Lawyers Gone Bad

by Philip Slayton

  “Today as a legal agent I have exactly the same practice as I had before,” Harry told me. “When it disbarred me, the Law Society clipped my wings, but I can still fly!” He called to his secretary, “Get me page 6!” She didn’t have to ask what page 6 he was talking about, and pulled out the dissenting reasons of bencher Thomas Carey in the disbarment proceedings, the reasons that favoured Harry’s case. The next morning I listened to his weekly morning show on a Toronto radio station. He was, yet again, attacking the police. “The police are just a gang of Crazy Harrys,” he said. Then, at the end of the program: “Do you need legal advice? Call me.” And he gave his telephone number.35

  SIXTEEN

  THE SEARCH FOR JUSTICE

  How much justice can the average Canadian afford? None.1 For financial reasons, he is denied use of the legal system and courts, key institutions of government and democracy. It is as if the right to vote in a general election were given only to those with an income above a certain level. Do not look to the legal profession to solve this problem. The answer will not be found within legal culture.

  In 2004, average after-tax earned income for a “non-elderly” male living in Canada (a Statistics Canada category) was $28,300; for a “non-elderly” female, $24,400.2 If this is how much money you make, you won’t get legal aid (available only to those who are really poor), and will almost certainly be denied the pro bono legal services that socially concerned lawyers occasionally offer.3 If you need a lawyer, you’ll have to dig into your own pocket. In the cities, even a junior lawyer charges $200 or more for an hour’s work. A routine matter can cost as much as a mid-priced car. Fees of this magnitude are beyond almost everybody’s ability to pay.

  Young people go to law school to improve or consolidate their social and economic position. Horatio Alger told us that hard work and virtue can overcome adversity and lead to great wealth and respect.4 Law school can put the child of a poor immigrant into a Bay Street bank tower. It can make the son of a Cape Breton coal miner into someone to be reckoned with. It can give a reputation to the child of parents who could barely read and write. It can make the daughter of immigrants from Taiwan into a professional. It can gratify a father who is a pillar of the church and the community. (None of this necessarily prevents eventual disaster and disgrace, as we have seen.)

  Law school encourages cosmopolitan desires and pursuits. It reaffirms traditional values. It teaches what the economist Paul Seabright has called “the narrative.”5 Students are encouraged to anticipate wealth and power; they are told how to serve the rich, for it is only the rich who can afford lawyers;6 they are taught rules, technique, and toughness, and learn to avoid emotional involvement or moral judgment. This is what law students, and those who will eventually employ them, want. Access to justice is not on the agenda. The one-time young idealist who backpacked through Asia and dreamed of a better world becomes a tax lawyer; the youthful environmentalist who once supported the Green Party, general counsel to an auto-parts company. As Michael Gorra has written of characters in Ward Just’s novel Forgetfulness,7 “They have discovered that a career creates its own requirements, which are often at odds with the ideals that led to the choice of that career in the first place. At their outer edges, the compromises people make become … Lebenslüge, the lie that allows one to live.”8

  Every year an army of law school graduands disperses into society and the workplace.9 These new lawyers are clever and educated, ambitious and aggressive. With few exceptions, they seek to participate in what their predecessors have established, not to reform what is there. They will make their way in the world as they find it. They will adopt its ways and eschew change. They will be reluctant to turn away clients, no matter who they are and what they want. They will be helpful, not judgmental. They want to work hard and be successful (although, as I have described, some will stray). They will serve their rightful masters. Their masters do not include the poor, or even the middle class.

  As the stories I have told show, a lawyer in practice, whether he is by himself or with a handful of others or in a large firm, has much to contend with. Harsh economic imperatives promote inefficient work habits and even bad behaviour (overbilling, for example, or other forms of cheating). There is no moral compass, for it is not the job of the lawyer to pass moral judgment. Professional mastery of legal rules, and the need to manipulate them on behalf of clients, may encourage disrespect for values that are found in the law. Almost all of its practitioners see law as a business (the judgment of the B.C. Court of Appeal in the Strother litigation notwithstanding10). And there is extensive psychological baggage. To quote Martin Seligman once more, “Lawyers are trained to be aggressive, judgmental, intellectual, analytical and emotionally detached. This produces predictable emotional consequences for the legal practitioner: he or she will be depressed, anxious, and angry a lot of the time.”11 Lawyers are also pessimistic. And sometimes, as some of my stories show, a lawyer descends into what can only be called a kind of madness, exhibiting psychopathic and other deviant behaviour. None of this favours justice in the broader community.

  Many new lawyers join the great Canadian law firms and stay there for many years, even for their entire careers. In these great firms, which serve the economic elite (corporations, governments, a few rich individuals), a lawyer’s work is as challenging as it gets; his prestige, considerable; his income (in due course), huge. Many of these firms are very large, with multiple offices in Canada and overseas. They have enormous overheads. They are businesses. Their need and desire for profit is relentless. Abusive billing practices are common. Oversight of quality and integrity is difficult, if not impossible. The partners and associates hardly, if at all, know each other. Knowing and trusting your partner or colleague is unusual and unnecessary; firm size, geographic spread, and organizational and legal structures (such as the limited liability partnership, creating what David Cay Johnston calls a “moral hazard”12) ensure that this is the case. A law firm has little concern for access to justice by the man on the street.

  Who will give us access to justice? Will the provincial law societies, explicitly charged with regulating the legal profession and protecting the public interest, do it? They have made some attempts to address the issue, principally by permitting contingency fees and class actions.13 In October 2002, the then treasurer of the Law Society of Upper Canada announced a new conduct rule for contingency fees. He said, “The strength of our legal system lies in its ability to be accessible to all people.”14 (The new rule was prompted by the judgment that year of the Ontario Court of Appeal in McIntyre v. Attorney General of Ontario, which held that contingency fee arrangements are not necessarily illegal.15) In 2004, a news release by the Ontario Ministry of the Attorney General announced some technical amendments to the rules governing contingency fees in the Solicitors Act. The treasurer of the Law Society of Upper Canada commended the Attorney General “for moving ahead with contingency fee legislation in Ontario, designed to enhance access to justice.”16 But the amended rules seem restrictive more than anything else,17 and few lawyers are ready to give up substantial and largely guaranteed hourly rates to gamble on contingency arrangements.

  I have described the often ineffective and confused treatment by regulators of lawyers gone bad. Sometimes egregious conduct leads to disbarment; sometimes, to a token reprimand. Sometimes a disbarred lawyer is easily readmitted to legal practice (after cooling his heels for a few years); sometimes he will remain forever beyond the pale. Sometimes sex with a client is regarded as acceptable; sometimes, not. The distinction between one case and the other may be elusive, and the discrepancies from one province to another considerable. Sometimes a law society’s disciplinary process is completely ineffective. On some occasions, confronted with a big problem, a law society seems simply baffled.18

  Law societies are run by lawyers, according to the world view and temperament of lawyers. It is no surprise that they have the same agenda and attitude as their members. Law societies are by na
ture conservative and protective of the status quo. They nourish their own and are the voice of the establishment. A law society member who is different risks severe criticism and marginalization.19 It is not the law societies of Canada that will change things. Among lawyers themselves there is growing resistance to the expanding concept of “professional misconduct,” and to the idea that law societies should be wide-ranging policemen of lawyers’ lives, supplementing, if not supplanting, everything from the teachings of the church to the strictures of the criminal law. This is particularly seen in the way law societies have dealt with sexual transgressions by lawyers.

  Sir David Clementi has said, of the current British system of regulating the legal profession and of the radical new system that he has proposed, “The current regulatory system is focused on those who provide legal services: the new framework will place the interests of consumers at its centre.”20 As described earlier, the 2004 Clementi Report contained four main sets of recommendations. It proposed that the legal profession be overseen by a new legal services board with a lay majority chaired by a non-lawyer and accountable to Parliament. It recommended that the profession lose its powers to investigate complaints against lawyers, and that a new independent office be created for that purpose. It recommended that lawyers should be free to enter into partnerships with non-lawyers. And it proposed what quickly became known as the “Tesco law,” allowing outside companies or individuals to own and manage a law practice (named after the British supermarket chain that offers do-it-yourself divorce and will kits, legal forms and agreements, and law books for the layperson, and that is expected to offer traditional legal advice once the Clementi reforms are implemented).

  It is time for very similar reforms in Canada. There are no good arguments for the view that only lawyers can regulate lawyers, and many good arguments for the contrary position. Disciplinary action should be in the hands of an independent body; for a law society to investigate, prosecute, and judge violates elementary principles of justice. Above all, it is time to put the interests of the consumer at the centre of the system, making the legal system and the courts available to all. Only the government can do these things.

  There will always be lawyers who go bad, no matter what the legal system. But the legal system should have no tendency to create, encourage, or permit transgressions. Those will inevitably come from the vagaries of human nature, which cannot be escaped.

  EPILOGUE

  I finished writing Lawyers Gone Bad in December 2006. The book tells stories of lawyers who got into serious trouble. It discusses broad themes suggested by those stories—problems in legal culture and education, the inadequate governance and discipline of the legal profession, and extremely poor public access to the legal system, mostly because of the high fees that lawyers charge. This introduction to the paperback edition, written at the end of April 2008, brings readers up to date with recent developments.

  What is the fundamental duty of a lawyer to his client? That was the question at the heart of the Robert Strother case (Chapter 6). Strother, after a retainer letter with one client expired, acquired a financial interest in another client in the same line of business, whose interests he then preferred. The first client took exception and sued. Did Strother’s duty of loyalty to the first client survive the expiry of the contractual obligations found in the retainer letter? The trial judge said it didn’t, the court of appeal unanimously said it did, and it was left to the Supreme Court of Canada to decide this fundamental issue, one way or another, once and for all.

  But, in Strother v. 3464920 Canada Inc., the Supreme Court decided one way and another, stumbling badly. Judgment was handed down on June 1, 2007. Five justices (Binnie, Deschamps, Fish, Charron, and Rothstein) took an expansive view of a lawyer’s fiduciary duty and thought that Strother had behaved improperly. The other four disagreed fundamentally. To make matters worse, the majority eviscerated their harsh assessment of Strother’s conduct by dramatically limiting the consequences for him of what he had done. Instead of having to hand over $30 million to his erstwhile client, as the court of appeal said he should, Strother had to disgorge only a million dollars, possibly less. The result of this unappetizing Supreme Court of Canada stew was that although Strother, in a strict legal sense, lost the case, he was able with some justification to issue a press release that, in effect, claimed victory.

  Justice Binnie gave the discursive majority judgment in Strother. He wrote, “Fiduciary duties provide a framework within which the lawyer performs the work and may include obligations that go beyond what the parties expressly bargained for.” Lawyers, he said in a colourful sidebar, are professional advisers, not used-car salesmen or pawnbrokers. A lawyer’s duty of loyalty, in some circumstances (where he is motivated by a personal financial interest, for example), may extend beyond contractual obligations found in a retainer letter.

  Chief Justice McLachlin, writing for the minority, had a completely different point of view. She considered that “whether a conflict between two clients exists is dependent on the scope of the retainer between the lawyer and the client in question. The fiduciary duties owed by the lawyer are moulded by this retainer, as they must be in a world where lawyers represent more than one client.” It was not open to the court, said the chief justice, “to superimpose a broad fiduciary obligation independent of and inconsistent with the retainer.” Later in her reasons, she commented, “If the duty of loyalty is described as a general, free-floating duty owed by a lawyer or a law firm to every client, the potential for conflicts is vast.” Finally, she referred abstrusely to the “underlying difficulty” in Justice Binnie’s majority judgment: “The reasons do not ask whether there was a direct conflict between Strother’s duties under his retainer … and what he was doing, but rather whether there was a decontextualized potential or past conflict.” After all the huffing and puffing and hand-wringing about Robert Strother over the past few years, the Supreme Court gave us something for everyone and nothing much for anyone.

  What’s happened to Ingrid Chen? The one-time Winnipeg immigration lawyer (Chapter 4) is most famous for hiring members of a motorcycle gang to intimidate clients who upset her. “It has to be one shot and then gone,” she instructed her Los Bravos contact in a telephone conversation monitored by police. In 1999, in her first encounter with the law, Chen was arrested and charged with drug and immigration offences. The Law Society of Manitoba suspended her almost immediately. It was not until May 2006, however, that a disbarment hearing was held, and not until March 14, 2007, that the discipline committee finally threw her out of the legal profession. Ingrid Chen’s disbarment appeal was dismissed by the Manitoba Court of Appeal on January 18, 2008.

  Toronto lawyers Simon Rosenfeld and Peter Shoniker, both wild and crazy guys (Chapter 5), were convicted separately of money laundering. Shoniker was sent to prison in September 2006 and was given early release in January 2007. In March 2005, Rosenfeld was sentenced to three years in jail; his appeal is expected to be heard later in 2008, and in the meantime he has been free on bail. Shoniker liked to hand out business cards describing himself as Sir Peter Shoniker, O.B.E., and was recorded by police as saying (inaccurately, as it turned out), “There isn’t a fucking judge in the city who would grant an authorization [tap] on my line.” As for Rosenfeld, he invited an undercover RCMP officer to a golf game where, he claimed, there would be naked women at every hole. Remarkably, both Shoniker and Rosenfeld are still lawyers, members of the Law Society of Upper Canada, although each has undertaken not to practise law until the law society agrees. Meanwhile, Canadian lawyers continue to be exempt from statutory requirements that suspicious cash transactions be reported to FINTRAC, a federal government agency, although the federal government has indicated that new regulations, to take effect at the end of 2008, will put lawyers on the list of those subject to record keeping and government scrutiny of suspicious financial transactions.

  What’s the latest on sex with clients (Chapter 7)? There have been interesting de
velopments in the cases of Gary Neinstein and George Hunter. In 2004, the Law Society of Upper Canada wanted to disbar Neinstein because of his sexual relationship with a client. In June 2007, the law society, battered and bruised after a long battle with Neinstein, finally settled for imposing the lesser penalty of a twelvemonth suspension. The reasons of the original Neinstein panel, the one that wanted him disbarred, were in part:

  We ask: how can it be in this day and age, given the public interest and expectation that a lawyer will be disbarred for stealing a client’s money, save exceptional circumstances, that the solicitor will not face the same fate when he/she commits sexual harassment, a breach of trust which violates the dignity and self-respect of a client or employee?

  That panel was chaired by George Hunter, who went on to become treasurer of the Law Society of Upper Canada and president of the Federation of Law Societies. But Hunter, who pursued Neinstein with such sanctimony and enthusiasm, was a man with a secret. In February 2007, his hidden life unravelling, Hunter himself admitted sexual misconduct with a client. On March 28, 2007, a law society hearing panel summoned up all its fortitude and suspended him for sixty days. The reasons of the Hunter hearing panel had quite a different tone from that of the Neinstein panel chaired by Hunter:

  The member should not be treated more harshly as a result of his former status as Treasurer and as a bencher. Nor, of course, should he receive favoured treatment, although he is entitled to make the important point that his entire career is incompatible with this misconduct and that, therefore, this misconduct can be regarded as “out of character.” We have no difficulty in so finding.