Carrots, Not Sticks: Building an Attorney Integrity System



Throughout its existence attorney discipline has been a punitive system.   While couched in the rubric of public protection, attorney discipline systems have always operated by imposing sanctions for proven misconduct, sanctions that hurt, including the ultimate sanction, removal from the profession.  Older cases refer to attorney discipline as “quasi criminal”  (see In Re Ruffalo (1968) 390 U.S. 544, 551.)  While attorney discipline almost always contains educational and remedial elements these days, it is still a fire department that almost always arrives after the house has burned down.

But what is we could prevent those fires before they breakout?  Prof. Susan Fortney writes of the recent approaches that have been adopted in Australia in her paper Promoting Public Protection through an “Attorney Integrity” System: Lessons from the Australian Experience with Proactive Regulation of Lawyers in the most recent issue of The Professional Lawyer, the scholarly publication of the ABA Center for Professional Responsibility.

As part of the reforms that legalized the alternative business structures the provide for some degree of non-attorney ownership of legal service providers, regulators in Australia required those entities to engage in an active management approach; in Prof. Fortney’s words:

To address questions related to the effect of non-lawyer ownership and limited liability, the statute imposes a number of management safeguards. First, the incorporated legal practice (ILP) must appoint a legal practitioner director to be generally responsible for the management of legal services provided by the firm.  Second, the statute provides that the legal practitioner director must ensure that “appropriate management systems” are implemented and maintained to enable the provision of legal services in accordance with obligations imposed by law.  The failure to implement and maintain appropriate management systems may constitute professional misconduct and can result in legal practitioner directors losing their practicing certificates and liquidation of the legal practice.  Regardless of whether there are any non-lawyer owners, all incorporated legal practices must meet these requirements.

Ethics lawyers have long preached pro-active risk management approaches to lawyers to help them understand how to stay out of trouble.  Australia has gone a significant step beyond, requiring that lawyers and law firms designate a responsible risk manager, requiring that risk management assessment take place and requiring that appropriate risk management be put in place.  Moreover, the regulating authority helps practitioners and law firms to become compliant.

Punitive discipline would, of course, still be available to address misconduct like dishonesty but moving toward a Attorney Integrity System approach will discourage those types of practitioners as well.  In my experience, they don’t have a keen interest in practice management.  Those seeking an easy graft won’t go through the effort.   Similarly, those with psychological or health problems would probably have trouble maintaining those certifications before they could harm clients;  moreover, moving away from a punishment based system would encourage them to seek help early.

The State Bar of California is taking its first small steps in the direction of creating an Attorney Integrity System with its project to create a voluntary online Client Trust Account survey of members, an instrument designed to both gather information for the State Bar and to educate survey takers about client trust accounts.   The Board of Trustees considered the expensive approach of a creating a full bore client trust account auditing programs along the lines of those in several states, all much smaller than California but chose to follow the educational path as an inexpensive way to address one of biggest causes of client trust account misconduct, sheer ignorance of the requirements.

Implementing an Attorney Integrity System in the Bear Republic won’t be cheap but the cost of discipline system is already amazingly expensive, more than  $64 million in 2014, according a year to the State Bar’s Annual Discipline Report at page 56.  And there is every prospect that it will be more effective at protecting the public, promoting confidence in the legal system, and even helping lawyers be better, happier, more successful practitioners.   While Australia’s reforms occurred in the course of their adoption of alternative business structures, those aren’t necessary to begin moving toward an Attorney Integrity System, as Prof. Fortney observes.  It is a positive step that regulators and practitioners can begin moving toward now.


donkey gets carrot

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