Axe Falls On Debtor’s Counsel

Just when I think my work here is done, I have a week like last week.

Everywhere I looked, the ax was falling on debtor’s counsel. Deservedly so.

• My Chapter 13 trustee complains that her staff is knee deep in debtor lawyer inattention and mistakes.
• The UST brings disgorgement motion against lawyer who took fees, then let paralegal file case without disclosure.
• Lawyer barred from bankruptcy practice for lack of skills withdraws from dozens of cases.

I couldn’t decide whether to cheer that someone finally noticed that the standard of practice among some of the newcomers to the bankruptcy bar was pretty dismal or ask the powers-that-be where they’ve been for the past five years.

Attention to work at hand

The trustee’s complaints, sadly, are the same ones she made a couple of years ago:  no pay advices, no tax returns, no understanding of what they were doing, and apparently no commitment to getting it right.

You could shrug these shortcomings off as no big deal.  These problems are fixable.

Only chasing debtor’s counsel for the obvious absorbs resources and does, in  fact, jeopardize client’s cases.

I thought this was behind us.

Sharp practices

More troubling was the case where the trustee brought a motion to disgorge fees.  The accused attorney didn’t appear and defend, so you have to conclude there was truth to the accusation.

It seems the attorney took $2200 in fees, handed the case to a paralegal who worked in her office, who filed the case for the debtor as a pro se and sought a fee waiver.

On the eve of the 341, the attorney subs in.  The client , who doesn’t speak English, doesn’t know what’s happening.  There’s no voluntary disclosure by attorney or paralegal of the fees paid.

The trustee reported that another judge in the division has ordered this attorney to disgorge fees under similar circumstances.

And what has happened to honest?  In the bar, for pete’s sake?

Incompetence

And then there was the lawyer who was barred by a bankruptcy judge from appearing in bankruptcy cases for two years.  The original order cited a myriad of instances of sub par performance.

After appeal, mediation, and stipulation with the UST, the attorney agreed to the two year bar from bankruptcy court and a ten year bar on appearing in Chapter 11 cases.

One hopes he learned that a Chapter 11 is not just a super sized 13.

I sat in court as waves of his consumer cases came up on motions to withdraw as counsel.  Who knows what successor counsel will find in those files.

Moral of  my story

Apparently, even the slow down in filings has not leached the incompetents and the dabblers from bankruptcy law.  Maybe the UST has awakened to the salutory role it could play in protecting consumers from their counsel.

And I guess I keep writing on the lawyer skill set it takes to be a really good consumer bankruptcy lawyer.  Your continuing interest is appreciated.

You might be interested, as well, in a two day intensive workshop Jay Fleischman and I are presenting July 13-14 in Boston on marketing, technology, and office management.  All the skills in the world are worthless unless you can draw and serve clients profitably.  That’s our focus.  Early bird pricing is only good til June 7.  Enter promo code lanning and you can take $100 off the early bird price.  The room is small;  don’t get shut out.

Image courtesy of wikimedia.