Citigroup

* A man on trial for sex crimes at a Minnesota courthouse allegedly shot three people yesterday, including prosecutor Timothy Scannell. Guess it’s time to get a metal detector. [Duluth News Tribune]

* Instead of trying to force Citigroup’s hand on a tougher settlement, the SEC is appealing Judge Rakoff’s rejection of the original. Don’t want to make the SEC do more work now, judge. [Bloomberg]

* You’d think that by now, law schools facing scrutiny over employment data would be willing to turn over some information to Law School Transparency, but you’d be wrong. [National Law Journal]

* China’s King & Wood and Australia’s Mallesons Stephen Jaques are combining to form a happy family this March. If this were in Japan, they’d be the Godzilla of law firms. [Wall Street Journal]

* Obvious news alert: Foxy Knoxy was acquitted of murder because there wasn’t enough evidence to prove she was guilty of murder. Thanks for this brilliant observation, Judge Hellman. [CNN]

* The Toy & Action Figure Museum will be opening a lawyerly superhero exhibit. This generation of lawyers has no superheroes, because unemployment isn’t a super power. [ABA Journal]

Drums please:

Bonus, bonus, bonus time. Time to sit back and unwind.

The first bit of bonus news has leaked out of Biglaw. We’re not talking about spring bonuses, and we’re not talking about random mid-year bonuses. We’re talking about regular, end-of-the-year, take-it-to-the-champagne-room bonuses.

And sure, the early news is bad, but that’s to be expected. This first report is just what Biglaw wants you to hear.

But if the past year in bonus news proves anything, it’s that Cravath sets the bonus market, even when they do it late….

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Burt Reynolds

* I know we’re a little tight for money, but we should find some money in the budget to make sure faded American stars are bailed out of the housing crisis, just like the banks were. [Monsters & Critics]

* Illinois’s redrawn legislative districts draw legal fire. I have an idea: let’s use Illinois as a laboratory for direct sponsorship of Congressional seats. I recognize the distinguished gentleman from Pizza Hut. [WSJ Law Blog]

* If anybody at Citi would like to sue for stress due to the fire drill there today, there are a bunch of out-of-work lawyers who would love to help you. [Dealbreaker]

* Prosecuting your own stalker: it’s a good story. This being the most I’ve read in a Marie Claire, however, I need to go hunt something and eat its liver to rebalance my hormones. [Marie Claire]

Stephen Mark McDaniel

* Here’s a chatwrap with Amy Leigh Womack and Joe Kovac, two reporters who have been covering the Stephen McDaniel / Lauren Giddings case down in Macon. The last time I remember Macon being this relevant to my day-to-day life, John Rocker was involved. [Macon Telegraph]

* Having to purchase legal services from a Wal-Mart that looks like a Neiman Marcus is probably something that happens in Hell. But it can’t be much worse that having to buy your clothes in a place where you buy your food. [An Associate's Mind]

* Lady lawyers: looking for a way to spend that spring bonus or partnership draw? Here are ten handbags that cost five figures. [Fashionista]

Although it officially passed away back in March, when its partners voted for dissolution, the law firm of Howrey LLP continues to twitch in its grave — or maybe even step out of its grave and walk around a bit, like a zombie from a horror flick.

Howrey continues to have a presence on Twitter, for example. A D.C.-based reader pointed out to us that the April 2011 issue of Washington Lawyer magazine contained a partnership announcement for the firm, on page 44: “Stephen D. Palley and Andrew R. Sommer have been named partner at Howrey LLP.” (Both landed on their feet: Palley is now a principal at Ober|Kaler, and Sommer is now of counsel at Winston & Strawn.)

And, strangely enough, Howrey is still seeking client engagements….

double red triangle arrows Continue reading “Dead Firm Billing: Howrey Going to Keep Doing Business?”

Although Howrey LLP officially dissolved as a partnership as of March 15, some operations continued beyond that date. But at the close of business today, the firm is going into a more complete shutdown, due to a withdrawal of bank financing.

“Last night, we received notice via email that Howrey is closing as of today, because CitiBank refuses to pay the payroll,” one source reported. “CitiBank has also refused to pay our PTO [paid time off], and our pension contributions.”

“Citibank has closed the door on Howrey operations today, more than a month before the May 9th date listed on WARN notices,” a second tipster confirmed. “No PTO, pensions will be paid out.”

UPDATE (6 PM): Citi takes issue with Howrey’s take on events. From a Citi spokesperson: “We are deeply disappointed in Howrey’s mischaracterization of the situation. Citi is not responsible for the employment practices of a client and has acted in a professional manner throughout this process.”

The full Howrey memo, after the jump.

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Firm shutting down today, after Citi pulls plug.

Accept your offers. It’s wise advice for 2Ls going through fall recruiting, and it’s wise advice for partners of the rapidly unraveling Howrey law firm, most of whom have offers to join Winston & Strawn. Last weekend, Winston made offers to a little over 75 percent of Howrey partners, with responses requested in 21 days.

Yesterday we mentioned that a Howrey partnership conference call took place on Tuesday. During that meeting, firm chairman Robert Ruyak and Winston & Strawn managing partner Thomas Fitzgerald apparently urged Howrey partners with Winston offers to accept them as soon as possible, according to The Recorder.

Many Howrey partners have already left for other firms, as chronicled in these pages. A group of eleven attorneys recently departed for Morgan Lewis, for example.

Of the 200 to 230 Howrey partners who remain, how many are likely to go with Winston?

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It’s time for a brief postscript on one of this month’s juicier (and well-trafficked) stories: the dismissal of three women associates from litigation powerhouse Boies Schiller. We have a few additional tidbits that we can share with you.

But this is probably the last story we’ll be doing on this drama, since we don’t expect anything else to emerge. One piece of information we’ve received is that the associates were offered severance pay — “very generous” severance, in the words of one source — but had to release any claims against the firm in exchange. All three took the deal, including the expectant mother. So don’t expect any “Aaron Charney for pregnant women”-type lawsuits.

What other details can we reveal about the situation?

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This morning brought more lawyer layoff news. As reported by Peter Lattman over at DealBook, David Boies’s celebrated litigation firm, Boies Schiller, last week laid off three associates.

(The DealBook piece refers to the dismissals as “layoffs,” and we’ve used that terminology in the title of this post and the first paragraph. But whether these terminations should be considered true “layoffs” is open to question — please keep reading.)

As noted in Am Law Daily, the three associates “worked on the firm’s representation of British private equity firm Terra Firma in its unsuccessful civil suit against Citigroup.” Now that the three-week trial is over, presumably the firm felt it could let the women go — and perhaps make them the “fall guys” (or gals) for the adverse result.

Two of three associates used to work in the firm’s former office in Short Hills, New Jersey. After that office was spun off last year into what is now Stone & Magnanini, the two jumped across the Hudson to join the New York office of Boies. So perhaps they didn’t have powerful patrons at BSF – NYC to protect them from the ax.

There’s also a bit of backstory here, which didn’t make it into the reports of DealBook, Am Law Daily, and the ABA Journal….

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(But query whether these were really ‘layoffs.’)

Back in September, we wrote about David J. Stern, “Florida’s Foreclosure King,” who earned our Lawyer of the Day title for his ascendancy from the fourth tier to the lap of luxury. At the time, we sang Stern’s praises. Stern, a graduate of South Texas Law, employs 900 people, made $17.8 million in 2008, owns $60 million in real estate, and collects yachts.

Thanks to the New York Times, we knew back then that Stern may have been a shady character. But we kind of brushed off those pesky little questions about his “ethics” and “questionable practice methods.” I mean, come on, how many lawyers can say that they drive a Bugatti?

Well, maybe we shouldn’t have overlooked these issues so quickly…

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In a couple of years, we might look back on today as the first point where the giant, unsustainable bubble that is the student loan market began to burst. Check out this press release:

The Student Loan Corporation (NYSE:STU – News), a subsidiary of Citibank, N.A., and a leading originator and servicer of student loans, announced that The Student Loan Corporation (“SLC”) and Discover Financial Services (“Discover”) have entered into a definitive agreement for Discover to acquire SLC, and thereby become the owner of its private student loan business as well as $4 billon of its private student loans. Separately and immediately prior to the transaction, (i) SLM Corporation (“Sallie Mae”) will acquire from SLC $28 billion of securitized federal student loans and related assets and (ii) Citi will acquire from SLC certain federal and private student loans and other assets totaling $8.7 billion. Upon the closing of the transactions described above, shareholders of SLC will receive $30 per share.

So Citi is getting out of the student loan origination business (although they’ll still have some existing loans on their books). I guess they don’t want to be the Lehman Brothers of this failing market…

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