Fee Dispute Pitfalls

A recent disciplinary case decided by the Iowa Supreme Court underscores the potential ethics pitfalls of lawyer overzealousness in pursuing a fee action against a client. The lawyer had served as an Air Force JAG officer and had overseen a clinical program between Legal Aid and Washington University of St. Louis. He also had created an “ecumenical legal assistance ministry” that aided impoverished areas of St. Louis. All went well until he entered private practice.

The court found that the attorney assessed finance charges to fees without advance written agreement to such charges. He either reported or threatened to report clients to the IRS based on the contention that his unpaid fees should be treated as income to the clients. He placed unauthorized liens on client real property. Finally, his retainer agreements were unethical in obligating clients to contest charges within 10 days and providing indemnity for legal negligence claims. The court ordered suspension for an indefinite period with no possibility of reinstatement for six months. [Mike Frisch]