Insurers, defense counsel, lecturers all tell us that attorney fee suits, and threats, are a major source of discipline and legal malpractice litigation. Here is yet another example.
"When a client hesitated over paying his bill, Richard Ledingham threatened her with criminal prosecution for "theft of services" and he didn’t stop there: He also warned that she might lose her business, her home and her professional license.
Those actions — all to collect a fee judged to be exorbitant — are cause for suspending the River Vale solo from practice for three months, says New Jersey’s Disciplinary Review Board.
Despite an ethics committee’s call for a reprimand and Ledingham’s lack of prior discipline in 25 years of practice, the board sought suspension "insomuch as he threatened his client’s ruination in all aspects of her life, even including her ability to provide for her children."
In its opinion issued Monday, In re Richard Ledingham, DRB 06-235, the board noted Ledingham’s failure to appear at the District IIA Ethics Committee hearing below, his lack of contrition and his attempt to collect "a grossly excessive fee."
According to the opinion, Ledingham billed his client Karen Ferwerda $52,742 for representing her in the purchase of a Sylvan Learning Center franchise in December 2003. When Ferwerda retained him in June 2003, Ledingham agreed to send monthly invoices but never did do until the purchase closed.
Ledingham’s work for Ferwerda was not extensive, the DRB found. He reviewed documents for a Small Business Administration loan for which she was approved but did not pursue. He reviewed a lease agreement but did not negotiate the terms. And he looked over the Sylvan franchise agreement, which was presented to her as a "take-it-or-leave-it" deal.
Ledingham, also a certified public accountant, charged Ferwerda $175 an hour. But his charges included 47 hours for studying a four-page section of the Internal Revenue Code §197, which deals with amortization of intangibles. "