With bankruptcy filings sky-rocketing over the past couple of years, it is only logical to hold that bankruptcy lawyers are cleaning up; that’s at least what the wave of advertisements and the “free consultation” signs many are hanging suggest.
While most lawyers in New York City said their firms have been thriving since the economy collapsed last year, many others disagree.
Lawyer Jacob Silver said his firm has received a significant boost in the past couple of years. People are “so highly leveraged today,” Silver said. It’s becoming a “cashless society”, he added. As soon as people lose their source of income, many are often left in debt; resulting in more business for bankruptcy attorneys.
“My practice is booming,” Silver said. “I’m very busy.”
However, getting more cases does not necessarily mean more profit for many law firms. Some lawyers said their firms did not benefit as one may expect.
Lawyer Derrick Hanna said he believed bankruptcy doubled since last year, but his firm has not been getting more profits.
Some 40 percent of bankruptcy cases are self applied, Hanna said. Fewer people are willing or able to pay the high fees, he added.
The average fee for filing bankruptcy is $1,500 – a substantial amount of money for people with a yearly income of less than $45,000, the median income that allows someone to file for bankruptcy.
The lack of business has caused Hanna’s firm, Hanna and Vlakhas, to trim its number of employees.
The scene is not that different at the law offices of Glenn S. Kessler.
“When there is an economic downturn,” lawyer Glenn Kessler said, “those attorneys whose practice suffers seek other areas of practice to make a living.”
The competition is out of control, Kessler said.
“I’m spending more on advertisement than I used to before the economic downturn,” he said.
Seems that not every cloud has a silver lining after all!