We recently reported on Stanford Law School's new grading system. Does it involve dollar bills? Or leaving book prizes on bedside tables?

Cristina Warthen (née Cristina Schultz) -- aka the Stanford Law Escort, now married to David Warthen, the filthy rich co-founder of Ask Jeeves -- is back in the news. From the San Jose Mercury News (via TaxProf Blog):

A Stanford law school graduate suspected of paying off her costly student loans by running a high-priced escort service has now been hit with federal tax evasion charges.

In court papers filed Tuesday in San Jose federal court, prosecutors allege that Cristina Warthen failed to pay taxes on more than $133,000 she earned as a prostitute in 2003, jetting off as a call girl for clients in Washington, D.C., Chicago, New York and other cities. The government has charged her with felony tax evasion for failing to pay about $25,000 in federal income taxes.

Warthen's business as a reputed high-priced hooker was first revealed several years ago, when the federal government searched her then-home in Oakland and seized more than $61,000 in cash suspected to be linked to her escort business. Court papers allege that starting in 2001, Warthen, then Cristina Schultz, used the name "Brazil'' and advertised her escort services on a Web site, TouchofBrazil.net.

Brazil. Great beaches. And waxing.

A little bit more, after the jump.

No, there's no decimal point missing. Computer virus fighter McAfee Inc. wants to quarantine the legal fees of WilmerHale, alleging that the firm overbilled the company. It finds WilmerHale's $12 million bill to be simply unacceptable.

From Niraj Chokshi of The Recorder:

The Santa Clara, Calif., company is embroiled with Wilmer, Cutler, Pickering, Hale and Dorr over $12 million in legal fees incurred in the trial of former McAfee Chief Financial Officer Prabhat Goyal. The company is accusing WilmerHale of fraud, theft, negligence and breach of fiduciary duty.

"[WilmerHale] intentionally overworked and churned the representation of Goyal; shamelessly employing over 100 WilmerHale timekeepers in the feeding frenzy," McAfee alleged in a complaint filed in the Eastern District of Texas earlier this year. "Defendant's bills reflect at least 16 partners, 34 associate attorneys, 10 legal assistants and 49 staff personnel -- how else could they amass this enormous trove of cash?" the complaint read.

On the one hand, $12 million is a sizable chunk of change. Did William DiSalvatore bill time to this matter?

On the other hand, big cases are, well, big. And part of the reason you hire Biglaw shops to tackle them is the ample supply of warm bodies to throw at the problem. Racking up an eight-figure legal bill is not unheard of in a long-running, large-scale white collar case involving top corporate executives.

More after the jump.

Writes Bess Levin over at our sibling site, Dealbreaker:

Sam Israel III, the convicted former hedge fund manager who no one believed committed suicide after he failed to show up to start serving a 20-year sentence for defrauding clients of a bunch o' money, has been taken into custody in Southwick, Massachusetts. The industry's biggest M*A*S*H fan apparently surrendered himself to authorities at 9:30 this morning.

As you may recall, on the day that Israel was supposed to report to prison, his abandoned SUV was found on a bridge, with the words "suicide is painless" written in dust on the vehicle's hood.

Back to Dealbreaker:

Finally, we're going to find out if the unknown tattoo on the Bayou Group founder's hip is:

(a) two egrets having sex;

(b) two egrets having a type of sex that is illegal in 38 states; or

(c) a depiction of interspecies sex between a human and a bird (participants: Sam Israel and egret).

For discussion free of references to avian sex, see the New York Times and the WSJ Law Blog.

Sam Israel Surrenders [Dealbreaker]
Fugitive Hedge Fund Manager Surrenders [New York Times]
A Fugitive No Longer: Samuel Israel Surrenders in Massachusetts [WSJ Law Blog]

In today's Morning Docket, we wondered about what Milberg Weiss's new name would be, now that Mel Weiss is on his way to becoming a convicted felon. The answer came more quickly than expected. From the WSJ Law Blog:

The firm formerly known as Milberg Weiss Bershad & Shulman LLP, then Milberg Weiss Bershad LLP, then Milberg Weiss LLP, will now be known just as Milberg LLP. According to a Milberg insider, the name change was announced at a staff meeting this morning, at which Mel Weiss gave a speech talking about the accomplishments of the firm. The audience reportedly applauded.....

"Hey everyone, I'm going to prison for 18 to 33 months. Give me a big hand!"

The WSJ reported this morning that Mel Weiss has struck a deal to agree to plead guilty in a case alleging improper kickbacks. Other former name partners David Bershad and Steven Schulman had previously pleaded guilty in the case.

The beauty of naming the firm after Larry Milberg? He dead.

More Milberg Weiss coverage, including a statement from Mel Weiss, at the WSJ Law Blog.

Introducing . . . Milberg LLP [WSJ Law Blog]

* "Are we headed for another Great Depression?" [McClatchy]

* Quelle surprise: Bear Stearns shareholder lawsuit (filed in S.D.N.Y. by Coughlin Stoia). [Bloomberg; WSJ Law Blog (PDF of complaint)]

* Speaking of Bear Stearns, here are some law firms losing out on BSC business. [WSJ Law Blog]

* Tenth Circuit reverses convictions of former Qwest CEO Joe Nacchio. [AP]

* Harvard Law School will pay the 3L tuition of future students who agree to work for nonprofit organizations or government for five years following graduation. [New York Times via Tax Prof Blog; Harvard Law School (news release)]

* Settlement in Paul McCartney-Heather Mills divorce (more on this later). [Legal Week]

* SCOTUS to hear Second Amendment / D.C. gun control case today (more on this later too). [New York Times; Reuters]

* Hot lawyers make more money. And we needed a study to tell us this? [Legal Blog Watch via ABA Journal; WSJ Law Blog]

* A truly insane murder case. And yes, Debra Opri -- who has represented Michael Jackson and Larry Birkhead, among other boldface names -- is on the scene. [DealBreaker; HedgeFund.net]

* Ann Althouse wonders: "We've already seen every possible permutation of Hillary, haven't we?" (And this is why we adore HRC -- she's the Madonna of modern American politics, constantly reinventing herself.) [Althouse]

* When it comes to law firm partnership, breaking up is hard to do. Especially when criminal charges are involved. [National Law Journal via Blogonaut]

So it looks like no bail for Stephen Yagman, the colorful and controversial civil rights lawyer who was convicted last year of tax evasion, bankruptcy fraud and money laundering. Yagman will start his three-year prison term later this month.

Yagman asked to remain free on bail while appealing his conviction (to the Ninth Circuit -- a court with which Yagman has a long and tortured history). But the district court denied his request.

Perhaps the court didn't want Yagman out and about, dropping $2,000 on shoes and $262 on dinner -- as he allegedly did just hours after filing for bankruptcy, as part of a scheme to avoid paying more than $200,000 in state and federal taxes.

High-profile LA lawyer denied bail [Associated Press]

This site tends to focus on large law firms when it comes to compensation coverage. There are several reasons for this. First, Biglaw shops tend to be more public about how they pay their people. Second, there's a larger audience for information about their pay scales. Third, even when firms don't make salary and bonus information publicly available, it's easier to get information out of a firm with several hundred lawyers -- there are more potential tipsters, and the risk of a leaker being discovered is much lower.

But many of you are curious about what pay is like at smaller shops. Here's a representative request from one reader:

How about getting the scoop on bonuses as smaller firms? My particular interest is in white-collar boutiques -- e.g., Morvillo, Lankler, Stillman, Zuckerman Spaeder, etc.

There's no info online, and those firms tend to be pretty quiet about how much they pay. This should be right up your alley.

So here's an open thread -- although we're not sure how successful it will be. As our tipster notes, smaller firms tend to be tight-lipped about compensation matters.

If you have information to share on the bonuses doled out by smaller firms, including but not limited to white-collar criminal defense shops and litigation boutiques, please share in the comments. It would be optimal if you could identify the firm by name; but if you can't, please provide as much information as possible (e.g., "a 25-lawyer, white-collar criminal defense firm in New York"). Thanks.

* John Carney on backdating: "Although it was billed as the latest financial crime of the century, backdating is turning out to have some very minor results. Few prosecutions, stalled or failed lawsuits..." [DealBreaker]

* Glenn Reynolds on the Omaha mall shooting: "[W]e've reached the point at which a facility that bans firearms, making its patrons unable to defend themselves, should be subject to lawsuit for its failure to protect them." [Instapundit]

* Ann Althouse on Hillary Clinton: "The resistance I feel toward Hillary has to do do with her advancement under the aegis of a powerful man — a powerful man who seems to have diminished quite a number of women." [Althouse]

* Dan Solove, author of The Future of Reputation, on breaking up with someone via Facebook. [Concurring Opinions]

* Michael Dimino on SOC: "Justice O'Connor's status as the first woman on the Court makes it easy to praise her. I cannot imagine that she would be receiving the praise that she gets from the country if she were male." [PrawfsBlawg]

* Valerie Plame, whose exposure as a CIA agent launched lengthy legal proceedings, on the prospect of posing in Playboy: "I'm a mother of twins, are you kidding me?" [Washington Examiner / Yeas and Nays via Gawker]

Yesterday the FBI executed a search warrant on the Scruggs Law Firm in Oxford, Mississippi -- the shop of high-flying plaintiffs' lawyer Dickie Scruggs. It wasn't immediately clear what investigation the search was related to. Here's some commentary on the situation that we enjoyed, from David Rossmiller (in brackets, following excerpt from news article):

"This is a surprise to everybody connected to the Scruggs Firm," [lawyer Joey] Langston said, "but I've got to tell you people who are very high profile and very successful have to contend with unpleasantries and this is unpleasant, but we'll contend with it."

[I like the touch of noblesse oblige here -- as if the FBI descending on one's place of business is the same as, say, getting heckled by drunken lumpenproletariat while showing up in top hat and tails to receive an award for charitable giving.]

Now we have a better idea of what the office search was probably about. From the Mississippi Clarion-Ledger:

Multimillionaire trial lawyer Dickie Scruggs has been indicted on charges of conspiring to bribe a judge in the case involving $26.5-million in attorney fees involving Katrina claims....

According to the indictment, Lafayette County Circuit Judge Henry Lackey cooperated with the FBI in the investigation after reporting a bribery overture to authorities.

According to the indictment, Scruggs and others tried to influence Lackey by giving him $40,000 in cash to resolve the attorney fees’ dispute in favor of Scruggs’ law firm. Some of the conversations between Balducci and Lackey were captured on tape.

An interesting observation, from the WSJ Law Blog:

Down in Mississippi, there has been speculation of a connection between the FBI search warrant and this week’s surprise resignation of Sen. Trent Lott (R-MS), Scruggs’s brother-in-law. Lott’s office told the Sun Herald the two events were but a mere coincidence.

Because, you know, it's so much better to have people think you stepped down because of a gay sex scandal, as opposed to your brother-in-law's indictment.

(For the record, the rumors about Sen. Lott and the gay sex scandal appear to be unfounded. See HuffPo and Wonkette -- two sites that would, of course, love for the rumors to be true.)

Scruggs arrested on bribery charges [Clarion-Ledger]
More on FBI search of Scruggs' law offices [Insurance Coverage Law Blog]
Dickie Scruggs Indicted On Federal Bribery Charges [WSJ Law Blog]

* The war on punitive damages continues. [USA Today via How Appealing]

* Suspect from Burning Man burning to burn something else. [Reno Gazette-Journal]

* Senators want clarification from Mukasey on waterboarding. [Jurist]

* Lerach pleads guilty. [Los Angeles Times]

* Do we have a de facto moratorium on executions pending this term's SCOTUS lethal injection case? We should find out today. [New York Times]

* Didn't they just execute somebody with an electric chair? And this is what gets them in trouble with the Constitution? [Jurist]

* Mel Weiss to be indicted. [New York Times]

* Oh, Al Sharpton, you're incorrigible. [CNN]

* Judge withdraws jury instruction in Spector case; has he set up an easy appeal if there's a conviction? [CNN]

As we mentioned in passing yesterday, infamous plaintiffs' lawyer William Learch will be pleading to a federal conspiracy charge, related to his involvement in Milberg Weiss's secret scheme to make payments to name plaintiffs in class-action cases. Under the deal that was so skillfully cut by Lerach's lawyer, John Keker of Keker & Van Nest, Lerach will cough up $8 million in forfeiture and fines and serve one to two years in federal prison.

Is Bill Lerach getting off easy? Quite possibly. But a judge still has to sign off on the deal.

Not surprisingly, Lerach spread his cash around liberally among several Democratic candidates for president. But his favorite was fellow plaintiffs' lawyer John Edwards. From Ben Smith over at Politico:

Edwards and Biden each gave away money from Lerach; no word yet on whether Hillary will give back the money he gave her 2006 Senate campaign.

Edwards, though, is particularly tied to him. Though he's giving away the $4,600 from Lerach, Lerach is also listed as a bundler, and employees of the lawyer's firm are his third-largest group of donors, mostly giving in the first quarter.

If we had to choose between disgraced Democratic fundraisers, we'd pick Norman Hsu over Bill Lerach any day. That Hsu is so cute -- he looks like a Treasure Troll! And he didn't intend to skip out on court the other day. He was "sick and confused," you see, and "may have thought he was boarding a Bay Area Rapid Transit train when he instead caught an Amtrak train heading out of the state."

The Lerach Case [Politico]
Fortunes Darken for Lawyer Melvyn Weiss [New York Sun]
Bill Lerach Agrees to Plead Guilty [WSJ Law Blog]
Is Bill Lerach Getting Off Easy? [WSJ Law Blog]
Hsu Didn't Intend To Skip Court, Spokesman Says [CBS5.com]

We fondly remember this episode of 90210: "Brenda gets into a car accident. The woman involved in the accident claims she has whiplash and threatens to sue the Walsh family."

But then, when Brenda visits the woman at home to apologize, she looks through the living room window -- and sees the woman jazzercising in front of her TV!

We were reminded of it by this AP story:

An appeals court judge was indicted on charges of scamming $440,000 from insurers by claiming he suffered debilitating injuries in a car crash, even while he golfed, skated and went scuba diving, federal prosecutors said....

"The bodily injury he says he sustained we believe was fraudulent," U.S. Attorney Mary Beth Buchanan said.

According to the indictment, Pennsylvania Superior Court Judge Michael Thomas Joyce "received $390,000 from his insurer, Erie Insurance Group, and $50,000 from State Farm Insurance, which insured the other driver." But maybe the insurers should have been a little suspicious:

Prosecutors said Joyce's car was rear-ended at about 5 mph in August 2001, and no police or medical personnel were called.... [Yet] Joyce complained of debilitating injuries, anxiety and difficulty sleeping and claimed they prevented him from pursuing higher judicial office, prosecutors said.

Being indicted on federal fraud charges might "prevent[] him from pursuing higher judicial office," too.

Pa. Judge Accused of Bilking Insurers [Associated Press]

We run ATL on a shoestring budget, so we can't exactly afford to send reporters across the country. Taking the train up to New York, to cover a hearing in L'Affaire Charney, is already a big deal for us.

So we're delighted when tipsters give us eyewitness reports on breaking news. Today we had a correspondent in the courtroom when the jury returned with its verdict in the stock options backdating prosecution of Gregory Reyes, the former CEO of Brocade Communications.

Our source filed this report:

Jury verdict: Guilty on all counts. Not really a scoop, since it's all over the media. But we were there and wanted to share.

Courtroom was two rows of press, armed with laptops and blackberries, and three rows of N.D. Cal. externs, armed with nothing else to do during the last week of their externships. And miscellaneous district court clerks, hangers-on, and family.

Reyes's family was sobbing when the deputy read off the verdict. It was pretty rough. Then a couple of jurors broke out in tears too. Can't say I envy them.

Or, for that matter, Gregory Reyes. The former member of the Forbes 400 -- which he first appeared on at age 37, with a net worth of $1 billion -- is presumably headed for federal prison.

Update: ATL's San Francisco correspondent had this to add:

Judge Breyer [Charles R. Breyer, li'l brother of Justice Breyer] gave the defense one week to file a motion for new trial, partly because he wants to be able to rule on it while the case is fresh in his mind, but also because he's confident that both sides will be able to staff it on that schedule, or something to that effect. I love it when judges basically tell big firms, "You've got enough manpower to throw at this."

Sentencing is set for November 21. Reyes gets to remain free until then.

Jury Finds Brocade Ex-CEO Guilty on Backdating Charges [WSJ Law Blog]
Ex-Brocade Chief Convicted in Backdating Case [Associated Press]

* When the music stopped, Craig Morford, interim U.S. attorney in Nashville, was left standing. So now Morford must fill Paul McNulty's uncomfortable shoes as Deputy Attorney General -- after several others apparently passed on the job. [Washington Post; New York Times]

* New Jersey lawyer Shalom Stone may need to be as charming as Shalom Harlow to win confirmation to the Third Circuit. [The Hill (ATL shout-out!) via How Appealing]

* Dow Jones director David Li could be in trouble with the SEC. Oh Wells. [DealBreaker]

* Go shorty. [MSNBC]

* Who let the dogs fight? Who? Who? Feds say: football star Michael Vick. [CNN; TSG]

* Bar-Bri class reps (no, different class reps): No incentive payments for you. [The Recorder]

* Seven-figure legal bills: par for the course for white-collar criminal defendants. [WSJ Law Blog]

* India market hot for law firms. [Law.com]

* Billionaire Siebel gets California Supreme Court's ok to sue lawyer and judge despite settlement. [The Recorder]

* UK girl loses fight to wear purity ring at school. Chastity belt still under review. [MSNBC]

* Ohio Turnpike murder-for-hire case could result in death sentence. [CNN]

Former Milberg Weiss partner David Bershad has agreed to plead guilty to a conspiracy count, and to cooperate with the feds in their investigation of his former law firm (in which he was once a name partner). The government alleged that Bershad paid kickbacks to clients to serve as plaintiffs in securities class action cases. See here, here, and here.

The best part of the whole story, from the WSJ Law Blog:

* In the earlier years of the alleged conspiracy, Bershad along with Partners A and B and others, “pooled their personal cash into a fund Bershad maintained in his office at Milberg Weiss, which was used by the Conspiring Partners to supply cash for secret payments to paid plaintiffs and others.”

* According to the statement, “the amounts the Conspiring Partners each contributed were supposed to be approximately proportionate to their respective partnership interests in Milberg Weiss. Bershad kept track of the amounts contributed and of the secret cash payments that had been made to paid plaintiffs.”

Now THAT is what we call partnership. Complete trust and cooperation. Working together towards a common goal.

Who says there's no honor among thieves?

Milberg Weiss’s Bershad to Plead Guilty [WSJ Law Blog]
Bershad Agreement: The Personal Cash Fund [WSJ Law Blog]
Lawyer Pleads Guilty in Securities Case [New York Times]

Kelley Drye & Warren partner Justine Clark looks like a younger, brunette version of Madeleine Albright. But the similarities probably end there, since one would expect the former Secretary of State to pay her taxes.

From the Temporary Attorney blog:

Justine Clark, a partner at Kelly Drye & Warren, just plead guilty for failing to pay state income taxes....

Despite the fact that KDW has seen a steady growth in profits per partner, and despite the fact that KDW has benefited from a steady stream of contract attorney outsourcing, Clark, with greed unquenched, went ahead and screwed New York State out of close to $200,000, based on her $2.7 million earnings.

Her penalty? A slap on the wrist misdemeanor.

Okay, that's a little harsh. As the New York Post notes, Clark earned $2.68 million not in a single year, but over the course of five years (2000 - 2004). That averages out to a little over $500,000 a year.

And in New York City, teeming with i-bankers and hedge funders, you're a pauper if if you're not taking home seven figures per annum. So can we really blame Justine Clark, struggling to keep up with the Joneses, for trying to keep a little more for herself?

Kelly Drye & Warren - Corporate Criminal [Temporary Attorney]
Docs, lawyers prove taxing to N.Y. State [New York Daily News]
Tax-Cheating Lawyers Nabbed [New York Post]
Justine Clark bio [Kelley Drye & Warren]

No? Okay. Then they shouldn't expect him to clean up after them.

Remember that majorly screwed-up tax case? It's still screwed up.

District Court Refuses to Correct Government's Botched Plea Agreement in Biggest Tax Fraud Case in History [TaxProf Blog]

Earlier: This Is Why Cite-Checking Matters