1. TOP TWELVE GRIEVANCES AGAINST LAWYERS HBA NEW LICENSE INSTITUTE June 5, 2015 Houston, Texas Richard A. Schwartz Vorys, Sater, Seymour and Pease, LLP 700 Louisiana, Suite 4100 Houston, Texas 77010 Phone: (713) 588-7016 Fax: (713) 588-7081 Email: dschwartz@vorys.com.dschwartz@vorys.com 1

2. OVERVIEW WHAT ARE THE PENALTIES FOR VIOLATING THE ETHICS RULES WHAT ARE THE AREAS OF LAW IN WHICH THE MOST GRIEVANCES ARE FILED WHAT ARE THE TYPES OF CONDUCT (RULE VIOLATIONS) WHICH ARE MOST FREQUENTLY ALLEGED HELPFUL HINTS ON STAYING OUT OF TROUBLE 2

3. POSSIBLE PENALTIES FOR VIOLATIONS DISBARMENT SUSPENSION PUBLIC REPRIMANDS PRIVATE REPRIMANDS RESIGNATION ORDERS FOR REHABILITATION RESTITUTI0N 3

4. Information Tracked By the SBOT STATISTICS Total Number of Grievances filed Grievance Results or Penalties Imposed Areas of Law Rule Violations 4

5. Grievances Filed vs. Penalties 5 13-1412-1311-1210-1109-1008-0907-0806-0705-0604-0503-0402-0301-02 Active Attorneys 92,21089,98787,88186,50084,18382,41480,09477,93477,05674,67573,08471,170 Grievances Filed 7,3947,8828,1357,3287,2337,1087,3076,5727,1186,9876,8917,5017,784 Dismissed as inquiries 5,8275,4955,3514,7785,0005,1685,1604,3704,5844,3184,4234,8334,895 Classified as complaints 15671,6282,2962,0471,9701,7611,9662,0272,3572,4382,2092,4792,624 Complaints resolved 403444516584417499 Total Number of disciplines 322367402370315335299320344427459437482 % of Disciplines out of complaints 20.5%22.5%17.5%18%15.9%19%15.2%15.7%14.5%17.5%20.7%17.6%18.3%

6. GRIEVANCE RESULTS 6

7. Actual Penalties for Violations 2012-13 Disbarments3910.6% Resignations246.5% Suspensions12233.24% Public Reprimands3710.1% Private Reprimands8924.25% Grievance Referral Program (rehabilitation)5615.25% 7

8. Actual Penalties for Violations 2013-14 Disbarments216.5% Resignations175.2% Suspensions13140.5% Public Reprimands319.5% Private Reprimands6520.12% Grievance Referral Program (rehabilitation)5817.95% 8

9. Client Attorney Assistance Program* Top 5 Concerns of Clients 2013-14 Not scheduling/keeping appointments672 Not Returning Phone Calls6,560 Fee Problems6713 Not providing/Returning Copies of File and Documents 8,375 Inattention and Preparation on the Case11,653 *Confidential dispute resolution service of the SBOT for minor concerns, disputes and misunderstandings 9

10. Client Attorney Assistance Program Type of Legal Matter 2013-14 Criminal36% Family20% Civil19% Personal Injury11% Immigration3% Probate3% Real Estate2% Collection1% Bankruptcy1% Business1% WCC1% EEOC1% Consumer Protection1% 10

11. AREAS OF LAW FOR THE MOST GRIEVANCES 11

12. Area of Law by Most Grievances 2012-2013 12 Criminal 2,441 Non-Client Relationships 1,506 Family 948 Civil 821 Personal Injury 349 Immigration 281 Other 263 Probate/Wills 153 Real Estate 117 Bankruptcy 66 Workman’s Comp 25 Traffic 24

13. 2012-2013 Grievances By Area of Law 13

14. Criminal Grievances 2001-2013 14

15. Non Client Relationship Grievances 2001 - 2013 15

16. Family Grievances 2001 - 2013 16

17. Civil Law Grievances 2003 – 2013 17

18. Personal Injury Grievances 2001 - 2013 18

19. Probate/Will Grievances 2001 -2013 19

20. Real Estate Grievances 2003 - 2013 20

21. Bankruptcy Grievances 2001 - 2013 21

22. Workmen’s Comp Grievances 2003 - 2013 22

23. Traffic Grievances 2001 - 2013 23

24. Other Grievances 2003 -2013 24

25. MOST FREQUENT RULE VIOLATIONS ALLEGED 25

26. 26 ALLEGED RULE VIOLATIONS12-1311-1210-1109-1008-0907-0806-0705-0604-0503-0402-0301-02 Communication83297510068717139289741183148817601180303 Neglect812888981932811937100912011437161112031788 Integrity607346403346427448509563710736469344 Declining or terminating representation506681638553405479436533502598421450 Safeguard Property260241192224380329321304320375251413 Conflicts13677737795889675102116100126 Tribunals11711986749997656177975894 Fees109152137105128132137157169203192236 Non-clients5280879297765077607673110 Confidentiality273647365130405751653950 Advertising & Solicitation21433648 412035 606552 Law firms173435271518202225264432

27. Alleged Violations 2012-2013 27

28. Lessons Learned from the Grievance Committee 28

29. Lessons Learned from the Grievance Committee Most frequent issues: – Communication – Terminating representation – Safeguarding Property – Fees 29

30. Communication 30

31. COMMUNICATION – 24.5% of Complaints Number 1 31 1.03 Communication

32. Rule 1.03 Communication (a) A lawyer shall keep a client reasonably informed about the status of a matter and promptly comply with reasonable requests for information. (b) A lawyer shall explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation. 32

33. Communication Comments to 1.03 The client should have sufficient information to participate intelligently in decisions concerning the objectives of the representation and the means by which they are to be pursued, to the extent the client is willing and able to do so. For example, a lawyer who receives from opposing counsel either an offer of settlement in a civil controversy or a proffered plea bargain in a criminal case should promptly inform the client of its substance unless prior discussions with the client have left it clear that the proposal will be unacceptable. 33

34. Comments to 1.03 In litigation, a lawyer should explain the general strategy and prospects of success and ordinarily should consult the client on tactics that might injure or coerce others. On the other hand, a lawyer ordinarily cannot be expected to describe trial or negotiation strategy in detail. Moreover, in certain situations practical exigency may require a lawyer to act for a client without prior consultation. The guiding principle is that the lawyer should reasonably fulfill client expectations for information consistent with the duty to act in the client’s best interests, and the client’s overall requirements as to the character of representation. – Examples: Extensions of time Continuances Settlement demands and offers Experts 34

35. Communication Problems – Being out of communication I called my lawyer over and over and never got a call back I never received any update on my case I wrote my lawyer letters and got no response – Responses: I didn’t have anything to report I responded (but no log, letter or proof) My secretary was supposed to do that 35

36. Communication Key Points: – Don’t be out of communication Send your clients the papers you file and receive and be able to prove it (keep copies) Return your clients phone calls even if you have not done what you said you would do or you have nothing to report Answer your client’s letters and keep copies Keep some record of your communications with clients. Put yourself in your client’s shoes. – Give the client sufficient information to make the important decisions 36

37. Terminating Representation 37

38. DECLINING OR TERMINATING REPRESENTATION – 14.5% Of Grievances No. 4 38 Rule 1.15 Declining or Terminating Representation

39. Rule 1.15 Declining/Terminating Rule 1.15 (d) Upon termination of representation, a lawyer shall take steps to the extent reasonably practicable to protect a client’s interests, such as giving reasonable notice to the client, allowing time for employment of other counsel, surrendering papers and property to which the client is entitled and refunding any advance payments of fee that has not been earned. The lawyer may retain papers relating to the client to the extent permitted by other law only if such retention will not prejudice the client in the subject matter of the representation. 39

40. Terminating Representation Problems – Not transferring the file timely – Not refunding unearned fees 40

41. Declining or Terminating Representation Key Points: – If you get out of a case, protect your client’s interests Give adequate time to get new counsel Transfer information and the file promptly Give an unearned fee back to the client 41

42. Safeguarding Property 42

43. SAFEGUARDING PROPERTY – 7.5% No. 5 43

44. 1.14 Safekeeping Property (a) A lawyer shall hold funds and other property belonging in whole or in part to clients or third parties that are in a lawyer’s possession in connection with a representation separate from the lawyer’s own property. Such funds shall be kept in a separate account, designated as a “trust” or “escrow” account, maintained in a state where the lawyer’s office is situated, or elsewhere with the consent of the client or third person. Other client property shall be identified as such and appropriately safeguarded. Complete records of such account funds and other property shall be kept by the lawyer and shall be preserved for a period of five years after termination of the representation. 44

45. 1.14 Safekeeping Property (b) Upon receiving funds or other property in which a client or third person has an interest, a lawyer shall promptly notify the client of third person. Except as stated in this Rule or otherwise permitted by law or agreement with the client, a lawyer shall promptly deliver to the client or third person any funds or other property that the client or third person is entitled to receive and, upon request by the client or third person, shall promptly render a full accounting regarding such property. 45

46. COMMENT TO RULE 1.14 A lawyer should hold property of others with the care required of a professional fiduciary. If there is risk that the client may divert the funds without paying the fee, the lawyer is not required to remit the portion from which the fee is to be paid. However, a lawyer may not hold funds to coerce a client into accepting the lawyer’s contention. The disputed portion of the funds should be kept in trust and the lawyer should suggest means for prompt resolution of the dispute, such as arbitration. The undisputed portion of funds should be promptly distributed to those entitled to receive them by virtue of the representation. 46

47. Safeguarding Property Problems – Receiving settlement funds and not giving them to the client – Comingling client and law firm money 47

48. Safeguarding Property Key Points: – Keep you client’s money separate from your own Operating account Trust account – Don’t take your client’s money unless you earned it Don’t put in operating before earned – Give your client’s money back, if not earned, when asked – Keep records of client money for 5 years – Be transparent. Give an accounting when asked 48

49. Fees 49

50. FEES – 3.5% No. 8 50 1.04 Fees

51. Fees Related rules are: Rule 1.08 (prohibited transactions between a lawyer and client) Rule 1.14 (safeguarding property) Rule 1.15 (terminating representation and refunding unearned fees) Rule 3.08 (the lawyer as witness) Rule 5.04 (the lawyer’s relationship with non-lawyers with respect to fees) Rule 7.03 (prohibited solicitations and payments) Rule 8.04(a)(3) 51

52. 1.04 Fees (c) When the lawyer has not regularly represented the client, the basis or rate of the fee shall be communicated to the client, preferably in writing, before or within a reasonable time after commencing the representation. 52

53. 1.04 Fees (d) A fee may be contingent on the outcome of the matter for which the service is rendered, except in a matter in which a contingent fee is prohibited by paragraph (e) or other law. A contingent fee agreement shall be in writing and shall state the method by which the fee is to be determined. If there is to be a differentiation in the percentage or percentages that shall accrue to the lawyer in the event of settlement, trial or appeal, the percentage for each shall be stated. The agreement shall state the litigation and other expenses to be deducted from the recovery, and whether such expenses are to be deducted before or after the contingent fee is calculated. Upon conclusion of a contingent fee matter, the lawyer shall provide the client with a written statement describing the outcome of the matter and, if there is a recovery, showing the remittance to the client and the method of its determination. 53

54. 1.04 Fees (e) A lawyer shall not enter into an arrangement for charge, or collect a contingent fee for representing a defendant in a criminal case. (f) A division or agreement for division of a fee between lawyers who are not in the same firm shall not be made unless: (1)the division is: (i) in proportion to the professional services performed by each lawyer; or (ii) made betweenlawyers who assumes joint responsibility for the representation; (2)the client consents in writing to the terms of the arrangement prior to the time of the association or referral proposed, including: (i) the identity of all lawyers or law firms who will participate in the fee-sharing agreement; (ii) whether fees will be divided based on the proportion of services performed or by lawyers agreeing to assume joint responsibility for the representation; and (iii) the share of fee that each lawyer or law firm will receive or, if the division is based on the proportion of services performed, the basis on which the division will be made; (3) the aggregate fee does not violate paragraph (a). 54

55. Fees Problems – No engagement letter or contract – Ambiguous engagement letters and contracts – Keeping fees not earned 55

56. Fees Key Points – Have written contracts with every client – Enter the contract before you do the work – Don’t keep money you haven’t earned – Don’t refer cases for a fee unless you work on the case – All contingent fee contracts must be in writing – Don’t have contingent fee contracts in criminal cases – If you sue your client, expect a malpractice claim or grievance 56

57. HELPFUL HINTS 57

58. BE … Honest Respectful of Others Professional Civil Ethical Excellent Organized Resourceful Creative Alert Attentive Proud 58

59. DO... Act with competence, commitment and dedication to the interest of the client Communicate regularly with your client Timely return phone calls (directly or indirectly through reminders to your attorney) Maintain confidential and privileged communications Plan for the unexpected. Join professional groups Read the applicable rules (e.g., statutes, discovery, court procedures, TDRPC, etc.) Demonstrate respect for the legal profession and the administration of justice Use the Ethics Hotline (800-532- 3947) 59

60. DO NOT... Do not procrastinate in your work Do not misrepresent the status of a case Do not communicate with someone represented by counsel Do not sign your attorney’s name without permission Do not hold a file for ransom Do not mishandle client trust funds Do not keep unearned fees Do not backdate letters, discovery or other legal documents Do not do anything that prejudices your client Do not lie, cheat or steal 6022042731