How Mike Ziegler turbocharged his bankruptcy and foreclosure defense practice with lucrative consumer plaintiffs’​ claims

In this episode of Bankruptcy Law Success, I interview Mike Ziegler of Clearwater, Florida, a bankruptcy attorney who does more than just bankruptcies. In fact, in addition to foreclosure defense, Mike offers an “alphabet soup” of consumer plaintiffs’ claims, including FCRA, FDCPA and TCPA.

Mike has blazed a new trail for bankruptcy attorneys who aren’t scared of litigation. And since consumer plaintiff’s claims pay more than bankruptcy filings, it’s easier to make more money doing it, too. In this remarkably candid interview, Mike explains exactly what he does, how he makes money doing it, and how you can do it too.

Some of the highlights in this interview include:

  • Exactly how Mike has leveraged the “alphabet soup” of FCRA, FDCPA, and TCPA complaints to make a lot more than somebody who just does bankruptcies.
  • Why not being scared of litigation is the first step to offering more than bankruptcies.
  • Exactly how you can get consumer plaintiffs’ claims from the exact same people for whom you’re already filing bankruptcies.
  • How focusing on “recovery per time in the case” made Mike realize that consumer plaintiffs’ claims were much more profitable for his law firm.
  • How doing plaintiffs’ claim work has been critical to his firm’s growth and stability.
  • And a whole lot more, including the exact statute you should leverage to get the overwhelming majority of your consumer plaintiffs’ claims to settle before the trial is even scheduled.

You can listen to the episode by clicking the “play” button in the audio player above, or read a full transcript below.

You can also subscribe to get an email when we release new episodes of the Bankruptcy Law Success podcast.

Bob: Hi, this is Bob Hiler of the Bankruptcy Law Success podcast, where we introduce you to successful bankruptcy attorneys, as well as powerful ideas that can transform your bankruptcy practice. Today, I’m talking with Mike Ziegler, a bankruptcy attorney in Clearwater, Florida.

Mike, welcome to the podcast.

Mike: Thanks, Bob. Real pleasure to be here. And like I was telling you before, I’m a fan of the podcast, in addition to everything else, so very much a privilege to join you.

Bob: Yeah, that’s the most exciting thing about doing the podcast now for almost six months. In the beginning, I had to call people and beg them to be on the podcast. Now what’s happening is what happened with you, which is that you called and said you’re a fan and then I invite you on the podcast and that’s been really cool.

Mike: Absolutely.

Bob: So, as we have with so many podcasts, I like to start kind of at the beginning of your career. One of the things I notice is that you graduated from law school at a… it’s either an auspicious time for a bankruptcy attorney, or an inauspicious time for a lawyer. You’re graduating in 2008… What was that like? What was the job market for attorneys at that time?

Mike: Yeah. You know it’s kind of an interesting thing because I’m a big believer in really controlling your direction in life and affirmatively making decisions that set you on your course. But I do think it was really a lot of circumstances that kind of put me in the direction of debt relief law and the type of work that we do.

So I did graduate in 2008, and my first job out of law school was to work at a legal aid office. And it’s one of those things that in hindsight, I’ve been very, very grateful for how fortuitous that was, because I was working in what they called their predatory lending unit which was basically helping folks that were under the poverty line overcome debt problems, which was principally foreclosure defense and some credit card defense and a few other areas.

And again, it’s one of those things that I’m just incredibly grateful for in hindsight, but the attorneys that were part of that group were recognized really at a national level for what they were doing, in particular with foreclosure defense. So it really kind of gave me this unique training ground to help get exposure to a lot of the practice areas that I do now, and just kind of sow the the seeds of how to help consumers through some of those practice areas.

Bob: You’ve talked about controlling your destiny. You worked at JALA, the Jacksonville Area Legal Aid. Was going there just happenstance, or was there was any kind of plan behind that?

Mike: It was mostly happenstance. It was at that point, it was just market availability, so the market for attorneys in particular was not particularly great in 2008.

Bob: Yeah, totally.

Mike: And so job availability was pretty limited. And so that that first job out of law school was just kind of fortuitous, it’s just kind of right time, right place. I did have a little bit of an interest in the area. I’d done some volunteer work with a different legal aid office during law school. And I think had more of a proclivity to the trend towards consumer rights. I’d also done an internship with the public defender’s office in law school, so it wasn’t an opportunity that I was disinclined towards. But I can’t say that it was kind of a deliberate part of my career planning.

Bob: Absolutely. I’m also starting to develop something of a theory. I’ll sound out the theory and you can tell me if this is in any way true, but…

I’m interested in bankruptcy from the marketing side but I’m interested in bankruptcy because my dad experienced financial distress. Our family experienced financial distress after he started a company when I was in seventh and eighth grade and kind of blew our savings and we kind of lost everything for a little while. So the idea of working with bankruptcy attorneys to help people through financial distress is something is really appealing to me.

On your side… Well, as I interview bankruptcy attorneys. I often hear about financial distress that occurs in their families while they were growing up… So my question is: was it all smooth sailing for you, or did something happen that really gives you empathy for your bankruptcy clients?

Mike: Well, that’s a great question. So I am very grateful in that there was never like a personal experience that I had where there was ever a doubt that there was going to be bread on the table. I’m very grateful that we were in that situation.

With that said I did come from… Growing up, my mom in particular had more of a religious background and so she really brought us up within the Church. And so doing like a lot of volunteer work and having a tremendous internal commitment towards service was a big kind of internal part of my compass. And so I think that for me is a lot of my personal draw… is just more of an interest in serving community members. That’s really what it boils down to fundamentally for me.

And to take that two, there steps further out… So after I completed my contract with the Legal Aid office, I took a step forward and moved over to private practice at a law firm in Pinellas County, which is the Clearwater/Tampa area for those outside of Florida. And that was just kind of really when the full weight of the economic meltdown was going on, and foreclosure defense in particular was probably the most prominent area out there. And I felt like… And at that point I was doing almost exclusively foreclosure defense, which was a valuable service.

But the trouble with foreclosure defense as a practice area is kind of the courtroom dynamic. So, in foreclosure defense whenever you are going into a courtroom, there’s kind of a presumed… almost a presumption against your client. Because presumably you’re walking in where, at the very least, your client has missed some sort of payments and you know three quarters of the cases is lost before you’ve ever walked into the courtroom.

Typically, your client has missed payments. Typically, they owe someone something and it’s just a matter of whether the lenders able to connect the rest of the dots. And it makes for a difficult strategic direction, because the state court judge is kind of anticipating that the majority of those elements are already there, otherwise the case won’t be in front of him or her. So, it makes for difficult litigation dynamic for the borrowers. And then on top of that, the way that the caseload developed in Florida largely developed to the benefit of lenders.

Bankruptcy was a really welcome escape. First of all, because it’s a natural fit in connection with foreclosures, where a client may need some additional time in a later-stage foreclosure case. But in addition to that, it’s just kind of this role reversal with the borrower/creditor dynamic, where instead of the creditor being at the top of the hill and the borrower doing their best to kind of fight upwards, it’s really kind of the other way around, where the presumption typically is in favor of the consumer getting the discharge and seeking whatever other relief might make sense, given the facts of the case. So bankruptcy was this great way of really empowering the consumer that that otherwise had been through through the wringer.

Bob: And also, on a personal note, you’re not Sisyphus rolling the rock uphill anymore. You’ve reversed the role and maybe the other guy is at the bottom of the hill being Sisyphus, right?

Mike: Right.

Bob: So actually, I wanted to kind of revisit foreclosure defense, because in a lot of states, foreclosure defenses is a very thin area of the law. Some of the bankruptcy attorneys that I speak to say that foreclosure defense is really… you’re getting two bites at the apple. The first bite is you’re getting paid for the foreclosure defense, and then when that fails, you put them into bankruptcy. So you get paid twice.

But I do know that Florida seems to have a more active foreclosure defense practice area. Can you maybe explain why that is?

Mike: I think so. So I’m not very familiar with foreclosure defense in other states. And of course many other states don’t have the benefit of being judicial foreclosure states.

Bob: Yes, yes.

Mike: But Florida does have that benefit.

Bob: OK. So that’s one of them. That’s the first thing.

Mike: Right. So first, and kind of to segment out maybe part of your question, I am a true believer that the recommendation at the time of the consultation has to genuinely be what is in the best interest of the client. And for some clients there may be at least a good faith opportunity to reach some sort of meaningful resolution without the need for bankruptcy. And, so, of course, if that’s the case, then that would be what would be explored.

Conversely, there might be much more benefit in heading directly into bankruptcy or what have you. And so my recommendations is always going to be in the best interest of the client.

But with that said, I don’t know outside of Florida being a judicial foreclosure state, I’m not sure why the law was maybe a little bit more dynamic here. But it has been very interesting to kind of see the different trends that have developed over the course of the last 10 years.

So in particular if you really rewind the clock to about 10 years ago or even kind of take it more broadly. So, of course, back in the day there was no mortgage securitization. You went to the corner bank and a loan was taken out for a piece of property and that was the bank that held the loan. And so the dynamics of loan ownership was really pretty much essentially a non-issue because very rarely would there ever be any transfer of the loan. And it wasn’t until give or take around 20 years ago that there was even the concept of loan securitization.

And that loan securitization, while it may have made some kind of financial benefits and which arguably were may have even been shared benefits — it may have helped reduce interest rates as well as made loans more appealing to lenders and investors — but as a technical matter, it made the loans very, very difficult to track in terms of who had the appropriate ownership rights. And infused in that, certain efficiencies that were created through the MERS system, and then maybe a number of other shortcuts. And that really made for some interesting technical dynamics in terms of the enforceability of the instruments.

Bob: So this is like… To the public, this is the robo-signing scandals and things like that, right?

Mike: Correct. And you can really take it on other levels because…

So the mortgage loans — and this is not isolated to mortgages, this is now pretty common with virtually all consumer loans — after they would initially be funded, usually the loans will be placed in a mortgage pool or a trust and basically turned into security instrument. And, so, the robo-signing was part of it.

But basically, whenever these loans are put into a pool or a trust, there is an agreement that basically says which loans will go into the trust, and the methodology for how they’re placed into a trust, and then that’s kind of layered with other state laws about how loans can be transferred and how that’s supposed to be documented. And a lot of times, when the loans were packaged together, the state laws were kind of overlooked or ignored or maybe sidestepped (however, you want to look at it).

And so when the lenders would finally go to foreclose, they would kind of be taking these steps retroactively. And that’s where you get the robo-signing, is these documents — typically assignments or what have you — that we’re supposed to document the transfers from the original lender through the chain of other loan owners. And that wasn’t really done the first time, it was kind of done retroactively by (usually) folks that were sitting in a big room with stack of documents that that maybe weren’t actually doing the diligence that their signatures said that they were doing. So all of these components…

And then you add on other layers of the onion about default servicing rules… Who’s entitled to force default servicing rules. Sometimes you have additional layers when you have insured mortgages that add additional requirements such as FHA or VA loans…

Bob: Well, actually, could you explain that? I’m not a lawyer, but I don’t understand the term “default servicing rules.”

Mike: So default servicing is basically the set of instructions that a lender’s supposed to undertake when a loon falls behind. So, to understand some that, you kind of have to take a look behind the curtain in terms of the way that loans work.

And a lot of people aren’t really familiar with this, but most loans have what they call a mortgage servicer. And usually the way that I explain a mortgage servicer… Because a lot of people are familiar with the way that many private landlords might get a property management company, and when they get a property management company, the tenant never really sees the owner of the house. They deal with the property management company every day, and that’s who they make their payments to, and it’s the property management company that they call when there’s a leak and what have you.

And mortgages are basically run the same way, where you have a loan servicer which is the face of the company. Behind the loan servicer, you have the loan owner, and that might be your security. It might be, like, a Fannie Mae or Freddie Mac. Sometimes, it’s a private investors. But that’s more the exception to the rule.

And then almost behind the loan owner, you have some sort of an insurance, like FHA is a type of insurance. You might have different private mortgage insurance, and the loan insurer might have their own, and each of these different phases — your servicer, your loan owner, your insurer — they may all have different sets of rules for how the loan is treated in different circumstances. So if the loan is current, then there’s a set of rules for that. If a loan is behind, then there might be a different set of rules for that, and they might have different influences depending on the different players at each of the different layers.

Bob: So, in a foreclosure defense that is for a loan that’s insured by the VA, I can imagine that that would have very friendly rules for the borrower, and then so you would… you might fight based off of those VA rules, you might fight to defend against the foreclosure. Am I understanding what you’re saying?

Mike: That is basically right, and you kind of hope that especially the insurers might have rules that might serve to benefit the homeowner. But where sometimes it can get complicating — and this was especially so early on in the the economic crisis, where frankly everyone was trying to get their feet under them, including the lenders — but sometimes those rules can be restricting.

So for example, a very common question from the homeowner is “Hey, I owe X number of dollars on this mortgage, call it $300,000 on this mortgage on a property that’s now worth $150,000, would the lender consider working with me to reduce this down to fair value?” And more often than not, the answer is “no,” and usually that’s because one or more of the players in this system — whether it’s the insurer or what have you — won’t agree to a principal reduction. Or they’ll have some sort of other restriction.

So, sometimes these different layers, or different players, can help to motivate a workout — whether it’s through modification or what have you — but sometimes they will create restrictions to more creative resolution of terms. So by that same token, very commonly, you’ll have, like, a mortgage modification mediation. And this is often done, or was often done, in the state courts, and now there’s a program for it within the bankruptcy courts, or at least within our district. That’s that’s reasonably successful.

But those mediations are very different than virtually any other mediation that you’d have in a litigation scenario, where in most litigation scenarios, you have one party that that starts at one end of the spectrum, and the other party starts at the other end of the spectrum, and you kind of work towards some sort of a center point.

In mortgage modification mediation, typically it’s kind of more of a situation where the borrower gives information and the lender responds with what they’re willing to do. And by and large, the person that’s on the phone on the lender side is really just punching numbers into some sort of an internal calculator and whatever spits out spits out. And they really have very little if any negotiability from that point. So it makes for a difficult negotiating standpoint.

Again, that’s that’s one of the reasons why bankruptcy and some of our plaintiffs’ work has been so rewarding, because it’s a little bit of a change in script. It places the borrower in a better position of negotiating power.

Bob: It also seems extraordinarily complicated. Is this… all of these little points involving foreclosure defense, did you learn that when you were at JALA, is that why you’re so grateful to them?

Mike: Well, that was definitely the jumping off point for me, and that really was the place where it kind of sowed the seeds for me and helped accelerate my learning level. But really, I would say foreclosure defense — for being such a kind of ancient component of the law — has really been very dynamic in Florida in the last 10 years, and kind of been one of those things where if you’re going to have any degree of success with it, you really kind of have to keep your ear to the ground.

I was at a fortunate starting place with JALA, and I think I’ve continued to be fortunate, partly from self-learning and partly from just alliances with other industry professionals and and obtaining the benefit of group learning. So just a lot of different components in there.

Bob: Yeah. The interesting thing in talking to a lot of bankruptcy attorneys… It seems like they kind of self-divide to fall into two categories

One are the form-fillers that just fill out the form and they attend 341 meetings.

And then there’s a type that, for whatever reason, got their start in litigation and aren’t afraid of litigation. It sounds like you’re solidly in that second category. I mean, is that fair to say?

Mike: Yeah, that is definitely fair to say. And maybe because I didn’t start exclusively as a bankruptcy attorney, I see our role in the bankruptcy as one part of the way of getting to the end path and strengthening our client’s position, whatever that looks like in the situation. And, so, I do think being in a position where you can take a more kind of assertive approach to whatever you’re trying to get to, you can definitely see much more productive results often than just kind of following the beaten path and filing the forms.

So we’ve had a lot of success intermixing bankruptcy with plaintiffs’ claims, FDCPA, our state counterpart TCPA, FCRA, some of those things. We’re being a little bit more creative within the bankruptcy through claim objections and things like that. And sometimes you can just reach a very productive result for the client through creativity. Sometimes, you don’t need creativity which is great, but sometimes you can.

Bob: I’ve heard of adversary proceedings within a bankruptcy. Can you explain what a claim objection is?

Mike: Sure, so the way that I explain claim objections is that it’s our way of being able to check each other’s work, between the debtor side and the creditors side. So, of course, we start with the petition and list all identifiable debts, but creditors don’t typically get paid just from us identifying the debts. They essentially have to register and they have to register a claim and that registration, so to speak, has a number of requirements.

And normally the claim is presumed to be correct but we have the opportunity to check their work, so to speak, and if we review the claim and think there’s something insufficient about it, then we have an outlet through that by objecting to the claim. And, at least locally, our claim objections are done under negative notice, meaning that we filed the objection and if there’s no response, then the claim would normally be disallowed. But if we do get a response, then we can go through what’s called a contested matter, which is similar to an adversarial proceeding except you don’t need a separate lawsuit, and we can take evidence and see whether the claim is sufficient.

Bob: Got it. So this alphabet soup of FDCPA complaints, and FCRA complaints, can you explain how you use, like, an FDCPA complaint, how you use that in conjunction with a bankruptcy to get a favorable result?

Mike: Yeah, so there can be a variety of different ways this can be set up, and part of it depends on whether the claim is pre-petition or post-petition, and whether it’s a 7 or a 13.

So, of course, if it’s a 7 petition, and if it’s pre-petition claim, then you’ll have to you review the petition and with your client whether that claim is going to be exempt and examine how that would be approached. And depending on your timeline, that might ultimately be the trustee’s claim and so you have to evaluate whether there’s something to pursue there.

But more in the lines of a 13 in particular, where it doesn’t so much matter whether it’s a pre-petition or post-petition claim… In some instances, if there is a violation of one of those consumer protection laws, those claims can be prosecuted. And sometimes you can reach some really good results through prosecuting the claim. So, some examples might be sometimes you can get a monetary recovery, and you can direct a portion of that monetary recovery into the plan, particularly if it’s a 100 percent payment plan then that might be advantageous for your client.

Bob: Oh, OK. Because I’m a concrete guy and I’m not a lawyer, I’d like to try to articulate this in a concrete example…

So you might have a 100% recovery Chapter 13, someone owes $50,000 to a credit card company. The credit card company continues to harass your client despite the fact that there’s a chapter 13 in progress, and thus under the FDCPA, you file a complaint. They settle for $10,000. So then you might take $10,000 and reduce the credit card balance from $50,000 to $40,000 or something like that. And you might kind of “put it into the plan” in that way or something like that. Is that the gist of it?

Mike: That’s basically correct, right. And even for cases that are not 100% plan, at least locally, we can often get a partial distribution to the consumer, so it still is a win-win; some of the recovery goes towards paying down the debt, while another portion will go in pocket for the consumer.

Bob: Yeah, I always wondered about this because I talked to a lot of bankruptcy attorneys. A lot of them are the form-filers that we talked about before. And I don’t say this in a condescending way, it just seems to be a fact. Some people are more comfortable with litigation, some people aren’t.

So, for those people that aren’t comfortable with litigation, I would imagine just talking to bankruptcy prospects and bankruptcy clients, that you hear about FDCPA violations just like every time we talk to a customer. These violations must jump out. Is that what you find, or am I estimating the case?

Mike: No, I think our practice area — and I kind of term it “debt problem solving” instead of “bankruptcy,” because the way I self perceive my law firm’s practice is that we aren’t exclusively a bankruptcy law firm, it’s just: what is the best legal solution to resolve the debt issue. And like it or not, that’s virtually what every bankruptcy lawyer does. It’s just,  maybe they’re only offering bankruptcy as a tool, or maybe they’re offering more than that.

And, so, absolutely hand in hand with the problems that arise from owing the debt itself are the other complications that that come from debt collection. Whether it’s a debt collector who’s calling a consumer’s employer about the debt, whether it’s debt collectors that are calling the consumer’s cell phone after the consumer has told them to stop, whether it’s debt collectors that are using overly abrasive terminology or calling unlawful times of the day…

So, really, the prospect pool for the consumer plaintiffs’ claims is identical to the folks that are calling for “bankruptcy” or “debt defense” or whatever. And there is a very significant portion of that prospect pool that are going to have a violation of a consumer protection law. It’s really just kind of being familiar enough with what the violations look like and how substantive the violation has to be for it to be productive in a lawsuit.

Bob: For me, obviously I’m not a bankruptcy attorney… But for me, if someone came into my office and was starting to mention about all these harassing debt collectors, I would get them to log onto their cell phone company and you know get that printout that we used to get before the internet? You would get them every month. But now, for the most part, you have to download them, but it has all the phone numbers and the time that they called. And just kind of start going through them with a highlighter and looking for those violations…

Is that something that you’ve ever done, or is it just me dreaming?

Mike: Yeah, that’s actually pretty close to what we do. It depends on… Whether you can actually pull those records depends on who the provider is, the cell phone service provider. Some of them do not provide logs like that unless you subpoena them.

But you’re absolutely in the right starting place that, as attractive as these claims can be, you also have to do as much diligence on the front end as you can to make sure that claims are viable. And that involves, number one, doing your best to match up whatever records you can obtain with what’s being presented to you.

But secondly, making sure that the party that’s done the wrongful act is a legitimate party. And an unfortunate reality of the collection industry is that a lot of the folks that do bad stuff know they’re not supposed to be doing what they do. And so they’ll either spoof their number or use a shell collection company that’s essentially uncollectable or something like that. So there is some work that’s done on the front end to make sure that this is a viable case.

Bob: And how much — I mean, I know it’s a range depending on the severity of the claim — but on the FDCPA side, what kind of results both on the attorney’s fees side and also the the consumer side, what kind of rewards can be expected on average?

Mike: That’s a good question. And it is really case-by-case. I would say if you have just a pretty vanilla statutory violation that might wrap up somewhere in the four figures total. Whereas if you have a really substantive violation, more aggressive damages, a better story to it, than that can end in the six figures. And in very extreme cases, even beyond that. So a total spectrum of results. But once you kind of tune your ear to what you’re looking for, the higher end results are not total anomalies. Those definitely do happen.

Bob: And what percentage of the cases do you have to actually have to litigate all the way to the end, versus being able to settle.

Mike: Well, most of them… I would say that the overwhelming majority of them settle, because if you have a stronger case, oftentimes, the creditor is going to have documentation that something didn’t go the way that it was supposed to. And usually, they don’t want to commit the resources to go all the way through trial, because most of these cases have prevailing plaintiffs attorneys’ fees provisions.

So, basically, what that means is that if they take it the whole way through to trial, then they’re not only going to have to pay for their attorneys’ fees, they’re going to have to pay for the value of your time. And so, by failing to reach a conclusion earlier, they’re only putting themselves out of pocket more.

Bob: And what kind of attorneys fees’ agreement… Is it like the personal injury bar where you get a third of the results, or how does how does that work?

Mike: So the way that we structure our fees, which is consistent with industry norms, is it is the greater of the fair value of our time in the case or a percentage of recovery. So the reason why it’s structured like that is principally because most of these statutes are fee-based statutes, or prevailing-party attorney fee statutes

So for many of the more… I call them “basic cases” but that’s that’s probably not the best way to term it. But for a more vanilla case where there may not be economic damages or might not be an out-of-pocket to the client, most of the way to the recovery is coming from the value of the legal fees that’s put into the case. So in a case like that, usually most of your value is coming from what’s called the statutory damages, which is kind of a predetermined amount set by the legislature, plus the attorneys fees and litigation costs.

So in a case like that, if it’s settling for a more conservative amount, than it would be really difficult for us to take that on a contingent basis and not get the value of our time in there. But through the attorney fee mechanism, that enables us to put the time in that that would otherwise not be possible in a $1,000 case.

Bob: Now we had actually talked — the first time that we talked, not this podcast which is the second time that we had talked — we had talked about using AdWords for what you called the alphabet soup cases: FDCPA FCRA, TCPA. That’s something that you’ve had some success with. I was wondering if maybe you could talk about that a little bit?

Mike: Sure, yeah. And to expand on that — even beyond where you and I had discussed — I really tried virtually every type of marketing mechanism — and I’m sure I’ll never stop with a trial and error process — but in particular over the last few years, I’ve experimented with a number of the lead generation services and always kind of being careful that they’re in compliance with Florida’s lawyer referral services regulations. But my experiences with those services often have not been very successful for the way that our firm is built. I’m sure they are successful for firms that are kind of prepared for that that sort of thing…

Bob: You’re being mighty generous. I’ve heard some real horror stories, but okay . .. I’ll let you be generous and you can tell your story, sorry, keep on going.

Mike: And to take that back to a real basic level…

So, there’s a number of kind of businesses out there, and basically the whole business model is that they have maybe a better ranking website and so they get a very large number of people that are interested. And somewhere on the Web site, there is some sort of a form that says if you’re interested in talking about this issue more with an attorney than fill your information here, and then that Web site would would disseminate the information to the subscribers.

And we’re maybe, by bankruptcy standards, a medium-sized firm. We’re a seven-person law firm, with two attorneys. And so while we can take an OK amount of call volume, there’s only so much time in the day to sift through junk, is basically what it boils down to. And, frankly, a lot of what we were getting from the services just wasn’t the right match for our capacity.

And, so, as I was reexamining how to kind of clean the mousetrap a little bit, I felt like it was better when we have leads that come directly into our own website. So, of course, those are folks that are deliberately seeking out our information, they’re calling and expecting us to return the call to discuss their appointment and their options. And so, of course, they’re naturally going to make for better prospects.

So we kind of shut down everything that we were doing with lead generation services. But I still wanted to place most of the firm’s marketing focus on our plaintiff’s claims, because for us, I think our “recovery per time in the case” is much stronger with the plaintiffs’ claims than it is with bankruptcy.

Bob: I would also imagine that it’s quite a bit cheaper, because a lot of bankruptcy attorneys are advertising on, say,the keyword “bankruptcy attorney” on AdWords. But not a lot of people are advertising on, say, “harassing debt collector” or something like that.

Mike: That is correct, and just by that same token, so you and I were looking at my firm’s Google rankings for “bankruptcy attorney,” which could stand to have improvement on a local basis. But when you search for things like “collection harassment attorney,” we rank very very well.

So you’re exactly right, there’s less competition in the “harassment” space and and, of course, we want to place more of our focus on the cases where we’re getting better recovery for our time. So we made a lead-gen — like a one-off web site — that is specifically focused on the collection and harassment work, and have an AdWord “system,” I guess? There’s probably a better word for that. That’s connected with the web site, and that’s a good source for leads for us.

Bob: And are you seeing the lead volume that you want to see from that?

Mike: Our lead volume on it is really good. I’ll never complain about having a few more leads in any given month…

Bob: Sure.

Mike: But it definitely, so far, is probably exceeding my expectations for our pay-in versus pay-out. So I think we just started that around December, and usually… just to put some numbers to it, I think our Adwords spend is maybe a little north of $1,000 a month and usually, so far, we’ve been hitting around 10 to 20 leads per month on there. So far, at least, for me, I’ve been pretty pretty pleased with that.

Bob: And that’s for the “alphabet soup” side of things, the FDCPA thing, or is it for everything?

Mike: Yes, it does market to the the alphabet soup claims, but again, typically, these are folks with debt problems to begin with, so sometimes it leads to a bankruptcy client. But the target is the plaintiffs’ claims.

Bob: Very cool. Are you advertising on some of the more general things like “debt consolidation,” things like that? Or are you really focused on like “harassing phone calls,” “harassing debt collectors,” “harassing collectors,” things like that?

Mike: “Debt consolidation” is not one of the keywords that we direct the plaintiffs’ claims towards. There might be some wisdom to that. But right now, that’s not part of what we’re affirmatively marketing towards.

Bob: So you actually.. you do FCRA cases as well, right?

Mike: That is correct. We don’t do them as mechanically as I would like for post-discharge cases. That’s an opportunity for development, but…

Bob: Yeah, that’s I going to ask you. You’ve listened to the podcast, and you heard how Michael Jaafar waits 60 days and then contacts his bankruptcy clients and then use that to generate FCRA cases. That sounds like something that you’re not doing now, but that you’d like to try doing?

Mike: Well, it’s something that I need to do better than what I’ve been doing so. So I did, maybe a year, a year and change ago, as part of our six-month-out thank-you letter…

So, we send a letter after the case is closed, about six months out, that just kind of reminds the client that we exist: “Hey, thank you again for everything, and just so you know, here’s the stuff that we do. And, by the way, please send in your credit report for a free review.” And we haven’t had a very good response rate on that.

Bob: Yeah.

Mike: There’s an opportunity for improvement, on my side, to more proactively work with clients to review the credit reports and see what can be done to identify any errors. And, to me, I do think that is part of a really valuable service on the part of the law firm. I do think — and one thing that I’ve become more aware of — is the value that clients place not just on a successful bankruptcy, but on being shown a path to put their financial future back on track after the bankruptcy is concluded.

And I do think a very important component of that is making sure that they are getting the benefit of the kind of debt cleansing from a credit perspective that they’ve gone through the trouble of entitling themselves to. So I think there’s a very important service there, and there’s an important opportunity for the law firm to both good and do well.

Bob: That was another podcast that I recently did with Phillip Tirone: 7 Steps to a 720 credit score, something like that. Is that something that you’ve experimented with, the credit education stuff? Or…

Mike: Yeah. And actually to Philip’s credit, we have signed up for his 720 program, and that seems to be well received by our clients. So I think he’s doing a good job of creating industry-wide awareness of that thought process of helping to leads your clients on a healthy credit development path after the bankruptcy is over.

Bob: How long have you been doing that?

Mike: That’s something that we’ve worked with them on only for the last couple of months now.

Bob: Oh, OK. The great part about that is that that gives you an existing relationship with the bankruptcy client, and it gives you a reason to contact them after 60 days. You had mentioned earlier that you’re sending snail mail letters to clients. That’s totally fine, but have you thought of assigning someone in your office, like creating a “tickle file,” so you have the discharge datess like in a spreadsheet, and then you write plus 60 and then you just call them on that date. Have you thought about doing that?

Mike: Yeah, actually, I have. And we’re in the process of probably adding a staff member because some of the credit report stuff, a lot of it comes from post-discharge credit report issues. But it’s also comes hand-in-hand with some of the debt defense issues. And what’s interesting is even within debt defense issues, you have a credit reporting overlap there. So if there’s inconsistency between the debt on the credit report and the amounts that are being alleged in a debt collection complaint, that can give rise to an issue. If it’s a disputed debt, and that’s not being adequately reported, that can give rise to an FCRA issue.

So there’s an opportunity internally for being much more in touch with the way that our existing caseload is touching on credit reporting issues that, frankly, we’re under-serving and need to develop. So that’s absolutely a place where we’re looking to go.

Bob: Have you used that CIN Legal Data Services, it’s like $40, $45 now to run like a three-agency credit report with some court judgements and everything like that… Do you know I’m talking about? Or…

Mike: I do. Yeah, and we do use that. That’s a really helpful tool, in particular for preparing the petition.

Bob: Well, we spent a lot of time talking about some of the more advanced things. Before I let you go, I actually wanted to just ask a couple questions about your sales funnel, whether it’s on the bankruptcy side or on the alphabet soup side…

When someone calls in, can you describe how you actually get them to retain you as an attorney? You know what I mean? Like, do you have them fill out a form, and that kind of simple sales funnel stuff. This is where I find so many attorneys really screw up, so I’d love to hear your process.

Mike: Sure. Absolutely. Absolutely. And it is interesting, because you get a whole bunch of variations between what law firms do. So just to start from the raw basics, we do not charge for a consultation and there’s different schools of thought on that. Neither one is necessarily right or wrong, it’s just . ..

Bob: No, no, the free consultation side is right. That’s absolutely right.

Mike: In that case, I’m very glad to hear that. So we do not charge for a consultation. We do have a receptionist who will initially take the call, the receptionist will do a ground level assessment of the prospect and we have a desktop-based case management software, and the case management software gives a guide of the information that we look to obtain. So we try to get some basics on contact information. Some basics about the reason why they’re calling, and just a little bit of more details so we’re prepared to take some next steps. Typically we will try to schedule them at that point.

Usually, we do not do you like hot transfers, because we are a relatively smaller office. I am open to both phone and in-person consultations. Again, I’ve heard wise attorneys who … some of which will not take phone consultations or in-person consultations, and vice versa. We’ll do either one.

I would say most recently I’ve found myself more partial to phone consultations, but it also depends a little bit on the prospect personality. We do a short form intake form, it’s a two-pager that gives some some basics, establishing contact information. Some basics on debt balances.

Bob: And when do they fill that out?

Mike: Aspirationally, before the consultation, sometimes when they get here. So we send it over by by email with our confirmation email. There’s also some questions on the form to cross-screen for potential plaintiffs’ claims. So we try to keep an open ear to everything that’s going on.

Bob: I love that. That’s great.

Mike: My associate and I split the consultations. She’s a little bit more active in the plaintiffs’ work, where I’m a little bit more active in the bankruptcy work. Usually if it’s a more complicated case, particularly with respect to a bankruptcy, usually I’ll take that. But we do a pretty even split. And then we have an attorney questionnaire to go into a little bit more detail about whittling down some of their debt issues, searching out for non-exempt property, doing a pretty good analysis of means test qualification but we don’t do a full work up. And then, from there, we work them through recommendations and what I usually call, like, a yellow flag or red flag if there’s a concern that we see, then we’ll discuss it with them then.

Bob: Couple of follow up questions: when you send the short-form questionnaire to people, is that a PDF?

Mike: We do send out as a fillable PDF, yeah, that’s correct.

Bob: OK. I’ve had great success with some attorneys switching from a fillable PDF, or even an unfillable PDF, to an electronic form that can be filled up over mobile phones. We’ve seen fill-out rates double sometimes by doing that…

Mike: Oh, that’s great.

Bob: And there’s a service that I use called Cognito Forms, it’s like “incognito” but there’s no “in.” And I believe in Cognito Forms so much that, like, I’ll help you set it up just because it will improve your business so much and that’s just a good thing for the universe. So let’s talk after the podcast and I’ll set you up there. But basically you can set it up so that it’s an actual form, and that form will look good on a mobile phone, and can be filled out on a mobile phone, and it can even be saved and finished later. So it’s a pretty cool thing.

Mike: Yeah that’s very cool.

Bob: So I want to bring that up not just for you, but for all the attorneys out there.

You had mentioned that your associate who works on the plaintiffs’ claims also does the calls, she’s also an attorney?

Mike: Correct, yeah.

Bob: Have you ever had a non-attorney do the initial intake, or thought about it?

Mike: Kind of. So, I’ve never taken the jump of a non attorney doing the complete intake. We have tried different variations of our, like, pre-consultation intake. So, for a while, we kind of had an intermediate step where the receptionist would take basic contact information, and then we’d have a law clerk do like a more comprehensive data collection process. And then, the attorney would round out and go through recommendations.

And that wasn’t so much a bad process. At that time, it was really just the seasonal aspect of the law clerks that I think rerouted us. So it would be hard for me to make the jump to non-attorneys completely doing the intake process.

Bob: Well, I mean, at some point, a lawyer definitely needs to be involved.

Mike: Right, but I do think there’s . .. I think it’s important for attorneys to stretch their way of thinking, because we really get into a way of thinking where things have always been done certain way, so that’s the way it should be done. But I don’t think it would be off base to have a consultation process the way that doctors do their exams, where you’d have a paralegal that would come and kind of get the stats, and then the attorney would come in afterwards. So I do think that’s very doable.

Bob: OK, so how long are your phone consultations? Are they 20 minutes, or are they longer?

Mike: 30 minutes. And with a little bit of leeway either way, of course, if it’s an issue that we’re able to problem solve or discount the case really quickly, then sometimes 15 minutes or less. If it’s a little bit of a more complex case, it might go a little bit over 30 minutes, but usually not by a whole lot.

Bob: How has the whole plaintiff’s claim thing worked for you? Because I can imagine essentially, in some cases, if someone has a valid plaintiffs’ claim, then you could say: look your bankruptcy is going to be free, essentially paid out of the plaintiffs’ claim. Is that something that you’ve tried doing, or is it too risky, or how do you approach that?

Mike: No, we do do exactly that, and we’ve tried to structure in a lot of different subtle ways.

So first, and speaking more broadly, doing plaintiffs’ work gives an interesting perspective to bankruptcy. So just by way of example, so if you assist someone and pursue a plaintiff’s claim and recover 100 grand, then typically the expectation is that the attorney is going to get 33 and a third or 40 percent or whatever it may be. And there’s kind of this accepted appreciation that the attorney gets paid proportionately to the service that they’re providing.

But in bankruptcy, it’s kind of the total opposite of that. If you are helping someone discharge hundred thousand dollars, no one would expect — in fact, it’d probably be frowned upon — if you were charging 30 grand or 40 grand or something like that. Normally, you’re charging somewhere around (depending on where you are) somewhere between 1,500 or whatever the case may be.

So that simple recognition of the difference between getting paid per-case-you-file versus getting paid proportionately based on the value you bring is, to me, really important if you’re going to have, like, a boutique firm helping folks with debt problems or however you want to term it, or “bankruptcy firm” or whatever. So the plaintiffs’ work has been really critical to our firm’s growth and stability and just allowed us to do a lot more with the same client population than what we’d otherwise be able to do.

In terms — and circling back to your question of making for free bankruptcies — sometimes that’s possible. It’s just a matter of recognizing all the subtleties in the way that would have to be implemented. So, for example, we basically did just that with a couple of experimental cases, where we basically said: “Look we’ll advance your the value of your bankruptcy fees and your costs and kind of build that into your plaintiff’s case.”

And there were sometimes when we did it right, and sometimes basically what it did was it made the client feel like they were getting a free bankruptcy. And my perception was that it placed less value on the services that we were providing out of the bankruptcy.

Bob: Yes, I can totally see that.

Mike: So there is kind of a path to get there. And definitely, the recovery from plaintiffs’ claims sometimes can be used to resolve debts through the bankruptcy itself, but it definitely has to be approached very carefully to help your client but also to meet a number of rules within the bankruptcy itself.

Bob: Wow, you just kind of also inferred that you’ve seen a case where the plaintiffs’ claims… the settlements from there were so large that they completely resolved the client’s debts. Have you actually seen that?

Mike: Yeah, but usually in those cases we won’t file for bankruptcy. So that that has definitely happened, where I’m personally in a bankruptcy consultation and going through a series of questions and through the questions I am able to determine that there is probably a plaintiff’s case where the expected recovery exceeds the debts. And, so, it’s actually better not to file for the bankruptcy to pursue the claims.

And we have been successful and for several clients and them just totally avoiding bankruptcy and wiping out enough debt and putting enough in their pocket where it’s not really in their better interest.

Bob: Wow, that’s incredible. That’s really exciting, congratulations!

Mike: Thank you.

Bob: So as we wrap things up, I’m a big proponent of this litigation… of doing what you call plaintiffs claims (or I call litigation) with FCRA, FDCPA complaints. Besides going to the school of hard knocks, are there any resources… Like I’ve been trying to find like a workshop, like a weekend workshop, for FCRA claims, to learn the FCRA universe. Michael Jaafar had recommended just buying the NCLS handbook and just reading it 10,000 times. I have a client who’s doing that right now but would love a shortcut. Do you have a.. any kind of resource that you… Do you know of a workshop, an FCRA workshop, where you can learn this stuff?

Mike: Yeah. Really, by far the preeminent organization in the alphabet soup claims is NACA, National Association of Consumer Advocates. There are admission requirements, so that’s something that you have to get through on a case by case basis. But they definitely have some really great group thought going on, and they’re like a sister organization to NCLC, and NCLC just has… and I think Michael Jaafar’s recommendation is just spot on. That’s just an incredible resource.

Bob: Wait, is it “NCLC”?

Mike: Yeah.

Bob: I think I said “NCLS”, I think that’s the baseball term [Bob: The baseball term I was referring to was NLCS]. Sorry, so NCLC. So NACA, they have… Do they have education, like weekend seminars, stuff like that where you can pick this up?

Mike: They do. Yeah. They’ll have periodic conferences and webinars and all that stuff.

Bob: Awesome. Well, I love the approach that you’re taking. I think that you’re doing really innovative work. You’re not just doing bankruptcy, and you’re not just doing plaintiffs’ claims or litigation. You’re kind of combining them into a new entity and that’s really cool. So thanks for sharing your experience with us.

Mike: Sure absolutely my pleasure.

Bob: Thank you so much. Bye bye!