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.
If a California lawyer has cheated you or acted dishonestly, you may be able to get some of your money back.
California in 1972 established a Client Security Fund. In a typical year it pays victims of dishonest California lawyers between $2 million and $ 4 million.
There are important restrictions. You have to show that you were cheated, not just that you were dissatisfied with your lawyer's performance or that the lawyer committed malpractice. It generally has to involve something like actual theft or taking your fees and then doing essentially no work. The money that you are trying to recover must have been received by the lawyer. In addition, you have to file a disciplinary complaint with the State Bar of California before you are eligible for any compensation. if the lawyer is disciplined and also found to have been dishonest, you then may be eligible to receive some money. Awards are limited to $50,000. The California Client Security Fund is in some sense a payor of last resort. Generally speaking the State Bar seeks reimbursement as part of the disciplinary process. The Fund is designed to help victims of attorney fraud and dishonesty where the lawyer lacks the resources to pay back the people he or she has harmed.
The California Client Security Fund, which in other states is sometimes referred to a Client Recovery Fund, is hardly a panacea. It takes approximately a year for eligible people to receive any funds. It is, however, better than nothing. In a typical year about 700-800 people receive some kind of payment from the Fund. In a state with more than 150,000 lawyers, that is a very low number. I suspect that few people know about the Fund. You can find out more information about the California Client Security Fund, including downloading an application for payment, by clicking here.
If you are wondering where the money in the Client Security Fund, comes from, it's not from taxes. California lawyers contribute to the Fund as part of their professional dues. It's one of the things that lawyers do that makes them professionals rather than just business owners. Please keep the Client Security Fund in mind the next time you hear someone bad mouth all lawyers.
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.
Let's start the new year by showing you a little known tip that can save you thousands of dollars on your legal bill.
Clients need to consent to fee increases imposed by their lawyers. In some states, such as California, judges have explicitly decided that this is the rule. In other states the situation is more informal. But whereever you and your lawyer are located, you should make sure that you understand how you are being billed by your attorney and for what. If you are being billed by the hour, review the bills for January especially carefully. On January 1, some lawyers automatically increase the hourly rates they charge for themselves and their staff (such as other more junior lawyers and paralegals). Trouble is that too many lawyers don't notify clients of this fee increase in advance. They just include the new, higher rates in the first bill or invoice of the new year. I'm not suggesting that you object to every fee increase. That's not sensible; attorneys also have to run a business. But if you do have questions or objections to the new fees, speak up. Don't just let them pass without comment. If you ever do get into a fee dispute, the lawyer may argue that your silence shows that you agreed to the higher hourly rates. And even if you don't have a problem paying the new fees, it may be a good idea to let the lawyer know that in the future you want advance written notice of any proposed fee increases or changes. Remember, working with a lawyer is like working on other personal and professional relationships. If you want to be treated better, it's wise to comunicate and let the other person know what bothers you and what you want.
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.
As I’ve mentioned before, clients can generally free to fire their lawyers at any time for any reason, or for no reason at all. In some states, this ability is restrained by the lawyer’s ability to hold on to the client’s file until the lawyer is paid. And in states such as Florida, where lawyers may charge nonrefundable fees, the client’s right to terminate a lawyer may be further restrained by the knowledge that the lawyer can keep the unused portion of the nonrefundable fee. But in states, such as California, where neither of these restraints are in place, the client has essentially an unfettered ability to fire a lawyer.
Sometimes clients abuse that power. Yesterday, I saw that firsthand. A lawyer I know called me to complain that one his clients fired him out of the blue. He found out when a signed substitution-of-attorney form was faxed to his office. He received no notice or explanation and his now former client didn’t return his phone call. This lawyer is a professional, so he did what he is required to do under the circumstances. He arranged to return the client file promptly and he wrote a letter to the new lawyer detailing the status of the case and the upcoming deadline. He lived up to the rules of conduct that govern lawyers in his state, but he did so with a heavy heart, and despite the fact that the client owed him thousands of dollars. I have no doubt that this will prove to be a temporary setback for the lawyer; he will get over it and will continue to work hard for his current and future clients.
But that doesn’t change the fact that the client acted badly--very badly. Just because you have the power to fire someone without suffering negative consequences doesn’t mean you should. If you have a problem with your lawyer, at a minimum let them know what it is. It’s the right thing to do. And who knows, you may even find out that your problem is resolvable or was based on miscommunication. Many lawyers will generally go away quietly when they are fired, no matter how unfair the circumstances. They feel restrained by the ethics rules and won’t confront clients. I don’t have to be so quiet. I won’t confront the client in this particular situation, but please keep in mind that the attorney-client relationship is already fragile and plagued with mistrust and misinformation. The leash is in your hands; you as the client have much of the power. Please use that power wisely and temper it with common decency.
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.
Lawyers can be among the first to know when a fellow lawyer rips off a client or otherwise commits a serious violation of the rules of professional ethics. Question is: How likely are lawyers to turn each other in to bar associations and other organizations that have the power to discipline lawyers?
There are some institutions, such as police and fire departments, which long have long been reputed to shield their members from outside accusers. The tendency of police officers to protect each other has been described as a "Blue Code of Silence."
In my experience, lawyers are not quite so insular. Lawyers are trained to keep secrets; they are not by nature or training likely to be blabbermouths. Lawyers are also competitive, so it's not that uncommon for lawyers to file ethical complaints against opposing counsel in a lawsuit. This can be part of a broader strategy to serve their respective clients. Lawyers also have an independent streak. We are trained not to lie on behalf of a client or otherwise to compromise our professional judgments. Thus, I believe that, while lawyers aren't enthusiastic about snitching, they are significantly more likely than police officers to report a colleague's misconduct.
The legal profession's attitude towards reporting wrongdoing is reflected in the recent decision of the Board of Governors of the State Bar of California. A Commission appointed by the Board recommended that the rule requiring lawyers to report misconduct by other lawyers be expanded to include certain felonies. As reported by The Daily Journal newspaper on July 27, 2010, a Committee of the Board of Governors rejected the recommendation and kept the current rule unchanged.
The committee flatly rejected a proposed rule, also much narrowed from an ABA [American Bar Association] rule, that would have required lawyers to tell discipline authorities about another lawyer's felonious conduct in certain situations.
"It's protection of the public," commission chair Harry B. Sondheim, a retired Los Angeles County deputy district attorney, told the board committee on Friday. "It's a major change from current California law."
The committee members clearly were concerned it would have been too big a change. Governors worried civil lawyers wouldn't be sure whether a theft by a colleague was a misdemeanor or a felony, for instance.
State Bar Deputy Executive Director Robert Hawley put the committee's concerns succinctly. Though arguments favoring the felony-snitch rule make for "good sound bites," Hawley said, the rule "doesn't work well anywhere" and "makes you your brother's keeper."
There are practical problems in enforcing a rule that hinges on the definition of a felony. Some crimes which seem significant might be characterized as misdemeanors and other seemingly trivial violations may in fact be felonies. And I don't doubt that some lawyers would make mistakes in this regard. The real question therefore is what kind of error is worse--punishing a lawyer for failing to report a crime that was in fact a felony or allowing a lawyer to keep silent when another lawyer commits a seemingly serious offense that happens to be a misdemeanor.
My sense is that many lawyers would be hesitant to turn in a lawyer for borderline crimes regardless of whether the crime is technically a misdemeanor or a felony. Thus, for example, I don't think that many lawyers would turn in a fellow lawyer for stealing a large quantity of paperclips from the office, even if that were technically a felony. Moreover, the State Bar would exercise its discretion whether to prosecute cases that were brought to its attention.
The Board of Governors decision is understandable. Most of the lawyers I know who have studied this issue more deeply than I have support the decision not to expand the current "snitch" rule. I do, however, have a nagging feeling that the attitude underlying the Board's decision is incomprehensible to most clients. For them, the bottom line is pretty basic--if one lawyer knows that another lawyer is a thief (something more significant that a few office supplies)--that conduct should be brought to the attention of the authorities. I would have a tough time explaining to members of the general public why known thieves can stay in the shadows.
This decision also has the unfortunate consequence of reinforcing what many cleints probably already feel--if it turns out that the chief witness against their lawyer is another lawyer, they probably will be blocked a Lawyers' Code of Silence.
There's a famous scene in the 1984 mocumentary "Spinal Tap," in which one of the members of the fictional rock band explains that their sound projects were louder than other bands because the the dials on their amplifiers go up to the number 11, rather than the more traditional 10.
The most recent game that law schools are playing reminded me of this scene. As reported in the New Tork Times, some law schools are arbitrarily and retroactively increasing the grade point averages of their students to make them more attractive to potential employers.
[Loyola Law School Los Angeles] is retroactively inflating its grades, tacking on 0.333 to every grade recorded in the last few years. The goal is to make its students look more attractive in a competitive job market.
In the last two years, at least 10 law schools have deliberately changed their grading systems to make them more lenient.
I've previously commented on the deficiencies in law school education. Even without this game-playing, and regardless of their grades, there is little reason to hire attorneys fresh out of law school. A vast majority of what lawyers know is learned on the job. Experience matters.
Apparently, law school administrators believe that the people who hire lawyers, including their own alumni, are a bunch of chumps. Do they really think that lawyers won't notice that grades have been inflated retroactively? This is just another sign that law school education is fundamentally flawed.
It's just one more reason to avoid hiring recent law school graduates altogther.
Before you decide to hire a lawyer, find out if they have a disciplinary record. In most states, either the Supreme Court of that state or the Bar Association is responsible for disciplining lawyers who practice in that state. In California, the Web site of the State Bar of California is the best place to do a background check. Lawyers who are members of the California Bar receive a monthly publication, California Bar Journal, which includes a list and description of recent disciplinary actions taken against California lawyers. Since so few clients receive this publication, your best bet is to check out a lawyer's online profile.
By way of example, here is the online profile of one of the attorneys, Laurence P. Posner, whose suspension is described in the August 2009 issue of the Journal. You can find a specific lawyer's online profile by clicking on the "Attorney Search" link that appears on the top right of the State Bar of California's home page. From there you can type in the name of the lawyer you are interetsed in, and if you only have partial information about a lawyer, you can use the "Advance Search" feature.
If a lawyer has been disciplined since 2005, you can get fairly detailed information about many kinds of discipline. Let's use Mr. Posner as an example. The top of his profile indicates that he is an Active Member; that means that he is entitled to practice law in California. But if you scroll down, you will see that in January 2009 he was suspended. Suspensions are the second-most serious category of disclipline imposed on California lawyers and are the most important category that you need to worry about as a client. The most serious category of discpline that can be imposed is a disbarment. That means that an attorney is prohibited from practicing law. Lawyers who have been disbarrd can petition the California Supreme Court to be reinstated, but this takes years, and is fairly uncommon. Thus, the most serious discipline that an active lawyer could have had is generally a suspension.
In Mr. Posner's case, he was suspended for 90 days. Technically, the sentence was two years suspension, but the actual length of suspension is only 90 days. How do I know that? It says so in the summary that appears at the bottom of his online profile. This is the same summary that is printed in the California Bar Journal that is mailed to lawyers.
January 23, 2009
LAURENCE P. POSNER [#170536], 42, of Alhambra was suspended for two years, stayed, placed on two years of probation with an actual 90-day suspension and was ordered to prove his rehabilitation, take the MPRE within one year and comply with rule 9.20. The order took effect Jan. 23, 2009.
Posner stipulated to two counts of misconduct stemming from a personal injury case in which his client was hit by a car. Posner worked for the Law Offices of Kenneth Jacobson.
In a written fee agreement, the firm and the client agreed that the fees would be 25 percent of the total settlement. According to the stipulation, Posner consulted with Jacobson, who said the “common fund doctrine” allowed the firm to retain one-third of the funds paid to the insurer as attorney’s fees. He also said the firm did not have to notify the client that it would keep that money under his mistaken belief that reimbursement to the insurer was independent of the attorney-client retainer agreement. And he told Posner to do his own research about the common fund doctrine.
The matter settled for $275,000; the insurer claimed a $63,241 reimbursement that was reduced to $42,051 (two-thirds of the medical benefits paid on the client’s behalf). The firm kept the remaining $21,190 as fees based on the mistaken understanding of the common fund doctrine.
When the client, who received more than $128,000, learned about the discrepancy, she demanded an explanation. Jacobson told Posner the firm had the right to keep the $21,190 and he relayed that information to the client. After she complained to the bar, the firm issued a check to her for $21,190, with an apology for misunderstanding the common fund doctrine.
Posner stipulated that he collected an unconscionable fee and committed acts of moral turpitude by making misrepresentations to the client about both the amount of the attorney’s fees and the amount of reimbursement to the insurer.
In mitigation, no clients were harmed and Posner submitted evidence of his good character.
A few of the terms in the description require additional explanation. First, the MPRE refers to the Multistate Professional Responsibility Exam. It is the exam that new lawyers have to pass in order to become lawyers. It tests a lawyer's knowledge of the basic ethical rules. I took it as a thrid-year law student; it is a separate exam from the bar exam, but you have to pass it in order to become a practicing lawyer. Here, Mr Posner was ordered to take the exam again and pass it within one year. The summary also indicates that Mr. Posner "stipluated to two counts of misconduct." A stipulation is just a fancy word for agreement. In other words, Mr. Posner didn't challenge the charges against him. He agreed that he committed two wrongful acats against a client in a personal injury case. In fact, you can see the document that Mr. Posner signed, which describes what he agreed or stipulated to. That document is linked to his online profile as a .pdf file that you can download and print. If you wanted to know more information about Mr. Posner's disciplinary file, you can pay to have that file copied and mailed to you. I wish this information was more readily available to clients for free, but at least this information is available in California. It isn't as readily available in some other states.
Thus, at least in California, you can conduct a fairly decent background check on any lawyer who has been subject to serious discipline. There are, however, certain limitations to keep in mind:
The online profiles of lawyers who were suspensed prior to 2005 are less detailed. If you want to see the summary that appeared in the Bar Journal, your best bet is to go to a public law library.
if your lawyer was disciplined in another state, you need to search that state's records. The information on the State Bar of California's website only applies to discipline imposed in California.
Not all kinds of discipline are disclosed. The website discloses the most serious kinds of discipline--disbarments, suspensions, and public reprovals. Repoval is just a fancy word for warning. Lawyers can receive a public warning as well as private warnings. The private warnings generally involve minor infractions. The warning goes into the lawyers file with the State Bar but is not revealed to other lawyers or to the public.
Because of these limitations, when you interview a lawyer, you should ask about all the states in which they have ever practiced and whether they have ever been dissciplined in any away, including priviate forms of discipline. If you ask these questions and check out their online profile at the California State Bar website, you will have dramatically increased your chances of uncovering a California lawyer's discipliary background. Of course, this is not the end of the matter. A lawyer without a disciplinary record can still be a lousy lawyer. But it would be crazy for you not to at least conduct a background check on every lawyer you are seriously considering hiring.
Lawyers can be among the first to know when a fellow lawyer rips off a client or otherwise commits a serious violation of the rules of professional ethics. Question is: How likely are lawyers to turn each other in to bar associations and other organizations that have the power to discipline lawyers?
There's a famous scene in the 1984 mocumentary "Spinal Tap," in which one of the members of the fictional rock band explains that their sound projects were louder than other bands because the the dials on their amplifiers go up to the number 11, rather than the more traditional 10.
