The Bankruptcy Lawyers Blog

The consumer bankruptcy business is booming, and that presents a dilemma for many solo and small firm consumer bankruptcy attorneys.  As we discussed recently, flexible solutions like LPO, virtual assistants or contract lawyers may be the answer for many small law firms. But working with outside attorneys and paralegals is new ground for many bankruptcy lawyers, and the options and possibilities may seem endless.  If contracting work out is going to benefit your firm and help you grow your practice, it's important that you understand exactly what benefits you'll be receiving from your assistant or LPO provider and what efforts will be required on your part.

As with any service or software, the right provider for you depends on your firm's needs and priorities.  Here are some questions to ask before selecting an outside attorney, paralegal, or LPO company:

-What, exactly, will this provider be taking off my plate?

-How much time will this save me?

-Is the price reasonable in terms of the amount of time it will free up for other work?

-What kind of training and experience do the people actually performing the work have in my particular area?

-How will I fulfill my obligation to supervise?

-How is information exchanged with my office?

-What is the time commitment for me or my staff in preparing files for the outside provider or coordinating with them?

-Whose time will be freed up in my office and how can I use it profitably?

-Is the provider flexible enough to meet your specific needs, or is it a one-size-must-fit-all service?

-Is the contract flexible enough to allow your usage to fluctuate with the demands of your business?

Some providers offer only petition preparation services, while others offer a broader range of services.  Some focus on consumer bankruptcy cases while others are jacks of many trades.  Some providers offer real-time online monitoring of case progress, while others simply present you with a completed file when their work is done.  Before making a decision about the right kind of support for your bankruptcy firm, take time to think through these questions and consider the concrete benefits to your firm.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

In 1997, when the first version of what would become BAPCPA was drafted, non-business bankruptcy filings reached 1,313,112.  The consumer credit industry fought for years and spent hundreds of millions of dollars to ensure that bankruptcy reform became law.  In 2005, it did, and non-business bankruptcy filings dropped...briefly.  Now, in BAPCPA's fifth year, non-business bankruptcy filings stand at 1,344,095 (FY 2009).

These numbers don't come as much of a surprise to most bankruptcy lawyers.  While Congress was apparently believed that complicating the bankruptcy process would make Americans better able to meet their financial obligations, we'd seen the reality in our offices.  Filings began to rise again almost immediately, and experts were predicting that we'd soon see pre-BAPCPA filing levels even before the worst of the economic crisis hit. 

Unfortunately, when Congress opted to shake up the bankruptcy process, it shook up the practice a bit, too.  Some general practice attorneys stopped taking bankruptcy cases altogether, unwilling to accept the added time investment and legal responsibility.  Some bankruptcy attorneys were forced to expand their practices into other areas of law, let associates and paralegals go, or even close their doors. 

Now, the National Bankruptcy Research Center is estimating that 1 in 80 U.S. households filed for bankruptcy protection during 2009.  With more than 110,000 new cases filed per month, many of those who remained in bankruptcy practice are seeing a tidal wave of new client inquiries.  While "more business than I can handle" is a good problem to have, it's still one that requires a solution. 

Many attorneys see the options as limited:  either turn away cases or increase your staff.  There are, of course, upsides and downsides to both.  Turning away cases means not having to make any changes, but limits revenues at a time when growth is at your fingertips.  Adding staff means you increase your capacity for revenue growth, but also your obligations and time investment.  You'll have to take time away from your already busy practice to recruit, interview, train and supervise.  You'll be committing to additional overhead in order to meet a demand that may or may not continue.  The open questions and up-and-downsides lead many lawyers to preserve the status quo, but there is another option.

Contract lawyers, contract paralegals and outsourcing of petition preparation and other tasks all provide an opportunity to increase volume and revenues without a significant investment of time or a commitment to increased overhead.  Working on a contract basis allows you to adapt your investment to demand, so that you can keep pace with new business while ensuring that you aren't paying people to sit in your office and wait for the phone to ring during quiet times.

Next week, we'll talk about how to choose the right virtual assistant, outsourcing company or contractor for your firm.  Until then, give some thought to how you could expand your practice and grow your revenues if you were able to free up some attorney and/or paralegal time in your office.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Adam Levitin at Credit Slips takes an interesting look at some of the changes subprime credit card issuers are making in order to keep profits up while complying with the Credit CARD Act.  It's not surprising that lenders are already applying all the creativity they can hire to finding ways to work around the new law and keep profits high, but Levitin does turn up one piece of information that may come as a surprise to many of our clients (and maybe even many of us):  First Premier Bank's new 79.9% interest rate, combined with lower fees, actually makes the card cheaper to use than the old, 9.9% version.

It's an excellent illustration of just how misleading that bold print can be, and well worth a read.  While it appears that the high-risk, high-cost issuers are going to find a way to keep on doing what they do, perhaps this change will at least make the costs more obvious to consumers up front.

• Email This
• Print
• Comments
• Trackbacks
• Share Link