SC Lawyer, May 2008, #3. Disciplinary opinions.

South Carolina Lawyer

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SC Lawyer, May 2008, #3.

Disciplinary opinions

South Carolina LawyerMay 2008 Disciplinary opinions published in the Advance Sheets represent only a small portion of the work of the Commission on Lawyer Conduct. In fact, about six percent of all grievances filed against lawyers involve misconduct serious enough to warrant public discipline. The vast majority of grievances that are not dismissed are resolved confidentially. A letter of caution and an admonition are two common ways in which the Commission can conclude a matter confidentially without dismissing it.

A letter of caution is a written warning, rather than a sanction. (RLDE 1.0(r)). An investigative panel of the Commission usually issues a letter of caution when three conditions are met: (1) the conduct involved is not serious misconduct; (2) there is no harm to the client or to the public; and (3) the lawyer has no relevant disciplinary history. A letter of caution is a confidential resolution and is only considered disciplinary history if the same rules are violated in the future. If a grievance cannot be dismissed, a letter of caution is the best result for a lawyer who needs to be more careful about compliance with the Rules of Professional Conduct.

An admonition is a sanction imposed by the Commission or the Court "in cases of minor misconduct, when there is little or no injury to the public, the legal system, or the profession." RLDE 1.0(a). An admonition is confidential unless the Court imposes it after a hearing on formal charges.

Because letters of caution and admonitions are not published, their utility as general preventative tools is limited. This column has been prepared to give Bar members an inside look at the types of complaints that are resolved confidentially. Of course, the two most common reasons lawyers receive letters of caution and admonitions are failure to adequately communicate with clients and failure to act diligently. Otherwise, there are four trouble spots that frequently result in letters of caution or admonitions.

Violations of the advertising and solicitation rules

While nearly 80 percent of all grievances are dismissed, only about five percent of advertising-related grievances are dismissed. That means that most of the complaints that are filed about lawyer advertising and solicitation have merit.

Cases involving blatant misrepresentation or a pattern of rule violations are rare, but do result in public discipline. (See e.g. In re Schmidt, 374 S.C. 167, 648 S.E.2d 584 (2007).) Most of the advertising violations reported to ODC are technical and minor. The most common violations are failure to include the name of at least one lawyer responsible for the content of the advertisement in violation of RPC 7.2(d) and failure to file a copy of the advertisement with the Commission within 10 days of dissemination in violation of RPC 7.2(b).

Other minor violations resulting in cautions include mentioning fees without explaining costs (RPC 7.2(g)); failure to disclose the geographic location where the cases will be handled (RPC 7.2(i)); using a form of the word "expert," "specialist," "authority" or "certified" by lawyers who are not certified specialists (RPC 7.4(b)); out-of-state lawyers failing to state the geographical limitations on their ability to practice (RPC 7.1(a), 7.2(i) and/or 7.4(b)); using comparative language (RPC 7.1(c)); listing prior successes (RPC 7.1(b)); and failure to include solicitation disclaimers (RPC 7.3(d)). Because these advertising and solicitation rules are straightforward, one wonders why they are so frequently violated. In nearly every case, the lawyer responds that he was not aware that the ad violated the rules. Simply taking the time to read RPC 7.1 through 7.5 prior to disseminating any form of firm promotion can help you avoid having to respond to a disciplinary inquiry.

Failure to pay court reporter invoices and other litigation-related expenses

Our Court has consistently cited RPC 4.4 and 8.4 as grounds for disciplining lawyers who have failed to pay litigation-related expenses. These rules elevate what might otherwise be a contractual obligation to an ethical one. When you schedule a deposition or request a transcript, you are responsible for the bill to the court reporter-regardless of an agreement with the client that the client will pay and regardless of whether you ultimately collect the money from the client. The same goes for expert witnesses, copy services and other litigation-related fees. Of course, a provider of case-related services might agree to collect directly from the client or to forgo collection until the case is resolved, but you are wise to get that in writing.

On the other hand, the Commission is not a collection agency. Generally, the complaint will be dismissed if the lawyer has addressed a legitimate dispute about the amount of the bill with the service provider; the service provider has not made reasonable attempts to collect the bill prior to filing the grievance; or the lawyer has made good faith efforts to communicate with the service provider and to make payments in the event of financial hardship or unforeseen circumstances.

It is potentially a violation of RPC 1.1, 1.2, 1.3 and 3.2 to refuse to schedule a deposition until the client provides the funds to pay for it. If you can't afford to front the money for necessary expenses, you must either structure your retainer to cover them or decline to take on the representation. Even if you have no disciplinary history and you ultimately pay the invoice, the Commission is likely to issue a letter of caution or an admonition for failure to timely pay these expenses.

Trust accounting errors and NSF checks

RPC 1.15(h) requires that every lawyer with a trust account direct his bank, in writing, to report checks written on insufficient funds to the Commission. Since the rule became effective in October 2005, approximately 320 notices of NSF checks have been filed. About 25 percent of those have resulted in disciplinary investigations.

If an NSF check is reported, the lawyer receives a request from ODC to explain the overdraft and to produce certain documentation. Most NSF reports result from bank errors, bookkeeping typos or inadvertent mistakes that have already been identified and corrected. When the lawyer responds with an adequate explanation and documentation of such errors, the matter is closed. Failure to respond, an incomplete response or a response that indicates a rule violation or defalcation results in a disciplinary investigation.

A disciplinary investigation usually involves a thorough examination of the lawyer's bank and accounting records for an explanation of the bad check and for other Rule 417 violations. Rule 417 sets out the minimum requirements for adequate trust accounting and documentation. Failure to comply with Rule 417 is sanctionable misconduct.

If the investigation reveals serious misconduct, such as misappropriation, commingling or failure to properly document and reconcile the accounts, ODC will seek public discipline. If the investigation reveals minor, technical violations of Rule 417, with no loss to the client, the bank or a third party, and the lawyer has no relevant disciplinary history, the investigative panel will likely issue a letter of caution or an admonition. In most such cases, however, the panel will expect the lawyer to engage in significant and meaningful remediation, usually involving extra CLE hours on trust accounting and establishment of new accounting systems and policies.

The best way to avoid bouncing a check in your trust account is strict compliance with Rule 417 and RPC 1.15. The Trust Account Manual available on the S.C. Bar Foundation Web site explains the requirements of the rules and provides a helpful checklist. At a minimum, you must (1) wait until funds have been deposited before you disburse checks, and (2) conduct a three-part reconciliation of your trust account(s) every month.

Failure to timely respond to disciplinary inquiries

Lawyers who fail to cooperate with disciplinary investigations are subject to sanction. RPC 8.1; RLDE 7(a)(3). This is the case even if the underlying allegations turn out to be unfounded. Sometimes, lawyers are late in responding or fail to submit complete responses. If the panel determines that there was no merit to the original complaint, that the lawyer ultimately cooperated with the investigation and that the lawyer has no relevant disciplinary history, the matter is often resolved with a letter of caution or an admonition citing RPC 8.1.

Facing a grievance is tough, but putting it off or ignoring it just makes a bad situation worse. If you receive an inquiry from ODC, it is imperative that you respond on time. Each request for information from ODC has a deadline for response; however, extensions are liberally granted to afford you the opportunity to prepare a thorough, well-documented response.

All of these trouble spots have a common solution: a thoughtful, careful reading of the applicable rules-before you advertise or send a solicitation letter, before you decide not to pay an invoice, before you bounce a trust account check, before you respond to a situation that makes you angry or frustrated, and before you respond to a grievance. Don't wait until after you receive a letter of caution or an admonition to conform your conduct to the rules.