THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: FRIDAY, June 17, 1994 TAG: 9406170574
SECTION: LOCAL PAGE: B4 EDITION: FINAL
SOURCE: BY MARC DAVIS, STAFF WRITER
DATELINE: 940617 LENGTH: VIRGINIA BEACH
On Thursday, the bar approved the first installment toward a $1 million boost in its Client's Protection Fund. The bar also agreed Thursday to hire two investigators to audit lawyer trust accounts.
{REST} These were the bar's first two concrete steps since the David Murray scandal of 1992. Murray, a Newport News lawyer, stole about $42 million from clients, then killed himself when he was caught.
Since then, the bar, which regulates all lawyers in Virginia, has scrambled to shore up its public image and prevent future scandals.
Last year, the bar considered random audits of member trust accounts. It would have worked like random audits of tax returns by the Internal Revenue Service. Any lawyer could have been audited at any time.
But the bar's statewide governing council backed off at the last minute. Many lawyers considered the proposal insulting and intrusive.
In March, the bar did the next-best thing: It adopted a new rule making it easier for investigators to look into a lawyer's trust fund. Previously, it took a formal complaint.
But until now, the bar had no staff to conduct the audits.
At its annual meeting Thursday, the bar council took the next logical step: It adopted a budget that includes two investigators who will review a lawyer's books whenever regulators suspect that the lawyer has violated professional standards.
The bar also added $130,000 to the fund that reimburses clients who are victimized by crooked lawyers.
The account, called the Client's Protection Fund, has about $1.2 million, but victims can only claim up to $25,000 each. ``It's nothing to scoff at, but obviously the claims we are now seeing are much higher,'' Bar President R. Edwin Burnette said.
Over the next five years, the bar hopes to add $1 million more to the fund and perhaps raise the claim limit for each victim.
Fattening the fund also would help multiple victims of a single lawyer. The bar will not pay more than 10 percent of the fund to victims of any one lawyer. That comes to $120,000 today. If the fund rose to $2 million, as planned, the limit for each bad lawyer would rise to $200,000.
The move to increase the fund is in response to a steady rise in complaints against bar members. Last year, the bar received more than 2,400 complaints against Virginia lawyers.
``We just know that with the increase in numbers . . . we've got to make the fund larger,'' Burnette said. ``We obviously have to do more to provide a source of recovery for those who have been victims of lawyer theft.''
The fund has never dwindled so low that it could not pay claims, but there was a huge run on the fund in 1991-92, after the Murray scandal. That year, 161 victims - mostly Murray's clients - made claims. That was more than double the usual number of about 60 a year.
In October, the bar will consider increasing the fund by siphoning interest from client trust accounts. Now, that money funds legal services for poor people. by CNB