Atlanta law firm is state bankruptcy behemoth

Clark has another reason to be happy: With a cadre of 50 attorneys, 185 paralegals and other support staff, Clark’s firm is the state’s largest filer of consumer bankruptcies, averaging roughly 5,000 a year.

The bad economy and Georgia’s double-digit unemployment rate are driving numbers up.

Through July of this year, the firm’s 12 metro Atlanta offices processed 3,597 filings in the U.S. Bankruptcy Court’s Northern District of Georgia. That’s more than 15 percent of all 22,902 personal bankruptcy cases filed in the Northern District’s Atlanta and Gainesville courts.

In an average week, the firm schedules roughly 900 appointments with existing and new clients. That number has steadily crept up as the economy has worsened and hit more middle-class people.

“We started seeing a change in June and July,” said Chris Kiefer, a partner with the firm. “We were seeing people who were laid off in December and in those six months they were either getting by on unemployment or drained their 401(k) accounts.”

In the post-dotcom recession of 2001, many high-salaried workers bided time in lower-skilled jobs such as retail until they found something in the salary range closer to what they had made.

“But even those jobs are gone,” Kiefer said.

A bad housing market, which has left many homeowners with mortgage notes that are more than the houses’ current sales value, also is driving more people in the door.

“More people are coming into my office and telling me, ‘let them have it,’ ” Kiefer said of some clients facing foreclosure. “They see that they can rent a bigger house for less than what they’re paying on their own mortgage.”

‘More resigned to it’

Clark & Washington’s size — in addition to its Atlanta offices, it operates another 21 in Florida and Tennessee — helps shore up its stature as the Wal-Mart of Georgia bankruptcy filings. So, too, does, changing consumer sentiments about taking that step, Clark said.

The American Bankruptcy Institute reported Friday that consumer bankruptcies this year passed the 1 million mark in September. The ABI predicts consumer filings in 2009 will exceed 1.4 million, up from about 1 million last year and 822,590 in 2007.

“I don’t keep a box of tissues on my desk anymore,” Clark said. “They’re more resigned to it and they’re more educated about it because so many more people have filed in the last 20 years.”

More donated work

Advertising doesn’t hurt, either.

Just outside the firm’s main offices off I-85 near the Chamblee-Tucker Road exit in DeKalb County, a giant electronic billboard in flashing red letters beckons: “DEBT RELIEF,” “It’s not too late” and “Bankruptcy is an option.”

The firm, founded in 1983, has been a staple in telephone book directories since rules against legal advertising were relaxed.

Clark bristles at the suggestion that the advertising amounts to ambulance-chasing for down-on-their-luck clients.

“If people are looking for help, you’ve got to let them know who you are,” he said. “And people are much more knowledgeable about Chapter 13s and Chapter 7s. Now, they come in and say ‘I need a Chapter 13.’ ”

Chapter 7, which comprise about 65 percent of personal bankruptcy filings, allows a consumer to discharge most debts and liquidate most assets. In Chapter 13s consumers reorganize debts.

He estimates about half the clients his staff will service this year will come from referrals by former clients, other lawyers and social service agencies. He also predicts an increase in pro bono cases, handled for clients who can’t afford attorneys fees.

“We are seeing more of a need for pro bono than we used to,” Clark said, explaining this year it is likely to be up to 4 percent of the firm’s caseload.

“There’s just a lot more people out of work and these jobs just don’t pay as much on a relative basis as they used to.”

Beyond statistics, Clark said each client has a story.

“The numbers are not what we’re about; it’s not reflective of what we do and why we do it,” he said. “The only part that we can help with is the financial. But sometimes, if you take a moment to listen, just listen, a lot of times, they have a story and a lot of times it’s important to them to explain how they got there.”

Beats divorce practice

Clark’s path to forming a firm that would become the state’s largest consumer bankruptcy practice was more happenstance than a set plan.

Initially, the University of Georgia graduate hoped to work for a big firm after graduating from law school in the late 1970s.

But those jobs weren’t in abundance and, after a few months of door-knocking, he figured it best to go solo. Clark rented an office in East Point for $75 a month and began representing clients in criminal and divorce cases.

Neither brought much satisfaction, he said.

“With criminal cases, I didn’t feel like I was doing much for society and divorce didn’t make me happy,” Clark said.

After a couple of years he itched to do something else. In 1978 Clark and his law partner at the time, Hoke Smith, attended a seminar on bankruptcy, which already seemed a crowded field.

Smith, now deceased, noted the 1,000 lawyers in attendance represented a lot of entrenched competition, Clark recounted.

“To me, it looked like a thousand were doing okay and there’s always room for one more,” he said. “I thought it sure beats my divorce and criminal practice.”