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 trust account credit card 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
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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.
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No. 2017AP243-D
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