How To Challenge Your Lawyer’s Bill
Most billing disputes between attorneys and their clients can be resolved quickly. And, as with many aspects of the relationship with their lawyer, clients have more leverage than they realize when it comes to complaining about or objecting to their lawyer's bill or invoice.
The most important thing a client can do is to object to the attorney's bill in a specific way as quickly as reasonably possible.
A timely and specific objection to your lawyer's invoice can be much more effective than a similar complaint to another service provider, such as a plumber. That's because lawyers and plumbers are subject to very different rules relating to how they handle money they receive from their clients. What do you think happens when you write your plumber (or most other service providers) a check at the beginning of a project? They deposit the check into their business bank account and are free to spend it right away. That's not true of lawyers.
In most states, lawyers are required to maintain at least two separate business accounts. One, which is generally called the Client Trust Account, is reserved for money that the lawyer is holding on behalf of clients and unearned fees. The second is a General Business Account, from which lawyers run their business and pay for expenses such as payroll. When a lawyer receives your check or other payment when you first hire them, the lawyer is generally required to deposit your money into the Client Trust Account. Moreover, lawyers generally may not withdraw money from the Client Trust Account until they have earned your fee. Once they earn the fee, however, lawyers must promptly withdraw the money from the Client Trust Account. This is because lawyers must keep your money separate from theirs. Thousands of lawyers have been disciplined and some have lost their law license because they didn't keep your money separate from yours. Lawyers who mix the two together are said to have commingled the money and that is a very bad thing for a lawyer to do.
So what happens when your lawyer sends you an invoice or bill? If you don't complain about it or object to it within a reasonable time, the lawyer is deemed to have earned that fee and must withdraw the earned fee from the Client Trust Account and deposit it into the General Business Account. But, and this is the critical part, the lawyer can't withdraw from the Client Trust Account funds that are disputed by the client. Thus, a written and specific objection to the bill can be much more effective than, for example, contesting the charge with a credit card company. Lawyers aren't happy when clients challenge credit card charges, but they are often even more interested in making sure that the State Bar or other disciplinary authority doesn't get involved in billing disputes. A rational lawyer will not want to mess around with any obligation relating to their duties to keep their money separate from their client's money. This does not mean they will necessary agree with your complaint or objection, but it does mean that your complaint is unlikley to be ignored.
Because lawyers are obligated to withdraw money from the Client Trust Account as soon as it is earned, it is important that you act quickly. Review the bill as soon as it arrives and if you have a specific question or objection, let the lawyer know as soon as possible. Better yet, put the objection or question it writing. Be specific. Let the lawyer know what aspect of the bill is confusing or potentially wrong. Don't just say that you have general questions about the bill without providing any details. Indicate the specific line items on the bill that you object to or don't understand. The more specific your complaint, the harder it will be for the lawyer to transfer the full amount of the invoice out of the Client Trust Account. The lawyer should, when receiving your objection, withdraw from the Client Trust Account an amount that is equivalent to the undisputed portion of the fee or invoice.
Nothing about this discussion means that you can't object to a bill, in part or in whole, after the lawyer has earned the fee and transferred the money into his or her General Busines Account. You can, and there are procedures in almost every state for resolving fee disputes between lawyers and their clients. Most lawyers will act reasonably when they receive your objection, whether or not they have already withdrawn the money from their Client Trust Account. You have more leverage, however, if you provide specific objections as soon as you reasonably can. It's the difference between preventing money from being withdrawn in the first place and trying to get it back later on.
Suspended Lawyer of the Month for February 2011
What do you do when a lawyer who has previously been suspended from the practice of law ignores the suspension and continues working as a lawyer?
That's just one of the questions that is raised by the disciplinary history of California lawyer Walter James Roberts IV.
Here, in its entirety, is the State Bar of California's summary of the one-year suspension that was imposed in May 2010 on Mr. Roberts:
WALTER JAMES ROBERTS IV [#225339], 47, of Rancho Cucamonga was suspended for two years, stayed, placed on three years of probation with a one-year actual suspension and he was ordered to take the MPRE and comply with rule 9.20 of the California Rules of Court. The order took effect May 2, 2010.
Roberts stipulated that while suspended in 2005 and 2007 he practiced law. He also disobeyed a court order and by failing to disclose his status to his clients, he committed acts of moral turpitude.
He did not comply with probation conditions attached to previous disciplinary orders, including a requirement that he develop a law office management plan, submit quarterly probation reports on time and keep his address current with the State Bar. He also submitted quarterly probation reports that contained misstatements.
In mitigation, Roberts cooperated with the bar’s investigation.
The State Bar's conduct in this case is more perplexing than Mr. Roberts. It's not hard to understand why a suspended lawyer might resist telling clients that they have been suspended. But why would you suspend someone who ignored two prior suspensions and submitted probation reports that contained misstatements? It's also a bit ironic that someone who has at best undermined the effectiveness of prior discipline seems in this instance to be credited for cooperating with the Bar's investigation.
Given that Mr. Roberts didn't submit quarterly reports on time, you would think that this would be fairly obvious within a few days of the deadline. I certainly hope that the State Bar will be especially vigilant in monitoring Mr. Robert's compliance with his current suspension.
California Lawyer Disbarred For Sex With Clients
California lawyer Patrick Earl Marshall was disbarred for having sex with two clients. He was working as a public defender at the time, and both clients were in jail.
Mr. Marshall's has travelled a long and windy road to disbarment. The sex seems to have taken place in 2004, when both clients were incarcerated in San Benito County. Over the prosecutor's objection, Mr. Marshall entered treatment for "depression disorder, sexual disorder, narcissistic personality disorder and obsessive compulsive disorder." He completed his treatment in 2007, he was suspended from the practice of law for one year and received a two-year suspension. The prosecutors appealed that sentence to the California Supreme Court, which in 2009 ordered additional hearings. Those hearings resulted in Mr. Marshall's disbarment.
Mr. Marshall is 63 and started working as a lawyer in 1975. He claimed that the sex was consensual and a one-time thing. Apparently, the sex lasted about an hour. Mr. Marshall doesn't seem to have had any prior disciplinary issues. Under the circumstances, permanently depriving a lawyer of his license might seem harsh. And if Mr. Marshall was a plumber, car salesman, or had any number of other jobs, it would be.
But lawyers are held to a different set of standards. It's not a secret. They all know they can't have sex with clients. And there is something particularly inappropriate when a lawyer who is paid by the public to defend those accused of crimes breaches his trust by having sex with them. Incarcerated clients are in an extraordinarily vulnerable situation. The Constitution includes important safeguards to protect them. Mr. Marshall didn't violate the Constitution, but he did demonstrate incredibly bad judgment and he abused his authority in an xgregious way. On balance, his disbarment is appropriate.
This is just one more reason why, as a client, you need to understand that sex between a lawyer and client is a bad idea, even if the sex is consensual.
A New Twist On Lawyer Sex
Sexual relations between lawyers and their clients is a definite no-no. That's been the rule in most states for more than ten years. It's considered to be a clear violation of a lawyer's obligation to avoid conflicts of interest with their clients, and it's the kind of violation that in many states brings a pretty severe punishment.
You would think that it wouldn't be necessary to clarify a rule that strictly prohibits lawyers from having sex with a client, but a recent South Carolina case shows that rules can always be more clear.
On September 13, The Supreme Court of South Carolina issued its decision in a case called, In the Matter of An Anonymous Member of South Carolina Bar.
So what did Anonymous Member do? Did he have sex with his client? No. That wouldn't be novel. He had sex with his client's wife while he was representing her husband.
The lawyer was charged with violating the specific ethical rule that prohibits conflicts of interests. And after a hearing was conducted, Anonymous Member won--at least for a while. The South Carolina Supreme Court stepped in and ultimately decided that Anonymous Member did violate the ethics rules. In fact, the Supreme Court's opinion was written in part as reminder to other lawyers that this conduct was pretty much an automatic violation of the rules.
And what kind of punishment did Anonymous Member receive? He got a public warning, in part because he had practiced for decades and had a clean record. My guess is that the punishment that awaited him on the home front was much more severe.
So what can clients learn from this tawdry business? Human beings in general and lawyers in particular are good at rationalizing the indefensible. How else to explain that Anonymous Member initially prevailed. But more importantly, make sure that you never ever cross the line with your lawyer. Sex between lawyers and clients may be a good plot device on television, but in reality, it's almost always a disaster. This is a non-issue with a vast majority of lawyers. But if you ever come across your own version of Anonymous Member, don't walk away--run! It's that simple.
Rehabilitating Impaired Lawyers
What do you do when a lawyer who is being investigated for breaking the rules of professional conduct claims that alcohol, drugs, and/or depression are a major cause of the problem?
Do you ignore these potentially mitigating factors and punish the lawyer to the fullest extent of the law, or do you aim to rehabilitate the lawyer?
California's State Bar Court has since 2002 been trying to do a little bit of both. It set up an Alternate Discipline Program, the first systematic effort to combine attorney discipline and substance abuse and mental health treatment.
The State Bar Court Alternative Discipline Program (ADP) represents the first comprehensive program in the United States for addressing the identification, assessment and treatment of substance abuse and mental health problems of respondents in the discipline process. The ADP is designed to protect the public, the courts and the legal profession, while respondents with substance abuse or mental health problems receive treatment.
The Alternate Discipline Program works in conjunction with the State Bar of California's Lawyers Assistance Program. The Lawyers Assistance Program is in many ways similar to the mental health programs that are made available to employees of large corporations. The employee (or in this the lawyer) can access to treatment services on a confidential basis, without informing his employer. Given the stigma that is too often attached to mental health issues, assistance programs are a smart and necessary way to get people to get the help they need.
The primary difference between the ADP and the Assistance Program is that the ADP applies to lawyers who are facing formal disciplinary charges. According to the State Bar's own statistics, about 90% of those formally charged end up being disciplined in some way. Thus, the ADP program is analagous to providing drug, alcohol, and mental health treatment to people who are being prosecuted for criminal violations.
Moreover, the anecdotal evidence suggests that lawyers who go through the ADP program receive less severe punishments than other lawyers who are facing formal disciplinary charges. In fact, some law firms that help defend lawyers facing discipline charges promote their ability to help lawyers "qualify for the Alternative Discipline Program and assist [them] in lowering your level of discipline." According to the State Bar's 2009 Annual Discipline Report, approximately 50 lawyers were referred that year to the Alternative Discipline Program. That's roughly ten percent of the cases in which the State Bar of California filed formal complaints in 2009. So it's not as if a huge amount of cases are being diverted to the Alternative Discipline Program. But neither the State Bar nor the State Bar Court appear to publish information showing how much more lenient is the Alternate Discipline Program. The odds are good that at least some attorneys who may have otherwise been suspended received a public warning or an even milder form of punishment because they were being rehabilitated. It's also possible, and more problematic, that some lawyers avoided disbarment because of their participation in the Program.
As a client, you generally need lawyers to help you with some important aspect of your life. Thus, if you find out that your California lawyer has been previously disciplined, you should ask them whether they were part of the Alternate Discipline Program or had any connection with it. I don't advocate that you automatically refuse to work with a lawyer who was in the Program. It is, however, a relevant and important factor to consider. You should, therefore, discuss the situation with the lawyer, and assess how they seem to be handling what was at one point a major problem.
How To Do A Background Check On Your Arizona Lawyer
Arizona's attorney disciplinary system appears to be more transparent than the sytem used in many states. It is, for example, possible to obtain online judicial opinions that detail what specific lawyers have done to warrant being disciplined. But, as is explained below, if you are considering hiring an attorney in Arizona, it isn't easy to determine online whether your lawyer has ever been disciplined.
The Attorney Discipline Unit of the Arizona Supreme Court handles formal disciplinary charges against lawyers. The Court's website identifies lawyers who are currentlly facing disciplinary charges. For each of these attorneys, it possible to review the report submitted by the Hearing Officer who heard the evidence in the case against the lawyer as well as the decision of the Disciplinary Commission, which in effect acts as an appealate body and reviews the Hearing Officer's decision. Both the Hearing Officer's report and the Disiciplinary Commission's review are accessible online in pdf format. In addition, the Attorney Disiciplie Unit publishes a Matrix that identies all disiciplinary decisions made by the Arizona Supreme Court since 1986. The Matrix also identifies disbarments and suspensions, the most serious violations, between 1981 and 1985. Beginning in 2003, the Matrix includes a link to the actual decisions made by the Hearing Officer, the Disciplinary Commission, and ultimately by the Arizona Supreme Court. For cases decided between 1981 and 2002, only the summaries of these decisions are available online. It appears that if you want to receive the actual disiciplinary reports for cases decided before 2003, you need to call the Supreme Court and pay for copies of the disciplinary record to be mailed to you.
The authorities in Arizona ahould be commended for including the full-text versions of the disciplinary decisions. Too often, summaries of disiciplinary proceedings are written in such a dry style—and contain so little information—that it is difficult to get a full picture of what the lawyer did and why they received the punsihment they did. The disciplinary decisions often reveal what arguments were made in defense of the accused attorney as well as the judge's conclusion as to whether the accused lawyer acted defiantly or was contrite. These can be important details to know if you are considering hiring a lawyer who has previoulsy been disciplined.
Arizona's online reporting system does, however, suffer from a serious flaw; its search feature doesn't work very well. In theory, it should be possible to conduct an online search to determine whether a particular lawyer has previously been disciplined. But when I entered the names of specific lawyers into the search engine, the results were essentailly useless. The results linked to the Matrix for certain years but the names of the specific lawyers I searched for were nowhere to be found.
Thus, Arizona's online system is helpful when you want to find out information about a lawyer who you know has already been disciplined. It is particularly user friendly when you know the specific year in which the lawyer was disiciplined. But if you don't know this information and you want to find out whether a particular lawyer has been disciplined, the Supreme Court's website isn't very helpful.
In a future post, I'll report on what to expect when you call the Arizona Supreme Court to determine whether a particular lawyer has been disciiplined. But even if it is possible to find out this information by phone, the fact that this information isn't online means that far fewer clients will be able to make an informed decision about one of the more important decisons they make in their lives—which attorney to hire.
How To Find Out If Your Lawyer Has Been Sanctioned
I have previosuly written about how you can conduct a background search to determine whether your lawyer has been disciplined by either the Supreme Court or the Bar Association of the state or states in which the lawyer is licensed. If you are hiring a lawyer to represent you either as the plaintiff or defendant in a lawsuit, you should also find out whether the lawyer has been penalized by a court for filing a frivolous lawsuit or otherwise acting undreasonably in connection with the lawsuit.
The most well known court-ordered penalty or sanction is Rule 11 of the Federal Rules of Civil Procedure. It provides that, by signing a document filed with the court, the lawyer is pledging that the document is not being used for an proper purpose, is based on existing law or a good faith argument for a change in existing law, and is not frivolous. In addition, Rule 11 empowers federal courts to fine and otherwise punish lawyers who violate the Rule.
A sanction imposed under this rule must be limited to what suffices to deter repetition of the conduct or comparable conduct by others similarly situated. The sanction may include nonmonetary directives; an order to pay a penalty into court; or, if imposed on motion and warranted for effective deterrence, an order directing payment to the movant of part or all of the reasonable attorney's fees and other expenses directly resulting from the violation.
Many states require lawyers who have been sanctioned more than a particular amount, often $1000, to notify the applicable disciplinary authority of the penalty. This requirement has had an unfortunate unintended consequence. Too many courts are hesitant to impose a sanction that will trigger the disclosure requirement. As a result, judges impose financial sanctions just below the disclosure limit. The lawyer's conduct therefore doesn't come to the attention of the disciplinary authority, and the amount of the fine is so low that it doesn't have much a deterent effect on the lawyer.
Many states have established court-ordered penalities that are comparable to those found in Rule 11. Most states also have passed laws that provide specific penalties and fines for lawyers who have been found to violate the rules relating to discovery—the process by which the parties to a lawsuit request and exchnage information from each other.
There isn't a sure fire way to determine whether your lawyer has been sanctioned by a court. Most lawyers don't handle lawsuits in federal court. Thus, Rule 11 doesn't directly apply. And even when a state has enacted a similar rule, it's often called something other than Rule 11. It can be worthwhile to enter your lawyers name in Google or some other search engine and see whether anything comes up when you look for discovery or litigation sanctions. Sometimes your best bet is to ask the lawyer during the interview whether they have ever been sanctioned and if so how much and for what.
Some Non-Refundable Fees Are Refundable
A non-refundable fee should be a simple concept; it seems to be a fee that, once its paid, won't be returned. When it comes to attorneys who charge "non-refundable" fees, the reality is a bit more complicated. I have come across an increasing number of attorney-client agreements that describe certain fees paid by the client as "non-refundable." Often times, the lawyers themselves aren't aware that in several states the Rules of Professional Responsibility severely limit when non-refundable fees can be charged. In most states, a lawyer may charge a non-refundable fee if the lawyer is simply being hired to be available to do work. Sometimes this arrangement is called a "pure retainer." The client isn't asking the lawyer to work on a specific project, just to be available to do the work. This situation rarely takes place. A vast majority of the time, clients are hiring lawyers to do something specific.
The law in an increasing number of states provides that lawyers must return a "non-refundable fee" if they don't do any of the work they were hired to do. A 2005 article describing the law in Washington State exemplifies how lawyers can be disciplined for not returning non-refundable fees:
The [Washington State] Supreme Court, in an October 21, 2004, disciplinary decision, rejected the argument that a lawyer is entitled to keep a nonrefundable fee whether or not services are performed. The Court distinguished a "retainer" to secure a lawyer's availability over a period of time, as discussed in WSBA Formal Opinion 186, from a flat fee for legal services in a specific matter. Because the lawyer failed to provide the contracted services, his failure to return unearned money violated RPCs 1.5 and 1.15(d).
Different states treat non-refundable fees differently. But if you paid a non-refundable fee and the lawyer did no work or an unreasonably small amount of work relative to he size of the fee, not only may you be able to get your "non-refundable fee" back, your lawyer could be disciplined for failing to return that fee. That's why non-refundable fees aren't as straightforward as they first appear.
The Relationship Between Legal Skills and People Skills
The September 2009 issue of Los Angeles Lawyer Magazine includes an intersting opinion piece about the limits of the attorney discipline system. The article, entitled "A Breakdown of the Attorney Discipline System" starts with the following bit of wisdom:
The California Bar Journal's monthly list of disciplined attorneys suggests that the surest ways to be disbarred, suspended or otherwise disciplined are to take client trust funds or cut off contact with a client."
The article's author, Jerry Abeles, has it about right. The only category I would add is the lawyer that fails to perform any legal sevices and just takes the money. Sadly, this too is a common fact pattern when you read the summary of disciplinary actions taken against attorneys.
Most of the article addresses a topic that gets far too litttle attention: attorneys whose abusive conduct against other lawyers is ignored by the disciplinary process. Specifically, the article describes an attorney who has repeatedly lied to judges and has even gone so far as to threaten other lawyers with "macabre death threats" and physical harm without being disciplined. I know Jerry Abeles. He is not one to exagerate when writing to a court or a large magazine readership. The point he makes is important. The discipline process tends to focus on specific, often technical, violations of the applicable rules of professional conduct. Acting as a harassing jerk is far less likley to get an attorney disciplined.
That's why clients are ultimately a better curb on obnoxious attorney behavior than the disciplinary process. Many clients don't know how their attorney treats other attorneys or court personnel. But if you, as the client, ever see your attorney acting in a way that strikes you as inappropriate, be sure to raise the issue with your lawyer. Such conduct tends to cost clients money and otherwise harms their interests. As a client, you often don't know how to evaluate your lawyer's performance. But you have a lifetime of experience judging whether people are courteous. Don't fall into the trap of deciding that you need someone obnoxious to defend you in a lawsuit or business transaction or to attack the other side.
The best lawyers are startegic, smart, and don't make enemies unnecessarily. They combine good legal skills with good people skills. Don't let anyone, especially a second-rate lawyer, convince you otherwise.
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