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One False Move Can Cost You Your Practice…And How You Can Avoid It

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This week’s news brings a couple of stories of solo and small firm lawyers who may not be practicing law much longer.  First up is Rochester, New York solo Melissa Mahler, who is the subject of  insider trading charges by the SEC.  Back in 2004, when Mahler worked as an associate at Nixon Peabody, she drafted a letter for a client regarding an impending merger which made her privy to confidential inside information about the deal.  Before the merger was announced, Mahler instructed her stockbroker to purchase 1200 shares of the company to be acquired and several days after the deal was consummated, Mahler cashed out in an almost picture perfect example of insider trading.  Mahler wasn’t a newbie either; according to Avvo, she was licensed in 1998 and should have known better.   Mahler left the firm in 2005 and started her own practice.   However, if you Google her name now, dozens of articles on the SEC charges appear before any of her attorney listings.  So even if Mahler miraculously beats the SEC charges and avoids disbarment or suspension, as a practical matter, with all of this negative publicity, Mahler’s legal career is sunk.

The same may be true for the 16 California lawyers who are the subject of a bar investigation alleging unethical conduct in connection with loan modification work.  The California Bar took the unusual step of publicly naming the charged attorneys; they’ve been the subject of multiple complaints, however, the charges remain under investigation.  I suspect that while some of these lawyers may have acted unscrupulously (and indeed, two have already resigned), others may have just gotten mixed up with the wrong companies and are now, being dragged down.

But that’s the risk of being a lawyer, a risk that’s felt more acutely as a solo: that one false move can sink your career.   Sometimes that false move may be sheer stupidity and lack of judgment, as in Mahler’s case with the insider trading.  But sometimes and more likely, an entirely innocent mistake may bring you down– like doing business with disreputable companies (like an unscrupulous loan modification shop) that didn’t quite seem on the up and up, but wasn’t so flagrantly crooked that you passed up the deal.

With so many potential pitfalls, as a solo you need a gut-checker.  Someone whom you can consult about the ethics of a particular practice or whether a deal like this one passes the smell test or whether you should really hit the publish button on that blog post in which you call a judge an evil witch.  Listserve are a great resource for gut-checks as are the lawyers who make up your own little Posse.  Bar counsel hotlines and trusted law professors also fit the bill.  By the way, if you’re a young lawyer building a practice, nothing flatters us older fogies more than seeking our advice on how to act ethically.  So don’t feel embarrassed to call a more experienced colleague for help.

If you’ve already started down the path to unethical conduct — for example, perhaps you’ve just signed a retainer agreement with a client with whom you have a ginormous conflict of interest — you may have to swallow your pride when you ask for a gut check and reveal some embarrassing or or stupid conduct.  But in the long run, losing your pride sure beats losing your practice or your reputation.

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