PROLIFERATION OF DISCOUNT LEGAL SERVICES AND THE PITFALLS INHERENT THEREIN

A disturbing and dangerous business model has become endemic which seeks to exploit unemployed and unemployable attorneys for whom there was never any room in the market place by paying them a highly undesirable salary by using them to provide basic legal services to people who presumably can’t or don’t want to pay for quality real legal assistance. Nowhere is it truer that with legal counsel you certainly get what you pay for.

The reason some attorneys make $200-$500+ per hour is because they have built their clientele and experience to such a level that clients see the value of paying such amounts in exchange for the services they receive. No attorney starts at $300 per hour. The labor of an attorney is strongly based on experience and the more experience an attorney has, that faster the work is performed, the higher quality it is, and the better results are obtained, along with development of that essential ability to predict the outcome of a given matter with a high degree of accuracy so as to be able to advise the client accordingly.

Attorneys are not being paid directly for the services they provide; their commodity is time: time invested in education, learning the profession, and time expended in performing their legal duties learning the various inherent processes of the legal industry. Time is a priceless commodity, and the more time is saved for the client the more a given attorney is worth. In the commercial world time also equals money, and the more time a client gains the more money they are generally able to make as a result of their counsel’s activity. An attorney always must have an eye towards maximizing the value to the client in that his/her business needs to experience a tangible benefit as a result of the attorney’s actions, whether its increase in revenues or avoidance of undesirable costs.

When a corporate middleman gets in-between a client and an attorney, results inevitably suffer. This is unavoidable as the discount workload flood to the low-paid counsel outweighs his/her ability to truly provide the most high-quality advice and their best work-product. The reasons for this are simple: employers have quotas, and pay the attorney a flat salary. The attorney is responsible to his/her employer, not to the client, therefore attorney-client relationships will ineluctably suffer, communication will be far less detailed and personally tailored, and the most beneficial results will not be obtained.

The law is a detail-oriented profession; with a deluge of clients demanding attention, the discount flat-fee attorney will not be interested in doing that second or third document review to make sure it’s as close to perfect as reasonably possible and avoids latent pitfalls for the client. He will not go out of his way to do that extra research to make sure that what he is drafting or reviewing is fully based in the law. Discount lawyers will not do the extra work necessary in providing the best quality services, but will merely do the minimum necessary to get the company’s client to move on.

There is an inherent conflict of interest in such a relationship: the attorney is being paid by his/her employer, not the client. The client is a client of the company, not the attorney. How will a client introduce his/her attorney to third parties? “This is my counsel he works for ‘Legal Zoom’ or ‘Rocket Lawyer’ for a flat monthly fee”? This is not in the least professional or impressive to any party dealing with a client as it appears like the person doesn’t have the cash flow from the success of a business to even retain a professional private counsel and prosecute a matter or negotiation to completion. No one would be intimidated in the event of a dispute, or even take such counsel seriously.

What if a third party to a transaction would need to communicate directly with an attorney, will the client provide the attorney’s contact information at his corporate employer? john@bizcounsel.com? Again, another bad and unprofessional idea; the third party will immediately understand the client’s funds are very limited and the legal services will be of low quality… It’s almost as bad as using a discount offshore attorney; such people really have little to no authority to act, make credible demands, or enter into dispute resolution processes. Such attorneys will generally be ignored and both the client and his/her attorney will not be taken seriously. This is entirely contrary to the response a client might receive by engaging an actual self-sustaining law firm with letterhead, an office address, and a professional email address. Such parties are respected and their communications are taken seriously.

Note that companies with many offices and departments will have a lot of eyes on your private personal and business information, which is a major ethical issue that has potential for violation of attorney/client confidences. A client has no idea how many people have reviewed his/her personal confidential information. Companies where data is freely exchanged and goes through many parties get hacked frequently and their data is regularly stolen ending up on the black market. They don’t have the same obligations to safeguard private client data as does a professional stand-alone law firm.

There is also that nagging question of fee splitting and whether non-law firm companies are permitted to hire attorneys, be paid by clients and pay the attorneys a salary based on the legal services they provide. Generally, splitting fees with non-lawyers is unethical and subject the attorney to discipline. The attorneys working on a given matter are clearly being paid by their employer, which is not a law firm, and not by the client. There is a lack of clarity as to how this situation is currently permitted by the various bar associations and the ABA, but as everyone knows money talks and their prior approvals of outsourcing legal work to other countries which caused havoc for new US lawyers have been disgraceful acts which undercut the integrity of a profession which had little of it to lose. Yes, the legal governing bodies are utterly corrupt and don’t care who suffers, whether it’s lawyers or clients, they will approve any state of affairs so long as they have a steady revenue stream. Similar actions have been carried out by regulatory bodies in many professions with the goal of reducing labor costs and lining their own and big-business’ pockets.

In conclusion, you have been warned about utilizing these discount low-quality intermediary legal services, but unfortunately most people don’t understand the difference between high quality legal services and mediocre legal services. High quality attorneys know that a client requires direct personal attention to receive the highest quality legal services, and to fully maintain the various confidentiality privileges inherent in this relationship, this is how their fees grow and they become reputable. An attorney has little if he does not have a good reputation. There are many price ranges for competent stand-alone legal counsel that will fit nearly any business’ needs, you will just need to do your research first and try to negotiate. If you still can’t budget for REAL legal counsel, without conflicts of interest, within your business’ operations, then you likely should not be in business to begin with.