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Law Practice,
Ethics/Professional Responsibility

Jun. 28, 2011

Now that I've gotten a State Bar letter, what's next?

Know thy adversary - what the State Bar considers when deciding to close an inquiry or investigation.

Stephen J. Strauss

Diane L. Karpman

Phone: (310) 887-3900


Diane is a legal ethics expert (expert witness and State Bar defense), she is a certified specialist in legal malpractice.


LAST IN A TWO-PART SERIES: Part one appeared on June 13.

Part one advised against providing the State Bar with an emotional response just because your former client is an ingrate - just like you would not mouth off to a police officer. Instead, your response must evidence the exercise of independent professional judgment.

We now look at the closing codes used by the Intake Unit of the Office of the Chief Trial Counsel, the factors used to determine whether to close a matter or dispose of a complaint, and alternatives available for disposing of complaints short of initiating formal disciplinary proceedings. This information will help you frame your response so that you get the accusations closed early on. The best time to get the matter closed is before anyone has invested a lot of time or energy investigating the allegations.

A review of the closing codes, historically used by the Intake Unit of the Office of the Chief Trial Counsel, clues us into some of the reasons why the State Bar might close an inquiry or investigation. While these closing codes are not part of the latest State Bar Discipline Report, submitted on April 30 by Executive Director Joseph L. Dunn, they offer considerable insight into what complaint analysts and investigators have historically used to justify closing a complaint to their superiors.

Fee Arbitration Matter (ARB): This applies to the garden variety fee dispute between attorney and client. A fee dispute standing alone, absent overreaching by the attorney or other aggravating factors, does not justify the imposition of discipline. Attorney-client fee disputes are subject to mandatory fee arbitration.

Death of Complaining Witness (DTW): Some codes facially appear quite obvious, but that is not always the case. For instance, with trust account violations, the State Bar doesn't need a single living witness, since the trust account records will speak volumes about what occurred. This is the reason "money counts" are difficult to defend.

Lack of Jurisdiction (LJR): This refers to conduct unrelated to the practice of law that is not criminal, actions not undertaken in a "professional capacity," or unusual conduct reported in the media. This might include practicing law out of a coffee shop or in the back of a Lincoln Town Car. The behavior may be unusual, but it is not unethical.

Lozada (LOZ): This is a unique, special exception for immigration law practitioners. This is the only coded designation based upon a specific practice area, which in turn is based upon a particular case (Matter of Lozada). It is a condition precedent to an immigrant filing an asylum appeal; they must also file a complaint with the State Bar accusing the lawyer of ineffective assistance of counsel. This has been codified at 8 C.F.R. Section 2008.4(a)(5)(iii).

No Merit (NMT): Consumers of legal services believe the myths propounded by the myriad number of law related television dramas whereby the good guys always win their cases. Therefore, when a client doesn't win, and 50 percent of the time they don't, it must be the lawyer's fault. Not getting a good result does not mean ethical misconduct occurred.

Insufficient Facts or Evidence (NSF): This covers the "He said, she said" type disputes (often involving opposing counsel or former clients) because proof must be by clear and convincing evidence, Rule 5.103, Rules of Procedure of the State Bar Court.

Statute of Limitations Exceeded (ROL): Rule of Procedure 5.21, as modified in 2006, provides a period of five years within which the State Bar must initiate disciplinary proceedings against you. Unfortunately, the rule has 13 exceptions. Often many of the exceptions will apply at the same time.

Matter Resolved (RSV): Often a partial fee refund timely made will cause the complainant to consider his accusations resolved. However, a direct resolution with the complaining client will not always ameliorate the State Bar inquiry. You also need to be very careful in structuring any compromise. It is cause for "suspension, disbarment or other discipline" to require, as a condition for settling a claim for professional misconduct, legal malpractice or another dispute with a client, that the plaintiff agree not to file a complaint with the State Bar regarding that misconduct or to withdraw such a complaint. Business & Professions Code Section 6090.5.

If the accusations against you don't warrant an outright closure, then you should be aware that there are other possible dispositions for low level or technical violations that result in little or no harm to the client, the public, or the administration of justice. Some of these alternative dispositions tend to come and go with whoever is the chief trial counsel in charge of the office at the time. These alternative dispositions include:

Directional Letter: Issued in those matters where there is a potential for future discipline if the underlying conduct is not corrected. These are very rarely issued.

Resource Letter: This letter is directed to an attorney advising of the various information resources that can assist in avoiding future problems and/or the filing of further complaints by clients and others. We have not seen one of these in many years.

Warning Letter: Issued in those matters where there was a probable violation of the State Bar Act of California Rules of Professional Conduct that was minimal in nature, did not involve significant harm to the client or the public and did not involve a misappropriation of client funds.

Agreement in Lieu of Discipline: Known as an ALD, pursuant to Business & Professions Code Section 6068(l), this is an agreement between the State Bar and the accused attorney as to facts and conclusions of law whereby the attorney agrees to comply with certain educational or rehabilitative conditions aimed at eliminating future misconduct. This may include attendance at the State Bar ethics and client trust accounting school. Failure to comply with any of the terms or conditions that may be attached to an ALD can lead to the filing of formal disciplinary

In determining the availability of various alternative dispositions, attorneys in the Intake Unit of the Office of the Chief Trial Counsel consider the following factors: the member's prior disciplinary history; the existence of other open inquires/investigations against the member; the seriousness of the alleged misconduct; the degree of client harm as a result of the alleged misconduct; the member's cooperation in evaluating the accusations; and the likelihood of further harm to the public if the alleged misconduct goes unchecked

Most significantly, these alternative means are not considered to constitute discipline. This distinction can be very important and class-action lawyers should take special note. When you apply for pro hac vice status outside California, and the application inquires whether you have ever been disciplined, you need not disclose such a disposition in response to a question about prior discipline.

There are about six states that have more sophisticated pro hac vice application questions. Some may inquire if there is anything currently pending at the State Bar. Your pro hac petitions must be absolutely accurate. Lawyers have been disciplined for inaccurate statements in these applications because it is tantamount to a false statement to a court or tribunal, Rule 5-200, Rules of Professional Conduct and Business & Professions Code Section 6068(d).

Likewise, other state jurisdictions and professional licensing boards often ask whether you have ever been disciplined. Resolution of an accusation by means of an alternative disposition can thus be quite beneficial whereas even a private reproval is discipline, which would have to be disclosed. If you are admitted in other states, discipline here could also trigger reciprocal reporting obligations in other states, just as discipline by the Securities and Exchange Commission, the Federal District and appellate courts, and the U.S. Bankruptcy Courts trigger reporting obligations to the State Bar.

It is always remarkable that when the bill comes due, clients will suddenly assert they have been ethically "harmed" by the now creditor lawyer. Knowing what criteria justify a closure and what criteria the State Bar uses to evaluate allegations can assist you in framing your response to achieve an early closure.

Short of closure, if you have engaged in technical or low level misconduct and you can demonstrate little or no harm to the client or the administration of justice, you may receive a warning letter, directional letter, or enter into an agreement in lieu of discipline. These alternative dispositions by definition do not constitute discipline and generally need not be reported. They will also save you a cost assessment of between $2,000 to $12,000, which is imposed as part of formal disciplinary proceedings.

So, know thy adversary.


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