Common Scams Targeting Attorneys and How to Avoid Them
Here's an email submitted through my law firm's website two months ago:
Hello, My name is [name] and I work with [company]. I am contacting you regarding a sales contract agreement i have with a Memorial hospital near you. Please email me directly for more details thank you.
At first glance, it seems normal enough. This appears within my practice area, and it is something I could conceivably handle. Too bad it's a scam. I'd be willing to bet that many other attorneys reading this have received similar messages via their websites or perhaps even directly to their email addresses.
How do I know it's a scam? A few tell-tale signs in the email alone. The person's name, which I won't republish, sounded like the most ridiculous name you've ever heard. Add to that the random capitalization of "Memorial," and the statement that the hospital is "near you" as opposed to naming a specific location. It all smells fishy.
It's difficult enough to market your services and provide them to real clients. In addition to that, internet scams targeting attorneys are constantly evolving and getting harder to spot. If you're wondering what kinds of attorney scams exist, how they work, and how to spot them, read on so you can engage your potential clients with appropriate amounts of confidence and caution.
Scammers Are Getting More Sophisticated
Not all attorney scammers stand out as much as our aforementioned sloppy friend. I'll share one more anecdote to show how some of the more savvy fraudsters operate.
One day, I received an email from a local attorney who I've known since my law school days with a potential referral. He forwarded a message he received through his website, which was well-written in conversational English. The "potential client" referred to a breach of a settlement agreement with a company in Colorado, and named the company. I had some apprehension because the individual was based out of the country--another common thread for attorney scams--so I did some digging. I looked up the company; it was real. I looked up the domain from which the scammer sent the email; it appeared to be a legitimate website. I told my attorney friend I'd consider it and he could have the potential client contact me.
He gave the man (or at least he claimed to be a man) my email address, and I was contacted promptly. I asked if the scammer would be willing to do a phone call, and he was. He came off very polished, and discussed the supposed settlement agreement in depth. However, he was unusually eager to pay me a retainer on his own initiative before I broached the topic. This raised a huge red flag; how many clients are excited about that? I then said I would be willing to consider taking the matter, but asked if he would share the settlement agreement. He agreed.
It took him another day to provide the settlement agreement, which was also odd given his very prompt responses prior to that. When I saw the document, I knew I was the target of a scam. It was clearly cobbled together overnight by the scammer. This was purportedly a high-value settlement, and no one would draft up a document that looked like this thing for something of that importance. I responded that I would not take the matter, and never heard from this person again.
What was his endgame? Why was he so eager to pay me a retainer?
Some Types of Scams Targeting Attorneys
Here is a summary of some of the scams that target lawyers.
Retainer Refund Scam
There are many types of scams targeting attorneys, but our friend above was likely attempting a retainer refund scam. Hence his excitement about paying the retainer.
Had I taken that retainer, the scammer would have had it paid by a "family member" via credit card. Then, my client would have quickly reached out to tell me that the case had settled, the bad guys capitulated and my services are were no longer necessary. The scammer would (1) provide written instructions from the "family member" to issue the refund to the scammer and (2) quickly send someone to pick up a check for the retainer amount from my firm's trust account before the bank identified the original credit card transaction as fraudulent. The scammers would have been in the wind with funds stolen from my firm's trust account. Like I said, much more sophisticated.
This can not only leave an attorney out thousands of dollars, but it can also trigger investigation by state regulatory authorities for potential mishandling of client trust funds, especially if the trust account balance dips below zero. A few tips to avoid this scam:
- Never refund money until you've verified that payment has cleared.
- To the extent possible, check the validity of all credit and debit cards and/or work with payment processors who can.
- Issue refunds using the original method of payment.
Settlement Check Scam
Somewhat of a variation on the refund scam, the settlement check scam is another oft-attempted scam targeting attorneys. It usually goes something like this: the attorney receives an inquiry from what appears to be a potential client. The potential client signs the retainer agreement, and then quickly tells the attorney that the mere threat of legal action has caused the bad guys to cave, and they're sending a cashier's check to the attorney's trust account. The "opposition" (who is working with the scammer of course) sends a check made out to the law firm. Unbeknownst to the attorney, of course, the check is a fraud, but the attorney deposits it into the firm's trust account.
Next, the client asks the attorney to wire the portion of the settlement funds to which they're entitled, generally to an offshore account. Once the attorney transmits the funds, the attorney learns the check was a fraud, leaving the trust account potentially overdrawn and the attorney liable to the bank for the shortfall.
Avoiding this scam is best done by following the advice above. Always make sure you confirm that funds have cleared before issuing a refund. There are numerous variations on these check scams, so the best advice is to--in addition to looking for universal indicators of scams--always be mindful of how you're accepting and disbursing funds into and from your trust account.
Impersonation Scam
An old classic, the impersonation scam has also become more sophisticated over time. A scammer will send you an email with a display name matching that of someone in your organization, usually someone who is senior or in a management capacity. While the display name is from your boss, the actual email address will not be legitimate. It could be a gmail address (easy to spot). However, some scammers even buy similar domain names to trick victims who might skip over details. So instead of bill@smithjones.x, it might be bill@smith-joness.x, or something similar.
In any event, the scammer will ask you something like "Are you in the office today?" If you reply, they will send you something like this (this is an actual email I received after responding hastily from my phone in the car to someone I mistook for a colleague):
Jay,I am out for an unscheduled presentation now with potential clients and legal experts from the state bar.Will be speaking till much later.Can't call or receive calls at the moment and my response may be delayed. I need you to help with a request for the presentation.For time reasons, you can have the details written out and sent to me.Will make a refund as soon as I am through.How soon can you get to the nearest Walgreen or a retail store close to you please. It's urgent. Thanks
At this point, I noticed that (1) this was a weird email and (2) it was sent from a gmail account with an unrecognized address. If I replied again, the response would have been that my "colleague" needed immediate funds to help with his presentation because his card had been frozen, or he would have perhaps even requested my own credit card information to make a purchase. Similar scams feature the scammer impersonating colleagues and posting GoFundMe links to fake fundraisers for sick children.
To avoid this scam, in addition to the universal indicators of scams outlined at the end of this post, always make sure to check the domain of the sender, especially if the content of the email seems out-of-character.
Phishing
Another old standby of the internet scammer. Generally, phishing involves a fraudster impersonating a company or individual to induce an individual to reveal personal and/or sensitive financial information. A phishing email will usually claim some urgency or threat, such as a claim that your account has been hacked and immediate response is required. The email might request information, or it might ask you to click a link or download a file, either of which could could install malware, spyware, or ransomware on your device.
You should never click a link or download an attachment unless you can verify that the sender is someone within your company, or someone you know and trust.
Identity Theft
In certain cases, scammers have used attorneys' identities to scam others. Although they might not cause direct financial damage to the attorney, the reputational damage is undeniable.
One example from California detailed a scammer who set up a fake law firm to persuade deposits into an escrow account for timeshare sales. The scammers then absconded with the funds, and the attorney whose identity was stolen is dragged into the mess.
General Tips for Avoiding Scams Targeting Attorneys
Now that we know some common types of scams, what are some tactics we can employ to avoid them?
- Keep an eye out for odd language and sentence structure from potential clients. If it reads weird, don't ignore that instinct.
- If the first communication from a potential client is overly vague and refers to something "near you" or "in your jurisdiction," activate your spider senses.
- Treat international potential clients with caution. This is not to say that such folks could have legitimate legal matters, but most scammers operate (or claim to operate) from outside the United States.
- If a potential client insists on communication solely via email or repeatedly misses calls with excuses, this is a red flag.
- Pay attention to the domain names of the email accounts you're interacting with. Make sure that there is no potential impersonation occurring.
- If you are disbursing money out of your trust account, ensure that the funds have cleared first.
- Finally, trust your gut! If you feel like something is off, don't ignore that feeling. It can be hard to tamp down the excitement of getting in a potential new client for what appears to be a juicy matter. Nevertheless, put your skeptic hat on, and always proceed with caution.
Additionally, here are a couple sites that have aggregated and continue to gather scams targeting attorneys:
Hopefully this helps you identify some of the scam tactics that target attorneys. Now get out there, (safely) market yourself and develop some business!