‘Free Consultation’ Offer Is Misleading if Part of Meeting Quietly Becomes Billable

By Joan C. Rogers  

The Ohio Supreme Court Dec. 3 reprimanded the owner of a law firm for offering a “free consultation” on the firm's website without disclosing that billing would begin even during the initial meeting once the prospective client signed a fee agreement (Cincinnati Bar Ass'n v. Mezher, Ohio, No. 2012-0684, 12/3/12).

In an opinion by Justice Judith Ann Lanzinger, the court also decided that another lawyer in the firm violated his obligation to explain the basis of his fee by not clearly communicating this limitation on free consultations during his initial meeting with clients. That lawyer, too, received a public reprimand.

Silent Meter Started Running.

The disciplinary proceeding targeted Kathleen D. Mezher and Frank E. Espohl, who practice together in the Law Offices of Kathleen Mezher & Associates LLC in Cincinnati.

A potential client, Stephanie Mahaffey, contacted the firm and set up an appointment to talk about her mother's estate. She was aware that the firm's website advertised free consultations, the court said.

Mahaffey, her husband, and her sister Jessica Burns met with Espohl. During the consultation, Burns signed a retainer agreement and left original documents with Espohl. About three weeks later, she asked for the documents back, saying the family no longer wished to retain the firm.

When Burns arrived to pick up the materials, she was presented with an invoice that included a $250 charge for “ATTY--CONFERENCE” on the day of the sisters' meeting with Espohl. Burns questioned the bill, and this disciplinary proceeding followed.

The complaint alleged that Mezher and Espohl committed misconduct by charging a client for an initial consultation that was advertised as free on the firm's website and by failing to adequately inform the client about the basis of the fee to be charged. A hearing panel and the disciplinary board recommended that the two lawyers be publicly reprimanded--Mezher for violating Ohio Rule of Professional Conduct 7.1 (communications about lawyer's services), and Espohl for violating Rule 1.5(b) (duty to explain basis or rate of lawyer's fee).

The supreme court adopted those findings and publicly reprimanded both lawyers.

Must Disclose Limitation.

The panel and board credited Espohl's account of what happened during the meeting with the two sisters. He said that in an initial segment of the meeting, he reviewed their mother's will and trust, explained the probate process, and answered their questions. They agreed to hire the firm, and Burns signed the fee agreement because she had been named executor in her mother's will.

Espohl testified that the sisters wanted to get started immediately, and that after the fee agreement was signed the meeting with the sisters continued for approximately an hour, during which time he reviewed the will and trust, researched real estate deeds, and answered additional questions.

According to Espohl, the sisters were billed only for the second portion of the meeting, in keeping with the firm's unwritten policy that although no fee would be charged for a free consultation, the free consultation ended when the prospective client either left without engaging the firm or hired the firm by signing a fee agreement.

Mezher adopted this policy as owner of the firm and conveyed it to associates, the court noted. It agreed with the hearing panel and the board that she violated Rule 7.1 by failing to include on the firm's website any information as to when the law firm would begin to charge for its services.

“The advertisement was misleading because it omitted a key piece of information--the free consultation ended (and billing began) with the signing of the fee agreement.”
Ohio Supreme Court

Rule 7.1 prohibits lawyers from making a false or misleading communication about themselves or their services, including communications that omit a fact necessary to make the statement, considered as a whole, not materially misleading. “The advertisement was misleading because it omitted a key piece of information--the free consultation ended (and billing began) with the signing of the fee agreement,” Lanzinger explained.

This incomplete advertising was similar, the court found, to the misconduct in two other cases in which lawyers were disciplined for advertising that there would be no fee if there was no recovery without disclosing that clients would still be responsible for paying costs.

Although the court held Mezher responsible for the misleading advertisement, it concluded that the charge against Espohl for violating Rule 7.1 must be dismissed, as he was not shown to have any control over the advertising on the firm's website.

Must Explain When Billing Starts.

The court concluded that Espohl violated Rule 1.5(b) by not informing the sisters that their free consultation ended when they signed the fee agreement.

Rule 1.5(b) requires a lawyer to communicate to a client “the basis or rate of the fee” for which the client will be responsible. “Thus, an attorney must inform the client when the representation and chargeable events commence,” the court stated.

Most nonlawyers, the court said, would view Espohl's meeting with the sisters as a continuous consultation rather than a free consultation followed by a billable attorney conference. Although Espohl viewed the signing of the fee agreement as the line of demarcation, nothing in the fee agreement alerted the sisters that their free consultation was over, nor did Espohl advise them of that fact, Lanzinger said.

With regard to Mezher, the court concluded that the charge of violating Rule 1.5(b) must be dismissed because she had no contact with the sisters and did not participate in preparing their bill.

The court found that a public reprimand was an appropriate sanction for both lawyers in light of their otherwise clean disciplinary records, cooperative attitude, and demonstrated good character, although they failed to make timely restitution. Mezher rectified the problems with the firm's website and modified her fee agreements, the court noted.

Dissent: Drop Charges.

In a dissenting opinion joined by Justice Paul E. Pfeifer, Justice Evelyn Lundberg Stratton argued that the lawyers acted in good faith and made at most a “communication error,” and that it was unreasonable for the clients to expect free work after retaining the firm.

In any event, the standards the majority announced in its opinion for advertising free consultations should apply prospectively only, because those standards had never previously been made clear, the dissenters contended.

James F. Brockman of Lindhorst & Dreidame, Cincinnati, and Katherine C. Morgan, also of Cincinnati, represented the Cincinnati Bar Association.

Thomas W. Condit, Cincinnati, and Michael B. Mezher Jr. of Kathleen Mezher & Associates, Cincinnati, represented Kathleen Mezher. Frank Espohl, Kathleen Mezher & Associates, represented himself.

Full text at http://op.bna.com/mopc.nsf/r?Open=kswn-92nnyw.

The ABA/BNA Lawyers’ Manual on Professional Conduct is a joint publication of the American Bar Association Center for Professional Responsibility and Bloomberg BNA.

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