¶2 Attorney Arellano was admitted to the practice of law in Wisconsin on September 27, 1985. He practices in Middleton, Wisconsin. He has one previous private reprimand dating from 2008.

¶3 On February 28, 2011, the OLR filed a complaint alleging 14 counts of misconduct based on events spanning from 1991 to 2007. The OLR initiated this proceeding after four female former clients filed grievances against Attorney Arellano, each alleging professional misconduct, including claims that Attorney Arellano engaged in improper sexual relations with them. The OLR sought revocation of Attorney Arellano's license.

¶5 This court will adopt a referee's findings of fact unless they are clearly erroneous. Conclusions of law are reviewed de novo. See In re Disciplinary Proceedings Against Eisenberg, 2004 WI 14, ¶5, 269 Wis. 2d 43, 675 N.W.2d 747. Here, the OLR acceded to the dismissal of six counts (Counts Two, Three, Four, Six, Thirteen, and Fourteen) so we need not review these. They will be mentioned only for context.

N.S.M.: Counts One through Eight

¶6 The first eight counts of misconduct were filed in connection with the matter of N.S.M. With respect to the allegations involving N.S.M., the referee found that Attorney Arellano engaged only in the misconduct alleged in Count Eight; the OLR agreed to dismiss Counts Two, Three, Four, and Six. The referee recommended dismissal of Counts One, Five, and Seven.

¶7 The matter will be briefly summarized. On or about August 1, 1996, N.S.M. retained Attorney Arellano to represent her in a divorce. Attorney Arellano and N.S.M. quickly commenced a relationship and eventually lived together for several years. Their relationship ended, acrimoniously, in 2005.

¶14 Count Five of the complaint alleged that by providing the guardian ad litem for N.S.M.'s minor child with 73 proposed requests to admit pertaining to N.S.M. for use in the post-divorce matters, Attorney Arellano violated former SCR 20:1.9(b).

¶19 Count Eight of the complaint alleged that by making misrepresentations to the OLR and to its District 9 Committee, or members thereof, in the course of the OLR's investigation of N.S.M.'s grievance, Attorney Arellano violated SCR 22.03(6) via SCR 20:8.4(h). The referee concluded that Attorney Arellano committed this misconduct.

¶20 The referee noted that obstructing the work of the District Committee by his misleading and false statements is a serious violation. The referee observed that the "ability of the Supreme Court to properly monitor and enforce the Rules of Professional Conduct through its investigative resources requires that attorneys under investigation be absolutely truthful in their response to inquiries." The referee observed that Attorney Arellano was an experienced attorney who had been previously investigated in another matter unrelated to this case. He knew the rules and his obligation to be truthful even when not under oath. In spite of this knowledge, Attorney Arellano chose to lie and to mislead the District Committee and, in doing so, he undermined the integrity of both the lawyer regulation system and the legal profession itself.

¶21 Thus, the referee found, and the record supports the finding, that Attorney Arellano was, for a time, N.S.M.'s lawyer and he and N.S.M. subsequently had an acrimonious break-up. The record discloses that both individuals engaged in behavior that was, to use the referee's words, "inappropriate, mean spirited and childish." Ultimately, there was insufficient evidence to substantiate the allegations in Counts One through Seven of the complaint. The referee concluded that Attorney Arellano committed the misconduct alleged in Count Eight by misleading the OLR and the District Committee about the nature of his representation of N.S.M. We accept these findings and conclusions.

M.F.: Counts Nine and Ten

¶22 On or about October 11, 2000, M.F. filed a Charge of Discrimination (Discrimination Charge) with the Equal Opportunity Employment Commission and the Equal Rights Division of the Wisconsin Department of Workforce Development against her former employer, the City of Milwaukee Mayor's Office (City). M.F. alleged that between 1995 and 2000, then-City of Milwaukee Mayor John Norquist unlawfully harassed M.F.

¶23 At or about the time M.F. filed the Discrimination Charge, Attorney Arellano initiated contact with M.F., calling her telephone number and leaving voicemail messages. Attorney Arellano solicited employment as her lawyer in the discrimination matter.

¶25 Count Nine of the OLR's complaint alleged that Attorney Arellano violated former SCR 20:7.3(c), by initiating contact with M.F. and making one or more unsolicited telephone calls to her for the purpose of inducing her to hire him to represent her in the Discrimination Charge against the City. Following the hearing, the referee concluded Attorney Arellano committed this misconduct.

¶26 The referee found that M.F. did not request the contact. The American Bar Association (ABA) Comment regarding SCR 20:7.3 in the Wisconsin Rules of Professional Conduct for Attorneys makes clear that the purpose of SCR 20:7.3 is to prevent a potential client from being pressured into entering into a representation agreement with an attorney. The Comment cites the unequal nature of the relationship between the potential client and the lawyer as being fertile ground for the application of undue pressure upon the client.

¶27 The referee noted that while it is true that Attorney Arellano did contact M.F., the contact was by telephone and not in person. Moreover, Attorney Arellano told M.F. that if she wanted to discuss the case further, she must come to Madison from Milwaukee and meet at Attorney Arellano's law office. A number of days after the call, M.F. did go to Madison, did meet with Attorney Arellano, and did sign a retainer agreement. M.F. never claimed that she was pressured by Attorney Arellano to retain his legal services. Thus, the referee noted:

¶28 Count Ten alleged that Attorney Arellano violated former SCR 20:1.8(k)(1) and (2) by commencing a sexual relationship with M.F. after she retained him as her lawyer. Attorney Arellano vehemently disputed this charge. M.F. testified in detail about the relationship. The parties litigated this issue extensively.

¶29 Following the hearing, the referee deemed M.F.'s version of events not credible. Extensive documentary evidence, including billing records submitted by Attorney Arellano, persuaded the referee that it would have been logistically impossible for Attorney Arellano and M.F. to conduct the relationship in the manner described by M.F. Thus, the referee concluded that the OLR failed to provide clear, satisfactory, and convincing evidence sufficient to sustain this charge. We accept the referee's findings and conclusion in this matter.

¶30 The parties' litigation of Count Ten is relevant because Attorney Arellano argues, persuasively, that a significant percentage of the evidentiary hearing was dedicated to the OLR's unsuccessful attempt to prove this charge. Ultimately, the referee had to decide whether M.F. or Attorney Arellano was more credible with respect to whether Attorney Arellano engaged in an improper sexual relationship in violation of former SCR 20:1.8(k)(1) and (2). Attorney Arellano contends the fact he prevailed on this charge warrants a significant decrease in the costs imposed on him.

I.G.: Counts Eleven through Thirteen

¶31 I.G. is a native and citizen of Mexico. In the fall of 2005, I.G. and Attorney Arellano began dating. At the time, I.G. had two minor children with a former husband from whom she was divorced in 1999. Between 2002 and 2004, I.G. was married to a U.S. citizen.

¶32 When I.G. met Attorney Arellano, she was trying to obtain immigrant classification as the spouse of an abusive U.S. citizen so she could lawfully remain in the United States and be eligible for certain government benefits. Seeking this status required her to file an "I-360 Petition for Amerasian, Widow(er), or Special Immigrant" (I-360 Petition) along with supporting documentation. She was working with another lawyer at this time.

¶33 In July 2006 I.G. became pregnant and told Attorney Arellano that he was the father of her unborn child.

¶34 In late 2006 Attorney Arellano began to provide legal services to I.G., including assistance in preparing the I-360 Petition. Attorney Arellano did this work individually, not through his firm.

¶35 In March 2007 I.G. gave birth to N.G. In April 2007 Attorney Arellano executed the I-360 Petition as the person preparing the form for I.G. as the petitioner and identified himself as the company or organization filing the petition.

¶36 By letter dated April 20, 2007, and prepared by Attorney Arellano, I.G. signed and filed with the INS the I 360 Petition and supporting materials. The I-360 Petition required that the petitioner supply "Information about the spouse and children of the person this petition is for," that is, the spouse and children of I.G. In preparing the I-360 Petition, Attorney Arellano included information about I.G.'s two older children. None of the filed documents mention the baby, N.G.

¶37 Both I.G. and I.G.'s mother allegedly asked Attorney Arellano about the omission of any information about the expectant child on the I-360 Petition. Attorney Arellano allegedly stated he did not want to include information about the expectant child because he did not want the state coming after him for support, and they should just wait and he and I.G. would be married after the baby was born.

¶43 Count Thirteen of the complaint alleged that Attorney Arellano violated SCR 20:1.16(d) by unilaterally withdrawing from representing I.G. relative to the I 360 Petition without prior notice and/or allowing time for employment of substitute counsel. The OLR stipulated to the dismissal of this charge.

E.W.: Count Fourteen

¶44 In April 1991 E.W. hired Attorney Arellano to represent her in a divorce action. The complaint alleged that Attorney Arellano began a sexual relationship with E.W. that continued during his representation of her. Their relationship terminated in 1994.

¶45 By September 2007 Attorney Arellano had reason to believe that N.S.M., I.G., and/or M.F., or possibly another woman, had filed or were likely to file grievances against him with the OLR.

¶48 In sum, following extensive pre- hearing motions, decisions, and a lengthy evidentiary hearing, the referee filed a report on May 25, 2012. The referee ultimately concluded that the OLR had proven that Attorney Arellano violated SCR 22.03(6) via SCR 20:8:4(h) because he was both misleading and untruthful in his answers to the District Committee with regard to their investigation of a grievance filed by N.S.M. (Count Eight). The referee also concluded that Attorney Arellano violated former SCR 20:7.3(c) by initiating contact with M.F. and making one or more unsolicited telephone calls to her for the purpose of inducing her to hire him to represent her in the Discrimination Charge against the City (Count Nine). The OLR did not succeed in proving any of the other 12 alleged counts of misconduct.

¶51 We turn next to the issue of costs. Assessment of costs in OLR matters is governed by SCR 22.24. Our general policy is that upon a finding of misconduct it is appropriate to impose all costs, including the expenses of counsel for the office of lawyer regulation, upon the respondent. In cases involving extraordinary circumstances the court may, in the exercise of its discretion, reduce the amount of costs imposed upon a respondent. SCR 22.24(1m).

¶52 The OLR filed its statement of costs on August 6, 2012, listing $40,960.49 in costs. The OLR concedes that there are extraordinary circumstances present that justify reducing the amount of costs imposed on Attorney Arellano, in part because OLR voluntarily dismissed six of the 14 alleged counts of misconduct prior to the evidentiary hearing. The OLR thus recommends this court impose on Attorney Arellano half of the costs, or $20,480.25, explaining that most of the OLR's trial time was spent on claims on which the OLR did prevail.

¶53 Attorney Arellano filed a timely objection, asking the court to impose no costs at all, and asserting, in the alternative, that imposition of no more than 10 percent of the costs is warranted.

¶54 In exercising our discretion regarding the assessment of costs, we consider the submissions of the parties and all of the following factors:

See SCR 22.24(1m).

¶55 Applying these factors, we observe that SCRs 22.24(1m)(a)-(c) are relevant here. The complaint alleged 14 counts of misconduct and sought revocation of Attorney Arellano's license to practice law. The referee ultimately concluded, and we agree, that Attorney Arellano committed two counts of misconduct, warranting a public reprimand. Without minimizing the seriousness of Attorney Arellano's professional misconduct, it was far less serious and of a significantly different nature than originally alleged.

¶56 As the litigation proceeded, one witness changed her story and conveyed exculpatory evidence to the OLR's retained counsel that had not been disclosed to the OLR during its investigation. The OLR promptly disclosed these developments to respondent's counsel resulting in the dismissal of six of the 14 counts. Two counts were dismissed at trial when one of the grievants did not appear in person and the referee concluded telephonic testimony should not be permitted. Under these rather extraordinary circumstances, we agree that a reduction in costs is warranted in part because of the disparity between the allegations and recommended discipline in the complaint and the ultimate conclusions of this court.

¶57 That said, we reject Attorney Arellano's assertion that we should assess no costs at all. We are not persuaded that the counts on which Attorney Arellano prevailed were wholly without prosecutorial merit or that the OLR's costs pursuing those charges were unreasonable or unnecessary. The OLR was confronted with four separate grievants who each alleged Attorney Arellano engaged in extremely serious misconduct. The only evidence given for the charge of over-litigating is that the OLR did not prevail on all counts, in part because one grievant essentially recanted and another refused to appear.

¶58 Attorney Arellano litigated this case vigorously as is his right. He cannot, however, be deemed wholly cooperative with the disciplinary process given our determination that he violated SCR 22.03(6) via SCR 20:8.4(h) by making misrepresentations to the OLR and to its District 9 Committee or members thereof in the course of the OLR's investigation of the N.S.M. grievance, a matter comprising more than half of the alleged counts of misconduct. See SCR 22.24(1m)(d). Attorney Arellano has also been disciplined before. See SCR 22.24(1m)(e). These factors weigh against a reduction in costs.

¶59 On balance, we deem it appropriate to impose 25 percent of the costs on Attorney Arellano, or $10,240.13. Our determination is not the result of the application of a precise mathematical formula, but is based on our thorough consideration of the record, the manner in which this case developed, the OLR's acknowledgement that extraordinary circumstances justify a reduction in costs, and the factors established in SCR 22.24(1m).

¶60 IT IS ORDERED that Victor M. Arellano is publicly reprimanded for professional misconduct.

¶61 IT IS FURTHER ORDERED that within 60 days of the date of this order, Victor M. Arellano shall pay to the Office of Lawyer Regulation the imposed costs of this proceeding.

¶62 IT IS FURTHER ORDERED that the director of the Office of Lawyer Regulation shall advise the court if there has not been full compliance with all conditions of this order.