I'd like to get off subject for a bit. This is a column about identity theft but I would like to think that it is also a column about common sense. When we are confronted with a new situation or a new set of problems what is the most productive way to solve it? Well, the most common way to look at new problems is through the lens of history. A response like "history tells us" or "conventional wisdom is" and so forth is pretty common. That means comparing new situations to previous ones. Quite impossible to do. A healthier way to tackle a new problem is to consider the results you want and think "What if history doesn't repeat itself?"
In the turmoil of our current economic crisis we seem to be applying old remedies to new problems. Look at the lending institutions as an example. Not every bank is going to fail. The institutions that will most likely fail are the ones that did not concern themselves with the probabilities that the lending economy might not be able to sustain itself without some dramatic changes. There are plenty of organizations both small and global that saw this likelihood however. JP Morgan, for example divested from loans to the government bond market. As the mortgage crisis grew they found themselves, as predicted, doing better rather than worse. What does this tell us about conventional thinking? In the simplest terms it means that we need to look at the worst case scenario and weigh that against the likelihood of it occurring. One will mitigate the other every time. The worst case is always possible and the likelihood will raise or lower the possibility, but the possibility always exists. This means one thing must be done. Get cheap insurance. Always hedge your liability with a tool. History will not repeat itself. If you don't count on the past to predict the future but instead guard against the worst case you cannot fail.
As most of you know I represent Pre-Paid Legal Service plans for small businesses and families. I speak with HR managers who due to the economy are increasingly concerned that their constituents can't afford or most likely won't want to participate in a Pre-Paid Legal plan for their families due to the cost. I understand the concerns they have. The real cost is obvious. So is the investment value, and it is that value I feel we must stress.
What do you think would have happened if the majority of the homeowners with an ARM who are faced with foreclosure had used an attorney to look over their loan documents before they signed? Do you think that at least some of them might have listened to counsel and not signed on to something they could not afford? That is just one example that in times such as these using an attorney is even more critical than ever. This amounts to cheap insurance. History will not repeat itself. Every situation we encounter is new and requires a new solution. Contrary to conventional belief there is no longer a correlation between a persons' assets and using lawyers. The risk of making mistakes is the same, and the downside is relative. Scale is merely that, a scale. There is no difference between JP Morgan and operating a family of four living on a tight budget except scale. When Morgan saw the coming crisis they sought the counsel of experts and made a prudent decision. That one decision effectively separated them from Bear Stearns, which Morgan eventually bought at a few cents on the dollar. When a family seeks counsel before making a major decision they are doing exactly the same thing. We ought to be preparing for the future not relying on the past. Now more than ever a good understanding of the law and individual rights and options is crucial. Over the last few years my family has saved several thousands simply by utilizing the counsel and help of our attorneys not to chase law suits but to seek counsel and be aware of our rights and exercise them when it became necessary.
This also relates to identity theft. In case you haven't noticed you have no privacy. Everything there is to know about a person is readily available for a price. From the day we were born to the present most every thing we have done is in a database somewhere. those databases have proved over the years to be sieves, leaking their contents to anyone who wants them. Do you know anyone foolish enough to try to plug up a sieve? We cannot apply old solutions to new issues.