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Thompson Hine LLP, a full-service business law firm with approximately 400 lawyers in 11 offices, was ranked number 1 in the category “Most innovative North American law firms: New working models” by The Financial Times and was 1 of 7 firms shortlisted for The American Lawyer’s inaugural Legal Services Innovation Award. The firm has been recognized by the National Law Journal as a Legal Technology Trailblazer and featured by Bloomberg for its innovative service delivery models, which drive accuracy and predictability. The firm’s commitment to innovation is embodied in Thompson Hine SmartPaTHTM – a smarter way to work – predictable, efficient and aligned with client goals. For more information, please visit ThompsonHine.com and ThompsonHine.com/SmartPaTH.

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<img style="max-width: 100%;height: auto;max-width: 100%;height: auto" loading="lazy" class="alignright size-medium wp-image-1488" src="https://www.thelawforlawyerstoday.com/wp-content/uploads/sites/754/2015/02/Dishonesty-232x300.jpg" alt="" width="232" height="300">A New Jersey lawyer was suspended&nbsp;for six months&nbsp;for misrepresenting to&nbsp;clients for&nbsp;about eight years&nbsp;that their arbitration matter &ldquo;was proceeding apace,&rdquo; when he actually had never filed their claim.&nbsp; The lawyer also concealed from his firm for almost two years&nbsp;the malpractice suit that the clients later filed, including the default judgment in the clients&rsquo; favor.&nbsp; The case shines a light on the drastic lengths to which lawyers can go to cover up a mistake&nbsp;&mdash; and how that just makes things worse.
Lack of FINRA finesse
As described in the disciplinary review board&rsquo;s <a href="http://drblookupportal.judiciary.state.nj.us/DocumentHandler.ashx?document_id=1108074">recommendation</a>, the&nbsp;long nightmare began when a couple retained the lawyer, an associate in a&nbsp;firm, to represent them in an action against their investment advisor.&nbsp;The lawyer filed suit in superior court, which was dismissed by stipulation&nbsp;nine months later, after it was determined&nbsp;that venue was not proper there, and that&nbsp;the&nbsp;claim needed to be submitted to the Financial Industry Regulatory Authority (&ldquo;FINRA&rdquo;).
But the lawyer only filed the FINRA claim&nbsp;six years later &mdash;&nbsp;and by then, it was too late.&nbsp; The defendant moved&nbsp;to dismiss;&nbsp;the lawyer failed to&nbsp;oppose the motion;&nbsp;and a FINRA arbitration panel dismissed the action.&nbsp;&nbsp;Over the many&nbsp;years, the clients periodically asked the lawyer for information; he repeatedly assured them that the matter was &ldquo;proceeding apace.&rdquo;
Eighteen months&nbsp;after the FINRA dismissal, the clients filed a legal malpractice suit against the lawyer and his firm &mdash; but the lawyer failed to inform his firm or&nbsp;file an answer.&nbsp; Nonetheless, during the ensuing year, the lawyer communicated with&nbsp;and met with the couple&rsquo;s malpractice lawyer, still without informing his firm of the ever-deepening trouble.
The malpractice case went to default, with a judgment against the lawyer and his firm for more than $450,000.&nbsp; The lawyer received subpoenas seeking post-default discovery on his firm&rsquo;s banking information.&nbsp; The lawyer&nbsp;provided some of the information about firm bank accounts, but still without disclosing the nightmare to his firm.&nbsp; To keep checks drawn against the firm account from bouncing, the lawyer deposited $3,500 of his own money.
Finally, six months after the default judgment, the firm&rsquo;s sole shareholder got notice that the firm&rsquo;s accounts were subject to a writ of execution.&nbsp; When confronted, the lawyer professed ignorance, saying that this &ldquo;was the first [he] heard about&rdquo; a levy, and that he didn&rsquo;t recall being served with a complaint against the firm.
Confession time
Finally, after the shareholder pressed him, the lawyer &lsquo;fessed up.
The disciplinary case against the lawyer proceeded on stipulations, in which the lawyer admitted that this long course of conduct violated New Jersey&rsquo;s versions of <a href="https://www.americanbar.org/groups/professional_responsibility/publications/model_rules_of_professional_conduct/rule_1_1_competence/">Model Rule 1.1</a> (&ldquo;Competence&rdquo;); <a href="https://www.americanbar.org/groups/professional_responsibility/publications/model_rules_of_professional_conduct/rule_1_3_diligence/">Model Rule 1.3</a> (&ldquo;Diligence&rdquo;) and <a href="https://www.americanbar.org/groups/professional_responsibility/publications/model_rules_of_professional_conduct/rule_8_4_misconduct/">Model Rule 8.4(c)</a> (dishonesty, deceit, fraud and misrepresentation).
Remarkably, the district ethics committee recommended only&nbsp; a reprimand.&nbsp; The disciplinary review&nbsp; board, however, recommended a six-month suspension, and the New Jersey Supreme Court <a href="http://drblookupportal.judiciary.state.nj.us/DocumentHandler.ashx?document_id=1114590">accepted </a>the longer recommendation.
Unmentioned in the board&rsquo;s opinion is the supervision issue, and how an associate&rsquo;s handling (or non-handling)&nbsp;of a matter could go unexamined for such a long time by&nbsp;anyone with supervisory authority in the firm.&nbsp; Under <a href="https://www.americanbar.org/groups/professional_responsibility/publications/model_rules_of_professional_conduct/rule_5_1_responsibilities_of_a_partner_or_supervisory_lawyer/">Model Rule 5.1(b)</a>, those with supervisory authority in a firm must make reasonable efforts to ensure that subordinate lawyers conform to the ethics rules.
Most&nbsp;significant, in the malpractice case, the court granted the firm&rsquo;s motion to vacate the default judgment, and the case was resolved with the firm&rsquo;s insurance carrier.&nbsp; (The judgment against the lawyer, however, is still in force, according to the review board&rsquo;s&nbsp;opinion.)
Digging a deeper hole
In discussing the appropriate penalty for the lawyer here, the review board described numerous cases involving lawyers who wove&nbsp;elaborate webs of deceit in order to cover up initial errors, including:
<ul>
<li>fabricating a&nbsp;promissory note;</li>
<li>fabricating a letter from the U.S. Embassy for Sweden, and forging the signature of a fictitious consul;</li>
<li>fabricating a $600,000 settlement agreement;</li>
<li>fabricating trial dates;</li>
<li>fabricating a motion for sanctions and traveling three hours with the client to a non-existent deposition;</li>
<li>fabricating court notices;</li>
<li>fabricating court orders and signing the name of a judge;</li>
<li>preparing fictitious orders of adoption.</li>
</ul>
And these are just the New Jersey disciplinary cases!&nbsp; There are similar cases involving desperate lawyers in every jurisdiction.
Many of these cases, like the case involving the FINRA claim, started with a simple mistake.&nbsp;&nbsp;And many of them,&nbsp;as with the FINRA claim, could have been substantially fixed at the outset, including&nbsp;through recourse to malpractice insurance.&nbsp; Yet, the lawyers involved plowed on, digging themselves deeper&nbsp;and deeper holes.
Don&rsquo;t let something like this happen to you.&nbsp; If you make a mistake &mdash; as painful as it is &mdash; tell someone.&nbsp; Living in an echo chamber of lies&nbsp;never provides a way out.

core/freeform

Ethics

Legal Ethics, Professional Responsibility and the Business of Law

NJ lawyer suspended for make-believe FINRA arbitration, hiding default against firm