Middle Class Bankruptcy: Unbundling Legal Services — Part Two

31 Oct Middle Class Bankruptcy: Unbundling Legal Services — Part Two

I return to this series (for the patient among you) on unbundling legal services because I believe the bankruptcy court system will incorporate more of its principles into the day to day practice of bankruptcy law, and the maxim regarding unintended consequences will come increasingly to bear. For example, in New Mexico, a sitting bankruptcy judge recently ruled that unbundling legal services may violate an attorney’s professional obligations. The particulars of the case involved reaffirmations in a bankruptcy context (see my earlier post, The Reaffirmation Trap — for Debtor and for Debtor’s Counsel for more about this).

As I discussed in my first post on unbundling legal services, Unbundled Services in Bankruptcy — Part One, the state family law courts started facing this issue head on more than ten years ago because of the massive numbers of pro se parties (people representing themselves in a court proceeding) filing in divorce court. They usually file pro se because they believe they cannot, or in fact cannot, afford to hire lawyers to represent them. I feel that the same economic constraints pushing what some call the new middle class bankruptcy Debtors into bankruptcy will also cause them to increasingly file their bankruptcy cases pro se, or, alternatively, they will want to use a lawyer for some but not all of what actions may occur within a bankruptcy. (For more on the middle class Debtor trend see Chip Parker’s post on American’s choosing bankruptcy over poverty, and this post on Elizabeth Warren.)

Last week (October 24 – 30) was National Pro Bono Week and there were celebrations throughout New Mexico. I also practice family law in New Mexico’s 1st Judicial District and attended my District’s celebratory luncheon and professionalism continuing education seminar that followed. The professionalism seminar was presented by Judge Raymond Z. Ortiz of the 1st Judicial District Court, who has chaired the 1st Judicial District’s Pro Bono Committee since its formation in 2006. Judge Ortiz spoke about what he called “five easy keys” that permit attorneys to meet their pro bono aspiration goals (in New Mexico, pro bono work is an aspirational goal, not a mandatory obligation). One of the keys was unbundling legal services, and he asked attorneys to consider unbundling as one key tool to expanding pro bono representation to both the poor and, increasingly, to middle class clients.

The concept is new to many attorneys, and I think more so in the federal court system than in state court systems. Judge Ortiz urged attorneys to trust that, with their good common sense and their good legal training, they could help clients mightily, even if not helping the client in all things in a case.

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Jay S. Fleischman is a bankruptcy lawyer with offices in Los Angeles and New York. He can often be found on Google+ and Twitter, where he shares information about consumer protection issues and personal finance.
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