A member of our panel of leading appellate attorneys reviews Thursday's Illinois Supreme Court opinion in the legal malpractice case Goldfine v. Barack, Ferrazzano, Kirschbaum & Perlman.

Goldfine v. Barack, Ferrazzano, Kirschbaum & Perlman

By Karen Kies DeGrand, Donohue Brown Mathewson & Smyth LLC

In a legal malpractice action for the loss of a claim under the Illinois Security Law of 1953, the Illinois Supreme Court rejected a law firm’s arguments that it was being punished for securities violations rather than subject to compensatory damages for negligence. Stock purchases made in 1987-1990 giving rise to an action against Shearson Lehman, broker Michael Steinberg, and others provided the backdrop for the legal malpractice action. The plaintiffs, Morton and Adrienne Goldfine, retained the defendant law firm, Barack, Ferrazzano, Kirschbaum & Perlman, to sue the brokers after the  investment proved worthless as a result of the bankruptcy of the company whose stock plaintiffs purchased in 11 transactions. The plaintiffs had a claim for rescission under the Illinois Securities Law; however, claims against the broker defendants were dismissed based upon the law firm’s failure to serve the rescission notice required by the statute.

The Illinois State Bar Association's Task Force on the Impact of Law School Curriculum and Debt on the Future of the Profession will hold seven open hearings throughout the state. The Task Force was established by President Richard D. Felice and is chaired by Hon. Ann Jorgensen, Justice of the Second District Appellate Court. ISBA members are encouraged to attend these hearings to discuss the core skill sets that new lawyers should have and how law schools can graduate more “practice ready” lawyers.

Those who provide comments should focus on:

Q. What ethical obligations should I be aware of if I wish to employ a nonlawyer assistant?

A.  IRPC 5.3 requires that nonlawyer assistants be adequately supervised.  It states: “With respect to a nonlawyer employed or retained by or associated with a lawyer:…a lawyer having direct supervisory authority over the nonlawyer shall make reasonable efforts to ensure that the person’s conduct is compatible with the professional obligations of the lawyer.” 

For more information, consult ISBA Advisory Opinion 13-08.

Michael J. Tardy, Director of the Administrative Office of the Illinois Courts, announced today that the Fourteenth Judicial Circuit judges voted to select Norma Kauzlarich as an associate judge of the Fourteenth Judicial Circuit.

Ms. Kauzlarich received her undergraduate degree in 1986 from Northern Illinois University in DeKalb, and her Juris Doctor in 1994 from the University of Iowa. Ms. Kauzlarich is currently affiliated with the Rock Island County State's Attorney's Office in Rock Island.

President Felice to speak at historic event

In 1938, Walter T. Gunn was sworn in as the 70th Justice of the Illinois Supreme Court. A self-described "ordinary country lawyer by profession", the Danville attorney continued to serve on the Court until his retirement in 1951. Justice Gunn also served as Chief Justice from 1940-1941, the second from Vermilion County to do so.

Nearly 76 years later, Champaign resident and internationally renowned vocalist Nathan Gunn will perform in the same building that his great-grandfather once heard oral arguments. He and his wife Julie Jordan Gunn are special guest performers at the Court's rededication ceremony of the restored Supreme Court Building on Tuesday, October 7 at 6 p.m.

"Older lawyers (like me) may muse wistfully about a time when you could believe what you read in the newspaper," Karen Erger writes in the October Illinois Bar Journal. "But younger lawyers -- including those who will soon be raising their right hands and solemnly swearing (or affirming) to uphold the State and Federal Constitution, and faithfully discharge their duties as attorneys and counselors of law -- have grown up with the Internet, and are well aware of the need to make their own determinations of the value and veracity of every bit of information found there.

"A tendency to question authority will help new lawyers live up to their ethical obligation," Erger writes. "Most of them will begin their careers as 'subordinate lawyers' who work at the direction of 'supervising lawyers.' And the Rules of Professional Conduct require subordinate lawyers to exercise independent judgment about their professional obligations, even when a supervising lawyer is calling the shots." Read on and find out more.

Asked and Answered

By John W. Olmstead, MBA, Ph.D, CMC

Q. I am the chair of the finance committee for our firm - a 17 attorney firm in Chicago. We have 6 equity partners in the firm. We are in the process of admitting a new equity partner and are reviewing our capital accounts and trying to determine our capital needs. I would appreciate your ideas and thoughts.

A. There are two categories of capital - short-term or working capital which is used to fund daily operations and long term capital which is used to pay for capital assets such as furniture and fixtures, computers and other office equipment. I guess I am old school but I believe that short term working capital should be funded as much as possible with partner capital and long term capital funded with bank borrowing or leases. I have more and more clients that are funding working capital with partner capital and have no bank debt at all. I have other clients that finance all working capital with their bank line of credit - these firms could find themselves in dire straits if bank credit should tighten in the future.

The amount of working capital needed by a firm depends upon your practice, billing and collection cycles, whether you do contingency fee work, and whether the firm is growing and adding attorneys and staff. As a rule of thumb I suggest that a firm have three times one month's expenses excluding draws in working capital. This would need to be increased if the firm has lengthy billing and collection cycles, does contingency fee work, and is in a growth mode.

Partner capital contributions are usually made proportionately based on partner earnings or ownership percentages.

Michael J. Tardy, Director of the Administrative Office of the Illinois Courts, announced Monday that the Third Judicial Circuit judges voted to select Martin J. Mengarelli as an associate judge of the Third Judicial Circuit.

Mr. Mengarelli received his undergraduate degree in 1989 from Loyola University in Chicago, and his Juris Doctor in 1993 from Northern Illinois University in DeKalb. Mr. Mengarelli is currently affiliated with The Simmons Firm in Alton.