In-House Counsel

Good News for In-House Counsel: Privilege Prevails in Showdown at Gucci Gulch

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Back in April 2010, we bestowed Lawyer of the Day honors upon Jonathan Moss, former in-house counsel to Gucci. There was a question, however, as to how much of a “lawyer” Moss was.

During his seven years working at the luxury fashion house, Moss did not have an active law license: he was a graduate of Fordham Law and a member of the California bar, but with “inactive” status. As a result, during the discovery process in some trademark litigation, opposing counsel from Guess? challenged Gucci’s assertion of attorney-client privilege over communications to and from Moss. The reasoning: because Moss wasn’t entitled to practice law in any jurisdiction, due to his inactive status with the California bar, the attorney-client privilege did not extend to communications with him.

A federal magistrate judge sided with Guess, concluding that Gucci’s communications with Moss weren’t privileged — and subject to disclosure. Yikes. After conducting an investigation that confirmed Moss’s inactive bar status, Gucci fired him in March 2010.

But now a federal district judge — Judge Shira Scheindlin, that delicious judicial diva of Zubulake fame — has set aside the magistrate’s order, and granted Gucci’s motion for a protective order….

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Inside Straight: Charging Litigation Losses to Business Units

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Ed. note: This is the latest installment of Inside Straight, Above the Law’s new column for in-house counsel, written by Mark Herrmann.

Here’s an issue that outside counsel never think about, but that matters intensely to in-house counsel: How should you charge business units for litigation losses?

For some types of cases, this poses no problem at all. If a company manufactures a prescription drug and gets named in product liability cases involving that drug, it’s pretty easy to figure out which business unit to charge for resulting judgments. (At least I assume that’s true. Perhaps some reader who works in-house at a drug company can correct me if I’m mistaken.)

But think about negligence cases in the context of a service business. At first blush, charging for litigation losses seems pretty easy: The business unit that was negligent and caused the loss should be charged for any resulting judgment.

If only it were so clear. Think about the complexities here: Some clown at the business unit screws up in 2005. The company is named in a lawsuit that’s filed in 2007. The clown changes jobs and leaves the company in 2008. The lawsuit results in a $10 million judgment in 2010. How do you account for that $10 million charge internally?

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Inside Straight: Entering Time

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Ed. note: This is the latest installment of Inside Straight, Above the Law’s new column for in-house counsel, written by Mark Herrmann.

Also, in case you missed them because of the holiday break, be sure to check out his recent posts on in-house compensation and bonuses.

First, a story. Then, my point.

(If I promise a point at the end, maybe you’ll persevere through the story.)

When I was a partner at a large law firm, sending out bills, I took the job seriously. I sat in a coffee shop one Sunday afternoon each month and went through every !*@!! time entry in every bill to be sure that (1) I could understand what task the lawyer had performed and (2) the time spent was not disproportionate to the work performed. Only then would I approve the bill.

Editing bills is like torture. In fact, strike the “like.” This is torture. At the end of three or four hours of editing bills, you’re ready to jam toothpicks into your eyes. So I took a lesson from Tom Sawyer and whitewashing fences: I conned my teenage son into thinking that editing bills was a very important job. He bit! (Other than falling for this, the kid is actually pretty smart.) During Jeremy’s sophomore through senior years of high school, he and I did some father-son bonding on the third Sunday of every month at the local coffee shop. I bought the kid a caramel frappuccino (“venti” if we were doing north of 500 grand in bills; otherwise, grande; always with whipped cream). He took half the stack of bills; I took the other half; we edited. (Stay calm. I didn’t charge clients even for my own time spent doing this, let alone the kid’s. This was on the up and up.)

What did we do?

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Inside Straight: In-House Compensation

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Ed. note: This is the latest installment of Inside Straight, Above the Law’s new column for in-house counsel, written by Mark Herrmann.

I really don’t care much about compensation.

Let the abuse begin.

If you hate your job, then no one can pay you enough to make going to work every day worthwhile. And if you love your job, you won’t be sitting around fretting about your pay. I understand that this is America and all that, but within very broad limits, you’re nuts to accept one job over another because of a small difference in compensation.

(I understand that you may be trapped in a job, because of student loans, or kids in college, or the like. I understand; trapped is trapped. And I understand that I personally have been awfully lucky, because I’ve never had to worry about finding money to pay next month’s rent, so I speak from a particular point of view. Despite all that, I stand by what I said — if job A and job B are meaningfully different from each other in ways that matter to you, and you’re not trapped, you’re nuts to take one job over the other just to earn a few extra grand each year. Period.)

Naturally, since I’m not interested in the subject, you can guess the question I’ve been asked most often since Above the Law anointed me an in-house counsel guru:

How does in-house compensation work, and what questions should I ask about compensation if I’m interviewing for an in-house job?

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Snowpocalypse Open Thread

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Dealing with a frozen job market.

As I alluded to last week, today I was supposed to be getting some action down in sunny Florida. Alas, thanks to the massive blizzard that hit the East Coast last night, I’m stuck in my Manhattan apartment — after three consecutive flights got canceled on me.

I’m grumpy, but understanding (and enjoying a Glee marathon — finishing up season one). The snowstorm was epic, after all. It’s over now, but the effects linger.

Just check out the view from my window….

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Inside Straight: Corporate Bonuses Announced!

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Ed. note: This is the latest installment of Inside Straight, Above the Law’s new column for in-house counsel, written by Mark Herrmann.

This just in: Corporations have matched the Cravath bonus scale!

Correction: The preceding sentence is not just false, but unintelligible.

Several folks have told me that a good way to juice readership of this column would be to publish a salacious post about bonuses paid to in-house corporate counsel, so readers could complain about how one corporation is stingy and another generous, or how corporations pay bigger or smaller bonuses than law firms. But I can’t write that post.

Why not?

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Morning Docket: 12.23.10

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Scanner or pat down?

* Got milk? Obama’s latest tax break gives a whole new meaning to the phrase “living off the government tit.” [Washington Post]

* Joe Miller is hoping for a Christmas miracle because the Alaska Supreme Court gave his lawsuit the pink slip. [Los Angeles Times]

* This holiday season, the TSA reminds you to leave your dignity at home, especially if you’re in the Super Best Friends. [Washington Post]

* If you get a job on Twitter’s legal team, your pleadings will probably be limited to 140 characters. [Corporate Counsel]

* The Senate passed the 9/11 Health Bill. The only laughable thing here is that it took so long for them to do it. [The Caucus / New York Times]

* Surprise! Rutgers is denying liability for Tyler Clementi’s suicide. Elie called it yesterday, but can you really blame them? [New Jersey Star-Ledger]

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Inside Straight: Business Development (Part 3)

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Ed. note: This is the latest installment of Inside Straight, Above the Law’s new column for in-house counsel, written by Mark Herrmann.

Is blogging a useful business development tool?

The folks who sell blogging platforms to lawyers say that blogging is the route to riches. But bloggers themselves are far less certain whether blogging actually generates business. What’s the truth?

Let me start with my personal experience; I’ll conclude with a thesis. The personal experience is just the facts — what I did as a blogger, how successful the blog was, and how, if at all, I profited from the experience. (I’ve previously recited parts of this story in both the print media and elsewhere. I’ll try to add a few new thoughts here.)

What did I do as a blogger? For three years — from October 2006 through December 2009 — while I was a partner at Jones Day, I co-hosted the Drug and Device Law Blog with Jim Beck, of Dechert. We wrote almost exclusively about the defense of pharmaceutical and medical device product liability cases. We affirmatively chose to have the blog co-hosted by partners at two different firms, for two reasons….

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Inside Straight: Reminiscence, After Four Weeks

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Ed. note: This is the latest installment of Inside Straight, Above the Law’s new column for in-house counsel, written by Mark Herrmann.

Look: If Lat and Mystal are silly enough to let me write a column about in-house lawyers when I’ve worked in-house for just ten months, then surely I can reminisce about blogging at Above the Law after just four weeks on the job. Fair is fair, guys.

So here are three thoughts, after four weeks of typing. First:

On November 15, Lat published the post announcing that my column would start in three days. Lat wrote the post; I had nothing to do with it. He promptly sent me a link to that post, telling me that we were up. I hung up the phone after finishing a business call and clicked on the link, viewing the post within ten minutes of its publication. Incredibly, the “commenters” were already out in force.

I scrolled through the comments and immediately learned that I’m (1) homophobic, (2) a failure in Big Law, (3) desperate for money, and (4) ugly.

Before I’d written a word.

Fortunately, an old friend sent me an e-mail providing emotional support: “Hey, Mark, you’re not homophobic.”

Second….

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Inside Straight: Business Development (Part 2)

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Ed. note: This is the latest installment of Inside Straight, Above the Law’s new column for in-house counsel, written by Mark Herrmann.

This post is a two-fer: It both suggests a way for outside lawyers to develop business more effectively and offers a tip to in-house counsel to protect their legal departments. (I bet you can hardly wait.)

First, the business development tip.

Outside lawyers often ask whether in-house lawyers are annoyed or impressed by the brochures that firms mail (or e-mail) to clients and prospective clients. I, at least, am not annoyed to receive those things. It’s awfully easy to delete things unread, so they don’t exactly impose a burden on me.

But am I impressed by the brochures? Obviously not; that’s why I now typically delete them unread.

What’s unimpressive about the brochures? Let me count the things….

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