Attorney Grievance Commission v. Wills

RODOWSKY, Judge. This bar discipline case illustrates the consequences of this Court’s adoption, by a divided vote, of Maryland Rules of Professional Conduct 7.2 and 7.3 that allow targeted mail solicitation. At the vortex of the controversy is Geraldine E. Butler (Butler), a paralegal with twenty years experience in working on personal injury cases. Butler left the employ of the complainant, Xavier Aragona (Aragona), when he sought to reduce her compensation package from approximately $87,-000 to $50,000 per year.

The respondent, Jackie Ray Wills (Wills), a sole practitioner, then hired Butler for $80,000 per year. Butler brought to Wills’s practice an enthusiasm for marketing herself and her employer, as well as counterpart client information cards on closed cases at the Aragona firm. The charges now before us were heard by Judge G.R. Hovey Johnson of the Circuit Court for Prince George’s County. Judge Johnson found a violation of Rule of Professional Conduct 7.2(c) (“A lawyer shall not give anything of value to a person for recommending the lawyer’s services ....”) and that Wills deliberately lied in an answer at the inquiry panel hearing, thereby violating Rule 8.4(c) (“engaging] in conduct involving dishonesty, fraud, deceit or misrepresentation”).

Judge Johnson also found violations of Rule 8.1(a) (“[A] lawyer ... in connection with a disciplinary matter, shall not ... knowingly make a false statement of material fact[.]”) and of Rule 8.4(d) (“engaging] in conduct that is prejudicial to the administration of justice”). I In this Part I we consider the solicitation charge. Aragona was engaged in the private practice of law in Oxon Hill, Prince George’s County, Maryland. In January 1983, primarily as a result of Butler’s having acquired ten years of ⁶³⁶ experience processing personal injury cases for Paul Shiftman, an attorney in the District of Columbia, Aragona and his then partner, John T. Szymkowicz (Szymkowicz), hired Butler as a legal assistant.

Butler’s starting salary with Aragona & Szymkowicz was just over $40,000 per year. As early as 1987, Butler became dissatisfied with working for Szymkowicz. She began to entertain the thought of leaving Aragona & Szymkowicz to associate herself with some novice attorney seeking to establish a thriving personal injury practice. She abandoned those plans, however, when Szym-kowicz left the firm in 1991.

Butler remained in the employ of the firm until April 1993. In February 1993, Butler initiated contact with Wills for the purpose of obtaining employment with him. At that time, Wills maintained an office for the general practice of law in Waldorf, Maryland. The majority of his practice was devoted to domestic relations and criminal defense, with only a moderately successful personal injury practice.

Butler assured Wills that she could assist him in building a successful personal injury practice, because, in addition to her expertise in the area, she had “ ‘lots of contacts and friends, [that she thought could] generate business over a period of time.’ ” At the time of these initial contacts between Butler and Wills, the latter explained to his longtime secretary, Joy Hamilton (Hamilton), that Butler “had many, many acquaintances and had done the personal injury work for many years and felt that she could generate a great deal of business for the firm.” Wills located office space in Oxon Hill and, in mid-May 1993, opened an office there. On Friday, April 9, 1993, during the time when Butler was conducting employment negotiations with Wills, Aragona informed Butler that her compensation package, which at that time approximated $87,000 per year and included a fully paid health insurance plan, a car lease for personal use, and a gasoline credit card, was to be reduced to a salary of $50,000 per year and that her health plan and car lease were to be terminated. On Monday, April 12, 1993, Butler informed ⁶³⁷ Aragona that she could not work under his proposed terms and intended to seek employment elsewhere, to which he responded that she should leave immediately. Later that same day Butler and Wills signed an employment contract under which she would receive a weekly salary aggregating $80,000 per year.

The contract conditioned further employment on Wills’s practice having acquired 100 personal injury files within a year from the date the contract was executed. 1 In the period before Butler received a salary from Wills, she brought to Wills’s Waldorf office copies of client information cards which contained the name, date of accident, address, phone number, insurance information, and additional information of many of Aragona’s personal injury clients. Butler had accumulated these cards over the course of her ten years of employment with Aragona’s firm and had failed to destroy her copies, as per office policy, after the files were closed. At Wills’s instruction, Butler generated announcements to prospective clients. The form letter read as follows: “[Name & Address of Specific Individual] “The Law Offices of Jack R. Wills, Esquire are pleased to announce the opening of their newest office located at Gateway East, 6188 Oxon Hill Road, Suite 701, Oxon Hill, Maryland, 20745. “Geri Butler, Legal Assistant to Jack R. Wills can be reached at the new office for all of your personal injury needs or questions at (301) 839-9000. “The Waldorf office of Jack R. Wills will remain available for domestic relations, civil, criminal, bankruptcy and other related needs at The Hamilton Centre, 3200 Crain Highway, Suite 208, Waldorf, Maryland, (301) 843-2700, (301) 645-8636 or 1-800-894-5583.

Free consultations are standard for the first visit. ⁶³⁸ “We hope that if you require any of the above services, you will contact one of these conveniently located offices. “Very truly yours, “Jack R. Wüls, “Attorney at Law.” Between 200 and 300 of these letters were addressed, and perhaps 100 were mailed. The overwhelming majority of the addressees were individuals whose names were on the client information cards. In May 1993, Aragona filed a complaint with Bar Counsel. He also caused a criminal prosecution for theft to be instituted against Butler, and his firm filed a civil suit against Butler and Wills.

Butler was acquitted of the criminal charge, and Wills settled the civil action by paying a sum of money. Aragona’s complaint to Bar Counsel against Wills focused on Butler’s having taken copies of the cards containing identifying information on clients whose cases were closed. An inquiry panel was convened to consider whether Wills should be charged with having violated Rule 5.5 (“A lawyer shall not ... assist a person who is not a member of the bar in the performance of activity that constitutes the unauthorized practice of law.”), Rule 7.3 (limiting and prohibiting certain in-person contact with a prospective client for the purpose of obtaining professional employment), and Rule 8.4(d). The inquiry panel recommended that the alleged violations of Rules 5.5 and 7.3 be dismissed.

That body, however, concluded “that the conduct of Mr. Wills in collusion with Ms. Butler is a violation of Rule 8.4(d).” The panel also concluded that Wills made a misrepresentation to the panel, discussed in Part II, infra, but that the misrepresentation was immaterial. The Review Board recommended that Wills be charged with violating Rules 8.1(a), 8.4(c), and 8.4(d). Based upon the facts relied upon by the Review Board, Bar Counsel included in the Petition for Disciplinary Action the charge of having violated Rule 7.2(c). See Attorney Grievance Comm’n v. Goldsborough, 330 Md. 342, 354-55 , 624 A.2d 503, 508-09 (1993) (It is not improper for Bar Counsel to include in its petition charges ⁶³⁹ of Rule violations not specifically found by the Review Board as long as the charges are plainly related to other violations explicitly found by the Review Board.).

When the charges were heard by Judge Johnson, Bar Counsel presented the case against Wills on a stipulation of facts, the transcript of proceedings before the inquiry panel, the transcripts of the testimony of certain witnesses taken in connection with collateral proceedings, and other exhibits. Only Wills testified. There was no testimony in any form from any addressee of the announcement letters. Judge Johnson concluded that Wills had violated Rule 7.2(c) on the following analysis: “Wills ... knowingly hired Butler not for her legal or secretarial skills but with the primary motive/purpose of obtaining the personal injury clients that could be delivered through Butler’s access to the white copy of the information forms from Aragona, [Shiftman], and/or her own personal client contacts.

Rule 7.2(c), the advertising rule, is the most appropriate one to apply to this violation. While this particular form of payment for referrals is a matter of first impression now before this Court, it is analogous to paying ‘runners’ or ‘bird dogs’ for referrals as discussed under 7.2(c). These are similar practices for which the Court has previously disciplined lawyers. See Attorney Grievance Commission v. Freedman, 285 Md. 298 , 402 A.2d 75 (1979) and Attorney Grievance Commission v. Lebowitz, 290 Md. 499 , 431 A.2d 88 (1981).

Butler brought no specific qualifications that would justify such an exorbitant compensation package; thus, it is clear that she was being compensated for her services in bringing in clients.” We begin our analysis by noting what this case does not involve. It does not involve the law of unfair competition, despite the emphasis which Aragona, the inquiry panel, Bar Counsel, and Judge Johnson have placed on the circumstances surrounding Butler’s possession of the client cards. We need express no opinion on the nature or extent of any interest which Aragona had in those cards, nor on whether civil remedies were available to him. We are concerned in Part I ⁶⁴⁰ of this opinion only with whether the use made of the cards violated Rule 7.2(c).

Moreover, this case does not involve in-person solicitation. Although Butler admitted that she telephoned a number of persons to advise them of her change of employment, Bar Counsel did not contend, and Judge Johnson made no finding, that this conduct constituted solicitation. This case does involve a lawyer’s responsibilities “[w]ith respect to a nonlawyer employed or retained by or associated with a lawyer.” Rule 5.3. These include “mak[ing] reasonable efforts to ensure that the firm has in effect measures giving reasonable assurance that the person’s conduct is compatible with the professional obligations of the lawyer.” Rule 5.3(a).

The nonlawyer employees of a lawyer are not subject to professional discipline. See Comment to Rule 5.3. The lawyer, however, is, under certain circumstances, “responsible for conduct of such a person that would be a violation of the rules of professional conduct if engaged in by a lawyer.” Rule 5.3(c). Obviously, a lawyer may not hire an employee for the purpose of having that person solicit on behalf of the lawyer.

Rule 7.2(c). On the other hand, the prohibition of Rule 7.2(c) against a lawyer’s giving “anything of value to a person for recommending the lawyer’s services,” is not more restrictive of an employee’s conduct than it is of the lawyer’s conduct. Phrased another way, there is no violation of the quoted portion of Rule 7.2(c) if the lawyer’s employee engages in conduct in which the lawyer permissibly may engage directly. Rule 7.2 does not prohibit direct mail advertising, targeted to specifically identified persons, even if they are not “a close friend, relative, former client or one whom the lawyer reasonably believes to be a client.” Rule 7.3(a)(1).

Rule 7.2(a), subject to the prohibition of Rule 7.1 against false and misleading communication and subject to the restrictions and prohibitions of Rule 7.3 against in-person contact, specifically permits a lawyer to “advertise services through public media ⁶⁴¹ ... or through communications not involving in person contact.” The Maryland Rules of Professional Conduct were proposed by a select committee appointed by this Court to study the ABA Model Rules of Professional Conduct. See Annotated Code of Maryland, 1 Maryland Rules (1998) at 11; 13: 11 Md. Reg. 3 (May 23, 1986). The Maryland Rules of Professional Conduct were adopted by Order dated April 15, 1986, and became effective January 1, 1987. See id.

The decision to permit “direct mailing by attorneys to specific persons known to need specific legal services, when the motive for that direct contact is pecuniary gain” was made after full deliberation. Dissenting Memorandum of McAuliffe, J., Md.Code, 1 Md. Rules at 12; 13: 11 Md. Reg. 3 . Under this change of policy in the wake of Bates v. State Bar, 433 U.S. 350 , 97 S.Ct. 2691 , 53 L.Ed.2d 810 (1977), the decisions of this Court interpreting and applying the predecessor Maryland Code of Professional Responsibility that were relied upon by