Ex-BigLaw Associate Faces Ethics Case Over Alleged Nonpayment of $78K Student Loan
Posted Jul 29, 2010 4:14 PM CDT
By Martha Neil
A graduate of the University of Chicago Law School who was being paid over $200,000 a year as an associate at DLA Piper in 2009 is facing a legal ethics complaint that alleges he failed to pay his guaranteed student loan debt.
Olufemi Nicol, 42, is accused of bad-faith avoidance of repayment and "conduct involving dishonesty, fraud, deceit or misrepresentation" concerning the loan in a March 2010 complaint filed with the Illinois Attorney Registration and Disciplinary Commission.
Additionally, he is accused of engaging in "conduct which tends to defeat the administration of justice or to bring the courts or the legal profession into disrepute," among other allegations, concerning his claimed failure to cooperate with the ARDC's investigation or even respond to its inquiries.
James Grogan, who serves as the ARDC's deputy administrator and chief counsel, said the Nicol complaint is only the third time he can recall in the past 20 years or so that a lawyer has been the subject of a disciplinary action over student loan debt.
Bad faith is required under the applicable disciplinary rule, and "it takes a lot to see that bad-faith element," he tells the ABA Journal. Such cases focus not on lawyers who are simply experiencing financial difficulty, he continues, but, speaking hypothetically, "fail to make a single [loan] payment although at the time they're buying boats and making cash payments for homes."
A 1994 law graduate of Chicago, Nicol was admitted to the Illinois bar later that year and worked for in Chicago for Ross & Hardies from 1994 to 1997 and Schiff Hardin & Waite from 1997 to 1999. For the next six years, he had jobs in business, including a stint as the president of Gear 7 in Los Angeles from 2003 to 2005.
He enrolled in the University of Chicago's business school in June of 2005, taking out a little over $78,000 in student loans within less than a year before withdrawing from the program in March of 2006. But when monthly student loan bills of $733.84 began arriving in the mail in October 2006 he didn't pay them, either then or later, the complaint alleges.
In April 2007, Nicol began working as an associate in the corporate and securities group of DLA Piper's Chicago office, earning $190,000 a year. At the end of August, still having made no payments on his student loans, he requested a one-time one-year administrative forbearance for what amounted to the 2007 calendar year, bringing his loan current and postponing the need to repay until Dec. 31, 2007.
As of Jan. 1, 2008, Nicol was billed $733.84 for his first student loan payment and, coincidentally, had his annual pay increased to $220,000 at DLA Piper on the same day, the complaint states. A month later he received a $14,841.27 bonus.
A little over a year later, he was terminated at DLA Piper in February 2009. (It appears that Nicol may have been one of the victims of the "bloody Thursday" in which DLA Piper laid off at least 80 associates and half a dozen other firms laid off hundreds more although the complaint says his termination took place two days later, on Valentine's Day.)
However, the firm continued to pay Nicol through May of 2009, the complaint says. And, at no point, it alleges, did he ever make a student loan payment.
At attempt by the ABA Journal to reach Nicol for comment was not successful; his ARDC listing gives only his DLA Piper phone number and a call to the sole phone number listed for an Olufemi Nicol in Chicago on a Web directory was answered by a message for a person with a different name.
As earlier ABAJournal.com posts have discussed, student loans generally can't be discharged in bankruptcy.
The St. Louis-based 8th U.S. Circuit Court of Appeals, for instance, held that a 2000 graduate of Lewis & Clark Law School couldn't have $360,000 in student loan eliminated under an "undue hardship" test because he had the ability to make more than the $48,000 a year he was presently earning.
Likewise, even a 65-year-old graduate of a non-ABA-accredited law school who had failed the bar exam three times had difficulty getting her student loans discharged, despite a judge who was obviously sympathetic to her plight.
ABAJournal.com: "Unpaid Student Loans Derail Law Grad’s Quest for NY Bar Admission"
ABAJournal.com: "Supreme Court Rules for Student Seeking Discharge of Loan Debt"
ABAJournal.com: "Appeals Court Permits Solo’s Student-Loan Suit, Despite Arbitration Clause"
ABAJournal.com: "Lawyer Sues Sallie Mae Over ‘Unrelenting’ Student Loan Robocalls"
Updated at 7:56 p.m. to include information from James Grogan interview.