Blog Articles

Advanced Legal Fees and Related Escrow Issues

Advanced Legal Fees and Related Escrow Issues by Chris McDonough

I recently gave a lecture where I was discussing retainers, legal fees, and escrow. It became clear that there’s some confusion over advanced legal fees paid to a lawyer.

A general retainer is a retainer paid to a lawyer for unspecified future services and for the lawyer to be available to the client in the future. For example, this might be used to engage a lawyer on a monthly or yearly retainer to be available for representation or to give the client legal advice as issues arise. Under this type of retainer, the fee paid is not an advance fee but is deemed earned immediately upon receipt. See NYSBA Opinion 570.

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Bars Rally Around Suspended Attorney

Andrew Keshner

Several bar organizations are supporting the effort of a suspended Long Island attorney to challenge in the state’s highest court what he describes as the overly strict approach of the Appellate Division, Second Department, to enforcing disciplinary rules governing attorney escrow accounts.

A Second Department panel suspended Peter J. Galasso of Galasso, Langione, Catterson & LoFrumento in Garden City for what it called his failure to exercise “appropriate vigilance over his firm’s bank accounts” from which the firm’s bookkeeper—Mr. Galasso’s brother Anthony—embezzled $4 million in client funds (NYLJ, Feb. 27). Peter Galasso cooperated with the prosecution of his brother, who is now in prison.

Mr. Galasso’s suspension was to begin on March 21, but on March 19, Court of Appeals Judge Victoria A. Graffeo (See Profile) stayed the suspension pending determination of Mr. Galasso’s motion for leave to appeal. The Grievance Committee for the Ninth Judicial District is due to file a response by April 2.
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APPLYING FOR THE BAR: PROVING YOURSELF TO THE COMMITTEES ON CHARACTER AND FITNESS

Section 90 of the Judiciary law states that the Appellate Divisions must “be satisfied” that a candidate for admission possesses the requisite character and fitness to join our profession.  This is quite a vague standard; attempting to quantify an equally vague character based value.

It is simple for the Committees to find someone questionable or unfit to practice law.  Indicators of dishonesty, self dealing, disrespect for the law and the like will trigger deeper levels of review and/or rejection.  But how can you prove your actual fitness?

Of course, the absence of the indicators listed above is paramount.  Yet, there are other methods you should know.  For example, if there is an arrest in your past, explain it in detail and honestly.  Take full responsibility.  Show remorse, and if possible, show what you have done to address your behavior or how you given back to the community you may have harmed.

Just keep in mind that a well crafted complete application for admission must “satisfy” the Committees upon initial review.  Any serious questions that remain will trigger a hearing; which will trigger, at minimum, a lengthy delay, substantial legal fees, etc.

The moral here?  Make sure you submit an application for admission that answers any and all potential questions that it may raise as to your fitness to practice.  If you are not certain, discuss the situation with competent counsel before filing.

APPLYING FOR THE BAR WITH A CRIMINAL RECORD

The reality is that in New York a criminal record is not a bar to admission.  Indeed, a criminal charge that would get a lawyer disbarred may not keep a bar applicant from being admitted.  The real test is – what was the character of the crime and how did the applicant grow or change subsequent to engaging in that crime?

Our office was able to get an applicant admitted to practice in New York despite having been imprisoned on a felony conviction for a drug based crime that involved the use of a hand gun.  A crime of this nature (drugs, guns, and the gross disregard for the safety of others), would ordinarily cause an applicant to be rejected out of hand.  However, in this case we were able to demonstrate that the applicant had done a 180 degree turnaround from the time of his conviction.

The Character Committee decided that we were able to prove, despite the applicant’s past conduct, that the applicant possessed the requisite level of fitness to be admitted at the time of the Character Committee review.

So, can you get admitted with a criminal record?  The answer is “possibly.”  Where the acts are simple, isolated and prior to law school, there is a good chance.  Where the conviction is for fraud, theft, or other acts of dishonesty; or for multiple crimes or crimes that show a clear disrespect for the law and the rights and welfare of other people, it is a tougher hurdle.  But, it can be done with the right amount of mitigation, acceptance of responsibility, and making sure you take the correct approach when filling out your application for admission and when you appear before the Character Committee.