Louisiana lawyer suspended for submitting false billable hours because he believed his partnership status required them

Hello everyone and welcome to this Ethics Alert which will discuss the recent Louisiana Supreme Court Opinion suspending a lawyer for 30 months with all but one (1) year deferred for false billable hours that he believed were necessary to maintain his partnership position and “in an effort to make himself look better on paper each month.”   The disciplinary case is:  In re: Kenneth Todd Wallace, Case No. 2017-B-0525.  The disciplinary opinion is dated September 22, 2017 and is here:  http://www.lasc.org/opinions/2017/17B0525.OPN.pdf

According to the opinion, the lawyer “joined the law firm of Liskow & Lewis as an associate attorney in 1998. After his promotion to shareholder in 2005, he served as the firm’s hiring partner and head of recruiting. He also chaired the firm’s diversity committee as the firm’s first minority recruiting and retention partner. In 2012, respondent was elected to the firm’s board of directors and served as the board’s junior director through April 2015.”

The lawyer stated that he made the false billing entries because he was concerned that his correct billable hours (along with an insufficient number of clients) were not adequate for a partner with his status.  “When his practice began to decline, (the lawyer) gave in to his own internal pressures and began to submit false time on a dismissed contingency fee matter, and eventually other matters, in an effort to make himself look better on paper each month.”

After the law firm became aware of his false billing in some client matters, the lawyer assisted the firm in conducting a full investigation.  The firm’s investigation showed that, between 2012 through 2015, the lawyer submitted 428 billing entries that the firm believed were “certainly false” and another 220 entries that the firm believed could be false or inflated; however, the law firm concluded that none of the false billing entries adversely affected any of the firm’s clients.

The lawyer had received $85,000.00 in merit bonuses between 2012 through 2015 and the firm concluded he would have received some or all of the bonuses even if he had not inflated his billable hours. The lawyer had also spent significant time with his firm management and committee responsibilities and had also met or exceeded billable targets during the years in question.  The lawyer resigned from the firm in 2015 and gave up his available bonus.

The disciplinary opinion imposed a 30 month suspension with all but one-year deferred.  The suspension was also made retroactive to January 2016, when the lawyer had been suspended on an interim basis pending the outcome of the matter.

Bottom line:  This is a very clear and unfortunate example of a lawyer who most likely destroyed his legal career after succumbing to the stress and pressure of a law partner’s need for large billable hours and a large number of clients (book of business).  I would imagine that, if asked, this lawyer would tell you that it was not worth it.

Disclaimer:  this e-mail is not an advertisement, does not contain any legal advice, and does not create an attorney/client relationship and the comments herein should not be relied upon by anyone who reads it.

Joseph A. Corsmeier, Esquire

Law Office of Joseph A. Corsmeier, P.A.

29605 U.S. Highway 19 N. Suite 150

Clearwater, Florida 33761

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

Joseph Corsmeier

about.me/corsmeierethicsblogs

Posted in Attorney discipline, Attorney ethics, corsmeier, deceit, dishonesty, fraud, joe corsmeier, joseph corsmeier, Lawyer discipline false billings, Lawyer Ethics, Lawyer fraud, Lawyer sanctions, Lawyer sanctions false client billings, Uncategorized | Tagged , , , , , | Leave a comment

Nebraska ethics opinion finds lawyers can accept payment in digital virtual currency such as Bitcoin

Hello everyone and welcome to this Ethics Alert which will discuss the recent Nebraska Ethics Opinion which found that lawyers may accept fees and payments in a digital virtual currency such as Bitcoin.  The ethics opinion is Nebraska Ethics Advisory Opinion for Lawyers 17-03 (September 11, 2017) and is here:  https://supremecourt.nebraska.gov/sites/default/files/ethics-opinions/Lawyer/17-03.pdf

This ethics opinion is the first to address this topic and notes a growing number of law firms in other jurisdictions accept payments in Bitcoin, a virtual digital currency with volatile prices.  As an example of the volatility, in 2013, the price of a single Bitcoin fluctuated from about $7.00 to $1,200.00.

The opinion states that lawyers who accept payment in digital currency should notify the client that the payment will be immediately converted to U.S. dollars, make the conversion through a payment processor, and credit the client’s account at the time of payment.  The opinion states that immediate conversion to dollars reduces the risk of volatility and potential excessive fees for legal services (or a reduction of the amount of payment because of a reduction on the value of the Bitcoin).

The opinion also states that lawyers who accept virtual currency must be careful to make sure that the “property” that they accept as payment “is not contraband, does not reveal client secrets, and is not used in a money-laundering or tax avoidance scheme; because convertible virtual currencies can be associated with such mischief.”

According to the opinion, Bitcoin cannot be deposited into a client trust account unless it is converted to U.S. dollars and, if the Bitcoin payment is intended to be used to pay future fees, the lawyer must immediately convert it to U.S. dollars before the funds are deposited into the trust account.

If the lawyer wishes to hold the Bitcoin funds in trust without immediate conversion to U.S. dollars, the lawyer must advise the client that the currency will not be converted to U.S. dollars, the currency must be held separate from the lawyer’s property, and the currency must be properly safeguarded. The opinion notes that there is no bank or FDIC insurance to reimburse a client for hacked Bitcoin and lawyers should take the proper precautions such as encryption or the use of more than one private key for access.

Bottom line:  This opinion is the first to address ethics issues when lawyers accept surrounding digital/virtual currencies as payment for fees.  For an excellent analysis of the Nebraska opinion and the potential pitfalls of lawyers’ acceptance of digital currency, especially to hold in trust, you should read Florida lawyer Christopher Hopkins’ recent blog titled “A Lot of Lawyers Claim That They Accept Bitcoin…But Are They Doing It Wrong?”, which is here: https://internetlawcommentary.com/2017/09/21/nebraska-ethics-opinion-for-lawyers-about-bitcoin-virtual-currency-payments-and-escrow/

Be careful out there in this digital age…

As always, if you have any questions about this Ethics Alert or need assistance, analysis, and guidance regarding ethics, risk management, or other issues, please do not hesitate to contact me.

Disclaimer:  this e-mail is not an advertisement, does not contain any legal advice, and does not create an attorney/client relationship and the comments herein should not be relied upon by anyone who reads it.

Joseph A. Corsmeier, Esquire

Law Office of Joseph A. Corsmeier, P.A.

29605 U.S. Highway 19 N. Suite 150

Clearwater, Florida 33761

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

Joseph Corsmeier

about.me/corsmeierethicsblogs

Posted in Attorney ethics, Confidential Information, Confidentiality, corsmeier, Ethics opinion lawyers accepting bitcoin digital virtual currency, Excessive fee, joe corsmeier, joseph corsmeier, Lawyer escrow accounts, Lawyer Ethics, Lawyer ethics opinions, Lawyer IOTA trust accounts, Lawyer trust accounts, lawyer unreasonable fee, Lawyers accepting bitcoin digital virtual currency, Lawyers and bitcoin, Lawyers and virtual digital currency, Nebraska ethics opinion lawyers accepting bitcoin, Uncategorized | Tagged , , , , | Leave a comment

Hello everyone and welcome to this Ethics Alert which will discuss the recent opinion of a federal district judge in North Carolina dismissing a non-profit corporation’s claims that the state’s UPL statute is unconstitutional.  The case is: Capital Associated Industries Inc. v. Josh Stein et al., Case No. 1:15-cv-00083 (U.S. District Court, Middle District of North Carolina).  The September 19, 2017 order and opinion is here: http://www.abajournal.com/images/main_images/NCBar.pdf

A corporation called Capital Associated Industries Inc. (CAI) filed the lawsuit after the North Carolina State Bar issued a proposed ethics opinion which found that CAI’s plan to provide legal services would constitute unlawful UPL.

According to the order and opinion of U.S. District Judge Loretta Biggs, CAI is a non-profit (and non-legal) corporation which provides human resources services to members, who pay annual dues. The corporation proposed to provide employment-related legal advice through its own lawyers as part of its membership services. It also proposed charging a separate fee of $195.00 an hour for other legal services, including drafting employment agreements and potential representation before the Equal Employment Opportunity Commission.

CAI argued that North Carolina’s UPL Statutes, as applied to them, “violate CAI’s right to substantive due process because the statutes are not rationally related to any legitimate governmental interest.  The State Bar responds that the NC UPL Statutes “are rationally related to North Carolina’s interest in avoiding potential ‘conflicts of interest and loyalty,’ as well as its interest in avoiding the ‘impairment of attorney independence.’”

The order and opinion held that the statute was sufficiently related to the government’s interest in avoiding potential conflicts of interest and loyalty, and in avoiding the impairment of attorney independence.  “North Carolina could rationally decide that nonlawyers would be more likely than lawyers to encourage the attorneys whom they supervise to violate the ethical canons that govern the legal profession.”

CAI also argued that the UPL Statutes “violate the freedom of speech guaranteed by the First Amendment, as applied to its proposed provision of legal services.  Specifically, CAI argues that the UPL Statutes restrict CAI’s speech on the basis of its content; that the UPL Statutes prohibit CAI from speaking on the basis of its corporate identity; and that this restriction on its speech cannot survive strict scrutiny.  The State Bar argues that the UPL Statutes operate as permissible regulation of a profession and not a restriction on speech that is entitled to First Amendment protection.”

The order and opinion stated that the UPL statute is not subject to strict First Amendment scrutiny since CAI’s proposed communications with members on employee legal questions are professional speech.  “The Fourth Circuit has held that under the professional speech doctrine, ‘a state’s regulation of a profession raises no First Amendment problem where it amounts to ‘generally applicable licensing provisions’ affecting those who practice the profession.’”  Pursuant to same, CAI “has no First Amendment right to advertise legal services since its right to provide such services is unlawful under the (UPL) statutes.”   According to media reports, CAI’s attorney has stated that the organization will appeal to the Fourth Circuit Court of Appeals.

Bottom line:  This opinion appears to strengthen the regulation of UPL by state Bars such as the North Carolina Bar.  The opinion also analyzes the constitutional scrutiny that applies in cases involving the regulation of professional speech “where it amounts to ‘generally applicable licensing provisions’ affecting those who practice the profession.”

Disclaimer:  this e-mail is not an advertisement, does not contain any legal advice, and does not create an attorney/client relationship and the comments herein should not be relied upon by anyone who reads it.

Joseph A. Corsmeier, Esquire

Law Office of Joseph A. Corsmeier, P.A.

29605 U.S. Highway 19 N. Suite 150

Clearwater, Florida 33761

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

Joseph Corsmeier

about.me/corsmeierethicsblogs

 

 

Posted in joe corsmeier, joseph corsmeier, North Caroline federal opinion on regulation of UPL, Uncategorized, UPL, unauthorized practice of law, unlicensed practice of law, U.S. Constitution professional speech | Leave a comment

Virginia lawyer previously suspended after disrupting CLE seminar suspended for 5 years on new candor violations

Hello everyone and welcome to this Ethics Alert which will discuss the recent 5 year suspension of a Virginia lawyer who was previously suspended for 6 months in 2015 for disrupting a CLE seminar and suspended for 3 years in 2016 when he failed to undergo treatment required pursuant to the 2015 suspension.  The 6 month suspension Order dated March 27, 2015 is here: http://www.vsb.org/docs/Hartke-050615.pdf and the 3 year suspension Order dated October 27, 2016 is here: http://www.vsb.org/docs/Hartke-110416.pdf.

According to the Virginia State Bar website, “on August 25, 2017, the Virginia State Bar Disciplinary Board suspended Wayne Richard Hartke’s license to practice law for five years effective October 27, 2019, for violating professional rules that govern candor toward the tribunal.  The suspension will be consecutive to a three-year suspension issued on October 27, 2016.”

According to the March 27, 2015 Disciplinary Board Order, the lawyer was intoxicated and disruptive at a Continuing Legal Education program.  Witnesses at the CLE seminar said that the lawyer was sleeping and loudly snoring during the morning session and then yelling at the video screen during the afternoon session.  A witness also said he smelled of alcohol and had a bottle of liquor with him at the seminar.  The lawyer was led from the seminar room by another person attending the seminar.

The lawyer was suspended for six months for that CLE disruption and for “failing to correct misrepresentations that he made to the Virginia State Bar during the disciplinary proceedings”.  The Order also required him to enroll in a two-year treatment and monitoring program stated that any notice of noncompliance would result in an order to show why his license should not be suspended for an additional three years.  According to the October 27, 2016 disciplinary Order, the lawyer failed to comply with the terms of the 2015 Order.  He also failed to show up for the disciplinary hearing.  The Disciplinary Board found that the violation was proven and suspended the lawyer for three (3) years, effective October 27, 2016.

The lawyer had previously been reprimanded in 2010 after settling a legal malpractice lawsuit which alleged that he failed to protect the interests of the members of the board of directors of a corporate client.  He was reprimanded again in 2011 when he was held in contempt and served 10-day jail sentence after his blood alcohol content was found to be .127 during a court appearance.

Bottom line:  According to the facts set forth in the disciplinary Orders, this lawyer has some serious and ongoing issues with both alcohol and candor.  The ultimate result was a 5 year suspension effective October 27, 2019 after he completes his current 3 year suspension and, unless that suspension is modified, it will continue until October 27, 2024.

Be careful out there.

Disclaimer:  this e-mail is not an advertisement, does not contain any legal advice, and does not create an attorney/client relationship and the comments herein should not be relied upon by anyone who reads it.

Joseph A. Corsmeier, Esquire

Law Office of Joseph A. Corsmeier, P.A.

29605 U.S. Highway 19 N. Suite 150

Clearwater, Florida 33761

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

Posted in Attorney discipline, Attorney ethics, corsmeier, deceit, dishonesty, joe corsmeier, joseph corsmeier, Lawyer Ethics, Lawyer false statements, Lawyer misrepresentation, Lawyer sanctions, Lawyer sanctions alcohol/substance abuse, Lawyer sanctions personal misconduct, Uncategorized | Tagged , , , | Leave a comment

New York Bar opinion states that lawyers must take reasonable steps to protect confidential information in a border search

Hello everyone and welcome to this Ethics Alert which will discuss the recent New York City Bar Association ethics opinion which states that lawyers must take reasonable precautions to protect attorney/client confidential information if the lawyer is searched by U.S border/customs agents (and/or agents of other countries).  The ethics opinion is NYCBA Formal Opinion 2017-5:  An Attorney’s Ethical Duties Regarding U.S. Border Searches of Electronic Devices Containing Clients’ Confidential Information and it is here: NYCBA Opinion 2017-5.

The opinion states that the lawyer should take reasonable precautions, which will be dependent upon various factors, including the sensitivity of the information, the likelihood of disclosure, and the cost and difficulty caused by implementation of the precautions.  The opinion further states that the simplest way to avoid the issue is to not possess any client confidential information when crossing the border and options would include carrying a “burner” telephone, laptop computer, or other digital device, removing confidential information from digital devices, signing out of cloud-based services, uninstalling applications allowing remote access to confidential information, storing confidential information in secure online locations rather than locally on digital devices, and using encrypted software.

If a border agent asserts lawful authority to search an electronic device containing confidential data, the opinion states that the lawyer should try to prevent disclosure which would include advising the border agent that the device contains confidential information and files, requesting that the confidential information and/or files not be searched or copied and, if the agent is not deterred from conducting the search, asking to speak to the agent’s superior. The lawyer should also carry proof of his or her Bar membership to support the argument.

The opinion states that lawyers should also consider having printed copies of the border agency’s policies and/or guidelines on border searches available since, under the U.S. Immigration and Customs Enforcement and U.S. Customs and Border Protection guidelines, agents who are advised of a confidentiality claim state that an agent should seek further review to determine whether there is a “suspicion” that the asserted confidential material may constitute evidence of a crime or pertain to matters within the agencies’ jurisdiction.

“Although it is uncertain how border agents apply this ‘suspicion’ standard in actual searches, attorneys should take advantage of this possible avenue for preventing the disclosure of clients’ confidential information.”  Finally, if confidential information is seized or compromised during a search, the affected clients should be promptly notified.

Bottom line:  This ethics opinion appears to be the first to address the issues related to searches of a lawyer’s electronic devices during a border search.  According to the opinion, lawyers who travel outside of the United States should take reasonable measures to avoid disclosure of client information if U.S. border agents (or border agents of another country) search their electronic devices and, if confidential or privileged material is disclosed, lawyers must notify the affected clients.  My recommendation to lawyers is to avoid the issue by carrying “burner” devices and not having any client confidential information when crossing the border or, if that option is not feasible, storing confidential information in a secure online location and/or using encrypted software.

Be careful out there.

Disclaimer:  this e-mail is not an advertisement, does not contain any legal advice, and does not create an attorney/client relationship and the comments herein should not be relied upon by anyone who reads it.

Joseph A. Corsmeier, Esquire

Law Office of Joseph A. Corsmeier, P.A.

29605 U.S. Highway 19 N. Suite 150

Clearwater, Florida 33761

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

Posted in Attorney ethics, attorney-client privilege, Attorney/client confidentiality, Attorney/client privilege, Confidential Information, Confidentiality, corsmeier, Ethics opinion- protecting client confidentiality in border search, Ethics opinion- protecting client confidentiality in search of digital device, joe corsmeier, joseph corsmeier, Lawyer ethics opinions, Lawyer/client confidentiality, Uncategorized | Tagged , , , | Leave a comment

Florida Appeals Court finds that Miami-Dade Circuit Judge’s Facebook “friendship” with lawyer and former judge is not disqualifying

Hello everyone and welcome to this Ethics Alert which will discuss the recent (August 23, 2017) Florida Third District Court of Appeal (DCA) opinion declining to disqualify a Miami-Dade County Circuit Judge who was “friends” with opposing counsel on Facebook.  The case is Law Offices of Herssein and Herssein, P.A. d/b/a Herssein Law Group and Reuven T. Herssein v. United Services Automobile Association, Case No.: 3D17-1421, Lower Tribunal No.: 2015-015825-CA-43 (Florida Third District Court of Appeal) and the opinion is here: http://www.3dca.flcourts.org/Opinions/3D17-1421.pdf 

In a somewhat surprising decision, the Florida Third District Court of Appeal found that Miami-Dade Circuit Judge Beatrice Butchko is not required to recuse herself from a case in which she was a Facebook” friend” of the lawyer for one of the parties (Israel Reyes).  The lawyer was also a former judge with whom she worked before he stepped down as a judge.  This decision diverges from a Fourth District Court of Appeal opinion as well as a 2009 opinion of the Florida Judicial Ethics Advisory Committee (JEAC)- JEAC Op. 2009-20 (Nov.17, 2009).  The Third DCA opinion states:

“A random name drawn from a list of Facebook ‘friends’ probably belongs to casual friend, an acquaintance, an old classmate, a person with whom the member shares a common hobby, a ‘friend of a friend’ or even a local celebrity like a coach.  An assumption that all Facebook ‘friends’ rise to the level of a close relationship that warrants disqualification simply does not reflect the current nature of this type of electronic social networking.”

As I previously reported in my August 4, 2017 Ethics Alert, the Herssein Law Group moved to disqualify the judge from presiding over a contract dispute against their client, the United States Automobile Association (USAA) in which Reyes represents a non-party USAA employee in the matter, who was identified as a potential witness/party.

The law firm argued that the judge could not be impartial in the case and cited the 2009 JEAC opinion which states: “Listing lawyers who may appear before the judge as ‘friends’ on a judge’s social networking page reasonably conveys to others the impression that these lawyer ‘friends’ are in a special position to influence the judge.”  In 2012, the Fourth District Court of Appeal relied on the JEAC opinion in disqualifying disqualified a judge from a case for being Facebook friends with the prosecutor. Domville v. State, 103 So. 3d 184 (Fla. 4th DCA 2012).

The Third DCA opinion further states that Facebook friendships could represent a close relationship that would require disqualification, however, many do not.  The opinion concluded:

“In fairness to the Fourth District’s decision in Domville and the Judicial Ethics Advisory Committee’s 2009 opinion, electronic social media is evolving at an exponential rate. Acceptance as a Facebook “friend” may well once have given the impression of close friendship and affiliation. Currently, however, the degree of intimacy among Facebook “friends” varies greatly. The designation of a person as a “friend” on Facebook does not differentiate between a close friend and a distant acquaintance. Because a “friend” on a social networking website is not necessarily a friend in the traditional sense of the word, we hold that the mere fact that a judge is a Facebook “friend” with a lawyer for a potential party or witness, without more, does not provide a basis for a well-grounded fear that the judge cannot be impartial or that the judge is under the influence of the Facebook “friend.” On this point we respectfully acknowledge we are in conflict with the opinion of our sister court in Domville.”

Bottom line:  This DCA opinion is contrary to the 2009 JEAC opinion and the 2012 4th DCA opinion and acknowledges that it is in conflict with that DCA opinion; however, it does provide the rationale that each case should be decided  by examining the facts and the relationship.  This would seem to open up potential confusion and potential disqualification motions that would have to be decided on a case by case basis.    It is still recommended that judges (and lawyers who may appear before them) would be well advised not to be “friends” or otherwise connect on social media and professional networking sites or, if they are already connected and a case is assigned, to immediately remove the connection and disclose it to all parties and provide an option to recuse if the party believes that it would potentially be prejudiced.

Be careful out there.

Disclaimer:  this e-mail is not an advertisement, does not contain any legal advice, and does not create an attorney/client relationship and the comments herein should not be relied upon by anyone who reads it.

Joseph A. Corsmeier, Esquire

Law Office of Joseph A. Corsmeier, P.A.

29605 U.S. Highway 19, N., Suite 150

Clearwater, Florida 33761

Office (727) 799-1688

Fax     (727) 799-1670

jcorsmeier@jac-law.com

www.jac-law.com

Posted in corsmeier, Florida Judge ethics, joe corsmeier, joseph corsmeier, Judge disqualification, Judge disqualification Facebook friends with lawyer, Judicial Ethics Facebook and LinkedIn, Uncategorized | Tagged , , , | Leave a comment