So.... about that bullet....

I hadn't thought about this in ages, but during my half-day constitutional the other day, I saw a lawyer's name on a local court calendar.  I hadn't seen his name in some time, and it took me back to well over four years ago when I was approached about a Business Opportunity this other guy had become involved in.  I passed on it at the time, and that now ranks among one of the better choices I've ever made. Because the other guy wound up getting his name on a published and cited case, which, as Miranda or Wade or Brown would tell you, never amounted to anything good for them. And Jason, aka the other guy, came within a hair of being barred from practicing his profession.

To understand the dynamics behind all this, you have to understand the almost medieval and ecclesiastical traditions that still permeate the practice of law in this country.  Virtually all professions in New York, from medicine to manicure, are regulated by the executive branch of state government. Between them, the Departments of State and Education determine the qualifications, issue the licenses and deal with any issues of discipline. The huge exceptions to that are for lawyers and judges, who not only work in and around the courts but are entirely regulated by them. At the state level, the Court of Appeals, our highest court, regulates law school and bar examination standards and judicial discipline. The intermediate level appellate courts (four of them, ours based in Rochester) are in charge of determining applicants'  fitness to be "admitted" to practice throughout the state's courts; considering charges of misconduct against lawyers; and issuing orders of suspension, disbarment and reinstatement accordingly.  Then, as if that's not complicated enough, each federal court in the country (hundreds of District Courts, thirteen Courts of Appeals and finally the Supremes) has its own internal procedure for admitting and disciplining attorneys. Our local bankruptcy court even has its own sub-level of regulating those who appear here. 

All of this predates multistate and international models of law practice, and is way more ancient than the Internet and its methods of marketing.  When I started practicing when dinosaurs roamed the earth in 1985, the only way for a lawyer to cross a state line was to become admitted in that second state for all purposes, or to apply for one-time admission for a particular case.  I've never been permanently admitted outside New York or its federal courts, but I've worked with lawyers who have. They took the time, spent the money and often took a whole separate bar exam in states like Florida and California that dislike poachers and never allow a lawyer to "waive in" after any number of years practicing.

I once did do the second temporary route- pro hac vice, it's called- for a bankruptcy case in New Jersey, and it's almost as much of a pain as taking another bar exam.  They charge a ridiculous fee in proportion to what permanent admission costs, and they made me register with the state's Lawyer's Fund for Client Protection. New York has one of these, too, paid for out of our biennial registration fees, and is a slush fund of sorts for reimbursement of clients who were done in by Bad Lawyers.  I finished my work in that one Joisey case in under a year sometime in the late 90s; years later, I got a demand letter from Trenton about my years of nonpayment of annual contributions to the slush fund and offering me "amnesty" from interest and penalties if I'd just pay the annual fee, now over 200 bucks a year, for all the years I'd "missed." I sent them a copy of the docket showing the conclusion of the case, but I'm still afraid of driving on the Turnpike lest my EZ-Pass identify me as a fugitive and my body dumped in the Pine Barrens.

Lawyers being the shifty sorts that we are, they are always trying to come up with ways to get around antiquities such as these to fit their business plans.  Bankruptcy is particularly fitting to a multistate model, because while there are differences between states and often even regions of a state, probably 90 percent of it is uniform. I could parachute into a 341 hearing in Georgia, or review a reaffirmation to be filed in Guam, and I would know most if not all of what I was doing.  The Official Forms are the same everywhere, and many local variations on some of them, such as reaffirmations and repayment plans, have been superseded by mandating the use of nationwide Official Forms.  So it was tempting for some enterprising folks to try to find a need and fill it, taking a nationwide model of marketing and trying to fit it within the pigeonholes of the existing structure of hundreds of federal bankruptcy courts regulated by as many federal district courts and deferring to the admission and discipline rules of 50 state courts.

It's not going well for them.  The System, which grew out of that hundreds-headed hydra of courts and centuries of tradition, fought back mightily against them as their model took hold, and I got to watch it solely as a bystander rather than as a participant. Or, as the local attorney Jason found, as a defendant.

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In late February of 2017, I got a phone call from a Chicago area code. The guy's last name was Bux. This may be a stage name, because bucks was what he was offering. To the extent I was told anything in confidence during communications with him and others up the food chain, I don't remember specifics, other than them being consistent with details that have been made public in various court cases over the ensuing years.

This piece from 2018 summarizes what went down in numerous jurisdictions between the time I got that call and the time the wheels started to come off:
 

( It's downright Upright! )

This was the crux of what Bux was pitching to me.  I told him I wanted to hear more, and particularly wanted to know if any other attorneys were on this program with them in my primary court. I got two names. Neither was one I recognized as a regular from practice: Jason, I hadn't heard of at all, while the other one was a much older Buffalo lawyer who I remembered from a lawsuit I brought on behalf of a bank at least 25 years earlier.

I searched the court's electronic files to look at a couple of their recent filings. They looked unremarkable; not great, not bad.  I reached out to Jason to find out more about his experience with the program, and we met briefly in Rochester, probably after a calendar we both had cases on. He spoke positively of it, but wasn't exactly gushing.

Bux continued to push for a reply. I did some more research, and found the beginnings of The System fighting back against this model:

UpRight Law has been under attack by the U.S. Trustee’s office in several states and though the allegations put forth in the Virginia cases sound more significant in fraud than the lack of oversight alleged in other cases in Louisiana and Tennessee, UpRight is likely to face additional sanctions in the coming months.

 

As the U.S. Trustee’s office noted, “[l]awyers who inadequately represent consumer debtors harm not only their clients, but also creditors and the integrity of the bankruptcy system. The damage caused increases exponentially when they operate nationally...”

That's from the 2018 article, but the UST  attorneys in Rochester already had Jason and this model on their radar. I found out some of the concerns that were leading to this aggressive action, mainly coming out of the failure to fully disclose the fee arrangements between the client, the local "partner" and the Chicago HQ, and the inadequate supervision of non-attorneys who were "selling" the service and making legal recommendations long before any lawyer got involved. This was certainly happening well before the local attorney, whose name would be on the actual petition, got any word of it.

I reported my concerns, and talked, first, to an actual attorney from the Chicago office. Then I got a call from a New York bankruptcy lawyer I knew. He was with one of the biggest firms New York State, a paragon of the traditional model of law practice with actual admitted lawyers and actual brick and mortar offices in many cities and states.  He wanted to assuage my concerns and thought we could work through them. Some of the identified issues had been resolved before my proposed involvement. It's all good!

It wasn't. I passed on it. I'd occasionally see Jason listed as attorney for someone appearing the same day as mine, but I also would see his name as a defendant in a related case brought against him and the Chicago home office, which was trying to disqualify all of them from representing anybody, not just that firm's clients, in the Western District of New York. The System ultimately failed to extract that punishment, and Jason continues to file cases to this day. Whether still for them or not, I don't know. But I do know that he was required to give back every penny he made on at least one case he filed for them, and his name is immortalized for his involvement with a "practice model" that now forever has the word "scam" attached to it.

Which gets us to the part I did NOT know about....

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The "Virginia cases," mentioned in the article quoted from and linked to above, came out after Jason's partial exoneration from further pain,  but they described an even stinkier part of the business model that I had not heard of and never would have given a blessing to:
 

( I'm from the Repo Man and I'm Here to Help You!  )

So, you take my car, haul it out of state, run up exorbitant towing and storage charges that prime the lienholder's right of payment AND pay for my bankruptcy? What could POSSIBLY go wrong?

Getting caught, is what. The Virginia cases ordered Repo Man to give back all the ill-gotten gains from this scheme, and suspended both of the local "partners" complicit in it from practicing before that Bankruptcy Court on any case for between 12 and 18 months, plus sanctioned each of them five grand.  The judge ended his decision with these ominous words:

Attorneys considering joining firms with this business model should understand that, in this Court, while an injury might be initiated elsewhere – there is a real possibility the pain is going to be felt at home.

Duly noted.

 

PS: The guy from the Big New York State firm who called toward the end of my brief encounter with these folks and tried to pitch me on them?  His firm wound up defending them in the morass of litigation brought in our local bankruptcy court, probably to the tune of hundreds of thousands of dollars in legal fees.  These days, that firm is much busier representing debtors. Not the poor and downtrodden, but all three of the Catholic dioceses that have filed Chapter 11 petitions in Rochester, Buffalo and Syracuse in response to being sued over priests diddling altar boys.  More hundreds of thousands of dollars in legal fees. And far as I know, no church vehicles have had to be towed out of state to pay for them!