ARDC Hearing Board Recommends Suspension of One Year For Lawyer Who Altered Firm’s Billing System

The ARDC Hearing Board recommended a one-year suspension for a lawyer who was found to have altered his firm’s billing system to improve his billings. The Hearing Board found as follows:

Sometime prior to May 2014, Respondent inadvertently discovered that his Juris profile allowed him to make changes to origination credits from his office computer. He testified he told his colleague Ryan Shpritz of his discovery and showed Shpritz how to make a change, but he did not tell Shpritz he intended to make changes. (Ans. at par. 8; Tr. 221, 268-70).
Respondent acknowledged that between May 2014 and April 2018 he made changes to origination credits. In addition to deleting an attorney with whom he was sharing origination credit, he also completely changed some origination credits from another attorney’s name to his own name. In making the changes, he considered how the client came to KSN. For example, when an inactive client came back to KSN through his efforts, he felt he should receive origination credit. In some instances he changed the origination credit in his favor, and then changed it back because he knew his actions were wrong. Respondent did not recall how many times he made changes, but acknowledged the KSN records reflect it was more than 200 times over a four-year period. (Ans. at par. 9; Tr. 220-23, 239, 252, 270-73).
Respondent testified he began making changes, even though he knew he had no authority to do so, because he was frustrated that his concerns were not addressed and it was a way to correct an improper allocation of credit on a handful of clients. He also felt, to some extent, that other people were riding on his coattails. He denied acting from ambition, and described himself as being conflicted over his conduct. He denied knowing he was among the highest paid non-equity principals. (Ans. at pars. 11, 12; Tr. 221-23, 229, 249-57, 267, 270, 274-78).
Discovery of Respondent’s Actions
Lieke Daley, controller at KSN and overseer of the firm’s database system, testified he received an email from a KSN attorney in April 2018 asking why certain client matters were not reflecting a split origination. After speaking to a Juris consultant, Daley began a time-consuming process of reviewing change logs, running reports, analyzing data, and confirming his findings with Juris. (Tr. 35-37, 41-43, 60).
Daley discovered that Respondent was the individual logged into the system when certain changes were made to origination credits. He identified two spreadsheets that reflect over 200 changes at the matter level and 20 changes at the client level. The changes resulted in an increase of $202,881.47 to Respondent’s book of business during the four year period and an increase of at least $30,000 to his origination compensation, to the detriment of other attorneys. The spreadsheets indicate numerous KSN attorneys were affected, including Robert Kogen and Ryan Shpritz. Once Daley was confident of his findings, he took the information to the executive committee. (Ans. at par. 10; Tr. 42, 46-55, 65, 72-73, 104; Adm. Exs. 3, 4).
Kogen testified he learned on April 18, 2018 that Respondent had changed origination credit for a number of accounts. On April 23, 2018 he and Matthew Moodhe, a member of KSN’s Executive Committee, met with Respondent for about two hours to question him about the changes. Kogen recalled Respondent vehemently denied doing so, and stated the changes must be a mistake. When they went to Respondent’s office to log in to Juris from Respondent’s computer, a screen appeared that was different than the screen on Kogen’s own computer and Kogen saw that changes could be made. After Respondent continued to deny changing any credits, Kogen suggested that he go home. (Ans. at par. 14; Tr. 93-96, 100-102, 120).
Kogen testified Respondent returned a short time later, broke down and admitted to what he had done. When Kogen asked for an explanation, Respondent stated he wanted to advance to equity partner quickly and once he started making changes, he could not stop. Kogen then spoke to his other partners and they agreed to terminate Respondent’s position with the firm. Kogen advised Respondent of their decision that evening. (Ans. at par. 14; Tr. 102-104).
Respondent attributed his initial denials of wrongdoing to being overwhelmed with fear and not thinking rationally. He knows he did not handle himself appropriately and testified if he were given the opportunity again, he would immediately admit his mistake. He agrees he was fired for conduct that was dishonest and which harmed his former law firm and colleagues. The day he was fired, he concluded his actions were wrong. (Tr. 224-25, 268).
Ryan Shpritz, an equity partner at KSN, testified Respondent was one of his best friends at the firm, but they have not spoken since shortly after Respondent’s termination. Shpritz recalled at that time Respondent was emotional and embarrassed; attributed his acts to pressure he place on himself to make equity principal; compared his behavior to an addiction; and stated he did not think he would be caught. Respondent testified he did not recall what he said at the time, but he would not characterize his actions as an addiction. (Tr. 126-29, 227-28).
Restitution to KSN
Kogen and Respondent both testified that Respondent offered to make restitution to KSN at their April 23, 2018 meeting, and again in subsequent email correspondence. No amount was discussed at those times. Kogen told Respondent he would get back to him, but did not do so. (Tr. 108-10, 229-31; Resp. Ex. 1).
On or about May 30, 2018 Respondent sent a letter to Kogen with a check for $30,432.22, which was the amount KSN had identified as being at issue in a communication to the ARDC. Respondent’s check included the words “Full Restitution” on the memo line. On June 11, 2018, a litigation attorney at KSN advised Respondent that the firm would not accept his check with the “Full Restitution” notation. Respondent sent a second check for $30,432.22 to KSN without any notation, and that check was accepted. (Tr. 111-13, 232-36; Resp. Exs. 2-5).

The Hearing Board found that the lawyer violated Rule 8.4(c) and recommended a suspension of one year. If you have questions about legal ethics, please review our legal ethics webpage.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s