October 05, 2011

Statement Of Mary Jane Trapp, October 1999 - Center for Professional Responsibility




October 9, 1999
Cleveland, Ohio


Mary Jane Trapp of Apicella & Trapp in Cleveland was the next hearing speaker. She thanked the participants and the audience for coming to the hinterlands of the Midwest to hear what attorneys in Ohio have to say about MDPs. Based on her readings and review of the House of Delegates listserv, she comes to the MDP issue from a totally different perspective than most commentators. She has spent most of her 18 years of practice involved with bar association work, advocating on behalf of lawyers and the administration of justice, specifically in the area of unauthorized practice of law. As a young lawyer she was appointed to the Unauthorized Practice of Law Committee of the Cleveland Bar Association; at any given time that Committee carries a docket of over 50 cases. She has served on the Board of Commissioners for the Unauthorized Practice of Law for the Supreme Court of Ohio, the entity that hears UPL cases and issues opinions. While serving on the Supreme Court Task Force studying the issue of unauthorized practice and delivery of legal services in Ohio, she authored the section of its Report dealing with paralegals. Her work in this area convinces her that MDPs will create havens for unauthorized practice of law.


She offered two Ohio examples to explain her opposition to MDPs. The first case, briefly talked about by her partner, is Cleveland Bar Association vs. Misch, 82 OS3rd 256 (1998). Paul Misch, a licensed attorney in Illinois, chose (for reasons apparent after taking his deposition) not to submit himself to the Supreme Court Board of Character and Fitness in Ohio. That Board would have found that he had been sanctioned multiple times by the National Association of Security Dealers (NASD), that his securities license had been revoked, and that there were many lawsuits outstanding against him from west of the Mississippi all the way to the Atlantic Coast. Upon his arrival in Ohio, Mr. Misch entered into an agreement with a Cleveland law firm whereby he was to act as a "consultant" (under the supervision of a firm attorney) and provide advice and counsel to some of that firm's clients with respect to mergers and acquisitions, refinancing and related corporate matters. He engaged in labor negotiations, prepared asset-purchase agreements, advised on restructuring of a foundry that was in dire trouble, met with banks and arranged for the transfer of foundry stock to a new corporation. Ohio has not enacted a statutory definition of the 'practice of law' but the Supreme Court has consistently held that the practice of law is not limited to appearances in court, but also includes giving legal advice and counsel, and preparing contracts and legal instruments by which legal rights are preserved. Mr. Misch characterized his activities as those that might be performed by a business consultant, a business broker or a paralegal, individuals who would traditionally be considered as part of an MDP. He said he did not draft the legal papers, but merely worked on documents drafted by others and assembled contracts and exhibits into final form. His clients, many of whom came down to Columbus to testify before the Board of Commissioners, thought he was their attorney. The attorneys from the law firm testified that the clients had been told that Mr. Misch was not licensed by the state of Ohio (that he had a federal court license), but such things go over the heads of most people who come to see an attorney in a distress situation. Clients seek help from a lawyer and if the lawyer brings in a consultant the client starts disclosing to that person confidential information that gets disclosed to the bank or the Ohio Department of Development or, in this instance, even the other side of the transaction. The Board of Commissioners found that Mr. Misch was actually the go-between and was representing both the distressed seller and the new buyer. All the conflict of interest safeguards that attorneys and their clients hold dear went right out the window in this de facto MDP. Another example of a practice problem in Ohio (and based on her discussions with probate attorneys, in other states as well) is Ohio State Bar Association v. Martin dba Kensington Estate Services, 642 N.E.2d 75 (1994 ). Kensington Estate Services was initially believed to be incorporated in California, but was later found to be just a name used by Reed Martin, a nonlawyer, to transact business all over the country. Mr. Martin set up an office in Columbus, Ohio, and at one point in time it appears that he had an arrangement with a local attorney to "review" form >living trusts', >Q-TIP trusts', >A/B trusts'. Nonlawyers who, at meetings in a hotel, delivered the sales pitch about the benefits of a living trust would get information from the client and fill out the check-off on a form. Considering this a perfectly acceptable way of delivering legal and financial services, the operation inserted a lawyer cursorily in the process, a lawyer who had never met the client, never looked at the client's portfolio or assets. She asked, who benefitted in this MDP (a lawyer sharing fees with a nonlawyer) - the company, the lawyer - but certainly not the people who spent thousands of dollars for trusts that they didn't need (based on experienced probate lawyers looking at the products). She raised as another MDP problem that, from what she can see, there's no limitation on who can be a member of an MDP.


At some point she thinks lawyers need to shift their thinking on the MDP issue. It's nice to talk about large corporations wanting the cost savings they think they can get from a large law firm that's merged with a large accounting firm. But the people she represents everyday, or sees when she is dealing in the unauthorized practice of law area, are normal everyday working class people. They are the ones who need and are not getting legal services and she doesn't see how this MDP proposal addresses that issue of access to justice. What it does is allow a disbarred lawyer (who might happen to be a CPA) to re-enter the practice of law through an MDP. How is that going to protect the clients of the former attorney the Supreme Court and its grievance committee felt compelled to disbar? In Ohio disbarment is the death penalty (the disbarred lawyer never gets his or her license back), but the creation of an MDP would allow the disbarred lawyer >back in' to start practicing law again under the MDP structure.


She is primarily a plaintiff's lawyer and a lot of the small firm practitioners who are defense lawyers (her opposition) talk to her about the increased pressure insurance firms are exerting on them under the regulatory structure that currently exists. The outside audits being imposed on defense lawyers are not being conducted by lawyers, or even by paralegals, but by bean counters who get paid for reviewing the bill based on how much they shave off a legal fee. The auditors question, why did the lawyer conduct this deposition, or they direct that in the next case the lawyer conduct only certain kinds of discovery, not so many depositions. Ms. Trapp questioned, where's the independent professional judgment? If the defense lawyers want to keep that insurance client they must follow >the rules'. She referenced a reliable source to comment that corporations are also now instructing their defense firms in writing about how the firm can handle a case; some of these instructions include no women litigators handling that corporation's case in court. When a firm's major client tells them that it does not want a woman in the courtroom representing the company Ms. Trapp questioned the effect on the judgment of small firms that are trying their best to attract and keep women litigators. How does such a constraint advance the ethical principles attorneys hold? As Ohio recently increased its lawyer registration fee substantially in order that the Supreme Court hire more people in the grievance and discipline and unauthorized practice areas, and pass large chunks of money back to certified grievance committees, she is concerned about the costs of the disciplinary actions that the proposed MDP audits may generate. Although the MDP proposal permits the Court to assess the MDP for the cost of the audit, she doesn't find any provision for pass-through of the additional disciplinary costs.


In closing, she passed along the comments of her accountant, a solo practitioner, to the MDP proposal. He said he didn't like the idea. Her accountant said he is feeling increasing pressure from providers with whom he deals, such as insurance companies and brokerages, to recommend certain products to his clients. Though accountants operate under less restrictive disciplinary rules than lawyers, he finds that he has to step back from recommending a product; it's a struggle. Ms. Trapp asked the Commission, and those within the ABA who are dealing with the MDP issue, to step back and look at what MDPs do to small firms B small accounting and small law firms. MDPs on a large scale may be great, but she said not thinking about the ramifications of an MDP on a small scale would be a grave mistake.