Burkert: Two-Year Suspension and Full Restitution as a Condition to File for Reinstatement in Law‑Firm Fee Diversion Cases

Introduction

In Office of Lawyer Regulation v. Matthew V. Burkert, 2025 WI 44 (Wis. Sept. 12, 2025), the Supreme Court of Wisconsin imposed a two-year suspension on Attorney Matthew V. Burkert for a sustained pattern of deceit and fee diversion from his law firm, Sorrentino Burkert Risch LLC (SBR). The case centers on Burkert’s creation and use of a personal limited liability company, MZR Advisors, LLC (MZR), his failure to disclose it to his firm, and multiple instances of diverting firm-earned legal fees to himself or MZR. Although the referee recommended an 18-month suspension under a stipulation, the Court increased the sanction to two years, citing the seriousness and duration of the misconduct and Burkert’s failure to accept full responsibility or make full restitution.

The key issues included:

Whether Burkert’s conduct violated SCR 20:8.4(c) (dishonesty, fraud, deceit, or misrepresentation) and SCR 20:8.4(f) (violating a supreme court decision regulating lawyer conduct), the latter enforcing the fiduciary duty to one’s law firm recognized in In re Disciplinary Proceedings Against Shea.
The appropriate sanction for a pattern of law-firm fee diversion where the respondent offers partial restitution and a no-contest plea but does not fully accept responsibility.
Whether, and to what extent, the Court can go beyond a party stipulation to require full restitution as a condition even to filing a reinstatement petition.

Parties:

Complainant: Office of Lawyer Regulation (OLR)
Respondent: Attorney Matthew V. Burkert
Referee: Hon. Karen L. Seifert

Summary of the Opinion

After roughly 22 months of litigation, Burkert entered a “Comprehensive Stipulation,” withdrew his answer to the amended complaint, and pled no contest to two counts:

Violating SCR 20:8.4(c) by engaging in a pattern of dishonesty, fraud, deceit, or misrepresentation.
Violating SCR 20:8.4(f) by breaching the fiduciary duty and duty of honesty to his law firm recognized in Shea.

The Court adopted the amended complaint’s allegations as the factual basis for misconduct across eight matters (seven client representations plus concealment/misuse involving MZR). It rejected the stipulated 18-month sanction and imposed:

A two-year suspension, effective on the date of the order (¶¶24, 27, 31, 34).
Restitution of $24,358.50 to SBR (or its successor or former members excluding Burkert) within 60 days (¶35), with restitution to be completed before paying costs (¶38).
A condition that Burkert may not even file a petition for reinstatement unless he proves he has made full restitution to SBR for all monies he diverted—beyond the $24,358.50—thus leaving no unresolved fee-diversion claims (¶¶32, 36).
Payment of costs of $4,875.21 (¶33, ¶37) and compliance with SCR 22.26 (suspended-attorney duties) and SCR 22.29(4)(c) (reinstatement conditions) (¶¶39-40).

The Court emphasized that partial restitution, delayed acceptance of responsibility, and last-minute no-contest plea did not justify a downward adjustment from precedent. It also underscored that it would “accept no excuses” for any failure to complete restitution before a reinstatement petition is filed (¶32).

Factual Background in Brief

Admitted in 2004, Burkert practiced in southeastern Wisconsin and had no prior discipline (¶3). While still a member of SBR, he formed MZR using SBR resources and funds and failed to disclose MZR on the firm’s malpractice insurance “Outside Interest Supplement” (¶¶6-8). After leaving SBR on July 31, 2020, SBR discovered that:

C.W.: Burkert invoiced through MZR for work SBR had billed; he refunded C.W. and directed payment to SBR only after SBR raised concerns of fraudulent conduct (¶¶10-11).
E.N.: Work performed using SBR systems was billed through MZR; Burkert denied intentional use of SBR resources (¶12).
Selzer-Ornst Construction: SBR billed $19,148.50; while still at SBR, Burkert issued a $20,000 MZR invoice, which was paid; he held the converted funds for years and had not remitted to SBR as of the amended complaint and even the stipulation (¶¶13-14).
Cox Plumbing: SBR performed over $42,000 in legal work; Cox provided at least $20,000 in plumbing services to Burkert personally as a purported barter; SBR was unpaid (¶15).
Cherney Brothers/M.B.: SBR provided $2,390 in legal services; days before departure, Burkert wrote off the SBR bill; Cherney had already paid MZR $17,350; Burkert claimed any legal fees included were “inadvertent” and promised reimbursement that had not occurred (¶16).
Cottage LLC: SBR provided $9,198 in legal services; Burkert wrote off the bill, citing a deal to exchange free SBR legal services for equity; later produced a letter attempting to distance the equity from legal services; SBR remained unpaid (¶17-18).
Jendrach, Dobogai, Lindseth, Inc. (JDL): JDL paid $968.50 directly to Burkert personally rather than to SBR (¶18).

Although OLR charged only two rule violations, the Court noted the multiplicity and breadth of the conduct, observing the matter could be viewed as involving 16 acts of misconduct (¶19).

Analysis

Precedents Cited and Their Influence

In re Disciplinary Proceedings Against Shea, 190 Wis. 2d 560, 527 N.W.2d 314 (1995): Establishes that a lawyer owes fiduciary and honesty duties to the lawyer’s firm. This decision is enforceable via SCR 20:8.4(f), which makes it misconduct to violate a supreme court decision regulating lawyer conduct (¶19). In Burkert, the Court applied Shea to hold that diverting firm fees and concealing a competing entity breaches these duties (¶¶19, 24).
Inglimo, 2007 WI 126, ¶5, 305 Wis. 2d 71: Articulates standards of review—factual findings are affirmed unless clearly erroneous; legal conclusions are reviewed de novo (¶23). The Court’s de novo determination on sanction thus was independent of the referee’s recommendation.
Widule, 2003 WI 34, ¶44, 261 Wis. 2d 45: Confirms that the Court determines appropriate discipline independently, albeit benefitting from the referee’s recommendation (¶23).
Scanlan, 2006 WI 38, ¶72, 290 Wis. 2d 30: Lists sanction factors: seriousness and extent of misconduct; need to protect the public/courts; impress upon the respondent the seriousness; deterrence (¶25). These factors drove the Court to the higher end of the sanction range.
Malloy, 2025 WI 39, ¶64: Affirms the practice of fitting sanctions within precedent while tailoring to case-specific facts (¶25).
Hotvedt, 2016 WI 93, 372 Wis. 2d 68: Stipulated 18-month suspension in a firm-fee diversion context, accompanied by an agreement on restitution (¶21; ¶29). Cited to mark the low end of the suspension range when accompanied by full restitution and responsibility.
Koenig, 2015 WI 16, 361 Wis. 2d 16: Stipulated two-year suspension and restitution in a fee-diversion case (¶21; ¶26). Support for the higher end of the range.
Brown, 2005 WI 49, 280 Wis. 2d 44: Stipulated 18-month suspension where the respondent self-reported and reached a restitution/dissolution agreement repaying all improperly taken fees plus damages (¶26; ¶29). Distinguishes cases with meaningful, early acceptance of responsibility.
Cotter, 171 Wis. 2d 373 (1992): Two-year suspension where the respondent accepted little, if any, responsibility (¶26; ¶29). The Court analogized Burkert’s posture to Cotter rather than to Hotvedt/Brown.
Carroll, 2001 WI 130, ¶40, 248 Wis. 2d 662: Cited by the referee as framework authority on disciplinary factors (¶22).

Taken together, these authorities establish a suspension band of roughly 18 months to two years for law-firm fee diversion, with the placement within that band keyed to restitution and acceptance of responsibility. Burkert’s case lands at the upper boundary due to sustained misconduct and inadequate remediation.

Legal Reasoning

The Court emphasized four themes in escalating the sanction to two years:

Seriousness and pattern, not an isolated lapse (¶28). Burkert devised and used a separate entity (MZR), incorporated using SBR resources, concealed it from firm disclosures, manipulated firm billing (“hold”/write-off directives), and repeatedly invoiced through MZR for work done by SBR or by SBR personnel. The pattern spanned numerous matters over a prolonged period.
Harm and risk. The conduct risked or resulted in:
- Clients being asked to pay twice (e.g., Selzer-Ornst, ¶14).
- Firm nonpayment for its work (e.g., Cox Plumbing, Cottage LLC, multiple others).
- Firm exposure on malpractice coverage due to nondisclosure of outside interests (¶7-8).
Lack of full acceptance of responsibility and delayed restitution (¶¶29-30). The Court contrasted Burkert’s posture with Hotvedt and Brown. Burkert litigated for nearly two years before entering a no-contest plea, repeatedly minimized or characterized actions as “inadvertent,” and agreed only to partial restitution in the stipulation. He had not reached any restitution agreement with SBR before the complaints were filed, and still retained funds years after diversion (¶14, ¶16, ¶30).
Deterrence and protection of the profession (¶31). To impress upon Burkert and the bar the seriousness of firm-fee diversion and concealment, and to deter similar misconduct, the Court selected the higher end of the established sanction range.

On restitution, the Court took a pragmatic but firm approach. It ordered payment of the stipulated $24,358.50 (¶35), but—rather than remanding to compute additional sums—it made full restitution to SBR for all converted/diverted fees an explicit condition of filing any petition for reinstatement (¶32, ¶36), referencing SCR 22.29(4)(m). The Court expressly warned that “no excuses” would be accepted; restitution “needs to be completed before a reinstatement petition is filed” (¶32). Restitution must be completed before costs (¶38).

Procedurally, because neither party appealed the referee’s report, the Court reviewed under SCR 22.17(2), which authorizes it to adopt, reject, or modify the referee’s findings, conclusions, and discipline (¶1). Exercising that authority, the Court independently increased the sanction and imposed the restitution-based filing condition.

Impact

The decision has several implications for Wisconsin’s attorney discipline landscape:

Sanction calibration in firm-fee diversion cases: The Court affirms a range of 18 months to two years, but clarifies that the higher end is appropriate where the respondent:
- Uses a scheme or entity to divert fees and conceal activities.
- Minimizes or delays acknowledgment of wrongdoing.
- Fails to promptly and fully restore the firm’s losses.
Restitution as a gatekeeping condition: By requiring full restitution as a condition even to filing a reinstatement petition, the Court strengthens restitution’s role from a typical reinstatement factor to a true precondition in fee-diversion cases. Practically, respondents should expect that negotiated stipulations with partial restitution will not avoid a robust restitution condition in the final order.
Stipulations are not binding on the Court: The Court will look past a jointly recommended sanction if the record reflects sustained dishonesty, ongoing harm, or insufficient accountability. Agencies and respondents should calibrate stipulations accordingly, securing comprehensive restitution and clear acceptance of responsibility if they seek lower-range sanctions.
Outside business interests and firm governance: Nondisclosure of outside entities on malpractice insurance supplements, and the use of firm resources to build personal ventures, materially aggravate discipline. Firms should reinforce policies requiring disclosure/approval of outside business interests and create audit mechanisms for time/billing anomalies, “holds,” and write-offs.
Client protection: The Court was alert to the risk of clients paying twice. Firms handling suspected fee diversion should notify clients promptly and coordinate with OLR to prevent duplicate payment or confusion. Respondents must unwind diversions in a way that makes clients whole and restores the firm’s rightful fees.

Complex Concepts Simplified

SCR 20:8.4(c): Dishonesty, fraud, deceit, or misrepresentation. This catch-all rule covers a wide range of deceptive conduct, including invoicing through an undisclosed affiliate, writing off firm bills while collecting personally, and telling staff to conceal an entity’s ownership.
SCR 20:8.4(f) and Shea. SCR 20:8.4(f) makes it misconduct to violate a supreme court decision regulating lawyers. Shea recognizes that lawyers owe fiduciary duties (loyalty, honesty) to their firms. Diverting firm fees to oneself or a personal company, or concealing a competing venture, breaches those duties.
Conversion of firm fees vs. client trust account violations. Even when funds do not pass through a trust account, diverting fees earned by the firm is conversion and can yield serious discipline. The absence of a trust-account violation does not immunize fee-diversion wrongdoing.
No-contest plea in discipline. A no-contest plea allows the Court to accept the complaint’s allegations as the factual basis for misconduct without the respondent admitting each allegation in his own words. It can streamline proceedings but does not guarantee a lesser sanction.
SCR 22.17(2) review. When no party appeals the referee’s report, the Court still reviews the matter and may adopt, reject, or modify the referee’s findings, conclusions, and discipline.
Restitution vs. costs. Restitution compensates those harmed (here, SBR) and in this case must be paid before costs to OLR (¶38). Costs reimburse the disciplinary system’s expenses.
“Hold” and “write-off” directives. Directing the firm’s accounting to “hold” or “write off” client invoices while separately billing or collecting through a personal entity is a red flag for fee diversion and a breach of firm fiduciary duties.
Barter/equity-for-fees. Accepting personal plumbing services or equity in lieu of a client paying the firm is impermissible unless properly authorized by and accounted for within the firm. Unilateral barters convert firm property.
Outside Interest Supplement. Many firms require disclosure of outside business interests for malpractice coverage. Failure to disclose can jeopardize coverage and is itself evidence of concealment and dishonesty.
Reinstatement prerequisites (SCR 22.26; 22.29(4)(c), (m)). A suspended lawyer must wind down practice properly (SCR 22.26). For reinstatement, the lawyer must show compliance with all conditions, including restitution; here, full restitution is a condition to filing the petition (¶¶32, 36, 39-40).

Why the Court Rejected the 18-Month Stipulation

The OLR initially sought two years but later agreed to 18 months based on Burkert’s no-contest plea and a promise of partial restitution ($24,358.50) (¶21). The Court found that insufficient to offset:

Burkert’s prolonged pattern and plan using MZR (¶28).
His minimization (“inadvertent,” “unintentional”), lack of prompt full restitution, and litigation posture over nearly two years (¶¶29-30).
Continued retention of diverted funds for years (e.g., Selzer-Ornst) (¶14).

By contrasting cases with prompt, full restitution and self-reporting (Hotvedt, Brown) against those with denial or minimal acceptance (Cotter), the Court concluded the higher sanction was necessary (¶27-31).

Practical Takeaways for Lawyers and Firms

Do not bill through a personal entity for work performed at or using the resources of your firm unless expressly authorized and properly accounted for.
Disclose all outside business interests in firm-required forms, especially for malpractice insurance renewals.
Never direct firm accounting to “hold” or “write off” invoices as a pretext to collect fees personally.
Do not accept personal barter or equity for matters handled through the firm unless formally approved by and documented with the firm.
If misconduct occurs, promptly self-report, accept responsibility, and make full restitution before stipulating to discipline; these steps can materially affect sanction length.
Firms should implement controls: regular audits of time/billing changes, mandatory outside-interest disclosures, and procedures to detect off-system invoicing.

Conclusion

The Wisconsin Supreme Court’s decision in Burkert reaffirms that diverting fees from one’s law firm and concealing a personal billing entity constitutes serious dishonesty and a breach of fiduciary duty to the firm. The Court set the sanction at the upper end of the established range—two years—because the misconduct was planned and sustained, and because Burkert did not accept full responsibility or promptly make restitution. Importantly, the Court strengthened the remedial framework by making full restitution a condition to filing any petition for reinstatement, signaling that partial, delayed, or disputed restitution will not suffice.

For future cases, Burkert clarifies that: (1) stipulations will not bind the Court where the record warrants stronger sanctions; (2) full restitution and genuine acceptance of responsibility are the key determinants between 18-month and two-year suspensions in firm-fee diversion matters; and (3) restitution may function as a gatekeeping prerequisite to reinstatement, not merely a factor. The decision protects clients, firms, and the legal system and provides clear guidance to practitioners on the grave consequences of concealing outside ventures and converting firm fees.

Note: Justice Rebecca Grassl Bradley did not participate (¶41).