WHAT WE DON’T DO
By
Martin A. Cole, Director
Minnesota Office of Lawyers Professional Responsibility
Reprinted
from Bench & Bar of Minnesota (November
2006)
We have an effective lawyer
discipline and client security system here in Minnesota. As part of that healthy process, there are in
place several programs that assist in regulating the practice of law. The trust account overdraft notification
programFtn 1 is an
excellent example of a mechanism for both detecting possible misconduct and for
educating lawyers about their fiduciary obligations. Fee arbitration programs, while not mandatory
in Minnesota, are available to help resolve lawyer-client fee issues. Other programs in use in Minnesota include
the use of probation as a disciplinary option, the telephone advisory opinion
service provided by the Office of Lawyers Professional Responsibility (OLPR, or
Director’s Office) and the
trust account brochures and information available on the Lawyers Board and MSBA
websites.Ftn 2
There are other
programs and ideas that Minnesota has chosen not to have as part of our
disciplinary system. Each of these
programs is in use in some other state or states, or is recommended by the
American Bar Association Model Rules for Disciplinary Enforcement. What are some of them and why don’t we have them?
Several states have a
random audit program by which attorney trust accounts are selected and audited
by professional staff to determine whether the attorney is maintaining proper
records and that the account is properly in trust. States that maintain such a program seem
convinced that it, much like the overdraft notification program, both detects
misconduct and helps educate attorneys on their recordkeeping duties. Iowa is a nearby state that has such a
program.
Several committees in
Minnesota have studied the possibility of instituting a random audit program
and consistently recommended against it, usually based on the considerable
expense of hiring professional auditors to conduct such a program as compared
to the anticipated benefits. In
addition, major attorney misappropriation often occurs outside of a trust
account. Thus, the actual number of
lawyer-thieves detected may not be significant.
Another perceived limitation on the effectiveness of a random audit is
that it is in fact “random,” unlike the overdraft notification program, which is triggered only upon an actual “for cause”
basis.
Insurance
Check Notification
A second program or
rule intended to detect misappropriation is what is known as an insurance check
notification or insurance payee notification program, which was first used in
New York and now exists in a small number of states. Whenever an insurance company issues a
settlement check to an attorney, principally in personal injury matters, the
insurer must copy the attorney’s client on the letter transmitting the
payment. This puts the client on notice
that their attorney is receiving funds so that the client can monitor the
distribution of the funds by their lawyer.
This requirement was established in response to several instances of
lawyers forging client endorsements on settlement checks and misappropriating
the funds, sometimes without the client ever knowing that their case had even been
settled.
While an insurance
notification rule may have caught a small number of Minnesota’s lawyer thieves, there have been concerns about and opposition to such
a program in many states. First, it
appears to single out a particular group of lawyers and one industry for
additional regulation. In most states,
it also would require action beyond a court rule to implement, such as
legislative action or new insurance regulations. Liability concerns for insurers have also
been raised should a payee be missed.
Central
Intake
A group of programs
that several states have in some combination involve what are known as central
intake offices, diversion programs, and ethics schools. Central intake is an idea that grew out of
ABA proposals in the 1990s. The idea is
that all complaints are submitted to a central intake office, a sort of
clearinghouse, which reviews a complaint and determines to whom or to what
agency it should be referred. In the ABA
model, there would be lawyer discipline, fee arbitration, attorney-client
mediation, and other separate entities each with their own function to which
the matter may be referred for handling.
The central intake office itself also may act in an ombudsman capacity
and handle some “minor” misconduct allegations such as noncommunication by simply contacting the lawyer
and requesting they contact their client.
Some offices accept complaints by telephone.
The supporters of such
a program believe it is especially consumer-friendly and, as part of an overall
program that includes the alternative methods of resolution mentioned above,
better meets the real concerns of most client-consumers and complainants than
treating all matters as disciplinary complaints. Wisconsin adopted such a program in
2001. In Minnesota, without all of the
mandatory entities to which a matter could be referred, central intake would be
a needless extra step. Further, the
Director’s Office already
refers simple fee disputes to voluntary fee arbitration.
Ethics
Schools
Along with central
intake, diversion and ethics schools also are becoming more common as a means
of dealing with “minor” misconduct. California is an example of a state employing
diversion to an ethics school, which is somewhat akin to criminal diversion
programs. An attorney who has had a
complaint filed against her, particularly one involving “minor” neglect or
noncommunication, is offered the
opportunity to attend classes on professional responsibility or take other law
office management-type classes; if the attorney takes up this offer, the
complaint does not result in a disciplinary decision or record. As long as the attorney then has no further
complaints for some period of time, no permanent record is maintained.
In addition to concern
for the logistical challenges of creating and running such a “school,” an argument raised in Minnesota against such a
program is that Minnesota has always treated violations of rules involving
diligence and communication as disciplinary matters; just like the violation of
any other rule of professional conduct, they are not considered “minor” matters. In addition,
the mandatory ethics CLE requirement has helped fulfill some of the same goals
in Minnesota.
Advertising
Regulations
One area of conduct
that some other states regulate to a far greater degree than does Minnesota is
lawyer advertising. In particular,
several states, including Florida and Missouri, require preapproval of
advertisements by an agency of the disciplinary system. To accomplish this purpose, Florida employs
an office roughly the size of the entire Director’s Office in Minnesota. Perhaps these states have experienced
egregious examples of improper lawyer advertising that established the need for
such an entity; fortunately that has never been the case in Minnesota. Very few instances of false or misleading
advertisements are brought to the Director’s attention, and just as few that, even while not in violation of any disciplinary rule,
exhibit particularly poor taste.
Some states also
attempt to regulate advertising content in a manner unlikely to be duplicated
in Minnesota. For example, a New Jersey
ethics opinion recently prohibited New Jersey lawyers from advertising that
they have been named a “Super Lawyer” by a publication
because it was considered inherently misleading.Ftn 3
The opinion went on to further prohibit lawyers from participating in
any survey or poll that produces the basis for such designations. The opinion has been stayed and is under
consideration by the New Jersey Supreme Court as this is written. Even if that court upholds the opinion, the
Lawyers Board and Director’s
Office have no intention of taking a
similar position in Minnesota. Lawyers
may continue to truthfully advertise their designation as a “Super Lawyer”
if it is factually true and the
publication is identified.
Mandatory
Malpractice
Finally, one state,
Oregon, and several Canadian provinces require lawyers to maintain malpractice
insurance. Minnesota, like almost all
states, has not followed suit, and it does not appear likely that mandatory
malpractice insurance is on the horizon in the foreseeable future.
Minnesota has joined a
growing number of states in adopting one malpractice program, however. The idea of a malpractice disclosure
requirement has existed for several years, but was slow to catch on. It was tabled by the ABA initially and
rejected by most states. Slowly the
national trend has shifted, however, and such a requirement is now in force in
several states, including Minnesota.
Since October 1, 2006, Minnesota lawyers who represent private clients
must indicate whether they maintain malpractice insurance, with what company,
and whether they intend to continue to maintain insurance in the upcoming year.Ftn 4 The information will be available to the
public through the Attorney Registration Office. Again, insurance is not required; merely
disclosure of whether there is insurance is mandated.
One possible aspect of
such a rule was not adopted. South
Dakota’s
malpractice disclosure
rule creates an affirmative duty on
attorneys to inform clients at the commencement of representation whether or
not they maintain insurance. Such an
obligation was not included in Minnesota’s new rule.
There is no perfect
set of programs that every state disciplinary system must or should
follow. Variation between states is
healthy in allowing new programs to be tested to determine their value. Some programs, such as random audits, will
resonate and work in some states, but not in others. The Director’s Office, the Lawyers Board, and the Client Security Board regularly review the
alternatives that are available, and will recommend any of them if it appears
that protection of the public can be significantly increased. For some other programs, they’ll remain
something that
we don’t
do.