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An ethics complaint against a New Brunswick, N.J., attorney is putting a twist on the notion of a portable client base: Do paralegals have their own clients? The contention that they do forms the basis of the response to an ethics complaint against sole practitioner Carl Gensib, who hired a paralegal and invited clients for whom she had worked to move with her. Gensib, who is charged with improper solicitation, contends that he was free to invite “clients” of his new paralegal, Stacey Deitch, to transfer their files to him. Gensib’s Feb. 23 answer in District VIII Ethics Committee v. Gensib, No. 00-006E, alleges that “the tables have turned against the lawyers — some of whom are now cutting deals with experienced real estate paraprofessionals with their own book of business for a portion of the fees such paraprofessionals generate.” Gensib’s letter, sent to 21 clients of Mayo & Russ, the East Brunswick firm where Deitch was previously employed, announced that Deitch had “joined” Gensib’s firm and invited recipients to return an authorization to change counsel “if you prefer to have Stacey continue to handle your pending transaction.” The complaint alleges that the letter constitutes “unsolicited direct contact with prospective clients” and omits certain language required by the ethics rules, such as the word “advertisement,” language about selecting an attorney and advice about contacting the Committee on Attorney Advertising if the letter is inaccurate or misleading. The letter is claimed to be in violation of Rules of Professional Conduct 7.3(b)(5)(i)-(iii). Gensib declines comment, but his answer acknowledges that he sent the letters and characterizes them not as solicitations of prospective clients but as announcements to Deitch’s “current clients,” similar to those used by lawyers when they switch firms. The answer also says that Deitch provided the list of recipients and that at the time, Gensib understood that all of them had tried to contact Deitch. Apparently, this may not have been true of all recipients. The complaint also charges Gensib with making a false statement under RPC 8.1(a) for telling ethics investigators that only clients who inquired about Deitch’s whereabouts got the letter. A PIECE OF THE ACTION Deitch worked at Mayo & Russ from May 4, 1999, to Feb. 10, 2000, first as an independent contractor and then as an employee. As a contractor, Deitch was paid $350 per purchase and $200 for a sale or refinance; she worked from her home; and she generally only went to the firm to attend closings, Gensib said in court papers. Even while Deitch was an employee, “her compensation was determined by the number of real estate closings that she generated,” Gensib adds. In his view, the issue is not solicitation of clients but competition between lawyers. More details about the tug of war over Deitch’s so-called clients emerge from papers filed in Mayo & Russ v. Deitch, MID-C-38-00, a suit brought by Mayo & Russ against Deitch and Gensib that has since been settled. The case was filed in the Chancery Division of Middlesex County on Feb. 22, 2000, as an emergent matter seeking injunctive relief against further solicitation. It asserted claims for interference with economic advantage, interference with contract, conversion and, as to Deitch, a breach of her duty of loyalty as an employee. Court papers indicate that on Feb. 8, 2000, Deitch told partner A. Todd Mayo she was leaving to work for Gensib. Gensib says she gave more than two weeks’ notice. Mayo says Deitch began contacting firm clients and real estate agents about her new job. While Mayo says Deitch agreed to leave on Feb. 10, Gensib says she was fired that day, escorted to the door and refused compensation for her work on pending files. Deitch went to work for Gensib the next day. Mayo says on Feb. 11 Deitch told him she had authorization to transfer four files to Gensib and that he agreed to release these files and charge no fee. Later that day, Mayo says a realtor told him Deitch had called and asked for a list of clients he had referred. Mayo says he wrote to Deitch and also contacted Gensib who told him Deitch was acting independently and he would get her to stop. On Feb. 15, a client told Mayo he had received the letter from Gensib about transferring his file. This time, Gensib refused to stop contacting clients, saying he saw no ethics violation, Mayo says. Mayo wrote to the Office of Attorney Ethics, enclosing a copy of Gensib’s letter. He says Gensib’s reaction was that he would view an ethics complaint as defamatory and intentional interference with his economic advantage. Gensib wrote to the judge, Joseph Messina, emphasizing that his letter was a one-time mailing to clients with whom Deitch had worked closely and was done in response to numerous calls by clients to Deitch’s home and his office. The letter also explained that Mayo paid Deitch by way of a draw that was periodically supplemented by additional amounts to reflect the excess of actual closings over the draw. Based on this arrangement, Gensib told Messina, Deitch “had a proprietary interest in each file she handled.” The case settled on Feb. 24, 2000. The judgment provides that Gensib will pay Mayo & Russ $300 for two closed files and half the fees on four unclosed matters and any other transferred files. It also required Gensib to provide Mayo & Russ with a list of clients he contacted and all information he had about former Mayo & Russ clients. It barred Deitch from any claim against Mayo & Russ arising out of her employment with the firm. PARALEGALS’ CLIENTS ARE ATTORNEYS Some paralegals and lawyers say Gensib’s picture of paralegals with portable portfolios of business is distorted. Neither Kandi Moncelsi, president of the Legal Assistants Association of New Jersey, nor South Jersey Paralegal Association President Catherine Mason has heard of such a development. Similarly puzzled are Kathleen Bonelli, the LAANJ representative to the National Association of Legal Assistants, Peggy Stalford who co-owns Paralegal Services, an Allenhurst, N.J., agency that hires out independent paralegals, and real estate attorneys Robert Clarke and Alan Cosner. They also condemn the idea as a breach of ethics. “I don’t see how a paralegal could take business with her,” says Moncelsi, who works for West Orange, N.J., sole practitioner Steven Greenberg. “That would imply she had a client who was not an attorney” and paralegals by definition work for attorneys. Stalford is also adamant that independent paralegals cannot have clients other than attorneys. Identifying her agency as a petitioner in Opinion 24, she says, “It was very important to us then and it is extremely important to us now that it is understood [independent paralegals] are no different from in-house paralegals even though we maintain our own premises.” In re Opinion No. 24 of the Committee on the Unauthorized Practice of Law, 128 N.J. 114 (1992), rejected a categorical ban on independent paralegals so long as they are appropriately instructed and supervised by lawyers. Deitch says she was in fact looking for such supervision when she sought employment with Gensib. She says she was so lightly supervised in handling real estate matters at Mayo & Russ that some clients never met a lawyer from the firm, not even at the closing, and she was not comfortable working that way. Deitch, who has been working as a real estate paralegal for 15 years, says: “I chose to be a paralegal because I need help from attorneys and can’t expect to know what they know.” Cosner, a partner with East Brunswick’s Cosner & Cosner, points to the southern New Jersey practice of allowing title companies to handle closings and cautions that if paralegals do start having their own clients, things “could evolve to where lawyers lose that business to paralegals.” A greater threat of displacement might come from title companies looking for business in the northern part of the state. Clarke, a Hillsborough, N.J., sole practitioner, says Cherry Hill, N.J.-based Congress Title, which is expanding northward, recently offered him $200 a pop to sit at the closing table. “I disagreed with that philosophy. I still practice law here,” says Clarke about why he refused the offer. A call to Congress Title for comment was not returned. Mayo declines comment on the case, as do Gensib and his attorney, Robert Zullo, a New Brunswick sole practitioner.

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