Former Skadden Attorneys Questioned on Business Background

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Whenever there is a layoff announcement, some readers point out that lawyers are not particularly good business people.

Even lawyers that leave Biglaw for big business have their acumen called into question.

The latest evidence comes from a conference call held between IDT (International Discount Telecommunications) and their investors.

Jim Courter, CEO of IDT, held the call to explain IDT’s quarterly earnings. Courter, himself a former partner at Verner, Liipfert, Bernhard, McPherson & Hand, explained the “disappointing” numbers. Then the call was opened up to questions from the investors.

At that point Thomas Kahn, head of the Kahn Brother’s hedge fund, laid into IDT for losing so much money. After criticizing the firm and their current chairman, Kahn asked to speak with Liore Alroy who is rumored to be the incoming COO of IDT.

And the second question is, Mr. Alroy, if we could hear from him, what his business background is, what his current role is in the Company, and what his role might be, or he think might be going forward? For example, is he going to be the COO of the Company going forward? I think it would be useful for us to hear something from him, because he should understand that a lot of water has gone over the dam, and a lot of things have been said which have not happened, or have not come true. So it would be useful for him to speak a little.

Mr. Alroy responded:

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Alright. Business background. My working career starts in 1993 as an attorney. I was with Skadden, Arps for about five years, mostly doing tax work, transactional tax work, I then went on to private practice elsewhere, including on my own. I did a little bit of advising and consulting as a sort of quasi-finance, quasi-tax advisor to some people, and then came to IDT through that consulting role. …

To be honest, I am arms, legs, and body, and a good part of my head into Telecom right now, there is so much to do, and I am keeping so busy with it, I don’t think too much about what my next role is.

The shareholders take swipes at Skadden after the jump.


Kahn was not impressed with Alroy’s credentials:

But you have not been a CEO of any profitable business venture, where you bring a background of being a CEO of a successful business venture to the IDT environment. In other words, one of my concerns has always been that there are too many lawyers and too many people with 160 IQ’s running around IDT, but not enough people who have been out working elsewhere, and have demonstrated track records of running successful profitable businesses.

I am sure you are doing a fine job where you are, but I would like you to pinpoint and give me, maybe you can e-mail the names of some people who are in the top upper echelons of IDT, who have run successful businesses on the outside, that have made money and grown, and yada-yada-ya, because grown, because I would be interested in knowing who is in the inner sanctum, who meets that standard.

At that point the operator moved on to other shareholder concerns.

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Are Mr. Kahn’s criticism valid? Are there too many lawyers mucking up big business? Barclays thinks so. A tipster reported to Dealbreaker:

Apparently, “legal is getting murdered today. Mostly Lehman people, though a few unfortunate Barclettes, as well.”

IDT Corporation Q4 2008 Earnings Conference Call Transcript [The Alacra Store]

Layoffs Watch ’08: BarcLehs Cans The One Group It Could Use Right About Now [Dealbreaker]

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