Legal News

Did Joe Collins Get Hit With a Lawyer Tax?

By Nathan Koppel

Yesterday, as we noted, former Mayer Brown partner Joseph Collins was sentenced to seven years in prison for aiding executives and owners of Refco perpetrate a $2 billion fraud.

That struck us, frankly, as a whopper of a sentence. Lawyers, a la Marc Dreier, have gotten worse when they have been primary violators in fraud. But we can't think of another attorney who drew anything like 84 months for aiding and abetting fraud.

A felony conviction alone, after all, costs a lawyer his law license and professional reputation. And in civil fraud cases, lawyers typically have immunity from aiding and abetting liability based on the notion that they’re not inflicting direct harm on injured parties.

As the ABA Journal today writes, the 7-year sentence against Collins can be chalked up partly to a lawyer tax, of sorts: Attorneys are held to a higher standard. Judges expect them to apply the breaks when clients flaunt legal standards.

“Being a lawyer ups the ante," Stephen Gillers, an ethics guru at NYU law, told the Chicago Tribune. "The judge understandably expects more from lawyers than from people not trained in the law.”

At yesterday’s sentencing hearing, Manhattan federal judge Joseph Collins said that Collins, while not motivated by greed, displayed "excessive loyalty to his client."

William J. Schwartz, counsel to Collins, argued that the attorney was doing honest legal work and was kept in the dark by his client. Schwartz said Collins would appeal the conviction.

We checked in with Gillers as well. He said that 7 years was certainly hefty given that Collins did not directly gain from the Refco fraud.

"I think it is at the high side of an acceptable sentencing range, but not beyond that, given the amount of money involved and the amount of money people lost because of his assistance," Gillers said.

And, he added, lawyers do deserve greater scrutiny. "They are officers of the court," he said. "That means they must display at least a punctilio of honor."

Full post as published by Law Blog - WSJ.com on January 15, 2010 (boomark / email).