Opinion ID: 2615610
Heading Depth: 1
Heading Rank: 4

Heading: mishandling of law firm funds

Text: ¶ 11 The Bar has charged Stutsman with misappropriating an attorney's fee from his firm and concealing that fact in violation of ORPC Rules 1.15(b) and 8.4(c). [13] ¶ 12 Where money has been entrusted to an attorney for a specific purpose, it must be applied to that purpose. The lawyer may not avail himself of a counterclaim or set-off for fees by interposing demands to count against any client's money coming into his hands for such specific purpose. [14] We employ three different culpability standards when evaluating mishandling of client funds: [15] 1) commingling, which takes place when client money is intermixed with the attorney's personal funds; 2) simple conversion, which occurs when a lawyer applies a client's money to a purpose other than that for which it was entrusted to the attorney and 3) misappropriation, the most serious infraction, which involves theft by conversion or otherwise when an attorney purposefully deprives a client of money by way of deceit and fraud. [16] The degree of culpability ascends from the first to the last of these categories. Each must be proved by clear and convincing evidence. [17] A lawyer's mishandling of funds belonging to a law firm, where that lawyer is employed, is not to be treated differently from misappropriation or conversion of funds belonging to the lawyer's client. [18] In each case, the lawyer violates the basic professional duty of trust, not only as counsel but also as fiduciary. [19] ¶ 13 Stutsman admits that he billed his client on his own letterhead for work that he did while working for Riggs Abney. By failing to report this money to the firm, Stutsman has commingled funds. ¶ 14 On de novo consideration, we adopt the PRT's conclusion and hold that discipline is warranted for respondent's mishandling of funds.