Thursday, December 31, 2009

Happy New Year!

I'm so happy to kick the Zilches out and welcome the double digits.  The future looks so bright.  Well, in comparison to the Zilches... it can't look that dark.  I will always remember the Zilches for law school graduation, the summer from Hell (the bar exam), the bubble bursting, 9/11, WAR, WAR, WAR, Lehman Bros. going poof, the Stock Market tanking, my 401K halving, the Great Recession, half of the country taking Sarah Palin seriously and being laid off from my dream job.  The only light that came out of the decade was all my neices and nephews (friends' children) and finding love after many failed attempts that I will also attribute to the Zilches. 

All and all, a pretty horrid decade.  But things have to get better..... Right??? Right???

I say this cause I'm trying to be a little cheery.  But I really would be lying if I said I believed what I'm telling you. I think my future (and the future of my many peers) is a big question mark. It always is, I suppose. I imagine a "?" followed by a red "!"--as in "beware" or "turn back."  The optimism that many Americans are known for is kind of lost on us.  I think that the legal world of the future will look vastly different from that of yesteryear.    Whether that means that document review will disappear to India, or it will become the new standard job for lawyers, traditional areas of the law will be performed by nonlawyers or, or that Big  Law won't pay so much--I have no clue. 

We are floating in ocean of flux and I'm very interested in what our world will look like in 2020. 
I'll leave this year off with a throw back to my favorite decade hence far--the 90s.  

Please be safe tonight.  Don't drink and drive or the Bar will take your law license away.

Wednesday, December 30, 2009

Hollywood Glorifies the Legal Profession Once Again: The Deep End

Watch the following trailer and then I'll discuss:

The Deep End is about 4 hot attorneys working at an extremely presigious LA firm dealing with the pressures of being an attorney.  Sounds great, huh?
But there are so many inconsistencies... I hope 0Ls don't tune into this show and let it influence their decision in any way.  I don't think I need to say it, but this show is extremely unrealistic.  Actually, I'm not surprised considering that it comes from the Grey's Anatomy people.  Everyone I know who is in medicine can't watch Grey's without cringing.  Apparently, their jobs are make-believe.
So, back to Deep End, this sought after firm is a small, exclusive, general practice????!  That isn't how it works.  Firms like that are generally more forgiving, but don't pay nearly as much. Unless, of course, it's a boutique firm specializing in, for example, patent law or securities.  But this imaginary firm thinks it should have the most brilliant attorneys in the whole world as first years.  Why, exactly?  They are doing child custody cases and cases of firemen with cancer?  That work is extremely rewarding and makes for great television, but that's not where the most exclusive firms spend their time.  And the money certainly is not in those sort of cases.  So, this show would be tons more realistic if the first years were totally broke.  Maybe working for $45K a year--forking over 2/3 of their salary to Access.  I would tune into a show like that in a heartbeat.

If I take the show on it's face--that this is an prestigious white glove firm--am I to believe that the first years are meeting with clients???  At a fancy pants firm, you don't get to meet a client until your 5th year!  And you definitely don't try cases or do depositions or settle cases.  Who are they kidding?

At least they were spot on with the office mates.  In big firms, no one gets their own office until the second year... at least. 

Will you be watching this show?  I won't be. I don't think I can watch it without yelling at the TV.
Oh yah.. I love this little speech:


Tuesday, December 29, 2009

Productive Whining: What's up with Student Loans and Forgiveness These Days?

Nada.... jack shit nothing.  I did a few searches on Google and found out that the issue is dead.  That's funny. According to my readers, defaulting on student loans is a very real issue, right now.  And it's an issue that weighs heavy on many lawyers' shoulders. 

I have a good friend that buckled down from the time he graduated (2004) until last year, and paid off his private loans. He's not done yet, of course.  But he is close to it.  In order for him to do this, he was frugal. He rarely/if ever went out to eat.  He brought a PB&J sandwich to work daily.  He did not engage in frivolous spending. I think his social life was somewhat limited by how much he was willing to spend, which was nothing. He didn't have a girlfriend during this stressful time.  I know he went on dates, but I'm sure he was somewhat constrained on what he could do with any girl.  Having fun costs money, right?  He lived in a studio apartment with hand-me-down furniture.  Ran instead of joining a gym.  He collected cans from co-workers to recycle for cash.  Wait... the kicker.  This was all while he was earning $100K.  That's how you pay back your student loans, folks.  I'm very proud of him.  I'm not sure that many people could make the same sacrifices.  Afterall, he basically handed one biweekly paycheck a month over to the Lender. 

So, when I spoke to him about my anger at the Bankruptcy Code and how hard it is to discharge Student Loan Debt and the potential for Loan Forgiveness given the current financial situation.  My friend was very against the idea.  He said that he had paid down his debt--why should others get off the hook?
Well, I don't even have an extremely burdensome loan. Maybe $60K at this point.  It's doable.  But even if loan forgiveness or a change in the bankruptcy code was implemented the day after my loans were paid in full, I would welcome the change.  This isn't like the brand new gym my elementary school built the year after I left.   I think that changes to the system need to be made to curb the skyrocketing tuitions at law school.  I'll go into how later....

So, I did find this article that was published in May of this year.  I'm bringing it up on the hopes of bringing the issue back to the forefront of our minds.  It's a good read and there are lots of valuable nuggets of info that pertain to most of my readers. 

It boils down to this:

"Bankruptcy law allows for discharges of credit card debt, car loans and even gambling debt, but not student loans."

Yes. Gamblers are given more breaks that students. And the standards for attempting to discharge a student loan are higher:

"A student loan debtor must try to claim an "undue hardship" to seek bankruptcy protection — a claim that is successful at best about 50% of the time. Unlike a traditional bankruptcy filing, a hardship filing requires debtors to file a lawsuit against creditors. That pits the student against corporate lawyers and defense teams, and often requires an expert witness, which can cost the graduate thousands of dollars to arrange."

No easy task I'm sure.
The change was made in 1998, but the noose tightened in 2005:

"In 1998, Congress ruled that federal student loans were not allowed to be discharged except under the undue hardship provision. In 2005, private loans, which can carry terms up to 25 years, came under the same regulations."

And in the same period of time, student loans have more than doubled. I'm sure this is causation, not just correlation. If there is no risk in giving a loan to a student, student loans are sure to be given out like free candy on Halloween. But this bazooka gum is laced with cyanide. And student loan default rates are the highest they have been since 1998: the year the code changed.

The article goes into a few student loan sob stories, with a couple of them being law school graduates. I wasn't surprised.

Well, President Obama has recognized the problem.  And in Obama fashion, has punted the issue.  However, Sen. Dick Durbin and Rep. Danny Davis, both democrats from Illinois, (Da Bears!) have taken this issue to heart.  Durbin wants to bring the code back to its pre-2005 form.  Davis wants to re-introduce a bill addressing the crisis, a bill that was voted down last year.

I wish I can tell you what happened to this bill. Unfortunately, the crappy computer I use on my doc review project shuts down if I have too many windows open at once.  Maybe my unemployed readers can do a little reseach and find out for us all.

Whatever the outcome, I am sure it wasn't helpful because the only viable solution I've heard for defaulting on your student loan is moving out of the country.

The most telling statement in the whole article was this; "If private student debt can be discharged in bankruptcy, that creates risk, and the result will increase the cost of tuition," says Scott Talbott, chief lobbyist for the Financial Services Roundtable.

Sure.. that's what he would say.  He, from his vantage point of self-interest and greed, sees that many schools would be forced to raise tuition to account for all of the students that would default on payments.  Simplistically, maybe.. but realistically no.  Because there is a big middle man.  What would happen is this.... once risk is infused back into the equation, KHELC and ACCESS and Sallie Mae [hereinafter "Lenders"] would be forced to realistically evaluate whether or not a borrower is a good investment or a nominal risk.  I can only judge my own field, so let's use a law student as an example.  If Suzie Q. Lawyer wants to go to law school at TTT School of Law and got a 147 on her LSAT, Lenders may think twice about handing her $120K to attend law school.  She would be a high risk for a default.  So, law school tuition may increase in the short term to account for all of the students that couldn't obtain financing... but ultimately schools would have to streamline and lower the tuition to assist 0Ls or new students in college (or whatever) in obtaining loans from the Lenders, i.e. "Come on, Lenders! Surely I will be able to pay back $50K if I go to TT school of law where I can come out earning $45K"--Suzie Q. Lawyer. So, ultimately, and contrary to what you may have believed about me, I believe that libertarian and capitalist principles will save us. It's not right that lenders can make money without bearing risk. Risk can be brought back into the equation with a revision of the Bankruptcy code.

Wow... I'm winded.

Monday, December 28, 2009

Another Lucrative Field of the Law HIJACKED by Law Students!

Common sense dictates that certain aspects of the national economy are certain to expand while others contract.  For example, during the height of the market; mergers and acquisitions, corporate and real estate areas of the law basked in the sunshine of the good economy.  In contrast, bankruptcies, divorce and and workers comp claims are on the rise because of the bad economy.  Traditionally--and fortunately for attorneys--it costs money to be unemployed, bankrupt, unhappy and single.  But, no thanks to the weak and ineffectual ABA, many states have changed the laws to allow non-lawyers to do traditional recession-type toilet bowl legal work. 

I ran across an example of this trend towards fleecing lawyers of clients and income on the web today.  This article outlines how University of Pittsburgh undercuts the profits of many local lawyers, most likely also former students, by offering a class allowing students to represent people who have been denied unemployment benefits.

"The course known as the Unemployment Compensation Practicum. In its second year at Pitt, the course is co-taught by Stephen Pincus and John Stember, adjunct law professors and partners with Stember Feinstein Doyle & Payne, a Downtown law firm that represents workers and unions in labor and employment cases."

This scheme is beautiful in its simplistic approach to destroying the legal industry.  They are using law students to screw ex-grads out of an income.  Once these law students are pushed out of the door, they realize that they received invaluable experience in workers comp law while in law school--but are unable to find clients post-graduation.  Only then will they see that they were part of the machine.  Rather than hire lawyers with experience in Unemployment Comp, people in Pittsburgh will flock to the law school for free legal help.  All the while, 0Ls will be attracted to UPitt School of Law for the wonderful experience that the curriculum provides.  How many classes in law school are as practical as "Unemployment Compensation Practicum"?  So, once again, people are paying exorbitant tuition to work for free, and adversely affecting the legal market in their wake.  Then suffering the consequences of their own uninformed choices. 

And how is this possible?  Because States are successfully expediting the outsourcing of legal work to both India and to non-lawyers.  "A state law enacted in 2005 allows parties to be represented by non-lawyers in unemployment compensation proceedings."  I think it's so ironic that the type of work that can be done anywhere (like document review and legal research and writing) is sent to India instead of sending it to lawyers sitting at laptops in the Midwest.  And work that can only be done in the States because it involves a judge or administrative hearing officer and courtroom located in the U.S., is handed to non-lawyers.  What about the ethical considerations of allowing for outsourcing?  Who is on the hook when someone rights are waived or eroded because of ineffective legal representation, if it's not legal representation at all?

Of course, what I would want more than customers paying for legal help would be for law schools to lower tuition so much so that lawyers could work for nearly nothing upon graduation, so that poor people could have the legal help they need for little to no money.  But with law schools costing as much as they do, a profession that was set up to help the people... much like the schools that manufacture lawyers... have to work FOR PROFIT.  When schools adhere to their original non-profit purpose and charge an appropriate tuition, the lawyers can work for the satisfaction of the profession, and not a salary.

When will the ABA wake up and help us???

Read more:

Thursday, December 24, 2009

Merry Christmas to All!

I hope you have a wonderful holiday.  Spend it with those you care about--not with your boss, a paralegal and/or other doc reviewers--but with your FAMILY.  I hope that you get great gifts.  If you want to show off or bitch about your gifts, feel free to do so here.  All I want for Christmas is a dog and I'm pretty sure I'm not getting one.

UPDATE:  No puppy.  But I got a new Mountain Bike!  YIPPY!  As you may recall, my bike was stolen back in the day..... So, my cheap broke ass is excited to get a new bike. And it's SO much better than my old one.  I won't be leaving it at the train station anytime soon.

Wednesday, December 23, 2009

Does Everyone Need to Go to College?

Here's a discussion about whether college is necessary....  I totally agree
with the second caller.  Jump to 1:00 and listen to that discussion. What do you think?

Tuesday, December 22, 2009

Remember the time....

As most of you should know by now, I spent a long time working in small firms before I landed a dream job that actually bored me to tears. I loved it and I will always miss the dream job because it allowed me to break $100K. And for that alone, I was grateful. By the time I landed the dream job, my interest in the nitty gritty of small firm practice had waned and I was feeling guilty practicing shit law.

I find that the amount that one is paid is conversely related to the amount of excitement in his area of the law. For example, a prosecutor is usually passionate about what they do and excited to go to work on a daily basis. Consequently, they are paid less in the spectrum of law jobs. Corporate lawyers are bored to tears with their work, especially if it's transactional. But they are paid extremely well. So, in line with that logic, in the beginning; I found my work extremely interesting when I could barely afford to pay my bills. But in an odd way, it kind of took a chunk out of my heart too. I felt bad about what I did for a living...

Let me explain...

I dabbled in many areas of the law, but the experiences that stick out in my mind involve people and their problems... .

Since I wasn't the boss, I would try to do what's right. For one, all people seeking a divorce from their spouse come to an attorney ready to fight. Even if they have three pennies between them, they are ready to fight hard for what is owed to them. So, if someone approached me and they were ready to tear their spouse to shreds because of infidelity or a drug problem or general irresponsibility, I would try to talk him/her off a ledge. We'd discuss what they think they would be willing to concede to and what they think their spouse would agree with. I'd always try and push the uncontested route with my clients. Sure, we would make less money that way. But the path of least resistance is always best.

Only when negotiations fell apart, would we proceed with a contested divorce. Of course, the clients would get caught up in the grounds... but that was never the meat of the case. It was always about the property. Like I said, most of my clients had very little to fight over.... a home, a couple of cars, a pension. Although I didn't send the bills, I felt very bad knowing that the "fortune" that my client and his/her spouse built together was ultimately going to end up in the pockets of both parties' lawyers. In the end, my clients were satisfied with the results. But I was left feeling a little dirty for having gotten involved.

One time, a client made an appointment to come and speak to me. We sat in the conference room for an hour while he explained that he believed his daughter to be suicidal if she didn't come and live with him soon. Apparently, she hated her mother. Stupid me, thinking that the client told me for a reason. After all, why would you pay an attorney $275 to speak to her for an hour, for no reason??? I filed an emergency motion to change custody based on the change of circumstances. When the client received his copy of the brief in the mail--he came to my office and tried to throw a chair at me. Apparently, I was wrong in thinking that he wanted me to act upon that information. He thought that I ruined his daughter's life. My boss intervened, saving me from bodily harm. Once again, I felt dirty. In the end, I was successful on the motion and, ultimately, the divorce went his way. He kissed my feet at the end of the case.

One time, a young father came into my office. He had a new baby with his wife, and thought it was time to have visitation with a child he had previously, that was now 10 years old. Apparently, the mother refused my client visitation with his child when he ended their relationship. To the child, who was 3 or 4 at the time of the separation, he was from "Daddy" to "Cousin Joe." I was very optimistic about the case. Once I got my client on target with child support, we filed the visitation petition and went to court.

We were both sitting there, waiting for roll call, when my client saw his son. He saw his son call his mother's husband "daddy." Then the child eyed my client and said, "Mommy, why is Cousin Joe here????"

My client was crushed. He stood up and said, "I can't do this. He thinks that man is his father." Well, I couldn't convince him otherwise. I understood why he was upset. He paid the firm for my time. But the outcome didn't sit well with me.

So, after years of doing "interesting" work that made a difference in someone's life, I was excited to leave it behind me. The excitement was cool, but it felt a little naughty. And I felt like my soul would burn in eternal hell for fucking with people's lives. Ultimately, what choice did I have? It didn't even pay well. But that's the last time my career excited me. Now, I just want to pay some bills. Is that so wrong?

Sunday, December 20, 2009

Wall of Shame Part III: New and Creative Ways of Making Money as a Solo!

Leon Gelfgatt, a Boston Solo, thought that being a solo practitioner was not lucrative enough--no secret to most attorneys.  So, to supplement his income, Mr. Gelfgatt decided to start recording fraudulent liens against properties that were about to be sold.  When time came for the property to change hands, the new mortgagee had to pay the existing secured lien holder at the closing table.  As first in line, Mr. Gelfgatt showed up to receive his due--thereby screwing the legitimate mortgagee.  Way to use you legal expertise, Mr. Gelfgatt!  Mr. Gelfgatt was figured out after making about a million dollars off of several properties.  Gelfgatt pleaded not guilty and was held on $1 million cash bail by Cambridge District Court Judge Roanne Sragow-Licht.

I can't say I don't understand his logic.  Banks are so overwhelmed with all of the distressed properties, properties in short sale and foreclosure--they might not notice a million dollar shortfall.  Or maybe he thinks that is the cost of his license to practice the law? Or it could be that he was a desperate solo who wasn't making enough money?  

I know that illegality is not endemic to solo practitioners.  But they certainly do get caught more than guys at the white glove firms.  Aside from that, solos are put under the magnifying glass by the state bar associations more so than the big wigs.  Although, I have no intention of being a crook... it's enough to make me scratch my head and wonder whether being a solo is a viable option.  Will I be tempted to co-mingle my clients funds with my own to pay for my bar dues?  Will I feel the need to guarantee results in order to land a client?  Will I have to give a short term loan to a client who needs the money NOW so that they won't fire me and go onto the next firm who will?  These are issues that we studied in Legal Ethics.  These are also issues that I saw when I worked at small law firms.  I'm just wondering if it's possible to NOT starve as a solo, and to follow the rules.  

As one commentator on the article said:  
Its so much easier to go the usual route: just create phony billing and have a specially assigned judge help fleece the clients. The scam is foolproof, and there's no no risk of jail time.

Friday, December 18, 2009

The Cravath System... Origins of Lockstep... and its Death.

I was reading up on today and noticed that the first NYC based law firm, Kelly Drye, is abandoning lockstep.  They have joined the company of several large firms based outside of New York; Wilmer Cutler Pickering Hale & Dorr; Sonnenschein Nath & Rosenthal; DLA Piper; and Orrick, Herrington & Sutcliffe.  I think that lockstep compensation may be dying and I'm pretty happy. Although I wish and bitch about attorney salaries today, I do not actually want attorneys to be paid more. As a libertarian, I just want the costs of an education, the number of jobs and the salaries to be shaped by accurate information, supply and demand.  So, naturally, I'm rather excited that the coveted salaries at big firms will not be guaranteed at $160K.  It will be determined by the market. 

I never actually knew about lockstep until I was a 2L.  So, for those of you that haven't heard of it, lockstep is "a system of remuneration in which the employees' salaries are based purely on their seniority within the organization. For example... all law school graduates hired by a law firm who graduated in the same year receive the same base pay, regardless of the background, experience, or ability of each." 

In my short career I remember lockstep went from $85K to $125K to $145K to $160K.  With each jump, I got a little dizzy.  It was an unsaid secret among those in the legal profession that lockstep was out of control.  But depending on who you were, you would smile happily to yourself or groan with envy.

But I think we all knew that it was bound to die.  Big Law Firms were increasing 1st year salaries because of what the "competition" was doing, and not because quality first years were any less abundant or business was so much more profitable or first years were any more qualified.  It seemed like a stupid idea.  Well, it's all done now. I imagine that salaries will float back down to $90K to $120K and remain there for years to come.  Of course, this would be for the lucky few... not the majority of law students.

Law firms are in the practice of implementing and following business models.  The most obvious one--and most people do not know it by name--is "The Cravath System," named for Cravath Swaine & Moore, which was formulated in the 19th Century.  Some of the tenents have stuck, and other have not. I will go through a few of them after the leap....

Thursday, December 17, 2009

There are no words....

Comment on the post from yesterday:

December 16, 2009 5:38 PM

Anonymous said...


I'll take your advice. I will score high on my LSAT and go to the most expensive private low-tier law school on a full ride scholarship.

After I graduate I will not worry too much about the pay scale because everyone pays their dues when they initially start out. Besides, I am not in law just for the money, I will have a PASSION for it.

To everyone: If you are going to law school because you think you will make big money then don't go. If you are going to go to law school because you have a PASSION for law then go. PASSION is what drive success, not greed.

This kid thought it was funny and naive too.

Wednesday, December 16, 2009

I Hate to Beat a Dead Horse, But....

The comments following Esq. Never's infamous cartoon made me crazy: 

jacobins3000 (12 hours ago) I can't understand this obsession law students have with "big law", heaven forbid they end up at a small firm with starting salary of a mere 80 fucking thousand. Law students are a bunch a of spoiled rich kids who have no idea what the average person makes in this country. They think they have a God given right to make 200K a year.

esqnever (4 hours ago) Yes, I made this video because I'm "only" going to make 80k a year.

Tell you what, if you find a small firm job anywhere that pays anything near that for an entry level position, post it here. If you do, I'm sure that firm's fax will literally melt due to the volume of responses.

Sorry, my friend, small firm jobs are going for around $35k these days. You're luck if you can get $50k. Not exactly worth three years of LS and six figures of debt.

ptothegizzo (1 hour ago) Um, I went to law school in Manhattan (and did average) and work at a small firm *in Manattan,* and I don't make nearly $80K. Since I'm neither spoiled nor rich and I support myself, in my first year of practice I had to couch surf because I couldn't afford the apartment I had lived in working part time and living off student loans. I have friends who did very well in school who, like myself, have to earn outside income to make ends meet because we're all in about $180K of debt. #realitycheck

Why are people so damn stupid????? I would jump for joy if I found a job paying 80K and I'm nearly a decade out. AND I was earning $100K+ before this "Great Recession". Why are people delusional?  Salaries are nowhere near what the movies tell you! 

Everyone's a Winner at Nixon Peabody!!! (except the 1st years)

Back in February, Nixon Peabody deferred start dates from September 2009 to January 2010.  At the time, they gave the first years a stipend of $10K to live on in the interim.  Well..... this week, NB decided to defer a little bit longer.  One third of the class was deferred further until February 8th, 2010.  The remainder will be deferred...............indefinitely.  But, "the associates who do not start in February will receive a monthly deferral payment. The firm did not disclose the amount of that payment and declined to comment further beyond the statement."  I wonder how much it is... considering that they were super generous in giving the first years $10K initially. I'm being facetious--of course. 

So, what is a Nixon Peabody to think?  When will they be taken on?  They are biting at the bit to join the Nixon Peabody team.  Well, NB doesn't know.

"We, like many other firms, are managing our intake of new associates to meet our clients' needs," Allison McClain said in a statement to The Am Law Daily. "The remaining associates will continue to be deferred and we hope will join the firm as our client needs evolve."

And for those that actually will start in February 2008, the yearly salary has been slashed to $145K.

I wonder what this means for the class of '10?  I think '10 grads will be missing from the roster of Nixon Peabody for years to come... and maybe even '11 grads.

So, I know that MOST people that read this blog don't care about the minute details of BigLaw... but as always, there is a point to be made here.

The kids hired by Nixon Peabody are the cream of the crop and this is the treatment they receive.  What can be expected for the new grads?  And those of next year, and the following?
What about the end of lockstep?  Is law school still worth it if you have a 5% chance of getting a Big Firm job earning anywhere from $90K to $160 and many salaries in between?  Is $90K great if you owe $200K in student loans?  Maybe you would have been earning $70 if you entered the corporate world after college and worked your way up in those three years.
And lastly, is everyone a winner at Nixon Peabody?

Food for thought.

Tuesday, December 15, 2009

Job Opportunities in Georgia!!!!!

Once again, a chance to work for free!  Georgia is joining the party and taking advantage of the overabundance of lawyers nation-wide, by changing the court rules to "make it easier for public agencies to take advantage of free legal aid in the midst of an economic downturn that has trimmed their budgets to the bone."

Do you know how much the state of Georgia wants you?  So much so that they are now "relax[ing] restrictions for out-of-state attorneys who want to volunteer for the Attorney General, a district attorney, a solicitor of a state or municipal court, public defender's office or non-profit organization."

"The rules allow a newcomer to appear in court as long as they are accompanied by an attorney for that agency. Out-of-state attorneys also can enter documents into the record as long as an attorney for the agency signs off."

Just like those fools that commute two hours to work for free in New Jersey, there are apparently people who find this sort of experience valuable enough to commute to the Peach State.  

Don't get too excited, readers. They don't want just anyone's free services.  Any old T>14, TT or TTT schmo can't land one of these jobs.  They want the crème de la crème for these pretigious positions.

Taryn Marks, an attorney licensed to work in Massachusetts is so excited that she will be able to make court appearances in Dekalb County, Georgia for free.  She says, "  "It's part of the whole process, so you get to do all the things behind the scenes and as well as appearing in court," Marks said. "To be able to experience all of it is very exciting."   I find it exciting to get paid.  You aren't Perry Mason, retard.  I guess she is one of the lucky ones though, as a deferred Ropes & Gray  1st year, she may actually have something to come back to.  Although, she's been without pay or a stipend  from graduation until her alleged January 2010 start date.  But I will admit, she is better off than 90% of her peers.  Man, she's going to find BigLaw extremely boring after doing criminal work.

Jacquelyn Schell, a 25-year-old deferred associate, graduated in May from Vanderbilt University, is yet another blessed deferred associate, who is now working for free in Georgia.  She was set up to work for Bryan Cave... a firm that deferred start dates, cut salaries, and laid off 58 associates.  She's certainly on steady ground. 

If this is how the best of us fare, how is it for the rest of us?  What's worse than working for free?  Nothing, actually.

I'd like to this opportunity to correct a horrible assumption that most recent grads have, which causes them to work for free or little pay.  Some recent grads pursue the "experience"--thinking that it will make the difference in their resume. They have been misled to believe--if only they have "experience"--they will land the ultimate job.  Let me explain something to you... if you have the right experience, then it will never do you wrong.  The right experience = experience in the field that you ultimately hope to practice in.  But if you seek to do corporate law, and you work for free in the DeKalb County Prosecutor's Office, your criminal law experience will be held against you--with the caveat that this general principle doesn't apply if you are deferred from a BigLaw job that forces you to take a public interest job.

From the day you graduate from law school, firms are trying to box you into an area of the law.  Although we all receive the same general law degree, law firms find it in their best interest to minimize your broad reaching experiences and maximize  your experience that are drastically different from their areas of practice.  Why would they do this?  Well, in my own experience, it seems that they will do anything to make your experience irrelevant so that they can pay you less. It all comes down to this statement, "Well it looks like you've focused on _______ area of the law, we do _________. So, we can't pay you like a 2nd/5th/7th year.  We are willing to offer you $50K."  That's been my experience at least. 

Take it or leave it.

Monday, December 14, 2009

Wall of Shame Part II: Aaron F. Biber

This is really sad, but I had to bring this guy up. He's not an unethical lawyer, but an unethical person.  Mr. Biber, a Minneapolis Attorney, has been accused of raping a 15-old-boy.  The complaint if available here... and it's bad.  He has been suspended from work, at Gray Plant and Mooty.  As you can see from a perusal of the firm website, they pulled his name down right quick.  I also found him on the Minnesota Bar Associate Website:
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Aaron Biber

Gray Plant Mooty Mooty & Bennett PA

80 S Eighth St #500

Admitted to MN bar: 5/12/1988
Minneapolis, MN 55402

Phone: (612) 632-3000 / Fax: (612) 632-4444

Judging by his admission, he's at least 46 years old.  Way to go in ruining your life, dip shit.

Definitely a good candidate for the Wall of Shame.

Sunday, December 13, 2009

Still Job Hunting? Let's see what's out there....

Assuming you could take the bar anywhere you wish [and you can't], let's open up the job search to the whole nation. I took a few minutes and combed the craigslist ads of several large cities and presumably large legal job markets and this is what I came up with....

If you have excellent academic credentials, you may be able to land this gem....

for 30K a year.  Never mind that Fairfax, Virginia's median income is $107K a year.

or you can get a bump up to $35K at this Tyson's Corner Firm....

but it will be kind of hard to afford an average home in the area at a whopping median cost of $487,150. I guess you'll have to live in your car.

But if you have 2 years of experience in residential conveyances, you can qualify to earn $40K in the Boston Area...

That's not much when you are living in the 2nd most expensive city in the United States.

This firm in Dallas is very generous.  You will start at $30K, but after a year of training... you will be bumped up to $40K.

How nice of them.  

Or you can have fun in the sun in Miami at this job that pays $40K.

I guess you won't be frequenting South Beach... it's a bit pricey.

And I hope you don't need to count on steady paycheck.... or benefits.. in Minneapolis.

at $150 to $200 per case... who knows if you'll be able to pay your rent every month???

And finally, this law firm offers great quality of life, boasting 9 to 5 hours for this position....

At $10 to $15 an hour, this job is great for any Spanish or Armenian speaking Lawyer.

OR... you can just drop the JD off of your resume and apply to this job....

as a legal assistant in Dallas, you can make $65K.  At least you may have a shot of paying back your student loans with this job.

Friday, December 11, 2009

Big Shout Out for ESQNever!!!!

EsqNever was featured prominently in the National Law Journal today!  I'm so proud of him, as a fellow blogger.  You have to see his "Law School Carol," if you haven't yet.  You should also forward it to friends.

The message is getting out!!!!  And the article taught me something new. I now hate the ABA and the NALP.  Self-reporting, my ass.  Just call it blatant lies. It's not possible that 23% of all law school grads land jobs earning $160K.  There's not even that many $160K jobs available out there!

Creative and LEGAL Ways of Avoiding Loan Repayment: Lesson #1

Some of my readers will agree... Law School was a worthless waste of money and it didn't result in a career, as promised by those myriad of pretty glossy brochures that were sent to all of us, our senior year of college.  But would it be so bad if it were free?  Or at least cheaper?  Well, one of my readers has figured out how to make law school worth it. Read on, my friends:

Hi, I've read your blog on a couple of occasions and appreciate your thoughts and think there should be more blogs like it out there. I'm an '06 TTTT grad whose been out of the law since April 2008 with mountains of debt, mostly from my idiotic college days when I went to an overpriced private school and ran up my credit cards. I probably spend a good half hour per day reading blogs like yours, Tom the Temp's, or seeing if there are any new articles referencing student loans or Sallie Mae's splendid business practices. I'm doing relatively well right now, but not well enough to pay for all my past sins. After all my deferments ran out, I basically have stayed enrolled half-time at a random community college - the latest being some school in Oregon that charges about $500 per quarter - to keep from having to pay about 2k in student loans per month. At this point, I feel beyond ripped off by higher education that I've basically decided that Sallie Mae or any of my other lenders will never see a dime of my money unless I somehow become ridiculously wealthy. Anyway, if you'd like to chat with another disgruntled "attorney," let me know!

He really got me thinking... We should all use the internet--or at least my blog--to share ways in which to avoid loan repayment in a slightly underhanded or off-color, yet legal, way.   I don't think this sort of info is widely available.  If you look up forebearance on google, you are directed to a bunch of loan/government sponsored websites, like these:
That's not helpful!  They want you to pay them eventually so they aren't going to tell you how to avoid them forever. 
I have a method:  Smoke a pack a day, drink and party like a rock star.  With any luck, I'll die before the loans are paid and, VOILA, discharged upon death!  I think that Attorney-al-LOL's suggestion is better for your health, but what is health when you're a contract attorney with no benefits???
Do you have any ideas?  If so, email me at and we can discuss the merits of your way.  BTW, what the hell is up with my formatting??? Sorry for the tech difficulties.

Thursday, December 10, 2009


For freeeeeeeeeeeeeeeeeeee..... BLAH HAH HAHAHAHAHAHAH!  (and the cartoon I picked below was too perfect not to include!)

Wednesday, December 9, 2009

What is it with Immigrant/Minority Parents?

As I have stated a few times, I am of brown origin.... meaning that I am a woman of color and a first generation American.  Or am I a second?  No matter, I was born here and my parents are excellent but can be backasswards in lots of ways.  As such, I can only speak from my experiences and not that of others.  My mother, in particular, is keen on bragging rights.  She is in the beauty industry and knows many attorneys... but she would never tell them that I was laid off.  Too embarrassing.  And when I visit her, I can't hint to my problems to people at her job.  She loves to act as if her daughter, the big firm attorney, is doing wonderfully. 
After all, the crown jewel of any immigrant family is the lawyer or doctor.  Right?

The funny thing is,  I'm soooo far from okay. My bro, who smartly didn't finish college, is bankrolling money as a salesman. I was fine while working at a big firm.  I was the "smart one".  I wish I had the intelligence and foresight of my brother.  He should have been given that title.  I'm a few dry months away (dry = months without contract attorney work) from being paycheck to paycheck once again.  And everyone knows that it's hard to rebound back to being a "saver", when  you have been "paycheck-to-paycheck."  Your credit card debt grows because you don't make enough to sustain your rather unimpressive life... and you begin to have the debate in your head, "Do you I put this money in savings, or do I pay off this credit card?  What's the point of having it in savings, if I have to pay 15% interest on a credit card?  And saving money doesn't make money anyways."  Then, there comes a point, when you miss having that debate because you look your checkbook squarely in the face and realize that you can BARELY make the minimum payment on your credit card.  Yes, this is the life of a lawyer.  Life was grand for those few years where I broke a 100K. But now, I'm back in the pit with the other crown jewels.

I received an email from a reader who asked for advice in convincing her immigrant mother to lay the hell off and stop pushing the law school dream down her throat. My comments are in blue: 


I love your blog and I'm writing because I'm hoping you can help me talk some sense into my mother.

Like you, I am brown and my immigrant parents worked hard to send me to private schools and to college. I graduated from college a couple of years ago, and I am currently working at a non-profit. I don't make great money, but I'm learning a lot and slowly paying off my undergrad debt. I refused to go to law school (my mom's dream for me, and what I thought was my dream) until I had some solid work experience under my belt and I felt 100% sure I want to be a lawyer. My mom was not okay with that, but I managed to get a job and pay my own bills, which gave her less of a say with what I get to do with my life.  Wow.   You are already more successful as a college grad than you would be as a law school grad. Most law school grads cannot pay their own bills these days because they are crushed by student loans and unable to earn decent wage. 

In my time out of college, I've seen how going to law school has played out for many people. It seems like a very few make the big bucks and the rest generally end up heavily indebted with varying abilities to make ends meet. I've meet lawyers who are happy, bitter, rich, broke and a few in between. I've decided that if I were to go to law school, I would want to do so on a huge scholarship. Getting into huge debt, especially when I'm inclined to want to work in public service doesn't seem appealing to me. You are so intelligent!  You obviously thought this through. Some schools advertise their public interest law programs, but cost over $30K a year... thus precluding a career in public interest law.  I went on an interview last week, to be a lawyer with an AIDS Advocacy Program.  The starting salary was $50K and the position is open for a year.  I told him I can't afford to work for him and left the interview.  On $50K, can you pay back $90K+ of debt? NO!

Since I graduated from college, my mother has been nagging me about going to law school. She insists I need to go to law school so that I can have a profession. I keep telling her that it's too expensive to justify the risk. I tell her that it's three years of my life and that I need to be sure that the path I can envision for myself as a lawyer is plausible given the lack of legal jobs out there. She pushes back and insists that I having a bachelor's degree is not enough and that I need a solid profession under my belt. To be clear, neither she nor I have the resources to put me through law school, so under my mother's wonderful life plan, I would mostly likely owe tons in student loans.  This is reason enough not to go.  I would only suggest going to law school if it was 100% free.  That means.. you must live and eat for free as well.  Does she have room for you to live in her basement?  Can she feed you for the next 3 years?

I know my mother wants what's best for me, but is not in touch with reality. She even provided me with a ridiculous example of an attorney she once met at city hall in a major city who said he or she made 200/hr. This is obviously crazy, as a municipal attorney would not make that much. She tells me I can go work for "city hall and make 200/hr" as a back up plan. She also cites the example of a relative who just graduated from a third-tier law school and she insisted that she had many job "offers" out of law school. I checked with my relative and my relative told me she had offers for job interviews, not job offers. Watch out for family liars.  Brown people hate to admit that their children are failures to family and family friends.  She's a bullshit artist. I'm actually shocked she got interviews at all.  She probably meant that she got registration interviews at temp agencies. 
Talking to my mom about law school as a risky investment isn't working and she gets resentful and angry at me for not wanting to take what she perceives is the next step in my future. Is there anything you think you can say to a brown mom to make her understand how thinks work in America in 2009, not her country in 1980?

Thank you,

Well, had I been as intelligent as you are, I would have told my mother... And I'm totally going out on a limb to assume that your culture may resemble mine....

"The more money I have to give to loans, the less money I will have to help my dear mama."  My mother, being of the old country, looks at children as an investment.  You work hard to get them on their feet so they can serve as the retirement plan one day.  That is, if she wants to move back to the old country or has an emergency, I will feel like I should pay for things because she pushed me through her birth canal and suffered for me.  But, as the situation stands, any money that I could have given to my mother to furnish her third world apartment or hire a cleaning lady or buy lavish gifts-- is being given to my mama that owns me, Sallie Mae.  Alas, there is nothing left for her.  Tell her to trust you ... and you will make money, especially since you will owe nobody anything. 

Anyone else feel familiar familial pressure to go to the the depths of hell law school?

Monday, December 7, 2009

Hollywood Glorifies the Legal Profession: Carlito's Way!!!! [Spoiler Alert!]

I don't much like rap music. I am definitely down with the beat.  I like most hooks and I sometimes get them stuck in my head.  But generally, I resent that rap music glorifies illegal drug dealing and the objectification of women.  Rap music will have our youth believe that drug dealing leads to lots of money and big butted women.  Generally, a drug dealing lifestyle will lead to a death by drive-by.  So, I think the  rap industry is irresponsible.  I like LL Cool J and Will Smith because they don't partake in that shit.  Of course, this is a huge red herring to my real point. Hollywood is irresponsible and dishonest in its portrayal of lawyers and I frown upon the inaccurate depiction of any group of people--drug dealers, ballers, corporate lawyers.

I can barely watch a movie or tv show about lawyers without cringing at the utter nonsense of it all. Damages, which was a show on FX, was a perfect example of that.  See below.  Bonus check for $2 million dollars, my ass.

It was that trailer alone that kept me from watching the show. I couldn't watch something that made lawyers appear so wealthy and glamorous.  There is NO WAY that a first year can earn a bonus check of $2 million.  Never, ever. So, they lost my business.

Last night, I was watching a movie called Carlito's Way and I got a familiar sick feeling in my stomach.  The movie is about a gangster named Carlito, played by Al Pacino.  But what bugged me out was Sean Penn's character, David Kleinfeld the attorney.  He was banging hot women in a club, doing coke off of every flat surface... he had a yacht and a beach mansion, a condo overlooking the triborough bridge.... and all the while being a solo attorney.  Kleinfeld had drug fueled orgies at his seaside estate. Actually, as an aside, I know for a fact that the beach house was the guest house of the mansion belonging to the owners of J&R Music World. It's in Kings Point, Long Island.  The yacht was owned by the same people as well.  At the time, Brian De Palma thought that the main mansion wouldn't realistically be owned by an attorney.  As it turns out, it's not realistic that the guest house would be owned by an attorney as well.  Most solos these days can't afford the primary domicile--let alone the beach front residence.

Even his office was awesome. The cherry wood panels and the opulent furniture. The secretary with the British Accent. Every solo office I ever went in looked like a cave, and not the bat cave either.... a dank and cold cave where things crawl in and die. Wild and crazy stuff.  Granted, Kleinfeld stole $1million from his client to bribe judges... but his wealth far exceeded that amount.  I have my doubts that an attorney in the late 70s could manage all of that... even though times were good back then.

My point, of course is that this is not real life.  Attorneys do coke, yes.  But it's not because they are party animals. It's usually to increase their productivity so they can bill more hours... fun times, right?
And if you're that rich of an attorney, you probably have no time to enjoy things like night clubs, yachts and ocean front property. It's a blatant lie.

The funniest part of the whole movie... to me... was the very realistic portrayal of Gail, Carlito's girlfriend.  She is a ballet dancer and can't find work in the city.  Why?  It's hard to break into the industry as a dancer or actress or otherwise... and that is certainly an accepted truth.  She ends up becoming a stripper.  How can Brian De Palma be so real about what happens to Thugs and Dancers in NYC, but portray lawyers as glamorous people who flirt with danger. 

Portraying lawyers in such an irresponsible manner is just as bad as having movie actors do smoking roles.  Both cause children buy into something dangerous.... going to law school and pulling out $100K+ in loans, and getting lung cancer. 

I'm pretty certain that every person who has every smiled at me when I said I was a lawyer has seen at least one film claiming that an attorney was rich. I wish that Hollywood would stop mass producing lies and bullshit.

That being said, the movie was excellent.  But I could have done without the rich lawyer. He would have been just as weaselly and complex as a broke solo.  I'm sure of it.

Sunday, December 6, 2009

Bloomberg is a Wise Man!

A while ago... when Bush was running for election... I was invited to a Republican Watch Party in New York City.  Don't get me wrong, this wasn't one of many high profile events that I went to. I was lucky.  My boss at the time had donated money to the Republican party and knew his local representative personally, so he took a bunch of lawyers with him to the party. I'm not even a Republican, but I couldn't resist the opportunity to rub elbows with some high powered people.

It was in an Italian Restaurant in Midtown.  The place was swanky.  The atmosphere was good. I was getting chatted up by tons of people, as if I had something to offer.  Of course, it was a little distracting that people were outside protesting and throwing rocks at the restaurant.  From the window (and while behind a curtain) I could see people being carted off to an impromptu waterside jail that had been set up on a Pier on the Hudson River.  The whole experience was quite surreal.  Although I donned a Bush/Cheney pin that I destroyed as soon as I left the place--my heart was with the protesters.  I was anti-war and that was the primary cause of the protesters.   I felt like a spy.

At some point in the night Mayor Bloomberg, then a Republican, showed up with his blacked out SUVs and many body guards.   He is independently wealthy and its my understanding that he used his own money to pay for all that.  That made his arrival even more impressive.  I was quick shocked at how petite he was.  But, powerful men often come in small packages.  I was in awe.  Although he was a Republican, he was quite a popular mayor.  I was definitely a fan.  Besides, he's an independent now.

He was making his way around the room and he finally came to me and my coworkers.  He turned to me and looked up... remember he's short.. and said, "What do you do?"

I said, proudly, "I'm a lawyer!"

At the time, I was proud. I wasn't earning much by any stretch of the imagination.  But I was still a believer.  My beliefs that being a good lawyer weren't stemming from my situation at the time. I was struggling to pay my bills. My student loans were crippling on my salary.  But my boss had done a good job convincing me that I had a bright future in this. Moreover, I really enjoyed my work.  At the time, I was a court running attorney. I did trials and depositions and felt like a real lawyer.  Sometimes my cases were high end and other times, I would be elbow to elbow with poverty in Landlord/Tenant court.  But it kept me on my toes and it was damn fun.  This was my state of mind.

Mayor Bloomberg answered, with a stone sober face, "I'm sorry."

I actually got defensive and said, "I enjoy being a lawyer!"

Mayor Bloomberg shook his head and moved on to the next person.

What a dummy I was.  That is why he's Dictator Bloomberg of New York City and I'm nobody.

Friday, December 4, 2009

NYLS, Brooklyn, NYU, Columbia, St. Johns, Albany, Cardozo, Fordham, Touro, CUNY School of Law, Cornell, Hofstra, Pace, SUNY Buffalo, Syracuse.... Binghamton???????

Yes... Binghamton is planning on opening up a law school.  They don't even lie and say that New York or that Binghamton (in upstate New York) is in dire need of a law school.  It's pretty daggone obvious that New York is drowning in law schools.  Besides the obvious motivation ($$$$$) what could they be thinking?  Especially with the legal industry producing a ton o'grads a year.  43,587 graduates to be exact.  So, what's another 160 or so???? 

Here is one of their reasons:

Based on statistics from 2007-08, out of all the then-seniors that applied to attend law schools across the country, 76 percent were accepted to one or more American Bar Association-accredited law schools after graduation. Of those applicants who were seniors at BU, 86 percent have been accepted to one or more law schools.

"We are 10 percent above the national rate," Appelbaum said. "Binghamton does a wonderful job in preparing students for law school. I think it would do equally well in providing a legal education."

What an achievement! With over 200 law schools in America, the Correspondence College for Monkey Science can produce graduates that get into law school... somewhere.  Is that really an achievement? 

Once again, the total disregard for the future of students after they get out of the law school is shocking to me.  I can open a law school in my living room, but I wouldn't.  I could just teach them a  Barbri Course and they will be better prepared for the Bar then if they went to law school.  But I won't.  Why not?  Because I can't tell these kids that they will have a future in the field.  What Binghamton and other law schools are doing is fraud.  Why isn't the State Attorney General of New York prosecuting these hacks.  I really think that law schools are the biggest Ponzi Scheme of all.   Deans everywhere should have to pay their unemployed graduates back the money they stole.  That would be justice.

Thursday, December 3, 2009

Wall of Shame: "Dr." Gary Karpin!

Lawyers don't retire, generally.  They work until they drop dead in their offices. Or, in the case of my old boss, until you drop dead of a heart attack on the bus coming into the office.  I digress.  Back to the point... I'm not sure if that is because they are so passionate about their work, or too broke to stop.  So, naturally, the legal industry doesn't make room for new meat. 

But there is one way that lawyers are siphoned out of the legal industry... through disbarment.  Typically, the victims idiots of "disbarment" are solos that can't make ends meet without ripping off their clients.   That is why I'm not super keen on being a solo. There are lots of places where you can slip.... like comingling funds, etc.

Then, there are egregious cases.  For these, I will be featuring a wall of shame a few times a month when I feel like it.

Gary Karpin, out of Arizona, is serving 16 years in prison for ripping off clients to the tune of $250K.  Not much money considering all that he has lost; a "late-model silver Corvette and his sprawling home in Gilbert that he bought for $495,000 in 2001" and a license to practice the law.  I'm sure he'll miss the Corvette and the home.

Not only did this former divorce attorney, turned mediator, promise to: "settle all issues -- no trial -- no court appearance -- be divorced in 90 days -- low cost -- low stress -- judge approved -- focus on best interests of children -- attorney supervised" and then charge clients up to $90K for divorces that should have cost $3K, but he also had romantic interests in at least 2 of his clients.  They fell for his guitar abilities and Chris Walken looks (Sorry, Chris!)

And, interestingly enough, he had retired from the practice of law in 1992 (read: disbarred in 1992).  Apparently, "[He had] engaged in an unprecedented pattern of submitting false statements, submitting false evidence and using other deceptive practices."  Whoops. 

He picked up the title of "Dr." somewhere along the way. "He call[ed] himself "Dr. Gary" because of his law degree -- a juris doctorate."  Ha!

This guy went to a law school in Vermont.  It's safe to presume that it's Vermont Law School, since that is the only one there (I think). It's definitely outside the top 100.  I'm sure they are beaming with pride.  Hmmmmm... correlation or causation? 

Wednesday, December 2, 2009

Anonymous Comments Now Welcome!

I never realized that I didn't allow for anonymous comments before.  But now, I welcome them with open arms.  :)

I hope more people comment now.  Have a wonderful day!

Tuesday, December 1, 2009

Supreme Court to Hear Case on Discharged Student Loan Debt!!!!!

Francisco Espinosa is soon to be the poster child for fighting against the Student Loan Machine! Please read the article below. This is about minor amounts, but the outcome will be huge. Please read on!!!!

High Court Hears Student Loan Bankruptcy Case
by Nina Totenberg

December 1, 2009
Student loans are a way of life in America, and the federal government guarantees most of those loans. The question now before the Supreme Court is what the obligations of the lender and the borrower are when a student can't pay.
More than a third of students enrolled in post-high school classes borrow money to advance their education. The federal government guarantees most student loans to the tune of $618 billion. To prevent people from just walking away from their obligation, federal law makes it hard to discharge a student loan debt (that is, not pay for it). The bankruptcy code allows discharge only in cases of undue hardship, but the code does permit restructuring of a debt to make it repayable.
Enter today's test case and its protagonist, Francisco Espinosa. In 1988, he was a baggage handler for America West Airlines. He enrolled in a technical school to learn computer drafting and design, but after graduating, he couldn't find a job.
Meanwhile, America West was in trouble. It froze wages and then cut them so that by 1992, Espinosa, still in his old job, was earning just over $6 an hour. He was single, lived frugally, drove a car worth $1,200 and had no debt, aside from his $13,000 student loan, which he was in arrears on.
Espinosa says he was humiliated and scared. The lender not only called him demanding that he repay the loan, but also called his mother, suggesting she borrow from her pension.
Then he fell in love and wanted to marry.
"I needed to get my finances squared away," he says. "I just can't come into a relationship and have people calling me, bill collectors."
Repayment Plan Established
Turning to the phone book, he called a lawyer. The lawyer filed what is known as Chapter 13 bankruptcy, which calls for the restructuring of a loan. "I did want to pay what I owed," Espinosa says. "I didn't want to get out of it."
A bankruptcy trustee working with Espinosa's lawyer worked out a plan for Espinosa to pay $274 a month, which would pay off the loan plus the bankruptcy fees. But it would not pay off the $4,000 accrued interest. The lender, United Student Aid Funds Inc., was notified in writing of the proposed repayment plan. It filed no objections, and six months later, a federal bankruptcy judge approved the plan. The company did not appeal, despite being notified a second time that the plan, if fulfilled, would discharge the debt in full, without the remaining interest payments.
Espinosa lived up to the plan's requirements, paying off the debt in installments over the maximum five-year period permitted under law. In 1997, the bankruptcy court declared the debt paid in full.
"I got my stamped release letter," Espinosa says. "I thought it was over and done with at the time."
Two years later, though, United started dunning Espinosa for the interest, among other things, and put a lien on his tax refunds. It continued to try to collect the money until Espinosa's lawyer asked the bankruptcy court to hold United in contempt.
Undue Hardship Requirement
Then, 11 years after the bankruptcy court had confirmed the original repayment plan, United claimed that the plan was illegal and void.
The lender noted that the federal bankruptcy code allows discharge of an unpaid student loan only if the borrower can show undue hardship. United said that to do that, the bankruptcy court should have conducted an adversary hearing with a formal summons ordering the company to appear in court.
Espinosa's lawyer countered that the company was repeatedly notified that the plan called for nonpayment of the $4,000 in interest, that the company in essence had waived its right to an undue hardship hearing, and that in any event, the bankruptcy court's judgment was final and could not be reopened long after the deadline for appeal had passed.
A federal appeals court ruled against United, declaring that "it makes a mockery of the English language and common sense" for United to claim that it "was somehow ambushed or taken advantage of." Backed by the U.S. government, 24 states and the entire student loan industry, United appealed to the U.S. Supreme Court.
United argues that without a finding of undue hardship, a plan discharging any part of a student loan debt is illegal and void under the law. If student loans could be more easily discharged, they say, lenders would be reluctant to make such loans.
Espinosa says that's nonsense; only a small part of the debt here was discharged — too small a part to require an adversary hearing if the company didn't object. Backed by the National Association of Bankruptcy Trustees, he says that courts, particularly bankruptcy courts, would be thrown into chaos if judgments had no finality and one side could appeal long after the fact.
Now the Supreme Court will decide.

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