What’s In A Retainer Agreement? Hint: Something Unethical

An attorney who engaged in multiple acts of serious misconduct over a protracted period of time should be disbarred, according to a recent report and recommendation of the California State Bar Court Review Department.

The attorney had a busy personal injury practice that kept him in court on a regular basis. He shared an office manager (Wheeles) with a law school classmate and friend. His trust in the office manager was misplaced.

When her issues came to his attention, he failed to act.

The board

…the misappropriation was the result of gross negligence amounting to recklessness, considering Guzman’s failure to monitor his CTA or his office staff. Yet, at trial, Guzman sought to blame Wheeles rather than accept responsibility for the misappropriation. In addition, we weigh heavily his overreaching in having his clients sign a fee agreement that ceded to him the unfettered right to control their cases, and after abandoning or settling their cases without their knowledge or consent, disappearing from view. Not surprisingly, this repeated course of conduct resulted in significant harm to multiple clients.

The attorney’s retainer form

 The Client hereby specifically authorizes The Attorney to settle his/her claims without instituting litigation, to receive the settlement proceeds; and to take a percentage of the recover in payment of his/hers fees. Client further authorizes The Attorney to endorse The Client’s name on checks paid in settlement claims, to have the proceeds placed in The Attorney’s Client Trust Account, and for The Attorney to with draw attorney’s fees from the account. (Errors in original.)

The hearing judge had proposed a one-year suspension. (Mike Frisch)