Vol. 76, No. 11, November
2003
Regulating the Legal Profession:
OLR Annual Report
This report from the Office of Lawyer
Regulation looks at the disposition of grievances against lawyers from
July 1, 2002 to June 30, 2003.
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 on the lawyer regulation system. This is the third report filed
under the new lawyer regulation system, which became effective on Oct.
1, 2000. This past year, the system made tremendous gains in reducing an
excessive caseload that began to develop in 1996 and persisted during
the transition to the new system. The reduction is nearly complete, and
the caseload should be within normal operating capacity sometime this
fall. The system's efficiency and effectiveness continue to improve
through refinement of policies and procedures.
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. Before 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, or if the allegations are not supported by a
sufficient factual basis, staff will close the file. 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, provided that nothing more than
minor misconduct is involved, the respondent agrees, and the respondent
is eligible to participate. Alternatives to discipline are usually
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. For each 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 (PRC) 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 PRC. The decision of the PRC 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 after they receive the
report.
The director may then submit the results of the investigation to the
PRC. The PRC 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 PRC
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 PRC 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 a 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. Under the new system, a
higher percentage of matters are being resolved within 90 days and
within 180 days.
During Fiscal 2003, the system completed most of the older
investigations. At the beginning of the fiscal year, the total number of
all pending formal investigations was 750; by the end of the year, the
number was down to 479. This number continues to decline. At the
beginning of the fiscal year, the number of formal investigations over a
year old was approximately 400; by the end of the year, the number was
approximately 190. This number also continues to decline. The OLR and
Board of Administrative Oversight are especially appreciative of the
contributions of the district committees and limited term employees,
whose hard work has been instrumental in this year's achievement.
The supreme court met with the Board of Administrative Oversight, the
Preliminary Review Committee, special investigators, and the Special
Preliminary Review Panel on April 11, 2003, to discuss current
developments in the lawyer regulation system. This fall, the court
considered amendments to the trust account rule and several procedural
rules. This year, in response to the ABA Ethics 2000 report, the court
established a committee to review the Wisconsin Rules of Professional
Conduct. The committee will seek comments from the bench, bar, and
public and will recommend changes to Wisconsin rules in the form of a
petition to be filed by October 2004.
The PRC re-elected attorneys James Wickhem, Janesville, chair, and
James D. Friedman, Milwaukee, vice chair. The PRC has considered whether
cause to proceed existed in 86 matters and has reviewed the director's
dismissals in 16 matters. The PRC met specially on two occasions during
the fiscal year and again in July to complete a large number of
investigations. PRC meetings will continue quarterly.
The Board of Administrative Oversight re-elected attorneys William H.
Levit Jr., Milwaukee, chair, and Ann Ustad Smith, Madison, vice chair.
Subcommittees to study district committees, to establish board
priorities, and to review rules proposals continued their work. The
board resolved to recommend retaining district committees, and is
considering improvements in their operations. The board will complete
its study this fall and submit its report to the supreme court by April
1, 2004.
The board assesses perceptions of the regulation system through a
questionnaire that is sent to each grievant and each respondent after
the grievance is resolved. The response rate is approximately 8 percent
for grievants and 12 percent for respondents. While perceptions
generally relate to the grievance outcome, the questionnaire responses
provide helpful information. The board will continue to monitor trends
in these perceptions.
Finally, the board remains aware of several significant policy
initiatives, including Ethics 2000, proposals for licensure of
paralegals, recommendations for improving lawyer regulation system
procedures, and reduction of the caseload to achieve capacity and
timeliness goals.
The district committees continue to make a valuable contribution to
the system, particularly this year. Committees were instrumental in
reducing the number of investigations. Improvements in training and in
information sharing have increased their effectiveness. The OLR
developed a new manual for district committees that is distributed to
each committee member.
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 2003,
special investigators received 37 referrals and resolved 49 matters. The
Special Preliminary Review Panel considered 13 matters: it dismissed 11
matters, found cause to proceed in one matter, and returned one matter
for further investigation. The court appointed six attorneys as special
investigators this year to increase the number.
The alternative to discipline program 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, 128 attorneys were diverted to alternative programs and 85
attorneys completed diversions.
The central intake program receives inquiries and grievances
concerning attorney conduct and provides preliminary evaluation of
grievances before any formal investigation. Inquiries and grievances may
be 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 2,261 inquiries and grievances. This
represents a slight decrease from the prior fiscal year. Of the matters
evaluated in central intake during the fiscal year, approximately 19
percent were forwarded for formal investigation; 12 percent involved the
resolution of minor disputes or grievances that were withdrawn; 2
percent involved diversion programs; and the remaining 67 percent were
closed for lack of sufficient information to suggest an allegation of
potential ethical misconduct.
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. That rule requires attorneys to authorize
their financial and investment institutions 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, www.wicourts.gov/olr.
During Fiscal 2003, 138 overdrafts were reported to the OLR, 21 more
than in the previous fiscal year. Overdraft reports resulted in the
commencement of one disciplinary proceeding this year. In addition,
overdraft notifications have resulted in the following dispositions:
diversion - 26; dismissal after diversion program successfully completed
- 3; dismissal after investigation - 17; dismissal after
investigation/advisory letter sent - 79; closed without
investigation10 - 13; closed without
investigation/bank errors - 32; closed without investigation/bank
errors/advisory letter sent - 10; closed pending reinstatement
proceedings - 2.
The advisory letters sent during Fiscal 2003, some of which included
more than one advisory, related to the following issues and record
keeping deficiencies: bank procedures/delays in posting transactions -
14; availability of funds for disbursement - 32; lack of maintenance
account - 21; lack of proper endorsement - 5; deposit slip errors - 9;
check errors - 5; check stubs/inadequacy as a check register - 14;
signatory authority on trust accounts - 6; failure to confirm wire
transfers - 5; failure to maintain canceled checks - 5; computer
software deficiencies - 10; subsidiary ledger deficiencies - 9;
impropriety of credit card transactions - 1; lack of running balances in
register and ledgers - 12; other - 7.
The OLR staff presented two half-day seminars on trust account
management in conjunction with diversions. Trust account management also
was covered at the OLR's Professionalism Seminar, another diversion
program, in November 2002.
The director and the overdraft investigator, with assistance from the
State Bar and the Wisconsin Bankers Association, completed work on
proposed amendments to SCR 20:1.15. In December 2002, the OLR and the
State Bar filed a joint petition with the Wisconsin Supreme Court
seeking the adoption of a new trust account rule. The court ordered a
public hearing on the petition for September 2003.
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. The reduction of the caseload is almost
complete.
The pending caseload is slightly more than 1,000 matters, down from
the prior year, and more than the optimal caseload capacity of about 870
matters. Increased referrals to district committees and the hiring of
temporary staff were effective in reducing the caseload. It is expected
that the caseload will be reduced to the normal capacity this fall.
The efficiency with which matters are processed is very good. The
average processing time was 240 days, which is abnormally high because
of the unusually large number of older investigations that factored into
that statistic this year. On the other hand, the percentage of matters
resolved within 90 days and 180 days remained high, 50 percent and 73
percent respectively, and should increase significantly next year.
Grievances. Figure
2 breaks down by category the grievances received between July 1,
2002 and June 30, 2003. In describing the nature of the grievances, only
the most serious allegation is reflected. While most grievances allege
more than one act of misconduct, it is not practical to list all
allegations.
The allegations most commonly made in grievances 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. (See Figure
2.)
Discipline. In Fiscal 2003, 46 attorneys received
public disciplinary sanctions. One attorney was sanctioned twice. The
supreme court imposed two revocations, three revocations by consent, 17
suspensions, six temporary suspensions, two summary suspensions, and two
public reprimands and dismissed two disciplinary matters. Referees
issued 15 public reprimands by consent. At the end of the year, 46
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 types 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 may be considered as an aggravating factor on the issue
of sanctions 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, 32 attorneys received private reprimands.
One hundred twenty-six attorneys entered the alternatives to discipline
program and 85 attorneys completed an alternative program.
Other dispositions included: matters closed after the initial intake
evaluation due to insufficient information to support a misconduct
allegation (1,880); dismissals after investigation in cases due to
insufficient evidence of a violation (184); dismissals with an advisory
letter (120); and matters closed pending petition for reinstatement
(21).
Reinstatements. During Fiscal 2003, the court
completed action on 24 reinstatement petitions, 17 administrative and
seven disciplinary, after investigations by the OLR and public
hearings.
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
2003 were approximately $50,000.
The budget for Fiscal 2004 is $2,201,000, down from $2,318,000 last
year. The assessment is $123.12, down from $128.55 last year. The
assessment is in line with those of neighboring jurisdictions - somewhat
higher than in Michigan and Iowa, the same as in Minnesota, and 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 of 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.wicourts/olr.
The Year Ahead
Next year, the lawyer regulation system will finish the caseload
reduction, and consolidate the OLR in Madison. Consolidation enhances
the management of the OLR's responsibilities and increases the
investigative capacity of the system by eliminating redundant overhead.
The lawyer regulation system will remain accessible to the public
through the central intake telephone procedure. The system also will
remain in contact with locations throughout the state through its
district committees. Significant work will continue on the district
committee study, the trust account management program and trust account
rule, and the Wisconsin Ethics 2000 Committee study of ethics rules.
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).
10All 13 overdrafts involved
collection matters and problems inherent to debt collection.
Wisconsin Lawyer