Risk Update

More Financial Risk — Fraudulent Billing Scandal, Insurance Premium Management

Biglaw Partner’s Suspension Quadrupled On Appeal Following Fraudulent Billing Scandal” —

  • “Back in 2019, we told you about the hot water Duane Morris partner Doreen Zankowski was in. The issue stems from her time at Saul Ewing — specifically her time entry in 2015, the year she made equity partner. Zankowski billed 3,173 hours and worked more than 720 non-billable hours that year, but during a compensation review, the firm became concerned with her hours. And though Zankowski left Saul Ewing in 2016 and joined Duane Morris, the investigation into her timesheets continued.”
  • “According to the initial ethics opinion, Zankowski ‘falsely inflated the number of hours on final bills sent to several clients, improperly entered her time as work by her associates, and knowingly billed clients for taking depositions that she did not attend.'”
  • “But after an appeal to the Massachusetts Supreme Judicial Court, the suspension was quadrupled to two years… ‘[Associate Justice David A.] Lowy — writing for a four-judge panel of the top court — increased the penalty to two years on Thursday. ‘Our focus, however, is not on the quantum of excessive fees that were billed, but on the fundamental dishonesty inherent in the respondent’s client billings themselves,” Justice Lowy wrote. “It is not the sheer number of unworked hours that establishes the misconduct but, rather, the dishonesty manifested by billing for them at all.””

For more, see Legal Profession Blog: “Billing Misconduct Sanction Increased

Next up: “Five Things You Can Do to Help Keep Your Malpractice Insurance Premium in Line” —

  • “Unfortunately, for some lawyers, there is an elephant in the room, which is failing to accept the reality that there really is a strong correlation between aggressive collections actions and malpractice claims. If you regularly sue for fees, meaning 2-3 times or more every year, that decision is costing you money. Thus, tip number two is if you regularly sue for fees, consider stopping this practice and focusing on finding ways to prevent serious delinquencies from ever developing in the first place.”
  • “Accordingly, tip number four is to encourage you to proactively manage your firm’s claims history by way of a robust risk management program. Insurers prefer to insure firms that consistently use engagement and closure letters, rely on effective rules-based calendaring and docket control systems, have deployed a state-of-the-art conflict checking system, and regularly conduct file reviews just for starters. Time spent on developing and maintaining risk management processes and procedures will be well worth it in the long run.”
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