Legal Ethics

The Beat Of Unchecked Egos Goes On ... And On

Clients and shovels, a match made in Hell.

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I guess that Michael Avenatti — the California lawyer who represented, among other clients, Stormy Daniels in her claims against Donald Trump — never learned the Eighth Commandment, that is, do not steal. It’s bad enough when anyone steals, but when a lawyer steals, embezzles funds from his client trust account, and then pleads guilty, it’s anyone’s guess as to what the sentence might be. We had a saying in the district attorney’s office where I worked: “don’t do the crime if you can’t do the time.”

The guessing is over. A federal judge here in Orange County gave Avenatti a very stiff sentence (well-deserved) for theft of client funds and defrauding the IRS out of payroll taxes. So, he’ll be spending 14 years in the pokey to run consecutively with the five-year sentence he is currently serving for the Nike extortion caper in New York.

Although Avenatti expressed remorse for his conduct — and the shame it brought upon his family, friends, and the profession — he also claimed that at no point in time did he set out to bilk his clients. (I wonder if he was able to say that with a straight face.) His bilked clients would disagree since he took their funds and lived an extravagant lifestyle at their expense. Sounds like another disgraced Southern California lawyer, doesn’t it? But Tom Girardi, diagnosed with Alzheimer’s, spends his days in an assisted living community, not prison.

Was Avenatti’s downfall narcissism? Did he believe his own press and think that he wasn’t going to get caught? That’s the feeling of a lawyer who formerly worked in Avenatti’s firm. The Los Angeles Times article quoted Andrew Stolper, who said that “None of it makes any sense other than he deluded himself into thinking he could get away with it. If you sit down and try to rationally figure out why a successful lawyer would resort to stealing money from his clients and at the same time elevate himself to the national stage, there’s not enough hours in a lifetime to figure that out.” Well said.

Do you think that ATL will ask for the return of its 2018 Lawyer of the Year Award given to Avenatti? BTW, the article does not mention Michael Avenatti as a previous awardee.

From time to time, every lawyer has told a client: STFU. However, some clients just can’t help themselves and find themselves with terminal cases of foot-in-mouth disease. At least several clients are in the news right now whose egos apparently do not allow them to take lawyerly advice. Of course, all of them are smarter than the lawyers anyway, until they stand before the judge. Then humility and groveling replace the overweening egos.

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So, it was nothing new when the lawyer who had represented Bernie Madoff (remember him?) told Samuel Bankman-Fried, CEO of his now-defunct crypto empire FTX, to say nothing, zero, zip. We all learned in evidence the power of an admission, which takes a lousy case from metal to gold. Bankman-Fried’s self-styled apology tour will do him no good, especially if he hopes to stay out of jail. He’s a classic example of two things: a client who won’t take his lawyer’s advice, and, while wielding a shovel, keeps digging his own grave. We’ve all had clients like that. Clients always think that they know best. How will Bankman-Fried’s “it’s all a big mistake” defense play out in bankruptcy court? In any criminal case that might be filed? Any other litigation that’s sure to arise?

And then there’s another client with a ginormous ego. If you were to compare egos between the former president now trying to get back into the White House (through the front door, a side door, or however else) and Elon Musk, I think it could well be a dead heat. Should the number of legal issues staring at each of them be used for comparison?

Trump certainly has his share: the Trump Organization convictions in New York; the E. Jean Carroll defamation lawsuit, also in New York; cases arising from the search warrant at Mar-a-Lago; and any criminal referrals the January 6th Commission will be making to the DOJ. (I am sure I have missed some.) Right now, Musk’s biggest legal headache appears to be the severance/not severance mishigas he has gotten himself into when firing or rehiring employees.

California has both federal and state WARN acts and precisely complying with both can make your head explode if not done correctly. I won’t bore you with mind-numbing details; suffice it to say that Musk cannot just ignore WARN Act requirements and any other severance claims included in the Twitter acquisition agreement. Having been involved in four acquisitions (both on the acquirer and acquiree side), there’s a whole laundry list of things to be done within certain time constraints to comply with WARN, certain head-counting, location-counting, and providing information to certain agencies as to who stays and who goes.

Does anyone think it’s a little ironic, or perhaps more than just a little, that an attorney for a bunch of pissed-off Twitter employees has posted his demand letter to Musk on behalf of those employees on the Twitter website?

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Clever use of the Twitter platform. Your thoughts? I think it’s perfect.

old lady lawyer elderly woman grandmother grandma laptop computerJill Switzer has been an active member of the State Bar of California for over 40 years. She remembers practicing law in a kinder, gentler time. She’s had a diverse legal career, including stints as a deputy district attorney, a solo practice, and several senior in-house gigs. She now mediates full-time, which gives her the opportunity to see dinosaurs, millennials, and those in-between interact — it’s not always civil. You can reach her by email at [email protected].

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