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Anatomy Of A Dissolution: Heller Ehrman v. Citi and B of A

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Heller Ehrman LLP Above the Law blog.JPGIt has been a while since we last checked in with the firm formerly known as Heller Ehrman. While many Heller partners have landed safely at firms like Orrick, Covington & Burling, and Winston & Strawn, some ex-Heller junior associates and staff are still twisting in the wind. The fact that markets everywhere are awash in legal resumes does not help.

Right now, former Heller people continue to fight with the firm and the firm’s banks over money they claim is owed to them. As Thomas MacEntee explains:

We’ve been hearing the same tired line of nonsense from Heller’s Dissolution Committee, Bank of America, and Citibank now since October. The Dissolution Committee passes the buck to the banks continuously and says “they won’t let us” when it comes to paying employees. The banks remain silent and play with not only the monies coming in but the day-to-day survival of ex-Hellerites.

When a bank is refusing to release the money you need for rent, things can get pretty heated. But you’d think that Citigroup at least would be a bit more willing to meet its obligations to regular people, since regular people just bailed them out:

How is it that these banks can be handed billions of dollars and yet be allowed to assist Heller in violating federal and state laws? My thinking is that authorizing the payment of what is due ex-Heller employees would put money back in the economy, allow people to make purchases, etc. Am I the only one seeing this? Or do I look “through a glass, darkly” as the saying goes, and my perception of reality is somewhat imperfect?

More bad news for Heller, and discussion of a “give us our money” email campaign, after the jump.

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Non-Sequiturs: 12.08.08

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albatross of biglaw doom.JPG* Mead and hookers. That’s what I remember from Lincoln’s Inn. [What About Clients?]

* Florida’s professional teams generally play in worse facilities than their college teams. Aside from the fact that I’d take the Gators (-3) over the Dolphins, Marc Edelman reports that new stadium construction is not always a good thing. [Rutgers School of Law-Camden]

* More people are going to law school (and B-School). Less people are going into Ph.D programs. No matter what Biglaw does to an associate, five more will rise to take his place. [TaxProf Blog]

* Sure, even if you have been laid off, you’re still a lawyer: a professional. But … even professionals need to pay “rent.” [Simple Justice]

* Profits per partner everywhere, but the bonuses still stink. Blawg Review tries to shoot down the albatross.

[Infamy or Praise via Blawg Review]

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November MPRE Scores Are Available

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MPRE.jpgIf you were not sure if you correctly handled the daunting thought experiments posed by the MPRE, scores are available today.

Usually not passing the MPRE is a way to be ridiculed by your family and friends, without any lasting professional consequences. The same is probably true this year, but given the market we really hope everybody passed. You don’t want to give a firm any reason to fire you or rescind your offer.

Still, failure on the MPRE is something that can be easily remedied. Just put the pipe down before the test starts, and you should be fine next time.

Congratulations to those who met the minimum ethical standards for our upstanding profession.

Earlier: MPRE Results Are Out: Open Thread

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SCOTUS Doesn’t Really Care About Obama’s Citizenship Status

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Obama smoking.JPGToday, the Supreme Court declined to take up the case about whether Barack Obama is constitutionally eligible to serve as President of the United States.

With no public discussion or debate, the Court ignored Donofrio v. Wells — and didn’t bother to explain themselves.

Apparently, the Court takes Justice Thomas about as seriously as the rest of us. According to SCOTUSblog:

In a brief order, the Court, as expected, turned aside a New Jersey voter’s plea for the Court to determine if President-elect Barack Obama was qualified to run for the White House — that is whether he was a “natural born citizen.” The stay application came in the case of Donofrio v. Wells, Secretary of State of New Jersey (08A407). This marked the second time in recent weeks for the Court to turn aside such a challenge; the first came on Nov. 3, in Berg v. Obama (08A391). The Court, in neither instance, gave reasons for turning down the applications. In neither case did the Court seek a reponse, thus indicating it had little interest in either or had found them to be completely without merit.

After the jump, was there a cognizable point to all of this?

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  • 08 Dec 2008 at 12:27 PM
  • Dreier

Breaking: Marc Dreier Indicted in S.D.N.Y.

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Dreier LLP Marc Dreier Marc S Dreier Mark Dreier Drier Dryer.jpgWe’ll have a more detailed Marc Dreier post up later; there have been a number of developments since our last report. In the meantime, check out this post by Zach Lowe, about the breaking news that Marc Dreier has been indicted in federal court.

Breaking: Dreier Indicted in Federal Court [Am Law Daily]

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  • 06 Dec 2008 at 11:26 AM
  • Dreier

Hung Out to Dreier: An Interview with a Dreier Lawyer

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Marc Dreier 2 Mark Dreier Marc Drier Marc S Dreier LLP.JPGThere are more updates to the saga of Marc Dreier and Dreier LLP over at Am Law Daily. They report that Wilson Sonsini has been retained, by a “substantial group of partners and associates” at Dreier, “to examine the operations and finances of the Dreier firm, including escrow accounts.”

The Am Law post also has a picture of Marc Dreier and Michael Padfield, the lawyer he allegedly attempted to impersonate. The two look nothing alike. Dreier is old ‘n grizzly, while Padfield is fresh-faced and kinda cute (albeit in a Canadian, law-dork sorta way).

Last night we spoke with a Dreier lawyer who gave us an inside peek at the current situation. The outlook is grim.

“There’s no way to save the firm given the amount of missing money,” said our source. “Dissolution is definite. The firm can’t make the next payroll. Most partners are packing up — staying here is not an option.”

We had previously heard reports of Dreier dragging his feet on paying bills, which our source confirmed: “He stiffed a lot of our creditors and vendors. Some have not been paid for a year. He’s way behind on the rent.”

Could other lawyers at Dreier be on the hook for firm liabilities? Our source thinks not. “First, he’s the sole equity partner. Second, it’s an LLP anyway.”

A little bit more, after the jump.

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Non-Sequiturs: 12.05.08

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Palin Vogue.JPG* Take a look at these pictures and make your own decision. The world waits breathlessly for the birth(date) of Bristol Palin’s baby. [The Atlantic]

* Is the mystique gone from Biglaw? Not so long as Cravath can still pay people in prestige points. [Law and More]

* Would we be better off right now if accountants and other business professionals were part of the partnership at major law firms? [Legal Blog Watch]

* If your looking to supplement your income during these tough times, maybe you should consider being an expert witness. It was marginal for former Gawker and Jezebel writer Moe Tkacik (that’s what she said). [That's What She Said]

* A pox on your cow tax. [TaxProf Blog]

* Gary Coleman is tall enough to drive? Who knew? [Popsquire]

109 Comments
  • 05 Dec 2008 at 6:23 PM
  • Dreier

Dreier Update: On Bail, Real Estate, and a Canceled Summer Program

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Dreier LLP Marc Dreier Marc S Dreier Mark Dreier Drier Dryer.jpgWe bring you assorted addenda to our earlier coverage of Marc Dreier — founder and managing partner of Dreier LLP, as well as the firm’s sole equity partner — who was arrested on Tuesday night in Toronto.

First, Dreier is now free on bail. From the Toronto Star (which a tipster tells us is our “best bet” for Dreier coverage in Canada, “as it is the equivalent of the New York Post”):

A prominent New York lawyer walked out of a Toronto court today after posting $100,000 cash bail. Marc Dreier, 58, has been charged with personation with intent. He was represented at today’s bail hearing by lawyer Edward Greenspan.

Greenspan said he was “pleased” his client was released on bail, but that it wasn’t unexpected. “He was charged with a minor offence under Canadian law,” Greenspan said. “The only allegation is that he impersonated another lawyer.”

Marc Dreier Marc S Dreier LLP.jpgAn ATL source provides context:

Mr. Dreier is apparently out on bail ($100,000 Canadian, or $77,330.93 U.S.). He’s also retained Eddie Greenspan, Canada’s answer to Johnnie Cochran. Mr. Greenspan represented Lord Conrad Black in Chicago and a number of other high-profile cases in Canada. He’s the go to guy if you’re rich, in trouble, and in Canada.

More information and links — about the allegations against Marc Dreier, his extensive real estate holdings, and the demise of Dreier’s summer program — after the jump.

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Associate Bonus Watch: Epstein Becker & Green Sets Bonuses to Zero

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law firm associate bonus watch 2008 biglaw bonuses.jpgIf the second-most profitable law firm in the nation cuts bonuses by 73%, what do you expect regional firms to do?

Today, the management committee at Epstein Becker & Green made a decision that we will probably be copied at regional firms throughout the country. From the EBG internal memo:

The cautiousness of the Firm’s clients regarding their cash position has continued to affect EBG’s cash collections through November. We, like all law firms in 2008, are experiencing a slower pace of payments to the Firm from our clients than in prior years. While we are confident that these monies will be collected over time and we are well positioned for 2009, cash available at year end is, as a consequence, more limited than it has been in years when the economy was stronger.

Reflecting this reality, and on our history of conservative but responsible fiscal management that dictates prudence in retaining our cash reserves and not incurring additional debt for non-capital expenses — thereby protecting the Firm’s position as we enter 2009 — the Compensation Committee has determined that no bonuses will be paid at year end 2008. While we do not make this decision lightly, at a time when many law firms and businesses are engaged in large-scale lay-offs or worse, this decision is, we believe, a moderate response to what are unprecedented circumstances facing our industry.

Remember that a problem many firms are facing right now is that while attorneys keep billing, some clients have stopped paying.

EBG is the first firm that we’re aware of that is offering the “special bonus” of zero. But they won’t be the last. Don’t forget to send us your tips on other mid-sized and regional firms as they make difficult bonus decisions this year.

Read the unabridged statement that EBG attorneys received today, after the jump.

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Lawsuit of the Day: We are not happy with Wii

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wii controller.jpgThe Wii is a gaming console that has challenged the image of gamers as couch potatoes. Using a remote control with motion sensors, player actually goes through the motions of swinging, throwing, dancing, hitting, and punching (depending on the nature of the game) to get their on-screen character to do the same. Most people love the wii… except when an exuberant swing sends the remote control flying into a $2,000 flat-screen TV, ending the game and smashing the screen.

Many have heard horror stories about remote controls being sent flying. Nintendo added safety straps to their remotes, to keep them attached to players’ wrists. But a Colorado woman claims the straps are defective, allowing controllers to “crash into TVs, walls and children,” and has filed a $5 million class action suit, citing a video game review from IGN.com. From Courthouse News Service:

The named plaintiff claims the wrist strap broke while her 11-year-old son used it properly, and the device flew into her 52-inch flat-screen TV, smashing it. She claims hundreds of other consumers have reported property damages and personal injuries from the failed wrist straps.

The complaint cites the editor in chief of IGN.com, who received a promotional game, and claims he “personally witnessed and observed the following while the Wii video game was being used in its intended and advertised manner: ‘so one of the girls in particular really was having a good time and really got into this game, and she was going for the full arcing motions likes you see in those commercials …’ and ‘before you knew it this Remote, with strap on, and I made sure that bad boy was strapped to her wrist, because Nintendo’s warned me so many times. It actually flew out of her hand anyway, broke, out of her hand, the strap actually ripped, it went like this, flying at mach speed I think, BAM!, hit our wall, put an indent in our wall.”

The complaint cites Nintendo’s instructions for the controller, including, “The key is to pump the Wii Remote and Nunchuck back and forth in your two hands as rapidly as possible without abating” and “Swing hard to make sure you clear the net!”

Nintendo should probably reword that, “Pumping your wii remote as rapidly as possible, but not at mach speeds.”

And Nintendo thought it had its hands full with controller patent infringement suits.

Wii Remote Out of Control, Says Class [Courthouse News Service]

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Associate Bonus Watch: Willkie Follows the Plan of Cravath

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law firm associate bonus watch 2008 biglaw bonuses.jpgWillkie Farr & Gallagher will be matching Cravath’s low bonuses this year.

The email didn’t bother to explain why, since it’s pretty clear that market conditions have beaten associates into submission with a giant, invisible hand.

The Executive Committee is pleased to announce the following year end bonuses for associates:

Class of 2008: $17,500 (pro-rated)

Class of 2007: $17,500

Class of 2006: $20,000

Class of 2005: $22,500

Class of 2004: $25,000

Class of 2003: $27,500

Class of 2002: $30,000

Class of 2001 and senior: $32,500

Bonuses will be paid in December, consistent with our customary practices.

The Firm appreciates your efforts during these challenging times.

Commentary and context, after the jump.

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Legal Eagle Wedding Watch 11.30: Softball Diamond

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champagne glasses small.jpg

After another craptasticical week for lawyerdom, here’s your weekly dose of wedding cheer. Unfortunately, like many of the firms we cover on ATL, LEWW has been forced to make some difficult decisions. We had to show one set of newlyweds the door–entirely for performance-related reasons, of course, because LEWW doesn’t do layoffs.

Here are the two lucky-to-survive entries:

1. Lauren Attard and Jordan Schwartz

2. Anna Joo and Adam Fee

Read more about these couples, after the jump.

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