely sticks the words “(or prospective client)” in without discussion. Given the text of the rule, this reference would appear to entirely transform RPC 1.8(a) from a rule that only applies to a business transaction with someone who has already become your client into a rule that now applies to contracts to form an attorney-client relationship.

While the NYC Bar Opinion does cite to Professor Simon’s annotated version of the New York Rules of Professional Conduct (not surprisingly in the four pages at the end which should stay), my admittedly quick review of what Professor Simon offers in the annotations to RPC 1.8(a) doesn’t appear to indicate that the rule is as expansive as this opinion seems to indicate. Many of those annotations certainly read like the transaction in question can’t be the one that creates the attorney-client relationship itself. That seems like a pretty big thing to parenthetically speak into existence in this ethics opinion.

New good, but not perfect, guidance from the ABA

The Standing Committee on Ethics and Professional Responsibility of the ABA has been on something of a bit of a “spree” when it comes to the issuance of ethics opinions. (At least, it feels like it.) In the last 18 months, it has issued 10 opinions.

The most recent one is ABA Formal Op. 487 which offers ethical guidance to lawyers who take cases on a contingent fee basis or, more precisely, lawyers who take cases on a contingent fee basis after some other lawyer in a different firm has previously taken on the same case on a contingent fee basis. The dynamic of what exactly happens in such situations if, ultimately, there is some sort of successful result is largely the stuff of state-specific case law driven by lien laws and the distinction between whether a lawyer ends up being able to seek fees under their contract or under quantum meruit. Despite that, and relegating reference to those issues to a footnote at the end of the opinion, SCEPR has decided this area needs to be filled with guidance.

In doing so, the opinion focuses its attention upon the obligations of the new lawyer to communicate to the client about the potential – as difficult to quantify as it admittedly is – that the first lawyer might still be entitled to an amount of fees in the event of a recovery in the matter.

In giving this guidance, the ABA Formal Opinion certainly isn’t wrong (although I think it is wrong in one particular statement), but it is not entirely helpful and it is certainly not very practical.

Where a client hires successor counsel to handle an existing contingency fee matter, it does not pose an unreasonable burden on the successor counsel to advise the client that the predecessor counsel may have a claim to a portion of the legal fee if there is a recovery. In many instances, precision on this issue may be difficult as successor counsel may need to review the predecessor counsel’s fee agreement and assess its enforceability. Similarly, successor counsel may not be fully familiar with the nature and extent of the prior lawyer’s work on the matter. Successor counsel also will not know the amount of the recovery, if any, at the beginning of the representation. Nevertheless, Rules 1.5(b) and (c) mandate that successor counsel provide written notice that a portion of the fee may be claimed by the predecessor counsel.

That reading of the requirements of Rules 1.5(b) and (c) is not really an obvious and straightforward one. Thus, I don’t think it gives a very compelling foundation for the opinion’s conclusion. The conclusion is still probably correct though. Because there is an ABA Model Rule that provides a pretty compelling rationale for the conclusion even though the opinion rather remarkably never once references it — Model Rule 1.4(b) (“A lawyer shall explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation.”)

As to the one particular statement that I think the opinion simply gets wrong, it is the statement that talks about clients not being able to be exposed to “more than one contingent fee when switching attorneys” and that ordinarily neither the first lawyer nor the second lawyer would ordinarily be entitled to a full contingent fee. I think both of those statements are offered with far too much certainty to comport with reality. It is not at all difficult to come up with scenarios where it is only the work of the second lawyer that provides the reasons for the successful outcome triggering the availability of a contingent fee.

One thing that the opinion does very well though is make clear the way in which the rules don’t work on this topic. The opinion spends a good bit of time explaining something that should have been obvious – but has not been for some courts — the rule on fee sharing between lawyers in different firms does not have any application to this situation.

The opinion adroitly walks through the ways in which ABA Model Rule 1.5(e) is entirely inapplicable to a situation in which the first lawyer on a case has been discharged and a second lawyer has taken over the representation of the client.

Inflation is likely more widespread than you’d like to believe.

Time inflation that is. I’m certainly not an economist.

In the past, I have written about issues associated with overbilling by lawyers in a number of different respects.

Today’s post involves a rare public situation involving the admission of overbilling by a lawyer – one that comes out of Illinois and involves a lawyer who worked his way up the ladder in not just one but two prominent firms in Chicago.  The attorney, Christopher Anderson, has now been made the subject of formal disciplinary proceedings based on his own admission of inflating his time entries and billings first while at Kirkland & Ellis as an associate and later at Neal Gerber Eisenberg, ultimately achieving the status of a non-equity partner.

Anderson came clean to the powers-that-be at the Neal Gerber firm after he had been practicing there for three years in 2018.  That firm did its own investigation and decided it needed to offer refunds or credits to some 100 clients who had been made to overpay as a result of Anderson’s conduct.  The refunds, as reported in the disciplinary complaint, amounted to roughly $150,000 and stemmed from the conclusion that only 4/5 of the time Anderson had billed to clients was legitimate.  The complaint indicates that once Kirkland & Ellis learned of Anderson’s conduct and that he had been engaged in the behavior there as well worked through its own process to offer refunds to clients.

The complaint describes the nature of the scheme on Anderson’s part to inflate his billings and is what I have always believed is what happens to be the most widespread way of abusing billable hours in our profession because it is the most tempting route to travel and the one that lawyers believe is the hardest to prove is happening:

During his time at both firms, in an attempt to meet what he perceived to be the firms’ billing expectations, Respondent recorded time beyond what he had actually spent in handling client matters, knowing that the time he recorded would be billed to his client and that they would be asked to pay fees based on the records he created.  For the days that Respondent felt he had not recorded sufficient time on client matter, he increased the time he claimed to have been spent on those matter based on a number of factors, including his assessment of the likelihood that the client would object to the time he recorded.  As an example, if Respondent spent 0.3 hours on a client matter, he would record that he had actually spent 0.5 hours, or he would bill 2.1 hours for work that actually took him 1.7 hours to complete.

Not surprisingly, some immediate reporting about the situation from The American Lawyer stressed the rareness of intentional overbilling. I beg to differ on that.   Unfortunately, I think this kind of practice goes on much more often than our profession would ever care to admit.  People who act out of a feeling of pressure that their “numbers” are not strong enough or who feel like they’re being forced to accept a cut-rate hourly fee for their time can find themselves heading down this path because, unlike inventing tasks that could be proven not to have been performed, there truly is very little ability for an outsider to prove that a lawyer who says they spent 2.1 hours doing something that really only took them 1.7 hours to complete is lying to you.

Or, as more succinctly put by my friend Trisha Rich who was quoted in the Chicago media about this:


“It would be hard for somebody to catch on to (overbilling in small increments) if somebody was doing that over time, because basically our billing records are on your honor,”

Other than this particular situation in which the conduct came to light because of the lawyer’s own guilty conscience, instances usually will not be ferreted out unless the lawyer also forgets that “pigs get fat and hogs get slaughtered.”

The other interesting piece of this story is that Illinois is only charging Anderson with violations of RPC 1.5 and RPC 8.4(c), but not also charging for violating RPC 7.1.  Illinois’s Rule 7.1 certainly could have also been included in the complaint because Illinois’s version of the rule has the same language as the ABA Model Rules:  “A lawyer shall not make a false or misleading communication about the lawyer or the lawyer’s services.”

Given that Anderson essentially has admitted the misconduct, throwing an additional charge at him likely would just have been piling on, but trying to remind lawyers that RPC 7.1 doesn’t just apply to advertising but applies to a wide variety of false statements about a lawyer or their services (here, falsely stating how much time you actually worked) is something of pet peeve of mind mine. [edited to be less stupid on 1/31/19]

They got away with it, but that doesn’t make it worth trying.

Lawyers billing clients on the basis of time spent is less than ideal for all involved.  For lawyers, it isn’t the best proxy for value delivered in terms of service and incentivizes inefficiency.  For clients, it isn’t the best proxy of value received in terms of service and leaves clients feeling like the only way to cut corners on costs is to either demand limited time on a task or to just not agree for a lawyer to perform a particular task.  For clients and lawyers alike, it also creates distrust of lawyers with respect to second-guessing the amount of time they spend on tasks (or claim to have spend on tasks).  It also doesn’t give clients much of a sense that they are paying for results or accomplishments.  Lots of pieces have been written, over many, many years, about how the billable hour model is outdated or on its way out the door.  Yet, it persists.

This is not going to be one of those pieces today.  Rather, I want to write a few words about a case out of Wyoming that I would worry is going to send exactly the wrong message to lawyers.  That case is a ruling on fee dispute litigation out of the Wyoming Supreme Court, Manigault v. Daly & Sorenson, LLC.  You may have seen headlines of stories about it that are in the nature of: Court rules billing in 15-minute increments was not abusive.

All lawyers who bill by the hour end up having to pick some base line minimum increment for billing purposes.  I, and my firm, do so using 6-minute increments (.1) as the baseline.  It is certainly possible to measure time more accurately than that, but (I believe) that the standard minimum these days for keeping time is to carve time up into 6 minute blocks.  There was a time when the standard minimum for those blocks were 15 minute intervals, but technology has advanced, timekeeping has improved, and the time when minimum quarter-of-an-hour billing was acceptable (in my opinion) has passed.

In the Wyoming decision, the Court ultimately found that this particular law firm’s use of a 15-minute minimum increment with this particular client was ultimately reasonable.  Remarkably, it did so even when the firm did not have a written fee agreement with the client.  But there are a couple of things about the case that – to me – stand out as crucial to the particular result and also help drive home the point that this is not something that most lawyers could get away with and, thus, should not attempt to do.

The first, and I think the more outcome-determinative, is that the fee dispute was one that was with a very long time client of the firm and, thus, someone who, over time, would be much less sympathetic to be heard complaining about 15-minute billing increments as the minimum.  Since apparently that was how this client and that firm had interacted over the course of almost 100 prior matters over 15 years.

The second is that the record indicated that the firm was relatively diligent about aggregating tasks into the minimum increments so that the minimum increment was not used as a method of easily increasing the charge to the client.

The Wyoming Supreme Court explained quite cogently the difference between the situation it had before it this time and other, prior circumstances in which it took lawyers to task for how they used their 15-minute minimum billing increment approach:

Manigault likens the firm’s use of a fifteen-minute billing interval to that which was the subject of a disciplinary proceeding in Casper.  In that case, the attorney employed a number of unethical billing practices and admittedly misused her fifteen-minute minimum billing interval.  She billed fifteen minutes every time she signed a document, and several times she billed fifteen minutes for reviewing a one-page document.  She also billed fifteen minutes to review a short document and then billed the same amount of time again for signing it.

In Casper, this Court discussed the practice of billing according to minimum intervals of six, ten, and fifteen minutes. . . . we observed it would be abusive to bill two fifteen minute charges for two five-minute phone calls in the same fifteen-minute period.

Nothing approaching that sort of unreasonable or abusive billing is evident on this record.. . .

[snip]

What is not often discussed is this concept of the need to still attempt to hew toward composite accuracy in the amount of time billed regardless of what minimum increment is used.  “Composite accuracy” might not be the right phrase but what I’m using it to attempt to describe is that the ultimate measure for a lawyer who bills by the hour has to be that you don’t use it to bill clients for more time in the day than the total time you actually spend working.

The truly pernicious problem for lawyers who attempt to still use 15-minute increments as their method of billing is how easily that can lead them to bill a collection of clients for 8 hours of time while only putting in 3 or 4 hours of actual work.  Or, more likely, billing 14 or 15 hours for a day where 6 or 7 hours of actual time was spent performing work for clients.

The Wyoming case also, unfortunately, gave credence to a common attempted justification by lawyers confronted with trying to justify the 15-minute billing increment that – to me – involves a significant amount of disingenuity:  that billing a client 15 minutes of time for a phone call that they know full well may have taken only 5 minutes is justified because the 15 minute time period also captures the time associated with stopping one task, shifting to the client’s task, making a note in the file about the interaction, and then trying to get back into the mindset of whatever you were working on before.

In modern practice, however, there is one dominant form of communication that simply – and often unequivocally – undercuts any lawyer that tries to use that justification.  Email.  Find me a lawyer who wants to justify a 15-minute minimum increment based on that kind of rationalization, and I strongly suspect that I can show that lawyer, by way of a review of their email history, that they turned much more quickly from answering an email for one client, to crafting an email for another client, then on to responding to some other email.

What that means is, if a lawyer is out there trying to charge their clients for 15 minutes of time for reading and responding to an email, which may have only taken them 5 minutes, and then attempting to justify it based on other things that were done or time lost as part of that, then it will often be extremely easy to demonstrate that within the same 15 minute period they will have replied or sent other emails to other clients on other matters and, likely, they will have billed that client for a 15 minute block as well.  This quickly adds up and is how a lawyer could easily manage in only 20 minutes of actual working time to attempt to bill for an hour of work.

That fudging of the numbers, of course, can also happen using 6-minute increments of time, which raises the ultimate larger point that I fear escapes notice of far too many lawyers:  no matter the minimum increment you pick (unless you are recording and billing for your time truly down to the minute), you are supposed to still be using that system as a proxy toward attempting to best capture your actual time spent.

That means that even if you are billing in 6-minute increments, you are supposed to be trying to bundle smaller tasks during the course of the day together into one of the minimum increments.  If, for the same client, you respond to 2 and only 2 emails during the course of a day and each one took you only a couple of minutes to address, you are supposed to bill that client for one .1 time entry – because you spent a total of 4 minutes working for them that day and you have arranged to bill them at a minimum increment of 6 minutes.  You are not supposed to bill .2 (12 minutes) for that 4 minutes of working time.  When lawyers do both this and opt for the minimum 15 minute incremental block, then the problems with the arrangement increase in magnitude because the lawyer ends up billing the client for 30 minutes of time for 2 tasks that only took 4 minutes to perform.

An ethics opinion from the Coinhusker state

Answering the question that was undoubtedly on the minds of every lawyer practicing in that state, the Lawyer’s Advisory Committee of the Nebraska Supreme Court issued Ethics Advisory Opinion for Lawyers No. 17-03 making clear that, yes, lawyers can accept payment from clients in the form of Bitcoin or other similar digital currencies.

I don’t exactly know what to make of this opinion.  I’m not normally a list maker, but here’s a quick pros and cons lists to label my feelings.

Pros:

  1.  It offers a pretty good explanation of what Bitcoin is and how it works.
  2. If you are a Nebraska lawyer interested in the answer to the question it definitely gives you a definitive answer.
  3. It is well written.
  4. It demonstrates how adaptable ethics rules for lawyers are that they don’t have to be changed simply because new technology arises that didn’t exist when the rule was first created.  (But see con #3.)

Cons:

  1.  I don’t know who this opinion is really for in terms of usefulness.
  2. Nebraska? Surely that wasn’t the state with a pressing need to be the first to issue an opinion on this topic.
  3. It incorrectly treats using property to pay an attorney fee differently than when the property involved isn’t Bitcoin.
  4. It entirely overlooks the most important aspect of lack of confidentiality in terms of impact on such a payment arrangement.

Since expanding on the “cons” is always a bit more fun as a writer, let me do that.

Who is the opinion for?  Why would any lawyer today be willing to accept Bitcoin as a form of payment?  Most answers to that question that I can come up with require the lawyer to be something of a believer in its use as a financial system.  If the lawyer in question happens to practice in Nebraska, that seems a pretty solid bet.  If that is true, then to some extent the opinion gives with one hand but takes away with the other by saying that a lawyer can accept payment in Bitcoin but then has to immediately convert the payment back into dollars.  If a lawyer is willing to put his or her faith into the Bitcoin currency system (and obviously the client must already have faith in that system), then why require them to immediately convert that client’s payment to dollars?

The answer to that – according to the opinion — is that Bitcoin is classified as property under the law and not as a currency and has the potential for rapid fluctuation in value.  But… shifting to the third con on the list… why should accepting this kind of property with fluctuating value as payment for services be treated so differently than other forms of property?

While we likely wouldn’t need a regulatory body to issue an ethics opinion on whether lawyers can accept payment in the form of gold or silver (of course they can), would we be comfortable with such an opinion declaring the lawyer has to immediately sell that property to turn it into cash?  If gold and silver seem too unwieldy for the thought exercise, then how about shares of stock or stock options.  (Let’s assume those would be otherwise done in compliance with restrictions such as Model Rule 1.8(a) and (i).)  Stocks can certainly fluctuate significantly in value and always have the potential to do so very rapidly.

Would you agree with an opinion that says a lawyer would have to immediately trade shares of stock for dollars because of the risk of rapid increase in value or decrease in value?  Why can’t two or more grown-ups negotiate an agreement for compensation in the form of property with a fluctuating value just because one or more of them is an attorney?  Why wouldn’t the lawyer taking on the risk of decrease in value play a role in evaluating reasonableness of the fee?

And, finally, the opinion talks a bit about confidentiality issues involved in payment via Bitcoin from a third party rather than the client, but completely overlooks the fundamental risk to client confidentiality created by accepting payment in Bitcoin from a client.  Such a transaction — necessarily because of the very architecture upon which Bitcoin is founded as the opinion does explain — is an open transaction for which confidentiality cannot be reasonably expected much less guaranteed.

Somehow the opinion  doesn’t manage to advise lawyers to make sure the client understands that – unlike cash or checks or wire transfers or even credit card payments — the fact of the client’s payment of money to a particular lawyer and all of the implications that payment entails is available to anyone sophisticated enough to understand how to delve into the Bitcoin ledger system.

So, in the end, sure the opinion says that a lawyer can accept payment in Bitcoin, but under this framework why would anyone ever do so?

Two short updates for a Tuesday

Late last month, I focused a post on a West Virginia lawyer who ended up staring down a 2-year suspension over chronic over-billing.  If you missed that post, you can read it here.  If you read it, you will recall that one of the items discussed was that the Executive Director of the West Virginia Public Defender Services agency had indicated that particular lawyer was not even among the worst offenders.

The ABA Journal online has a piece up that is apparently about one such even worse offender who has skipped out on bail regarding the criminal charges he is facing over his rampant over-billing (including billing more than 24 hours on 17 different days) and is suspected to be a fugitive in a much more temperate part of the world than West Virginia.

Over a larger time period and with a bit more frequency, I’ve written a little bit about the ABA Ethics 20/20 revisions to the Model Rules — admittedly through the lens that those revisions were being considered and then adopted here in my home state of Tennessee.  If you’ve been looking for a really good window into what the technology-focused aspects of the Ethics 20/20 revisions mean for your law practice, you are in luck because the ABA Standing Committee on Ethics and Professional Responsibility has now put out Formal Ethics Op. 477 which pretty much provides exactly that.

It is a good opinion – it’s getting a lot of attention in the legal media for establishing new standards but that’s not quite right.  It doesn’t really establish anything new but it does do a really good job of focusing lawyers’ attention upon the logical repercussions of the Ethics 20/20 revisions and the risks that lawyers need to be acutely aware of when communicating with clients.

It is also worth noting — particularly given the last few days of ransom ware news (and one other high-profile instance of information that was promised to be kept secret being disseminated under questionable circumstances) that user error continues to be a leading cause of unintended disclosure of (or complete loss of access to) confidential information whether technology is involved or not.

It should go without saying that there is only so much a lawyer can do to try to guard against those kinds of risks.

A tale as old as time.

Stop me if you’ve heard this one … it’s about a lawyer getting into trouble for overbilling … where there are examples of the lawyer even trying to claim to have billed more than 24 hours in a day.

You probably stopped me somewhere in there because you have heard it before.  The legal profession is filled with people who bill their time fastidiously and honestly.  The legal profession also has among its ranks some folks who don’t.  A West Virginia lawyer subjected to a two-year suspension from practice is among the “don’t” and, remarkably, almost got a much lesser suspension, in part, simply because he was not among the worst overbillers that a West Virginia agency – Public Defender Services – was dealing with.

That context is actually part of what makes this particular incident really worth writing about because it is another unfortunate example of discipline for overbilling coming up in a context where some people can often try to argue it away as being somehow more understandable — lawyers who are trying to make a living off of court-appointed work at unfairly low hourly rates.  The problem, of course, is that not only is that still not a particularly good excuse for deceptive billing practices but it also is counter-productive to how much more difficult it makes it for people who want to advocate for better compensation arrangements for such lawyers to gain traction.

I tend to think the frequency with which lawyers get caught for over-billing in connection with court-appointed work isn’t necessarily a matter of those lawyers being more prone to doing so as much as it is that they are more prone to getting caught because there is effectively one “client” able to see all of their time records and, literally, do the math that the clients of lawyers in private practice serving a variety of clients aren’t as readily positioned to do.

Overbilling was not the only ethical flaw of the West Virginia lawyer made the subject of this 40-page opinion of the West Virginia Supreme Court of Appeals — interestingly enough his other problems involved missing deadlines and neglecting client matters and even includes an interesting side excursion into his suffering from low testosterone which manages to make the inflated billable numbers from prior years seem even more . . . nope, I’m not going to go for blue humor.  At least not today.

For those who don’t want to read a 40-page opinion about this kind of conduct, just a few of the highlights in terms of both the egregious nature of the billing practice and the really pretty remarkable testimony about how he stacked up compared to other lawyers in terms of Cooke-ing the books (We know while I may shrink at going blue I always rise to the opportunity for word play.)

First, here are the lawyer’s overbilling highlights uncovered by the Executive Director of West Virginia’s Public Defender Services:

  • “found to have exceeded fifteen billable hours a day on thirty-one dates from mid-January, 2014 to mid-September, 2014.” (NB: the lawyer’s claimed low testosterone problems were stated to be during and around August 2014 and the West Virginia court most certainly paid attention to that time line to point out that it was interesting that he claimed to be sleeping 10 to 16 hours a day when he couldn’t meet certain deadlines so that, at most, during the relevant time period he couldn’t bill more than 8 to 14 hours a day.)
  • “on four dates he submitted vouchers for twenty-three or greater billable hours and on two dates he submitted vouchers for greater than twenty-four hours” (including billing 27 hours on December 26)
  • “billed 2,568.5 hours, 2,279.3 hours, 2,671.2 hours, and 3,259.46 hours for the years 2011-2014, respectively. These billable hours equate to an average daily billable rate of 7 hours, 6.2 hours, 7.3 hours, and 8.9 hours, for 365 days.”
  • “rarely billed activity at less than .2 hours (12 minutes); the only .1 (6 minutes) entries are attempted phone calls and, occasionally, a hearing. Review of any and all documentation or correspondence, including email, is billed at a minimum .2 hours. Virtually every hearing entails billing .3 hours for “waiting in court,” which affords a higher hourly rate.”
  • “On April 17, based on Cooke’s accounting of his time utilizing his schedule and the court’s docket, in the two-hour window from 1:00 p.m. until a 3:00 meeting at the jail, he billed a cumulative 4.3 hours of “actual time”; the activity billed all consisted of travel, waiting in court, and attending hearings. Similarly, on August 18, Cooke’s incourt schedule shows hearings at 9:00, 9:30, and 10:30 with the docket resuming at 1:00. The matters which were scheduled in the three-hour window from 9:00 a.m. until noon, were billed at a cumulative 6.1 hours. Additionally, matters beginning at 1:15 p.m. on that date were billed at additional 7.2 hours and consisted solely of waiting in court, reviewing “court summaries” while waiting, and attending hearings.”
  • when first called on to explain certain aspects of his billing, he said he couldn’t do so because Public Defender Services hadn’t provided him the information he needed and ” his own time-keeping system would not permit him to retrieve that information.”

As to the chilling notion that this lawyer was not as bad as others, the Executive Director testified:

I still hold firm that we were billed for duplicate—we were billed several times for the same trip, that we were billed several times from the same period of waiting in court. In other words, if he had three hearings, let’s say he waited in 17 court for one hearing while he was actually doing another hearing. That’s not properly [sic] billing. That’s billing the same period of time. So I firmly believe that that had happened, but in looking through the vouchers and everything else, it appeared to be less frequent than I had seen with other counsel. 25 The only perceived fraud or deception that still exists in my mind is the fact that he may have been value billing, that is, billing a .2 for an activity that should’ve only been a .1 or a .4 when it should’ve been a .2. However, he wasn’t billing me 3.0 for these things and he was—and he was saying 12 minutes as opposed to 240 minutes. . . . I just did not see in his case the overt deception that existed with many other attorneys. . . . He was unable to exonerate himself completely in this situation because he had failed to comply with that time requirement, but that, overall, I believe that he was zealously representing his clients and he was providing the actual services that were described even though the time allotted to them may have been—may not have been the actual time.

and he also:

gave the example of one attorney who “rubber-stamped” the same time for each day and one attorney who billed 900 hours of travel in a three-month period.

As a way of further bolstering the problem this creates for those working hard to try to get better, fairer hourly rate reimbursements in place, the Executive Director of the West Virginia program also:

explained that PDS is paying $25 million a year to court-appointed counsel that are, in his opinion, undercompensated at $45/hour for “out of court” time and $65/hour for “in court” time.14 He indicated that when requesting an hourly increase at the Legislature he was typically confronted with the fact that many attorneys were making greater than $100,000.00 a year in court-appointed work and that the legislators took a dim view of an hourly rate increase when, in their opinion, the court-appointed attorneys had given themselves a “raise” by overbilling.

Well, anyway, get back to work I guess.

It doesn’t all even out in the Walsh.

Selecting just the right item to write about is not easy.  This is not going to be an instance of accomplishing it.  This is going to be an instance of writing something just because I truly find the outcome astounding (or at least I found the outcome astounding when I first read a blurb about the situation, but now having read the full Court opinion I’m less astounded).

A little less than a week ago, the Wisconsin Supreme Court released an opinion in which it accepted a lawyer’s effort at consenting to the revocation of his law license.  An outcome that is, as I understand Wisconsin procedure, technically not a disbarment, but also not quite the same thing as the surrender of a law license that we have here in Tennessee.

The headlines/blurbs I encountered as a first way of hearing about the story were of the Law360 variety — Atty’s Scanty Records Preclude Client Repayment, Court Says.   The disheartening takeaway one gets from reading that story reporting on the opinion is that a lawyer got away with trust account malfeasance by failing to keep the records that would be necessary to prove up the wrongdoing.  Knowing how tough disciplinary authorities can be on trust accounting violations, this was one where I had to find the time to read the actual opinion.

You can do so right here.  If you want to do so right now, I’ll wait until you get back.

Ok.  So now that you’ve read it too, what about the one client and his $1,500?  The second part of the complaint/investigation?

Attorney Walsh agreed to represent O.B. in attempting to have his felony convictions expunged or to seek a pardon for those convictions.  According to his fee agreement with O.B., Attorney Walsh accepted an advanced flat fee of $1,500 at or near the time of entering into the representation and deposited the advanced fee into his law firm’s business account.  Attorney Walsh claimed to the [Office of Lawyer Regulation] that he had done work on O.B.’s behalf and was able to describe some of that work.  According to the OLR’s summary Attorney Walsh promised O.B. in July 2015 that he would be following up on a lead that required research, but warned that O.B. would likely be out of luck if the research did not yield favorable results.  Attorney Walsh, however, failed to communicate the results of his research to O.B.  He then failed to provide O.B. with any of the notices that were required when an attorney placed an advanced fee into the attorney’s business account and utilized the alternative advanced fee procedure outlined in [a particular Wisconsin rule].  Indeed, Attorney Walsh failed to provide O.B. with a final accounting that showed how he had earned the $1,500 flat fee.

For a while I thought I could manage to work through the giant, headline-grabbing angle given that none of the clients associated with any of the things involving fluctuations in the bank records contend they are out money and since there weren’t sufficient records available to truly prove what was what, the Wisconsin disciplinary counsel opted not to seek restitution.  so while not quite “no harm, no foul,” but “definitely a foul, and he’s offering to give up his license without a fight so we’ll just take it and be done with it.”  Though it does appear that the lawyer first tried an approach that would be more like Tennessee’s law license surrender approach by first filing a petition for the voluntary resignation of his license.  Like surrender here, the existence of a pending disciplinary investigation can thwart that in Wisconsin so he tacked to filing a petition for consensual revocation.

But, there was at least that one client standing right there in these proceedings saying that they were out $1,500 as a result of this character.  How could the Wisconsin disciplinary counsel not pursue getting that person their money back?  And how could the Wisconsin Supreme Court manage to shrug its shoulders at that outcome?

Similarly, given the lack of billing records, the [Office of Lawyer Regulation] cannot determine with any reasonable certainty that [the client] should receive a refund of any particular amount of his advanced fee from Attorney Walsh.

Talk about the opposite of a “tie goes to the runner,” kind of ruling.

Which leads me back full circle to being astounded at that outcome up Wisconsin-way.  It’s an outcome that sends a really clear – but unfortunate – message to Wisconsin attorneys that are truly willing to just disregard obligations — make sure you don’t keep records as well.

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

No, stop, this is not a post about politics.  Not sure why you’d think that just from the title…

It’s Groundhog Day here in the United States.  As a person of a certain age, Groundhog Day makes me think of the Bill Murray movie more than the actual parlor trick with a rodent that happens in Pennsylvania, so mining a situation that happens over and over again (unfortunately) in the world of ethics feels like low-hanging fruit.  That situation:  Lawyers losing their license over the willingness to lie.

But, today’s entry involves a lawyer on his way to being disbarred from practicing law in Michigan for conduct of an extent that (fortunately) you don’t see every day.  The conduct is level of mendacity that is difficult to imagine explainable as anything other than an actual psychological condition — someone who comes across as a pathological liar or a sufferer of narcissistic personality disorder.  Again, stop, why do you keep trying to think about politics in this post.  You should stop being so weird about this.

The lawyer in question is a gentleman named Ali Zaidi.

Now, before grabbing snippets of the Opinion issued by the State of Michigan Attorney Disciplinary Board that details the lengths and breadths of Mr. Zaidi’s false statements that cost him his license, the subject matter of some of the falsehoods gives an opportunity for a brief reminder about an aspect of the ethics rules not always spoken about or focused upon.

Michigan, like most jurisdictions, has a version of Rule 7.1 that makes it unethical for lawyers to make false statements about themselves or their services.  Lots of lawyers think of that rule – Rule 7.1 —  as applying only to advertising – because it is housed in the 7s – but it actually applies to any communications by lawyers.  An example I’ve used from time-to-time at seminars is to make the point that a lawyer who sends inflated bills to a client wouldn’t only violate RPC 1.5 but also would run afoul of RPC 7.1 because the contents of the billing statement would be a false and misleading communication about the lawyer’s services – specifically about the amount of time the lawyer spent providing those services.

With that more academic pursuit behind us, here are the snippets from the order that show the scope of the falsehoods this to-be-disbarred Michigan attorney used in bringing about his own downfall:

failing to correct his resume during his employment with one firm; submission of fraudulent resumes to a potential associate, a staffing consultant to fill a position with another attorney, and the Bank of Montreal; repeated failure to provide his correct address to the State Bar; misrepresentations in and related to respondent’s website for Great Lakes Legal Group; and misrepresentations in his answer to the Request for Investigation.

The order lays out in pretty significant the extent of the falsehoods in the various resumes which included claims to be licensed in two states where he wasn’t, claims to have worked as a summer associate at three firms where he never worked, claims to have earned an undergraduate degree from Harvard which he didn’t, and claims to have competed in an Olympics for a U.S. Field Hockey Squad of which he was never a member.  Beyond his resume claims, the lawyer also practiced law under the name of a law firm, Great Lakes Law Group, which he later admitted wasn’t really so much an actual law firm as an “idea that is still in progress.”  The panel also even threw shade on parts of the lawyer’s resume not proven in the proceedings to be false in a footnote that lists other claims in terms of education and work history about which the panel is clearly quite skeptical.

This lawyer also did his cause no favors by representing himself and parts of the order focus on things that were said during the defense of the case that were also false like his reason for not showing up for hearings.  But, he may have even done himself more damage when he was present and involved in the hearings:

[PANEL MEMBER 1]: Where do you live now?

MR. ZAIDI: I currently-my-to establish clarity on that, this has been a source of some issues and concerns, I will be in Texas. My whole goal after my tenure ended in Michigan is

[PANEL MEMBER 1]: See, it’s not a trick question. Where do you live now?

MR. ZAIDI: I have a place. It’s not a simple answer. I’m trying to explain to you and give you that answer as well. Texas was a goal, which is why I always put Texas. She mentioned my current address is in New York. And even when I called [the State Bar of Michigan] and I updated my- I let her know that Texas – that address in Addison, Texas is still the best address for me.

[PANEL MEMBER 1]: Who lives there?

MR. ZAIDI: It’s my family business. And the reason – and part of the reason – let me explain to you why­

[PANEL MEMBER 1]: So it’s not even a home? It’s a business address?

MR. ZAIDI: Yes, it’s a business address.

[PANEL MEMBER 2]: What is your family business.

MR. ZAIDI: My Dad owns some restaurants.

[PANEL MEMBER 2: So you gave the address of the restaurant in Texas?

MR. ZAIDI: No, it’s not a restaurant. It’s basically his office where he operates and there are other offices there. It’s just basically a big office building. And that’s where ­

[PANEL MEMBER 1]: When did you come to Michigan for this hearing?

MR. ZAIDI: I came this morning.

[PANEL MEMBER 1]: Where did you fly from?

MR. ZAIDI: I didn’t fly. I drove.

[PANEL MEMBER 1]: Where did you drive from?

MR. ZAIDI: I drove from Toronto.

[PANEL MEMBER 1]: What are you doing in Toronto?

MR. ZAIDI: Well, my wife lives in Toronto. And I live in Toronto for the most part, but I travel routinely to Lewiston where I’m trying to establish some business there.

[PANEL MEMBER 1]: Where’s Lewiston?

MR. ZAIDI: It’s in New York.

Not to say that having a lawyer represent him during the proceedings would have let this lawyer be spared disbarment, but not representing himself was clearly the only possible way that outcome might have been avoided.