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Attorneys get public reprimand

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In a disciplinary action released by the Indiana Supreme Court today, the justices held that the text of a 2004 version of the Indiana Professional Conduct Rule 1.15(b), as reinforced by Comment 3, required attorneys to promptly distribute undisputed portions of funds they held for clients or third parties. The high court also ruled that an attorney's duty to produce documentation in complying with the duty to render a full accounting to a client includes a full accounting of the attorney's billing statements, including hours spent under hourly contracts.

In the case In the matter of Kevin W. Marshall; In the Matter of C. Jerome Smith, No. 45S00-0606-DI-218, the justices found attorneys Kevin Marshal and C. Jerome Smith, partners in the same firm, violated Professional Conduct Rule 1.15(b) (2004) by failing to promptly release to a client the funds he was owed. The Supreme Court imposed a public reprimand.

Marshall and Smith's client retained Marshall to bring a suit against two insurance carriers. Under the first contract he signed, the client was billed $150 an hour but no further payments were required if the lawsuit was unsuccessful. Marshall told the client in 2004 that he'd have to win at least $300,000 in a jury verdict to cover his legal expenses and had a new contingent contract drawn up. The second contract gave the firm one-third of the gross recovery.

The client received a jury verdict of $1 million; the client was owed $562, 235.62. The client didn't receive a prompt payment and asked for Marshall's billing hours statements. Marshall refused to provide those. Nearly six months after the verdict, the client received the amount he was owed.

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