When I was a young lawyer, I worked for a firm that had four (4) lawyers and eight (8) offices. Needless to say, seven (7) of those offices were simply rooms with a desk in them, or “Satellite” offices. In those days, the firm charged about $850.00 for a Chapter 7 bankruptcy, including all fees and costs. However, they advertised bankruptcies “starting at” $299.00. It was impossible to get a $299.00 bankruptcy. In fact, there was nothing that they did in the Bankruptcy area that would cost less than $850.00.
Today I had a client come in who was referred to me by a former client of mine. She had earlier been to an attorney who she found on the internet. The particular firm has six (6) lawyers and ten (10) offices. She saw the lawyer in a room with a desk in it. Their website said that this particular firm “offers bankruptcy attorney’s fees starting at only $499.00.” At another place their website stated “it is amazing to us that our competitors can actually get away with charging Bankruptcy Clients $1,500.00, $2,000.00, $2,50.00(sic) in attorney’s fees OR MORE for a Chapter 7 bankruptcy case that we can typically handle for a fraction of those fees.” Now that I am representing this person, I can tell you that hers is about as simple and straightforward of a bankruptcy as there is. The client does not own a house and has no significant assets. The client works but has very modest income. The debt is credit cards, medical bills, and some old utilities. All of the debt is old. The total debt is less than $20,000.00. I charged her $1,750.00, including all of the filing fees, credit counseling fees, debtor education fees, and every other fee and expense that goes into every single Chapter 7. It even includes my pulling her credit report! This law firm which advertised $499.00 and is amazed that other lawyers “get away with charging” $1,500.00 wanted $1,850.00 plus credit counseling and debtor education costs. In fairness, that $1,850.00 did include the $306.00 filing fee, so the lawyer fee, would be $1,544.00. Still they advertise “it is amazing” that other lawyers can charge $1,500.00. My fee works out to be $1,374.00, and even that includes copying, postage, gas and parking (all things my old firm added to the $299.00).
“It is amazing” to me that anyone would hire a law firm that is so fundamentally dishonest. It is one of the reasons I left the firm I used to work for. I simply could not stand this practice and immediately got rid of it as soon as I became the boss. I think that it is cruel to do this to anyone, but it is especially cruel to do this to a person experiencing financial problems.
I mentioned that I was a young lawyer. In fact I was twenty-seven (27). I would be in my room with a desk and working people, much older than myself, would come into the office with their $299.00, which was a significant amount of money to them. I could see that triumphant look as they put it down on my desk and said that they were ready to file bankruptcy. They had struggled and saved their money to do this. I also saw the hurt in their eyes when I told them that they were only a third of the way there. I remember one case vividly, because I really thought that this middle-aged man, who worked all of his life and had fallen upon hard times, was going to cry. I remember as I was driving back to the main office after meeting with him thinking to myself “I crushed a man’s soul today”.
All I can say is when you see these fees advertised that seem to be too good to be true, they usually are. An attorney client relationship is a relationship of trust and confidence. I do not see how an attorney can be trusted or how a client can have confidence in an attorney who started the relationship with a lie.