46 Pages Posted: 30 Mar 2013
Date Written: March 28, 2013
The recent housing crisis increased demand for attorneys to process foreclosures through state courts. This increase in demand was coupled with a desire for the fastest and cheapest legal services available. As a result, large foreclosure firms designed to handle an enormous number of foreclosure cases quickly and inexpensively evolved and flourished. During their ascendancy, these firms consistently generated complaints about their conduct, including questions about their ethical decision-making and about the veracity of the pleadings and documents they filed. Scholarly literature on the housing crisis, however, is largely devoid of commentary on ethical issues related to increased foreclosures.
This Article tracks the rise and fall of several notorious high volume foreclosure firms and examines the numerous instances of serious misconduct their attorneys and paralegals perpetrated. The Article accordingly examines the curiously muted reaction from state bar associations, judges, and state legislators.
The Article then proceeds to examine how these foreclosure firms differ in makeup from traditional large law firms. Notable characteristics of these foreclosure firms include lenders and servicers’ relentless demand for increased speed and low costs, lack of firm-specific capital at foreclosure law firms, and a factory-like atmosphere of legal practice. The Article concludes with an examination of three policy options to prevent another surge in attorney misconduct: changing ethical rules, improving ethical education, and increasing state bar association funding and authority.
Keywords: foreclosure, housing crisis, ethics, law firms, partners, associates, tournament, human capital
Suggested Citation: Suggested Citation
Zacks, Dustin A., Robo-Litigation (March 28, 2013). Cleveland State Law Review, Vol. 60, No. 4, p. 867, 2013. Available at SSRN: https://ssrn.com/abstract=2241117