TEXAS LAWYERS' INSURANCE EXCHANGE

Grievance Defense and Adversariality

Everyone says that the American system of justice is an adversarial system. There are plaintiffs, defendants, lawyers advocating zealously, and judges to referee. Negotiations are frequently oppositional. Lawyers use combat imagery to depict what they do. Trial lawyers compose extravagant odes to the glories of the adversary system. Alienated legal intellectuals mostly decry it, and extol the virtues of problem-solving. Much of the country watches LAW AND ORDER with compulsive fascination.

The image of adversariality as pervasive is misleading. Mostly, criminal proceedings end with guilty pleas. Those accused frequently cooperate with the government. Most civil cases end with settlements, after a good deal of lawyerly collaboration. Lawyers on opposite sides of a deal can be guilty of negligent misrepresentation to non-clients; clearly, the existence of that tort limits adversarialism.

Nowhere is the standard paradigm of warring parties more dangerously misleading than in the area of grievance defense. When a lawyer is accused of having violated the TEXAS DISCIPLINARY RULES OF PROFESSIONAL CONDUCT, there will be temptations to act adversarially. Make the other side work for information! Don't give anything up. Deny, deny, deny! Temptations usually need to be resisted.

As applied to disciplinary proceedings, Model Rule 8.1 impliedly requires openness and forthrightness. Texas Rule 8.01(a) doesn't go that far. It simply prohibits any lawyer from knowingly making false statements of material fact in connection with disciplinary matters. This rule applies not only to lawyers subject to grievances but also to every other lawyer involved, including defense lawyers.

Rule 8.01(b) goes much further. It requires every lawyer involved in any grievance proceeding to correct (all) misapprehensions in that proceeding. Rule 8.01(b) also requires every lawyer involved in a grievance to respond to every lawful demand for information from a disciplinary authority. Given the placement of this requirement, Rule 8.01(b) requires a full response.

Rule 8.01 is limited only by the privilege against self-incrimination, the client-attorney privilege, the work product privilege, and good-faith challenges to the legitimacy (e.g., loose relevance) of discovery requests. Texas Rule 8.04(a)(1) makes it lawyer misconduct (itself subject to discipline) to violate any of the Texas Disciplinary Rules of Professional Conduct. That includes Rule 8.01(b). Thus, an attorney subject to a grievance proceeding who fails to correct a misapprehension becomes guilty of a new violation and subject to further discipline.

A lawyer representing another lawyer in a disciplinary proceeding has his or her own problems. The right (duty) he/she has to maintain silence pursuant to the attorney-client privilege is in tension with the thrust and spirit of Texas Rule 8.03(a); it requires one lawyer to report another when the former lawyer has knowledge of "professional conduct that raises a substantial question as to [the second] lawyer's honesty, trustworthiness or fitness as a lawyer[.]"

Obviously, the client-attorney privilege must trump what some wags scornfully (but mistakenly) call the Squeal Rule. Nevertheless, because the two rules conflict, the client-attorney privilege will not be construed broadly. Certainly, the privilege does not permit silence with respect to conduct that violates grievance rules if that conduct is not criminal. In addition, the slightest unprivileged disclosure by the lawyer-client will destroy a privilege.

A recent Wisconsin case illustrates some of these ideas. In Re Raymonds, 618 N.W.2d 521 (Wis. 2000), involved a real estate lawyer, L, who processed many closings but kept sloppy records. He had a computer, but did not use its check-balancing feature. Large sums of money passed through L's trust account, and the bank levied service charges against its corpus for several years.

The Supreme Court of Wisconsin held that L had used client trust funds for his own personal expenses. After all, he was responsible for the bank charges. Of course, a lawyer who misuses trust funds can expect severe discipline.

It's not as though L willfully stole his client's money, financed an affair (or a divorce) with it, or sent his daughter to Stanford. Indeed, the Bar did not forever disbar him. Unfortunately for Raymonds, though, two more dark features discolored his case.

First, the bank eventually bounced a trust account check L wrote. Naturally, neither the client nor the Bar liked that much. Next, L borrowed money from his sister and deposited it in the trust account to make good the check. The disciplinary authorities held that he thereby commingled trust and personal funds. One might think this interpretation a stretch. After all, L was giving back money he owed. If the borrowed money ceased to be his once deposited in the trust account, then there was no commingling of trust and personal monies. The court was not impressed with L's maneuver, however. Perhaps the reason was that L certainly commingled the assets of his different clients.

Second, Raymonds repeatedly tried to conceal the facts. As a consequence, the Bar charged L with a new offense: violating the Wisconsin equivalent of Texas Rule 8.01(b). The Wisconsin Supreme Court even criticized L for saying he borrowed money ($150,000) from a family friend, when he borrowed it from his sister. It used phrases like "lack of candor," "less than forthright," and "disingenuous." It was even more critical of L's attempt to draw a distinction between a returned check bearing the notation "refer to maker," and one marked "insufficient funds."

Stealing from a client is probably the worst sin a lawyer qua lawyer can commit -- much worse than a fist fight with a client or opposing counsel. Many a client (and not a few lawyers) may need -- or at least deserve -- a good thrashing. Cf., Grievance Administrator v. Fink, 612 N.W.2d 397 (Mich. 2000) (verbal and physical assault on a witness led to reprimand). However, no client ever needs its assets filched.

Bribing judges and other public officials sinks (nearly) as low as stealing the client's money, since it too "strikes at the very heart of the integrity of the legal profession." In re Mithun, 2001 WL 25744 (La. 2001). Preparing fraudulent documents is also pretty bad, and often leads to disbarment, but the worst cases are those in which there is also stealing. In re Peterson, 620 N.W.2d 29 (Minn. 2000) (suspension instead of disbarment for forgery only).

The moral of Rule 8.01(b) is that when charged with a grievance, a lawyer's best defense is often not resistance and diversion, but disclosure and explanation. In short, candor is the key to defending most grievances; still, patterns of wrongful conduct take place in a context. That context frequently involves understandable pressures which can be rectified and reformed. Most Bar committees take redemption seriously. Occasionally, doubtful grievance accusations are filed; often, juries eventually resolve those disputes in favor of the lawyers. Most grievances tried to courts and juries will not turn on clever defense tactics, concealed facts, or half-truths. Generally, however, context trumps contest.

Geoffrey Hazard, known as one of America's leading philosophers of lawyering, wrote recently that the practice of law is "a Machiavellian calling." To be a great lawyer it is necessary "to be a great feigner and dissembler."¹ The purposes of lawyers are best served by "'cunning alone.'"² Perhaps Prof. Hazard is often right. He is not right across the board: Machiavellianism has little place in the grievance process. This proposition is true not only as a matter of grievance law, but as a matter of raw strategy and defense psychology. In grievance defense, candor is the key.

TLIE greatly appreciates the contribution of this article by Mr. Quinn, an adjunct professor at the Law School of the University of Texas-Austin. A shareholder in the Austin office of Sheinfeld, Maley & Kay, he works on the legal problems of lawyers and complex insurance matters, and often testifies about them. He may be reached at mquinn@smklaw.com or at 512-474-8881.

^{1Geoffrey C. Hazard, Jr., "Law Practice and the Limits of Moral Philosophy," the fifth essay in Deborah L Rhode, Ed., ETHICS IN PRACTICE: LAWYERS' ROLES, RESPONSIBILITIES, AND REGULATION 75, 89 (2000).}

^{2 Professor Hazard argues that lawyers cannot satisfy all three of the following at once: autonomy, impartiality, and truthfulness. He argues that lawyers are "highly compensated untouchables." Id. at 75.}