Attorneys who find themselves in the crosshairs of an ethics investigation or disciplinary proceeding face significant costs. When a lawyer receives a bar complaint, they typically focus on what it will cost to pay an attorney to represent them. But the true price of an ethics investigation involves much more than just lawyer fees. Lawyers faced with an ethics complaint need to be mindful of the full extent of costs to which they are potentially exposed.
Attorney Fees and Expenses
An attorney who must hire another attorney naturally will focus on their attorney’s fees and expenses. Depending on the gravity of the situation, those outside lawyer expenses may be substantial. Moreover, the fees for representation in defending a bar complaint may, or may not be, covered by insurance—provided the lawyer has any (many do not, and most jurisdictions do not require lawyers to be insured).
Some malpractice insurers provide coverage for disciplinary defense counsel. However, those policies normally limit such coverage. Typical policies provide indemnity in the range of $10,000-$50,000. Depending upon the seriousness, complexity, and duration of the matter, those limits of coverage may not be nearly sufficient–although it certainly can help.
On the other side of the spectrum, some insured practitioners may have to pay a deductible (or “retention”) before insurance ever kicks in. But depending on the matter, they may never reach the deductible amount–making the lawyer effectively self-insured.
Some lawyer choose to avoid those costs and represent themselves. There is an adage that a practitioner who represents himself has a fool for a client and an idiot for a lawyer. It is difficult for a lawyer under investigation to think objectively or realistically about their own conduct. This is particularly true in matters before the U.S. Patent and Trademark Office, where highly technical or seemingly innocuous practices are treated by the Office as serious ethics offenses. For more on pro se respondents, check out our post here.
Lost Opportunity Costs
While many ethics investigations are conducted in secret and thus are not generally publicly available, the lawyer may still be obligated to inform others who have a right, or need, to know. That disclosure, in turn, can cost a lawyer substantial opportunities.
A targeted lawyer who is employed by a law firm or corporation likely will have to disclose the matter to their employer. That could cost them their job.
Even if the attorney keeps their job, a pending ethics matter may delay chances for promotion or other opportunities for professional advancement until the matter is concluded–a process that may take years.
If the practitioner is looking into a lateral move, they will likely be required to disclose a pending bar investigation or disciplinary proceeding to prospective employers. Good luck with that. Until the ethics matter is finally concluded, a lawyer may find it very difficult to change career paths or find new work opportunities.
Delayed Licensing Costs
If the practitioner who is under investigation has an open bar application pending elsewhere, they will be required to disclose their pending investigation or disciplinary proceeding to any bars in which they are seeking admission. Many bars, when dealing with an applicant who is under investigation, will simply place the lawyer’s application on “hold” until the investigation is concluded. Such delays can cause the lawyer to lose opportunities for practicing in other jurisdictions.
Litigators may need to obtain pro hac vice admission. Most PHV applications require the applicant to disclose if they are involved in a pending disciplinary proceeding. Such disclosure could cause a court to reject the application or place conditions upon it. That could lead to more lost opportunities, as well as the possibility of a very uncomfortable client conversation.
If the targeted practitioner holds another professional license, such as a professional engineering , securities broker, or real estate license, they may be required to disclose the ethics matter to their other licensing bodies. That may result in an adverse impact on other licenses until the ethics investigation fully plays out.
Time Costs
Lawyers have an affirmative duty to cooperate with ethics investigation and cannot simply ignore the process. Those investigations can require the lawyer to divert time they might otherwise spent on more productive or pleasant activities into dealing with the investigation.
The time commitment may be substantial–particularly if disciplinary counsel files a formal complaint seeking to publicly sanction the lawyer. Especially if the lawyer has a busy practice, any time they must spend on their ethics case could affect how much time they have to work on billable work or client development.
Health and Wellness Costs
Turns out that being a respondent in a bar investigation, against a deeply-pocketed adversary, in a secret forum, in which your ability to earn a living is on the line, can mess with your head–literally. Fight-or-flight kicks in. Fear, anxiety, depression, self-blame, and anger are all common responses to the lawyer disciplinary process.
Bar investigations can trigger mental health issues, which in turn can trigger, or exacerbate, physical health issues. Stress kills. The whole process can literally make a lawyer sick.
Add to this the fact that a significant percentage of attorneys already suffer from mental health or addiction issues. Studies confirm that members of the legal profession are much more likely to have a mental health or addiction issue than members of other professions.
As we have discussed here, the mental health and well-being crisis in the legal profession is very real. For practitioners who may be already suffering, or are pre-disposed to, a mental health issue, an ethics investigation or disciplinary proceeding can exacerbate an already fragile condition. In some cases, the stress and anxiety of a bar investigation can trigger a relapse, or worse.
Bad Settlement Costs
USPTO and other state or federal bar investigations and disciplinary proceedings are marathons, not sprints. Practitioners who find themselves sucked into one must prepare for a long game. And many practitioners reach a point where they just cannot take it anymore.
They break. And so, they settle.
When settling, the lawyer who is tapped out is not engaging in an arms-length negotiation. They are not compromising. They are capitulating. When they do, they may agree to terms of settlement that are unfavorable, unreasonable, unwarranted, untrue, and downright unfair. Bar settlements are the product of grossly disproportionate bargaining power.
Effectively Managing the Costs
Ethics cases are physically, mentally, financially, and emotionally draining ordeals. They are a lawyer’s worst nightmare.
An attorney who is going through the ethical system should be cognizant of all possible costs. Those who do best take steps to help manage those costs. Such steps can include:
- Checking for insurance and other forms of payment;
- Seeking the guidance of professional counsel;
- Leaning on a support system–including family, close friends, trusted colleagues, and their faith community;
- Taking care of their physical and mental health and wellness.
But with careful planning, and help, attorneys can equip themselves better to help manage the true price of an ethics investigation.
