Could the credit rating agencies who are now being sued for their alleged role in the financial meltdown have a valid First Amendment defense? Floyd Abrams, god of First Amendment law and longtime partner at Cahill Gordon & Reindel, thinks so.
Abrams is the subject of a lengthy, interesting article in Sunday’s New York Times, focused on his representation of Standard & Poor’s, the biggest of the rating agencies. From the NYT:
Dozens of investors have filed lawsuits seeking redress from the rating agencies, contending that the companies bear responsibility for investors’ losses, under a Whitman’s sampler of theories. The recession, in other words, is about to begin its litigation phase, and Mr. Abrams and a handful of partners at the law firm of Cahill Gordon & Reindel are readying defenses for more than 30 suits filed against S.& P. Up first, an oral argument on a motion to dismiss one case is set for July 31….
Mr. Abrams will contend that S.& P.’s ratings deserve exactly the sort of free-speech protections afforded to journalists, on the theory that a bond rating is like an editorial — an opinion based on an educated guess about the future. And for the same reason you can’t sue editorial writers, Mr. Abrams will argue that you can’t sue a bond rater because the economy went into a free fall that few saw coming.
Is this a valid comparison? Is trying to sue a ratings agency like trying to sue a newspaper editorial board? Or the weatherman?
Read more, and debate the issue, after the jump.
Things could be better over at Cahill Gordon. In May, the American Lawyer noted Cahill’s fall from the Am Law 100, the nation’s 100 largest law firms by revenue. Until its recent tumble, Cahill had been on the list for 24 consecutive years.
Back in January, we reported that Cahill Gordon laid off approximately 10 percent of its associates. At the time, we mentioned that first- and second-year associates were spared from the winter cuts.
Well, it appears that the wheel has come around. Multiple independent sources report that Cahill laid off a number of associates last week. Our sources report that junior attorneys were the focus of this round of cuts:
It seems without warning many 2nd years were let go [last Wednesday].
Another tipster reports:
Second years out the door [last week]. I guess the January reprieve was just temporary.
At least second years received some extra pay. The firm did not respond to our request for comment, but we understand that laid-off associates did get a severance package.
And the sacrifice of Cahill second years could preserve the salaries for all of the remaining Cahill associates. More details, plus a reader poll, after the jump.
Some of our friendly commenters frequently gripe about the high number of Rabbi-officiated weddings featured in this space. They’ll be delighted to know that only one of our three weddings this week is a straight-up Rabbi wedding. The others were jointly officiated by a Rabbi and a Mennonite minister and a Rabbi and a bankruptcy judge. Yay for diversity!
We are now ready to confirm some of the reports flying around the internet about layoffs at Cahill Gordon. We now have multiple tipsters who work at Cahill who can confirm that there were significant layoffs at the firm last Thursday.
Our tipsters don’t know the numbers of cuts — and the firm has rebuffed our repeated requests for comment on the story — but some tipsters report that as many as ten percent of associates were let go.
The timing of last week’s cuts seemed to rankle some of our sources. On Wednesday, Cahill announced Half-Skadden bonuses. But on Thursday associates were called in for their “annual review” and told that they were being let go … and that they would not be receiving the 2008 bonuses the firm announced the day before.
As we understand it, first and second years were spared. But everybody else was fair game.
Working all of 2008 and still not getting a 2008 bonus has to sting. But the firm did give a 3 month severance package.
Still, the firm apparently doesn’t want to talk very much about their decision to fire people without giving them their bonuses. Tipsters weigh in after the jump.
If the photos of this week’s contestants look a little stiff, please understand that it’s because the NYT didn’t run pictures of any lawyer weddings this week, forcing us to Photoshop them from the attorneys’ firm bios. You’re welcome. And Happy Thanksgiving!
Here are this week’s Legal Eagle Wedding Watch finalists:
Judging from our traffic, readers are enjoying this rundown of the Vault 100. We do aim to please here at ATL. We appreciate those who have offered insights about firms in the comments.
Moving on to the next group (with prestige scores in parentheses):
As we move down the Vault list, “notable perks” are becoming less elaborate. This group is dominated by tales of free food, from endless soda at Greenberg Traurig to weekend doughnuts and muffins at Foley. And it appears that Pillsbury lacks a monopoly on cookie benefits; over at Cahill, lawyers are plied with “twice daily cookie trays.”
We note this food-related perk at Bingham: “If any lawyer takes out a more junior lawyer for drinks/dinner, he/she can submit the expense to the mentoring budget AND the senior person can get creditable hours.” Can you expense the roofies?
We invite you to compare and contrast these firms’ work, lifestyle, benefits… and cookies, in the comments. Earlier:Vault 100 Open Threads – 2009
Cahill Gordon & Reindel has matched, but won’t pay until January 2008. From the memo:
MEMORANDUM TO COUNSEL, SENIOR ATTORNEYS
November 2, 2007
We are pleased to announce that our regular and special merit bonuses for 2007
for associates in good standing at December 31, 2007 will be as follows:
Class Regular Bonus Special Merit Bonus
Class of 2007 – $35,000 (pro -rated) —
Class of 2006 – $35,000 $10,000
Class of 2005 – $40,000 $15,000
Class of 2004 – $45,000 $20,000
Class of 2003 – $50,000 $30,000
Class of 2002 – $55,000 $40,000
Class of 2001 – $60,000 $50,000
Class of 2000 – $65,000 $50,000
Class of 1999 – $65,000 $50,000
Class of 1998 – $65,000 $50,000
Bonuses for Counsel, Senior Attorneys and other associates will be determined on
an individual basis. Bonuses will be paid by January 11, 2008. Counsel, Senior Attorneys and
Associates who were on unpaid leave or worked part-time during any part of this year and those
who started during this year will be eligible for pro-rated bonuses.
Thank you for your dedication, hard work and continued contribution to the success
of the Firm.
Sadly, the music-loving law firm of Nixon Peabody is not on this afternoon’s list of five Vault 100 firms to talk about. And don’t hold your breath — we won’t reach NP until we hit the 70′s.
Here are the firms that are on the table:
Okay, commenters, break it up. There’s no need to come to blows over the propriety of discussing clerkship bonuses in a salary post.
Here at ATL, there’s enough cyberspace for everyone. We’re putting an end to the turf wars, by giving you a new, dedicated thread for talking about clerkship bonuses.
We’ll kick things off with some news. First, a reader alerted us to a change made to Cahill Gordon’s website:
Sign-on Bonuses: The firm pays sign-on bonuses of $50,000 to judicial clerks and $15,000 to LL.M. (tax) graduates when they start at the firm.
Second, from a law clerk tipster, about Paul Weiss:
I’m clerking for two years. Paul Weiss just notified me, by phone, that they will be giving $70K bonuses to all two-year clerks. Hurray!
Congratulations, law clerks! Your Memorial Day holiday weekend is off to a good start. Compensation & Benefits [Cahill Gordon & Reindel]
Earlier this week, we reported on the unexpected early promotions of four corporate associates at Cahill Gordon. According to various comments, the four soon-to-be partners, whose promotions will take effect in July, are Doug Horowitz, Corey Wright, Bill Miller, and Jonathan Frankel.
As some speculated, this quartet was promoted early to prevent them from leaving for greener pastures. Here are more details:
The way it apparently went down is that all 7th and 8th year litigators were sat down individually by a partner and told, a week or so ago, that 7th and 8th year corporate associates — corporate associates only — were going to be voted on this summer. The given reason was to prevent these people from leaving to go to i-banks.
Litigators were apparently told that they should not consider this to be a negative commentary on their value to the firm, and that they would be considered in the normal course, either end of this year (8th years) or end of next (7th years). Their chances of making it were described as “the same as they were yesterday.”
It’s my understanding that there is a growing rift between corporate and litigation at the firm. Each group — partners included — increasingly resenting the other. Corpies think litigators are lazy, don’t have to work nearly as hard for the same amount of money. Litigators resent being treated as second-class citizens.
Very interesting. Some food for thought:
1. Several top law firms have struggled to deal with the problem of star associates leaving for investment banks, hedge funds, and other opportunities in the world of finance. Will other Biglaw shops start employing this strategy of early promotion to retain their best associates? Could we be witnessing the start of a trend?
2. According to conventional wisdom, corporate lawyers generally have “better” — or at least more lucrative — exit opportunities than litigators. As a result, law firms face more outside competition for them. Could we eventually see a system in which partnership tracks are shorter for corporate associates than for litigation colleagues, in reflection of the different markets for the two practice areas?
Watch to find out what some of our subscribers received in their May box!
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We currently have a number of active openings for associate roles at US and UK firms in HK / China, Singapore and two new in-house openings. As always, please feel free to reach out to us at email@example.com in order to get details of current openings in Asia, as well as to discuss the Asia markets in general and what we expect for openings later this year. Our Evan Jowers and Robert Kinney will be in Beijing the week of March 25 and Evan Jowers will be in Hong Kong the week of April 1, if you would like to meet them in person.
The US associate openings we have in law firms are in the usual areas of M&A, cap markets, FCPA / white collar litigation, finance, and project finance. The most urgent of our top tier (top 15 US or magic circle) law firm openings in Asia (among many other firm openings that we have in Asia) are as follows:
• 2nd to 5th year mandarin fluent M&A associates needed in Beijing and Hong Kong at several firms;
• Korean fluent 2nd to 4th year cap markets associate needed in Hong Kong;
• 2nd to 5th year Japanese fluent M&A associates needed in Tokyo;
• 4th to 6th year mandarin fluent cap markets associate needed in Hong Kong;
• 2nd to 4th year M&A / cap markets mix associate needed in Singapore.
The last time I flapped my wings your way, I tried to make at least enough noise about your mobile phone to make you more than a little bit uncomfortable. I hope I did. If enough of us become anxious enough about the known and unknown unknowns and knowns in our mobile phones, then we can start making wise decisions about how to manage that information and its resultant investigations.
Today, I’d like to put a finer point on the last installment’s topic by asking a question that seemed to catch most attendees off-guard at a conference panel that I moderated last week: is there discoverable personal information in a mobile app? Our panelists’ answer was a uniform “yes” with one stating that, if he had to choose only one type of data that he could discover from a mobile phone, he’d choose app data. Why? Because there’s simply so much of it and because almost all of it is objective – not just user-created like an email – but machine-tracked like GPS, usage duration, log in and log out times, browsed web addresses, browsed actual addresses. Also, most of us seem to have the idea that data doesn’t actually “stick” to our mobile devices the way it “sticks” to our hard drives. Maybe there’s a disconnect based on the fact that our phones are mobile so we assume the data is mobile to?
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