Alternative Fee Arrangements

* Dewey know how many professional firms have been allowed to stay on as advisers for the largest law firm bankruptcy in U.S. history? Six out of nine firms were permitted to continue services, but Proskauer wasn’t one of them. [Am Law Daily (sub. req.)]

* In other defunct firm news, Al Togut will be presenting Dewey & LeBoeuf’s former partners with a proposed settlement on Wednesday. You’ve been warned: prepare yourselves for some Biglaw-style bitching. [Thomson Reuters News & Insight]

* Despite reports of the billable hour going the way of the dodo bird, it looks like they’re here to stay. Right now, corporate law departments are still much more excited about alternative billing arrangements than law firms. [WSJ Law Blog]

* Judge Sam Sparks, the King of Benchslaps, dismissed Lance Armstrong’s lawsuit against the USADA in record time. That ruling came too quickly — guess it’s time to investigate judicial doping. [New York Times]

* Marc Dreier’s son, Spencer Dreier, is representing himself pro se in a defamation suit against his former college roommate. Looks like Daddy couldn’t spring for his kid’s lawyer while he was in the clink. [Bloomberg]

* A California woman claims that the Food and Drug Administration’s methods regarding sperm donations are unconstitutional. Why should she have to go to an intermediary to get sperminated? [Huffington Post]

* Do you smell what The Rock is cooking? It’s not exactly something to be proud of. Actor Dwayne Johnson is listed as a “co-conspirator” in a $1.8M fraud lawsuit that’s been filed by a South Florida family. [NBC Miami]

There are firms that won’t do it at all, and God bless them if they can get away with that in this environment. Any law firm leader today who thinks they can do 100 percent of work on billable hours forever into the future is not going to have a law firm for very long.

Robert Lipstein, a partner at Crowell & Moring, explaining the shift toward alternative fee arrangements within the legal industry.

Apparently Google thinks this Mob Wife is a 'cheap hooker.' If nothing else, she totally dresses like one.

* The harsh realities of post-recession practice: will Biglaw leaders have to resort to alternative billing practices in order to survive? Well, they better, or else they’re “not going to have a law firm for very long.” [Washington Post]

* I don’t think “secret service” means what you think it means. Listen up, agents, prostitution might be legal in much of Columbia, but it makes America look bad when you can’t afford a $47 hooker. [New York Post]

* Jessica Recksiedler, the judge assigned to oversee George Zimmerman’s case, may have a conflict of interest thanks to her husband. Somebody’s getting banished from the bedroom this week. [Bloomberg]

* Law firms with ties to New Jersey Governor Chris Christie have seen record profits compared to their take under Jon Corzine’s rule. That said, even if he called them “idiots,” it was totally worth it. [Star-Ledger]

* UMass Law is being reviewed for accreditation by the American Bar Association, and opponents are throwing some major shade. As if Dean Ward’s scandalous resignation wasn’t enough. [South Coast Today]

* Is this house haunted as a matter of law? That’s what this New Jersey couple is hoping that a judge will say about their rental home. Hey, it wouldn’t be the first time it’s happened in the tri-state area. [ABC News]

* The billable hour may be far from dead, but last year, 61% of general counsel worked out alternative fee arrangements with outside counsel, including counsel from elite (read: Biglaw) firms. [Wall Street Journal]

* Dewey need to take lessons on revenge from this firm? John Altorelli, the D&L defector who spilled all the beans to the Am Law Daily, was blasted on Page Six this weekend. More on this to come later today. [New York Post]

* CHECK YOU LATERALS: recent Quinn Emanuel hires William Burck, Paul Brinkman, and Andrew Schapiro, as well as name partner John Quinn, have entered appearances on behalf of Megaupload. [Am Law Daily]

* Copyright infringement suits over porn downloading involving some 3,500 defendants were dismissed because the plaintiffs’ attorney, Terik Hasmi, couldn’t get it in legally in Florida. [National Law Journal]

* In England, there’s no such thing as a no-fault divorce, but instead, you can get one for “unreasonable behavior” — behavior like malicious service of tuna casserole, and speaking only in Klingon. [New York Times]

* This gives “I’m a Slave 4 U” some new meaning. Britney Spears’s fiancé, Jason Trawick, is trying to start their impending rocky marriage off on the right foot. He’ll soon be her co-conservator. [New York Daily News]

Ah, nothing brings around the lawyers of today like the talk of money. One of the most popular Google searches by law students and lawyers is “how to make money as a lawyer.” I rarely see searches for “how to cross examine the expert witness,” or “building a reputation, one case at a time.”

It’s all about the cash.

So here it is, here’s your red meat:

Charging “what everyone else charges” is for losers.

Good clients know you get what you pay for. Cheap, annoying, time-sucking, Bar-complaint-filing clients try to own someone for nothing. If you want the same clients everyone else has, charge the same legal fees. You can be Wal-Mart, or you can be Saks. More people shop at Wal-Mart, but people looking for quality shop at Saks, and they know the difference. They go in, they see something they want, and pay for it (without a payment plan). (And don’t tell me “credit cards are payment plans.” The seller gets the full amount, the buyer makes payments to the bank.) Saks doesn’t have “low prices,” and customers aren’t going there for low prices. They’re looking for quality. Price is secondary….

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I won’t say whether I actually heard these conversations or I just dreamt them.

First: The head of the business unit confronted with a new litigation matter:

“This is an outrage! How could they have accused us of this? We want to fight! Fight! Fight!”

“The defense costs will be charged to your business unit, which will reduce your bonus pool.”

“Settle!”

Second: One partner at a law firm — who wants to visit a client, make a presentation, and take the client to dinner — to a second partner — who is the relationship lawyer for the client:

double red triangle arrows Continue reading “Inside Straight: Creating The Wrong Incentives”

Tom Wallerstein

A general counsel recently asked me, “Why should my company risk hiring a lesser-known, small firm?”

I told him that it shouldn’t. I don’t think any company should unnecessarily “risk” its business without good reason. I’ll be the first to admit that there are some matters that simply demand big firm attention.

But I also told the GC that there were many matters that I thought my smaller firm could handle just as well as could a big firm, and with cost savings that would be relatively significant given the amount at stake.

I wouldn’t ask someone to hire me if I thought that doing so was risky for them. A client should not have to choose to lose or win; it needs to make sure the small-firm attorneys have the necessary skill and experience. But with that caveat, some matters are particularly well suited for boutique treatment.

Assuming a client can afford to hire a Biglaw firm for a particular matter, why might it consider a small firm or boutique — beyond the obvious lower cost?

double red triangle arrows Continue reading “From Biglaw to Boutique: Which is Better for Clients?”

* First the Jones verdict, then the Fourth Circuit affirmed the dismissal of Jose Padilla’s torture lawsuit. It’s enough to make ACLUers develop bipolar disorder. [Washington Post]

* Release the Kagan! The Supreme Court rejected Freedom Watch’s motion for time to argue that Justice Elena Kagan should recuse herself from the Obamacare case. [CNN]

* Biglaw problems: here’s a great round-up of 2012′s law firm lawsuits, starring Akin Gump, Crowell & Moring, Dechert, and Greenberg Traurig, to name a few. [Am Law Daily]

* After dropping a lawsuit challenging their forcible eviction from Zuccotti Park, supporters of Occupy Wall Street will go back to occupying the couches in their parents’ basements. [Bloomberg]

* Not interested in being a lawyer? Check out these suggestions for “unique” career paths (i.e., ones that you could have pursued after college, with half the debt load). [U.S. News]

* Not such a great alternative fee arrangement. A prosecutor turned solo practitioner is going to jail after accepting oxycodone pills as payment from a police informant. [Tampa Bay Times]

Tom Wallerstein

When I started my firm, several mentors gave me the same advice: Don’t work for free. It’s easy to see the problem with working for free. Giving away what you’re trying to sell isn’t exactly in the business plan. Unfortunately, this sage advice can only really be learned the hard way, through experience.

Working for free can arise in many different ways. The most obvious example is a client who wants you to represent him but can only promise to pay you later.

Even if your gut tells you that taking on that client is a bad idea, this can be surprisingly tempting to a new firm or solo practice. For starters, there is such a thrill with getting your first client, or your first “real” client, or your first big client, or your first whatever client, that the excitement can cloud your better judgment. You will be tempted to overlook the red flags that you will not be paid for your work….

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Edward Hayes (on The Charlie Rose Show)

What draws people to the practice of law? Some do it for the paycheck, some do it for the prestige, and some do it for the excitement and fun of it all.

Veteran New York litigator Edward Hayes belongs firmly in the final camp. Although he has amassed fame and fortune over almost four decades of practicing law, his legal career reflects a quest for adventure.

And what adventures Hayes has had. After graduating from the University of Virginia and Columbia Law School, he joined the Bronx District Attorney’s office, where he prosecuted homicides (which there was no shortage of in the Bronx in the 1970s). He then launched his own practice, handling civil and criminal matters for such clients as the estate of Andy Warhol, notorious “Mafia cop” Stephen Caracappa, acclaimed architect Daniel Libeskind, actor Robert De Niro, celebrity editrices Anna Wintour and Tina Brown, billionaire publisher Si Newhouse, and then-paramours Sean Combs and Jennifer Lopez (after they were arrested together back in 1999).

Eddie Hayes has even found his way into literature. He served as the basis for Tommy Killian, Sherman McCoy’s defense lawyer in Tom Wolfe’s great novel, Bonfire of the Vanities. Wolfe dedicated the book to Hayes, a close friend of his for many years.

This past summer, I enjoyed the privilege of spending a day with Ed Hayes. We met up at Penn Station and took the train out to his vacation home in Bellport, Long Island, where we enjoyed a leisurely lunch, dining outdoors and overlooking the water. (There are Lawyerly Lairs-style photos of his house, after the jump.)

During our time together, Hayes reminisced about his extraordinary life in the law, offered career advice for fellow lawyers, and showed me how to properly prepare a caprese salad….

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