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Published: 13/11/2008 00:00
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I suspect, and forgive me if I am incorrect, that the questioner here is hoping that someone will say that charging social events to the firm is perfectly fine - sadly, I do not think that it is. This question seems to demonstrate an incredible naivety at the very least. Where to draw the appropriate line at first seems quite tricky, but the reality is that its a simple task, bearing in mind you are a senior associate. Client events, transportation to and from and other associated costs should be reimbursed by the firm. I would also think it standard that team meals/drinks at the end of a big deal were items that could be billed to the firm, albeit in such circumstances, I would expect a partner to circulate the invitation. You should have been familiar with firm policy before charging such items. Social events, personal taxis and the like are clearly, and I write "clearly" because there really is little doubt that those items should not be billed to the firm. If your peers are shocked by the items you have billed, that ought to tell you, and in any event, I cannot see how you would be confused that you should not have billed such items to the firm. I assume you were not aware that these personal items should not be charged? How then, did you charge them? Presumably you had to bill these matters to a client? If that is the case, clearly there is dishonesty here. If you were able to bill them to a general firm matter, then perhaps you were just reckless, either way it does not look good. I assume you had to give some explanation for the expenditure? What did you say? It seems to defy logic that a senior associate does not know the difference between client and personal matters. As a lawyer, you should not be seeking to avoid being found out, now that you are aware of your indiscretions, it is dishonest not to disclose them. After all, you have received payment for items you were not entitled to. The proper thing to do is to declare that. Whether you choose to do so or not is a matter for you and given the question, I suspect you will not seek disclosure and consequently I would advise against doing anything proactively at all other than keeping quiet. Classic example of deteriorating standards when the good times are here!
Posted by: US Associate on 13 Nov 2008
If your company uses a traditional paper-based expenses system and your authoriser adopts the typical approval process of 'look the other way and sign it' then you'll probably be ok. However, you might want to reconsider your position in the legal sector given that you have just admitted defrauding your company on a regular basis. The annual cost to British industry from this type of theft (that's what it is) is estimated at more than £350 million per annum! Clearly it is people like you who are responsible for this. I hope for all of our sakes, you're caught and made an example of.
Posted by: David Vine, Managing Director, GlobalExpense Limited on 13 Nov 2008
Rarely in life is anything black and white. That said, this appears to me to be a pretty black and white situation. The simple fact that you say "pass off" in reference to your drinks should make it clear - passing off is never good, or acceptable (please tell me you remember this concept from law school???). As to your drinks that "weren't strictly for work purposes" - I it depends on what you mean, and just how far away from work purposes they were. If it was a team function approved by a partner, acceptable. If it was you looking to trip the light fantastic at you firm's expense (no doubt taking along the necessary team bods in an attempt to justify the expenditure as "team building") - not acceptable. I'm really surprised that as a senior associate you would make what I'm assuming (not to mention hoping) most people would regard as fundamental errors of judgement. Perhaps something a hopelessly naive, very green trainee overcome by the new corporate Amex in their purse/wallet, but certainly not something to be done by a senior associate (I suppose it's worth mentioning that I'm assuming you're a 'real' senior associate - i.e. with a reasonably numbers of years experience, as opposed to someone given the title to improve your teams proportion of 'senior associates'. Then again, even if not a 'seasoned' senior associate, I would hope you would be able to appreciate that what you have done is not acceptable). If you're willing to make these sorts of compromised decisions now at this stage in your career, I can only imagine what decisions you might make if you were to be a partner? Perhaps the clients really would appreciate a nice villa in Monaco....
Posted by: Dorothy Gale on 13 Nov 2008
Gosh, I think everyone is being a little harsh: "fraud" and "theft" - Come off it!!! I hope your quick judgements are remembered the next time you send personal mail at the firm's expense!
Posted by: DD on 13 Nov 2008
David Vine is the one who should be made an example of, for his shameless 'profiteering' and trying to get some publicity for his company. There is no mens rea to convict.
Posted by: Barrister-turned-businessman on 13 Nov 2008
The number of times I've worked late but lost my taxi receipt, or paid for a client lunch on my personal card and forgotten to claim it back, I don't have a problem with occasionally having an after work drink at the firm's expense - it's swings and roundabouts. That said, actively charging personal expenses to a client matter is a big no-no.
Posted on: 13 Nov 2008
I have an annual tube season ticket paid for with a firm loan. If I use my ticket for business I do not charge the client. Opinion is divided here - others do charge the client, and pocket the petty cash. That seems dishonest to me, but those who do it consider it legitimate. That said I too forget to claim expenses. However the firm I work for has had a major crackdown on all expenses (thought by the gossips to be a consequence of serious abuse by a couple of partners, but who knows?) so that even a pint with a client has to be pre-authorised (the risk of asking afterwards is that you might not get authorisation. You can probably guess where I work as we are not exactly famous for excessive hospitality! Advice to the poster: keep your trap shut mate, but don't do it again.
Posted by: Percy on 13 Nov 2008
Don't say nuffink 'till your brief gets there.
Posted on: 13 Nov 2008
It sounds pretty black and white to me - these are personal expenses that either the firm, or worse, clients might be reimbursing you for. It may or may not amount to fraud or theft. It almost certainly amounts to grounds for disciplinary action and possible summary dismissal depending on your contract. If it is in any way an offence of dishonesty, and even if it isn't, if it brings the profession into disrepute, it's potential grounds for striking off. Apart from anything else, in the current climate anybody who 'bends' expenses rules is more than a bit daft, as a firm looking for people to make redundant will be handed a perfect excuse to legitimately dismiss you without making a redundancy payment ...
Posted by: Associate top 25 firm on 13 Nov 2008
You know you are pushing the limit with expenses. From these responses, you're not the only one who does the same. But if your firm is looking for an excuse to get rid of you, or cut headcount, and they find out about this, you're out of the door. Squeaky clean with expenses is the safe policy.
Posted on: 13 Nov 2008
On the record - shame on you, boo etc. Off the record - wouldn't worry, providing it isn't running into high figures it's unlikely to cause any major issues. Yes, I would curb it under current circumstances, but if the values are low then I doubt you'll be done for fraud. On the record, you'll definitely be done for fraud.
Posted on: 13 Nov 2008
I cannot believe you have actually gone to the trouble of asking this question. It's outrageous that you are even questioning whether or not what you've done is wrong. Obviously your gut instinct is that it is. I also work for a US firm and so I know that you get paid a decent salary which can often be higher than our peers at UK firms. Stop being such a tight-arse and pay for your own social activities. It's this type of behaviour - your sense of entitlement and lack of morals - which give lawyers a bad name.
Posted by: Aussie lawyer on 13 Nov 2008
Where to draw a line - can't believe someone who works as a lawyer is asking a question about where to draw a line. Claiming work expense is exactly that, and claiming client entertainment is exactly that as well. Its not theory on the law of restitution is it now? If I were your boss, I would have sacked you.
Posted by: Magic Circle Trainee on 13 Nov 2008
DD's comments are bizarre. Who charges personal mail to the firm? At the very least you should offer to pay! And, maybe we are being harsh, but the person in question is a senior associate no less, a lawyer! How would the general public interpret this? A tight arse lawyer who slimed their way out of paying for drinks by incorrectly charging them to the firm, whilst no doubt receiving pats on the back and handshakes from the recipients who thought the senior associate was just an overly nice guy. Its exactly this kind of disgraceful behaviour that gives lawyers a bad name - I doubt any of us read this article and genuinely believed that a senior associate could get this so wrong! This is shameful behaviour! If you think this kind of behaviour is acceptable, quite frankly, you shouldn't be an attorney. Lawyers must set an example!
Posted by: US Associate on 14 Nov 2008
Oh dear. If you have to ask the public where the line is drawn, don't you know that people are going to throw the book at you, as many have done above (fraud, theft etc)? The reality is that you can be proud that you are maintaining standards appropriate for a lawyer, and being creative at the same time, if you used your noddle. My boss (a partner and co-proprietor of the firm) used to take us out on team-building nights out, and he paid for it or asked an associate to do so, and it was claimed back legitimately from the firm the next day, with the blessing of the firm. There was no fraud or theft there. However, if we had claimed against a particular client for whom we are doing some work, or we didn't have a partner's approval to claim back against the firm, clearly we should have expected loss employment for gross misconduct, if the client didn't press you to be disbarred. So it's a question of judgment and it's no excuse to say you're naive, especially for a senior associate.
Posted by: May on 14 Nov 2008
US Associate, I am surprised that you consider the frequent practice of dropping personal mail into the out-tray without a stamp, "bizarre" - it does happen! I think many of you need to get off your high horse. Yes, it is wrong to charge personal items to the firms expense but, put it into perspective! To call it disgraceful, is just over the top. My advice is to stop pretending that you are not sure whether your actions are wrong and just get on with things. If you get caught, you know the potential consequences!
Posted by: DD on 14 Nov 2008
I've charged many non-work related to company expenses, it's simply a matter of ensuring you don't get caught. When the markets are good, I charged all my dinners with my girlfriend at Claridges and Nobu to corporate expenses, but when the markets are what they are now, any expense including a £5 cab fare will come under close scrutiny. Why is this person who posted this thread worried about what other associates think? Why are you even telling people about this?? You do know that if the person you told this to has any common sense he or she will leverage this kind of information against you to extort "favours" i.e. blackmail 101. It doesn't take much to get fired nowadays, law firms are trigger happy to keep costs down, and they have a perfect excuse to get rid of you now. Your mistake was not in fraudulently expensing non-work related activities, but in telling people what you did. Maybe you should post another thread, something like "how can I keep co-workers quiet?"
Posted by: Investment Banker on 14 Nov 2008
My own view is that, if you are happy to defend yourself on your expenses if you are pulled in by your manager, then claim it. If you think that will cause you blushes, then don't. Sounds to me by the fact that you have written in in the first place that you know you have kind of pushed your luck a bit - hopefully this will be a bit of a scare you need to remind you to pay yourself next time! Investment Banker - next time the market is good, let me know if you need a dinner date at Claridges!
Posted by: lawyerinlimbo on 14 Nov 2008
Regarding the 'personal mail' issue, people really need to chill out... yes, I sometimes send personal mail through the office, but in my opinion, the fact that I don't have time to go to the post office because I'm working through my lunch hour more than excuses my actions!
Posted on: 14 Nov 2008
To lawyerinlimbo: Alex Novarese has my e-mail, I'm always on the look-out for cute lawyers to have dinner dates with.
Posted by: Investment Banker on 14 Nov 2008
The questioner ought to bounce the idea off the Solicitors Regulation Authority, but before doing so perhaps he/she should read the core duties in Rule One of the Solicitors Code of Conduct 2007, as a bit of a clue as to what might concern the SRA, of upholding the rule of law, acting with integrity, not permitting their independence to be compromised and not behaving in a way that is likely to diminish the trust the public places in the profession - although given the question and some of the replies it might be difficult to identify any trust that public now has!
Posted on: 14 Nov 2008
You must have learned one lesson by now. Never ask lawyers ambiguous questions! You either get high morality or ill-defined opinions but never anything practical. It was a daft question to ask mind you!
Posted by: Consultant on 17 Nov 2008
I don't know about anyone else but our firm has really cracked down on expenses claims lately, to the point that any business development/client entertainment expenditure over £25 is closely scrutinised and has to be pre-authorised - otherwise you simply won't get reimbursed. I am amazed that any firm in the current climate is on the one hand laying off staff left right and centre, whilst on the other hand blithely waving through the type of expenditure described by the questioner which in some instances must run into hundreds of pounds. Perhaps managing partners need to be taking note and tightening up their procedures.
Posted on: 18 Nov 2008
I assume that everyone who has been so harsh on this questioner was responding in their own time, and not on their firm's clock?! There is a legitimate question here: to what extent can particular activities legitimately be conducted in work time and/or viewed as expenses of the firm rather than personal expenses. For example, I recently bought a gift for a secretary by way of thank you for an excellent job on a tricky project. Chargeable or not? I decided to view the gift as a personal thank you from me, but I could have argued the other way. Similarly, a couple of drinks with associates in a different team might be incredibly valuable to the firm. My own rule of thumb is this: if faced by the senior partner could I make a convincing case that on balance the item was rightly chargeable?
Posted by: Ex-MC Lawyer on 19 Nov 2008
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