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Overcharging clients lands lawyer $20K fine

Overcharging clients lands lawyer $20K fine

A lawyer who had enjoyed a “stellar career path” has been hit with a $20,000 fine, but will be allowed to continue practising in a more junior capacity, after he admitted to deliberately overcharging 23 clients.

Luke James McDonald reported himself to the Legal Services Commission for investigation when accountants and senior partners from his firm had noticed the environment and planning lawyer’s billings had escalated “many times over”.

The top Brisbane lawyer confessed to fraudulently overcharging a total of 23 clients more than $515,000 over an 18-month period.

The nature of Mr McDonald’s conduct was described by the tribunal as “systematic” forgery of 914 electronic timesheet entries submitted by legal staff under his supervision, which contained false hours and had the practical effect of overcharging clients.

Mr McDonald said that while he remembered “doing the increased billing” over 18 months between 2012-2013, he could not recall what he was thinking at the time. His budget realisation rate during the time of the offense jumped from 83.5 per cent to 99.1 percent.

Once the deception was uncovered by Mr McDonald’s employer, believed to be a leading national law firm, he was subjected to an internal audit and admitted to the fraud. Mr McDonald resigned and clients who had been ripped-off for his overcharging were compensated with interest.

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The Queensland Civil and Administrative Tribunal heard at Mr McDonald’s disciplinary hearing last October that he had shot to a position of seniority at his law firm at a very young age, and subsequently found himself dealing with “enormous pressures at work” and a family breakdown.

Less than 10 years after his admission as a lawyer, Mr McDonald had risen to the position of supervising partner.

In an affidavit tendered for his disciplinary hearing, Mr McDonald said that just prior to the period of his offending conduct, the situation at home had become stressful, with members of his family suffering health concerns. Responsibilities at work had also escalated and he spoke of working 12-13 hour days, and usually one day each weekend.

“By the standards of (the firm), I was very young (35-36 years old) to be the head of a workgroup and to have the supervision and other responsibilities that I had,” Mr McDonald said in his affidavit.

“I was, as I now recognise[,] under enormous pressures at work.

“That pressure had steadily been increasing. By late 2011/early 2012 my position as the head of Planning and Environment workgroup for the firm was [sic] increasingly required me to travel interstate for national firm matters. I was spending more time at work and on work related travel and less time at home.”

In 2012, Mr McDonald said that an abrupt separation from his wife meant that the time he spent with his two children became limited and he began working longer hours during the week in order to spend the weekend caring for them.

“Unless I was away for work, I had the children from Friday evening until Monday morning. I began working longer hours during the week so that I could spend that time with my children. I was probably at work 13 or 14 hours a day during the week and sometimes longer. I then spent my weekends with and caring for my children,” he added.

The Queensland Civil and Administrative Tribunal handed down a decision in March, sparing Mr McDonald from being struck off.

The Legal Services Commissioner had sought an order to remove the practitioner’s name from the local roll for professional misconduct.

Counsel acting for the commission told the tribunal that, while Mr McDonald may have been apologetic, ashamed and contrite, he was unable to fully identify, own and address the root causes of his actions because he did not seek enough insight-oriented psychotherapy in the intervening years since.

Defence barrister, James Bell QC, told the tribunal that the commissioner had not proven current or likely future unfitness on the part of Mr McDonald.

Given mitigating factors such as his full cooperation with his employer’s internal audit; candid and unqualified admissions of wrongdoing; self-reporting to the regulator; and his loss of career and reputation – a penalty consisting restrictions on his practising certificate and a fine was sufficient, he said.

Mr Bell also noted that Mr McDonald had already suffered a “significant penalty”, in that a proud reputation built up over many years was effectively destroyed.

The barrister argued that Mr McDonald would have to rebuild his career from scratch and that the financial loss Mr McDonald suffered because of his resignation from the mid-tier partnership has been very substantial.

Mr McDonald was ordered to pay a $20,000 fine for his professional misconduct. He was also penalised with a prohibition from applying for or obtaining a certificate to practice as a principal for five years after being granted an employee-level practicing certificate.

The tribunal said in its decision that where permanent unfitness was not demonstrated by past misconduct or otherwise, the circumstances contributing to temporary professional incapacity were no longer present.

“A practitioner remaining in the very profession he has damaged with the expectation that they can command the necessary degree of confidence and respect of the court, clients and colleagues is clearly problematic and a legitimate concern to the tribunal particularly the professional and community assessors,” the tribunal said in its decision.

“On the other hand, ending the career of a talented, hardworking and highly productive lawyer is too high a price to pay for public approval or appeasement.”

Overcharging clients lands lawyer $20K fine
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