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Morning Docket 12.19.08

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* The White House has raised the prospect of “pushing the cars into a managed bankruptcy as a solution to save the companies from financial collapse.” [The International Herald Tribune]

* The Iraqi journalist who threw the shoe at President George W. Bush will go on trial for insulting a foreign leader, which could get him up to two years in prison. Another case may be brought against the people who beat him after the incident. [The Associated Press]

* “Deep Throat” W. Mark Felt Sr., the second highest official in the FBI during Watergate, and the famous anonymous source who led journalists Bob Woodward and Carl Bernstein through the “crimes and coverups” of Richard Nixon died yesterday at 95. [The Washington Post]

* The 9th Circuit ruled that the U.S. courts might not be the appropriate place for Papua New Guinea citizens to sue British mining company Rio Tinto for inciting a “savage” ten- year civil war. [Courthouse News Service]

* A California jury acquitted surgeon Dr. Hootan Roozokh, who was accused of trying to accelerate an organ donor’s death. [The Los Angeles Times]

* Remember DC Judge Roy Pearson’s pants suit? The D.C. Court of Appeals rejected it yesterday…no surprise there. [The Associated Press]

* First there was the recession, then there were the bankruptcy’s, followed by the lay-offs, and now here are the scandals. The DOJ charged four people in an insider trading scheme incolving a Lehman broker.[CNN]

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Associate Bonus Watch: S&C Announces Half-Skadden Bonuses (But May Pay More Come Spring)

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law firm associate bonus watch 2008 biglaw bonuses.jpgSources at Sullivan & Cromwell confirm that the firm is going to pay (deep breath) the New York market rate on 2008 associate bonuses.

We haven’t gotten our hands on an actual memo yet, but our sources are unhappy enough that we believe it to be true. From one S&C associate: “Either the firm is in piss poor shape & Rodge [Cohen] is a liar or we are lemmings and do what Cravath does. Bonus = total BS. People are PISSED.”

Half-Skadden wins. Partners win. Cravath defenders win.

NYC associates lose. Manhattan real estate brokers lose (again). Top billers lose.

Update (6:20 PM): Am Law Daily reports that the firm promised supplemental bonuses in the spring — this time for all classes, not just senior associates — depending on market conditions:

[The S&C] memos also said the firm intends to issue all associates another check in April. The spring distribution, or supplemental bonus, will be based on the firm’s overall financial performance. The firm also issued supplemental bonuses last year, though the circumstances were somewhat different since it was the height of the dealmaking boom.

This past April, S&C’s supplemental bonus was paltry. We reported:

[W]e have confirmed with sources at the firm that S&C paid out its special “senior associate bonuses” last week. We don’t know the numbers for all years, but word on the street is that current fifth-years received around $2,500.

So maybe, if everything goes right, a senior S&C associate will get a little more of a bonus than a first year at Skadden.

So that’s positive, right?

Update (8:02 PM): After the jump, read the full version of S&C’s bonus memo.

BREAKING: Sullivan & Cromwell Bonuses Cut, But No Freeze on Pay [AmLaw Daily]

Earlier: Prior ATL coverage of associate bonuses

Associate Bonus Watch: Sullivan & Cromwell’s Super-Special Bonuses

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Non-Sequiturs: 12.18.08

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Jack Bauer v Cravath.jpg* I wonder what Jack Bauer would say about pardoning John Walker Lindh. If only we had a commenter that could channel Bauer and share his thoughts with us … [Legal Pad]

* If you are thinking about going down to D.C. for the inauguration, you should listen to Kash’s sage guidance. [WYNC]

* At that inauguration, Rick Warren will be giving the invocation. What a savvy bi-partisan move to reach out to potentially disgruntled evangelicals! (Mr. Kennedy, Obama’s the guy right? We’re still absolutely sure about this right? Because … oh why yes, I’d love some more Kool-Aid). [Althouse]

* Here’s the Miley Cyrus/Lanier Law Firm party wrap. [Tex Parte Blog]

* With all the unemployed lawyers out there it seems appropriate to point out some legal research tools that you don’t need a westlaw account to access. [E-Justice Blog]

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Associate Bonus Watch: Skadden Memos Are Out

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law firm associate bonus watch 2008 biglaw bonuses.jpgIndividualized memos have been issued to Skadden Arps associates to inform them of their 2008 bonuses and 2009 base salaries. The Skadden base salaries reflect the customary annual pay raises — sorry, Lathamites.

Because Skadden’s announced bonuses this year are so much higher than the Cravath-established market level, folks at other firms have wondered: Are the Skadden bonuses for real?

The short answer: yes. To quote the famous Seinfeld episode, “they’re real — and they’re spectacular.”

We’ve surveyed Skadden associates from a variety of class years, from 2008 through 2001. The scale we’ve pieced together looks like this (i.e., like last year’s year-end or regular bonus schedule, but without the “special” bonus amounts):

Class of 2008 — $35,000 (prorated)
Class of 2007 — $35,000
Class of 2006 — $40,000
Class of 2005 — $45,000
Class of 2004 — $50,000
Class of 2003 — $55,000
Class of 2002 — $60,000
Class of 2001 — $65,000

The bonus schedule is, of course, subject to the 1600-hour minimum. That’s not an onerous burden, and pro bono hours count towards the minimum, in unlimited amounts. If you fall short of the 1600-hour minimum, you may still be eligible for a 50 percent bonus — aka a “half-Skadden” bonus.

After the rest of the New York market settled around the Cravath bonus levels, some wondered: Do the Skadden partners feel like chumps?

Find out, after the jump.

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A Depressing “Happy Holidays” from Grodsky & Olecki

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California firm Grodsky & Olecki likes to have fun with its annual end-of-the-year holiday card. The firm likes them so much that it keeps cards dating back to 2003 archived on its site. In recent years, the firm has humorously touched on the Writers Guild strike, red state-blue state divide, and malfunctioning voting machines. Suffice to say, the firm has a quirky sense of humor.

This year’s card is edgy, and certainly less cloying than Cadwalader’s. Here’s the gloomy front of the card:

Bear Stearns stock certificate holiday card.jpg

Shouldn’t J.P. Morgan’s name really be on that certificate, c/o the American taxpayer? And do we actually want to be reminded of bail-outs in holiday cards this season? To lift your spirits again, check out name partner Allen Grodsky doing a yoga headstand pose on his bio page.

And check out the festive (at least in coloration) backside of the card, after the jump.

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Ragin’ Cajun Courtroom Fracas

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fighting gator pit of swamp death.jpgLawyer fight! The New Orleans Times-Picayune reports that competition for clients is heating up in the bayou:

Two attorneys competing for clients, prestige and a bounty of legal fees opened a hearing at Orleans Parish Civil District Court on Monday with a schoolyard brawl that shocked the buttoned-up crowd and ended with one led away in handcuffs on charges of contempt.

The best thing about lawyer fights are the clever euphemisms that the combatants use to explain just how badly they got their asses kicked. Remember this Louisiana throw down between attorneys who were also in-laws?

“I said, ‘You just bought yourself a ticket to a bar (association) complaint.’ He grabbed me by the neck and started swinging me back and forth. .¤.¤. He hurt me substantially. I became woozy and fell.”

This time, both battling attorneys (Madro Bandaries and J. Robert Ates) offered competing explanations as to how they were so easily and quickly defeated.

The case of Glass Joe versus Captain Inaction continues after the jump.

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Livin’ For The City

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Kaufman logo.JPGThe effects of the global economic crisis continue to trickle through all aspects of the legal industry. Many firms simply aren’t willing to share the profits with associates as has been done in years past.

While we tend to focus on the Biglaw view of this crisis, it’s important to remember that associates as smaller firms are getting hit just as hard or worse from a dollars-per-hour perspective.

Last year we brought you a series of posts on law firm life outside of the top teir. One of the firms we highlighted was Kaufman Borgeest Ryan, a boutique insurance coverage firm with offices in New York, New Jersey, and California. Starting salaries there are about $90K while senior associates make just under what Biglaw first-years pull down.

In the past, associates have been eligible to receive around a $10K bonus, if they meet the minimum billable hours requirement of 2100.

Imagine being a lawyer, living in New York City, billing over 2000 hours a year, and making less than six-figures. Calgon take me away.

This year, associates at Kaufman should still receive their bonus, but it’s complicated. More after the jump.

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Michigan Professor Responds To Michigan 2L

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michigan law school strikes back.jpgWe have been following the sad tale of a University of Michigan 2L and a U-M professor who got caught up in a prostitution scandal. Yesterday, the Michigan 2L responded to some of the comments that have been made about her.

Today, the professor involved asked ATL for equal time and an opportunity to tell his side of the story. In a letter entitled: “Have you considered whether she may be simply lying?” and sent to the entire law school, the professor says:

I wish to raise with you the claim that, for whatever reasons, your student is simply lying. Allegations must be substantiated with facts; here are the facts as they emerge from the police report (which, as I am sure many of you know, anyone is entitled to get from the police).

We reprint the letter in full after the jump.

And just to be clear, this will conclude our coverage of these events. Both parties have had an opportunity to say their piece, and we’d like to leave it at that.

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Mos Def is Johnny B. Bad when it comes to his Blank Rome legal bills

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Mos Def sued by Blank Rome.jpgWe’ve previously reported on law firms having difficulty getting clients to pay their bills. It’s not just happening to firms working on deals that go bust; it has also happened to a firm representing a celeb after his marriage went bust. From Am Law Daily:

Blank Rome is suing rapper/actor/activist Mos Def for over $60,000 in unpaid legal bills stemming from his 2006 divorce from Maria Yepes.

The couple ended their 10-year marriage that year in a Brooklyn court, with Judge Sarah Krauss pleading with them to settle their differences outside her courtroom.

Reports say that the Brooklyn-born Mos Def (real name: Dante Smith) owes the money to Blank Rome in the form of unpaid fees and retainers. The Emmy, Golden Globe, and Grammy award-nominated entertainer retained lawyers from the firm’s well-regarded matrimonial practice, which advises high-end clients on divorce, mediation, property distribution, paternity, visitation rights, and trusts and estates.

This is Mos Def’s second month in a row of legal troubles. In November, Las Vegas police issued an arrest warrant after Mos got in a scuffle with a photographer. In more bad news, his portrayal of Chuck Berry in the recently released music biopic extravaganza Cadillac Records was panned by the Los Angeles Times.

We wonder if this will make him rethink the title of his upcoming album, rumored to be titled Ecstatic.

Some good news for Mos Def, after the jump.

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Lawsuit of the Day: Is there a Date Deductible?

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services rendered.jpgLet’s say you meet a woman. You like her, she likes you, and eventually you move in together. She helps around the house and, you know, “helps” with other things too. Let’s say that over the course of a year, you “spend” $10,500 on that woman.

How would you explain where that money went, to say an account or on your tax forms?

Well, if you are Mr. Howard Shih of California, you call the $10,500 “wages” and try to get a tax deduction.

That is the situation that the U.S. Tax Court recently wrestled with. Except the proceeding was not directed at Mr. Shih for claiming a deduction, instead the case was about whether the woman (Ms. Jue-Ya Yang) should have reported the $10,500 as “income.”

(Dear God: That whole “The Law” idea you had is brilliant. What a great premise for your “Earth” sitcom. Don’t change a thing! It’s comedy gold.)

After the jump, TaxProf Blog walks us through the difference between wages, gifts, and illicit prostitution.

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Associate Bonus Watch: Cadwalader Matches The NYC Market

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law firm associate bonus watch 2008 biglaw bonuses.jpgFollowing up on its inspirational holiday card, yesterday Cadwalader announced the NYC-standard crappy Cravathy bonuses. The transmittal memo, which included the familiar numerical table, was short and sweet:

We are pleased to announce that the Firm will award year-end bonuses to associates and counsel as follows. Bonuses will be based on previously communicated criteria and are expected to be paid in January 2009. Associates who joined the Firm subsequent to January 1, 2008 and prior to October 1, 2008 will receive a pro-rated portion of the bonus.

The reference to “previously communicated criteria,” we’re told, is a reference to CWT’s hours requirement.

Full memo after the jump.

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Morning Docket 12.18.08

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* A couple is suing United Airlines for “overserving” the husband by serving him red wine every 20 minutes on the flight. They say this is what caused him to beat his wife on the way to customs. [Chicago Tribune]

* “Federal judges in some parts of the United States are delaying the swearing-in of new citizens, apparently so that courts can keep millions of dollars in naturalization fees paid by immigrants, according to a new government report.” [The Washington Post]

* A Rhode Island family sued their cable provider for hooking up the Playboy channel, which plays hardcore porn. [Courthouse News Service]

* Investors in Madoff’s ponzi scheme might be able to get back some of their money by filing for a U.S. tax refund. As if the U.S. government isn’t paying out enough money these days…[Bloomberg.com]

* The high court in Europe says a UK couple should be bound by the ruling of judge in southern Cyprus that they demolish their vacation home. The house is built on land that belongs to a Greek Cypriot who claims it was taken from him during the Turkish invasion in 1974. [BBC News]

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