A Classic

A recommendation just issued by the Illinois Review Board

This matter arises out the Administrator’s eight count Complaint charging Respondent with misconduct in handling mortgage modification and foreclosure matters. The Hearing Board found that Respondent improperly shared fees with non-lawyers, failed to properly handle money tendered to Respondent as costs, failed to adequately communicate with several clients and failed to represent one client with diligence. The Hearing Board recommended that Respondent be suspended for six months and be required to complete the ARDC Professionalism Seminar.

The Hearing Board also characterized the fees Respondent charged his modification clients as classic retainer fees, noting that Respondent called the fees classic retainers in his written fee agreements. Upon review, the Administrator asked the Review Board to overturn that factual finding, and instead find that Respondent utilized security retainers, requiring that the retainer fees be held in Respondent’s client trust account. Because Respondent routinely put these retainers into his business account, the Administrator asked the Review Board to find that Respondent violated Rules 1.15(a) and (c) with respect to his fees. The Administrator did not seek additional sanctions based on the additional misconduct, but asked that the Review Board to adopt the sanction recommendation of the Hearing Board. Upon review, the Respondent asked the Review Board to recommend a lesser sanction than the Hearing Board.

The Review Board concluded that the fees charged by Respondent were not classic retainers, despite Respondent’s label in his fee agreements. Rather, the fees were security retainers and as such, the fees were required to be deposited into Respondent’s client fund account. Because Respondent failed to properly handle the fees, the Review Board overturned the Hearing Board’s finding and found that Respondent violated Rules 1.15(a) and 1.15(c). The Review Board concluded that the Hearing Board’s recommendation adequately addressed Respondent’s misconduct and the mitigating evidence. The Review Board recommended that Respondent be suspended for six months and until he completes the ARDC Professionalism Seminar.

The board

As outlined in greater detail in the Hearing Board’s Report, eight clients retained Respondent and paid him anywhere from $4,200 to $21,300 to attempt to obtain a modification of their mortgages. In each situation, the client was unhappy with the results achieved by Respondent. While the Hearing Board concluded in each matter that the Administrator had failed to prove that Respondent’s fee was excessive or that he had engaged in dishonesty, the Hearing Board expressed concern at Respondent’s practices and concluded that Respondent engaged in misconduct in each matter.

The Hearing Board found that Respondent collected money from seven clients for costs but failed to deposit that money into a client fund account as required. Instead, he deposited the cost money into his business account and commingled it with his own funds. In two matters, he failed to refund unused costs to the clients. In two matters, he failed to adequately communicate to the clients about the matters. He neglected one of the matters, in violation of Rule 1.3. Finally, in three of the matters, he improperly shared a legal fee with FDP in violation of Rule 5.4, by paying them a portion of his fee to channel the work to him.

In mitigation, the Hearing Board noted that Respondent had a myriad of problems in his law office after he associated himself with FDP. He took steps to correct the problems in his office after the ARDC’s investigations were initiated. He hired a business coach and implemented a computerized case management system. Several character witnesses testified on his behalf. In addition, he offered significant evidence of charitable work. Respondent, a Navy veteran, testified that he routinely performed pro bono legal services for veterans for the Chicago Volunteer Legal Services (“CVLS”) and has worked with Amvets and Habitat for Humanity. He received an award as Litigator of the Year from CVLS for work on a family law case. He has not been previously disciplined.

(Mike Frisch)