2014 Ethics and Discipline Update

2014 Ethics and Discipline Update Barbara M. Seymour Deputy Disciplinary Counsel I. II. III.

2013 - 2014 Opinion Summaries Recent Rule Revisions & Proposals 2013-2014 Annual Report on Lawyer Discipline

I. 2013 - 2014 Opinion Summaries Criminal Conduct (1) Matter of Allmon. Lawyer closed a loan for his wife (purchaser) and a client (developer). His wife did not have the required $15,000 down payment, so lawyer and the developer agreed to an 'exchange of services' rather than payment. Lawyer misrepresented the transaction to the lender by stating on the settlement statement that the down payment had in fact been made. Lawyer pled guilty to making a false and fraudulent statement to a federal agency (HUD). He was sentenced to five years' probation and restitution to the lender. Definite suspension of one year, retroactive, plus costs and Ethics School, by agreement. Note that Lawyer is not eligible for reinstatement until all of the terms of his sentence, including probation, are completed. (Op.#27350, January 15, 2014) (2) Matter of McAuley. Lawyer was charged with and pled guilty to misconduct in office by a public official. While employed as a full-time public defender Lawyer represented clients who were not financially qualified to receive a public defender. In addition, she accepted funds from non-qualified clients whom she represented. Lawyer was suspended for eighteen months, retroactive to her interim suspension, by agreement. She must complete the Legal Ethics and Practice Program Ethics School within twelve months of her reinstatement. (Op.#27399, June 18, 2014) Dishonesty & False Swearing (3) Matter of Massey. Lawyer falsely represented the residence of a child in an affidavit filed in connection with a custody case. Lawyer had a disciplinary history that included a prior disciplinary suspension and admonition. Public reprimand, plus costs and Ethics School. (Op.#27409, July 2, 2014) (4) Matter of Taylor. In responding to a disciplinary complaint by a domestic client, Lawyer fabricated several letters to the client and submitted them to ODC in an effort to establish diligence and adequate communication in defense of the grievance. He also submitted an affidavit to the Family Court that falsely claimed more attorney's fees than the client actually incurred. In an unrelated matter, Lawyer failed to diligently pursue service of a divorce complaint on his client's husband, failed to respond to the client's calls, and closed his office without notice to the client and without formally withdrawing as counsel. Disbarred, retroactive, by agreement. (Op.#27425, July 30, 2014) (5) Matter of Peper. After only three months at the Bar, Lawyer filed a petition with the Probate Court to be substituted as trustee for a family trust, which held some stocks and a residence. Lawyer's childhood friend was the sole beneficiary. 2

Lawyer exaggerated his experience and qualifications in his petition to the court. During the three years Lawyer served as trustee, the stocks were converted to cash to provide support to the beneficiary. During this time, Lawyer also provided financial assistance to the beneficiary from his own pocket. After two years, Lawyer deeded the residence from the trust to himself and encumbered it with a mortgage, the loan proceeds from which he used for his own benefit. Although Lawyer paid no consideration for the property and the beneficiary intended to retain an interest during his lifetime, the documents Lawyer prepared reflected payment of $50,000.00 and no life estate or other retained interest. When Lawyer petitioned to terminate the trust, he failed to advise the court that he had transferred ownership of the property to himself, which was in direct contravention of the court's order of appointment. In an unrelated matter, Lawyer accepted a nursing home case he was not yet competent to handle. Lawyer failed to move the case forward and then referred the matter to a more experienced colleague in his building just three months before the expiration of the statute of limitations. Although the clients consented to the referral, they understood that the two attorneys would be working together. Lawyer failed to clarify for the clients or the associated counsel that he was withdrawing from the representation. Neither Lawyer nor associated counsel filed suit before the statute of limitations ran. Public reprimand, plus costs, Ethics School, Trust Account School, and Law Office Management School, by agreement. (Op.#27441, September 3, 2014) Neglect of Client Matters (6) Matter of Hughes. Lawyer neglected an estate matter, in spite of a show cause order, an extension, and two reminder letters from the judge. After a second show cause order, Lawyer was held in contempt of court. The Lawyer had previously received three letters of caution and an admonition. Public reprimand, by agreement. (Op.#27331, November 27, 2013) (7) Matter of Jones-Burgess In seven domestic cases, two adoption cases, and two disability cases, Lawyer failed to adequately communicate with her clients, failed to diligently pursue their legal matters, and failed to inform her clients that she was closing her law office as a result of illness. In some of these cases, Lawyer failed to hold unearned fees in trust and failed to refund those fees upon closing her office. Lawyer also failed to respond to disciplinary inquiries. Lawyer's disciplinary history included a letter of caution, a confidential admonition, and a deferred discipline agreement. Definite suspension for twelve months, retroactive, plus costs and restitution, by agreement. (Op.#27349, January 15, 2014) (8) Matter of Lorenz. Lawyer conducted a real estate closing on behalf of a client but did not pay off the client's mortgage or record the deed in a timely manner. Shortly after the closing, Lawyer closed her practice and moved to Georgia without providing her new contact information to the title insurance company or the South Carolina Bar Attorney Information System. Lawyer owed the title company $4,533.24 in title insurance premiums on approximately twenty-five (25) closings. Lawyer did not respond to investigative requests from ODC. Disbarred, retroactive to the date of her interim suspension, by agreement. (Op.#27378, April 9, 2014) Misappropriation and Other Trust Account Violations 3

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Matter of Reynolds. Lawyer's bank reported an overdraft on his trust account. The overdraft was the result of Lawyer's misappropriation of approximately $3,000.00. Lawyer acknowledged substance abuse and entered into a deferred discipline agreement. Lawyer failed to comply with certain terms of the agreement, including submitting reports regarding compliance with a Lawyers Helping Lawyers contract, completing LEAPP, and abstaining from alcohol. The Commission on Lawyer Conduct renewed the deferred discipline agreement and extended it for two additional years. Lawyer again failed to file the required reports and resumed consumption of alcohol. The second agreement was terminated. Definite suspension for nine months, plus costs, blood testing, LHL contract, and medical treatment, by agreement. (Op.#27332, November 27, 2013) (10) Matter of Walker. Lawyer represented a client in a personal injury claim. He had a medical provider's lien against settlement proceeds. After numerous requests by the medical provider to Lawyer, he responded that he had dropped the case and was no longer representing client. After collection efforts were made, client told the medical provider that the claim had been settled and produced a letter from Lawyer stating the bill had been paid and a copy of the cancelled trust account check. Lawyer admitted he had not paid the medical provider, had misappropriated the $1,880 owed and fabricated the check. It was later discovered that Lawyer had failed to pay the medical provider for liens against settlements for a number of years. He provided an affidavit admitting he misappropriated the $353,000 he owed the medical provider and a Confession of Judgment for the same amount. Additionally, Lawyer failed to comply with a prior agreement for discipline in which he was required to provide monthly trust account reconciliation reports, bank statements and financial records for one (1) year. The submissions were incomplete and included fictitious entries. Disbarment with costs and restitution to the medical provider. (Opinion #27338, December 11, 2013) (11) Matter of Miller. Lawyer agreed to hold $91,000 in trust for a workers' compensation client. Lawyer misappropriated the funds, depleting his trust account to $75. Over time, Lawyer disbursed about half of the money to the client from his law firm operating account. Ultimately, Lawyer paid the client back all the money taken. In an unrelated matter, Lawyer misappropriated $67,687 from a real estate refinance, resulting in foreclosure on the client's property. Further, Lawyer deposited his personal funds into his trust account to avoid tax liability. Lawyer did not maintain an accounting of those funds and failed to keep required financial records. Complaints arose from various other matters, including failing to diligently pursue a civil matter for a client and failing to pay a fee disputes award. In addition, Lawyer failed to cooperate in the disciplinary investigation and provided false information to disciplinary authorities. Disbarred, retroactive, plus costs, reimbursement to the Lawyers' Fund, and a full accounting and restitution, by agreement. (Op.#27342, January 2, 2014) (12) Matter of Williams. Lawyer misappropriated funds from a number of estates for which he served as personal representative. In connection with several of those matters, Lawyer attempted to disguise his conversion of estate funds by filing false accountings and making false representations to the probate court. In one of the cases, Lawyer had drafted the will and had the client execute it in his hospital bed, although he could no longer speak or sign his name. The Court held that Lawyer engaged in a business transaction with a client because the will named Lawyer as 4

the PR and set a commission for him. Lawyer failed to make the required conflict disclosures and obtain the required consent. Lawyer further exacerbated his problems by making false statements during the ODC investigation, concealing evidence, continuing to practice law after interim suspension, failing to cooperate with the Court-appointed trustee, and attempting to remove funds from his trust account after it had been secured by the trustee. Disbarred, not retroactive, plus costs, reimbursement to the Lawyers' Fund, and a full accounting and restitution, by agreement. (Op.#27361, March 5, 2014) (13) Matter of Hoffman. Lawyer was hired to assist with the administration of a trust. He entered into a fee agreement and required his client to pay $5,000 as a retainer with the fee agreement stating, "[t]his initial deposit is nonrefundable, paid in exchange for the Attorney's agreement to represent client." He deposited the check in his trust account on a Friday and transferred the funds to his personal account on Monday even though he had not earned the entire fee and his fee agreement was insufficient for him to treat it as an advanced fee earned upon receipt under Rule 1.5(f), RPC, Rule 407, SCACR. Client's check was returned for insufficient funds. The bank reported to the Commission on Lawyer Conduct that a check for $5,000 had been presented on lawyer's trust account and there were insufficient funds. Client sent Lawyer $3,000 which she thought would leave her ahead in payments. She then decided she did not need any further service and asked Lawyer for an invoice and refund of unearned fees. Lawyer told client he had earned the $3,000, was entitled to the full $5,000 plus additional costs, and that Client was subject to criminal prosecution for writing the bad check. In response to ODC, Lawyer was unable to provide adequate financial records and acknowledged that he failed to create and maintain many of the records required by Rule 417, SCACR. He stated that he had a minimal number of transactions in his trust account and used it like a savings account. He did not have an operating account. Public Reprimand and complete the South Carolina Bar's Legal and Ethics Program. Lawyer is also required to file copies of specific trust account records with the Commission on Lawyer Conduct for one (1) year. (Opinion #27388, May 28, 2014) (14) Matter of Swanner. Lawyer practiced as a solo practitioner for approximately fifteen years. For several years his spouse and other non-lawyer staff did the monthly reconciliation and financial recordkeeping of his trust account. Lawyer did not review any of the accounting reports. In 2010, Lawyer's spouse discontinued doing her accounting work for the firm. From that time forward, Lawyer failed to conduct any monthly reconciliations of his trust account. Lawyer's practice was primarily workers' compensation and personal injury. His routine practice was for a non-lawyer staff person to deposit the settlement checks in the trust account, and prepare the disbursement statement and trust account checks and enter them into the accounting software. The Commission on Lawyer Conduct was alerted by the bank when Lawyer negotiated three handwritten trust account checks payable to himself totaling $6,500. ODC's investigation reflected a number of negative client ledger balances, an arrearage of $42,000 and on fourteen occasions, trust account checks written to himself totaling $59,485.12. Lawyer states that the checks were issued outside normal procedures because of urgent needs for funds and the unavailability of the non-lawyer assistant and he believed he had sufficient earned fees in the trust account to cover the checks. The accounting problems including ledger shortages and accounting and transition errors were not 5

discovered because Lawyer was not conducting the required reconciliations. Lawyer also arranged for his father to loan funds to his clients that would be paid back at the time the client's claims were resolved. Promissory notes were drafted including interest rates but missing important terms necessary to protect the client's interests. Lawyer also did not get informed consent to the conflict of interest as required by Rule 1.7(b), RPC, Rule 407, SCACR. In a separate matter, Lawyer failed to timely file a Request for Review with the Commission after the denial of a workers' compensation claim. Definite suspension for two (2) years, attend Legal Ethics and Practice Program Ethics School and additional monitoring conditions. (Opinion #27389, May 28, 2014) (15) Matter of Rivers. For six years, Lawyer knowingly permitted his law partner to use client funds to cover misappropriation from the law firm trust account for a period of six years. Lawyer and his partner routinely settled claims without client consent, signed client names to checks and releases, lied to clients and lienholders about the status of case and disbursements, and used client funds to pay for the operation of the law firm including the partners' salaries. As a result of the partner's suicide and the lack of adequate financial records, the extent of the defalcation is unknown; however, the Lawyers' Fund for Client Protection received more than $5,000,000.00 in claims. Lawyer pled guilty to federal mail fraud charges and awaits sentencing. Disbarred, plus restitution, by agreement. (Op.#27414, July 16, 2014) (16) Matter of Davidson. A disciplinary investigation was instituted on a complaint that Lawyer improperly paid a debt directly from earned fees in his trust account. The ensuing investigation revealed that Lawyer failed to reconcile multiple trust accounts for several years. He also did not maintain the required financial records. When Lawyer left his practice and the state, he had unreconciled accounts, unpaid outstanding checks, undisbursed and unidentified client funds, and negative ledgers balances. Disbarred, plus accounting, restitution, and costs, by default. (Op.#27432, August 13, 2014) Conflicts of Interest (17) Matter of Papa. Lawyer had a long term relationship with Mr. and Mrs. Doe and handled both personal and business legal matters for them. After Mr. Doe died in 2002, Lawyer held life insurance proceeds in his trust account for Mrs. Doe. Throughout 2003, 2004 and 2005 Lawyer collected legal fees from funds held in trust for Mrs. Doe for a variety of legal matters that he handled. In the course of managing Mrs. Doe's funds held in trust Lawyer invested in multiple real estate projects in which he had a financial interest. Lawyer neither disclosed the conflict of interest related to these transactions nor obtained her informed consent. Lawyer did not maintain accurate records of transactions involving Mrs. Doe's funds and could not provide an accounting due to a lack of adequate recordkeeping. Lawyer failed to comply with the recordkeeping and reconciliation requirements of Rule 417, SCACR. Suspension for three (3) years and payment of costs. Attend Legal Ethics and Practice Program Ethics School. (Op.#27339, December 11, 2013) Unauthorized Practice of Law (18) Matter of Berger. Lawyer is licensed to practice law in Florida and not in South Carolina. In two cases Lawyer solicited clients in South Carolina and represented 6

clients in separate legal matters before the courts of this state. Each of the clients was facing foreclosure. In the first case the client did an internet search to find a lawyer and completed a mortgage modification form on a website. Lawyer sent the client a letter offering assistance. Lawyer assured the client that they would have local counsel. The client paid a $1,500 retainer and agreed to have the law firm deduct a monthly fee from their bank account. Over the next six months, the client was unable to reach any lawyer in the firm or local counsel. A date was scheduled for the sale of the house with information about the procedures necessary for filing an appeal. The client ultimately hired new counsel. For close to a year, Lawyer continued to make monthly drafts from the client's bank account for attorney's fees. The second matter was also a foreclosure case in which the clients paid a $1,500 retainer and agreed to have a monthly draft from their checking account. The same month a foreclosure hearing was held. No one from Lawyer's law firm appeared and a default judgment was entered. A motion for reconsideration and to reinstate the loan was prepared by the law firm but no one appeared on behalf of the client and the home was sold. For six months Lawyer continued to draft $750 from client's bank account for attorney's fees. Lawyer failed to respond to ODC, failed to answer Formal Charges or show up for a hearing and is deemed to have admitted the factual allegations. Since Lawyer is not admitted in South Carolina, the Court permanently debarred him from seeking any form of admission to practice law in this state without first obtaining an order of the Court allowing him to seek admission. Lawyer was ordered to reimburse all fees and costs in these matters to the clients. (Opinion # 27377, April 9, 2014) Ex Parte Communication (19) Matter of Nelson. While Lawyer was employed as an assistant solicitor, his cousin was called for jury duty in a criminal case being prosecuted by another assistant solicitor. Lawyer was aware that his cousin was in the jury venire, but assumed that the cousin advised the court of his relationship during voir dire. When Lawyer learned that his cousin was selected to serve on the jury, he took no action to inform the prosecutors, the court, or the defense counsel. During the course of the two-week trial, Lawyer was in contact with the cousin via telephone and text message more than two dozen times. After the close of the state's case, the defense attorney learned that Lawyer's cousin was serving on the jury. When questioned by the defense counsel, the prosecuting attorney, and later by the trial judge (on two occasions), Lawyer gave false information regarding the extent of his contact with the cousin while he was serving on the jury. The cousin was excused. The investigation also revealed that the trial judge texted Lawyer while Lawyer was seated in the courtroom observing the trial. According to Lawyer, he and the trial judge were friends and texting with the judge was not uncommon. Suspension for six months, retroactive, plus costs and LEAPP, by agreement. (Op.#27327, October 23, 2013) Advertising and Solicitation (20) Matter of Defillo. Lawyer licensed in Florida only opened a law office in Greenville to handle federal immigration matters. This practice is authorized by the Rules of Professional Conduct; however, Lawyer's website advertised for state law matters. Lawyer's letterhead, business cards, and print advertising disseminated in South Carolina failed to fully comply with the advertising rules, including holding out as 7

having associates, using prohibited words, and failing to identify geographical limitations on her law practice. Bar to admission, by default. (Op.#27431. August 13, 2014) (Motion for reconsideration pending.) Failure to Comply with Supreme Court Rules and Directives (21) Matter of Collie. Lawyer is the plaintiff in a lawsuit with an appeal pending at the Supreme Court. At oral arguments in that case, the Court advised Lawyer and her counsel that Lawyer did not have an active email account registered with the Attorney Information System (AIS) as required by Court rule. Lawyer is also the respondent in a pending public disciplinary proceeding. In connection with that matter, the Supreme Court Clerk wrote repeatedly to Lawyer instructing her to update her AIS profile with a working email address. Lawyer failed to comply. In addition, Lawyer filed several motions with the Court related to the pending disciplinary matter. The Court denied these motions and issued an order finding that Lawyer's eight filings attempting to address the merits of the disciplinary proceeding constituted abuse of legal process and enjoining further filings until the matter was before the Court. Within a month of that order, Lawyer filed three additional motions, which the Court refused to accept. As a result of Lawyer's persistent refusal to comply with its directives, the Court, placed her on interim suspension. (Shearouse Adv.Sh. No. 45, Order dated October 17, 2013) (22) Matter of Smiley. Lawyer failed to timely comply with multiple requests for information and documentation from ODC in connection with several disciplinary matters. Two of those investigations revealed misconduct, including failing to maintain required financial records and accidentally entering a plea in a traffic case without the client's consent. Public reprimand and Trust Account School by agreement. (Op.#27426, July 30, 2014) Non-Disciplinary Opinions of Interest (1) Imputed Disqualification Based on Lateral Hire. Lawyer was lead counsel for the defendant in a copyright infringement case. Law Firm represented the plaintiff. Lawyer withdrew from the case and became a partner at Law Firm. The defendant moved to disqualify Law Firm as the plaintiff counsel, citing Lawyer's conflict of interest. Law Firm argued that ABA Model Rule 1.10 allows the firm to continue the representation of the plaintiff in the case as long as Lawyer is "screened." Court disqualified Law Firm from the case and pointed out that the screening provision of the ABA Model Rule 1.10 has not been adopted in South Carolina. (H&C Corp. v. Puka Creations LLC. 2013 BL 283297, DSC No. 4:12cv-00013-RBH, October 11, 2013) (2) Arbitrator's Conflict of Interest. Lawyer served as arbitrator in connection with a construction case. Lawyer issued an award favorable to the plaintiff. The defendant subsequently learned “by happenstance” that an employee of the plaintiff was the brother of one of the arbitrator's law partners. The circuit court judge granted the defendant's motion to vacate the arbitration award based on the arbitrator's failure to disclose his law partner's familial relationship with an employee of a party. The ruling was based on the legal standard of "evident partiality" set forth in the South Carolina Code of Ethics for Arbitrators, which requires disclosure of any relationship that “might reasonably create an appearance of partiality or bias.” The Supreme Court rejected the appearanceof-bias standard in favor of the standard impliedly set forth in the SC arbitration 8

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statute, which requires proof that "a reasonable person would have to conclude that an arbitrator was partial to the other party to the arbitration." (Crouch Const. Co., Inc. v. Causey, 405 S.C. 155, 747 S.E.2d 482 (2013)) Appeal of Order Denying Disqualification of Lawyer is Interlocutory. Lawyer represented Employer in various employment and labor law matters from 2002 to 2004. In 2011, Employer sued Employee for breach of contract. Employee retained Lawyer to represent her in defense of the lawsuit. Employer filed a motion to disqualify Lawyer, which was denied. Employer appealed. The Supreme Court held that an order denying a motion to disqualify an attorney for a conflict of interest is not immediately appealable. (EnerSys Delaware, Inc. vs. Hopkins, 401 S.C. 615, 738 S.E.2d 478 (2013)) Terminating the Attorney-Client Relationship. Joel, a Georgia lawyer, employed Glover, a South Carolina attorney, to run an office here. Tuten hired Joel to handle her SC car wreck case. When Joel decided to leave the SC market three years later, Glover agreed to continue to handle some of the firm's existing SC cases, including Tuten's. Five months later, Glover filed a complaint for Tuten on the day before the statute of limitations expired. Neither Glover nor Joel served the pleadings or took any further action on Tuten's behalf. The case was ultimately dismissed. The jury in Tuten's malpractice case awarded $275,000.00 against both Joel and Glover. In his appeal, Joel argued that his representation of Tuten ended when he closed his SC office and Glover continued the representation at her own law firm. The Court of Appeals disagreed, finding that there was no evidence that Joel took any action to end his attorney-client relationship with Tuten, including failing to notify her that he was not going to be representing her. (Tuten v. Joel and Glover, SC Ct.App. Op.#5268, Shearouse Adv.Sh. No. 34, August 27, 2014)

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II.

Recent Rule Revisions & Proposals

1. New Exception for Disclosure of Confidential Information to Detect Conflicts in Connection with Changes in Employment- Rule 1.6(b)(8) (9/17/14) The South Carolina Supreme Court has revised Rule 1.6 (Confidentiality) to conform with changes to the ABA Model Rules. Under the new subsection (b)(8), a lawyer is now permitted to reveal information relating to the representation of a client in order to detect and resolve conflicts of interest when moving to a new firm or when changes in the composition or ownership of a firm occur. Disclosure is limited to the extent the lawyer reasonably believes necessary to avoid conflicts. Further, if revealing the information would compromise the attorney-client privilege or otherwise prejudice the client, the exception does not apply. Extensive new commentary provides examples and guidance for lawyers and law firms undergoing employment changes and restructuring. 2.

Advertising Disclaimer Rule 7.2(i) (effective 7/1/14)

Many of the provisions of the Rules of Professional Conduct related to advertising and solicitation require a disclaimer or disclosure of certain information. The Supreme Court has now amended Rule 7.2 to add subsection (i), which provides detailed guidance about the format of those disclaimers and disclosures. In addition to the specific requirements set forth in each subsection that requires a disclaimer or disclosure, the new rule mandates that all disclosures and disclaimers that appear in an advertisement or unsolicited written communication "must be of sufficient size to be clearly legible and prominently placed so as to be conspicuous to the viewer." If the disclosure or disclaimer is televised or broadcast in an electronic or video medium, it must be displayed for a sufficient time to enable the viewer to both see and read it. If the disclosure or disclaimer is spoken aloud, the new subsection requires that it be plainly audible to the listener. Statements made on a lawyer's website, online profile, Internet advertisement, or other electronic communication must be accompanied by the required disclosure or disclaimer on the same page as the statements being disclosed or disclaimed. 3.

Stress Management Class Added to Mandatory CLE Requirements (7/23/14)

The requirement that non-exempt Bar members obtain one hour of CLE instruction on substance abuse and mental health issues every three years has now includes the option of programs on stress management. The SA/MH/SM requirement satisfies one of the two mandatory legal ethics hours. The total number of mandatory CLE hours has not changed. 4.

Trust Account Draft Rule (4/10/14)

Some courts and government agencies have begun accepting fees by electronic funds transfers. New Comment [9] to Rule 1.15 (Safekeeping of Property) now permits a lawyer to authorize the transfer of funds from a trust account electronically to a government agency (or its vendor) to pay recording fees, submission fees, filing fees, 10

etc. on behalf of a client or third party. The Comment specifically allows the lawyer to grant the government agency or its vendor the right to debit the funds authorized by the lawyer from the trust account, subject to the requirements of Rule 1.15(f). 5.

New Rule 426 - Adoption of ABA's "Katrina Rule" (7/23/14)

In 2007, the ABA adopted a model rule that allows for temporary practice by lawyers displaced from their home states by a major disaster. This rule was formulated following the destruction of law offices and evacuation from states affected by hurricane Katrina. South Carolina is neighbor to many states that could be impacted by a major disaster such as a hurricane and, as such, should temporarily open its borders to lawyers who are unable to practice in their home states so that they can continue to provide legal services to their clients. Further, this rule new rule permits out-of-state lawyers to offer legal services pro bono to residents of their home state who are displaced to South Carolina as a result of a major disaster. Before an out-of-state lawyer can practice here under the new rule, the Supreme Court must declare an emergency affecting the justice system in this state or in the lawyer's home state. Further, lawyers practicing here pursuant to such a declaration must register with the Supreme Court and subject themselves to the disciplinary authority of our state. South Carolina is the seventeenth state to have adopted some version of the model rule. New York invoked its version of the rule in the wake of Hurricane Sandy.

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ANNUAL REPORT OF LAWYER DISCIPLINE IN SOUTH CAROLINA 2013- 2014 COMPLAINTS PENDING & RECEIVED: Complaints Pending June 30, 2013 1223 Complaints Received July 1, 2013 - June 30, 2014 1692 Total Complaints Pending and Received DISPOSITION OF COMPLAINTS: Dismissed: By Disciplinary Counsel after initial review By Disciplinary Counsel after investigation By Investigative Panel By Supreme Court Total Dismissed Not Dismissed: Referred to Other Agency Closed But Not Dismissed Closed Due to Death of Lawyer Deferred Discipline Agreement Letter of Caution Admonition Public Reprimand Suspension Disbarment Bar to Future Admission (out-of-state lawyer) Irrevocable Resignation Contempt of Supreme Court Total Not Dismissed

2915

409 1015 22 3 1449 1 2 6 1 166 26 6 26 21 2 0 4 261

Total Complaints Concluded (1710) Total Complaints Pending as of June 30, 2014 1205 2000 1800

1878

1647

Number of Complaints

1600 1400

1657

1496

1484

1692

1753

1661 1442 1612

1580 1349

1529

1710

1200 1223

1000 800

937 876

1030

1205

875

888

Received

600

Resolved

400

Pending

200 0 07-08

08-09

09-10

10-11 Fiscal Year

11-12

12-13

13-14

12

Practice Type Solo practice Law firm Public defender Prosecutor Other government

36.75% 35.86% 16.74% 6.65% 1.66%

Out-of-state Corporate counsel Guardian ad litem Mediator/arbitrator Not practicing

1.54% <1.00% <1.00% <1.00% <1.00%

Sources of Complaints Client Opposing Party Attorney Bank Family/Friend of Client Court Reporter/Third Party Payee Judge Citizen Disciplinary Counsel Self-Report Family/Friend of Ward

58.61% 14.03% 5.62% 5.27% 3.43% 2.24% 1.36% 1.36% 1.12% 1.12% 1.07%

Case Type Criminal Domestic General Civil Real Estate Personal Injury Probate Debt Collection/Foreclosure Post-Conviction Relief Not Case Related Property/Contract Dispute Employment Workers Comp Bankruptcy Corporate/Commercial/Business Regulatory Professional Malpractice Social Security/Federal Benefits Immigration Homeowners' Assn Disputes Landlord/Tenant

Public Official/Agency Family/Friend of Opposing Party Fee Disputes Board Family/Friend of Victim Victim Anonymous Prospective Client Litigation Witness Law Enforcement Medical Provider Family/Friend of Lawyer Employee of Lawyer

<1.00% <1.00% <1.00% <1.00% <1.00% <1.00% <1.00% <1.00% <1.00% <1.00% <1.00% <1.00%

Alleged Misconduct 41.48% 13.03% 7.95% 7.89% 6.46% 4.96% 4.06% 3.89% 2.93% 1.32% 1.20% 1.20% <1.00% <1.00% <1.00% <1.00% <1.00% <1.00% <1.00% <1.00%

Neglect Inadequate Communication Dishonesty/Deceit/Misrepresentation Trust Account Misconduct Other Litigation Misconduct Failure to Deliver Client File Improper Fees Conflict of Interest Failure to Pay Third Party Lack of Competence Advertising Misconduct Discovery Abuse Incivility Unauthorized Practice Declining/Terminating Representation Scope of Representation Inadequate Nonlawyer Supervision Failure to Pay Fee Dispute Personal Conduct (not client-related): Criminal Conduct Real Estate Misconduct Probate Conduct Business Transaction Conduct Domestic Conduct Bar Admissions/Disciplinary Matter Sexual Misconduct (not criminal)

24.08% 18.87% 16.88% 7.44% 4.54% 4.42% 3.75% 2.96% 2.42% 2.12% 1.88% 1.75% 1.75% 1.15% 1.01% <1.00% <1.00% <1.00% 1.27% <1.00% <1.00% <1.00% <1.00% <1.00% <1.00%

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SUBSTANCE ABUSE/MENTAL HEALTH: In 46 complaints concluded in the 2013-2014 fiscal year, substance abuse or mental health issues were brought to the attention of ODC. This represents 17.62% of the complaints that were not dismissed this year. Issues included: Depression Alcohol Abuse Illegal Drugs Prescription Drugs Aging Issues/Dementia

12 11 5 3 1

YEARS IN PRACTICE: In the 2013-2014 fiscal year, complaints were filed against 1166 lawyers. Of those lawyers, 17.15% were in their first six years of practice. A total of 33.62% of lawyers complained about were in their first twelve years of practice. The statistical significance of this data is dependent on the number of lawyers in active practice in South Carolina in each category. Information about the demographics of practicing lawyers can be obtained from the South Carolina Bar. Years in Practice up to 6: 7 - 12: 13 - 18: 19 - 24: 25 - 30: 31 - 36: 37 - 42: 43 - 48: 49 - 54: 55 - 60: 61 - 66: 67 and up:

Number of Lawyers 200 195 190 186 139 129 91 21 5 6 2 2

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COMMISSION ON LAWYER CONDUCT COMMISSION PROCEEDINGS: Meetings of Investigative Panels 10 Formal Charges Filed 9 Disciplinary Hearings 7 Incapacity Proceedings 1 Meetings of Full Commission 1 REQUESTS FOR DISMISSAL REVIEW: Requests for Review by Complainant Dismissal Affirmed Case Remanded for Further Investigation Dismissal Review Pending

128 (120) (2) 6

RECEIVER APPOINTMENTS: Appointments 16 Discharged (1) Pending 15 ATTORNEYS TO PROTECT CLIENTS’ INTERESTS: Serving as of July 1, 2013 35 Appointed + 3 Discharged (22) Serving as of June 30, 2014 16 LAWYERS BEING MONITORED: New Monitor Files Opened Lawyers Currently Monitored

48* 114

*includes 8 conditional admissions

ATTORNEYS TO ASSIST DISCIPLINARY COUNSEL ATA ASSIGNMENTS: Complaints Assigned to ATAs 8 Reports Filed by ATAs 14 Outstanding ATA Reports 6 SUPREME COURT OF SOUTH CAROLINA DISCIPLINARY ORDERS*: Dismissal 3 Letter of Caution 2 Admonition 7 Public Reprimand 4 Definite Suspension 11 Disbarment 7 Bar to Future Admission 1 Transfer to Incapacity Inactive 0 Interim Suspension 18 *These figures represent the number of orders issued by the Supreme Court, not the number of complaints. Some orders conclude multiple complaints.

COMPLAINTS REFERRED TO SUPREME COURT: Complaints resolved 68 Pending as of June 30, 2014 48

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