Law Firm Automation Gone Wrong

I think a lot about legal technology, and how lawyers are succeeding by applying automation technology to their practices. I look at law firms that are prime examples of automation, and technology that can support them. (It’s one of my things. Everybody’s got a couple.)

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However, law firms can take automation too far. What’s too far? When firms ignore their duties of oversight. Remember, responsibility for a matter always resides with the lawyer. So the steps you take to automate must still leave room for adequate review.

One firm clearly did not leave room for adequate review. Frederick J. Hanna & Associates (Hanna) — a law firm that specializes exclusively in debt collection actions — has agreed to pay $3.1 million in to settle federal accusations that they were operating a lawsuit mill in violation of the law. The firm was cranking out lawsuit filings and threats of lawsuit filings to coerce consumers into paying debts that often could not be verified or may not be owed.

The Consumer Financial Protection Bureau (CFPB) argued that the firm did not live up to their ethical duty of oversight by relying on automated systems and non-attorney support staff to determine whom to sue. Non-attorney staff would created lawsuits and use the lawyers assigned to the cases as rubber stamp signatures on the paperwork. This method was terribly efficient, allowing the firm to handle truly massive caseloads. In the state of Georgia alone, Hanna filed more than 350,000 collection suits from 2009 through 2013!

From the complaint by the CFPB,

“In 2009 and 2010, the Firm directed one attorney to sign about 85% of the Georgia Collection Suits — about 138,000 lawsuits. Over two years, this single attorney signed an average of about 1,300 collection suits a week.”

Hanna’s assigned attorneys were expected to spend no more than 1 minute reviewing and signing pleadings prepared by support staff.

Here are the five things not to do when automating your firm (according to the complaint):

1. Don’t let staff determine if accounts are “suit worthy;”
2. Don’t abrogate your responsibility to determine the legal status of claims;
3. Don’t let staff solely determine legally significant facts;
4. Don’t let non-attorney staff figure amounts in dispute without review; and
5. Don’t delegate to non-attorney support staff the responsibility for drafting complaints on a mass scale for placement into mail buckets forwarded to attorneys. (You should draft your own complaints on a mass scale, I guess.)

I believe lawyers can use technology to automate their firms.

However, if you’re going to be a bad lawyer using the law to harass and bully people, I’d prefer you to stick to paper and pen. That way, we can limit the damage you do to the public and to the legal profession.