24 Nov 2016

How Lawyers Play You

Your grief is their beef fillet

By Julius Grafton

Our story about the TCP Fraud in September had an unhappy sequel. The duped lease guy called and informed us he had spent $900,000 on un-successful legal actions to try to claw back some of the $1m in lease funding he advanced. It sent him broke.


If you missed the story, the leases were based on a variety of false and forged documentation authored by former TCP Director Rickard Skarzynski. He in turn dragged his partner Tony Musico into a criminal case, until Musico proved to the court he was an innocent victim.

Which leads to this column, all about how the legal system is fed by the litigant – and how some solicitors and barristers will play you until you run out of the folding stuff. Then they will dump you like a hot potato.

I know some ethical and honest lawyers, and those are the ones we retain here at CX where a solid legal shield is sometimes needed to deflect opportunists who have a swipe at us. Most often this is just an alpha male having a bellow, a wounded ego rather than a defamation settlement grab. The latter is where someone launches action with a view to a settlement. We have never settled.

I had a drink with Mike* who called me after reading a piece I wrote regarding the apparent phoenix of  a  mob called The Artistry Events. In that story (not refuted, not subject to any legal actions either) we painted a scenario where the company failed and then a similarly named company popped up and kept going, minus the debt.

Mike was not of sound mind at our meeting. He had come direct from the meeting room of his law firm, where he has sunk over half a million trying to collect $250,000 from a phoenix. His I.T. firm did the work and got strung along with promises before the customer did a phoenix and restarted a similarly named company the day after liquidating the first one.

The lawyers were indignant. Of course there were remedies at law! We will haul this guy into court and have him account for his actions! With a male sense of pride and a potential outcome he launched proceedings. Without realizing it, Mike had embarked on a voyage of discovery. He was to discover How The Law Makes Money.

A $5,000 down payment went fast. The letters and emails and calls flowed. Often the letter from the law firm was steeped in legal gibberish which required a call to clarify what they were saying. The first invoice contained many pages of interactions, and at first Mike did not realize he was being charged the standard 6 minute block.

This is a wonderful device that enables a lawyer (or an accountant) to bill more than 60 minutes an hour! Say they take or make a call that takes less than six minutes. Their hourly rate is $400, so a six minute block is 10% of an hour, or $40. If you can make a lot of short transactions, like opening and reading an email, or sending a short one, you can stack up those blocks. I dated a lawyer once who routinely worked seven hours and billed ten. Every day.

Mike was so deep in his legal mire that he left our meeting and despite my alarmist warnings dived right back in. I’d advised him to walk away as there was zero prospect of any recovery. Yet he was still listing to his lawyers voice in his head, and had become mentally captive to the ruse.

Sadly he also had no one to talk to – his marriage was on the rocks, he had a fat mortgage and three kids, and his business was tanking since his mental strength had ebbed away with the court cases.

While there are good decent and effective law firms using the six minute block (which is quite common) there are also manipulative, scheming and deceptive charlatans who will unscrupulously gouge you for your last dollar. These are usually charismatic actors versed in manipulation.

Did you ever watch Rake on TV? There are criminal lawyers just like that as well, some of which play legal privilege so effectively they become quasi-criminal themselves. Bags of coke and stacks of cash go into their safe at night as their clients pay them using stock of their trade.

Hopefully you’ll never meet one.

*I changed his name, he doesn’t need the shame.


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