Recently, I filed an adversary proceeding relate to a creditor violating the automatic stay issued in a bankruptcy. It was a relatively small claim, which might have cost the creditor a few thousand of dollars to resolve. The reason the lawsuit was filed was because the creditor (debt buyer) would not stop sending billing statements to the bankruptcy debtor despite the fact the bankruptcy attorney had called the creditor and reminded them to stop, and sent two demands by fax informing the creditor of the violations and asking the creditor to stop free of litigation. It was not as if efforts were not made to get the matter resolved without the need for litigation, which was unfortunate because violators who have knowledge of the bankruptcy and who violate the automatic stay are generally held strictly liable.
Now, once I file a suit as here, the creditor usually notices the error and someone is on the phone apologizing and seeking to resolve the matter. Why? Because, again, it is costly to move forward on such a suit, you can usually prove up a violation by use of objective facts, and because the creditor is strictly liable not only for the violation, but for the cost of the litigation.
That is what normally happens, but not always.
The other day I get no phone call, no discussion, and no warning. What I receive is a motion to dismiss my adversary proceeding from the creditor claiming that the Bankruptcy Court lacks jurisdiction to enforce its own injunctions and orders. A pretty amazing statement when you think about it. And, one not likely to prevail. It is the legal equivalent of a Hail Mary pass.
So, I call up the opposing counsel, remind him of the strict liability nature of the suit, that the willful nature of the violation is proved by objective facts from the Court's own files coupled with the actual billing statements sent and the faxes to the creditor from the bankruptcy attorney. The response from the lawyer, I would assume to the shock of his client if known, was that his creditor/client "pays like a slot machine", and as a result the creditor will get everything that creditor is due.
The conversation was interesting. Contrary to my intent, the conversation did not center around the perceived needs of the Plaintiff of Defendant. It centered on the need for lots of cash of the attorney for the Defendant. It centered on the need for Defendant's counsel to offer as much service, at the highest price possible, on what is likely a Don Quixote defense for no better reason than his debt-buyer client is huge and will pay his bill pretty much without question. The attorney would rather have the $10,000 to $20,000 in his pocket, from his client, as compared to the $2.000.00 or $3,000.00 the Defendant might have to pay now. We know this because the remark of Defendant's counsel did not indicate any larger legal issue that needs to be resolved, or even his client's good faith need for the extension or change of the law.
Note that Defense counsel did not indicate that he would not earn the money he intended to be paid from his "slot machine" client, or that he was not going to provide substantial services to his client. He fully intended to provide his client every conceivable service he could think of, however justified or unjustified, before settlement could be considered or a judgment could be obtained.
In litigation they typically refer to this as a "Wal-Mart defense". I have never litigated against Wal-Mart, but it is said that the company refuses to settle any case, no matter how meritorious, for fear that it would simply encourage other aggrieved people to sue Wal-Mart. Maybe this is true as to Wal-Mart, and maybe it is not, but that is the vernacular in which lawyers speak.
The difference is that theoretically in Wal-Mart's case that this type of fully bundled, all out litigation is its decision and it is consistent. Having litigated against this debt buyer in the past without this particular attorney on the other side, and having litigated against this attorney in the past without this debt buyer on the other side, this Wal-Mart defense is not the typical province of the debt buyer, but it is the typical province of this attorney. In short, this lawyer handles most of his cases this way regardless of who he might represent. From this we might be able to assume that it is the attorney in this case, and not his "slot machine" client that is deciding on the bundle of services provided in the litigation.
I recognize that there is a tendency in all lawyers to judge what we perceive as the poor litigation choices of the other side. We would like to pretend we do not do this, but we do. In this instance, however, my point is more illustrative of a larger point.
Litigation does not really follow a strict set of rules that have to be obeyed in every case. My client could send a settlement letter before litigation is file; it could file a motion to dismiss instead of an answer; it could file a motion for summary judgment even though the issue is primarily factually based; it could send its own written discovery, request its own depositions in any number or configuration; or, it elect to either pursue a timely resolution or not. These are but a few examples, and what they demonstrate is that litigation is made up really of a bunch of unbundled services that are combined together in, what is hopefully, a larger strategy other than to make the "slot machine" pay off for an attorney.
Litigators, as well as other attorneys, can talk in terms of the foolishness of not undertaking things like discovery, for example, and they might be right. I often advise my clients not to undertake discovery and to keep their cost under control. My position is often that the facts are objective and documented, and to follow opposing counsel down every rabbit hole to counter his or her arguments is not always cost effective. We need to concentrate on telling our story at trial and we need to let the other side do the same.
But, despite all of this talk about unbundling services, the truth remains that most all legal services are already unbundled. The client is free to do what the client wants to do in the litigation. The problem with the way things typically operate is that the lawyer, and not the client, decides which unbundled services to employ and which unbundled services not to employ. Often times the client might not even understand that their is a choice. Many times the client does not want to make that choice. Therein probably lies the fallacy of the unbundled legal service argument. The client's decision is in retaining the lawyer or law firm it wants, and not in micromanaging the litigation, which was the reason it decided to retain the lawyer in the first place.
My earlier point was that attorneys can certainly do more to make their client's aware of this fact. Clients should realize sometimes that particular attorneys are not good for them or view them not so much as an issue to be resolved than as a "slot machine". The truth of the matter is, however, that you can promote unbundled legal services, and probably should in the context suggested, but to most litigation clients it is not going to make a bit of difference in how they proceed. This is so because the services are already unbundled, and clients are relying on the attorneys to figure out how they should be bundled. In short, although the verbal and marketing highlights change, it is not that litigation clients do not already understand that services are unbundled, as they are making their decision as to which attorney to retain to make those decisions how to bundle the services available. They trust, like and have faith in their attorney or they do not. If they do, the attorney is almost always left with the task of bundling services or at least making recommendations, which are accepted. If they do not trust or have faith in the attorney the decision is usually to unbundle the attorney from the case.
I'm trying a new flavor of unbundled representation - it's a cross between traditional representation and no representation in Texas family law cases. See http://www.texas-divorce-lawyer-online.com
Posted by: Jimmy Verner | April 27, 2010 at 04:28 PM