In 2018, Veritext swallowed-up 14 independent court reporting agencies across the country.
From transitioning new technology to exploring new markets, these are interesting times in the field of court reporting and stenography. Here at MGR, we are watching closely as the industry evolves. As an independent New York court reporting agency, we see first-hand the effects of that evolution.
The Diamond Buy-out
Most New York legal professionals are aware that New Jersey-based Veritext Legal Solutions recently acquired Diamond Reporting. Owned by Leonard Green & Partners, Veritext has been providing deposition and litigation support services since 1997. The acquisition of Diamond – one of the largest court reporting agencies in New York – has us all wondering what the ramifications will be.
A String of Acquisitions
Not to sound paranoid, but what is Veritext up to? In 2018, they swallowed-up 14 independent court reporting agencies across the country, as listed below.
Freedom Court Reporting
Henderson & Associates
Kramm Court Reporting
M&M Court Reporters
Personal Court Reporters
Victoria Legal & Corporate Services
Corbin Reporting & Video
Gore Brothers Reporting
Black Label Legal Services
David Feldman Worldwide Court Reporting
Diamond Reporting & Legal Video
YOM Full Service Court Reporting
Obviously, a continuation of buy-outs will have a powerful effect on local markets as well as the national landscape. There is a growing concern regarding the expansion of national court reporting firms. Many states have enacted anti-contracting legislation to prevent what some consider unfair practices.
Currently, 29 states have anti-contracting laws. Virginia has the strongest anti-contracting legislation to-date. Their law became effective in July 2018, despite opposition from a team of lobbyists known as the Court Reporting Alliance. Members of this alliance include Veritext, U.S. Legal Support, Esquire Deposition Solutions, and Magna Legal Services (four of the largest national court reporting firms).
Conflict of Interest?
With more than 50 offices around the country and hundreds of affiliate locations, Veritext offers “preferred provider” contracts. These contracts give discounted rates to high-volume users like insurance companies, conglomerates, government agencies, and educational institutions.
To support these contracts, Veritext employs local court reporters and small court reporting agencies. Some stenographers appreciate the extra freelance work and access to state-of-the-art technology. Many, however, reject work from Veritext because a number of states have laws forbidding a “contractual relationship” between a party litigant and a court reporting firm. The court reporter, as the official “guardian of the record,” should never be directly or indirectly associated with a litigant.
“Any arrangement that threatens the impartiality of court reporters or merely threatens the appearance of impartiality will lead to a breakdown of our justice system. What if the judge in a case of yours was being paid by your opponent in the litigation? Would their oath to be impartial be enough for you? If you lost, would you feel as though you got a fair shake? It is our faith in the impartiality of the judicial system that is the very basis of our Rule of Law and ordered government, and this foundation erodes when the antagonists in litigation–the parties–start directly paying the bills of the allegedly impartial.”
National Court Reporting Association
What it Means for Freelancers
Nationwide, about 75 percent of court stenographers are independent freelance professionals, while the remainder are official reporters employed by court systems. A freelance stenographer can either start his/her own agency or work as an independent contractor for an established firm.
By acquiring these established local firms, Veritext is positioning itself to control local and regional markets. Only time will tell how this will affect the pricing, integrity, and quality of service.
Let’s say you have a long-term relationship with an attorney for deposition services. If your client takes on a case for a national insurance company that has a contract with Veritext, all depositions will have to go through the Veritext-owned “Joe’s Court Reporting.” Depending on your relationship with the attorney, you could either 1) lose the work, or 2) sub-contract with “Joe’s Court Reporting” at a substantially-reduced rate.
If your state has an anti-contracting law and you find that a national court reporting firm is in violation, you can file a complaint with the Attorney General. Currently, New York has no law in place.
According to a report by Ducker Worldwide, the majority of court reporters are in four states, California, New York, Texas, and Illinois. Veritext has a strong presence in all of those states, with access to a large pool of experienced freelance court reporters all over the country. Many freelancers have been very vocal online about their dissatisfaction with the company and the negative effects Veritext is having on the court reporting industry as a whole.
While advertising its efforts to recruit new stenographers and help to expand educational opportunities, Veritext also promotes digital recording as a replacement for stenographers.
Touting their proprietary technology , Veritext has even suggested that legal professionals update their deposition language to include verbiage that allows for “alternative means of capture” in recording a deposition.
For the typical freelance court reporter, 75% of his/her work is depositions for litigation. The stenographic record and its associated transcript are used for insurance company cases such as those involving medical malpractice, personal injury, and property damage.
The law firms involved in this type of litigation tend to adhere to tried and true processes and the stenographer is a vital part of the process. Deposition records must be 100% accurate and can sometimes require translation. Due to the variables involved, many legal professionals are reluctant to fully embrace digital recording technology. Maybe this is why these litigation firms are being gently urged to update their deposition language. Just in case, wink, wink.
Court Proceedings and Digital Reporting
Deposition recording is one thing; court proceedings are another. Right now, many states don’t allow digital court reporting at all. In the states that do allow it, it is limited to certain types of cases (New York is one example). Official reporters are always in place for important cases, when an accurate record may be required for an appeal.
There are a few states that have made a complete transition from stenographic court reporters to digital recording. Alaska, for instance, which has always struggled with attracting and retaining qualified court reporters.
It’s also interesting to note that some court systems are “firing” their official court reporters and bringing them back as independent contractors on an as-needed basis. This trend makes sense for budget-strapped local courts looking for ways to cut costs.
It’s been well-publicized that the current crop of experienced court reporters and stenographers will eventually age-out of the profession and there is not enough new talent entering the field. The recent acquisitions and the push for digital recording are signs of a shifting paradigm. We cannot afford to remain silent.
As guardians of the record, court reporters and stenographers must remain vigilant and stand together against any and all corporate attempts to lower the integrity of the profession or move the industry in an unscrupulous direction.