Mark Dubois ()
I feel like I’m caught is some weird, warped time loop — reliving, again and again, spectacular lawyer self-destructions. The last few weeks brought press reports of guilty pleas from several of our brethren. Change the names, and they could be any one of many, many I’ve seen before.
One involved a bankruptcy practitioner who allegedly took a bundle of money from clients involved in workouts to finance an unsupportable lifestyle that supposedly included flying to his yacht in Miami, Florida, every weekend. Another was involved in a scheme to fund the purchase of life insurance policies by frail elderly folks, producing a windfall for the investors when the inevitable happened. The third was a fellow who facilitated a foreclosure rescue scam, promising distressed homeowners relief from the burden of crushing monthly payments and foreclosure suits.
All of this has a numbing aura of deja vu, echoing not just cases I have been involved in during past decades but also celebrated implosions and explosions going back generations. When I wore the badge of one who was supposed to ride herd on the bar, more than a few judges — justices and bar leaders, when faced with the latest scandal — told me that something had to be done or bad consequences would follow for us all. Looking back, I can say that while a lot of smart people tried to stem the tide, the inescapable conclusion is that, despite best efforts, we are doomed to relive the embarrassment and cost when yet another of us crashes and burns.
I remember asking the late Jeff Donahue, a wise and wonderful lawyer who died one day while working for Disciplinary Counsel, if he thought it possible to find some “root causes” in the ongoing waves of lawyer self-destruction. If so, maybe we could take prophylactic measures to protect the profession. Father Donahue, as we called him, smiled and, drawing on his Irish wit and wisdom, suggested that we’re all sinners deep inside. Unless I could find a way to change human nature, the best we could ever do is pick up the pieces.
Some of the problem is rooted in the fact that lawyers are a thinly regulated profession, where many of us have occasional access to a lot of other people’s money. We tried to tighten up clients’ funds management by instituting random audits of trust accounts, but what others who had tried this before learned and warned of proved true. Due to resource limitations, the huge volume of accounts and the ease with which bad actors can conceal their sins, the best we can ever do is scare a few sloppy practitioners into hiring bookkeepers.
Yes, a whole new class of lawyers discipline respondents we call “old guy overdrafts” has emerged, as the auditors root out the mathematically challenged and record-keeping nightmares among us, but few of these have led to the discovery of big fish defalcators.
When exploring whether we should start the audit program, I spoke with folks in every state who already had such a program, and this is exactly what they told me would happen. One wag in New Jersey said the best program would be to send a random audit notice to every lawyer every year, as some of the worst would just mail back their licenses rather than face the ignominy of a failed audit. Forget ever finding a bad defalcator. They just don’t register their accounts, so they don’t get audited.
Another recurring theme involves lawyers looking to bridge the gap between legal practitioner and business entrepreneur, buying into schemes like foreclosure rescue and viatical syndications. When confronted with the big money con men can realize fleecing the credulous and foolish or exploiting regulatory loopholes, some of us adopt what the federales call “conscious avoidance” or “willful blindness,” trading our talents, knowledge of the system, and the cachet of our professional standing for a piece of the action. Our legal training gives us the ability to rationalize just about anything, but in the end we’re only fooling ourselves.
The two common aspects of these cases is sentence enhancements because, as lawyers, we should have known better, and netting the smallest piece of the pie among the co-conspirators. More than one lawyer-defendant has tried the “why would I have risked so much for so little” defense. All that proves is that, as crooks, they’re outclassed, outgunned and outthought by the true professionals.
Somewhere, above or below, Jeff Donahue is chuckling and shaking his head. You can’t change human nature.