Ticket To Ride: Smolen Suspension Proposed

A one-year suspension with treatment conditions has been proposed by an Illinois Hearing Board for former Sidley Austin partner Lee Smolen.

Many of the facts related to Respondent’s conduct are not in dispute. Respondent admits he falsified and submitted for reimbursement more than 800 receipts for cab rides he did not take. He further admits he received reimbursement totaling $69,800 for the fabricated receipts.

Respondent’s conduct was purposeful and intentional. We do not accept his explanation that he simply acted without thinking. Respondent made conscious decisions and took conscious action each time he created and submitted a false receipt. He charged the cab rides to the Wells Fargo unallocated account, which he controlled. There was no reason for Respondent to take the actions he took unless he intended to make the Sidley accounting department and management believe something that was not true, i.e., that he incurred valid cab ride expenses for which he was entitled to be reimbursed. See Edmonds, 2014 IL 117696 at par. 55.

We do not find credible Respondent’s assertion that he did not realize he was doing anything wrong. An attorney of any level of experience should recognize the wrongfulness of fabricating expenses. Given Respondent’s substantial legal experience and accounting background, his professed lack of awareness is implausible.

Respondent’s purported use of the reimbursement funds for a legitimate purpose does not alter our finding of dishonesty. Other than Respondent’s testimony, no evidence supports his claim that he used the funds for client development. Respondent’s testimony on this issue was inconsistent and he has no records or receipts to corroborate his assertion. Respondent’s wife testified that she withdrew cash from their checking account and gave it to Respondent, but she had no knowledge how Respondent spent the cash.

The hearing board noted that

In 2005, Respondent billed 3,576 hours, which included time billed to clients and time spent on services to the firm. He billed 3,483 hours in 2006 and 3,332 hours in 2007. (Tr. 192-93). Respondent typically spent 12-15 hours per day at work and did additional work after he came home and on weekends. (Tr. 262-63, 352). He slept three or four hours per night. (Tr. 359). Respondent’s annual compensation at the time he left Sidley was $3.5 million. (Tr. 33). He was one of the most highly compensated partners in the firm. (Tr. 34).

Sidley partner Theodore Miller testified Respondent felt he should receive more compensation. (Tr. 149). According to Miller, the intensity with which Respondent sought additional compensation caused him to stand out from the vast majority of Sidley partners. (Tr. 184-85). Another Sidley partner, Carter Phillips, testified his impression was that Respondent was “a little underwhelmed by his compensation.” (Tr. 123). Respondent and his wife, Susan, testified Respondent was satisfied with his compensation. (Tr. 261-64).

Smolen is now with DLA Piper

The parties stipulated to the testimony of attorneys Peter S. Pantaleo and Jay Epstien, both of whom are partners at DLA Piper. Pantaleo is general counsel to DLA Piper and was involved in deciding whether to invite Respondent to join the firm. Respondent appeared before DLA Piper’s executive committee and acknowledged that he made a horrible mistake. After Respondent’s appearance, the executive committee voted unanimously to recommend Respondent be allowed to join the firm. Pantaleo monitors Respondent’s billing and has found it to be appropriate. He was initially concerned about Respondent joining DLA Piper but is now fully supportive of his membership in the firm.

Evidence of mitigation was offered and given some weight

We…consider the evidence pertaining to Respondent’s mental health. Dr. Henry and Dr. Spira provided different assessments of the connection between Respondent’s mental health issues and his misconduct. Dr. Henry opined there was a “loose association” between Respondent’s personality disorder and his misconduct, in that Respondent was excessively devoted to work as a result of his obsessive-compulsive disorder. Dr. Spira found a stronger connection, opining that Respondent’s depressive disorder and anxiety disorder led to “tremendous impairment of judgment,” which in turn led to the misconduct. Considering both experts’ testimony, we find that Respondent’s mental health played at least a minor role in his misconduct. Accordingly, we give some weight to Respondent’s mental health issues as a mitigating factor.

The proposed sanction would require twelve months of continuous psychiatric treatment.

Our coverage of the charges is linked here. (Mike Frisch)