Attorney reprimanded for charging unreasonable fees

Back to TopCommentsE-mailPrintBookmark and Share

The Indiana Supreme Court has publicly reprimanded a Hamilton County attorney for violating Indiana Professional Conduct Rule 1.5(a) by making agreements for and charging unreasonable fees.

The justices released a per curiam opinion Feb. 11, In the Matter of Heather McClure O'Farrell, No. 29S00-0902-DI-76, in which the majority chose the discipline based on Heather McClure O'Farrell’s lack of prior disciplinary history and her cooperation with the Disciplinary Commission. Chief Justice Randall T. Shepard and Justice Robert Rucker joined in a dissent to the sanction. Because O'Farrell’s lawyer indicated that she is unrepentant, the dissenting justices believe a period of suspension without automatic reinstatement should have been instituted to protect clients.

McClure & O’Farrell, where O'Farrell practices, uses an “Hourly Fee Contract” or a “Flat Fee Contract” most of the time when it represents a party in a family law matter. Both contracts contain a provision for a nonrefundable “engagement fee.” The Disciplinary Commission alleged that O'Farrell improperly charged two clients these nonrefundable engagement fees and didn’t refund unearned fees after the representations ended.

The justices examined the various types of fee arrangements and the nonrefundability of fees. O'Farrell argued that the nonrefundable fees she charged the two clients were justified because by representing these clients, the law firm couldn’t represent opposing parties and it required time that the firm could have otherwise devoted to other representations. But this would be true anytime an attorney is engaged by a client, the opinion said.

They determined that the fees at issue are flat fees for work to be performed. O'Farrell failed to tell her clients that the flat fee could be refundable upon the failure to perform the agreed legal services; instead, she told her clients the fee was nonrefundable even if the client-attorney relationship ended before the completion of the attorney’s representation.

“The presence of this contract provision, even if unenforceable, could chill the right of a client to terminate Respondent's services, believing the Law Firm would be entitled to keep the entire flat fee regardless of how much or how little work was done and the client would have to pay another attorney to finish the task. We conclude that Respondent violated Rule 1.5(a) by including an improper nonrefundability provision in her flat fee agreements,” said the opinion.

They also found she violated the rule by charging and collecting flat fees that were nonrefundable, regardless of the circumstances.

“The Court is mindful of the legitimate concern of attorneys that they will go through the initial steps of opening a case and beginning work for a new client, only to have that client discharge them and demand a refund of the entire initial payment as unearned. The solution, however, is not allowing attorneys to charge flat or advance fees upfront that are wholly nonrefundable regardless of the amount of services rendered,” wrote the justices.

They decided based on the record they weren’t able to hold that some amount of the flat fee must be returned in all cases in which the attorney-client relationship ends before the work contracted for is completed. They also were unable to determine how much, if anything, O'Farrell should have refunded to the two clients, so they found the Disciplinary Commission didn’t meets its burden of proof that she violated Rule 1.16(d).


  • Consistent
    If I recall, Tony Zirkle did not cooperate in the disciplinary process.
  • consistent or not?
    is this consistent with the punishment laid on Tony Zirkle or was he punished more severely? And why?

Post a comment to this story

We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
You are legally responsible for what you post and your anonymity is not guaranteed.
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in Indiana Lawyer editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
Subscribe to Indiana Lawyer
  1. Lori, you must really love wedding cake stories like this one ... happy enuf ending for you?

  2. This new language about a warning has not been discussed at previous meetings. It's not available online. Since it must be made public knowledge before the vote, does anyone know exactly what it says? Further, this proposal was held up for 5 weeks because members Carol and Lucy insisted that all terms used be defined. So now, definitions are unnecessary and have not been inserted? Beyond these requirements, what is the logic behind giving one free pass to discriminators? Is that how laws work - break it once and that's ok? Just don't do it again? Three members of Carmel's council have done just about everything they can think of to prohibit an anti-discrimination ordinance in Carmel, much to Brainard's consternation, I'm told. These three 'want to be so careful' that they have failed to do what at least 13 other communities, including Martinsville, have already done. It's not being careful. It's standing in the way of what 60% of Carmel residents want. It's hurting CArmel in thT businesses have refused to locate because the council has not gotten with the program. And now they want to give discriminatory one free shot to do so. Unacceptable. Once three members leave the council because they lost their races, the Carmel council will have unanimous approval of the ordinance as originally drafted, not with a one free shot to discriminate freebie. That happens in January 2016. Why give a freebie when all we have to do is wait 3 months and get an ordinance with teeth from Day 1? If nothing else, can you please get s copy from Carmel and post it so we can see what else has changed in the proposal?

  3. Here is an interesting 2012 law review article for any who wish to dive deeper into this subject matter: Excerpt: "Judicial interpretation of the ADA has extended public entity liability to licensing agencies in the licensure and certification of attorneys.49 State bar examiners have the authority to conduct fitness investigations for the purpose of determining whether an applicant is a direct threat to the public.50 A “direct threat” is defined as “a significant risk to the health or safety of others that cannot be eliminated by a modification of policies, practices or procedures, or by the provision of auxiliary aids or services as provided by § 35.139.”51 However, bar examiners may not utilize generalizations or stereotypes about the applicant’s disability in concluding that an applicant is a direct threat.52"

  4. We have been on the waiting list since 2009, i was notified almost 4 months ago that we were going to start receiving payments and we still have received nothing. Every time I call I'm told I just have to wait it's in the lawyers hands. Is everyone else still waiting?

  5. I hope you dont mind but to answer my question. What amendment does this case pretain to?