How To Stop Corporate Fraud in Court Reporting by Joe Gratton

The following was written by Joe Gratton for the Stenonymous blog, mostly unedited:

There’s currently ongoing and blatant corporate fraud in the court reporting industry. Yet many industry professionals remain unaware and unconcerned about the danger posed by companies deliberately exaggerating the court reporter shortage to espouse the benefits of digital court reporting as if the two services are somehow equivalent.

The companies that have tacitly colluded under the umbrella of the non-profit Speech-to-Text Institute (STTI) are engaging in deceptive practices by spreading misinformation about the cost, quality, and validity of digital court reporting services.

With little to no oversight by courts or government agencies, these companies are getting away with it. However, there are steps stenographers, lawyers, and other affected parties can undertake to ensure justice is served and the court reporting profession is protected from further subversion.

Background to the Corporate Fraud Currently Occurring in the Court Reporting Profession

It’s worthwhile spending a few moments elucidating the circumstances that have allowed corporate fraud to occur unchecked thus far.

It’s essential to start by explaining that, yes, there are court reporter shortages within the United States – primarily due to retirement. However, these shortages are minimal and localized. Moreover, these minor shortages are increasingly offset by excellent recruitment initiatives led by National Court Reporters A to Z, Project Steno, Open Steno, and other worthy organizations.

The companies launching spurious claims that the shortage can’t possibly be filled with more stenographers (and, therefore, should be replaced with the vastly inferior practice of digital court reporting) base their assumptions on the deeply-flawed Ducker Report of 2013-14, which stated that 70% of court reporters would retire over the next 20 years (2013-2033).

Not only is the report now rapidly approaching ten years since publication (significantly undermining its relevance), but those predictions were based on, wait for it, interviews with 120 industry professionals from in and around the industry. Even with some “proprietary data analysis” thrown in from Ducker, how anyone can profess that there’s currently a potentially industry-ending court reporter shortage based on such flimsy evidence is anyone’s guess.

Worse, when reviewing objective industry data, there are around 27,000 court reporters still active within the profession. How many were there in 2013, the year of the Ducker Report? 21,000. The predicted retirement cliff must be getting taller every day since stenographer numbers are still trending upward ten years later.

And yet, companies such as Veritext, US Legal, and others have happily used these terribly inaccurate extrapolations to make even worse predictions about stenography’s future.

For instance, they have gone on the record to claim the industry requires 82,000 stenography training program enrollments annually (based on a 10% graduation rate) to plug the self-proclaimed shortfall. Yet this figure would quadruple the size of the entire court reporter industry today and increase the pool of available court reporters to six times that of 2014, the year the so-called “shortfall crisis” started.

With wildly incorrect and baseless predictions like these, it’s easy to see why those with only the most tenuous of links to the legal profession are raising eyebrows at how some of these court reporting companies are getting away with blatantly misleading the public for so long.

Why Corporate Fraud in Court Reporting Continues Today

There’s a pretty obvious reason these companies keep promoting and disseminating their misleading and inaccurate claims: there’s a lot of money to be made.

Stenography is skilled labor and is remunerated as such (some might say underpaid). For someone to type at a rate of 225+ words per minute with an accuracy rate of 99.8% takes years of training and dedication. Stenographic writing is closer to playing the piano than typing on a keyboard. It takes at least two years in a stenography training program, state licensure, and professional certification.

Digital court reporter training lasts six months, with most of that time spent learning how to take accurate notes and operate sound and video equipment. That’s it.

In short, these companies want to replace those hard-earned skills with technology so they can charge less for their services and make huge profit margins while doing so. With audio and video equipment in place, digital court reporters merely make sure the equipment is working and note key pieces of testimony.

The companies in question want to mislead the world into thinking that digital court reporting does the same work as traditional court reporting. But once again, the objective facts of the profession paint a different picture.

Automated Speech Recognition (ASR) software delivers a dreadful 25%-80% accuracy rate, and non-stenographers transcribe English dialects such as African American Vernacular English (AAVE) at a rate half as accurate as court reporters. These are merely two of dozens of damning examples showing that digital court reporting cannot replace standard court reporting.

And yet the two are conflated as one and the same on a daily basis by those that stand to profit most from doing so.

How they have been allowed to for so long somewhat beggars belief.

It seems that, thus far, the courts and government agencies tasked with protecting the public from fraudsters and con artists seem unwilling or unable to act.

So can change be instigated? How can those being hurt by these misleading and fraudulent claims take action?

How to Fight Corporate Fraud in Court Reporting

The simple answer is to fight back. The very tactics companies use to mislead the public can be used against them. They are so brazen and demonstrably false that they are easy to report to the appropriate authorities.

Report Antitrust, False Advertising, or Deceptive Business Practices to the State Attorney General

Where applicable, it makes sense to refer complaints about deceptive practices and patently false advertising to the relevant state attorney general. Not only will they have a more precise understanding of the misrepresentation at hand (being lawyers themselves) than government agencies such as the Federal Trade Commission (FTC), but state attorney generals have the legal power to act against such companies.

Their purview, among other responsibilities, includes enforcing their given state’s consumer protection laws. Given the flagrant breaches occurring, including false advertising, tacit collusion, and deceptive marketing practices, it would be entirely reasonable to expect that they can take action against these corporate fraudsters if made aware.

Report Antitrust Violations and False Advertising to Federal Trade Commission

Given the attempts by the STTI to falsely create a market problem and sell the solution (digital court reporting), it’s worth reporting any antitrust or false advertising violations to the FTC.

Not only have they already pledged to protect gig workers from unfair, deceptive, and anticompetitive practices, but they have specifically stated they will also investigate exclusionary or predatory conduct that could cause harm to customers or reduced compensation, or poorer working conditions for gig workers.

Given the practices of these companies harms both customers (by giving the false illusion of equivalency between standard and digital court reporting and deceptively exaggerating the court report shortage) and the 70% of court reporters that work as independent contractors, the FTC should at the very least investigate these practices.

Sending Information to Local and Corporate News Outlets

Sometimes the only way to draw attention to a problem is to throw a spotlight on it. By writing emails to editors of local newspapers or contacting local TV stations and radio stations, it’s possible to make clients aware of the deceptive practices and have them contact the relevant authorities and regulators to demand action.

At the very least, it may be that these fraudulent operators have to answer very direct questions regarding their business practices. With the glare of a significant readership or viewership, they may squirm under the pressure and be forced into providing evidence and documentation that doesn’t actually support their statements.

Contact Local Elected Officials

Another option for stopping corporate fraud on this scale is contacting elected local officials at either state legislature or county levels.

Not only do they have the power to pass laws that protect consumers from unfair or deceptive trade practices, but they also have a direct line to the government agencies tasked with enforcing those laws, such as the FTC and state attorney general.

Once again, those with the power to act can’t do so if they are ignorant of the problem in the first place. Only by publicizing these fraudulent practices can lawmakers and regulators be forced to act.

Court Reporting is Under Attack from Those Standing to Benefit from Its Demise: It’s Time to Act

There’s no question that the court reporter shortage has been leapt upon by companies such as Veritext, US Legal, Planet Depos, and other members of the STTI as an opportunity to cash in on the digital court reporting market.

By replacing incredibly skilled labor with unskilled and automated digital transcription, they persist in attempting to convince law firms, courts, and even government agencies that digital court reporting is a viable replacement.

The statistics speak for themselves on that front.

However, it’s the hyperbolic claims being made and the outright lies being spread about the court reporting industry in the name of corporate greed that are truly egregious. It’s naked corporate fraud that is only being further enabled by the willful ignorance of many lawmakers and regulators tasked with protecting consumers from unfair and deceptive trade practices.

Thus, the onus is now on those willing to stand up for justice to take action using some, if not all, of the avenues mentioned above.

Hopefully, with coordinated and concerted action, there can be an end to the rampant corporate fraud taking place within the court reporting and stenography profession.

Author: Joe Gratton
Bio: Joe Gratton is a professional writer who has worked with a number of legal firms in the United States, covering topics including court reporting, legal videography, electronic discovery (e-Discovery), and trial presentation services.

NCRA Net Assets Dwarf Competitors, Digital Court Reporting Bad for Business

I’ve raised questions about the Speech-to-Text Institute’s data and some companies’ blind reliance on that data. Today I’ve got to raise the fact that, if we compare net assets on 2020 tax returns and information found on ProPublica for NCRA, STTI, AAERT, and NVRA, it seems like NCRA is the clear leader at over $6 million, and its nearest “competitor,” AAERT, had about $217k. STTI came in dead last, more than $100,000 in the red. This doesn’t even account for the myriad court reporting associations and nonprofits across the country and the money that goes into them.

It still remains a serious question why the public and court administrators would rely on the word of an organization that doesn’t seem to have the monetary support needed to address the court reporter shortage in California, let alone America. Think about it. If you want to raise a workforce of possibly 20,000 professionals, who do you turn to, the organization with $6 million or the organization that’s in the red and being kept afloat by some undiscovered means?

There also remains a question about the severity of the shortage. As told by the document linked above, it states that over 50% of California courts have reported they are unable to routinely cover non-mandated case types. California’s shortage was forecasted to be the worst in the country, about 20x worse than many other states. If around 50% of California courts are having trouble, it would follow that somewhere around 2.5% would be the average across the country. Devising relocation incentives could pull more people to California and solve the problem.

This has implications for the big business bosses and the small businesses they bully. They’re going to have to spend a whole lot of money to match stenographic initiatives. Eventually shareholders are going to ask why these businesses are swimming against the direction of the market. Why would you spend time and attention trying to cultivate a professional community in digital court reporting when one clearly exists in the stenographic community? Why would you aggravate the talent/labor until it starts discussing things like misclassification, pay, and working conditions?

Stenonymous reporting live from the dead internet.

NCRA 2020: $6,293,223 net assets.

AAERT 2020: $217,609 net assets.

NVRA 2020: $122,098 net assets.

STTI 2020: -$119,169 net assets.

STTI-2020 Download

Bulletin: Court Reporter Shortage or Fraud?

Law360: A Dire Court Reporter Shortage? Depends on Who You Ask.

Certain court reporting companies are exaggerating and exacerbating the stenographer shortage for the purpose of selling digital court reporting to lawyers/courts/consumers.

Veritext, US Legal Support, and Planet Depos have all publicly made statements about the unavailability or shortage of stenographers while putting most of their effort into expanding digital court reporting. Succinctly, utilizing their market share to obfuscate the availability of stenographers and artificially increase digital court reporter demand. It is unknown whether this is concerted or a form of tacit parallelism.

The resulting atmosphere is also misleading to those seeking a career in court reporting.

The nonprofit Protect Your Record Project was formed to educate consumers on the bait and switch tactics occurring in the court reporting industry.

In 2021, US Legal Rep Peter Giammanco wrote, “Does it really matter if done legally and ethically and both methods end with the same final transcript?” A consumer awareness campaign was subsequently launched. There are questions about whether digital recording is reliably the same as stenography. In one New York case, the court remarked that past holdings that recording was equivalent to stenography were belied by the record in that appeal.

Companies continue to profess shortage while placing the bulk of their effort into expanding the digital reporting market, effectively limiting consumer choice and ignoring consumer preference for stenography. The 2013-2014 Court Reporting Industry Outlook is used to add credibility to these claims, but that forecast is nearly a decade old and does not account for recruitment initiatives such as National Court Reporters A to Z, Project Steno, and Open Steno.

Attorneys, courts, and support staff can attempt to find stenographers or stenographer-run businesses through their state court reporting association or NCRA Pro Link.

The FTC has stated it will crack down on companies taking advantage of gig workers. It is unknown how this will affect court reporting, a field that is approximately 70% independent contractors according to available data. It is also unknown how rampant misclassification may be in the field.

Stenonymous (Christopher Day) is dedicated to informing the court reporting and legal community and has faced legal threat for accurate reporting in the past.

Does this look like they’re looking for stenographers?

Members of the community that wish to support advertising for this bulletin may send money through the donation box at Stenonymous.com.

New York’s Short(age) Squeeze

Everyone has different page rates, but utilizing historic data from 1991 and 1999, we can get a rough idea of what the page rates would be today had they been consistently updated for inflation. It’s my hope that putting this out there often enough helps reporters know their value.

First, let’s look at the freelance rates adjusted for inflation by year. For the freelance rates, I pulled the 1991 rates right out of an old Federation of Shorthand manual.

Federation of Shorthand page rates 1989-1991

I took the 2.75 rate from 1991, and I adjusted it for inflation each year using a Bureau of Labor Statistics inflation calculator. In 1992, for example, that $2.75 in 1991 dollars was worth $2.82 in 1992 dollars. If a reporter didn’t get a $0.07 raise between 1991 and 1992, that reporter lost buying power, and would have to work about 2% harder to make the same buying power. Doesn’t seem that bad, right? But by 2022, that $2.75 in 1991 dollars is worth $5.74 in 2022 dollars. This means that a reporter that is not making $5.74 in 2022 on a regular has to work harder to have the same buying power as a 1991 reporter. This means a reporter making $4.00 a page has to take 30% more pages than a reporter in 1991 in order to have the same buying power.

This chart shows the starting rates for 1991 data adjusted for inflation each year.

As an example of how this plays out for new reporters, when I was a new reporter in 2010 at Jaguar Reporting, I was offered $2.80 a page. Not knowing anything about the field, I took it. Adjusted for inflation, the 2010 rate would have been $4.43 on a regular. This means that to have the same buying power as a 1991 reporter, I would have had to have taken almost 40% more pages than that 1991 reporter. That’s a lot of efficiency to squeeze out of workers, whether you want to consider us common law employees or independent contractors.

Juxtaposing freelance versus official rates can be even more concerning. Officials typically receive their pages on top of a salary. Many are producing fewer pages, but adjusted for inflation, the rates appear to be far higher.

This chart shows the starting rates in 1999 adjusted for inflation each year.

This “squeezing of efficiency” is not sustainable in the long term. The rates must go up in order to obtain and retain talent. For as long as they do not, we are asking reporters to work harder for less buying power.

This is not normal. The average workers’ pay has gone up slightly, adjusted for inflation. Because most court reporters are working for less than they were 30 years ago adjusted for inflation, stenographers’ pay has gone down. Just check out the Statista data on that. After a 2009 to 2015 crash, wages sharply rose on average. And this data doesn’t even take into account “the great resignation” of 2021 and 2022, where employees are leaving jobs for higher pay at rates never seen before!

Statistic: Median inflation adjusted hourly earnings of wage and salary workers in the United States from 1979 to 2020 (in constant 2020 U.S. dollars) | Statista

Find more statistics at Statista

While I’ll be the first to say that this is a wonderful career and I enjoy it very much, and I’ll even go so far as to concede we don’t have to keep up with inflation perfectly for it to remain a great career, I think this data makes the case for why there is a shortage today. We are simply not competitive in terms of wage growth, and we are asking young people and newbies to work harder for less buying power — again, in some cases, 40% less. This is compared to the average worker between 1991 and 2020, who, by 2020, could work about 15% less and have the same buying power that they did in 1991!

The lack of data in and on our field remains a fundamental problem. Trade associations are entitled to collect and distribute aggregated rate data. If we had good data from 1991 to now on the average page rate, we could simply adjust those years to be in 2022 dollars and show everyone that they’ve gone up or down. Because we do not have the data, we’re stuck with taking a fixed point in history where we knew the rate, adjusting that each year, and then comparing that to what each of us makes personally.

I’ve created another spreadsheet with all of this information. It’s available for everyone, and I encourage people to share it. It not only informs people in the stenographic camp, but also in voice writing and digital court reporting, because ultimately if they are working for less than stenographic court reporters, they are being taken advantage of while being used to push us out of the market.

Hourly Conversion for Digitals:
A stenographic to digital comparison is possible by estimating average pages per hour. As a freelancer, I averaged about 40 pages an hour. Current freelancers have told me they can get as much as 60 pages an hour. The court reporter page rate encompasses transcription time and “writing time.” It can be 1 to 2 hours for every hour on the machine, so it’s safe to assume writing time is about a third of the page rate. If we take the $5.74, that 1991 rate adjusted into 2022 dollars, we can calculate that a third of that is $1.89.

Assuming 40 pages an hour, that “writing time” is worth about $75.77 an hour.

Assuming 60 pages an hour, that “writing time” is worth about $113.65 an hour.

This creates a valid argument that a digital charging less than $75.77 an hour is being underpaid. Obviously, I don’t personally believe, based on all I know today, that digital reporting is equivalent to stenography, but there are some outfits and organizations that insist on perpetuating this myth of equivalency. If they are equal, the next question is whether they are being paid equally to their historic “equals.” If the answer is no, the next question is “why?”

Conversions for Transcribers:
Again, taking my assumption, based on my own experience, that transcription time is worth at least two thirds of the page rate, we can create page and hourly conversions for transcribers. From that $5.74 rate, we can derive a page rate of $3.82 in transcription time.

Assuming 40 pages an hour, that’s about $152.80 an hour.

Assuming 60 pages an hour, that’s about $229.20 an hour.

Hourly Conversion for Stenographers and Voice Writers:
Assuming 40 pages an hour and the $5.74 adjusted rate, the transcription time and writing time together is worth about $229.60 an hour.

Assuming 60 pages an hour and the $5.74 adjusted rate, the transcription time and writing time together is worth about $344.40 an hour.

This might seem like a lot of money. But remember that the $229.60 to $344.40 an hour figures encompass 3 hours’ worth of work. Interestingly enough, this averages out to $76.53 to $114.80 an hour, which is comparable to what captioners charge.

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Ultimately, we can play with numbers all day long. If my work falls on blind eyes, then people will continue to get underpaid, grow discontent with the field, and leave. Because this is a very specialized field where we get better with time in, the loss of a practitioner is massive — you cannot just replace someone who’s been at this for a year, or two, or ten, slip someone brand new in, and get the same quality transcript. People will move on regardless of the methodology. I have offered fairly concrete math on the fact that we are underpaying most practitioners during a time of alleged shortage.

My next step, when I have some more time or funding, will be to begin collecting and distributing data myself. But again, I have to stress that this is something that our associations should have been doing for the last 30 years, and instead were trained and training reporters that they could not do, which enabled rate abuse that drove reporters out of the field over the last decade. This is why it is so insulting to me when it is alleged that the stenographer shortage cannot be solved. It does not take a genius to figure out that giving a class of workers the equivalent of $5.74 in 1991 and watching that value erode year after year is going to drive workers away — a fact that has somehow eluded the CEOs and business types of steno-America, and a fact that I hope is understood and embraced by the majority of our field over the next decade.

Addendum:

Lisa Migliore had this to add. While I feel it doesn’t detract from the overall flow of what I’m saying, I do think it is an important point and information that deserves to be included here.

The Irreversible Institute

Speech-to-Text Institute is an association that claims it wants to define, modernize, and lead the court reporting industry. About three years ago, in the Impossible Institute post, I wrote about how it appeared that the STTI had already concluded our shortage was impossible to solve. My position was simple: “There have been no updates since Ducker. How can anyone make that claim?

The Speech-to-Text Institute erroneously claims the stenographer shortage is impossible to solve.

Several readers sent me the STTI’s newest production, a series of slides that make more claims about our industry and profession.

The Speech-to-Text Institute states there is a steady and ***irreversible*** decline in the number of stenographic court reporters even though there is no good, current data on which that claim can be made.

This is one of those times that it’s difficult to choose how to respond. Spreading their materials gives them free publicity. Being silent gives them free rein over the discussion. I think it makes the most sense to analyze the materials publicly and see what discussion springs from that.

STTI submits there is a steady and irreversible decline of stenographers. My feelings here are similar to the “impossible” argument. It’s a future prediction that’s not predicated on anything other than a forecast that’s been around the better part of a decade and a survey that could not possibly capture all the factors at play in our industry.
STTI submits digital reporting technology is “more than capable…” Arguendo, let’s say that digital IS more than capable. This is an imperfect world. Transcripts are going to be imperfect. And we’ve seen this when it’s studied. Stenographers were only about 80% accurate in the Testifying While Black (2019) study. But a pilot study from TWB revealed laypeople transcribed statements with about 40% accuracy. Half the accuracy! Not utilizing stenographers likely has a significant cost to accuracy.
STTI mentions the current or future capabilities of automatic speech recognition (ASR). There is a patent from around 2000 that shows 90% accuracy was thought to be possible. More recently, in the Racial Disparities in Automatic Speech Recognition (2020) study, ASR from major players like Amazon, Google, Microsoft, Apple, and IBM were tested. Their tech was about 80% accurate for white speakers, 65% accurate for black speakers, and as low as 25% accurate for African American Vernacular English speakers. Succinctly, the current capabilities of ASR are not very good when studied objectively. Future capabilities are another unknown, and a case of wishful thinking. Dragon remains the best ASR, and that’s the domain of another established method, voice writing.

STTI then mentions that this is an era of alternative facts in order to disparage dissenting views. But this is a clever deflection, as STTI itself is guilty of pushing alternative facts. Just look at this old STTI graphic.

Speech-to-Text Institute erroneously pushes a narrative of an irresolvable stenographer shortage so that business owners and practitioners come to its conclusion, that digital reporting expansion is necessary.

If we assume these numbers are correct and that there were 27,700 stenographers in 2018 and a supply gap of 5,500, that means that as of 2018, nearly 1/5 of every single job would be going uncovered, and it would get worse every year. It’s 2022. Agency owners may be having some trouble finding coverage, but not one has expressed that 20% of their work is going uncovered.

STTI points to how difficult it would be to recruit a large number of stenography students to make up for the historically lower graduation numbers. But a little comparative analysis is in order. Stenography has 26 NCRA-approved schools, tons of schools that are not yet approved (>100), and three separate nationwide initiatives to introduce people to stenography (A to Z, Project Steno, Open Steno). Digital has BlueLedge and the few schools that can be convinced to teach stenography and digital side by side. Digital is less efficient than stenography and it’s likely that multiple transcribers will be needed in addition to each digital reporter in order to make up for the efficiency loss. When turnover of audio monitors and transcribers is factored in, we are likely talking about recruiting similar numbers of people. The difference is that stenography has more infrastructure to introduce people to it. So companies turning to digital doesn’t appear to be a legitimate shortage concern, it appears to be about making money on the “labor churn.”

BlueLedge charging over $1,500 to forget to tell students there’s a better career path with more options in steno.

STTI’s next slide continues to paint a stark picture of the situation.

Misleading claims by Speech-to-Text Institute lead readers to believe that digital court reporting is the future of the industry.

The slide is misleading in that it makes tactical use of the word “some.” A large percentage of firms having “some” level of struggle isn’t surprising. Firms were having “some” level of struggle to cover things before the shortage too.
STTI claims the majority of court reporting firms use digital. But STTI only surveyed 156 firm owners. According to the Kentley Insights Court Reporting & Stenotype Services 2019 market research report, there were over 3,000 firms in the industry. A population of 3,000 would need a sample size of 341, assuming a confidence interval of 5, according to this sample size calculator. If we wanted to be more certain, with a confidence interval of 2, the sample size jumps to 1,334. And again, there is tactical use of the word “some.” “Some” digital use could be one digital reporter sent out on one job. I can’t blame STTI for trying to collect data, but the data is not reliable for making definitive, sweeping, or predictive statements.
STTI mentions the widespread use of remote reporting, but fails to mention that this has increased stenographers’ coverage abilities. Many of us are no longer sitting in traffic and are able to jump job, to job, to job.

The technology slide points to how technology suppliers want us to embrace what they’re selling. It’s self-serving. “Trying to change stuff is futile, now buy my new software.” It is laughable to me that they think ASR is a future supplement for this field when they have not even worked out good and consistent cross-compatibility among softwares. Who would believe that these companies are going to succeed where the tech giants have failed?

We actually see this play out in a later slide where the technology suppliers outright admit they’re aiming for the business of digital court reporters, court reporting firms, and courts. It’s not about selling what’s efficient or best for your business, it’s about selling.

Speech-to-Text Institute survey finds massive shift in audience products are aimed at.

This is about making business owners afraid that if they do not jump on the digital/tech train, they will be left behind. We can all appreciate the importance of technology. But there is, to some extent, a practice among tech suppliers to make consumers afraid so that consumers open their wallets. Nobody wants to be Kodak, so everybody piles blindly into what they are told is the future.

Satire: Have you heard of the court reporter shortage? You have to use digital court reporters now! Many agencies report some digital reporter use!

I operate under the belief that most people seek truth. By summing up how and why these claims are questionable, I hopefully enable others to educate. If you feel there is some merit to these arguments, feel free to share, and enable more reporters and business owners to understand what’s out there, what’s being said, and why it may not be accurate.