Florida Attorney Becomes Client’s Creditor So Client Can Pay For Foreclosure Defense

One firm in Florida came up with the idea of taking a second mortgage on their clients’ homes – so their clients can borrow money to pay foreclosure defense fees equal to a percent of what the law firm saved the clients in foreclosure litigation. They offered this option to clients who could not otherwise afford to defend their cases and might lose their homes. There are potential problems with this approach as it may create a conflict of interest for the lawyer, although it also may be possible for the client to waive the conflict. It also sets up the firm as a secured creditor of the client but that is really not much different than the typical fee arrangement where a lawyer is an unsecured creditor of the client. My firm has not taken this approach although we do encounter many clients who have difficulty paying for quality legal defense. This novel approach was discussed today in a NY Times article.

There is one glaring omission in this article. It does not discuss the problems that will arise from handling too many cases at one time. The article states that the Florida firm has 19 lawyers and 3000 foreclosure cases. To me, that is a recipe for disaster. That comes out to about 158 cases per lawyer. I don’t see how any lawyer can properly handle this many cases at one time. Each case requires individual attention. Each client has their own story. Cases like this require detailed attention to discovery (disclosure of bank records).