Tuesday, April 9, 2013

Does Blue Horseshoe Still Love Anacott Steel?

Ethics Is Easy, Until . . . 

Early in my legal career I was given an opportunity to teach at Denver University’s College of Law by John Carver, a long-time faculty member who was also Of Counsel to our firm.  Phil Figa — later to become Judge Figa — was taking a leave of absence from teaching to chair the Colorado Bar Association’s Ethics Committee, so D.U. needed a Lecturer in Law to teach Phil’s Professional Responsibility class.  John knew I had a teaching bug so, either to help me scratch that itch or cure me of it, he recommended me for the job.

I’m not sure there was much competition.  It was the night division of the law school and if it paid anything it was an honorarium so small I can’t recall what it was.  But I loved it.  Here was a group of students, most of whom were holding down day jobs, who so badly wanted to become lawyers that they were willing to pull double or triple shifts to achieve their goal.  I was determined to give them their money’s worth and engage and challenge them.  

 If “Legal Profession” was considered to be an “easy ‘A’” at most law schools, it wasn’t going to be in my class.  I not only had a casebook, I created a 100-page supplement.  My goal was not to be a hard-ass, but to go well beyond the Code of Professional Responsibility to show how ethics applies in real legal practice.  For, to paraphrase Lt. Commander Riker, “When has ethics ever been as simple as a rule book?” 

To this end, one evening when I sensed my charges growing incredulity at the brazen ethical lapses that filled their casebook, I dramatically pulled out my wallet and, holding it aloft, proclaimed, “Ethics is easy, until this gets in the way.”  Melodramatic?  Sure, but also more accurate than I could have possibly then known.

I recalled this bit of classroom stagecraft recently while watching Wall Street: Money Never Sleeps, the sequel to Oliver Stone’s classic Wall Street.  In the original film, the protagonist, Gordon Gekko, preaches that “Greed . . . is good,” at least until you’re caught.  In Money Never Sleeps, after several years in prison and another seven years out of public view, Gekko is back in the limelight pitching his book, a story of personal redemption, Is Greed Good? 

Throughout the film the audience is left wondering whether prison has truly rehabilitated Gekko, or whether his public reformation is simply another con.  The uncertainty of Gekko’s salvation, set against the backdrop of the 2008 financial meltdown, and featuring a cast including ethical, unethical, and morally ambiguous characters, is surprisingly engaging and suspenseful.

In perhaps my favorite scene Gekko runs into his former protégé, Bud Fox, at a lavish philanthropic event at the Metropolitan Museum of Art.  Catching up on their lives, Bud tells Gordon that, “after a little time away” (in prison for insider trading) he turned his father’s airline “into one of the largest private jet brokerages in the world and sold it . . . made millions.” Fox now lives the life of ease he sought in Wall Street – “golf, winters in St. Barths, philanthropy,” and a gorgeous woman on each arm.  Fox then asks Gekko, “Does Blue Horseshoe still love Anacott Steel?” (the code phrase used in the original Wall Street to signal others to start buying and bidding-up the price of Anacott Steel.)  Gekko smiles and, laughing, replies, “You know it.”  But the audience is left wondering is Gekko just playing Fox?  Is he kidding himself?  Is “greed,” still “good” for Gekko?  Is the thrill of the game, and the desire too win, simply too intoxicating, too all-consuming, for Gekko to resist?  And are lawyers all that different from Gekko?

Why Do Good Lawyers Go Bad?  

Most lawyers are hard-working, honest, and ethical.  Still there are notable exceptions – the kind that filled my students’ casebook.  How many lawyers succumb to Gordon Gekko’s mantra “Greed Is Good”?  

One gets some idea reviewing the 2012 Annual Report of the Colorado Supreme Court’s Attorneys’ Fund for Client Protection.  Established in 1999 to reimburse losses caused by dishonest Colorado attorneys, as of December 2012 the Fund had made total disbursements of $5,127,474.47 on claims totaling $10,057,474.09.  That represents quite a few believers — and more than a few true believers — of the Gekko gospel among our legal brethren.  

Sadly, fraud, theft and other dishonest conduct by lawyers is frequent enough that, a few years removed from law school, the novelty is gone and we are generally anesthetized to the monthly “Roll of Shame” published in The Colorado Lawyer. That is, until it happens to someone we know and like.  Then we ask, “why did this happen?” and, if we have the temerity, “could this have happened to me?”

The Curious Case of Mark W. Fischer   

Fischer's Confession
My “there but for the grace of God” moment arrived in April 2007 when Mark Fischer, an attorney I had worked with years earlier, made a startling confession.  In 2005 Fischer had fabricated an order and forged the signature of federal judge Phillip Figa – the same Phil Figa whose Professional Responsibility class had been entrusted to my care years before.  

The faux order purported to stay execution of all judgment liens in a protracted and bitterly contested theft of trade secrets case in which Fischer had been engaged as defense counsel.  Fischer gave this forgery to his client, Judy Heumann, to record.  The counterfeit order purportedly enabled Heumann to stave off foreclosure and possible bankruptcy, continue to borrow against the property, and thus continue to finance her defense.  In his confession, Fischer stated:

I want to be absolutely clear.  Ms. Heumann and her husband had absolutely no knowledge that this document was false.  They had no reason to believe anything other than the document had been legitimately secured from the Court.  As evidence of this, before giving Ms. Heumann the document, I required her to provide my firm with $90,000 which I told her I would deposit into the Registry of the Court in order to secure the stay of execution.  Of course, no such deposit was ever made.
When I first met Mark Fischer in 1995 he was a young IP associate with Chrisman, Bynum & Johnson.  CBJ was an established Boulder firm which had grown to become the largest in town.  Although Mark struck me as a bit formal, he also impressed me as intelligent and hard-working.  I never had any occasion to question, or even consider, his honesty.  Although I had been practicing for ten more years than Mark, we were the same age and, both being IP lawyers, I felt a kindred connection with him, even more so because we both lived in Boulder.

In the twelve years since that encounter, CBJ merged into Faegre & Benson, and Mark had become a partner.  Reading his confession in Above the Law and other contemporaneous news accounts, I was disturbed that Mark could have done such a thing.  

Mark’s disbarment was a foregone conclusion, but offered no resolution for me.  Six years later, whenever I thought about it, his possible motivation and the forces that led to Mark’s downfall still bothered me, like a personal poltergeist.  In an attempt to make some sense of this tragedy I recently dug into the public record.  The clues I discovered left me better informed, but in ways more mystified.

Mark’s confession — in which he also professed “I am uncertain as to why I did what I did” — demonstrates a disturbing lack of self-awareness and/or candor.   I always assumed that money was at the root of his behavior.  An Amended Complaint filed against Fischer, Faegre & Benson, and their clients by Infant Swimming Research, whose judgment lien had been released by the ersatz order, seemed to confirm my suspicion:

10.   In late 2004 and into 2005, Faegre & Benson was pressuring Defendant Fischer to get its bill paid for legal fees in the Prior Action.  Otherwise, Fischer risked losing his job, his income, and his partnership interest in Faegre.
. . . .
16.   Through the forged order, Fischer retained his job and partnership, Faegre & Benson’s bill was paid, and Heumann was able to proceed with AGR’s work on the property and avoid foreclosure.  Fischer and Faegre & Benson were also able to bill more fees for an appeal for Heumann in the Prior Action, even though they lost.
Mark’s confession certainly hints that the $90,000 was used to pay Faegre’s legal fees, and I found nothing in the record to contradict drawing that inference.  Mark’s Conditional Admission of Misconduct resulting in disbarment was based solely on the creation and presentation of the fabricated order.  There was no claim that he converted the $90,000 he required from his clients as a condition of “securing” the stay of execution.  There is no other mention of what happened to the $90,000 in the public record – only the statement in Mark’s confession that “Of course, no such deposit was ever made.”  Since this “deposit” was given by Judy Heumann two years before the deceit was discovered, it is reasonable to infer it was used to pay outstanding legal fees which must have been substantial given the many years over which the Infant Swimming Research case was prosecuted.

However, in an affidavit submitted in support of Faegre’s successful motion for summary judgment, Mark categorically denied that his actions were the result of any pressure placed on him by his firm:

3.  . . . At no time leading up to the fabrication of the Order did Faegre “intensify its pressure on [me] to get its bill paid.”
4.  I was never under the impression, and no one ever indicated to me in words or substance, that my job or partnership interest in Faegre were in jeopardy should Heumann fail to pay her bill.
5.  My decision to fabricate the Order had nothing to do with insuring that Faegre was paid for services performed on behalf of Heumann.
Declaration of Mark Fischer dated 19 June 2007 (emphasis added).  

How does one reconcile this statement with the allegations of the Amended Complaint that Mark’s position at Faegre was at risk?  

One way is to discount the affidavit as disingenuous.  As the plaintiff argued, this was, after all, the statement of someone who had confessed to fabricating a court order and forging a federal judge’s signature, and who was at the time under investigation for violating federal criminal law[1].  Parsing the affidavit, Mark does not attest that he felt no pressure for Heumann’s bill to be paid, only that Faegre did not “intensify its pressure on [me] to get its bill paid.” (Emphasis added.)  

It is also entirely believable that Faegre did not “indicate[] to [Mark] in words or substance, that [his] job or partnership interest in Faegre were in jeopardy should Heumann fail to pay her bill.”  The pressure to collect large receivables is rarely so overt in law firms, yet it is palpable.  Most firms regularly provide accounts receivable reports to partners, and one’s compensation, if not one’s equity status, is determined on the basis of “productivity,” a central component of which is collections.

Moreover, for any conscientious partner the pressure to collect fees is internalized.  Faegre would not have had to have threatened Mark with expulsion.  $90,000 — assuming, as the record suggests, that the requested “deposit” had some relation to Heumann’s outstanding legal fees — is a substantial receivable.  The pressure to collect it would have been enormous, omnipresent and more insidious than any overt threat.  

There is, however, another explanation which comports the allegations of the Amended Complaint and the most interesting statement in Mark’s affidavit – that his “decision to fabricate the Order had nothing to do with insuring that Faegre was paid for services performed on behalf of Heumann”: The possibility that Mark had become lost in his case.

If one assumes a relationship between the $90,000 “deposit” and fees owing to Faegre, that Faegre would not have remain engaged as counsel indefinitely without a substantial payment of fees owed and/or a retainer against future fees and costs, and also considers that Faegre’s representation continued for two years following the fabrication of the order, Mark’s statement that his conduct “had nothing to do with insuring that Faegre was paid” can be explained as the actions of an attorney who had become so involved in his defense that he could not bear to see, and would not allow it to end for something as crass as non-payment of legal fees.  Having admittedly practiced a gross deceit against the court, his clients and his firm, Mark’s actions may be understood as those of an attorney who could not disengage; one who not merely adopted his client’s cause, but usurped it.  This possibility is far more disturbing than assuming that Mark acted out of financial self-interest for, if true, it evidences of complete loss of professional objectivity.

I am resigned to never knowing for certain what drove Mark to commit professional suicide.  There was no discovery or trial because the civil suit against Fischer, Faegre and their clients was shortly dismissed on summary judgment.  The dismissal was affirmed by the Tenth Circuit because, “notwithstanding Fischer’s abhorrent conduct, ISR suffered no injury-in-fact because its judgment was paid in full immediately after the final judgment was entered; thus, it never needed to execute or rely on its lien.”  

Perhaps Mark simply thought that, because Infant Swimming Research’s judgment was promptly paid, his actions would go unnoticed.  In fact they were for two years, until Infant Swimming Research’s counsel discovered the faux order, which forced Mark to “out” himself and Faegre to withdraw.  However, while calculating that the risk of discovery was small may have weighed in Mark’s decision-making, it does not explain his reasons for undertaking such a brazenly unethical and fraudulent criminal act in the first instance.  Was “greed,” i.e., financial pressure to blame?  Was the defense too simply too all-consuming for Mark to disengage?  Or was he driven by something else?  Like Gordon Gekko’s, Mark’s motives are consigned to remain a mystery.


Once or twice in the past when I thought about this case I entertained the idea of driving over to Mark’s house and demanding point-blank “Why did you do it?”  It was brief entertainment.  I didn’t know Mark well.  It would have been intrusive and self-indulgent, and Mark had already paid the ultimate professional price.  Moreover, if Mark was unwilling to be candid with himself (“I am uncertain as to why I did what I did”), there was no reason to believe he would be honest with me.  It is, in any event, too late.  In researching his case I discovered that Mark passed away last summer from complications of bladder cancer.

Following his disbarment, Mark appears to have found peace and accomplishment outside the practice of law.  He was employed by CGQ in Denver, where he rose to become its Vice President of Product Management.  He was beloved by his family, and admired by his colleagues.  De mortuis nil nisi bonum dicendum est.

What lessons can be drawn from the legal life Mark Fischer? 
First, assuming that the financial pressure of a client being behind in its bill was at least partly responsible for Mark’s actions, allowing one’s client to incur a large debt, even in a perceived good cause, is not charitable; it has adverse consequences.  A client with a large account payable is under duress, and a lawyer with a large account receivable is, at a minimum, distracted from focusing on solutions to the client’s problems.  This combination rarely bodes well for the quality of representation.  If a client is falling far behind in her financial commitments and/or cannot afford the cost of litigation going forward, an attorney must at least consider that litigation — “The Sport of Kings” as one of my former partners called it — may not be in the client’s best interest. 
Second, a legal cause belongs to, and must at all times remain, the client’s.  An attorney provides value through professional objectivity and dispassionate representation.  Undertaking the client’s cause as one’s own, or worse, covertly converting it to one’s own, is both unethical and unwise.  The function of law is to resolve disputes.  Litigation is not an end in itself, no matter how irresistibly intoxicating the Sport of Kings may be.  A client deserves an honest lawyer, which requires first that a lawyer be honest with himself.
For me, though, the greatest lesson taken from Mark Fischer’s legal life may be humility.  In the Mark Fisher that I worked with as a professional colleague I saw a reflection of myself: a Boulder IP lawyer, just my age, hard-working, reasonably intelligent, whose integrity I never had cause to question.  In the tragedy of Mark’s fall from grace I cannot ignore that there are dark paths upon which even an ethical lawyer may somehow be tempted to stray.
John Donne
No man is an island, entire of itself; every man is a piece of the continent, a part of the main. If a clod be washed away by the sea, Europe is the less, as well as if a promontory were, as well as if a manor of thy friend's or of thine own were: any man's death diminishes me, because I am involved in mankind, and therefore never send to know for whom the bells tolls; it tolls for thee.
John Donne, Meditation XVII.  

Rest in peace, Mark.

[1] On 15 February 2008 Fischer pled guilty to one count of violating Title 18, United States Codes §505, forging or counterfeiting the signature of a judge or court officer.  His conditional admission of misconduct and disbarment occurred one month later, on 24 March 2008.