## Facts

- Carl H. Creedy was admitted to the Wisconsin bar in 1980 and had no prior discipline.
- Creedy entered into a business relationship with Joseph Murphy, a nonlawyer who operated American Disability Entitlements LLC and represented Social Security disability claimants (a role permitted under Social Security Administration rules).
- After Murphy learned that attorney fees in Social Security matters could be paid directly by the Social Security Administration from a claimant’s award, Murphy proposed working with Creedy so fees could be recovered through an attorney.
- Creedy and Murphy jointly worked on Social Security disability matters and verbally agreed, case by case, how to divide fees; they did not reduce their arrangement or fee division terms to writing.
- Murphy routinely collected unlawful advance fees from claimants. Creedy maintained he did not know about that practice until around March 2010.
- Creedy stated he learned of the advance-fee practice when another attorney informed him that a claimant had been charged two fees—one paid to Murphy and another paid to Creedy through the Social Security process.
- After confirming the double-fee situation, Creedy refunded one set of fees and began ending the business relationship with Murphy.
- While law enforcement investigated Murphy, Creedy voluntarily gave investigators information about Murphy’s dealings without Murphy’s consent, using information Creedy had learned through the professional relationship.
- The Wisconsin Office of Lawyer Regulation (OLR) filed an eight-count disciplinary complaint against Creedy. After proceedings before a referee and a stipulation, some counts were dismissed and Creedy entered no-contest pleas to the remaining misconduct allegations.
- The referee found Creedy credible and professional, found no proof that Creedy knew of Murphy’s unlawful fee advances before March 2010, and characterized the violations as largely technical with minimal harm (if any) to anyone other than Murphy.
- Although the OLR initially sought a suspension, after the hearing the parties stipulated that a public reprimand was sufficient. The referee recommended a public reprimand and that Creedy pay only half of the nearly $18,000 in costs.
- No appeal was taken from the referee’s report, and the matter proceeded to the Wisconsin Supreme Court for review and imposition of discipline.

## Issues

1. What discipline is appropriate for an attorney who entered a business transaction with a client without required written terms and consents, and who disclosed representation-related information to law enforcement without client consent, where the violations were found to be largely technical and caused minimal harm?
2. How should costs be allocated in the disciplinary proceeding given the parties’ stipulation, the referee’s findings, and the dismissal of some counts?

## Decision

- The Wisconsin Supreme Court approved the referee’s findings of fact and conclusions of law.
- The court agreed that a public reprimand was sufficient discipline for Creedy’s misconduct.
- The court ordered Creedy to pay one-half of the costs of the disciplinary proceeding (with total costs of roughly $18,000 as requested by the OLR).
- The court ordered no restitution.

## Legal Principles

- A lawyer entering a business transaction with a client must satisfy conflict-of-interest safeguards, including fair and reasonable terms, written disclosure of terms, written advice to seek independent counsel, and the client’s informed consent confirmed in a signed writing.
- A lawyer generally may not reveal or use information relating to the representation to the client’s disadvantage without the client’s informed consent, absent an applicable rule-based exception.
- In Wisconsin attorney discipline, the supreme court reviews and may adopt a referee’s findings and recommendations and then determines discipline that fits the misconduct and the goals of the lawyer-regulation system.
- A no-contest plea in a disciplinary matter permits a referee to find misconduct based on an adequate factual basis, and the resulting misconduct determination carries consequences in later disciplinary or reinstatement proceedings.
- Cost awards in lawyer-discipline matters are within the court’s discretion and may reflect case-specific considerations, including the outcome of contested counts and the overall seriousness of the proved misconduct.

## Conclusion

The Wisconsin Supreme Court adopted the referee’s report and publicly reprimanded Attorney Carl H. Creedy for technical ethics violations arising from an unwritten business/fee arrangement with his client Joseph Murphy and for disclosing representation-related information to law enforcement without Murphy’s consent, and it ordered Creedy to pay one-half of the proceeding’s costs without ordering restitution.


In re Disciplinary Proceedings Against Creedy, 854 N.W.2d 676 (2014)