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Solo Suspended for Trust Error But Biglaw Unscathed for Botching Capital Appeal

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Professor John Steele offered up an interesting juxtaposition of ethics related cases at the Legal Ethics Forum yesterday.  On the one hand, he links to a Washington Post editorial urging the Supreme Court to show mercy in the Cory Maples case that biglaw firm Sullivan & Cromwell botched by failing to file a timely appeal.  The reason?  The young lawyers handling the matter pro bono had left the firm and when notice of the court’s order, triggering the deadline for appeal, came into the S&C mailroom, the firm returned it to sender instead of contacting the lawyers or tending to the case.  [Note – this is old hat; CDL bloggers Greenfield and Gamso covered this nearly a year ago].  As far as I can tell, no one at S&C has been disciplined for missing the deadline and indeed, the firm is getting “atta boys” for moving mountains to correct the mistake.

Contrast that kind of understanding treatment with the career-ending penalty doled out to solo Thomas Lindmeier, the Nebraska lawyer who received a six month suspension for trust accounting errors in State v. Lindmeier.  In one matter, Lindmeier accepted a $4000 fee for a criminal matter, where he told the clients that he lacked enough expertise and would bring a more experienced lawyer on board.  Lindmeier then apparently paid the $2000 to the other lawyer, claiming it as a fee earned and deposited the remainder into the account.  Disciplinary counsel faulted Lindmeier for failing to detail the fee splitting agreement in writing and for taking the money without having earned the fee.  In a second matter, Lindmeier settled a small contingency case, with the client’s portion of the settlement amounting to $656.67.  Lindmeier didn’t have enough in trust to cover it, so he deposited his own money, thus violating rules on commingling.

Now, lawyers all know that bars can be harsh when it comes to trust account violations.  But the Nebraska Disciplinary counsel was absolutely draconian: the office slammed Lindmeier with a 6 month suspension, which is the practical equivalent of putting him out of business permanently.  Once suspended, lawyers like Lindmeier will have to notify clients of the suspension and refer them to other lawyers.  It’s anyone’s guess how many clients will return to Lindmeier’s practice after six months have gone by.  Also during a suspension, lawyers must curtail any advertising, and essentially take their law firm off the market.

Lindmeier has been practicing since 1976, and thus may be reaching an age where he might sell or turn his firm over to someone else.  The bar’s shut down pretty much forecloses that option since Lindmeier will need to reopen his firm just to resell it.

Even in a worst case scenario, both of these Lindmeier’s disciplinary transgressions are cases of no harm, no foul.  There’s no complaint from the criminal client about poor service, and the contingency client received her settlement promptly even if from Lindmeier’s pocket.  How terribly unfair that Lindmeier will lose a lifelong career in the law because of a few inadvertent and meaningless accounting mistakes, while Sullivan & Cromwell will chug along, never in danger of losing its livelihood even though its actions may result in a client losing his life.

How do you like them ethics?

  • I suspect that either error would not have cost him nearly as severely, but that the multiple errors got him in trouble. Bar Counsel found out about this somehow; he should have had enough in the escrow account to handle his client's portion of the settlement (i.e. where was it, unless he had already defalcated it)? Was there a bounce?

    It's not the deposit that gets me, but the prior unauthorized withdrawal or failure to deposit client money. If he had a good reason to deposit his own money in (e.g. anticipated bank fees) that's not commingling but generally permitted activity under most bar rules.

    The $2K fee seems like sharp practice but somehow less severe. If he had no disciplinary record I agree it's too severe.

  • From the opinion:

    “On the same day the $4,000 advanced fee was received, respondent deposited $2,000 of the advanced fee into his personal account and the remaining $2,000 into his trust account. This resulted in a trust account balance of $2,312.83 at the end of that day. On July 29, 2008, respondent withdrew $802.98 from his trust account, leaving a balance of only $1,509.85. And on August 3, respondent gave the attorney with whom he said he would work on the criminal matter a $2,000 check drawn on the trust account. At the time he received this check, the attorney had not yet earned a fee in that amount.” – In short, aggressive overdraft of client trust money after pocketing $2K before doing one shred of work.

  • Eric Cooperstein

    I agree it’s a harsh result but I wouldn’t go so far as to call it a career-ender. Many attorneys do recover from suspensions, even when the suspension is six-months or longer. I have found that clients and colleagues can be surprisingly forgiving where the attorney is otherwise of good character, fully owns up to the misconduct, and can keep his nose clean while suspended.

  • Carolyn Elefant

    @Eric – It's good to know that lawyers rebound from suspensions. In this case, I think it's justified

    Also, just a general clarification – I don't mean to completely trivialize the violations. Lawyers are on notice of the importance of proper trust accounting. I just felt that the penalty here was too severe – in my view, a reprimand and education on trust accounting would have sufficed assuming these were first time offenses (there's no indication in the court decision on this point one way or another)

  • Leeturner

    I agree absolutely no draconian! How was anyone hurt?

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