Texans for Lawsuit Reform

Through political action, legal, academic and market research, and grassroots initiatives, TLR fights for common-sense reforms that keep Texas open for business.

  • About TLR
    • Our Mission
    • Our Team
    • Timeline of Reforms
  • Videos
  • Issues
  • Resource Center
    • Special Reports
    • In the News
    • Press Releases
    • The Advocate
    • TLR Blog: For the Record
  • Get Involved
  • Contact
    • Contact Us
    • Invite a TLR Speaker
  • Donate
  • Stay Informed
In the News

‘Trolling for clients’: The battle for new plaintiffs creates friction among lawyers and referral services

Legal Newsline, May 8, 2019

By: John O’Brien

It’s a world that the public rarely catches a glimpse of, but the competition for clients can lead to nasty disputes among plaintiffs attorneys and lawyer referral services who question whether the rules are being followed by everyone.

For plaintiffs lawyers, referrals can be the difference between boom or bust – especially for firms that prefer a business model that includes a high volume of cases that they can settle quickly rather than finance all the way through trial.

Legal Newsline previously reported that a Florida man ended up the plaintiff in a class action that he didn’t care about as a result of an app on his phone referring him to a lawyer. More digging through court records showed that attorneys and companies in the lawyer referral game keep an eye on competitors in case they need to accuse them of ethical breaches.

“It’s a dog-eat-dog world out there, and this sort of turf warfare is common,” says Eric Troutman, a class action defense lawyer at Squire Patton Boggs.

“(M)ost often, the drama unfolds behind the scenes.”

But some drama plays out in public records, like a lawsuit filed last year by Connecticut lawyer Sergei Lemberg, who does not appear to be suffering a shortage of clients. A search of the federal court database shows him as the lawyer in more than 3,000 lawsuits filed since 2007.

“Trolling for clients”

Lemberg feels a company called Egeneration is operating a lawyer referral service while not adequately disclosing that it is not an actual law firm, so he sued it a year ago in Connecticut federal court.

Lemberg’s stopcollector.com advertises his Fair Debt Collections Practices Act practice, while Egeneration maintains stopcollections.org. Egeneration’s site has “disseminated false advertising in Connecticut,” Lemberg wrote in his lawsuit.

“While Defendants disclaim being an attorney referral service, their website hides such disclaimer in small print at the very bottom of the site,” Lemberg wrote.

“In reality, the website was designed with the intent of deceiving consumers into believing they are dealing with a law firm who can help them with their FDCPA claims, when in reality the defendants are really trolling for clients for unidentified lawyers.”

Egeneration has asked that Lemberg be disqualified from representing his own firm in court and that the lawsuit be dismissed. The company says it discloses that it is a referral service and not a law firm, while Lemberg’s claim that the site does not comply with attorney advertising rules is not recognized as a private cause of action in Connecticut.

“The truthful disclaimers and explanations on the website cannot be disregarded because of their placement or font size,” the company said.

Troutman isn’t surprised these disputes arise, wondering whether Lemberg is motivated by a desire to protect his website from one with such a similar name.

Referrals, Troutman says, are the lifeblood for firms like Lemberg’s, who is also active in filing suits under the Telephone Consumer Protection Act.

“In the TCPA space, in particular, a solid referral can net hundreds of thousands or even millions in attorneys fees in a settled class action,” said Troutman, whose main focus is the TCPA.

“But relatively few people actually want to sue callers over the nuisance of, say, one wrong-number phone call. So consumer firms have to get creative to net referrals so they sometimes partner with call-blocking apps to generate leads and, ultimately, revenue.”

‘This disgusting mess’

Use of one of those call-blocking apps was at the center of another of Lemberg’s legal battles when a former business partner accused him of unethical behavior with referrals obtained from PrivacyStar, a wing of First Orion.

After Lemberg sued fellow TCPA lawyer Tammy Hussin for a business arrangement that ended, Hussin mounted a counterclaim that alleged Lemberg was taking a $595 “PrivacyStar cost” out of each referral’s settlement and forced her to pursue lawsuits on behalf of people who didn’t know they were filed.

Troutman says many users of call-blocking apps don’t realize they are agreeing to be contacted by lawyers. Hussin’s claims back that assertion.

Just doing business with Lemberg while he obtained referrals from the app harmed her reputation, she claimed. She claims she was “bombarded” with clients Lemberg contacted through the call-blocker when they reported unwanted calls.

He sent her “clients” that weren’t informed why Lemberg’s staff contacted them and were unaware they were caught up in a mechanism intended to produce lawsuits, she said. Lemberg insisted Hussin file the cases before speaking to the new “clients” who were referred to her, Hussin claimed.

“Hussin unknowingly filed complaints on behalf of Californians who were unaware of legal representation, causing embarrassment to Hussin and causing Hussin to expend wasteful hours to correct such deficiencies,” she wrote.

Unaware that the app was sold to MetroPCS customers, Hussin says she was amazed at how many of her clients sent by Lemberg were using MetroPCS.

She even bought stock in the company, believing it to be “the telecommunications carrier of the future,” she said.

Her counterclaim details her experience with the PrivacyStar clients who she says did not know they had hired a lawyer for a TCPA lawsuit and were “suspect of Hussin’s true intentions.” Their claims were worth a substantial amount, she said, but many were unresponsive.

In 2014, Hussin told Lemberg that using PrivacyStar was unethical and must be stopped, the counterclaim says. Ultimately, their business relationship fractured, and Hussin claims Lemberg stole her clients and forged her signature on settlements.

Lemberg says Hussin’s claims and an ethics complaint she filed with the Connecticut Bar were attempts at extortion.

He said she failed to discuss the administrative fees with clients while denying most other allegations.

“(Hussin’s) ethics complaint included allegations that were patently false and baseless,” Lemberg wrote. “Defendants did not have and still do not have a reasonable basis for bringing the ethics complaint or making the confidential ethics allegations public.”

Eventually the two reached a settlement, but the fight shows why lawyers prefer to keep these disagreements out of a courtroom. Hussin lamented in an affidavit that she “would like to see every pleading in this disgusting mess sealed forever.”

What’s at stake? “Faith in the legal profession”

Of course, not every dispute involves Lemberg. For instance, a company called LegalForce, a law firm that offers law firm automation and free trademark search services on its website Trademarkia, has filed several lawsuits since 2017, with at least one of its targets being a lawyer referral service.

LegalForce says it is abiding by the rules prohibiting attorneys sharing fees with non-attorneys but feels competitor UpCounsel is not. It cites laws in California, Pennsylvania, South Carolina, New York and Ohio.

“This rule was adopted to prevent non-lawyers from aggressively reselling hourly and fixed-fee attorney services at a mark-up, causing the public to lose faith in the legal profession,” the complaint says.

“These rules have not been revised in the age of the Internet… In contrast, despite Plaintiffs’ belief that fee-sharing rules are out of date, in the absence of formal legislative change, Plaintiffs have chosen to lawfully abide by the regulations.

“As a result, Plaintiffs have been unable to fairly compete…”

LegalForce creator Raj Abhyanker, who files the cases himself, says his original concept has been copied by companies willing to skirt ethics rules.

The UpCounsel lawsuit settled in March, months after a California judge allowed parts of it to proceed.

In its defense, UpCounsel said LegalForce was attempting to bully it, much like it had when it filed similar lawsuits against companies like it and individual attorneys.

“LegalForce and… Abhyanker have made a habit of abusing the courts in this district to compensate for their professional shortcomings,” a motion to dismiss said.

“Rather than compete in affair and open market, they attempt to use litigation to squeeze and bully companies that have succeeded where LegalForce failed.”

Follow us on Facebook

Comments Box SVG iconsUsed for the like, share, comment, and reaction icons

Texans for Lawsuit Reform

3 days ago

Texans for Lawsuit Reform

In case you missed it: Specialized business courts like the Delaware Court of Chancery can be an important addition to a state’s economic foundation. These courts quickly and expertly handle complex business litigation, freeing up other courts to handle other types of cases. Read and share: bit.ly/3y7zwnI ... See MoreSee Less

Link thumbnail

Making Business Our Business

bit.ly

Much has been written about Elon Musk—eccentric billionaire, CEO of some of the most innovative companies in the world and… future owner of Twitter? While the nuances of this deal are daily fodder...
View on Facebook
·Share

Share on FacebookShare on TwitterShare on Linked InShare by Email

  • Likes: 0
  • Shares: 0
  • Comments: 0

Comment on Facebook

Texans for Lawsuit Reform

4 days ago

Texans for Lawsuit Reform

The federal judge who supervises multidistrict opioid litigation had ordered a certain percentage of future opioid settlements to be set aside for plaintiffs’ lawyers who have similar cases outside the MDL, diverting more settlement money away from the victims. Read & share: bit.ly/3NqcDQP ... See MoreSee Less

Link thumbnail

Multidistrict Opioid Litigation Continues to Enrich Plantiffs' Lawyers

bit.ly

Multidistrict opioid litigation is once again being used to the advantage of plaintiffs’ lawyers. This very serious issue requires a victims-first approach, not a plaintiffs’-lawyer-payday-first a...
View on Facebook
·Share

Share on FacebookShare on TwitterShare on Linked InShare by Email

  • Likes: 1
  • Shares: 0
  • Comments: 0

Comment on Facebook

Texans for Lawsuit Reform

5 days ago

Texans for Lawsuit Reform

A month passed before Harris County courts brought in 18-year-old Corey Hodges, who violated his bond conditions 37 times. Crime Stoppers’ Andy Kahan blames the initial judge's lack of enforcement on his first bond violation back in 2015. Read and share: bit.ly/3A6vLjC ... See MoreSee Less

Link thumbnail

18-year-old charged with murder, aggravated assault violates bond conditions at least 37 times

bit.ly

HARRIS COUNTY, Texas – 18-year-old Corey Hodge could be a poster guy for Breaking Bond. “This is clearly you are breaking your bond conditions,” said Andy Kahan with Crime Stoppers. On April 17,...
View on Facebook
·Share

Share on FacebookShare on TwitterShare on Linked InShare by Email

  • Likes: 1
  • Shares: 1
  • Comments: 0

Comment on Facebook


Follow us on Twitter

lawsuitreform avatarTLR@lawsuitreform·
1 Jul 1542991625462464513

TLR is working to make the Texas legal system fair, efficient, and accessible for all. Learn more: #tortreform #stoplawsuitabuse

About - Texans for Lawsuit Reform

TLR's objective is to restore litigation to its traditional and appropriate role in our society. A lawsuit takes a heavy emotional and financial toll ...

bit.ly

Reply on Twitter 1542991625462464513Retweet on Twitter 1542991625462464513Like on Twitter 1542991625462464513Twitter 1542991625462464513
lawsuitreform avatarTLR@lawsuitreform·
1 Jul 1542901497490456578

#ICYMI: Certain business courts like the Delaware Court of Chancery can be an important addition to a state’s economic foundation. These courts quickly & expertly handle complex business litigation freeing up other courts to handle other cases. Read & RT:

Making Business Our Business

Much has been written about Elon Musk—eccentric billionaire, CEO of some of the most innovative companies in the world and… future owner of Twitte...

bit.ly

Reply on Twitter 1542901497490456578Retweet on Twitter 15429014974904565781Like on Twitter 1542901497490456578Twitter 1542901497490456578
lawsuitreform avatarTLR@lawsuitreform·
30 Jun 1542629262443905024

Fighting lawsuit abuse keeps our courts fair and our economy strong. Learn more →

About - Texans for Lawsuit Reform

TLR's objective is to restore litigation to its traditional and appropriate role in our society. A lawsuit takes a heavy emotional and financial toll ...

bit.ly

Reply on Twitter 1542629262443905024Retweet on Twitter 1542629262443905024Like on Twitter 1542629262443905024Twitter 1542629262443905024

Texans for Lawsuit Reform
1701 Brun Street
Houston, Texas 77019

Ph. 713-963-9363
  • About TLR
  • Our Mission
  • Our Team
  • Timeline of Reforms
  • Videos
  • Issues
  • Resource Center
  • For the Record
  • Special Reports
  • In the News
  • Press Releases
  • Invite a TLR Speaker
  • Get Involved
  • Invite a TLR Speaker
  • Donate
  • Stay Informed
  • Contact TLR

Copyright © 2022 · Texans for Lawsuit Reform. All rights reserved. | Privacy Policy

Copyright © 2022 · Texans for Lawsuit Reform.
All rights reserved.
Privacy Policy