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BigLaw attorney disbarred for collecting outside client fees

Can an attorney be disbarred for handling outside cases when employed by a law firm? It depends on what their employment contract with the law firm says, according to the Washington Supreme Court and that state bar's Office of Disciplinary Counsel. And, if that employment contract prohibits the lawyer from handling outside cases, accepting fees for those cases constitutes theft.

An attorney who worked at the international law firms Dorsey & Whitney, LLP, and Ogletree, Deakins, Nash, Smoak & Stewart, P.C., has been disbarred for performing legal work for outside clients and keeping the fees instead of handing them over to her employers. According to the Washington Supreme Court, doing so constituted theft. She denies the allegations and considers the issue a contract dispute which should not have gotten her disbarred.

Between 2006 and 2011, the attorney was working for Dorsey & Whitney, making $225,000 a year. However, she apparently collected over $56,000 in fees from outside clients, according to the ABA Journal. She didn't disclose this outside representation to Dorsey & Whitney and only partially disclosed the information when confronted with evidence.

She also allegedly violated ethics rules by failing to deposit the outside fees into lawyers trust accounts, which is generally required in order to ensure that client funds are never mixed with non-client funds, and also to ensure that clients receive all the interest they are entitled to.

When Dorsey & Whitney fired the lawyer, she signed a separation agreement requiring her to repay $51,000 to the firm. When another outside client paid her, however, she kept the money despite the fact that the client had asked for it to be transferred to the firm. She alleged that the money was hers because it wasn't covered by the separation agreement.

The woman then got a job at Ogletree Deakins, allegedly by fudging the reason for her firing from Dorsey & Whitney. There, she collected some $10,000 in outside fees without disclosing them to her new firm, apparently in violation of her employment agreement. She also failed to put these fees in trust accounts.

Similar to Pennsylvania, Washington State includes in its definition for theft "wrongfully obtaining property" and "exerting unauthorized control over property." The Washington Supreme Court ruled that in retaining fees from outside clients in violation of her employment agreements, she had unambiguously met the definition of theft.

Furthermore, it ruled that "engaging in extensive and repeated theft of firm funds is sanctionable attorney conduct," not a contract dispute that wouldn't lead to disbarment.

The lawyer made a number of arguments in her defense, none of which the court accepted. She plans to appeal her case to the U.S. Supreme Court.

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