The former office manager who blew the whistle on an Indianapolis lawyer disbarred recently by the Indiana Supreme Court said he paid a personal and professional price and endured threats from his ex-boss after reporting his egregiously unethical conduct.
“I let my integrity override my need for a paycheck, and my family suffered for it,” said the ex-office manager for David J. Steele who spoke to IL on condition he be identified only by his initials, J.B.
Meanwhile, a small firm that took Steele’s clients has managed to get most of the cases where they should be, an attorney said.
The Indiana Supreme Court disbarred Steele on Dec. 1 for stealing about $150,000 from his clients, systemically over-billing them, denying refunds, and “disclosing client confidences for purposes of both retaliation and amusement, threatening and intimidating his office staff (and) lying pervasively to all comers.”
J.B., father of two minor children, worked at Steele Legal Group for less than three months earlier this year. He arrived at the family law practice after he said Steele terminated former office staff who likewise objected to his conduct that the court called outrageous and repugnant. J.B.’s volatile tenure ended when Steele called him into his office over his mounting disagreements and conflicts arising from his boss’s behavior.
“He told me I was gone and never to speak of him again,” J.B. said. “He said if I did, he would make sure I never make it into law school and that I would never work in this town again.”
The meeting was short, and while J.B. was in the room, he said Steele reinforced the point. He “pulled out his gun and laid it on his desk.” J.B. said it was clear Steele was trying to intimidate him and keep him from speaking to the Disciplinary Commission. By this time, J.B. said, Steele already was the subject of a commission investigation triggered by an overdraft of his firm’s Interest on Lawyer Trust Account.
“He knew well I was going to the Disciplinary Commission,” J.B. said.
After his firing, J.B. said Steele spread false accusations to other lawyers and potential employers. Steele told them he’d fired J.B. for sex in the office with another man, and that J.B. stole client files and engaged in other unethical conduct.
“The reason why he fired me is he and I were arguing over what he was doing with that money,” and over Steele’s neglect of clients, among other things, J.B. said. J.B. contends that in the approximately 10 weeks he worked at the office, Steele came in just seven times, mostly to collect checks.
Steele’s attorney in his disciplinary proceeding, Kightlinger & Gray LLP senior partner Michael Brown, did not respond to messages seeking comment from him or his client.
J.B. now works as a paralegal at a small Noblesville firm, but he said the salacious lies Steele spread about him kept him from finding a legal job for about five months after he was fired. He said potential employers balked when they asked him to explain why he had been fired.
“No one wanted to believe me because (Steele) was an attorney and attorneys can do no wrong,” J.B. said. In one instance, J.B. said a firm had hired him, but he was terminated after Steele contacted the employer to spread the falsehoods.
In this way, Steele effectuated a threat he’d made to J.B. According to justices, Steele had warned him in a retaliatory text, “No one will ever hire you if (I) get disbarred for something you told them. You think lawyers want someone in their office who tried to get their last boss disbarred?”
Steele had been under emergency interim suspension since Sept. 4, when he tendered an affidavit consenting to discipline for eight counts alleging violations of rules of professional conduct. Justices adopted the allegations in the Disciplinary Commission’s verified complaint and “conclude(d) without hesitation that (Steele) should be disbarred.”The court identified 16 rule violations, from charging an unreasonable fee to lying to the commission. Steele had been licensed to practice since 2003 and had no prior disciplinary history.
Cody Cogswell is an attorney with CGS Legal Group LLP, which in August stepped in to take Steele’s cases. “We were led to believe he had some issues, but we did not appreciate or realize how bad it was,” Cogswell said. “The firm was neglected for well over a year.”
Cogswell said it’s possible more than $150,000 may have been misappropriated from clients. “It stressed our limits staff wise,” he said, but the firm was able to bring clients’ cases current. He said client records were scrutinized to determine the extent of overcharges, and his firm provided free service on those cases to make up what clients lost. He said lawyers and staff worked quite a few 70-hour weeks.
“Frankly, that’s what those people deserve,” he said. “At the end of the day, I get absolutely beside myself with the negative attorney stereotype. What better way to say, ‘We’re not really like this.’”
Since taking the cases in August, Cogswell said bills sent out in the last month were the first to include new hourly charges for Steele’s former clients whose funds were stolen, though he said some still have balances from the amounts they had paid to Steele for representation.
Justices wrote the scope and brazenness of Steele’s conduct was outrageous. “(R)ather than express any regret or remorse for his actions or the harm they have caused, (Steele) has proudly trumpeted his repugnant behavior as the raison d’etre of his practice.”
According to the discipline record, Steele typically charged clients a deposit of $2,500 to $3,500 at the beginning of a representation, then “vigorously enforced” impermissible non-refundable fee provisions. He “instructed his office staff to inflate billable hours and rates by a variety of means,” justices wrote.
“Numerous clients requested refunds of unearned fees,” the opinion says, “which (Steele) was unable to provide because he had stolen virtually all the funds contained within his trust account.” In other cases, Steele refunded portions of client fees with advance payments collected from other clients.
Steele’s disciplinary record reveals he pressured staff members to lie to clients and opposing counsel and retaliated against them when they refused. Among instances cited by the court, Steele encouraged his staff to falsely tell people he was at a hospital visiting with someone dying of cancer or that his dog had died.
The commission’s disbarment brief notes, “Not only is Steele compulsively dishonest, but he actively pressed his dishonesty on his staff as standard office policy. For example, Steele sent an email to (J.B.) stating, “(a) good office manager needs to lie once in a while. Especially working for me! (Former employees) told me that (they) ‘would not tell a lie.’ Man that pissed me off.”
The court wrote that Steele “made false statements to the Commission during its investigation that, by Respondent’s own description, were ‘virtually pathological in frequency and scope.’”
He also encouraged clients to lie about his legal skills, the court found. He incentivized clients to post positive Avvo ratings and punished people who posted negative reviews, responding to them with online comments that sometimes disclosed confidential information. The commission said Steele had more Avvo reviews than any Indiana lawyer. Of 46 reviews posted as of Dec. 3, 41 gave Steele the highest rating of five stars. The other five gave him the lowest possible rating, one star. His sometimes combative responses to those negative reviews contained remarks that disclosed client confidences.
Commission lawyers contacted Steele’s attorney when they learned Steele was sending threatening texts and emails to J.B. in an effort to dissuade him from cooperating with its investigation. According to the commission’s brief on disbarment, this only served to escalate Steele’s threats.
After contacted by the commission, Steele asked J.B. what would happen if he was disbarred. “Does that help you? All it will ensure is that (I) have nothing but spare time to seek vengeance,” he wrote, according to the record.
J.B., meanwhile, said he feels for law office staff and young associates who find themselves in similar dilemmas, torn between professional responsibility and the need to earn a living.
“I think it happens a lot more than people think,” he said.•