Law Shucks

Litigators Finally Get Third Comma

lawshucks — Tue, 09 Feb 2010 11:25:19 +0000

Sure, anyone can sue for $662 trillion, but rare is the litigator who actually gets even a billion-dollar judgment. Deal lawyers, on the other hand, get to tell their mothers about three-comma deals all the time.

Last week, we lowered our standards to give the “slip & fall” departments their moment in the sun, writing about the Samsung-Rambus $900 million settlement.

We shouldn’t have been so quick to settle (no pun intended).

Thank you, Johnson & Johnson, for convincing us to keep our standards high. If there’s not a billion dollars (or at least some sort of vice) involved, we’re not going to be featuring the lawyers.

How J&J joined the club, and the lawyers who got them there, after the jump.

Boston Scientific has been shelled by J&J in multiple lawsuits claiming that their cardiac stents infringed the company’s IP. In September, they had agreed to settle the majority of the cases relating to those particular products for $716 million (again, simply not newsworthy by our high standards).

That settlement seems to have opened the floodgates, as Boston Scientific and J&J decided it was worth $1.73 billion to settle (some of – see below) the remaining suits in the 17-lawsuit legal barrage. It could have been worse, Boston Scientific actually won an infringement suit against J&J, so that was probably netted out against the total amount, which will be paid $1 billion up front and the balance by January 2011. J&J also had an infringement victory at trial, and the companies were gearing up to go to the damages phase on both trials, which are now off the table.

Amazingly, that doesn’t clear up all the stent litigation.

The legal wrangling over heart stents isn’t over, however. J&J’s stent-making Cordis unit noted in a release that other litigation between the companies continue, including lawsuits Cordis filed regarding Boston Scientific’s Promus-brand stents.

On the Promus front, Boston Scientific noted the court in Delaware found last month that four patents in a lawsuit J&J brought regarding Promus were invalid, and that a trial on those patents won’t proceed. Cordis plans to appeal seeking reversal of those rulings and is also pursuing litigation against Promus stents based on other patents.

Promus stents are made by Abbott Laboratories, which sells the same devices under the name Xience, and sold by Boston Scientific under a profit-sharing deal. Boston Scientific now sells new home-grown Promus Element stents in Europe that don’t come from Abbott.

Even though the net payment is just $2.4 billion or so, the total fees to counsel are orders of magnitude more than deal lawyers would earn on a similarly sized transaction.

So who were the lawyers racking up the big fees?

Johnson & Johnson was represented by Sidley Austin Chicago partner David Pritikin (Cornell BA ’71, Harvard JD ’74), as well as their own lavishly-paid GC Russell Deyo (Dartmouth BA ’72, Georgetown JD ’75). On a sidenote – does anyone actually know which NYC firm Deyo worked at before his position with J&J? We have been looking, but so far have been unsuccessful.

Boston Scientific was represented by Kenyon & Kenyon partner Richard DeLucia and GC Timothy Pratt, formerly of Shook Hardy.

This isn’t Boston Scientific’s first loss in the stent field, either. Two years ago Gary Hoffman of Dickstein Shapiro represented another plaintiff who got a $432 million judgment against the company. DeLucia was also on the wrong end of that one.

Quick Shucks – 2/8/10

lawshucks — Mon, 08 Feb 2010 20:00:07 +0000

Sidebar – Shon Hopwood, Mediocre Criminal Turned Top Jailhouse Lawyer – NYTimes.com – Seth Waxman raves about the guy's work. Pretty interesting.
Being Available During Holidays Proved Fortuitous for Steptoe Associate, Now VP at AOL – News – ABA Journal – It's rare that there's such a clear connection between working on the weekends and success, but it's nice to see here. We've always felt the people complaining about "lifestyle" issues weren't the ones actually in the office on the weekend taking on extra work anyway.
Finances First or Culture First? – Adam Smith, Esq. – This piece is just excellent. They analyze a number of decisions Cesar Alvarez made that took Greenberg Traurig from nowhere 10 years ago to #10 in the AmLaw 100.
Hogan Lovells names global heads for five core practices- Legalweek – It's a bunch of two-headed monsters. The major practices will have two heads, one in each of the US and Europe. Not surprisingly, the Hogan & Hartson guys are running the US side of corporate, finance, and disputes, while the legacy Lovells guys (it's all men) are running the European side. Jeanne Archibald from the Hogan side is in charge of the government practice and the only woman. Andreas von Falck from Lovells will run IP out of Dusseldorf. So they basically went co-heads on everything important then gave each other sole control of a minor practice each. It's like they tried too hard to make it even.
Loyola L.A. Law Grad Gets Savaged in the Shark Tank – Above the Law – Jason Calacanis is absolutely right when he talks about how retarded this show is. The VCs have no connection to reality and it's just a disgusting abomination of how real investors treat potential business partners. This show can't get canceled soon enough. Actually, The Deep End needs to get canceled first, then this.

This Week in Layoffs – 2/5/10

lawshucks — Sat, 06 Feb 2010 20:24:42 +0000

Pic: U. Chicago

Regular readers of this column are well aware by now that the overall unemployment rate isn’t a particularly good indicator, but it’s the most-commonly discussed number so we use it. The predictions are always wrong and it grossly undercounts the number of people any reasonable person would define as unemployed. But for all its problems, it’s not entirely useless to show trends.

According to the Bureau of Labor Statistics:

The unemployment rate fell from 10.0 to 9.7 percent in January, and nonfarm payroll employment was essentially unchanged (-20,000), the U.S. Bureau of Labor Statistics reported today.

That’s what we’ve been harping on all along. Overall unemployment didn’t improve because of a flood of people going back to work; it improved because so many people fell out of the BLS’s definition. We remain frustrated by any definition of unemployment that doesn’t include people who got frustrated and gave up looking or whose unemployment had outlasted their benefits:

About 2.5 million persons were marginally attached to the labor force in January, an increase of 409,000 from a year earlier. (The data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey. (See table A-16.)

Among the marginally attached, there were 1.1 million discouraged workers in January, up from 734,000 a year earlier. (The data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.5 million people marginally attached to the labor force had not searched for work in the 4 weeks preceding the survey for reasons such as school attendance or family responsibilities.

The U-6 rate, the government’s most-inclusive definition, is a little closer to what most people would think of when figuring out the unemployment rate, and that is still over 16%. But the trend is the same for both: January was probably slightly better than December (only probably, because the number of long-term unemployed was up again).

Still, there’s a long way to go, with an estimated 11 million jobs needing to be created to get us back to the 5% unemployment level pre-recession.

How that translated into the legal sector, and what firms have been doing to weather the storm, after the jump.

1,100 jobs were lost in the legal sector in January, according to the BLS, compared to 2,100 in December, 2,900 in November, and 5,800 in October. That’s actually counter to what’s been going on in the BigLaw part of the legal sector, though. As we reported in the Law Shucks Month in Layoffs – January, while only 136 people were laid off from major firms in the month, that was almost double the mere 76 let go in December. Still, it’s a far cry better than this time last year – 1,540 people were let go in January 2009.

Curiously, this is also the fourth week out of five in which a solitary firm announced layoffs. It would be five for five but for a Law Shucks tipster who let us know about Marks & Clerk laying off a single person due to office consolidations last week, which the firm confirmed.

Howrey’s announcement that it had laid off 94 people (29 lawyers, 65 staff) was very frustrating, because Law Shucks knew about it a month ago. We e-mailed the firm’s leadership back on January 10 seeking confirmation of a tip that the decision had been made during Christmas week to lay off 27 lawyers (our source was off by two or they were subsequently added). They refused to respond to our inquiries, though. That just goes to show you shouldn’t count on someone else providing the information, if you’ve got something the media should know about, send it in yourself because we can’t report what we can’t confirm.

Howrey’s was the biggest layoff since Eversheds announced it was cutting 22 lawyers and losing 95 secretaries to outsourcing in September. There have been 26 smaller layoffs reported by major firms in that period. Prior to that, it was DLA Piper cutting 121 in July (LegalWeek just did an interesting piece on that firm’s increasing debt load, by the way). While those were in US offices, it’s still a predominantly English firm. The last time a US firm laid off more people was when Fish & Richardson laid off 120 people on May 13, 2009 (71 reported layoffs ago).

Difficult as it is for the individuals affected, layoffs of people from private practice don’t generally pose a risk to the public. That’s the concern raised by news that prosecutors’ offices in Wisconsin will be forced to cut personnel.

Elie called out Paul Weiss for an insensitive misstatement. The firm claimed that it had improved PPP “without resorting to layoffs.” But the firm eliminated the staff-attorney program, resulting in layoffs of 45 non-associate attorneys. Actually, even if they had said “without resorting to associate layoffs,” we would have called BS, because they’ve been long-rumored to be one of the firms engaged in the vile practice. If a firm is going to try to distinguish itself by claiming it hasn’t laid people off perhaps it should confirm that. Or at least define what they mean by “no layoffs.” They probably didn’t want to do that, because then they’d have sounded like lawyers with something like “without resorting to an explicitly economic-based program of associate layoffs.”

Of course, Paul Weiss is the same firm whose tactics just recently led Judge Rakoff to opine “even a zealous advocate might perceive that such an argument hints at hypocrisy.”

In non-layoff news, the most-interest was probably Mintz Levin’s super-deferral. Members of the law school class of 2010 who have accepted offers from the firm will be starting no earlier than January 2012. Oof. On the happy side of the ledger, Cravath is holding a lottery to let some of its deferrees from the class of 2010 to start this fall (i.e., what we all used to call “on time”).

Pillsbury at least gave some clear direction, unlike the mishmash of confused announcements we reported last week. If you can keep up with ATL jargon, that means that they’re not going lockstep and

it’s a true-up raise for some, a single class thaw out for those low on hours, and a salary cut for many outside of New York.

(All that jargon makes me want to order a half double decaffeinated half-caf, with a twist of lemon.)

Mayer Brown also “unthawed,” which puts the spotlight squarely on Sidley.

Law-firm layoffs this week and month:

Howrey 94 (29 associates, 65 staff)

So far in 2010, major law firms have laid off 230 people (75 lawyers, 155 staff).

Last Day for Lateral Tracker Entries

lawshucks — Fri, 05 Feb 2010 12:48:13 +0000

Contest really does end tonight, so get those last-minute entries in.

Plenty of prizes and good odds to win:

The grand prize winner (1) will receive a gift certificate for use in the Apple Store or at www.apple.com. This gift certificate can be used to purchase a new iPhone 3GS or any other item(s) at the winner’s discretion, up to the value of the gift certificate ($199).

The four participants with the most submissions will each receive a copy of The Lawyer’s Guide to Finding Success in Any Job Market by Richard Hermann, courtesy of the author.

Ten random winners will each receive a copy of Building a Better Legal Profession’s Guide to Law Firms: The Law Student’s Guide to Finding the Perfect Law Firm Job, courtesy of Building a Better Legal Profession.

If you don’t want the phone, you’d be half way to a new iPad, instead.

And don’t forget to check out our first visualization of all that data you’ve helped provide (nearly 100 contributions so far!) with the Network Visualization.

Good luck!

Taking the Lateral Tracker out for a Spin

lawshucks — Thu, 04 Feb 2010 10:52:18 +0000

A question we’ve been asked a number of times since announcing the Law Shucks Lateral Tracker is, "What are you going to do with that data?"

The short answer is, we’re going to pick it apart and make pretty charts out of it, just like we’ve been doing with layoffs.

But there are some even cooler things we can do.

After the jump, a sample: an interactive network diagram of the laterals from January 2010.

We’re taking the IBM Many Eyes (every time we read that name, we can’t help but think of "20 Eyes" by The Misfits (link is to live performance from 1982 btw)) project for a spin. It allows for all sorts of visualizations of different data types.

First up, a network visualization of all the moves in which a lawyer left one AmLaw 100 firm for another. All of these moves come right out of the Lateral Tracker, so that’s why we need your help with submissions. We used just 79 of the month’s 121 entries to keep the graph from getting too complicated.

That should be fully interactive. Just click on it to activate the controls. You can scroll and pan around and zoom in. Arrows show which way people went, and the size of the circle indicates the number of people coming and going. Click on a firm to highlight it and see the other firms to which it is connected.

Stay tuned, we’ve got a lot more interesting presentations planned. If you have any suggestions or requests, let us know.

Let us know what you think, and don’t forget to get those entries in! The deadline has been extended to Friday, February 5.

BigLaw Gangs up on NYS Legislature

lawshucks — Wed, 03 Feb 2010 11:18:49 +0000

Back in July, we noted that “There Are Cliques in BigLaw, Too” when seven firms (Cravath, Davis Polk, Latham & Watkins, Simpson Thacher, Skadden, Sullivan & Cromwell, and Wachtell) collaborated on a comment letter to the SEC about shareholder-access rules.

This time around, the firms are getting all “We Are the World” and ganging up on the New York legislature.

51 of New York’s finest issued a white paper, “Interpretive Issues Related to Recent Changes to the New York Power of Attorney Law.”

A summary of the white paper (boring) and the firms included and excluded (interesting) after the jump (plus we learn something new about a firm’s organizational status).

According to the Harvard Law School Forum on Corporate Governance and Financial Regulation, the white paper

examines principles of New York and federal law to reach a finding that, at the least, substantial portions of the recently amended New York General Obligations Law §§ 5-1501 et seq. (the “Statute”) do not apply to proxies for shares of New York corporations and non-New York corporations, certain powers of attorney executed in connection with the registration of transfer of certificated securities or many powers of attorney granted in connection with the formation and governance of non-New York limited liability companies and non-New York limited partnerships.

They felt the need to issue the paper because they think there is some ambiguity, which they want the legislature to clear up.

As for the firms (which you’ll note right off the bat includes the original batch of mean girls):

Akin Gump Strauss Hauer & Feld LLP

Bryan Cave LLP

Cadwalader, Wickersham & Taft LLP

Cahill Gordon & Reindel LLP

Chadbourne & Parke LLP

Cleary Gottlieb Steen & Hamilton LLP

Clifford Chance US LLP

Covington & Burling LLP

Cravath, Swaine & Moore LLP

Davis Polk & Wardwell LLP

Debevoise & Plimpton LLP

Dechert LLP

Dewey & LeBoeuf LLP

Dickstein Shapiro LLP

DLA Piper US LLP

Edwards Angell Palmer & Dodge LLP

Fried, Frank, Harris, Shriver & Jacobson LLP

Gibson, Dunn & Crutcher LLP

Goodwin Procter LLP

Greenberg Traurig LLP

Hughes Hubbard & Reed LLP

Jones Day

Katten Muchin Rosenman LLP

Kaye Scholer LLP

Kelley Drye & Warren LLP

King & Spalding LLP

Kirkland & Ellis LLP

Kramer Levin Naftalis & Frankel LLP

Latham & Watkins LLP

Mayer Brown LLP

Milbank, Tweed, Hadley & McCloy LLP

Morgan, Lewis & Bockius LLP

O’Melveny & Myers LLP

Patterson Belknap Webb & Tyler LLP

Paul, Hastings, Janofsky & Walker LLP

Paul, Weiss, Rifkind, Wharton & Garrison LLP

Quinn Emanuel Urquhart Oliver & Hedges, LLP

Ropes & Gray LLP

Schulte Roth & Zabel LLP

Shearman & Sterling LLP

Sidley Austin LLP

Simpson Thacher & Bartlett LLP

Skadden, Arps, Slate, Meagher & Flom LLP

Stroock & Stroock & Lavan LLP

Sullivan & Cromwell LLP

Wachtell, Lipton, Rosen & Katz

Weil Gotshal & Manges LLP

White & Case LLP

Willkie Farr & Gallagher LLP

Wilmer Cutler Pickering Hale and Dorr LLP

Winston & Strawn LLP

That’s half the AmLaw 100. We’re all for inclusion, but they could have been a little more selective.

Going through it alphabetically, we see all kinds of firms that could have been left out. Akin Gump is a Texas firm. Bryan Cave is from freaking St. Louis. Talk about flyover land. Clifford Chance isn’t even American (yes, we know they acquired Rogers & Wells) and neither is DLA Piper (notwithstanding the fact that the US operations are a separate legal entity that report separate financial statements and are on separate compensation schedules – if the non-American firm’s name comes first, it’s not an American firm).

Then there’s a bunch of firms from Acela stops: Covington (DC), Dechert (Philly), Dickstein Shapiro (DC), Edwards Angell (Boston), Goodwin Procter (Boston), Morgan Lewis (Philly), Ropes & Gray (Boston), and Wilmer (DC).

We don’t even know if Acela goes as far as Miami, which is where Greenberg Traurig is from, but we’ve heard there’s some sort of car-carrying train you can take that way. Jones Day is from yet-another flyover city, Cleveland. If you’re going to be from the heartland, at least be from Chicago, like Katten Muchen, Kirkland, Mayer Brown, and Sidley are. King & Spalding is from Atlanta.

Latham is at least arguable: it’s a California firm at heart, but its largest office is in New York. Gibson Dunn, O’Melveny, Paul Hastings, Quinn Emanuel, are just California, even if they’ve got reasonably large NY presences.

So cut out the non-NY firms and you’re down to 27 firms.

But there are also a few firms that seem to be missing.

Proskauer is the obvious omission.

Then there are some others that could have made the list. For example, Curtis Mallet-Prevost & Mosle and Seward & Kissel, and Carter Ledyard are very old, very New York firms, despite the low-key reputations.

Who else got left out and who asked all those non-NY firms to weigh in?

And like we said last time, Wachtell should be at the top of the list because its partners are on the hook for unlimited personal liability, as the firm is still a general partnership.

Surprisingly, they should be joined by Jones Day, which is also a general partnership! Who knew?

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lawshucks — Tue, 02 Feb 2010 18:38:57 +0000

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The Month in Layoffs – January 10

lawshucks — Tue, 02 Feb 2010 11:51:39 +0000

January was an odd month. Every week, there was one firm laying people off. Some weeks it was lawyers, some it was staff.

It was just enough to keep everyone on edge.

Which is probably what the firms wanted, as they were focused more on spinning the year-end numbers for inclusion in the AmLaw rankings.

This time last year, it was pretty clear that a number of firms just waited to get through the holidays then opened the floodgates.

The total for January this year was only about 10% of last year’s.

Details after the jump.

Only 136 people were laid off in January 2010 (46 lawyers / 90 staff). That’s a far cry from a year ago, when 1,540 people were let go (694 / 846).

But even that 136 was almost twice as many as were laid off in December – which way will the trend go?

It’s been a while since we’ve put out the entire chart going back to January 2008, so here it is:

Similarly, the average layoff size was almost double in January compared to February.

That, too, is far short of the overall average size of 52.17 people per layoff (275 layoffs affecting 14,347 people).

Next month will be interesting. Law firms, in a practice that must make management gurus sick, typically announce bonuses in December, pay them in December or January, then do reviews in January and February. So we’re heading into the height of stealth-layoff season. We’ll be particularly vigilant about not letting firms change their standards, so help us out with tips.

Details of the month’s layoffs can be found in the “This Week in Layoffs” series.

The January 2010 weekly recaps:

This month’s layoffs (attorneys/staff):

Marks & Clerk* (1/0)
Morrison & Foerster (0/50)
Wilson Sonsini (0/20)
Seyfarth Shaw (20/20)
Cahill Gordon (25/0)

* This layoff was reported by one of our own tipsters, and we subsequently got confirmation from the firm’s PR agency. Marks & Clerk, about whom we’ve previously broken a round of redundancies, has laid off one more fee-earner in the Birmingham Manchester office as a result of consolidation of the Liverpool office.

Extending the Lateral Tracker iPhone Contest

lawshucks — Tue, 02 Feb 2010 02:35:43 +0000

One of the joys of rolling out a new app is breaking it in production. We had a bunch of downtime last night with procrastinators getting in their last-minute entries (or something – not sure what caused it yet). Plus, non-blog events are conspiring to keep us busy for a few days, so we’re extending the deadline to Friday night, winners will be announced on Monday.

Read the rules, go to the Lateral Tracker, and get in those entries!