Small Law Firms

Michael Avenatti And The Art Of The Attorney Shakedown

One of the realities of legal practice is that attorneys will oftentimes attempt to threaten others with annoying, and sometimes meritless, legal claims to make a quick buck.

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Michael Avenatti (Photo by Jennifer S. Altman/For The Washington Post via Getty Images)

Several months ago, we all learned about one of the biggest attorney shakedowns ever perpetrated.  Indeed, this website and many news outlets reported that lawyer Michael Avenatti allegedly attempted to shake down Nike for millions of dollars for claims relating to illicitly paying college athletes.  Rather than comply with Avenatti’s requests, Nike got the feds involved, and Avenatti has been charged with a number of crimes related to this alleged scheme.

Many members of the public and numerous legal practitioners were left scratching their heads about this whole ordeal.  Surely the line between diligent representation and illegal conduct is at least somewhat gray, and many lawyers have probably seen tactics like those allegedly used by Avenatti employed at some point or another.  Of course, there is a major difference between pursuing even frivolous claims and allegedly extorting a major company into forking over millions of dollars to prevent harmful information from coming to light.

In any case, I was recently on the receiving end of a nasty attorney shakedown.  In addition, I am willing to bet that most attorneys have been subject to an effort by another lawyer to force a client to fork over money in order to eliminate annoying and somewhat meritless claims.  Although I do not want to condone attorney shakedowns, and Avenatti’s story broke months ago, recently dealing with an attorney stickup myself has shown me a few things lawyers can learn from Avenatti’s ordeal.

Don’t be greedy

The less money that is requested in an attorney shakedown, the more likely a stickup will succeed.  Of course, if you demand millions of dollars from a major company like Avenatti allegedly did with Nike, the company is probably going to do everything in its power to oppose you.  However, if you simply demand a small amount of money that is less than a defendant would spend litigating a case, and refrain from illicit tactics, you are much more likely to succeed.  Indeed, people usually call this amount “nuisance value” and if this sum or less is requested in an attorney shakedown, it is more probable that the stickup will be successful.

I recently settled a matter for peanuts, since the attorney only requested a sum that was far below what I considered to be nuisance value.  Even though I had extremely strong defenses, it was much cheaper to just pay off the lawyer than to spend money litigating the case.  Pretty much every bank robbery movie I’ve ever seen including “Point Break” (the original one!) and I think “Baby Driver” and “Going in Style” advises that bank robbers should be satisfied with the money in the drawers and not waste time going for more money in the vault.  Although this is admittedly not the best analogy, if an attorney demands a small enough amount of money, a lawyer shakedown is more likely to succeed without the other party doing much to oppose a claim.

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Stick to Legal Causes of Action

In order to have the best chances of success in an attorney shakedown, lawyers should stick to discussing their legal claims and not tangential effects legal action could have on a defendant.  For instance, during his shakedown of Nike, Michael Avenatti allegedly discussed how disclosing damaging information could have a substantial impact on the market capitalization of the company.  However, it was unclear how this was related to meritorious causes of action that could be brought in a legal action.  In addition, threatening to cause greater harm to a defendant other than the headache of litigation will usually motivate individuals and companies to do everything in their power to oppose a claim.

In every instance I have been on the receiving end of an attorney shakedown, the attorneys always stuck to discussing their legal causes of action.  Sure, some of the lawyers mentioned the expense of litigating a case, but this is still related to the legal claims that will be prosecuted by the lawyer conducting the shakedown.  So long as attorneys remember that they are legal professionals, and should focus on their legal claims, they will have a greater chance at success with their shakedown.

Due Diligence

Some attorneys who conduct lawyer shakedowns are pretty lazy, and they just want a quick recovery without having to do much work.  If the attorney has to spend hours preparing legal papers, paying filing fees, and dealing with motions to dismiss, it might not be worth it for the lawyer to even go the distance with the shakedown.  When I am on the receiving end of a attorney stickup, I always ask to see a draft complaint before I consider settling a matter.  If the attorney refuses to provide me with a draft complaint, I can usually tell that they are full of malarkey and will not go the distance with any claims.

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As a result, it is important that attorneys executing a lawyer shakedown fully prepare to file suit.  These attorneys should draft all required legal papers, conduct necessary research, and otherwise take all advisable steps to go the distance with a claim.  I am not sure how much work was done in Avenatti’s case, but working up a matter will make an attorney shakedown much more likely to succeed.

In the end, one of the realities of legal practice is that attorneys will oftentimes attempt to threaten others with annoying, and sometimes meritless, legal claims to make a quick buck.  Of course, there is a difference with the type of conduct attorneys commonly see from adversaries, and the allegedly illicit conduct perpetrated by Michael Avenatti.  In any case, by keeping a few things in mind, lawyers can ensure they are more successful when executing an attorney shakedown.

Jordan Rothman is the Managing Attorney of The Rothman Law Firm, a New Jersey and New York litigation boutique. He is also the founder of Student Debt Diaries, a website discussing how he paid off his student loans. You can reach Jordan through email at jrothman@rothmanlawyer.com.

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