“If enforced, this clearly excessive fee would create an economic deterrent for the departing attorney that would adversely affect the clients’ right to retain an attorney of their own choosing.”
How later courts described this case
- “If enforced, this clearly excessive fee would create an economic deterrent for the departing attorney that would adversely affect the clients’ right to retain an attorney of their own choosing.”
Written by the judges who cited it.
The opinion
[Cite as Cincinnati Bar Assn. v. Hackett, 129 Ohio St.3d 186, 2011-Ohio-3096.]
CINCINNATI BAR ASSOCIATION v. H ACKETT.
[Cite as Cincinnati Bar Assn. v. Hackett,
129 Ohio St.3d 186, 2011-Ohio-3096.]
Attorneys at law — Misconduct — Participation in employment agreement that
restricts rights of an attorney to practice after termination of agreement —
Consent-to-discipline agreement — Public reprimand.
(No. 2011-0308 — Submitted March 23, 2011 — Decided June 30, 2011.)
ON CERTIFIED REPORT by the Board of Commissioners on Grievances and
Discipline of the Supreme Court, No. 10-082.
__________________
Per Curiam.
{¶ 1} Respondent, Paul L. Hackett III of Cincinnati, Ohio, Attorney
Registration No. 0040638, was admitted to the practice of law in Ohio in 1988.
On October 11, 2010, relator, Cincinnati Bar Association, filed a complaint
charging respondent with offering or participating in an employment agreement
that restricts the right of a lawyer to practice after termination of the relationship
and that provides for an illegal or clearly excessive fee.
{¶ 2} The parties submitted a consent-to-discipline agreement pursuant
to Section 11 of the Rules and Regulations Governing Procedure on Complaints
and Hearings Before the Board of Commissioners on Grievances and Discipline
of the Supreme Court (“BCGD Proc.Reg.”). A panel of the Board of
Commissioners on Grievances and Discipline recommended the acceptance of the
proposed consent to discipline, affidavit, exhibits, and rule violations. The board
adopted the panel’s recommendation, as do we. Accordingly, we publicly
reprimand respondent for his misconduct.
Misconduct
SUPREME COURT OF OHIO
{¶ 3} The stipulated facts of this case and respondent’s admissions show
that in February 2002, respondent entered into an employment agreement with an
associate that stated that upon his termination, the associate would no longer
continue to represent or attempt to represent clients of respondent’s firm whose
claims had been assigned to him for representation. The employment agreement
further provided that if a client chose to leave respondent’s firm and thereafter be
represented by the associate, the associate would pay respondent’s firm 95 percent
of any attorney fees generated by that case, based upon a 33.3 percent contingent-
fee agreement. Respondent also used the same form of employment contract
when he hired another associate.
{¶ 4} On April 14, 2009, ten days before his termination, the associate
executed a contingency-fee agreement on behalf of respondent’s law firm to
represent a client in a personal-injury matter. On June 30, 2009, the client
advised respondent that he had decided to retain respondent’s former associate to
handle his case. Respondent acknowledged receipt of the client’s letter on August
10, 2009, and requested instructions from the client as to the disposition of his
file, but he never received a response.
{¶ 5} In the fall of 2009, respondent learned that the client’s case had
been settled and that the settlement check had been sent to his former associate.
Respondent filed suit in the Hamilton County Court of Common Pleas on October
29, 2009, to enforce the employment agreement and to recover fees paid to his
former associate. The trial court granted the associate’s motion to dismiss the
complaint, holding that the employment agreement violated Ohio’s public policy
favoring a client’s freedom to choose a lawyer and observing that it may also
violate Prof.Cond.R. 1.5 and 5.6. Hackett v. Moore, 160 Ohio Misc.2d 107,
2010-Ohio-6298, 939 N.E.2d 1321, ¶ 5, 9-10. Respondent did not appeal that
decision and has disavowed further use of the employment contract.
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January Term, 2011
{¶ 6} Based upon these facts, the parties have stipulated and the panel
and board have found that respondent’s conduct violated Prof.Cond.R. 1.5
(prohibiting a lawyer from making an agreement for, charging, or collecting an
illegal or clearly excessive fee) and 5.6 (prohibiting a lawyer from offering or
participating in an employment agreement that restricts the right of a lawyer to
practice after termination of the relationship).
{¶ 7} “There is nothing more critical to the professional relationship
between attorney and client than the trust and confidence of the person being
represented.” Fox & Assoc. Co., L.P.A. v. Purdon (1989), 44 Ohio St.3d 69, 71,
541 N.E.2d 448. In Akron Bar Assn. v. Miller (1997), 80 Ohio St.3d 6, 9, 684
N.E.2d 288, we recognized that a lawyer’s job is not to sell goods or a service or
to simply supply the means of achieving a client’s goals. Rather, a lawyer’s
fiduciary duty to his client requires him to deliberate with and counsel the client
to make wise decisions in furtherance of those goals. Id., citing Kronman, The
Lost Lawyer (1993) 128-129. To that end, the lawyer’s duties of trust and
confidence and the ethical rules incumbent upon Ohio lawyers require that “the
personal desires of the lawyer must be subordinated to those of the client.” Id.
{¶ 8} We have held that “[a] client has an absolute right to discharge an
attorney or law firm at any time, with or without cause, subject to the obligation
to compensate the attorney or firm for services rendered prior to the discharge.”
Reid, Johnson, Downes, Andrachik & Webster v. Lansberry (1994), 68 Ohio St.3d
570, 629 N.E.2d 431, paragraph one of the syllabus. This right would be hollow
if the discharged attorney could prevent other attorneys from assuming the
client’s representation. As the Official Comments to Prof.Cond.R. 5.6 explain,
any agreement that restricts the right of lawyers to practice after leaving a firm
limits both their professional autonomy and the client’s freedom to retain a lawyer
of their choice. Prof.Cond.R. 5.6, Official Comment [1].
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SUPREME COURT OF OHIO
{¶ 9} In this case, respondent sought to restrain his former associates
from taking clients with them when they left his firm. His employment contract
required a departing associate who continued to represent the firm’s former
clients to remit 95 percent of the fees generated in the clients’ cases to respondent
regardless of the proportion of the work that each attorney performed. If
enforced, this clearly excessive fee would create an economic deterrent for the
departing attorney that would adversely affect the clients’ right to retain an
attorney of their own choosing. Therefore, we agree that respondent has violated
both Prof.Cond.R. 1.5 and 5.6.
Sanction
{¶ 10} In recommending a sanction for respondent’s misconduct, the
board considered the aggravating and mitigating factors listed in BCGD Proc.Reg.
10. The parties have stipulated to, and the panel and board have found, just one
aggravating factor—respondent’s use of the unethical employment agreement
with more than one associate. See BCGD Proc.Reg. 10(B)(1)(d). As mitigating
factors, however, the panel and board cite respondent’s lack of a prior disciplinary
record, the absence of a dishonest motive, his cooperation in this disciplinary
proceeding, and evidence of his good character, including his exemplary service
as a Lt. Colonel in the United States Marine Corps. See BCGD Proc.Reg.
10(B)(2)(a), (b), (d), and (e). We accept all but one of these findings.
{¶ 11} Pursuant to BCGD Proc.Reg. 10(B)(2)(b), the absence of a
dishonest or selfish motive may be considered as a mitigating factor. Conversely,
the presence of a dishonest or selfish motive may be considered as an aggravating
factor pursuant to BCGD Proc.Reg. 10(B)(1)(b). While respondent did not
possess a dishonest motive, the employment agreement that he entered into with
his associates provided that he would receive 95 percent of the fees generated if a
client followed the associate when the associate left the firm, regardless of the
amount of work respondent performed on a case. Therefore, we conclude that
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January Term, 2011
respondent possessed a selfish motive, consider that motive to be an aggravating
factor, and reject the parties’ stipulation that respondent’s lack of a dishonest
motive is a mitigating factor. Nonetheless, in light of the remaining mitigating
factors and the fact that no client suffered harm, we agree that a public reprimand
is the appropriate sanction for respondent’s misconduct.
{¶ 12} Accordingly, respondent is publicly reprimanded for his violations
of Prof.Cond.R. 1.5 and 5.6. Costs are taxed to respondent.
Judgment accordingly.
O’CONNOR, C.J., and PFEIFER, LUNDBERG STRATTON, O’DONNELL,
LANZINGER, CUPP, and MCGEE BROWN, JJ., concur.
__________________
Rosemary D. Welsh and Linda A. Ash, for relator.
Gallagher Sharp, Timothy T. Brick, and Monica A. Sansalone, for
respondent.
______________________
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