Attorney’s Duties

Had dinner with an attorney friend last night, and laid out matters for him.

He said, “I just hope their malpractice policies are in place and have a big cap.” With regard to the “attorney for the board,” William “Wit” Davis, he said, if hasn’t been warning board members, and I’ve had done it in writing, that they have immense personal exposure to suit, he’s putting his policy on the line. You have a duty to keep your clients well-informed as to all risks they are exposed to. “If those were my clients, they’d be holding a letter describing, as best I could, their exposure to suits and the amount at risk, and outlining the effects of having their insurance lapse on August 31. This is serious s__t.”

Later in the evening, he called to ask how the board had picked their attorney. He had had great trouble even finding him on the internet. Normally, an attorney who’s been around for a while, you get a lot of hits. His legal documents wind up on the net, appellate rulings where he is mentioned, newspaper articles sometimes, a business webpage, these days everyone has one. But William W. Davis is almost impossible to find. He finally found he’s practicing by himself in Wisconsin.

“One thing I did find: he’s not a member of the New York bar. If NRA had asked me to advise their board, I’d have answered, ‘if it’s governed by New York law, you need someone who is admitted to New York’s bar. You shouldn’t be interpreting and applying New York law if you aren’t licensed there. And for serious s__t like this, it should be someone with experience in New York not-for-profit law, every state’s laws there are different.”

He asked again how they found him, and I could only say LaPierre picked him, and he was said to be a friend of Bill Brewer. “Great” he responded, “Look at the situation. LaPierre has every incentive to use the board to cover his ___, even if it puts the board in danger, so long as it protects him. Then the board lets him pick their attorney. The attorney knows that LaPierre can as easily fire him if he gives the board the “wrong” advice, such as “you are in danger” or “let LaPierre go. Naturally, he’s tempted to keep his mouth shut. You don’t want an attorney who knows if he tells you certain things, he could be fired by someone else.”

“Way back, there was a huge legal mess with the savings and loans. Almost every one of them in the county collapsed and was taken over. A lot of big law firms, and accounting firms, were devastated by malpractice suits. What’d happened was, the attorneys and accountants knew that in theory they worked for the corporate S&L, but in practice their paychecks were signed by the S&L president, who could let them go. So they let the president get away with things that endangered the corporation, it’d be painful if he stopped throwing money at them. Then came the implosion, they got sued, and had no way to justify what they’d done and advised, in terms of their duty to the corporation. Sounds like Brewer and this fellow Davis are in just that situation.”

Then he pointed out something I hadn’t seen. “The directors probably can’t get out of it by resigning. The corporate bylaws probably say that directors and officers can be indemnified their legal costs, but don’t say anything about former directors and officers. So if they resign, they may be outside indemnity and not entitled to claim against that dinky $5 million fund.”

I asked, so what can they do? “If it was me, I’d make sure to stay and vote the honest way, and make sure the vote was on the record. If it’s a voice vote, scrawl a note and tell the secretary to insert it in the minutes. You want everything on paper. And if I did resign, I’d not make it a quiet one, for family reasons or time constraints. I’d say it right out, and say it’s because I am disgusted by the corruption but cannot out-vote the majority who endorse it.”