In the Matter of Phillips (12/16/10)

This is a disciplinary decision. The issues involve ER 5 – a lawyer must make reasonable effort to ensure that his firm and those he supervises act ethically – and what the sanction should be.

Phillips runs one of those high-volume, high-advertising firms.  In 2002 he was put on probation because the firm was doing most of the things those firms can have problems with. The terms of probation included, basically, making sure that it didn’t do them. His suspension ended but the complaints didn’t, so the Bar sought discipline again. The Hearing Officer recommended a six-month-and-a-day suspension; the Disciplinary Commission accepted it by a vote of 6-2, the minority wanting the suspension reduced to ninety days. Phillips sought review. (Arentz, another member of the firm, was also involved in this and also sought review; the court denied his petition.)

What the firm did wrong takes five pages to summarize (boiled down from a Hearing Officer report well over 100 pages long). Read the opinion if you want the gory details; basically, it’s a laundry list of the pitfalls in running those firms (if you don’t know how they work then this opinion will be an eye-opening education). What they have in common is that Phillips didn’t do any of the individual acts (he no longer represents clients) but was responsible for the policies and procedures that allowed them to occur.

Phillips’ argument was that he therefore shouldn’t be responsible for them, that the Hearing Officer merely found him vicariously liable for the offenses of others. But the Hearing Officer “clearly understood and correctly applied” the law that Phillips was liable for his own ethical breaches in not enforcing proper policies and procedures. ER 5 (the opinion deals specifically with 5.1 and 5.3) says so.

That was the legal issue on which the court granted review. The analysis takes about a page. What takes the remaining 11 pages of the majority opinion? The sanction. But the court agrees with the Hearing Officer’s findings and conclusions on everything except the issue of proportionality.

On that the court first says that a case “involving a ‘consumer law firm’ and a high volume practice . . .  is difficult to compare with others.” That is worth a long article. But the short version is: no, it isn’t, unless the suggestion is that “consumer” law firms (whether “consume” refers to lawyer or client isn’t clear) needn’t follow the same rules of ethics as the rest of us.

But rejecting  proportionality allows the court to address “internal proportionality” – i.e., to compare Phillips’ sanction to Arentz.’ Arentz had 19 ethical violations; Phillips scored only 12. Arentz was more directly involved with his violations. But Arentz got only sixty days. And the reason for Phillip’s “and a day” sanction was because that means he would have to go through a formal reinstatement process, lengthening the sanction. Although the court agrees that Phillips deserves worse that Arentz, it concludes that six months – without the complication of the extra day – is enough. (There is also probation, the 21 conditions of which are stated in the appendix. In addition, while suspended “Phillips’s [sic] name may not be used in firm advertisements, letterhead, or other communications” – stand by for some Glen Phillips commercials – and he can’t take any firm income.)

Judge Weisberg, sitting by designation, writes separately to support the stiffer “and-a-day” sanction. “Phillips is not being sanctioned for his second ethics violation [as the majority suggests]. He is being sanctioned for his ethics violations eighteen through twenty-nine.” If you’re keeping score, Phillips’ 29 beats Arentz’ 19.  Phillips had been on probation once already. And Arentz was “working in a system that was developed, implemented, and supervised by Phillips.” He does agree, though, that you can’t compare “consumer” law firms (the court at least has the grace to put that in quotation marks) with the rest of us, who presumably exist merely to grind the faces of the poor.

Now, regardless of what you think of this type of firm or this type of law or this type of lawyer, you have to wonder what was going on here. The court denies Arentz’ petition, grants Phillips’ petition purportedly for an issue that it spends about ten seconds on, then reduces Phillips’ sanction not because of what he did but supposedly because it wasn’t proportional to a sanction it had denied itself the opportunity to review (which, as Judge Weisberg tries to point out, was too light), by pretending that comparing one case to one other is a proportionality analysis. This is one of those times when you don’t know what to hope – that the court didn’t realize how bad this would stink, or that it did.


(link to opinion)