Chicago Attorney Charged With $250K Billing Fraud

Posted on May 21st, 2014 by Legal Fee Advisors

In the Legal Profession Blog article dated April 24, 2014 it was reported that the Illinois Administrator has charged a Chicago attorney with billing fraud in violation of Illinois Rules of Professional Conduct 1.5: Fees and 8.4(c): Misconduct involving dishonesty, fraud, deceit, or misrepresentation.[1] The attorney in question allegedly increased the legal fees billed to a large publicly-owned client by $251,863 for services rendered between January 1, 2012 and July 13, 2013[2].

During this period, the firm recorded a total of 19,092.3 billable hours charged to the client. However, the attorney allegedly altered the bills sent to the client claiming a total of 19,951.3 billable hours. A subtle increase of 859 hours resulting in a $251,863 increase in fees billed to the client. This deception was perpetrated by increasing the hourly rates charged by various billers, by shifting time from a biller at a lower hourly rate to a biller at a higher rate, or by simply increasing the amount of time recorded by a biller. In reliance on the bills presented, the client unquestionably paid the firm for their services.

These kinds of actions will likely have dire consequences for the Chicago attorney such as sanctions, discipline and even disbarment which is more than enough to discourage most other attorneys from even considering such egregious behavior. Moreover, these actions will most probably affect the firm’s reputation and result in a decrease in business across the board.

Although this is not the first instance of billing fraud, the question remains, what, if anything, can be done to prevent it? While there is no definitive answer, one proposed solution would be for firms to implement monitoring, oversight and review protocols of legal bills even for top level partners. Even though the vast majority of attorneys understand that it is their duty to bill fairly and honestly with the best interests of their clients in mind, billing fraud is a realistic threat which must be looked out for with a watchful eye.

A. Vays

Legal Fee Advisors © 2014