Posted Jul 13, 2010 12:43 pm CDT
Cohen & Slamowitz has only 14 lawyers on staff, but it manages to file about 80,000 lawsuits a year.
The Woodbury, N.Y., firm files debt collection suits, and it uses computer software to help prepare its cases, the New York Times reports. It also hires outside lawyers to appear in court on a per diem basis and has on staff 30 to 40 paralegals and secretaries, as well as about 60 people trying to collect debts, firm partner David Cohen said in a 2009 deposition.
One software program used by law firms, Collection-Master, can generate collection letters, summonses and lawsuits, according to the story. The plaintiffs are often debt buyers who purchased the right to collect debt from credit card companies for as little as 5 cents or less on the dollar. The debt buyers send their databases of consumers in default to law firms, which then feed the information into their software programs.
In a Times interview, Richard Rubin, a New Mexico lawyer who represents consumers in debt collection cases, criticizes the automated suits as “the factory approach to practicing law.” Other critics say the suits are sometimes based on inaccurate or insufficient information, and the huge numbers of cases are straining the court system.
The Federal Trade Commission issued a report on the debt collection system Monday that calls on states to require more information about debts in the lawsuits, according to a press release. The FTC also says states should take steps to make it less likely that collectors will sue after the statute of limitations has run.