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    Wisconsin Lawyer
    December 01, 2001

    Wisconsin Lawyer December 2001: OLR Annual Report - Fiscal Year 2000-2001

    CapitolOLR Annual Report
    Fiscal Year 2000-2001
    Regulating the Legal Profession


    The new lawyer regulation system became effective on Oct. 1, 2000. This first report from the Office of Lawyer Regulation looks at the disposition of grievances against lawyers from July 1, 2000 to June 30, 2001, and presents an overview of the OLR's structure and responsibilities.

    by the Board of Administrative Oversight & Office of Lawyer Regulation

    The Office of Lawyer Regulation (OLR) and Board of Administrative Oversight (board) files 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 first report filed under the new lawyer regulation system, which became effective on Oct. 1, 2000. The new organizations are formed and functioning. The new central intake and alternatives to discipline programs have been established and are working well.



    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. 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, the 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. 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 90 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 a copy 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 90 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 conclusion of the hearing, 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 decision by the court. 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. Figure 1 depicts the organization of the lawyer regulation system.

    The Year in Review

    Implementation of the New Lawyer Regulation System. Fiscal 2001 saw the most dramatic change in lawyer regulation in Wisconsin in more than 20 years. In September 2000, the supreme court completed its review of lawyer regulation in Wisconsin by establishing a new system through complete revision of Chapters 21 and 22 of the Supreme Court Rules, which became effective on Oct. 1, 2000.

    The Preliminary Review Committee was organized on Nov. 3, 2000; it elected attorneys James Wickhem, Janesville, chair, and James D. Friedman, Milwaukee, vice chair. The committee has considered whether cause to proceed existed in 11 matters, and has reviewed the director's dismissals in 51 matters based upon grievant requests. The committee will continue to meet quarterly.

    The Board of Administrative Oversight was organized on Dec. 15, 2000; it elected attorneys William H. Levit Jr., Milwaukee, chair and Ann Ustad Smith, Madison, vice chair. Significant board actions during the year included approval of the lawyer regulation system budget for Fiscal 2002; appointment of a district committee study subcommittee that developed a three-year plan for studying the district committees; appointment of subcommittees on priorities and rules review; and development of a program for monitoring the fairness, productivity, effectiveness, and efficiency of the regulation system. In addition, the board studied proposals for amendments to the Supreme Court Rules relating to the regulation system, and considered means to assess perceptions of the bar and the public concerning the integrity of the lawyer regulation system. The board meets quarterly.

    The district committees continued intact from the prior regulation system; nevertheless, the implementation affected them. The chairs met to consider the changes in district committee responsibilities resulting from the new system and to identify means to improve the cooperative investigative efforts of the committees and the OLR staff. In addition, the training of new district committee members has been redesigned to account for new procedures, to focus more on investigative tasks, and to use an interactive training approach. The OLR plans to make the training more accessible than in the past by conducting sessions at various times and locations throughout the year.

    The special panels, a new feature in the new regulation system, were organized in January and May, and are processing matters involving allegations against attorneys who serve with the regular components of the regulation system. In Fiscal 2001, 22 matters were referred to the Special Investigative Panel. As of the end of the fiscal year, none of these matters were yet concluded.

    In addition to creating a new structure, the court established two important new programs within the OLR. The first, the alternatives to discipline program, became effective on Oct. 1, 2000. By authorizing this program, the court has provided 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 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, 27 attorneys were diverted to alternative programs.

    The second new program, Central Intake, became effective on Jan. 1, 2001. Central Intake provides for the receipt of inquiries and grievances concerning attorney conduct, and for the preliminary evaluation of grievances prior to any formal investigation. Inquiries and grievances now are received by telephone. Previously, grievances were required to be in writing. 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.

    From January through June, Central Intake received about 1,200 inquiries and grievances. This represents a significant increase in matters received and indicates that the lawyer regulation system is now more accessible. Moreover, 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 dispose of matters. From January through June, Central Intake disposed of about 1,000 matters. Of these, about 150 were forwarded for formal investigation, four were forwarded to another agency, three were diverted to an alternative to discipline, and 57 minor disputes were resolved. The other matters were closed because the grievance did not involve an ethical violation or because there was insufficient evidence of a violation. The preliminary evaluation process now allows the staff to determine much more efficiently whether a matter should be formally investigated, closed, or resolved another way.

    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. A separate telephone line, (414) 227-4492, was designated for inquiries relating to the program.

    During the 2001 fiscal year, staff nearly completed work on the trust account database that was created to store information regarding overdrafts and information obtained from attorneys regarding their trust and fiduciary accounts.

    Staff responded to more than 270 telephone contacts from attorneys relating to concerns about trust account rules, overdrafts on trust accounts, and overdraft reporting requirements. During the period of June 11 to June 30, 2001, staff responded to an additional 89 inquiries regarding the 2001 State Bar dues certification statement.

    During Fiscal 2001, 131 overdrafts were reported to the OLR, which resulted in the following dispositions: temporary suspension - 1; diversion - 1; dismissal with caution - 1; dismissal after investigation/advisory letter sent - 6; dismissal - 5; closed without investigation/advisory letter sent - 14; and closed without investigation/bank errors - 25.

    The director and overdraft investigator continue to work with the State Bar Professional Ethics Committee regarding concerns relating to the interpretation of SCR 20:1.15. In response to a joint petition from the State Bar and the OLR, the supreme court clarified SCR 20:1.15(a) and (g). In Order No. 01-06 of April 11, 2001, the court stated, "[a] lawyer must certify all trust accounts and safe deposit boxes in which the lawyer deposits clients' funds or property held in connection with a representation or held in a fiduciary capacity that directly arises in the course of or as a result of a lawyer-client relationship." The OLR and State Bar Professional Ethics Committee will consider revisions to SCR 20:1.15 to address additional concerns that have arisen relating to the interpretation of the rule.

    Survey of Matters

    Overall Processing. Fiscal 2000 and 2001 were years of transition. While the rate at which new matters were received increased significantly from the average pace of the past eight years, efforts to develop and to implement the new lawyer regulation system somewhat diverted staff efforts. Nevertheless, now that the implementation is complete, productivity and efficiency are very much improved under the new system. Some concerns remain; these will be carefully monitored.

    Although the Central Intake staff operated during only the latter half of Fiscal 2001, the lawyer regulation system as a whole made a significant accomplishment in improving its productivity and efficiency over prior years. The system received 1,951 matters this year, an increase of 28 percent over last year and 37 percent over the average of the previous eight years. In addition, the system resolved 1,698 matters this year, an increase of 32 percent over last year and 21 percent over the average of the last eight years. The average matter processing time improved slightly from the prior year. This halted an upward trend and kept processing time close to the average for the past eight years.

    Trends in the number of pending matters, and the number of matters more than one year old, merit continued attention. Central Intake appears to be resolving matters or referring them for investigation more quickly than in the past, with an increase in matters closed within 90 days and within 180 days. Over time, this should tend to reduce the number of matters pending more than one year. However, should the number of new matters received increase substantially in the future, this trend would be mitigated or negated.

    Grievances. Figure 2 breaks down by category the grievances received between July 1, 2000 and June 30, 2001. 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 filed 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 2001, 37 attorneys received a public disciplinary sanction. The supreme court imposed five revocations, 12 suspensions, eight temporary suspensions, two indefinite suspensions, and three public reprimands. BAPR and referees issued seven public reprimands by consent. The court dismissed two proceedings. At the end of the year, 16 formal disciplinary matters were pending in the supreme court. The number of attorneys receiving public discipline increased from the prior year, but remains slightly below the average number for the past eight years. 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, 10 attorneys received private reprimands. This number is significantly less than last year because 27 matters that typically might result in a private reprimand were diverted to an alternative to discipline program.

    Fourteen attorneys received dismissals with caution by BAPR in Fiscal 2001. This disposition occurred in cases where there was a violation of a supreme court rule, but no discipline was warranted. Typically, a caution was issued for a technical violation of a rule that caused no harm to a client or other person. Since Oct. 1, 2000, this disposition is no longer available.

    In Fiscal 2001, there were 1,167 additional dispositions. This category includes matters closed after the initial intake evaluation due to insufficient information to support a misconduct allegation (631); dismissals after investigation in cases due to insufficient evidence of a violation (456); matters dismissed with an advisory letter (68); and matters closed pending petition for reinstatement (12).

    Reinstatements. During Fiscal 2001, the court completed action on 20 reinstatement petitions, seven administrative and 13 disciplinary, after investigations by the OLR and public hearing. (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, Preliminary Review Committee, and Board of Administrative Oversight. 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 2001 were $60,320.69.

    The budget and the assessment for Fiscal 2002 are $2,102,700 and $124.78, respectively. In each of the past two budget cycles, the budget increase has been 17 percent. This is principally due to the establishment of the Central Intake program, which operated for half of Fiscal 2001 and will operate for all of Fiscal 2002. The assessment increase was 11 percent last year and 24 percent this year, because reserves that were available to apply toward the assessment last year are not available this year. The assessment is in line with assessments in neighboring jurisdictions, somewhat higher than Minnesota and Iowa, but lower than Illinois. The assessment is significantly lower than in Colorado, which has a comparable lawyer population and similar programs.

    Other Matters

    Public Information and Outreach. Due to the transition to the new lawyer regulation system, public information and outreach became more prominent. During the year, the OLR gave 28 presentations relating to the new system to groups such as the State Bar and several of its member entities, eight local bar associations, law firms, and various professional organizations.

    In addition to making public presentations, the OLR provided articles for The Third Branch and Wisconsin Lawyer and updated and improved the information available from its Web page.

    Case Compendium. This year the vision of the State Bar and the Board of Attorneys Professional Responsibility for a comprehensive compendium of Wisconsin professional discipline cases became reality. Professional Discipline of Wisconsin Attorneys: A Compendium was published in February 2001. The compendium includes court cases, court reprimands, and consensual reprimands, and indexes materials by rule, area of practice, and topic. The compendium is available in circuit court libraries statewide and may be purchased from the State Bar.

    The Year Ahead

    This past year was a time for implementing a new program. The year ahead will be a time for evaluating and improving the new system. The Supreme Court has invited comments concerning Chapters 21 and 22 of the Supreme Court Rules, and held a public hearing Sept. 20-21, 2001. The interest and support of the Bar and the public has been integral to the successful implementation of the system and will remain vital to the system's continued success.

    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).


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