The practice of law is regarded as a profession of men and women who are towers of integrity and propriety. Before a person can practice law, each must take an oath to support the Constitution of the United States and the Constitution of their state and execute the office of Attorney-at-Law to the best of their ability. Some legal minds however are swayed by money or power or political pandering and step outside the code of ethics and drift into lawlessness. Following are contemporary examples.
The firm of Dewey and LeBoeuf LLP of New York once employed 1,300 attorneys in offices worldwide. The firm collapsed in 2012 due to its inability to meet the $50 million requirements of its borrowing. This was an iconic law firm that existed for more than 100 years.
Documents opened during a grand jury indictment in early March revealed that the firm had been operating with growing imprudence in financial affairs. What causes a law firm to operate in such a reckless manner? To clarify the answer, the Manhattan District Attorney’s office is charging four of the firm’s principals with crimes including grand larceny, securities fraud, conspiracy and falsifying business records. To ordinary people, that’s called ‘cooking the books.’
Some of the most egregious legal violations are related to the British Petroleum (BP) Gulf oil spill catastrophe that occurred on April 20, 2010. According to BP, they have paid out more than $26 billion. Of that total, $12 billion has been paid to meet hundreds of thousands of claims by individuals and companies.
Shortly after the tragic oil spill that took the lives of 11 people, BP announced the Gulf Coast Claims Facility (GCCF), headed by Presidential appointee attorney Kenneth Feinberg. Due to suspected fraud and halting payments to the thousands of claimants, the settlement program was turned over to Federal Judge Barbier in New Orleans. Judge Barbier in turn appointed former New York Federal Judge and FBI Director Louis Freeh in early July 2013 as a ‘special master’ to investigate alleged misconduct and monitor the claims payout program.
A claim in behalf of a fisherman stated he had earned $150,000 in 2009, the year before the spill. However, his tax return for that year showed that he was unemployed with no income. Unsigned claims documents were submitted, yet the claimant was awarded $357,000. The attorney representing the claimant was also working inside the settlement program; a clear conflict of interest.
A claim of more than $7 million was paid to the Andry Law Firm of New Orleans. Their claim was based on a contingency fee of years earlier, before the firm existed. The losses by the firm were ethereal, and were based on a revised strategy of business focus, not actual or contingent losses.
Five senior officials of the settlement program resigned or were terminated when evidence turned up that a strip club in New Orleans where these people had been entertaining each other received a settlement of $550,000.
A law firm specializing in institutional investments and hedge funds was awarded $5 million for lost income in 2010. A law firm whose profit almost doubled over the prior year was awarded $3 million. In spite of increased earnings over 2009, an award of $8 million was made to a law firm representing several hundred claimants. In addition to their own claims, law firms are taking 25% of the settlements from claimants. With about $5 billion paid out through the end of 2013, law firms will receive about a billion dollars and plaintiff attorneys will be receiving an additional $600 million from the BP settlement.
When BP agreed with President Obama regarding the amount and process of damage settlements, some attorneys were prone to patronize their false impulsive instincts. Don’t lose faith in your attorney but be wary of those who enter into political pandering, lapses of judgment and just plain greed. The foundation of our government is based on the observance of the spirit and the letter of the law. No one is above the law.
– Dick Baynton
