The Tennessee Supreme Court has affirmed the 60-day suspension of Brentwood attorney Michael Gibbs Sheppard from the practice of law.

Mr. Sheppard's suspension was based on his failure, over a four-year period, to maintain and monitor client funds in his law firm's trust account. This resulted in the commingling of client and law firm funds and the use of client funds to pay the firm's operating expenses. Mr. Sheppard did not dispute that trust account funds had been mismanaged, but submitted that his actions were due to negligence and inexperience in trust account management and were not intentional.

A Tennessee Board of Professional Responsibility hearing panel found that Mr. Sheppard's actions constituted "knowing" violations of his ethical duties under Rules of Professional Conduct 1.15 (safekeeping property and funds) and 8.4 (misconduct). The hearing panel recommended that Mr. Sheppard be suspended for 60 days, followed by two years of probation under the supervision of a practice monitor, and that he complete 15 hours of continuing legal education on law office management and trust accounting procedures. On appeal, the Williamson County Chancery Court modified the hearing panel's decision by increasing the periods of suspension and probation and by imposing additional conditions of probation. The Board of Professional Responsibility appealed to the Tennessee Supreme Court.

The Supreme Court, in reviewing the hearing panel's decision, examined the American Bar Association's Standards for Imposing Lawyer Sanctions, aggravating and mitigating factors, and sanctions imposed in similar cases. The Court held that the hearing panel's decision to suspend Mr. Sheppard was supported by substantial and material evidence and within the range of appropriate sanctions for his misconduct. The Court reversed the chancery court's judgment modifying the sanction and affirmed the 60-day suspension of Mr. Sheppard from the practice of law, as well as the 2-year probation period and 15 hours of continuing legal education requirement recommended by the hearing panel.