Samuel C. Stretton.

Pennsylvania has a unique attorney disciplinary system and a very fair one in many ways.

Is there set discipline for certain types of attorney misconduct?

The answer is no. The Pennsylvania Disciplinary System has been very innovative system and does not have set discipline. For instance, in New Jersey, misuse of funds normally results in disbarment. New Jersey also precludes reinstatement for disbarment.

Pennsylvania has taken a different approach in the disciplinary world. The Pennsylvania system is based on individual review. In other words, a lawyer could do something very serious, but in reviewing mitigation and other issues there would be far less discipline. One could misuse funds and still not be disbarred and sometimes not even suspending depending on the facts and the record. This is based on the case of Office of Disciplinary Counsel v. Lucarini, 472 A.2d 186 (Pa., 1983). In Lucarini, Disciplinary Counsel attempted to establish disbarment for misuse of funds as the appropriate discipline like New Jersey. The Pennsylvania Supreme Court refused to adopt that position. As a result, Pennsylvania has a very individualistic attorney discipline approach and what many people consider a more liberal less punitive approach to attorney discipline.

Having said that, over the years since the 1980s, discipline has taken a more punitive approach. A review of the early Disciplinary Board reports and the Supreme Court orders for discipline demonstrate that discipline has gotten increasingly harsher in recent years. For instance, back in the 1970s, when this writer was Assistant Disciplinary Counsel, informal admonitions were given for neglect. One could accumulate five or 10 informal admonitions for neglect over a period of time without receiving more substantial discipline.

Now, if one gets an informal admonition the next level of discipline is either going to be a private reprimand or public reprimand. After that it could be a public censure or suspension. In other words, the discipline is treated cumulatively and what would be minor discipline can now be much more serious discipline if there was prior private discipline.

Even if a lawyer has a criminal conviction for a felony in Pennsylvania, that doesn't necessarily mean the lawyer will be disbarred as is routinely done in some jurisdictions. In Pennsylvania, the discipline depends again on the individual facts, i.e., the circumstances, the nature of the felony, the harm, the lawyer's psychological status, mitigations, etc. It's all a balancing act. At times there has to be punitive aspects, but the bottom line is the Pennsylvania disciplinary system is not punitive in nature, but instead has the purpose to protect the public and the bar and make sure lawyers are fit to practice.

Over the years, there has been some areas where certain harsher disciplines are imposed. For instance, the unauthorized practice of law, if it is not through inadvertence and a one-time occasion, usually the discipline starts at a year and a day suspension. A year and a day is significant since anything over one year requires a reinstatement process that takes another one to two years. Therefore, if a lawyer does not pay the annual fee or take their CLE courses on time and is placed on administrative suspension, that lawyer can also be cited for the unauthorized practice of law and/or law related activities if they continue practicing while their administrative suspension was in place before they are able to get reinstated.

Many times, the administrative suspension is for just a few days. Under these circumstances, the discipline can be resolved with private or public reprimands. But if a lawyer continues to practice over several months, then the year and a day suspension may be sought. Also, a lawyer who is on administrative suspension, but still practicing, has to be very careful because often times Disciplinary Counsel will start looking at the nature of discipline as a year and a day which can up or down depending on other circumstances.

More and more three to five cases of neglect will result in a suspension. Of course, there are exceptions to the rule but there are a number of cases where lawyers have been suspended sometimes for a lengthy period of time, because they neglected four or five cases. It's difficult for many lawyers to understand that concept of cumulative discipline. For instance, a lawyer could have a bad six months due to personal problems, etc. and neglected five or six cases. But, similarly, the lawyer has been practicing for a number of years and has handled tens of thousands of cases perfectly. One would like to think that the tens of thousands of cases done well would mitigate against the five or six cases handled poorly during whatever period of personal problems. But that is not always the case. If the lawyer perhaps can present serious psychiatric issues or addiction issues during that time period, there's a good chance that lawyer can reduce the discipline. But without that mitigation, serious cases of neglect can result in several years of suspension.

Other areas of concern, of course, is the record-keeping requirement. The Pennsylvania Disciplinary Board in the last 10 years has tightened record-keeping. Under Rule 1.15 and Pennsylvania Rules of Disciplinary Enforcement 221, there are rather stringent record requirements. The escrow account is supposed to be reconciled every month with records of the reconciliations kept. There should be an ongoing ledger sheet for every client with an active balance setting forth what monies are being held. The ledger be done either on paper or electronically, but must be maintained. All financial records have to be maintained for five years. Deposit slips, checks and bank statements are to be maintained. Failure to maintain these can create some serious problems. A little history is needed to understand why.

In years' past when an attorney had an escrow account and operating account, there were no specific rules as to what records had to be maintained. It was often very difficult for the Office of Disciplinary Counsel to get records timely from a lawyer if there were issues of misuse of funds. Many lawyers didn't maintain any records, had no ledger sheets, and did have bank statements or checks. This would often times delay prosecution of these lawyers unduly. The delay allowed the lawyer to continue with their misconduct.

As a result, the Pennsylvania Supreme Court had had enough of lawyers not maintaining their financial records. Failure to maintain these records can result in professional discipline. Rules such as the aforementioned Rule 221 and amended Rule of Professional Conduct 1.15 were promulgated with the specific record-keeping requirements. Some lawyers, such as this writer, have objected. The objection is not that it's a bad idea to keep those records, but it seemed like over-regulation to discipline lawyers if they didn't keep the records in that fashion as long as there were no problems. But these rules have now long been passed. Unfortunately, many of these rules are honored in the breach, particularly by smaller firms that don't often have a full-time accountant or even a part-time accountant or bookkeeper. In a perfect world, it's nice to think that all lawyers are making at least a very comfortable living. But, in reality, at least in the modern practice of law that is far from the truth. Many lawyers, particularly small firms and solo practitioners, are struggling just to make ends meet. There is a great deal of competition out there, many clients who are no longer able to pay, a middle class that doesn't exist. The result is lawyers have difficulty getting clients and collecting fees. Sometimes Pennsylvania judges don't understand that, particularly those who have been on the bench for many years.

The practice of law 15, 20 or 30 years ago was very, very different in the way it's practiced now. Further, the cost of practicing law has gone way up and the ability to get fees has gone way down except for many firms who have major corporate clients. Even those clients are balking at paying the fees like they used to. Therefore, when many of these rules are put into place, the impact it has on particularly smaller firms has never been truly measured.

The bottom line is lawyers have to maintain these financial records now. If the lawyer can't produce the records timely, the Disciplinary Board of Pennsylvania, particularly recently, has been threatening to petition the Supreme Court. If they petition the court, there is a 10-day response time and then the court can place the attorney on interim suspension for not maintaining the records. That could be a devastating blow. If a lawyer is placed on any sort of suspension, they have to close down their practice and notify all clients. Even if the lawyer is reinstated six months or a year later, there is no practice left. To try to restart a practice, particularly after many years, is tough. Middle-aged and older lawyers don't have the energy that they had when they were 27 or 28 and out there trying to develop a practice. Further, trying to develop a practice now with the huge number of lawyers and excessive competition, is very, very difficult.

But failure to keep these records accurately can result in the lawyer losing his license on an interim suspension and potentially an ordered suspension after a disciplinary trial. The point is that lawyers should be aware and comply with these rules even if they seem unduly burdensome and harsh.

The failure to maintain financial records can result in a suspension, depending on the circumstances.

Violation of attorney-client privilege and conflict of interest usually the first time is private discipline, although a gross violation may result in public discipline. But if it continues there will be suspensions.

Pennsylvania has a unique attorney disciplinary system and a very fair one in many ways. There is no standard discipline for a specific factual pattern. Discipline is decided on a case-by-case basis. But the trend, at least in recent years, has been for far more severe discipline than in years past.

A lawyer can never put his interest above the client's interest.

Can I, in my fee letter, have an arbitration or alternate dispute resolution clause if the client is dissatisfied with my services or feels I committed legal malpractice?

The answer is maybe and it depends on how a lawyer does it. In the fee agreement or fee letter, one has to be well aware of a potential conflict of interest if the lawyer is putting his interest above the clients'. If the representation of the client is limited by the lawyer's desire to not be sued, then there is a classic concurrent conflict of interest under Rule 1.7.

If there is a conflict of interest that could be waived, the lawyer would have to get informed consent. The conflict of interest rule doesn't say informed consent has to be in writing, but it certainly would be a wise idea to memorialize when consent was given. Usually informed consent also requires suggesting the client get the advice of other counsel. That, of course, could be a deadly proposition since in this day and age, a client might never come back once other counsel induces them to remain.

The bottom line is that adding these clauses does put the lawyer and the client in a conflict. The lawyer wants to in the fee agreement have a nice resolution if there is a dispute such as fee dispute or alternative dispute resolution or binding arbitration. It may be in the client's interest not to agree to the arbitration. If the lawyer doesn't handle a case properly it may be far better for a lawyer to have a trial in the Court of Common Pleas or a jury trial. A sophisticated client might recognize that, but many clients are not as well educated or sophisticated.

If a lawyer is going to have such an arbitration clause in the fee agreement, it ought to be very specific. It certainly ought to list the pros and cons from the client's viewpoint of why to agree to it and why not to. Such disclosure is probably a good idea for fee disputes. Whether the Pennsylvania courts would allow a cause to override a client's desire to bring a suit for legal malpractice is not certain at this point in time. If a lawyer is going to do this, he or she certainly owes the client in writing a review of the advantages, disadvantages, and issues of conflict. Also, it would be wise to suggest a client seek independent counsel.

If a lawyer does all that and the client consents, then perhaps these clauses are permissible. But without doing that, the clauses raise serious questions as to whether or not the lawyer acted unethically in having the client sign such an agreement with these limitations.

When a lawyer represents a client, the lawyer has to do everything he can to help the client within the confines of the representation. The lawyer can never put their interest above the client's interest. It's a bad way to start a professional relationship by having a fee agreement that limits the client's future remedies if the lawyer doesn't do something right and if the client fully understands the consequences.

Chester County lawyer Samuel C. Stretton has practiced in the area of legal and judicial ethics for more than 35 years. He welcomes questions and comments from readers. If you have a question, call Stretton directly at 610-696-4243 or write to him at 301 S. High St. P.O. Box 3231, West Chester, Pennsylvania, 19381.