Oregon State Bar Bulletin — MAY 2011

Speaking Ill of the Dead
This is my first letter to the editor, so I’ll keep it short. I am appalled that three of the 11 attorneys identified as culprits requiring awards from the Client Security Fund were dead before any investigation occurred regarding their role in alleged client “victimization” (“Client Security Fund: 2010 Annual Report,” February/March 2011).

The article stated that such “awards are made from the fund only if there is evidence of dishonesty... (and are available) ... to clients who are victimized by dishonest attorneys.” (Emphasis added).

I’m glad that the fund exists, and I can understand the potential benefits incurred in exposing living attorneys who, after having an opportunity to respond to such charges, are found to have victimized their clients. Identification of such rascals is good “PR” — lending an aura of transparency to bar functions and acts as a warning to other (living) attorneys who may be tempted to commit similar crimes and misdemeanors.

However, since the dead cannot speak for themselves it is considered boorish in most civilized societies to speak ill of the dead. I would suggest that this would particularly be true for previously trusted colleagues and friends who leave behind widows and children entitled to think well of their deceased kin. These dead lawyers could not participate in their own defense or confront their accusers. And while it is good that, under such circumstances — where harm is clearly proved — that the aggrieved client be compensated, publicly smearing a dead man’s reputation serves no positive function.

Let the dead rest in peace, for God’s sake.

Greg Smith, Salem

Beware the Pitfalls of Equity Financing

In the Parting Thoughts column, “Equity v. Debt” (Bulletin, February/March 2011), my former professor Jeffrey Standen suggests an interesting equity-based approach to financing a legal education, as an alternative to debt financing. Before future lawyers set out to seek venture capital for their education, they would be wise to consider Rule 5.4 of the Rules of Professional Conduct which restricts the sharing of attorney fees with a nonlawyer and specifically prohibits a lawyer from practicing with or in a professional corporation in which a nonlawyer owns any interest therein. Under this rule, students who turn to equity financing could later find themselves unmarketable for the practice of law.

Of course Rule 5.4 does not prohibit a lawyer from granting an equity stake in their career to another lawyer, but a law school professor who makes an equity investment in his or her student could be subject to allegations of grade bias.

Notwithstanding these and other potential pitfalls, a careful and regulated approach to equity financing of law careers could very well benefit students, law schools, the profession and the public in the ways suggested by professor Standen. Among other potential benefits, equity financing opportunities could also lead new students to quickly learn a great deal about corporate law!

Kassim Ferris, Portland

Jeffrey Standen responds: The student surpasses the teacher. Mr. Ferris is correct that funding legal education with an investment rather than a debt obligation lets the camel’s nose under the tent, albeit in a small and defensible way, on the bigger issue of public ownership of law firms. At that point Rule 5.4 stands in the way. Notably, other businesses which market expert advice, such as investment banks, have gone public, successfully. It is far from clear that it is in clients’ interests that law firms sell legal advice exclusively and be lawyer-controlled. Nevertheless, as Mr. Ferris suggests, equity financing could be structured to preclude investor control, maintaining the lawyer’s functional independence.

Evening the SCORE

The story on Consumer Law (“Looking Out for the Little Guys,” April 2011) prompts this letter about a serious but easily corrected problem for consumers: businesses that take advantage of a gaping loophole in our commercial laws to hook people into monthly contracts with stiff early cancellation penalties without ever disclosing the full price that the consumer will wind up having to pay under the contract to avoid the penalty.

I have drafted a proposed law in response called “Service Contracts Oughta Reveal Everything,” or SCORE. SCORE would still let businesses charge whatever they want to for early cancellation penalties — provided the buyer knows, up front, what the total of payments (including equipment fees, service fees, taxes, connection fees, setup fees, and any other imposed charges) that must be made under the contract to avoid the penalty are.

Sadly, several people with responsibilities and influence in this area have warned me that, while SCORE is fair and easily complied with, big business that rely on relentless advertising, hyped teaser rates and unreadable “mice type” disclosures will never permit it to become law. In other words, I’ve been told that the Oregon Legislature is so captive to business lobbyists that even a pure disclosure law that doesn’t limit early cancellation fees at all still hasn’t a prayer.

I’m not ready to be that cynical, so I want to keep pressing the case for SCORE. I invite any Oregon State Bar members who would like to help to contact me at John@JohnGearLaw.com.

John Gear, Salem

More Trials Not Necessarily for the Better

I read Richard Birke’s article “The Case for Trials” in the April 2011 issue of the Bulletin, but I do not understand what his point is.

Many of us have known for years that big firm lawyers do not try cases. We have wondered for years why clients involved in litigation hire firms that do not try cases. I have always said that I would rather have a lawyer experienced in the district attorney’s office try a case for me than a big-firm civil lawyer. Of course trying cases makes one a great experienced trial lawyer able to engage in credible negotiations based on trial experience.

However, the reasons advanced by Birke (expense, risk and unpredictable jurors) for settling cases remain. Are we to sacrifice a client’s interests (without the client’s informed consent) to those unpredictable factors so that we can gain civil trial experience? Obviously not.

I disagree with Birke’s suggestion that a lawyer who uses mediation to orate and attempt to try to persuade an opponent of the risks of not settling does a disservice to his or her client. That is what mediation is all about. A mediator cannot decide anything. He/she can point out risk.

If a lawyer’s posturing at mediation costs him/her credibility that is something that the mediator or the lawyer’s opponent can point out. If a lawyer needs trial experience, he/she should volunteer at the district attorney’s or public defender’s office. Some civil cases have to be tried, but more civil trials for the sake of having more civil trials is not the answer.

Peter M. Appleton, Salem

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