Where’s The Money?

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One of the most difficult discussions that a lawyer has with her client or with a mediator is to assess the likelihood of judgment collectability. The client wants her pound of flesh, wants to go in to court with guns blazing, wants to spend “whatever it takes” to bring down that rascal defendant, and pound him into a quivering mass of jelly. Not so fast, hold your horses, whatever the phrase might be in the circumstances. Even if the plaintiff scores a desired verdict, it doesn’t necessarily follow that the vanquished defendant will whip out a checkbook and pay that judgment in full along with whatever costs and fees are due the plaintiff. (Don’t we all wish that happened in real life?)

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Nope, collecting on that judgment after all avenues of appeal have been exhausted is a journey all its own, and it’s why some lawyers specialize in post-judgment collection. The unfortunate thing from the plaintiff’s perspective is that, often, defendants are judgment proof: they have no assets, at least none that can be found after a diligent search everywhere.

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Or, even worse, the defendant agrees to pay some or all of the judgment, usually over time, and then files bankruptcy, discharging that judgment unless it meets one of the exceptions to discharge, further enraging the victorious plaintiff who may have to cough up any preferential payments made. Winning at trial doesn’t translate into a collectible judgment. Far too often, plaintiffs think that it’s a slam dunk after the win; it’s anything but that, and so it’s critical to advise clients that the easier part of the case was winning at trial; the far more difficult part is collecting on that judgment. Not an easy conversation but a necessary one for the perplexed and crestfallen client.

I have deliberately refrained from any Tom Girardi stories recently in deference to my editor, but no more. The hearing before a federal district court judge in Los Angeles into Girardi’s competency to stand trial has concluded, but it’s going to be some months before there’s a decision. The Illinois criminal trial is on hold until such time as there’s a decision here in California. In case you’ve forgotten, Girardi is facing criminal charges both in Chicago and in SoCal, for allegedly having ripped off clients’ settlement funds to the tune of millions of dollars. So, the district court’s decision will affect proceedings here and there.

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But wait! There’s more. The parents of a son who died of cancer and who was represented by Girardi has filed a class-action lawsuit against the State Bar of California, alleging “gross negligence” and “reckless misconduct.” The lawsuit claims, among other things, that the California Bar “failed to do its job” and “actively protected Tom Girardi and [his firm] Girardi & Keese from ethical complaints and discipline for decades.” It also alleges: “Had the state Bar carried out its mission of protecting the public, this complaint, and many others like it, would not be necessary.”

The complaint further alleges that, rather than protecting the public as its first order of business, “state Bar officials were gallivanting around the country in Girardi’s private jet, staying at luxury hotels in Las Vegas, enjoying fine dining at expensive private clubs, attending lavish holiday parties with Hollywood entertainers, or attending concerts and other events, all paid for by Girardi.” As an administrative arm of the judicial branch, do you think the California State Bar should be able to argue qualified immunity? The cherry on top of this sorry sundae: Girardi mouthed an expletive at the federal prosecutor at the conclusion of the competency hearing,

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Competent or not competent? You decide.

Moving from California to east of the Hudson River, a New York lawyer has pleaded guilty to one count each of conspiracy to commit money laundering and conspiracy to commit wire fraud. Not only will he serve some years in the clink, he also must forfeit $19 million (not a typo) in ill-gotten gains, including more than $6 million due to family members he fleeced. (Family dinners may not be happy occasions.)

Bravo to Joe Patrice for making it clear that AI needs to fit within a lawyer’s practice, not the other way around. Chat GPT and other AI mechanisms are handy-dandy helpers in law practice, but they should not be the be-all and end-all. Yes, they can cite-check in less than a heartbeat (hopefully correctly). Lawyers read the cases (also, hopefully) so that they can tell the court whether the case is “on all fours” and, if not, why not. (Rarely is a case precisely on all fours, and it’s the ability to distinguish cited authorities that is a key one between us humans and AI.) I doubt that AI can stand at counsel table and answer the court’s pointed questions.

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How many lawyers are letting AI do the heavy lifting and yet billing as if the attorney is doing the work? How to bill for the work AI has done? If AI can deliver decent work product in the blink of an eye, what happens to the billable hour? As Ken Crutchfield says, AI is only a tool and not a replacement for lawyers. At least, not yet.

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Jill Switzer has been an active member of the State Bar of California for over 40 years. She remembers practicing law in a kinder, gentler time. She’s had a diverse legal career, including stints as a deputy district attorney, a solo practice, and several senior in-house gigs. She now mediates full-time, which gives her the opportunity to see dinosaurs, millennials, and those in-between interact — it’s not always civil. You can reach her by email at [email protected].

Topics

Biglaw, California, Courts, Jill Switzer, Legal Ethics, Small Law Firms, Tom Girardi