Tom Girardi’s fall gives ethics lessons to lawyers
The Covid-19 lockdown in March 2020 closed courts across the country, meaning there has been no new verdict and no urgency for defendants to pay settlements. For the plaintiff’s former lawyer Tom Girardi, who is now struck off the federal bar and whose firm, Girardi & Keese, is bankrupt and involuntary receivership, was the beginning of the end of his seemingly illustrious career.
Girardi’s career includes his work with Ed Masry on the environmental contamination case dramatized in the 2000 film “Erin Brockovich” and his portrayal of the families of the victims of the Lion Air crash in 2018 that killed all 189 people on board.
As lawyers, we must right the untold damage his actions have caused to the legal profession. We can start with these three ethical lessons.
Failure to maintain funds in client’s trust account
According to documents filed by the California state court, Girardi failed to keep funds that belonged to its clients in their respective trust accounts (CTAs), as required. In January 2021, Girardi went so far as to leave a voicemail message for his co-counsel, Jay Edelson at Edelson PC, claiming that he had paid their customers the full Lion Air settlement amount of $ 2 million owed by their CTA. Despite being a co-advisor, Girardi had sole control and was the sole signatory of the CTAs.
One of the many lessons for the state bar is that it needs more scrutiny CTA’s monitoring process and new regulations to prevent this type of diversion in the future. The lesson for lawyers is to do more internal control of their firm’s CTA accounts.
If more than one lawyer is a signatory, each signatory should review each deposit and withdrawal and know the deadlines by which clients are to receive money from the account. Even if a lawyer is not a signer, if there is the slightest suspicion of embezzlement or mixing of money, the lawyer should escalate the issue within the
Iaw closes, and if not resolved internally, to the state bar for review. The ethical treatment of customers should always be at the forefront of our minds.
Failure to maintain malpractice insurance
California’s rules of professional conduct don’t require attorneys to carry malpractice insurance, they only require that a lawyer who has no insurance must disclose this fact to their clients. According to a 2018 survey, 39% of sole practitioners and 12% of lawyers in small firms with two to five lawyers do not have liability insurance.
Girardi’s firm did not have malpractice insurance. While it is not clear whether the insurance would have covered the losses in this case due to the allegations of willful misconduct, the state bar should reconsider how it is handling this issue.
Disclosure is not sufficient protection. There is a vast imbalance of power, both with the client’s likely failure to understand any boilerplate disclosure in the agency agreement and with the generally dire circumstances a client finds himself in precipitating the need for counsel. in the first place. All lawyers should be required to carry malpractice insurance.
A request to terminate the lawyer-client relationship
Girardi’s wife Erika Jayne, one of the cast members of “The Real Housewives of Beverly Hills,” filed for divorce in November 2020. The filing generated a huge amount of publicity and speculation as to whether she was aware of her husband’s alleged relationships, and more specifically whether her businesses received settlement money from her client.
On June 15, his lawyers requested to step down as counsel, stating that “the relationship of trust that is essential to the proper functioning of an attorney-client relationship has broken down and, according to the good faith assessment of lawyer, the relationship is irreparable. ”
The takedown request was widely reported due to the high-profile nature of the case, and the filing came a day after the premiere of the Girardi and Jayne documentary, “The Housewife and the Hustler.” Two days later, on June 17, his lawyers voluntarily withdrew their withdrawal request. of his case, without further comment. In the court of public opinion, however, the damage was already done.
According to the California Rules of Professional Conduct regarding attorney-client relationships and dealing specifically with termination of representation: “An attorney should not terminate representation until he has taken reasonable steps to avoid harm. reasonably foreseeable to the rights of the customer ”.
Arguably, the filing of the takedown request in itself prejudiced Jayne, particularly coming so close to the documentary’s release and the wording used in the filing. It would be reasonable to believe that the words “trust” and “broken down” meant that the lawyers believed their client was lying to them based on new information they had received either from the documentary or court documents. The problem is, in just two days, lawyers changed their minds about how they viewed their lawyer-client relationship.
The ethical lesson for lawyers is that the lawyer-client relationship is sacrosanct and there is always an imbalance of power, even if the client is a celebrity and in the public eye. The actions of her lawyers made it look like she was lying, and once someone’s credibility is damaged, it is very difficult to rehabilitate herself.
As new information comes to light about Tom Girardi’s alleged actions, we lawyers must strive to learn every lesson and take whatever steps are necessary to regain public confidence in our profession.
This column does not necessarily reflect the opinion of the Bureau of National Affairs, Inc. or its owners.
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Dina Sayegh doll is a lawyer, television commentator and certified mediator. She practiced law at Gibson Dunn & Crutcher LLP before co-founding Doll Amir & Eley LLP. She is a legal analyst for the Law & Crime Network and appears regularly on a wide range of media.