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NJ Supreme Court Disciplined Fewer Attorneys in 2000 More disbarments, fewer suspensions

For release: Aug. 24, 2001
For further information, contact:
John J. Janasie, Acting Director, OAE (609) 530-4008
For Judiciary information, contact:
Linda Brown Holt, Judiciary Office of Public Affairs (609) 292-9580

Trenton, N.J….The New Jersey Supreme Court disciplined 198 attorneys in 2000, according to a report released today by the Supreme Court's Office of Attorney Ethics (OAE). A total of 162 attorneys received final disciplinary sanctions, while another 36 were the subject of emergent temporary suspensions.

This year's figure represents a decrease from the 1999 figure of 239 total sanctions, which was the highest number of sanctions recorded in a year (a tie with 239 in 1997).

During 2000, disbarments increased by 12 percent from the previous year (46 in 2000 vs. 41 in 1999). At the same time, suspensions decreased by 39 percent, from 73 in 1999 to 44 in 2000.

Despite this decrease in total disciplinary sanctions, the number of new grievances filed against attorneys increased in 2000 over those filed in 1999. A total of 1,320 grievances was docketed during 2000, compared to 1,294 the year before.

The statistics are included in the OAE's 17th annual report to the Court. The OAE serves as the Supreme Court's investigative and prosecutorial arm in attorney-discipline matters. The report also includes information on the attorney fee arbitration process, random audit program and the annual attorney registration process. The text of this report is available online at the Judiciary Web site, www.judiciary.state.nj.us.

The disciplinary system, the fee arbitration process, the random audit program and the annual attorney registration process are financed through annual assessments paid by attorneys. At the end of 2000, there were 72,738 lawyers admitted to practice in New Jersey, compared with 41,166 at the end of 1990.

Since 1994, there has been a dramatic increase in the number of grievance investigations being handled within the time goals set out by the Supreme Court - six months for standard investigations and nine months for complex matters. At the end of 1994, 43 percent of all grievance investigations met the goals. At the conclusion of 2000, 83 percent of all investigations complied with the goals.

The success in meeting time goals corresponds to changes the Court made to the system in July 1994 when, for the first time, the Supreme Court authorized full-time investigators to handle approximately one-fourth of all attorney-discipline cases in the state. Since March 1995, full-time investigators have conducted investigations of attorneys in the disciplinary districts of Essex-Newark and Camden-Gloucester Counties and some of the investigations in Ocean County.

In all other districts, investigations are undertaken by attorney volunteers who are also supported in the hearing process by volunteer public members. The report commends their efforts as well. The OAE continues to handle the most complex cases and those requiring immediate attention.

The timeliness of hearings, where attorneys are tried on charges of unethical conduct, has also improved during the last six years. In 1994, only 37 percent of hearings were concluded within the Court's six month time goal. In 2000, that compliance rate increased to 59 percent statewide.

OAE Year 2000 Report Highlights

Public Discipline

In 2000, 198 attorneys were finally (162) or temporarily (36) disciplined. There were 46 disbarments (19 by opinion of the Supreme Court and 27 by consent of the attorneys), 44 final suspension orders of various lengths, 48 reprimands, and 24 admonitions (the least serious discipline sanction imposed). Additionally, 36 attorneys were either temporarily suspended from practice or otherwise disciplined on an emergent basis.

Last year, 239 attorneys were disciplined (185 final and 54 through temporary suspensions). There were 41 disbarments (22 by opinion of the Supreme Court and 19 by consent of the attorneys), 73 final suspensions, 48 reprimands, and 23 admonitions.

In 1998, 185 attorneys were sanctioned, 160 through final discipline and 25 who were subject to emergent temporary sanctions. Of those, 39 were disbarred (22 by opinion of the Supreme Court and 17 by consent of the attorneys), 43 received final suspension orders, 49 had public reprimands, and 29 were admonished. In 2000, gross and patterned neglect of clients' matters continued as the top cause of attorney discipline. It was cited in over 25 percent of the final discipline cases.

Next was knowing misappropriation of trust funds which occurred in over 20 percent of these cases. Of those attorneys publicly disciplined in 2000 for knowing misappropriation, six were detected through the OAE's Random Audit Compliance Program and disbarred. The OAE's Trust Overdraft Notification Program resulted in five disbarments for knowing misappropriation of clients' funds in 2000.

That program requires all financial institutions to report to the OAE whenever an attorney overdrafts an attorney trust account or any time a check is presented against insufficient funds. Other money offenses, including negligent misappropriation, record-keeping and escrow violations, accounted for more than 10 percent of cases where lawyers were disciplined.

The number of disputes submitted to New Jersey's program to arbitrate disagreements over attorney's fees was 1,232 in 2000, according to the OAE report. In 1999, 1,289 fee disputes were submitted to the program.

The report states, "When one considers the hundred of thousands of civil, criminal, equity, small claims and municipal court matters that are filed with the courts, and the hundreds of thousands of non-litigated matters ... handled annually by New Jersey lawyers, it is clear that the number of fee arbitration matters filed is a very small percentage of the total number of attorney-client transactions." The report also notes that the 1,232 fee disputes represent only 2.2 percent of the active New Jersey lawyer population.

In New Jersey, lawyers are required to submit their fees to review by an arbitration committee at the request of a client. Under the program, the attorney has the burden of proving that the fee charged was reasonable. New Jersey is one of only 10 states to have a statewide, mandatory fee arbitration program.

Since participation in the fee program is mandatory on the part of lawyers, clients requesting use of the system must consent to be bound by the results of the process. There are 17 district fee arbitration committees that handle such disputes, consisting of attorneys and public members. If the fee in dispute is $3,000 or more, a panel of two lawyers and one public member usually hears the matter; disputes involving smaller amounts may be heard by a single lawyer member of the committee. Filing fees of $50 each from both the client and lawyer are required in arbitration cases.

The fee arbitration system, which is administered by the OAE under the supervision of the Supreme Court, operates independently of the disciplinary system. According to the report, 90 percent of the 1,220 fee dispute cases resolved in 2000 were accomplished through formal determinations (787) and settlements (316). These two categories of cases involved total billings of about $13 million, with $9.3 million the subject of formal determinations made by the 17 district fee arbitration committees.

The committees reduced fees by $1.4 million in the 787 formal determinations it made. In 38.1 percent of those cases, legal bills were upheld in full. In the remaining cases, the total reductions came to just under 23 percent. Figures for fees reduced through settlements are incomplete since the parties are not compelled to report results.

New Jersey is one of only six states to have an operational random audit program. Under this program, trust accounts of private practice law firms in the state are randomly selected by computer for audit. The primary purpose of the audit is to determine whether or not the law firm is complying with mandatory record-keeping requirements meant to insure the integrity of clients' trust monies.

In 2000, a total of 339 audits were conducted involving private practice law firms. Since audits began in July 1981, 6,904 random audits have been conducted through the end of 2000. Approximately 49.45 percent or 6,565 of the 13,277 estimated law firms were audited as of 1999, the last year for which the number of New Jersey law firms was available. Of these, 47 percent were solo practice firms and 53 percent were larger law firms consisting of two or more attorneys.

Analysis of the percentage of deficiency notices issued to law firms by the random program from 1988 to 2000, shows a marked improvement overall in the way that New Jersey law firms maintain accounting records required by the Supreme Court. Proper trust account reconciliations increased by 15 percent. Improper trust account designations improved by 23 percent. Maintenance of cash receipts and disbursement books for the trust account increased by 31 percent and 25 percent, respectively.

While designed primarily for educational compliance checks, the program has developed a small, but significant, number of cases involving lawyer theft and other serious financial violations. In 2000, the Supreme Court disciplined nine attorneys detected by the random program. Of these, six were disbarred for knowing misappropriation of clients' trust funds.

For additional background on the Office of Attorney Ethics, please visit the Web site>http://www.judiciary.state.nj.us/oae/index.htm

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