Taking Accountability Over Accounts: Familial Relationship Is No Excuse

The Supreme Court of Ohio recently released an opinion the sanctions to be imposed on two attorneys for their violations of several rules of professional conduct, including Professional Conduct Rules 1.5(a) (excessive fees), 1.15(a) (holding client funds in interest-bearing account with a clear fiduciary title), 1.15(a)(2) (maintenance of complete records of accounts with client funds), and 1.15(a)(5) (monthly reconciliations of accounts with client funds).

In this case, the attorneys—along with their client—were signatories on a special account set up by the firm as the client’s primary vehicle for managing her money. A third attorney, the father of the two signatory-attorneys, was primarily responsible for preparing accountings on the special account. The account did not bear interest, was not designated as a fiduciary account, and was not reconciled on a monthly basis. The attorneys also failed to maintain complete and accurate records on the account. The issue that received most of the court’s attention, however, was the charging of excessive legal fees. The client was essentially charged separate attorney fees, some of which were paid through the special account, for nonlegal services and was charged twice for several services. Additionally, unbeknownst to the two attorneys appearing in this case, some of the attorney fees were paid directly to their father.

The attorneys argued that their father was the “mastermind” behind the excessive fees and that they were “restrained from acting in the best interests of their client, at least in part, because of the familial relationship.” The Ohio Supreme Court declined to accept such a “family relations” excuse and declared that neither case law nor professional conduct rules offer an exception for situations where an attorney is complicit in a relative’s conduct. Ultimately, the court emphasized the responsibility that attorneys have to act in the best interests of their clients, even when that would require preventing the actions of relatives. The court concluded that because both attorneys had a fiduciary responsibility to oversee the special account and because their “collective silence…by their failure to oversee the special account was vital to their father’s success in overcharging,” both were ultimately responsible for the charging of excessive fees. The court therefore ordered both attorneys to pay restitution.

Leave a Reply

Your email address will not be published. Required fields are marked *