Recently in Professional Responsibility Category

Consider yourself deterred.

Two former lawyers were handed hefty federal prison sentences on Monday for stealing settlement funds from their clients. William Gallion and Shirley Cunningham had represented over 400 clients in a drug-injury lawsuit against pharmaceutical company American Home Products (now Wyeth) over fen-phen diet drugs.

Gallion and Cunningham were sentenced to 25 and 20 years, respectively, after their convictions for fraud and conspiracy.

When the attorneys agreed to a $200 million settlement with AHP, according to the Louisville Courier-Journal, they would have been entitled to a fee in the neighborhood of $60 million. Instead, they kept the settlement amount secret and managed to set aside over $100 million for themselves and others.

Louisiana firm the Wolfe Law Group won a victory in federal court this week in its challenge to Louisiana's new regulations on online advertising.

Judge Martin Feldman of the Eastern District of Louisiana granted in part Wolfe's summary-judgment motion, agreeing that the state's efforts to pre-screen ads that attorneys intended to post online ran afoul of the First Amendment.

The Louisiana Supreme Court had revised its attorney-advertising rules at the direction of the state legislature in an apparent effort to "clean up" lawyer advertising in Louisiana and make it more consumer-friendly. Part of this cleanup involved changing the rules for online ads. A firm that wanted to run an ad online would be required to submit the proposed ad to a committee of the Louisiana State Bar Association for review to ensure its compliance with advertising rules, at a fee of $175 per ad.

A Colorado lawyer is facing discipline from the state bar -- and he may have made things worse for himself by his conduct at his disciplinary hearing.

According to State Bill Colorado, the attorney, Mark Brennan, represented William Cadorna, a former Denver firefighter, in a federal age-discrimination suit against the city. At the 2006 trial, Brennan's courtroom tactics were allegedly "abusive" and "disruptive," according to the Office of Attorney Regulation Counsel, which brought the disciplinary action. Repeatedly butting heads with Judge Robert Blackburn and even drawing a contempt citation, Brennan nevertheless won a verdict in favor of Cadorna.

That verdict was later thrown out upon the city's motion because, according to Judge Blackburn, Brennan's conduct had been so outrageous as to prejudice the jury. Given a chance to try the case over again, the city agreed to a settlement with Cadorna.

You work hard to make your money, especially in tough times when business can be hard to come by.  The last thing you want is for a partner or employee to steal money from the cookie jar while you're concentrating on representing your clients.

Unfortunately, if you're a small firm or solo attorney, it's much more likely to happen to you than it is to a large or mid-size firm.

This article is by Kristopher Klein, J.D. of InOutsource. For more author information, please see below.

Conflicts of interest surrounding the "lateral" movement of attorneys from one firm to another have proven to be a risk management challenge for many firms today. One of the more uncertain aspects relates to conflicts created by laterals' former clients that do not come to the hiring firm. For example, Attorney was formerly with Firm A, where she did work for Company A, drafting and negotiating a supply contract with Company B.  Attorney then takes a job with Firm B, which is representing Company C adverse to Company A in a contract dispute over a similar contract.  Despite the fact that Company A is the lateral's former client and will not come to Firm B with Attorney, Attorney may have information the firm could use to the detriment of this former client. 

To prevent restrictions on practice, while at the same time reducing clients' limitations on choice of lawyer, states have adopted rules providing mechanisms to prevent imputation of conflicts brought about by laterals' former clients. Although these rules vary among jurisdictions, they typically allow firms to construct so called ethical screens to prevent imputation under limited circumstances. This past February, in a long awaited, while at the same time highly debated shift, the ABA's governing body modified Rule 1.10 of the Model Rules of Professional Conduct, to allow screening to prevent imputation of conflicts brought about by laterals' former client relationships. While not authoritative in itself, this ABA rule change has the potential to influence remaining states to adopt similar provisions.

Hopefully, yesterday's post about the state of the legal market in the first quarter of 2009 only strengthened your resolve to roll up your sleeves and drum up some business. 

If, on the other hand, you or anyone you know has been feeling down for economic or professional reasons, you may want to take a look at this: "What Lawyers Need to Know About Suicide During a Recession" is a free download available from the American Bar Association that covers what employers should know in order to help employees or clients who exhibit signs of suicidal behavior.

As government programs encouraging loan modifications and foreclosure alternatives flourish, many brokers and loan modification agents are seeking to enlist attorneys in "new business models" around the opportunities created by the subprime mortgage meltdown, according to an article in the California Bar Journal.

But beware: these schemes could lead to criminal and ethical charges against attorneys since most of them are no more than running and capping and/or fee-splitting arrangements.

Everywhere you look these days, it seems like someone's getting busted for running a Ponzi scheme. 

Not to be left out, an internet-based law firm has apparently decided to get in on the action, according to a lawsuit filed in Los Angeles Superior Court.

Every lawyer knows that a good fee agreement is essential: it helps avoid disagreements between the attorney and client down the line, lists what the fees will and won't cover and clearly defines the parameters of the work to be done on the case.

They can be a chore to set up, though, and it's tough to know exactly how to set them up.  Here, at least, is a cautionary tale showing that there are some types of fee agreements you definitely should not enter into.