Part 2 of a series
State bar associations impose a thicket of onerous rules that make it difficult for lawyers to operate in the internet era amid competition from online legal advice and other disruptive business models. As a lawyer in patent and trademark law in Silicon Valley, I struggle on a daily basis with these restrictions.
Yet some of my legal brethren sneak around the rules and hide their subterfuge. They open up separate, secret non-lawyer shops to take cost-saving shortcuts the bar forbids, masking their ownership. They use an array of shell companies, deploy “straw man” owners who have no day-to-day role in the business and create firms, dissolve them and reopen under a new name to outrun complaining customers.
One wonders: what do they have to hide? Keep reading, we will name names.
All of this is deceptive, if fiendishly inventive, and it leaves their clients with little recourse when bad advice is meted out, which happens all too often at some of these fly-by-night outfits. I know this because of the investigative work that my law firm, LegalForce in Mountain View, Calif., has done in preparing for our recent filing of 11 lawsuits against two dozen lawyers and others on charges of deceptive practices, false ad claims, neglect of fiduciary duties and other misdeeds.
One intent of my unlikely legal crusade is to expose the hypocrisy of the bar for burdening lawyers with an antiquated regimen of costly, clumsy procedures while failing to take action against new-wave rivals that cut corners, dispense unauthorized legal advice and hand out legal counsel that is just plain wrong.
As a lawyer in California, I must follow rules that complicate the process and raise costs to my clients without improving the advice they receive. When clients first pay me for a trademark search, I am required to establish a separate “Interest on Lawyer Trust Account” (IOLTA) for each client as extra protection. I am forced to have lawyers involved in matters that can be handled easily by paralegals and secretaries. All signatures must be official and authorized. At every turn lies the threat that any deviation from these tedious and painstaking provisions can be prosecuted and punished by the bar.
If state bar associations updated their rules to let me operate more efficiently, I could cut my costs by 50% and pass on those savings to my clients—and this I would do.
By contrast, some of our rivals in trademark search are free to assign client work to non-lawyer staff at lower cost. They take in client money without having to safeguard it in a separate account. They have non-lawyers offering what clearly is legal advice that is supposed to be the sole purview of lawyers. In some cases, they write in the signatures of their clients on legal documents without deigning to get their clients’ permission.
At the same time, these rivals compete with my website, Trademarkia, in bidding for ad search words on Google, with some of them laying claim to phrases such as “trademark attorney” even though they employ no such attorneys. How can this be anything other than false advertising?
State bar associations and the U.S. Patent and Trademark Office have let these improper and, in some instances, potentially harmful practices go largely uncontested. While bar rules technically forbid a lawyer from engaging in the loosey-goosey methods in use at non-lawyer trademark firms, it is difficult to penalize them for it, because some lawyers do such a good job of hiding their ownership.
Here are some examples culled from the lawsuits we have filed:
- Trademark Engine, a non-lawyer trademark firm whose “covert” owner is a Texas lawyer named Travis Crabtree, of Gray Reed & McGraw. Crabtree’s ownership is unlisted anywhere online—except in a Better Business Bureau form for an entry that was taken down because Trademark Engine violated BBB ethics rules. Case No. 5:17-cv-7303, U.S. District Court in the northern district of California, San Jose division.
- Our lawsuit against TTC Business Solutions (based in Cary, N.C.) also names its purported president, Amy Reynolds, a “straw woman” with no role there. The owner, a defendant in our lawsuit, is lawyer Matthew H. Swyers, who in 2017 was excluded from practicing before the U.S. patent office for submitting fraudulent specimens and failing to supervise trademark assistants. Case 5:17-cv-7318, U.S. District Court.
- Trademark Information International LLC of Santa Barbara, Calif., which runs the Trademarks411.com website, is a non-lawyer firm whose principal owner is listed as Nicholas Greenside, an entrepreneur. Unmentioned is the lawyer who also is an owner—in violation of California state bar rules: Stephen W. Erickson of Rogers, Sheffield & Campbell LLP in Santa Barbara. Case No. 5:17-cv-7354.
- Alin Cheie (aka Alin Iacob), a lawyer in Park Ridge, Ill., has “created a vast number of ‘shell’ companies all serving as his alter-ego to hide from competitors, regulators, and angry customers,” our lawsuit against him states. This includes Sharp Filings Inc. (a defendant) and half a dozen firms whose ownership seems intentionally obscured, including: Trademark Plus Inc. (dissolved), Leading Edge Filings (involuntarily dissolved), Premier Legal Filings Inc. (inactive), and Bluestone Filings Inc. (inactive). Case No. 5:18-cv-127.
Are we having fun yet?
One of the worst offenders in this realm also operates on the largest scale, by far: LegalZoom, and so we have filed a lawsuit against that giant disruptor, as well, to “expose the willful and systematic acts of unauthorized practice of law, false advertising and unfair competition by LegalZoom with respect to preparation and filing of trademark applications before the U.S. Patent and Trademark Office,” as our lawsuit puts it.
It is the most important case among the various complaints we now are pursuing, and if my side wins we could free up thousands of lawyers to operate more efficiently, serve clients better, reduce our rates and help more businesses secure legal protection for their intellectual property.
In these lawsuits, I have chosen to represent myself; lawyers can be obscenely expensive, and my labor is cheaper. Albeit I am all too aware of the old saying (often attributed to Abraham Lincoln) that any man who represents himself in court has a fool for a client. I’ll have more on that front, coming up.
NEXT- Part 3: Taking on LegalZoom.
Part 1: When Lawyers Sue Lawyers
Part 2: A Sneaky Shell Game
Part 3: Taking On LegalZoom
Part 4: Trial of the Century
Part 5: Patently Offensive
RAJ ABHYANKER, is the founding partner of LegalForce RAPC Worldwide. Raj is a winner of the American Bar Association Legal Rebel award, and the Fastcase 50 Legal Innovation Award. In addition, Raj was an economic policy adviser to the Chief Technology Officer of the United States White House for the America Invents Act, and invited speaker at the Association of California Bar Associations conference, and an invited speaker at the U.S. District Court (9th district) Judge Aiken conference on Innovations in Law, Science, & Technology. He has been quoted in the ABA Journal, New York Times, Bloomberg, Fox News, and Fast Company magazine.