Limping to the finish line, how bad will the 2009 numbers be?

As the structured settlement profession starts it's annual year end rush for business I'll be curious to see if we can close the gap in production in what has been a horrible year for the vast majority of brokers. As I related in an earlier post, most brokers and industry insiders estimate that the profession is off anywhere from 25% to 35% from 2009 compared to 2008, with various culprits jumping up to lay claim as to the cause of this decline:

1. The impact of American General and Hartford being down graded to A ratings by AM Best was more profound then anyone anticipated.

2. The loss of Aviva which was building the industries most innovative and aggressive sales team pulled a lot of energy, and premium, out of the markets. Sales are not a "zero sum" game where you just shift premium around. Innovative and smart sales support groups at life markets can make a big difference in developing and supporting sales efforts so cases get closed.

3. The retreat of Allstate and Prudential in non-qualified markets, alternately reducing capacity and closing down Prudential's offshore assignment operation, not only cut premium but killed momentum and growth in those innovative markets.

4. A plunge in interest rates making yields on structured settlement annuities drop to a level where most people are reluctant to go long term at very low yields.

5. A desperate need by plaintiffs to reduce debt and pay off bills eliminating funds that would previously be allocated to structures.

Hopefully the last 8 weeks will carry the profession to a strong finish and most conversations I am having seem to point in the direction of our typical year end bump. However, whether or not it gets us out of a deep hole is another matter and the raises the question of the ability of the profession to kick start sales in 2010.

Does the structured settlement profession have the salesmanship and marketing skill necessary to restart sales growth, or are we witnessing a slow steady decline in production levels? As I've opined before, unless or until our profession restarts the non-qualified market and more fully embraces settlement planning as a legitimate process, we are going to see ongoing deterioration in our production numbers as a profession. While many will prosper in the coming years, can our profession survive in a climate of continued shrinkage in premium growth?

Any estimates from my readers as to how the premium numbers finish up for the year?

The FBI Broadens The Investigation of Scott Rothstein Structured Settlement Fraud

In yet more bad news for the structured settlement profession the FBI today put out an announcement for information from the public and investors who had been burned or involved with what they are calling the Rothstein Structure Settlement Investments. (RSSI). Scott Rothstein

Great, just what we needed as a profession, more traffic and news with our trade name dragged into what looks to be a growing fraud in which the term Structured Settlements was used to lull investors into thinking this scam had the legitimacy and security offered by structured settlements.

You can read the entire FBI press release by clicking here.

What is also distressing is that what looked to be a $100 million scam and limited to a few cases is now being announced by the FBI as potentially exceeding $1 billion in losses and involving a network of individuals who were working with Scott Rothstein.

The Legal Broadcast Network will be following this story closely over the next few week but as a special guest we had Civil Action Attorney Jan Schlichtmann join us today to discuss from the perspective of a trial lawyer the distressing trend of lawyers being implicated in not just frauds, but in the betrayal of their clients and associates all in the name of greed. Watch today's extended interview with Jan Schlichtmann on Voices of the Law and tune in next week as we continue to bring in more commentators and news on this scam, as well as shine light on the "cash now" industry that seems to have been the model for how this program was designed.

Watch Attorney Jan Schlichtmann discuss the Scott Rothstein fraud and the issues confronting trial lawyers nationally regarding the proliferation of "cash now schemes" that are being offered to lawyers, plaintiffs and investors with little or no regulation or oversight.

Rapid Response to Scott Rothstein Structured Settlement Debacle Pays Dividends

However the primary beneficiary of the response happens to be the commentators on The Legal Broadcast Network as opposed to the larger membership of the structured settlement profession.

As our readers and viewers know, early last week a story started to percolate in the media that a major Florida law firm was about to be dragged into a scandal by it's well known and flamboyant partner, Scott Rothstein. While the story was big headlines and was related to a classic ponzi scheme by a guy who was busy selling to trusted friends and associates, what caught my eye was the phrase that this scam was based on his ability to sell " structured settlements".

Now, to the untrained or uncaring eye who could possibly care less what he was selling, but the fact is any time the trade name of my industry's core product is involved, I felt it needed immediate investigation and reporting to correct any errors in how it was described. It didn't take much reading to realize that the fraud had absolutely nothing to do with structured settlements but was a classic scam where he tossed in the name because it is generally regarded as the most safe and secure investment possible for injury victims, knowing it would lure in those foolish enough to buy his scheme.

The reason i'm posting this commentary is to demonstrate to you the effectiveness in just a very short time of using The Legal Broadcast Network to respond almost immediately to the issue and dominate Google searches. This was essential in this case as the potential for the trade name to be smeared in the press and over the internet was considerable.

In a 24 hour period we had a video from myself, one from Matt Bracy and one with John Darer and I discussing the topic. This was supported with relevant and timely blog posts and then syndicated over our powerful RSS feed. The net effect as of this morning is when you type in " Scott Rothstein Structured Settlements" that you will find The Settlement Channel as either the number one or two response, with 4 other posts or videos on the result also from the network. We totally dominate the video search and as of this morning have had over 3800 views across our platform of a video related to correcting the perception on the Rothstein fraud.

In this short time frame we have successfully gained the first page of Google, traffic is consistently turning to our content and commentators and it was all done in a matter of hours by simply having people get on the phone and call us. What you will observe is that our network will continue to drive more content on this topic as we will be bringing in some of the key reporters, local lawyers and other settlement professionals associated with our network to comment. 

I'm not complaining and neither are my commentators, but you'd think our two industry associations would take a hint and start working with us instead of forming a committee everytime a new idea is proposed on how to quickly respond in a new media world.

Is NSSTA heading toward irrelevance or is it already there?

Over the last few weeks I've had the opportunity to talk with a lot of settlement professionals and discussed some of the bigger events of the last month, among them the retreat from the structured settlement market by Hartford Life and the smearing of the structured settlement brand name in the Scott Rothstein fraud. As this is "convention season" I've met people at the NSSTA regional and several other meetings that were hosted here in Scottsdale, as well as a lot of phone call and company people in to visit when the weather improves out here in the Valley of the Sun.

The one over riding theme is that our trade association, while well intentioned and staffed by decent people, is becoming increasingly irrelevant in the professional life and plans of most settlement professionals.

By a wide majority the following are the primary concerns of most settlement professionals I've spoken with:

1. As an industry our market is down anywhere from 30% to 40% year to date with some firms and individuals down over 50%. While there is some uptick at the end of the year, there is little doubt that most firms are going to end the year off 20% to 30% which when you consider how stagnant the market has been leading up to this, is a huge pay cut for the profession.

2. The loss of Hartford Life and the continued struggles of American General and other A rated firms to attract premium indicates further weakness in the market, making attracting new players even more difficult.

3. That NSSTA is "doing nothing" to address the business decline or promoting the industry in a fashion where other firms look to enter the market and invest in new products. Further the perception from many is that due to it's organizational structure and historic mission, it is ill suited to address protecting the brand or attracting new players.

Of the three topics, the third is the most troubling as it indicates to me that most members pay their dues out of necessity, not out of any passion for the mission, and that as events unfold in our profession that the organization is not properly designed to react quickly or proactively.

The best example was last week as the Scott Rothstein saga unfolded it became readily apparent that this was going to be a real issue in protecting the Structured Settlement brand name that is so important to our profession. News reports then, and now, blasted all over the internet and into search engines that this con artist had been running a "structured settlement" scheme. Now, as we all know, and as Peter Arnold went to great pains to point out to many news organizations, this was NOT a structured settlement scheme but a total fraud. However, the harm was done and this story is now circulating all over the internet and dominating search results, with the net impact long term being that the brand name has been associated with a major financial fraud.

While our PR guru was doing his job and we had a position paper on the NSSTA web page, the new media tools that have been offered to NSSTA over and over again were largely ignored as it was impossible to find " a voice" that was able to speak for the organization. This is largely a function of the fact that many of our officers have day jobs working for life markets, have compliance issues to worry about and can't afford to be active spokesman for the profession. By the time NSSTA forms a committee and checks to make sure no one is going to be offended by something, the opportunity is lost and we once again surrender the internet and search results to those who do not have our professions best interests as their primary motivation.

Additionally the continued frustration about trying to attract new markets and players to our profession only drives home NSSTA's organizational inability to get this done. Now I have covered this before but NSSTA really CAN'T do this as their are anti-trust issues and competitive market players that don't make recruiting new markets very plausible. I get it, it's not NSSTA's job and I've opined on that topic on many occasions. However, the fact that NSSTA can't address the big issues concerning most brokers just points out how irrelevant it is in the professional lives of most.

The question now becomes, what if any organization will rise up to address these concerns effectively or are we as a profession content to run out the clock as the foundations of our business continue to crumble?

I already know the approach I'll be taking, but i'm curious as to the thoughts and ideas of others. Drop me a note or comment on the post and lets discuss whether NSSTA will continue to play the central role in our profession or if we are now evolving to a time when other entities might start taking it's place as the world and profession evolve.

Using video to market to lawyers, three easy steps

I have recently shot a three part series on using video in your legal marketing program that I'll be introducing each day this week. As you may have noticed, The Legal Broadcast Network is developing a wide range of instructional videos for lawyers, marketing professionals and others interested in developing video programs for use in an integrated marketing plan. This isn't an accident but the start of phase three of the growth and development of The Legal Broadcast Network as we continue to demonstrate our ability to develop excellent video content, place that content over a wide syndicate of affiliated and relevant sites and now offering our amazing search engine placement to a select group of commentators.

There is no question but that video search and search results is the biggest area of growth for lawyers and their marketing over the next three years. However, there is still a great deal of confusion as the best way to develop video, distribute it and integrate it into a cohesive marketing plan.

Toward that end I've developed what I call the three easy steps, each centered around a fundamental marketing principal, easy to execute and workable in budgets as small as $500 per month. If you look at the type of results we are talking about and the potential growth of this area of search, being late to this party is going to cost you a lot of potential clients and allow your competitors to run past you.

Watch the "Three easy steps to excellence in Legal marketing using Video" series and learn how you can build your own video search powerhouse and promote your firm and expertise.

Attached is Part one, The importance of quality video.

Structured settlement trade name dragged into the mud of Rothstein case

On today's Speaking of Settlements I am joined by John Darer as we discuss the Scott Rothstein case in South Florida where it appears Rothstein was at the center of a major financial fraud involving the "cash now" group that preys on desperate plaintiffs who need money.

While that case and story are deserving of several broadcasts, today's centers on the careless use of the term Structured Settlements in the complaint that was filed to dissolve the firm. The complaint or petition to the court described the lending pool as a collection of structured settlements, when the proper definition clearly would have been law suit loans or cash now programs.

We will be doing several follow up stories on this, but for now it is important for every settlement professional to be aware that thanks to the wide spread reporting of this story that our trade term of Structured Settlements is being linked with one of the biggest frauds ever perpetrated by a lawyer and we need to be proactive in protecting our profession.

Scott Rothstein fraud has NOTHING to do with structured settlements

Despite what the crack reporting staff at AmLaw Daily has been reporting all day, and unfortunately has been circulating through out the internet via links and cross postings, the Scott Rothstein fraud has absolutely nothing to do with Structured Settlements as erroneously reported by AmLaw Daily.

Even a modicum of reporting and analysis, never mind a call to a structured settlement firm or the NSSTA, would have revealed that this has NOTHING to do with the  corrupt sale and " purchase of structured settlements, whereby an individual sells a stake in a large legal settlement for cash." Nothing could be further from the truth and this kind of lazy reporting and analysis will now take weeks of corrective posting, writing and commentary to counter the misperception created by these kinds of posts. Scott Rothstein

Trust me, we will be doing a long series of podcasts on this starting tomorrow discussing the structured settlement industry response, the response of the factoring business that is also being unfairly and inaccurately tainted, and a review of the despicable " cash for plaintiffs" business that soaks the most vulnerable, uniformed and helpless victims, all with out ANY state or federal regulation oroversite.

No, for those of you who care to know, this story is about the "cash now" industry that has sprung up in the trial lawyer circles where in hedge funds and investment pools, exactly like the one Rothstein was apparently running gather up assets and then go and cut private deals with plaintiffs in law suits to give them up front money right now and in return the "lender/loan shark" goes and collects on the case when it settles.

This is a cess pool of conflict of interests, clients being sold out by their attorneys, rebates and referral fees to the lawyers who send them clients and a totally unregulated shadow business run by the likes of a Rothstein and the attorneys who work with them. Even if he didn't take a dime of client money and this all works out in the end as just one big "misunderstanding", this will bring welcome light to the repulsive act of exploiting desperate plaintiffs in return for huge yields to investors and lots of money to the lawyers charged with protecting their welfare.

Hopefully AmLaw Daily will retract this error at some point and put some real work into exactly what has been going on with these lending pools and litigation cash pushers. Every legal convention and meeting of lawyers has these sales teams circling around them now and perhaps AmLaw Daily should investigate why no one has until now looked into these abusive and questionable dealings before.

Keep watching The Settlement Channel and The Legal Broadcast Network, we will be bringing you the real story from the lawyers who are in the case and can provide insight and information into yet another unfortunate black eye for the legal profession.

Attorney John O'Quinn dies in car accident

Thursday, October 29, 2009 at 12:16PM

Prominent Houston attorney John O'Quinn was one of two men who died this morning when their speeding SUV slammed into a tree on Allen Parkway after the driver apparently lost control, police said.

"I'm stunned. The community lost one of its biggest assets," said Rick Laminack, who worked with O'Quinn from 1987 until 2006. "He was a great lawyer who shared a lot of his wealth with people who needed help."

O'Quinn, who made his fortune largely in personal injury cases, most notably in successful breast implant cases in the early 1990s, was a local philantrhopist. He gave money to the Harris County Children's Assessment Center, the Houston Council on Alcohol and Drugs and various Texas Medical Center institutions including St. Luke's Hospital, which has a tower bearing his name..

The football field at the University of Houston's Robertson Stadium also is named for O'Quinn, a big UH supporter.

"Big man, big loss," Laminack said.

He also was a prolific giver to Democratic Party candidates. In the 2006 governor's race, he was the single biggest donor to Democratic nominee Chris Bell's unsuccessful campaign to unseat Republican Gov. Rick Perry. O'Quinn gave Bell $2.5 million. (Dale Lezon, Houston Chronicle)

Legal career

Making his name in handling plaintiff's, litigation among O'Quinn's biggest wins were:

• $1 billion verdict in 2006 against Wyeth Laboratory for its diet drug, fen-phen
• $17.3 billion tobacco settlement for the state of Texas
• $100 million for silicone breast implants made by Dow Corning

In total, O'Quinn is estimated to have won $1.5 billion for the firm of O'Quinn & Laminack,  of Houston. According to a 2006 article in Forbes, O'Quinn's own firm had pending cases against stock brokers  and hedge funds for shorting the shares of weak companies, and against Ford for rollover accidents caused by the Ford Explorer   In the past decade, O'Quinn won, through settlement or verdicts, more than $20 billion for his clients. 

Hartford Life exits the structured settlement market

Effective November 6th, 2009, Hartford Life, part of Hartford Financial, will cease writing structured settlement annuities and shut down what was once one of the leading structured settlement divisions in the market.

This comes as no great shock as the company has been staggered by a series of market related developments that made it almost impossible for structured settlement brokers to utilize their product.

The first major change was the turmoil of last year in which Hartford Life was one of the major red flag companies caught up in the variable annuity market in which their widely sold and highly popular line of annuities were pummeled by market value guarantee riders that rating agencies required them to reserve heavily for at the very time when capital was the most difficult to raise. The company weathered the storm, partnered with Allianz financially to some degree and rode things out, but the resultant drop in their AM Best Rating to A crippled them in the structured settlement arena. A similar fate befell American General Life and in a matter of weeks two of the industries leaders were essentially sidelined and deemed unfit to write a wide range of settlement annuities.

It is a sad day for the profession as another market leaves an already reduced group of life markets and another group of quality professionals are put out of jobs in a touch economy. Watch my interview with John Darer

CA Senate Bill 510 discussed by Pat Farber of Ringler Associates

On this weeks Speaking of Settlements, host Mark Wahlstrom is joined by long time structured settlement broker Pat Farber of Ringler Associates.

The topic for this weeks discussion is the passage of California Senate Bill 510, a bill that was originally going to be vetoed by the Governor, but with the cooperation and assistance of both the structured settlement and factoring industry passed with enhance consumer protections for those looking to sell all or part of their structured settlement annuity.

The history of relations between the factoring and structured settlement industry have been strained at best, so this bill and the cooperative approach taken to add a level of additional oversight and analysis of structured annuity factoring transactions is a welcome change. The net result, as you will learn from watching this video interview, is model state regulation that gives greater protection to consumers while not restricting their right to factor or sell their annuity.