Legal Ethics

A bookkeeper’s discovery while managing partner vacationed leads to partner's disbarment

An Oregon family law attorney has been disbarred for withdrawing about $100,000 from his law firm and partly attributing it to business expenses when coding the entries using accounting software.

The lawyer, 50-year-old Jeffrey Renshaw, was managing shareholder of Johnson, Renshaw & Lechman-Su in Lake Oswego and a former chairman of the Oregon State Bar Family Law Section, according to the Oregonian and an Oregon Supreme Court opinion (PDF) ordering the disbarment.

A discovery by the law firm’s bookkeeper while Renshaw vacationed in Hawaii helped set the disciplinary case in motion, the Legal Profession Blog notes.

Before Renshaw left on the vacation in July 2008, an accountant preparing the firm’s tax returns questioned why Renshaw owed the firm $28,000 while the firm’s two other shareholders each owed less than $3,000, according to the Oregon Supreme Court’s description of factual findings.

The money represented unauthorized shareholder distributions and money Renshaw had used for personal expenses while coding it to accounts receivable. Renshaw had made shareholder distributions to himself for two years in a row, even as he told his partners that the firm could not afford to pay them any distributions, the opinion said.

After the bookkeeper raised the issue, Renshaw wrote an email to the two partners entitled “mea culpa” stating he needed to “cleanse my soul to you two.” He said he was “in the midst of plans to get this cleared” and the firm would be repaid.

But Renshaw did not disclose he had taken additional funds, the supreme court said. While he was on the vacation, an accountant noticed he had used firm credit cards for other personal expenses, such as payments to a pet clinic, Nordstrom, a Florida vacation and remodeling work on his home. Renshaw did not claim the payments as personal expenses, sometimes coding them as business expenses in the firm’s QuickBooks software.

Renshaw agreed to resign after returning from the vacation. The firm investigated, finding more personal expenditures. Renshaw admitted at a trial panel hearing that he took about $100,000 from the firm, according to the opinion.

The trial panel found had found that, as a mitigating factor, Renshaw did not act with a “self motive” because the funds were taken “out of desperation to provide for his family, not to fund any self need or desire.” Renshaw’s lawyer pressed that argument on appeal. The Oregon Supreme Court rejected the idea.

“It is difficult to describe taking at least $100,000 of someone else’s money to pay for your family’s vacations, pet care, and home remodeling as either selfless or morally neutral acts,” the court said. “Far from being a mitigating factor, the reasons that the accused took the firm’s funds constitute an aggravating factor.”

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