In August, 1990, Lester Magnuson and his wife, Donna, had an initial meeting with Atty. Jeffery J. Drach of Wausau, and hired him to represent their interests in the partnership, in a corporation called the Magnuson Brothers Corporation, and personally. Lester and Donna had another meeting with Atty. Drach in September, 1990. As a result of that meeting, Atty. Drach sent a letter to Lester and Donna confirming that they had retained Atty. Drach to represent them. The letter was sent to Lester and Donna and did not state that the scope of the representation would extend to the partnership and/or Herbert.

Although he was initially retained to represent Lester and Donna, Atty. Drach also began acting as the partnership's attorney by 1991 and continued to do so until 1997. At the time Atty. Drach began representing the partnership, the partnership and the partners had a common interest, to protect their assets from Mr. Wells and Ross-Wells. Lester and Herbert did not sign a fee agreement hiring Atty. Drach to represent the partnership, nor did Atty. Drach disclose in writing to Herbert that Atty. Drach had initially represented Lester and Donna Magnuson. However, Herbert was fully aware of Atty. Drach's role as partnership attorney. During much of the same time period, Herbert was represented individually by Atty. Corliss Jensen. Atty. Drach mistakenly assumed that Lester was allowed to act as the partnership's managing partner, when, in fact, the partnership agreement required the consent of both parties to encumber the partnership's assets. Atty. Drach also assumed that Lester kept Herbert informed as to the partnership's transactions, but Herbert contends he was not always kept informed.

From 1990 through June 20, 1997, when the bankruptcy was filed, Atty. Drach assumed Lester to be the managing partner and relied on him to make decisions pertaining to the partnership. In June, 1997, Atty. Drach discovered that there was, in fact, a partnership agreement and that the partnership agreement did not allow for one managing partner. During the course of Atty. Drach's representation of the partnership, the situation was further complicated by the deterioration of the relationship between Lester and Herbert, who had different perceptions of their relationship with Mr. Wells. Lester considered the debt to Mr. Wells to constitute financial trouble, while Herbert had developed a close friendship with Wells and did not share Lester's concerns.

Mr. Wells or Ross Wells held a mortgage on all of the partnership's real estate. By 1991, the partnership's debt to Mr. Wells was approximately $900,000. In August, 1996, Mr. Wells obtained several money judgments against the partnership and the Magnusons personally. In October, 1996, Ross Wells obtained a foreclosure judgment and a money judgment against the partnership and against the Magnusons personally.

In February, 1995, at the direction and with the consent of Lester Magnuson, Atty. Drach prepared a real estate mortgage from Lester and Donna Magnuson to Atty. Drach for protection of his legal fees on real estate that was owned by the partnership, without informing Herbert. At the same time, at the direction and with the consent of Lester Magnuson, Atty. Drach prepared a real estate mortgage on partnership real estate from Lester and Donna to the partnership's accountant, for protection of his fees, again without informing Herbert, who states that he first learned of the mortgages when they were listed as secured obligations in the partnership's chapter 11 bankruptcy in 1997. Atty. Drach's failure to consult with and keep Herbert informed at the time that Atty. Drach prepared mortgages on partnership real estate in favor of himself and the accountant constituted violations of SCR 20:1.2(a) which requires a lawyer to consult with a client as to the objectives of representation and 20:1.4(a) and (b), which require a lawyer to keep a client reasonably informed about the status of a matter and to explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation.

Early in 1996, Mr. Wells offered to settle the partnership's indebtedness to him for a lump sum payment of $750,000. Atty. Drach unsuccessfully sought to obtain refinancing from area banks for the partnership to pay the lump sum. The partnership also sought to sell some real estate holdings that were not involved in the mink farm. The partnership owned a valuable parcel of real estate on a lake, but the partnership lacked sufficient funds to develop the property so that it could be subdivided. One area banker, however, offered to lend Atty. Drach the sum of $150,000 for him to purchase the property personally, and Atty. Drach could, in turn, lend the $150,000 to the partnership as a last resort to achieve the lump sum payment.

On March 5, 1996, Atty. Drach prepared an offer to purchase the property for $150,000. The offer identified the buyer as Spirit Country Realty, LLC, with Atty. Drach signing as owner. Lester accepted the offer on March 9, 1996. An Addendum to the offer to purchase identified the buyer as Spirit Country Realty, with the names of Atty. Drach, Lester and Herbert appearing underneath. The partnership was identified as the seller, with Lester's name appearing underneath. Atty. Drach and Lester signed the Addendum, and the line for Herbert's signature was left blank. The settlement strategy to make the lump sum payment was not implemented because of other problems that arose. Atty. Drach did not inform Herbert or his counsel, Atty. Jensen, of the $150,000 offer to purchase until October 29, 1996, while they were traveling with Atty. Drach to meet with Mr. Wells' attorneys. Atty. Drach's failure to inform Herbert of the proposal whereby Atty. Drach and the partners would purchase the lake property constituted a violation of SCR 20:1.4(a), which requires a lawyer to keep a client reasonably informed about the status of a matter and promptly comply with reasonable requests for information.

In March, 1998, Atty. Drach prepared articles of organization for Lamer Brothers, LLC, whose principals were Lester's son, Lowell, and Lester's wife's brothers. Atty. Drach listed the legal work of preparing the articles of organization for Lamer Brothers, LLC, in the work-in-progress billing for Magnuson Bros. Farms, although the billing was never sent to the partnership. It was understood that the legal costs related to organizing Lamer Brothers and the subsequent purchase of the debt of Magnuson Bros. Farms by Lamer Brothers would be paid by the partnership and not by Lamer Brothers. In April, 1998, Lamer Brothers purchased a note and mortgage held by Ross Wells on the partnership land and also obtained an assignment of the Ross Wells foreclosure judgment. Shortly thereafter, Herbert had a total falling out with Lester and Lamer Brothers when, according to Atty. Drach, Lester discovered that Herbert had an undisclosed agreement with Mr. Wells to preserve Herbert's property when Ross-Wells foreclosed on the partnership assets. Lamer Brothers then decided to proceed immediately with the collection remedies it had acquired from Ross Wells. At that time, Atty. Drach concluded he had a conflict of interest, and he withdrew from the case.

At the time of its incorporation, Lamer Brothers and the partnership had a mutual goal of preserving the partnership and avoiding foreclosure. In drafting the articles of organization for Lamer Brothers, LLC, which was organized, at least in part, for the purpose of seeking to purchase the Ross Wells judgment, note and mortgage, and consequently, becoming the largest creditor of Atty. Drach's client, Magnuson Bros. Farms, and with the expectation that Magnuson Bros. Farms would pay the legal fees related to preparation of the articles of organization, Atty. Drach committed a violation of SCR 20:1.7(b) which prohibits a lawyer from representing a client when that representation conflicts with the lawyer's responsibilities to another.

In accordance with SCR 22.09(3), Attorney Jeffery J. Drach is hereby publicly reprimanded.