Wherever There is a Human Being, There is an Opportunity for a Kindness

 

In January we wrote about the case of Zaug v. Virginia State Bar (here).  Today, a follow-up.

 

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First, a brief summary of the facts: After speaking on the telephone for less than 60 seconds with a plaintiff in a medical malpractice case in which Zaug's firm represented the defendant, the Virginia State Bar (and an appellate court) determined that attorney Zaug had violated the Rules of Professional Conduct. 

In particular, the Bar said that Zaug violated Rule 4.2:

In representing a client, a lawyer shall not communicate about the subject of the representation with a person the lawyer knows to be represented by another lawyer in the matter, unless the lawyer has the consent of the other lawyer or is authorized by law to do so.

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Zaug appealed to the Supreme Court, and the Court reversed the appellate court's finding of misconduct.  You can read Justice Mims's decision here.

 

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The Supreme Court has gotten this decision right. Justice Mims emphasizes that lawyers in Virginia are governed both by the ethical canons and by a duty of courtesy to all.

Our society does not put enough emphasis on politeness. I was heartened that Justice Mims bucked the trend. His opinion includes a reminder that the oath taken by Virginia attorneys includes a promise to "courteously demean oneself". 

Here is an excerpt from the decision:

In the course of being admitted to the Bar of this Court, every attorney swears the following oath: 

Do you solemnly swear or affirm that you will support the Constitution of the United States and the Constitution of the Commonwealth of Virginia, and that you will faithfully, honestly, professionally, and courteously demean yourself in the practice of law and execute your office of attorney at law to the best of your ability, so help you God? (Emphasis added). See also Code § 54.1-3903.  

Further, the State Bar publishes principles of professionalism on its website. The preamble states, 

From Thomas Jefferson to Oliver Hill, Virginia lawyers have epitomized our profession’s highest ideals. Without losing sight of what lawyers do for their clients and for the public, lawyers should also focus on how they perform their duties. In their very first professional act, all Virginia lawyers pledge to demean themselves "professionally and courteously."  

Virginia State Bar, Principles of Professionalism. The principles state that, "In my conduct toward everyone with whom I deal, I should [r]emember that I am part of a self-governing profession, and that my actions and demeanor reflect upon my profession," and "I should [t]reat everyone as I want to be treated —with respect and courtesy." Id. 

The Virginia Rules of Professional Conduct are precisely what they are described by their title to be: rules of professional conduct. They exist to further, not to obstruct, the professionalism of Virginia attorneys. Professionalism embraces common courtesy and good manners, and it informs the Rules and defines their scope. Accordingly, we will not construe the Rule to penalize an attorney for an act that is simultaneously non-malicious and polite.

Happy St. Patrick's Day! 

Albemarle County's "Life After High School" Conference

On Saturday, Albemarle County's Commonwealth's Attorney Denise Lunsford and I spoke at Albemarle County's "Life After High School" conference for students with special needs.  The conference was held at CATEC.  The turnout this year was great.

Denise and I led a discussion about the legal rights and responsibilities of adulthood.  As the basis for our presentation, we used the Virginia State Bar's resource, So You're 18: A Handbook on Your Legal Rights and Responsibilities.

You can download a free copy of So You're 18, here.  This is an excellent book, and I enjoyed reading through it again while preparing for the conference. The book summarizes various legal issues including employment, contracts, jury duty, and criminal charges. It focuses on how a person's rights and duties change when he or she turns 18-years old.

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The "Life After High School" conference included a series of presentations related to completing high school and then transitioning into adulthood.  Other sessions included "Transition from Pediatric to Adult Medicine", "Employer Expectations", and "Alternatives to Guardianship." My sense was that parents and students alike found the presentations informative and valuable.

Conservation Easements Circa 2013

This weekend's Wall Street Journal included an article about the inclusion, in the fiscal cliff compromise, of the generous federal tax benefit for conservation easement donors. Rachel Silverman's piece is here. 

 

The recently-passed legislation provides for a federal deduction equal to the easement's value up to 50% of adjusted gross income, with a carry forward of 15 years.

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The Journal article includes a cautionary note about the IRS's increased scrutiny of easements:

Beware that the Internal Revenue Service has been increasing the number of conservation-easement tax returns it audits, concerned with abuses in which donors have taken inflated deductions or have placed restrictions on land with little conservation value.

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At Richmond & Fishburne we have started work on 2013 easement donations (wow - there is some beautiful property in Albemarle County, and there's nothing better than getting away from this computer for a site visit to meet with a prospective easement donor).

Because of the lengthy review, revision and approval processes undertaken by the Virginia Outdoors Foundation, the Department of Forestry, and other donee organizations, it is important that easement donors start the process early in the calendar year for which they want to make their donation.

Trusts & Estates Downsized

Word has rustled through the lawyer grapevine for several years that a number of large law firms are down-sizing (or eliminating altogether) their trusts and estates practices. 

The explanation is that T&E work does not generate revenue commensurate with other "big firm" specialties, in particular corporate transactions and litigation.

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Now comes evidence of the trend in last week's New York Times.

Peter Lattman reports (here) that Debevoise & Plimpton is eliminating its entire T&E department. Previously, Weil, Gotshal and Gibson Dunn did the same.

Here is Lattman's explanation:

There are problems with trusts and estates within a big law firm model. The practice, to use the law firm management parlance, is not as leverageable as other areas. Corporate and litigation partners generate big fees by assigning armies of junior lawyers to megamergers and complex lawsuits. By comparison, trusts and estates work requires far less manpower, which mean far less profit. 

Another issue in sustaining these departments is that individual clients bristle at billable rates that now reach more than $1,000 an hour. While big corporations grudgingly pay those rates, wealthy families often resist them. 

As a result of these dynamics, firms’ trusts and estates practices have remained small and, in many cases, decreased. At the same time, firms have aggressively built up their corporate and litigation practices across the globe. They have also embraced hot, moneymaking practice areas like patent law and white-collar criminal defense. 

Richmond & Fishburne does a great deal of T&E work, and we think it's some of the most satisfying legal work there is. Helping families plan for the future may not be leverageable from a management perspective, but it is absolutely valuable from a people perspective.

Now let's go cheer for Joe Harris and those surprising Wahoos as they take on the Hokies at the JPJ this evening!

Short Sale Shenanigans = A Michigan Supreme Court Justice Pleads Guilty to Fraud

Individuals who sell their property short (that is, for less than the outstanding value of the mortgage) are required to disclose their other assets as part of the lending bank's approval process.

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Now comes a jaw-dropping story from Michigan about a former Supreme Court justice who pleaded guilty to bank fraud in connection with lying to her bank in order to obtain approval of her short sale.

Diane Hathaway faces a potential prison term of up to 18 months after her guilty plea.

According to the Associated Press (here), Hathaway and her husband owned property in Florida in addition to the house in Michigan that they were selling short.

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The AP reports that, in order to establish financial hardship, Hathaway and her husband transferred the Florida real estate to a relative -- and then the relative transferred the property back, after the short sale was approved and the Michigan transaction had closed.

When the Florida transfers were discovered, prosecutors pounced.

Wow. You can't make this stuff up. The practice points here practically slap you in the face:  

1. Records related to the ownership of real estate are public (and increasingly accessible, not just buried in the deed books).
2. Banks and federal prosecutors have the time and resources to investigate those records.
3. Tell the truth.

And, bonus pointer #4: Charlottesville has at least one resident expert on short sales, attorney Bill Tucker at Tucker Griffin Barnes.  If you are buying or selling in a short sale situation, you should be represented by Tucker or another experienced-hand.