The Professional Responsibility Board is required by A.O. 9, Rule 1 E.(2) to provide to the Supreme Court A an annual report, including statistics and recommendations for any rule changes, which report shall be public.@ The following is submitted in accordance with this mandate.

        This is the fourth annual report to be issued by the Professional Responsibility Program which came into existence on September 1, 1999. The Program replaced the former Professional Conduct Board which operated from 1972 until April of 2000. While its predecessor= s mission was focused solely on lawyer discipline, the Professional Responsibility Program has a wider mandate. It is:

(1) to resolve complaints against attorneys through fair and prompt dispute resolution procedures, (2) to investigate and discipline attorney misconduct, and (3) to assist attorneys and the public by providing education, advice, referrals, and other information designed to maintain and enhance the standards of professional responsibility.

        Administrative Order 9, Preamble.

        Now in its fourth year of operation, the Program has complete data over four years and has begun to take a critical look at whether the changes to the system occasioned by the mandates of the Rules adopted in September of 1999 have advanced the overall quality and purpose of the program. While level funded and without the services of the Bar Counsel for a significant portion of the year, the Board was able to function at an efficient level and accomplished the first series of random audits of trust accounts, submitted proposed changes to Rule 1.15 and began the consideration of developing and adopting a program compatible to our existing program, designed to address disciplinary issues involving impaired lawyers.

        This report covers the period beginning July 1, 2002 and ending June 30, 2003.

II. REPORT OF ACTIVITIES OF THE PROGRAM

A. Report of Activities of Bar Counsel

Bar Counsel=s powers and duties are set forth at Rule 3.B. of Administrative Order No. 9:

Bar Counsel shall administer the dispute resolution program; respond to inquiries from lawyers regarding ethics and law practice; consult and coordinate with state and local bar associations, the Judicial Conduct Board, the Board of Bar Examiners and other related organizations regarding matters concerning attorney conduct and professional responsibility; confer periodically with the Board to review program operations; provide administrative and legal support to the Board and assistance panels: and perform such other functions as are necessary to accomplish the goals of the program.

In addition, Rule 9 states:

Inquiries from attorneys regarding ethical issues or practice questions shall be referred to bar counsel, who may provide referrals, educational materials, and preventive advice and information to assist attorneys to achieve and maintain high standards of professional responsibility.

        Any report of how these duties were carried out during the fiscal year must begin by noting that Bar Counsel was on personal or medical leave a substantial part of the fiscal year. This decrease from the previous year necessarily affected the ability to reach goals and reduced the statistical measure of productivity accordingly.

        Bar Counsel= s first duty is to administer the dispute resolution program which is administered formally within the framework of the Assistance Panels (Rule 4) and informally through the intake and resolution of telephonic inquiries. The latter, as it is the first level on non-disciplinary dispute resolution which a member of the public will encounter, is addressed here first.

        We receive informal inquiries about lawyer conduct from clients, other members of the public, lawyers, and judges. Anyone who has a concern about a lawyer= s conduct but has not yet filed a complaint may contact Bar Counsel for information and assistance as to how he or she might proceed. Where there are minor disputes that can be mediated or resolved easily, Bar Counsel will do so. In all cases, Bar Counsel explains to the caller his or her options and choices including the filing of a formal complaint, mediation, fee arbitration, private litigation, etc.

        In addition, Bar Counsel receives inquiries from lawyers seeking ethical guidance regarding his or her own conduct. These callers are generally seeking informal and speedy guidance as to where to look for answers. Bar Counsel provides resources and educational information and occasionally may refer the caller to the VBA Professional Responsibility Committee for a formal advisory opinion.

        Unlike formal complaints which are received and screened by Disciplinary Counsel, inquiries are generally received and resolved by telephone and occasionally by e-mail.

        Bar Counsel tracks contacts from members of the public separately from those of lawyers or judges. In this regard, the program essentially mirrors the typical Consumer Assistance Program operated by an increasing number of jurisdictions around the country.

        Anyone who calls either the Burlington or Montpelier Office with a concern or complaint about a lawyer= s conduct is briefly interviewed by one of the administrative assistants who reduces the caller= s concern to writing, and sends it to Bar Counsel. Unless it is clear that the complainant ought to file a complaint promptly, in which case complainant will be so advised, Bar Counsel then contacts the caller personally to discuss the concerns and tries to resolve the matter if appropriate. Bar Counsel= s goal is to contact most callers within the week and to have every inquiry resolved within 30 days. Those goals were regularly met during the fiscal year when Bar Counsel was not on leave.

        The types of inquires received are as varied as are the resources needed to respond to them. Not all informal inquiries can or should be resolved. Some raise disciplinary issues, some cannot be resolved informally without written material, some require more resources than are available to Bar Counsel. Bar Counsel= s work is reviewed by a member of the Board who reads her progress notes on each of the informal inquiries received.

        This year we responded to 145 people who had questions or concerns about attorney conduct. Of these, 62% were successfully resolved. Thirty-four per cent of all callers (public and lawyers) were advised to file formal complaints. The remaining 4% were referred to other sources.

        Fielding 145 inquiries is approximately 25% less than the 201 inquiries handled in FY2002. This may be attributable to the fact that, while Bar Counsel was on leave 25% of the year, most callers= concerns could not be resolved A up front@ because there was no one available to assume this responsibility. Rather, during Bar Counsel= s absence, fielding inquiries from the public was suspended, and callers were advised to file formal complaints. There are no statistics measuring the number of callers who actually followed through with formal complaints; similarly there is no measure that demand for this service decreased during the fiscal year.

        Informal telephonic and e-mail questions from lawyers both within and beyond Vermont are handled the same way as inquiries from non-lawyers. However, the duty to respond to theses inquiries is more specifically mandated by the Rule 9 duty to provide preventative advice and education to lawyers with questions about ethics. The questions range from requests for simple information to consultations over complex ethical dilemmas which would require significant legal research.

        The numbers of contacts from lawyers has been strong since this program was initiated.

        During FY 2000 the calls were minimal as the new program began. During FY 2001, Bar Counsel fielded telephone calls from 42 different attorneys. During FY 2002, the calls increased by 22% to 64 lawyers. In FY2003, Bar Counsel and members of the Board acting in her stead responded to 61 lawyers. Of the 61, the concerns of 50 of these lawyers were resolved to their satisfaction. Ten were advised to file disciplinary complaints and 1 attorney was referred to the VBA= s Professional Responsibility Committee for a formal advisory opinion.

        Assistance Panels serve two functions. They serve either as mediators of disputes between two parties, invariably a lawyer and a client. Or they serve as a diversion board, handling cases of very minor misconduct that would otherwise be dismissed, in much the same way that court diversion boards do. Sitting in either role, the Assistance Panels represent a very progressive approach to demonstrating a high level of responsibility to the public.

        Each Assistance Panel consists of three volunteers, all trained in mediation, at least one of whom is a public member and one of whom is a member of the Professional Responsibility Board. In addition to the seven Board members, the following volunteers serve on Assistance Panels:

        The referral of cases to the Assistance Panels was down from the previous two years. However, statistics indicate that the Panels promptly dealt with all cases which were referred to them as reflected in the following table:

        In response to a recommendation made at the June 2002 annual meeting, a questionnaire was created to collect their comments from participants of Assistance Panel hearings in order to determine their opinion as to the value of the experience. During the year, the questionnaire was handed out to participants at the conclusion of the hearing. The participants were asked to fill it out and return it in a pre-stamped envelope. During FY 2003, a total of 21 questionnaires were distributed; 12 were returned. Of those 12, all but one contained positive comments. The Assistance Panel members themselves continue to report that they find their service on the panels very rewarding. They see, in most cases, that the experience appears to make a significant difference to the participants.

        Bar Counsel= s second duty is to work with other organizations regarding matters concerning attorney conduct and professional responsibility. To that end, she undertook the following tasks during fiscal 2003.

        a. Bar Counsel met with the chair of the VBA Fee Arbitration Committee to review issues of mutual concern and co-ordinate areas of mutual interest.

        b. Along with the chair of the Board, Bar Counsel met with representatives of the ABA= s Commission on Lawyer Assistance Projects which conducted a study of Vermont= s response to lawyer impairment. Additionally, Bar Counsel contacted ABA staff counsel to obtain additional information on the nationwide response to lawyer impairment within the Judiciary, as opposed to bar associations. Plans were begun to use some of this information to prepare a CLE for the Vermont Bar Association= s annual meeting next fiscal year as well as to begin to consider how or whether the ABA= s recommendations would ever be adopted in Vermont.

        c. A sub-committee of the Supreme Court=s Civil Rules Committee began the task of reviewing the 2002 changes which the ABA made to the Model Rules of Professional Conduct. Bar Counsel began working with this group in April of this year. Because she had been the reporter for the Supreme Court= s study group in 1997 which initially considered adopting the Model Rules of Conduct and because the rules eventually adopted varied significantly from the national model, she prepared a document which compared and contrasted all three versions of the Rules: the ABA= s pre-2002 version, Vermont= s existing rules, and the proposed 2002 changes. Bar Counsel has been attending the subcommittee= s meetings and is working with its members in crafting the proposed rules to suit Vermont= s particular needs without straying too far from the proposed rule so as to lose the value of using a national model.

        d. Bar Counsel worked with the chair of the Board of Bar Examiners and staff to resolve problems with how lawyers licensing status was tracked. The hope was to eliminate confusion regarding the status of inactive lawyers and resigned lawyers, particularly those who had resigned under disciplinary investigation.

        Aside from the normal administrative support functions rendered every year, Bar Counsel provided the Board, as requested, with a rewritten version of Administrative Order No. 9. This document was prepared so that the Board, in turn, might consider whether to propose certain changes to the Supreme Court. The primary change contemplated in this document is the insertion of an appellate process within the Professional Responsibility Program between the hearing panel decision and the review by the Vermont Supreme Court. This might be achieved in any number of ways including reworking the role of the current board or creating a separate adjudicative board out of the existing hearing panels. The primary policy reason driving such a change is the need for overall consistency in the decisions reached at the hearing panel level, particularly now that cases of public sanctions are no longer always taken up for review by the Court.

        The rewrite of Administrative Order No. 9 also suggested correction of a number of drafting errors in the 1999 version of the Order plus clarified some procedural issues and addressed some inconsistencies.

        The Board expects to take up this issue in FY 2004.

        Rule 13 provides that Bar Counsel is responsible for notifying various national disciplinary, state and federal agencies of the imposition of public discipline. The rule also requires Bar Counsel to notify the courts within the State of Vermont and the local newspaper when a lawyer has been publicly disciplined. Bar Counsel= s office also publishes each hearing panel decision through VALS (Vermont Automated Library Systems). The public can access these decisions through the Judiciary= s homepage at www.vermontjudiciary.org. The decisions are distributed to other publishers and are maintained in a loose-leaf binder for public access as required by Rule 13 E. This year, 19 decisions were issued. In addition, Bar Counsel publishes a digest, with each decision summarized, also available for viewing on the Judiciary= s homepage. The digest is attached hereto as Appendix A.

B. Report of Activities of Disciplinary Counsel

        Pursuant to Rule 3(B)(2) of Administrative Order 9, Disciplinary Counsel administers the disciplinary program, investigates and litigates disciplinary and disability matters, and confers periodically with the Professional Responsibility Board. In FY 2003, the Office of Disciplinary Counsel (A ODC@ ) consisted of Disciplinary Counsel, Deputy Disciplinary Counsel, and an Administrative Assistant to Disciplinary Counsel. For the purposes of this report, the staff is collectively referred to as A Disciplinary Counsel.@ This is the report of Disciplinary Counsel= s activities in FY 2003.

        Rule 10 requires that A all inquiries concerning attorney conduct will be directed to the Professional Responsibility Program@ and A [a]ll complaints will be screened by counsel@ for the Program. For the past three years, Bar Counsel has been the program counsel who has assumed responsibility for screening all of the formal complaints. For administrative reasons, the Board assigned the screening function to Disciplinary Counsel early in FY 2003.

    Written complaints are filed with Disciplinary Counsel. Upon receipt, they are processed by administrative staff and then directed to an attorney for screening.

    Disciplinary Counsel aspires to screen each complaint within 30 days of receipt. That goal was met in the vast majority of cases. The purpose of the screening process is defined by Rule 10 of Administrative Order 9. Specifically, complaints are screened in order to determine the nature of the inquiry and whether it can be resolved through non-disciplinary methods. A.O 9, Rule 9(A). While the specifics of the screening process vary from case to case, it usually entails a limited investigation. If the complaint appears to allege misconduct that would require a disciplinary sanction, it is referred for a more formal investigation. A.O. 9, Rule 9(C). Otherwise, upon the conclusion of the screening process, Disciplinary Counsel may dismiss a complaint or refer it for non-disciplinary resolution.

        Nature of the Complaints

        Not counting notices of overdrafts to trust accounts, the PRB received 225 complaints in FY 2003. Most complaints include more than one type of allegation. As such, it is somewhat difficult to categorize the nature of complaints. However, certain allegations appear more often than others. The following allegations appeared most frequently:

        The clear majority of complaints lodged against lawyers involve, in one way or another, a client= s belief that his or her lawyer has neglected a matter and/or failed to keep the client updated as to the status of a matter.

        This fiscal year the program received 285 new cases, up from 247 in FY 2002 and 204 in FY 2001. As the fiscal year opened, 7 cases that had been filed in FY 2002 needed to be screened, thus 292 cases were received for screening. Counsel was able to screen 287 of them by the end of the fiscal year. Of these 287 cases, 121 were complaints that were referred for further investigation, 60 were IOLTA overdrafts that required further investigation, 5 were sent to Assistance Panels for mediated resolutions, 6 were sent to conflict counsel, and 95 were dismissed. These results are graphically represented in Chart 2.

Chart 2: Disposition After Initial Screening

        For the third year, we have tracked the reasons for closing cases at initial screening to give a better sense of the kind of cases that do not go on to the investigation or mediation stage. Of the 95 cases closed at screening:

A. 74 (78%) were dismissed either because they did not allege conduct that violated the Rules of Professional Conduct or because the screening process failed to reveal sufficient support for further investigation;

B. 14 (15%) were resolved by counsel without the need to refer the matter to an Assistance Panel for more formal mediation;

C. 3 (3%) were dismissed as being petitions for post conviction relief, something over which the Board has no jurisdiction;

D. 3 (3%) were dismissed as involving fees disputes that did not rise to the level of an unethical fee. In each of these three cases, the complainant was advised of the existence of the Vermont Bar Association Fee Arbitration Committee and was advised to contact the Chair of that Committee for additional information; and

E. One (1%) was dismissed because the complainant was asked nothing more than for an order that substitute counsel be named to represent him.

Chart 3: Cases Dismissed by Screener - Reasons for Dismissals

        If a complaint is dismissed at screening, the complainant is advised, in writing, of the reason for that decision. The complainant is also advised of his or her right to appeal the decision, within 60 days, to the Chair of the Board.

        In FY 2003, 31 (33%) complainants appealed the decision to dismiss a complaint at screening. 29 of the appeals were upheld by the Chair; 2 were referred to counsel for further investigation. Disciplinary Counsel eventually dismissed each of the appeals that the Chair referred for further investigation.

        In general, the number of appeals was consistent with the numbers from previous years. For instance, in FY 2001, approximately 38% of those complainants whose cases were dismissed at screening appealed to the Chair. In FY 2002, 27% appealed to the Chair.

Chart 4: Appeals to Chair

        Disciplinary Counsel= s core function is to investigate and prosecute disciplinary matters. In FY 2003, Disciplinary Counsel investigated approximately 215 complaints; the 121 that were referred during the fiscal year and the 94 that had been pending when the fiscal year opened. By comparison, Disciplinary Counsel investigated 187 complaints in FY 2002.

        Typically, when a complaint is referred for a formal investigation, the respondent is given three weeks to file a written response with Disciplinary Counsel. Upon receipt of the response, the matter is reviewed and is assigned to Disciplinary Counsel or Deputy Disciplinary Counsel. The attorney handling the case typically contacts both the respondent and the complainant with questions and/or requests for information. Other witnesses are interviewed and, in most cases, documents related to the underlying representation are reviewed. Most interviews are informal. However, in some instances, Disciplinary Counsel requests an investigatory subpoena and, if one is granted, interviews a particular witness under oath.¹ Upon the conclusion of an investigation, a complaint is either dismissed, referred to an Assistance Panel, or prosecuted.

        A complaint can be dismissed for a variety of reasons. Appendix B. Section E(7) of this report discusses the cases that Disciplinary Counsel dismissed in FY 2003.

        When Disciplinary Counsel refers a complaint to an Assistance Panel, it is usually a case in which the lawyer has not violated the Rules of Professional Conduct, but has acted in such a manner as to indicate that a dialogue with an Assistance Panel would assist the lawyer in improving his or her practice and/or communication skills. Frequently there has been a breakdown in communication between the lawyer and the client that, hopefully, can be resolved by an Assistance Panel. Section E(6) discusses the cases that Disciplinary Counsel referred to Assistance Panels in FY 2003.

        If Disciplinary Counsel decides to prosecute a complaint, the prosecution begins with Disciplinary Counsel asking a hearing panel to review for probable cause the decision to file formal disciplinary charges.² If probable cause is found, Disciplinary Counsel files a petition of misconduct, unless the parties stipulate to misconduct.³

        Upon the filing of a petition of misconduct, the respondent has twenty days to file a formal answer.⁴ Within twenty days of the filing of an answer, the parties must exchange witness lists.⁵ Within sixty days of the filing of an answer, the parties may take depositions and make requests for production.⁶ At trial, Disciplinary Counsel must prove its case by clear and convincing evidence.⁷

        The process is a bit different when a case is submitted by stipulation. Typically, the parties stipulate to misconduct and join to recommend a particular sanction. However, it is not uncommon for the parties to stipulate to misconduct and then submit argument as to the appropriate sanction. In either case, the hearing panel to which a stipulation is assigned can either reject the stipulation or accept it and impose whatever sanction it deems appropriate.⁸

        A hearing panel has sixty days from the conclusion of any hearing to issue its decision.⁹ Hearing Panel decisions may be appealed by the respondent or Disciplinary Counsel. Even if neither party appeals, the Vermont Supreme Court is free to order a review of a particular decision on its own motion.¹⁰

It is difficult to quantify the work that goes into an A investigation@ or a A prosecution.@ For example, it is not uncommon for a case that ends up being dismissed to involve more work than a case that results in a stipulation to misconduct. Nonetheless, previous Annual Reports have focused on statistics and Disciplinary Counsel= s caseload. The remainder of this report is intended to provide a statistical review of the cases handled by Disciplinary Counsel in FY 2003.

        As FY 2003 opened, Disciplinary Counsel had 94 cases under investigation and 7 cases in litigation. During the course of the year, 121 other complaints were referred for investigation. Thus, to one degree or another, Disciplinary Counsel worked on approximately 222 cases in FY 2003. This report will address the following areas:

(1) Disciplinary Counsel= s docket as FY 2003 began;

(2) What happened to the cases on the docket as FY 2003 began;

(3) Cases that were referred to Disciplinary Counsel during the course of FY 2003;

(4) Formal action taken by Disciplinary Counsel in FY 2003; and

(5) Disciplinary Counsel= s docket as FY 2003 closed.

        The statistics from FY 2003 indicate that the A backlog@ of cases under investigation continues to be virtually eliminated.

        As FY 2003 opened, Disciplinary Counsel had 94 open cases, compared to 70 cases when FY 2002 opened. In addition, 7 were pending hearing panel action, 6 were pending Supreme Court action, and 5 were pending Assistance Panel action.

Chart 5: Beginning of FY 2003 - Status of Cases Under Investigation

        As mentioned, 94 cases were under investigation as FY 2003 opened. As FY 2003 closed, the status of the A original 94" was as follows:

    Thus, of the 94 cases that were under investigation as FY 2003 opened, formal action was taken in 79 were resolved during the fiscal year. This is not to say that nothing was done in the other twenty-five. Rather, the investigations in those cases simply were not completed in FY 2003.

    During FY 2003, 188 new cases came to Disciplinary Counsel. They arrived via four routes:

    Of these 188 cases, forty remained under investigation as the fiscal year ended. In other words, over 80% of the investigations opened by Disciplinary Counsel in FY 2003 were completed during the fiscal year.

        For the purposes of this report, A formal action@ is deemed to have occurred when Disciplinary Counsel took any of the following steps: (1) stipulated to a disbarment on consent; (2) filed a petition for an interim suspension; (3) filed a petition of misconduct; (4) filed a request for review for probable cause; (5) filed a stipulation to misconduct; (6) referred a case to an assistance panel; or (7) dismissed a case. In FY 2003, the number of cases in which each type of formal action took place was as follows:

1. Disbarment on Consent B 1

Rule 19 of Administrative Order sets out the procedure by which an attorney who is the subject of a disciplinary investigation can resign. If the resignation is accepted, the Supreme Court enters an order disbarring the attorney on consent. One disbarment on consent was filed this fiscal year.¹²

2.  Petitions for Interim Suspension B 1

When Disciplinary Counsel receives evidence indicating that a lawyer has violated the Rules of Professional Conduct and poses a substantial threat of serious harm to the public, Rule 18 of Administrative 9 requires Disciplinary Counsel to transmit the evidence to the Supreme Court along with a proposed order for an interim suspension of the attorney= s license to practice law. In FY 2003, Disciplinary Counsel filed one petition for an interim suspension.¹³ After the matter went to trial, the hearing panel recommended a 3-year suspension. The Respondent appealed, and it was pending before the Supreme Court as FY 2003 ended.

3. Requests for Review for Probable Cause B 14

Upon concluding an investigation and deciding to file formal disciplinary charges, Disciplinary Counsel is not permitted to file a petition of misconduct. Rather, Disciplinary Counsel must file a request asking a hearing panel to review for probable cause the decision to file formal charges.¹⁴ A request for probable cause review usually includes both an affidavit describing the investigation and a memorandum of law in support of Disciplinary Counsel= s decision to file formal charges. In FY 2003, Disciplinary Counsel filed fourteen (14) requests for probable cause review. Thirteen (13) of the requests were granted and one (1) request was withdrawn.¹⁵ In other words, in nearly 100% of the cases that Disciplinary Counsel decided to file formal disciplinary charges against an attorney, an independent hearing panel found that the decision was supported by probable cause.

4. Petitions of Misconduct B 7

Once a hearing panel finds that the decision to file formal charges is supported by probable cause, Disciplinary Counsel is authorized to file a Petition of Misconduct. In the disciplinary system, a Petition of Misconduct is, in effect, a complaint that outlines the facts supporting the charged violation.

In FY 2003, Disciplinary Counsel filed seven (7) Petitions of Misconduct, involving 6 respondents. By comparison, eight (8) were filed in FY 2002.

As FY 2003 closed, four (4) of the petitions had resulted in a final discipline order, two (2) were pending hearing panel action, and one (1) case was on appeal to the Supreme Court.

More specifically, the four final discipline orders included:

• Suspensions: 3 (involving 2 attorneys)
  
• Reprimands: 1
  

The case on appeal to the Supreme Court was one in which the hearing panel recommended a three-year suspension.

5. Stipulations to Misconduct B 12

It is not uncommon for a respondent to stipulate to misconduct. In most cases involving stipulations, Disciplinary Counsel and the respondent submit a Stipulation of Facts, a Joint Recommendation as to Conclusions of Law, and a Joint Recommendation as to Sanction.

In FY 2003, there were twelve (12) cases in which stipulations of misconduct were filed. The cases involved ten (10) attorneys.¹⁶ Ten (10) resulted in final disciplinary orders during FY 2003 and one resulted in a hearing panel decision that was pending Supreme Court review as the fiscal year ended. The twelfth stipulation remained pending in front of hearing panel. In that case, a decision had been issued during the fiscal year, but Disciplinary Counsel filed a Motion to Reconsider one aspect of the decision.

Of the 10 stipulations that resulted in final discipline orders, the following sanctions were imposed:

• Admonitions: 7
  
• Public Reprimands: 1
  
• Suspensions: 2
  

The case that was pending approval by the Supreme Court involved an admonition, as did the case in which Disciplinary Counsel had filed a Motion to Reconsider.

6.  Referrals to Assistance Panels B 9

Disciplinary Counsel may refer a case to an Assistance Panel. Typically, Disciplinary Counsel refers to an Assistance Panel cases in which the lawyer has not violated the Rules of Professional Conduct, but has acted in such a manner as to indicate that a dialogue with an Assistance Panel would assist the lawyer in improving his or her practice and/or communication skills. Frequently there has been a breakdown in communication between the lawyer and the client that, hopefully, can be resolved by an Assistance Panel.

In FY 2003, Disciplinary Counsel referred nine (9) cases to Assistance Panels.¹⁷ By comparison, six (6) cases were referred to Assistance Panels in FY 2002.

7.  Dismissals B 179

If, upon concluding an investigation, Disciplinary Counsel decides not to file formal disciplinary charges, a complaint is dismissed. In FY 2003, Disciplinary Counsel dismissed one hundred and seventy-nine (179) complaints. The following chart illustrates the breakdown of the 179 cases dismissed by Disciplinary Counsel in FY 2003:

        As FY 2003 closed, Disciplinary Counsel had 79 open cases. As of June 30, 2003, the status of those cases was as follows:

        Previous reports have focused on the ages of the cases under investigation. Traditionally, the Board has defined an A old@ case as one that has been under investigation for more than two years. As FY 2003, closed, 5 of the 71 (7%) cases under investigation had been open for more than two years.

        Thus, for the second consecutive year, the number of A old@ cases that were under investigation remained low. Over the past several years, while the number of cases has risen, significant progress has been made in investigating cases before they become A old@ .

        For the second year in a row, Disciplinary Counsel= s staff remained constant throughout the fiscal year.

        Disciplinary Counsel performs several tasks in addition to its core function of investigating and prosecuting disciplinary matters. The work below represents some of the additional tasks that Disciplinary Counsel performed in FY 2003:

1. As mentioned above, early in FY 2003, Disciplinary Counsel undertook to screen all disciplinary complaints.

2. Working with the Board, Disciplinary Counsel put out a Request for Proposals that sought bids from accountants willing to perform random audits of trust accounts. Disciplinary Counsel received three bids and recommended a particular firm to the Board. The Board agreed with the recommendation and Disciplinary Counsel entered into a Letter of Agreement with the firm.

   In addition, working with both the Bar and the Board, Disciplinary Counsel participated in the random selection of 6 firms to be audited. Two of the firms had more than 6 lawyers, two had between 4 and 6, and two had 3 or fewer.

3. Disciplinary Counsel= s administrative assistant worked extensively with Bar Counsel and the PRB= s Program Administrator to docket phone inquiries and new complaints. When a new complaint is filed, Disciplinary Counsel= s administrative assistant creates a file and forwards hard copies and electronic copies to Screening Counsel and the Board= s Program Administrator.
4. Deputy Disciplinary Counsel attended the annual meeting of the National Organization of Bar Counsel and, throughout the fiscal year, she and Disciplinary Counsel remained active in the NOBC= s discussions of issues related to lawyer discipline.
5. Disciplinary Counsel served as a panel member at a CLE on trust-account management. In addition, Disciplinary Counsel appeared on a panel at a CLE designed to address the reporting duties of in-house counsel.
6. Disciplinary Counsel lectured at the Vermont Law School on ethical issues related to the use of the internet and e-mail.

        With significant assistance from the PRB, Disciplinary Counsel was able to continue the fair, efficient, and effective investigation of ethics complaints filed against Vermont attorneys. As a result of the work done in FY 2003, it appears that in FY 2004 both complainants and respondents will be able to continue to expect ethics investigations to be completed in a timely and fair fashion.

        The Board held seven business meetings during FY 2003, in addition to an annual meeting for all program members. The highlights of its accomplishments are as follows:

        The Professional Responsibility Board held its annual meeting at the Costello Courthouse on Friday, May 16 with approximately 30 board members, staff, hearing panel members and assistance panel members attending.

        In a addition to a welcome and introduction by Chair Joan Wing, the morning agenda topics included A The Year in Review B Panel Decisions from FY > 03" presented by Leslie Black, Esq., a A Brief Explanation of the Random Audits@ co-presented by Vice-Chair Steven Adler and Disciplinary Counsel Michael Kennedy, A Trust Accounts B Why the PRB Should Care@ presented by Peter Zuk of the Vermont Attorneys Title Corporation, and A Reparative & Restorative Justice: How it Might Apply to Lawyer Discipline,@ presented by David Peebles of the Vermont Department of Corrections.

        The afternoon agenda included a panel discussion on A The Experience B Shared Thoughts; Suggested Improvements.@ Views from different perspectives included a member from a hearing panel, a probable cause panel, an assistance panel, an attorney who has served as Conflict Counsel and an attorney who had represented a respondent before the Professional Responsibility Board and other professional licensing boards.

        The meeting concluded with a wrap-up and closing remarks. Attorney members who participated earned 4.25 CLE ethics credits.

        The Board adopted, one new policy, amended one previous policy and rescinded one policy.

        The Board adopted Policy No. 24 in which the Board decided that assistance panels will not have access to respondent= s disciplinary history. (September 19, 2002).

        Policy No. 17 authorized the Board to share minutes of its meeting with the Court Administrator and the Chief Justice. In FY 2003, Associate Justice Morse was appointed as the Court= s liaison to the Board. As such, that policy was amended as reflected in Policy No. 25 to allow the Board to share meeting minutes with the court-appointed liaison as well as the Court Administrator and Chief Justice.

        The Board abolished (Policy No. 5) the so-called A wall@ that prohibited Bar Counsel from sharing with Disciplinary Counsel statements made by a respondent during the screening of a complaint. Prior to making the change, the Chair met with Bar= s Board of Managers so as to provide the Bar with notice of the proposed change. The Board of Managers expressed support for the change and the wall was eventually abolished by vote of the Board (Policy No. 26).

        All of the policies which have been adopted in the prior four years of the Board= s existence are published in Appendix C attached at the back of this annual report.

        Pursuant to A.O. No. 9, Rule 2.A., the chair of the Board appoints standing hearing panels as may be required. Each hearing panel consists of two members of the bar of this state and one public member. The chair of the Board also appoints a lawyer-member of each hearing panel to serve as chair of the panel. Terms are for two years, and no member shall serve for more than three consecutive terms or parts thereof. Members of the Board may not serve simultaneously as members of a hearing panel. The following volunteers served on hearing panels during FY2003:

        Leslie G. Black, former chair of the Professional Conduct Board and the Judicial Conduct Board, and who is one of Vermont's leading experts on the law of ethics, serves as hearing panel counsel on a part time basis to assist the panels as necessary.

Along with Bar Counsel, the Board developed a questionnaire to distribute to participants in matters that are referred to Assistance Panels. The questionnaire is designed to assess the strengths and weaknesses of the non-disciplinary resolution process.

    The Board proposed that the Supreme Court amend Rule 1.15 to read as follows:

A lawyer shall hold funds and property of clients or third persons that is in the lawyer= s possession in connection with a representation separate from the lawyer= s and/or law firm= s own funds and property. Funds shall be kept in accordance with Rules 1.15A, B, and C. No funds belonging to the lawyer or law firm, except funds reasonably sufficient to pay or avoid the imposition of fees or charges imposed by the financial institution, may be deposited in such an account. Other property shall be identified as such and appropriately safeguarded. Complete records of such account funds and other property shall be preserved for a period of six years after termination of the representation.

    The Board proposed the following comment to the amended rule:

The Rule does not represent a departure from the notion that lawyers shall not commingle funds with client funds. Rather, the intent of the Rule is to allow lawyers and firms to deposit into client trust accounts the minimum amount of their own money necessary to cover fees that are reasonably expected to be charged by the financial institution at which the account is maintained. The question of whether the amount of the lawyer= s or firm= s funds is A reasonably sufficient@ will depend on a variety of factors, including, but not limited to, the nature of the lawyer= s practice, the frequency of activity in the trust account, the fees charged by the financial institution, the frequency with which the fees are charged, and whether the amount of non-client funds is reasonably related to bank fees or whether the deposited funds appear intended to serve as a pad designed to prevent overdrafts to the trust account.

While the Rule allows lawyers and firms to deposit their own funds into trust accounts, lawyers and firms should avail themselves of other options of paying the bank fees that result from the operation and maintenance of a client trust account. For example, lawyers should inquire as to whether the financial institution will bill the lawyer for the fees or charge the fees against a separate account, such as an operating account. Such options are preferable to the decision to deposit non-client funds into a client trust account.

The Supreme Court had not acted on the Board= s recommendation at fiscal year= s end.

        In November of 2002, the Board decided to conduct and fund six random audits of lawyer trust accounts. To that end, the Board issued a Request for Proposals that solicited bids from accounting firms interested in performing the audits. Three firms submitted proposals. The Board eventually retained Sullivan, Powers & Co. to conduct the audits.

        The Board decided to audit 2 large firms, 2 mid-size firms, and 2 small firms. The Board defined the sizes as follows:

        The Vermont Bar Association assisted in this endeavor by providing the Board with a list of all the lawyers in the State. The list was broken down by the categories referenced above and assigned a number to each lawyer in each category. The Board used a computer program that randomly generates numbers to select the firms that would be audited.

        The audits took place in May and June of 2003. These were compliance audits designed to determine whether the lawyer/firm maintained:

• A ledger or system showing all receipts and disbursements from trust accounts;

• A separate accounting page, record, or column showing a running balance for each client;

• Records documenting timely notice to the client of all receipts and disbursements from the trust account; and

• An index of all trust accounts.

        As the Fiscal Year ended the Board was awaiting the auditor= s reports. The Board intends to conduct full audits in the next fiscal year and will work with the Court to determine funding sources for such audits.

        The Program has met many of its goals for the last fiscal year and continue to struggle with the issues surrounding funding of the Program, consideration of new programs, accomplishing full audits and prioritizing within its budget. In the next fiscal year, the Board will be taking a critical look at the conclusions drawn from its four year experience under the new Rules.

Appendix A

Digest of Professional Responsibility Board Decisions