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In re Romansky

December 20, 2007


The opinion of the court was delivered by: Kramer, Associate Judge

On Report and Recommendation of the Board on Professional Responsibility (BDN 96-163)

Argued May 18, 2006

This case returns to the Court of Appeals from the Board on Professional Responsibility ("Board") after a remand in In re Romansky, 825 A.2d 311 (D.C. 2003) ("Romansky I"). In its first Report and Recommendation, the Board found that the respondent had committed three distinct violations of DISTRICT OF COLUMBIA RULES OF PROF'LCONDUCTR. 8.4 (c), which provides, "It is professional misconduct for a lawyer to . . . [e]ngage in conduct involving dishonesty, fraud, deceit, or misrepresentation . . . ." In Romansky I, we affirmed in part, reversed in part, and remanded to the Board for reconsideration of whether two of the claims at issue constituted dishonest conduct under Rule 8.4 (c), anticipating that the Board would make further factual findings with respect to the respondent's "actual state of mind in the existing circumstances" that would specify whether the respondent "acted knowingly or recklessly when he adjusted the client bills." 825 A.2d at 311, 317. Moreover, in remanding, we directed the Board to "determine whether Romansky's explanation for his conduct is true." Id. Further, we instructed, "When conducting its analysis, the Board must clearly articulate its findings and make credibility determinations to support its conclusions." Id. Despite these instructions, both the Office of Bar Counsel ("Bar Counsel") and the respondent advised the Board that further fact-finding was unnecessary, and the Board accepted their position. Thus, on the record previously developed, the Board applied the legal standard set forth in Romansky I and found that there was insufficient evidence of the respondent's dishonesty on the two counts still at issue.

Despite its choice to forego further fact-finding, Bar Counsel has filed an exception to the Board's Report.*fn1 It is not ordinarily our role to act as the fact-finder, but rather to give deference to the Board's findings so long as they are supported by substantial evidence. D.C. Bar R. XI, § 9 (g). In this instance, however, we conclude that the primary issue is whether or not the respondent was reckless, as opposed to negligent. That issue, involving ultimate facts, we may review de novo. In re De Maio, 893 A.2d 583, 585 (D.C. 2006). Having examined the question, we conclude that the record is sufficient to find by clear and convincing evidence only that he was negligent, not reckless. We also review the sanction of thirty-day suspension recommended by the Board. The majority of this panel concludes that there is not adequate reason to depart from the Board's recommendation, and thus the court imposes a suspension from the practice of law for a period of thirty days. Judge Kramer writes separately regarding the sanctions to set forth the reasons why she would impose a sanction of sixty days.

I. Facts

A. Background

As we noted in Romansky I, the basic facts of this case are largely undisputed. At all relevant times, the respondent was a partner and leader of the health care practice at the Washington, D.C. office of McDermott, Will & Emery ("McDermott"). In that capacity, he had significant billing responsibilities. In late 1994, McDermott instituted a change in its billing practices. Under the firm's old engagement letters, it billed clients based solely on hourly rates. The firm's new engagement letters allowed, inter alia, attorneys to charge a premium for services rendered and informed clients that "fees will be based primarily on the time spent by each professional, although other factors may be taken into consideration" (emphasis added). McDermott instructed billing attorneys to use the new billing practices effective September 12, 1994.

The events at issue on this appeal took place during the transition from the old billing arrangement to the new one and regard bills prepared for two firm clients, Dr. Steven Siepser and Surgical Health Corporation ("SHC"). Though the respondent prepared the bills for these clients after the effective date of the new billing practices, he concedes that the old engagement letter limiting billing to hours actually worked by the firm's attorneys still governed their billing arrangements because new engagement letters had not been sent to these clients, and they had never consented to a new fee structure.

McDermott's standard practice during the relevant time period was for its administrative personnel to first send "pre-bills" to billing attorneys for their review. The pre-bills were internal firm records and were not sent out to clients in the ordinary course of business. After the billing partner's review, the pre-bills went back to billing specialists for processing. The billing attorneys then received drafts of the final bills and another opportunity to make corrections before the final statements went to the clients.

B. The Siepser and SHC Matters

In 1994, Dr. Siepser had engaged the firm to help him obtain approval for an ambulatory surgical center in Pennsylvania. The respondent asked another firm attorney, Robert Shay, to work on the case. In short order, Mr. Shay completed the assignment and, in addition, obtained a refund of more than $21,000 in fees from a law firm that the client had previously retained. After reviewing the September 1994 pre-bill for Dr. Siepser, the respondent decided that a $700 premium would be appropriate in light of the quality of the representation provided by Mr. Shay. Rather than expressly adding the premium to the bill, however, the respondent, without consulting Mr. Shay, added three hours to the time that he had recorded for the matter. On November 17, 1994, McDermott sent a bill to Dr. Siepser that provided only a bottom-line figure for "professional services rendered" and did not inform him of the changed hours or that a premium had been charged. The respondent testified that he does not remember ever focusing on the terms of Dr. Siepser's engagement letter when working on the bill.

The SHC matter began in mid-1994 when the client contacted the respondent seeking advice concerning various issues. The respondent and another attorney, Diane Millman, worked on the matter. Again the respondent determined that the firm had provided exceptional service to the client in a cost-effective manner and decided to add a $530 premium to the pre-bill. He added two hours to the time recorded by Ms. Millman based upon his belief that the value of her services exceeded the amount that McDermott would earn based solely on hourly rates. The respondent testified that he did not recall considering which billing policy applied to SHC. The final bill sent to SHC did not disclose the hour adjustments or that the firm had charged a premium.

The respondent openly acknowledges that he intended to charge a premium in both cases and that he accomplished this by adding to the hours recorded by his associates. Before the Hearing Committee, he testified that he did not intend to make the bills misleading or dishonest. The Hearing Committee did not discredit this testimony, and despite the number of questionable billing actions taken by the respondent, there is no direct evidence in the record indicating that the respondent knew that the two cases were governed by the old engagement letter which provided that clients would only be charged for the time McDermott's professional staff actually spent working on the clients' cases. At the time the bills were prepared - shortly after the announced change in billing practices - the firm did not yet have a policy in place addressing how attorneys should add premiums to a client's bill. Moreover, the Hearing Committee and the Board also found that the respondent's attempts to charge a premium in these cases could not have affected his compensation from McDermott.

Charles Work and James Sneed, partners at McDermott at the time, acknowledged that the respondent might have been confused as to which billing policy was applicable to the Siepser and SHC matters at the time he worked on the bills. The respondent sent out thirty to sixty bills each month,*fn2 and Mr. Sneed testified that "any billing attorney with that volume wouldn't necessarily be able to know immediately which letter was applicable to which client at a particular time."*fn3 According to Mr. Work, McDermott's internal investigation found "no evidence really to contradict [the ...

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