KBA CONTINUES TO CLOSELY REVIEW COMPLAINTS AGAINST FEE BILLS OF INDIVIDUAL ATTORNEYS AND SMALL LAW FIRMS. WE CAN’T FIND EVIDENCE OF THE REVIEW OF BILLING PRACTICES OF INSURANCE DEFENSE LAWYERS BY KBA.

Kentucky Bar Ass’n v. Greene, 386 S.W.3d 717 (Ky., 2012) November 21, 2012

As a result of the above conduct on March 16, 2009, Carneal and his current wife filed a bar complaint against Respondent pertaining to Respondent’s representation of him. On July 21, 2009, the Inquiry Commission filed a four-count charge against the Respondent alleging the following violations: (I) SCR 3.130–1.9(a) (conflict in representation with a former client for representing Potter in a custody dispute against his former client Carneal); (II) SCR 3.130–1.2(d) (scope of representation); (III) …

We agree with the Board that Respondent’s representation of Carneal in the 2007 temporary custody case and Potter in the 2008 de facto custody case did not violate SCR 3.130–1.9(a). This rule provides that “A lawyer who has formerly represented a client in a matter shall not thereafter represent another person in the same or a substantially related matter in which that person’s interests are materially adverse to the interests of the former client unless the former client gives informed consent, confirmed in writing.”

Nevertheless, there was evidence before the trial commissioner supporting Respondent’s testimony that he performed fourteen to sixteen hours of work on the Foster case. Obviously a fee of $2,000.00 for this amount of work (less than $150.00 per hour) is not unreasonable, particularly considering the extraordinary efforts made to accommodate Foster during her initial, highly distraught, visit to the office. Nor would a $2,000.00 advance retainer for this type of case be unreasonable given the circumstances presented. By depositing of the funds directly into his office account rather than his client escrow account, Respondent committed a violation. That violation was, however, mooted in the short time it took Respondent to perform services that earned the fee.
“The burden of proof shall rest upon [Bar Counsel] in a disciplinary proceeding, and the facts must be proven by a preponderance of the evidence.” SCR 3.330. Because Bar Counsel failed to present any testimony to refute Respondent’s evidence, the alleged violation was not proven by a preponderance of the evidence. As such, based upon the evidence presented at the evidentiary hearing as discussed above, we determine that Respondent did not charge an unreasonable fee in violation of SCR 3.130–1.5(a) and he did not fail to return an unearned fee in violation of SCR 3.130–1.16(d). The brief comingling of client funds with the law firm’s funds (SCR 3.130–1.15(a)) was of such duration that we agree with the Board’s conclusion that discipline is not warranted.

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