Defunct Legal Vendors Can Create Lots Of Problems

// Attorneys rely on all kinds of legal vendors in order to most efficiently handle matters for clients. Lawyers routinely hire vendors to handle e-discovery issues, manage significant print jobs, or complete other tasks that law firms cannot manage in house. However, lawyers need to be careful when choosing legal vendors and ensure that legal vendors are both reputable and financially secure. If a legal vendor goes out of business, this can create numerous issues for lawyers and their clients that attorneys might not be able to fix.

Several years ago, I had to pick up the pieces after a legal vendor went out of business, and the situation can be instructive for other lawyers. In the past, I have used a particular vendor when handling depositions since this vendor was a big name in the legal industry. Of course, depositions need to be managed by neutral parties, and lawyers routinely rely on legal vendors that specialize in deposition services in the course of their practices. One time, an adversary of mine booked a deposition using a different legal vendor that I had never heard of before. This vendor had an easy-to-use online interface, and the prices were much better than other similar vendors with which I had worked in the past. I thought that I could save the client money by using this particular deposition vendor rather than a mainstream vendor, and for several depositions, the vendor performed perfectly.

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Then, one time shortly after using this vendor (and after fully paying for its services), I received notice that the vendor going out of business. I needed this vendor to complete the services for which we paid, and there were deadlines that were fast approaching in the case. I called every single telephone number I found for this vendor, and messaged every email address I could find, but got absolutely no response. I thought that the legal vendor had pulled a “rug pull” on its clients and left numerous law firms in the lurch.

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Eventually, a substitute legal vendor stepped in and completed the work that was supposed to be handled by the initial legal vendor that went defunct. Thankfully, all deadlines were met, and there were no consequences to the case because of the vendor going out of business, except for paying some extra money to the substitute. However, this entire experience made me much more likely to use the services of one of the big vendors in legal industry next time so that I could avoid a situation like this in the future.

Over the years, I have heard through the grapevine a few other stories of legal vendors going out of business that should also give lawyers pause. I once worked at a law firm that used a particular company to provide expert services for a specific type of case we handled. The company was affordable, and usually, they were dependable.

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One day, we got word that this company was going out of business even though they had failed to complete a report that we needed to file in the case. We ended up informing the court of the situation and requested that we be allowed to use a different expert and undertake further inspections so that we could have a proper expert report in that matter. I don’t remember if the court allowed us to retain a substitute expert, but I would not be surprised if we were precluded from proceeding with a substitute expert even though the initial expert was unavailable. I have also heard of experts retiring, and even passing away, and how these circumstances can create issues for a case.

I also once heard a story from an old-timer attorney who frequently used a particular appellate printing company. Back in the day, in certain jurisdictions (and perhaps in the present, I have not filed an appeal since 2015!), litigants filing appeals needed to print books containing appellate briefs and the appellate record connected to a given appeal. The vast majority of lawyers would contract with an appellate printer to complete this task, and many appellate printers can also provide advice on the intricacies associated with filing an appeal.

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In any event, apparently this lawyer used an appellate printer that went out of business before it could complete the printing work for a given appeal. This made it extremely difficult for the lawyer to perfect the appeal, since he had to hire another printer to complete the work on short notice. Since some appeals are perfected close to the deadline, I can only imagine the difficulties this situation created for the lawyer.

In the end, I’m not saying that lawyers should always use bigger legal vendors, since smaller vendors might have lower prices and better customer service. However, attorneys should be aware that legal vendors can and do go out of business and this can create a number of difficulties for law firms and their clients.

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Jordan Rothman is a partner of The Rothman Law Firm, a full-service New York and New Jersey law firm. He is also the founder of Student Debt Diaries, a website discussing how he paid off his student loans. You can reach Jordan through email at [email protected].

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