Legal Ethics for New Attorneys: Recent State Bar Attorney Disciplinary Actions

Commonalities of Rules Violations

In the past several months, the State Bar of California has disbarred or suspended the license to practice law of at least 10 California attorneys. There are common themes threading their way through the disciplinary findings in each of these cases that are important for practitioners to consider. The purpose of this article is to identify some of those themes.

The San Francisco Daily Journal has reported on each of the disciplinary actions at issue. These cases highlight some of the Rules of Professional Conduct (the “Rules”) whose violation may garner the attention of the State Bar for investigation and possible prosecution. Of course, all of the Rules are important and require compliance.

A common predicate to State Bar discipline is a client complaint. Such a complaint is not the only triggering event for a State Bar investigation and possible prosecution, but is by far and away the most common event. Attorneys should treat entering into an attorney-client relationship as establishing a partnership where the lawyer takes on the role of a fiduciary and the client is our partner.

When choosing a “partner,” an attorney should ensure the client does not have the obvious characteristics of a chronic complainer. As counsel, we are subject to the affirmative duties owed to a client as set forth in the Rules, and failing to abide by those duties can be catastrophic to one’s license to practice law.

The first Rule expresses the overarching function of the Rules. Rule 1.0 is fundamental to the attorney-client relationship and to the State Bar’s enforcement.

It declares that the “Rules are intended to regulate [the] professional conduct of Lawyers through discipline.” They are intended to “protect the public, the courts, and the legal profession; protect the integrity of the legal system; and promote the administration of justice and confidence in the legal profession.”

What does a sampling of the reported Rules’ violations by the 10 attorneys at issue reveal to be common threads leading to State Bar action that culminated in the permanent or temporary loss of a license to practice law? Acts that led to the imposition of discipline include an attorney’s failure to perform professional duties competently; to act with the utmost of honesty in dealing with the client and the courts; failing to communicate with the client about the representation; and the handling of money.

The following examples from the 10 disciplinary proceedings exemplify the application of the Rules to real-world scenarios.

The State Bar determined Attorney 1 did not perform her duties with “competence.” Rule 1.1 mandates that “a lawyer shall not intentionally, recklessly, with gross negligence, or repeatedly fail to perform legal services with competence.”

Attorney 1 gave her client-landlord erroneous advice about the procedure to terminate a tenant’s occupancy. Highlighting the fact that discipline is more likely than not premised upon multiple Rule violations, the State Bar also determined that Attorney 1 failed to handle client funds properly; was dishonest in reporting to the client the status of various matters; and entered into settlement discussions without client approval. The Rule defines “competence” as the application of “the (i) learning and skill, and (ii) mental, emotional, and physical ability reasonably necessary for the performance of such service.”

The State Bar determined Attorney 2 made false and misleading statements to a client verbally and in writing. Attorney 2 made these mistakes when acting as an escrow agent and paymaster for a complicated financial transaction. Rule 8.4 states that it “is professional misconduct for lawyer to… (c) engage in conduct involving dishonesty, fraud, deceit, reckless or intentional misrepresentation….” Implicit in Rule 1.4 – which is entitled “Communications With Clients” – is truthfulness to clients.

Like Attorney 2, Attorney 1 also failed to communicate adequately with her client. She failed to discuss settlement strategy with the client before engaging in settlement discussions.

Rule 1.4 requires, among other things, that a client be “promptly inform[ed]… of any decision or circumstance with respect to which disclosure or the Client’s informed consent is required by these Rules or the State Bar Act; (2) reasonably consult with the Client about the means by which to accomplish the Client’s objectives in the representation; [and] (3) keep the Client reasonably informed about significant developments relating to the representation ….”

Attorney 3 failed to render a timely accounting of client funds; failed to pay out undisputed settlement funds to a client; failed to promptly refund undisputed advance fees; and comingling personal and client funds in his client trust account. Rule 1.15, entitled “Safekeeping Funds and Property of Clients and Other Persons,” mandates that all client funds “shall be deposited in one or more identifiable bank accounts labeled ‘trust account’….”

Furthermore, “A Lawyer shall… maintain complete records of all funds, securities, or the property of the Client…; [and] properly account in writing to the Client ….” To assist attorneys in dealing with client funds the State Bar promulgated the Handbook on Client Trust Accounting for California Attorneys.

These are but several examples of the State Bar applying the Rules and exercising its power to ensure attorneys comply with them. These examples highlight the imperative need of an attorney who is the subject of an investigation and a prosecution to both respond to and cooperate with any State Bar inquiry. Several default disbarments are among the 10 cases reported on. In at least one instance, the responding attorney’s lack of cooperation resulted in enhanced discipline.