On November 22, 2021, the Massachusetts Board of Bar Overseers of the Supreme Judicial Court publicly reprimanded lawyer Mark C. Watson for failing to adequately supervise a paralegal, for record keeping violations, and for failing to properly distribute funds to those entitled to receive them. See Bar Counsel v. Mark C. Watson, Order of Public Reprimand No. 2021-15 (Mass. Nov. 22, 2021).
Failure to Supervise Paralegal
The facts giving rise to the public reprimand are as follows:
The respondent is a real estate practitioner who received, into an IOLTA account, funds from lenders and others. One of his long-time paralegals, whose responsibilities included tracking all funds deposited into and disbursed from the firm’s IOLTA account, stole over $244,000 from him over a period of several years. She was able to do this because she was the only person who tracked all funds deposited into and disbursed from the IOLTA account, she used a computer that only she had access to, and she maintained Quicken records solely on that computer. She also opened the relevant mail and took all phone calls, so she was able to deflect inquiries. She diverted the funds by writing IOLTA checks to two acquaintances of hers, as well as several of her own creditors. She disguised her theft by falsely entering the names of persons who were not the payees of the checks in the Quicken records. The respondent failed to uncover the theft because he never viewed the actual cancelled checks. Of the $244,000, at least $67,000 misappropriated by the paralegal was owed to the respondent’s firm.
The respondent received, in 2003, $240,000 in mis-wired funds – funds that should not have gone to him. He kept them in his account for many years without determining who they belonged to. Despite some efforts, he has not been able to figure out to whom these funds belong. The respondent’s misconduct violated Rules 1.15(c), 1.15(f)(1)(C) and (E)(iii), and 5.3(a) and (b).Id.
The Massachusetts Board of Bar Overseers imposed a public reprimand on these facts.
Similar Result in Louisiana?
The Louisiana Supreme Court would likely impose discipline on a Louisiana lawyer under similar facts. A lawyer’s obligation to supervise nonlawyer assistants is very similar to a lawyer’s responsibility to supervise subordinate lawyers. First, the lawyer must exercise reasonable care in overseeing the work of nonlawyers. Thus, a partner must ensure that the firm has in place reasonable measures to ensure that nonlawyers conduct themselves in a manner consistent with these rules–although as a technical matter these rules do not apply to nonlawyers. See La. Rules of Prof’l Conduct r. 5.3(a) (2004); In re Bailey, 115 So. 3d 458, 465 (La. 2013) (disbarring lawyer for failure to ensure lawyer’s nonlawyer wife, who lawyer appointed as trustee of client’s trust, followed proper accounting and adequate preservation of client’s trust among other violations stemming from appointment of wife as trustee); In re Wahlder, 728 So. 2d 837 (La. 1999) (holding that a lawyer has ultimate responsibility for actions of nonlawyer staff); see also Restatement (Third) of the Law Governing Lawyers § 11(4)(a)(i) (2000).
Likewise, a supervisory lawyer must ensure that the conduct of nonlawyers whom he or she supervises conforms to these rules. See La. Rules of Prof’l Conduct r. 5.3(b) (2004); see also Restatement (Third) of the Law Governing Lawyers § 11(4)(a)(ii) (2000); In re Serret, 35 So. 3d 256, 259 (La. 2011) (disciplining lawyer for failure to recognize and prevent secretary’s embezzlement); In re Shortess, 950 So. 2d 570 (La. 2007) (disciplining lawyer for not adequately supervising a non-lawyer assistant in preparing pleadings); In re Brown, 813 So. 2d 325 (La. 2002) (disciplining lawyer for failure to supervise paralegal who was functioning like a lawyer); In re Wilkinson, 805 So. 2d 142 (La. 2002) (disciplining a lawyer for failure to supervise nonlawyer’s handling of succession matters); see also La. State Bar Ass’n v. Keys, 567 So. 2d 588 (La. 1990); La. State Bar Ass’n v. Edwins, 540 So. 2d 294, 299 (La. 1989). To comply with this rule, a partner or supervisory lawyer should inform all nonlawyer assistants in writing about the fundamental duties owed by lawyers to their clients, particularly the duties of confidentiality, loyalty, competence, and diligence. Furthermore, a lawyer should supervise with particular care all staff members entrusted with the handling of client or third-party funds.
Many lawyers depend on non-lawyer staff in order to maintain their law practice. Non-lawyer assistance is invaluable to the busy lawyer. However, lawyers must provide their non-lawyer assistances with the appropriate instruction and supervision regarding the ethical aspects of their employment. It is particularly important to train and ensure non-lawyer assistants comply with the Rules of Professional Conduct related to confidentiality and managing client funds. Indeed, the Louisiana State Bar Association recommends that a non-lawyer should handle and distribute client money only under close supervision. See LSBA Practice Aid Guide: The Essentials of Law Office Management, Chapter 3: Fees, Billing and Trust Accounts at 52.