Lawyer Sanctioned for Employee’s Misconduct

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An attorney can’t be held accountable for her client’s breach of the Rules of Professional Conduct, right? Wrong. Model Rule of Professional Conduct 1.15 provides that a lawyer cannot commingle a client’s property (i.e. money) with the lawyer’s. Seems simple enough: don’t mix personal with business.  However, what happens when the lawyer complies with this standard but her employee doesn’t?  According to a Texas state court, the lawyer is still responsible.

A Texas attorney was recently sanctioned and then temporarily banned from practicing law because her employee commingled client and personal funds.  Before an evidentiary panel hearing, the lawyer admitted that she “failed to hold funds belonging in whole or in part to clients or third persons that were in [her] possession in connection with the representation separate from [her] own property.”   She also admitted that she had direct supervisory authority over a non-lawyer assistant and that she failed to make reasonable efforts to ensure that the employee’s conduct was aligned with her own professional obligations.

The court found that the attorney violated various portions of Texas’ Rules of Professional Conduct pertaining to safekeeping of property and responsibilities regarding non-lawyer assistants.   Rule 5.03 specifically provides that “a lawyer having direct supervisory authority over the non-lawyer shall make reasonable efforts to ensure that the person’s conduct is compatible with the professional obligations of the lawyer.”

As a result, the court ordered the attorney to pay over $6,000 in attorney’s fees to the chief disciplinary counsel of the state bar and suspended the attorney from practicing law for a period of 12 months.

This is an extreme example of the consequences of failing to supervise employees. While it may be easy for lawyers to keep themselves in line, perhaps many professionals forget the obligation to ensure employees maintain those standards as well. A note to the Texas Rule at issue is instructive: “a lawyer should give such assistants appropriate instruction and supervision concerning the ethical aspects of their employment” and “the measures employed in supervising non-lawyers should take account of the fact that they do not have legal training and are not subject to professional discipline.” This is sound advice for all professionals to consider.