Good Faith And Other Peoples Money

Massachusetts, like the District of Columbia (see post immediately below), is dealing with the ethics of advanced fees.

The sanction imposed by a justice of the Supreme Judicial Court is a six-month suspension with a requirement that the attorney petition of reinstatement.

From the Memorandum of the Board of Bar Overseers

A hearing committee concluded that the respondent knowingly misused payments received in advance on behalf of a client under a written hourly fee agreement, money that constituted a retainer as a matter of law and which should not have been withdrawn until the fee was earned. The committee characterized the misuse as a good faith mistake on the part of the lawyer, who claimed that the payment represented a flat fee, which he was entitled to draw down immediately. We do not agree that the respondent’s misuse of client funds was merely a mistake. The terms of the fee agreement were – and should have been – clear to the respondent. Rather than accept the committee’s recommendation of a six-month suspension with three months stayed, we recommend that the court suspend the respondent for the.entirety of the six-month period and that the court require him to file a petition for reinstatement if in the future he seeks readmission to the bar.

Unlike D.C., Massachusetts does not impose near-automatic disbarment for intentional or reckless misappropriation. (Mike Frisch)