Sometimes an attorney needs an attorney: a law firm that will represent them. The Nissenbaum Law Group focuses on doing just that; specifically, it defends Pennsylvania attorneys facing ethics complaints and IOLTA attorney trust account audits. To do so, the firm has assembled a PA ethics defense team led by Anthony C. Gunst, IV, Esq., overseen by our managing attorney, Gary D. Nissenbaum, Esq. and supported by additional attorneys, a paralegal and practice assistant.  It also provides such representation in New Jersey and New York, something that can actually be of benefit to Pennsylvania attorneys if they are licensed in New Jersey or New York as well. In such instances, an ethics breach in one state can result in reciprocal discipline in those other states.

Defending Lawyers Responding to Ethics Complaints, Trust Account Audits
Assisting in the Sale of a Law Firm or Succession Planning

It is important to keep in mind that the Nissenbaum Law Group’s attorney ethics practice is made up of three distinct foundations. First, the firm defends attorney accused of violating the Pennsylvania Rules of Professional Conduct. Second, it provides representation to  attorneys facing a trust account audit, such as one precipitated by a dishonored check investigation. Third, it renders transactional representation concerning law firm management and ownership issues that involve ethical concerns, such as succession planning, the sale of the firm as an ongoing business and the form and wording of the law firm’s retainer agreements.

Some of the most serious ethics complaints involve deficiencies in the process of maintaining a fully reconciled attorney trust account. While it is generally assumed that the main trigger for an ethical complaint in that regard would be a knowing misappropriation of a client’s money being held in escrow, there are actually many other scenarios that can create a problem for the attorneys involved. Indeed, the more common issue that results in an ethics complaint is the negligent misappropriation of trust account monies; in other words, an attorney who acts in good faith but falls short in their ethical obligations as a fiduciary.

One of those fiduciary obligations is to perform a three-way reconciliation, which is required on a monthly basis. The process involves (1) reconciling the internal bookkeeping of the law firm to be sure that the entire trust account is in balance; (2) determining that the law firm’s bank statement and internal bookkeeping match up, such that there are no errors or unreported items; (3) reconciling each client’s subaccount within  the larger attorney trust account so that that funds of one client are  not effectively used to pay the another client’s debts. An example of the latter would be if the attorney deposits a client’s retainer check in the trust account and then performs a transfer from the trust account to the professional account to pay that client’s legal fees before the client’s deposit clears.

Strategic Approaches to Defending Attorneys Accused of Violating the PA Rules of Professional Conduct

One of the key strategic approaches to defending an attorney accused of a violation of the PA Rules of Professional Conduct is to retain an expert who can provide a written report and testify in defense of the attorney-respondent. This commonly arises in two contexts.

The first is an expert witness with knowledge of the ethics case law and underlying RPCs implicated by the specific violation that is being alleged. Normally, they will analyze the facts as applied to prevailing laws and rules so as to opine that the factual predicate and/or legal elements of the putative ethics violation has not been met.

The second is a forensic accountant who can serve as an expert in an ethics matter to review any relevant financial books and records—either those involving bank accounts or simply the manner in which money changed hands outside of an escrow arrangement—and render an opinion that the internal procedures of the law firm comported with all applicable ethical standards (assuming they did).

An Overview of the PA Ethics Process

The ethics process is fairly straightforward. While there are a number of variations, the standard approach involves a series of stages. The typical ones are as follows: (1) investigation, (2) recommendations by Disciplinary Counsel, (3) review by a hearing committee member, (4) final prehearing disposition, (5) formal hearing, (6) action by the Disciplinary Board, and (7) review by the PA Supreme Court.

Frequently Asked Questions (FAQ) When Facing a PA IOLTA Attorney Trust Account Audit

The following is a series of frequently asked questions regarding how an attorney should approach an audit of their PA IOLTA Trust Account.

• What are the consequences when a law firm is the subject of a trust account audit, and it has not been maintaining its bookkeeping properly with appropriate three-way reconciliations?
• May a law firm destroy its IOLTA account bookkeeping records after a certain period of time, and if so, when?
• What is the law firm’s obligation with respect to interest earned on funds held on behalf of a client in an IOLTA trust account?
• If the law firm cannot locate the person or entity whose funds are being held in trust, or if funds are otherwise unidentifiable, what is the appropriate procedure?
• May an attorney hold their own funds in their IOLTA trust account?

Frequently Asked Questions (FAQ) When Facing a PA Ethics Complaint

The following is a series of frequently asked questions regarding the defense of Pennsylvania ethics matters.

• How are ethics complaints filed and processed in Pennsylvania?
• What are the reasons an attorney ethics complaint might be dismissed without discipline and what other recommendations can Disciplinary Counsel make?
• Are disciplinary proceedings public?
• What Are the First Few Steps Involved in the Legal Strategy to Address a Typical PA Ethics Matter?

Frequently Asked Questions About the Process by Which a PA Ethics Matter Proceeds

Finally, the following is a series of frequently asked questions regarding the process governing PA attorney ethics matters.

• What is the attorney-respondent’s obligation to provide discovery or other materials?
• What is the effect of the attorney-respondent not filing an answer in the Pennsylvania disciplinary proceeding?
• Are subpoenas available as a discovery device in Pennsylvania attorney ethics disciplinary proceedings?
• Is there a way of terminating the PA ethics disciplinary proceeding by stipulating to discipline by consent?

PUBLICATIONS & PRESENTATIONS

Gary D. Nissenbaum, Esq.

• Presented Seminar, Six Aspects of Attorney Ethics Enforcement in NJ, NY & PA That You May Not Have Heard About Before, Lawline, Summer 2024 (Anticipated Presentation Date)
• Presented Seminar, Attorney Ethics and Law Firm Succession Planning, Immigration Law Section, NJSBA, March 2023
• Panelist, New Jersey Trust and Business Accounting, New Jersey Institute for Continuing Legal Education, February 2021
• Presented Seminar, How to Avoid Serious Mistakes When Facing an Ethics Grievance or Random Trust Account Audit, Essex County Bar Association, December 2020
• Presented Seminar, “Good Grievance, Charlie Brown!” Latest Developments in NJ Ethics Law and Procedure, New Jersey Institute for Continuing Legal Education, July 2020
• Presented Seminar, How to Avoid Serious Mistakes When Facing an Ethics Grievance, Wilshire Grand Hotel, December 2019
• Presented Seminar, Attorney Ethics Grievances: 20 Insights from the Trenches, Wilshire Grand Hotel, December 2016
• Presented Seminar, Attorney Ethics Grievance Process, Union County Bar Association, 2011

Anthony C. Gunst, IV, Esq.

• Presented Seminar, Six Aspects of Attorney Ethics Enforcement in NJ, NY & PA That You May Not Have Heard About Before, Lawline, Summer 2024 (Anticipated Presentation Date)
• Presented Seminar, How to Avoid Serious Mistakes When Facing an Attorney Ethics Matter, New Jersey Association of Legal Administrators, April 2023