Trust Account – Trusted Employee; Social Media Trouble; End of Run

Best Practice: Trust yourself

Lawyers use trust accounts to hold cash that belongs to someone other than the lawyer. Usually the funds belong to a client, or are prepayments for fees that have not yet been earned.  Solo and small firm lawyers often have a trusted employee monitor and handle the account. The employee may write checks on the account under the direction of the managing lawyer.  The best practice is for the lawyers or partners to have the only signature authority. Second best practice is to have safeguards in place to catch mistakes.

Jay Foonberg and the ABA wrote the book on how to handle trust accounts “The ABA Guide to Lawyer Trust Accounts.”  

The worst practice is to ignore the account and the employee handling it, thinking that the State Bar Counsel will contact you when there are bounced checks. They will, but it will not be pleasant.

Michael Krebes of Kokomo, IN used the worst practice.   “She started working for me in the summer of 2002,” said Krebes. “She worked for me in the private sector. She was court reporter for me when I was judge, and when I left the bench, she came with me.  I had blind trust in her. She was like the little sister I never I had. I knew her kids, her husband, her family.”

Now tens of thousands of dollars later, with disciplinary issues staring him in the face, his practice in shambles, and clients heading out the door, having lost significant sums, Krebes realizes his mistake, and the results.  “I have refunded money to some clients already. I’ll take care of everyone; it’s just not something I can do overnight. The clients are understandably anxious to get this resolved, and I don’t blame them. I have to make these people right,” said Krebes. “I can’t just say it was her fault. They didn’t hire her; they hired me. The money was in my trust account. I am the responsible party. In order to keep my license, I have to make it right.”

Whatever your trust practice now, it is time to double-check the procedures you have to protect the clients (you are a fiduciary in your relationship with them), yourself and your license and livelihood.

Foonberg’s book has an 89 question self test. You might want to find or buy a copy (I have recommended this book to several lawyer clients who had trust account problems) and take the test.

You may want to: 1) require two signatures on all trust checks; 2) open the trust account statement (and certify that each such statement is opened by you) to review all checks that went through the account in the prior month; 3) re-read Rule 1.15 of the RPC and the IOLTA regs in the Admission and Discipline Rules Governing Attorney Trust Account Overdraft Reporting; 4) check on the several cases, and the reported punishments.  The Supreme Court does not take these situations lightly.

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Caution about Live Tweeting

Sarah Peterson was working for an appellate court in Kansas when she screwed up.  Watching an appellate hearing on her office computer she just had to share her thoughts.  Her bosses did not think that she did a very good job sharing those thoughts, finding that “The overall tone of her comments revealed a disrespect for a litigant before the appellate courts as well as a disrespect for the Supreme Court panel hearing the case,”

Well she is working no longer, and after seven months, she is still looking.  The details are at the link above.

H/T Vic Indiano

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End of the Run with this Blog Series

This has been a good way to learn more about blogging, and the defense of lawyer discipline matters has made the time worthwhile, but staying on top of lawyer discipline is not a fun way to spend extra time.  I started this thinking that a reminder to “Look both ways” would pay dividends for you and me. It has not paid dividends for me, so I will be closing Lawyers with Troubles after this the 66th in the series, and reviving the old blog Ted’s Legal Blawg at http://tedwaggoner.wordpress.com/ soon.

I like most of the people who have chosen to be lawyers, and do not enjoy seeing so many get in trouble here or around the country.  I will be pleased to continue to help those who need to respond to allegations by the Disciplinary Commission, and will provide LPM practice advice to help lawyers stay out of trouble.  But I am done sharing the troubles of lawyers with you in this blog.

Another topical blog will be coming, and I may promote it with this site, but for now watch for Ted’s Legal Blawg at http://tedwaggoner.wordpress.com/.

Be good to one another and to your clients.

Practice while suspended – bad idea even for “corporate lawyer” — Supreme Slap-down? Bottle of Red? — What Do the Prosecutors Think?

Get a License

Some corporate lawyers forget that they are required to be licensed in the state where they practice law. Indiana has a special rule for that.

In Ohio, David Troller was suspended from practice for failing to register as a lawyer. So after that, he kept practicing law, did not meet the requirements for a suspended lawyer, forgot to get reinstated, and recently got a new two-year suspension, with six months withheld, and was ordered to stay in the Lawyers Assistance Program of Ohio.. As a corporate employee he might have gotten away, but he claimed the title “Chief Legal Officer” which means you are a lawyer.

H/T Andy Perkins.

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Scalia Slapdowns are the worse

Lawyers spend their lives dreaming of taking a case to the US Supreme Court. Some make it, a few wish they hadn’t.  Steven Lechner was arguing his first case in the Court, before the nine justices. He was trying to make the points needed by his client when out of the blue, J. Scalia says: “Counsel, you are not reading this, are you?”

Lechner froze, because he was.  J. Breyer said: “It’s all right.” and broke the silence.

Scalia is a lightning rod for criticism anyway, and the bolts hit fast.  Scalia was lambasted, and supported.  Finally the issue was more or less decided that Scalia was right, if not kind, to hold Lechner to the Supreme Court Rule #28, which says in part: “Oral argument read from a prepared text is not favored.”

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 Bottle of Red, a Bottle of White, Charged with a Crime, the lawyer must now Fight!

We have written about lawyers doing illegal things a few times, but wine smuggling?  Philly lawyer Art Goldman is now charged with Selling Wine without a License, after an undercover investigation showed that he had high-end wines, not found with the state seal, or available in the state-run liquor stores.  The police seized about 2,400 bottles of wine, with a value estimated at $200,000.  Multiple misdemeanors could result in fines of over $200,000, if he is convicted.

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Blog for Prosecutors and those who deal with them

If you know a prosecutor who needs to read up on the issues that are critical to them, or if you want to eavesdrop on what prosecutors are talking about, you may want to link to the Prosecutors Discretion blog. Recent topics include the Brady Evidence Dilemma, and Why One Prosecutor will not Talk to Jurors.  Good reading.

Be Careful Helping your Friends – Sharing with Friends – Treating Staff and Litigants

When is a Lawyer just a Friend — in trouble?

Jameson Conrad was with a friend on New Year’s Eve, in Charleston WV. Conrad’s friend got into a dispute with another man, and used his gun to make his point. The shooting was caught on tape. Conrad then used his lawyerly skills to advise friend to “run,” he then kept friend’s cell phone and refused to identify friend when police asked.

When you are a fact witness, it is hard to claim a lawyer-client privilege, because the police think you are an “accessory to malicious wounding.” It might work, we will know in several months.

But, upon these facts, WV Bar Counsel alto thinks you are enough of a menace to make a prompt Complaint to the Investigation Commission, seeking suspension from the practice, and to report it when asked by the local paper.

H/T Gary Welsh.

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Who do YOU Trust with your Client’s Secrets?

It is only a little secret. Something you learned while working with the world’s most famous writer. Surely your wife’s best friend can be trusted not to tell what you should not have told her.  But she told, and now you pay, in a couple of ways.

JK Rowling has been known to write some pretty good books, sold millions of books, and movie tickets from the Harry Potter series.  She ought to be able to trust her secrets to her solicitors.  But Robert Galbraith’s identity was not safe with Christopher Gossage, one of her lawyers.  Robert Galbraith is the pseudonym Rowling used on a new book she wrote, trying to see if she could enjoy writing without the hype and expectations of her name.  She was displeased, even though the book sales jumped after the word was leaked by the trusted friend of Gossage’s wife.

The law firm fell on the sword, quickly admitting that Gossage had shared the information with Judith Callegari during a private conversation. “The disclosure was made in confidence to someone he trusted implicitly.”  Not a great judge of character there.

Who do you trust implicitly enough to turn your license over for their discretion? The Solicitors Regulation Authority in England fined Gossage £ 1,000. for the breach of confidentiality.  Rowlings charged even more.

There was a winner in this matter. “The Soldiers Charity” was the recipient of all the book proceeds, plus the settlement damages Gossage and his firm, as well as his trusted friend paid to Ms. Rowling. Nice touch.  Hard for a billionaire to get much in the way of sympathy for herself.

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Judge Suspended for Treatment of Staff, Lawyers and Litigants.

The Judge Kimberly Brown story is a big story in Indiana legal circles. She has been through a protracted hearing before the Master Panel to determine a recommended punishment, based on a multi-count complaint of judicial misconduct. She was reported to have mistreated staff, lawyers and litigants in unusual and contemptible ways.

The Master Panel has recommended her removal in spite of some clever legal maneuvering by her new lawyer-team, after firing her earlier team of lawyers.  Now the Supreme Court has temporarily suspended Judge Brown and will take further action in due course.  Her suspension, as recommended is with pay.

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Ted Waggoner will be offering the annual kickoff session to the IVY Tech Agricultural Seminar Series on Jan. 22, at the Cole campus in Logansport. The topic – Family Farm Ownership: What is the Right Solution for You and Your Family. For more information, contact Julie Byrd at IVY Tech, 765-459-0651 x 288.

Bad way to finish the year – Two cases, One Good Finish for the Lawyer.

Stealing from a church is bad enough, but…

To have the Ohio Supreme Court choose Christmas Eve to suspend your license might make you think that the court believes there are greater punishments in store for Mark Anthony than a long term license suspension. The underlying problem was a gambling issue. The amount exceeded $118 000 for the lawyer, who was also the business manager of the Catholic Church in Lebanon, OH. The terms of suspension require full restitution to the church’s insurer of $128,000 before he can apply for reinstatement, plus establish a gambling addiction plan, and maintain the plan.  The fact that he did not get disbarred prompted a dissent from 3 of the 7 justices. A similar, but distinguishable case of gambling prompted embezzlement had resulted in disbarment.

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Biglaw Pro Bono seems different

Lots of biglaw firms are having associates do pro bono work. That is a good thing, the young lawyers get experience, the clients get free legal services.  Winston & Strawn is among the biggest of the Biglaw firms. A former juvenile prisoner sued the City of New York as a pro bono case.  He claimed he was attacked by guards at Rikers Island, injured and not treated. The court referred the case to Winston & Strawn, who assigned an associate lawyer to handle the case.

A discovery issue broke out. The City did not respond to demands for information and for a witness for deposition. The city asked the court for a protective order, and W&S responded. The court found the city did not comply and that it was responsible for fees.  W&S asked for $20,000 for 33 hours work.  The senior associate billed at $620 an hour, three other associates billed from $390 to $570 per hour.

The magistrate found the motion and responses “very simple and straightforward” not requiring the expertise or efforts of four lawyers, and he disregarded hours billed for such issues as “preparation for filing” at 4.5 hours, and for issues in the case, but not germane to the discovery issues which could be billed.

The court set the rate for all lawyers on the case at $300 per hour and said no more than 12 hours could be charged.

** The firm in a statement said that W&S “generally donates fee awards in pro bono cases to public interest agencies after deducting for expenses.”  That is a good Christmas thing to do.

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Good to be back after a couple decades?

Bill Drozda’s troubles started in 1991, when the Disciplinary Commission charged him with 10 counts of misconduct, then increased the number to 13. They all had to do with neglect of clients cases, and the consequences of such neglect. Drozda accepted an immediate and temporary suspension, which was finalized in 1995. After finding him guilty of all 13 counts the Supreme Court imposed a 3 year suspension, with credit for time served.  As I calculate that, he had some work to do to clear up the record (pay costs, and now includes take the  multistate ethics exam).  Well he finally requested reinstatement last year, and the Court granted his return of license, 22 years after he lost it, as of Dec. 19, 2013.

Before his troubles he was a three term member of the Indiana General Assembly.

Being Kind to Lawyers for Christmas, but There is Still News

ABA Accreditation Issues

Law schools are supposed to play by a set of rules issued by the American Bar Association, Law School Accreditation Committee.  They are regularly audited for their performance, and deans have been known to lose their jobs for weak reports.  Fines are pretty unusual for violation – But the Rutgers School of Law – Camden just got whacked.

Admission credentials are pretty important, but Rutgers found a way around the normal LSAT-GPA process, unsuccessfully.  It violated Standard 503 and Interpretation 503-1 in allowing admissions off the grid.

$25,000 is a small fine if you are a big time coach (Steelers’ Coach Tomlin as an example), but in the ABA world, with the dual requirement to post the findings on the law school website for a full year, it makes pretty big news.  Rutgers is already in the news for a coach’s actions, basketball coach Rice apparently was too tough on players, fired and sued.  New Jersey has some catching up to do with the coach situation, but no Indiana law schools are in trouble like Rutgers – Camden.  NJ has two law schools, similar to Indiana University. Rutgers’ are in Newark and Camden. Indiana University’s are in Bloomington and Indianapolis.

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Ethics Update – Get with Tech

The ABA Ethics 20/20 report tells lawyers that to be considered competent, they must “keep abreast of changes in the law and its practice, including the benefits and risks association with relevant technology. . .

Oklahoma Bar Association Management Assistance Program Director tells lawyers “You cannot be Luddites” in a blog post here.  Comment 8 to Rule 1.1 of the Rules of Professional Conduct was amended by the ABA recently, and submitted to the states for consideration and adoption. He identifies other articles concerning lawyers messing up trials by not understanding such programs as Twitter and Facebook.  The solution suggested by some – talk to the younger lawyers or staff members of the firm.

For Solos, it means get thee to a Solo and Small Firm Conference of your choosing. They are great sources for tech lessons. Indiana’s SSF conference will be June 5-7 in French Lick, IN.  Check the Indiana State Bar website for more information.

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Finally Good news for Young Lawyers

The pipeline behind you is emptying, the pressure of ever more lawyers has dropped.  The current 1L class is the smallest in 45 years, even with more law schools being built. Another decade of this, and the ratio of lawyers to clients, at least at the retail end of the practice might be back in balance.

I will now take a couple of weeks off the blog, to give you a chance to avoid looking over your files during the holidays, to see if you have committed any recent misdeeds.

Merry Christmas, or whatever holiday you choose to honor during the early winter season.

Report Your Convictions, Indiana Lawyers; Scammed; School Board Lawyers Indicted over Free Lunch?;

Those other Rules also Count to the Ind. Supreme Court

There are several (18) sets of rules that lawyers need to know about as a part of your practice, and sometimes we forget them. One that bit a lawyer recently was the rule on reporting our convictions.  No, not our deeply held principles, but the convictions we get for violating the law. The Rule is A&D Rule 23 §11.1 (a)

(2)    An attorney licensed to practice law in the state of Indiana who is found guilty of a crime in any state or of a crime under the laws of the United States shall, within ten (10) days after such finding of guilt, transmit a certified copy of the finding of guilt to the Executive Secretary of the Indiana Supreme Court Disciplinary Commission.

The 18 sets of Rules on the Court’s website can be found here.

Gary Selig, of Indianapolis, was convicted in 2003 of OVWI, but did not report it to the Disciplinary Commission. In 2013 he was again convicted, and started treatment. This time the conviction was reported, apparently by the judge (see below) His matter went to the Commission, and was docketed with the Supreme Court on two charges: Committing a criminal act that reflects adversely on his fitness to practice (RPC Rule 8.4(b) and Failure to Report the 2003 conviction (A&D Rule 23 §11.1(a)(2)).

The penalty: 30 days suspension from the practice of law, stayed for a six months probationary period with terms to help with the alcohol issues in his life, and to remain under JLAP supervision.  Good luck.

While it is probably painful to report a criminal conviction, it will be an aggravation factor if you don’t. Judges:  if a lawyer is convicted in your court, you also have a duty under 11.1(a)(1) to report that conviction within ten days.  Don’t overlook that duty.

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When the money is coming from Nigeria – Be careful

At least he did not fall for an email from Nigeria, but maybe what he did was worse.  Above the Law has the snarky version of the tale of the Iowa lawyer who not only fell for the $18.8M scam, but convinced several clients to invest in the up front payment of $177,660 to get that big check. He did it for the client who got him into this mess, (a criminal defendant with a pending case) and for the 10% finder’s fee that Robert Allen Wright Jr. (lawyer son of a prominent Iowa lawyer) was expecting out of the deal.

He even tried to get the funds from the Bank of Nigeria and the President of Nigeria (Nigeria is ruled by an Edo – the title used by the current “ruler” of Nigeria.)

Among the charges that were filed was a charge of Fraud on Clients, but it was dropped by the Disciplinary Board, because the evidence showed that Wright did not know there were no funds, and that he still is delusional about the prospect of obtaining the Nigerian cash, any day. Stupid is as stupid does…

He was suspended for a year from the practice. No word on restitution to the clients who were duped, and no requirement was stated for IQ or EQ testing before reinstatement.  Sounds like it might be a good idea.

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Got to Quit Reading NJ Law Journal
School board lawyers in NJ get indicted on Free Lunch scam for Board Members.

School Board member reports to the board lawyers that his income statement was “misstated” by his wife and he wanted to correct it “so I don’t end up like” another board member who was under investigation for getting free lunches when her kids were not eligible, due to her income.

The lawyers solved the problem for the board member, by conspiring to hide evidence, and telling staff to remove lunch applications from files, and doctor computer records, all to cover up for the various board members’ misdeeds.  Oops.   It was reported that:

A state grand jury in Trenton charged Capece and Nelson [the lawyers] with second-degree conspiracy and official misconduct, third-degree tampering with public records and physical evidence, and fourth-degree hindering prosecution.

If convicted, they would spend a minimum of five years in jail without parole and could pay fines of $150,000.

(emphasis added)

And you thought we school board lawyers lived quiet lives.

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FYI, Last Friday, I presented a three-hour CLE (one hour ethics) seminar on Representing and Working with a Not for Profit Entity.  A good session sponsored by the Northern Indiana Community Foundation (Fulton, Miami and Starke Counties), the Marshall County Community Foundation and the Pulaski County Community Foundation. If you are interested, contact me at ted@peterson-waggoner.com

Little Corruption or Little Jail Time? Wyser – No Time=Right result?; Conour Redux, again!

What is the cost for fixing tickets?

How corrupt is a NJ judge who fixes tickets for her “significant other?”  Corrupt enough to get kicked off the bench, and have her license suspended it appears.  Former judge Wanda Molina already lost her position as chief municipal judge, and the NJ Supreme Court will decide on whether and how long to suspend her license to practice law.  The disciplinary prosecutors are asking for a 2-3 year suspension, but others expect maybe a six month layoff.

Four other municipal court judges were also caught up in the ticket fixing scandal, and resolved their charges.

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Was Wyser’s Punishment the Right Result?

The Indy Star story starts: “Former deputy prosecutor David Wyser’s after-the-fact acceptance of $2,500 for approving the early release of a convicted killer was a “wobble” in an otherwise unblemished career of public service, federal Judge Sarah Evans Barker said [Nov. 25] as she sentenced Wyser to three years of probation.”

Paula Willoughby, convicted of murdering her husband, was sentenced to 70 years, but after lobbying by her defense lawyer (who appears to have offered a bribe and has not been charged yet) the deputy prosecutor David Wyser agreed to reduce the sentence to the 18 years she had served.  That was followed by a “campaign contribution” of $2500 from the father of Willoughby. The timing was apparently critical.  In 2006 Wyser decided that a sentence modification was appropriate “once she served the minimum time” she could have been sentenced to, which was the 18 years, in 2009. When that time came, Wyser filed the paperwork. He was campaigning for Hamilton County Prosecutor at that time, and says the contribution came when he needed some campaign cash.

The victim’s family thought a travesty occurred when Federal Judge Sarah Barker ordered six months sentence of house arrest and three years probation (reports do not identify the underlying sentence that would be imposed if Wyser violates the terms of the probation).

Judge Barker comment that Wyser helped with investigations into the defense lawyer who offered the contribution and Carl Brizzi, Wyser’s former boss. No charges have been filed against either person, and none apparently will be filed against Brizzi.

A check today shows that Wyser’s law license is still “Active in Good Standing.”

My take: The law license matter is incredible.  That should have been resolved by now with a disbarment or resignation.  Interesting when/if it will occur.  The sentence is a more difficult matter to decide. Judge Barker is not a “softee” on anyone. Her rationale makes some sense – if the law license is gone.  But there are lawyers who do crimes similar to non-lawyers, and who get more favorable treatment. Sorry fellow lawyers, but the Courts should hold us to the standards of the law.  Exceptions ought to be the rare event, and it does not seem like it is.

That is the troubling trend.

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Another Round for Conour?

This blog has covered the William Conour matter in some detail. With six previous stories, his sentencing and McKinney Law stripping his name off the wall of the atrium, I thought I was done with him.  Today the federal prosecutors are talking out loud about the possibility of appealing the 10 year sentence he got for stealing millions from widows, orphans, and severely injured clients.   A notice of appeal was filed last week in the 7th Circuit Court of Appeals.

The sentencing judge said at the time of sentencing that the time was set so there is a possibility that Conour will make some restitution to the victims. At 66 years of age there is some concern that a longer sentence will make that impossible. But there is the troubling trend.

A check on the status of Conour’s license:  Resigned.

No published report from the ISBA on the impact on the Client’s Financial Assistance Fund.

More to come.