Archive for February 2009

Hogan & Hartson Offers Buyout of 250-300 Staff

By Elie Mystal

Hogan Hartson logo.jpgMultiple sources told ATL on Friday that Hogan & Hartson would offer a buyout to 250-300 of its support staff. The firm has now had an opportunity to inform all of the personnel.

We spoke with Hogan & Hartson Chairman J. Warren Gorrell Jr. on Friday. He explained that the buyout is part of Hogan’s attempt to find solutions to the financial crisis in both a creative and sensitive manner.

Gorrell also explained the specifics of the offer. Staffers with more than five years of experience will be offered four weeks pay plus one week for every year they’ve been with the firm. For some senior people, that could end up at 20 or 30 weeks, which is considerably more than what other firms are offering displaced staff members as part of a severance package.

Tipsters weigh in after the jump.

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Morning Docket 2.9.09

By Eliza Gray

baseball.jpg

* The U.S. government may force GM and Chrysler into bankruptcy to ensure re-payment of the $17.4 billion bailout to taxpayers. [Bloomberg]

* A hearing today before the Ninth circuit in San Francisco will provide insight in to the administration’s views on extraordinary rendition–the secret transfer of a terror suspect from one state to another. [ABC]

* The Italian Senate will discuss a “Right-to-die” bill designed to keep an Italian woman on life-support. [The International Herald Tribune]

* When will the baseball steroid scandal ever end? Sportsfans are up in arms about reports that Alex Rodriguez used steroids in 2003. [Reuters]

* A new book “Claudette Colvin: Twice Toward Justice,” sheds light on a forgotten hero in the civil rights movement and the legal fight to de-segregate busses. [The Associated Press]

* Need a job? Attorney Michael D. Hausfeld, who once represented Holocaust victims against Swiss banks, started a law firm that focuses on protecting businesses against global cartels. [The Washington Post]

Non-Sequiturs: 02.06.09

By Elie Mystal

Michael Phelps pot marijuana bong.jpg* In case you are wondering, I’m in the foreground on the right in this artist’s depiction. [Courtoons]

* Are doctors now more hated than lawyers? That probably depends on how sick you are. [What About Clients?]

* Should you friend your boss on Facebook? [Corporette]

* It might be in poor taste, but Ruth Bader Ginsburg’s surgery was the opening bell on the Kagan v. Sotomayor steel cage match. [CQ Politics]

* Michael Phelps lost one of his sponsors, after being photographed smoking from what looked like a marijuana pipe. ESPN is doing 24/7 analysis about what this means for Phelps, kids, and America. I’m sure Katie Couric is going to get involved soon. Thank God I only smoke tobacco, drink alcohol and caffeine, eat red meat with lots of salt, take whatever Pfizer tells me I need, and gamble away all of my disposable income. A real role model follows the law! [Popsquire]

Gibson Dunn: Gross Revenue Up, Profits Per Partner Down, No Layoffs in Sight

By Elie Mystal

Gibson Dunn.gifGibson Dunn hasn’t laid off associates, didn’t freeze salaries, and paid a market bonus. The firm also took a minor hit to profits per partner. AmLaw Daily reports:

The firm reports that gross revenue rose 5.4 percent to $957 million, however other financial metrics fell, presenting a slightly more sobering picture. Gibson Dunn’s profits per partner declined 1.3 percent to $1.9 million, while revenue per lawyer dropped 4.3 percent to $1 million.

Is this an example of a partnership taking a hit in profits in order to save associate jobs?

After the jump, is Gibson Dunn hiring?

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Legal Eagle Wedding Watch 2.1: Cy For Me

By Laurie Lin

champagne glasses small.jpgRemember Lisa Loeb? She got married last week. She’s 40 and still wearing those funky glasses.

Unfortunately, she didn’t marry a lawyer, so she isn’t eligible to be one of finalists. Here they are (only two this week):

1. Emily Rubin and Daniel Feldman

2. Leah Yoon and Cyrus Frelinghuysen

Read more about these couples, after the jump.

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More Straight Talk From John Quinn

By Elie Mystal

Quinn logo.jpgLast week, John B. Quinn, managing partner of Quinn Emanuel, gave his “state of the firm” address. Quinn’s address made some associates feel better and more secure. Other associates were angry. But if you are interested in how partners really think, the address was pretty interesting.

Quinn takes questions during this annual address, and this year the questions quickly turned to Quinn Emanuel’s bonus structure. Quinn paid Cravath-level bonuses for associates that hit 2100 hours (while giving more money to associates who far exceeded that target).

But Quinn also showed a significant surge in profits per partner, up 11 percent from last year. So associates wondered why more of that money didn’t trickle down to the associate level. According to tipsters, John Quinn told the gathering:

He said that we could have afforded to pay the higher bonuses, and we could afford to increase everyone’s salary by 10 to 15 thousand a year, but that doing so just doesn’t make strong business sense.

When we contacted Mr. Quinn, he reiterated his position that the market, not profit numbers, sets the level for associate bonuses:

i also said that the amount of associate bonuses–for all firms, not just ours–is driven by the market, which is very efficient. and of course it’s a business decision. firms don’t base bonuses, or salaries for that matter, on “what can we afford”, but on the market. we are no different.

Of course, Quinn Emanuel isn’t the only game in town. After the jump, we learn that Mr. Quinn won’t hold it against you if you feel you can get a better deal than what his firm is offering.

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Latham & Watkins: Two IP Partners Leave

By Elie Mystal

Latham Watkins LLP lw logo.jpgWe got a report last night that Latham & Watkins was losing two more IP partners to Quinn Emanuel. We’ve been able to confirm with sources at Quinn that the firm has in fact added Sean Pak and Dave Nelson. Both partners were patent litigators with Latham.

Our sources at Latham are worried that this is even more bad news for the firm:

This is on top of the NY IP partners all leaving last year. Expect several associates to follow. Right now LW has no IP practice in NY, and soon to have no substantial IP practice in Chicago. Rats leaving the sinking ship?

But is the Latham ship sinking? One tipster has no special information, but is worried nonetheless:

Rumors are flying within the firm that we’re going to announce layoffs soon…. I have no clue if the rumors are true but would love to hear everyone’s commentary.

After the jump, we get into some of the flying rumors.

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Lawyer of the Day: A Prostitute-Loving Cravath Partner?

By David Lat

Cravath Swaine Moore LLP Above the Law blog.JPG[Ed. note: We mentioned this briefly in Morning Docket. But any story involving the words "Cravath partner" and "hookers" deserves its own post.]

The late Deborah Jeane Palfrey, aka the “D.C. Madam,” has a New York counterpart. From ABC News (via our sibling site, DealBreaker):

Wall street lawyers, investment bankers, CEOs and media executives often used corporate credit cards to pay for $2,000 an hour prostitutes, according to the madam who ran one of New York’s biggest and most expensive escort services until it was busted last year.

But prosecutors in the Manhattan District Attorney’s office chose not to pursue any of the corporate titans, says Kristin Davis, who pleaded guilty last year to charges of running a prostitution business that used more than a hundred women.

Presumably no relation to actress Kristin Davis, who played squeaky-clean Charlotte York on Sex and the City. The actress is a brunette; the madam is a blonde (of course).

Among the names ABC News was able to confirm on [Davis's client] list:

* a partner at the Wall Street law firm of Cravath Swaine Moore, “looking for a party girl to come fully equipped,” [who] spent a total of $20,000.

Finally — a plausible explanation for those disappointing Cravath bonuses. The money went to a different set of hourly billers.

We appreciate the CSM partner’s demand that his high-class escort arrive “fully equipped.” Cravath lawyers believe in the importance of preparation. Whether dealing with depositions or dealmaking, their motto is: “Be prepared.”

Just like the Boy Scouts. If Boy Scouts blew twenty grand on whores.

Given the prestige (and profitability) of Cravath, some might find this news shocking. But those in the know realize that the white-shoe law firm has a long and august history…. of sexual deviance and prostitute patronizing.

Some historical context, after the jump.

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Job of the Week: You Will Comply

By Elie Mystal

Job of the Week Lateral Link ATL logo.gifToday’s mission, should you choose to accept it, is to work in a Manhattan high-rise for a solid company. Make sure you bring all of your knowledge of the regulatory environment and compliance with you in order to achieve ultimate success. Because of Lateral Link’s outstanding reputation with legal recruiters, Lateral Link members have a significant advantage when seeking a new position. Membership in Lateral Link is free and you can apply at www.laterallink.com.

Position: Assistant Vice President Corporate and Markets Compliance

Locations: New York

Description: This New York based international insurance company seeks an attorney (or someone with a legal background) with 8+ years of experience in compliance preferably with knowledge of the life insurance business. This person should understand the regulatory environment, corporate governance issues and related legislation pertaining to this industry. The candidate will possess strong knowledge and experience with U.S. and International anti-corruption statutes and regulations and OECD compact. In addition, this candidate should have knowledge and experience with U.S. and International anti-money laundering statutes and regulations and U.S.A. Patriot Act statutes and regulations. Candidates who have worked in an international environment are preferred. The ideal candidate has the ability to mentor and develop talent and demonstrates excellent business judgment and sharp analytical skills. Compensation commensurate with experience.

For more information about this position or to apply, please see Position 10336 on Lateral Link. Current members can also contact their personal search consultant directly to discuss this position.

Layoffs: What Partners Think

By Elie Mystal

pyramid scheme capstone small.jpgLeigh Jones of the National Law Journal was able to get partners to open up about the reason behind Biglaw layoffs. Not surprisingly, it’s all about the Benjamins:

Law firm leaders and industry consultants say a firm cuts costs by an average of $250,000 for each attorney let go. For each legal assistant or other staffer laid off, a law firm saves about $100,000.

According to the NLJ’s figures, rent and salary accounts for 85% of a firm’s operating budget:

“There’s only so much you can save by pulling the tea and cookies out of the conference room,” said the chairman of a major U.S. law firm that has laid off attorneys during the economic downturn. In order to speak candidly about his firm’s finances, he requested anonymity for this story. “The rent you’re stuck with, so you’re left with this huge megillah of compensation,” he said.

We have explored the concept of forced attrition in this space before. According to at least one partner, that is precisely what is happening.

Details after the jump.

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Morning Docket 02.06.09

By Kashmir Hill

pretty-woman.jpg* A New York madam, whose escort service was busted last year, shares her client list with ABC News. Among her clients, “a partner at the Wall Street law firm Cravath Swaine Moore ‘looking for a party girl to come fully equipped’ [who] spent a total of $20,000.” Perhaps we’ll call Cravath bonuses hooker-sized rather than half-Skaddens next year. [ABC News]

* Cadwalader joins Sonnenschein as the U.S. government’s bankruptcy advisers. [Bloomberg]

* Bail has been set for Marc Dreier at $10 million. If Dreier pays up next week, he can return to his East Side apartment, but will be under lock, key, and guard there. And Judge Jed Rakoff says no Blackberrys allowed! [New York Times]

* Tony Mauro of Legal Times talks about Ruth Bader Ginsburg’s surgery and the history of health issues at SCOTUS. [BLT]

* Tyco ex-CEO Dennis Kozlowski, of the $6,000 shower curtain, has hired Carter Ledyard & Milburn to appeal his conviction to the U.S. Supreme Court. [Bloomberg]

* 50 Cent no longer has to worry about this $50 million lawsuit. [People]

Morning Docket is sponsored by PBwiki — an easy, affordable online workspace that you can use as a legal knowledgebase or to manage cases. Seven of the top 20 law firms in the United States are PBwiki customers.

Weil Gotshal Associate Shown the Door for Failure To Graduate From Law School

By Elie Mystal

Weil.gifWe’ve often explored the studio space in terms of what a “performance-based layoff” actually means. But today we can report about at least one person who would have been fired in this market or any other.

According to multiple sources, both inside and outside Weil Gotshal, the firm recently fired an associate for failure to graduate from law school.

How did this escape the notice of Weil personnel? How was he outed? What was he thinking?

Well, Weil did not respond to our requests for comment. But we imagine that it is not unusual for firms to hire a summer based on 1L grades, make them an offer when the summer is over, and then never really look at a transcript again.

What we do know is that the associate “attended” NYU Law School. Tipsters report that he then did some study abroad and thought his credits would transfer back over to NYU. They did not. He never made them up, hence, no diploma, no graduation.

But this story is a little beyond a technicality. More details after the jump.

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Non-Sequiturs: 02.05.09

By Elie Mystal

Bill Walton for SCOTUS.jpg* Here is an actual quote from “local woman” Phyllis Shepard: “I’ve never seen anything like this. You know it happens behind closed doors, obviously. But in a public place, it’s no good.” [MSNBC]

* Next week on the Simpsons, Bart gets busted with 2.5 grams of weed and gets sent to Principal Skinner. [My Law Life]

* … Meanwhile, if you have a good lawyer you can get high in a national park. [Underdog]

* Bill Walton would make a great Supreme Court Justice. His dissents would become instant classics. “That’s just a TERRIBLE job by Scalia today. Just AWFUL. You’ve got a statute here that is on fire, and you’re going to apply intermediate scrutiny to this? Really? What WAS he thinking? [Suits and Sentences]

Can’t find work? Try working for free volunteering.

By Kashmir Hill

volunteer.jpgWhen the economy was better, we had a career alternatives for lawyers series, for those in Biglaw looking to do something new. Given the layoffs and sluggish law firm hiring these days, we’re starting a new series: “Can’t find work?” We’ll offer “options” for those shut out — or forced out — of Biglaw.

On Tuesday, we suggested an “option” for recent law grads unable to find work: start your own firm. Two University of Missouri grads were unable to find work and hung out their own shingle in Kansas City. ATL readers lent their support to the venture by spell-checking the hell out of the Buckley & Hutchings website.

Today, we have a new “option” for those looking for work. Offer up your legal services for free!

CARPLS, a legal aid society based in Illinois, is offering unemployed attorneys true pro bono work. From the Chicago Daily Law Bulletin (subscription):

A local legal aid provider is seeking unemployed lawyers as volunteers to staff its telephone hotline for low-income families in need of legal advice…

The volunteers must be licensed Illinois lawyers and are asked to work on the CARPLS hotline for at least four hours each week on a morning or afternoon shift. Schwartz said CARPLS officials hope that between 40 and 50 out-of-work lawyers will volunteer for the new program. The new volunteers will supplement the work of 32 paid staff lawyers, Schwartz said.

CARPLS officials posted a job description for the new program on craigslist and other online sites Thursday afternoon, Schwartz said. By Friday morning, there were about 35 responses, he added. The first response was from a lawyer who was offended because she was being asked to work for free, according to Schwartz. The rest of the responses came from lawyers interested in participating in the program, he added.

You may not get paid in cash, but you will get basic training in family, landlord-tenant and consumer law. Press release from CARPLS, after the jump.

So, if you’re twiddling your thumbs these days, think about calling up your local legal aid office and putting some of their attorneys out of work by volunteering your time.

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  • 05 Feb 2009 at 3:13 PM
  • Dreier

Penthouse Arrest For EVERYONE!

By David Lat

rsdss.jpg[Ed. note: This is a cross-post from one of our sister sites, Dealbreaker, which we thought you might appreciate because of its focus on an ATL celebrity: the recently indicted, high-profile litigator, Marc Dreier.]

Clearly, major fraud defendants have the best racket going- unless you just can’t live without the Deli down the street. First Madoff, now this:

A federal judge says a prominent New York lawyer accused of defrauding investors of more than $400 million can be freed under house arrest.

Judge Jed Rakoff on Thursday lifted financial requirements that had forced Marc Dreier to remain jailed.

Last month, a magistrate judge had required that Dreier produce $10 million in cash or property to secure a $20 million bail.

And we are worried about the optics of Wells Fargo going to Vegas?

Read the original post, and comment, over at DealBreaker.

Dean Koh to State Department?

By Elie Mystal

Harold Koh Yale State.jpgThe Yale Law School campus is buzzing with rumors that their popular dean, Harold Hongju Koh, could be leaving for a job in the Clinton State Department. The Yale Daily News reports that Koh could be appointed as legal adviser to the State Department:

In that position, Koh — a former assistant secretary of state and a leading expert on international law — would serve as principal counselor on all legal matters to Secretary of State Hillary Rodham Clinton LAW ’73.

Rumors have swirled for months around the Law School and in Washington, D.C., that Koh, whose five-year term as dean ends in June, might leave Yale to serve again in government. Koh, however, has repeatedly dismissed talk about a possible appointment as pure speculation.

Koh and the YLS press office did not respond to ATL’s requests for comment.

Even though Koh’s five year term is up in June, Yale has given every indication that Koh can keep his current job if he wants it:

University President Richard Levin said Wednesday that a routine review of Koh’s tenure at the Law School — timed for the end of his first term as dean — had yielded positive responses.

“It was clear that the community supported his reappointment,” Levin said. “There’s no question: If he stays here, he will be reappointed.”

If Koh leaves, he’ll be creating yet another opening on the Law School Dean circuit — which is one of the few jobs in the legal profession that is hiring.

Details after the jump.

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Cooley Law School Develops More Useless Than Normal Law School Rankings

By Elie Mystal

Cooley law school logo.jpgThomas M. Cooley Law School’s tenth annual Judging the Law Schools rankings are available. (Hat tip: ATL commenters.)
I was not aware that this school list existed. But now that I’ve seen it, I can’t stay the same. The rationale behind this list is rigorous and powerful:

Imagine that college football teams are ranked each year by the quality of the freshman recruits and the pre-season polls of the press and the coaches. Games don’t count, only what people expect, based upon the potential of the high school players and the pre-season assessment of two groups with some involvement in football. Imagine as well that the rankings for the year are determined just once, before the season begins and those players are tested by competition.

Dude, totally. Keep talking, I’ll roll the next one:

That unimaginable scenario is pretty much what happens when law schools are ranked. The quality of the incoming class and the reputation of the schools according to the academics and lawyers control the rankings.

This is just like that time when we were on that thing, and we saw all those little dudes. And they were running man, remember? But where? Where were they going, man? So fast:

Legal education is one of the last places in America where ignorance is used as a basis of judgment (I never heard of it, so how good can it be?) and where subjectivity and bias are actually valued over objectivity and fair-mindedness (this or that school has a good or bad reputation).

I’m totally wigging out.
You will be shocked to learn that Cooley Law School’s “objective” and “fair-minded” list ranks Thomas M. Cooley Law School 12th best, among the 197 ABA-accredited law schools.
See the top 20, plus some notes on Cooley’s methodology, after the jump.

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The February Freeze Round-up: New Firms on Ice (and smaller raises at Jenner & Block NYC)

By Kashmir Hill

pay freeze salary freeze pay cut law firm.jpgAnother month, another round of freeze announcements. Here are the latest firms to announce the withholding of class year raises in 2009:

  • Baker & McKenzie (“Slurpee” freeze– will be revisited on June 30)
  • Cooley Godward
  • Patton Boggs
  • Seyfarth Shaw

    Jenner & Block is not freezing salaries, but it is giving smaller raises to New York associates. The salary scale will no longer match the market in New York, reports one ATL reader:

    Jenner & Block just announced that they are not matching NY market for salaries. Instead, they are going to pay equal salaries across their offices, meaning their NY office associates will make at least $10k less than other associates at tier one firms in NY. From what I hear, people are pretty angry, particularly because a) Jenner also does not cover bar fees or court admission fees (as nearly all other firms do, particularly in NY); b) Jenner does not count all pro bono hours one-for-one with billable hours towards their 2000 hour requirement (unlike many firms); and c) Jenner’s profits went up last year.

    Since Jenner is essentially doing a salary raise cut (rather than a freeze), it has avoided being added to our list of firms that have frozen. To see Cooley’s 2009 salary levels, Seyfarth’s freeze memo, and the growing list of firms that are keeping 2009 salaries at 2008 levels, you have to jump.

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    • 04 Feb 2009 at 1:59 PM
    • Sports

    Sports and the Law: Can Schools ‘Cheer’ Their Way into Title IX Compliance?

    By Marc Edelman

    Last Tuesday, the Wisconsin Supreme Court held that a cheerleader who allegedly failed to spot his teammate was immune from liability under a Wisconsin assumption-of-risk statute, which forbids bringing a claim against any amateur athlete who acts negligently while performing a sport. In reaching this conclusion, the court explained that competitive cheerleading was indeed a “sport” based on the American Heritage Dictionary‘s definition of that word: “an activity involving physical exertion and skill that is governed by a set of rules or customs.”

    Upon learning of this decision, one astute Above the Law reader asked if courts would similarly find cheerleading to be a sport under Title IX of the Patsy T. Mink Equal Opportunity in Education Act. This is an especially interesting question because some schools including the University of Maryland and Seton Hall University have granted varsity status to their disproportionately female cheerleading squads. Thus far, the Department of Education has not taken a stance on these particular schools’ Title IX compliance, nor has there been a test case in our court system.

    After the jump, should cheerleaders count for Title IX purposes?

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    • 04 Feb 2009 at 10:20 AM
    • Biglaw

    Goodbye, lockstep compensation?

    By Kashmir Hill

    We linked to this article from the National Law Journal in the Morning Docket yesterday, but we think it warrants a deeper treatment.

    Karen Sloan of the National Law Journal digested a recent survey [PDF] of legal market trends by Hildebrandt and Citi. A lot of it we all know already– things were bad in 2008, and will be nastier in 2009, with average profits-per-partner predicted to decline by 5 percent to 15 percent. Survey says: Expect more layoffs, smaller bonuses, and more salary freezes.

    What caught our eye was the analysts’ suggestion for generating profits in 2009:

    [Firms will need to] reconsider changes to several key aspects of their business model. That includes everything from adjusting associate compensation structures and being more flexible with professional staff to offering alternatives to the billable hour model.

    Biglaw to… competency-based models?

    [F]irms should move away from lockstep associate compensation models and instead consider competency-based models, the advisory suggests. Jones said that instead of increasing compensation by class year, an alternative model is to separate associates into three or four levels, determined by their specific skill sets. Associates then would move up the next level only after they acquired certain skills. Rising to the next level would trigger an increase in compensation.

    The report also suggests upping the number of contract attorneys hired. A commenter on yesterday’s Morning Docket was not pleased by the suggestions:

    The suggestions they make for firms to change their promotion policies and use more staff attorneys would turn practices into f***ing Walmarts.

    Well, Walmart is one of the few businesses doing well in the downturn. We’re just saying.

    Continued Decline in Law Firm Profits Seen for ’09 [National Law Journal]