William M. Richmond (2005)

http://www.nh.gov/judiciary/supreme/opinions/2005/richm050.htm 5/17/2005

venturer in GES, in an involuntary bankruptcy action against GES. Richmond Two years later, in April 1999, Richmond represented Gras and Graham Bunce, a co­

approximately $6,000 of the $36,000 owed to Gras. formed along with three other co-venturers in 1994. Richmond collected terminated from his position at Global Environmental Solutions (GES), a company he to collect his judgment on a wage claim. During the prior year, Gras had been Richmond first represented Gras in 1997 in an action against Gras' former employer formation of an Internet start-up company, Environmental Showcase, Limited (ESL). Richmond's representation of Seaton Gras and his later involvement with Gras in the in New Hampshire in May 1996. This professional conduct matter arose from The record reflects the following facts. Richmond was admitted to the practice of law

referee's recommended sanction. and recommended suspension for six months and assessment of costs. We adopt the Professional Conduct l.1(a), l.1(b)(I), 1.l(b)(5), l.7(a), l.7(b), l.8(a), 7. I (a) and 8.4(a), by clear and convincing evidence that Richmond violated New Hampshire Rules of referred the petition to a Judicial Referee (Temple, J.) for a hearing. The referee found William M. Richmond, receive a six-month suspension from the practice of law. We Conduct (committee) filed a petition with this coUrt requesting that the respondent, DUGGAN, J. On March 6,2003, the Supreme Court Committee on Professional

William M. Richmond, by brief and orally, pro se.

brief and orally), for the committee on professional conduct. Cook Little, Rosenblatt & Manson, P.L.L.C., of Manchester (Arnold Rosenblatt on the

No. LD-2003-001

Original

page is: http://www.courts.state.nh.us/supreme. by 9:00 a.m. on the morning of their release. The direct address of the court's home following address: reporter@courts.state.nh.us. Opinions are available on the Internet be made before the opinion goes to press. Errors may be reported by E-mail at the Concord, New Hampshire 03301, of any editorial errors in order that corrections may requested to notify the Reporter, Supreme Court of New Hampshire, One Noble Drive, formal revision before publication in the New Hampshire Reports. Readers are NOTICE: This opinion is subject to motions for rehearing under Rule 22 as well as

Richmond's Case Page lof7 http://www.nh.gov/judiciary/supreme/opinions/2005/richm050.htm 5/17/2005

p. 2 obtaining a written waiver. Finally, the referee found that Richmond violated Rules serving as corporate counsel without disclosing the potential conflict of interest and violated Rules 1.7(a) and (b), 1. 8 (a) and 8.4(a) by forming and operating ESL while the representation despite the conflicts. The referee also found that Richmond adequately identifying the conflicts of interest and obtaining both clients' consent to Professional Conduct 1.7(a) and (b) in representing Gras and Bunce without Based upon these facts, the referee found that Richmond violated Rules of

further violations of the securities laws. administrative fine and Richmond and Gras were ordered to cease and desist from RSA 421-B:6 (Supp. 2004); RSA 421-B:ll (Supp. 2004). ESL agreed to pay a $7,500 laws by selling unregistered securities and selling securities without a license. See consent order in which Richmond, Gras and ESL admitted violating State securities form U-7 on ESL's behalf. The Bureau conducted an investigation that resulted in a disclosure. After further discussions with the Bureau, Richmond later withdrew the commented on at least eighty-four items that required correction or additional never been filed. The Bureau completed an initial review of the form U-7 and file direct public offerings, although Richmond had only drafted offerings that had Richmond's law firm suggested that he had experience in helping small businesses conduct a sale of up to one million dollars of common stock. The web site for with the New Hampshire Bureau of Securities Regulation (Bureau) in order to In August 1999, on ESL's behalf, Richmond filed a form U-7 disclosure document

regarding the potential conflicts. counsel and did not advise the board to seek the advice of independent counsel Richmond failed to obtain the board members' written consent to serve as corporate stemming from his roles as COO, corporate counsel, board member and shareholder. his involvement with ESL, Richmond never disclosed the potential conflict of interest drafted corporate by-laws and advised ESL on securities matters. Over the course of as COO and corporate counsel, Richmond filed ESL's articles of incorporation, was a member of the board of directors and the Chief Operating Officer (COO). Acting Gras was the majority shareholder and chief executive officer of ESL, while Richmond an idea that Gras developed to provide a web portal to the environmental industry. During the same period of time in 1999, Gras and Richmond formed ESL based upon

Gras' objection. the bankruptcy action. The bankruptcy court permitted Richmond's withdrawal over thereafter, Richmond filed a motion for leave to withdraw from representing Gras in his approval, even though the settlement terms were adverse to Gras. Shortly the settlement negotiations, he reviewed the settlement agreement and gave Bunce and cease assisting Gras in that litigation. Although Richmond did not aid Bunce in agreement required Bunce to withdraw from the bankruptcy petition against GES Richmond's assistance, agreed to settle the matter with Barnes. The settlement GES co-venturer, on an unpaid promissory note. In November 1999, Bunce, without represented Bunce in a lawsuit brought against him by Stephen Barnes, another While representing Gras and Bunce on their bankruptcy claim, Richmond also

however, did not obtain a written waiver of the conflict from either client. representation of Gras and Bunce and they orally waived the conflict. Richmond, testified that he discussed the potential conflict of interest created by his joint

Richmond's Case Page 2 of7 http://www.nh.gov/judiciary/supreme/opinions/2005/richm050.htm 5/17/2005

p. 3 Alan L. Reische, the COlll111ittee's expert witness on securities law, in evaluating Richmond argues that the referee erred in relying upon the report and testimony of

Id. l.l(b).

no avoidable harm to the client's interest. assure that the matter undertaken is completed with (5) attention to details and schedules necessary to

(4) proper preparation; and

attention; competence and bringing thOSe areas to the client's (3) identification of areas beyond the lawyer's

(2) performance of the techniques of practice with skill;

the lawyer practices; (1) specific knowledge about the fields of law in which

competence: R. Prof. Conduct 1.1(a). Rule 1. 1 (b) establishes the minimum requirements for legal Rule 1. 1 (a) states,"A lawyer shall provide competent representation to a client." N.H.

there is insufficient evidence to support a finding that he violated these rules. (b). He argues that under the correct standard, a"general practitioner" standard, "specialist" or"expert" standard when evaluating his conduct under Rules 1.1 (a) and We first address Richmond's argument that the referee incorrectly applied a

149 N.H. 19,22 (2002), cert. denied, 540 U.S. 815 (2003). review de novo to determine whether the referee committed errors of law. Feld's Case, same conclusion as the referee based upon the evidence presented. Id. However, we referee's factual findings to determine whether a reasonable person could reach the appropriate sanction. Shillen's Case, 149 N.H. 132, 136 (2003). We review the found, a violation of the rules governing attorney conduct has occurred and, if so, the by the record but retain the ultimate authority to determine whether, on the facts In professional conduct matters, we defer to the referee's factual findings if supported

argues that we should adopt the referee's findings and recommended sanctions. severity of the offenses and the presence of several mitigating factors. The committee should impose a lesser sanction than the referee recommended based upon the not dispute the referee's findings of conflict of interest violations, he argues that we false and misleading. See N.H. R. Prof. Conduct 1.1, 7.1. Although Richmond does competence in securities law and in determining that his web site advertisement was Richmond argues that the referee applied an improper standard in evaluating his

law and assessment of all expenses incurred by the committee. recommended that Richmond receive a six-month suspension from the practice of preparing the form U-7 and misrepresenting his firm's legal services. The referee 1. 1 (a) and (b), 7. 1 (a) and 8.4(a) by issuing unregistered securities, inadequately

Richmond's Case Page 3 of7 http://www.nh.gov/judiciary/supreme/opinions/2005/richm050.htm 5/17/2005

p. 4 Standards set forth the following factors for courts to consider in imposing sanctions: (1992) (Standards), we look to them for guidance. Feld's Case, 149 N.H. at 28. The Although we have not adopted the ABA Standards for Imposing Lawyer Sanctions

any mitigating circumstances appearing in the record. ld. The sanction we impose must take into account the severity of the misconduct and legal profession, and prevent similar conduct in the future." ld. (quotation omitted). protect the public, maintain public confidence in the bar, preserve the integrity of the an offense. O'Meara's Case, 150 N.H. 157, 159 (2003). Rather, its purpose"is to we are mindful that discipline is not intended as a mode of inflicting punishment for lesser sanctions than those recommended by the referee. In exercising our authority, consider the appropriate sanction. Richmond argues that his violations warrant Having found that Richmond violated the Rules of Professional Conduct, we next

material misrepresentation of fact in violation of Rule 7.1. Bureau. Thus, the record supports the referee's finding that Richmond presented a drafted, but never filed, a registration statement for the issuance of stock with the training or experience in securities law." Richmond testified that he had previously expertise in financing and raising capital even though"'he did not have any special fact or law." ld. 7.1(a). The referee found that Richmond's web site advertised his communication is false or misleading if it"contains a material misrepresentation of misleading communication about the lawyer or the lawyer's services." ld. 7.1. A web site violated Rule 7.1. Rule 7.1 prohibits a lawyer from making a"false or Richmond also argues that the referee erred in finding that the content of his firm's

supports the referee's finding that Richmond violated Rules 1.1 (a), (b)( 1) and (b)(5). applied the correct standard in evaluating Richmond's conduct and that the record with disclosure standards and securities practice." Thus, we conclude that the referee Bureau, Reische noted"examples throughout the form that reflect an unfamiliarity learn the requirements for filing the form U-7 by contacting a staff attorney at the to ESL's interests. Although Richmond argues that he made reasonable efforts to to the client's attention, and failed to pay sufficient attention to detail to avoid harm about securities law, failed to identify areas beyond his competence and bring these Reische testified that, in his opinion, Richmond did not have specific knowledge and"failed to ... acquire the needed knowledge from other sources." Likewise, concerning the operation and interplay with state and federal securities legislation" In his report, the referee noted that Richmond"lacked needed knowledge and skill

avoid harm to the client. See id. 1.1(b)(I), (3). knowledge about the specific area of law in which the lawyer is practicing in order to must identifY areas in which the lawyer is not competent and acquire sufficient required in some circumstances." ld. Rule 1.1 mandates that a general practitioner ABA Model Code Comments. However,"[e]xpertise in a particular field of law may be experience to handle problems of a type with which the lawyer is unfamiliar." ld. 1.1 general practitioner. ... A lawyer need not necessarily have special training or prior to Rule 1.1 state that" [i]n many instances, the required proficiency is that of a minimum standards for competency under Rule 1.1. The ABA Model Code comments that expertise in a specific area of law generally is not required in order to meet the securities law specialist in judging Richmond's conduct. We agree with Richmond Richmond's competency and in doing so applied the knowledge and skill of a

Richmond's Case Page 4 of7 http://www.nh.gov/judiciary/supreme/opinions/2005/richm050.htm 5/17/2005

p. 5 in misrepresenting on his web site the extent of his experience in securities law. See Standards, supra § 9.32(b). We find, however, that Richmond acted dishonestly belief that he participated in the formation and operation of ESL as a co-venturer. First, Richmond points to his lack of a dishonest or selfish motive, coupled with his

factors in turn. See Feld's Case, 149 N.H. at 29. Standards, supra § 9.32. We consider the evidence and weight of each of these has already suffered financial loss; and (5) his remorse for his actions. See effects of his misconduct; (3) his cooperation with the committee; (4) the fact that he sanction: (1) his lack of a dishonest motive; (2) his good faith effort to remedy the Richmond argues that the following mitigating factors support a more lenient mitigating factors and recommended that Richmond be suspended for six months. mitigating factors. Kersey's Case, 150 N.H. at 588. The referee found no substantial Before we determine what disciplinary action we will take, we must also consider

Standards, supra § 9.22. reprimand in 1999 for an unrelated violation of the Rules, as an aggravating factor. N.H. at 29. We also consider a prior disciplinary offense, including Richmond's the degree of discipline imposed. Standards, supra §§ 9.21, 9.22; cf. Feld's Case, 149 Rules of Professional Conduct is an aggravating factor that justifies an increase in and his role as corporate counsel for ESL. Commitment of multiple violations of the 1.8 through his joint representation of Gras and Bunce in the bankruptcy litigation In addition to violating Rules 1.1 and 7.1, Richmond admitted violating Rules 1. 7 and

and an administrative fine for violations of State securities laws. Richmond's lack of competence harmed ESL, resulting in withdrawal of the form U-7 form U-7. The record, however, provides clear and convincing evidence that reasonable efforts to educate himself about the regulatory process prior to filing the site. Throughout these proceedings, Richmond has maintained that he made misrepresenting the extent of his experience in this practice area on his firm's web knowledge about securities law practice. Furthermore, Richmond violated Rule 7.1 by conducting ESL's stock offerings and filing the form U -7 demonstrate his lack of knowledge needed to practice securities law. Richmond's numerous errors in N.H. at 159. The referee found, and we agree, that Richmond lacked the skill and case, including preserving the integrity of the profession. See O'Meara's Case, 150 combined with probation would adequately address the purposes of discipline in this injury to a client." Standards, supra § 4.52. Richmond counters that a reprimand in which the lawyer knows he or she is not competent, and causes injury or potential provide that suspension is appropriate when a lawyer"engages in an area of practice We first examine the recommended sanction for lack of competence. The Standards

Responsibility Rules and Standards 341 (1999 ed.). serious misconduct." American Bar Association, Compendium of Professional it might well be and generally should be greater than the sanction for the most sanction for the most serious instance of misconduct among a number of violations; recommends that the sanction imposed"should at least be consistent with the 125 S. Ct. 97 (2004). In the case of multiple charges of misconduct, the ABA factors." Standards, supra § 3.0; see Kersey's Case, 150 N.H. 585, 587, cert. denied, caused by the lawyer's misconduct; and (d) the existence of aggravating or mitigating "(a) the duty violated; (b) the lawyer's mental state; (c) the potential or actual injury

Richmond's Case Page 50f7 http://www.nh.gov/judiciary/supreme/opinions/2005/richm050.htm 5/17/2005

p. 6 order to be reinstated. See Sup. Ct. R. 37(12)(e) (2003; amended 2003). satisfactorily complete the Multistate Professional Responsibility Examination in 2003); Standards, supra § 2.8. Furthermore, we note that Richmond must practice law. See Sup. Ct. R. 37(14)(a) (2003; amended 2003); 37(16) (2003; amended prosecuting this matter and disclose the jurisdictions where he is admitted to appointed attorney, reimburse the committee for the costs of investigating and recommendation that Richmond surrender his client files for inventory by a court­ suspension from the practice of law. In addition, we adopt the referee's mitigating factors, we agree with the referee's recommendation of a six-month Because our review of the record reveals aggravating factors but no substantial

mitigation. Cf. O'Me~ra's C~se, 150 N.H. at 159-60. he is not competent." Therefore, we do not find a level of remorse adequate to merit Mr. Richmond's position that he may continue to offer legal services in areas in which from his multiple representation of parties" and that"[a] risk of harm is presented by that"Mr. Richmond has shown little appreciation for the conflicts that could arise remorse and admitted the conflict of interest violations. The referee, however, found Standards, supra § 9.32(m). The committee acknowledges that Richmond expressed Finally, Richmond argues that he feels sincere remorse for his violations. See

and penalty under Rule 11 of the Federal Rules of Civil Procedure). complaint"); see also ,Tones' Case, 137 N.H. 351, 359 (1993) (noting prior sanction to be considered but does not provide absolution from the charges made by [the] had been subjected to fines and probation in criminal proceeding"is a circumstance mitigation. See Wholey's Case, 110 N.H. 449, 450 (1970) (noting fact that attorney investment decisions as the type of penalty or sanction that would warrant However, we do not regard Richmond's financial losses resulting from his poor (recognizing"imposition of other penalties or sanctions" as a mitigating factor). would terminate his means of earning a livelihood. See Standards, supra § 9.32(1) suffered financial loss due to his involvement with ESL and suspension from practice Fourth, Richmond argues that suspension is too great a sanction because he already

Case, 149 N.H. at 29. has a professional duty to cooperate with the committee's investigation. &.e Feld's ensuing hearings, we do not ascribe significant weight to this factor because a lawyer Although we agree that Richmond cooperated with the committee's inquiries and forthcoming in his testimony before the referee. See Standards, supra § 9.32(e). Third, Richmond argues that he has been cooperative with the committee and was

(1). Thus, there is no mitigation. relationship after a conflict of interest causes harm. &.e N.H. R. Prof. Conduct 1. 16(a) but merely satisfied Rule 1.16, which requires the termination of a professional Standards, supra § 9.32(d). Richmond's withdrawal did not"rectify consequences" good faith effort to make restitution or to rectify consequences of misconduct." interest that developed. However, mitigation considers whether there was a"timely bankruptcy litigation, he made a timely and good faith effort to rectify the conflict of Second, Richmond argues that by withdrawing from his representation of Gras in the

Thus, we do not find this mitigating factor to be present.

Richmond's Case Page 6 of7 http://www.nh.gov/judiciary/supreme/opinions/2005/richm050.htm 5/17/2005

BRODERICK, C.J.