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TOP TWELVE GRIEVANCES AGAINST LAWYERS

HBA NEW LICENSE INSTITUTEJune 5, 2015

Houston, Texas

Richard A. SchwartzVorys, Sater, Seymour and Pease, LLP

700 Louisiana, Suite 4100Houston, Texas 77010

Phone: (713) 588-7016Fax: (713) 588-7081

Email: dschwartz@vorys.com.

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OVERVIEW

WHAT ARE THE PENALTIES FOR VIOLATING THE ETHICS RULES

WHAT ARE THE AREAS OF LAW IN WHICH THE MOST GRIEVANCES ARE FILED

WHAT ARE THE TYPES OF CONDUCT (RULE VIOLATIONS) WHICH ARE MOST FREQUENTLY ALLEGED

HELPFUL HINTS ON STAYING OUT OF TROUBLE

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POSSIBLE PENALTIES FOR VIOLATIONS

• DISBARMENT• SUSPENSION• PUBLIC REPRIMANDS• PRIVATE REPRIMANDS• RESIGNATION• ORDERS FOR REHABILITATION• RESTITUTI0N

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Information Tracked By the SBOT STATISTICS

• Total Number of Grievances filed• Grievance Results or Penalties Imposed• Areas of Law• Rule Violations

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Grievances Filed vs. Penalties

13-14 12-13 11-12 10-11 09-10 08-09 07-08 06-07 05-06 04-05 03-04 02-03 01-02

Active Attorneys 92,210 89,987 87,881 86,500 84,183 82,414 80,094 77,934 77,056 74,675 73,084 71,170

Grievances Filed 7,394 7,882 8,135 7,328 7,233 7,108 7,307 6,572 7,118 6,987 6,891 7,501 7,784

Dismissed as inquiries 5,827 5,495 5,351 4,778 5,000 5,168 5,160 4,370 4,584 4,318 4,423 4,833 4,895

Classified as complaints 1567 1,628 2,296 2,047 1,970 1,761 1,966 2,027 2,357 2,438 2,209 2,479 2,624

Complaints resolved 403 444 516 584 417 499

Total Number of disciplines 322 367 402 370 315 335 299 320 344 427 459 437 482

% of Disciplines out of complaints 20.5% 22.5% 17.5% 18% 15.9% 19% 15.2% 15.7% 14.5% 17.5% 20.7% 17.6% 18.3%

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GRIEVANCE

RESULTS

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Actual Penalties for Violations 2012-13

Disbarments 39 10.6%

Resignations 24 6.5%

Suspensions 122 33.24%

Public Reprimands 37 10.1%

Private Reprimands 89 24.25%

Grievance Referral Program (rehabilitation) 56 15.25%

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Actual Penalties for Violations 2013-14

Disbarments 21 6.5%

Resignations 17 5.2%

Suspensions 131 40.5%

Public Reprimands 31 9.5%

Private Reprimands 65 20.12%

Grievance Referral Program (rehabilitation) 58 17.95%

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Client Attorney Assistance Program*Top 5 Concerns of Clients 2013-14

Not scheduling/keeping appointments 672

Not Returning Phone Calls 6,560

Fee Problems 6713

Not providing/Returning Copies of File and Documents

8,375

Inattention and Preparation on the Case 11,653

*Confidential dispute resolution service of the SBOT for minor concerns, disputes and misunderstandings

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Client Attorney Assistance ProgramType of Legal Matter 2013-14

Criminal 36%

Family 20%

Civil 19%

Personal Injury 11%

Immigration 3%

Probate 3%

Real Estate 2%

Collection 1%

Bankruptcy 1%

Business 1%

WCC 1%

EEOC 1%

Consumer Protection 1%

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AREAS OF LAW FOR THE MOST

GRIEVANCES

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Area of Law by Most Grievances 2012-2013

Criminal2,441

Non-Client Relationships 1,506

Family 948

Civil 821

Personal Injury 349

Immigration 281

Other 263

Probate/Wills 153

Real Estate 117

Bankruptcy 66

Workman’s Comp 25

Traffic 24

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2012-2013 Grievances By Area of Law

Traffic5%

Bankruptcy15%

Probate/Wills25%

Non-Client Relationship225%

Personal Injury55%

Family145%

Criminal355%

Other45% Civil

125%

Real Estate25%

Immigration45%

Workman's Comp5%

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Criminal Grievances2001-2013

01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-130

500

1000

1500

2000

2500

3000

3500

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Non Client Relationship Grievances 2001 - 2013

01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-130

200

400

600

800

1000

1200

1400

1600

1800

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Family Grievances 2001 - 2013

01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-130

200

400

600

800

1000

1200

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Civil Law Grievances2003 – 2013

03-04 04-05 05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-130

100

200

300

400

500

600

700

800

900

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Personal Injury Grievances2001 - 2013

01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-130

100

200

300

400

500

600

700

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Probate/Will Grievances2001 -2013

01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-130

50

100

150

200

250

20

Real Estate Grievances2003 - 2013

03-04 04-05 05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-130

20

40

60

80

100

120

140

160

180

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Bankruptcy Grievances2001 - 2013

01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-130

20

40

60

80

100

120

140

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Workmen’s Comp Grievances2003 - 2013

03-04 04-05 05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-130

10

20

30

40

50

60

70

80

90

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Traffic Grievances 2001 - 2013

01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-130

20

40

60

80

100

120

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Other Grievances2003 -2013

03-04 04-05 05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-130

100

200

300

400

500

600

700

800

900

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MOST FREQUENT RULE VIOLATIONS ALLEGED

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ALLEGED RULE VIOLATIONS 12-13 11-12 10-11 09-10 08-09 07-08 06-07 05-06 04-05 03-04 02-03 01-02

Communication 832 975 1006 871 713 928 974 1183 1488 1760 1180 303

Neglect 812 888 981 932 811 937 1009 1201 1437 1611 1203 1788

Integrity 607 346 403 346 427 448 509 563 710 736 469 344

Declining or terminating representation 506 681 638 553 405 479 436 533 502 598 421 450

Safeguard Property 260 241 192 224 380 329 321 304 320 375 251 413

Conflicts 136 77 73 77 95 88 96 75 102 116 100 126

Tribunals 117 119 86 74 99 97 65 61 77 97 58 94

Fees 109 152 137 105 128 132 137 157 169 203 192 236

Non-clients 52 80 87 92 97 76 50 77 60 76 73 110

Confidentiality 27 36 47 36 51 30 40 57 51 65 39 50

Advertising & Solicitation 21 43 36 48 48 41 20 35 35 60 65 52

Law firms 17 34 35 27 15 18 20 22 25 26 44 32

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Alleged Violations 2012-2013Law firms

5%Advertising & Solicitation

15%

Confidentiality15%

Non-clients15%

Fees35%

Tribunals35%

Conflicts45%

Safeguard Property75%

Declining or terminating representation

145%

Integrity175%

Neglect235%

Communication245%

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Lessons Learned from the Grievance Committee

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Lessons Learned from the Grievance Committee

• Most frequent issues:– Communication– Terminating representation– Safeguarding Property– Fees

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Communication

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COMMUNICATION – 24.5% of ComplaintsNumber 1

1.03 Communication

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Rule 1.03 Communication

(a) A lawyer shall keep a client reasonably informed about the status of a matter and promptly comply with reasonable requests for information.

(b) A lawyer shall explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation.

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Communication

Comments to 1.03

The client should have sufficient information to participate intelligently in decisions concerning the objectives of the representation and the means by which they are to be pursued, to the extent the client is willing and able to do so. For example, a lawyer who receives from opposing counsel either an offer of settlement in a civil controversy or a proffered plea bargain in a criminal case should promptly inform the client of its substance unless prior discussions with the client have left it clear that the proposal will be unacceptable.

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Comments to 1.03• In litigation, a lawyer should explain the general strategy and prospects of

success and ordinarily should consult the client on tactics that might injure or coerce others. On the other hand, a lawyer ordinarily cannot be expected to describe trial or negotiation strategy in detail. Moreover, in certain situations practical exigency may require a lawyer to act for a client without prior consultation. The guiding principle is that the lawyer should reasonably fulfill client expectations for information consistent with the duty to act in the client’s best interests, and the client’s overall requirements as to the character of representation.– Examples:

• Extensions of time• Continuances• Settlement demands and offers• Experts

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Communication• Problems

– Being out of communication• I called my lawyer over and over and never got a call back• I never received any update on my case • I wrote my lawyer letters and got no response

– Responses: • I didn’t have anything to report• I responded (but no log, letter or proof)• My secretary was supposed to do that

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Communication• Key Points:

– Don’t be out of communication• Send your clients the papers you file and receive and be able to

prove it (keep copies)• Return your clients phone calls even if you have not done what

you said you would do or you have nothing to report• Answer your client’s letters and keep copies• Keep some record of your communications with clients.• Put yourself in your client’s shoes.

– Give the client sufficient information to make the important decisions

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Terminating Representation

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DECLINING OR TERMINATING REPRESENTATION – 14.5% Of Grievances

No. 4

Rule 1.15 Declining or Terminating Representation

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Rule 1.15 Declining/TerminatingRule 1.15(d) Upon termination of representation, a lawyer shall take steps to the

extent reasonably practicable to protect a client’s interests, such as giving reasonable notice to the client, allowing time for employment of other counsel, surrendering papers and property to which the client is entitled and refunding any advance payments of fee that has not been earned. The lawyer may retain papers relating to the client to the extent permitted by other law only if such retention will not prejudice the client in the subject matter of the representation.

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Terminating Representation• Problems

– Not transferring the file timely– Not refunding unearned fees

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Declining or Terminating Representation

• Key Points:– If you get out of a case, protect your client’s interests

• Give adequate time to get new counsel• Transfer information and the file promptly• Give an unearned fee back to the client

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Safeguarding Property

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SAFEGUARDING PROPERTY – 7.5%No. 5

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1.14 Safekeeping Property

(a) A lawyer shall hold funds and other property belonging in whole or in part to clients or third parties that are in a lawyer’s possession in connection with a representation separate from the lawyer’s own property. Such funds shall be kept in a separate account, designated as a “trust” or “escrow” account, maintained in a state where the lawyer’s office is situated, or elsewhere with the consent of the client or third person. Other client property shall be identified as such and appropriately safeguarded. Complete records of such account funds and other property shall be kept by the lawyer and shall be preserved for a period of five years after termination of the representation.

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1.14 Safekeeping Property

(b) Upon receiving funds or other property in which a client or third person has an interest, a lawyer shall promptly notify the client of third person. Except as stated in this Rule or otherwise permitted by law or agreement with the client, a lawyer shall promptly deliver to the client or third person any funds or other property that the client or third person is entitled to receive and, upon request by the client or third person, shall promptly render a full accounting regarding such property.

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COMMENT TO RULE 1.14• A lawyer should hold property of others with the care required of a

professional fiduciary.

• If there is risk that the client may divert the funds without paying the fee, the lawyer is not required to remit the portion from which the fee is to be paid. However, a lawyer may not hold funds to coerce a client into accepting the lawyer’s contention. The disputed portion of the funds should be kept in trust and the lawyer should suggest means for prompt resolution of the dispute, such as arbitration. The undisputed portion of funds should be promptly distributed to those entitled to receive them by virtue of the representation.

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Safeguarding Property• Problems

– Receiving settlement funds and not giving them to the client– Comingling client and law firm money

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Safeguarding Property• Key Points:

– Keep you client’s money separate from your own• Operating account• Trust account

– Don’t take your client’s money unless you earned it • Don’t put in operating before earned

– Give your client’s money back, if not earned, when asked– Keep records of client money for 5 years– Be transparent. Give an accounting when asked

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Fees

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FEES – 3.5%No. 8

1.04 Fees

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Fees Related rules are: Rule 1.08 (prohibited transactions between a lawyer and client)Rule 1.14 (safeguarding property)Rule 1.15 (terminating representation and refunding unearned fees)Rule 3.08 (the lawyer as witness)Rule 5.04 (the lawyer’s relationship with non-lawyers with respect to fees)Rule 7.03 (prohibited solicitations and payments)Rule 8.04(a)(3)

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1.04 Fees

(c) When the lawyer has not regularly represented the client, the basis or rate of the fee shall be communicated to the client, preferably in writing, before or within a reasonable time after commencing the representation.

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1.04 Fees

(d) A fee may be contingent on the outcome of the matter for which the service is rendered, except in a matter in which a contingent fee is prohibited by paragraph (e) or other law. A contingent fee agreement shall be in writing and shall state the method by which the fee is to be determined. If there is to be a differentiation in the percentage or percentages that shall accrue to the lawyer in the event of settlement, trial or appeal, the percentage for each shall be stated. The agreement shall state the litigation and other expenses to be deducted from the recovery, and whether such expenses are to be deducted before or after the contingent fee is calculated. Upon conclusion of a contingent fee matter, the lawyer shall provide the client with a written statement describing the outcome of the matter and, if there is a recovery, showing the remittance to the client and the method of its determination.

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1.04 Fees(e) A lawyer shall not enter into an arrangement for charge, or collect a contingent fee

for representing a defendant in a criminal case.(f) A division or agreement for division of a fee between lawyers who are not in the

same firm shall not be made unless:(1) the division is:

(i) in proportion to the professional services performed by each lawyer; or(ii) made between lawyers who assumes joint responsibility for the representation;

(2) the client consents in writing to the terms of the arrangement prior to the time of the association or referral proposed, including:

(i) the identity of all lawyers or law firms who will participate in the fee-sharing agreement;

(ii) whether fees will be divided based on the proportion of services performed or by lawyers agreeing to assume joint responsibility for the representation; and

(iii) the share of fee that each lawyer or law firm will receive or, if the division is based on the proportion of services performed, the basis on which the division will be made;

(3) the aggregate fee does not violate paragraph (a).

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Fees

• Problems– No engagement letter or contract– Ambiguous engagement letters and contracts– Keeping fees not earned

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Fees• Key Points

– Have written contracts with every client– Enter the contract before you do the work– Don’t keep money you haven’t earned– Don’t refer cases for a fee unless you work on the case– All contingent fee contracts must be in writing– Don’t have contingent fee contracts in criminal cases– If you sue your client, expect a malpractice claim or grievance

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HELPFUL HINTS

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BE …• Honest• Respectful of Others• Professional• Civil• Ethical• Excellent

• Organized• Resourceful• Creative• Alert• Attentive • Proud

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DO . . .• Act with competence,

commitment and dedication to the interest of the client

• Communicate regularly with your client

• Timely return phone calls (directly or indirectly through reminders to your attorney)

• Maintain confidential and privileged communications

• Plan for the unexpected.• Join professional groups • Read the applicable rules (e.g.,

statutes, discovery, court procedures, TDRPC, etc.)

• Demonstrate respect for the legal profession and the administration of justice

• Use the Ethics Hotline (800-532-3947)

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DO NOT . . .• Do not procrastinate in your work• Do not misrepresent the status of

a case• Do not communicate with

someone represented by counsel• Do not sign your attorney’s name

without permission• Do not hold a file for ransom

• Do not mishandle client trust funds

• Do not keep unearned fees• Do not backdate letters, discovery

or other legal documents• Do not do anything that

prejudices your client• Do not lie, cheat or steal

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