Naegeli Threatens Legal Filing Against Stenonymous

I had a lot of fun writing the Naegeli article. When I was done with it, I let them know it was live.

In my defense, it was 7:30 EST.

Naegeli apparently doesn’t agree with what I’ve written. Richard Teraci told me the company’s attorneys would be filing suit against me if it is not removed by Monday, November 22, 2021 at 9 PST. My response can be read below. I also accidentally BCC’d a number of news organizations and field contacts so that if Naegeli fails to take legal action everyone sees it’s a barking dog with no teeth.

“Can’t wait. Supreme Court, Richmond County, New York State.” — Christopher Day 11/19/21 writing to Naegeli USA.

Unfortunately, Richard didn’t appear to appreciate my response much.

“You are not to contact me ever again. All communication from this point forward will be through our attorneys.” — Richard Teraci, Naegeli USA

Some companies seek to keep court reporters silent. Fear is a tool used to maintain silence. Either the company will fail to sue me and show you all there is nothing to be afraid of, or they will sue, lose, and show you all there is nothing to be afraid of. Either way, reporters across the nation will get to see this for what it is, a baseless attack on our right to free speech. More as this story develops.

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Naegeli Charged $11.50 Per Page on a Copy Sale

As explained in August, many court reporting firms attempt to beat the competition through what can be described as cost shifting. The CR firms charge really low on the original transcripts that their clients buy and charge astronomical prices on copy sales in order to make up for the loss. This has a net effect of making it harder for small businesses to compete. As far as I understand, this occurs in many markets in the United States and is not rare, but the news media and government pay little attention to our $3 billion industry, allowing rampant abuse and fraud against our consumers, attorneys across America. Perhaps I should be grateful. The complete failure of the media to provide anything but thinly-veiled marketing for digital court reporting has opened up a special niche for me.

When a source passed me this letter from the late Richard R. Johnson, Esq., I was delighted. It was yet another tangible piece of evidence that the abuse we have, as a field, long suspected was occurring, was actually occurring. After all, we cannot solve problems in our industry without discussing them. For reference, the proceeding occurred in May 2017. The letter was written in June 2019.

Mr. Johnson uses that word “unreasonable.” For many court reporters, that term unreasonable rings a bell, US Legal Support was accused of the same. And we do not have to take his word for it, we have also been provided with a copy of the bill Naegeli sent.

What’s more, my source tells me that the deposition was taken by a digital court reporter named April J. Austin. I hope Austin finds stenography for all the reasons I’ve covered in past articles. I am further informed that Washington is a mandatory CCR state, RCW 18.145.010, which means that the use of digital court reporters is likely illegal. I know what my audience is thinking. “Isn’t that what got StoryCloud in trouble?” Yep. Here are some documents related to that fiasco. For more on the practice of court reporting in Washington State, see RCW 18.145.020.

I asked Naegeli to comment. Naegeli’s Richard Teraci tried to tell me that the reason the copy was so high was because it was an expedite. He also asked me to please remove it from my blog.

A source close to the issue stated that the matter was ultimately concluded by Mr. Johnson consulting a court reporter in Washington State on what a reasonable fee would be for the copy. Mr. Johnson allegedly forwarded that amount to Naegeli and that was the end of the matter. The source also stated that normal copy fees at that time were under $3.25 per page in Washington and that currently a normal copy fee is under $3.50, though some agencies do charge “considerably” more, up to $3.80 per page.

Even without Naegeli’s cooperation, we do have some idea of that Washington market. We also know what Naegeli is looking to pay transcribers on digital matters, so we can work out about what it might have cost Naegeli to produce the transcript. Just for a recap, Naegeli wants to pay transcribers $1.75 per page. That’s about $105 for a 60-page transcript. Succinctly, on a copy sale, it appears that Naegeli intended to charge about 7x what it would have cost to produce the original. For people that don’t understand the way this business works, in conventional court reporting, the original has always been a higher cost than the copy, and the split between court reporters and firms in markets where court reporters aren’t 30 years behind inflation is a lot closer to 50/50 than giving the transcriber a pathetic 15%. This also assumes that the transcriber was given a percentage of the copy money, which is an assumption so generous Robin Hood would probably cringe. Transcribers typically aren’t given anything and may even live offshore.

If those market comparisons are unclear, let’s try some more comparisons. Let’s compare Washington State to New York. In New York, the freelance stenographic reporters routinely make somewhere in the ballpark of 25 cents on a copy. The officials make somewhere in the ballpark of a dollar. As of writing, the cost of living in New York City is about 33% higher than Seattle, so you would expect the New York prices to be somewhere in the ballpark of 33% higher. Again, New York court reporting rates are 30 years behind inflation, meaning New York’s prices should be about double what they are. That would be in the ballpark of $0.50 a copy for freelancers and $2.00 a copy for officials. Assuming a traditional 50/50 split, a reasonable copy could be said to be in the realm of $4.00 per page. The bill from Naegeli is about 3x what is reasonable on a copy and about 7x what it would’ve cost to produce. Even if we buy what Mr. Teraci says about it being an expedite, expedites are usually in the realm of 50% higher price, not triple.

There is also an elephant in the room. The copy sale does not stand alone, it stands alongside whatever Naegeli made on the original. Handing out generous assumptions to prove a point, assume the original was one third of the copy sale. That would be $15.30 per page. If that’s reasonable, then every stenographer in New York City should move to Washington, because our reporters routinely get a comparable amount of work done for $4.50 a page or less. Assuming an expedite, under $6.00 a page. I cannot make it clearer that court reporters can compete with these “large” agencies and probably make more money doing so. The simple truth is every reporter produces most of the work and has none of the overhead. That’s like Walmart treating its workers poorly if every single employee had the ability to compete with Walmart. Agencies have a value, as I will cover in a future post, but their value to us is diminished when they’re not selling steno.

All of these comparisons, of course, are assuming parity with stenographic court reporting. Digital court reporting is not as efficient as stenography, and therefore in any real-world evaluation, that fact must be taken into account. Stenographer rates are being charged for what is an inherently inferior service. Put it this way, digital reporting is so bad that it has to defraud people interested in court reporting to get them to go digital.

May this set the stage for us to discuss price structure as a field. While there are certainly antitrust concerns when court reporters discuss pricing due to our heavy use of independent contractors, it seems reasonable to ask ourselves if this is a fair way for consumers to be treated or business to be conducted. It also seems fair for our trade associations to begin collecting and dispersing historic, regional rate data so that our students can never be taken advantage of again in the way that my generation was.

“…unlikely to raise competitive issues.”

For what it’s worth, Kentucky is leading the charge there.

“The Kentucky Court Reporters Association board has created a salary survey for the benefit of correcting misinformation that is being disseminated.”

Legality aside, imagine if you were the Johnson firm. Is it fair to be locked into a copy sale from a service that can just charge whatever it wants, see if you pay it, and then cut the bill down to a third of what it was if you complain? Reminds me a lot of the way medical billing is today. Think of how happy receiving surprise medical bills makes you. Now, just think, that’s what’s happening every time a law office gets a bill for $11.50 on something where the actual value is about $4.00.

Reporters need to start competing. Digital isn’t cheaper than you and the rapacious behavior of companies like Naegeli is destroying your profession. Our collective job security relies on broadcasting that fact.

Addendum:

I have been informed by its owner that Cover Crow will soon release tools to track and release rate data. This may be an opportunity for associations to get a head start on collection of data from multiple sources.

Veritext and US Legal Lied to the Public About Stenographer Shortage

Veritext, through its puppet Cooper, and US Legal, have both been lying about the stenographer shortage. How do we know? Cooper claims the problem started 8 years ago. This is objectively false. Firms 8 years ago were saying they could not pay better rates because there was a glut of reporters. Even if you don’t believe that, stenographers are 30 years behind inflation, which does not happen if a field is experiencing a shortage.

But they’ve made it even easier to tell they are lying and committing a fraud against the legal profession. Let’s see what Cooper has to say.

As you can see, Cooper claims you would need 82,000 students to enroll in court reporting training programs nationwide in 2019 and each year following in order to overcome the deficit.

What does US Legal say?

Wow. 82,000 enrollments needed and only 2,500 enrollments occurred. Sounds like a death knell for stenography. Right?

Liars. How do we know? In 2014, BLS told us there were 21,000 court reporters. From my own independent analysis of the numbers and NCRA statistics, there are actually closer to 27,000 or 28,000 court reporters. It does not matter whose statistics you use, the conclusion they’re lying remains the same. There was no shortage crisis in 2014. We have roughly the same number of court reporters today as we did back then. The 2013 Ducker Report told us that 70% of court reporters would retire over the next 20 years (2013-2033). 70% of that 28,000 is about 20,000 reporters. Succinctly, the retirement cliff we are trying so hard to fight is about 20,000 people if you trust NCRA and about 15,000 people if you trust the Bureau of Labor Statistics.

About 10% of people that start steno graduate. So if we had 82,000 enrollments a year, that’s 8,200 new stenographers per year. But look at what US Legal wrote again. “We needed 82,000 new students to enroll in court reporting training programs nationwide each year to overcome the impact.” If we, in fact, have 82,000 new students each year from 2019 to 2033 (15 years), we would have 1.23 million enrollments or 123,000 graduates. Our field would be quadruple the size it is today, and if you go by the Bureau of Labor Statistics, nearly six times larger than it was in 2014.

To combat our retirement cliff of 20,000 people between 2019 and 2033, we need a total of 200,000 enrollments. That’s about 13,400 enrollments or 1,340 graduates a year, a number six times smaller than the one proffered by US Legal and Veritext/Cooper. If you’re six feet tall, that’s like me claiming you’re 36 feet tall. If we required 8,200 stenographers per year, about half of all depositions would be going uncovered right now (8,200 x 3 years 2019-2021, a gap and demand for 25,000 stenographers by 2021.)

If you accept Owler’s revenue numbers, Veritext controls about $490 million in revenue and US Legal controls about $100 million. That’s a combined total of $590 million. If you accept the Kentley Insights 2019 Stenotype Services market research report, that’s about 20% of our field, and they are using their power to destroy it.

590 million divided by 3 billion is almost 20%

Some have said: They’re lying. So what?

Well, the market preference is stenography.

Court Reporting Industry Outlook 2013-2014 Ducker Worldwide

We know from nonprofits like Protect Your Record Project that attorneys are being told they must accept digital because no stenographer is available even after attorneys order stenographers. So we know there’s some serious false advertising going on.

Previously, I was unsure if there was collusion between major players in the field. Considering that both are using similar language it seems unlikely that both have come independently to the same incorrect conclusion. It’s not like the two firms are enemies. They’ve lobbied together before.

It seems much more likely that following fraudster Jim Cudahy’s lead via the Speech-To-Text Institute, the two companies are involved in a plot to hurt the market and rob consumers of their choice. Quite frankly, Cudahy uses his ex-NCRA credentials to lend credibility to this fraud. After all, STTI has been instrumental in creating the propaganda ruining our field. STTI was, without a doubt, created for the sole purpose of promulgating propaganda and facilitating the ongoing fraud, against its stated mission of representing all modalities in speech-to-text transcription. STTI’s lies are also easy to see through.

Virginia Lawyers Weekly

A gap of 11,000 predicted by 2023 according to a recent study. What study was that? None. The year 2023 doesn’t appear in the Ducker Report. At best, these numbers are extrapolated from an outdated report that could not account for the positive recruitment impact of NCRA A to Z, Project Steno, and Open Stenoinitiatives that Jim Cudahy should have known about in 2019.

Unless you believe 2 + 2 = 24, the stenographer shortage is being exaggerated and exacerbated by Veritext and US Legal Support. And now you have a brief video to help explain it directly to attorneys.