Ethics Opinions
Iowa Supreme Court Board of Professional Ethics and Conduct

Date of Opinion: 09/15/2004

Opinion Number: 05-02

Title: EMPLOYMENT OF REVOKED ATTORNEY

Opinion: You were admitted to the Bar in Iowa in 1994. Until 2002, you and another lawyer were partners with offices at the same address where you now maintain a solo practice. In 2002 your former partner entered pleas of guilty to three counts of theft in the first degree, a class “C” felony, and one count of theft in the second degree, a class “D” felony. He was sentenced to prison. The charges involved matters in which he had served as a fiduciary or attorney or both. He was ordered to pay restitution of more than $300,000 to a client whose power of attorney he had held; $140,000 to a trust for which he had served as trustee and attorney; and over $95,000 to another trust. In November 2002 he signed an affidavit consenting to disbarment. The Iowa Supreme Court revoked his law license later that month.

In June 2004 your former partner was released from prison. You report that he “has enormous amounts of restitution to repay” and [“w]ithout his law license, his ability to support himself, let alone pay any meaningful restitution is severely limited.” You wish to employ him as a paralegal in your office and ask the following questions:

(1) [My former partner] has nearly 40 years experience in the legal areas of tax and probate, and would be of value to me in a Clerk/Assistant position. Am I allowed to hire him as a Clerk/Legal Assistant in my law firm?

(2) If he is allowed to work as a Clerk/Legal Assistant, will he be able to meet with clients and take preliminary information the same as a normal Clerk/Legal Assistant could?

(3) Is he able to do tax returns, i.e. meet with tax clients, take down information regarding income and expenses, provide tax advice along with preparation of the returns? I am assuming since one does not have to have a law license to prepare returns, that he would be able to do so, however, if there are any issues regarding his preparation of tax returns, please advise.

You have supplemented your opinion request as follows:

[The former partner], since being released from prison, has been working in my office doing legal research and preparing documents under my supervision. He will not be meeting with any clients until such time as this Board meets to give me a formal ruling on what he can actually have for client contact. An example of his work to date would be a title matter wherein I have a client who purchased some farm ground on contract. During the term of the contract one of the Sellers died. No estate was probated. Research was done and an Affidavit was drafted by [the former partner] to clear the title. Said Affidavit was reviewed and approved by me. At this point in time it has not been signed. …

We have met with his parole officer and working for me does not violate any terms of his parole as far as his parole officer was concerned.

[The former partner’s] office used to be the first office as you proceeded down my hallway from the front lobby. He is now in a back room with a desk and phone and in no direct proximity to clients while they are in the building other than if they need to use my restroom facilities. …

At this time it is my intention that [the former partner] will not meet with tax clients during income tax season. I do, however, have questions regarding income tax work. Clearly you do not need a law license to prepare income tax returns and give income tax advice in this state. So, there would be nothing illegal or unethical about my father doing income taxes on his own. However, does this present a problem if he does income tax work while in my office? Is tax advice somehow transformed to legal advice when it occurs within the walls of a law office? If so, can he take down the tax information from the client if he does not give any “tax advice”?

Your former partner is no longer a lawyer and is not subject to discipline under the Code of Professional Responsibility. The issue before the Board, however, is not what a layperson may do but what your ethical duties are as the employing/supervising attorney. Iowa Court Rule 35.12(4) sets rules for a law firm’s employment of a suspended lawyer; however, that rule does not address the employment of a lawyer, such as your former partner, whose license has been revoked. Nor does the Code of Professional Responsibility explicitly address this situation.

Various provisions of Canon 3 of the Code of Professional Responsibility give guidance on the question of a lawyer’s employment of laypersons in general. These include:

DR 3–101(A)

A lawyer shall not aid a nonlawyer in the unauthorized practice of law.

DR 3–102(A)

A lawyer or law firm shall not share legal fees with a nonlawyer.…

DR 3–104

(A) A lawyer or law firm may employ nonlawyer personnel to perform delegated functions under the direct supervision of a licensed attorney, but shall not permit such nonlawyer personnel to (i) counsel clients about legal matters, (ii) appear in court or in proceedings which are a part of the judicial process … or (iii) otherwise engage in the unauthorized practice of law.

(B) A lawyer or law firm employing nonlawyer personnel shall not permit any representation that such nonlawyer is a member of the Iowa Bar.

(C) A lawyer or law firm employing nonlawyer personnel shall exercise care to ensure compliance by the nonlawyer personnel with all applicable provisions of the Code of Professional Responsibility. The initial and continuing relationship with the client must be the responsibility of the employing lawyer or law firm.

(D) The delegated work of nonlawyer personnel shall be such that it will assist only the employing lawyer or law firm and will be merged into the lawyer’s completed work product. A lawyer shall examine, supervise and be responsible for all work delegated to nonlawyer personnel.

(E) The lawyer or law firm employing nonlawyer personnel shall not permit such nonlawyer to communicate with clients or the public, including lawyers outside the firm, without first disclosing the nonlawyer’s status.

(The foregoing duties are discussed at greater length in EC 3–6, which is not reproduced here.)

At a minimum, you must strictly comply with the above Canon 3 rules. Any work performed by employees of your office is attributable to you, as is any failure by them to comply with the Code of Professional Responsibility. In particular, you must not allow a nonlawyer employee to give legal advice to your clients. See DR 3-104(A)(i). When given in the context of a law practice, legal advice includes tax advice. See Committee on Prof’l Ethics & Conduct v. Mahoney, 402 N.W.2d 434, 436 (Iowa 1987) (“Doing tax preparation … is not necessarily the practice of law and properly may be done by nonlawyers[, but w]hen done by a licensed lawyer [it] constitute[s] the practice of law.”).

Nevertheless, strict compliance with the above Canon 3 requirements will not resolve the narrower question of whether you may employ your former partner on your premises at all. This person is not just any layperson; he is a convicted felon, thief, and former lawyer. You are employing him to work not only in the same community but in the very offices where he committed the thefts for which he went to prison. He also has substantially more experience in the practice of law than do you and until two years ago was the senior partner in the firm. It will be difficult if not impossible to avoid doubts as to who is really running the firm and even more difficult to avoid the perception that his employment represents “business as usual” at “the scene of the crime.” Nor can the public be confident that a felon with “enormous restitution” to pay will not again be tempted to steal clients’ funds. The Board assumes you will strive to ensure these perceptions do not become reality, but believes the perceptions will remain.

The following rules are relevant to your situation:

EC 9–2

…When explicit ethical guidance does not exist, a lawyer should act in a manner that promotes public confidence in the integrity and efficiency of the legal system and the legal profession.

EC 9–6

Every lawyer owes a solemn duty to uphold the integrity and honor of the profession … and to strive to avoid not only professional impropriety but also the appearance of impropriety.

DR 1–102(A)(5), (6)

A lawyer shall not … engage in conduct prejudicial to the administration of justice or … in any other conduct that adversely reflects on his fitness to practice law.

It is the opinion of the Board that the employment of your former partner in the very offices where he previously practiced, and where he committed serious crimes in which the victims were clients, is so potentially damaging to public confidence in the profession and the disciplinary system that it not only would create the appearance of impropriety, contrary to EC 9–2 and EC 9–6, but also would be prejudicial to the administration of justice and reflect adversely on your fitness to practice to law, in violation of DR 1–102(A)(5) and (6). It is further the opinion of the Board that the damage would occur and the employment would be improper even if you deny your former partner access to clients’ funds and to clients.

There may be other factual situations in which a law firm’s employment of a disbarred lawyer would not create the same risks. Under your particular circumstances, however, the continuing employment of your former partner at your law office would violate the rules identified herein.

Because the Board has not previously addressed the issue of employment of a disbarred lawyer, this opinion shall be effective October 1, 2004, and shall not provide a basis of discipline for conduct occurring before that date.