Law Shucks

Note to W&C: Promoting Associates No Substitute for Lost Partners

law shucks — Wed, 10 Mar 2010 20:05:29 +0000

Not sure why White & Case thinks people will be fooled by this:

White & Case has made an additional round of partner promotions in a bid to rebuild its partnership, following a number of high-profile departures in recent weeks.

The U.S. firm has promoted five lawyers to the partnership.

The promotions plug the gaps in several areas where the firm has been badly affected by recent departures, with two new partners in Abu Dhabi and three in its global banking practice.

Why this is a joke, after the jump.

The firm just announced a huge class of 33 partners just four months ago and none of these people, however nice they may be, made the cut.

Losing others shouldn’t mean that people previously considered not-yet-qualified should get promoted.

Firm chair Hugh Verrier commented: “These new partners are among the emerging generation of leaders cultivated within White & Case, reflecting our future as a truly global law firm. Their election to partner underscores our commitment to serving our clients and further strengthening our global banking and Middle East practices.”

At least Verrier has finally poked his head out with a public comment.See related stories below for plenty of previous coverage on the subject.

John Quinn Can Skip the Stairmaster

law shucks — Wed, 10 Mar 2010 19:25:30 +0000

Fortune has a long, fascinating piece about the firing of fund manager Jeffrey Gundlach (pictured). [HT: Business Insider]The story has it all, porn, sex toys, pot, and $70 billion in AUM. But here’s the highlight for the BigLaw crowd.

[Gundlach] stormed out of the room and began walking down the stairs. [Quinn Emanuel's John] Quinn and [Trust Company of the West GC] Cahill trailed him, thinking he was headed for the trading floor one level down, but Gundlach kept going. It was a surreal procession, says Quinn; they marched down 17 stories in total silence. The lawyers followed Gundlach out of the building and onto the street until Gundlach finally turned around and told them he wasn’t planning on stopping anytime soon.

We had to chuckle at the visual of two lawyers silently chasing a hedgie down 17 flights of stairs.

Cahill is also a BigLaw veteran, having worked at O’Melveny.

No word yet on whether Quinn is the company’s counsel in the lawsuit against Gundlach.

Does the billing rate go up when physical exertion is involved?

Kaye Scholer Screws Up, Apologizes

law shucks — Wed, 10 Mar 2010 18:38:02 +0000

Attorneys at Kaye Scholer were berated by a bankruptcy judge for including potentially defamatory claims in a pleading without sufficient basis for doing so, according to the Wall Street Journal.The firm represents Bank of America in a bitter dispute over the blowup of one of the worst condo deals in Miami.

In the pleading, the firm (although technically, it’s the Bank that’s the actual party) claimed the debtor developer had leased nine apartments to convicted felons, including a sexual predator.

Turns out it was only two, and neither was a sex offender.

Plenty of bickering, after the jump.

It seems the judge’s real problem was that the firm was either grandstanding or lacked common sense.

“If you truly believed there were dangerous individuals living in that building,” the judge wrote of the Kaye Scholer claims, “then that is something you should have brought to the debtor’s attention immediately, unless it’s more important to score a litigation point than it is to protect the safety of the people living in your collateral.”

Faced with the criticism, the firm stepped up and volunteered to pay the debtor’s counsel’s expenses – although that was probably a foregone conclusion anyway.

Bank of America’s attorneys apologized in open court for not conferring with Cabi first before including the accusations in their pleadings. “I regret and apologize on my behalf and on behalf of the bank for the mistakes,” said H. Peter Haveles Jr., a Kaye Scholer attorney.

Haveles (Harvard AB ‘76, BU JD ‘80) is Co-Chair of the firm’s Complex Commercial Litigation Department and Chair of the Financial Services Litigation group.

Despite the apology, the issue of fault is still simmering.

Outside the courtroom, however, attorneys for both sides continue to argue over the cause of the mistake. A Kaye Scholer attorney blamed Cabi for the false information. “The motion contained data that the bank believed to be true based on the records that the debtor produced from its own lease files for review by the bank’s advisors,” said Ana M. Alfonso, of Kaye Scholer in an email message. “Unfortunately, some of the information contained in the debtor’s lease files was not totally accurate.”

Alfonso (Vanderbilt BS ‘94, NYU JD ‘97) doesn’t seem to want to let it go. Nor does the debtor’s counsel.

“That’s completely wrong,” said Cabi attorney Andrew Glenn, of Kasowitz, Benson & Torres, in response. “And had they picked up the phone and asked us about it we could have confirmed that in 15 minutes for them.”

So Kaye Scholer is picking up part of the Kasowitz bill, but will they pass it through to B of A? Will they even bill B of A for the time spent arguing about the pleading defects?

Dear Law Shucks – Cheats and Cheaters

law shucks — Tue, 09 Mar 2010 21:58:20 +0000

We get interesting emails from readers all the time. Some are tips, some are rants, some are weird.

We’ve decided that rather than limit the treasure of our response to just one person, we’ll from time to time share the question and our answers with everyone. We’re generous like that.

Today, we have a three parter:

Do you think small law firms are less ethical? My reasoning is that the large law firms have decentralized management. So recourse seems more possible (by calling someone at a different office) and the threat of it is more of a deterrent. Do you think that smaller law firms are managed less ethically than bigger ones? Also, do you think affairs are common at law firms? I’ve seen attractive women promoted rapidly.

Our answers after the jump.

Do we think small firms are less ethical? No, we don’t think firms are ethical at all.

People behave ethically (or not). In small firms, unethical people comprise a far greater percentage of the firm, so it’s easier to attribute one miscreant’s behavior to the whole. See, for example, Scott Rothstein.

The same problem happens when the unethical person is the public face of a firm. See, for example, Marc Dreier.

Unethical behavior abounds in large firms as well. See, for example, Mark McCombs at Greenberg Traurig. We don’t know whether the behavior is more or less common in large firms than in the general public.

You could argue it either way. Small-firm lawyers have less supervision, so their behavior can go unchecked. On the other hand, large-firm lawyers may feel so alienated and insignificant that they think no one will notice.

Management is a little clearer. There may be small firms that are managed by unethical people, in which case the management is dominated by that person. Large firms may have unethical people in management roles, but they tend to not last long and they certainly don’t have the ability to take control of a large firm. We know douchebags, jerks, and all sorts of other unsavory types who are in management roles at large firms, but in our experience we’ve never come across a big firm that we’d say was either unethical as a whole or managed unethically.

Affairs? Yes, they’re common. At some firms it ranges from rampant to occasional (and even within firms, different practice groups’ partaking vary), but on the whole, it’s common. We know partners who have married multiple secretaries, associates, paralegals, HR staff, and other partners. Associates marry each other all the time. If people are going to cheat, the fact that they’re lawyers who did it where they work doesn’t make them any different from any other segment of society.

It’s like summer camp. You’ve got hordes of similarly situated people locked up together with little opportunity to enjoy outside entertainment. What do you expect to happen? And they’re all consenting adults, so who cares?

Your last comment wasn’t a question, but we’ll respond anyway. Yes, attractive women do well in the workforce. Law firms are no different. Penelope Trunk writes about this stuff all the time, even calling plastic surgery the next must-have career tool.

Readers, what do you think?

The Firms Behind the Dear Investor Letters?

Get Ready for Blawg Review

law shucks — Tue, 09 Mar 2010 15:48:57 +0000

We’re hosting Blawg Review #255 on Monday, March 15 – Beware the Ides!

If there’s anything you’d like included, make sure to submit it through Blawg Review.

Other than submissions, which should go through Blawg Review, feel free to put any requests in the comments below.

Agents Ride on BigLaw’s Coattails

law shucks — Mon, 08 Mar 2010 20:49:08 +0000

Bitter Lawyer has just put out a list of the top sports agents who are lawyers.

None of them are from major firms, but they can all trace their success to two big firms that paved the way.

A quick recap of the BigLaw connection to sports history after the jump.

Major League Baseball free agency came first. It resulted from a line of cases beginning with [St. Louis outfielder Curt] Flood v. [Commissioner Bowie] Kuhn. That case went to the Supreme Court, where it was (unsuccessfully) argued by the late Arthur Goldberg, a former Supreme Court justice who was then at Paul Weiss. The public backlash and spine-stiffening among players opened the door and free agency came rushing in shortly thereafter.

Then Weil Gotshal got into the business. If there’s one firm responsible for free agency (whether you think that’s a good thing or not), they’re it.

A Weil team led by James Quinn (Notre Dame BA ‘67, Fordham LLB ‘71) represented Oscar Robertson in a suit against the NBA that got rid of its antitrust immunity. Seven years later, in 1983, he negotiated basketball’s first collective bargaining agreement. Shortly thereafter, Quinn led the team that won McNeil v. NFL, which opened the door for NFL free agency.

Quinn’s right-hand man was Jeffrey Kessler (Columbia BA ‘75, JD ‘77), who has since gone on to Dewey & LeBoeuf.

Between Quinn and Kessler, they’ve effectively put free agency into place in the NBA, NFL, and arena football, as well as significant groundwork in soccer, hockey, and other sports.

So while these agents are highfiving their superstar clients and making the cover of Sports Illustrated, don’t forget it was BigLaw that paved their way.

There are plenty of athletes and celebrities represented by lawyers at major firms, do you know of any interesting ones?

This Week in Layoffs – 3/5/10

law shucks — Sun, 07 Mar 2010 03:09:26 +0000

Pic: U. Chicago

First-time jobless claims dropped last week, and the overall unemployment rate (U-3) held steady at 9.7% in February.

But you won’t call that “good news” if you know what’s good for you.

Ross Todd at the American Lawyer spared us some typing:

The news for the legal services sector is one of the more hopeful signs of late. Only 100 jobs were lost in the legal sector in February, the second month in a row that has seen a substantial drop-off in job losses. According to seasonally adjusted BLS data, the legal sector lost 1,100 jobs in January compared to 2,100 in December, 2,900 in November, and 5,800 in October. Since February of last year, the sector has shed 37,100 positions.

Coincidentally, that lines up very closely with the 110 jobs we reported lost from major law firms in “The Month in Layoffs” for February. (BLS reports net numbers, we’re just tallying layoffs at major firms)

But layoffs aren’t firms’ only costcutting measure, and in fact they seem to be falling out of favor quickly. After the jump, what the firms have been up to this week.

First off, we’re happy to note that no layoffs have been reported for the second week in a row. That hasn’t happened since the December holidays.

This is no time to start feeling all secure and go crazy, though. As Hiring Partner just wrote, it’s still important to cover your ass.

One reason for fewer layoffs going forward is simply that hiring is falling off a cliff. People who summered in 2008 got offers at almost a 90% clip. Last summer, the rate dropped below 70%. Of course, those ‘08 summers were the ‘09 grads who had their offers rescinded or their start dates deferred, so it’s kind of a pick-your-poison situation. Get screwed early or get screwed late, either way, both classes got screwed.

Not that it’s likely to matter to the recent graduates and junior associates, but corporate law departments are supposedly getting ready to hire. Even that is bad news for firms, though, because it’s part of an effort to reduce spend by reducing reliance on outside counsel.

For firms that have already laid off staff and associates, lowered salaries, reduced bonuses, and curtailed hiring, what’s left when clients won’t accept rate hikes? Cutting partners, at least according to Hildebrandt and Citi.

Even among the gainfully employed, “morale is very low” at Reed Smith, where they’ve just announced salaries for 2010 and the effects of leaving lockstep are finally hitting wallets and purses. Is it finally settling in? Not all of you are in the top 10%? For that matter, not all of you are not even in the top half.

OK, maybe it’s a little early for that, but we are curious to see how the averages in non-lockstep firm compare to their lockstep counterparts. We’re firmly in the camp of not using abandoning lockstep as cover for salary cuts.

That’s nothing compared to the dissension being sown by two members of the most recent summer class at Mayer Brown. Ahh spring is just around the corner and we have green shoots of thoughts turning to collective action. Part of the problem with the misery of 2009 was that we missed out on the perennial cries for unionization of BigLaw associates. Perhaps the summers and law students can lead the way?

Frankly, this is just an opportunity to use a quote from a previous round of Marxist agitating:

I can just see it now as an associate in an Armani suit holds up a sign reading Union in the middle of the law firm cafeteria . . . and is carried away screaming by security thugs.

Well said, Prof. Secunda.

Amazingly, Rosencrantz and Guildenstern seem to have gotten what they wanted – word came from the firm that Mayer Brown has been prodded into realizing that they’re six months overdue in making a decision and has just now begun to contemplate the situation.

Is there something about Chicago that is retarding the decisionmaking process? Katten Muchin hasn’t set salaries yet, despite indicating back in January that it would be done by March 1. Maybe KMZ lawyers are better off waiting. Just a few weeks ago we wrote about rampant jealousy in the Second City.

Major firms have laid off

nobody this week (again) or month!
246 people this year (91 lawyers, 155 staff)
14,457 people since January 2008 (5,677 lawyers, 8,780 staff)

The Month in Layoffs – February 10

law shucks — Sat, 06 Mar 2010 20:37:36 +0000

What a difference a year makes. February 2009 blew away all previous layoff totals as the wave started to surge (only to be eclipsed by March ‘09).

February 2010 may be the harbinger that the tide has receded and firms are no longer resorting to mass layoffs to reduce expenses.

After the jump, details on February’s layoffs and a look back to put it in context.

Only three firms were reported to have laid people off in February, down from five in January. That’s the fewest since August, but is consistent with the last seven months, during which only a handful of firms have had reported layoffs.

[Note: click to embiggen any chart]

The number of people laid off by major law firms also dropped in February, to 110, down from January’s 136. Take out the lull for the December holidays, and that’s the fewest people laid off in any month since September 2008.

The number of associates laid off was flat, though – 45 in February, 46 in January. Still, it’s not likely that attorney layoffs will ever catch up to the staff cuts at this point. Attorneys account for just under 40% of the 14,457 layoffs tracked to date.

Firms that had reports of layoffs in February:

Ashursts (9, all lawyers – partners, in fact)
Drinker Biddle (7, all lawyers)
Howrey (94, 29 lawyers/65 staff)

More detail about the layoffs and the other cost-cutting measures firms have embraced can be found in the weekly analyses:

What do you think, is that the end of an awful era?

Lawyers Sharing Cabs & Blowing Opportunities

law shucks — Fri, 05 Mar 2010 20:00:25 +0000

Business Insider turned our attention to a story in the NY Post about a new cab-sharing program. The TLC is offering group rides from stands in the largely residential Upper East Side neighborhood to largely commercial Midtown.BI’s Law Review focused on one lawyer-civilian pairing:

David Alper, the hedge fund manager on the left, looks like he’s about to jump out of a moving cab.

Adam Gehrie, the corporate lawyer on the right, is covering his shame with his coffee cup.

It doesn’t look like either of them is actually interested in networking with another finance guy who can’t afford his own cab.

More on that and the other big-firm lawyer sharing a cab (and looking for love) after the jump.

Gehrie (Amherst BA ‘01, Georgetown JD ‘04) is actually a hedge fund guy at Dechert. So Adam, if you’re reading this, some free advice.

THIS IS TOTALLY UNACCEPTABLE:

“We should get together,” Alper suggested as the two exited their ride at 42nd and Park, the farthest the discounted rides will take up to four passengers.

YOU SHOULD BE THE ONE SUGGESTING A GET-TOGETHER. Seriously, this is a golden opportunity. The guy is a potential client and he’s right in your wheelhouse!

If you ever want to make it to Minder, let alone Finder, you’re going to have to learn to seize these chances.

Another corporate lawyer was sharing a ride and far more alert to opportunity.

Sarah Hewitt, a corporate lawyer, and Alexandra Winterfeldt, who works at Sony Music, both admitted they were supposed to be at work at 9:30 a.m., even though they were still en route at 9:45.

Hewitt, who’s single, also quipped that she hoped to find “a cute guy” some day in one of the shared rides.

Sorry for outing your tardiness, Sarah (Williams BA ‘79, Cornell JD ‘82), but since you’re a partner at Blank Rome, there are fewer people keeping tabs on your comings and goings.This isn’t the first time Hewitt has been in the paper, either. The Times wrote about her purchase of a place in Sag Harbor a few years ago.

Hiring Partner: CYA

Hiring Partner — Fri, 05 Mar 2010 15:54:56 +0000

Welcome to HP’s second installment here at Law Shucks (Previous columns can be found in the growing archives).

This week’s topic complements last week’s post on looking out for yourself and not expecting the firm to be your friend.

After the jump, HP explains how to look out for #1 without stepping in #2.

Part of looking out for yourself includes the recognition that your fellow partners/associates may tell you one thing on Monday, then say they said something different come Friday, or they may actually mess up and try to blame you for it.

My motto is “if I screw up, I take the fall, but I am CERTAINLY NOT taking the fall for someone else’s screw up. This is an important point and I have seen it a million times.

You are a lawyer, you document other things. Document to save your a**.

This point also applies to clients. Some time ago, I had a heavily accented client asking me a question about the legalities of doing something. I really wasn’t sure I even understood him. I asked him to please send me an email so I could review the full scenario. When he did, I concluded something different than if I had just given quick advice on the phone.

Or, client tells you something, you act, then client says it was something else, and now there’s a problem. I usually start memoranda or even emails with what my understanding of the situation is…something like “We understand that X operates at ___ business in the following states. X provides __ but does not provide __. You have inquired whether —-….I know that most of us do this when we are doing formal memos but don’t let email trip you up.

Cover your ass.

I hate to say it, but some colleagues will at some point, attempt to screw you over.

Why? Well, they are trying to save their own asses of course.

In these uncertain law firm times, who wants to admit they made a mistake?

Classic example: one Friday, I had to leave early for a family matter. While I am out, I get an email from partner Harry saying wasn’t something supposed to get on file the day before, and have I missed a deadline. My heart sunk (and why do these messages always come when you are not in the office?). But I gathered my thoughts — because I know I am quite crazed about deadlines — and I kind of knew that this was not on my watch.

I went back to my emails and searched. Sure enough, I had an email from Harry some weeks back where I told him about the deadline, and asked if he needed help. He replied very clearly “no, I will take care of it.” So.. now I had my CYA documentation. I forwarded it to Harry and said, something like, actually, as indicated in the attached, you said you were taking care of it. End of story. As I said, don’t take the fall for someone else’s screw up and have the evidence to support your side.

Next week, we will cover the “Me File.” It sort of goes hand in hand with CYA. The bottom line of all this is looking out for YOU and protecting your “brand” in the market. You do it for clients, treat yourself just like you would treat the biggest client.

Have a great weekend!