Wisconsin Lawyer
Vol. 75, No. 12, December 2002

OLR Annual Report - Fiscal Year 2001-2002

by the Board of Administrative Oversight & Office of Lawyer Regulation

The Office of Lawyer Regulation (OLR) and Board of Administrative Oversight (board) file annually with the Wisconsin Supreme Court a report of their activities during the preceding year to permit the court, the bar, and the public to evaluate their performance. This is the second report filed under the new lawyer regulation system, which became effective on Oct. 1, 2000. The new system continues to improve its efficiency and effectiveness. Though challenged with a heavy caseload that developed over several years, the system has sufficient capability to meet this challenge and to address current developments in lawyer regulation in a deliberate, comprehensive, and responsive manner.

Lawyer Regulation System Overview

The Wisconsin Supreme Court created the lawyer regulation system to carry out the court's constitutional responsibility to supervise the practice of law and protect the public from misconduct by persons practicing law in Wisconsin. Figure 1 shows the composition and organization of the lawyer regulation system. The court has adopted standards of professional conduct for attorneys. The court confers the privilege to practice law on an attorney conditioned on his or her compliance with those standards.¹ A failure to comply with the court's standards may constitute misconduct or may be evidence of a medical problem.

The OLR director is required to investigate any possible misconduct or medical incapacity of an attorney licensed to practice in Wisconsin.² Communications with the OLR alleging lawyer misconduct are privileged, and no lawsuit predicated on those communications may be instituted against any grievant or witness.³ Attorneys and grievants may consult with and be represented by counsel at any stage of an investigation. Prior to the filing of a formal complaint or petition, all papers, files, transcripts, and communications in an OLR investigation must be kept confidential by the OLR.⁴ The OLR may, however, provide relevant information to the respondent and the grievant.⁵ Although the Supreme Court Rules provide no sanction for disclosure of a grievance by the respondent or the grievant, the OLR requests that those involved in an OLR investigation keep confidential all documents generated by the investigation.

Initially, the OLR staff screens all inquiries and grievances concerning attorney conduct. If the allegations made are not within the OLR's jurisdiction, staff will close the file. If the grievant disagrees with the staff's decision, the grievant may make a written request for the director's review of the closure. The director's decision is final. After preliminary evaluation, staff also may forward the matter to another agency; attempt to reconcile the matter between the grievant and attorney if the dispute is minor; or refer the matter to the director for diversion or investigation. Before or after investigation, the director may divert the matter to an alternatives to discipline program, providing that nothing more than minor misconduct is involved, the respondent agrees, and the respondent is eligible to participate. Alternatives to discipline usually are educational programs or monitoring arrangements that help an attorney improve the quality of his or her practice.

If the grievance sets forth sufficient information to support an allegation of a violation of SCR chapter 20, OLR staff may initiate an investigation. The OLR staff will send a letter to the respondent, enclosing the grievance and requesting a response within 20 days. In most instances, staff will forward the attorney's response to the grievant for comments. When the OLR staff has completed the preliminary investigation, the director will determine whether: 1) an uncontested violation exists; 2) the grievance should be dismissed for lack of merit; 3) further staff investigation is needed; or 4) the matter should be assigned to a district investigative committee for further investigation, pursuant to SCR 22.04(1).

If the grievance is further investigated by staff or a district committee, the respondent and the grievant will be kept advised about the investigation. The committee chair can assign the matter to one of the committee's investigators. Pursuant to SCR 22.04(2), the respondent may request a substitution of a district committee investigator within 14 days of receiving notice of the assignment of the investigator. The respondent shall be granted one such substitution as a matter of right, and any other requests for substitution shall be granted by the committee chair for good cause shown. If the committee decides to take sworn testimony regarding a grievance at an investigative meeting, the respondent and the grievant will receive timely notice of the meeting. Committee members elicit pertinent information from witnesses at such a meeting. In any matter referred to committee, the committee will prepare a report summarizing the facts and potential disciplinary violations. That report will be sent to the respondent and grievant for comment.

After the investigation is completed by staff and/or a committee, the director may dismiss the matter for lack of sufficient evidence of cause to proceed, divert the matter to an alternatives to discipline program, obtain the respondent's consent to a private or public reprimand, or present the matter to the Preliminary Review Committee for a determination of whether there is cause to proceed. In cases in which the director dismisses the matter, the grievant has 30 days after receiving written notice of the dismissal to make a written request for review of the decision by the Preliminary Review Committee. The decision of the Preliminary Review Committee is final.

If, after the investigation is completed, the director does not dismiss the grievance, seek a consent reprimand, or divert the matter, the OLR staff will prepare an investigative report and provide copies to the grievant and the respondent for comment. (In cases in which a district committee investigates a matter, its report will serve as the investigative report.) The grievant and the respondent may submit written responses to the report within 10 days following receipt of the report.

The director may then submit the results of the investigation to the Preliminary Review Committee. The committee determines whether the evidence presented supports a reasonable belief that an attorney has engaged in misconduct or has a medical incapacity that may be proved by clear, satisfactory, and convincing evidence.⁶ If the committee dismisses the matter, the grievant has 30 days after being notified of the dismissal to file a written request for review of that decision. The supreme court will select a referee to review the matter, and the referee's decision is final.

If the Preliminary Review Committee determines that the director has established cause to proceed, the director may file a complaint with the supreme court alleging misconduct. The OLR, rather than the grievant, is the complainant in such a matter. If the director files a complaint, an answer is required within 20 days of service of the complaint. Upon proof of service, the supreme court appoints a referee to hear the matter pursuant to SCR 22.13(3). The referee holds a scheduling conference to define the issues and to determine the extent of discovery. The referee then presides at a public hearing that is conducted as a trial of a civil action to the court.⁷ The OLR must prove misconduct or medical incapacity by clear, satisfactory, and convincing evidence.⁸

Within 30 days after the hearing concludes, the referee will submit his or her report to the supreme court, including findings of fact, conclusions of law, and a recommendation of dismissal or imposition of discipline. The OLR or the respondent may file an appeal of the referee's report within 20 days after the report is filed. If no appeal is timely filed, the supreme court reviews the referee's report and determines appropriate discipline in cases of misconduct and appropriate action in cases of medical incapacity. The court may, on its own motion, order the parties to file briefs. Either the respondent or the OLR may file a motion for reconsideration of the supreme court's decision within 20 days of the filing of the court's decision. The filing of a motion for reconsideration does not stay enforcement of the judgment. The supreme court's final dispositions of disciplinary and medical incapacity proceedings are published in the Wisconsin Reports and in the Wisconsin Lawyer.

The Year in Review

Significant Lawyer Regulation System Developments. Fiscal 2001 efforts focused on implementing the new system. Fiscal 2002 efforts focused on improving the system's efficiency and effectiveness. As system participants have become more experienced, decision-making and efficiency have improved. The new system has a significantly greater capacity than the prior system, due in equal part to the increase in staff and the new central intake procedure. An increasingly higher percentage of matters are being resolved within 90 days and within 180 days than under the prior system.

The increase in the number of matters over a year old, however, has raised considerable concern. This increase is attributable to an increase in the number of grievances over several years not addressed by staffing increases, and the need to implement the new regulation system and train its participants. During this fiscal year, several measures were applied to alleviate this concern, including staff overtime, limited-term employees, and increased district committee referrals. More aggressive measures are in place for next year, such that the number of matters over a year old should be reduced to a minimum.

The supreme court conducted a hearing on petitions to amend the rules relating to the lawyer regulation system on Sept. 20, 2001, and amended the rules on Nov. 14, 2001, and Jan. 23, 2002. On March 12, 2002, the court met with the Board of Administrative Oversight, the Preliminary Review Committee, special investigators, and the Special Preliminary Review Panel to discuss current developments in the lawyer regulation system.

The Preliminary Review Committee reelected attorneys James Wickhem, Janesville, chair, and James D. Friedman, Milwaukee, vice chair. The committee has considered whether cause to proceed existed in 42 matters and has reviewed the director's dismissals in 66 matters. The supreme court increased the committee's membership, adding an attorney member and a public member. In May, the court appointed attorney Michael Anderson, Madison, and Dr. Thomas Radmer, Trevor, to these positions. The committee received educational presentations during its open meetings, and further developed its operating procedures. Committee meetings will continue quarterly.

The Board of Administrative Oversight reelected attorneys William H. Levit Jr., Milwaukee, chair, and Ann Ustad Smith, Madison, vice chair. Attorney Scott Roberts, Stevens Point, was appointed to the board to replace attorney John Holzhuter, who resigned. Subcommittees to study district committees, to establish board priorities, and to review rules proposals continued their work. The board began a program to assess perceptions of the regulation system through a questionnaire that is sent to each grievant and respondent after the grievance is resolved. The response rate is approximately 6 percent for grievants and 8 percent for respondents. While respondents' perceptions generally relate to the grievance outcome, the questionnaire responses provide helpful information. The board will continue to monitor trends in these perceptions.

Also this year, the board has given careful consideration to reducing the number of matters more than a year old. In addition to regular monitoring, the board approved an aggressive plan to reduce the number to minimum levels during this next year. In its budget submission, the board proposed and the court approved funding for six limited-term grievance investigators and two program assistants. The board also supported the director's request for staff overtime and encouraged referring significantly more matters to district committees.

The district committees continue to make a valuable contribution to the system, particularly this year, as the caseload has required referring many more cases than normal. Improvements in training and in information sharing have increased committee effectiveness.

Special investigators and the Special Preliminary Review Panel process matters involving allegations against attorneys who serve with the regular components of the regulation system. During Fiscal 2002, special investigators received 67 referrals and resolved 33 matters. The Special Preliminary Review Panel considered whether cause to proceed existed in three matters and reviewed special investigator decisions to close or dismiss matters in 25 matters. The supreme court modified the special procedures effective April 1, 2002, to more closely parallel the normal process, and added another member to the review panel, Mr. Dennis Gorder, Necedah.

The alternatives to discipline program, which became effective on Oct. 1, 2000, provides an effective way to improve an attorney's ability to practice in accordance with high professional standards. Frequently, this is a more effective measure than professional discipline. The court has authorized diversion to an alternative program in situations where the program will likely benefit the attorney, and where the attorney will not likely harm the public. Alternative programs may include mediation, fee arbitration, law office management assistance, evaluation and treatment for alcohol and other substance abuse, psychological evaluation and treatment, medical evaluation and treatment, monitoring of practice or trust account procedures, continuing legal education, ethics school, and the multistate professional responsibility examination. During the fiscal year, 85 attorneys were diverted to alternative programs.

The central intake program, which became effective on Jan. 1, 2001, receives inquiries and grievances concerning attorney conduct and provides preliminary evaluation of grievances prior to any formal investigation. Inquiries and grievances are now received by telephone; callers may use a toll-free number to contact the OLR. After the preliminary evaluation, the central intake staff may forward the matter to another appropriate agency, attempt to reconcile the matter if it is a minor dispute, close the matter if it does not present sufficient information to support an ethical allegation, or refer the matter for investigation or diversion to an alternative to discipline.

Central intake received approximately 2,400 inquiries and grievances. This represents an increase of approximately 60 percent in matters received compared to the period prior to the program. Of the matters evaluated in central intake during the last six months of the fiscal year, approximately 25 percent were forwarded for formal investigation. Of the 75 percent that were closed without formal investigation, 15 percent involved the resolution of minor disputes or grievances that were withdrawn.

The regulation system is more accessible than in the past. The ability to communicate by telephone with grievants and respondents provides more personal contact and increases the level of satisfaction with the process. Central intake also provides an efficient means to respond to grievances. Decisions whether to close or to formally investigate are made more promptly. As a result, the number and percentage of matters resolved within 90 days and within 180 days have increased.

Overdraft Notification Program

The Overdraft Notification Rule⁹ went into effect on Jan. 1, 1999. The rule requires attorneys to authorize their banks to notify the OLR of overdrafts on their client trust accounts and fiduciary accounts. Information regarding the trust account overdraft program is available from the OLR Web page.

During the 2002 fiscal year, 117 overdrafts were reported to OLR, 14 fewer overdrafts than in the previous fiscal year. Overdraft reports resulted in the commencement of two disciplinary proceedings this year. Those proceedings remain pending. In addition, overdraft notifications have resulted in the following dispositions: diversion - 5; dismissal after investi gation/advisory letter sent - 22; dismissal - 10; closed without investigation/advisory letter sent - 23; and closed without investigation/bank errors - 39.

Beginning this year, the OLR will conduct a trust account management seminar as an alternative to discipline program. The director and overdraft investigator continue to work with the State Bar regarding possible amendments to SCR 20:1.15.

Survey of Matters

Overall Processing. Since the inception of the new system, the number of grievances has increased approximately 60 percent. System capacity also has increased, such that the processing of matters occurs efficiently. There is, however, a significant increase in the number of matters more than a year old that should be resolved during the next year.

The pending caseload is more than 1,200 matters, up from the prior year, and more than the optimal caseload capacity of about 950 matters. Increased referrals to district committees and the hiring of temporary staff should reduce the number to the optimal caseload during this fiscal year.

With the exception of matters more than a year old, the efficiency with which matters are processed is very good. The average processing time was 184 days, which is near the average for the last 10 years. The percentage of matters resolved within 90 days has increased from 44 percent in Fiscal 2000, to 55 percent in Fiscal 2001, to 58 percent in Fiscal 2002. The percentage of matters resolved within 180 days increased from 68 percent in Fiscal 2000, to 70 percent in Fiscal 2001, to 74 percent in Fiscal 2002. These percentages are expected to increase this year.

Grievances. Figure 2 breaks down by category the grievances received between July 1, 2001 and June 30, 2002. In describing the nature of the grievances, only the most serious allegation is reflected. While most grievances allege various acts of misconduct, it is not practical to list all allegations.

The allegations most commonly made in a grievance were lack of diligence by the lawyer entrusted with the legal matter and lack of communication with the client. The two areas of practice that produced the most grievances during the year were criminal law and family law. While clients file the majority of grievances, anyone can file a grievance.

Discipline. In Fiscal 2002, 28 attorneys received a public disciplinary sanction. The supreme court imposed one revocation by consent, 10 suspensions, eight temporary suspensions, and four public reprimands. Referees issued five public reprimands by consent. At the end of the year, 32 formal disciplinary matters were pending in the supreme court. Figure 3 shows the numbers and percentages of attorneys receiving public discipline since Fiscal 1979. Figure 4 shows the type of misconduct found in public discipline decisions.

A referee has authority, under SCR 22.09(3), to issue private reprimands pursuant to an agreement between the director and the attorney. Typically, a private reprimand is imposed for an isolated act of misconduct that caused relatively minor harm. A private reprimand is not imposed if public disclosure of the attorney's misconduct is necessary to protect the public. Private reprimands are retained permanently and are available as an aggravating factor on the issue of sanction if the attorney commits subsequent misconduct.

Summaries of private reprimands, without any reference to or identification of the attorney involved, are printed twice a year in the Wisconsin Lawyer.

During this fiscal year, 21 attorneys received private reprimands. Eighty-five attorneys entered the new alternatives to discipline program and 18 attorneys completed an alternative program.

In Fiscal 2002, there were 2,139 additional dispositions. This category includes matters closed after the initial intake evaluation due to insufficient information to support a misconduct allegation (1,664); dismissals after investigation in cases due to insufficient evidence of a violation (363); matters dismissed with an advisory letter (84); and matters closed pending petition for reinstatement (28).

Reinstatements. During Fiscal 2002, the court completed action on 20 reinstatement petitions, 14 administrative and six disciplinary, after investigations by the OLR and public hearings. (In the past, public hearings were before a district committee. Under the new system, public hearings are before a referee.)

Finances

The legal profession is unique in assuming all costs for regulating itself. An assessment on every member of the State Bar of Wisconsin pays the costs and expenses of the lawyer regulation system, including all the costs and expenses of the OLR, district committees, the Preliminary Review Committee, and the board. To help offset the costs, the OLR collects costs from attorneys disciplined in formal court proceedings and collects fees on petitions for reinstatement. Collections for Fiscal 2002 were $51,839.52.

The budget for Fiscal 2003 is $2,318,000; the assessment is $128.55, up from $124.78 last year. The assessment is in line with assessments in neighboring jurisdictions, somewhat higher than in Minnesota and Iowa, but lower than in Illinois. The assessment is significantly lower than in Colorado, which has a comparable lawyer population and similar programs.

Public Information and Outreach

To promote understanding and confidence in the lawyer regulation system, public information and outreach efforts are ongoing. General information about the lawyer regulation system is available at www.courts.state.wi.us/olr.

The Year Ahead

Next year, the system will be challenged to reduce the number of matters more than a year old; it should meet that challenge as it continues to improve in its efficiency and effectiveness. Efforts to assess perceptions of the system and to evaluate its effectiveness will continue. These efforts will further enhance fairness and effectiveness and promote increased public confidence in lawyer regulation. Finally, the system will begin to consider and address the current issues affecting lawyer regulation, particularly those related to Ethics 2000, an ABA initiative to review the model rules of professional conduct.

Endnotes

¹ SCR 21.15(2).

² SCR 21.03(6)(a).

³ SCR 21.19.

⁴ SCR 22.40(1).

⁵ SCR 22.40(2).

⁶ SCR 22.001(2).

⁷ SCR 22.16.

⁸ SCR 22.38.

⁹ SCR 20:1.15(i) - (p).

Wisconsin Lawyer