Don’t Fall For Scams In SmallLaw!

Avoiding getting scammed isn’t hard. Always be on the alert.

scam-alert-2New York State Attorney General Eric Schneiderman announced a couple of days ago that phishers pretending to be representatives of his office were targeting attorneys. The lawyers out there might be saying to yourselves, “Attorneys?? But aren’t we smarter, more careful than everyone else?” Um, yeah, okay, whatever gets you through the day. Evidently, the phishers are sending out emails saying the attorney was the subject of a complaint, and the recipient has 10 days to respond by clicking on a suspicious hyperlink.

I didn’t fall for this one, since my clients tend to enjoy complaining right to my face instead of through a third party. But I’m not too proud to say I have fell for some other scams, so I thought a column on scams was in order. SmallLaw attorneys are particularly susceptible to scams, since we have to land our own clients and will likely be more responsive than a Biglaw associate whose mailbox is full half the time.

Today I’ll discuss three popular scams.

Phishing. Hopefully we’re all jaded enough not to fall for phishing scams. This morning, I got one purporting to be from the International Monetary Fund, notifying me that the IMF World Fund Discovery Management and Payment Bureau — a “Bureau set up by the World Bank and IMF to discover all outstanding payment being owned to scammed Individuals all over the world through Inheritance and unclaimed Lottery payment” — had determined that I was owed money. I was surprised to see it was actually from an imf.org address, but then when I hit “reply” it of course went to the much less-surprising jmiller.imf@gmail.com. JMiller, we are wise to your ways.

Bad Check Overpayment Scam. This is far and away the most popular scam targeted at lawyers. In fact, in doing research for this column, it was hard to find any other scam targeting attorneys (pages and pages of search results yielded only hits for this one specific type of scam).  Folks who are new to having their own practice should be on the lookout for it. A person will either call or email you, asking if you can help with an M&A matter or a dispute involving a company or person in your state. Often the person contacting you will proclaim to be overseas, and more often than not, the person is willing to sign an engagement letter, though they won’t send you a retainer. Then lo and behold, there will be a settlement or the transaction will close, and you’ll be awarded a slice of the funds for basically doing nothing. Next you’ll receive a check via overnight mail for a large amount, and you’ll be asked to deposit the money into your trust account and then wire the remainder to the client. The check won’t be for millions of dollars like a Nigerian prince scam: It’ll be for something like $90,000, with you getting to keep $10,000 or so of it. Sure, a big check, but not one that’s completely bonkers.

I fell for this one, just a few months after opening my practice. The person claimed they were an architect in London, and by Googling I verified that there was an architect in London with that name. I deposited the check and my bank told me the check had cleared, so for 48 hours it seemed everything was legit. Fortunately, I happened to be on vacation overseas at the time so there was a bit of a delay on my side. When I got back in touch with the bank to wire the money to the fellow’s account, they told me there was an issue with the check and a hold had been put on it, and yes, this was AFTER they had told me it had cleared. I knew I had been had and felt all lousy and embarrassed, until a couple of months later a large law firm contacted me, saying they had gotten taken by the same fellow, only to a much more serious degree. Thank goodness all I had wasted was time!

See Scams Targeting Attorneys, How to Avoid Getting Scammed, and Scammed! Sophisticated Check Fraud Schemes Target Lawyers for more about this particular kind of scam. You can see in the last article that many times the bank has reported to the attorney that the funds have cleared.

Sponsored

Opinion Letters. Be careful with these. If a person contacts you out of the blue and tells you all they need is a “routine” opinion letter, it’s red flag time. There are a couple of ways it can go: (1) you can end up issuing an opinion on a shady deal, and even if you fill it with assumptions and disclaimers, you can later get sued and have to spend an enormous amount of time dealing with it, or (2) the person pays you for an opinion but then it turns out he’s told everyone else on the deal that you’re the company’s lawyer and you end up getting sent a lot of work which you feel forced to do but then afterwards you’re never paid for. The latter is of particular concern if you got the work through a third-party platform.

Avoiding getting scammed isn’t hard. Just keep in mind that if someone you don’t know contacts you with something that sounds good — maybe not too good to be true, but at least approaching it — then you should be on the alert. If your gut tells you it might be a scam, don’t do it. If your gut tells you it’s fine because it would like a four-star dinner tonight, contact your local bar association for an impartial second opinion.


gary-rossGary J. Ross opened his own practice, Jackson Ross PLLC, in 2013 after several years in Biglaw and the federal government. Gary handles corporate and securities matters for startups, large and small businesses, private equity funds, and investors in each, and also has a number of non-profit clients. You can reach Gary by email at Gary.Ross@JacksonRossLaw.com.

Sponsored