A D.C. lawyer who recently was suspended from practicing law because of behavior resulting from a longstanding mental condition has been hired to a high-ranking administrative position in the city's Office of Human Rights.

Earlier this year, James E. Mercer's law license was suspended indefinitely by the D.C. Court of Appeals after allegations that he had virtually abandoned his clients and misappropriated their funds.

According to court records, the incidents occurred last year after Mercer stopped using medication for a mental disorder. Last month, he was hired as associate director of the human rights office to supervise about 20 employes involved in processing and investigating civil rights complaints.

Yesterday Maudine Cooper, director of the office, defended her decision to hire Mercer, 39, describing him as a capable administrator whose mental problems are under control.

"As long as Mr. Mercer is doing the job, I am all behind him," said Cooper, adding that city law forbids discrimination in hiring the handicapped, including those who are afflicted with conditions such as Mercer's. "You can't prejudge bizarre behavior. It comes and it goes."

Mercer, who has been active in the D.C. Democratic Party, was described by associates yesterday as a hard-working lawyer who gave no inkling of his mental problem until a year ago, when he began to exhibit bizarre behavior that ultimately led to his suspension from practicing law.

According to court documents, associates and family members became concerned last August when Mercer stopped answering his phones, left mail unopened and verbally confronted employes at the downtown law office where he worked.

Clients complained that work Mercer said he was doing was not done, and that money deposited in clients' accounts had disappeared. Mercer was accused of misappropriating at least $5,500 in client funds.

The Appeals Court's board on professional responsibility requested an emergency suspension of Mercer's license. According to records of the proceeding, Mercer voluntarily committed himself to St. Elizabeths Hospital last September, where he was found to be suffering a bipolar mood disorder for which he had stopped taking his prescribed medication. Mercer had been treated for the condition at St. Elizabeths six years earlier.

A court-ordered psychiatric report in January found that Mercer had "a firm belief that he is Jesus Christ."

Requests for comment from Mercer yesterday were directed to his attorney, F. Joseph Warin, "He told me about his problems . . . . I didn't ask to see the psychiatric report."

-- Maudine Cooper

who said that since early this year, Mercer had resumed taking his medication under a physician's supervision. Warin added that Mercer expects to reimburse former clients for misused funds.

"He regrets any damage or injury that has been meted to his former clients," Warin said. "They were related to his illness and he has taken responsible steps to see that it remains in remission and will not reoccur."

Associates said they had not known Mercer was taking medication for the mental condition and were surprised when his behavior changed last year.

"When he was working here, the attorneys respected him," said lawyer Martin F. McMahon, who had rented a legal office to Mercer. "If anything, he had too much to do. He took on a lot of work."

Cooper said she had known Mercer for "a number of years" because of discrimination cases he brought before the city, and that she first hired him as a consultant to the human rights office after his suspension when he called her looking for a job.

She said he was hired for his current $40,000-a-year supervisory post last month because a planned merger with the District's minority business office requires more managers.

She said Mercer was the best qualified of several applicants.

"He told me about his problems," Cooper said. "I asked him, 'Are you handling the situation? ' He said, 'Yes, I am.' That's as far as I think you can go. I didn't ask to see the psychiatric report."

Cooper said Mercer's job does not require legal expertise.

Under terms of Mercer's law license suspension, he must demonstrate to the court that he is mentally fit in order to resume practicing law.

Warin said Mercer has no immediate plans to do so.