2017 WI 24

SUPREME COURT OF WISCONSIN CASE NO.: 2017AP243-D COMPLETE TITLE: In the Matter of Disciplinary Proceedings Against Adam Walsh, Attorney at Law:

Office of Lawyer Regulation, Complainant, v. Adam Walsh, Respondent. DISCIPLINARY PROCEEDINGS AGAINST WALSH

OPINION FILED: March 23, 2017 SUBMITTED ON BRIEFS: ORAL ARGUMENT:

SOURCE OF APPEAL: COURT: COUNTY: JUDGE:

JUSTICES: CONCURRED: DISSENTED: NOT PARTICIPATING:

ATTORNEYS: 2017 WI 24 NOTICE This opinion is subject to further editing and modification. The final version will appear in the bound volume of the official reports. No. 2017AP243-D

STATE OF WISCONSIN : IN SUPREME COURT

In the Matter of Disciplinary Proceedings Against Adam Walsh, Attorney at Law.

Office of Lawyer Regulation, FILED Complainant, MAR 23, 2017 v. Diane M. Fremgen Clerk of Supreme Court Adam Walsh,

Respondent.

ATTORNEY disciplinary proceeding. Attorney's license

revoked.

¶1 PER CURIAM. Attorney Adam Walsh has filed a petition

for the consensual revocation of his license to practice law in

Wisconsin pursuant to Supreme Court Rule (SCR) 22.19.1 Attorney

1 SCR 22.19 provides: Petition for consensual license revocation.

(1) An attorney who is the subject of an investigation for possible misconduct or the respondent in a proceeding may file with the supreme (continued) No. 2017AP243-D

Walsh's petition states that he cannot successfully defend

against the allegations of professional misconduct arising out

of two Office of Lawyer Regulation (OLR) investigations

concerning his conduct. An OLR summary of those investigations

and of the potential allegations of professional misconduct is

attached to Attorney Walsh's petition.

court a petition for the revocation by consent or his or her license to practice law.

(2) The petition shall state that the petitioner cannot successfully defend against the allegations of misconduct.

(3) If a complaint has not been filed, the petition shall be filed in the supreme court and shall include the director's summary of the misconduct allegations being investigated. Within 20 days after the date of filing of the petition, the director shall file in the supreme court a recommendation on the petition. Upon a showing of good cause, the supreme court may extend the time for filing a recommendation.

(4) If a complaint has been filed, the petition shall be filed in the supreme court and served on the director and on the referee to whom the proceeding has been assigned. Within 20 days after the filing of the petition, the director shall file in the supreme court a response in support of or in opposition to the petition and serve a copy on the referee. Upon a showing of good cause, the supreme court may extend the time for filing a response. The referee shall file a report and recommendation on the petition in the supreme court within 30 days after receipt of the director's response.

(5) The supreme court shall grant the petition and revoke the petitioner's license to practice law or deny the petition and remand the matter to the director or to the referee for further proceedings.

2 No. 2017AP243-D

¶2 Attorney Walsh was admitted to the practice of law in

Wisconsin in January 2008. He most recently practiced in

Madison under the name Affordable Legal Services of Wisconsin.

Attorney Walsh sold the law firm to another attorney effective

January 1, 2015. He continued to work at the firm, however,

until November 25, 2015.

¶3 Attorney Walsh has been the subject of professional

discipline on one prior occasion. In 2015 he consented to the

imposition of a private reprimand pursuant to SCR 22.09 for

improperly using his client credit card trust account on three

separate occasions to disburse trust account funds prior to the

deposit and availability of those funds for the respective

clients and for failing to maintain and to produce required

trust account records. Private Reprimand 2015-1 (electronic

copy available at

https://compendium.wicourts.gov/app/raw/002757.html).

¶4 Attorney Walsh filed a petition for the voluntary

resignation of his license to practice law in this state in June 2016. Because the OLR's response to that petition indicated

that it was conducting an investigation regarding Attorney

Walsh, his voluntary resignation petition has been held in

abeyance. In light of his current petition, his petition for

voluntary resignation is being dismissed pursuant to a separate

order being issued simultaneously with this opinion.

¶5 The OLR summary attached to Attorney Walsh's petition

for consensual revocation sets forth two main areas of investigation into potential ethical violations. 3 No. 2017AP243-D

¶6 The first area involves Attorney Walsh's multiple

instances of insufficient balances in his client trust account.

Attorney Walsh maintained a client trust account at JP Morgan

Chase Bank in Madison from November 19, 2010, until October 14,

2015. At the time he closed the account, Attorney Walsh

withdrew for himself the remaining balance of $868.26. A check

Attorney Walsh had issued against the trust account, however,

was subsequently presented for payment on November 3, 2015, and

was returned for insufficient funds. Attorney Walsh claims that

he reimbursed the recipient of the trust account check via other

means.

¶7 Although the OLR's investigation was hampered by

Attorney Walsh's refusal or inability to provide records for his

trust account, the available information shows that on multiple

occasions, the trust account contained substantially less money

than it should have in 2014 and 2015. For example, bank records

show that the balance in the trust account was $469,349.55 on

May 31, 2014. At that time, the trust account should have contained at least $78,351.86 in funds belonging to two clients,

J.M.G. and M.J.E. Subtracting that amount from the balance

would leave a remaining balance of $390,997.69. This amount,

however, was more than $50,000 less than Attorney Walsh had

previously admitted in a letter he should have been holding for

another client, a substantial trust. Indeed, that amount would

have been more than $78,000 less than the amount identified in

the March 28, 2014 annual report of the trust. Moreover, the limited records the OLR was able to obtain indicate that 4 No. 2017AP243-D

Attorney Walsh deposited over $589,000 into his trust account on

behalf of the trust, but those records also show total

disbursements of only approximately $530,000 to proper

recipients of the trust's funds. Because the OLR has not been

able to obtain complete records, it cannot tell whether there

were other disbursements to proper recipients for which records

are not available or whether Attorney Walsh converted some or

all of the remaining trust's funds to his own use.

¶8 Similar possible shortcomings in disbursements of

other client funds appear in connection with at least three

other clients. The amounts that do not appear to have been

disbursed to the clients or to other proper recipients, however,

are substantially smaller than was the case with the trust's

money. What is clear is that in at least one case, the balance

of Attorney Walsh's client trust account dipped more than

$30,000 below the amount that should have been held in trust for

just one client. Thus, that amount of client funds had to have

been converted to the use of other clients or to Attorney Walsh's personal use.

¶9 Indeed, Attorney Walsh admitted to the OLR that

starting at least as far back as 2011 he had placed substantial

sums of his own money into the trust account and had not kept

track of those funds. Given the fact that on multiple occasions

the balance in his trust account was substantially less than the

amounts that were owed to clients, one can only conclude that

Attorney Walsh needed to deposit his own funds into the account

5 No. 2017AP243-D

at times to avoid overdrafts and to repay amounts he had

previously converted to his own use.

¶10 In the course of its investigation, the OLR asked

Attorney Walsh to produce a transaction register, client

ledgers, and a monthly reconciliation for his trust account.

Attorney Walsh failed to produce any of these requested records.

He produced only a single bank statement for October 2015, the

month prior to closing the account. His response to the OLR's

request stated merely that he was no longer practicing law and

that he did not possess any further records.

¶11 The OLR's summary indicates that its investigation of

Attorney Walsh's handling of his client trust account involves

Attorney Walsh's potential violations of the following Supreme

Court Rules: SCR 20:8.4(c);2 SCR 20:1.15(b)(1);3 former SCR

2 SCR 20:8.4(c) provides: "It is professional misconduct for a lawyer to engage in conduct involving dishonesty, fraud, deceit or misrepresentation." 3 Effective July 1, 2016, substantial changes were made to Supreme Court Rule 20:1.15, the "trust account rule." See S. Ct. Order 14-07, (issued Apr. 4, 2016, eff. July 1, 2016). Because the conduct underlying this case arose prior to July 1, 2016, unless otherwise indicated, all references to the supreme court rules will be to those in effect prior to July 1, 2016.

SCR 20:1.15(b)(1) provides:

A lawyer shall hold in trust, separate from the lawyer's own property, that property of clients and 3rd parties that is in the lawyer's possession in connection with a representation. All funds of clients and 3rd parties paid to a lawyer or law firm in connection with a representation shall be deposited in one or more identifiable trust accounts.

6 No. 2017AP243-D

20:1.15(b)(3);4 former SCR 20:1.15(e)(4)c.;5 former SCR

20:1.15(e)(6) and (7);6 and former SCR 20:1.15(f)(1)a., b., and

g.7

4 Former SCR 20:1.15(b)(3) provided: "No funds belonging to the lawyer or law firm, except funds reasonably sufficient to pay monthly account service charges, may be deposited or retained in a trust account." 5 Former SCR 20:1.15(e)(4)c. provided: "A lawyer shall not make deposits to or disbursements from a trust account by way of an Internet transaction." 6 Former SCR 20:1.15(e)(6) and (7) provided:

(6) A lawyer shall maintain complete records of trust account funds and other trust property and shall preserve those records for at least 6 years after the date of termination of the representation.

(7) All trust account records have public aspects related to a lawyer's fitness to practice. Upon request of the office of lawyer regulation, or upon direction of the supreme court, the records shall be submitted to the office of lawyer regulation for its inspection, audit, use, and evidence under any conditions to protect the privilege of clients that the court may provide. The records, or an audit of the records, shall be produced at any disciplinary proceeding involving the lawyer, whenever material. Failure to produce the records constitutes unprofessional conduct and grounds for disciplinary action. 7 Former SCR 20:1.15(f)(l)a. provided: The transaction register shall contain a chronological record of all account transactions, and shall include all of the following:

1. the date, source, and amount of all deposits;

2. the date, check or transaction number, payee and amount of all disbursements, whether by check, wire transfer, or other means;

(continued) 7 No. 2017AP243-D

3. the date and amount of every other deposit or deduction of whatever nature;

4. the identity of the client for whom funds were deposited or disbursed; and

5. the balance in the account after each transaction.

Former SCR 20:1.15(f)(1)b. provided:

A subsidiary ledger shall be maintained for each client or 3rd party for whom the lawyer receives trust funds that are deposited in an IOLTA account or any other pooled trust account. The lawyer shall record each receipt and disbursement of a client's or 3rd party's funds and the balance following each transaction. A lawyer shall not disburse funds from an IOLTA account or any pooled trust account that would create a negative balance with respect to any individual client or matter.

Former SCR 20:1.15(f)(1)g. provided:

For each trust account, the lawyer shall prepare and retain a printed reconciliation report on a regular and periodic basis not less frequently than every 30 days. Each reconciliation report shall show all of the following balances and verify that they are identical:

1. the balance that appears in the transaction register as of the reporting date;

2. the total of all subsidiary ledger balances for IOLTA accounts and other pooled trust accounts, determined by listing and totaling the balances in the individual client ledgers and the ledger for account fees and charges, as of the reporting date; and

3. the adjusted balance, determined by adding outstanding deposits and other credits to the balance in the financial institution's monthly statement and subtracting outstanding checks and other deductions from the balance in the monthly statement.

8 No. 2017AP243-D

¶12 The second investigation that the OLR has been

conducting relates to Attorney Walsh's representation of O.B.

Attorney Walsh agreed to represent O.B. in attempting to have

his felony convictions expunged or to seek a pardon for those

convictions. According to his fee agreement with O.B., Attorney

Walsh accepted an advanced flat fee of $1,500 at or near the

time of entering into the representation and deposited the

advanced fee into his law firm's business account. Attorney

Walsh claimed to the OLR that he had done work on O.B.'s behalf

and was able to describe some of that work. According to the

OLR's summary Attorney Walsh promised O.B. in July 2015 that he

would be following up on a lead that required research, but

warned that O.B. would likely be out of luck if the research did

not yield favorable results. Attorney Walsh, however, failed to

communicate the results of his research to O.B. He then failed

to advise O.B. in November 2015 that he was leaving the law firm

and was ceasing his practice of law. Attorney Walsh failed to

provide O.B. with any of the notices that were required when an attorney placed an advanced fee into the attorney's business

account and utilized the alternative advanced fee procedure

outlined in former SCR 20:1.15(b)(4m).8 Indeed, Attorney Walsh

8 Former SCR 20:1.15(b)(4m) provided:

Alternative protection for advanced fees. A lawyer who accepts advanced payments of fees may deposit the funds in the lawyer's business account, provided that review of the lawyer's fee by a court of competent jurisdiction is available in the proceeding (continued) 9 No. 2017AP243-D

to which the fee relates, or provided that the lawyer complies with each of the following requirements:

a. Upon accepting any advanced payment of fees pursuant to this subsection, the lawyer shall deliver to the client a notice in writing containing all of the following information:

1. the amount of the advanced payment;

2. the basis or rate of the lawyer's fee;

3. any expenses for which the client will be responsible;

4. that the lawyer has an obligation to refund any unearned advanced fee, along with an accounting, at the termination of the representation;

5. that the lawyer is required to submit any unresolved dispute about the fee to binding arbitration within 30 days of receiving written notice of such a dispute; and

6. the ability of the client to file a claim with the Wisconsin lawyers' fund for client protection if the lawyer fails to provide a refund of unearned advanced fees.

b. Upon termination of the representation, the lawyer shall deliver to the client in writing all of the following:

1. a final accounting, or an accounting from the date of the lawyer's most recent statement to the end of the representation, regarding the client's advanced fee payment with a refund of any unearned advanced fees;

2. notice that, if the client disputes the amount of the fee and wants that dispute to be submitted to binding arbitration, the client must provide written notice of the dispute to the lawyer within 30 days of the mailing of the accounting; and

(continued) 10 No. 2017AP243-D

failed to provide O.B. with a final accounting that showed how

he had earned the $1,500 flat fee.

¶13 The OLR was unable to determine the full extent of

Attorney Walsh's work on O.B.'s behalf because Attorney Walsh

says that he is no longer in possession of his billing software,

and the lawyer who purchased the law firm from Attorney Walsh

states that she is unable to access Attorney Walsh's billing

records.

¶14 The OLR's summary indicates in connection with

Attorney Walsh's representation of O.B. that it is investigating

possible violations of the following Supreme Court Rules: SCR

20:1.3;9 SCR 20:1.4(a);10 SCR 20:1.16(d);11 and former SCR

20:1.15(b)(4m).

3. notice that, if the lawyer is unable to resolve the dispute to the satisfaction of the client within 30 days after receiving notice of the dispute from the client, the lawyer shall submit the dispute to binding arbitration.

c. Upon timely receipt of written notice of a dispute from the client, the lawyer shall attempt to resolve that dispute with the client, and if the dispute is not resolved, the lawyer shall submit the dispute to binding arbitration with the State Bar Fee Arbitration Program or a similar local bar association program within 30 days of the lawyer's receipt of the written notice of dispute from the client.

d. Upon receipt of an arbitration award requiring the lawyer to make a payment to the client, the lawyer shall pay the arbitration award within 30 days, unless the client fails to agree to be bound by the award of the arbitrator. 9 SCR 20:1.3 provides: "A lawyer shall act with reasonable diligence and promptness in representing a client."

11 No. 2017AP243-D

¶15 Attorney Walsh's petition for consensual revocation

asserts that he is seeking the consensual revocation of his

license freely, voluntarily, and knowingly. He states that he

cannot successfully defend himself against the allegations of

misconduct summarized above and more fully described in the

OLR's summary. Attorney Walsh also acknowledges that he

10 SCR 20:1.4(a) provides that a lawyer shall:

(1) Promptly inform the client of any decision or circumstance with respect to which the client's informed consent, as defined in SCR 20:1.0(f), is required by these rules;

(2) reasonably consult with the client about the means by which the client's objectives are to be accomplished;

(3) keep the client reasonably informed about the status of the matter;

(4) promptly comply with reasonable requests by the client for information; and

(5) consult with the client about any relevant limitation on the lawyer's conduct when the lawyer knows that the client expects assistance not permitted by the Rules of Professional Conduct or other law. 11 SCR 20:1.16(d) provides:

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 advanced payment of fee or expense that has not been earned or incurred. The lawyer may retain papers relating to the client to the extent permitted by other law.

12 No. 2017AP243-D

understands he is giving up his right to contest any of the

OLR's allegations, as well as his right to have the assistance

of counsel in this matter. Finally, the petition acknowledges

that if the court grants the petition and revokes his license,

Attorney Walsh will be subject to the requirements of SCR 22.26

and, should he ever wish to seek the reinstatement of his

license, the reinstatement procedure set forth in SCRs 22.29-

22.33.

¶16 The OLR's summary and its recommendation in support of

the petition make clear that it is not seeking a restitution

award in this case. While it is clear that there were multiple

instances of conversion of trust account funds (either for the

benefit of other clients or for Attorney Walsh's personal use),

the OLR states that it has not been able, given the limited

records and information it was able to obtain, either to

identify to whom restitution might be owed or to arrive at any

reasonably ascertainable restitution amounts. The OLR further

notes that despite the apparent looseness with which Attorney Walsh handled his client trust account, no individual has

notified it that Attorney Walsh still owes him or her any money.

Similarly, given the lack of billing records, the OLR cannot

determine with any reasonable certainty that O.B. should receive

a refund of any particular amount of his advanced fee from

Attorney Walsh.

¶17 Having reviewed Attorney Walsh's petition, the OLR's

summary of possible misconduct, and its written recommendation in favor of the petition, we conclude that the petition for 13 No. 2017AP243-D

consensual revocation should be granted. It is clear from the

OLR's summary of misconduct allegations that Attorney Walsh

treated his client trust account as if it were a community fund

at his constant disposal. His disregard for the core ethical

value of protecting the integrity of each client's funds and his

complete rejection of any obligation to maintain the required

records that are necessary to keep client funds in order

represent serious breaches of his ethical obligations as a

lawyer in this state. His ethical lapses are compounded by his

apparent lack of diligence and communication in the

representation of O.B. Moreover, the private reprimand

previously imposed on Attorney Walsh demonstrates that there is

a pattern of misconduct.

¶18 Given the OLR's admitted inability to determine

whether any particular client or third party is owed any money

by Attorney Walsh, and to arrive at a reasonably ascertainable

amount, we have no choice but to accede to the OLR's request not

to award restitution in this matter. We are disturbed that this outcome appears to result from Attorney Walsh's failure to

create, preserve, and/or produce the necessary records. We

note, however, that if Attorney Walsh were ever to seek the

reinstatement of his license, he would be required to prove

affirmatively that he had made full restitution to all persons

injured or harmed by his misconduct. See SCR 22.29(4m).

¶19 Finally, because this matter is being resolved via a

petition for consensual revocation without the need to appoint a

14 No. 2017AP243-D

referee or hold an extensive hearing, we do not impose any costs

on Attorney Walsh.

¶20 IT IS ORDERED that the petition of Adam Walsh for the

consensual revocation of his license to practice law in

Wisconsin is granted.

¶21 IT IS FURTHER ORDERED that the license of Adam Walsh

to practice law in Wisconsin is revoked, effective the date of

this order.

¶22 IT IS FURTHER ORDERED that, to the extent he has not

already done so, Adam Walsh shall comply with the provisions of

SCR 22.26 concerning the duties of a person whose license to

practice law in Wisconsin has been revoked.

15 No. 2017AP243-D

1