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Eminent Art Attorney Suspended for Billing Clients for Personal Car

Ralph E. Lerner, one of the most prominent art-law attorneys in the U.S. and a former partner at Sidley Austin, has been suspended from practicing law for one year. On October 29 2013, the appellate division of the New York Supreme Court noted in its decision that Lerner had improperly charged the firm's clients $50,000 for 448 car services rides for himself and his family over a period of 10 years. According to the decision, Lerner resigned from Sidley Austin after the firm confronted him about the alleged improper charges and subsequently reported himself to the Department of Disciplinary Committee. The firm has recovered the sums from Lerner's capital account.

Apart from the present suspension, Lerner is already facing similar charges in Delaware. He has been accused of fraudulently taking at least $750,000 in fees from the foundation of the artist Cy Twombly. Allegedly, despite being a member of the foundation's board, he has charged legal fees for merely attending board meeting, reviewing and editing the meeting minutes at a rate of $950/hour. Although Lerner defended these charges stating that those were charged according to the agreed stipulations, this rate does seem exorbitant.

Lerner's fame as an eminent art-law lawyer with 45 years of experience and high profile author for various legal publications makes this case more notable. However, he's not the only one out there. In 2006, a New York attorney was suspended for one year after charging the firm's clients $30,000 for his own personal phone calls. Matter of Carmody, 32 A.D.3d 173, 819 N.Y.S.2d 518 [1st Dept 2006]); see also In re Johnson, 294 Kan. 575, 276 P.3d 213 (Kan.,2012)(suspending a Kansas attorney for one year concerning dishonest false billing entries for various conferences which in fact never took place); In re Tun, 26 A.3d 313 (D.C.2011), (suspending a District of Columbia attorney for eighteen-month for "double billing,": i.e. seeking payment for the same time period for two or more clients, on 162 occasions); Cincinnati Bar Assn. v. Washington, 109 Ohio St.3d 308 (Ohio 2006)(suspending an Ohio attorney for 2 years for billing multiple insurance clients $91,000 for work that he did not perform). . . and so on . . . it's a huge list of recent cases from all around the U.S.

Unfortunately, a typical individual client would lack the ability to effectively monitor and assess the billing practice of their attorneys. However, corporate clients have the advantage to consult and engage appropriate experts such as bill review experts, third party administrators etc., to ensure that their cases/matters are managed properly. E-billing and bill review software helps to identify various improper billing issues including, for example, improper hourly rates, blocked billing, vague entries, attorney billing for paralegal tasks, non-billable items, conditional billable activities, disbursement costs etc., according to the service level agreement. However, the most important aspect of achieving such precautions would be to ensure a full-fledged billing guideline that addresses billability of each task and expense involved in litigation.

(Article By Sivakumar Jayabalan, Manager Legal Services, LSG)

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