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Lawyer’s side practice leads to disbarment

Maryland’s top court decided Monday to disbar an attorney who kept a side practice without his employer’s permission and deposited client checks into his personal account instead of a trust account.

Michael R. Carithers Jr. also used letterhead, billing statements and resources from the firm, Brown & Sheehan LLP, and retained clients that the firm had dropped because they did not pay their bills.

“Both Michael Brown and I are really saddened by the result here. While I haven’t read the Court of Appeals’ decision, I’m sure they gave him every consideration,” said David Sheehan, a founding member of Brown & Sheehan, who now works as of counsel for Thomas & Libowitz P.A. in Baltimore.

Brown, who is now with Miles & Stockbridge P.C., could not be reached for comment Monday. Baltimore-based Brown & Sheehan dissolved in November 2009, more than a year after it discovered Carithers’ duplicity and fired him.

Carithers, who has been practicing as the Law Offices of Michael Carithers LLC since July 2008, did not respond to a request for comment. His attorney, Edward J. Smith Jr., a solo attorney in Baltimore, was in court Monday and not available for comment.

Carithers, who was admitted to practice in Maryland in 2006, has been practicing law for 20 years with a variety of noteworthy firms, companies and public offices. He spent a year and a half as of counsel to Greenberg Traurig LLP in Washington, D.C., and many years at other Washington firms. He worked in the Office of the General Counsel at Ford Motor Co. in Michigan and, briefly, at the City Solicitor’s Office in Baltimore, according to the opinion.

According to the website for Carithers’ firm, he also worked as a federal prosecutor with the U.S. Attorney’s Office in Detroit, his hometown. He is a graduate of Harvard and the University of Michigan Law School.

Hearing Judge Kendra Y. Ausby in the Baltimore City Circuit Court found that Carithers violated several Maryland Rules of Professional Conduct along with the Maryland Business Occupations and Professions Art. 10-304(a), which requires that a lawyer must deposit trust money into a trust account.

The Court of Appeals agreed with Ausby’s assessment.

“Absent compelling extenuating circumstances, intentional misappropriation of client funds or another’s funds is deceitful and dishonest conduct, which justifies disbarment,” Judge Clayton Greene Jr. said in the court’s opinion.

The court overruled Carithers’ many exceptions to the hearing judge’s findings.

Carithers was of counsel to Brown & Sheehan from 2005 through 2008. During that time, he received a salary but, without the firm’s knowledge, also maintained a side practice. All deposits from the side practice went directly into his personal account, rather than a client trust account.

He opened several new cases without entering them into the firm’s database, while using the firm’s resources to collect payment.

According to the opinion, even after Sheehan told Carithers to withdraw from certain cases because the clients had not paid their bills, Carithers decided to keep them as a side practice to avoid withdrawing from the cases.

The hearing judge said Carithers violated Maryland Rule of Professional Conduct 1.15(a), which requires the creation of a trust account “separate from the lawyer’s own property.”

Ausby also found Carithers violated 8.4(a)-(d). Notably, she found he committed theft by accepting payment directly from clients and engaged in dishonesty, fraud, deceit and misappropriation.

Under Rule 8.4(d), the Court of Appeals previously found that misappropriating client funds is “prejudicial to the administration of justice.”

Carithers’ disbarment will take effect 30 days after the effective date of the court’s order.

WHAT THE COURT HELD

Case:

Attorney Grievance Commission v. Michael R. Carithers Jr. Misc. No. AG 18, Sept. Term 2010. Reported. Opinion by Greene, J. Filed July 18, 2011.

Issue:

What is the appropriate sanction for an attorney who operated a side practice without his employer’s knowledge, and deposited client money from the side practice into his personal account rather than a client trust account?

Holding:

Disbarment; the attorney’s conduct amounts to theft and misappropriation, in violation of the MRPC.

Counsel:

Marianne J. Lee for petitioner; Edward J. Smith Jr. for respondent.

RecordFax#11-0718-21