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. 

FTC to Crack Down on Companies Taking Advantage of Gig Workers

The FTC seems very conscious of gig workers, a label that freelance court reporters almost certainly fall into. Our industry was doing gig work before it was popular.

While nothing in the statement linked above specifically mentions our industry, it does show that they have a very good understanding of how markets like ours operate. It talks about the concentration of markets. In ours, this is similar to how the private equity brigade is quietly buying everybody out so that it’s an open secret they own dozens of smaller firms and are using that power to turn around and dictate rates to court reporters. This becomes illegal if and when they start agreeing with each other to fix prices on us, at least as can be inferred from this bulletin.

The FTC is more or less coming out for the workers here. That’s the “freelancers” that might be subject to the illegal conduct described below.

Court reporting companies should take note. This reads to me like a warning shot. “Clean up your markets and treat your people well, or the government gets involved.”

We made a lot of noise at the FTC back in January. While I can’t guarantee that this action is related to the concerns raised by us and other antitrust activists, I’ve got a feeling our industry is on their radar despite its size.

This also makes the deceptive actions of companies like Veritext risky. How long before consumers are aware that the company has used its market power to limit consumer choice? Can the company guarantee that not one consumer has been denied a stenographer under the guise of shortage? And if the company can, then it calls into question shortage claims, because the statistics say 20% of the jobs should be going uncovered. If I had some advice for the private equity brigade, it would be to stop squeezing the people that perform the work. It’s not a good look for you. It’s only going to shake consumer confidence when they find out that instead of helping to grow and develop the existing processes, you sought to make money off of worker turnover — virtually guaranteeing a workforce of amateurs, exactly what every lawyer asks for at their legal proceeding! Even if there isn’t some kind of suit and direct losses, the loss in reputation will be phenomenal, and in this business, reputation is everything.

For now, this is a solid case of “let’s see what happens.”

Pre-Launch: Stenonymous’s Project Phoenix

By my estimates there are 20,000 freelancers and 28,000 court reporters total in this country. We do not receive much formal legal education beyond the terminology we might hear. This has left many of us confused on our legal rights. Even the agencies that hire us, schools that train us, and the members of the bench and bar we work with every day lack basic information about important concepts we are dealing with. This puts court reporters at a serious competitive disadvantage against anyone with the funds to hire a lawyer.

It’s time for change. If you are ready for that change, please take some time to answer this 8-question survey. I encourage you to share it with anyone you feel might answer it honestly. Every single honest answer will pave the way for taking this from concept to execution. This survey allows me to gauge interest and expand the project. I will release more information as soon as it is appropriate and safe to do so.

We must keep recruiting and sharing information. But I would like to remind everyone to take care of yourself this holiday season. If the stenographic newswire or some other issue is causing you to feel down, take care of yourself. Try to reach out to a support system. Humans are communal. You are not bad, wrong, or alone. You are human. You will be okay because all feelings change over time.

A very special thank you to every single one of my readers. Your readership has made this moment possible. Let me just note that Sound Professionals’ Chris Carfagno has let me know about their latest product announcement. I have always heard good things about SP; I have a great impression of Chris and have no problem recommending them. I will state that I do not believe I’ve personally used their products. When I used to use audio, I think I was using a mic sold by Stenograph at the time, which probably explains why I don’t use audio anymore. I have also started transitioning to Eclipse in honor of the Stenograph boycott. It feels great to be learning new skills and technology in my field and I would encourage every single reporter in the industry to give it a try. Eclipse provides robust training resources on top of its Anytime Support. I even had to call them recently (weekday, business hours), and they returned my call in under three minutes. Switching isn’t easy, but Eclipse has done all it can to make my transition pleasant. I have a feeling that once I am done, I will be able to honestly tell readers which software I prefer from a performance standpoint. Stay tuned.

PS. Stenograph reached out to the Texas Court Reporters Association board. My understanding is that there will be a future meeting in 2022 where members will be allowed to ask questions. This is why I called for the boycott. The more pressure we apply, the more urgent it is for them to curry favor with our associations and make us happy. It would make me personally happy if Stenograph acknowledged that digital court reporting will likely hurt minority speakers’ transcript accuracy. I give my word that if Stenograph makes such an acknowledgment, I will call off the boycott. Until then, let’s see how far those revenues can fall for 2022 and 2023 renewals as people continue canceling support. This profession will endure. Stenograph’s endurance relies upon its service to this profession.