LSO revokes license of lawyer who misappropriated funds from trust to cover expenses, repaying later

Admits the biggest mistake she was "not valuing" herself and the services she provided properly

LSO revokes license of lawyer who misappropriated funds from trust to cover expenses, repaying later
Osgoode Hall in Toronto houses the Law Society of Ontario

A Law Society of Ontario tribunal has revoked the license of a Toronto-based employment lawyer for failing to maintain proper books and records and for improperly using funds from a trust account to cover expenses, which she would later reimburse.

“The panel accepted that while there were some mitigating factors, there were no exceptional circumstances to rebut the revocation that follows a finding of misappropriation,” tribunal member Kathleen Lickers wrote in a decision in the case of Hermie Yaba Abraham released May 31. In addition to revoking her licence, it ordered Abraham to pay $3,500 in costs.

Admitting to the misappropriation, Abraham expressed her remorse and “profound regret” to the tribunal, stating, “Two things can be true: you can be a good lawyer and be working hard in that capacity and also be a bad law business owner. I am truly sorry for this.”

Abraham also observed that “the biggest mistake” she made was “not valuing” herself and the services she was providing properly, adding she felt “very uncomfortable about the value” of what she was providing clients.

The tribunal noted the majority of Abraham’s practice was based on contingency fees, and “by her own admission, [she] had a general discomfort with collecting fees from clients and found it difficult to run a financially sound practice.”

She also admitted that when she withdrew money from the trust account to her general account, she was “experiencing financial difficulties covering her office expenses, including the salary of an associate.”

She added that given that her financial troubles were “deeply rooted in loss of feelings or worth,” it is “something that I will continue to work on.”

The tribunal decision said it hoped Abraham “will heed her own advice and at the appropriate time reapply to the profession.” The tribunal decision included Abraham’s own words, Lickers’ decision said, “should a future panel be seized with considering [her] rehabilitation efforts and good character application.”

Abraham was called to the bar in 2009 and practiced solely in employment law. “In her short career Ms. Abraham became a valuable contributor to professional development programs hosted by the Law Society and was a regular contributor to the Globe and Mail.”

On April 20, 2018. Abraham was subject to a spot audit, revealing that her books and records were not compliant. A second spot audit was conducted on September 25, 2019, and found that she had not brought her books and records into compliance since the initial audit.

It was through this second audit, and not a public complaint, that a law society investigation was launched into her conduct.

On February 28, 2020, the society’s spot audit department reported that, having conducted that second audit, it could find no evidence that she had brought her books and records into compliance since its initial audit in 2018.

The second audit revealed that Abraham had been transferring funds from her trust account to her general account to cover business expenses. She would later reimburse the trust account with funds from her general account. During the audit period between January and September 2019, a total of $17,972.85 was misappropriated in this manner.

That second audit also revealed that $24,942.25 was taken from the trust. This amount was otherwise due to Abraham for services she had given clients. These trust amounts were eventually returned or rectified by Abraham.

The spot audit report prompted the Law Society to refer the matter to investigation, where further irregularities were discovered to have occurred from October 2019 to March 2020. Abraham “continued to misappropriate money and withdraw funds without rendering an account from her trust account, even after two spot audits.”

During the investigation period, Ms. Abraham misappropriated $5,621.32. She withdrew $378.68 from the trust account without first delivering a billing, but these funds were otherwise due to Ms. Abraham for services rendered.

“By her admission, the misappropriated amounts were used to cover firm operating expenses at a time when Ms. Abraham’s firm was experiencing financial difficulties,” the decision said. “There was no evidence that the amounts were used for any other purpose,” and since the second audit, Abraham “returned or otherwise rectified all trust amounts.”

The panel pointed to a 2021 Law Society Tribunal Appeal Division case, which said: “It does not matter that client monies were only taken for a few months and later repaid. Lawyers and paralegals cannot take money from client trust funds without proper authority.”

As for the penalty, the tribunal said, “It is well settled that protecting the public and maintaining confidence in the professions are the priorities in penalty decisions where misappropriation has been found.” “Revocation of the licence “is the presumptive penalty even in the face of strong mitigating factors.”

The $3,500 in costs that Abraham is ordered by pay “reflects a significant discount” from actual expenses incurred, the decision said, and was granted given her co-operation throughout the investigation, “abbreviating the need for extensive time and resources and her willingness to reach an agreed statement of facts.”

It also agreed to extend the time for Abraham to pay the costs of the law society investigation to April 2026, “reflective of the fact that the revocation of her licence will impact Ms. Abraham’s ability to earn a living.”

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