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aig.jpgAnother day, another market massacre. Right now the SEC is meeting about “improper short selling” of Morgan Stanley and Goldman Sachs stock. The Dow is down nearly 450 points.

We have definitely entered the “dogs and cats, living together, mass hysteria” phase of this meltdown.

But while everybody is running around trying to CYA, the government is giving away the store. Professor Bainbridge has nine excellent questions about the AIG bailout; questions that the government lawyers seem to be willfully ignoring. Here are some crucial ones, maybe we can help Bainbridge (and our country) out of this mess:

* On what basis does the Fed have authority to use the discount window to bail out an insurance company?

* Who would have standing to challenge the Fed action, if anyone?

* Why was AIG to big too fail but Lehman wasn’t? Was AIG’s role in the credit default swap market really that important?

* Has the federal government ever taken an equity stake–let alone a controlling stake–as part of a bailout before? Was there any equity stake in Chrysler?

See the rest of Bainbridge’s probing questions here.

There are a lot of smart men and women here. Does anybody have any idea how the federal government just shoved AIG down our collective throats?

Things I don’t Understand About the AIG Bailout [Stephen Bainbridge]

Charles Whitebread.jpgWe’d like to take a moment and acknowledge the great life and career of Professor Charles H. Whitebread. Professor Whitebread passed away Tuesday, in Santa Monica, California.

Professor Whitebread was a legend at the USC Gould School of Law, but most attorneys will remember him for his BAR/BRI Criminal Law lectures. We fondly remember the bow-tied professor for adding a bit of levity at a time when we were stressed beyond belief.

He is survived by his life partner, John Golden, and his devoted friend Michael Kelly.

The USC Gould School of Law will hold a memorial for Professor Whitebread at a date still to be determined. Donations to the Charles H. Whitebread Memorial Scholarship may be sent to the law school.

law clerk judicial clerkship Abovethelaw Above the Law blog.jpgSome of you might remember that there is a presidential election going on. Turnout is expected to be high and many voters will be participating for the first time.

However, if you are a federal clerk you had better keep your political opinions to yourself. Free speech does not exist for you. One of our readers pointed out:

I just accepted a position as a federal law clerk for the 2009-10 term. I also have an Obama sticker on my bumper and an Obama sign in my yard. According to Ethics for Federal Judicial Law Clerks (p.20), I would be violating Canon 5 of the Code of Conduct for Judicial Employees if I were currently clerking.

Pretty much. The scope of political activity is curtailed not just by the canons of judicial ethics, but also by the Hatch Act. As a clerk, you are discouraged from giving money, attending events, you’re not even allowed to wear a campaign button to work.

We’re all for judicial impartiality, but making clerks say “I don’t know nothin about birthin’ no babies” seems a bit undemocratic (small “d”) to us. Federal clerks participate in some of the most important decisions about how we live, and we expect them to be able to weigh both sides without passion or prejudice. But a bumper sticker removes the veil of ignorance and reduces clerks to partisan hacks? A legal fiction is one thing, this is a legal farce.

Luckily for new clerks like our reader, this is not a problem for 2009-2010 clerks. They can go nuts until they are “official” federal employees. But current clerks can attest to the exact moment where free speech falls to the illusion of impartiality.

Update: If you’re interested in learning more about clerkships, and if you’ll be in Washington on Saturday, October, 4, this free event may be of interest to you.

Earlier: Prior ATL coverage of clerkships

shared office space copy.jpgWe’ve noticed a conversation in the ATL community page about Biglaw associates who have been forced to shack up in shared office space. According to the community post:

Dewey & LeBoeuf [FN1] has informed us that first, second and third year associates will be sharing 12X12 offices. In a meeting we were basically told ‘like it or leave it’ but were shortly there after reminded of the slumping economy’s effect on top tier law firm associates job market. Is any other top tier firm pulling this crap or it is just these soul sucking greedy slobs here?”

Shared office space is certainly not the ideal. It’s distracting to hear the type, type, typing of your office mate’s computer and to listen in on their calls. And you can’t really let it all hang out when the door is closed (or get up to the mischief detailed in this Skadden urban legend).
Firms usually cite space reasons as the culprit behind pairing associates up. Some have also claimed that a senior office mate can be an asset, one who provides guidance and can answer small questions that come up. Perhaps they also like the monitoring aspect: associates may be less likely to spend an hour on the phone talking about the weekend’s events if they’ve got a colleague within earshot.
At least it means that your firm is doing well, and buzzing along at full employment, as there aren’t empty offices to go around. Dewey’s not the only one. See another on-topic e-mail after the jump.
What’s the trend at your firm? Is office sharing common, and if so, for how long? And you know, of course, that we treasure on-the-job vignettes, so if you have any amusing or horrible office-sharing moments to spill, please do.
[FN1] The firm’s name was disclosed in the comments on the post. We reached out to them for comment, but are still waiting to hear back.

double red triangle arrows Continue reading “Open Thread: I Vant to be Alone
(Or, Unwanted Officemates)”

recession california associate pay raises.jpgMore law firms are benefiting — at least in the short term — from Wall Street jumping the shark.

The WSJ Law Blog has a roundup of the newest firms to come away with a piece of the bankrupt pie. Cleary Gottlieb Steen & Hamilton advised Barclays on their scavenging Lehman’s North American business, while Davis Polk & Wardwell helped your nominally “free-market” government bail out AIG.

But the financial crisis is far from over. Which firms are still left to benefit as the financial sector careens down the off ramp of success? We know Simpson Thacher has done a lot of work with Washington Mutual, and we know WaMu is about as stable as Courtney Love after a Seattle rainstorm. Will Simpson be able to cash in on a WaMu sale, or will Weil just add another bloodied notch to their belt?

Anybody else with their hand out? After the jump.

double red triangle arrows Continue reading “Open Thread: Will Your Firm Get Some Scraps?”

waterless urinal of sadness.jpgKids running for office say the craziest things. Even when that office is for student government at the S.J. Quinney School of Law at the University of Utah.

This election isn’t going to come down to which student candidate will do the best job at providing low-cost outline alternatives to disadvantaged 1Ls. Instead, membership on the Student Bar Association will be based on toilets and tacos. According to one “undecided” at the law school:

I don’t want to sound cynical (okay I do), but in my experience concerning any type of “student government” (which experience is unfortunately extensive), “representatives” don’t really amount to much.

If there power could equal the power they think they have, then that would be something. I’ll tell you what counts for me: tuition costs, book costs, and the fact that there aren’t enough bathrooms in this place. Let’s be serious, the SBA will not build new bathrooms or lower costs. My “representative” may wish to pad their resume with another feather in their hat, but unless you can save me money or time, I understand how limited the SBA’s influence truly is and subsequently couldn’t care less. God bless America…

P.S. You get a taco cart up here for lunch and you’ll win.

Let’s address the last thing first: I was unaware that there were any schools out there still without reliable access to a taco cart. This is America! A taco cart is a law school birthright.

After the jump, we delve into the incredible waterless toilet.

double red triangle arrows Continue reading “Is The Market For Toilets Drying Up?”

untitled-5.jpgAs the Fed steps in to save the financial world with a bridge to nowhere AIG, we pause to reflect on the results from Monday’s ATL / Lateral Link survey, which asked whether the woes of Lehman Brothers and Merrill Lynch would hurt your career.

We received 830 responses, and quite a few of them looked like this one:

It’s the end of the world.

Overall, 42% of practicing attorneys said the demise of Lehman Brothers and Merrill Lynch would hurt their careers, which is way up from the 27% who said the same about Bear Stearns back in March. Law students are even more concerned, with 50% of 3Ls, 68% of 2Ls, and 63% of 1Ls feeling fearful.

While a third of New Yorkers were afraid about the impact of Bear Stearns back in March, the more recent collapses have frightened 55% of the Big Apple’s Big Law respondents. In fact, fear has risen dramatically in every market:

Responses by market: Are you afraid that the recent collapse will hurt your career?

After Merrill Lynch    
& Lehman Brothers    
Bear Stearns
20% yes
20% yes
20% yes
31% yes
16% yes
34% yes
Washington, D.C.    
37% yes
20% yes
Bay Area
38% yes
13% yes
39% yes
8% yes
Los Angeles
41% yes
24% yes
44% yes
17% yes
54% yes
25% yes
54% yes
New York
55% yes
33% yes

Additional discussion, including selected comments from survey respondents, after the jump.

double red triangle arrows Continue reading “Associate Life Survey: Life After Lehman Brothers?”

irs new jobs no layoffs.jpgWe have to at least entertain the possibility that the tanking economy could fundamentally change the Biglaw lifestyle that we have come to know and bilk. We could see flat salaries, tepid bonuses, and decreased job security over the next few years. Maybe this is the perfect opportunity to break out of the “top school-top firm-top shrink” pipeline?

Enter Don Korb, Chief Counsel of the IRS. As Tax Prof Blog mentioned earlier this week, Korb has been trying to recruit law students to the IRS.

And why not (if you’re into that sort of thing)? Nobody is planning on downsizing the IRS anytime soon. And you will likely get the kind of experience that law firms will respect once they get around to having paying clients again. Korb lays out what the IRS has done for his life in his recruitment brochure:

I have been both an associate and a partner in a law firm, a partner in a Big Six accounting firm, and an Assistant to the Commissioner of Internal Revenue. Now I’m back leading the Office where I began my legal career. What has stayed with me throughout this journey has been the wonderful foundation in the tax law that I gained during my first stint in the Office of Chief Counsel, an experience that I believe cannot be found anywhere else.

In fact the IRS just reported a 72% job satisfaction rate. Granted, that number is out of all their employees. But go find four random people walking through your office today and ask yourself if three of them are happy.

The pay isn’t great. But it beats the bag out of what you’d get at the unemployment office.

The IRS Office of Chief Counsel — A Great Place to Start Your Tax Career [TaxProf Blog]

aig.jpg* The Fed reverses course and agrees to bail out insurance giant American International Group. [Forbes]

* Alaskan lawmakers file suit to stop the “Troopergate” investigation of Sarah Palin. [New York Times]

* Eight lawyers are on the American Lawyer’s 2008 Lifetime Achievers list for “history-making accomplishments.” [American Lawyer]

* The law against baggy pants is deemed unconstitutional. “Your Honor, we now have the fashion police.” [Palm Beach Post]

* DLA Piper will help raise funds for maglev trains in California. [The Press-Telegram]

Covington Burling LLP logo Abovethelaw Above the Law blog.JPGIt turns out that the mystery meeting at Covington & Burling involved some great news for Covington, and some bad news for Heller Ehrman.

Fifteen IP partners will be leaving Heller to join Covington, as Covington expands into Silicon Valley. The Daily Journal reports that in the wake of the latest defections and yesterday’s failed merger, Heller Ehrman has decided to stop seeking merger options:

Heller management told the firm attorneys Monday that they are going to cease merger pursuits and “try to go it alone,” the Heller attorney said. But some legal observers said this could be a sign of Heller’s imminent dissolution. Heller partners have been in clustered meetings all day, the Heller attorney said.

Guess San Francisco isn’t far enough west to escape the tough economic climate for law firms.

This should be great news for Covingtion, and you would think they would want to spread the word about their hiring coup. But apparently not. A tipster’s report on yesterday’s firm-wide meeting:

First came the ten-minute lecture regarding tipping off the blogs, and then the news about Silicon Valley. It surprises me that they were so freaked out about the spread of positive news in the scary economy.

It surprises us too. It’s hardly a bad thing if Covington’s surrogates do a better job of publicizing the firm than Covington’s own PR people.

As always, we thank all of our tipsters who are willing to sit through ten minutes of “lawyer talk” in order to bring us the latest information.

Partners Leave Heller as Mayer Backs Off []

Heller Ehrman, Mayer Brown Merger Is Off [Daily Journal] (subscription)]

Earlier: Covington & Burling’s Mystery Meeting

Law Firm Merger Mania: The Heller / Mayer Merger Is Off

jimmy walker.JPG* Cyrus Mehri is ready to take on the advertising industry for its depiction, or lack thereof, of African-Americans. Dyn-o-mite! [Gawker]
* Need help picking out a work appropriate nail salon on your lunch hour? Might I suggest a partial frontal lobotomy instead? [Corporette]
* Who is going to replace financial services clients? Tech firms? Green industries? Or nobody at all? [Law and More]
* A bunch of radio talk show hosts are being sued for violating FCC obligations “by using their radio license to discuss only Republican issues.” [Overlawyered]

Gabriel_Schwartz_t220.jpgIt seems that things have been going pretty well for Gabriel Schwartz. A 2004 graduate of the University of Denver College of Law, the 29-year-old is already the founder of a law firm, Sandomire & Schwartz. He’s president of his own company (PDF). And he was selected to be a Colorado delegate to the Republican National Convention.

But, at the Convention, he went home with a random new lady-friend — and now he’s the fodder for this headline, “GOP delegate’s hotel tryst goes bad when he wakes up with $120,000 missing.” From the St. Paul Pioneer Press:

He met her in the bar of the swank hotel and invited her to his room. Once there, the woman fixed the drinks and told him to get undressed.

And that, the delegate to the Republican National Convention told police, was the last thing he remembered.

When he awoke, the woman was gone, as was more than $120,000 in money, jewelry and other belongings… The haul included a $30,000 watch, a $20,000 ring, a necklace valued at $5,000, earrings priced at $4,000 and a Prada belt valued at $1,000, police said.

Apparently, Denver attorneys can do pretty well. More on this bling-blinging Lawyer of the Day, after the jump.

double red triangle arrows Continue reading “Lawyer of the Day: Gabriel Schwartz”

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