May 02, 2009 (Original publish date) • By Dennis Beaver
This recession has now touched lawyers, many who earned hundreds of thousands of dollars a year, are out of a job.
There are indeed certain legal specialties in great demand during a down economy, but most are not. For many firms, getting clients to pay is a problem, but the “worst” client of all is the one who tells you to just end it, to wrap up the lawsuit.
Today’s story asks this question: How do you protect yourself from a lawyer who ignores your instructions to stop the law suit?
It began with an e-mail from “Robert,” a second year law student in San Francisco.
“I have discovered that the firm where I am a law clerk is performing unrequested and unnecessary services after being told by clients to end all work and immediately settle their cases. What do you recommend that I do?”
I e-mailed back, “Call me, and if you do not want your phone number to be revealed, just hit *67 before dialing. I can help.” Within seconds, my phone rang. Suddenly the John Grisham movie, “The Firm,” came to mind. It was about a crooked law firm.
“We handle business law, divorce, estate planning, probate, but the largest source of income came from commercial litigation — suits which went on for years. Many of the corporations who bankrolled these endless battles realized they were wasting money, and virtually all of them fired the lawyers and settled the cases on their own.”
This firm has had to let staff go, and incomes are way down, but nothing could prepare me for a phone call I got one evening while doing legal research for my boss, one of the partners.”
It was a divorce client — the wife. I was familiar with the case and could not understand why it kept on going. Attorney fees were enormous, and the husband had seemed to be reasonable,” Robert explained.
“She left instructions three months earlier to wrap up the case and accept her husband’s settlement offer. She had just received our bill which led to her call, hoping to find him working late. Would I look into this and tell her what was going on, as she did not have any more money to spend on this divorce.”
“In her file I found those messages. I also found a section of the file marked, confidential internal office communications — not part of file. In it was a memo from the firm’s managing partner which read: You can justify two more depositions and interrogatories before closing case. See me. Do not settle until then.
“In the billing section of her file was our bill for more than $7,500.”
Robert felt this could not have been an isolated case where a client’s direct instructions were ignored and settlement delayed just to generate attorney fees. He spent the next several hours going through files throughout the firm, looking for similar memos.
“At about 2 in the morning, I had found 20 very similar memos, plus evidence those unrequested services were in fact performed, at a huge cost to clients. I just felt sick,” he told me.
“But what can I do? Can this be reported to someone anonymously? No one knows about this, and I do not want to destroy my chances of finding a good job after law school, being known as a snitch,” he asked.
After our lengthy talk, I spoke with the California State Bar. “We receive complaints like this more often than you would imagine, from law clerks, legal secretaries and paralegal. It is a violation of Business and Professions Code Section 6128 — a misdemeanor — for a lawyer to drag out a case for financial gain. This could also be a felony, grand theft. Such practices violate our Rules of Professional Conduct (Section 4-200).
“Robert can anonymously contact the bar, and we will investigate. Whatever he can send us will help. He is doing the public a great service — at a time when we are hearing more and more of these complaints from the inside of law firms you’d never suspect,” I was told.
Next time: How do you protect yourself?
Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.