JEFFERSON CITY, Mo. — The Missouri Supreme Court recently scrutinized the practices of two attorneys who partnered with an Arizona-based attorney financing firm, challenging their methods in offering bankruptcy services through unusual fee arrangements. The cases, held on Feb. 11, spotlight broader concerns about transparency and potential exploitation in legal billing practices.
The first case reviewed Jennifer Benedict Raines, an Independence-based solo practitioner specializing in bankruptcy, family law, and personal injury. Represented by Anthony Rupp of Foulston Siefkin, Raines faced questions over her collaboration with Fresh Start Funding, which provides financial services to law firms for offering payment plans to cash-strapped clients.
Raines’ approach, allowing clients to choose between an upfront fixed payment or a deferred higher fee after proceedings start—a method known as bifurcation—came under fire from a bankruptcy court. Although bifurcation is not prohibited, the court raised issues about the way Raines executed this strategy, particularly focusing on her adherence to the court’s “rights and responsibilities agreement” in five cases.
Chief disciplinary counsel Laura Elsberry expressed concern that Raines might have breached professional conduct rules by failing to ensure that her methods were fully compliant with bankruptcy regulations. Addressing these allegations, Raines admitted to charging excessive fees and making inadequate disclosures, eventually agreeing to a settlement after two years of litigation and providing full restitution to the affected clients.
Justice Brent Powell raised questions about whether Raines’ conduct stemmed from negligence or a deliberate act, pointing to potential discrepancies in the documents she presented to her clients and the court. The state disciplinary panel had initially recommended just a reprimand for Raines, but the court decided to call for further arguments to fully address the professional misconduct allegations.
The second case involved Vernon County attorney Jovanna Rene’e Bearden who similarly partnered with Fresh Start Funding in 2019 and offered bifurcated payment options. Bearden’s practice areas included consumer debt defense and bankruptcy law. Like Raines, she assured the bankruptcy court in 10 cases that she had complied with necessary agreements; however, her billing practices too were questioned, leading to a settlement after court challenges.
Expressing concern, Elsberry noted that all 10 of Bearden’s clients were impacted by these violations. She highlighted that these clients were vulnerable, heavily relying on their attorney during financially stressful times. Yet, mitigating factors such as Bearden’s cooperation, self-reporting, and demonstrated remorse were considered significant. During her defense, Mimi Doherty of Kansas City-based Rynearson, Suess, Schnurbusch & Champion, argued that Bearden had not acted with deceit but was possibly misled about the appropriateness of the bifurcation practice by Fresh Start Funding.
These disciplinary hearings, while focusing on individual attorneys, echo a broader imperative for clarity and fairness in legal financing, especially in practices directly affecting financially vulnerable clients. They underline the importance of maintaining integrity within the legal profession and ensuring compliance with both legal and ethical standards.
The cases, listed as In Re: Jennifer Benedict Raines, case No. SC100641, and In Re: Jovanna Rene’e Bearden, case No. SC100642, serve as a reminder of the ongoing oversight required to protect clients’ rights in the nuanced intersections of legal and financial obligations.
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