High-profile law firm faces complaints, lawsuits

Former lawyers, clients allege unethical activity

By Greg Moran
UNION-TRIBUNE STAFF WRITER
signonsandiego.com
November 25, 2007

By the firm's estimate, it has represented 10,000 clients in drunken-driving and other criminal cases, bankruptcy, and personal injury lawsuits since opening here in 2003.

The advertising campaign promises aggressive representation and “little or no money down” and features testimonials for the center and its lawyers.

But in recent months, that picture has been clouded by lawsuits, a judge's ruling and action by the Better Business Bureau.

Former clients say it was difficult to get enough time with an attorney. Some say they were given unrealistic assessments about their cases.

Lawyers formerly employed by the firm have alleged in lawsuits and in sworn statements that Pacific Law Center uses unethical practices, such as allowing unlicensed clerks to sign up clients and give out legal advice. Two attorneys sued, claiming that they were fired after objecting to that.

Lawsuits filed by former Pacific Law Center attorneys depict a business where lawyers have caseloads so large that it is difficult for them to provide the kind of representation the firm advertises. Instead, they say, the emphasis is on settling cases as quickly as possible.

The Better Business Bureau, a business ethics and consumer protection agency, downgraded its rating of the firm from satisfactory to neutral after fielding 38 complaints over the past three years.

A judge ruled in June that the firm appeared to be “gouging” local taxpayers by seeking public funds to hire experts in two cases for which the firm already had collected thousands of dollars in fees from the clients.

Senior attorneys for the firm defend their practices and reject the various allegations. They insist that their caseloads are manageable and that they have time and resources to give clients personalized attention.

Robert Arentz, the managing partner, said that clerks act as fact gatherers and that no final agreement is ever signed without a lawyer first being brought in to talk to the clients. Arentz said all clients are told that the people they first speak to are not lawyers.

“We have a lot of attorneys and a lot of clients,” Arentz said. “It's easy to find individuals who have individual complaints about their individual situation.

“Overall, the majority of our clients are extremely happy with their representation.”

Arentz spoke from the Phoenix office of the law firm Phillips & Associates, which is affiliated with Pacific Law Center, where he often works.

Jeffrey Phillips, an attorney with the Phoenix firm that bears his name, is listed on the articles of incorporation for Pacific Law Center filed with the California secretary of state. Phillips is not licensed to practice law in California.

Arizona state bar records show that Phillips was censured in September 2002 and placed on two years' probation because he “failed to adequately supervise subordinate attorneys and non-lawyer specialists.”

The records say non-lawyers who first met with prospective clients failed to say they were not lawyers and did not adequately describe the firm's “little or no money down” payment plan.

Phillips completed his probation in January 2005. Complaints of aggressive intake clerks and hard-sell tactics are now being made against Pacific Law Center.

Phillips said potential clients are told repeatedly that the intake clerks are not lawyers, but assistants.

“We don't believe there is any way any of our people are doing anything wrong here,” Phillips said during a recent interview.

Assistants faulted

Court documents, as well as interviews with nearly a dozen lawyers who left the firm but did not sue, describe tactics by “legal assistants” who are not lawyers, who raise clients' expectations about what can be accomplished to get them to hire the firm.

“There were a significant number of clients who didn't get what they thought they bought,” said Charles Luckman, who worked as a criminal defense lawyer there from March 2004 to August 2006. “The best analogy I can give you is it was a law firm run like a used-car dealership.”

Often, according to court records and interviews with former lawyers with the firm, clients became angry when told that their cases were likely to turn out differently than what they were told when they signed up.

“I had to spend my first conversation with clients backpedaling like crazy from what the intake clerks said,” recalled one lawyer who wanted to remain anonymous because he feared retaliation from the firm.

Arentz declined to comment on the lawsuits or the specific allegations in them.

Luckman was one of three lawyers who sued after being fired last year. He reached a quick settlement with the firm, as did the other two lawyers.

He spoke to The San Diego Union-Tribune after the suit was filed but before the settlement, which contained a confidentiality clause, was reached.

In December 2005, Luckman wrote a memo to his superiors that the intake clerks were giving out “unlicensed, unqualified and erroneous legal advice” to clients, according to his lawsuit.

One client was told by a clerk that Luckman was a former judge, which was not true. Luckman said he handled 50 to 80 cases at a time, representing all the firm's East County clients.

In August 2006, after raising more complaints about the firm's practices, Luckman was fired.

Attorney Colin Cossio filed suit in September 2006, alleging he was fired after making numerous complaints about the business practices of the firm and saying he would complain to the State Bar of California.

Cossio said his caseload was enormous.

“When you have 800 files, how can you give each client the attention they deserve?” Cossio said in an interview before he settled his case.

His lawsuit said that non-lawyers routinely dispensed legal advice at the firm, in violation of bar rules and state law.

The complaints detailed by Cossio and Luckman were strongly rebutted by lawyers who now work at the firm. Ten lawyers sent unsolicited e-mails to the Union-Tribune, all saying that their caseloads were not overwhelming and that they had the resources and time to represent their clients well.

Michael Stuart, a lawyer handling criminal cases in El Cajon, said he had 55 active cases and that was manageable. Stuart wrote that he was “proud to be part of an organization that prides itself on ensuring the constitutional rights of its clients through excellent legal representation.”

Most of the letters lauded Alan Spears, named the head of the firm's criminal division in 2007. Spears' name has been in the news lately because he is the lawyer for Seth Craven, one of five men charged with murder in the death of a La Jolla surfer in the “Bird Rock Bandits” case.

Spears, who joined the firm this year, defended his lawyers.

“Do I think I have experienced and aggressive lawyers who vigorously defend people?” Spears said. “If that is the question, the answer is an unequivocal yes.”

In a later e-mail he said it was “absurd” to say his lawyers are overworked.

Judge criticizes lawyers

How the firm bills for services is another area of contention.

Superior Court Judge Jeffrey Fraser criticized the center in June for seeking public funds for indigent defendants in two cases in which the clients already had paid the firm for representation.

In one case, the defendant had paid the firm $12,000 of a $35,590 bill for a sex crimes case in which he pleaded guilty relatively quickly.

In another case, the firm charged $25,590 to represent a man who, after pleading guilty, changed his mind and wanted to withdraw his plea. The man had paid $19,500 of the $25,590 bill in advance.

In both cases, the firm wanted to hire psychological experts to examine their clients – and asked that they be paid from taxpayer funds administered by the court.

Fraser reasoned that some of the retainer fee could be used to pay the experts and rejected the request. It's important that “the public treasury is protected from greedy attorneys,” he wrote.

It is not only former lawyers and a judge with complaints against the firm.

The San Diego Better Business Bureau gives the firm a neutral rating, rather than the more common “satisfactory” or “unsatisfactory” rating. The reason: the large number of complaints consumers have lodged with the BBB.

Most of those complaints concern “service issues,” defined as delays in providing services, inferior quality of service, or not providing a promised service.

“We saw a pattern that causes concern,” said BBB President and CEO Sheryl Bilbrey. “They weren't bad enough to lose membership, but they are not good enough to get a satisfactory rating.”

Several former clients of the firm contacted for this story were bitter about their experiences.

One of those complaining to the Better Business Bureau was Genevieve Ruggles, 71, of Rancho Bernardo, who paid the firm $11,330 to represent her adult son in a drunken-driving case in Ventura County. When her son rejected Pacific Law Center's representation, it took Ruggles nearly six months to get her money refunded. She said that at her first visit to the firm to discuss the case she was immediately pressured to sign up.

Another former client paid the firm $5,500 to represent her on a drunken-driving charge. She said she and her husband spoke to “an aggressive kind of sales guy” when they went to the firm's La Jolla office, who told her the charges easily could be reduced. She said the representative later warned her she could spend 10 days in jail.

Neither turned out to be correct.

The woman, who wanted to remain anonymous because she did not want her arrest widely known in the industry she works in, eventually fired Pacific Law Center and settled the case with a new lawyer.

“They just really pressured us,” she said of the firm's sales tactics.

Arentz and Phillips both said they have worked with the Better Business Bureau and the clients to resolve the complaints. Moreover, Arentz said in a statement, considering the 10,000 clients the firm has represented since opening, the number of complaints to the BBB represents one out of every few hundred clients.

Marsha Hall, a former client who lives in Imperial County, did not complain to the BBB but sued the firm in July, claiming malpractice, fraud and false advertising. The lawsuit contends that the firm botched her case by missing the deadline to file a claim against Pioneer Memorial Hospital in El Centro – a necessary and routine step when suing a public agency.

Instead of admitting the error, the suit said, lawyers persuaded Hall to drop the case after referring her to experts who said she had no chance of winning.

Hall said two members of Pacific Law Center, Michael Clarke and John Schill, told her that her case had no merit – but did not tell her the firm failed to file a government claim on time.

John Schill was identified as the executive director of the firm on the BBB Web site file in May, but he no longer is listed there. He is licensed to practice law in Arizona, but not California.

Clarke has a discipline record from the State Bar of Arizona. He was suspended for six months in 2002 for misusing client funds. He was reinstated in September 2002.

Hall's malpractice lawsuit alleges that it was illegal to allow Schill to work on Hall's case in any way, because he is not a member of the State Bar of California. The suit also contends that Clarke's wife was one of the experts who told Hall the case had no merit.

The firm has denied Hall's allegations and insists it does quality work for clients.

“We have dozens of excellent lawyers, and we are proud of achieving client satisfaction and good results,” Arentz said in a statement.

By Greg Moran
signonsandiego.com
April 6, 2008

In the past few weeks, local airwaves have been filled with a remodeled advertising campaign featuring well-known San Diego lawyer Kerry Steigerwalt promoting the merger of his practice with Pacific Law Center.

But even with the new face, problems that have dogged the La Jolla-based law center for several years – complaints from clients, allegations of unethical activity by former lawyers – continue.

Clients unhappy with the firm have sued, as has a former attorney alleging that the law firm engages in illegal business practices and that the sale to Steigerwalt was a fraud.

One case has quietly become the talk of the downtown courthouse, with allegations of poor legal work by the law firm and a sexual relationship.

Antoine Mcelroy, 19, pleaded guilty in December to an attempted murder charge, admitting that he used a firearm and belonged to a street gang. His family had paid Pacific Law Center $31,000 to represent him.

But Mcelroy now says he was coerced into taking the plea agreement, and his new defense lawyer, Thomas Matthews, is trying to reverse it.

In court papers filed to reverse the plea, Mcelroy's 21-year-old sister said she had a sexual relationship for several months last year with Alan E. Spears, the bearded, baritone-voiced lawyer who appeared in many of the firm's commercials.

Mcelroy's sister also said Spears gave her thousands of dollars in cash and bought a 1997 BMW for her. The court papers include financing documents signed by Spears and the woman, and the vehicle registration showing Spears as a co-registrant on the car.

Hearing on guilty plea

A hearing on withdrawing the guilty plea is scheduled for Thursday. Spears, who did not negotiate the plea agreement or work on the case, denied that he had any sexual relationship with the woman, Patrice Smalls. Spears said he did help her purchase the vehicle.

But Matthews said the relationship with Mcelroy's sister “taints” the entire case, even if another Pacific Law Center attorney handled the plea. “Their conduct, both professionally and ethically, in this case is reprehensible,” Matthews said.

He argues that Mcelroy did not understand the street gang charge and balked at admitting to it.

“No, no. I didn't do it for the gang,” Mcelroy said, according to a transcript of the Dec. 3 hearing in which he pleaded guilty.

Matthews said that Arthur Katz, the Pacific Law Center lawyer who worked on the case, then stepped in.

“It's my understanding that there had been homicides between the two gangs and that my client did it in retaliation for a gang homicide . . . ” Katz said, according to the transcript.

Mcelroy then admitted to the gang charge. But Matthews contends Katz's statement was improper and he essentially admitted his client's guilt. Mcelroy did not exercise “free judgment,” Matthews said, and that – coupled with what he contends was poor legal work and the relationship with Spears and the sister – created an overall coercive environment that should nullify the guilty plea.

Katz has since left the firm. Reached last week, Katz said he would give his response to the allegations under oath when he testifies at the hearing. Katz said he had no knowledge of any relationship Spears may have had with Mcelroy's sister.

Spears said he believes there was no coercion and Katz properly counseled Mcelroy. He said the issue of whether or not he had a relationship with Mcelroy's sister has nothing to do with the legal question of whether the plea was voluntary and proper.

On Thursday, Steigerwalt fired Spears because of the allegations. “His decision-making does not exemplify the type of lawyer I want working for my law firm,” Steigerwalt said.

'Taking care of business'

Steigerwalt purchased 51 percent of the firm last month. He is the majority partner, with Phoenix lawyer Robert Arentz – the former managing partner – having a 49 percent stake.

Since then, Steigerwalt said, he has jettisoned some lawyers, brought on others, refunded some client payments and settled a lawsuit from an angry former client.

Problems, Steigerwalt said, stem from the “old” Pacific Law Center, and he is instituting new measures to improve the law firm. “I'm taking care of business and trying to do the right thing here,” he said.

The Mcelroy matter is one of several issues that the new Kerry Steigerwalt's Pacific Law Center faces.

In February, Carl Hancock, a lawyer who worked at the firm for about 10 months, filed a lawsuit alleging that the firm engages in unethical and illegal conduct. Hancock alleges that three nonlawyers – Larry Majors, his son Austin Majors and Jeffrey Phillips, an Arizona lawyer not licensed in California – control the business. Under state law, nonlawyers can't be officers or shareholders of a law firm, Hancock said.

“It's not a legal business model,” said Hancock, who left the firm before Steigerwalt took over. Hancock's lawsuit said his complaints and concerns over the firm's excessive fees and hard-sell sales tactics by nonlawyers drove him out.

Similar accusations have been raised in other suits from former lawyers over the past two years. Those suits were settled out of court before trial.

Hancock also alleges that the sale to Steigerwalt was a “sham sales transaction” to shield the owners from any damages he would win, and Hancock wants a court to cancel the sale.

But Steigerwalt said Hancock's allegations were “ludicrous and outlandish.” He said that after Hancock left and before Steigerwalt took over, Hancock asked him several times for his job back.

Steigerwalt said that Larry Majors “was never involved” in the business and that Jeffrey Phillips has no role in the criminal-defense side of the firm. As part of the deal, Steigerwalt's class-action practice from his old law firm was transferred to Arentz's Arizona firm, where Phillips is also a partner.

Steigerwalt said he was aware of the firm's problems and has been working to fix them. “The problem attorneys are no longer with the firm,” he said. “It was a somewhat disheveled firm, and it needed skilled criminal-law practitioners. It needed the right supervision and the right lawyers.”

Steigerwalt said he has set up a new client-relations department to handle complaints quickly; has a legal ethics lawyer; and has required lawyers to have mandatory professional training each week on legal issues.

Lawsuits and complaints

Still, other lawsuits loom, including one from the family of the law firm's highest-profile client, Seth Cravens. Prosecutors contend that Cravens is one of the Bird Rock Bandits, and he faces murder charges in connection with the death of surfer Emery Kaunaui Jr. in May 2007.

Cravens' family hired Pacific Law Center for $175,000 but dropped the firm in January. Cravens is now represented by Alternate Public Defender Mary Ellen Attridge, who has said in court that Pacific Law Center handed over little work that was “usable.”

Now a lawyer hired by Cravens' family said a lawsuit to recover the fees is imminent.

“We're very committed to pursuing it,” said lawyer Douglas Gilliland. He said the firm's accounting shows that paralegals worked more hours on the case than the lawyers.

Complaints from former clients about the law firm have been lodged with the State Bar of California and the San Diego Better Business Bureau.

On March 19, the bureau revoked the law firm's membership, citing a steady pattern of complaints from consumers.

Steigerwalt said he was “flabbergasted” at the number of bureau complaints – 47 in the past 36 months, according to the bureau. He said he elected to let the membership of the old Pacific Law Center expire and plans to seek accreditation under a new entity later this year.
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Comment:

Watch the video below. Can you imagine this guy having a sexual relationship with your daughter or sister. Phillips and Associates Law Firm in Phoenix, Arizona and Pacific Law Center in San Diego, California make a living from defending repeat child molesters, pimps of child sex, ETC....

This guy Alan Spears is not the only one from both of these law firms to violate your daughters and sisters. They have violated every child in the world for defending repeat child molesters.