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					Isaac Hecht Remembered

                                 A Newsletter for Law Client Protection Funds

                                                                                                                                                      Volume 6 Number 2
                                   Client Protection Webb

         See Page 2           Published by The National Client Protection Organization, Inc.        Fall 2003

                                                        Letter to the Editor published recently
                                                        in the American Bar Association Jour-
                                                                                                              Planning for the
           A Message                                    nal was highly critical of client protec-
                                                        tion funds and the lack of protection
                                                                                                            Isaac Hecht Award
           From the                         they provide. The letter, entitled “Security Funds
                                            Not Up To Snuff”, was authored by “HALT – An                  Isaac Hecht, Director Emeritus and Co-
           President                        Organization of Americans for Legal Reform”. I              founder of the National Client Protection
                                                                                                        Organization, died in Baltimore, Maryland on
                                            was unfamiliar with HALT, and my first reaction
            Janet Green Marbley             was a defensive one – why is this organization at-          January 23, 2003, at age 89. Isaac was a long-
                                            tacking client protection funds?                            time Treasurer of the Maryland Lawyers’
                                                                                                        Fund for Client Protection and, over an 18-
                                              To move beyond my initial reaction, I had to              year period, a member of the American Bar
    Inside                                  make a determined effort not to focus upon HALT,            Association’s Standing Committee on Client
                                            but its message, which was based primarily upon             Protection and its predecessor standing com-
2   Isaac Hecht Remembered                  the data published in the ABA’s latest Law Client           mittees. Isaac was an expert and frequent lec-
    By Kenneth J. Bossong                   Protection Survey. Halt’s letter argued that arbi-          turer at national professional conferences in
                                            trary fund limits and inadequate financing is only          matters involving professional responsibility,
3   Report of the Secretary
    By Georgia Taylor                       “lip service” to client protection. The letter offers       ethics and client protection funds. At his
                                            inaccurate data to support HALT’s message.                  death, Isaac was an active partner in the Bal-
    NCPO Plans New Orleans                                                                              timore law firm of Hecht & Chapper.
                                              With the help of several NCPO members, I pre-
    ABA’s Standing Committee                pared a response. In addition to correcting the               Shortly after Isaac’s death, NCPO’s Board
    Roster 2003-2004                        inaccurate information, we acknowledged that no             of Directors announced its intent to create
                                            fund is perfect, and that there are some in need of         the Isaac Hecht Law Client Protection Award
    NCPO’s Annual Meeting                                                                               to honor Isaacs’s extraordinary contributions
                                            real improvement. But that response has not put
4   Media Tips for Client                   the issue at rest for me.                                   to the legal profession in the United States
    Protection Funds                                                                                    and Canada, and its programs to protect law
    By Marla Hockfeld                         Those of us who are committed to providing                clients from dishonest conduct in the prac-
                                            support to funds and other programs aimed at                tice of law. The Board of Directors also au-
5   National Forum in Florida               protecting legal consumers from dishonest con-              thorized NCPO’s Treasurer to establish a spe-
6   Some Difficult Claims in                duct in the practice of law must always be willing          cial bank account to fund the award with con-
    California                              to address legitimate concerns raised about client          tributions from Isaac’s family, his friends and
    By Lori Meloch                          protection. We must also continually look for ways          professional colleagues.Contributions thus far
                                            to do what we do better. We must gather and re-             exceed $5,400. More are welcome, and can
7   Las Vegas Workshop a
    Hugh Success!                           view, no less than annually, the statistics on what         be sent to A. Root Edmonson, c/o North
    By Janet Green Marbley                  we are doing. This form of self-evaluation is one           Carolina Client Security Fund, P.O. Box
                                            way to ensure that our funds are not simply pay-            25908, Raleigh, NC 27611.
8   When is a Loan Not a Loan               ing “lip service” to client protection.
    By Robert W. Minto, Jr.
                                              In addition to self-evaluation, we must continue            The Isaac Hecht Law Client Protection
9   MJP & Safe Harbors - Safe                                                                           Award will be presented annually to an indi-
    For Whom?                               to exchange information among ourselves, other
                                            members of the legal profession, and others who             vidual, client protection fund, or other pro-
    By Kenneth J. Bossong
                                            share our commitment to client protection.                  fessional association that has demonstrated
    MJP and Law Client                      NCPO’s workshops, newsletter, and training ma-              excellence in the field of law client protec-
    Protection                                                                                          tion. “Excellence” includes significant
    By Charles Goldberg and                 terials are aimed at helping us to better achieve
                                            this goal.We must also look for new ways of sup-            achievements in promoting public confidence
    John S. Gleason
                                            porting funds and improving their protections.              in the administration of justice and the integ-
10 Message from Seattle                     That is why it’s critically important that we react         rity of the legal profession; the substantial
                                            to letters like HALT’s, but not simply with an-             reimbursement of law clients for eligible
    Archer Anoints Welden                                                                               losses; the development of programs to pre-
                                            other letter. We must react by finding ways to im-
11 News In Brief                            prove law client protection.                                                   continued on page 3 :
                                                                           ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○      The Client Protection Webb     Fall 2003                  1
                                 Isaac Hecht Remembered

                                  DOING THE BEST WE CAN                                                             Kenneth J. Bossong

                                                         beyond the Committee functions. Stories          ionated, strong-willed people could be so
                                                         of our families intermingled with those of       devoted and in love for so long is something
                                                         our funds. As the friendship bonds grew          else to cherish. Nancy told me Kitty was
                                                         stronger, the ideas got better. While we did     special right after meeting her, and thus be-
                                                         not always agree, a passion for doing cli-       gan a series of adventures over the years
                                                         ent protection right brought us together,        while husbands were cooped up in meeting
                                                         and personal regard sustained us.                rooms. It wasn’t long before each would try
                                                                                                          harder to make trips after learning the other
                                                           To the extent we took on roles, Fred was       was going. One time I told Isaac I regretted
                                                         often the firebrand, I the philosopher, and      not being able to attend an event, and he

               ulogizing his father, Henry Hecht
                                                         Isaac the advocate for effective action.         responded, “That’s okay. What about
               said that two words come to mind
               when thinking of Isaac: love and pas-     When I’d be off on some abstract, doctri-        Nancy?”
               sion. Henry then mentioned ex-            nal point, I could rely on Isaac to say, “Par-
    amples of those for whom Isaac had both – his        don me. That’s all well and good, but what         My last contact with Isaac was not a call,
    wife; his children, their spouses, and his grand-    are we going to do? I think we should...”        but a brief visit for which I will always be
    children; his clients and the practice of law with   Apart from the sheer pleasure we derived         thankful. It was on Saturday, January 18.
    his partner; and Maryland’s law client protec-       from each other’s company, there was this        Isaac was out of ICU, but still weak. It was
    tion fund. That is honored company, indeed,          benefit: we each knew that if we could get       the only time I can remember Isaac looking
    for the protection fund. Henry also described        an idea past the other two, it had real merit    anywhere near his age. After greeting him, I
    the pleasure of a call from his father. On that, I   and was worth pursuing.                          mentioned that they said he was improving
    can also speak from experience.                                                                       (which was true). Isaac gathered himself,
                                                           Isaac meant what he said, and said what        smiled, and retorted, “What about you? Are
      “Kehhhhnnnnn?” [In that gravelly,                  he meant. He was a man of tremendous ac-         you improving?” I laughingly denied all im-
    basso-profundo rumble]                               complishment, but utterly without pretense.      provement.
      “Yes?”                                             He did what he said he would do, and woe
      “Iiiiiiiisaac.” [As if it could be anyone          to those who didn’t! Though he could be            Isaac told me he was concerned that he
    else]                                                impatient, even his gibes were usually laced     might not make the NCPO Workshop in Las
                                                         with affection. As one of the best storytell-    Vegas; he was to do the loss-prevention ses-
      How many wonderful phone calls began               ers I’ve ever known, Isaac would delight         sion, and did not want to let anyone down.
    this way!                                            us, even with ones we’d all heard before.        He seemed relieved when I told him Fred
                                                         His favorite, which therefore came to be         and I had discussed my taking the presenta-
      The first such call was an invitation, 20          mine, recounted a conversation he had with       tion if he could not. I urged him to consider
    years ago, to meet with the ABA Standing             Maryland’s Chief Judge upon one of his           the ABA Forum in May to be the goal. As I
    Committee on Client Security Funds. The              many re-appointments as Trustee of the           left, I told him two things: that the entire
    Committee had divided itself up regionally,          Maryland fund.                                   client protection community of North
    with members seeking to foster relationships                                                          America was pulling for him; and that he
    with their area’s funds. The Committee’s                Reminding Chief Judge Murphy of his           meant so much to all of us, his job was to
    next meeting was in Washington, D.C., and            age, Isaac expressed some concern over his       get stronger.
    Isaac was inviting his states’ participation.        ability to complete the term. Chief Judge
    Thus was Isaac the bridge for me to active           Murphy replied with a parable. When a man          Isaac Hecht spent a lifetime doing the best
    participation in the ABA, and to the national        sentenced to 50 years in prison protested        he could. Now, it’s up to us. We could fill
    client protection community. I soon realized         that he was 60 years old and could not hope      this edition of the Webb with fond remem-
    that the idea of enhancing protection funds          to serve a 50-year sentence, the judge told      brances of Isaac, but we honor him best with
    through personal relationships was his. It           the defendant to do the best he could.           effective action. Prevent any loss we can,
    was, and is, a great idea. And it typified a         “Isaac,” he said, “do the best you can.”         and pay every loss we can’t prevent.
    great man.
                                                           Calls with Isaac ended in a special way,
      The “three amigos” who founded NCPO,               too. Each time, without fail, Isaac told me
    Isaac, Fred Miller and I, were brought to-           to give his love to my Nancy, and I asked
    gether by the Standing Committee in the              the same for his Kitty. We both meant it.        : Kenneth J. Bossong is the Executive Di-
    early to mid ‘80s. It was a collegial and in-                                                         rector and Counsel of the New Jersey Law-
    teresting group to begin with, but we three            Isaac and Kitty: what a magnificent            yers’ Fund for Client Protection, and
    found ourselves doing things together, even          couple! That two such bright, funny, opin-       NCPO’s first President.

2   The Client Protection Webb        Fall 2003   ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
Planning for the Isaac Hecht Award
6continued from page1                          Report of the
                                                                                                       NCPO Plans New
vent or detect professional misconduct in
the practice of law; and meaningful public
                                               Secretary                                               Orleans Workshop
information programs for client protection     Georgia Taylor
funds, attorneys and legal consumers.                                                                   NCPO’s Board of Directors is

                                                        n May 30, 2003 NCPO held its Sixth
                                                        Annual Meeting in Chicago with 18             planning its next Training Work-
  NCPO intends that the Isaac Hecht Law                 attendees. A new slate of officers was        shop; this one in New Orleans,
Client Protection Award will encourage         approved, as well as a proposed budget for             Louisiana, on Friday, March 19,
individuals and professional associations in   2003-2004. Among the topics discussed, the             2004, at The Iberville Suites Hotel
the United States and Canada to become         Membership Committee reported on its re-               in New Orleans’ historic French
effective advocates and administrators of      cruiting and retention efforts, the Publications       Quarter. Hosts for the Workshop
law client protection programs.                Committee spoke of enlarging, and there was            are the Louisiana Supreme Court
                                               a report on the Nova Scotia trustee training           and the Louisiana State Bar Asso-
  NCPO’s Board of Directors will annu-         project. Webmaster Mike Knight (NY) dis-               ciation. Preliminary agenda plans
ally appoint a standing committee to ad-       cussed communication issues and was the re-            include numerous and snappy pre-
minister the Isaac Hecht Law Client Pro-       cipient of an award honoring him for his many          sentations covering all important as-
tection Award. The standing committee will     efforts on behalf of NCPO.                             pects of administering a client pro-
solicit recommendations for the award                                                                 tection fund. Contact Fred Miller
from all appropriate sources, including          Benette Johnson, a Justice with the Loui-            with suggestions for specific topics,
state client protection funds; the American    siana Supreme Court, invited NCPO to con-              and to volunteer as a presenter:
Bar Association and its entities; the Con-     duct their next Workshop in Louisiana, per-   Stay in touch
ference of Chief Justices; the National Or-    haps in New Orleans in spring 2004.                    with NCPO’s website for further in-
ganization of Bar Counsel (NOBC); and                                                                 formation:
the Association of Professional Responsi-        On July 16, 2003 the Board of Directors
bility Lawyers (APRL). The standing com-       held a teleconference. Among the items dis-
mittee will report its selection efforts and   cussed were the Isaac Hecht Award and
candidate recommendations to NCPO’s            what form the award might take (plaque,
Board of Directors, which shall comprise
the selection committee for the award.
                                               scholarship, medallion, etc.), the issues sur-
                                               rounding a uniform MJP rule as it pertains
                                                                                                  NCPO’s Annual Meeting
                                               to client protection funds, and a resolution

Recipients of the award will be invited to                                                              CPO held its Sixth Annual Meet-
serve on the standing committee.               of the problems associated with the dupli-               ing in Chicago on May 30, 2003.
                                               cative list serves sponsored by the ABA and              A new slate of officers was approved,
  The Isaac Hecht Client Protection Award      NCPO. It was determined we will conduct as well as a proposed budget for 2003-2004.
will likely consist of an engraved medal-      the Difficult Claims Workshop at next June’s Topics discussed were membership recruiting
lion which will be presented annually.         ABA Forum in Naples, Florida.                  efforts, trustee training in Nova Scotia, and a
NCPO hopes to make the first presenta-                                                            NCPO workshop in New Orleans. NCPO Web
                                                                                                  Master Michael J. Knight, Deputy Counsel of
tion of the award at the ABA’s National        : Georgia Taylor is NCPO Secretary
Client Protection Forum on June 4, 2004                                                           the New York Lawyers Fund, discussed com-
                                               and the administrator of Nevada’s client
                                                                                                  munication issues, and was presented with a
in Naples, Florida.                            protection fund.                                   special award honoring him for his contributions
                                                                                                  in developing NCPO’s web site:
   NCPO’s Board of Directors on Novem-
ber 19, 2003 appointed a standing com-           ABA’s Standing Committee
mittee to administer the first grant of the          Roster 2003-2004
Hecht award. The standing committee con-
sists of A. Root Edmonson, Janet Green
Marbley, Frederick Miller, and William T.      T    he ABA’s Standing Committee on Cli-
                                                   ent Protection has new members for the
                                               2003-2004 year. Serving with Chair Rob-
Ricker, Jr., with Miller as Chair
( Plans for the award        ert D. Welden of Seattle are Melissa
are still preliminary, and comments and        DeLacerda of Stillwater, OK; A. Root
suggestions from the client protection com-    Edmonson of Raleigh, NC; Gwendolyn D.
munity are welcome, as are contributions       Hodge of Little Rock, AR; Lori S. Holcomb
to enable this fund to become a permanent      of Tallahassee, FL; Henry A. Kelly of Albu-
feature of law client protection in the        querque, NM, and Lynda C. Shely of
United States and Canada. Contact any          Scottsdale, AZ. Liaisons include Alice E.
member of the standing committee, and,         Richmond of Boston, MA (Board of Gov-
of course, feel free to recommend deserv-      ernors); G. Fred Ours of Baton Rouge, LA
ing colleagues to be the award’s first re-     (NOBC); and Janet Green Marbley of Co-                  Mike Knight and NCPO President
cipient.                                       lumbus, OH (NCPO).                                            Janet Green Marbley

                                                                   ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○      The Client Protection Webb        Fall 2003   3
                 Media Tips for Client Protection Funds
                                                                  Marla Hockfeld

      What Does the Media Want?                        put “For Immediate Release” at the top.        know” rather than “no comment”. To be
      There are ten basic principles essential for       If you are in doubt about anything, just     safe, don’t address questions you can’t or
    developing a good relationship with the me-        ask. The media would rather you ask be-        shouldn’t answer. And never speculate, guess
    dia:                                               fore the fact rather than after.               or provide information that you wouldn’t
                    Your honesty                         Make a copy of your release and a list of    want the general public to know about you
                    Your integrity                     people you sent it to so you can follow-up     or your organization.
                   Your accuracy                       if need be and track your exposure.              The best response to a tough question is
         The newsworthiness of your story                                                             often to say something like, “I don’t have
             Use of the correct format                      Dealing with the News                     that information, but I’d be glad to put you
              Knowing the deadlines                                                                   in touch with someone who might.” Or, let
            Knowing whom to contact
                                                                   Media                              them know you just found out about that situ-
       Knowing where to direct your release              Eight tips for dealing with the news me-     ation and don’t want to respond without all
            Paying attention to details                dia:                                           the facts. Tell the reporter when you’ll call
       Knowing why the media would want                  Be polite and helpful. In most cases,        them back and make sure you do so.
                 to use your story                     the media person is calling you regarding        Unless you’re a seasoned veteran dealing
                                                       a news story or similar opportunity that       with a reporter you’ve known and trusted
                                                       will help you. The media’s perception of       for years, don’t talk to reporters “off the
     How to Write a Press Release                      your organization is going to be shaped        record.” Remember that anything you say to
       First, you need to prepare. Gather all the      by how you treat them. Treat them like an      a reporter can be quoted in print or on radio
    facts, confirm the correct spelling of names,      important client.                              and TV. This is especially important in a po-
    and determine the key points you need to             Be responsive. Reporters are usually in      tential crisis situation.
    cover. You also need to consider who the           a hurry to get the information they need         Answer questions directly, but do not
    release is being distributed to and make sure      to complete a news story before their dead-    elaborate on questions you don’t like. For
    it meets their needs.                              line. Reporters at daily newspapers and re-    example, if you are asked why the public has
       Second, use the inverted pyramid style of       porters at TV and radio stations often call    such a negative image of lawyers, don’t feel
    writing. Start with the most important points      for an interview or a piece of information     compelled to provide a whole list of reasons.
    and information and then proceed to the least      that they need that day. If you can’t pro-     A good response would be to say you haven’t
    important detail. This allows the editor to        vide the information they need when they       seen any data on the subject, but the lawyers
    cut the end off if space is short and still not    need it, the opportunity may be lost. I        in your state are doing positive things. This
    affect the main thrust of the story. Sometimes     know it’s not always possible to provide       will give you an opening to list the positive
    it is helpful to give your press release a hu-     what they need that fast. But you should       things happening in your community and the
    man interest angle by providing a sample (and      make every effort to try.                      state and with your organization. And never
    brief) case history of a client you’ve helped.       Put the media in touch with the ap-          mislead or lie. Your credibility will go down
    Many of the community-oriented papers like         propriate person. Reporters often want         the drain.
    this type of lead in and it will increase your     to speak to the leader of your organiza-         Know your audience. Most people don’t
    chance of getting published.                       tion. However, when reporting on a hard        understand legal terms or procedures, so
       Third, as you write the release, you’ll need    news story or working on an investigative      keep your comments simple. When doing an
    to remember not to assume anything. Don’t          story, some reporters will try to get infor-   interview for a newspaper or magazine, you
    abbreviate. Don’t assume people understand         mation from anyone they think might be         can talk more in depth than when you are
    legal lingo. And double-check your facts.          able to provide it – regardless of whether     doing a television or radio interview. Short
    Also, make sure you give the full title of any-    they are authorized or knowledgeable           sentences and lively quotes are great for ra-
    one you are quoting.                               enough to discuss the subject. Refer me-       dio interviews. And when doing a television
       Finally, your release needs a few more items    dia calls to those designated, trained and     interview, make sure you don’t speak too fast
    before you send it off. You need to include        authorized to deal with the media.             so everyone can understand you.
    contact information (a name, phone number,           Now, if you are able to confirm or pro-        Get the basics. When the media comes
    email address, cell phone number, even a           vide some facts for the reporter, go ahead     calling, ask the reporter for her name, phone
    website address) the media can go to if they       and do so. However, if the reporter wants      number, e-mail address, and the name of the
    have any questions.                                an opinion or statement on something,          media organization she represents. Whenever
       When all these details are gathered, type       you’ll always be best off letting the head     possible, find out what type of information
    them up in a word processing program so            of the committee or your spokesperson do       they are seeking and how soon they need it.
    you can email it to them and save them the         so. Your role will be to make every effort     Then make sure you communicate all this to
    time of having to retype your information.         to put the reporter in touch with the chair    your organization’s spokesperson. Finally,
    Make sure you include a release date. If the       as soon as you can.                            take time to prepare your response and de-
    information is available for immediate use,          The best response might be “I don’t          liver it with confidence. Don’t allow report-

4   The Client Protection Webb     Fall 2003   ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
ers to pressure you into talking if you are       brochures that tell about their program. These
not ready.                                        are great to have available for when people
                                                  call you requesting information; but, it is sort
  Always maintain your professionalism
and don’t be shy about following up. You
                                                  of a passive way to communicate with people.
don’t want to stoop to the level of an un-          To promote your client protection fund,
professional reporter. If the reporter’s tone
or behavior becomes intolerable, politely
                                                  you must communicate. You must make po-
                                                  tential clients and supporters aware you ex-
                                                                                                            in Florida
                                                  ist. And you must help them understand what

excuse yourself from the interview. And af-                                                                  he ABA’s Standing Commit-
ter the interview is published, if you feel you   you do and how you can benefit them.                      tee on Client Protection will
were misquoted or that an interview agree-                                                                  hold its 20th National Forum on
ment was violated, point it out to the editor.      Organizations mostly communicate with            Client Protection June 4-5, 2004, at the
                                                  the public through press releases and public       Registry Resort, in Naples, Florida.
  Now, let’s say all these media calls you are    service announcements. Success depends on          NCPO will conduct this year’s Difficult
getting are because of a scandal that’s oc-       creating awareness that you exist and pro-         Claim Workshop. Several members of
curred, what do you do? Every situation is        moting an understanding of your services. By       NCPO will serve on panel discussions.
different, so here’s just a sampling of some      learning about the media and what their needs        The Forum is an informational and
of the actions you can take:                      and requirements are, you will greatly in-         educational program for profession-
                                                  crease the chance that your press releases and     als working in the area of client pro-
  Make sure you have a designated spokes-         public service announcements will get used.        tection including client protection
person. Or, say, that spokesperson is unavail-                                                       funds, fee arbitration and lawyer-cli-
able, hold an emergency conference call with        Rather than viewing the media as your en-        ent dispute resolution programs. It is
your committee members, come up with a            emy, it’s important that you view them as a        an open arena for the exchange of
consensus on how you want to respond to           bridge that transports your message to the         ideas and provides a platform for all
media inquiries, and quickly prepare a writ-      public. Maybe you’ve submitted press re-           colleagues in the client protection
ten statement that may be provided to re-         leases in the past and never saw them get          field to foster ideas and share their
porters. This way you avoid not comment-          used or printed, so you’ve given up.               experiences.
ing at all and you hopefully won’t have con-                                                           Harry Lee Anstead, Chief Justice of
flicting statements being issued by several         You’ve got to remember, the media receives       the Florida Supreme Court and Roy
different members of your committee.              a huge amount of information daily. Your           L. Glass, Chair of Florida’s client pro-
                                                  story competes for the same space and time         tection fund will make the opening re-
  You can write letters to the editor to cor-     as the other stories. To be successful, you        marks at this year’s Forum. Panel dis-
rect misimpressions or misinformation.            must understand the needs of the media and         cussions will include: actuarial prin-
                                                  lots of times this simply involves picking up      ciples as applied to lawyers; funds for
  You can write and submit an editorial           the phone, finding out the right person to send    client protection; bankruptcy and the
(sometimes called an op ed piece) which           your information to, how far in advance they       recoupment of claims paid;
explains in detail your stance or opinion on      want it and in what format (email, mail, or        custodianships; judicial review of
a certain matter.                                 fax) and then just do what they tell you.          fund determinations and the training
                                                                                                     of fund trustees. There will also be
 Arrange for your spokesperson to appear                                                             Difficult Claims and Fee Arbitration
on a public affairs show, radio and/or TV.                                                           Workshops and a Town Hall Meet-
                                                                                                     ing. During the 20th National Forum,
 Call a press conference if need be.                                                                 the NCPO will present, for the first
                                                                                                     time, its Isaac Hecht Law Client Pro-
  Return phone calls and if you can’t com-        : Marla Hockfeld is the former Director            tection Award. The award is in honor
ment at that time, let them know when you         of Communications for the State Bar of             of Isaac Hecht, a long-time Trustee
can. This will keep the media from hound-         Nevada and Editor of the award winning             of the Maryland client protection
ing you.                                          magazine, Nevada Lawyer. She holds a               fund, an 18-year member of the
                                                  B.A. in Communication, with a major in             Standing Committee.
  And finally, if the situation is more than      Public Relations, from the University of             If you have any questions or need
you can handle, you may want to turn things       Alabama, and is an active member of the            any additional information, please
over to a public relations agency or consult-     National Association of Bar Executives’            contact John Holtaway, ABA Client
ant who has experience in crisis manage-          Communications Section.                            Protection Counsel at (312) 988-
ment.                                                                                                5298,
                                                    This article is adapted from Ms.                 Registration materials will be mailed
 Upgrading the Reputation of                      Hockfeld’s presentation at NCPO’s                  out in February 2004 and will be avail-
                                                  Training Workshop in Las Vegas on                  able on-line at:
      Honest Lawyers                              February 29, 2003.                                 cpr/prconf.html.
 Most client protection organizations have

                                                                      ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○   The Client Protection Webb      Fall 2003   5
    Some Difficult Claims                             into which the checks and other payments the requirements of Rule 2 have been
                                                      were deposited.                          met. Although the payments were made
    in California                                       No work is performed by the lawyers,
                                                                                                   through the corporation, rather than be-
                                                                                                   ing paid directly to the lawyer, the Com-
    Lori Meloch                                       or anyone else, for the inmate clients.      mission has concluded that these funds
                                                      Usually, it is the family members of the     came into the lawyer’s hands. The cor-

            he Client Security Fund Commis-           inmates who pay the fees to the corpora-     poration was effectively the lawyer’s of-
            sion in California has been chal-         tion upon the promise that the named law-    fice, he or she participated in illegal fee
            lenged by two lawyers who joined          yers will visit the inmates and begin work   sharing with the non-attorneys at the cor-
    forces with a disbarred lawyer and a para-        to obtain early release. In the approxi-     poration and the lawyer had an obliga-
    legal, among others, to supposedly provide        mately 50 applications that have been        tion to supervise the office, and to stay
    representation to criminal defendants to          filed with the fund, there were rarely any   informed as to what the non-attorneys in
    obtain early release from prison.                 visits to the inmates, and there were no     the office were doing in their dealings
                                                      documents reviewed or filed. Eventually,     with clients. This duty included staying
      The disbarred attorney and paralegal            requests for information from the clients    informed regarding the collection of le-
    created a corporation which they used to          or the family members are ignored, or the    gal fees and the work or lack of work be-
    publish a magazine that is circulated in          telephone number is changed.                 ing performed for clients.
    prisons. The enlisted lawyers, who allow
    their names to be used as the front for the         The difficulty with these cases is meet-     The Commission concluded that there
    corporation, appear in “full page” ads that       ing the requirements of Rule 2 of the Cli-   was such reckless disregard of the
    feature their names and pictures. The ads         ent Security Fund rules, which provides      lawyer’s duties to the clients that the con-
    claim that the specifically named lawyers         that the funds must have come into the       duct rose to the level of dishonest con-
    can obtain early release from prison for          lawyer’s hands. In most of these cases the   duct as required under Rules 2 and 6 of
    the inmates, as well as provide other ser-        funds were paid directly to the corpora-     the fund’s rules.
    vices if needed. The telephone number in          tion.
    the ad is the telephone number for the                                                           The Commission determined that the
    corporation.                                        In objecting to payments from the fund,    dishonesty included Rule 6(b), because
      The lawyers entered into contracts with the
                                                      these lawyers argue that they did not re-    the lawyer failed to perform more than
    disbarred lawyer and the paralegal whereby        ceive the advance fees. They claim that      an insignificant portion of the services
    they shared legal fees with them and the oth-     the requirements of Rule 2 have not been     he agreed to perform and Rule 6(e), be-
    ers involved in the corporation. All intake       met, because the advance fees were made      cause the lawyer engaged in acts of de-
    functions, client screening and fee collection    payable to the corporation and given to      ceit which proximately led to the loss of
    is done by the non-attorneys who run the          employees who deposited the funds into       money by his or her clients.
    corporation. Clients were instructed by the       bank accounts on which the lawyers were
    lawyers on billing statements and in dealings     not signatories.
    with the office staff to make checks payable                                                   : Lori Meloch is Senior Counsel at the
    directly to the corporation. The lawyers were       The Commission has determined in its       State Bar of California’s Client Security
    not listed on the corporation’s bank accounts     tentative decisions in these matters that    Fund.

                                                                                                            Hawaii Eyed
                                                                                                        The ABA/NCPO Consultation
                                                                                                        Team (John Holtaway, Janet
                                                                                                        Marbley and Bob Welden) are
                                                                                                         greeted in style by Hawaii
                                                                                                       Trustees Gayle J. Lau, Curtis Y.
                                                                                                        Harada, Michael D. Miyahira,
                                                                                                        and Magali V. Sunderland, as
                                                                                                             well as Hawaii Fund
                                                                                                          Administrator Carole R.
                                                                                                          Richelieu, at the historic
                                                                                                        Willows Restaurant. The next
                                                                                                         day they commenced their
                                                                                                          rigorous examination of
                                                                                                        Hawaii’s law client protection

6   The Client Protection Webb     Fall 2003   ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
                           Nevada Supreme Court
                           Justice Nancy A. Becker

                                                                                                                             John Gleason,
                                                                                                                             Howard Stern
                                                                                                                             and Chuck

              n February 28, 2003, more than
             40 client protection administra-                                                                                Goldberg discuss
             tors, staff, and trustees, gathered                                                                             the unique role of
             in Las Vegas, Nevada for the fifth                                                                              fund trustees.
NCPO Training Workshop. The Nevada Client
Protection Fund and the Nevada State Bar As-
sociation hosted the workshop, which was a
great success. Georgia Taylor and her Nevada
colleagues, as well as NCPO’s planning com-
mittee, are to be commended for a job well done!    Las Vegas Workshop
  The Workshop was held at the Tuscany
Suites Hotel in Las Vegas. A reception was
held the night before the Workshop began,
                                                    A Huge Success!
                                                    Janet Green Marbley
followed by dinner for the group on Las Ve-
gas’ legendary “Strip”. The reception and din-
ner provided a wonderful opportunity to meet
and greet one another while enjoying the
wonders of Las Vegas.

  The Workshop began with welcoming re-                                Coffee Break.
marks by Justice Nancy A. Becker of the Ne-                            John Holtaway and
vada Supreme Court. The Workshop agenda                                Chuck Goldberg
included a presentation on 12 different areas
of client protection, including how to inter-
view claimants, dealing with the media, the
role of trustees, loss prevention programs,
and sanctions and restitution. The Workshop
provided an excellent overview of the vari-
ous topics, and provided an opportunity to
discuss and exchange information.

  NCPO was founded to be an educational
resource for the exchange of information
among client protection funds throughout the
United States and Canada. The Las Vegas
Workshop provided an excellent opportunity
to do just that and more. Thanks again to
Georgia Taylor, Fred Miller, and the other
members of the planning committee, the Ne-
vada State Bar, and to the Workshop partici- Welcome!                                      Edmonson
pants.                                       Deborah Davis,
                                                   Marj Perrin and                         discusses
                                                                                          coping with
: Janet Green Marbley is NCPO’s President,         Michelle Berkey
                                                   of the Nevada                       abandoned law
and the Administrator of the Ohio Supreme
Court’s Client Protection Fund.                    State Bar

                                                                     ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○   The Client Protection Webb      Fall 2003   7
    When is a                                         have a loan, we have an expectation that       Simply it is level of sophistication. The
                                                      the funds would at some point be returned      bank knows the risks involved in mak-
                                                      (presumably with interest) but what we         ing loans and the individual may not. On

    Loan Not a                                        don’t have is the usual entrustment of funds
                                                      for the client’s benefit.
                                                                                                     the other hand the individual may also
                                                                                                     be a very sophisticated business person
                                                                                                     every bit as capable as the bank in un-

    Loan?                  Robert W. Minto, Jr.
                                                        The loan evidences an intent by the par- derstanding of the risk. So is the differ-
                                                      ties that the attorney would use the money ence one of client sophistication rather
                                                      for his or her own purposes and that it than individual vs. corporate?

              or client protections funds, this       would be repaid as part of a commercial
              seems to be the $64,000 ques-           transaction between a borrower and a             Sophistication may be relevant in mak-
              tion when a client loans an at          lender. Does the mere existence of the trust- ing discipline and ethics decisions, but
              torney money and the attorney           ing relationship between the attorney and it has no place in the determination of
    fails to repay the loan.1 I hope to place         client change the nature of the transaction? the standard of care of money held in
    the question in perspective from the frame        I don’t believe so.                            trust by attorneys. Attorneys owe the
    of reference of a protection fund’s pur-                                                         same duty to the sophisticated and the
    pose and over-riding obligation: to pro-            The last criteria offers us little help as a unsophisticated alike whether they are
    tect clients from attorneys who steal their       civil judgment on a promissory note would corporations or individuals and our de-
    money or property. In this regard, ethical        not prove or even indicate a wrongful act termination to pay or not to pay must
    rules are largely irrelevant (unless the          on the part of the attorney, and criminal con- likewise be based on facts, not emotions.
    fund’s rules specify otherwise).                  viction, disbarment or suspension based on So as bad as we feel about the individual
                                                      failure to repay the note is not likely, short who loses money from a loan to an at-
      If a lawyer accepts a loan of money from        of a really strong case of fraud in the in- torney, protection funds must apply the
    a client and executes a debt instrument           ducement.                                      rules they have been given.
    (note), in favor of the client and subse-
    quently defaults on the note, can the cli-          Where does this leave us? No one can se-           It follows that discipline may be ap-
    ent make a claim for reimbursement?               riously argue that the attorney acted appro-      propriate where a client lacks sophisti-
    Short answer: generally no. Long answer:          priately; this because of the position of         cation, but a payment by a protection
    still generally no, but it may well depend        power enjoyed by the attorney in the trans-       fund would not be. After all, as decision
    on facts that are not clear from the “four        action.2 Surely the client should be repaid       makers for client protection funds, we
    corners” of the transaction. Let’s exam-          by somebody. It’s also true that many, if not     must constantly remind ourselves, as in
    ine the elements required for most funds          most, experts agree that it’s a rare case in-     the case of uninsured attorney malprac-
    to be able to pay the claim: (1) an attor-        volving these facts where it’s appropriate        tice, there will be times when we might
    ney-client relationship (2) a taking of cli-      for a client protection fund to respond with      like to make payment from the fund, but
    ent property by the attorney, and (3) a           repayment. We must remember that the              it is simply not appropriate. Until courts
    terminal determination of attorney                fund is not a guarantor of attorney conduct       and bar associations provide the fund-
    wrongdoing related to the taking (gener-          or ethical behavior where misappropriated         ing and the mandate for comprehensive
    ally in the form of disbarment, suspen-           client funds or property are not involved.        client protection, we can’t be the source
    sion, criminal conviction or civil judg-                                                            of payment for all attorney-client ills.
    ment).                                              In the case of a loan, sadly, at the time the
                                                      attorney uses the funds, they were his or
      For this discussion we can assume an            hers to use, just as they would have been           1 Every fund has a different spin on the
    attorney-client relationship, but can we          had the loan been made by a commercial            issue so I will editorialize only from the
    assume that the relationship is tied to the       lender. Consider your view of our scenario        perspective of my vantage point as a member
                                                                                                        of the State Bar of Montana Fund for Client
    loan or do we even need to? I think it is         if the client involved was a commercial
                                                                                                        Protection and the President of a Lawyers
    safe to say it probably doesn’t matter. In        bank. We would not even be discussing the         Professional Liability Insurer.
    every case I have seen, the only reason           issue where a bank loan was involved.
    that the loan was made was because the            However that same bank has the same                2 This, of course, assumes an
    client trusted the lawyer and wanted to           privilage (note that I did not say “right”) to    unsophisticated client.
    help a trusted advisor out of a financial         make a claim against the fund if the attor-
    situation. In short, these clients are not        ney steals from moneys advanced by the
    generally in the lending business and             bank to an attorney’s trust account as part
    wouldn’t have made the loan but for the                                              : Robert W. Minto, Jr. is a Trustee of the
                                                      of a commercial closing where the attor-
    attorney-client relationship.                     ney is the closing agent.          Montana Fund For Client Protection and
                                                                                         the President and CEO of the Attorney
      Having cleared hurdle #1 we turn to the So why is there is a difference about how Liability Protection Society (ALPS) of
    issue of a taking by the attorney. If we we view the bank and the individual lender? Missoula, Montana

8   The Client Protection Webb      Fall 2003   ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
MJP & Safe Harbors - Safe For Whom?                                                                        MJP and Law
                                    Kenneth J. Bossong                                                    Client Protection
                                                                                                                 Charles Goldberg

           ost jurisdictions are likely consid-      are going to act badly. There will be un-
           ering various concepts of multi-          ethical behavior and malpractice with                             and
                                                                                                                 John S. Gleason
           jurisdictional practice (MJP). What       and without coverage.
follows is just one person’s opinion, but I do                                                         The agenda for NCPO’s workshop in
find some of this stuff scary, from a client-pro-      I am most concerned about what hap-           Las Vegas included an informative pre-
tection standpoint.                                  pens when they steal. Faced with such a
                                                                                                     sentation of the American Bar
                                                     scenario, client protection funds unable to
                                                                                                     Association’s new model rules on the
  Stated simply, the issue is to what extent, if     consider claims against persons not li-
                                                                                                     multi-jurisdictional practice of law.
any, and under what circumstances a lawyer           censed in their jurisdictions have a couple
not licensed in a jurisdiction may neverthe-         of choices, both lousy. Changing their
                                                                                                     Clearly there will be practical problems
less be permitted to practice there. Situations      rules to permit consideration of such           for client protection funds when they are
in which unlicensed lawyers may practice in a        claims greatly increases exposure, with no      confronted by losses caused by “out-of-
jurisdiction have come to be referred to as          additional revenue. While a terrible pros-      state” lawyers, but who are lawfully
“safe harbors”; that is, areas in which it is safe   pect for most funds, the alternative is even    practicing in their jurisdictions pursu-
to operate without fear of prosecution for the       worse: no remedy for their victimized citi-     ant to these “MJP” rules.
unauthorized practice of law.                        zens (other than to leave them to the mercy
                                                     of the fund in the miscreant’s home state).       At the workshop, we suggested that
  The biggest problem with many safe har-                                                            NCPO work on developing a uniform
bors under consideration is their vagueness.           I don’t care how easy or difficult a juris-   model rule to prevent disputes between
Few support the idea that lawyers admitted           diction wants to make it to be authorized       jurisdictions where a lawyer who is li-
in any jurisdiction should be able to just wan-      to practice there. I also don’t care what       censed in State A causes a loss in State
der anywhere they can convince someone to            being authorized to practice is called. For     B, where the lawyer had been admitted
hire them. Not to worry, we are told, practice       those making these tough calls, I do urge       pro hac vice, or had been engaged in
in our jurisdiction by lawyers licensed else-        three basic principles:                         law-practice activities. We propose that
where will be limited to that which is “tem-                                                         NCPO and funds nationwide consider
porary” or “occasional”, or “related” some-             However easy or hard you want to make        a uniform rule modeled after the “most
how to a practice where licensed. Perhaps the        it, and whatever you want to call it, being
                                                                                                     significant relationship” approach set
unlicensed lawyer has some sort of relation-         authorized to practice law in your juris-
                                                                                                     forth in Restatement (Second) of Con-
ship with someone who is licensed, or (one           diction is significant. Who is, and who is
                                                                                                     flicts of Law §§ 6, 145 and 188. We of-
of my favorites) is thinking about asking to         not, so authorized must be known, quickly
be admitted pro hac vice in a matter. Such           and easily.
                                                                                                     fer for study and consideration the fol-
language provides illusory protection, and                                                           lowing:
invites all sorts of mischief:                         Anyone who has the privilege of being
                                                     authorized to practice in your jurisdiction       In claims involving dishonest con-
  q  Enforcement will be problematic, at             ought to be held accountable and respon-        duct by a lawyer who is licensed in
best. It will take years of litigation to find out   sible, at least to the extent of being sub-     State A but is either admitted pro hac
how occasional “occasional” has to be, for           ject to discipline and the annual assess-       vice in State B, or who has rendered
example, if it is enforceable at all.                ment. (The latter presupposes, of course,       legal services pursuant to an attorney-
  q Such “standards” restrain only the scru-         that your fund benefits from the preferred      client relationship in State B where the
pulous. Inevitably, the least scrupulous will        method of financing: an annual assess-          loss to the client has occurred, the loss
be the most brazen in utilizing safe harbors.        ment.)                                          should be borne by the law client pro-
They will do whatever they want, wherever                                                            tection fund where the lawyer is li-
they want, and worry about arguing the defi-           The client protection fund should have        censed and has his or her “principal
nitions of these vague terms in the unlikely         jurisdiction to consider claims based on the    place of business.” An analysis of a
event they ever get caught.                          dishonest conduct of anyone authorized to       lawyer’s “principal place of business”
  q The clients they find, or who find them,         practice law in your jurisdiction.              is to be determined after assessing
are likely to be among the more vulnerable                                                           which state has the most significant
and least sophisticated.
                                                     (Editor’s Note: Keep reading.)                  contacts with the dishonest lawyer.
  q Most MJP schemes have no mechanism
                                                                                                     Among the factors to be considered
for knowing who is taking advantage of the
safe harbors. No one in the regulatory system
has any way of knowing who they are, what                                                             q The domicile of the lawyer;
they are doing, or even that they are out there.      : Kenneth J. Bossong is Executive
                                                                                                      q The residence of the lawyer;
  q The dangers will be brought into bold            Director and Counsel of the New Jersey
                                                                                                      q The number of years the lawyer
relief when things go wrong. While flitting in       Law Client Protection Fund, and NCPO’s
and out of jurisdictions, some of these folks        first President.                                                 continued on page 11 :

                                                                        ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○   The Client Protection Webb   Fall 2003   9
  Message from                                        isting clients that they do not maintain
                                                      malpractice insurance. Although sup-             Archer Anoints
                                                      ported by the National Organization of
  Seattle                                             Bar Counsel, no other ABA entity sup-               Welden
                                                      ported the proposal. Alaska, New

   Editor’s Note: Bob Welden, new Chair of            Hampshire, Ohio and South Dakota                     ennis Archer, President of the Ameri-
   the ABA’s Standing Committee on Client             have adopted amendments to their rules               can Bar Association, has appointed
   Protection, has accepted an invitation to          that require such disclosure.                        Robert D. Welden to serve as Chair of
   author an article of interest for each edition                                                  the ABA’s Standing Committee on Client Pro-
   of The Client Protection Webb. Here’s the                                                       tection for 2003-2004. Welden is General
                                                         As an alternative, the Standing Com-      Counsel of the Washington State Bar Associa-
   first.                                             mittee will propose a Model Rule on Fi-      tion (WSBA), and a former Regional Vice-
                                                      nancial Responsibility, similar to the       President of the National Client Protection Or-

           here’s a lot more to client protec-        ones adopted in Delaware, Michigan,          ganization (NCPO).
            tion than client protection funds.        Nebraska, North Carolina and Virginia.
            Obviously. As an organized bar,           The proposed Model Rule requires law-          The ABA Standing Committee on Client
   lawyers do a lot to protect clients, as evi-       yers to disclose on their annual regis-      Protection, which works closely with
   denced by the fact that every state in the         tration statement whether they maintain      NCPO, provides support for client-protec-
   Union has a client protection fund. True,          malpractice liability insurance or have      tion programs in every jurisdiction in the
   some are stronger than others, but there is        another form of adequate financial re-       United States and Canada. The committee
   at least some recourse when a client is the        sponsibility. This information would be      also examines practice issues concerning the
   victim of a dishonest lawyer.                      made available to the public by the reg-     unauthorized practice of law, model fee ar-
     However, as a profession we have not             istration authority.                         bitration and mediation rules to resolve dis-
   done much to protect clients from the neg-                                                      putes between clients and their lawyers, and
                                                        q Establishment of funds similar to
   ligent, incompetent or disabled lawyer                                                          promotes other client-protection programs.
                                                      client protection funds that would pro-
   who harms clients through malpractice.             vide compensation for some minimal
                                                                                                     Washington was one of the earliest states
   Surprisingly, there has been no study to           level of damage caused by malpractice.       in the United States to champion client pro-
   show whether uninsured lawyers are                 What the limits would be and how             tection, and has had a client-protection pro-
   harming clients, or whether malpractice            claims would be determined have not          gram in place since 1960. In 1992, the
   judgments are not pursued or not collected         been fully discussed, but the idea is that   WSBA and the Washington State Supreme
   because of the lack of professional liabil-        a fund like this would protect clients       Court instituted a mandatory client-protec-
   ity insurance. But client protection fund          from harm where the lawyer had no in-        tion assessment for all its active lawyers.
   trustees and administrators have some em-          surance, or the claim was so small that      “Washington has been a leader in the realm
   pirical evidence that clients are being            the client could not reasonably pros-        of client protection,” said Welden, who has
   harmed. Every year a number of fund ap-            ecute a claim.                               been involved in issues relating to client pro-
   plications are denied on the grounds that            q Mandatory insurance. The reality         tection since 1985, and a member of the
   the application is based on negligence or          is, this is not likely to happen. Oregon     ABA Standing Committee on Client Protec-
   malpractice, and not on dishonest conduct.         is the only U. S. jurisdiction that re-      tion since 2001, “and we have one of the
                                                      quires lawyers in private practice to be     best programs. It is a great privilege to be
     In the brief space of this article I can only    insured, through the Oregon Profes-          appointed to this position.”
   touch on some of the proposals that have           sional Liability Fund. In every other ju-
   been made to address this issue. Maybe,            risdiction in the U. S. where it has been      Welden was a staff attorney for the WSBA
   as some suggest, they are solutions in             proposed, the bar has successfully op-       from 1981 to 1988, and in 1988 became the
   search of a problem, or maybe they reflect                                                      Bar’s general counsel. Prior to coming to
                                                      posed it. The reasons for this can be de-
   one of the great failings of the American                                                       the WSBA, he was in private practice, and
                                                      bated at length. Some call it the bar’s
   legal system. To get some flavor of the de-                                                     staff attorney for Seattle Indian Center Le-
                                                      “dirty little secret” that lawyers are not
                                                                                                   gal Services and the Seattle-King County
   bate on this issue, read the pro and con           required to be insured. They point out       Public Defender’s Office. Since 2002 he has
   statements on the ABA website at                   that in many states you have to be in-       been administrator of the Washington Prac-                 sured to roof a house, manicure a            tice of Law Board, and from 1998 to 2001
   loads/lpl/mandatorydisclosure.pdf.                 poodle, or drive a car, but not to deal      was vice president of the NCPO. He has been
                                                      with the most important legal affairs of     chair of the ABA Advisory Commission on
    Here are 3 approaches that have been              clients.                                     Lawyers’ Funds for Client Protection since
   proposed:                                                                                       1999, and was a member of the ABA Ac-
                                                       We need to think about this, and talk       cess to Legal Services Committee and the
     q Disclosure. The Standing Committee             about it, and argue about it, and see        ABA Task Force on the Model Definition
   on Client Protection proposed an amend-            what needs to be done. And then we           of the Practice of Law. Welden earned his
   ment to Model RPC 1.4 that would require           need to try to do it. See you in New         J.D. in 1970 from the University of Wash-
   that lawyers disclose to prospective or ex-        Orleans.                                     ington.

10 The Client Protection Webb     Fall 2003   ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
MJP and Law Client Protection
6continued from page 9
has been licensed in each jurisdiction;
  q The jurisdiction where the lawyer
                                                       News                     In Brief
                                             ○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○ ○ ○ ○ ○ ○
  q The jurisdiction where the attor-        More Reimbursement in Illinois                    as stealing from clients, saying that that
ney is licensed to drive an automobile;        Eileen Donahue of Chicago reports that ef-      both types of theft constitute very serious
  q The location of the lawyer’s prin-       fective April 1, 2003, the Illinois Client Pro-   violations of the public trust. (Matter of
cipal office;                                tection Program has increased its $10,000         Arcia, 5/29/03)
  q The location where the attorney-         award maximum to $25,000; and its
client relationship arose;                   $100,000 aggregate maximum per dishon-            Open for Business Again in New Mexico
  q The primary location where the le-       est lawyer to $250,000.                             Christine Halter, Director of Member
gal services were to be rendered;                                                              and Public Resources for the State Bar of
  q The place where the loss arose; and      Ditto in Ohio                                     New Mexico, reports that “we are once
  q Any other significant contact.             The Supreme Court of Ohio has approved          again taking claims for the client protec-
                                             an increase in its client protection fund award   tion fund. It is being reinstated as previ-
  Doubtless there are other approaches       limit from $50,000 to $75,000. So reports         ously administered with a cap of $2500
that might be utilized, but we submit that   fund Administrator Janet Green Marbley,           per claimant.” The State Bar’s Board of
a sound conflict of law rule, regardless     who says that the increase was effective on       Commissioners has approved a $50,000
of how it is formulated, should be           August 1, 2003. Also, that the Ohio fund is       allocation to the fund from the State Bar’s
adopted by each state. This is a wonder-     attempting to get in place a trust account        general fund for 2004. The Supreme Court
                                             overdraft rule, and an insurance payee noti-      is considering policy and rule recommen-
ful opportunity for NCPO to take the
                                             fication rule.                                    dations submitted to it by the American
                                                                                               Bar Association. The State Bar closed the
                                             Claims Decline in New York                        fund on January 31, 2003, when the Su-
  (Editor’s Note: President Janet Green
                                               Reimbursement claims to the New York            preme Court refused its request for a $15
Marbley invites readers’ comments and
                                             Lawyers Fund continued to decline in 2002.        lawyer assessment to maintain the fund’s
suggestions on the Goldberg-Gleason
                                             Timothy J. O’Sullivan, the fund’s Executive       solvency.
proposal. E-mail Janet at:
                                             Director & Counsel, cited several reforms in
                                             New York for the downward trend in claims,        Payouts Grow in New Jersey
                                             including the court system’s “bounced check         The Trustees of the New Jersey Law-
                                             rule” and consumer education programs. Af-        yers’ Fund for Client Protection, which is
                                             ter climbing steadily throughout the 1990’s       funded by the Garden State’s lawyers and
                                             to a peak of 625 reimbursement awards in          judges, recently announced $650,695 in
: Charles Goldberg is Chair of the
                                             1997, the number of new awards in 2002            reimbursement awards to law clients of 16
Colorado Law Client Protection Fund,
                                             dropped to 187. The fund provides $300,000        dishonest lawyers. The protection fund
and John S. Gleason is Bar Counsel for
                                             coverage for each eligible loss. Nearly all       provides $250,000 coverage for individual
the Colorado State Bar.
                                             losses resulting from the theft of law client     losses, with a maximum aggregate limit
                                             funds are fully reimbursed.                       of $1 million per attorney.

             Help!                           LawyerTrust Accounts and Medical Liens
                                               The Oklahoma Supreme Court May 27
                                             publicly reprimanded a lawyer who disbursed
                                                                                               Malpractice Insurance Disclosure
                                                                                                 Oregon is the only state which requires
      The Client Protection Webb
                                             settlement proceeds from a personal injury        lawyers to maintain malpractice insurance.
   needs news and feature articles
                                             action without notifying the medical provid-      But recent court rules in Michigan, Ne-
  from every jurisdiction in order to
                                             ers who had a claim on the money, or with-        braska, North Carolina and Virginia re-
          serve its mission as a
                                             out researching controlling law governing the     quire lawyers to disclose annually whether
     meaningful newsletter for the
                                             priority of medical providers’ liens (Matter      they carry malpractice insurance. In Ne-
     client protection community in
                                             of Taylor, 5/27/03)                               braska, Virginia, and North Carolina, that
    the United States and Canada.
                                                                                               information will be available to the pub-
  Remember, the Webb is the only
                                             Getting Tough(er) in Florida                      lic. Michigan is collecting the data for “sta-
        newsletter we have. Items
                                               The Florida Supreme Court suspended for         tistical purposes” says a bar official, and
    needed include rules changes,
                                             three years a lawyer who stole more than          no public disclosure is contemplated. Go-
  examples of difficult claims, your
                                             $62,000 in legal fees that belonged to his law-   ing even further, rules in Alaska, New
   fund’s claims experience, court
                                             firm employer, and announced that hence-          Hampshire, Ohio, and South Dakota re-
    decisions, personnel changes,
                                             forth the theft of law firm funds will carry      quire lawyers in those states to inform cli-
  policy and rule proposals. E-mail
                                             the presumptive sanction of disbarment. In        ents and prospective clients if they do not
   your contributions to the Editor:
                                             the court’s per curiam opinion, the court         maintain minimum levels of malpractice
                                             ranked the transgression on the same plane                       continued on page 12 :

                                                                 ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○   The Client Protection Webb        Fall 2003   11
    ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
                                           In Brief
                                                          disbarred after pleading guilty to stealing
                                                          more than $2.1 million from 17 incapaci-
                                                          tated clients. Fortunately, state law requires
                                                                                                           been struggling with a multitude of un-
                                                                                                           earned fee claims, as well as lawyers loan-
                                                                                                           ing, borrowing and brokering loans for and
                                                          guardianships to be insured, and all victim      from clients. The fund considered a policy
   6continued from page 11                                losses have been covered. Kress’ wine col-       which would deny unearned fee/retainer
   coverage. Stay tuned.                                  lection, which was stored in New Jersey,         claims, but opted for a new policy based on
                                                          was sold at auction for several hundred          the ABA’s Model Rules and others in U.S.
   New Trustees in Maryland                               thousand dollars to repay victims and credi-     and Canadian jurisdictions. Related amend-
     Janet Moss, Administrator of Maryland’s              tors.                                            ments to the Nova Scotia Rules of Ethics
   client protection fund reports three new                                                                and trust account regulations respecting
   Trustee appointments by the Maryland                   Reimbursement Rises in Oregon                    loaning, borrowing and brokering of loans
   Court of Appeals: attorneys Patrick A.                   Sylvia E. Stevens, Assistant General           by lawyers is under consideration.There’s
   Roberson, Cecelia Ann Keller, and Leonard              Counsel of the Oregon State Bar, reports         also a new protection fund up there called
   H. Shapiro. Barbara Ann Spicer, Vice-chair             that the State Bar’s law client protection       the Land Registration Act Compensation
   of the Board, has been elected Chair of the            fund paid $98,664 in reimbursement in            Fund. Created by the Nova Scotia bar in
   Board of Trustees to succeed Richard                   2002. Claims pending at year’s end totaled       partnership with the provincial government,
   Reed.                                                  $108,000. The maximum limit per loss in          the fund’s purpose is to compensate losses
                                                          Oregon is $25,000. The fund is financed          arising from fraud and dishonesty under a
   Progress Continues in Colorado                         by a $5 annual assessment on Oregon’s law-       new Land Registration Act system. Con-
     Charles Goldberg, Chair of Colorado’s                yers. The largest number of claims seek re-      tact Victoria for further information:
   law client protection fund, has co-authored            imbursement of unearned legal fees, and the
   with Alex C. Myers, a third-year student at            largest losses involve the theft of trust and
   the University of Denver College of Law,               estate assets.                                   Full Reimbursement to Massachusetts
   a comprehensive analysis of the Colorado                                                                Victims
   fund’s history, structure, procedures, and             L.A. Law                                           Karen D. O’Toole, Assistant Board Coun-
   experiences.“The Colorado Attorneys’                     The National Law Journal reports that          sel for the Massachusetts law client protec-
   Fund for Client Protection” was published              the District Attorney of Los Angeles has         tion fund reports that the fund’s 2000 An-
   in the November 2003 issue of The Colo-                created a task force that has the exclusive      nual Report has been posted on the fund’s
   rado Lawyer. The fund was established by               assignment of prosecuting lawyers who            handsome new website:
   the Colorado Supreme Court in 1998. Thus               have committed crimes, most often against        ClientsSecurityBoard/.The fund reim-
   far it has reimbursed eligible victims                 their law clients.The three-year old unit has    bursed $1.1 million to 69 eligible law cli-
   $235,141. The fund has a $25,000 maxi-                 thus far won 16 convictions, and has eight       ents in 2002, fully reimbursing nearly every
   mum limit on awards. E-mail Chuck                      cases pending. There are about two dozen         loss.The fund closed the year with 115
   Goldberg for a copy of the monograph:                  open cases under investigation by the three      pending claims, alleging $10.9 million in                              assistant district attorneys who staff the       losses, another new record.
                                                          special unit. The cases prosecuted include
   Last of the Wine                                       the theft by disbarred lawyer Leonard            Reforms in Michigan
     A New York City lawyer who bought a                  Samuels of a $190,000 medical malprac-             Victoria V. Kremski, Assistant Regulation
   bungalow in Hawaii and a world-class wine              tice settlement that alleged a failure to di-    Counsel for the State Bar of Michigan re-
   collection while stealing from the accounts            agnose his client’s stomach cancer.The cli-      ports that the Supreme Court has approved
   of disabled and mentally ill people he had             ent died before Samuels’ trial.                  a $15 annual assessment on each lawyer to
   been appointed to protect as legal guard-                                                               finance the law client protection fund.The
   ian has been sentenced to serve a three to             News from Nova Scotia                            Court has also appointed a special commit-
   nine-year prison sentence. The lawyer was               Victoria Rees reports that her fund has         tee to review all aspects of the fund’s struc-
                                                                                                           ture and operations, including insurance and
                                                                                                           bonding for risks now covered by the fund..
            The Client Protection Webb
    The Client Protection Webb is a public-interest
     publication of the National Client Protection                                                         Impaired Lawyers and Client Protec-
                  Organization, Inc.                                                                       tion
                                                                                                             The ABA’s Standing Committee on Eth-
               Frederick Miller, Editor
                5 Chestnut Hill South                                                                      ics and Professional Responsibility has is-
            Loudonville, New York 12211                                                                    sued Formal Opinion 03-429(6/11/03)
       Telephone and Facsimile: (518) 465-8682                                                             which identifies the obligations of law part-
                                                                                 ners and supervisors when a law firm col-
                                                          The publication of The Client Protection         league develops a mental impairment which
             Designer: Adept Impressions                  Webb is made possible by the generous
                2196 Webster Drive,                                                                        threatens the firm’s clients.
               Schenectady, NY 12309                      underwriting assistance of the Attorneys
              Telephone: 518-372-6533                     Liability Protection Society of Missoula,
                 Fax: 518-382-9392                        Montana.                                                      In Memorium
                                                                                                                   Gilbert A. Webb, Esquire
12 The Client Protection Webb          Fall 2003   ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○