Sure it is - the Trustee makes $60 per no-asset case, and then a percentage of what’s recovered in an asset case. That percentage is all they can make, unless they appoint themselves attorney for the Trustee. That’s not a free pass to bill all you want - if the Trustee spends $1,100 trying to recover a $2,000 tax refund, he’s not going to get it. The United States Trustee reviews all fee applications, and anything over a certain amount gets reduced per their discretion.
If that $2,000 tax refund gets sent directly to the Trustee, then there is no billable time, but there is also no wasted time.
You do realize that a $1000 refund will do dick to pay general unsecured claims. Tax refunds are not the bread and butter of a chapter 7 trustee’s asset cases. In all likelihood, your debtor isn’t going to be garnished over a small refund because the trustee willl simply not pursue it.
So which is it? The trustee’s going to pursue recovery of the $2,000 refund becuase the debtor spent it (because he couldn’t pay you $300 to tell him not to) or the trustee isn’t going to pursue recovery of the spent refund because it’s not worth it and the UST will be on him for his fees?
You bet wrong - I’m in the Northern District of Indiana - Indiana has opted out of the Federal exemption scheme, and we have no wild card exemption.
And of course I can see the potential pitfalls of a non-ethical paralegal. I see all the time the repercussions of a non-ethical lawyer as well, and the Bar generally seems hopeless to do anything about it until money is actually missing.
Would you have less of a problem if there was a “bar” for paralegals? Maybe a brief exam for each area of case law that is “commodity law” - say, easy divorce, BK, real estate paperwork, wills, powers of attorney, corporate paperwork, those types of things. If passed, that person would be “board certified” to practice in a limited area. We could even have paper to hang on the walls, a title and a secret handshake!
I don’t mean to snark, but I see far more attorneys with their heads up their ass, who is usually being saved from disbarment by a paralegal who is worked half to death for shit pay.
In practice, what happens is that the Trustee and the UST sign a stipulation ahead of time, with a compromised amount. The last thing a judge wants is to get in the middle of a fee dispute with Court officers.
You probably don’t realize - I am a paralegal for a Chapter 7 Trustee. I have been a paralegal for a Chapter 7 Trustee for twelve years.
Tax refunds are the bread and butter of a Chapter 7 Trustee, and account for a large chuck of pro rata payments to Creditors. Those small-ish checks to the Trustee pay the overhead, and the large, corporate cases pay for the Trustee’s Jag. I’ve garnished lots of Debtors for a tax refund, usually totalling at least $2,000. Then we get treble damages under Indiana’s conversion statute.
And I have represented chapter 7 trustees (inclduing one in the same firm) as a lawyer for 8 years (I’ve practised for over ten). If you’re relying on $2000 tax refunds for your bread and butter, you’re small timing it. Sure they happen, but they’re not worth garnishing for.
As someone who has personally responded to objections to fee applications and defended fee applications in court, I can assure you that this isn’t what always happens. Sure, often times we are able to work things out, but the UST is not the final arbiter on fees.
I ask again: So which is it? The trustee’s going to pursue recovery of the $2,000 refund becuase the debtor spent it (because he couldn’t pay you $300 to tell him not to) or the trustee isn’t going to pursue recovery of the spent refund because it’s not worth it and the UST will be on him for his fees?
how much does he bill for this bread and butter work?
I am in NW Indiana, which does have a large filing base. It appears you’re in Atlanta, which like Chicago, has different threshholds for when an asset becomes worthwhile. But, the cost of living is lower here.
And, I didn’t realize that we were going to have a competition over who’s “big time” vs. “small time”. I was just trying to point out that, while you were talking to me as if I didn’t really know what I was talking about, I did.
I know that the in-house lawyer at my firm who does most of the Trustee attorney work has a somewhat skewed view of how the Trustee money comes in. She does a lot of complex legal work, which usually results in complex fee applications (like the $1 million that got approved last week). But she is almost totally unaware of how much the small cases bring in over the course of a year. Since I do that work, I see both numbers. Small checks pay the overhead, and those big fees are just gravy.
We would file a lawsuit for any refund $2000 and over, because that is the the cutoff for requesting fees. Most of the time, it’s formwork, so the cost isn’t that bad. It’s the sticky ones that suck time and money. Then, it’s just like any other collection cases - you hope you can collect the judgment.
He doesn’t bill as Trustee, he gets a percentage of assets recovered. When he bills as attorney for Trustee, his rate is $300.00 per hour.
Filing a lawsuit is attorney work, not trustee work. So that’s $300 an hour for a $2,000 asset? Hardly makes sense. And I am not trying to suggest I am more big-time. I am saying that your connundrum of the lost refund is not as simple as you make it out to be.
We’re a tad off the track of this here, but I’m talking about the practical angle. Neither the Trustee nor the attorney has anything to do with the Complaint - I do it, and I make the call to do it. The cutoff of $2,000 is not set by my boss, it’s procedure. Most refunds we pursue are not exactly $2,000 - they are most often around the $4,000 mark. So, the Trustee gets the work done by someone else, bills for his time (or an associate at $200/hour) and it’s a win-win…
except for me, which brings us around to my point - I have a skill set that is worth $300 an hour. I am legally prevented from using that skill set. How is that okay?
Don’t let the Indiana State Bar read this. The way you’ve described it, you’ve likely engaged in the unauthorized practice of law and jeopardized your boss’s position on the panel. Unless you’ve slightly overstated your role. For one, a lawyer had to sign the complaint you “made the decision to draft.” That’s scary just to type.
Well the partner (or whatever we are calling him or her) doesn’t bill at $300 an hour because the work done in a particular situation justifies $300 an hour. The partner is there in case something unexpected arises, and will recognize that, deal with that, and take responsibility for that.
The paralegals I work with often know the law of a particular situation much better than me. My hourly rate is higher because I am expected to be able to handle the unexpected. They aren’t.
Things are different in smaller firms. Paralegals do quite a bit of legal work, it’s all just behind the scenes. The definition itself is tricky - say, I calendar something, the Debtor blows the deadline, I draft a Complaint, the attorney signs off on it without reading it. It happens all the time, and it’s based on trusting your staff. Some attorneys are more picky than others. I am trusted not because I know the law, it’s because I know when to ask questions of my attorney.
Are you going to answer my question about the proposed licensing of paraprofessionals?
Right - so how much is your paralegals’ knowledge and ability worth? And why can’t they charge for their $30/hour worth of knowledge?
And to you lawyers - what is it about your knowledge base that is so important? I can read Westlaw just as well as you can. Is it licensing? Why can’t we set up paralegal licensing to police paralegals?
This makes me a little sick to my stomach in a nervous way. If the bar found out, it could easily lead to discipline of the attorney. If your E&O carrier found out, it coudl lead to coverage being cancelled.
No, I don’t approve of licensing paralegals to practice law on a limitted basis. For one, I don’t trust them to know when they’re in over their heads. Two, if a
“good” paralegal like you can’t spot why what you’ve wirtten above is legally troublesome, I have no doubt there are other things you’d simply miss.
Here’s one example, it’s the ability to recognize what consitutes a legal issue (like the unauthorized practice of law). It’s a gatekeeper as well. The legal profession suffers enough from high profile idiots. I don’t think the solution is to make it easier to practice law.