Small Law Firms

Lockdown Didn't Slow Indomitable Spirit Of Lawyers Who Steal From Clients

It was a tough year for everyone.

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A lot changed in 2020, but when it comes to lawyering, it didn’t really slow the time-honored tradition of attorneys raiding client escrow funds as their own piggy banks. In fact, New York reports that while the total number of claims were down last year, the amount of pilfering actually went up. Hey, it’s a tough economy and there’s a whole bunch of money just sitting right there. What’s to stop a lawyer from using a smidgen to make ends meet except for a basic appreciation for legal ethics?

The Times-Union notes:

The Lawyers Fund for Client Protection, a state agency that compensates victims of crooked and extremely negligent attorneys, paid $3.4 million alone last year to victims whose attorneys who stole from real estate escrow accounts. That’s more than 40 percent of all the money the agency reimbursed, according to its most recent annual report.

It’s the most repeated ethical edict drilled into young lawyers. My character and fitness interview was entirely about escrow accounts as though a drone at an Am Law 50 firm was ever going to have to deal with Morgan Stanley’s trust accounts. But it just underscores how wild it is that some lawyers still think they can pull off the one thing the state bar fixates upon.

“Hey, how about I take loads of money out of accounts with my name on them, creating a glaring paper trail, knowing that this is the most obvious, and most heavily policed fraud in the profession? There’s no way this can backfire!”

“Lawyers who steal should be disbarred,” the fund’s former executive director, Timothy J. O’Sullivan, testified in 2015 before the Commission on Statewide Attorney Discipline, which was put together by then-Chief Judge Jonathan Lippman to review the state’s disciplinary system for attorneys.

They should be disbarred for stupidity before we even get to the ethics. There’s something about this quote in the story that reads as though it’s a controversial take, which is weird. Disbarment seems like the least we could do for grand larcenists.

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If only there were a way to protect clients from practitioners like these. Perhaps a one-time, two-day test on obscure UCC provisions? That should protect the public, right?

Law Beat: Theft by attorneys still a problem, even amid pandemic [Times-Union]

HeadshotJoe Patrice is a senior editor at Above the Law and co-host of Thinking Like A Lawyer. Feel free to email any tips, questions, or comments. Follow him on Twitter if you’re interested in law, politics, and a healthy dose of college sports news. Joe also serves as a Managing Director at RPN Executive Search.

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