ACS:Law Boss: I Feel Defeated And Could Go Bankrupt

After disgruntled letter recipients mailed off a barrage of complaints to the Solicitors Regulatory Authority against ACS:Law owner Andrew Crossley, he told his advisor that not only did he "feel defeated" but that in his long-term interests it might be better if he "shut up shop". Doing so, he explained, would bankrupt him.

Some people, particularly those of a resilient nature operating in the cut and thrust of big business, have a skill for letting nothing get to them. Or at least they give that impression. Up until recently ACS:Law owner Andrew Crossley was one of those guys.

Despite mounting criticism and the immense pressure of several hundred complaints about his company’s conduct delivered to the Solicitor’s Regulatory Authority, in public Crossley has remained strong. Defending his position at every available opportunity through media interviews and self-penned pieces, one might be forgiven for thinking that nothing could shake this man from his ‘turn piracy into profit’ crusade.

But behind closed doors, things were very different.

“I am worried about the latest developments. Apparently there are presently over 500 complaints against me thanks to the internet campaign and Which,” Crossley wrote to his advisor just over a month ago.

“Each complaint is essentially the same and they are borne out of a determination by some to stop legitimate steps being taken to curtail illegal file sharing. However, I do not know how I can avoid being found guilty of something, with 500 complaints to choose from,” he continued.

The concern that Crossley shows for the complaints that have been made to the SRA will be very empowering for those who took the time to write to the solicitors’ watchdog. Some individuals had begun to air frustration that their efforts had been in vain, but even in advance of a Solicitors Disciplinary Tribunal decision which is still some time off, it is clear those efforts have seriously got under Crossley’s skin.

But the problems for ACS:Law go deeper than the SRA investigation. While turning alleged file-sharing infringements into settlement agreements, and in turn transforming those into hard cash may be a fairly new business model, it suffers from the same problems as any commercial operation.

Despite Crossley pulling in huge amounts of money and leading the high-life, company emails reveal that he paid the bulk of his employees very little. Nevertheless, the costs of operating the business had been spiralling in recent months causing it to experience cash-flow and other financial problems.

One long-running payment dispute involved UK ISP Entanet who had been supplying ACS with customer identities and charging for the service. In March this year, a series of emails between Entanet and ACS Law’s company-hopping Terence Tsang revealed that the law firm still had not paid an invoice from July 2009, some 8 months earlier, and several thousand pounds remained outstanding.

After promising to pay but failing to do so, Entanet said they would no longer provide ACS with subscriber details and threatened to take the law firm to court for the debt. The company also had problems paying an O2 bill of more than £13,000. Even ACS:Law business partner Lee Bowden from Media CAT became irate in August after his emails demanding money owed went unanswered.

“You seem to have ignored my previous e-mail, I am not happy and want some revenue in account,” he wrote to Crossley. “Everyone is getting [th]eir bit and I am owed £17k ffs.”

Of course, financial frictions are a daily event for many companies. But for a firm already under pressure, with its owner seriously considering the future viability of the business, there were added pressures. As Crossley made clear to his advisor in August, ACS:Law’s entire future hangs on the success, or failure, of his Speculative Invoicing model.

“If I stop this work my business will fold and my clients will be big losers, but if I carry on I fear that it will be worse for me in the long run,” he wrote to his advisor, prophetically.

If Crossley was of the opinion that things could be worse in the “long run” even before the email leak, one can only imagine what he is thinking now. Even back then, just over a month ago, he was clearly disillusioned and on the verge of giving in.

“Presently I feel defeated by it and feel I should shut up shop, which will cause me to go bankrupt for certain,” he explained. The prospect of ACS:Law stopping their activities will be music to the ears of many thousands of people, but what are the chances of that?

Looking at the business chain, fairly high. Even if the various rights holders stick with the company and Crossley doesn’t decide to pull the plug voluntarily, it may prove difficult to service them.

Apart from the fact that the ACS internal emails show significant amounts of friction between the company and their IP harvesting partners, before this fiasco only TalkTalk and Virgin Media refused to cooperate when ACS:Law went to court to request the handover of customer data. After the epic data leak of BSkyB, BT and Plusnet user data, all of these ISPs have said they will cease cooperation with the company. Furthermore, at this stage it seems unthinkable that any ISP would risk being seen to hand over data to ACS:Law.

Furthermore, it would also seem reasonable to presume that Chief Master Winegarten will probably feel a little uncomfortable authorizing any more court orders until ACS can prove they have their house in order, and that could take a very long time indeed. Coupled with the cash-flow problems touched on above, that day might never come.

So, with no ISP subscriber details handed over, there will be no names to connect to possible infringements. With no names and addresses to put on letters, there can be no cash settlements. With no cash settlements, there can be no more turning piracy into profit. There could hardly be a more bleak outlook.

But of course, ACS still has all the IP addresses and identities from earlier court orders, maybe they’re hopeful that these could still yield some cash to bridge this period of uncertainty? That seems unlikely. Not even Crossley is confident.

While bemoaning public perception that a complaint had already been upheld against him by his recent referral to the SDT, Crossley concluded: “Meanwhile, thanks to Which and their lawyer I doubt that the latest campaigns which we were out to run will have any meaningful recovery..”

It is easy to blame (or credit, depending on your perspective) Which? for cutting off ACS:Law’s revenue stream (arguably BeingThreatened.com have made a greater contribution in this respect) but since the email leak and the absolute destruction of the company’s reputation, it would take a special kind of letter recipient who, despite the mountain of information available via a simple Google search, still chose to keep the company alive by paying them money.

But, as the saying goes, a fool and his money are soon parted.

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