Bar reviewing Ephrata attorney

EPHRATA - A state bar investigator is claiming Jerry Moberg violated rules concerning practices owned by non-lawyers.

Moberg's law firm, Jerry Moberg and Associates, provides legal services to several cities and Grant County through the insurance company Canfield.

Moberg has been trying to get the bar to establish rules for how a firm like his should run since 2000, he said.

Washington State Bar Association Senior Disciplinary Counsel Christine Gray recommended the issue go to the review committee of the disciplinary board, according to a letter sent to Seattle attorney Christopher J. Bohannon.

Bohannon filed the initial grievance, including allegations Moberg has an "unethical business relationship with his corporate employer, Canfield and Associates," according to the letter.

Gray's recommendation is based on how Moberg's firm is structured. The firm works directly for the insurance company, providing legal services to the company's clients, according to the letter.

State rules of professional conduct prohibit lawyers from sharing legal fees with someone who isn't a lawyer, or allowing a non-lawyer to control a lawyer's firm, according to the letter.

"Since 2003, Canfield and Associates has been wholly owned by Brown and Brown, a publicly traded for-profit Florida corporation," according to the letter. "Thus, Mr. Moberg's employer was and is owned, at least in part, by non-lawyers. Our review of the Brown and Brown web site (and filings with the Securities and Exchange Commission) regarding its corporate officers shows that most of its corporate officers are non-lawyers, including the chairman and the president and chief executive officer."

Gray also pointed out the firm charges an hourly rate, which is sent to Canfield's accounting department. The lawyers receive a salary and don't receive the hourly payment.

Moberg welcomed the association's involvement, but didn't think it should go through a disciplinary process, he said. He compared his law firm to other "captive" firms which are employed by insurance companies and provide services to the companies' clients.

"I've been trying to get (the bar association) involved for a long time," he said. "I've been waiting for them to adopt rules for how captive (law firms) practice."

He sent the bar association a letter in 2000 asking them about the bar's rules for captive law firms, Moberg said. The informal opinion didn't discuss what the rules for a captive law firm should be.

"Nobody seems to know what the rules are," he said. "I think it's a very valid model to deliver legal services to public entities."

Without a clear direction, Moberg adopted the rules from Florida, including moving into a separate building, not allowing Canfield to have access to their legal files and setting up the firm with a separate name, Moberg said. Canfield's administrators aren't allowed to tell the attorneys what to do or punish them for their decisions. The division between the two is set up through a contract.

"We have complete autonomy. Canfield can't tell us how to practice law. Those are the kind of things that we set up. Washington doesn't have any rules ... I've been hoping that Washington would adopt rules," he said. "They're accusing me of violating rules we don't have."

Gray asserted "Moberg's situation is plainly distinguishable from the typical captive law firm situation," according to the letter.

She pointed out clients aren't normally billed and don't pay legal fees.

Moberg said the company doesn't receive any legal fees, and all the money goes to pay for the expenses of the law firm.

"Canfield does not share a profit. In fact, it's been a losing proposition for them. It's cost them money. The benefit is they have really good lawyers," he said. "We've been careful to make sure that we don't violate the rules. I don't think non-lawyers should tell lawyers how to practice law."

The bar's review committee will decide whether to dismiss the grievance, issue an admonition or order a hearing.

Both Moberg and Gray pointed out the initial grievance contained a complaint about Moberg's investigation of former Deputy Prosecutor Teddy Chow. Bohannon was a contributor to Albert Lin's campaign for prosecutor.

"Mr. Moberg has asserted that he prepared the report at the request of the prosecuting attorney, but was not doing so in his capacity as a lawyer. At the beginning of the report, Mr. Moberg stated that he was 'acting as an independent investigator, and not as an attorney.' While the report's assertion that it was 'independent' is arguably misleading to third parties, it could not have been misleading to the prosecuting attorney to whom Mr. Moberg provided the report," Gray wrote.