A Great Video Ad To End the Year:
I posted on this video here. In my view and for the reasons I described in that post, it's hands down the best and most effective lawyer ad that I've seen this year, rivalling my favorite ad of 2006, by criminal defense attorney Allison Margolin, that I wrote about here.
Lights, camera, action - are you video-ready for 2008?
Talk About Hypocrisy: Doesn't the Bar Have Anything Better To Do Than Go After a $35/Hr. Contract Attorney?
With billing fraud rampant at major law firms, guess who the Illinois disciplinary committee decided to prosecute? Was it the the partners at a
Chicago office of a national firm, whose own colleague shined a light on overbilling? Nah - that's too large a target. Why not go after the smallest possible potato instead - like a $35 an hour contract attorney who allegedly overbilled by $2913.75 for work performed on a month long document review gig for Mayer Brown (a firm whose own rap sheet includes firing 45 equity partners to preserve the firm's $1 million profits-per-partner ratio and a partner just indicted on charges of criminal fraud).
According to the bar complaint, the contract attorney, who'd been assigned to the document review position through a staffing agency, worked 51.75 hours over the course of two weeks, but submitted a timesheet for 135 hours. Based on the timesheet, Ajilon paid the contract attorney $4,725 for his work - $2,913.75 more than he should have received. The complaint charges the expected laundry list of misconduct: fraud, dishonesty, deceipt, misrepresentation and that old pompous favorite, "conduct which is prejudicial to the administration of justice or which tends to defeat the administration of justice or to bring the courts or the legal profession into disrepute."
The bar's complaint doesn't say who filed the charges - the staffing agency or the law firm. But the identity of the complainant wouldn't change my view that this case isn't about a breach of ethics, but a breach of contract. The contract attorney had a contract with the staffing agency to provide document review service and receive compensation for those hours worked, while the staffing agency had a contract with Mayer Brown to staff projects with contract lawyers. Assuming that the contract attorney billed for 84 hours that he never worked, then sue the guy for breach of contract or unjust enrichment. Why convert an ordinary complaint for $2913 into a ginormous ethics matter? Bringing a claim before a disciplinary committee that properly belongs in small claims court is not only disproportionately punitive to the contract attorney, but it opens up the grievance process for gamesmanship and abuse, a concern that I voiced here.
What's most outrageous, however, is the hypocrisy of all of this. In our present-day legal caste system, contract attorneys are viewed as the untouchables of the profession, migrant lawyers who don't qualify for as much as an interview for, let alone an associate position at Biglaw. (Note- this isn't my view, I'm just bluntly describing current realities). Yet while treated as "glorified paralegals" in the legal work force, contract attorneys are, apparently, still bound to abide by all of the ethics obligations that apply to full fledged attorneys who actually receive the benefits of self-regulation of the legal profession provided by the code.
Moreover, while the Illinois bar screams bloody murder over a $2913.75 overcharge by a guy making $35/hr, it's one of virtually every bars nationwide that allows law firms to mark up rates paid to contract attorneys, without disclosing the premium to clients. In this case, I would guess that Mayer, Brown paid Ajilon around $60 for this $35/hr contract lawyer (to reflect the staffing agency's cut) then turned around and charged clients $150 an hour for his time. But in the vernacular of the bar, that's not billing fraud, just smart business.
Mike Frisch of the Legal Profession Blog (the source for this story) predicts that the bar won't show much sympathy for the accused because "he's a contract lawyer, rather than a highly compensated partner in a major firm." That comment sums it up for me as well.
$42 Million Fee - Inherently Unreasonable? That Depends, But Here, It Was
Over at Legal Blog Watch, I've posted my view on the $42 million fee collected by a law firm in a multi-million dollar estate matter. Basically, the lawyers originally had a fee agreement with the client; when she found her legal fees mounting (to the tune of $1 million per quarter), she asked her lawyers what they could do. The proposal? The client would pay an additional $1.2 million after which the lawyers would take 40 percent of the total proceeds recovered in the matter. At the time the fee agreement was renegotiated, the lawyers had already collected $18 million (not clear how much related to this precise matter) and there was a $60 million offer on the table. Five months later, the lawyers settled the case for $100 million and with their 40 percent, the client took...$60 million, the same amount she'd been offered earlier.
There are more details in my other post, particularly about some of the facts that make this case particularly egregious. The court didn't approve the fee, just said it wasn't inherently unconscionable and set the case for trial. And if you're wondering what I'd consider fair in this case, let's just say that had the lawyers' renegotiated fee agreement allowed them 40 percent of the difference between $60 million and the amount eventually recovered, I'd not be writing this post.
There's one more important issue here. Some believe that when lawyers negotiate a fee agreement with a potential client, they have not ethical or fiduciary duty to ensure that the agreement is fair, beyond the bare minimum that ethics rules require. Fair enough. But that argument doesn't apply here. When theses lawyers renegotiated the fee, they already represented the client; and they had a duty to look out for her best interest and ensure that the new fee agreement was fair. These lawyers certainly looked out for someone; let's just say that it wasn't their client.
Beware the Mis-named Non-Refundable Retainer
Thank goodness for lawyers who are willing to risk a disciplinary sanction to retain $2500 of money that any objective observer would recognize as unearned and undeserved. After all, if we didn't have lawyers like this, we wouldn't have the benefit of this well written and researched decision by the Michigan Attorney Grievance Board that describes the difference between an ordinary retainer fee (which represents advance payment for services to be rendered) and a non-refundable retainer fee (which is typically allowed only where a fee agreement states specifically that the retainer is intended to compensate the attorney for availability, not for service to be rendered) (hat tip to Legal Profession Blog for the link.
The Michigan case involved attorney Patricia Cooper, who collected a $4000 non-refundable retainer from a client to handle her divorce. After two weeks, the client changed her mind about going forward with the divorce and asked to Cooper to stop work, provide an itemized bill and return an unearned balance. Cooper sent an itemized bill showing that she performed $1228 worth of work and agreed to return $1385 "out of the goodness of her heart." She refused, however, to return the balance, citing the non-refundable nature of the retainer agreement.
The client filed a grievance seeking a refund. The Michigan Board agreed. The Board explained that Cooper's designation of a retainer as "non-refundable" was irrelevant because the retainer was intended to secure advance payment for services to be rendered in the future. Because Cooper did not render the services contemplated, she was bound to refund the unearned amount. Citing cases from a variety of jurisdictions, the Michigan Board cautioned that a non-refundable retainer could be used only in situations such as to secure a lawyers availabilty and that the purpose of the non-refundable retainer must be explained to clients.
For those who have wondered about non-refundable retainers, the Michigan Board clarifies that they're generally a "don't" except in narrow situations. And the Board also makes clear that if you're not sure of whether a retainer is non-refundable or not, then GIVE THE UNEARNED MONEY BACK!!
Do Ethics Committees Pick On Solos? Yes, yes and yes!
Back in February 2003, when MyShingle was still in its infancy, I wrote this blockbuster post, entitled The Bar's Dirty Little Not So Secret Secret, which offers some powerful evidence to demonstrate that solo and small firm lawyers are the targets of disciplinary actions far more than our large firm counterparts. Apparently, the disparity between large and small firm treatment remains an issue four years later; it was the topic of a bar panel discussion at last week's ABA conference, with some great follow up commentary here at Susan Cartier Liebel'sHow to Build A Solo Practice blog.
Take a look at my earlier post which summarizes my own reaction to the panel discussion better than I'm able to do at the moment.
A Tale of Two Lawyer Ratings Systems
Imagine a lawyer rating system that assigns lawyers different categories of grading and purports to provide an objective way to assess a lawyer and through "third party validation of ethics and legal ability provides that extra level of confidence that the right lawyer or firm has been selected." A ratings system that takes years of experience into account in issuing ratings and removes positive ratings where a lawyer has a negative disciplinary record. A ratings system that even generates enough profit to fund a fellowship. And a ratings system that includes some errors and omissions.
If you thought that the lawyer rating system that I just described would be the subject of class action lawsuits, you'd be wrong. But that rating system sure sounds like this one, which is the subject of a class action lawsuits. And indeed, many of the claims alleged in the class suit (which you can access here) would seem to apply to both ratings systems: such as complaints of arbitrariness of ratings or that the rating service makes deceptive and false representations that clients can rely on the ratings in choosing a lawyer.
So, one of these ratings systems is sued, while the other is not. And if you're wondering about the reasons for the differential treatment, I can think of at least one: consider the ratings of the class action's lead plaintiff by this ratings service and this one.
Note: for the record, I have criticized both ratings services for various reasons here and here and here. In my view, ratings systems aren't worth much because choosing a lawyer isn't like picking a restaurant or buying a house. So if we lawyers allow ratings system, we should explain that they're one of many, many factors in picking a lawyer. But more importantly, if we allow ratings systems, we must tolerate all systems; we shouldn't be able to pick and choose by filing class actions between those ratings systems that we want (because they grade us better) and those we don't.
You know what...this judge WAS a few fries shy of a Happy Meal
Ever since I've started my site, I've blogged about situations where, in my view,
judges have gone way over the line in sanctioning attorneys for conduct, such as sending a lawyer to jail for refusing to apologize or showing up late for a hearing. But typically, these sanctions have issued against solo and small firm attorneys.
But outrageous judicial conduct isn't any less outrageous when it's directed against our biglaw colleagues. And that's why the scenario described in this,
Lawyer's 'Super-Size' Gaffe Costs Him Client and Possibly Right to Practice Before Fla. Court (law.com 5/31/07) really ticked me off. According to the article, William Smith, a partner at large, Chicago based law firm of McDermott, Will & Emery commented to Judge Laurel Myerson Isicoff during a hearing Bankruptcy Court for the Southern District of Florida that "with all due respect, you're a few french fries short of a Happy Meal." The relevant portions of the transcript, available here at David Lat's Above the Law show that the judge didn't say anything other than "proceed counsel" at the hearing. But subsequently, issued a Show Cause order asking Smith to demonstrate why his pro hac vice status shouldn't be revoked in light of his remarks. The judge also denied Smith's motion, and Smith's client has since replaced him with a local firm.
The judge's decision is wrong on so many levels that I can't even begin. First, if she was offended by the comment at the hearing, she should have said so right away and given the attorney a chance to apologize. To me, this smacks of a set up. Second, quite frankly, this is overkill. Requiring a lawyer to respond to a show cause order and convening a hearing uses time and resources. Why couldn't the judge simply have slapped the lawyer with a monetary sanction right on the spot? At least, it would have ended the matter. Third, did the judge really need to copy every other judge on the bench with the show cause order? To me, that's simply vindictive. After all, many judges may have taken the remark in stride or come back with a snappy quip from the bench in response.
I also question the judge's motives. I wonder whether she'd have reacted the same way had a local attorney rather than one from an out of state, biglaw firm made the same remark. And as a result of her action, the client did channel its case to a local firm. As a solo, that should give me pleasure (since I often serve as local counsel), but it doesn't. If I get business, I want to win it fair and square - not because local judges are mistreating out of state counsel.
The Unbearable Weightiness of Bar Sanctions on Solos
One aspect of solo practice that's commonly overlooked is the impact that a suspension can have on a solo's career. Over at Legal Profession Blog, Mike Frisch notes that even a bar suspension of a short duration can kill a solo's practice because he or she may not have colleagues who can assume control of the case. By contrast, lawyers employed at a firm can turn matters over to their partners while they serve their time.
Many probably assume that a lawyer who's done something bad enough to get suspended doesn't deserve a second chance to practice anyway. I disagree. In fact, the suspensions that are actually harshest are those of short duration, where the conduct was not terribly bad, but the lawyer must shutter his practice during the suspension, and then try to ramp it up again. And, sometimes bars suspend lawyers where they may have made a simple mistake.
UPDATE A reader sends this link to the sad story of Ed Slavitt who received a 6 month suspension for writing a bar reference that didn't tell all about the applicant. Is that worth losing your legal career? You tell me....
How NOT to Handle a Mistake
It's something that all of us practicing lawyers dread: we file a case, and it's lost or somehow misplaced at the court, resulting in a missed statute of limitations. So if you find yourself in this situation, do you (a) try to appeal the dismissal of the case, arguing that the clerk erred; (b) 'fess up to the client and offer to make her whole; (c) seek advice from a trusted colleague on what to do or (d) conceal the mistake and present a "settlement" to the client, purportedly from the defendant.
The lawyer who was the subject of the disciplinary action described by Mike Frisch in this post at the Legal Profession Blog , chose "c" and "d," and received a 2 year suspension. As I'll discuss, I think that's too harsh (and for that reason, I'm not using the lawyers' name in this post, to avoid caching this event in the search engines). At the same time, the decision teaches some great lessons for solos, which I'll summarize at the end of this post.
According to the decision (embedded in Frisch's post), a lawyer (apparently a solo) agreed to represent a client in a small personal injury matter, valued at around $10k (the policy limit). She filed the complaint the same day as she filed a complaint in another case. The clerk erroneously assigned the same docket number to both complaints, and as a result, one of them was apparently never deemed filed. When the lawyer discovered the error, the statute of limitations had passed (it's not clear from the decision why the lawyer never tried to correct the mistake or otherwise challenge the error).
The lawyer informed the defendants that the suit was finished, since the SOL had passed without the lodging of the complaint. The lawyer never informed her client of the dismissal. Instead, she decided to simply make the client whole by paying her what she would have received if she had gotten the $10 k settlement expected. Prior to making the proposal, the lawyer consulted with a colleague, a partner at a prominent DC law firm, about the ethics of not disclosing the dismissal to the client. The partner advised that not disclosing the dismissal would not violate applicable ethics rules, so the lawyer proceeded with her plan. She extended a "fake" settlement to the client, indicating the client's portion. Subsequently, the case reached the bar (though it's not clear how, because the client insisted that she was happy with the attorney and would hire her again). The DC Board originally recommended a 30 day suspension, but the court upped it to a two year suspension. And the lawyer who provided the advice received 60 days for "aiding and abetting" in the violation.
The court ruling raises many questions in my mind. I'm not sure how any practicing attorney, particularly one at a top DC law firm, could ever believe that it's alright not to tell a client that her case was dismissed. But sheer stupidity requires correction or a humiliating public reprimand (assuming it's the first time it happened), not suspension. As for the lawyer who didn't reveal the dismissal, no doubt she erred big time. But it seems to me that she simply panicked. The case was dismissed, she feared embarrassment and felt that she could make it right another way. And she consulted with a colleague (though again, it's not clear why she didn't call the bar hotline). The lawyer wasn't extremely careless (the dismissal resulted from a quirky error), and I don't think she acted with malice. And the client got what she'd have gotten if the case had been properly filed, or even if she'd brought a malpractice action. Yes, what the lawyer did was wrong - but not to the tune of a two year suspension (again, assuming it's a first time offense), particularly, when her own client would have rehired her. I'd have given the lawyer an absolute maximum 60 day suspension, combined with plenty of CLE, and maybe train her to work at a bar hotline, to provide the kind of sound advice to other lawyers that she couldn't find in her case.
Still, some good can come out of this case if other lawyers can learn from it. Here are the lessons that I glean - please share your own ideas below:
1. DON'T HIDE A MISTAKE:
I've written about handling mistakes before, and I can't emphasize it enough. When you make a mistake, admit it, offer to fix it and move on. Hiding it will only make it fester into something far worse than it was originally. Here, if the lawyer had simply told the client the case was dismissed and offered to make amends, that probably would have been the end of the matter.
2. Keep a list of go-to resources for discussing ethics matters:
Don't try to mull over an ethics issue on your own - you're too close to the issue, and as a lawyer, you'll most likely wind up rationalizing the problem away. Compile a list of "go to" resources to help you with your ethics matter, and gather a couple of opinions, rather than relying on one. In my case, I always call the DC Bar hotline for ethics questions that arise in DC. I'll also post my question on Solosez (if you think lawyers aren't ethical, you ought to check out this list - I have never seen a group of more conscientious and honest lawyers committed to helping other lawyers do the right thing) and a smaller, more close-knit list. Finally, I'll consult with a colleague of mine who defends disciplinary actions as part of his practice. Who are your "go to" people for ethics questions?
3. Don't go before a bar hearing pro se?
In reading the decision, I noticed that both the solo and the biglaw attorney represented themselves pro se before the bar, something that I couldn't understand. Most legal malpractice insurance covers discipinary proceedings - was coverage denied because the lawyers didn't provide notice of the triggering event (which after all, they'd concealed?) Still, couldn't the lawyers have afforded to pay a lawyer to represent them before the disciplinary proceeding? I think that both the DC Board, and more importantly, the Court of Appeals give much more credibility to lawyers' defenses to a disciplinary action when they're represented by other counsel and not pro se.
Now it's your turn. Do you agree with the suspension, (I know, I'm a softie when it comes to lawyer discipline!) and what can other lawyers learn from this case.
The Florida Bar won't let lawyer promise to help you get rid of "that vermin you call a spouse"
Ah, I suppose it was just a matter of time before the Florida Bar went after divorce lawyer Steven Miller, who ran these provocative ads that insult overpriced downtown lawyers and promise to help clients "rid themselves of that vermin [they] call a spouse." According to this story (3/27/07), when Miller submitted his ad for review by the Florida Bar, found that the ad is a "verbal depiction" whose language promises a particular result, which is prohibited under Florida law.
When I posted about Miller's ad several months ago, I applauded him for targeting that underserved part of the population that can't always afford high priced legal counsel. At the same time, I explained that I wasn't a fan of his confrontational style, not because I found it offensive or unprofessional or deceptive but rather, because I feared that it would attract the types of uncompromising, litigious clients who eventually devolve into "clients from hell."
Just like with its decision banning use of animals like pit bulls, sharks and snakes as logos, it seems to me that the Florida Bar's prohibition on Miller's ad is a stretch. In the "animal logo" decision, the Florida bar determined, among other things, that consumers might not realize that pit bull on a logo is simply a metaphor and instead, might conclude that the lawyers really behaved like pit bulls. Here, the bar's conclusion that the bar promises a result is untrue. In the ad, Miller says that by signing up for his service "you're on your way to getting rid of that vermin you call a spouse," but he doesn't promise that he will succeed. That's not a guarantee of a result in my view.
If Miller's ads are truly offensive - and don't kid yourself, that's the only reason why the bar wants them eliminated - then the market will decide their success. Clients turned off by Miller's ads won't use him and as a result, he'll change his approach. But if consumers have a need for low cost or aggressive, straight talking lawyers, they're entitled to that option - and without Miller's ad, consumers might never learn of that option. Moreover, in our technologically enabled age, the bar has an option as well: let the bar put up its own video on YouTube and explain to consumers what's wrong with Miller's ads. The bar doesn't need to ban them.