Saturday, November 19, 2022

Senior Living

The Massachusetts Board of Bar Overseers has reprimanded an attorney for multiple rule violations in connection with an ancillary business.

According to a summary, Respondent represented an elderly client transitioning to her home after treatment for a serious fall

The respondent operated a business called Senior Living Services Group (“SLSG”), which provided elder care coordination services to the client and was affiliated with his law firm. The respondent provided the eldercare services to the client pursuant to an agreement that provided for SLSG to (1) coordinate with vendors who provided services to the client (such as home care vendors); (2) receive and pay the vendor’s invoices from funds the respondent held in trust for the client; and (3) pay the respondent as owner of SLSG a 20 percent administrative fee on each invoice paid (“SLSG Agreement”). SLSG had no employees and operated exclusively through the respondent and other employees of his law firm. These services constituted “law-related services” as defined by Mass. R. Prof. C. 5.7(a) and were thus subject to the Massachusetts Rules of Professional Conduct.

The SLSG Agreement was a business transaction between the client and the respondent in which the respondent obtained a pecuniary interest adverse to the client, as defined by Mass. R. Prof. C. 1.8. The terms of the SLSG arrangement were unfair and unreasonable to the extent that they permitted the respondent to collect a 20% administrative fee on any vendor invoice submitted regardless of the amount of the vendor bill or the amount of work performed by SLSG. The respondent failed to obtain his clients’ informed consent to the SLSG transaction in a writing containing the essential terms of the transaction; namely, the services to be covered by the SLSG 20% administrative fee versus the respondent’s legal fees; the respondent’s collection of the 20% administrative fee regardless of the amount of work performed by SLSG; and the potential conflicts of interest relating to the SLSG Agreement. In particular, the SLSG Agreement permitted the respondent to collect 20 percent on the home care vendor bills which ranged from $11,000 to $13,000 on a bi-weekly basis regardless of how much or little work SLSG performed.

Upon the respondent’s payment of vendor invoices, and upon the respondent’s payment to himself as SLSG, the respondent provided the client with invoices that failed to contain a statement of the balance of the client’s trust funds. Further, the invoices did not differentiate the amount paid to the vendors versus the amount paid the respondent as SLSG.

Additionally, the respondent charged the client at his hourly attorney rate for certain nonlegal services performed as power of attorney and certain eldercare coordination services that were redundant to services performed under the SLSG Agreement. These fees were clearly excessive.

After the client’s trust funds were exhausted, she terminated the respondent.

The reprimand was an agreed sanction

The respondent was admitted to practice in 1994 and had no prior disciplinary history. In mitigation, the respondent returned to the client all fees he collected (including those billed as legal fees and those billed through SLSG). Additionally, the respondent returned to the client all fees that respondent paid from the client’s accounts to the home care vendor.

(Mike Frisch)

Bar Discipline & Process | Permalink


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