Law Blog

During economic recessions, many people keep better tabs on their money, and even try to recoup their investments.  This phenomenon has a way of bringing fraudulent schemes to the surface, as demonstrated by the Bernie Madoff scandal, which was unveiled after Madoff’s clients started asking to withdraw their long-gone investments.  Of course, fraud is not usually perpetrated on such a grand scale.

According to LegalMatch.com intake reports collected over the past five years, the most common “white collar” crime charge people sought legal help for was credit card fraud.  Ironically, it may have been Madoff’s greed that prevented him from experimenting with credit card crime.  Many criminals make fairly modest credit card transactions in order to avoid the harshest penalties:  according to one source, the Secret Service doesn’t prosecute cases involving less than $150,000, and the Federal Trade Commission doesn’t investigate fraud cases unless they involve at least $2,000.  Madoff, whose giant Ponzi scheme involved about $65 billion, may have considered credit card scams not worth his trouble. 

The second most common charges facing LegalMatch clients involved insurance and unemployment fraud.  It’s obvious why Madoff, who was wealthy before embarking on his scheme, couldn’t pull off unemployment fraud, but it’s less clear why he avoided insurance fraud.  

The third most common charge facing LegalMatch’s white collar crime clients involved check fraud.  This crime is usually committed on a smaller-than-Madoff scale, which most victims losing an average of $5,000.

Madoff’s case differs from the average LegalMatch client’s case in other ways too.  While Madoff did not have any prior arrests or convictions, 34% of LegalMatch.com white collar crime respondents had prior arrests, 26% had prior felony convictions, 24% had prior misdemeanor convictions, and 16% had prior juvenile convictions.  Madoff’s clean record could have helped him avoid detection by authorities:  Madoff planted the seeds of his scheme in the early 1990s, and although concerns were raised as early as 1999, serious inquiries were not made until December 2008, and formal charges were not brought until 2009 after Madoff’s sons reported him to federal authorities. 

Finally, while Madoff is 70, most LegalMatch.com white collar fraud cases involved persons in their 40s and 50s, and no LegalMatch cases involved defendants in their 70s.  Perhaps Madoff’s age worked to his advantage: he probably acquired significant financial and social skills over the years, and investors may have perceived him as more “trustworthy” because he was older.  Of course it also helped that he had inside connections which allowed him access to numerous investors, wealthy and middle class alike.

Almost everyone knows what Prenuptial Agreements do: they are premarital agreements for the division of property following a divorce. What no one really knows is how many of them exist. Data from Legalmatch.com client intake reports, however, shows that these agreements are most popular for the following age brackets: 

AGE                % CLIENTS SEEKING PRENUPS

18-25               11%
26-32               23%
33-39               21%
40-46               18%
47-53               14%
54-60               6%
61-67               2%
68 and above    1%

The median age for a first marriage in the United States is 26. Most second marriages (i.e. where at least one of the spouses has been married before) occur after the age of 35. Although most experts think prenuptial agreements are most common for second marriages, LegalMatch’s numbers show that a large number of people younger than 35 are getting prenuptial agreements.

Nothing wrong with that, and most divorce attorneys think it’s a wise idea for people to officially designate what is and is not separate property prior to their marriage, whether it’s their first, second, or 16th. If folks going through a second marriage are doing it, that probably means it would have been a wise idea the first time around as well.

Apparently thousands of Americans are not heeding dire warnings that Obama’s tax plan is going to ruin small business owners. (End sarcasm). Last year LegalMatch.com received thousands of requests for business formation lawyers. Our respondents told LegalMatch they were looking to create the following types of businesses:

• LLC (limited liability company): 45%
• Corporation: 17%
• S Corporation: 15%
• Nonprofit: 9%
• Partnership: 8%
• LLP (limited liability partnership): 3%

Don’t they realize there is an impending war on the rich and on business owners?! That this country is going to be socialist before the year is over?!?! (OK, now I am really ending the sarcasm, I promise…)

All jokes aside, LegalMatch.com statistics support the conventional wisdom that LLCs are the most popular type of new business in the country. Limited Liability Companies are a relatively new invention, but a powerful tool if one wants to limit their exposure while running a business.

Are lawyers helping this increase? Lawyers typically operate LLCs when they form their own small firm. The tanking economy is affecting everyone, attorneys included, and more and more attorneys are looking to go it alone. Newly minted attorneys, thousands of whom are regularly churned out every year, are facing stiff competition in a vastly shrinking field. Business is so bad (or is it good?) that an online university offering courses on how to build and run a solo practice has recently opened. Because clearly, the best thing a recent law graduate can do is spend more money on school. (I thought I stopped being sarcastic?)

Obviously new grads aren’t the only ones going it alone; the vast majority may be experienced lawyers or attorneys with a year or two already under their belt. As more and more biglaw firms collapse, we may be seeing more and more fragmenting in the legal community. This could be good thing for clients and attorneys. More lawyers competing may mean lower fees for our services, and more new lawyers getting out of their biglaw basements and acting like real attorneys means more experience and possibly more options down the line. In every crisis there is an opportunity; is now the time for a change?

Other than drug possession, there might not be a bigger criminal defense field than drunk driving attorneys. In the past year alone thousands of clients have come to LegalMatch.com seeking an attorney to represent them in a drunk driving case.

Most people have heard of a .08 blood alcohol content (BAC) limit, and will somehow assume this has something to do with driving drunk. In reality the law varies by state to state. (How many times have you heard that?) Some states have higher legal limits than others, or laws that do not require a blood alcohol measurement for conviction.

The following lists the most common BAC levels cited by the thousands of LegalMatch customers looking for a drunk driving attorney last year, in order of frequency: 

• I don’t know: 24%
• .10 to .15: 20%
• No test given: 16%
• .16 to .20: 12%
• .08 to .09: 9%
• .21 or more: 7%
• .07 or less: 7%

There is an easy joke here about not remembering what your test score was for driving drunk. I will eschew it as a matter of editorial professionalism. There are a variety of reasons besides inebriation for not knowing what the test results were.

My interest lies in the 7% who were pulled over and arrested for being below a .07%. The reason most states utilize a .08% blood alcohol level is because of studies showing a significant drop off in a person’s ability to drive with a .08% or above BAC. Prosecuting the offense follows a familiar pattern: introduce the reading, introduce the expert, and introduce the findings damning the defendant to the nether-regions of presumptive guilt-purgatory.

But what about the tee-totaling .07 percenters?  Presumably their state still allows for their prosecution. In California, for instance, you can be prosecuted either for being above a .08%, or for driving “while under the influence.” In English, that means that you were so under the influence that your ability to drive was impaired.

Even though the defendant can technically still be guilty of a crime, anything below a .08 BAC in a state like California will always be used by the defense. Why? Because jurors expect a .08 reading or above. It is akin to the CSI effect: jurors expect police investigations to have fancy forensic scientists with super-technologically advanced super-computers that can recreate three dimensional representations of a crime scene piece by piece. Which of course is a complete fantasy.

For whatever reason, jurors come into the court with a preconceived notion that drunk driving means driving above a certain level, usually .08%. The truly rational left brained jurors might be able to completely shed this preconception. The majority of jurors, on the other hand, are skeptical of a test below .08%, or the absence of a test at all. Throw in error rates and the fuzzy science often relied upon by prosecution experts as “proof” that field sobriety tests show impairment, and the prosecution usually has a loser on its hands.

In the past 2 years tens of thousands of clients have come to LegalMatch.com seeking real estate attorneys. I was curious at what stage in the real estate transaction people were seeking the help of an advocate. Listed below are the top reasons people cited, in order of frequency:

1. Give me general advice on how to proceed to protect my interests: 30%
2. Bring a lawsuit against the other party: 25%
3. Act as my agent in the transaction: 14%
4. Assist me in the remaining stages of the transaction: 13%
5. Other: 10%
6. Defend against a lawsuit filed by the other party: 5%

Thankfully, the vast majority of people are securing legal advice at the right time; i.e., before the deal goes down the tubes. Considering the fortune you are about to put down on your investment, it is always a good idea to get a legal assessment of a real estate contract, as well as legal advice concerning your rights and liabilities.

Unfortunately, 30% of people coming to LegalMatch.com have waited until something went terribly wrong to hire an attorney. This predicament is not unique to real estate. In almost every facet of society, lawyers typically do not get involved to prevent bad things from happening. They get involved once the mess has been made.

Now as lawyers we don’t always mind this. After all, we get paid to clean the mess up. And from a client’s perspective, not wanting to hire a lawyer until it is absolutely necessary is understandable. Attorney fees, even for an hour of advice and consultation, are expensive. (Arguably too expensive). It’s no secret there are also unsavory attorneys who will claim this or that needs to be done to try and milk even more of a client’s time.

For clients, however, the old adage that an ounce of prevention is worth a pound of cure rings true. Solid legal advice before a big investment, a major business deal, or any significant endeavor can save lots of money, time, and anxiety down the road. One hour of a good lawyer’s time is a heck of a lot cheaper than one month.