Law Firm Statistics

The above chart demonstrates the total law firm client savings versus the total fees paid for non-formal debt resolution services performed by an attorney for clients utilizing Morgan Drexen, Inc.'s services and represents the net benefit to consumer welfare. For those law firm clients who have completed the program, the total clients savings was over 210% of the total fees paid. Data is as of June 30, 2010.

* Law firm clients may pay fees for other legal services performed by their attorneys, such as advocacy services in collection litigation. This chart excludes such other fees.

There is a correlation between the number of debts resolved and the total dollar amount of the debts resolved. This is, in part, due to the duration of services, the amount of funds in an attorney's trust account available to resolve the debts, the greater incremental discounts available due to the overall volume and velocity of resolutions, and Morgan Drexen's increased proprietary "know how" that has developed over time. The chart depicts cumulative completed resolutions since program inception through June 2010. As of June 30, 2010, Morgan Drexen, Inc. in conjunction with the attorneys, have resolved over 38,250 debts for over $147.9 million in debt for $57.2 million or approximately 38.66%.

Over 20.9% of all current law firm clients who engaged an attorney that utilized Morgan Drexen's services had achieved resolutions within the first six months. By the end of the first year of representation, the percentage of law firm clients with resolutions increased to 55.8% and almost 95% by the time the law firm client completed 2 years of debt resolution services. We anticipate significant improvement in the percentage of law firm clients with a resolution within the first six months due to recent operational changes.

* The data used in the calculation for the category "Within six months" was derived from law firm clients who engaged an attorney that utilized Morgan Drexen, Inc.'s services from the most recently completed 12 months (July 1, 2009 through June 2010) and remained enrolled at least six months. We selected data from the most recent annual period in order to properly reflect current operations. In order to get a more full population, data used in the calculation of the other categories is from inception of Morgan Drexen, Inc. (March 2007) and remained in the program for the duration indicated or had a resolution within the timeframe indicated.

The above chart represents the total law firm client savings as a percentage of total fees of all law firm clients with at least one resolution. A cumulative net savings greater than 100% indicates the total combined client benefits are greater than the total combined fees paid by that group. The data is grouped based on the law firm client's initial engagement date (i.e. each data point on the x-axis represents the total combined cumulative net savings of all law firm clients with at least one resolution that started in the month identified). The number of months in parenthesis represents the number of months that group of law firm clients have been in the non-formal debt resolution negotiation process. The more time the client is engaged in the resolution negotiation process, the greater the likelihood of achieving multiple resolutions, and the greater the cumulative net client benefit from the process. This trend is demonstrated by looking to the earliest starting data group (March 2007) and noting this group has the largest

* Represents the group of all law firm clients with at least one resolution who were enrolled in March 2007. The law firm clients within this group have been engaged in the process for approximately 39 months.

** Represents the most recent group of all law firm clients with at least one resolution (enrolled in May 2010). The law firm clients within this group have been engaged in the process for for approximately one month.

The above chart compares total cumulative law firm client's fees to total cumulative client savings for all such clients since inception of engagement. Total client savings and client costs are projected based on the recent trends of client costs and net client savings. Total cumulative net client savings became positive in December and are projected to significantly increase as more resolutions are negotiated on behalf of clients. Additionally, more clients are continuously entering the debt resolution process and the time to reach the critical first resolution milestone is decreasing.

Note: Client costs do not include other legal fees for services such as in-court advocacy and other unrelated legal services. Data is as of June 30, 2010.

* Source: www.creditscoring.com, Fair Isaac quote (12/28/06)
** Source: www.creditscoring.com, various quotes
^ MD Database of law firm clients. FICO score obtained prior to engagement.

Resolutions demonstrate successful milestones on the path to relieving the law firm client's unsecured debt. In 2009 Morgan Drexen instituted several improvements that decreased the time to that critical first resolution. For law firm clients who first engaged their attorney in 2009, the median time to the first resolution was reduced by 24%. The median time to the second resolution is even quicker than to the first resolution. In 2010 Morgan Drexen made further enhancements to reduce the number of days to that first resolution, however, it is too early to quantify the reduction on the median of days.