Most attorneys conduct their business with the utmost integrity, putting their clients’ best interests above all else. These attorneys usually comply with all the rules and regulations on how to work with and represent clients, to manage their funds and to avoid conflicts of interest. They have protocols to protect their clients that exceed what is required by bar associations and local legislatures in the states they operate. They should be applauded and emulated.
But the small percentage of attorneys and law firms that put their own financial and other interests above those of their clients can wreak financial and emotional damage to such a degree that their affected clients’ lives may be ruined. And to make matters even worse, such clients tend to be the most vulnerable and can least afford to fall prey to an unscrupulous attorney.
Consider for example, a recent case from my home state of California, where a renowned – and quite famous attorney both within and outside of legal circles – allegedly embezzled millions of dollars of settlements his firm won on behalf of its clients. These include the proverbial “widows and orphans” who lost family members in a plane crash; a group of senior women cancer survivors who won a medical malpractice suit; a burn victim in a pipeline explosion; a double amputee injured in a car accident; and residents of a town whose drinking water had been contaminated by a public utility. At last count, this attorney and his firm had had more than 100 lawsuits filed against them, many alleging misappropriation of funds.
While this attorney’s alleged use of client funds for his personal gain is perhaps one of the most egregious due to his notoriety and the sums involved, there are many other examples of lawyers literally sacrificing their clients’ wellbeing for their own. The sums may be far more modest, but the damage they do is just as debilitating. These include an attorney who advised a client to deposit child support checks into the attorney’s account to “protect them” from a potential suit and attachment. The attorney then used those funds to pay bills. Another attorney set up investment funds as an adjunct to his law practice (which violates federal securities laws). He then used client assets to make payments to the investors. Another attorney routinely short-changed clients on transactions and kept the difference for himself.
As you can imagine, using a client’s money for anything other than paying out a settlement or covering previously approved expenses (such as court filing fees) is a very serious offense that can result in disbarment, criminal charges or both. While bar and statutory regulations on how an attorney is supposed to protect client assets may vary slightly by jurisdiction, the common requirements include:
- All funds received or held by a lawyer or law firm on behalf of a client need to be deposited into a trust account;
- The funds in the trust account can never be commingled with those of the lawyer or the law firm except in very specific situations such as to pay bank charges;
- The lawyer or law firm is required to maintain and preserve complete and meticulous records of all client funds and property in their possession; and,
- The lawyer or law firm must promptly distribute any undisputed funds the client is entitled to received, for example from a settlement.
How to Protect Yourself as a Consumer
There are two key elements in protecting yourself from falling prey to an unscrupulous lawyer. The first, which is admittedly more difficult for many people, is psychological. The second, which also can be challenging, is doing the legwork before deciding on who to retain as counsel for your legal issues. While either alone will reduce your risk, the best is to do both.
The first, the psychological, has to do with how you see lawyers and/or other experts you hire or work with to help solve your life problems. These would also include, for example, doctors, accountants, therapists and spiritual advisors. They all have two things in common – one, they know more than you about their field and, two, this knowledge makes them de facto authority figures. From a young age, you were probably taught – either explicitly or implicitly – to not question authority figures lest you seem impertinent or ungrateful for their help. After all, your internal dialogue goes, “who am I to question this person who knows so much more than I do?”
This view of authority figures tends to engender an unearned trust in these individuals, their advice and their actions. This trust is reinforced if the person is famous, has great reviews, is highly recommended by others, or if people you know work with them. A good example of this trust-by-association is disgraced financier Bernie Madoff who masterminded what was perhaps one of the largest and longest running securities Ponzi schemes of the 20th Century. Simply put, people trusted him blindly, completely and without question.
Don’t make the same mistake when selecting your lawyer. Remember that it is a transactional relationship and that you, as a consumer, are paying for a service. The lawyer, or doctor or other professional, is not doing you a favor by taking your case. It may be a challenge to change this “chip” about working with experts, but it is a necessary one to make and one that will make the second element far easier.
The other element, the legwork, is to research and interview your candidates. You should, in an ideal world, consider several lawyers. That will to help you make the most educated, objective decision. Here are my suggestions:
- Your first stop should be your state’s bar association. Their website will most likely have an area where you can search the name of the lawyers you are considering to find out if they are in good standing with the bar, when they were admitted, and any complaints about or disciplinary actions against them. If there are any of the latter, consider eliminating those attorneys from your list of candidates.
- Go ahead and do a Google search of the lawyers on your list. You will probably find client reviews, news coverage (if there is any) as well as other relevant information and background including where they studied law, what their practice specialties are and whether they are a sole practitioner or part of a larger firm.
- Visit their website. If they do not have one, that is a red flag nowadays. If they do have one you will learn additional information about them and their work. You want a lawyer who has experience with your type of case rather than one who is going to “learn on the job” with yours.
- When you talk with the candidates, ask them what protocols they follow to protect client financial and other interests. The fact that you ask this will send a clear message that you would not be an easy “mark.”
- Ask about their track record with similar cases and how they see your chances of winning. If they are overly optimistic or give you assurances, that should be cause for concern. Guaranteeing an outcome is also illegal. While you want a lawyer who is confident, keep in mind that no lawyer can guarantee a result. If they do, take them off the list.
- Have questions ready about their fees and billing. Press them to be upfront and detailed about them. If they are vague or do not answer your questions clearly, proceed with caution.
Finally, be cautious of any lawyer who may approach you through social media, in person or on the phone to offer you their unsolicited services.
And last, but not least, after doing your research and interviews, listen to your instincts. If something does not feel right about any candidate, keep looking.