Friday, November 30, 2012
In Virginia, judges usually appoint a law firm when it places an elderly or incapacitated person in a guardianship and that person has no one else to take care of them. This happened to Samuel and Jeanne Drakulich, who were placed in the guardianship of Needham, Mitnick and Pollack (NMP). The major problem with this model is that it can be quite expensive. So much so, that the Drakulich's and NMP are in a dispute turned lawsuit over "tens of thousands of dollars in billing" that NMP charged the couple to take care of them. According to the Washington Post, "NMP billed the Drakuliches $6,300 to prepare $1,800 worth of household items for auction, another ward $2,300 to sell a $4,000 car and a third person in their care $4,200 to recover $5,300 worth of investments." For daily expenses, NMP charged between $85 to $125 an hour. The Drakulichs argue that the amount of money that they are being charged is too much. NMP, however, asserts that the amount that the couple is being charged is their normal professional rate.
The problem for the Drakulichs stems from the fact that there is no cap or guidelines on the amount that NMP can charge. The only guideline is that fiduciaries are entitled to receive "reasonable" compensation. What makes matters more troubling is that professional guardians are not required to have any formal training, and the State of Virginia lacks of unified system to keep oversight over the firms it places in guardianship positions.
Recently the county's commissioner of accounts, the fiduciary watchdog that approves billings, told NMP to refund about $229,000 for expenses in seven different cases, including the Drakulich's case. In the case of Drakulichs, NMP argues that the fees they charged the Drakulichs was reasonable because of "the amount of work needed on cases with complicated family dynamics." Now, the Supreme Court of Virginia will hear this precedent setting case on how much a private firm can charge for guardianship duties. What shocked the family members of the different wards was that the firm was charging them $165,000 legal tab to defend itself.
See Justin Jouvenal, Guardianship Case in McLean Illustrates Lack of Regulation For Those Caring For The Elderly, The Washington Post, Nov. 29, 2012.
Special thanks to Lewis J. Saret (Attorney at Law, Washington D.C.) and Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.
In response to this posting, the law firm of Needham Mitnick & Pollack submitted the following response:
Our firm, Needham Mitnick & Pollack, has served as guardian and conservator in numerous cases over the last 20 years, including many pro bono cases. We take our responsibilities seriously, as evidenced by our reputation in the community. We also take seriously the misleading reporting by The Post in this article.
What was not stated in the article is that both an independent court investigator and the judge reviewed all of our bills for seven years of work and concluded that all of our time was reasonable and that the services performed were necessary, appropriate, proper and of value to the wards.
To illustrate just one problem with the story, the article’s closing implied that our goal was to deplete the Drakuliches’ estates of all assets. However, when Jeanne Drakulich died in December 2010, there was more than $379,000 in her estate and all four Drakulich children asked our firm to serve as administrator of her estate.
By not providing a balanced story, The Post has done a disservice to the valuable work performed by the elder law community.