PCB 91

[07-Jul-1995]

                             STATE OF VERMONT

                        PROFESSIONAL CONDUCT BOARD


In re:  	PCB File No. 95.40
		PCB File No. 95.40.1


                            NOTICE OF DECISION
							
                            Decision No.    91


The stipulated facts of these two cases present a situation where
Respondents' billing practices resulted in their acquiring a personal
interest in their clients' cases in violation of DR 5-103(B).

Respondent in 95.40 was admitted to practice law in the State of Vermont more
than 10 years ago.  Respondent in 95.40.1 was admitted some five years ago. 
Both lawyers practice law together and, until recently, followed the same
billing practices.

In non-contingency cases, Respondents required their clients to advance a
non-refundable retainer as a minimum fee.  Respondents would then document
the hours of service each provided to the client.  If the initial, minimum
retainer amount was not fully expended, Respondents would keep the balance as
their fee.  If the initial, minimum retainer amount was fully expended,
Respondents would require another lump sum advance fee.  If there was a
remaining balance of this second advance, it was refundable to the client.  

Although the fee agreement form stated that the client was responsible for
all expenses of litigation, these expenses were actually taken out of
Respondents' fees without any expectation  of reimbursement.

The result of these fee arrangements was that Respondents had a financial
interest in how each prosecuted the clients' cases.  This arrangement
resulted in Respondents paying their  clients' expenses.  If Respondents
elected not to take a deposition or hire an expert witness, the fee would be
greater than if they decided to take those courses of action on behalf of the
client.  If the costs of litigation were extraordinary, Respondents, on
occasion, would request reimbursement from the client.  Such practice was
not, however, the usual course of doing business.  The clients with whom
Respondents made such fee agreements were not all indigent or parties to a
class action.	 	DR 5-103(B) provides, in pertinent part:

While representing a client in connection with contemplated or pending
litigation, a lawyer shall not advance or guarantee financial assistance to
his client, unless the client is indigent or a party to a class action; a
lawyer, may, however, advance or guarantee the expenses of litigation,
including court costs, expenses of investigation, expenses of medical
examination, and costs of obtaining and presenting evidence, provided the
client remains ultimately liable for such expenses.

By assuming the costs of litigation on behalf of clients who were not
indigent or members of a class action, Respondents violated DR 5-103(B).

Bar Counsel has recommended that these lawyers be privately admonished.

Section 4.34 of the ABA Standards for Imposing Lawyer Sanctions provides
that 

[a]dmonition is generally appropriate when a lawyer engages in an isolated
instance of negligence in determining whether the representation of a client
may be materially affected by the lawyer's own interests...and causes little
or no actual or potential injury to a client. 

There is no evidence in the stipulated facts that any clients were actually
injured by Respondents' fee arrangements, although there was clearly a
potential for injury.  Nor is there any evidence in the stipulated facts that
Respondents acted dishonestly.  In mitigation, we find that neither
Respondent has a  prior disciplinary record and both have taken corrective
steps to insure that their fee schedules now comply with the Code.  The only
factor in aggravation is that Respondent in 95.40 has substantial experience
in the practice of law.

The Board accepts Bar Counsel's recommendation.  A letter of admonition will
issue.

Dated at Montpelier, Vermont this   7th  day of July, 1995.

	PROFESSIONAL CONDUCT BOARD


	     /s/
	___________________________
	Deborah S. Banse, Chair


/s/
___________________________	___________________________
George Crosby			Donald Marsh


/s/	     			/s/
___________________________	___________________________
Joseph F. Cahill, Esq.		Mark Sperry, Esq.


/s/	     			/s/	
___________________________	___________________________
Nancy Corsones, Esq.		Charles Cummings, Esq.


/s/	     			/s/
___________________________	___________________________
Paul S. Ferber, Esq.		Robert F. O'Neill, Esq.


/s/
___________________________	___________________________
Nancy Foster			Ruth Stokes


/s/	     			/s/
___________________________	___________________________
Rosalyn L. Hunneman		Jane Woodruff, Esq.


/s/
___________________________	
Robert P. Keiner, Esq.	

	


                            DISSENTING OPINION

There is no evidence in the stipulation that Respondents ever took any short
cuts in order to obtain more fees at the expense of their clients.  There is
also no evidence that Respondents intended by their fee practices to obtain
any interest in their clients' litigation.  As I read the stipulated facts,
it appears that Respondents failed to understand that their fee schedules
could violate the Code.  I would dismiss the complaint.

/s/
____________________________
Karen Miller, Esq.

/usr3/wsc/95.40dec