South Carolina Lawyer Disbarred after Stealing $31 Million from Veterans
In an
Opinion dated June 20, 2024, the Supreme Court of South Carolina disbarred a lawyer who was found guilty of swindling veterans out of nearly $31 million by running an illegal scheme to pay veterans lump sums in return for assignment of their pensions and disability benefits. She charged the veterans high fees for this service and even
sued some of them when they realized they were being bilked and refused or were unable to pay.
The Supreme Court disbarred lawyer Candy Kern after finding that she pled guilty to violating 18 U.S.C. § 371, conspiracy with objects of mail and wire fraud. She admitted that she used her law firm to represent buyers in a structured cash flow business that offered veterans cash payouts in return for assignment of their benefits. She confirmed that she withheld from both buyers and sellers the fact that Federal law prohibits the assignment of these benefits as well as misinformed the sellers about the lump sums they would receive. She was sentenced to five years’ probation with five hundred days of home confinement and was ordered to forfeit $1,446,336 along with costs and interest.
Kern was also ordered to pay restitution totaling $2,943,438 plus administrative penalties totaling $560,000 by the Securities Division of the Arizona Corporation Commission. She was fined $725,000 and was enjoined from brokering, offering, or arranging purported sales of pensions and disability benefits, any related collection activity, and engagement in any financial services business in the state of South Carolina by a Federal Court.
AI in Law Is Happening: Thoughts on Its Effects
This newsletter has frequently featured stories of lawyers who came to grief from filing AI-generated documents without reviewing their accuracy, often containing “hallucinations” – completely fictitious citations.
However, recent articles have made it clear that AI resources are playing a greater role in the practice of law and not an entirely negative one. Several commentators have noted that AI-assisted research offers the possibility of more results obtained in far less research time to the economic and legal benefit of clients. Some suggest that the lawyer has a professional duty to clients to use such resources to achieve maximum effectiveness and efficiency.
One Federal judge on the Eleventh Circuit Court of Appeals recently took the time to write a
concurring opinion to
document his use of two Large Language Models (LLM) to research a definition for the purposes of a decision. In a case involving a contractor who was sued over installation of a ground-level trampoline, Judge Kevin Newsom
wrote of his own use of ChatGPT and Google’s Bard (now Gemini) to explore the everyday meaning of “landscaping” to determine whether the term applied to the project in question. He did so with skepticism only after conventional research proved time-consuming and unhelpful. Through this effort, he concluded that the results, rather than being “nutty” as he expected, were quite concise and useful. In a thirty-two-page opinion, he laid out long lists of pros, cons, and cautions but concluded that “LLMs have promise. At the very least, it no longer strikes me as ridiculous to think that an LLM like ChatGPT might have something useful to say about the common, everyday meaning of the words and phrases used in legal texts.”
Those lawyers and firms who are interested in exploring AI-driven research options may face a bewildering variety of choices. Nicole Black, an attorney, author, journalist, expert on emerging technologies, and senior director of subject matter expertise and external education at MyCase,
writes in the
ABA Journal to offer a rundown of technologies available to lawyers and firms along with cautions and considerations about their choice and use. She concludes, “If you’re part of a litigation team, the availability of AI tools that reduce the tedium of pretrial discovery tasks is undoubtedly a welcome reprieve from the repetitive, time-consuming discovery process . . . These tools won’t replace you; instead, they will remove drudgery from your plate, enabling you to be the best lawyer possible for your clients.”
Since the work best performed by AI applications – legal research and routine drafting – is often performed by paralegals, many have questioned whether the rise of AI resources will adversely affect the job market for paralegals. The Bureau of Labor Statistics
projects a 4% increase in the number of paralegal jobs over the next decade, but a
Goldman-Sachs report estimates that 44% of legal (lawyers and paralegals) jobs could be lost to AI-driven automation in the coming years.
Eda Rosa, host of the podcast
Let’s Talk Paralegal and CEO and founder of Eda Rosa, a law firm consultancy, is more optimistic. She comments, “AI may take a bulk of the administrative and even repetitive tasks that are included within the paralegal role. However, it will not be able to analyze and strategize a case to the capacity of a lawyer or a paralegal. Like any other technology, it has its limitations.” Paralegals would be wise to view AI technology not as a threat but as a tool to expand their effectiveness. A study at George Washington University
found that paralegals who employed AI software in drafting a contract were able to finish that task fifteen percent faster than those who didn’t. Since it is a challenge for busy lawyers to invest time in learning and mastering AI technology, paralegals can enhance their value to their employers by developing their expertise in that area.
They may need to, as Ann Pearson, the founder of Paralegal Boot Camp, a training program for paralegals in Satellite Beach, Florida,
says, “I advise paralegals that they shouldn’t worry as much about AI taking their jobs as they should be worried about the paralegal who knows how to use AI taking their jobs in the future.”
With the apparently inevitable growth of the use of AI technology not just in the legal profession but in many kinds of business, the role of insurance in managing the risks inherent in the technology becomes an important consideration.
Kevin P. Kalinich is the founder of Aon’s Cyber Solutions Group and leader of Aon’s global practice to identify exposures and develop insurance solutions related to intangible assets such as intellectual property, technology errors and omissions, professional and media liability, and coordination of insurance related to cyber perils and digital assets. He has written an
extensive article for the
ABA Journal detailing the risks, insurance gaps, and best practices relating to liability insurance for AI-related issues, not only for lawyers’ and law firms’ own professional liability coverage but also for business clients using AI technology whom lawyers may need to advise.
He notes that most organizations underinsure for intangible assets compared to what they cover for tangible items. He lists seven areas that liability policies should address, including technology errors and omissions, cyber liability, intellectual property, crime insurance, and others. He notes four areas of gaps where even well-written policies may not provide the coverage clients expect. Finally, he provides a list of best practices to follow and questions that law firms and business clients should ask to ensure that the coverage they obtain meets their needs and provides for contingencies that may arise.
In conclusion, he states, “As the AI landscape continues to evolve, a collaborative effort between stakeholders, led by legal counsel and compliance – and mandated by management – is crucial to ensure that the potential perils of AI are effectively managed and mitigated.”
Pittsburgh Zoning Board Allows Heinz Ketchup Bottle – with Puns
The Pittsburgh Zoning Board of Adjustment
handed a victory to the Senator John Heinz History Center by a
decision allowing the Center to continue to display a thirty-five-foot tall Heinz Ketchup bottle, holding that the display did not meet the definition of a “sign”. The bottle, which was formerly on display at Heinz Field before it was rebranded as Acrisure Stadium, is nearly twice the size allowed for a sign under the city ordinance.
The situation lent itself to humor, and the Board did not restrain itself. It noted, “The Applicant created its own fifty-seven varieties of a pickle when it installed the ketchup bottle without first determining whether the installation passed legal mustard under the Code’s requirements.” It added, “To be frank, the Board does not relish considering legal bottlenecks where the Applicant’s anticipation of approval necessitates playing catch-up. Any seasoned applicant should understand that post hoc applications for approvals are a big dill and could be a recipe for landing in hot sauce.”
The Board’s essential finding was that the definition of a sign does not include works of art or physical constructs that do not promote a product, service, or activity. Since the Center draws its name from the late Senator John Heinz, rather than the iconic food products produced by the Kraft Heinz Company, the Board found that the display was a historical artifact from Heinz Field and was not intended to promote either the museum or the food products.
The Center noted that the installation of the bottle met with widespread community support and approval and that no one appeared at the hearing in opposition to the display. No doubt the center’s response to the decision was, “Hot dog!”
