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October 26, 2011

Panel at Legal Reform Summit Addresses Commercialization of the Practice of Law

The practice of law has traditionally been regarded as a profession with clear guidelines, rather than a cutthroat commercial business sector.

But as the participants on the first panel discussed today, aspects of the legal industry have become much more like a business.

Roger Parloff of Fortune magazine discussed the activities of third-party litigation funders in the transnational tort case against Chevron. Some of these funders have close ties to the plaintiffs’ lawyers in the case, which has been plagued by allegations of fraud.

Former Georgia Attorney General Thurbert Baker discussed other areas of third-party financing “I’ve never seen a greater threat to the integrity of the judicial system than third-party financing,” he said.

Baker addressed the numerous ethical issues that arise from lending, such as the threats to the attorney-client relationship. He noted that lawsuit lenders in many states are seeking legislation to exempt the industry from laws and regulations applying to other lenders.

Pete Snyder of New Media Strategies discussed how the plaintiffs’ bar advertises online for clients. In 2011, trial lawyers will spend more than $52 million on key word advertising alone, which is three times the amount that the Obama 2008 presidential campaign spent on its entire online advertising program. Some firms even create online front groups that masquerade as nonprofit health or public interest organizations in order to recruit clients. Snyder’s presentation can be viewed here.

Ken Goldstein of the Campaign Media Analysis Group discussed the prevalence of trial lawyer television advertising. Last year, the plaintiffs’ bar spent $844 million on TV ads, and that figure is expected to increase this year. In fact, trial lawyer advertising on TV has increased by an average of 8.1% each year since 2004, while other advertising levels have been flat. Trial lawyer ads are especially prevalent on morning and daytime TV. Goldstein’s full presentation can be viewedhere.

The presentations on this panel clearly demonstrated that some sectors of the legal industry operate as high dollar commercial enterprises, far removed from the idyllic Atticus Finch-like images they promote to the general public.

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