Saturday, November 21, 2009

Bait-And-Switch Tactics Merit Suspension

The Illinois Review Board has recommended a five-month suspension in a matter involving an attorney who handled real estate closings. The attorney had failed to disclose his financial interests in survey and title companies used in the transactions. He had widely advertised for business and the bar matters involved the complaints of four unhappy clients, who had paid more than they thought they were going to. At the hearing, the Administrator presented the testimony of a real-estate expert, who stated that disclosure was required and that the attorney's reputation was "uniformly poor."

The Hearing Board had found misconduct but rejected false advertising charges. The review board disagreed:

Unlike the Hearing Board, we conclude that the Respondent's advertisements were textbook examples of false or misleading advertising. The Respondent promised a low fixed legal fee for closing services but did not honor that promise. The advertisement received by Thomas Britain offered "Complete Start to Finish Closing Services at One Affordable Low Fee Including Buyer/Seller negotiations thru closing, Contract Review, Survey Order, Title Order and Review, Complete Document Preparation, Schedule and attend closing as your legal representative." The only reasonable interpretation of this statement is that the listed services were included in the Respondent's "one affordable low fee." The Respondent, however, charged Britain extra for title review and preparation of a power of attorney.

The Respondent contends that some of the listed services were included in his legal fee, while others were not. The advertisement does not support the Respondent's interpretation. There is absolutely nothing on the face of the advertisement that would alert clients to the fact some of the listed services were not included in the "one affordable low fee" or differentiate between the services that were included and those that were not. In an effort to generate business, the Respondent's advertisement materially misrepresented the amount of his fee and omitted facts that would be necessary for a client to ascertain what services were included in the Respondent's legal fee.

The advertisements received by John Gedwill and Douglas Conway were similarly misleading. Both advertised a low legal fee and listed numerous services related to real estate closings that the Respondent's firm purportedly did for a "fixed legal fee" that was "considerably less" than other law firms. A reasonable person reading these advertisements would be led to believe that the legal fee included the listed services. The advertisements did not inform Gedwill or Conway that the low legal fee did not include title review or preparation of a power of attorney and that they would be charged additional fees for those services. For these reasons, the advertisements sent to Gedwill and Conway violated Rule 7.1 as well.

The Hearing Board's finding that the Respondent and his clients had meaningful discussions about his fees does not remedy the false and misleading nature of the advertisements. Any subsequent communications do not alter the fact that the Respondent used improper advertisements to attract business that otherwise may have gone to another attorney. The Rules of Professional Conduct do not allow such "bait and switch" practices.

The review board found that an aggravating factor was that, as a result, the clients were more distrustful of the legal profession. (Mike Frisch)

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