Create Discipline Systems That Engender Trust and Respect:

The failures of the Texas attorney discipline and client compensation systems.

Texas Lawyer - September 15th, 2003

By James C. Turner and Suzanne M. Mishkin

A Dallas construction worker paid $2,000 to a Texas lawyer who then failed to pursue his auto accident claim, but when the worker contacted the State Bar of Texas for help, he says he was told to go to small-claims court, according to an Aug. 21, 2000, article in The National Law Journal, a Texas Lawyer affiliate. When he later learned that the Texas Client Security Fund was available to him, the construction worker only received 50 cents on the dollar for the money he paid to his lawyer, who was subsequently disbarred, under the fund's 50 percent cap in fee rip-off cases.

The case is just one example of the failures of the Texas attorney discipline and client compensation systems. With woefully limited funding ($250,000 annually for the Client Security Fund), arbitrary caps on awards ($5,000 for fee cases, $30,000 for other individual claimants), and a maze of procedural red tape, these lawyer-controlled systems do not adequately protect consumers from attorneys who commit unethical misconduct.

There is no question that additional resources could help. But more dollars alone will not put real teeth into the discipline system, end the continual delays or restore lost public confidence in our ability to hold unethical lawyers accountable. These problems are more deep-seated and demand a more radical response than simply throwing money at the system and hoping for the best.

And Texas is not alone. Across the country, attorney discipline systems fail to protect the public from lawyers who abuse their trust. Plagued by inadequate resources and hamstrung by secrecy requirements, discipline systems yield a tiny trickle of disbarments, suspensions and reprimands. The resulting public mistrust is a black mark against all in our profession.

Last fall, HALT, a public interest group working to improve access and accountability in the civil justice system, completed a comprehensive evaluation of discipline systems in all 50 states and the District of Columbia, using data compiled by the American Bar Association and our own state surveys. We then graded states' performance in six key areas: adequacy of discipline imposed, publicity and responsiveness, openness of the process, fairness of disciplinary procedures, public participation and promptness.

Our report cards confirm a nationwide pattern of toothless sanctions, unnecessary secrecy, biased procedures and endless delays. Of the 51 jurisdictions, 39 (including Texas and Oklahoma) earned a C-minus or lower, 21 (including New Mexico) received D's or lower and Pennsylvania and North Carolina outright flunked.

In state after state, HALT found that most complaints are not investigated or are dismissed on technicalities. When discipline is imposed, it often takes the form of a private admonition or closed-door reprimand. In 2000, 114,000 complaints were filed against the nation's 1.2 million lawyers. Of those, only 3.5 percent led to formal discipline, and just 1 percent resulted in disbarment. Four states - Delaware, Nevada, New Hampshire and Wyoming - did not disbar a single attorney. In 10 other states, only a single attorney was voluntarily disbarred. Is it any wonder then that a 2002 Columbia Law School survey found that more than two-thirds of Americans do not think lawyers are even "somewhat honest?"

With better communication technology, publicity about lawyer discipline services has improved slowly, but many states remain stranded in the dark ages. About half said that they do not publicize their discipline services in the phone directory. And such states as Alaska, Arkansas, Delaware, Kentucky and North Dakota post no information about their discipline systems on the Internet. Even states with Web sites do not necessarily provide good information. New York, for example, is splintered into six different decentralized agencies. If an individual from Long Island attempts to access information about the local disciplinary agency, he or she is directed to a site about lawyers licensed in the Hudson Valley.

Attorney discipline proceedings frequently are secret hearings where a panel of lawyers sits as judge and jury. In every jurisdiction but Iowa, lawyers have a majority voice on these panels. About one-third of states do not provide for any lay participation. In many, injured consumers are forced into silence by gag rules that threaten fines or jail time for talking about a complaint or its outcome. Even states without gag rules often try to restrain speech, urging complainants to keep their grievances confidential.

Justice delayed may be justice denied, but it is par for the course in attorney discipline cases. Even the state that earned our highest grade - Massachusetts with a B-minus - took an average of 681 days to issue formal charges and well more than two years to impose discipline. In Washington state, it took one victim 13 years to get an incompetent lawyer suspended.

An Unkept Promise

In Texas, despite the dedicated efforts of the chief disciplinary counsel, the system is a case study in what goes wrong. With inadequate funding and arbitrary limits, the Texas Client Security Fund is one of the nation's weakest compensation systems, paying out less than $6 per licensed attorney (in contrast to New Jersey's $50 and New York's $45 per lawyer).

But the problem is not just one of inadequate compensation. All too often the discipline system seems designed to protect attorneys rather than the public. With limited nonlawyer representation on grievance committees (two-third attorney membership), extensive delays (while the Texas bar does not report timeliness data, individual cases have taken two years or more for discipline to finally be handed down) and appeals for the accused lawyer at every step, only the most committed complainant will see the process through to completion.

And the actual disciplinary output reflects this unlevel playing field. The ABA's most recent statistics show that most complaints filed against Texas lawyers are summarily dismissed; only 32 percent are actually investigated. Less than 1.5 percent of complaints result in disbarments and less than 5.4 percent in suspensions. Finally, more than 6 percent result in a mere slap-on-the-wrist in the form of a private reprimand.

Unfortunately, in Texas, as in the rest of the country, our profession's promise to protect the public from those who abuse their license to practice law is not being kept.

Clients injured by attorney misconduct have few meaningful alternatives. In Texas, victimized clients cannot sue lawyers for professional misconduct under the state's Deceptive Trade Practices Act, because a loophole in the law excludes "professional service, the essence of which is the providing of advice, judgment, opinion, or similar professional skill." (Texas Business & Commerce Code 17.49.)

Similarly, legal malpractice suits usually are not viable options. Outside the major metropolitan areas, it is almost impossible to find attorneys willing to take these cases; lawyers simply do not want to sue other lawyers. And unlike medical and other malpractice claims, clients victimized by lawyers must prove that absent their attorney's misconduct, they would have won their underlying case - a burden of proof almost impossible to meet.

Client security funds also offer little help. Like Texas, many other states pay only lip service to client protection with compensation funds that are effectively neutered by arbitrary limits and inadequate funding. Consider California, where the fund only will reimburse a token $35 regardless of the loss. Or Illinois, where the total annual payment for all claims is $100,000 - less than $1.35 per attorney. Worst of all is New Mexico, where the fund has simply gone bankrupt. Nine other states have hidden all information about their funds, and numerous others offer only incomplete data.

These problems are anything but new. In 1970, an ABA blue-ribbon committee, led by then-retired U.S. Supreme Court Justice Tom Clark, conducted a thorough review of the nation's attorney discipline system and found a "scandalous situation" that required "immediate attention." Ultimately, the Clark committee itemized 36 specific defects, including deliberate efforts to discourage any publication of information about disciplinary activities.

Twenty-two years later, a second ABA panel led by New York University Dean Robert McKay, reported that the public has a "growing mistrust" of lawyer discipline. The McKay commission concluded that the practice of allowing bar officials to control state disciplinary systems was perceived as a gross conflict of interest. The commission memorably criticized attorney discipline as "too slow, too secret, too soft and too self-regulated."

Five Reforms

Sadly, little has changed. To correct the entrenched nationwide pattern of laxity, secrecy, bias and delay, five fundamental reforms are needed.

With better resources, complaints could be given the attention they deserve. Greater nonlawyer participation would remove the taint of the old boys' network. Expanded openness would begin to restore public confidence. More even-handed procedures would bring much-needed fairness. Deadlines that are enforced would finally stop the endless delays. In sum, these reforms could help replace an abject failure with a system that actually protects consumers.

Unfortunately, many in the profession resist these changes. Some oppose dues increases, although more revenue is essential. Others claim that nonlawyers are not sufficiently informed about the profession to make disciplinary decisions, despite the fact that jurors with no special expertise regularly decide equally sophisticated questions. Some assert that more open and streamlined procedures could serve to damage the reputation of innocent attorneys - a morally bankrupt approach that protects lawyers first and consumers second, if at all. And still others complain that prompt deadlines give them insufficient time to develop defenses, despite the fact that time limits routinely are enforced in every other administrative and judicial proceeding imaginable.

Remarkably, some opponents of reform seem to believe that by sweeping ethics problems under the rug, they somehow protect the broader reputation of the profession. But all who practice law have a shared interest in creating a discipline system that investigates promptly, deliberates openly, and weeds out unethical or incompetent attorneys. By addressing long-recognized failures, we can create a discipline system that engenders consumer trust and respect, rather than alienation and resentment.

After three decades of neglect, can we do less?


James C. Turner is executive director and Suzanne M. Mishkin is associate counsel of HALT Inc., a Washington, D.C.-based, nonprofit, nonpartisan public interest group (www.halt.org).


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