In re Phillips: Indiana Supreme Court Establishes CPA-Monitored Probation as the Default Sanction for Trust-Account Mismanagement and Unreasonable Estate Fees

Introduction

The decision in In the Matter of Christopher Paul Phillips, Supreme Court of Indiana, Case No. 25S-DI-49 (31 July 2025) marks a significant development in Indiana’s attorney-discipline jurisprudence. The respondent, attorney Christopher Phillips, faced allegations of (i) charging exorbitant and undisclosed fees in two probate matters and (ii) mishandling client funds in his trust account. The Indiana Supreme Court accepted a Conditional Agreement for Discipline that imposed a 180-day suspension—120 days to be actively served and the remainder stayed—conditioned upon a three-year period of probation monitored quarterly by a certified public accountant (CPA).

While fee disputes and trust-account issues are recurring themes in disciplinary cases, the Court’s express endorsement of mandatory CPA monitoring as part of stayed suspension represents a notable clarification of the sanctions framework, effectively signaling that such supervision will be the presumptive remedy whenever record-keeping deficiencies accompany client-fund mismanagement.

Summary of the Judgment

• Misconduct Found: Violations of Indiana Rules of Professional Conduct 1.3, 1.5(a), 1.5(b), 1.15(a), and 8.4(c), plus Admission & Discipline Rule 23(29)(a).
• Sanction: 180-day suspension commencing 11 September 2025, with 120 days active and 60 days stayed, subject to a minimum 3-year CPA-monitored probation.
• Restitution/Remediation: Respondent repaid over \$100,000, transferred an \$85,000 vehicle, and settled civil suits with both estate clients.
• Costs: \$259.64 assessed against Respondent for investigative expenses and court costs.
• Court’s Rationale: Seriousness of overbilling and dishonesty outweighed by absence of prior discipline, remedial payments, and completion of trust-account training.

Analysis

A. Precedents Cited

The principal precedent invoked is Matter of Keckley, 254 N.E.3d 1062 (Ind. 2025). In Keckley, the attorney similarly overcharged heirs, failed to keep trust-account records, and later made significant restitution. The Court approved a 120-day active suspension coupled with probation. By paralleling the sanction in Keckley, the Court in Phillips confirms and effectively cements the Keckley model:

1. Moderate active suspension (≈ 4 months) for first-time offenders;
2. Extended probation (≥ 3 years);
3. Mandatory external oversight—now explicitly a CPA rather than a mentor-attorney.

Other sources shaping the analysis include:

• Indiana Rules of Professional Conduct—particularly Rules 1.5 (fees), 1.15 (safekeeping property), and 8.4(c) (dishonesty).
• Admission & Discipline Rule 23—detailing record-keeping obligations and probationary mechanics.

B. Legal Reasoning

The Court followed its customary four-step disciplinary methodology:

1. Determine Rule Violations. The absence of written fee agreements, self-authorized withdrawals in supervised estates, and false statements concerning a statutory 40% fee collectively breached Rules 1.5 & 8.4(c). Prolonged inactivity on the estates constituted a Rule 1.3 violation, while failure to maintain ledgers and source documentation violated Rule 1.15(a) and Adm.&Disc. R. 23(29)(a).
2. Assess Aggravators & Mitigators. Aggravating factors—dishonesty, selfish motive, multiple victims, and duration (2021-24). Mitigators—no prior discipline, completion of trust-account training, full restitution.
3. Select Appropriate Sanction. Looking to Keckley, the Court treated restitution and remedial education as weighty mitigators while still emphasizing public protection. A 120-day active suspension preserves deterrence; stayed suspension plus probation incentivizes continued compliance.
4. Craft Probationary Conditions. The Court ordered CPA monitoring with quarterly reporting, revocable at the Commission’s discretion. These tailored conditions aim at preventing recurrence by addressing deficient accounting practices.

C. Likely Impact of the Decision

1. Standardization of CPA Monitoring. Prior cases occasionally required outside audits, but Phillips makes CPA monitoring the centerpiece of probation where trust-account violations coincide with unreasonable fees. Expect disciplinary counsel to propose—and hearing officers to recommend—similar CPA conditions in future cases.

2. Estate-Practice Guidance. Probate lawyers are on notice that: (i) self-approved fee withdrawals are impermissible in supervised estates, (ii) any contingent-style percentage must be based on written agreement, (iii) court approval for distributions is mandatory.

3. Enhanced Restitution Incentives. By explicitly crediting restitution and asset transfers (e.g., signing over an \$85,000 vehicle) as mitigating, the Court reinforces the pragmatic message—fix the harm promptly to avert harsher discipline.

4. Procedural Efficiency via Conditional Agreements. The opinion showcases Rule 23(12.1)(b) “Statement of Circumstances and Conditional Agreement for Discipline” as an expedient alternative to trial. Mutual settlements that package restitution + education + monitoring are likely to proliferate.

Complex Concepts Simplified

• Supervised Estate. A probate proceeding in which the court retains close oversight. Attorney fees and distributions generally require prior judicial approval.
• Trust (IOLTA) Account. A bank account where client or third-party funds are held separate from the lawyer’s own money, with detailed ledgers for each client.
• Conditional Agreement for Discipline. A negotiated settlement between the lawyer and the Disciplinary Commission that the Supreme Court must approve. If approved, it bypasses a contested hearing.
• Active vs. Stayed Suspension. The attorney is barred from practice during the active portion; the stayed portion remains suspended but not served unless further misconduct or probation violation occurs.
• CPA-Monitored Probation. A disciplinary condition requiring a certified public accountant to audit and report on a lawyer’s trust-account activity, ensuring compliance with record-keeping rules.

Conclusion

In re Phillips crystallizes a modern template for addressing egregious fee inflation and sloppy or dishonest trust-account practices: a short but meaningful active suspension, restitution, trust-account education, and—most importantly—rigorous CPA oversight during a lengthy probation. The ruling harmonizes with Keckley yet pushes the envelope by treating CPA monitoring as a default rather than discretionary tool. Probate practitioners and all Indiana attorneys should heed the Court’s unmistakable signal: meticulous record-keeping, transparent fee agreements, and candor with clients are non-negotiable pillars of ethical practice. Failure to honor them will now predictably trigger CPA-supervised probation in addition to suspension.