FOR THE RESPONDENT FOR THE INDIANA SUPREME COURT
DISCIPLINARY COMMISSION Karl L. Mulvaney Donald R. Lundberg, Executive Secretary Nana Quay-Smith Dennis K. McKinney, Staff Attorney Bingham Summers Welsh & Spilman 115 West Washington Street, Ste. 1060 2700 Market Tower Indianapolis, IN 46204 Indianapolis, IN 46204-2982 ______________________________________________________________
IN THE MATTER OF )
) Case No. 49S00-9603-DI-252
JAMES J. SCHNEIDER )
in this case. Matter of Hampton, 533 N.E.2d 122 (Ind. 1989).
He also requested oral
argument as to some of the issues presented. We deny that request, and now proceed to our
factual findings in this case.
Count I. We now find that, in addition to practicing law as James J. Schneider, Attorney at Law, the respondent is a certified public accountant, practicing as Schneider & Co., Inc. The respondent's law practice is a sole proprietorship with respondent as the sole employee. In conjunction with both practices, the respondent used letterhead that identified him as an attorney and a certified public accountant. The letterhead denoted his law practice as Professional Services Group and listed five additional members, two designated as attorneys and three as CPAs. None were actually employees of the respondent's law practice. The letterhead also proclaimed: WE HELP YOU CREATE AND PRESERVE WEALTH.
Indiana Professional Conduct Rule 7.2 provides:
(a) A lawyer or law firm shall not use or participate in the use of
professional cards, professional announcement cardss, office signs,
letterheads, telephone directory listings, law lists, legal directory
listings, or a similar professional notice or device if it includes a
statement or claim that is false, fraudulent, misleading, deceptive, self-
laudatory or unfair within the meaning of or that violates the
regulations contained in Rule 7.1.See footnote
(b) A lawyer shall not practice under a name that is misleading as to the identity, responsibility, or status of those practicing thereunder, or
is otherwise false, fraudulent, misleading, deceptive, self-laudatory, or
unfair within the meaning of Rule 7.1, or is contrary to law. In that it
is inherently misleading, a lawyer in private practice shall not practice
under a trade name. . . .
The hearing officer found that the respondent's listing of other attorneys and CPAs on his letterhead, where those persons were not in fact associated with the respondent's law practice, violated Prof.Cond.R. 7.2(a) in that it was deceptive and misleading. She also found that the respondent's use of the descriptor Professional Services Group violated Prof.Cond.R. 7.2(b) because it was used in such a way as to be misleading as to the identity, responsibility, and status of persons who did work for the respondent's law practice.
The respondent's use of one letterhead for both his law and accounting practices, which letterhead included attorneys and other professionals not employed by the law practice, would understandably create confusion regarding the identity and responsibility of those practicing law or performing services in support of the law practice. It leaves the impression that those listed are associated with the law practice, when in fact they are not. Similarly, the identifier Professional Services Group is misleading to the public and potential clients. There is no doubt that the use of a trade name is inherently misleading, particularly as to the responsibility over employees and the duty owed by the lawyers. Matter of Sekerez, 458 N.E.2d 229 (Ind. 1984). In this case, the respondent held himself out as part of a group including other attorneys, although his law practice had no employees other than himself. Referring to his practice as part of a group created a false impression that the other attorneys were associated with respondent in the practice of law.
the hourly based charges . . . from 70 to 300% of hourly charges but
can be lower or much higher if we deem it appropriate.
On March 6, 1995, the client signed and returned the engagement letter and fee agreement. By May 15, 1995, the respondent had billed the client $583, yet the respondent had initiated no contact with the debtor. The client informed the respondent that he would not pay the amount and that he wished to terminate the representation. After receiving the discharge letter, the respondent returned a letter which demanded payment of the outstanding bill. The reply and demand letter generated an additional $360 charge to the client.
Indiana Professional Conduct Rule 1.5(a) provides that a lawyer's fee shall be reasonable. Factors to be considered when assessing the reasonableness of a fee include (1) the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly; (2) the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer; (3) the fee customarily charged in the locality for similar legal services; (4) the amount involved and the results obtained; (5) the time limitations imposed by the client or other circumstances; (6) the nature and length of the professional relationship with the client; (7) the experience, reputation, and ability of the lawyer or lawyers performing the services; and (8) whether the fee is fixed or contingent. Id.
The respondent's fee was unreasonable. The respondent charged his client $360 for generating a demand letter to collect his own disputed fee. The respondent had obtained no results for his client-- the hearing officer found that the initial bill for $583 appeared before
the respondent had even contacted the debtor. Although it is, of course, not necessary for
a lawyer to obtain the client's desired outcome in order to be paid for services, a lawyer
should take some logical, tangible, substantive step toward resolution of the client's
problem, especially regarding a relatively simple matter such as collection of a memorialized
debt. The respondent billed the client $943 for writing two letters to him: one outlining the
procedure that might be employed in collecting the debt (and supporting the initial charged
fee of $583), the second demanding payment of the bill incurred for the preparation of the
first letter. That the respondent never got around to making a bona fide attempt actually to
collect the debt (i.e., contacting the debtor) reflects the unreasonable nature of charging the
$943 fee. We therefore find that the respondent attempted to exact from his client an
unreasonable fee, both before and after his termination from representation, in violation of
Count III. On June 24, 1994, a client contacted the respondent regarding a tax matter. The client subsequently met briefly with the respondent and another purported member of the respondent's Group on June 28, 1994. At that time they discussed the client's tax problem. Bankruptcy was suggested as a possible remedy. Upon leaving the June 28 meeting, the client signed a fee agreement containing language clearly anticipating work yet to be done. Another attorneySee footnote 2 did substantial research based upon the questions raised by the client during the June 28 meeting. On July 27, 1994, yet another individual
listed on the respondent's letterhead contacted the client and asked him to come in to review
his tax issues. The client declined, requested the written answers to at least some of the
questions he posed at the June 28 meeting, and requested a bill for services rendered. The
respondent sent a letter on July 29, 1994, which addressed the bankruptcy issues. The next
day, the respondent billed the client $2,580. The underlying statement indicated the fee was
for the preparation of a memorandum listing various legal alternatives for solving the client's
tax problems. These alternatives were not shared with the client in the July 29 letter.
August 8, 1994, the client refused to pay the $2,580
, reasoning that he had not received the
benefit of the work for which he had been billed. On August 31, 1994, the respondent sent
a letter to the client responding to his refusal to pay, along with an additional billing of $432
for the preparation of the reply letter and demand for payment.
As with Count II, billing the client, after representation has been terminated, for responding to the client's refusal to pay and demanding payment is an attempt to exact an unreasonable fee. Additionally, billing the client for work done, but not provided to the client, is also an attempt to exact an unreasonable fee because the client received no tangible benefit despite the respondent's investment of time and resources toward the effort. Accordingly, we find that the respondent violated Prof.Cond.R. 1.5(a) by attempting to charge his client over $400 for writing a letter demanding payment of a legal bill, and for charging the client for work product that was not shared with the client.
Having concluded that respondent engaged in misconduct, we must now determine an appropriate discipline for it. The respondent urges that a private reprimand is appropriate.
In mitigation, we note that the respondent ceased use of the offending letterhead prior to
these disciplinary proceedings. The fact remains, however, that the message he supplied to
the public was calculatingly misleading. Such communications make informed selection of
a lawyer by consumers impossible and opens the door for overreaching. Matter of
Anonymous, 689 N.E.2d 442. Perhaps even more disturbing are the respondent's heavy-
handed billing practices where clients, even after they had fired the respondent, were billed
excessive amounts for the preparation of letters demanding payment of fees. We have stated
that charging excessive fees is a serious matter:
[W]hether or not the fee charged is excessive is a question of public import; it has an impact on the availability of legal services to the public, the administration of justice, and, ultimately, reflects on the attorney's professional status. Excessive cost of legal service deters the public from using the legal system in the protection of rights. Matter of Gerard, 634 N.E.2d 51 (Ind. 1994) (citation omitted).
The respondent's billing of his clients for legal work done, but not shared with the clients, is equally distressing. In this case, his withholding of the work product completely divested his client of any benefit from the respondent's efforts. In order to demonstrate to the respondent and the bar that letterhead and billing practices such as utilized by the respondent are wholly inappropriate, we conclude that a suspension from the practice of law is warranted.
Accordingly, the respondent, James L. Schneider, is hereby suspended from the practice of law for a period of thirty (30) days, beginning May 17, 1999, at the conclusion of which he shall be automatically reinstated.
Converted from WP6.1 by the Access Indiana Information Network