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Immigration Reform

There's a lot of tough talk about immigration: Build a wall. Get Mexico to pay for it. Mass deportations. Self-deportation. Bad hombres. You name it.

It's gotten so bad that immigration is now a fighting word. We have entire political dogmas based on Orwellian phrases like "undocumented worker", "illegal alien," and "comprehensive immigration reform." Our president-elect built his entire campaign on it. 

But, like most things, a lot changes when you actually meet real people affected by it. And that's what happened to me yesterday. 

I went to visit two new members of our church congregation. They are a beautiful, young, newly married couple who just rented a little house in South Austin. I will call them Jenny and Javier. When I got there, Jenny was making her second Sunday dinner—lasagna—for Javier and was worried about the burning smell coming from their oven. The house was decorated with the cute little knick knacks one only gets at wedding receptions. 

Jenny was born and raised in the gilded Seattle suburb of Bellevue, Washington. She is studying to get her nursing degree. Javier is from Mexico. He is handsome, articulate, and works hard starting his own home remodeling company. He looks like he could bench 280. 

He is also illegal or, depending on who you're talking to, undocumented. 

Javier came to the United States with a so-called H2B Visa to work as a temporary seasonal worker. Most of these visas require you to leave the United States after a year and no more than three. But, like a lot of workers, Javier stayed. He found new work, a better place to live, and a better life. Eventually, he found Jenny.

If Javier left the country now, he would be prohibited from returning for 10 years as a penalty for his overstay. So he's stuck. He can't leave and he can't get citizenship. He can't get a real job because his immigration status prevents it. So this hard-working, smart, capable young man sits in limbo, remodeling people's bathrooms. 

If you talk to a hard-core Trump supporter, the answer is: "Don't matter. He is here illegally and he needs to be deported. It's his fault he broke the law and it's Jenny's fault for marrying an illegal immigrant. They both knew what they were getting into and now they have to pay the consequences." 

But if you talk with anyone (including me) who is capable of psychological empathy, the answer is a lot more difficult. Did Javier break the law? Well, technically yes, but kind of like we all break the law when we drive 40 in a 35. It's not that big a deal. It's understandable. And it's certainly understandable now that's he's married to Jenny. 

Luckily, there's a way for Javier to get back in the clear. He can apply to correct his overstayed visa. It's risky, because if his application is rejected (and he's got to be worried about what a Donald Trump-run Immigration and Customs Enforcement agency will do), he will be deported. If it's accepted, he will have to start the long (and very expensive) process of becoming a permanent resident (a "green card").

It's the right thing to do. And it's a whole lot more complicated than just "build a wall and deport them all." 

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Losers Pay

It's holiday season, so, like you, I'm spending more time at get-togethers with people like the guy who was lecturing other party-goers the other night about the evils of our court system. He's being sued and is upset about the fact that each party in a lawsuit usually pays its own legal fees.

This is so unique to our legal system that it's called the "American Rule." The reasoning behind it is that it helps poor people access the court system because it doesn't discourage them from filing a lawsuit if, for some reason, their claim is unsuccessful. The rich, they say, are better insulated from financial losses associated with lawsuits and can afford to lose. Poor folks can't. 

The other thing is that, once you're in a lawsuit, rich people and corporations have such an overwhelming advantage (they can afford better lawyers, spend more money on expenses, and generally spend more time dragging things out for years), that any help poor people can get levels the playing field.

Well, this guy was still mad and fiercely advocating for a so-called "loser pays" system where, as it says, the loser pays the other side's legal bills. The entire reason we haven't adopted this rule, he said, is because the "plaintiff's bar has a lot of money" and shoots it down every time it's proposed. 

But here's the funny thing. Plaintiffs lawyers like me would freakin' love loser pays. It'd be gosh-dang Christmas. And the real people who don't want it are the rich people and corporations who get sued. 

Here's why:

My clients are usually poor folks who don't have enough money to pay me. So we make an arrangement—called a contingency fee—that gives me a financial stake in their lawsuit. That means, if I don't win, I don't get paid. And my pay (usually 40%) comes directly out of my client's winnings. They get less, so I get paid.

This also means that, when I file a lawsuit, I make dang sure I'm going to win. If I don't think that's going to happen, I don't take the case or I drop it. I wouldn't be in business if I didn't.

But rich people and companies have enough money to pay their lawyers by the hour. Their lawyers don't care about getting paid at the end of the case (because they're getting paid every month). Their only concern is keeping their rich clients happy—taking them to fancy dinners, golfing, box seats at ballgames, that sort of thing (I know, because I used to take clients to big fancy dinners at a big Houston law firm. We even had a billing code for it: "Client Development"). The other way big firms keep clients happy is to bluster about how they're going to win their case and file every motion imaginable to make the other side miserable (oh, and make the law firm a lot of money).

In a loser pays system, all of that would go out the window. 

I'd still pick and win my cases. But, at the end of the case, my poor client wouldn't get stuck with the bill. They'd get their attorneys fees and costs paid by the rich person or corporation they sued. My client would get reimbursed for 100% of her damages instead of having to pay me 40%. It would be beautiful.

But guess who doesn't think that would be so beautiful? Yup, the rich people and corporations who would pay my bills.

Want proof? Texas actually tried this a few years ago. With great fanfare, Gov. Rick Perry (of DWTS fame), signed what he called a "loser pays" law that let courts award attorneys fees and costs against a plaintiff who brought a lawsuit with "no basis in law or fact." But it was only one-sided. Yes, you heard that right, it didn't apply to defendants if they lost. It was like saying: "The winner of the Texas-Texas A&M game wins, unless it's Texas A&M."

Not surprisingly, the law is seldom used because (surprise!) not many plaintiffs lawyers like me are filing lawsuits with "no basis in law or fact" (remember, we don't get paid if we don't win). And the loser still pays.

Gig 'em. 

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5 Easy Steps to Starting Your Own Law Firm

Step 4. Get a Room.

Step 4. Get a Room.

Everyone knows there are a record-number of lawyers out there looking for jobs. In a magical place called la-la-land, law schools crank out thousands of lawyers each year who will all land jobs in mahogany-paneled offices making $160,000 a year. What really happens is the top 5 percent of law grads get jobs in cubicle farms billing 2,200 hours a year working for equally overworked and unhappy partners who take two-thirds of every dollar they bring in.

What no one tells you is that there are also a record number of people looking for legal help. And there are a lot of new ways to charge them for so-called "limited scope" or a-la-carte legal services that make legal fees more affordable for the masses. Believe it or not, "creative disruption" is coming to the legal world and—shhhhh, don't tell the big firms—it's going to be led by small-firm lawyers who decide to go out on their own and help people one at a time. 

Just for fun, I jotted a few things down that I think will get you started on your way to making a killing with your own law firm. It just takes a few days to set up and you’ll be in business.

1. Get a name. Go to the Texas Secretary of State’s website and fill out the Certificate of Formation for a professional corporation. I’m a PC, but other firms I know are PLLC’s. Don’t matter. Just pick a name like "Yourlastname Law PC" (or PLLC) and go with it. Fill out the paper, walk it on down to the Sec. of State’s office on 11th, pay them $300, and they’ll do the rest (you can also do all this online, instantly, through the Secretary of State’s draconian SOSDirect website, but you have to register for an account (not hard) and navigate through several circa-1998 web pages). Then, go to the IRS’s website and get an Employer Identification Number. This is like your business’s Social Security number and will be necessary for the next few steps. 

2. Get a bank account. Free. Go to any bank (I use Chase) and tell them you need to open a law firm checking account. You need one operating account for firm expenses and one IOLTA account for client funds. They will know exactly what to do. This should take 30 minutes. While you’re at it, apply for a business credit card too so you can better manage and track expenses (and build airline miles—I use the totally amazing Chase Southwest Airlines Visa card).

3. Get Quickbooks Online. This is a must. I use the “Plus” version, which allows for the most flexibility for a law firm with multiple client accounts. $24/mo. This is the single, best accounting software on the planet. It is universally used and understood by almost all bookkeepers and accountants and, since it is now web based, can be viewed and edited anytime, anywhere, in real-time, by anyone you want. Oh, and with a few short clicks, you’ll be set up to send invoices and take client credit card and bank payments over the phone and online. It’s real slick. Then, with your new bank accounts and Quickbooks subscription in hand, click on the “Order Checks” button in Quickbooks and order yourself 250 checks for each account—Operating and IOLTA. Yes, Quickbooks checks are a little more expensive then the internet check printing mills, but they are immensely better quality and pre-formatted to work with Quickbooks. Just do it. It’s worth it.

4. Get a room. You don’t need a fancy office to do legal work. Your kitchen table or living room couch will work just fine for now. But if you regularly meet with clients, you’ll need a place to do it that won’t creep them out. Starbucks works OK for this, but it’s probably better to have a dedicated conference room in an established-looking office. Clients are shopping around for lawyers and, like it or not, appearance matters. A nice office will sell your firm better than you can. There are a bajillion office sharing spaces that sell subscriptions that allow you to use their facilities, mailing address, and conference rooms for a small, monthly fee. Regis and Intelligent Office are the biggest ones. WeWork is another—more hipster oriented—space. Oh, and you don’t need a fancy law library or Westlaw account either (who pays for that???). Just use the incredibly powerful and FREE legal research software that comes with your bar membership FastCase and CaseMaker (both available on the SBOT website after you log in) or use Ravel, a pretty cool (but a little wet-behind-the-ears) case law research tool that is about to eat Westlaw for lunch.   

5. Get some clients. OK, here’s where we get down to brass-tacks. You need clients or you will slowly starve to death. First things first: Get a website. This is a cake walk. Go to squarespace.com and sign up. It’s going to cost you a little money ($12/month), but it’s nothing compared to the thousands a web designer would cost to do the same thing. Then register a domain name (yourlastnamelaw.com is a good start, but, for search engine ranking purposes, I like generalized addresses like austin-car-accident-lawyer.com) and pick a website template. Just follow the prompts and Squarespace will do the rest. It doesn’t have to be a fancy or huge site. Remember, in marketing—especially in today’s attention span-deprived world, less is more. Be succinct, brief, and tell your customers what you do and why you do it. Throw up some background photos of the city you live in (people love to see their city), list your new “office” address, and your cell phone number, and hit the “Publish” button. Boom. Done. Next, list your business on Google. Go to Google My Business and register. This is what will get you listed on Google Maps and business listings and will make the Google Gods aware of your existence. I like to do everything Google asks—upload photos, fill out every blank, wave incense over my computer keyboard—whatever they want to make sure they rank you higher than your competitors. Finally, get the word out. Tell everyone you know—friends, family, people at the grocery store, that you’re in business. You will be amazed at the people who come out of the woodwork needing your services. Don’t worry. If you build it, they will come. 

OK, there are probably a few more things in each area to expand on, but this is the basic list. In no time, you’ll be earning more money than you ever got paid by your former big law firm slave masters and spending less time billing hours at the office.

Now get to work.

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The Whole Foods Cake Lawsuit

If you're like me and like to get your news from the source, here's the lawsuit filed April 18 by "Pastor Jordan Brown" against Whole Foods. 

Whole Foods filed its answer the next day, April 19. It denies everything in the lawsuit and adds a counter-claim against Pastor Brown for defamation (the legal term for saying something untrue about someone).

To be continued...

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Want a Robust Economy? Hire More Lawyers.

I’ve always been perplexed by my right-wing friends’ inherent hatred of lawyers. To them, we’re a drag on business, the economy, and society as a whole. They love to quote Shakespeare (out of context) that, “the first thing we do, let’s kill all the lawyers.”

But what lawyers do is exactly what right-wing conservatives advocate all the time: Provide a private, market-based solution to economic regulation. 

Economies (and societies) are made up of billions of private transactions. If I sell apples and you need apples, we might enter into a transaction to sell and buy apples. I will sell you apples for the highest price I can get and you will buy apples for the lowest price you can get. We both get what we want and we’re both happy. Done deal. 

But what if I hide the fact that the apples I’m selling are rotten? I picked them from a worm-infested orchard. You would take the apples home and find out you got screwed. What do you do?

You could take them back to me and ask for a refund. If I’m scrupulous, I will apologize and give you your money back. But what if I’m a fly-by-night huckster? What if you can’t find me? What if I intentionally deceived you and am out selling more rotten applies to unsuspecting plebes like yourself?

You’d hire a lawyer. 

The resulting lawsuit would force me to appear and answer for my misdeeds, pay for the damages, and deter me from selling more rotten apples. You’d pay your lawyer the lowest price you could and your lawyer would get paid the highest price she could. You’d both get what we want and you’d both be happy. Done deal.

A private, market-based solution to economic regulation.

But, consider the alternative, as Shakespeare said, in an economy where we “kill all the lawyers.”

I’d still sell you the same bad apples and you’d still go home and realize you got screwed. But there would be no private solution. You’d rely on some big-government agency called, say, the Federal Committee to Ensure Fair Business Practices (FCEFBP), to regulate the transaction. 

You’d file a complaint (alongside the millions of other complaints) and wait for the FCEFBP to act. Maybe they’d decide to do something. Maybe they’d decide they’re overworked and complaints like yours just aren't worth their time. But, either way, you’re at the mercy of a big-government bureaucracy to solve your very real economic mess.

Now, to be fair, there are are big government bureaucracies that regulate business transactions all the time: the Federal Trade Commission, Consumer Finance Protection Bureau, Consumer Product Safety Commission, Securities and Exchange Commission, and the Food and Drug Administration to name just a few.

But, again, these are exactly what pro-business, right-wing conservatives hate anyway. A big-government solution to a private, market-based problem.

If you don't believe me, check out this story from yesterday’s Wall Street Journal (not exactly a champion of big-government regulation). 

It’s a bit about how Japan, in its post-90’s economic meltdown introspection, decided to “breathe dynamism into society by mimicking the Western legal system, where courts are more involved in settling issues such as consumer safety and corporate malfeasance.”

In other words, Japan decided one of the solutions to its stuck-in-the-mud economy was to entice more lawyers to file more lawsuits.

The problem was, not surprisingly, a lot of people were getting screwed in Japan’s sluggish economy.

“The move to overhaul Japan’s legal system dates to the collapse in the early 1990s of its stock-market and real-estate bubble—which was blamed in part on opaque regulations and shady business practices,” the Journal says. 

The approach called for doubling the number of Japanese lawyers “to move toward a more market-oriented, rule-based approach.”

Turns out, Japan realized, the best way to patrol private, market-based economic transactions is with a private, market-based legal system.

Just don't tell my right-wing friends.

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Why are we still signing credit card receipts?

Today's topic: Things that annoy me to the max. Today's subject: Signing credit card receipts.

OK, here we go: Some brief background and a little law school. In the epochs-long history of banking, credit cards are a recent creation. Really, they are little plastic promissory notes—the legal document you sign whenever you take out a loan. You sign a piece of paper (the note) promising to repay the lender (the promise). It's the way banking was done for thousands of years.

Enter credit cards. I'm sure when bankers first pitched the idea—an open-ended, revolving credit line for the everyman, their lawyers pitched a fit.

"Where's the promissory note?!" they must have screamed. And I'm sure the lawyers demanded, at some point in the transaction, the cardholder sign a piece of paper promising to repay the loan.

Look close next time the register prints out one of those curled-up receipts. Most still say something like "I promise to pay the above amount in accordance with the card issuer agreement."

Isn't that crazy? It's 1999 (or something like that) and we're still putting PEN to PAPER to sign our name promising to repay loans.

Problem is: This wastes time, paper, and our patience in a society where our time and attention is the new gold rush.

...And I just found this fabulous NPR story from 2008 that answers my question beautifully. 

But I'm still annoyed.

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Why Easy Money is Hard on the Environment

Homes from the $20 millions: Current listings on the slopes in Park City, Utah.

Homes from the $20 millions: Current listings on the slopes in Park City, Utah.

For almost a decade the Federal Funds interest rate set by the Federal Reserve has hovered near zero. The thinking was that this would entice companies to borrow so-called "easy money" and invest it in new workers, factories, and productivity-enhancing technology. 

What really happened is a bunch of Wall Street bankers and industry titans (OK, and a few lawyers) took the money and built houses in Park City.

Even one of the best money managers in the world—legendary PIMCO boss Bill Gross—is saying "easy money" is hard on the economy.

"Low interest rates are not the cure—they are part of the problem," he said in a recent piece in Barrons. Instead of spurring new and exciting companies to invest in growth, they enabled old-school "zombie" industries to prop up their stock prices with share buy-backs. It's leading to grossly inflated asset prices (stocks, real estate, etc.) and fueling a bubble that's valuing Central Austin teardowns in the millions and Uber at more than $50 billion.

Which brings me to my point: Easy money is really hard on the environment. It enables worthless use of limited natural resources. Take this house on five acres, high in the back bowls Park City's Canyons resort.

Versailles in the Sky: One of Park City's ski-in-ski-out palaces.

Versailles in the Sky: One of Park City's ski-in-ski-out palaces.

Priced at nearly $8 million with six bedrooms, four baths, and 12,000 square-feet, it's relatively reasonable in a neighborhood of $10-, $15, and $20 million lodges. It has everything you'd expect in a ski chalet high in the mountains: Beautiful rock work and giant timber framing, plus a theatre, billiards room, and a huge unsupported spiral staircase beneath a soaring atrium.

But what's it doing at 10,000 feet in the middle of one of my favorite ski runs? 

Who cares? With money this easy, it'd be crazy not to build it.

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Why Would You Give This Man Your Money?

Not Leonardo DiCaprio, who played the "Wolf of Wall Street" on TV, but real bankers who aren't so handsome and charming.

Not Leonardo DiCaprio, who played the "Wolf of Wall Street" on TV, but real bankers who aren't so handsome and charming.

It is a tenet of American life that the only way to save for retirement is through a so-called 401(k). We route a "defined contribution" from each paycheck into a tax-deferred 401(k) account and, if we're lucky, our employer matches a portion of that contribution. It's a bare-knuckle, every-man-for-himself approach to retirement savings. 

But it wasn't always like this. In fact, it's been like this for less than 40 years. Before that, there was no such thing as a 401(k). Employees didn't "save for retirement"—their employers did it for them through "defined benefit" pensions. Employers rewarded loyal employees with promises to pay a certain amount through retirement. It's what fueled the massive post-war middle-class expansion and allowed hundreds of thousands of World War II veterans to retire comfortably in sunny California.

The pensions worked because sophisticated companies worked with sophisticated money managers to securely invest their pension portfolios in long-term income funds. The money grew reasonably and predictably and paid out as expected. Occasionally, a pension fund would get into trouble by promising too much, but state pension guaranty funds were there to pay the losses and protect retirees. It was a fairly decent system that kept investments safe and reasonable.

It was a huge problem for Wall Street. Pensions are boring. They require slow and steady growth over long periods of time—not the type of investing that makes, say, 30-something Wharton graduates hundreds of millions of dollars. They left way too much money in boring, predictable long-term income funds and not enough to trade in-and-out of fast moving—and commission generating—high-risk growth stocks.

So Wall Street came up with a fix. Under the guise of individual responsibility, it lobbied Congress to pass the Revenue Act of 1978, which created Internal Revenue Code Section 401(k). Over the next few years, most of corporate America shifted their employees onto 401(k) "defined contribution" plans—taking the responsibility for retirement savings out of the hands of sophisticated employers and transferring it to lunchbox toting workers who were much less suited to do the job. 

Enter the "wolfs" of Wall Street. Soon, every bank on Wall Street was paying commissioned salesmen to sell high-risk, high-growth stock funds to ordinary Americans who needed nothing more than a long-term, income-generating, slow-growth fund.

But the money was insane. By 1987—the amount of cash in the stock market (as measured by the Dow Jones Industrial Average) had tripled. Ten years later, in 1997, it had increased 800%. Wall Street money managers were killing it. And they were just getting started.

Exponential Growth: The Dow Jones Industrial Average since 1975.

Exponential Growth: The Dow Jones Industrial Average since 1975.

By 1999, the Dow—which had hovered below 1,000 for the better part of a century—hit 10,000 for the first time. After that, it almost touched 12,000 before—disaster. All the high-risk, fast-growth stock funds that had been sucking in money from 401(k) funds started a series of never-ending bubbles and crashes. The staid and boring stock market that had fueled a generation of slow and predictable growth had become a torrent of booms and busts.

The biggest of which was, of course, 2008's "Great Recession." Wall Street mixed an intoxicating cocktail of high-risk, get-rich-quick inventions called the Collateralized Debt Obligation and Mortgage-Backed Security to make huge loans to ordinary Americans who could never repay them. That was OK of course, because Wall Street would just lie about the loans and sell them back to you-know-who—investors in the stock market. When it all fell apart, the Dow—and all those 401(k)'s invested along with it—lost almost half its value in less than a year. And retirees were left holding the bag. 

There is—and was—a better way. Invest in yourself. Pay off your debt. Don't spend more than you make. Save at least 20% of your pay. And, if you want, invest your savings in a low-cost, slow-and-steady growth fund. Just don't give your money to Leonardo DiCaprio.

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Why your health insurance plan looks like a craps table

Craps: Just like health insurance, but a lot more fun.

Craps: Just like health insurance, but a lot more fun.

It's health insurance "open enrollment" time again in our office and I've been reviewing our health plan choices. We use just one insurance company (UnitedHealthcare) and have just one health plan (something it calls a T9-2/RXJF).

But first, let's talk about craps. 

Craps is that Vegas dice game where everyone is standing around a big, walled table, kissing and yelling at a pair of dice not to come up seven. I was introduced to it a long time ago in a smokey casino in Wendover, Nevada. I immediately found the game utterly incomprehensible (and a lot of fun). 

The table is a mess of numbers, lines, drawings, and boxes. There are no less than 29 different bets (and a nearly infinite number of bet combinations). The Wikipedia entry for the game prints out on 27 pages and lists 15 different subsections. It explains the simplest bet in craps: The "passline," as follows:

"If the come-out roll is 7 or 11, the bet wins. If the come-out roll is 2, 3 or 12, the bet loses (known as "crapping out"). If the roll is any other value, it establishes a point. If, with a point established, that point is rolled again before a 7, the bet wins. If, with a point established, a 7 is rolled before the point is rolled again ("seven out"), the bet loses. The pass line bet pays even money."

That's just the simplest bet. And, of course, this and every other bet in craps is so rigged that "the house always wins."

Which brings me back to our health plan.

Some of the possible 3.2 trillion combinations of choices from our health care plan. 

Some of the possible 3.2 trillion combinations of choices from our health care plan. 

If we want to stay with the T9-2/RXJF, we can. From our health plan manual, it pays:

"100% of in-network medical care after a $5,000 deductible. But it pays 70% of out-of-network medical care after a $10,000 deductible. There is a $30 office co-pay for network providers, but no co-pay for out of network ones. Preventative care is covered at 100%, but there is not something called a "Med/Rx Ded Combined." Pharmacy expenses are covered at $15/$40/$70, depending on something referred to as "Spec; Non-Spec." It has a $10,000 "out of pocket max" for non-network providers, but no out of pocket max for in-network care."

And that's just if we keep the status quo. There are more than 60 other plans, with names like "AA-QP/RXMM" and "XA-J/RXJF" that adjust each of the above variables in seemingly random ways. One plan has a $6,300 deductible and pays 100% after that and another has $3,750 and pays 80%. There are some that pay 50% for out-of-network providers, some that pay 70%, and some that don't pay anything. Taken together, there are over 3.2 trillion combinations of plans, deductibles, co-pays, out-of-pocket maxes, etc. that we can choose from—and that's just from one insurance company.

And, I don't need to remind you that, like in craps, these combinations are derived by smart statisticians (who insurance companies call "actuaries") that make sure, no matter what, that "the house (the insurance company) always wins."

So, if it seems to you like the "rules" of health insurance plans are longer, more filled with insider jargon, and more confusing than the rules of craps, I think you're right. There's not much difference at all.

It's just that craps is a heck of a lot more fun.

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Why Your Texas Uninsured Motorist Policy is Just About Worthless

Uninsured or underinsured motorist coverage is supposed to do what you think: Pay for damages caused by an uninsured or underinsured motorist. Easy enough, right?

Wrong.

The big insurance companies push this type of insurance on Texas consumers. They use scare tactics to warn you that there are a lot of uninsured drivers out there and you could be “up a creek” if you don’t buy their uninsured motorist coverage to protect you against them. And they make a lot of money selling this stuff. It’s an easy policy add-on that puts quick money in their pockets.

The problem is, the insurance companies don't have any intention on paying you unless you haul them into court at your own expense.

Really?!?

Yes, a few years ago, the Texas Supreme Court decided to change the way the entire insurance world operates (i.e., you make a claim and your insurance company accepts or denies it). Instead, the Court said, you can’t even make a claim unless an actual judge in black robe says you can.

“A claim for UIM benefits is not presented,” the Court said in the 2006 case Brainard v. Trinity Universal Insurance Company, “until the trial court signs a judgment.”

This is like saying you can’t order your food until after you’ve eaten it. Or you can’t buy your house until after you’ve moved in. The Supreme Court basically re-wrote insurance and contract law (and basic logic) to say that you cannot have a cause until after the effect.

So all that stuff about protecting yourself from underinsured motorists? True, but you should really be worried about protecting yourself from fake insurance scams like uninsured motorist coverage in Texas.

"And," like Farmers says, "we don’t have to tell you, that usually means frustrating phone calls, four letter words, and maybe legal action."

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9 Things to Know About Your Property Damage Claim.

The insurance company said I would be in good hands. BAHAHAHAHAHAHAHA! 

The insurance company said I would be in good hands. BAHAHAHAHAHAHAHA! 

Usually the first thing staring you at the face after a car accident is the big, rusting, twisted piece of metal sitting in your driveway (or the towing impound lot).

Luckily, if all goes well, your car should be repaired or replaced in a couple weeks. But, if insurance companies decide to give you the runaround (as they are wont to do), then you could be looking at an endless loop of unreturned phone calls, broken commitments, and towing storage and rental car bills piling up in your mailbox. 

Neither of us want that, do we. So here's what you do:

1. Point your finger at the right person (or insurance company). In a perfect world, the person who caused your car accident would get out of their car, apologize profusely, hand over their insurance information, and their insurance company would quickly pay for your rental car and repair or replace your vehicle to your utmost satisfaction. 

Unfortunately, what usually happens is the person who causes your car accident stumbles out and starts pointing their finger at YOU. After you threaten to call the police, they reluctantly give you their insurance information, but tell their insurance company the opposite of what happened—that you caused the collision. Then their insurance company, hoping that you'll just go away, drags their feet, doesn't return your phone calls, or, worse, believes their insured's bogus story and denies your claim. All while you're answering angry phone calls from tow truck operators asking when you're going to come pick up your rusting, twisted piece of metal in their lot, or worse—when they're going to sell it to pay for all their storage charges.

Now what?

2. Bite the bullet and make a claim on your own collision insurance coverage. If you're fortunate enough to have collision or "full" coverage on your car, then you can (and should) quickly make a claim on your own policy. Yes, it's not fair that your own insurance has to pay for someone else's mistake. But, as they say, "fair" comes once a year.

Your own insurance company has a duty under the Texas Insurance Code to treat you fairly and in good faith. It should quickly send an adjuster out to appraise your car and decide if it's repairable or a total loss. More on this later. Then it should put you in a rental car and quickly pay for the repairs or replace your vehicle. Simple as that.

Texas law forbids an insurance company from raising your insurance rates if you make a claim for a collision that was not your fault. But heaven knows what they really do. If you notice your rates go up, then shop around for a different insurance company. It's a competitive market with lots of companies fighting for customers. GEICO spent more than $1 billion last year on advertising alone. Someone else will be glad to have you.

3. What if I don't have full coverage? First, extend your left arm, with your palm facing up. Then contract all of your fingers and close your thumb around them to make a fist. Then quickly bend your elbow in such a way as to make your fist strike your face. There, now that you've successfully punched yourself in the face, read on. 

You are at the mercy of whatever fly-by-night insurance company the person who hit you had or did not have. Contrary to whatever they may tell you on their TV commercials, insurance companies are not cute little lizards with Cockney accents or stern, deep-voiced men droning on about personal responsibility. They are a big, fat, emotionless corporations who exist for one reason and one reason only: To make money.

Insurance companies do not care about you. They barely care about their own customers. Insurance companies make money by doing one thing well: NOT PAYING CLAIMS. So do not expect them to roll over and pay yours. They have invested lots of time and money into big, fancy Wall Street business consultants who have taught them to "delay, deny, and defend" even legitimate claims. Why? Because the longer the insurance company holds onto its (your) money, the longer they can invest it and make more money in the stock market. You don't think Warren Buffet owns GEICO because he loves the insurance business do you? Of course not, I didn't think so. He owns it because it's a great way to invest more money in the stock market—something Mr. Buffet does quite well.

And GEICO is one of the better insurance companies. Thanks to Texas's deregulated auto insurance market, there are scores of new, fly-by-night operators who call themselves insurance companies but are really just scams. Texas Watch, a nonprofit consumer advocacy group, calls these insurance companies' products "junk policies." Why? Because they don't cover hardly anything and, even when they do, it's like pulling teeth to get them to pay.

So, if you don't have your own collision insurance, sit back, relax, and prepare to be ignored, low-balled, and bullied until you say uncle and call a lawyer.

Now, what if you don't have full coverage and the other driver does not have insurance at all? This is not the time to delay—call a lawyer. We will research your options and find out if we can help you. 

4. What if my car is repairable? If the adjuster says your car can be fixed, then take it to any body shop you want. I like to start by calling the car dealer where I purchased my car and ask them for their recommendations. Most car dealers get body work done all the time and know a good body shop that can work on their particular vehicles. Use them.

Once you make an appointment, the body shop will have an estimator give you a written estimate. Most reputable body shops have a dedicated employee that does nothing but argue with insurance companies all day. They are A LOT better at this than you are. So shut your trap and let them do their jobs. When all's said and done, you should have a car that looks just like new.

But, you ask, what if my car is worth less now than it was before it was repaired. This is called "diminished value." And to prove it, you need to hire your own appraiser to come and give you an estimate for what your repaired car is worth versus what it would be worth before the wreck. This is expensive and usually not worth the cost unless you are driving a) a brand-new car right off the lot or b) a collectors or exotic car that has a subjective value up to exert determination. Again, talk with your lawyer and he or she can help. 

5. What if my car is a total loss? Your car is "totaled" when it's worth less than the cost to repair it. If you have a big, fancy, expensive new car, then it will take more damage to total it than if it were an old, cheap jalopy. If your car is totaled, then your insurance company should quickly give you a written "total loss appraisal" that outlines the amount they are willing to pay for your car. This amount is the "fair market value" of your vehicle immediately before the collision, i.e., the amount you could have reasonably expected to sell your car for on Craigslist the day before the collision.

And no, contrary to what you might think, your car was not special. It was not worth more than 99% of all other Toyota Camrys driving around out there. It was just a car. It was metal and plastic and rubber and glass. That's it. The insurance companies use fairly sophisticated auto sales data software to spit out an accurate number here. So, unless you were driving a 1933 Duesenberg or an original Shelby Cobra at the time of your collision, then the number the insurance company gives you is usually accurate about 99.9% of the time. Take the money and run.

6. What about a rental car? Good question. Your car is wrecked or ruined and life goes on—you need to get to work, doctors' appointments, and your kids need rides to school and soccer practice. What do you do? Luckily, there are three ways to get into a rental car after a wreck—each with varying degrees of difficulty.

The first, and easiest way, is if you have rental coverage through your own insurance. This will quickly pay for a rental car usually for up to 30 days while your car is either totaled or repaired. Your car insurance company will usually have a deal worked out with a local rental outfit like Enterprise and you simply go to the rental car location and pick up a car with the rental car authorization number from your insurance company—no muss, no fuss. You will have to return your car when your car is fixed or totaled.

The second easiest way to get a rental car is to pay for it on your own. Just go onto any travel website like kayak.com and find a rental car and rent it. If you are hoping to be reimbursed later (more on that below), then make sure you rent the cheapest, yellow Chevy Cobalt you can find (no more than $25-$30 per day) and don't keep it very long. 

The third—and hardest—way to get a rental car after a wreck is to wait for the other person's insurance company to pay for it through a "loss of use" claim. Unfortunately, this is like waiting for a cold-front in a Texas summer—excruciatingly rare and short-lived. By law, the driver who hit you must pay for your economic damages. Like I said above, this includes the cost to repair or replace your vehicle. It also includes money to compensate you for the "loss of use" of your car. Seems fair and simple enough, right?

Wrong. Thanks to some ridiculous interpretations of Texas case law, predicting exactly what and when insurance companies will pay for loss of use is like the Heisenberg principle of insurance law—it's impossible. Some insurance companies will immediately offer to put you in a rental vehicle with their own rental authorization number. Some will offer to reimburse you for your own rental receipts (up to a certain amount or time limit). Still others will refuse to pay altogether—citing a Texas appellate court case to say they don't have to pay loss of use on total loss claims (utterly insane, but this is what they think). And others will offer to pay a small fraction of the real cost of your loss of use claim on the hopes that you'll just give up and take their money.

In the end, talk to your lawyer. We know the law and how to deal with each of these situations. 

7. I'm mad. I had just finished paying off my car and now I have to go buy a new one. Shouldn't the insurance company have to pay for that? No. Think of this from the Golden Rule perspective. If you caused a collision and damaged someone else's property, you would of course accept responsibility and offer to pay for the damage. I'm sure you would think it was fair to pay to repair or replace the property. But what if the property you damaged was old, used, and worn-out? And what if the owner demanded that, instead of repairing or replacing the old, used, and worn-out property, you had to buy them a brand, sparkling, spanking new one? Catch my drift? That ain't right.

So that's why the law demands that the person who hit you pay to repair or replace your vehicle—not a brand-new version of your vehicle, but the same dirty, smelly, cat-hair covered thing you were driving before this collision. Theoretically, you can take the money and go buy another car just the same as the old one. So if you were driving a 1997 Chevy Caprice with 170,000 miles on it, you can turn around and go buy another 1997 Caprice with 170,000 miles. Or, if you want, you can pay the difference and buy a brand new one (don't get another Caprice). It's your choice and it's the cycle of life. 

8. This sucks. I still owe money on my totaled car. Now what? Yes, this does suck. No one likes to pay money for something they don't get to enjoy. And your mangled, wrecked, P.O.S. in the towing yard is certainly giving you no love. But you still owe money—maybe even more than it's worth—on that thing. But your bank don't care—it wants to get paid. So what do you do?

Luckily, if you thought ahead, you have what's called "gap" insurance. This covers the "gap" between what your totaled car is worth and what you owe. It's not expensive and you usually can buy it anytime after you buy a car. Unless you put a lot down on your car and are not upside down in your loan, It is a very, very good idea. 

But let's say you're like most of us and didn't plan ahead. The insurance company will not pay you for your car unless your lien holder (the car loan bank) is on the check and, if you owe more than your car is worth, then all of the money will go to them. Then you're stuck making payments on a car you no longer have. This can be a problem. Again, talk to your lawyer. We may be able to help you make additional claims and recover more money to help offset the difference.

9. Believe it or not, your property damage claim is not that big of a deal. Remember the old saying: If it's a problem that can be fixed with money, it's not a problem. Count your blessings. If the biggest problem you have after your car collision is a wrecked car, you're lucky. It could be a lot worse. As long as you and your loved ones are healthy and safe, you can be happy. Remember the saying: Where there is life, there is hope. Your property damage claim will be over before you know it. You will soon be in a fixed or new car and forget all the trouble you went through. It's going to be OK.

If you have any more questions, call us at 512-329-6800. We'll be happy to help you.

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How Much is my Case Worth?

“One meeeeeeeeliiion dollars!”

Just kidding, of course. Remember, we don’t represent people who think a fender-bender earns them a ticket to some so-called “Lawsuit Lottery.” For one, that doesn’t exist. The Framers of our Constitution designed our civil justice system to fairly and accurately assign liability and value harms and losses. It’s not perfect, but it’s the best system mankind has devised yet. So there’s never a “jackpot” jury award or settlement—only fair and reasonable compensation for the real harms and losses caused by someone’s negligence.

That said, valuing cases is not an exact science. You may ask me what the weather will be like in Austin on August 8. I can tell you almost certainly that it will be hotter than a wicked witch’s white-hot steel whistle, but I don’t know if it will be cloudy or raining or windy or…you get my drift. That same thing goes for your case. I will know early on whether it will settle for a TON or a TINY bit, but there are a lot of variables in between. This is why we pay very close attention to what goes on at the courthouse and appellate courts. It’s the best way we know how to judge what actual real, live juries are compensating people in real cases.

Your case value will be determined by the sum of your economic damages (things that have a receipt) and non-economic damages (the stuff you hear about on The Good Wife or Law & Order like “pain, suffering, and mental anguish”). You may be surprised to find out that huge “million dollar verdicts” are actually quite rare (and for good reason). We are very conservative and only ask for what we think is fair and reasonable. We don’t want you—or us—to get laughed out of the courtroom or lose credibility with a judge, jury, or insurance adjuster. Plus, it’s just the right thing to do.

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Do you Want your Lawyer to be a Lab or a Pit Bull?

Dude the Dog

A friend called me last week with a legal problem. After explaining the basic issues about a minor dispute that had exploded into a full-blown mess, he told me he wanted to hire a lawyer who’s “a real pit bull” to make the other side “as miserable as possible.”

I told him there are plenty of so-called pit bull lawyers out there who will do that—as long as you’re willing to pay them. But, I tried to convey, that’s not really what you want.

Lawyers like to advertise themselves as aggressive, all-or-nothing zealots who will stop at nothing to ruin their opponents. Some call themselves sharks. Some call themselves hammers. Some call themselves pit bulls.

I’ve found what they really are, most of the time, are big fat bullies.

A bully is someone who’s so insecure about himself that he has to abuse someone who he thinks is weaker than himself in order to feel better. It’s the same behavior you find on elementary school playgrounds and high school locker rooms. Not surprisingly, a lot of these bullies eventually decide they want to continue making people miserable as lawyers.

You see this behavior play out in the courts as bully lawyers spend all their clients’ time and money battling over stupid and irrelevant legal issues—just to abuse the other side. You see it in ridiculous discovery disputes and pointless procedural battles that do nothing but drive the other side batty and spend ridiculous sums of money.

In the end, no one wins but the bully lawyer—who gets to bill his client by the hour for every stupid, ridiculous legal filing and nasty letter he sends. 

We’re not like that.

We try to be more like our loyal black lab, Dude, who spends most of his time laying on our back deck. He is always there. And, if we accidentally leave the back gate open, Dude will still be sitting there when we get home. He’s friendly, easygoing, and loyal.

But when an unknown person comes through the back gate, Dude goes nuts. He barks and growls and looks menacing. I’ve had service people say they can’t work because the “aggressive dog in the backyard” won’t let them in. Of course, as soon as Dude knows the person is friendly, he backs off and goes back up to the deck.

Of course, it’s because Dude’s loyal. He sees our house and his house and us as his family. And he won’t let anyone threaten them.

We’re the same way—friendly, easygoing, and loyal. But, if we think someone is threatening you or your case, we’ll go nuts. Because we’re loyal to you. 

That’s the different between a lab and a pit bill lawyer.

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Will You Pay Me to Take My Case?

No joke. If you’ve ever called in sick to work and flipped on the TV during the hours of 10 a.m. and 4 p.m., you’ve probably seen the annoying lawyer commercials running all day long promising to give you an “interest free loan” if you hire the lawyer to take your car accident case.

Is this ethical? Believe it or not, the Texas Disciplinary Rules of Professional Conduct (the ethics rules for Texas lawyers) allow a lawyer to “advance or guarantee court costs, expenses of litigation or administrative proceedings, and reasonably necessary medical and living expenses.” And we pay all of our clients’ court costs and case expenses directly to the vendor out of our own budget. This is a crucial part of the case and it’s only fair that we have some “skin in the game” along with you.

But we do not give clients cash money in the form of an “advance” on living expenses or an “interest free loan.” We think that violates the spirit of the rule and is just downright in bad taste. Not to mention the fact that, at the end of the case, the client will have to pay every penny of that advance back to the lawyer. As my Mom used to say, “it’s six by one, half-dozen by the other.”

It also doesn’t say much about the lawyers offering to pay clients to hire them. Think of it this way: If you were looking for a surgeon to operate on your very serious medical condition and you found one that said “I am one of the best in my field and will do my very best. I am honest and my fees for my work are reasonable.” And then you found another doctor who said “I'll give you an "interest free loan" to let me operate on you.” Which one would you choose?

Duh.

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Will I Have to Go to Court?

Not if we can help it. Eight out of 10 of our cases settle before we ever file a lawsuit. This is because we’re reasonable and conservative and settle cases for fair and reasonable amounts. This is not because we are weaklings—just ask your insurance adjuster who probably says some not-nice-things when they see our letterhead come across their fax machine.

If we have to file a lawsuit, almost 100% of those cases settle before trial. There’s always the chance your case will go to trial, but we do everything we can to avoid it. This is because we don’t like litigation (what lawyers call filing a lawsuit and going through the court process). We think it sucks. It’s time consuming, EXPENSIVE, and just all-out life-sucking. It’s not good for you and it’s not good for me. Like Abraham Lincoln (himself a pretty decent lawyer and fellow) said:

“Discourage litigation. Persuade your neighbors to compromise whenever you can. As a peacemaker the lawyer has superior opportunity of being a good man.”

Well said Abe. Agreed.

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How Long Will This All Take?

Good question. Every case is different, but for the most part, from past experience, your case will be all wrapped up in about a year.

It really depends on how long you treat with your medical providers. We don’t want to settle your case before you’re done treating, because you may have more treatment or another injury pop up later. If you treat for a long time, then we will wait until you are finished with your treatment. If you wrap up with treatment quickly, then we will kick into gear and work on getting your case settled more quickly. It’s all up to you and your doctors.

Don’t worry, while you’re treating, we’re working. We’re busy collecting evidence and communicating with your medical providers to make sure you’re getting the best possible care. When you’re done, we’ll collect all of your medical and billing records and start going through them with a fine-tooth comb. Then we’ll type up a demand letter to the other driver’s insurance company. This is a fancy, long letter that details exactly what we think your case is worth and how much we’ll settle it for. We typically give the insurance company a few weeks to respond with a reasonable offer. If they do, then great—we’ll settle it. If they don’t, then we’re off to lawsuit-ville: Population you and us.

Again, each case if different—like a delicate little snowflake. But—bottom line—your case should be done in about a year.

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How Much Will this Cost?

Jon Selden & Company charges what’s called a contingency fee. This is just like the commercials you see on TV—we don’t get paid unless we win your case. When we do win your case, our fee is one-third of whatever we recover. If we have to file a lawsuit, then our fees go up to 40 percent. This is because it’s a huge pain in the you-know-what to file a lawsuit and go to court. But we will do it if it means winning your case.

Contingency fees are a great way to charge for legal services because our interests are totally aligned with your interests. In other words, we want your case to settle for as much as possible as fast as possible. Because, not only do you get more money faster, but so do we. This sure beats hourly-billing, where we’d require a HUGE retainer fee up front and then bill you a bajillion dollars an hour. In that case, our only interest is to keep stringing you along for as long as possible—not cool!

Every case has expenses too—stuff like copies, postage, medical record ordering fees, etc. We pay for all case expenses out of our firm budget, and then reimburse ourselves at the end of the case. Our case expenses in a typical car wreck case are usually a couple hundred bucks. So don’t worry, we won’t be staying at the Waldorf Astoria and flying private jets around* while we work on your case. We’ll be watching the budget very closely. Why? Because we’re spending our own money.

Remember, we want your case to settle for as much as possible as fast as possible.

*Actual question from actual client.

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Do I Need a Lawyer?

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Do I Need a Lawyer?

This is one we get all the time. And I’ll give you the classic lawyer answer that makes all people hate lawyers: Maybe. Maybe not.

Here you go: If your case is REALLY simple—I mean, you’re not hurt, you didn’t miss work, the person who hit you accepted responsibility at the collision scene and YOU HAVE PROOF, their insurance company is being really nice to you, your property damage is minimal, and you want to wrap things up in like a week or two. Then no, you probably don’t need a lawyer. 

Just call up the insurance company (what we lawyers call the “liability carrier”) and ask them to pay for your car repairs, rental car, PLUS an amount for your inconvenience and they will probably offer to pay for your car repairs, a few days of rental, and a thousand bucks. Not bad. But not good either. But hey, if this is cool with you, knock yourself out. 

BUT...If you got hurt AT ALL, missed work, the driver who hit you was wishy-washy at the scene or is lying about hitting you, their insurance company is being a bunch of bozos, or if your car is really messed up and you think you might have a diminished value claim (the difference between what your car was worth before the wreck and what it’s worth after repairs), then YOU ABSO-FLIPPIN’-LUTELY NEED A LAWYER. 

I know you’re smart, but do you really understand all the ins-and-outs of what you can claim for damages and what they’re worth. Not to mention the skills necessary to collect the evidence that will be admissible at trial to PROVE the other driver caused this wreck?

So, unless you’d suture yourself up—Rambo-style—if you took a bullet to your shoulder, don’t try to stitch your serious case together without a lawyer.

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