Background
Attorney Gary W. Thompson, a Milwaukee lawyer admitted to practice in Wisconsin since 1988 with no prior disciplinary history, represented a subcontractor in an arbitration dispute against a general contractor over a commercial construction project. As the arbitration hearing approached, Thompson contacted J.T., the former project manager who had worked for the subcontractor and whose employment had ended after he declined a 50% pay cut. Thompson sought J.T.’s assistance in document review, case preparation, and testimony at the arbitration.
Thompson sent J.T. a text message offering $2,000 (later increased to $5,000) for his time in assisting with the case, and also promised that J.T. “would be entitled to $25,000” if Thompson’s client prevailed in the litigation. Thompson characterized the $25,000 as a bonus owed to J.T. under a 2017 employment agreement. J.T. never agreed to assist. Opposing counsel learned of the offers and moved for sanctions; the arbitrator granted the motion and dismissed Thompson’s client’s claims. The Office of Lawyer Regulation (OLR) subsequently filed a single-count complaint alleging that Thompson violated SCR 20:3.4(b) by offering an inducement to a witness that is prohibited by law.
After an evidentiary hearing, Referee James J. Winiarski found the violation proven, rejected Thompson’s claim that the $25,000 represented a legitimately owed bonus, and recommended a public reprimand and full costs. Thompson appealed, arguing the rule was unconstitutionally vague as applied, that his conduct did not violate it, and that only a private reprimand with reduced costs was warranted.
The Court’s Holding
The Wisconsin Supreme Court unanimously affirmed the referee’s findings and conclusions. The court rejected Thompson’s vagueness challenge, holding that ethical rules are evaluated under a “reasonable lawyer” standard rather than the “ordinary person” standard applied to criminal statutes, and that SCR 20:3.4(b) — which tracks ABA Model Rule 3.4(b) word-for-word — adequately informed any licensed attorney that Thompson’s conduct was prohibited. The court noted that no court has found the ABA model rule’s language unconstitutionally vague.
On the merits, the court held that all three payment offers violated SCR 20:3.4(b). The contingent $25,000 offer was an impermissible outcome-dependent payment to a fact witness, condemned under Wisconsin common law dating to 1924. The referee’s rejection of Thompson’s “owed bonus” explanation — finding that the employment agreement had been terminated and the bonus condition (project completion within schedule and budget) had never been met — was affirmed as not clearly erroneous. The $2,000 and $5,000 offers were likewise improper because they were not tied to particular losses actually incurred by J.T., but were instead forward-looking estimates of time and a speculative market wage rate generated by the client, not the attorney. The court also made clear that good faith and lack of intent to influence testimony are not defenses to an SCR 20:3.4(b) violation.
The court imposed a public reprimand — declining to issue only the private reprimand Thompson requested, given that the misconduct caused actual harm (dismissal of the client’s arbitration claims) and warranted public deterrence — while declining to impose a suspension in light of Thompson’s single count of misconduct, 38-year clean record, and cooperation with the disciplinary process. The court ordered Thompson to pay full costs of $23,209.42 within 60 days.
Key Takeaways
- Contingent payments to fact witnesses — i.e., offers conditioned on the outcome of the litigation — are categorically prohibited under SCR 20:3.4(b) and Wisconsin common law, regardless of any claimed legitimate basis for the payment.
- Flat-fee or time-based payments to fact witnesses are also improper unless they are tied to particular, actual out-of-pocket losses or time actually lost by the witness; forward-looking estimates of anticipated time and a hypothetical market wage do not satisfy this standard.
- Good faith and absence of intent to influence testimony are not defenses to a witness-inducement ethics violation; ignorance of the rule’s scope does not excuse noncompliance.
- An attorney who vigorously litigates a disciplinary matter and is ultimately found guilty of misconduct should expect to bear full costs, regardless of whether a lesser sanction would have resolved the case earlier.
Why It Matters
This decision provides a clear, practical framework for Wisconsin attorneys navigating the permissible boundaries of witness compensation. The court’s analysis distinguishes lawful reimbursement — tied to a witness’s actual, particularized expenses and time lost — from unlawful inducements, including both contingent success-fee arrangements and flat payments that exceed what a witness concretely lost. The explicit rejection of a good-faith defense sends a strong signal that attorneys must affirmatively know and comply with ethical rules governing witness payments, not simply act without corrupt intent.
The opinion also reinforces Wisconsin’s application of a “reasonable lawyer” vagueness standard to professional conduct rules, aligning the state with a broad national consensus and signaling that broad ethical prohibitions will not be struck down merely because they lack exhaustive enumeration of every prohibited act. For attorneys in arbitration and litigation practice, the case is a reminder that payment arrangements with fact witnesses — particularly former employees of a client who hold critical knowledge — require careful, documented analysis tied to the witness’s actual losses, not client-supplied estimates.