Why not let nonlawyers help regulate the legal profession? Law prof makes case for change

James Moliterno

Why not let nonlawyers help regulate the legal profession? Law prof makes case for change
ABA Journal Law News Now
May 20, 2013
By Debra Cassens Weiss

Lawyers are not all-knowing and could benefit by allowing nonlawyer outsiders to help regulate the profession, a law professor says in a law review article.

Washington and Lee law professor James Moliterno tells the Wall Street Journal Law Blog (sub. req.) that nonlawyers should be allowed to serve in leadership and policy positions in the ABA and state bar associations, where they could help set standards for the profession. He makes his case in an Emory Law Journal article (PDF) and a new book, The American Legal Profession in Crisis: Resistance and Responses to Change.

In an interview with the Law Blog, Moliterno outlines possible changes if nonlawyers help govern the profession. There could be a movement to a national law license or a relaxed admission-on-motion system to allow freer law practice across borders. Ethics rules barring nonlawyer ownership of law firms would likely be relaxed. And entities such as LegalZoom and Rocket Lawyer would gain ground as a way to assist low- and middle-income people needing legal help.

Here are some excerpts from Moliterno’s article:

"The profession seems to repeat the same question in response to every crisis: How can we stay even more ‘the same’ than we already are? In short, the legal profession is ponderous, backward looking, and self-preserving. …

"I recommend a more forward-looking approach that welcomes the views, and even control, of nonlawyers and innovators in business and other enterprises. My hope is that the legal profession can be more like companies that have thrived because of their innovative tendencies (e.g., Apple, IBM, and Western Union), and less like companies whose stagnancy caused large-scale problems (e.g., Kodak). …

"History demonstrates that lawyers are inept at being their own exclusive regulators. Lawyers tend to look backward to precedent and sideways to existing articulations of law. When lawyers do look forward, their primary task is to predict and guard against risk. It is not in lawyers’ nature to be forward-looking planners or sensitive to cultural trends. …

"The unwelcome cure is to enlist nonlawyers—planners and evaluators of cultural trends—in the regulation of the legal profession. These people, who have a wider view and can see the path ahead and not merely the ground already trod, can regulate the legal profession without the same self-interest as established members of the bar." Read more here

New federal agency sues 2 law firms over debt-relief fees; one attorney is also criminally charged

New federal agency sues 2 law firms over debt-relief fees; one attorney is also criminally charged
ABA Journal Law News Now
May 7, 2013
By Martha Neil

A new federal agency filed a lawsuit Tuesday against two New York City area law firms and an attorney who owns a related business. It contends that they charged illegal advance fees for so-called debt-relief services that provided little or no benefit to consumers, who routinely lost amounts ranging from $1,300 to $3,000.

In addition to the advance-fee allegations against Mission Settlement Agency; its attorney-owner Michael Levitis and his law office; Premier Consulting Group; and the Law Office of Michael Lupolover, the Consumer Financial Protection Bureau also alleges that Mission and Levitis violated the Consumer Financial Protection Act by using unfair and deceptive marketing practices, the Blog of Legal Times reports.

Among other issues, the civil complaint (PDF) filed in federal court in Manhattan by the CFPB says the Mission defendants violated federal law by misrepresenting to consumers the fees that would be charged and the benefits that would be provided concerning the debt-relief services they marketed.

Separately, the U.S. Department of Justice unsealed an indictment that includes criminal charges against Mission Settlement Agency, Levitis, and three current or former employees, according to the Hill's RegWatch page. It was the first criminal case ever brought based on a referral by the CFPB, the article says.

The indictment (PDF) accuses the criminal defendants of participating in a mail and wire fraud conspiracy that bilked consumers out of millions of dollars.

As part of the criminal case, the DOJ is seeking to seize the Rasputin Supper Club in Brooklyn, which is owned by Levitis, the New York Daily News reports. Federal prosecutors say he used money from the debt-relief operation to fund the glitzy Brighton Beach club, lease two upscale vehicles and pay his mother's credit-card bills.

A press release from the Manhattan U.S. Attorney's office provides further details.

"These wolves in sheep’s clothing take money from consumers who are already struggling to pay their bills, falsely promising them help while really making their problems worse," CFPB director Richard Cordray said said in a written statement provided to the Philadelphia Inquirer.

Attorney Jeffrey Lichtman represents Levitis and tells the BLT that his client has been cooperating the government. He said Levitis has been trying to meet with prosecutors to provide evidence about the "rogue former employees who committed many of the frauds alleged in the indictment" before exiting to open their own debt-relief business. "Now Michael Levitis is left to clean up the mess," Lichtman said.

In an email to the BLT, Lupolover said the CFPB suit "has nothing to do with the law offices of Michael Lupolover." Read more