Cash for Cheated Clients

"Philadelphia lawyer" has long been a layman's synonym for a shrewd or conniving attorney. But, last week, a luckless client whose funds had been embezzled or otherwise misappropriated by his lawyer could rejoice if the lawyer were a Philadelphian: the Philadelphia area now boasts the largest clients' security fund in the nation. Financed from association dues, the fund has reserves of $127,000 and it has paid claims amounting to $26,000.

The idea that the bar is responsible for the financial misdeeds of its members originated in New Zealand in 1929 and soon spread to Europe. The concept did not reach the U.S., home of the richest lawyers on earth, until 1959, when the Vermont Bar Association put up the money to start a clients' security fund. About the same time, the American Bar Association organized a committee "to assist and encourage" similar funds in the other states. The current committee chairman, Attorney Karl C. Williams of Rockford, Ill., reports that four newcomers--Missouri, Maryland, Michigan, Florida--have joined in the first six months of this year, bringing the total to 26 states and 20 local bar associations.

The funds themselves vary widely: the Alaska bar association pays for insurance policies that cover mistreated clients, in Maryland annual security-fund payments by lawyers are required by the state as a prerequisite to practice. Everywhere the basic idea is to give clients some recompense for misconduct by their lawyers. A client who thinks he has been cheated must first complain to the state or local bar association, which then begins an investigation that may well end in suspension or disbarment. After that, the client files a claim with the fund.

In most states, payment is made only after disciplinary action has been taken against the guilty attorney. The clients' security fund, says Chairman Williams, is "a debt of honor and part of our responsibility to the public. Our success has been excellent. The public response and feeling of those who have been reimbursed has been very, very warm." Still, being lawyers, the men running the funds have hedged their bounty with "certain basic principles" in fine print. ''Negligent acts or conduct" by lawyers, for example, rate nothing from the funds and, cautiously adds the A.B.A. committee, "payment out of the fund is a matter of grace, not of right."

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