* Lawyer opinions solicited: Is this an effective ad for malpractice insurance? [Copyranter]
* Another ugly day for the stock market. [Volokh Conspiracy]
* On that subject: Is the vast family fortune of Rachel Kovner, ATL’s official It girl, in jeopardy — as recently rumored by our sibling site? Not exactly. But if Bruce Kovner’s legendary fund is up only 3 percent year-to-date, things could certainly be better. [DealBreaker]
* What? The iPhone is not God’s greatest gift to man? Bite your tongue! [Althouse]
* Ignoring a handslap will get you a benchslap. See page 15, footnote 7. [U.S. Court of Appeals for the Second Circuit (PDF)]
- 2nd Circuit, Advertising, Ann Althouse, Bruce Kovner, Malpractice, Non-Sequiturs, Rachel Kovner, Technology, Wall Street
* Lawyer opinions solicited: Is this an effective ad for malpractice insurance? [Copyranter]
In this week’s New York Observer, there’s an article (by yours truly) that may be of interest to ATL readers. It’s entitled Profits vs. Partners: Are the country’s top law firms going the way of the dinosaur?
You can check it out by clicking here. The piece has also been picked up by DealBook and the WSJ Law Blog (with a somewhat snarky title — but if we can dish it, we can take it).
The point of the article is not that law firms are becoming more businesslike and profit-oriented (yawn), but what this means for the profession — and also for firms as profit-maximizing businesses. Here’s an excerpt:
It’s a noteworthy shift for the legal profession, whose denizens like to think of themselves as intellectual types—and view their Wall Street cousins as money-obsessed philistines. Many angst-filled attorneys suspect they should have gone into something more tweedy and creative than relocating commas within merger agreements. As Clarence Darrow said, “Inside every lawyer is the wreck of a poet.”
Such questions of professional identity aren’t just theoretical; they have ramifications for law firms as businesses. If law firms become “just like banks,” but with smaller paychecks, firms may lose their appeal to the talent they must attract in order to thrive.
In other words: Is Biglaw, by emphasizing money so much, hoisting itself by its own petard? If it’s all about the benjamins (baby), why not just go to an i-bank or hedge fund? Are firms going to lose their top talent to the world of finance — which would then impair Biglaw’s ability to thrive as a business?
(If Biglaw has nothing to offer but monetary rewards, which are offered in larger amounts by Wall Street, will law firms end up as dumping grounds for the mathematically-impaired? (Please don’t take offense; that includes us. We can’t balance our checkbook without a calculator.))
More excerpts and discussion — including predictions from law firm consultants about when the next round of associate pay raises is coming, which we know you’re dying to hear — after the jump.
Earlier this week, we reported on the unexpected early promotions of four corporate associates at Cahill Gordon. According to various comments, the four soon-to-be partners, whose promotions will take effect in July, are Doug Horowitz, Corey Wright, Bill Miller, and Jonathan Frankel.
As some speculated, this quartet was promoted early to prevent them from leaving for greener pastures. Here are more details:
The way it apparently went down is that all 7th and 8th year litigators were sat down individually by a partner and told, a week or so ago, that 7th and 8th year corporate associates — corporate associates only — were going to be voted on this summer. The given reason was to prevent these people from leaving to go to i-banks.
Litigators were apparently told that they should not consider this to be a negative commentary on their value to the firm, and that they would be considered in the normal course, either end of this year (8th years) or end of next (7th years). Their chances of making it were described as “the same as they were yesterday.”
It’s my understanding that there is a growing rift between corporate and litigation at the firm. Each group — partners included — increasingly resenting the other. Corpies think litigators are lazy, don’t have to work nearly as hard for the same amount of money. Litigators resent being treated as second-class citizens.
Very interesting. Some food for thought:
1. Several top law firms have struggled to deal with the problem of star associates leaving for investment banks, hedge funds, and other opportunities in the world of finance. Will other Biglaw shops start employing this strategy of early promotion to retain their best associates? Could we be witnessing the start of a trend?
2. According to conventional wisdom, corporate lawyers generally have “better” — or at least more lucrative — exit opportunities than litigators. As a result, law firms face more outside competition for them. Could we eventually see a system in which partnership tracks are shorter for corporate associates than for litigation colleagues, in reflection of the different markets for the two practice areas?
Please feel free to discuss in the comments.
Earlier: Some Premature Promotions at Cahill Gordon?
- Asians, Blogging, Defamation, Goldman Sachs, Insider Trading, Vicious Infighting, Wall Street, White-Collar Crime
“In an effort to uphold the rule that the Masters of the Universe can pretty much get away with anything simply because they’re the Masters of the Universe (see, also: Jobs, backdating), a federal judge has ruled that Goldman cannot be included in a lawsuit by Fannie Mae shareholders.”
2. Dow Jones Insider Trading Watch: Two Charges, Dow Jones Director Scutinized. Hmm, this sounds a wee bit fishy to us:
“[T]he SEC filed a lawsuit against a Hong Kong couple, Kan King Wong and Charlotte Ka On Wong Leung, accusing them of insider trading. The couple had purchased $15 million of Dow Jones shares prior to the May 1st announcement.”
They liquidated the position after News Corp.’s unsolicited offer to boy Dow Jones, for a tidy profit of $8.2 million. More details here.
3. In the Future of a Defamation Lawsuit, Dimon Is the Law. Here’s a teaser, concerning the lawsuits that are flying between Dow Chemical and a former executive and board member: “It’s the legal equivalent of a John Woo action scene.”
You can check out the full post here.
If you look up the term “private equity” in Black’s Law Dictionary, the entry reads: “Lucky bastards who make three times as much as you do, even though you graduated from college at the same time.”
But perhaps lawyers should think warm-and-fuzzy thoughts, as opposed to envious and resentful ones, about private equity types. Today’s DealBook has an interesting item about how private equity deals are keeping law firms busy — including a number of shops outside the private equity “Holy Trinity” of Simpson Thacher, Cleary Gottlieb, and Ropes & Gray.
The DealBook item is based on an article in the current issue of the American Lawyer, which contains this tidbit about lateral moves from Simpson:
An unintended consequence of our level of market share in private equity is that as private equity firms have grown, they’ve all developed in-house legal staffs, starting from zero, five years ago,” says Simpson partner Alan Klein. “They’re trying to populate those staffs with our associates.”
Seven lawyers left Simpson for private equity shops last year, according to Corporate Counsel, a sibling publication of The American Lawyer. Partly to stem defections, Simpson raised associate salaries in January, prompting a raise-a-thon among its competitors.
“I don’t understand what causes a firm be the first to increase the salary of a brand-new lawyer from an already eye-popping $145,000 to $160,000. There is no competitive advantage in doing so. Other firms will surely follow suit, and the firm that led the market will quickly be indistinguishable from the rest of the pack.”
Well, there’s your answer, Mr. Sandman. Simpson isn’t competing with you and other non-NYC firms; it’s competing with private equity and investment banks. And your profits per partner are just collateral damage.
More Law Firms Crowd into Private Equity Deals [DealBook]
Corporate Scorecard: Gargantuans at the Gate [American Lawyer]
The legal ninjas of
Cobra Kai Kobre & Kim are coming after our friends at DealBreaker. Yikes.
Good luck, guys! We’re pulling for you.
P.S. Our esteemed colleague, DealBreaker editor John Carney, is also a lawyer (who practiced at Skadden for several years). So he’s not as easily intimidated by scary lawyer letters as most other blog editors.
Update: Filing lawsuits against bloggers — all the cool kids are doing it!
Solengo Seeks Court Order To Strip DealBreaker Of Brochure [DealBreaker]
As Pitch Leaks to Web, a Hedge Fund Wants Quiet [DealBook]
Earlier: Will Our Big Sibling Get Sued?
Our big sibling, the Wall Street tabloid DealBreaker.com, obtained and posted a promotional brochure for Solengo Capital, the new hedge fund being launched by former traders at the ill-fated Amaranth Advisors. Amaranth, you may recall, accomplished the impressive feat of losing $6 billion in a single week, before breathing its last.
Apparently the Solengo Capital folks weren’t thrilled about the free publicity. After DealBreaker didn’t comply with its request to take down the brochure, Solengo had its lawyers at
Kobra Kai Kobre & Kim send out a mean letter. And that’s where things currently stand (no summons and complaint just yet).
Update: It looks like that lawsuit is on its way.
Anyway, if you have some
free legal advice thoughts to offer on this matter, we welcome them in the comments.
P.S. As for why Solengo is so hot ‘n bothered over all this, here’s one theory.
Solengo Capital coverage (scroll down) [DealBreaker]
Ex-Amaranth traders ask blogs to remove materials [Reuters]
OOPS!!! Sorry about that.
The Court’s order vacating its December grant of review explains that it was “advised by Justice Kennedy that he now realizes that he should have recused himself from participation in this case, and does now recuse himself.”
Justice Kennedy contemplated, but ultimately decided against, issuing a separate order explaining his belated recusal, calling his son Gregory Kennedy (at right) “very handsome,” and declaring his intention “to hug him no matter how old he gets.”
Kennedy Recuses From Antitrust Case Involving Son’s Company [Legal Times]
Greg Kennedy bio [Credit Suisse]
Earlier: The Michigan Supreme Sandbox: We Left Out the Best Part
This morning brings some big news in the world of bankruptcy law. From the WSJ Law Blog:
You can go home again, especially if you’re Harvey Miller (at right). The legendary bankruptcy lawyer is expected to rejoin to Weil Gotshal, whose partners are scheduled to vote on his return tomorrow.
“I would be delighted to have Harvey back, but it’s premature at this stage to comment on his rejoining the firm until the partnership votes on the issue,” says Stephen Dannhauser, firm chair.
Before decamping to investment bank Greenhill & Co. in 2002, Miller had spent the previous 33 years at Weil, building its bankruptcy department into one of the most prominent debtor-side practices in the country.
And from a little bird (so consider this to be nothing more than rumor at this point):
It appears four bankruptcy partners are leaving Weil and moving to Cadwalader (apparently to swim in Bob Link’s shark tank and make the big $$$). Partners include Deryck Palmer, John Rapisardi, and George A. Davis.
Could the return of Harvey Miller to Weil be related to the (rumored) departures of these younger partners?
We are following up on this rumor and will let you know what we find out.
UPDATE: Harvey Miller’s return to Weil is official. The WGM press release is available here. A longer version of the release, which was circulated by email at Weil, appears after the jump.
Bankruptcy King Harvey Miller Expected to Rejoin Weil [WSJ Law Blog]