Legal Ethics Opinion No. 1434

  Threatening Criminal or Disciplinary Charges: Attorney Demand
Letter Stating Civil and Criminal Penalties for Failure to Settle
                     Breach of Contract Claim

You have presented a hypothetical situation in which an attorney
[Attorney A] was employed as general counsel for a corporation
while a member of the bar in another jurisdiction.  After
Attorney A's employment with the corporation was terminated, the
corporation felt it had fully compensated Attorney A.  However,
Attorney A believes he is due additional compensation.  Attorney
A subsequently became admitted to the Virginia State Bar and
became associated with a District of Columbia law firm which
maintains an office in the Commonwealth of Virginia.

An attorney with the law firm [Attorney B] sent a letter to the
corporation indicating that it represented Attorney A and
demanding that the corporation pay both back salary and severance
pay to Attorney A.  The letter did not reveal that Attorney A was
associated with the firm, but the letter stated:

     If you would like to avoid litigation in this matter, I
     suggest you call me immediately.  Please understand
     that your failure to pay Attorney A is not only a
     breach of contract, but also a violation of Virginia
     law which could subject you to civil and criminal
     penalties.  Attorney A has every right to report you to
     the Virginia Department of Labor and Industry. 
     However, we would like to resolve this matter amicably. 
     [emphasis added]    

You have asked the committee to opine whether, under the facts of
the inquiry, the demand letter is violative of  Disciplinary Rule
7-104 as to (l) Attorney A, (2) the law firm with whom Attorney A
is associated, and/or (3) Attorney B (who is not a member of the
Virginia State Bar).

As your inquiry posits, the appropriate and controlling
Disciplinary Rule related to the facts you present is DR 7-104(A)
which provides that a lawyer shall not present, participate in
presenting, or threaten to present criminal or disciplinary
charges solely to gain advantage in a civil matter.

The committee has previously opined that it is unethical for a
lawyer to threaten to present criminal charges solely to obtain
an advantage in a civil matter.  See LEOs #715, #716, #776,
#1233.  Additionally, in LEO #715, the committee stated that if
counsel alludes to possible criminal prosecution when
corresponding with a debtor for the sole purpose of advancing his
client's civil claim, such conduct is unethical.  Thus, if
Attorney A authorized the use of the language quoted above, the
committee opines that Attorney A's conduct, in authorizing
Attorney B to refer to possible criminal penalties for failure to
pay back pay, is improper under the dictates of DR 7-104(A) DR
l-l02(A)(l). 

The committee also opines that, since the attorney-client
relationship is a personal one, thus precluding violations of the
Virginia Code of Professional Responsibility by a business
entity, the law firm entity cannot be found to have committed any
ethical violations as to the letter. 

In addition, the committee directs your attention to DR 1-103(A)
which mandates reporting to the appropriate authority by an
attorney having knowledge that another attorney has committed a
violation of the Disciplinary Rules that raises a substantial
question as to that lawyer's fitness to practice law in other
respects.  Whether an attorney's conduct is such that it raises a
"substantial question as that lawyer's fitness to practice law in
other respects" requires a case-by-case determination which
should be made after consideration of the facts and analysis of
the impact on the offending lawyer fitness to practice law. 
[See:  LEO #1308 and In re Himmel, 125 Ill.2d 531, 533 N.E.2d 790
(1988)]        

Finally, the committee opines that Attorney B is not subject to
the Virginia Disciplinary Rules since he has not been admitted to
practice in this jurisdiction.  The committee suggests, however,
that his conduct may be of interest to the disciplinary body in
which he is licensed to practice.

Committee Opinion 
October 21, 1991