Biglaw Associates Caught Overbilling Lose Jobs, Ability To Practice Law

Stop padding your hours, because those pesky ethical obligations will always catch up with you.

Billing is a big — nay, huge — part of working at a Biglaw firm. As an associate, your life is divided into tenths of an hour, and if you don’t meet your hourly requirements by year end, you can expect to be penalized accordingly. Everyone else may be getting enormous bonuses but not you. No, you’ll be lucky if you’re able to receive half as much as everyone else if you miss your billing milestones.

Unfortunately, this harsh reality is why some lawyers overbill their clients. If they get caught, the punishment can be even worse than going without a bonus.

John P. Paleczny and Stephanie A. Gerstetter, now former associates at Lewis Brisbois and Reed Smith, respectively, learned this lesson the hard way. As reported by the ABA Journal, both Illinois attorneys will be suspended from the practice of law for inflating their hours, with their suspensions to commence on October 14.

Paleczny received a tougher suspension because his behavior was quite questionable. How questionable? We’re talking billing thousands of hours to a closed case. We previously discussed the matter here. Again, here are the details:

Paleczny was accused in a June ethics complaint of recording more than 2,000 annual hours on a closed pro bono case, earning a $12,000 bonus as a result. …

Paleczny was fired in February 2021 after admitting that he was recording time on the case, even though it had been tossed, the ethics complaint alleged. Paleczny was representing a federal inmate who said he lost his prison job as an orderly in the law library after he complained about a new library policy.

After his firing, Paleczny interviewed with at least four Chicago law firms, falsely saying he was laid off from Lewis Brisbois because he did not have enough work to do, the ethics complaint alleged.

Paleczny will be suspended for one year’s time, and on top of that, he will remain suspended until he successfully completes a professionalism seminar.

Gerstetter, on the other hand, who worked at Reed Smith from September 2018 until June 2020, when the firm conducted an inquiry into her billing practices, merely (comparatively speaking) overbilled a client on a document review project to the tune of 86.4 hours. Gerstetter’s padding of her hours resulted in an overcharge of more than $40,000 to Reed Smith’s client, which the firm later refunded. Here are the details. courtesy of the ABA Journal:

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The complaint alleged that the time that Gerstetter entered into the billing system for the document review project was greater than the time recorded on Relativity, the program used to analyze and code digital documents. The times should have been about the same, the complaint said.

Gerstetter will be suspended for 60 days, and she agreed to the disciplinary action.

Stop overbilling on your assignments. No matter how big or how small the hourly overage, someone will eventually catch you, and you’re not going to like the results.

2 former BigLaw associates get suspensions for inflating hourly records [ABA Journal]


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Staci ZaretskyStaci Zaretsky is a senior editor at Above the Law, where she’s worked since 2011. She’d love to hear from you, so please feel free to email her with any tips, questions, comments, or critiques. You can follow her on Twitter or connect with her on LinkedIn.