Wisconsin Lawyer
Vol. 75, No. 11, November 2005

Regulating the Profession:
Office of Lawyer Regulation - Annual Report 2004-2005

Sidebars:

• Lawyer Regulation System Composition

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 fifth report filed under the new regulation system, which became effective on Oct. 1, 2000. This past year, the system met standards on intake evaluations, maintained pace with formal grievance investigations, and increased the number of matters pending in litigation. Progress was made on several important policy issues, including trust account rule amendments, timeliness of proceedings in cases involving interim suspensions, assessment of costs in disciplinary cases, and management of district committee investigations. Finally, the Professional Discipline Compendium became available online, providing free public access through the OLR Web site, at www.wiscourts.gov/olr.

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, if 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 the 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 must 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. The system maintained pace with its caseload this year. At the end of the fiscal year, there were a total of 393 formal investigations, up from 389 at the end of last year. Central intake maintained its timeliness standards throughout the year. The number of formal investigations pending over 11 months remains high. Special efforts will be made this year to achieve timeliness standards for formal investigations.

The average processing time for intake matters improved from 60 days last year to 54 days this year; this is an appropriate amount of time. The average processing time for formal investigations improved from 426 days last year to 391 days this year; this must be improved. Overall average processing time improved from 185 days last year to 170 days this year.

The percentage of matters completed within 90 days increased from 64 percent last year to 71 percent this year. The percentage of matters completed within 180 days increased from 76 percent last year to 81 percent this year.

The supreme court met with the Board of Administrative Oversight, the PRC, special investigators, and the Special Preliminary Review Panel on April 6, 2005, to discuss current developments in the lawyer regulation system. This year, the court heard a petition by the Wisconsin Ethics 2000 Committee for changes to the Rules of Professional Conduct for Attorneys. The court also established time limits in interim suspension cases, and improved the management and operations of the district committees.

The PRC re-elected attorneys James Wickhem, Janesville, chair, and James Friedman, Milwaukee, vice chair. The PRC has considered whether cause to proceed existed in 421 matters and has reviewed the director's dismissals in 11 matters. The PRC met quarterly during the year and will continue to meet quarterly.

The Board of Administrative Oversight re-elected attorneys William H. Levit Jr., Milwaukee, chair, and Ann Ustad Smith, Madison, vice chair. The board met quarterly and considered and made recommendations concerning the assessment of costs in disciplinary cases and the timeliness of proceedings in interim suspension cases. The board continues to monitor carefully the processing of matters and the effective use of district committees.

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 11 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.

The district committees continue to make a valuable contribution to the system and were instrumental in resolving matters requiring a depth and breadth of legal and other professional expertise. While referring matters to committee involves a significant commitment of time and talent, the results are beneficial and worth the commitment. Improvements in training and in the management of cases have increased their effectiveness. This year, the court increased the composition of public members on the committees from one-third to two-fifths. The chairs met with the director in May to discuss improvements in operations.

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 2005, special investigators received 33 matters and resolved 38 matters. The Special Preliminary Review Panel considered no matters for cause and seven matters on review.

The alternatives 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 in which the program will likely benefit the attorney and in which 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 and 102 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 2,105 inquiries and grievances. There has been an average 4 percent decrease in the number of grievances filed in each of the last three fiscal years. Of the matters evaluated in central intake this fiscal year, approximately 18 percent were forwarded for formal investigation; 10 percent involved the resolution of minor disputes or grievances that were withdrawn; 5 percent involved diversion programs; and the remaining 67 percent were closed for lack of sufficient information to suggest an allegation of potential ethical misconduct.

Overdraft Notification Program

The Overdraft Notification Rule⁹ went into effect on Jan. 1, 1999. That rule requires attorneys to authorize their financial 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 2005, 104 overdrafts were reported to the OLR, 28 fewer than the previous fiscal year. Overdraft notifications have resulted in the following dispositions during this year: five month suspension¹⁰ - 1; temporary suspension for noncooperation¹¹ - 1; diversion - 15; dismissal after diversion program successfully completed - 12; dismissal after investigation - 8; dismissal after investigation/advisory letter sent - 37; closed without investigation/collection account exception - 2; closed without investigation/real estate exception/advisory letter sent - 1; closed without investigation/bank errors - 19; closed without investigation/bank errors/advisory letter sent - 3; closed pending reinstatement proceedings - 1.

The advisory letters sent during Fiscal 2005, some of which included more than one advisory, related to the following issues and record keeping deficiencies: availability of funds for disbursement - 12; bank procedures/delays in posting transactions - 3; maintenance account (to cover bank charges) - 4; deposit slip errors - 1; lack of proper endorsement - 6; signatory authority on trust accounts - 2; failure to maintain canceled checks - 10; transaction register/subsidiary ledger deficiencies - 36; check stubs/inadequacy as a transaction register - 4; computer software deficiencies - 2; commingling - 2; prohibition against electronic transactions (credit card/telephone/internet) - 3; other - 6.

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, on Nov. 5, 2004. The OLR's trust account program administrator also presented several CLE programs regarding the new trust account rule. Finally, during the year, the OLR director and trust account program administrator worked with the State Bar in drafting proposed amendments to the new trust account rule.

Survey of Matters

Overall Processing. The pending caseload is 855 matters, up from the prior year, consistent with an increase of matters in litigation, and within the system's caseload capacity of about 870 matters. The efficiency with which matters are processed is very good. The average processing time was 170 days, faster than last year and better than the five-year average. Also, the percentage of matters resolved within 90 days and 180 days increased, to 71 percent and 81 percent respectively, and should increase again next year.

Grievances. Figure 2 breaks down by category the grievances received between July 1, 2004 and June 30, 2005. 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, lack of communication with the client, and misrepresentation or dishonesty. The two areas of practice that produced the most grievances during the year were criminal law and family law. It is important to point out that while clients file the majority of grievances, anyone can file a grievance. (See Figure 2.)

Discipline. In Fiscal 2005, 39 attorneys received public disciplinary sanctions. The supreme court imposed two revocations, four revocations by consent, 17 suspensions, 19 temporary suspensions, two summary suspensions, one medical suspension, and 11 public reprimands, and dismissed two disciplinary matters. Referees issued four public reprimands by consent. At the end of the year, 148 formal disciplinary matters were pending in the supreme court, up from 52 last year. 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, 16 attorneys received private reprimands. The supreme court issued four private reprimands. Eighty-five attorneys entered the new alternatives to discipline program and 102 attorneys completed an alternative program.

Other dispositions included: matters closed after the initial intake evaluation due to insufficient information to support a misconduct allegation (1,653); dismissals after investigation in cases due to insufficient evidence of a violation (80); dismissals with an advisory letter (54); and matters closed pending petition for reinstatement (15).

Reinstatements. During Fiscal 2005, the court completed action on 26 reinstatement petitions (22 administrative and four disciplinary).

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 PRC, 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 2005 were approximately $171,761.40.

The budget for Fiscal 2006 is $2,413,000, up from $2,398,000 last year. The assessment is $132.66, the same as last year. The assessment is in line with those of neighboring jurisdictions. 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.gov/olr.

The Year Ahead

The lawyer regulation system will make special efforts to achieve its timeliness goals for formal investigations. Significant work will continue toward improvements in ethics rules and system procedures. During the year, the supreme court will give considerable attention to the proposals of the Wisconsin Ethics 2000 Committee and may order significant changes in the rules sometime during the year.

Endnotes

¹SCR 21.15(2).

²SCR 21.03(6)(a).

³SCR 21.19.

⁴SCR 22.40(1).

⁵SCR 22.40(2).

⁶SCR 22.001(2).

⁷SCR 22.16.

⁸SCR 22.38.

⁹SCR 20:1.15(h), formerly SCR 20:15(i) - (p).

¹⁰Included condition of two years of trust account supervision following reinstatement.

¹¹Due to database error, this suspension was not included in the FY 2004 OLR Annual Report. It is included here to address that omission.

Wisconsin Lawyer