Bar Counsel: Ethical Issues of Unauthorized Practice and Supervisory Liability: Part 2
From Washington Lawyer, September 2004
By Joyce E. Peters and Anthony C. Epstein
Last month Bar Counsel’s column featured the first part of a conversation between Bar Counsel and Anthony Epstein, the current chair of the District of Columbia Court of Appeals Committee on Unauthorized Practice of Law. Our goal was to illuminate the different ways in which cases of unauthorized practice of law and supervisory liability arise and are handled in the District of Columbia.
In our discussion we highlighted how enforcement authority for unauthorized practice of law is divided between Bar Counsel and the committee, depending upon whether the individual engaging in the unauthorized practice is subject to the court’s disciplinary authority. Tony described how the committee operates and takes enforcement action, some of the basic principles and policies underlying Court of Appeals Rule 49 (the rule that defines the practice of law in the District of Columbia), and how important it is for practitioners to give notice about any limitations of their practice in order to avoid unauthorized-practice-of-law issues.
We also discussed how reciprocal discipline has arisen in unauthorized-practice-of-law cases, how law firms are accountable under Rule 49, and how individual supervisory lawyers who fail to meet their responsibilities under Rule 5.1, 5.3, or 5.5 of the District of Columbia Rules of Professional Conduct may face enforcement action by the committee as well as prosecution by Bar Counsel for unauthorized-practice-of-law violations by others. As Tony pointed out, “We probably get as many complaints about lawyers in some of the largest and best-known firms in the city as we do about solo practitioners or lawyers in small firms.”
This month we continue our conversation and describe how the committee, Bar Counsel, and other professional authorities—including the Committee on Admissions, bar counsel in other jurisdictions, and law enforcement agencies— work together on issues of unauthorized practice of law and supervisory liability. Included are some tips on how lawyers and supervisory lawyers can avoid unauthorized-practice-of-law issues. These tips should be useful to all lawyers regardless of where they are practicing. We will begin by examining how the committee works with disciplinary authorities.
Peters: Does the committee ever involve bar counsel here or in another jurisdiction when it finds a Rule 49 problem?
Epstein: As you know, we do so regularly. I’m happy to report that the Court of Appeals adopted our recommendation to amend Rule 49 to permit us to share information about ethical issues with you and disciplinary counsel in other jurisdictions. Rule 49(d)(3)(E)(v) now allows the committee to refer cases to “other appropriate authorities.” As a result, we can share information not only with your office, but also with bar counsel in other jurisdictions, as well as with the D.C. Court of Appeals’ Committee on Admissions and the D.C. Bar’s Lawyer Counseling Committee, which assists lawyers with alcohol and substance abuse and other personal problems. We can and do also share information with federal and local law enforcement authorities.
Peters: Why was the change to Rule 49 to permit this sharing necessary?
Epstein: The committee is generally subject to a strict confidentiality rule requiring us to keep confidential all information that we develop in an investigation. The change to Rule 49 makes clear that we may disclose information to other professional authorities to ensure that lawyers are held accountable. This limited authority is fully consistent with legitimate confidentiality concerns, because any information that we provide to other professional authorities would be subject to applicable confidentiality protections for respondents in such matters. Thus, disclosure would not undermine the primary purpose of the confidentiality rule, which is to protect from unwarranted publicity respondents who are the subject of unfounded complaints.
Peters: Confidentiality rules also apply in disciplinary proceedings under D.C. Bar Rule XI, § 17(a). Our investigations are confidential until either a petition initiating formal disciplinary action is filed and served or Bar Counsel issues an informal admonition. Cases that result in a dismissal or diversion are usually never made public unless the respondent lawyers make them public.
Of course, when we get a complaint against a lawyer who is not a member of the D.C. Bar or not otherwise subject to our disciplinary jurisdiction, the confidentiality rules do not apply. That is why we can simply refer these cases to the Committee on Unauthorized Practice or to disciplinary counsel in other states. If there is a supervisory lawyer involved who is a D.C. lawyer, we would docket a separate matter for investigation by Bar Counsel. That investigation would be confidential.
Why did the committee want to be able to disclose information to other professional authorities?
Epstein: We were primarily concerned about two situations. First, in a small percentage of its investigations, the committee becomes concerned that a lawyer admitted in another jurisdiction has committed an aggravated violation of Rule 49 that may bear on the lawyer’s character and fitness to practice law. In such cases we want to notify the bar authorities in the lawyer’s home jurisdiction (or jurisdictions) of the information we have found, even if we do not initiate formal proceedings. Our notification enables those authorities to evaluate the lawyer’s conduct and determine whether the lawyer’s license should be suspended or revoked, or whether other disciplinary or remedial action is warranted.
The second situation involves lawyers who are not respondents in committee investigations. In the course of its investigations, the committee occasionally uncovers evidence that a lawyer other than the respondent may have committed a violation of the Rules of Professional Conduct. You explained the requirements of Rules 5.1 and 5.5(b) of the D.C. Rules of Professional Conduct. A D.C. Bar member who works with a person engaged in the unauthorized practice of law may violate Rule 5.1 by failing to supervise the individual properly or Rule 5.5(b) by assisting a person in the performance of an activity that constitutes the unauthorized practice of law. Because of the bifurcated system in the District of Columbia, the committee has no jurisdiction to take action concerning such lawyers, and by informing the Office of Bar Counsel the committee helps to ensure that all lawyers who engage in misconduct are accountable.
In addition, if the bar counsel in any jurisdiction independently decides to investigate a lawyer who was a respondent in an earlier committee investigation and asks the committee for any information it has, the committee should be able to respond and provide information that it has obtained.
Peters: If you refer a matter to bar counsel in the respondent’s home jurisdiction, would you expect bar counsel to take action?
Epstein: Any lawyer who thinks bar counsel doesn’t really care what a lawyer licensed in one jurisdiction does outside that jurisdiction should think again. A good example is the case of Attorney Grievance Commission of Maryland v. Walker-Turner. At the urging of Maryland’s bar counsel, the Maryland Court of Appeals suspended a Maryland lawyer who engaged in the unauthorized practice of law in the District of Columbia. That was the only misconduct alleged, and it was enough to warrant a 30-day suspension from the practice of law in Maryland.
Peters: This is an interesting result because it indicates that Maryland disciplinary authorities take a dim view of any type of unauthorized practice, whether it is a Maryland lawyer straying outside Maryland or a foreign lawyer coming into Maryland. In either case discipline is likely. In many states bar counsel does not have authority to impose discipline on lawyers who are not admitted to their bars. Maryland is certainly an exception to this in the area of unauthorized practice.
What should law firms and other organizations do to prevent unauthorized practice problems from occurring?
Epstein: As in many other areas of law firm management, an ounce of prevention is worth a pound of cure. Law firms should audit their compliance with Rule 49 and take immediate steps to bring their lawyers into compliance, if they are not already. Prudent steps would include reviewing the firm’s practice with respect to new entry-level or lateral attorneys, particularly those who are not yet admitted to the D.C. Bar arriving from other states, and evaluating the adequacy of the disclosures on the firm’s web site, on its letterhead and business cards, and in retainer letters for new clients. The firm should determine whether lawyers who are not admitted in the District of Columbia are currently satisfying the requirements of the exceptions in Rule 49. Because lawyers’ practices change over time, the firm may need to reassess compliance on a regular basis. Firms should consider an annual interview of each lawyer who is not a member of the D.C. Bar, or an annual certification that each such lawyer has read Rule 49 and has concluded in good faith that his or her practice falls entirely within one or more specific exceptions to the rule, with a brief explanation of that conclusion.
Peters: This is a lot of work for managing partners and supervisory lawyers. Who should do this?
Epstein: Because it’s important to assign responsibility for ensuring firmwide Rule 49 compliance so that this task does not fall through the cracks, the responsibility should rest with an individual attorney (which could be the managing partner or the firm’s ethics officer, if it has one) or with a small committee. In the committee’s experience, entrusting this responsibility to the firm’s marketing department, because it maintains the web site and other marketing materials, is not a formula for success. Lawyers are accountable, and lawyers should oversee compliance.
Peters: Most D.C. lawyers know that if they have questions about the Rules of Professional Conduct, they can seek assistance from the legal ethics counsel at the Bar or request an opinion from the D.C. Bar Legal Ethics Committee. The Legal Ethics Committee issues written opinions that are included as part of the subscription to the D.C. Rules of Professional Conduct, published by the D.C. Bar and available online at www.dcbar.org. Many large organizations, including government agencies, also have internal ethics departments or ethics counsel to provide assistance if a lawyer has a question about an ethical issue. There are many sources of guidance on the Rules of Professional Conduct. But what if a lawyer has a question about Rule 49? How can that lawyer get answers?
Epstein: One of the committee’s principal functions is to provide guidance to lawyers and nonlawyers about the requirements of Rule 49. The committee issues formal opinions that answer some of the more frequently asked questions about Rule 49. These opinions are also available on the new web site of the District of Columbia Court of Appeals. Members of the committee also routinely provide informal guidance in response to written and telephone inquiries.
Peters: What we haven’t discussed, however, is how unauthorized practice of law by a lawyer prior to or while seeking admission to the D.C. Bar may affect the admissions process. If the unauthorized practice occurs prior to the lawyer’s admission to the bar but is not discovered until after admission, the Board on Professional Responsibility may take disciplinary action.
Epstein: Yes, and if the unauthorized practice of law occurs prior to the lawyer’s admission, the Committee on Admissions will work with the Committee on Unauthorized Practice. Although the Committee on Admissions operates as a separate committee of the District of Columbia Court of Appeals, it periodically seeks the views of the Committee on Unauthorized Practice if a lawyer applicant has been practicing law for a substantial period before applying for admission and it is not clear that the extended practice was authorized under any exception to Rule 49. The Committee on Unauthorized Practice then advises the Committee on Admissions whether it believes the lawyer applicant was engaged in unauthorized practice, and if so, whether the violation of Rule 49 was aggravated.
Peters: Even if the Committee on Unauthorized Practice decides to enter into a consent order with a lawyer to resolve an unauthorized practice issue, the Committee on Admissions, acting independently, could still decide to recommend rejection of that lawyer’s application if it determines that the lawyer does not currently meet the standards for admission based on the unauthorized practice. In making recommendations to the Court of Appeals, the Committee on Admissions has to resolve how the lawyer’s unauthorized practice bears on that lawyer’s fitness to join the D.C. Bar, taking into account any information provided by the Committee on Unauthorized Practice.
For example, in the case of In re Mbakpuo, the Committee on Admissions recommended against admission of a lawyer whose license was suspended indefinitely in Ohio based on (1) charges of unauthorized practice of law in both Maryland and the District of Columbia, (2) threats made to the chair of the D.C. Committee on Unauthorized Practice of Law, and (3) neglect of a federal case in Virginia. Thereafter the lawyer was disbarred in Ohio. The Court of Appeals denied admission to the lawyer, basing its decision on the fact of the disbarment and the court’s recognition that “[i]f we were to admit him now to the District of Columbia Bar, [he] would be immediately subject to reciprocal disciplinary action . . . as a result of his disbarment in a sister jurisdiction.” The court concluded it could not grant admission until the lawyer had been reinstated in Ohio. In this case it was a disciplinary issue—the possibility of reciprocal discipline after admission—that caused the Court of Appeals not to admit the lawyer.
Epstein: This decision highlights that it is not only possible but also likely that some cases involving unauthorized practice may involve the Committee on Unauthorized Practice of Law, the Committee on Admissions, and the Office of Bar Counsel. This example shows the importance of cooperation among the three organizations and how their work, while independent, is often interrelated.
Peters: This is a good place to end our conversation. I’d like to thank Tony for sharing his insights concerning the operation of the Committee on Unauthorized Practice of Law and how it handles ethical issues involving unauthorized practice and supervisory responsibility.
What is clear from our discussion is that many complex issues arise when lawyers cross borders to engage in their profession. There is no substitute for a careful reading and review of the applicable rules—not only the Rules of Professional Conduct but also other court rules (and sometimes statutes)—that define both the practice of law and unauthorized practice, not just in the District of Columbia but also in any jurisdiction in which the lawyer may intend to act.
Ethical issues involving unauthorized practice of law can affect both the individual lawyer and partners or supervisory lawyers with responsibility for the lawyer’s activities. These issues may lead to consideration and recommendations by Bar Counsel, the Committee on Unauthorized Practice of Law, and the Committee on Admissions. The ultimate resolution, however, always remains with the Court of Appeals.
 See D.C. App. R. 49(d)(3)(B)(i), (C)(i), (E)(iii).
 Our duty to keep matters confidential ends if and when we begin formal proceedings. See D.C. App. R. 49(d)(3)(B)(i).
 812 A.2d 260 (Md. 2002).
 Not all bar counsel handle unauthorized-practice-of-law issues. If, however, the disciplinary provisions in ABA Model Rule 8.5 are accepted by states adopting new multijurisdictional practice rules, the authority of bar counsel to discipline nonmembers (those lawfully engaged in multijurisdictional practice) would be expanded.
 See http://www.dccourts.gov/dccourts/appeals/cupl/index.jsp.
 Lawyers may contact the committee by writing to District of Columbia Court of Appeals, Committee on Unauthorized Practice of Law, 500 Indiana Avenue NW, Room 4200, Washington, DC 20001.
 In re Starnes, 829 A.2d 488 (D.C. 2003). Starnes involved unauthorized practice of law and making false statements about it, in violation of Rule 8.1(a), along with several other violations. The court accepted the recommendation of the Board on Professional Responsibility and imposed a six-month suspension with fitness as a sanction. The case is interesting, as it involved not only the disciplinary system but also both the Committee on Admissions and the Committee on Unauthorized Practice of Law. The court’s opinion includes excerpts from the board’s report outlining the history of the case, the actions taken by the various committees, and the board’s analysis.
 In re Greenwald, 808 A.2d 1231 (D.C. 2002).
 829 A.2d 217 (D.C. 2003).
 Id. at 220.
Joyce E. Peters is bar counsel for the District of Columbia Bar. Anthony C. Epstein, a partner with Steptoe & Johnson LLP, is chair of the Committee on Unauthorized Practice of Law of the District of Columbia Court of Appeals.
Board on Professional Responsibility Undergoes Changes
On August 1 the membership of the Board on Professional Responsibility underwent a major change at the direction of the District of Columbia Court of Appeals. Timothy J. Bloomfield, a partner at Holland & Knight LLP, completed 12 years of distinguished service to the disciplinary system, including six on the board, and stepped down as its chair. Also leaving the board are Elizabeth B. Frazier, executive director of the George Preston Marshall Foundation, who served with distinction for six years as a public member; Frank H. Wu, formerly of Howard University School of Law, who has accepted a position as dean of Wayne State University Law School; and Maria Holleran Rivera, deputy director of the Office of Civil Rights and Diversity at the U.S. Department of Energy, who is moving to China.
The court appointed Martin R. Baach, a partner at Baach Robinson & Lewis PLLC, to serve a second three-year term and elevated him from vice chair to chair. Paul R. Q. Wolfson, a partner at Wilmer Cutler Pickering Hale and Dorr LLP, was appointed as the new vice chair. Replacing the departing members are Ernestine Coghill-Howard, a health systems consultant, who will serve as a new public member, and three new lawyer members: Lee Ellen Helfrich, a partner at Lobel, Novins & Lamont; James P. Mercurio, the founder of JPM Associates, specializing in service as a neutral in alternative dispute resolution; and Charles J. Willoughby, assistant inspector general and counsel for the Federal Communications Commission. Remaining on the board are lawyer members Roger A. Klein, a partner at Howrey Simon Arnold & White, LLP, and Shirley M. Williams, legal counsel for the elderly at AARP Foundation; and public member Kay T. Payne, currently the project director and coordinator for grants management and development at Howard University.
Disciplinary Actions Taken by the Board on Professional Responsibility
In re Douglas F. Gansler. Bar No. 425465. July 9, 2004. In a reciprocal matter from Maryland, the board recommends that the court impose functionally identical reciprocal discipline and publicly censure Gansler. The Court of Appeals of Maryland publicly reprimanded Gansler for making out-of-court statements to the press in his capacity as state’s attorney for Montgomery County, Maryland, regarding three criminal prosecutions, in violation of Rules 3.6(a), 3.6(b), and 8.4(a) of the Maryland Rules of Professional Conduct. The board found that Gansler’s conduct in Maryland violated Rule 3.8(f) of the D.C. Rules of Professional Conduct. Two members of the board dissented, in part, concluding that the misconduct would not constitute misconduct in the District of Columbia and thus no reciprocal discipline should be imposed.
In re John H. Midlen Jr. Bar No. 36384. July 15, 2004. The board recommends that the court disbar Midlen for reckless misappropriation of client funds or, in the alternative, suspend Midlen for 18 months if the court finds negligent misappropriation. Midlen misappropriated client funds in connection with his representation of a client in the recovery of cable royalty fees by failing to keep disputed funds in which both he and his client claimed an interest separate from his own, in violation of Rule 1.15(c). In addition, Midlen failed to provide a prompt accounting of funds held on his client’s behalf, in violation of Rule 1.15(b), and engaged in dishonesty, in violation of Rule 8.4(c), when he deducted his legal fees from client funds and failed to account for these payments, and when he executed an addendum in direct contravention of his client’s instructions and then failed to tell his client he had done so, even though he had several opportunities to do so. The board also found that Midlen’s failure to provide information that his client requested regarding the royalties he collected on his client’s behalf, to respond to requests for information regarding the amount of fees he was deducting from these payments, and to inform his client that he had executed a settlement document on the client’s behalf violated Rules 1.4(a) and 1.4(b). Finally, the board concluded that Midlen’s failure to protect his client’s interest adequately after he was discharged and his failure to provide a prompt accounting and to deliver the client’s file to successor counsel in a timely fashion violated Rule 1.16(d).
In re John H. Partridge. Bar No. 447514. June 24, 2004. In a reciprocal matter from Virginia, the board recommends that the court disbar Partridge. This reciprocal matter consolidated four separate orders of discipline that involved numerous rule violations and multiple clients. The board’s recommendation was based on Partridge’s consent to revocation of his license in Virginia, the functional equivalent of disbarment, and one other matter involving 10 different complaints that included conduct ranging from neglect and incompetence to dishonesty, occurring between 1998 and 2002. The board also recommends that the court dismiss as moot two of the four matters, for which Partridge received public reprimands in Virginia.
In re Joseph C. Ruddy Jr. Bar No. 195230. June 7, 2004. The board dismissed the matter against Ruddy with prejudice.
In re Donald L. Schlemmer. Bar No. 414582. June 16, 2004. On remand from the court for reconsideration on the issue of sanction, the board reprimands Schlemmer for violating Rules 1.3(a) and 1.4(a) by failing to file an appeal and failing to advise his client an appeal had not been filed in an immigration matter.
In re David Abrahamson. Bar No. 337279. June 24, 2004. The court suspended Abrahamson for six months, nunc pro tunc to August 28, 2001. Abrahamson pleaded guilty to a misdemeanor offense of unlawful receipt of compensation with the intent to defeat the purposes of the United States Department of Housing and Urban Development, in violation of 18 U.S.C. § 1012. Abrahamson violated Rules 3.4(a), 8.4(b), and 8.4(d).
In re Richard P. Brown. Bar No. 414983. June 24, 2004. The court suspended Brown for one year with fitness. Brown was convicted of securities fraud (third degree) in the state of New Jersey in violation of Rules 8.4(b) and 8.4(c).
In re William H. Butterfield. Bar No. 1727. June 17, 2004. The court suspended Butterfield for 30 days. Butterfield failed to perform a conflicts check, and once he was aware of the conflict, he failed to obtain waivers from the affected clients or to withdraw from representation of the new client, in violation of Rule 1.7(b)(1) and (2).
In re John A. Crockett. Bar No. 416447. July 15, 2004. The court indefinitely suspended Crockett based upon a disability and ordered that all disciplinary matters pending against him be held in abeyance until further order of the court, pursuant to D.C. Bar Rule XI, § 13(e).
In re Charles F. Loyd. Bar No. 411773. July 15, 2004. In a reciprocal matter from the United States Court of Appeals for the Tenth Circuit, the court imposed nonidentical discipline and publicly censured Loyd for violating Rules 1.3(a) and 8.4(d). The Tenth Circuit disbarred Loyd for ignoring four orders to show cause arising from his failure to file the opening brief in a criminal appeal for an indigent defendant and his related failure to pay a $150 court-imposed fine.
In re Ralph T. Mabry Jr. Bar No. 955633. June 3, 2004. The court publicly censured Mabry and ordered him to participate in the D.C. Bar’s Lawyer Counseling Program and submit quarterly reports of attendance and compliance until he is released from the program. Mabry failed to respond to requests for information from Bar Counsel and the board in violation of Rules 8.1(b) and 8.4(d) and D.C. Bar Rule XI, § 2(b)(3).
In re Robert E. Miller. Bar No. 59634. July 15, 2004. The court indefinitely suspended Miller based upon a disability and ordered that all disciplinary matters pending against him be held in abeyance until further order of the court, pursuant to D.C. Bar Rule XI, § 13(e).
In re Julia A. Soininen. Bar No. 448700. July 15, 2003. The court suspended Soininen for six months. Soininen had engaged in the unauthorized practice of law and dishonesty by practicing before the immigration courts and the Department of Labor and falsely representing she was a member in good standing of the D.C. Bar, in violation of Rules 3.3(a)(1), 5.5(a), 8.4(c), and 8.4(d), while on interim suspension by the District of Columbia Court of Appeals.
Informal Admonitions Issued by the Office of Bar Counsel
In re Joseph R. Conte. Bar No. 366827. May 27, 2004. Bar Counsel issued Conte an informal admonition for violating Rules 1.1(a), 1.1(b), and 1.3(a) by failing, while retained to represent a criminal defendant in a serious felony case, to conduct a sufficient investigation of his client’s defense and version of events, to prepare his client or his client’s witness adequately to testify, and to obtain a copy of the preliminary hearing transcript.
In re Alan H. Freedman. Bar No. 326108. May 27, 2004. Bar Counsel issued Freedman an informal admonition for violating Rules 1.3(a) and 1.3(c) by failing to represent his immigration client zealously, diligently, and promptly; Rules 1.4(a) and 1.4(b) by failing to inform his client that he would not provide legal services to him for a lengthy period of time; and Rule 1.8(g)(2) by failing to advise his client of the need to retain independent counsel before signing a release of malpractice liability as a condition for obtaining a refund of the client’s retainer fee.
In re Samuel Levine. Bar No. 166306. May 27, 2004. Deputy Bar Counsel issued Levine an informal admonition for violating Rules 1.1(a), 1.1(b), 1.3(a), and 1.3(b) by failing to file a legally adequate motion in an immigration deportation matter.
In re Steven R. Sager. Bar No. 449132. May 27, 2004. Bar Counsel issued Sager an informal admonition for violating multiple rules while retained to represent clients in two immigration matters. In the first matter Sager violated Rules 1.1(a), 1.1(b), 1.3(a), and 1.5(b) by failing to address the issue of his client’s arrests in an Immigration and Naturalization Service adjustment-of-status proceeding and to provide a writing setting forth the basis or rate of his fee. In the second matter Sager violated Rules 1.1(a), 1.1(b), 1.3(a), 1.4(a), 1.4(b), and 1.16(d)) by failing to file documentation with an adjustment-of-status application for other clients to address why their application had previously been denied, to meet a deadline for filing a registration for temporary protected status for his client, to communicate with that client, and to turn over that client’s complete file to successor counsel.
In re Lydia A. Wade. Bar No. 439361. May 27, 2004. Bar Counsel issued Wade an informal admonition for violating Rules 1.15(a) and 1.17(a) by commingling entrusted funds with personal funds while representing a client in a personal injury matter.
In re William H. Wade. Nonmember. May 27, 2004. Bar Counsel issued Wade an informal admonition for violating Rule 1.15(b) by failing, though not a member of the D.C. Bar but appearing pro hac vice to litigate a personal injury matter, to notify a third party of the receipt of settlement funds in which the party had an interest and to ensure prompt payment.
The Office of Bar Counsel compiled the foregoing summaries of disciplinary actions. Reports and recommendations issued by the Board on Professional Responsibility, as well as informal admonitions issued by the Office of Bar Counsel, are posted on the D.C. Bar Web site at www.dcbar.org. Court opinions are printed in the Atlantic Reporter and, for decisions issued since mid-1998, are also available online. To obtain a copy of a recent slip opinion, visit www.dccourts.gov/dccourts/appeals/opinions_mojs.jsp. Please note that in some cases Bar members may have the same name. To confirm the identity of individuals who have been subject to discipline, contact the D.C. Bar Member Service Center at 202-626-3475 or firstname.lastname@example.org.