Limiting Competition in the Business of Law

Imagine if we had kept the same kind of guild for managing the airlines as we have in the business of Law today? We would still have expensive meals, assigned seating, few baggage charges but the fares would be two to three times as high.

Why not open up the law industry like we have the airline industry? Today this business is controlled and regulated by itself. Its stated mission is to protect the public but in reality its actions consistently reduce competition, protect attorneys and carry on the status quo. The American Bar Association (ABA) acts like a guild to restrict competition, limit the number of new attorneys, and make it very expensive for new entrants to upset the apple cart.

It probably doesn’t matter to you (directly) if some faceless corporation is paying $500 and hour for advice on a securities filing. But how about when you need assistance on a contract dispute that involves $25,000? How much “help” can you afford on a smaller dispute?

The American Bar Association approves law schools, manages the process of disciplining attorneys via State bars, and controls who can practice law via its administration of state licensing.

Here is what the legal industry does not do: 1) make it easy for an alternative approach to preparing future lawyers; 2) insist that attorneys tell their clients how much legal malpractice insurance they carry (in most states); 3) insist that attorneys tell their clients how many times they have been sanctioned or sued for legal malpractice; 4) make the complaint process against attorneys fast, transparent and fair; 4) use non-attorneys in the regulation of the legal industry (in any meaningful way); 5) demonstrate any correlation between passing the bar exam with providing excellent legal service.

There is a small glimmer of hope in a few minor areas of the law: 1) advertising is now allowed (albeit with some major restrictions); 2) in a few states individuals can take the bar exam without graduating from an ABA accredited law school; 3) foreign law firms (primarily from India) are competing with some of the research functions that were historically provided by big US law firms; 4) Legal Zoom and other online services provide legal forms that assist Americans with standard wills and contracts that were historically generated by attorneys at a much higher price; 5) internet services like elance.com allow clients to seek out legal and paralegal assistance from all over the world to do their own legal research rather than having to pay several times as much to a large US law firm.

This piece in the New York Times speaks to the obstacles to reducing the cost of law school.

The ABA requires a minimum percentage of full-time professors, strongly suggests tenure programs, and requires law schools to maintain expensive law libraries. And then they manage the accreditation process and have convinced the US government to only allow veterans to use their college benefits to pay for ABA accredited law schools.

It is time for far more competition in the business of law.

Before you hire an attorney

You should check with the state bar to review the record of your prospective attorney. Most of the time this is an online search (for example in California one would go to their web site ). At a minimum you will be able to confirm that they are licensed to practice in your state, when they were admitted to the state bar and what law school they attended.

More importantly, in many states the online material will show you if there has been disciplinary action against the attorney. I recently checked out a California attorney that has been practicing since the late 1980's but had been disciplined for not filing the proper papers with the court for a conservatorship. She had been paid in advance, and the clients had to hire another attorney to complete the work. Does this sound like the kind of attorney you want working for you?

An article about hiring a tax relief attorney

An article about hiring a tax relief attorney.

"If you need help with your tax debt, it is recommended for you to call a tax relief attorney." The article suggests considering hiring an attorney that is also a CPA (fairly rare). And I personally would start with my CPA in this situation. Depends on the cost of the attorney versus the CPA and are you only talking about fighting additional levies or do you have a criminal risk. In the later case I would definitely talk to an attorney, if we are only talking about money my personal preference is the CPA route.

Some good advice from an attorney on DWI cases

One important thing to know from the start is to always cooperate with the arresting officer who pulls your car over. If you are compliant and respectful it will set you in a much more positive light when your case is presented to a judge. Being belligerent and causing the office difficulty during the arrest process will likely work against you in court

Lawyer burns cigars!

BEST LAWYER STORY OF THE YEAR

This took place in Charlotte, North Carolina . A lawyer purchased a box of very rare and expensive cigars, then insured them against, among other things, fire.

Within a month, having smoked his entire stockpile of these great cigars, the lawyer filed a claim against the insurance company.

In his claim, the lawyer stated the cigars were lost 'in a series of small fires.' The insurance company refused to pay, citing the obvious reason, that the man had consumed the cigars in the normal fashion.

The lawyer sued - and WON!

Delivering the ruling, the judge agreed with the insurance company that the claim was frivolous. The judge stated nevertheless, that the lawyer held a policy from the company, in which it had warranted that the cigars were insurable and also guaranteed that it would insure them against fire, without defining what is considered to be unacceptable 'fire' and was obligated to pay the claim.

Rather than endure lengthy and costly appeal process, the insurance company accepted the ruling and paid $15,000 to the lawyer for his loss of the cigars that perished in the 'fires'.

NOW FOR THE BEST PART...

After the lawyer cashed the check, the insurance company had him arrested on 24 counts of ARSON!!! With his own insurance claim and testimony from the previous case being used against him, the lawyer was convicted of intentionally burning his insured property and was sentenced to 24 months in jail and a $24,000 fine.

This story won First Place in last year's Criminal Lawyers Award contest.

(unfortunately according Snopes.com the story is false)

Should you hire an attorney pursue a lawsuit?

If you are considering a lawsuit as a plaintiff (you want to be paid for damages from the defendant), you need to consider carefully if it is worthwhile.

If you are hoping to hire an attorney on contingency where your attorney only gets paid if you prevail (see earlier post) then the attorney will do much of the due diligence to determine if your case is worth his time.

But if you are paying by the hour, you are much less likely to hear from your attorney (early on) that you are wasting your money.

Beyond considering if you have been wronged and if you have a case, the most important factor to consider is will you ever collect. If the defendant is about to declare bankruptcy, you will likely collect nothing but frustration. If the defendant is a small company, what prevents the defendant from simply folding up shop? For individuals and small companies it is very tough to determine what the wrongdoers assets and liabilies are. The fact that they drive a nice car and live in a nice home means nothing these days. The car may be leased and the house is likely underwater relative to the mortgage. At least on the defendant's real property you can go down to the county recorder's office and see what liens are already filed against the property.

So first and foremost start with an analysis of the ability to pay a judgment by someone you are considering suing.