CBA Record February_March 2016

foreclosure proceedings, but also failed to notify them to obtain other counsel. The Illinois Supreme Court, noting that Dure had acted in utter disregard of the disciplinary proceedings, accepted the recommendation of the Hearing Board and suspended Dure for one year and until he made restitution to the three sets of clients. Of note is Dure’s disbarment on consent on May 14, 2015, following conviction for mail fraud. In re Fleck demonstrates how a recently licensed lawyer can run afoul of many of the rules of professional conduct when unwittingly duped by a non-lawyer, busi- nessman who wanted to use a lawyer’s name to facilitate business. In re Fleck, 2011 P.R. 00054 (Review Board, February 26, 2014) Fleck, the young lawyer, met Joe Aldeguer when both were advertising on WLS in 2008. In January of 2009, Fleck and Aldeguer formed a loan modification company, Loan Litigators International, LLC. Fleck and Aldeguer were the only shareholders in LLI and each held a 50% interest. LLI provided mortgage loan renegotiation or modification services between distressed homeowners and their mortgage providers. Aldeguer had a weekly radio show called “Making Money with Joe Aldeguer” where Fleck made several appearances during his affiliation with LLI. Aldeguer advertised certain unrealistic time frames in which LLI could obtain loan modifications for clients. Aldeguer also represented the loan modification process as without risks and promised homeowners a full refund if LLI could not negotiate a loan modification. The ARDC Review Board Report, comprising 50 plus pages, is replete with evidence of Fleck’s failure to adequately supervise nonlawyer employees, failure to represent clients with diligence and failure to adequately commu- nicate with clients. Fleck also improperly withdrew when he ended his relationship with Aldeguer. The Hearing Board con- cluded that Fleck’s misconduct was “less a result of venality, but was instead borne of ignorance.” According to the Hear- ing Board, Fleck was “unsophisticated, inexperienced, and completely lacking

ETHICS EXTRA

BY MICHAEL REED

Who was that Partner I saw you with?

L a wyers often need the help of other professionals and therefore enter into agreements with doctors, accountants, inventors, and engineers, among others. These relationships must be fine tuned so as not to run afoul of the ARDC for violations of Rules 5.4(a) and (b) of the Illinois Rules of Professional Conduct. Rule 5.4(a) proscribes sharing fees with any non-lawyers, and Rule 5.4(b) proscribes partnerships with non-lawyers. In Re Discipio is the leading Illinois case on fee sharing with non-lawyers. 163 IL.2d 515 (1994). Discipio practiced primarily workers’ compensation law and received referrals, including names, facts, and other data from Ruther, also an attorney. Both appeared as attorneys of record for their clients, and they shared fees, virtually 50/50. The problem arose when Ruther took a plea for mail fraud and was disbarred on consent. The problem mushroomed because Discipio and Ruther continued the fee sharing for 13 years after Ruther was disbarred, although he no longer appeared as attorney of record in Discipio’s cases. Ruther did not work in Discipio’s office, but he did continue to gather information for Discipio and helped clients complete forms required for workers’ compensation claims. In the Illinois Supreme Court, Dis- cipio unsuccessfully argued that Ruther’s services were akin to that of a paralegal, in response to which the court responded that lawyers and paralegals seldom, if ever, share fees 50/50. The court noted that some of Michael Reed anticipates receiv- ing his JD in May 2017 from The John Marshall Law School, where he is a Morrissey Scholar.

Discipio’s clients told Discipio that they thought Ruther was an attorney; Discipio stated that he disabused them of that notion. The court held that Discipio had aided Ruther in the unauthorized practice of law. The court disbarred Discipio for two years, stating its sanction should be a lesson to the Illinois bar that sharing fees and accepting referrals from disbarred attorneys is, in the court’s own words, “folly.” In re Dure further demonstrates the harm that lawyers sharing fees with non- lawyers can inflict upon the public. In re Dure, 2012 P.R. 00137 (Hearing Board, July 29, 2013). In the wake of the mort- gage crises that arose after 2008, Karim Dure and one Kevin Johnston agreed that Johnston, a mortgage broker, would refer persons having financial problems to Dure to effect a modification of the mortgage terms or defend them in fore- closure proceedings. Dure agreed to pay Johnston a $300 “finders” fee from any fee clients paid Dure. One couple paid an initial fee of $1995 to Dure from which Johnston was paid $300. Dure met once with the clients, who agreed to pay him $650 per month thereafter. Some 18 months later, when Dure had done nothing of substance for the clients and their lender had filed for foreclosure, the clients demanded return of their fees and received but $650 of the $5,895 the clients had paid. In another Dure scenario, two sets of clients suffered from ill treatment by Dure and a former mortgage broker. The former mortgage broker and two friends agreed to solicit clients for Dure and act as interpreters for the clients. The “finders” fee in this agree- ment was $600-700. These two sets of clients lost $2600 each. One set was the subject of a foreclosure action, and Dure not only failed to defend the clients in the

continued on page 54

CBA RECORD 49