Wednesday, January 16, 2019
Self Report Of Bill Inflation Leads To Bar Charges
The Illinois Administrator has filed a complaint alleging billing misconduct by a former Kirkland & Ellis associate
In 2011, Respondent began working as an associate at the Kirkland & Ellis firm in Chicago, where he worked in the firm’s intellectual property transactional group. In August of 2015, he joined the Neal Gerber Eisenberg firm as a lateral hire. Two years later, he became a non-equity partner in that firm.
During his time at both firms, Respondent prepared records relating to the time he spent providing legal services to the firms’ clients, and he knew that the records he provided to both firms would be a component of the amount of fees the firms sought from their clients; i.e., the firms’ bills to their clients included, in part, the time Respondent claimed to have spent on client matters multiplied by his hourly billing rate, which was $450 in 2018.
During his time at both firms, in an attempt to meet what he perceived to be the firms’ billing expectations, Respondent recorded time beyond what he had actually spent in handling client matters, knowing that the time he recorded would be billed to his clients and that they would be asked to pay fees based on the records he created. For the days that Respondent felt he had not recorded sufficient time on client matters, he increased the time he claimed to have spent on those matters based on a number of factors, including his assessment of the likelihood that the client would object to the time he recorded. As an example, if Respondent spent 0.3 hours on a client matter, he would record that he had actually spent 0.5 hours, or he would bill 2.1 hours for work that actually took him 1.7 hours to complete.
Respondent’s inflation of the time he spent on client matters, as described in paragraph three, above, was false, because he had not actually spent all of the time he recorded, and the firms billed, on client matters.
Respondent knew that some portion of the time the firms billed to clients was not genuine, in that he knew that he had not spent that time on behalf of the clients and he had calculated which billing entries to inflate based on his assessment of whether he could get away with increasing the time billed to the clients.
The time Respondent recorded, including time Respondent knew to be false, was billed to both firms’ clients, who, in reliance on Respondent’s time records, paid the amounts he claimed were due the firms.
In August 2018, Respondent reported his conduct to one of the leaders of his practice group at Neal Gerber Eisenberg. The firm then conducted an inquiry into Respondent’s billing practices, at the conclusion of which it determined to offer a refund or credit to more than 100 clients who may have been affected by Respondent’s conduct. As a result, the firm offered to return funds that amounted to 20% of Respondent’s recorded time that was actually billed to and paid by the firm’s clients, which totaled more than $150,000. The Kirkland & Ellis firm, which also had not been aware of Respondent’s conduct at the time it was occurring, similarly determined to offer refunds or credits to clients affected by Respondent’s conduct.
The complaint alleges violations of Rule 1.5(a) and 8.4(c). (Mike Frisch)
https://lawprofessors.typepad.com/legal_profession/2019/01/the-illinois-administrator-has-filed-a-complaint-alleging-billing-misconduct-by-a-former-kirkland-ellis-associate-in-2011.html