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Legal Ethics

How To Lose Your License to Practice Law in One Easy Step

Let me start by saying that I really, really, like accountants. I had deep and valued relationships with a number of accountants when I practiced law, and they were by far my best referral sources. Many became good friends. So, the negative stories which I am about to tell relate to a tiny minority of the accountants who I came across.

However, that small minority can do real damage and young lawyers in particular must be able to recognize the danger.

Accountants have been known to try to get stuff past young lawyers who do not know better.

The most egregious example that I can give happened when I was very new to the profession. It went something like this:

Accountant: Young Murray, the client lost a whack of money last year so we need you to do a trust agreement saying that the corporation carried on the business in trust for the individual. That way we can use the losses against the shareholder’s other income. You need to date the trust agreement on the date of incorporation.

Young Murray: I may be new at this, but I am pretty sure that it would be unethical for me to backdate the document.

Accountant: You just prepare the document and send it to me. I will date it.

Young Murray: What will the tax department say about this?

Accountant: Nothing if they don’t audit. If they do audit, they will ask me to provide an affidavit confirming when it was signed.

Young Murray: What will you do then?

Accountant: I will sign the affidavit saying that the trust agreement was signed on the incorporation date.

Young Murray: Count me out. I’m having no part of this.

Most lawyers are not going to come across an accountant who is quite that scummy, but it is not uncommon for some accountants to ask lawyers if can date transactions earlier than they occurred. They try the lawyer on for size. If the lawyer goes along with it, they figure that they have helped the client out and the risk is on the lawyer. If the lawyer says no, they either give in or try to move the file to a more cooperative solicitor.

Lawyers who go along may be putting their license to practice law at risk.

Then there are some accountants who are more aggressive. They will tell the lawyer that ‘it is always done that way’ and ‘it is not a big deal’ and ‘that is how business works.’

And the risk is not only from accountants. Law firm partners have been known to try to browbeat associates into doing things that they are not comfortable with as well. A few associates who went along have been disbarred. Apparently, “the partner told me to do it” is not a valid defense.

So, here is my reminder to young lawyers: It is your law license. The same rules apply whether you have been practicing twenty years or twenty minutes. When in doubt, speak to senior, trusted counsel and be sure you know what your obligations are. 

2 replies on “How To Lose Your License to Practice Law in One Easy Step”

A former colleague of mine was told, very early on in her career, to forge a bunch of client signatures for a deal. Completion was scheduled for later that day, and the client director had been held up, so instructed the lawyers to sign the documents for him. I imagine that because of the execution requirements of the client entity, it had to be done in the director’s name. My colleague was told that because the client had authorised this, it was okay and they had to do it to save the deal.

I appreciate that this is more akin to getting documents completed on a “Saturday” in Ontario for statutory reasons as per your other post – as opposes to tax fraud – but what was more shocking was that this was happening in a global firm which I think has offices in Canada.

Did you ever notice how the people telling the junior that it is okay to do these things never want to do it themselves? Law firms have to have systems which permit a junior who is concerned about questionable instructions to consult with a designated “ethics” partner without fear of repercussions. But even so, at the end of the day each lawyer is responsible for their own actions and “I was following instructions” will not save their license to practice if it blows up.

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