October 10th, 2011

Shpoonkle – A Lousy Idea for Lawyers and Clients

There is a legal auction site called Shpoonkle. The gut instinct of many is to question the sanity of their name. But not me. I question the sanity of anyone that would use it.

According to this article at VentureBeat, this company seeks to have potential clients post information about their issues and then have lawyers bid on them. As per the article:

People who need legal representation but who don’t have time to call around for rates, or who might not be able to afford a lawyer in other circumstances, can post their needs and get bids. Attorneys then have to compete for a piece of the action. According to the company’s theory, this will lower legal fees.

I’ll get to the ethical issues in a bit, but first let’s tackle the most fundamental issue of anyone looking for an attorney: Getting the right one. And the article cites personal injury law as an example. According to CEO Robert Nitzig:

our users keep more of their winnings on contingency cases

I want to puke already. I don’t know any lawyer that meets personal injury victims that would ever refer to an award as “winnings.” Oddly enough, those that have lost a child, or a leg, or are living in constant pain, don’t see a settlement or jury verdict as “winnings.” I once took a verdict in a case for a Spanish-speaking client that was quite substantial. She was stone faced. I asked her daughter if she had translated the verdict for her mom, and the answer was yes. “Well,” I asked, “What did she say?” “My leg still hurts.”

Now to the guts of the issue: Is a client really keeping “more” of any recovery? Well, now that depends. Let’s say that, in a community where a 33% fee is the standard, that a lawyer “wins” the auction with a 25% bid and the case settles for $100,000. The client got an 8% bonus of about $8,000, right? But not if the case was worth $250,000  in the hands of someone with experience and a proper skill-set. The client, then, would be a huge loser.

You see, as per the article, this is a great site for new attorneys since 13,000 out of the 44,000 graduating law grads don’t have jobs. So how does the rookie lawyer have the knowledge to work the case up, appreciate the significance of injuries s/he has never seen before, know their value, know how to address the defenses and cross-examine the hired expert guns, and handicap the odds of prevailing? And even more importantly, does the newbie lawyer have the depth of experience and the cojones to say “no” when the adjuster calls with the 100K offer, when the case is worth more and that young lawyer is struggling to pay the rent?

There is an old saying that “you get what you pay for” and that is often true in the professions. Not all doctors are created equal, nor architects, nor lawyers. People pay for experience, because that experience is what benefits them in the long run.

Now let us go the dynamics of the auction site itself. According to the article:

People who need legal representation but who don’t have time to call around for rates, or who might not be able to afford a lawyer in other circumstances, can post their needs and get bids.

This raises two distinct ethical issues: First, clients may be seen to have waived their attorney-client privilege by making the information available in such a fashion. They haven’t contacted one lawyer, they have contacted every lawyer in the database that can access the information and who have not agreed to represent the potential client. What if this was a slip and fall in a restaurant, and it just so happens that the restaurant lawyer can access the information also? Now what?  Now the information that the client distributed to, potentially, hundreds or thousands of mystery lawyers, may be anything other than confidential.

How stupid does someone have to be to distribute their confidential information about a legal issue to lord-knows-how-many mystery people?

How do you pick the right lawyer? In one of my very first first posts when I created this blog almost 5 years ago, I wrote on just that subject, and addressed this fundamental question: There are so many attorneys and legal websites, how do I select a law firm? While it may not be the most inspirational writing, I stand by the fundamentals of how to find a lawyer, and a lowest-bidder auction certainly isn’t one of them

And as to the Shpoonkle name, I won’t criticize it’s Yiddish sound. After all, many colorful Yiddish words start with “sh” (or “sch”). Some that spring to mind are shlemiel, shemendrick, shnook and shmoe, all of of which someone would have to be to get suckered by this auction shtick to use this shlock service. Which may result in the client getting shtupped.


Shpoonkle By Any Other Name (Simple Justice)

Any lawyer who signs up for this service should be immediately disbarred, then tarred and feathered, then publicly humiliated.  It doesn’t matter how awful a lawyer you are, how pathetic your business, how grossly incapable you may be in getting any client to retain you.  Those are all good reasons to apply for the assistant manager’s position at Dairy Queen.  This is worse.

The Shpoonkle-ization of a Legal Profession w/o Doc Review Jobs (Solo Practice University)

Here you have a race to the bottom as lawyers bid against one another to pay the lowest fee to anonymous clients with legal problems.

Another Attempt at a Reverse Auction for Legal Services (Robert Ambrogi’s LawSites)

With its launch today, will Shpoonkle, the latest reverse-auction site for legal services, find itself suffering the same fate as its forerunners? Or is the time finally right for such a site?