Words to the Wise
Words toto the Wise
from a Suspended
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By Andrew Toth-Fejel
Every month in the Oregon State Bar Bulletin, we read stories of the discipline meted out to attorneys. We may wonder, as we read, how anyone could be so foolish. But (sometimes in the same breath) we worry that we too might run afoul of the Bar’s disciplinary process. So we try to follow the Rules of Professional Conduct and to practice law ethically. As a debtor-creditor attorney for 17 years, I, too, intended to follow these rules and practice law well, yet I was suspended.
There were three claims against me that resulted in my suspension. None were brought by clients.
1. I faced a sanctions motion by a creditor in a chapter 11 case involving a sham corporate debtor. I had plenty of clues that I should have investigated the client and its principal more thoroughly. But my wife had just been hospitalized, money was very tight and time in the office was limited, so I participated in the bad faith filing of the case. Soon thereafter, when the sanctions motion was filed against the debtor, its principal and me, I knew I needed to withdraw as counsel. Although I sought an ethically appropriate way to do so, I failed to contact the bar, the PLF, or any of my
Bankruptcy Litigation Support for Attorneys, Andy@BLSforAttorneys.com; Telephone office: 503-292-4344, cell: 503-310-7944colleagues, for advice. Although the corporation’s principal stopped cooperating in the case, I foolishly tried to defend the sanctions motion against both my client and myself. A huge sanctions order was entered against me, resulting in significant risks to an innocent former law partner, and many months of litigation and appeals involving the PLF.
2. When a title company sent me a debtor-client’s large check that belonged to the chapter 7 trustee, I delayed dealing with it for months. I told myself that the debtor had a possible exemption (the funds were indirectly related to a retirement account), and that there was no hurry since other assets would eventually be available from a personal injury settlement. Because of my client’s gambling problem, I had worked for her through the intervention of her adult children to whom she had given power of attorney, but she withdrew that power of attorney and was difficult to work with, adding to my rationalizations for avoiding the matter. As a result not only did I not reply timely to the turnover order that the trustee was compelled to get from the court, I also made false representations to the trustee’s attorney.
3. In another matter, I became dissatisfied with my partnership’s expense allocation formula and our efforts to renegotiate it, so when a client made a payment, I deposited it into my personal account instead of the partnership account. I convinced myself that I would make up the funds shortly, and on that occasion I did. But then I did the same with other client payments. For a while I was able to reimburse the partnership, but eventually I could not. This cycle continued for months until my partner discovered it and understandably reported it to the Bar.
Following my suspension, I have had to relearn principles of healthy law practice. These will be at the heart of my practice when I am reinstated. In the hope that other attorneys will benefit from my experience, I urge you to heed the following principles in your practices.
Trust Your Instinct for Trouble
We are all ethical beings who begin to build moral compasses very early in life. As attorneys dealing with difficult clients and facing litigation and practice dilemmas, we need to become more attuned to circumstances we should avoid. Beyond having a clear understanding of the Rules of Professional Conduct and an absolute commitment to abide by them, we all need to figure out what we are not willing to live with in terms of risk and professional discomfort, and to be uncompromising about it.
In each of the instances described above, I rationalized behavior that I knew was highly problematic. I let my own financial and personal issues cloud my judgment. Since then, I have been mindful of the courage and steadfastness of attorneys who make hard choices without regard for personal benefit, based on their knowledge of the ethical rules and their gut sense of what is right – a higher standard than those rules. Their moral standards are independent of those of their clients; they lead their clients instead of allowing their clients to sway their decisions. I try to emulate those attorneys.
