Lawyer Rebuked for Helping Client Financially but Two Justices Stress Limits on Prohibition

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By Joan C. Rogers  

Oct. 2 --A “review panel reprimand” is an appropriate sanction where a lawyer admitted he should not have made a loan to a client who was a longtime acquaintance and needed money to deal with personal problems, the Georgia Supreme Court decided Sept. 23 (In re Morse, 2013 BL 254060, Ga., No. S13Y1581, 9/23/13).

In a concurring opinion two members of the court said the relevant disciplinary rule prohibits financial assistance to a litigation client only when there is a connection between the monetary aid and the representation. The lawyer here implicitly conceded that connection by admitting to a violation of the rule but, they said, lawyers should not face discipline for helping clients financially in other scenarios.

Admission of Fault

Jack O. Morse filed a petition for voluntary discipline before any formal complaint was issued. He admitted violating Georgia Rule of Professional Conduct 1.8(e) when he loaned $1,400 to a personal injury client for the client's use in preventing foreclosure and avoiding possible jail time for violating probation. The client repaid the loan in full.

With two exceptions not applicable to Morse's situation, Rule 1.8(e) provides that “A lawyer shall not provide financial assistance to a client in connection with pending or contemplated litigation.”

As discipline, Morse requested a “review panel reprimand,” which is a public form of discipline administered at a hearing of the review panel of the disciplinary board. This level of discipline is appropriate in cases “that merit more than an investigative panel reprimand but less than a public reprimand,” according to Georgia Bar Rule 4-102(b)(4).


“Lawyers can be generous, and it is not uncommon for lawyers to help out their kin, their friends, and their neighbors.”

 

Concurring Justice Keith R. Blackwell

In requesting this level of discipline Morse pointed out that he had no other disciplinary infractions since 1998, and he asked the court to consider in mitigation his cooperation with disciplinary authorities and the fact that he was trying to help a longtime acquaintance. The bar did not object.

In a per curiam opinion, the court noted that a violation of Rule 1.8(e) is punishable by public reprimand, but it accepted the requested review panel reprimand as an appropriate sanction in the circumstances of this case.

'Connection' to Litigation

Justice Keith R. Blackwell, joined by Justice Carol W. Hunstein, wrote separately “to remind our readers that a lawyer providing financial assistance to a litigation client is not always a violation of Rule 1.8(e).”

“By its plain terms, the Rule only prohibits the provision of financial assistance to a litigation client to the extent of some 'connection' between the financial assistance on the one hand, and the litigation or representation on the other,” Blackwell wrote.

Blackwell said the connection requirement is consistent with the three purposes of the rule. He identified them as (1) preserving the loyalty and independence the lawyer owes the client; (2) preventing clients from selecting a lawyer based on improper factors; and (3) restraining the harmful practices of barratry, maintenance and champerty.

“As I see it, financial assistance to an existing client that has no connection whatsoever with the litigation or representation of the client does not offend any of the policies that the Rule is intended to promote,” he wrote.

Blackwell suggested that the requisite connection might exist if, for example, (a) the lawyer intended the financial assistance to enable or encourage the client to retain the lawyer or pursue the litigation; (b) the financial assistance actually had that effect on the client; or (c) the lawyer and client agreed that the money would be repaid from the client's recovery.

'A Little Troubling.'

Absent such a connection, Blackwell said, a lawyer may provide financial assistance to a litigation client without running afoul of Rule 1.8(e).

He asked readers to imagine a lawyer who represents her 17-year-old son in court on a traffic violation. Without the “connection” requirement, Blackwell said, the lawyer would violate Rule 1.8(e) simply by furnishing room and board to her son, giving him an allowance or paying his school expenses during the representation. No serious person would contend that the lawyer should be required to choose between representing her son and providing him with food and shelter, he said.

Blackwell said he found Morse's case “a little troubling” because the lawyer and client apparently were longtime friends, so that Morse may have made the loan independent of the attorney-client relationship or the litigation. “Lawyers can be generous, and it is not uncommon for lawyers to help out their kin, their friends, and their neighbors,” he said.

However, Blackwell said he was content to join the court in accepting Morse's petition for discipline because the lawyer admitted the violation and thereby implicitly admitted a connection between the financial assistance he provided and the litigation in which he represented the client.

Warren R. Hinds of Warren R. Hinds, P.C., Roswell, Ga., represented Morse. The Georgia State Bar was represented by Senior Assistant General Counsel Jonathan W. Hewett and General Counsel Paula J. Frederick, Atlanta.

To contact the reporter on this story: Joan C. Rogers in Washington at jrogers@bna.com

To contact the editor responsible for this story: Kirk Swanson at kswanson@bna.com


Full text at http://www.bloomberglaw.com/public/document/IN_THE_MATTER_OF_JACK_O_MORSE_No_S13Y1581_2013_BL_254060_Ga_Sept_.

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