Morgan Drexen These guys took my money. They told me I could get a refund.The last guy I talked to said sorry and never called me back. Anaheim California

For four months, Morgan Drexen and consumer's attorney had worked diligently to negotiate Jonathan's debt. 

For example, Jonathan's Bank of America account had a balance of $16,603.  Morgan Drexen and the attorney negotiated Bank of America down to $13,282 as of July 23, 2009, with negotiations still ongoing.

Another example:  Jonathan's Chase account had a balance of $1,982.67.  Chase came down to $793.  The attorney countered at $750.

Jonathan had $40,000 in debt when he enrolled in his attorney's program.  He was told that it would take more than a year to get debt free.  Why?  Because Jonathan had to save up enough money in his client trust account to fund the settlements.

On its web site, the BBB provides the standard for debt settlement: “What they are supposed to do for you while you’re saving up your money is to contact your creditors and inform them that they’re working with you, negotiate the amount to settle your debt, and ask them stop contacting you.”  Morgan Drexen did precisely that as Jonathan was saving up money.  In addition, the law firm agreed to advance funds into Jonathan's account as a courtesy to complete these settlements. 

Yet, a little more than 4 months into the program, Jonathan cancelled.

Most readers would say, "I expended quite of bit of time doing what I promised to do.  I should get paid for what I have done!"  Indeed, Jonathan's contract with his attorney provides that all fees are earned immediately despite a cancellation.

Yet, Morgan Drexen and the law firm returned to Jonathan his money.

Going through debt recovery can sometimes be a difficult and emotional experience. It takes time to build the funds into the program so that we can present a reasonable settlement to creditors. We know that often it can be hard to be patient to wait until those funds build.

It is unfortunate that we were not given the opportunity to help Jonathan become debt free, but would love to welcome him back to the program.

We would invite him and any other reader who may be near bankrupt and suffering under a mountain of unsecured debt to personally call me to discuss how the program works.

Dear Mr. Katz:

Morgan Drexen claims that it does not perform debt settlement.  Rather, according to Morgan Drexen, it helps the attorneys who perform debt settlement do it better.  According to Morgan Drexen, it provides a team of paraprofessionals who assist attorneys to undertake debt settlement on behalf of their consumer clients.  In other words, the consumers are the attorneys' clients.  The consumers are not Morgan Drexen's clients.

Assuming I have correctly stated Morgan Drexen's role, it seems to me that Jonathan had an attorney client relationship with the law firm that you say ultimately returned his money.  Accordingly, Jonathan should also enjoy an attorney-client privilege and the law firm that represented him has a duty - even after the termination of the representation - to treat communications with Jonathan confidentially.  That duty extends to Morgan Drexen because of its relationship to the law firm. 

You should be more circumspect about disclosing potentially confidential client information.  If Jonathan expected his financial information to remain confidential and is upset that you posted it on this website, I would encourage Jonathan to complain to the law firm that represented him about this ethical lapse.  If the law firm does not answer his complaint, I would encourage him to raise it with the bar of the state in which that law firm is based.  Assuming that Jonathan did not give his attorneys permission to disclose his financial information to the general public, most bar associations would treat such cavalier disclosure of confidential communications rather harshly.

Regards,

JRW

JRW,

There are several reasons why this would probably not constitute a violation of the attorney-client privilege.

Most notably, Jonathan's last name is never disclosed in the report or the rebuttal.

Also, legal professionals are granted some leeway in disclosing client information when it is necessary to defend against a claim of malpractice.

The last reason I will bother to point out (because the others are very technical and complicated) is that, apparently, Morgan Drexen is not a law firm. From what I understand (which is based entirely on the information presented here), they hire the attorneys, not the other way around. As such, they are not agents of the attorney and not bound by the attorney client privilege.

All this is NOT to say that there isn't some other legally actionable breach of confidentiality here. There may be something in the law regarding debt collection agencies, or something in Jonathan's contract, that would prohibit these disclosures. But since the last name was never revealed, that is unlikely.

Tim,

You are right about one thing:  Morgan Drexen is not a law firm.  This is how Morgan Drexen describes itself:

"Consumer Advocate Attorneys engage Morgan Drexen Integrated Legal Systems to provide Intensive support services. Morgan Drexen provides a safe and effective platform for Law Firms to perform debt settlement services. It is far better as a consumer to be represented by a Law Firm than a Debt Settlement Company. Engaging a law firm to perform debt settlement services provides you the consumer legal representation. Consumers who suffer from the burdens of Credit Card debt and the collection efforts of Legal Collection Law Firms need proper assistance. Working with an attorney who is provided services by Morgan Drexen gives you the needed leverage to effectively resolve your situation. Dont settle for anything less than legal representation through a law firm who uses Morgan Drexen Integrated Legal Systems. Its simple to engage an attorney who is a part of the Morgan Drexen family, which simply means, we will stand by you and your family in your pursuit of debt relief. Dont feel like you have to do it alone."  See (((Redacted)))(emphasis supplied).

Based on Morgan Drexen's own description of its services, consumers are represented by attorneys who use Morgan Drexen.  In other words, according to Morgan Drexen, Morgan Drexen provides a service for the attorney in the course of that attorney's representation of the consumer.  If Morgan Drexen's description is accurate, then the attorney is bound to ensure that Morgan Drexen complies with the attorney's ethical obligations. 

The attorney's ethical obligations will vary depending on the state in which the attorney is licensed.  Rule 1.6 of the South Carolina Rules of Professional Conduct - the Rules likely at issue here - defines the attorney's duty of confidentiality and enumerates the exceptions to that duty:

Rule 1.6 Confidentiality of Information

(a) A lawyer shall not reveal information relating to the representation of a client unless the client gives informed consent, the disclosure is impliedly authorized in order to carry out the representation or the disclosure is permitted by paragraph (b).

(b) A lawyer may reveal information relating to the representation of a client to the extent the lawyer reasonably believes necessary:

(1) to prevent the client from committing a criminal act;

(2) to prevent reasonably certain death or substantial bodily harm;

(3) to prevent the client from committing a crime or fraud that is reasonably certain to result in substantial injury to the financial interests or property of another and in furtherance of which the client has used or is using the lawyer's services;

(4) to prevent, mitigate or rectify substantial injury to the financial interests or property of another that is reasonably certain to result or has resulted from the client's commission of a crime or fraud in furtherance of which the client has used the lawyer's services;

(5) to secure legal advice about the lawyer's compliance with these Rules;

(6) to establish a claim or defense on behalf of the lawyer in a controversy between the lawyer and the client, to establish a defense to a criminal charge or civil claim against the lawyer based upon conduct in which the client was involved, or to respond to allegations in any proceeding concerning the lawyer's representation of the client; or

(7) to comply with other law or a court order.

Unless either (i) Jonthan impliedly authorized the attorney to allow Morgan Drexen to disclose his private financial information to the general public; or (ii) one of the seven exceptions in 1(6)(b) is satisfied, it would appear that Jonathan's attorney breached his professional obligation by allowing Morgan Drexen to publicize confidential financial information to the general public.  The fact that Jonathan's last name is omitted may not excuse Jonathan's attorney.  Whether or not Jonathan's attorney should have done more to ensure that Jonathan's information remained confidential is a matter for the South Carolina Bar ethics committee.

Regards,

JRW

Tim,

This is how a Morgan Drexen employee described Morgan Drexen's obligation to keep it's clients' confidentiality on this very website:

"Additionally, every precaution is taken within Morgan Drexen to ensure that all of our clients’ information is kept secure and confidential.  Any of the attorneys that work with Morgan Drexen are bound by strict rules of professional conduct and client confidentiality.  As such, Samantha’s (and all client information) is very secure. It has been 9 months since Samantha has provided us with her information and there has been no breach of any confidentiality."  See http://www.ripoffreport.com/credit-debt-services/morgan-drexen-integr/morgan-drexen-integrated-legal-cdjba.htm

According to Morgan Drexen, they are bound to adhere to the attorney's duty of confidentiality.  It is indeed strange that Mr. Katz - who is the general counsel of Morgan Drexen - appears to be unaware of obligations that Morgan Drexen's other employees openly acknowledge and discuss.

Regards,

JRW