Biglaw, Law Shucks

This Week in Biglaw: 04.18.10

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Ed. note: Law Shucks focuses on life in, and after, BigLaw, including by tracking layoffs, bonuses, and laterals. Above the Law is pleased to bring you this weekly column, which analyzes news at the world’s top law firms.

Layoffs are no longer the core theme of this column, and there were none reported at major firms this week, but it’s still the source of one of the most-interesting stories. New Manhattan DA Cyrus Vance pink-slipped 10 ADAs (of about 500 total) [HT: ABA Journal].

It’s a detour from our focus on BigLaw, but you’ll have to excuse us, because: (a) most of those affected were very senior, so are more likely to join or face off against BigLaw, and (b) their reactions are exactly the same as we’ve been hearing from affected BigLaw lawyers for two years now:

“It’s been very unsettling, I think, for a lot of people because it hasn’t been part of the culture here that people would get fired,” said one prosecutor… .

Another senior assistant district attorney said that morale was “terribly low.”

“We’re all now told that the firings are over for the time being,” the assistant said. “Everybody is walking around wondering if they’re going to be next.”

Some prosecutors, the assistant continued, “are starting to reassess their career path.”

Sound familiar?

After the jump, we get back on track with BigLaw news about sanctions, laterals, and more.

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Practice

One of the most-frightening stories of the last few years (other than, you know, layoffs) was the sanctions imposed against Qualcomm’s lawyers at Day Casebeer and Heller Ehrman for discovery violations. The lawyers were finally permitted to break privilege and present evidence of the difficulty they had with their client, which resulted in the sanctions’ being lifted more than two years after imposition.

Kash interviewed one of the recently vindicated lawyers, Adam Bier, who was an associate at Day Casebeer at the time. Not only is it a cautionary tale, a theme reiterated by the Recorder in an ABA Journal story, but it’s also looking like it will be a story of redemption. Bier is doing well with a fledgling solo practice working on startup matters.

As good as that news was, Stroock & Stroock & Lavan got equally bad news. Most people had expected the firm to be left off the hook for a mere scrivenerial error in a real-estate-development offering package, but no such luck. Putting the wrong date in the documents could expose it to tens of millions of dollars in liability.

Laterals and Promotions

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One of the areas we’ve been looking forward to addressing in our newly expanded scope is laterals, and there were definitely a couple of interesting stories on that front this week.

In addition to the usual bouncing around between firms, there were a couple that broke out of the usual mold.

ATL was all over Lanny Davis’s departure from McDermott Will & Emery. The DC powerbroker had arrived from Orrick a mere six months ago, only to decide the problem wasn’t with Orrick or MWE, but with working out of a big firm entirely. So he’s setting up his own shop in order to avoid conflicts in his crisis-response practice.

BigLaw is the right place for two former inhouse lawyers. Mary Huser is returning to Bingham after a two-year stint heading the IP practice at eBay. Her is the simple storyline: BigLaw to inhouse and back to the same BigLaw firm whence she came. Michael Halloran is taking a more circuitous route. He started out at Pillsbury Winthrop then took jobs at the SEC and Bank of America, rising to GC, before returning to private practice at Kilpatrick Stockton last year. That wasn’t quite the right fit, though, so he just moved over to Haynes and Boone.

Then there’s Jane Sherburn, who is going the other, more-traditional way: BigLaw to inhouse (albeit with a detour). The Wilmer Hale alum has been biding her time in a solo practice after getting squeezed out in the Wells Fargo/Wachovia merger and has now landed the top job at Bank of New York/Mellon.

Paul Weiss won the Mark Mendelsohn sweepstakes, landing the deputy chief of the DOJ fraud section’s criminal division. He’s the heavyweight champ of FCPA prosecutions, and with that heating up as a practice area, his services were in high demand. Ironically, it was just over a month ago that he was saying the government would be stepping up enforcement on that front, with his old shop potentially growing by 50% over the next year or two. He won’t be part of that, but that will only be good for business on the defense side. The WSJ Law Blog reports that he’ll be earning $2.5 million, which is roughly average for the firm’s partners.

There were about two dozen lateral moves this week, and you can see them all in the Law Shucks Lateral Tracker.

Suits

The blockbuster suit this week is the SEC’s allegation that Goldman Sachs committed fraud in the offering of its ABACUS 2007-AC1 CDO.

To the absolute surprise of no one, Goldman turned to Sullivan & Cromwell. The firm has been joined to the bank’s hip for decades, as Carney noted a few months ago. Of course, S&C’s work for Goldman has almost always been on the corporate side, but clearly the bank was going to pick the firm it knows so well.

The S&C litigator taking care of Rodge Cohen’s BFF is Richard Klapper, who last appeared on ATL for his tangential involvement in the Charney affair, but he’s got a whole bunch of other interesting cases on his resume, too.

The investment banker at the core of the allegations, Fabrice Tourre, turned to Pam Chepiga of Allen & Overy.

BigLaw Business Model

Two developments on how firms run their business this week, both of which may start trends… for better or worse.

The trend that may not be appreciated is the announcement that Freshfields is preparing for an abundance of work not by staffing up but by lining up contract lawyers. We thought their other recently announced plan to tap a pool of alumni was an interesting play for mommy-tracked lawyers, but this is potentially more nefarious. The third alternative the firm is considering is outsourcing. They’re serious about sticking to 3:1 leverage.

The other potential trend, which is probably neutral to associates, was the announcement that Dewey & LeBoeuf was refinancing its bank debt with a $125 million private-placement bond offering. That may benefit associates, because the money saved on interest payments provides a little more cushion on cash flow. Actually, that argument might fly better at other firms. Dewey did just lay off 30 staff. Still, it takes a strong balance sheet to complete an offering like this, so we’re still not sure how many other firms will be able to pull it off.

In the conclusion of the article on Law Shucks, we address salaries and bonuses, plus the sui generis story of the week and the layoff tallies.

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