Unauthorized Practice By Proxy

The Tennessee Supreme Court has affirmed and reversed in part a Board on Professional Responsibility hearing panel determination involving charges against a suspended attorney

We find that the attorney violated RPC 5.5(a) by continuing to manage and market his law practice; by directly or indirectly communicating with office staff, attorneys, and former clients; and by recruiting and hiring attorneys while his law license was suspended. The hearing panel’s decision that the attorney violated RPC 5.5(a) is supported by substantial and material evidence. We hold that the attorney’s law license shall be suspended for two years, with eighteen months served on active suspension. 

The attorney had been suspended for three years in 2017 and was subject to supplemental charges in 2019 and 2020. 

The hearing panel’s findings

At the time of his suspension, Mr. Waggoner had two offices in Memphis: the Waggoner Law Firm on Poplar Avenue and Memphis Legal Group on Summer Avenue. After his suspension, Mr. Waggoner closed the Waggoner Law Firm office, notified his clients of his suspension, and advised his clients that attorney Brad Reasonover would finish their cases or they could hire another attorney. The Memphis Legal Group office, which primarily handled traffic ticket cases, remained open and continued to accept new clients after Mr. Waggoner’s August 1, 2017 suspension through August 2018 when he closed the office. After his suspension, Mr. Waggoner communicated with his former clients through Christi Walker, who was Memphis Legal Group’s office manager, and through other staff members. Mr. Waggoner interviewed and hired attorneys to staff Memphis Legal Group and otherwise directed and marketed the firm after his suspension.

After the hearing

The Board appeals to this Court, challenging the trial court’s reversal of the hearing panel’s finding that Mr. Waggoner violated RPC 5.5(a) by engaging in the unauthorized practice of law from August 1, 2017, until August 13, 2018, and the reduction of Mr. Waggoner’s suspension from four years to one year. The Board argues, in part, that the trial court defined “practice of law” too narrowly and disregarded substantial and material evidence showing that Mr. Waggoner participated in the management and marketing of his wholly owned law firm, in the supervision of its staff, and in the recruitment and hiring of attorneys.

Mr. Waggoner argues that the hearing panel’s findings and conclusions regarding the RPC 5.5(a) violation and the aggravating and mitigating factors were unsupported by the evidence and that the hearing panel’s sanction was too severe.

The unauthorized practice issue is one of first impression

After careful review, we hold that an attorney who has been suspended from the practice of law violates RPC 5.5(a) by managing and marketing his law firm; by directly or indirectly communicating with office staff, attorneys, and former clients; and by recruiting and hiring attorneys to exercise the “professional judgment” that the suspended attorney is forbidden from doing.

Because

It would undermine the purpose of the attorney disciplinary process if a suspended attorney could make an end-run around his suspension, practice law by proxy, and continue to generate revenue from the practice of law.

…substantial and material evidence supports the hearing panel’s findings that Mr. Waggoner continued to play an active role in the operation, management, and marketing of Memphis Legal Group to maintain his practice during his suspension and to generate revenue to fulfill his financial obligations for lease payments and other expenses. Mr. Waggoner tried to skirt his suspension by hiring contract lawyers through Memphis Legal Group to do work he was prohibited from doing and using these attorneys and staff as a firewall against unauthorized practice. Mr. Waggoner also continued to communicate with attorneys, staff, and former clients during his suspension.

Sanction

we hold that Mr. Waggoner shall be suspended from practicing law for two years, with eighteen months on active suspension, effective upon the entry of this Court’s order.

(Mike Frisch)