If you missed the Goldman Sachs Congressional hearing today, you missed the height of unintentional comedy. There are too many highlights to mention. Senator Carl Levin using a dirty word, the ongoing train wreck that is Senator Tom Coburn, it was the kind of hearing that makes you laugh out loud at Congress (and secretly weep for our country). I’ll let Bess Levin of our sister site, Dealbreaker, describe a particularly lively twenty minute exchange:
* 10:09: Carl [Levin]: “Goldman Sachs treats clients like objects (of profit).” Jackie Treehorn, a former prop trader, was the first to pioneer this model at the firm.
* 10:16: Goldman made money off its shorts. Dun Dun Dun.
* 10:26: Apparently Goldman didn’t just hurt its clients, it hurt everyone in the world. Take a moment right now to show us on the doll where Goldman touched you.
Today H. Rodgin Cohen officially moves his Subaru into the right-hand lane, making way for Joseph C. Shenker to take the pole position as Sullivan & Cromwell’s new managing partner. Rodge will still be around, but leadership of the firm shifts to Shenker. Both the New York Times and Am Law Daily have marked this momentous occasion with write-ups on Shenker today.
Reading about Shenker reveals that there are three kinds of people in life: people who work for Goldman Sachs, people who work with Goldman Sachs, and people who lose:
Mr. Shenker, whose practice ranges from mergers and acquisitions to real estate to tax and estate planning, may not be the highly connected banking lawyer that Mr. Cohen is. But he maintains a sterling reputation of his own, maintaining close relationships with real estate magnates and one of the firm’s most significant clients: Goldman Sachs.
It appears that becoming managing partner of S&C is just the latest in a long list of accomplishments in Shenker’s career.
Over the weekend, the New York Times had an interesting article about compensation for Wall Street bankers. The article explained how, due to criticism from the public and from Congress, banks shifted employee comp away from cash and towards stocks and options. This shift was supposed to align pay with performance, averting an AIG situation of rewarding failure.
Now, thanks to the recovery in bank shares — fueled in part by generous government bailouts, and not necessarily the brilliant performance of bank employees — these stock and option grants are turning out to be super-lucrative. Here’s an interesting excerpt:
Goldman Sachs, for instance, sharply cut nearly all bonuses it paid last year but gave some executives more options than usual.
The company gave its general counsel, for example, 104,868 stock options and 14,117 shares in December, when the bank’s stock was around $78.
Now the bank’s shares have more than doubled in value, making that stock and option award worth nearly $12 million, according to Equilar, an executive compensation research firm in Redwood Shores, Calif.
Sullivan & Cromwell partners, eat your hearts out. Not only does Goldman GC Gregory Palm get to boss you around, he also makes more money than you do.
It’s NCAA Tournament time, which means that if you get married this weekend or the next two, your guests will be cursing you as they surreptitiously refresh their BlackBerries. We therefore applaud this week’s brides, who planned their weddings for this past weekend, before the madness struck. They are — if we may say so — our Cinderellas.
* Paris isn’t the only Hilton getting in trouble for sex. The former manager of a restaurant in the Hilton Minneapolis is suing the Hilton for “undirected” sexual harrassment because he walked in on upper management having an orgy. [Courthouse News Service]
* GMAC LLC, the financing arm of General Motors, is not allowing holders of so-called SmartNotes to exchange thier notes for more secure bonds. The exchange, which the company is offering as a ploy to get some of the bail-out money, is “limited to institutional notes and does not include retail debt instruments.” This means that holders of SmartNotes may get nothing if the company goes bankrupt, which could lead to some serious law suits. [Bloomberg.com]
* Lawyers: 1, bankers: 0. Former bankruptcy lawyer James H.M. Sprayregen is returning to Kirkland & Ellis after a three-year stint in the restructuring group at Goldman Sachs. The decision represents a triumph for corporate lawyers in their long standing rivalry against financiers. [The New York Times]
* Protestors in Thailand have concentrated their efforts on the airports in anticipation of a court verdict Tuesday that will likely order the Somchai’s People Power Party to disband. [Reuters]
* A plea-deal has been offered to an 8-year-old boy in Arizona, who confessed to killing his father and another man. [ABC News]
* The Federal Trade Commission is stopping the merger of two software companies because of the potential loss of competition. Capitalism will prevail! [Courthouse News Service]
We’re not the only ones obsessed with layoffs these days. So is the New York Times, which has published two meaty articles on layoffs in the past few days — one in the Business section, and one in Sunday Styles.
The upshot of the business piece: Wall Street firms are increasingly relying upon “stealth layoffs” (like their brethren in the law, as we’ve discussed). Louise Story and Eric Dash report:
[E]xactly how many jobs have been or will be eliminated [on Wall Street] is unclear. In the past, banks typically made sharp reductions all at once. After the 1987 stock market crash, for example, employees were herded into conference rooms and dismissed en masse.
This time, companies are making many small cuts over the course of weeks or even months. Some people who have lost jobs, and many more struggling to hold them, say banks are keeping employees in the dark about the size and timing of layoffs.
Sound familiar, law firm associates?
Read the rest, below the fold.
“In an effort to uphold the rule that the Masters of the Universe can pretty much get away with anything simply because they’re the Masters of the Universe (see, also: Jobs, backdating), a federal judge has ruled that Goldman cannot be included in a lawsuit by Fannie Mae shareholders.”
“[T]he SEC filed a lawsuit against a Hong Kong couple, Kan King Wong and Charlotte Ka On Wong Leung, accusing them of insider trading. The couple had purchased $15 million of Dow Jones shares prior to the May 1st announcement.”
They liquidated the position after News Corp.’s unsolicited offer to boy Dow Jones, for a tidy profit of $8.2 million. More details here.
3. In the Future of a Defamation Lawsuit, Dimon Is the Law. Here’s a teaser, concerning the lawsuits that are flying between Dow Chemical and a former executive and board member: “It’s the legal equivalent of a John Woo action scene.”
You can check out the full post here.
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Ed. note: The Asia Chronicles column is authored by Kinney Recruiting. Kinney has made more placements of U.S. associates, counsels and partners in Asia than any other recruiting firm in each of the past six years. You can reach them by email: firstname.lastname@example.org.
Deal flow has clearly picked recently up for most US associates, counsels and partners in Hong Kong/China and Singapore. We are on the phone with a lot of these folks on a daily basis, many of whom we have known for years. Further, the head of our Asia team, Evan Jowers, and Kinney’s founder and president, Robert Kinney, frequently meet in person with leading US partners in Asia to assess their needs and keep on top of the inside scoop at as many firms as possible. The need for legal recruiting help in Asia from experienced recruiters appears to be live and well. In March, Evan and Robert were in Beijing at such meetings, in April, Evan was in Hong Kong, and for half of June Evan will be in Shanghai and Hong Kong. Thus its pretty easy for us to tell when there has been an across-the-market pick up in capital markets and corporate work.
On an average day in Asia when Evan and Robert visit firms, they typically have 5 to 9 meetings a day, mostly with US partners in the market. The reason they have these meetings is not simply because Kinney makes a lot of US attorney placements in Asia and that a particular firm may have openings; instead these are just visits with friends. After years of working together as business partners, the folks at Kinney are actually these peoples’ friends. The firms Kinney work closely with in Asia (which is just about every law firm – call us if you want to know the one firm in the world we will never place anyone with again, ever, and why) look forward to the visits, or at least act like they do. After seven years in the market, many of the client partners are former associate candidates. Also, these US partners see Kinney as a very good source of market information as well, because they know how deep their contacts are in the market and how frequently they are speaking to counterparts at peer firms.
In a land that is right here and in a time that is right now, a technology has arisen so powerful that it can replace basic human document review. Is it time to bow down before our new robot overlords?
First, here’s a little story about me: my life in the legal world began as a paralegal. My first case was a GIANT patent infringement case that was already six years old and had involved as many as five companies, multiple US courts, the ITC and an international standards committee. I knew nothing about any of this.
On my first day, my supervisor (a paralegal with at least eight other cases driving her crazy) sat me down in front of a Concordance database with a 100,000+ patents and patent file histories. “Code these,” she said. I learned that “coding”, for the purposes of this exercise, meant manually typing the inventor’s name, the title of the patent, the assignee, the file date, and other objective data for each document. I worked on that project – and only that project – for at least the first six months of my job. After a week or so, time began to blur.
What I know, in retrospect and with absolutely certainty, is that as time began to blur, so did my judgment. So did my attention to detail. If you could tell me that I did not make at least one mistake a day – one inconsistent spelling, one reversed day and month, one incorrectly spaced title – I frankly would need to see your evidence. I would not believe it. The human mind is trainable but it is not a machine.
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