The best practice is to always keep one's law license active, even if the lawyer wants to retire or slow down.

I saw a proposed rule about resignation by a lawyer. I am not sure what that means, and why would anyone ever use that? There is a proposal for a rule change involving permanent resignation. I thought a resignation was a disbarment by consent. Am I wrong?

Samuel C. Stretton.

You are wrong. Sometimes the language gets confusing. The practicing lawyer who is facing discipline can reach a consent decree with The Office of Disciplinary Counsel. It used to be one could only reach an agreement for disbarment by consent. But 10 or 15 years ago, the Disciplinary Board changed the rules to allow The Office of Disciplinary Counsel and the respondent's lawyer to negotiate lesser forms of discipline. Now, one can have a consent decree for a reprimand or suspension, etc.

When a lawyer reached an agreement or consent agreement for disbarment, it was sometimes called a resignation. In essence, a resignation or admission of guilt and the resulting discipline, if agreed to by the Pennsylvania Supreme Court, was really disbarment by consent. That choice of words was not really written in the rules, but was unfortunately used.

There has always been a separate rule for resignation from the practice of law where a lawyer decides they do not want to be a lawyer anymore and just resigns. This rule was found in the Pennsylvania Rules of Bar Admission, Rule 201(b), and allowed any lawyer who was not the subject of discipline or a disciplinary investigation to submit their resignation from the practice of law. Obviously, this was rarely used because what would be the purpose of giving up one's right to practice law, particularly if there were no disciplinary proceedings.

In fact, it would be foolish to do that since, if a lawyer really did not want to practice law anymore, they could seek a voluntary retirement, or go inactive (administrative suspension) by not paying their annual fee or not taking CLEs. Obviously if one does that, they have three years to seek reinstatement automatically, and after that, they would have to apply for a reinstatement if they chose to return to the practice of law.

This concept of resignation has been of some concern to The Disciplinary Board over the years because many people believed the rule was placed in the wrong section. It should not have been in the bar admission rules. It should have been in The Pennsylvania Rules of Disciplinary Enforcement. A new rule change has been proposed placing the resignation rule under Pennsylvania Rules of Disciplinary Enforcement, new Rule 404. The new proposed rule expands on the previous rule. The previous rule found in Rule 201(b) of the bar admission rules only dealt with a lawyer who was not the subject of an investigation. The new rule has a Subsection 404(b) that deals with resignation while the lawyer is under administrative suspension. The new rule now requires a $250 fee that was not required previously.

Under the new rule, if a lawyer does resign, they cannot seek reinstatement if they change their mind. They can seek readmission only by going through the Pennsylvania Bar Admission Rules i.e., taking the bar exam again and going through the character and fitness evaluation.

It is important to note that a lawyer cannot resign if there are pending attorney disciplinary charges, or an attorney disciplinary investigation. Years ago, a lawyer who was facing disbarment tried to resign and then argued the Disciplinary Board and the Court no longer had jurisdiction. The argument was rejected by the Pennsylvania Supreme Court. Therefore, there is no shortcut for a lawyer to avoid serious disciplinary matters by resigning. One can only use the resignation process if they do not have any pending investigations or pending disciplinary charges.

Administrative suspension is a relatively new term and replaces the old inactive status. The trouble is the administrative suspension has a negative connotation even though it just means that one did not pay their fee or did not take their CLEs or just decided they did not want to practice anymore.

There would be almost no benefit to ever use the resignation procedure since one can place themselves on inactive status (administrative suspension), retired status or emeritus status under the Pennsylvania Rules of Disciplinary Enforcement.

The only time this writer is aware that an attorney utilized the resignation process was when the lawyer was a candidate for appointment to the federal bench. That attorney had practiced in Pennsylvania years before, and then moved to another jurisdiction where she had a distinguished career as a trial lawyer. She let her Pennsylvania license lapse because she was not practicing in Pennsylvania. Originally, she was placed on inactive status, but then, that was changed to an administrative suspension because of the rule changes in The Pennsylvania Rules of Disciplinary Enforcement.

Because she had the term administrative suspension with this negative connotation on her attorney record, when she went before the Senate Judiciary Committee, they would not consider her case without her resolving the administrative suspension. Of course, that would have been easy to resolve, but it would take three or four months since one had to apply for reinstatement and ultimately get a Supreme Court order. Apparently, there was a timetable where she had to get before the Judiciary Committee in a shorter time period. As a result, the only procedure was the resignation procedure. It is very difficult to tell someone to resign their right to practice law in Pennsylvania after a person works so hard to be admitted, but it had to be done. Once she resigned, that removed the administrative suspension and that person was then approved by the Senate and is now a federal judge. That is about the only time this writer is aware this procedure was used and the only time there would have been a good reason to really use it.

Perhaps, someday resignation should be eliminated, but it is available for now. One would be very ill advised to use that procedure unless there was some excellent reason because once one permanently resigns, they cannot apply for Reinstatement and cannot practice law in Pennsylvania. They cannot receive referral fees and they cannot seek administrative Reinstatement. The only way they can come back again is to start from scratch and apply for admission, take the Bar Exam and go through all of the Character and Fitness Evaluations, etc. Also, in the change to the Rules of Disciplinary Enforcement Rule 204, if one does permanently resign and holds a limited in-house counsel license, that also means they can no longer do that. See new proposed Rules of Disciplinary Enforcement Rule 204.

The best practice of law is to always keep one's law license active, even if a lawyer wants to retire or slow down or not take cases. It only takes 12 CLEs and a $225 annual fee. One never knows when they may need or wish to be able to give legal advice or practice law again. There is an even more practical reason to keep an active license. A lawyer can receive a referral fee, but a resigned or inactive lawyer cannot if referred when they were no longer a lawyer.

 Never do business with your client.

I am representing a client in a DUI case. He owns a business that supplies office legal paper. Can I purchase the paper products from him? Or is that prohibited?

The specialized conflict of interest Rule 1.8(a) has a general prohibition about a lawyer entering into a business relationship with a client. A lawyer is not allowed to do so unless transactions and terms, in which the lawyer acquires the interest, are fair and reasonable to the client, and the terms are fully disclosed and set forth in writing. Second, the client also has to be advised in writing of the desirability of seeking and given a reasonable opportunity to seek the advice of independent counsel. Third, the client has to give informed consent in writing. If the Rule 1.8(a) is complied with, only then is there a valid waiver allowing the lawyer to do business with the client.

Having said that, it is never recommended that a lawyer do business with a client. It should be the very rare exception and not the rule.

The question posed is a somewhat different situation. This is not doing something individually with a client. This involved a client who has a normal commercial business, and the lawyer wants to purchase legal paper and xerox paper at the normal business rates. Comment One to Rule 1.8 appears to make an exception. Comment 1 notes as follows about the rule:

"In addition, the rule does not apply to standard commercial transactions between the lawyer and the client for products or services that the client generally markets to others, for example, banking or brokerage services, medical services, products manufactured or distributed by the client, and utilities' services. In such transactions, the lawyer has no advantage in dealing with the client, and the restrictions in paragraph (a) are unnecessary and impracticable."

Therefore, to answer the question, it would appear that one could purchase paper and legal supplies from a client the lawyer is representing in the DUI case assuming the purchase is at arm's length, has normal commercial fees, and the lawyer is not taking advantage of the client.

A problem arises when lawyers take advantage of a client in a business transaction. Lawyers, at times, have received substantial suspensions for doing so. For instance, a lawyer should never, if representing a client, seek to borrow funds from the client, or obtain a loan from the client without going through Rule 1.8. This is particularly true if the request was for an unsecured loan procedure. No independent counsel would ever advise the client to enter into this type of business arrangement.

As noted, unless the client is involved in some regular normal businesses such as legal supplies, computer services, medical services, the better practice is never to do business with one's client. Whether or not there are advantages in the short run, it can have some really serious disadvantages in the long run. The wise lawyer would not be doing business with a client under almost any circumstance and would always carefully read Rule 1.8(a).

Chester County lawyer Samuel C. Stretton has practiced in the area of legal and judicial ethics for more than 47 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 103 S. High St. P.O. Box 3231, West Chester, Pennsylvania, 19381.