DennisBeaverJanuary 10, 2015 • By Dennis Beaver

In America’s small towns both lawyers and clients face two challenging realities:

  • Lawyers who know and must be able to work with each other;
  • The fact that almost everyone knows each other or are related in some way.

Often an attorney is familiar with all the parties in a dispute, has represented some of them in the past, or now. As lawyers owe their clients a duty of loyalty, conflicts of interest are a real issue.

“While conflicts of interest can sometimes appear out of the blue, in general it is pretty much of a common sense matter to determine whether the lawyer can continue the representation once the potential conflict becomes apparent,” Bakersfield attorney James Duncan told You and the Law. Duncan is the in-house Legal Ethics Ombudsman at his 40 person law firm.

“Friendships or social relationships which may impact the lawyer’s ability to zealously represent the client and providing complete loyalty to the client must be disclosed. An attorney should never agree to represent people who are involved in a dispute with his other clients.

“If that happens — and it comes to the attention of a judge — the attorney will almost always be disqualified from continued representation,” Duncan observes.

“Worse yet, the road to trouble with the State Bar is in accepting compensation with a known conflict and then refusing to refund fees once a judge has declared a conflict of interest and disqualified the attorney.”

“A lawyer who puts money ahead of good judgment and respect for our Rules of Professional Conduct is asking for trouble. The license to practice law can offer a gratifying career, the chance to do good things and earn a nice income. But when all a lawyer cares about is money, sound judgment often flies out the window,” Duncan concludes.

When a lawyer loves money too much

That is precisely what we observed take place right outside a Small Claims courtroom in a Central Valley courthouse, involving readers–three members of an Asian church with marginal English skills–who had been sued by their lawyer “David” for unpaid attorney fees.

It was a stunning example of conflict of interest.

The three were slapped with a restraining order filed by board members acting on behalf of the church. But there was one huge problem, brought to the attention of a Superior Court Judge who found that lawyer David had represented the church and even had some of their money in his trust account.

“You are disqualified from representing these three members of the congregation as you are still, technically, representing the church,” the judge told him.

Instead of refunding the thousands of dollars they had paid — which David was required to do under the rules of Professional Conduct — he billed them for even more money, and sued when they refused to pay.

As most experienced lawyers know, for many reasons, it is rarely a good idea to sue a client for fees. But the love of money has been the downfall of many.

Right to fee arbitration by local bar association 

In California, clients have a right to have an attorney fee dispute handled by a local bar association arbitrator. Before filing suit against a client for fees, a lawyer must provide notice of that right to arbitrate.

But that’s not what happened, as according to the three congregation members, none of them ever received that notice. We firmly believed what they stated.

Lawyers are not permitted to represent parties in Small Claims Court, but at the same courthouse that day for other matters, helping our readers when their case was called, we saw to it that the judge was informed this matter required Fee Arbitration. And with that, everyone was sent outside, to the hallway, to find a settlement or speak with a mediator.

I want $6,000 right now!

While lawyers are generally not afraid of other lawyers, clients sometime scare easy. Insisting on being paid $6,000 immediately, despite our recommendations that the small claims matter be dismissed, and that the three were owed a refund, in addition to warning David of potential trouble with the State Bar, he remained unwavering.

One of the church members had driven several hundred miles to be in court and did not want to return again. Rejecting the $6,000 demand, he offered David $1,500. “Cash only, right now,” demanded their former attorney, and it was paid, David returning to the courtroom and dismissed the three lawsuits.

It was an unhappy ending to a story which should never have been, had David been honest from the outset. As people are consistent, he will face other ethical challenges, and maybe, just maybe, a client who will stand up for what is right.

Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.