Court-Appointed Guardians Fleece Vulnerable Clients

It was 10:30 p.m., and my friend and I, both young lawyers, were taking the subway home after another unrewarding night defending people in small claims court.

My friend, who like me didn't want to spend the next 30 years slugging it out on lower Broadway, confided with a smile that his days in the trenches might be over.

His father, also a lawyer, had spoken to a Brooklyn judge and chances were good that my friend would be appointed the guardian for a legally incapacitated, elderly person who was about to become a ward of the court. He described it as a "deep hook." Once he was appointed guardian to a ward of the court, he said, his "ship will have come in."

Like people who run personal injury clinics and see the no-fault automobile insurance mandated in most states as an easy opportunity to make $50,000 for every injured person who walks through their door, there is a group of politically connected lawyers who view the guardianship laws enacted in most states as an opportunity to fleece these vulnerable clients of hundreds of thousands of dollars.

The kinds of abuses that have recently come to light are those that can occur only if the lawyer's client is unaware of his environment. Unfortunately, this is usually the case when the client in question needs to have a lawyer appointed his guardian. They include a bill with $1,275 attributed to unspecified "administrative tasks"; a $37.50 charge for a two-minute voicemail message; a cumulative overcharge of $82,000; and a charge of $850.00 incurred while the lawyer visited his client to celebrate her birthday. And then there is the Holocaust survivor who was relieved of more than one-third of his $900,000 life savings with a single lawyer bill.

The oversight of lawyers acting as guardians is the responsibility of judges, who must approve the lawyer's bill before the lawyer can get paid. But judges regularly approve bills that include such outrageous fees as a $400 hourly rate for reconciling a bank statement. Once the lawyer's bill is approved, he can write himself a check out of his ward's bank account. Unlike any other type of case, in which the client is aware of what is happening around him and can know if the lawyer has actually performed the work for which he bills, the guardianship of the elderly or incapacitated rarely involves the "client oversight" that lawyers are slowly getting used to.

How lucrative is appointment as a guardian? It's lucrative enough that a few years ago, two Brooklyn lawyers did the unthinkable. They actually complained in writing to their local Democratic Party boss that they had provided their legal services to the party's local law committee in exchange for guardianship appointments that had failed to materialize. Their reasons for taking such a risk become clear when you see the potential for huge profitability in a guardianship.

Consider that in an average year, top-billing lawyers at medium and large firms, charging about $195 an hour, bill for about 2,000 hours. That equates to a total annual billing of about $390,000, for all clients. In recent years, lawyers appointed as legal guardians have been known to bill as much as $400,000 in one year from their one client --- the elderly or incapacitated person whose interests they were appointed to protect. At a similar hourly rate, an annual bill of $400,000 means that the lawyer is allegedly spending every waking minute in the service of a single client.

The judges who approve these fees appear to now be wising up. Last year, a guardian for an elderly man in Manhattan had her $300,000 bill reduced to just $31,000. But despite the court's new attempts at vigilance, there are still plenty of unethical lawyers who are, amazingly, still being appointed guardians. Last year, a Washington state lawyer disciplinary committee was charged with deciding whether to disbar, or temporarily suspend, a lawyer who stole client funds and hid money in his client trust account to avoid payment of court-ordered child support. In its decision to suspend, it found that despite these acts of complete dishonesty -- crimes, actually -- the lawyer was still fit to act as a guardian.

Matt Hayes began practicing immigration law shortly after graduating from Pace University School of Law in 1994, representing new immigrants in civil and criminal matters. He recently left the New York City law practice he founded in 1997 for the "more normal life" of insurance defense, and is co-author of  The New Immigration Law and Practice, a textbook to be pubished by West Legal Publications  in October, 2003.

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