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Trying a New Business Model? Ask for an Advisory Opinion

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By Robyn Hagan Cain on April 26, 2013 1:20 PM

Thanks to television advertising, many of us have fond memories of our hometown personal injury attorneys' commercials. In South Louisiana, where I grew up, there were two attorneys whose slogans dominated the air waves: Morris Bart ("I'm Morris Bart, and I'm on your side") and E. Eric Guirard ("Get the E guarantee!").

Bart is still going strong. Guirard was disbarred in 2009.

There are plenty of sketchy things that warrant disbarment -- charging excessive fees, witness-tampering, etc -- but Guirard's sins were comparably tame. He was disbarred because his business model violated the rules of professional responsibility.

Guirard's office heavily relied on case managers until 2004. Case managers took initial calls from clients, and decided if the firm would be interested in handling a case. After the firm received a client's signed contract and information, one of the attorneys in the office would review the file before assigning it to a case manager for processing.

An attorney would eventually approve a high dollar value and a low dollar value on the case for purposes of making a settlement demand. Then the file went back to the case manager, who would send a demand letter signed by a lawyer. The case manager was responsible for contacting the insurance adjuster and negotiating a settlement.

When a settlement was reached, the case manager notified the client, arranged for the client to come to the office to pick up the settlement check, and prepared the settlement disbursement statement. Guirard typically met with the client to disburse the settlement funds.

Case managers were compensated on commission computed as a percentage of the firm's gross legal fees collected on the individual settled cases that the individual case manager worked on and settled during the payroll period

If you read that description and thought, "By George! These attorneys were sharing fees with non-attorneys and permitting non-attorneys to participate in the unauthorized practice of law," then give yourself a gold star. The Louisiana Office of Disciplinary Council thought the same thing.

Even though Guirard completely abandoned the case manager business model in 2004, it was too late. The Louisiana Supreme Court disbarred Guirard and Thomas Pittinger (another attorney at his firm) for their "business first" model.

"Usually when you get disbarred, it's some dastardly act - you're lying, you're cheating, you're stealing, committing a crime," Guirard told Dig Baton Rouge in 2011. "It was actually the first ethical prosecution of its kind. Not only in the history of Louisiana, but in the history of the United States. I got disbarred for a business model. Essentially it was, for a layman to understand, it's the insurance company business model."

As the legal industry continues to struggle, some lawyers will look for ways to make the litigation process more efficient. But, as Guirard learned, a better business model might violate the rules of professional conduct. If you're worried that your idea to disrupt the industry would actually disrupt your license, ask the state bar for advisory opinion.

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