My Shingle

Don’t Moonlight

by Carolyn Elefant on July 20, 2011 · 5 comments

in Ethics Issues, Mistakes/What NOT To Do

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Because of my work with lawyer/author Julie Tower-Pierce on The Part Time Shingle, I’m often asked by aspiring solos about whether they should start a practice while working for a law firm. My answer never varies. Unless you disclose and receive permission from a law firm employer to start your own side practice, DON’T! From potential conflicts of interest to exposing your employer to malpractice to dealing with accusations of using company time for your benefit, running a law firm on the side is never a good idea.
In fact, you could even lose your law license. That’s what happened to James Schoenecker, a Wisconsin attorney who was suspended from the practice of law for three years in a decision affirmed by the Wisconsin Supreme Court. Of course, moonlighting wasn’t Schoenecker’s only problem – he stole money from his fiance’s bank account to spend at a casino, continued representing her in a legal matter while he owed her money, fabricated fraudulent bills for his services and failed to disclose all of his assets in a bankruptcy proceeding, eventually leading to the court rescinding the discharge of debt.
Still, even with all of that, the Court highlighted Schoenecker’s misconduct arising out of his side practice. From the decision:

Count Three states that Attorney Schoenecker’s 2010 dues statement failed to identify the client trust account that he had set up for his separate private law practice, in violation of SCR 20:1.15(i).[5] Count Four asserts that Attorney Schoenecker’s establishment of a clandestine law practice while working as an associate attorney for the Clair law firm and his failure to disclose and to account for the fees he earned in the separate law practice constituted a breach of his fiduciary duty to the Clair law firm and a breach of his duty of honesty in his professional dealings with the firm, in violation of SCR 20:8.4(f).[6

Count Six similarly lists a number of statements made or actions taken by Attorney Schoenecker that involved dishonesty, fraud, deceit or misrepresentation, in violation of SCR 20:8.4(c):[8] […] (4) establishing a solo private law practice while employed by the Clair law firm without disclosing such practice to his employer or providing an accounting of the legal fees earned in that solo practice…

Though it’s certainly understandable that lawyers would want to hang on to their former job to keep a stream of revenue while starting a practice, the Schoenecker case shows that lawyers who “cheat” on their existing law firm stand to lose far more than the short term income they might gain. Be honest with your employer about your desire to start your own shop – your firm might be willing to use your service on a contract basis or even keep you on to build out your own practice area. Why keep your new practice hidden in the dark from your employer and lose out on the opportunity to shine? And even if your employer shows you the door when you ask about starting a firm on the side, at least you can move forward faster.

  • Carolyn Elefant

    Just to clarify, this post applies to lawyers who are starting a practice on the side while working at a law firm.  For lawyers who are working in non-legal positions – e.g., at Starbucks or tech industry – the part time considerations are not as problematic, though you should still consult your HR rules on what types of work can be done outside of the office.  Some government entities, for example, prohibit employees – not just lawyers – from earning money in outside positions whether related to their official government duties or not.  You only get one chance to start your firm, so do it right!

  • http://www.facebook.com/susangainen Susan Gainen

    Similarly, imagining that you can run an entirely separate non-law-business from your cell phone while in somone else’s employ is delusional. This has been attempted, and, no surprise, it was a spectacular failure.

  • http://twitter.com/mikewhelanjr Mike Whelan

    So I know my current boss is going to offer me a job for the same low rate that he pays every new attorney, and I will say no. But I plan to offer to work there for a minimum of X hours and be paid Y% of every dollar I bill. He may just say no, but if he says yes, where can I look for ideas on how to protect him and myself? As long as I still have total freedom to build my practice, I wouldn’t mind a bit of cash to keep the kids fed.

  • http://twitter.com/BruceGodfrey Bruce Godfrey

    There are many law firms that would actually encourage a part-time associate to have an independent practice, especially if it did not directly compete with the firm’s main line of business.  I would not want a family law practice in my firm, for example, as I am not competent to supervise it; I’d be delighted if a part-time associate of my firm had her own family law practice that never came near mine.  The Of Counsel arrangement may be ideal for this.

    Maryland associates may wish to look at AGC v. Carithers, in which very recent case the attorney was outright disbarred not for mere moonlighting but for misuse of company letterhead, hard-core escrow account violations and misrepresentation.

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