Shpoonkle: Selling by Shills? (Update)

Yesterday, a swarm descended on  an old post here about a mutt of a concept, Shpoonkle.  The reason for the sudden “interest” on a post from last March was a story in the Chronicle of Higher Education, a bit puffy and somewhat inaccurate, but including some of my thoughts about this mutt.

Although I spent a good deal of time explaining to the author, Katie Mangan why this was a terribly bad idea for lawyers and clients, and the substantial ethical problems associated with essentially every aspect of it, she stuck with the sound bites rather than the substance.  No matter, as any attorney worth his salt knows the problems already, and few “legal consumers” read the Chronicle, and would have to come to realize why this is could be ruinous to them on their own.

As a result, however, something happened here that is far more serious and disturbing than its mere existence.  It revealed, again as it did when my post first appeared, that it’s battle against sound judgment and ethical constraints appears to be waged by a war of deception, by a gaggle of commenters whose job it is to defend the business and deceive.  While Shpoonkle is an ethical morass in concept, its execution in reputation management appears to be nothing short of a deliberate scheme to deceive. 

Reading through the comments received, only one in favor of this scheme appears to be legit. This is consistent with the comments from when the post was first published. They all carry the same earmarks, anonymous “gmail”-type email addresses, no links to websites, people who have never commented here before and suddenly appear for this post, and comments that are carefully designed to defend the business, though simplistic, as if the ideas of, oh, law students or marketers who lack sufficient depth to understand what lawyers already know, or what is meaningful to lawyers.  In other words, shills.

The problem isn’t really about Shpoonkle, which has proven to be a non-starter for lawyers. They managed to capture a total of 2100 lawyers, by their own claims, since starting the business,  If true, which is doubtful, this number is so small and inconsequential as to reflect a wholesale rejection by lawyers despite many being in desperate straits.  So the business is dead, as well it should be.

What it does reflect, however, is a business model that is being defended by lying on the internet, shills pretending to be supporters and defenders, lawyer haters and bashers. The first time Shpoonkle’s shills tried to spam me, I got tired of it and stopped allowing the comments after a while. Yesterday, I decided to let them go through, so they would serve as an example of how low things can go.* And while amusing in their absurdity, they were pretty darn low. 

Meet the future of deception. Consider a business designed to market legal services based on the lowest price, and its marketing scheme is based on using shills to lie about it.  Talk about adding insult to injury.

Curiously, SJ wasn’t the only blawg to be the target of the swarm.  The Chronicle article was also mentioned by Paul Caron at Tax Law Prof. While Paul’s blawg is certainly well known and regard among academics and lawyers, it’s now exactly a place for non-lawyers to hang out.  There was no mention of Paul’s blawg in the Chronicle article, yet there they were, the swarm of lay commenters offering the same sort of nonsense and attacks as here.  I asked Paul whether these comments/commenters reflected his norm and, of course, he told me they didn’t. 

To the extent it’s even remotely conceivable that there are bunch of people who so desperately adore a business that they spend their day trolling the blawgosphere in defense of it (and in infantile attacks on me), this would be the blawg they attack.  But there is no explanation for the comments at Tax Law Prof other than shills. 

One of our ethical obligations is to alert and educate others to potential violations, to educate both the public and the profession to things that could do grave harm to clients.  It’s of no consequence that the harm comes from a 22-year-old entrepreneurial law student named Robert Niznik, who thinks he’s come up with a way to beat the system.  As Katie Mangan asked when we spoke, wasn’t I being harsh given that Niznik was only a baby and could hardly be expected to understand the implications of his concept with maturity and depth.


Asked whether he had any qualms about unleashing his tirade, which also mocked the name of the new site, against a then-21-year-old student who was about to enter a brutal job market, Mr. Greenfield said, well, no. “You don’t get a pass for youth. This isn’t a lemonade stand.”

While Niznik may be a kid, and think like a kid, the people who are affected by schemes like his aren’t children. They’re real people with real interests at risk. The harm isn’t mitigated by Niznik’s youthful limitations or job prospects. If he wants to play with real people’s legal interests, he has to do so within the ethical framework that applies to big boy lawyers, not just foolish children.

That Niznik either doesn’t grasp the ethical implications, the conceptual failings, of his scheme is of little consequence.  Most law students don’t seem to have much of a grasp on ethics and the enormous potential for harm they could cause, especially when its offset by the potential of their making a few bucks.  Nothing, it seems, trumps their entitlement to do anything that might make them some money.

On Niznik’s part, he see’s his detractor’s as “bullies,” the new fad word for every child who isn’t coddled.

As for his critics, “The good news is that bullies always lose in the end.”

And shills are the path to success?  There have been no shortage of new schemes to suck in the desperate, both lawyer and client, on the internet.  Like Shpoonkle, many have a superficial appeal to those who lack the capacity to grasp where they could go horribly wrong, or are desperate enough to ignore the monumental problems in the race to the bottom.  And if, like Shpoonkle, they are fraught with ethical dilemmas and enormous potential to do harm, there is an obligation to protect others from the carnage.

And us “bullies” who take note of them will be the target of their marketing tactic of shills.  So be it.  This is the ethical burden we bear as lawyers, to not avoid the responsibility of challenging these schemes no matter how many shills call us names.

* While I allowed the shill comments yesterday to the original Shpoonkle post, the same won’t be allowed here.  I gave them their chance to make a few dollars by posting their nonsense, but that’s as far as my tolerance goes.  Maybe they can start a blog about Greenfield the Bully where they can write all about how mean and evil I am. 

Update:  I’ve been asked by a reader (who has also asked that I not identify him) to spell out the reasons behind my “harsh” view of schemes like this.  While I trust that much of this is obvious to lawyers, I see no harm, aside from wasting a reader’s time in doing so.

This isn’t intended to be an exhaustive list, but it suffices to make the point.

1. Clients are engaging a lawyer about whom they know nothing except the lawyer’s self-assessment, a notoriously unreliable metric.  This is different than other bad sources, such as billboards or the Yellow Pages as the clients don’t engage the lawyers until after they meet them, giving the client at least a minimal opportunity to assess the lawyer’s merit.


2. The concept is based solely on price, with lawyers low-balling the work to get the gig. While the cost of legal services is obviously a critical concern, when it becomes the only concern, it presumes lawyers to be fungible. We aren’t. A lawyer who has never drafted a will before (whether young or old) can offer $99 wills, but the nightmare of what becomes of the client’s estate if the will is flawed won’t be known until much later. A $99 failed will is no bargain.

 

3. In order to put one’s “work” out for bid, a client needs to explain his predicament/need. For litigation, this is tantamount to an admission/confession, likely written inartfully.  It is available to any lawyer who wants to find it, and may well be discoverable.  Since it’s written without advice of counsel, there’s no telling how damaging it could be to the client’s cause.

 

4.  Further, the inartfully described “work” is the subject of the bid, and when it proves to be inaccurate (and this can apply to anything, from a simple will to litigation), the engagement is no longer applicable, and the lawyer it free to charge at will.  This have a multitude of ramifications, from getting the client into deep trouble by pursuing an inappropriate cause because that’s what he asked for to opening the door to buying one service but finding that he’s now subject to an entirely different legal need, and he’s already in too deep to extricate himself, to being subject to substantially greater legal costs than anticipated because the nature of the legal work is entirely different than what was originally sought.

 

5. For those lawyers inclined to take advantage of clients, this scheme is rife with opportunity. Low ball the bid, and after the client has paid the agreed-upon sum, spin the situation to a significantly different, and more expensive, legal work. And as we are all unfortunately aware, there is no shortage of lawyers willing to take advantage of clients.

 

6. Even in those instances where a client is honestly and accurate informed about the bidding lawyer, and honestly and accurately describes the legal services being sought, the concept ignores the variables that regularly arise in the course of legal work. The client is led to believe that he’s got a fixed price, a firm handle on what the legal services will cost, only to learn after the fact that assumptions were false, situations change, and the cost is significantly different. The entire point of this service is lost, and the client is stuck.

 

7. From the lawyer side, the initial (and most obvious) problem is that by low-bidding services (and assuming his honest about his price to the client), he’s put in the position of either downgrading the representation provided to meet the low-ball price or eating the difference. While some lawyers may be desperate enough to do that, working at a loss does nothing to help a lawyer survive, pay his bills and feed his children. 

 

8.  Those inclined toward volume practices, the mills, must degrade their representation in order for their practice to be viable.  In doing so, they lower the tide for all, and consequently compel others to degrade their services in order to meet their competition’s price.  Bear in mind, no one can run a viable practice at a cost that doesn’t meet expenses and turn a profit.  While clients don’t (and shouldn’t) care about this, the reality is that lawyers have to pay the rent or they get tossed out on the street like everybody else.

 

9.  Participation in schemes like this contribute the grossly mistaken notion that lawyers are fungible and that the price of legal services, alone, is an appropriate metric.  No lawyer believes this to be true, though some will happily take advantage of it, and yet they knowingly contribute to public misconception about lawyers, itself an ethical violation.

 

10.  If a client is dishonest, or perhaps just overly optimistic, and describes his needs in underwhelming terms, an honest lawyer may feel constrained to live with his bid and be victimized by the engagement.  I realize that many lay-people will have no sympathy for lawyers who are lied to (and believe that all lawyers are scum and deserve to get screwed), this remains a very real problem.  Moreover, if the lawyer recognizes that he’s being played and refuses to honor the bid, the opportunity for a grievance, or grievance extortion, is obvious.

 

11. To the unwary lawyer, especially the newer ones, who may lack the experience to realize that the services requested are not appropriate to the client’s needs, this is a huge malpractice trap.  The client is entitled to be wrong about his needs. It’s the lawyer’s duty to recognize the client’s error and to address it. There’s no comfort to be taken by the fact that a client only asked for certain services, which the lawyer provided, that end up going horribly wrong.

 

12. To the extent that a lawyer gains experience via services provided at low ball prices, and assuming he’s managed to navigate his way to competent practice without unintentionally burning clients along the way, he has unwittingly created a reputation as low price lawyer.  While this may be fine at the time, and he may be happy to do low priced work when he’s new, hungry and desperate, this reputation will follow him as his skills develop and competence grows.  Chances are poor that he will be able to shake off the reputation as a lawyer who sells cheap, and only later will he come to appreciate the damage he’s done to his career and practice.

 

Most of these reasons can be split up into additional problems, dealing with particular types of work and varying circumstances, but I trust that rational people can appreciate the inherent problems.  This isn’t to say that some clients and some lawyer will be able to make a fair deal and achieve a good outcome for a inexpensive fee.  However, the clients could accomplish the same thing by contacting a few lawyers through appropriate means, personal referrals, and ascertain fees and negotiate them to a level they can live with. 

The suggestion that all lawyers charge $1000 an hour is nonsense, as lawyers are painfully aware. To the extent that much of the chatter is about how lawyers rape and pillage clients, how lawyers are all scum, how law is easy and anybody can do it (so why do they need us anyway?), there is little that can be said to address such notions.  I’m constrained to deal with reality, not fictions invented beneath tin foil hats.

 

For those who seek legal representation at a price they can afford, the benefit of such schemes can be accomplished through far better means, and the detriment that this scheme presents is omnipresent.  The fact that some people simply cannot afford legal services is still a problem, but that doesn’t make schemes like this a solution. 

I’ve offered solutions. I’m open to new ideas. I’ve  taken a stand against the proliferation of lawyers that our economy can’t absorb (though notably this is directly contrary to the argument of those who think lawyers are paid too much, and more lawyers means cheaper legal services, a position that doesn’t bear up to scrutiny given the cost of entry). I am not, however, willing to shut my eyes, click my heels, and pretend every new scheme, no matter how bad, is acceptable.

There is one issue, one problem, however, that remains even if everything goes exactly to plan: It still teaches the public that legal services should be a commodity, without any real concern for competence or experience, and that price alone is an acceptable metric for lawyers.  There is nothing that can be done to eliminate this fault, and everyone, layperson and lawyer, is the worse for it.  This is how we race to the bottom.


 



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8 thoughts on “Shpoonkle: Selling by Shills? (Update)

  1. Sam Glover

    Unfortunately, I’ve heard of at least two startups trying to succeed at the same sort of business as Shpoonkle. One even has a name that doesn’t sound stupid.

  2. SHG

    Everybody wants to come up with something that will make them rich.  Even while trying to pass it off as a humanitarian effort. 

  3. Lurker

    Coming from a civil law country, I often wonder how small things require legal assistance in the US. Here, in Finland, most new start-up companies are founded and their company charters prepared without ever hiring a lawyer. The same goes for renting apartment: if you own an apartment, and want to rent it out, preparing a rental contract almost never involves a lawyer. (Most private-person landlords even handle the eviction proceedings of their non-paying tenants without legal assistance.)

    The legal culture and statute law are so well developed in these areas that a very simple document (usually a single page) is enough. The rest of the contract is in the default provisions of the statute law, so even a short document suffices, unless you want to deviate from the statute law default contract. And because the statute law default contract (or company charter) is usually rather equitable, the non-lawyers use its provisions, avoiding the expensive use of lawyers.

    In public life, the same idea exists: any educated person is assumed to be capable to serve as a secretary, treasurer or chairman of a small-to-medium non-profit organisation. And as a secretary of a small non-profit (say, an orchester, a trade union chapter, housing co-op, or a boy scouts troop), you are responsible for writing the minutes-of-meetings of the board, preparing yearly reports, and drafting bylaws, if changes to bylaws are felt necessary. Similarly, it is culturally assumed that any college-educated person can serve as a treasurer, keeping the books, membership records and filing the organization’s tax reports.

    Of course, this cultural preparation comes from the fact that there is an immense amount of organizations: on average, every Finn belongs to ten non-profit associations. Thus, almost everyone will, at some point of their life serve as a member of the board for a non-profit.

    And believe it or not, there is surprisingly little litigation arising out of layman-written legal documents. There are two reasons: first, the monetary sums involved are very small. Second, there is a strict loser-pays regime, making it unfeasible to go to court on any matter not involving your entire livelihood.

  4. Frank

    Not surprised something like this has hit the legal profession. Pointy-Haired Managers have had the same attitude towards us IT folks for years. And they really don’t care how bad a project tanks as long as the bottom line shrinks for their quarterly bonus.

    Oh, and anyone that believes my gmail address is anonymous hasn’t thought my username through. (Hint: http://www.arrl.org)

    [Edit. Note: Link allowed under the host’s prerogative.]

  5. SHG

    In any endeavor that requires thought, there will be a trade-off between competency and cost.  Where along that spectrum someone falls, and how much someone is willing to/capable of paying, is a question for each to decide. But to use only one axis and ignore all else is a fools paradise.

    And by the way, as to your gmail address, you’ve been clear that you’re not a lawyer, and you’ve never made an assertion that relies on your credibility or personal experience. Thus, you are free to be any damn body you want to be. If that changes, nay, I’ll be sure to let you know.  And if I ever decide to delve into ham radio, you’ll be the first person I call.

  6. heather

    Lurker, I can’t say that I agree with you. The vast majority of nonprofits don’t hire lawyers to do their minutes or bylaws or anything else. Most board members are lay people. The vast majority of landlords use form leases from their local real estate association, and the vast majority of renters sign without legal review. Most businesses are started without legal help.

    Contrary to what you seem to to be observing, I think there is a lot of resistance in normal American life to using lawyers. (Or maybe there is just a resistance to paying for legal help?) I cannot tell you how many clients I’ve seen dig in their heels and refuse to pay for a lawyer (these are companies who could afford it!) until they are backed in a corner and all but screwed. Hey, the law is easy, anyone can do it, right?

  7. Anon

    Are you saying that if Niznik could address the issues you raise, you would retract your harsh criticism and support Shpoonkle?

  8. SHG

    Generically, I would. While the knee-jerk supposition of newly minted entreprenuers is that the old guard is antagonistic because of self-interest, I’ve supported new ideas and efforts when they deserve it, not just because they are new.  Nor does simplistic marketing nonsense make me love or hate an idea. Marketing is fine, but the underlying concept must still be sound.

    That said, if what the evidence suggests is true, that Shpoonkle is using shills, an inherently deceptive means, to defend its reputation and attack its critics, than it tells me that it can’t be trusted in any aspect of providing legal services.  One doesn’t run a legitimate business by engaging in improper and deceptive conduct.

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