Saturday, February 12, 2011

Fear of Disbarment

Atrios writes,
I've mentioned this before, but my new pet peeve is the regular plot in lawyer and doctor shows in which a relatively minor ethical transgressions cause everyone to panic about likely disbarment/license losing. If these were real concerns, things like this would not happen.
The fastest way to get suspended or disbarred is to get caught stealing from clients, and the second fastest is to neglect client matters and lie to clients about the status of their cases. If you're with a large firm, the firm should have protocols in place to help identify and prevent that type of problem, so if you're caught pilfering funds it's most likely from the firm as opposed to the firm's accounts and, at least in theory, somebody else in the firm can step in when your drug or alcohol problem (the most likely causes of the neglect of cases) gets out of control.

Beyond that, well... let me put it like this. The ethics rules are written to advantage large firms over small. And the system favors those who have the money and resources to keep fighting and fighting and fighting against ethics charges. I've seen small firm lawyers who are willing to do so put up an incredible fight against discipline and, despite having committed offenses far more egregious than those for which others voluntarily accept responsibility and are disciplined, manage to put off the consequence for years or get away with little to no consequence... beyond perhaps five to six figures in legal fees spent fighting the charges. But really, while the small firm practitioner really does have to sweat the small stuff, the rules likely to trip them up are often written or interpreted in a manner favorable to large firms.

Even something as simple as writing a client fee agreement is a potential hornet's nest. Way back when, I worked at a non-profit that collaborated with top practitioners to put together a manual that included instruction on how to draft a retainer agreement, and included a variety of sample agreements. A few years later an attorney with the state's Attorney Grievance Commission (AGC) was flipping through the book at a seminar and stated that any number of clauses weren't acceptable. This caused the book to be removed from the market. We could not get the attorney to agree to help us edit the agreements to be compliant with state ethics rules, nor to provide sample agreements that they deemed compliant.

So if you're a small firm lawyer trying to draft a contract with your client you cannot find a sample retainer agreement that you can be sure will be ethically proper, and even if you do the AGC has turned the rules into a moving target - they may change the interpretation of the rules such that your entirely proper retainer agreement suddenly includes an unethical provision. Please note, I'm not stating that this results from a rules change. This can result from an unpublished, internal change in the way the AGC interprets the rules.

Let's take an example from a few years back. You're a small firm lawyer. You can only handle a certain number of time-intensive cases. So you decide that you're going to charge an engagement fee to clients - a non-refundable fee for taking the case, in order to hold your time. But your clients are hard up for money, so you agree not to start charging them money until after working a certain number of hours on the case. The AGC decided that if the engagement fee is applied to attorney fees, it's a retainer and is thus refundable. Your choice as a small firm practitioner was to risk that the client would change his mind about litigation after you gave up business by sticking with a standard retainer agreement, give no credit for the engagement fee and, perhaps, charge a lower hourly fee, or perhaps negotiate a flat fee for part or all of the case. But working out an agreement that protected you while protecting your client from the fee games resulting from this rule interpretation? Unethical.

It doesn't hurt the large firms, of course, that the AGC's leadership typically comes out of the large firm environment. So large firms get sympathetic rule interpretation while small firms are treated as suspect, have to deal with a game of "hide the ethics ball", and are apt to make the "mistake" of taking early responsibility for their errors instead of fighting tooth-and-nail and getting a better outcome. But you know what? That's not much different from how the legal system, at large, functions... so perhaps its an object lesson for small firm lawyers.

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