Office Management Is An Ethical Duty

Gross mismanagement, sloppy bookkeeping and inadequate supervision of employees can lead to disbarment. No dishonest motive or intent need be shown.

North Carolina was the second jurisdiction in the nation to disbar for gross negligence in managing an office. The first was Washington, D.C.

The seminal case in North Carolina is In re Ford, 94 DHC 4. There, an attorney was disbarred for gross mismanagement. This resulted in misappropriation of client funds. Following are relevant considerations in evaluating negligence in such situations:

• Was the staff member hired properly?
• Did he or she receive proper training?
• Did the attorney properly supervise his or her staff?
• Did the support staff have  a proven record of trustworthiness?
• Did the attorney lack knowledge of the support staff’s misconduct?
• Did the attorney take steps to cover up the misconduct?
• Were immediate steps taken to rectify the situation?
• Was there prompt and full restitution?
• Were safeguards put into place to prevent future problems?

[Source: Michael J. Dayton, 1995 North Carolina Central Law Journal, Vol. 21: 343, 351]

Following are some specific North Carolina ethics/disciplinary cases involving office mismanagement:

- Disbarment for gross negligence in managing trust account and neglecting a series of client matters. In re Colbert, April 2000

- Disbarment for neglecting a series of client matters. In re Mercer, April 2000

- Reprimand for neglecting three client matters and failing to communicate with all three clients. In re Seltzer, January 2000

- Indefinite suspension for neglecting two client matters and misrepresenting the status of the case to one client. In re Hitselberger, November 1999

- Suspension for neglecting client matters, failure to return unearned fees and surrender client property, and failure to respond to the State Bar. In re Dowell, September 1999

- Suspension for neglecting two domestic matters, misrepresenting the status of cases, failure to respond to the Grievance Committee and failure to communicate with clients. In re Hausle, October 1999

- A lawyer may delegate management of a trust account to a paralegal or other nonlawyer employee but the lawyer remains professionally responsible for the safe keeping of the funds deposited in the account and for compliance with the record keeping and accounting required by the Rules of Professional Conduct N.C. State Bar Guidelines.

A “legal assistant or paralegal” is a person, qualified by education, training or work experience who is employed or retained by a lawyer, law office, corporation, governmental agency or other entity and who performs specifically delegated substantive legal work for which a lawyer is responsible.

- File your tax returns. A number of attorneys have received active suspensions for failing to file income tax returns or failing to collect and remit employee taxes.

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