Are you a bankruptcy attorney who needs to empathize more with your clients — e.g., by declaring bankruptcy yourself? Check out this job posting — which won’t be our Job of the Week anytime soon — courtesy of that gold mine of employment opportunities, Craigslist:
Bankruptcy Attorney Position (Dallas)
Small Consumer Bankruptcy firm in Dallas looking for new associate attorney. 50-60 Hours per week, with some travel to Fort Worth required. Salary: $40,000.
If “travel to Fort Worth” is required, you need to add another zero to that salary. This is not the kind of income that will help you pay off massive educational debt (non-dischargeable in bankruptcy, at least for now).
Last month, New York Times columnist Ron Lieber wrote an interesting piece analyzing whom to blame when students wind up in over their heads in educational debt. This past weekend, he wrote a somewhat more optimistic article, raising the possibility that student loans might become more easy to discharge in bankruptcy.
The status quo in terms of educational debt and bankruptcy is all too familiar to many law students and lawyers:
If you run up big credit card bills buying a new home theater system and can’t pay it off after a few years, bankruptcy judges can get rid of the debt. They may even erase loans from a casino. But if you borrow money to get an education and can’t afford the loan payments after a few years of underemployment, that’s another matter entirely. It’s nearly impossible to get rid of the debt in bankruptcy court, even if it’s a private loan from for-profit lenders like Citibank or the student loan specialist Sallie Mae.
Gambling debts can be discharged in bankruptcy like any other debts, but educational debts are subject to a test that requires the borrower to establish “undue hardship” (very tough to do under existing law). And losing money in a casino is a heck of a lot more fun than three years of law school.
But could changes to this legal regime be on the way?
UPDATE (May 30): Law student responds via YouTube, and shows off his very impressive office.
A law student in Massachusetts is looking for a job. He found a listing on Craigslist to work as a paralegal for a bankruptcy attorney. He applied, got an interview, and got an offer (kind of). But then he got into a spat with the attorney via email, preserved for posterity by The Docket.
The law student interviewed on Monday. On Tuesday, the female attorney sent him a rather candid email:
I have to confess, I am on the fence about offering you a position. This is a thought I had…tell me your thoughts.
The thought was that she would have the law student do a few freelance projects for a month, and if those went well, she would offer him a full-time position. He responded:
I can do any type of Motion, and research. I do not think a 30 day trial period is necessary. I would prefer bring me on full time to show you my capabilities.
That’s really not the right time for a grammatical typo, my law school friend.
In response, the lawyer laid out exactly why she had reservations about him, and wished him “best of luck in [his] job search.” That just made him crankier…
In journalism, there are certain go-to stories that one writes around big events. At Halloween, everyone writes the “most popular costume” story. At Christmas, it’s the “most popular toy” story. At Thanksgiving, it’s the “how the community is giving back” story.
Over the last two years, a recurring event has been “the big bankruptcy.” And it seems that the journalistic go-to is the “how much are the greedy lawyers making off of this” story. We’ve seen it with the GM bankruptcy, the Tribune bankruptcy, and the Chrysler bankruptcy. Yesterday, the New York Times applied the story model to the Lehman bankruptcy, but they got pay czar Kenneth Feinberg to weigh in — and lay into the firms working on the case: Weil, Jones Day, and Milbank.
“It violates any sense of proportion,” says Kenneth Feinberg, the Washington lawyer who serves as the “pay czar” for banks bailed out by the government and whom the court appointed last June to monitor fees associated with the Lehman bankruptcy. The court asked him to participate after concerns were raised in the news media about the soaring fees in the Lehman case.
“Unemployment is over 9 percent, and to be paying first-year associates $500 an hour angers the public,” he observes. “People read about all of this and say that lawyers and the legal system are one more example of Wall Street out of control.”
The article outlines the fees that have outraged — tangential Nationwide Perk Watch: Weil attorneys get limo transport — and the new limits that have been placed on bankruptcy attorneys on the case. No first class for you!
The Supreme Court ruled that a student’s failure to show undue hardship didn’t void a bankruptcy agreement to discharge student debt. It’s a minor victory for student debtors everywhere, and Justice Clarence Thomas did all he could to limit its effect.
The decision came down today in the case of United Student Aid Funds v. Espinosa. Justice Thomas, writing the opinion for a unanimous Court, ruled that a bankruptcy judge should have required trade school student Fransisco Espinoza to show undue hardship before approving the discharge of Espinosa’s student debt. But the error was not serious enough to void the agreement.
SCOTUSblog explains that the holding is very limited:
Today’s ruling in the student loan case is confined primarily to the situation where a discharge of such a debt has become final without the creditor using its option to challenge it at the time. It makes clear that bankruptcy courts may discharge a student loan debt only if they find it is an undue hardship to require payment.
Thomas’s language upholds the notion that undue hardship must be a part of the discharge of student debt …
Despite her death back in February 2007, Anna Nicole Smith (aka Vickie Lynn Marshall) continues to make headlines. From the Ninth Circuit comes bad news for her former lawyer (and lover) Howard K. Stern, and her daughter, Daniellynn. From E! Online:
[A court] said today that the estate of Anna Nicole Smith is not entitled to the $300 million-plus judgment previously awarded from her late oil tycoon hubby’s billion-dollar estate.
The court battle over Texas oilman J. Howard Marshall II’s millions has been ongoing since 1995.
You can download the opinion from the Ninth Circuit here [PDF]. You’ll see a familiar name on the list of counsel.
Kathleen Sullivan, new name partner at Quinn Emanuel, filed an amicus brief in the case for the Washington Legal Foundation, arguing in support of the decision by the Texas probate court that originally denied Smith’s claim to Marshall’s $1.6 billion fortune.
UPDATE: Congratulations to Dechert partner G. Eric Brunstad, the veteran Supreme Court litigator who represented the victorious estate of Pierce Marshall in this case. (Brunstad was also Lat’s bankruptcy law professor at Yale.)
The Texas judge who ordered Microsoft to pay $290 million for infringing a patent included a $40 million enhancement that he said was partly justified because of alleged trial misconduct by a lawyer from Weil, Gotshal & Manges.
U.S. District Judge Leonard Davis tacked on the $40 million penalty because of evidence of willful infringement. But also “favoring enhancement,” he said in an opinion, was trial conduct by lawyer Matthew Douglas Powers, a Weil Gotshal partner.
Matthew Douglas Powers is a big name in IP circles. And he’s the co-chair of Weil’s litigation department. But he’s not going to comment on Judge Davis’s $40 million critique of his trial performance.
What were the judge’s reasons for admonishing Powers? Check after the jump.
* Meanwhile, a Pentagon official who inspected Guantanamo at Obama’s request is under fire from human rights activists for filing a report (which declares Gitmo humane) that is little more than good public relations for the administration. [The New York Times]
* What do you do when your boss gets indicted for securities fraud? You get another job. A team of seven bankruptcy lawyers left Dreier LLP for Epstein Becker Green. [EBG]
* A federal judge encouraged the Obama administration to decide whether to keep pursuing a case against 11 Vietnam War Veterans accused of trying to overthrow Laos’s communist government. [The Associated Press]
* Judge says: UBS must respond to the U.S. lawsuit seeking disclosure of 52,000 names of people who allegedly used Swiss accounts for tax evasion. [Bloomberg]
So should Weil Gotshal associates be rooting against a government bailout of GM and the other big automakers?
GM bankruptcy –> more fees for Weil –> bigger bonuses (which WGM has not yet announced)?
UPDATE (1:00 AM): As of now, it looks like the auto industry bailout talks have failed. This makes a GM bankruptcy even more likely.
But even if GM does file for Chapter 11 (or even Chapter 7), thereby generating thousands of billable hours for Weil associates, it’s unlikely that Weil will pay out Skadden-sized bonuses (although the speculation sure is fun). As noted in the comments, Weil generally follows the market, and the market has settled around Cravath.
Paying above market could create problems for Weil. As one reader previously noted, “Weil will never be a bonus leader because there is concern at the firm that it would seem unsightly by the firm’s bankruptcy clients to lead the market with bonuses.”
That concern seems warranted. As GM director George Fisher told Bloomberg last week, “We are fearful, very fearful, of a prolonged [bankruptcy] proceeding that would just destroy our brand in the marketplace and therefore that is not considered a viable option…. These Wall Street geniuses and law firms are coming up with all these solutions that make them a lot of money.”
Just as Weil, Gotshal & Manges welcomes back legendary bankruptcy partner Harvey Miller, the firm is saying goodbye to four other restructuring stars who are leaving to join a rival firm.
Cadwalader, Wickersham & Taft is set to announce today that it has recruited George A. Davis, Deryck A. Palmer, John J. Rapisardi and Andrew M. Troop as partners in New York. The move, involving four of Weil Gotshal’s most prominent bankruptcy partners apart from Miller and practice co-heads Martin Bienenstock and Marcia Goldstein, points to a major realignment among elite bankruptcy practices.
In our post from last week, we had all of the names except for Troop.
Our tipster chalked up the move to the departing partners’ desire “to swim in Bob Link’s shark tank and make the big $$$.” The NYLJ piece seems to confirm that:
[Deryck Palmer] praised Cadwalader’s famously performance-driven culture, where top partners are rewarded handsomely and weaker ones are winnowed out.
“Cadwalader provides an environment where every lawyer can achieve their potential,” said Palmer.
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Ed. note: The Asia Chronicles column is authored by Kinney Recruiting. Kinney has made more placements of U.S. associates, counsels and partners in Asia than any other recruiting firm in each of the past six years. You can reach them by email: email@example.com.
Deal flow has clearly picked recently up for most US associates, counsels and partners in Hong Kong/China and Singapore. We are on the phone with a lot of these folks on a daily basis, many of whom we have known for years. Further, the head of our Asia team, Evan Jowers, and Kinney’s founder and president, Robert Kinney, frequently meet in person with leading US partners in Asia to assess their needs and keep on top of the inside scoop at as many firms as possible. The need for legal recruiting help in Asia from experienced recruiters appears to be live and well. In March, Evan and Robert were in Beijing at such meetings, in April, Evan was in Hong Kong, and for half of June Evan will be in Shanghai and Hong Kong. Thus its pretty easy for us to tell when there has been an across-the-market pick up in capital markets and corporate work.
On an average day in Asia when Evan and Robert visit firms, they typically have 5 to 9 meetings a day, mostly with US partners in the market. The reason they have these meetings is not simply because Kinney makes a lot of US attorney placements in Asia and that a particular firm may have openings; instead these are just visits with friends. After years of working together as business partners, the folks at Kinney are actually these peoples’ friends. The firms Kinney work closely with in Asia (which is just about every law firm – call us if you want to know the one firm in the world we will never place anyone with again, ever, and why) look forward to the visits, or at least act like they do. After seven years in the market, many of the client partners are former associate candidates. Also, these US partners see Kinney as a very good source of market information as well, because they know how deep their contacts are in the market and how frequently they are speaking to counterparts at peer firms.
In a land that is right here and in a time that is right now, a technology has arisen so powerful that it can replace basic human document review. Is it time to bow down before our new robot overlords?
First, here’s a little story about me: my life in the legal world began as a paralegal. My first case was a GIANT patent infringement case that was already six years old and had involved as many as five companies, multiple US courts, the ITC and an international standards committee. I knew nothing about any of this.
On my first day, my supervisor (a paralegal with at least eight other cases driving her crazy) sat me down in front of a Concordance database with a 100,000+ patents and patent file histories. “Code these,” she said. I learned that “coding”, for the purposes of this exercise, meant manually typing the inventor’s name, the title of the patent, the assignee, the file date, and other objective data for each document. I worked on that project – and only that project – for at least the first six months of my job. After a week or so, time began to blur.
What I know, in retrospect and with absolutely certainty, is that as time began to blur, so did my judgment. So did my attention to detail. If you could tell me that I did not make at least one mistake a day – one inconsistent spelling, one reversed day and month, one incorrectly spaced title – I frankly would need to see your evidence. I would not believe it. The human mind is trainable but it is not a machine.
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