Attorney Misconduct, Crime, Legal Ethics, Real Estate

Are Lawyers Just One Step Removed From Criminals?

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Jean Valjean once stole a loaf of bread to feed his starving family during a down economy in France. Despite this crime, Valjean is regarded as a hero who stole only when it was absolutely necessary, then devoted his life to helping others and serving God.
I thought of the Les Misérables story when I read a distressing tale on the ABA Journal this morning:

California bar officials are blaming the recession for an increase in lawyers being investigated for pilfering client funds or collecting fees to modify mortgages without doing anything to help.
The State Bar of California is investigating 1,200 loan modification cases and more than 300 lawyers who were involved, the Fresno Bee reports. More lawyers are also being accused of mishandling client funds, according to Carol Langford, a lawyer who defends lawyers accused of ethical wrongdoing. Most of the lawyers under investigation were retired or relatively new to practice, the story says.

Hmm … I just don’t know if “Les Avocats” will be quite as catchy.
Should we feel sorry for California lawyers forced into a life of crime?


I guess the argument is that lawyers wouldn’t steal if clients just paid their bills on time. The Fresno Bee reports:

This recession has been especially hard on lawyers, said Carol Langford, a San Francisco lawyer who defends lawyers before the California State Bar Court in disbarment cases.
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.
Along with losing clients, lawyers have lost money in the stock market and lost value in their homes — assets that could have kept them going until the economy turned around, Langford said.

This is a similar argument to the one my bookie made to me this morning (Jets +7.5; d’oh), right before busting me in the kneecaps. Look, it’s clear a lot of clients aren’t paying their bills on time (or at all). And with those clients there’s an argument to be made for breaking a couple of fingers. But the lawyers at issue in these crimes aren’t trying to recoup money that they are legitimately owed. Many of them are just trying to steal money in payment for services they never provided:

Typically, homeowners facing foreclosure complain that they paid attorneys who then did nothing to help them keep their homes.
The loss to the public from loan-modification cases is in the millions of dollars, State Bar officials say. Most of the attorneys under investigation are from Southern California, but many of the victims live in the central San Joaquin Valley, enticed by loan-modification companies that advertised on the Internet.
“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.

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That’s not aggressive bill collection, that’s racketeering.
A story like this reminds you of just how many citizens go from “upstanding” to “criminal” the minute the financial screws are put to them. Ethics are a common casualty of recessions.
Valley lawyers turn to crime in tough times [Frenso Bee]
Recession Blamed for Increase in Lawyer Wrongdoing in California [ABA Journal]

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