Legal News

Struggling Lawyers Turning to . . . Lives of Crime

By Ashby Jones

That same professor we had back in law school — the one who worshiped Judge Posner and felt passionately about property — was, perhaps not surprisingly, instructed deeply by the law-and-economics movement.

He used to make provocative assertions about ethics. Most people’s most firmly held ethical beliefs, he would say, were, at bottom, easily swayed by economic factors. People would kill for medicine they otherwise couldn’t afford. In certain parts of the world, baby girls were killed shortly after they were born because they’d ultimately prove to be a drain on a family’s finances.

That professor might get a kick out of this article that appeared recently in the Fresno Bee. The article’s thrust: In southern California, struggling lawyers are increasingly turning to unethical — and sometimes criminal — behavior.

Complaints, it seems, are flooding state bar officials, who expect to discipline or expel hundreds of lawyers in coming months. Most are from lawyers feeling the effect of tightening screws. The complaints allege a range of actions, but many are stemming from clients who say their lawyers illegally withheld settlement money or charged them for work they didn’t do — especially those who promised help modifying mortgages.

It’s a phenomenon relatively new to the legal profession. Reads the Bee:

In past downturns, lawyers were among the last professionals affected because clients usually put a priority on paying legal bills, Langford said. But not this time. Now everyone is “waiting until the very last minute to pay a lawyer,” she said.

The loss to the public from loan-modification cases is in the millions of dollars, State Bar officials say. “It’s the most disturbing thing I’ve seen in the legal profession practicing for more than half a century,” said Howard Miller, president of the California State Bar.

Lawyers say that attorneys who steal from clients often start off by “borrowing” money from their clients’ trust accounts. They put a little bit of the money back, but not all. After a while, they end up being unable to repay, said Andrew Kaufman, a professor of legal ethics at Harvard Law School.

Langford said lawyers often are in denial. They believe they can pay the money back. “Probably 65% to 75% of the time, they’re wrong,” she said.

Full post as published by Law Blog - WSJ.com on January 28, 2010 (boomark / email).