Communicating a law firm’s services. Ethics.
By Robert Perez – Reprinted with permission of WASHINGTON CRIMINAL DEFENSE
The Rules of Professional Conduct for lawyers in each state typically preclude a lawyer from making false or misleading statements regarding their services. In Washington, RPC 7.1 provides:
A lawyer shall not make a false or misleading communication about the lawyer or the lawyer’s services. A communication is false or misleading if it contains a material misrepresentation of fact or law, or omits a fact necessary to make the statement considered as a whole not materially misleading.
California RPC 1-400 (D) provides:
A communication or a solicita tion (as defined herein) shall not:
(1) Contain any untrue statement; or
(2) Contain any matter, or present or arrange any matter in a manner or format which is false, deceptive, or which tends to confuse, deceive, or mislead the public; or
(3) Omit to state any fact necessary to make the statements made, in the light of circumstances under which they are made, not misleading to the public… .
In February of 2011, WACDL member Michael Brodsky was cold-called by a representative of the Terani Law Firm, a Beverly Hills law firm that advertises — heavily — its availability to represent clients in 46 states on virtually any crime. The firm called to solicit his participation in a subcontracting arrangement with an unnamed client who needed representation for a serious felony charged in a county serviced by Brodsky.
According to Brodsky, the Terani representative explained that the firm had been retained by the defendant and they were seeking local counsel to represent him. She stated she was not calling to have Brodsky associate on the case or have him act as local counsel for Terani to appear pro hac vice, but to be the primary counsel on the case. She explained that they had been paid a fee of $6,500 and would pay local counsel $2,300 for “pre-trial” representation only. Brodsky told her he would consider it, but smelled a rat.
The proposal seemed wrong on a number of levels. First, while Brodsky is clearly a highly qualified and competent criminal defense attorney, he had no idea how Terani would know this. It appeared to him they just looked him up on the Internet. There was no interview and no request for credentials or references; they didn’t even ask if he had the knowledge and experience to handle a felony.
Second, it appeared that Terani was proposing a 65% finder’s fee for merely setting up the representation and doing nothing else. There was no plan for Terani to be involved in any appearances, any review of discovery, or any substantive participation in the case whatsoever.
Third, like many attorneys, Brodsky was uncomfortable accepting a case on a “pre-trial” basis only. While many of us occasionally structure our fee agreements to include a separate trial fee, Brodsky’s practice limits this to the rare case where a settlement is highly likely and it is understood that the trial will involve a far more intensive effort than the parties contemplate at the time the fee is paid. Brodsky was also concerned that accepting a matter on a “pre-trial” basis would naturally place an additional financial burden on his client should he wish to assert his Constitutional right to trial. And the “take-it-or-leave-it” sound of such a proposal bothered him. In the event his client wanted a trial, he would then presumably be expected to go back to Terani, who would then then take another exorbitant “finder’s fee” to hire the same lawyer and pay that lawyer a similarly small percentage of that fee to handle the rest of the case.
So, what kind of fee agreement did Terani propose with Mike Brodsky?
Terani’s “Attorney Procedures for New Case Assignment” states in paragraph 3: “Attorney should introduce himself/herself as ‘calling from the Terani Law Firm’ to ensure client is not confused in any way.” In other words, the attorney is directed to lie to the client since the attorney is clearly not a member of the firm and is not “calling from the Terani Law Firm.” This is not a good way to begin an attorney-client relationship. Does this violate RPC 7.1 or RPC 1-400 regarding the duty to refrain from making any “untrue” or “misleading” statements regarding the attorney’s services? Let’s see: it’s a statement. Check. At worst it’s untrue, at best it’s misleading. Check. It is directly relating to the attorney’s services. Check. Mate.
Of course, Brodsky declined to accept the matter and went on without ever even learning the client’s name. Then, a few months later he received an inquiry from a referral service to which he subscribes. It was a client looking for representation on a serious felony in a nearby county. Sound familiar? Yes, it was the same client. Not surprisingly, Brodsky reports, the client had been summarily dumped by the attorney Terani arranged to take the case after the client rejected the plea-as-charged “offer.” When Brodsky disclosed to the client all of these facts, the client went ahead and hired him to represent him on the still pending felony matter. Brodsky took the case, took it to trial, and secured an acquittal from a jury. Happy ending? Mostly, but there’s more.
After the case was over, the client wrote to Terani requesting a refund. Brodsky reports that they never even responded. Bar complaints were filed in both Washington and California alleging, among other things, that a $4,200 finder’s fee cannot be considered reasonable on these facts. After all, Terani did nothing but broker the attorney client relationships. And confuse the client.
One might reasonably ask: why would someone charged with a crime in Washington hire a law firm based in California? To begin with, the client was confused by the website which claims offices around the country (some appear to be just mailboxes). Second, like many of our clients, the client was wholly inexperienced in criminal matters (his acquittal supports this) and had no clue how important it is to work with local counsel who know the environment.
On May 8 of this year, Brodsky received a letter from the California State Bar informing him that the grievance against Michael Dayan Terani had been dismissed. The Bar found that Terani did not owe the client a refund because their fee agreement made clear that the scope of representation was “for pre-trial representation only.” They don’t appear to have addressed the issue of whether the fees charged were “reasonable” (perhaps that’s just a Washington thing). They did however issue a “Warning Letter” to Terani calling for changes to his practice regarding “the Terani Law Firm’s website, advertisements, and new case assignment procedures.” As a member of the California Bar since 1977, I am professionally embarrassed and appalled that my home state essentially endorses an arrangement like this. I would like to think that Washington State would have had a different take on the matter but, because the client was not timely in responding to requests for more information (didn’t check his mail while he was in trial), the Washington Bar grievance eventually was also dismissed. So Terani goes on soliciting attorneys they don’t know, to handle cases they don’t work. And they get 65% for doing it.
In the end, this client got the good representation that he sought, and received a just result in court, even though he had to pay three different lawyers to get it. Fortunately, he wound up with the best one.
Robert Perez is a member of the WACDL Board of Governors.