BEFORE THE HEARING BOARD

OF THE

ILLINOIS ATTORNEY REGISTRATION

AND

DISCIPLINARY COMMISSION

In the Matter of:

STEPHANIE ALEXANDRA GERSTETTER,

Attorney-Respondent,

No. 6329724.

Commission No. 2021PR00050

FILED --- June 18, 2021

COMPLAINT

Jerome Larkin, Administrator of the Attorney Registration and Disciplinary Commission, by his attorney, Rory P. Quinn, pursuant to Supreme Court Rule 753(b), complains of Respondent, Stephanie Alexandra Gerstetter, who was licensed to practice law in Illinois on November 8, 2018, and alleges that Respondent has engaged in the following conduct which subjects Respondent to discipline pursuant to Supreme Court Rule 770:

(Creation of False Billing Entries, Charging and Collecting Unreasonable Fees)

1. In 2017, while attending law school in Chicago, Respondent began working as a law clerk at Reed Smith LLP law firm ("Firm"). After graduation, from September 2018 to June 2020, Respondent worked at the Firm as a salaried associate attorney.

2. During Respondent's employment at the Firm, she prepared records relating to the time she spent providing legal services to the Firm's clients. The Firm billed clients for Respondent's purported services based on these records of time multiplied by her hourly billing rate. Respondent's hourly billing rate was $435 in 2019 and $465 in 2020. Respondent knew the hourly rate at which the Firm billed her services, and she knew that the Firm billed clients based on the time that she reported spending on their matters.

3. Between September 2018 and June 2020, Respondent entered her records of the time she expended into a billing management system used by the Firm. Respondent knew that the Firm required that each entry of time she spent should contain detail regarding the type of work she performed, the time she spent doing that work, and what client matter related to the work performed.

5. Between September 2018 and June 2020, the Firm used a database software program called "Relativity" to analyze and code digitally-stored documents for document review projects. Relativity tracked the total amount of time a user has the program open. Additionally, Relativity tracked and logged every action users performed in the program. The amount of Respondent's time tracked by Relativity should have been the same or close to the same as the time she entered into the Firm's billing system for reviewing documents.

6. In August 2019, Natalie Salazar ("Salazar"), a mid-level associate at the Firm, requested that Respondent assist her in a document review project ("2019 Project"), and Respondent agreed to work on the project.

7. Between August 9, 2019 and August 21, 2019, Respondent recorded billing entries on eight separate days totaling 29.2 hours of purported time. At Respondent's billing rate of $435, the Firm billed the client a total of $12,702 for the time she claimed to have spent reviewing and coding documents for the 2019 Project. However, Respondent only worked 23.5 hours as described in the chart below:

Date

Hours Claimed by Respondent

Hours Worked by Respondent

Difference

Difference Multiplied by Respondent's Billing Rate ($435)

8/9/2019

.7

.1

.6

$261

8/12/2019

2.0

.2

1.8

$783

8/13/2019

.5

1.3

.8

$348

8/14/2019

2.0

0.0

2.0

$870

8/15/2019

2.2

1.7

.5

$217.50

8/19/2019

3.5

2.6

.9

$391.50

8/20/2019

5.5

3.9

1.6

$696

8/21/2019

12.8

11.8

1.0

$435

8/22/2019

0.0

1.9

1.9

$826.50

Total

29.2

23.5

5.7

$2,479.50

8. In March of 2020, Salazar requested that Respondent assist her in a second document review project ("2020 Project"), and Respondent agreed to work on the project. The 2020 Project also required Respondent to analyze and code digitally-stored documents.

9. Between March 10, 2020 and June 24, 2020, Respondent recorded billing entries on 49 separate days totaling 197.7 hours of purported time that she claimed to have spent reviewing and coding documents. At her 2020 billing rate of $465 per hour, the Firm would bill the client $91,930.50 for the time Respondent claimed to have spent reviewing and coding documents. However, Respondent only worked 33 separate days totaling 113.1 hours as described in the chart below:

Date

Hours Claimed by Respondent

Hours Worked by Respondent

Difference

Difference Multiplied by Respondent's Billing Rate ($465)

3/10/2020-3/31/2020

44.3

34

10.4

$4,789.50

4/1/2020-4/30/2020

67.8

27.9

39.9

$18,553.50

5/1/2020- 5/29/2020

67.4

41.5

24.9

$11,578.50

6/1/2020- 6/24/2020

18.2

9.8

8.4

$3,906

Total

197.7

113.1

84.6

$39,339

10. Respondent's records of the time she spent on client matters, as described in paragraph nine above, were false because she had not actually spent all of the time she recorded and that the firm billed, on the document review project.

11. At the time Respondent prepared the billing entries described in paragraph nine above, Respondent knew the entries were false because she knew she had not worked the number of days or hours she described in those entries.

12. The Firm, in reliance on Respondent's representation on the billing records she created and submitted to the Firm, billed the Firm's clients for the services Respondent claimed to have provided through June 1, 2020. Upon receipt of the bills, the clients paid the Firm approximately $83,467.50 based on the entries described in paragraph nine, above.

13. In June 2020, the Firm conducted an inquiry into Respondent's billing practices. At the conclusion of its inquiry, the Firm determined Respondent had billed more time than she had actually spent reviewing documents. The Firm decided to offer a refund or credit to the client who was charged for legal services that were not provided by Respondent.

14. By reason of the conduct described above, Respondent has engaged in the following misconduct:

  1. charged and collected an unreasonable fee, by conduct including billing clients for time she knew had not actually been spent on their matters, in violation of Rule 1.5(a) of the Illinois Rules of Professional Conduct; and

  2. conduct involving dishonesty, fraud, deceit or misrepresentation, by conduct including knowingly creating billing entries that exceeded the time actually spent working on client matters, in violation of Rule 8.4(c) of the Illinois Rules of Professional Conduct (2010).

WHEREFORE, the Administrator respectfully requests that this matter be assigned to a panel of the Hearing Board, that a hearing be held, and that the panel make findings of fact, conclusions of fact and law, and a recommendation for such discipline as is warranted.

Rory P. Quinn
Counsel for Administrator
One Prudential Plaza
130 East Randolph Drive, Suite 1500
Chicago, Illinois 60601-6219
Telephone: (312) 565-2600
E-mail: ARDCeService@iardc.org
E-mail: RQuinn@iardc.org

Respectfully submitted,

Jerome Larkin, Administrator
Attorney Registration and
Disciplinary Commission

By:  /s/ Rory P. Quinn
Rory P. Quinn