I was recently asked by a law firm to come to their place of business and give them a presentation on ethics. The topic was wide open, which gave me a chance to look closely at the rules, combine them with my experience, and provide the most value I could for my colleagues and their staff.
How could I assist this law firm? What did I have to offer that could help? Reviewing the Michigan Rules of Professional Conduct, I came upon this rule:
RULE 5.3 RESPONSIBILITIES REGARDING NONLAWYER ASSISTANTS
With respect to a nonlawyer employed by, retained by, or associated with a lawyer:
(a) a partner in a law firm shall make reasonable efforts to ensure that the firm has in effect measures giving reasonable assurance that the person’s conduct is compatible with the professional obligations of the lawyer;
(b) a lawyer having direct supervisory authority over the nonlawyer shall make reasonable efforts to ensure that the person’s conduct is compatible with the professional obligations of the lawyer; and
(c) a lawyer shall be responsible for conduct of such a person that would be a violation of the rules of professional conduct if engaged in by a lawyer if:
(1) the lawyer orders or, with knowledge of the relevant facts and the specific conduct, ratifies the conduct involved; or
(2) the lawyer is a partner in the law firm in which the person is employed or has direct supervisory authority over the person and knows of the conduct at a time when its consequences can be avoided or mitigated but fails to take reasonable remedial action.
Seeing this rule jogged my memory. In my six years on the Attorney Grievance Commission, I reviewed thousands of cases. In the years since, I have had the pleasure of representing dozens of attorneys facing the disciplinary process. Out of all of these cases, there were a large number that stood out. These cases shared one thing in common: the lawyer or group of partners faced significant discipline, including suspension or worse, because of something that their staff had done or not done.
These cases begin with an allegation that comes into the Commission, and the Commission receives an answer required by MCR 9.113(A), which states that “the respondent shall file with the administrator a written answer signed by the respondent in duplicate fully and fairly disclosing all the facts and circumstances pertaining to the alleged misconduct.” The Commission, having received the information, then determines whether the allegations in the request for investigation were true. When it is determined that the allegations are true, the Commission then decides the appropriate course of action depending on the infraction.
When these cases begin, we typically find that a member of the staff has committed an infraction. Some of these infractions are inadvertent, for instance, mistakenly issuing a trust check when a firm check was called for. Other infractions include intentional embezzlement from the client on the part of a staff member, for instance, pocketing cash payments, or other transactions designed to hide the embezzlement. In either event, discovery of the infraction constitutes both good news and bad news. The good news is that the behavior was discovered and stopped. The bad news is that the discovery had established misconduct within the firm – misconduct in the form of a “failure to supervise.”
The breakdown of these cases revealed the following categories:
- Firms that had not specifically trained or instructed their staff on how to handle certain matters. Here, the firms had simply “assumed” that their staff had known what to do, had been trained by other staff members, or had come to the firm with experience.
- Firms that had trained their staff properly, but the staff still committed the violation. Here, the firms could assert that they had trained the staff, but the only proof of the training would be testimony of members of the firms, testimony that the Commission or a tribunal might view as self-serving and biased.
- Firms that had trained their staff properly, the staff still committed the violation, but the law firms had third party proof of the training. In my experience, this has never been the case.
When I finished my analysis, I determined that one of the best ways that I could serve the Partners of the firm who had retained me would be to present a program focused on Michigan’s ethical requirements and law firm practices. As is usually the case, I found that most of the lawyers in attendance were well-versed in the rules. I prepared my materials and presented them over the course of about two hours. During my presentation, I was amused to see the Office Manager smiling and nodding as I presented the information. I could tell that she felt validated and that my presentation was reinforcing what she had been doing her best to put into practice. There were also many questions during my presentation that revealed that some people were really quite surprised by what I was telling them. There were follow-up questions about how to comply and about things that could be done to enhance the firm’s procedures.
I noticed that the staff was very protective of the firm and its lawyers. I also noticed that many of the staff members did not know the reasons behind some of the procedures that the office was attempting to implement. Almost universally among staff members, I noted surprise when I told them of the possible consequences of their inadvertence, or mistakes, in failing to follow firm practices. They were equally shocked to find out that their lack of diligence could in fact jeopardize the law licenses of the lawyers with whom they worked.
Needless to say, I captured my documents and training materials. My calendar reflected the date of the presentation, the materials covered, and the depth of coverage. Should the firm to which I made the presentation run into future problems, they would be better equipped to independently evaluate the allegations; if the materials I presented were relevant to the Commission’s inquiry, then they would be able to offer evidence of the presentation and training given their staff at that time.
As a supervising Partner in a law firm, or a solo practitioner with a staff member, what else are you supposed to do? You can instruct your staff to follow appropriate procedures and explain the reasons why they are necessary. You can set up checklists and procedures to be followed. You can supervise your staff, watch what they are doing, and make sure that they have an understanding of all of the transactions taking place. Can you actually watch everything and everyone all of the time? That is a good question. By paying to have your staff properly trained and keeping track of the ethical and procedural training that your firm undertakes, at least you will have substantial evidence of your good faith attempts to comply with the rules and properly supervise your staff.
Properly training your staff can be the best thing you can do for your own protection.