On review from the report of the Grievance Commission of the Supreme Court of Iowa.
The opinion of the court was delivered by: Appel, Justice.
The Grievance Commission of the Supreme Court of Iowa filed a report recommending that an attorney receive a public reprimand for a violation of the Iowa Rules of Professional Conduct. LICENSE
The Iowa Supreme Court Attorney Disciplinary Board alleged the respondent, Patrick Alex Henrichsen, violated Iowa Rule of Professional Conduct 32:8.4(c) by depositing earned fees into his personal bank account instead of the firm's account as directed by an agreement of the firm's shareholders. The Grievance Commission of the Supreme Court of Iowa filed a report recommending a public reprimand. Pursuant to our court rules, we are required to review the commission's report. See Iowa Ct. R. 35.11(1). Upon our de novo review, we suspend Henrichsen's license to practice law indefinitely with no possibility of reinstatement for a period of three months.
Our review of attorney disciplinary proceedings is de novo. Iowa Supreme Ct. Att'y Disciplinary Bd. v. Johnson, 792 N.W.2d 674, 677 (Iowa 2010). The Board must prove an attorney's ethical misconduct by a convincing preponderance of the evidence. Iowa Supreme Ct. Att'y Disciplinary Bd. v. Templeton, 784 N.W.2d 761, 763 (Iowa 2010). We will respectfully consider, but are not bound by, the commission's findings of fact, conclusions of law, and recommended sanction. Iowa Supreme Ct. Att'y Disciplinary Bd. v. Axt, 791 N.W.2d 98, 101 (Iowa 2010). Once the Board has proven an attorney's misconduct, we may impose a "lesser or greater sanction than the discipline recommended by the grievance commission." Iowa Supreme Ct. Bd. of Prof'l Ethics & Conduct v. Lett, 674 N.W.2d 139, 142 (Iowa 2004) (citation and internal quotation marks omitted).
II. Factual and Procedural Background.
Henrichsen has been licensed to practice law in Iowa since 2000. Henrichsen practices primarily in the areas of real estate, estate planning, and taxation, although he also helps new small businesses form business entities. Outside of his practice, Henrichsen has volunteered with Habitat for Humanity, participates in charitable activities organized by his church, teaches Sunday school, and coaches soccer. Although Henrichsen is now a solo practitioner, we are concerned with his conduct at his former law firm.
In 2008, he became the fourth shareholder in a law firm organized as a professional corporation in West Des Moines. Clients would frequently address checks for legal services to a particular attorney at the firm. Pursuant to an agreement of the shareholders, each attorney was required to give all earned fees to the firm's bookkeeper for deposit into the firm's general account. The four shareholders drew equal salaries from the firm every two weeks. At the end of each fiscal quarter, the remaining funds in the general operating account were distributed to the members as deferred earnings based upon a formula that took into account overhead costs and the different quarterly earnings of each shareholder. Accordingly, each member would receive a share of the quarterly distribution proportionate to the revenue for which he was responsible.
In fall 2010, the bookkeeper began to notice that Henrichsen had not given her any checks from the Iowa Finance Authority for some time. These checks, which were commissions for title guarantee work, usually came each month. At some point thereafter, the other shareholders at the firm asked the bookkeeper to investigate Henrichsen's billing records and receipts. The bookkeeper reported that there may have been clients from which the firm never received fees. The other shareholders confronted Henrichsen, who admitted to depositing the checks into his personal account. The other shareholders and Henrichsen estimated that Henrichsen failed to deposit $10,000 into the firm's general account. The record confirms that Henrichsen withheld at least this amount between April 2008 and September 2010 in matters related to real estate, estate planning, and taxation. Henrichsen and the other shareholders mutually agreed that it would be best if Henrichsen left the firm. Henrichsen and the firm settled their financial matters internally during the separation process. Henrichsen then started his own practice.
The firm also investigated whether Henrichsen's actions affected any ongoing client matters. An audit performed by an outside accountant did not reveal any irregularities in its client trust accounts. Further, they confirmed that Henrichsen's actions did not affect regularly billed clients or cause any client to be billed more than once for the same legal work. Thus, the firm verified that Henrichsen's actions only pertained to accounts receivable and did not affect any of its clients.
In October 2010, Henrichsen wrote a letter to the Board reporting his actions. In his letter, Henrichsen stated he did not know why he deposited the fees into his personal account. At the hearing on this matter in June 2012 before the commission, Henrichsen testified that he and his counselor believe he has control issues. Henrichsen also testified that he did not spend the funds. Following the hearing, the commission recommended that Henrichsen receive a public reprimand.
Iowa Rule of Professional Conduct 32:8.4(c) prohibits a lawyer from engaging in "conduct involving dishonesty, fraud, deceit, or misrepresentation." Iowa R. Prof'l Conduct 32:8.4(c). It is virtually identical to its predecessor, DR 1-102(A)(4). See Iowa Code of Prof'l Responsibility for Lawyers DR 1-102(A)(4). We held on numerous occasions that a lawyer violated DR 1-102(A)(4) by depositing receivables intended for the firm into a personal bank account. See Iowa Supreme Ct. Att'y Disciplinary Bd. v. Isaacson, 750 N.W.2d 104, 108-09 (Iowa 2008); Iowa Supreme Ct. Bd. of Prof'l Ethics & Conduct v. Irwin, 679 N.W.2d 641, 644 (Iowa 2004); Iowa Supreme Ct. Bd. of Prof'l Ethics & Conduct v. Huisinga, 642 N.W.2d 283, 286-87 (Iowa 2002); Iowa Supreme Ct. Bd. of Prof'l Ethics & Conduct v. Schatz, 595 N.W.2d 794, 796 (Iowa 1999); Iowa Supreme Ct. Bd. of Prof'l Ethics & Conduct v. Carr, 588 N.W.2d 127, 129 (Iowa 1999); Iowa Supreme ...