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Thorne v LPS, Pommis, Et Al, 3rd Amended Complant.bank.ND Miss.feb.5

Thorne v LPS, Pommis, Et Al, 3rd Amended Complant.bank.ND Miss.feb.5

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Published by AC Field
Updated filing in suit challenging the legality of the business model of LPS and Prommis Solutions
Updated filing in suit challenging the legality of the business model of LPS and Prommis Solutions

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Published by: AC Field on Feb 07, 2011
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11/14/2011

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its SEC filing, admitting:

“Regulation of the legal profession may constrain the operations
of our business, and could impair our ability to provide services to
our customers and adversely affect our revenue and results of
operations

44

Case 10-01172-DWH Doc 75 Filed 02/05/11 Entered 02/05/11 16:12:41 Desc Main
Document Page 44 of 104

Each state has adopted laws, regulations and codes of ethics that
grant attorneys licensed by the state the exclusive right to practice
law. The practice of law other than by a licensed attorney is
referred to as the unauthorized practice of law. What constitutes or
defines the boundaries of the "practice of law," however, is not
necessarily clearly established, varies from state to state and
depends on authorities such as state law, bar associations, ethics
committees and constitutional law formulated by the U.S. Supreme
Court. Many states define the practice of law to include the giving
of advice and opinions regarding another person's legal rights, the
preparation of legal documents or the preparation of court
documents for another person. In addition, all states and the
American Bar Association prohibit attorneys from sharing fees for
legal services with non-attorneys.

Pursuant to services agreements between us and our law firm
customers, we provide mortgage default processing services,
including foreclosure- and bankruptcy-related processing services,
to law firms, and in trustee states we provide foreclosure processing
services directly to mortgage lenders and loan servicers through our
trustee subsidiary, Cal-Western. Current laws, regulations and
codes of ethics related to the practice of law pose the following
principal risks:

• state or local bar associations, state or local prosecutors or
other persons may challenge the services provided by us as
constituting the unauthorized practice of law. Any allegation
regarding the unauthorized practice of law could have a
disruptive effect upon the operations of our business,
including the diversion of significant time and attention of
our senior management. We may also incur significant
expenses in connection with a claim regarding the
unauthorized practice of law, including substantial fees for
attorneys and other professional advisors. If this type of
claim were successful, we may need to materially modify our
operations in a manner that could adversely affect our
revenue and profitability and we could be subject to a range
of penalties that could damage our reputation in the markets
we serve. In addition, any similar challenge to the operations

45

Case 10-01172-DWH Doc 75 Filed 02/05/11 Entered 02/05/11 16:12:41 Desc Main
Document Page 45 of 104

of our law firm customers could adversely impact their
mortgage default business, which would in turn adversely
affect our revenue and results of operations;

• the services agreements to which we are a party with our law
firm customers could be deemed to be unenforceable if a
court were to determine that our agreements constituted an
impermissible fee sharing arrangement between the law firm
and us; and

• applicable laws, regulations and codes of ethics, including
their interpretation and enforcement by courts and state bar
associations, could change in a manner that restricts our
operations.”

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