Litigation and Trial - Max Kennerly : Philadelphia Trial Lawyer Max Kennerly : Business and Commercial Litigation : Civil Attorney : The Beasley Firm : Philadelphia Pennsylvania

Over at the Delaware Corporate and Commercial Litigation Blog, Francis Pileggi highlights one of the many quirks of practice in Delaware:

Professor Bainbridge discusses an article here from The Wall Street Journal that quotes a Delaware Superior Court judge in connection with a dress code for those who appear in his court. Most Delaware lawyers know that it is at least an unwritten rule that a "white dress shirt" is expected of lawyers who appear in a Delaware court.

Delaware, it must be said, has among the most formal and quaint procedures I've ever seen. Even though, as Pileggi previously pointed out, Delaware law recognizes no formal distinction between "local counsel" and "forwarding counsel," it is still generally the practice in Delaware for local counsel to sign all discovery and letters for the court. Only a few months ago, opposing local counsel called me out for signing discovery requests with my name, rather than local counsel's; in response, I shot back a copy of that opinion, and never heard another word from opposing counsel (thanks Francis!).

But I save the retorts for opposing counsel — far be it from me to tell the judge it's odd and unnecessary for local counsel, as is the custom, to personally introduce me before each and every oral argument, even after I've been granted pro hac vice status and thus have entered the case, with the same responsibilities and duties as the local counsel.

When in Delaware, do as the Delawareans do.

But let's switch gears for a moment.

I tend to agree with Mark Bennett that "experienced" isn't "better" when "experienced" doesn't mean "wiser," just "older": 

When looking for a less-expensive lawyer, you can go one of two ways: either to a lawyer of the same vintage who for some reason charges lower fees, or to a younger lawyer. I always recommend that you look for the latter—a lawyer who is in the situation I was in, say, ten years ago: with four years of criminal-defense experience behind me, but without children, big mortgages, or a steady stream of clients; competent, experienced, and well-trained (ten years ago, I was coming off a string of acquittals and five weeks at the Trial Lawyers College) but working on developing the business side of my practice. Highly determined and energetic, and with lots of time to dedicate to the few cases on my docket.

The alternative would be an older lawyer who might be charging lower fees because he doesn’t have confidence in his abilities (and so doesn’t think he’s worth more), because he has a high-volume practice or because, despite the time he has had to build a reputation, others don’t think he’s worth more. This should not inspire confidence in the potential client.

That said, there are dozens of unwritten rules applicable to the practice of law, only a few into which other lawyers will clue you. There is, for example, no rule governing how a potential qui tam relator must preview a potential false claims act case to the U.S. Attorney's office — there's just a way of doing it, a way you only learn by doing it.

Which reminds me of one of my posts from last fall, Why It's Hard For BigLaw Associates To Start Rainmaking, where I wrote:

Experience drives word of mouth, drives referrals, builds ability, builds confidence, and enables your practice to grow.

So how do associates get "it?"

...

Get clients in the door. You can't compete on experience, so compete on price, on selectivity, on service, on anything you can.

Maybe that means cutting rates. Maybe that means billing fewer hours. Maybe that means taking difficult, frustrating, unprofitable cases. Maybe that means jumping into other fields and wasting dozens of unbillable hours just making sure you've got the basics right. Maybe that means spending some time, off the clock, figuring out how potential clients in your field find lawyers, and figuring out how to make their name the first that a potential client hears.

That is to say, associates need to use the methods other entrepreneurs use to build business.

Yet, few of those methods are available to associates at BigLaw firms, because the business model — which generates most of its profits by creating unnecessary work for recent law graduates — is designed for the short-term compensation of the partners, not the long-term career of the associates. Experienced rainmakers can squeeze every last penny of profit out of a case by having you spend all weekend reviewing documents. You don't even have a case at all.

It's hard to go a day without reading something about "work/life balance." But what about work/career balance? "Working your way up the ladder" is often cited as a way for associates to succeed, but let's be honest: these days, few people are putting out ladders for you to climb.

So scrap the ladder metaphor, start thinking about the bootstrap instead, and go learn all the white dress shirt rules out there.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Jason Wilson is trying to figure out — first at his own site, then again at Slaw — what to do with the explosion of legal analysis on the internet:

[W]e have seen a rapid growth in legal media outlets, although I don’t think we could characterize all of them as “expert.” Regardless, thousands of lawyers and legal professionals are creating content, and more specifically, analytical material. Little of that content, however, is curated (i.e., evaluated, authenticated, and categorized). And if digital outlets are going to compete against traditional publishing companies, their collective analytical content—which is fast becoming substantial—will need to be managed.

Curating this growing body of analytical content will be difficult. It suggests a person-machine process of locating and separating good content from bad, and categorizing, verifying, authenticating, and editorializing that content. It will undoubtedly require the creation of a rich taxonomy to help organize and manage the content for later discovery, clean metadata, and a good search engine, and raises issues from data permanency to copyrights to brand dilution. It’s a mess. But a worthy one I think.

Edward Adams of the ABA Journal says in the comments that they've been "curating" the legal web for years, to which Jason (correctly) replies that the ABA Journal is "more of a 'news organization' rather than an 'analytical destination.'" Perhaps worse, as Scott Greenfield notes, "[they're] in this for the money, and the idea of putting the power in the hands of a corporation that has its own blogs (and blog advertising) to sell is absurd."

Sites like the ABA Journal, Above The Law, Legal Blog Watch, WSJ Law Blog, and the like will, by design and by necessity, gravitate towards news stories with big companies or scandalous facts, and so have neither the interest nor the incentive to properly tend to substantive analysis posted at blogs hosted by practicing attorneys.

More to the point, though, how much curating do we really need? 

Consider Gregory P. Joseph's Complex Litigation Blog. He does not comment on the top stories  making rounds in the press or in the blawgosphere. He is not in the least bit funny and expresses no outrage at the injustices commonplace in the American legal system. Indeed, the blog includes barely any original content at all: other than a handful of sporadic articles, the posts are little more than a descriptive title and an excerpt from a recent court opinion.

But that's the point: Joseph's the curator. He's a distinguished lawyer and, through his blog, an exceptional curator of cases of interest to lawyers who litigate complex cases. Not every post is of serious interest to me, but I wouldn't want someone else or a computer program to make that decision for me. Joseph thought it was interesting, and I'm willing to spend a second or two skimming each post to see if it is of interest to me, too.

I use Joseph's blog as an example because his role as "curator" is obvious, but the principle applies just the same to other substantive legal analysis blogs run by practicing attorneys. Are you a civil litigator in Tennessee? Consider following John Day. Do you do a lot of e-discovery? Why not put Joshua Gilliland into Google Reader?

Really, it doesn't take that long to follow these people — between pouring my coffee and finishing it, I'll have reviewed dozens of feeds in Google Reader — and each of those personally-curated feeds has already been whittled down to the content that fine lawyers like Gregory, John and Joshua thought was worthy of their readers' time.

Which is why I question the value of adding another level of curating for substantive analysis by practicing attorneys. For the blogs that are worth reading, the content has already been curated by the bloggers. Although it often makes sense to follow filtering sites that whittle down thousands of mass media stories into the handful likely to interest some particular variety of readers, the same analysis doesn't apply to blogs like Gregory's, John's, and Joshua's. Once you, dear reader, have chosen to read a blog at that level of specialization and that level of professional editing — i.e., the professional is the one deciding on the content — either you're interested or you're not, and if you're interested, you're interested enough to at least skim each post's title to see if you want to read more.

To put it another way, I don't want less of the blogs I like: I like how they bring to my attention cases and issues that I wasn't even looking for, but which I can use. Further, when I am looking for specific cases and issues, I can use Google Reader to search the content from those blogs' feeds; within a second of typing in "spoliation" in Google Reader, I have a link to one such case from Joshua's blog. Or just use the "site:" modifier in Google on the site for the same effect.

Is this system perfect? Of course not. There's always room for improvement. But, if anything, we don't need sophisticated information technology right now, all someone need is a list of good blogs — blogs that the individual reader, not some filtering person or program, thinks are good — and an easy way to read them. That doesn't require anything more than patience, perseverence, and Google Reader.

• Email This
• Print
• Comments (1)
• Trackbacks
• Share Link

At the WSJ Law Blog:

The U.S. Chamber of Commerce’s Legal Newsline reported on Wednesday that the U.S. Department of Treasury may be about to grant plaintiffs’ attorneys long-sought tax write-offs for the costs associated with fronting contingency-fee lawsuits.

...

Apparently at the heart of the matter is an April letter Sens. Max Baucus (D., Mont.) and Richard Durbin (D., Ill.) sent to Michael Mundaca, assistant secretary for tax policy seeking clarity on the 9^th Circuit ruling in the 1995 case of Boccardo v. Commissioner.

In the Boccardo case, the IRS asserted that out-of-pocket expenses incurred by attorneys on behalf of clients while prosecuting contingency cases are not deductible because the law firm expects reimbursement upon getting a settlement or judgment. The Tax Court agreed.

The 9^th Circuit took up the matter. The letter sums up the ruling like this:

The court “held that attorneys who represent clients in contingency fee cases may treat litigation costs that are paid by the attorneys, such as filing fees and witness expenses as deductible ordinary and necessary business expenses . . . when the attorney and client agree to a specific fee arrangement known as a gross fee contract.”

The IRS issued a memo saying that the ruling applied only to attorneys in the 9^th Circuit. But the Tax Court has since recognized the validity of the decision in at least one other case, according to the letter.

Of course, every other business in American gets to deduct its expenses. Some favored industries, like oil companies, get to deduct more than just their expenses:

Percentage depletion allows an independent oil company to deduct from its taxes about 15 percent from the revenue generated from a well, even if that amount exceeds the well’s total value. This means that oil companies take a deduction as long as a well is producing oil, without regard to how much, or whether, the well is still declining in value. Companies in other industries are only allowed to deduct an amount that represents the decline in their investment’s value that year. The administration expects that eliminating this subsidy to produce budget savings of about $10 billion over 10 years.

That's just one of the goodies Congress doles out to upstanding corporate citizens like BP, which will pay at least $10 billion less in taxes as the result of its own oil spill, since it gets to deduct all of the cleanup costs, the compensation it pays out to victims, and the loss in value of the well.

But not plaintiff's lawyers. The IRS requires that we treat expenses on our cases as actually being profits, since we might, years down the road, recover those costs. (Nevermind that, even then, it's not profit, it's just a recovery of expenses.)

Since small businesses (like law firms) have an effective tax rate around 20-25%, such disparate tax treatment ends up making the costs on plaintiff's litigation one-fifth to one-quarter more than the costs of any other business, including the business of defending the exact same lawsuit.

A little over a year ago I posted about Contingent Fee Business Lawyers As Venture Capitalists, giving a few sample numbers:

A large-damages personal injury / product liability / medical malpractice lawsuit can be done by one or two attorneys and costs below $250,000, with recovery of $5-$10m within 1.5-3 years. That's a big win: you put in $250k out of pocket, likely didn't impair bandwidth, and recovered $2-$4m in attorneys' fees.

The numbers aren't too much different for most small business cases, with breach of contract, unfair competition, etc.

A regional-market antitrust / mid-sized patent infringement case can be done with 3-6 attorneys, $1-$5m in costs, with a recovery of $15-$50m in 2-4 years. Another big win: you put in $1-$5m out of pocket, moderately impaired bandwidth, and recovered $7-$20m in attorneys' fees.

A massive shareholder class action / national antitrust / large patent infringement case can be done with 10-40 attorneys, $10-40m in costs, and a recovery of >$100m in 4-10 years. Think of the Blackberry patent infringement case, which ended with a $612m settlement and over $200m in fees (resulting in profits-per-partner than year over $4m).

As I wrote then, day in and day out, the primary thing a contingent fee law firm does is spend lots of money. In addition to all the normal costs of a business (rent, staff, etc.), you have to pay your attorneys salaries which are competitive in the market, even against hourly billing firms, and you have to dump loads of money and time into cases for experts, motions, discovery, trials, appeals and negotiations, none of which earn you a dime until the very end.

The Duck Boat accident, for example, was a major maritime accident with two wrongful deaths and more than two dozen personal injury claims that will involve two primary defendants (K-Sea and Ride The Ducks) and a handful of their employees. Litigating the Limitation of Liability Act issues like "seaworthiness" will probably take at least a year or two, after which the litigation will begin in earnest, probably lasting another two-to-five years (though possibly more), with costs of at least $1,000,000. Those costs could be doubled or tripled if there's a need to do extensive testing on the seaworthiness of the tugboat or the duck boat. Some sample potential costs:

• renting an identical tugboat and barge to do visibility tests;
• buying a duck boat and then ramming it to see how easily it sinks; and,
• buying a dozen duck boat engines and running them day and night to see how long it takes for them to overheat.

None of that would be unusual or unexpected. Cases against car manufacturers that allege inadequate "crashworthiness" routinely require the destruction of a few identical cars to see how they holdup and how alternative designs would have worked better.

That's where the lack of a tax deduction has a big bite: when most businesses think of "$1 million in costs," they think of them in terms of deductible costs. For a plaintiff's lawyer, then, they have to see "$1 million in costs" as being more like "$1.25 million in costs" to any other business, since the plaintiff's lawyer will be taxed on the costs. Given the time value of money, if we assume the case takes five years, and that the taxes paid could have been invested at a modest 5% annual return, then the lack of a tax deduction adds an additional $320,000 in costs to that $1 million in expenses. If the case costs $3 million on paper, it'll cost $4 million once the lack of a tax deduction is figured in.

In contrast, the defendants and their insurers will be able to immediately deduct every penny they spend on their defense.

Is that fair? Of course not, but it's been the law for years, just another way in which the deck is stacked against plaintiff's lawyers, another reason why we have to be so selective about cases and charge such a large contingent fee.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Via Above The Law, Elizabeth Wurtzel has a post at the Brennan Center complaining about the bar exam:

[T]here’s a long, proud tradition of gifted attorneys who failed the bar, at least on their first try. Hillary Clinton, Michelle Obama, Franklin D. Roosevelt, Jerry Brown—who is now California’s attorney general—all screwed up once, as I discovered when I myself failed. ...

There are many better ways that the ABA could keep the numbers down in the profession: for instance, while there are only 130 accredited medical schools, there are nearly 250 law schools that have been approved by either the ABA or a state equivalent. (California is particularly notorious for pretty much letting anyone with a law license and a shingle open a legal academy.) And there are many more students in a law school than a medical school, given the lack of need for cadavers and the like: for instance, the entering class at Harvard Medical School has 165 slots, whereas the 1L class at Harvard Law School contains 550 people. Plainly, the population of legal academia is excessive.

The bar exam does not, like a licensing exam for nurses or physicians, test a potential lawyer's recognition and understanding of the laws he or she will be expected to utilize in practice. For example, in virtually every state, all criminal law on the bar exam in derived from the Model Penal Code, which is not actually the law in any state. (A handful of states, including Pennsylvania, have adopted most of the MPC; even then, the specifics of the MPC have little relevance to the daily lives of criminal defense lawyers.)

The bar exam similarly does not in any sort of objective manner evaluate a lawyer's generalized ability to analyze legal issues, to, as they say, "think like a lawyer." In most states, the bar exam involves a multiple choice test — something that never happens in law, and which conceals the ambiguity of most legal questions — followed by a series of short essays graded based on "issue-spotting." Here's a tip to young lawyers: if you ever load up a brief to a court or a letter to a client with as many legal issues as you can "spot," you will swiftly lose and/or be fired.

It's hard to even guess what the bar really tests; it mostly tests a candidate's ability to memorize a particular method for spotting and discussing generic legal issues in short hypotheticals.

At the same time, though, outside of California and New York — renown for arbitrarily high failure rates — the failure rate of most bar exams is overstated. In Pennsylvania, three-quarters of first-time takers pass the bar (as do 88% of Beasley School of Law graduates). Taking the bar exam is a grueling, frustrating, and expensive process, but it's not completely arbitrary. For the great majority of candidates, the bar exam is more a nuisance than a genuine barrier to practice.

The bigger problem, however, is just what Wurtzel said: there are way too many law graduates.

Although Wurtzel sees the bar as a means of restricting the number of lawyers — presumably to keep legal billing rates high — there doesn't seem to be too much genuine, price-lowering competition among lawyers, particularly not among the Wall Street corporate lawyers whose work Wurtzel considers such a "noble pursuit." Even in our dismal economy, with an unemployment rate hovering just below 10%, lawyers are making out more like bankers than like average workers, with average hourly billing rates expected to rise more than four percent just over the next year, four times the core inflation rate.

How can lawyers do that? Simple: despite years of dire predictions about the "commoditization" law, lawyers still aren't commodities. Trusted lawyers don't have a lot of direct competition. Sure, there's always some lawyer willing to undercut the fee charged by another, but who wants to entrust their money, livelihood, or freedom to a discount lawyer they barely know? Lawyers are no different from doctors, plumbers or mechanics: they work in areas beyond the abilities of their clients. Once clients find lawyers they trust — at all — they tend to stick with them unless the fees become unbearable. (Need proof? Witness Hunter S. Thompson calling his lawyer's work "inadequate and inexcusably negligent" and then nonetheless trusting him with another matter.)

But what about when those fees do become unbearable? What about clients who have not yet found lawyers they trust?

That's why we have a bar exam. It may be unreliable, imprecise, and almost punitive in its design, but, as of yet, it's the only way we have to separate the wheat from the chaff, the only way we have to protect clients from truly incompetent lawyers who made their way through the diploma mills that Wurtzel bemoans — diploma mills that sometimes include Yale, Harvard, and Stanford. There are plenty of smart people at those schools, but there's no assurance that every last one of them is competent to practice law: none of those three bother to issue grades any more, not even inflated grades, and they can produce lawyers capable of bungling lawsuits or walking their clients into criminal charges. Little wonder Wurtzel knew several people at Yale Law who failed the bar: the bar was the first experience they had in real grading on legal performance, and they didn't adequately prepare. 

Did they eventually pass? If so, chalk their failure up as a nuisance, rather than a barrier to practice. They just needed a little more threshing than some other grains did. Maybe they were even made more diligent and humble by the failure, and thereby were made better lawyers.

I don't think passing the bar means a lawyer is necessarily skilled or competent, nor do I think that failing the bar once is an indication that someone will not be a great lawyer, but if a potential attorney can't ever pass the bar — the same bar that thousands of others pass every year on the first attempt — then why should they be licensed by the state to represent clients?

• Email This
• Print
• Comments
• Trackbacks
• Share Link

I'm not writing it down to remember it later, I'm writing it down to remember it now.

—Field Notes' slogan.

Via Arts & Letters Daily, Nathan Schneider, senior editor of Killing the Buddha, has a post about the rise of reading via computers, Kindles and iPads, titled In Defense of The Memory Theater:

The Greeks and then the Romans created imaginary edifices by which they could carry entire speeches, taxonomies, and epics in their heads. By the medieval period, this tradition was expressed in Dante’s circles of Hell and Aquinas’s placement of memory within the cardinal virtue of prudence—thereby elevating it to a moral responsibility. As Renaissance polymaths drew from classical and esoteric sources, they designed and even physically built more elaborate theaters of memory. In place of an audience, the 16th-century memory theater of Giulio Camillo presented to its stage an array of images, symbols, and archetypes that amounted to a microcosm of the cosmos. Standing before it, a person could loose the binds of forgetfulness and access the mind’s resources unrestrained. “Whoever is admitted as a spectator,” reported Erasmus, having heard about the theater from a correspondent of his, “will be able to discourse on any subject no less fluently than Cicero.” Shakespeare’s Globe Theater, Yates controversially argued, was designed in this way to help the actors remember their lines. Francis Bacon reportedly had a private memory theater in his home, with painted glass depicting “several figures of beast, bird and flower.”

...

In the age of inexpensive, printed books, our memory theaters have become both richer and more banal; we have entrusted them to our bookshelves rather than to tricks of mental contortion or cosmic schemata. As I look over my own shelf, I see my life pass before my eyes. The memories grafted onto each volume become stirred and awakened by a glance at the spine, which presents itself to be touched, opened, and explored. Without the bookshelf’s landscape to turn to, that manifest remainder from a lifetime of reading, how would one think? What would one write? ...

I confess to feeling the allure of the burning library. Maybe we all do, a little. A culture so willing to downsize and sell off its libraries must. It gestures toward the shadow side of being so dependent on, and thus protective of, a bookshelf. When it becomes my memory theater, what have I become? What becomes of me without it? A passage comes to mind that I first discovered in Yates’ Art of Memory, from the Phaedrus of Plato. Socrates is repeating the speech of an Egyptian king named Thamus to Theuth, the god who has just invented writing:

[T]his invention will produce forgetfulness in the minds of those who learn to use it, because they will not practice their memory. Their trust in writing, produced by external characters which are not part of themselves will discourage the use of their memory within them. You have invented an elixir not of memory but of reminding; and you offer your pupils the appearance of wisdom, not true wisdom, for they will read many things without instruction and will therefore seem to know many things, when they are for the most part ignorant and hard to get along with, since they are not wise, but only appear wise.

Plenty has been written about the transition of reading from print to computers; google Nicholas Carr ("it makes us stupid") or Clay Shirky ("it gives us a cognitive surplus") for more. I agree more with the latter than the former.

My focus here is more on memory. High school and college students are often told that lawyers, particularly trial lawyers, need a good memory.

There's some truth to that, but no trial lawyer uses their "memory" in the same ways in which students are asked to use it. I've never known, nor heard of, any trial lawyer sitting down and setting aside time for the express purpose of memorizing facts about a case. It just isn't how the work is done.

Instead, before a trial, lawyers work their way back and through the testimony and evidence in their cases; the process is less like the memorization of facts for a test and more like the kneading of dough for bread. There aren't any short cuts, but there also aren't any secrets about the process, and it's hard to do it wrong so long as you do it. Keep kneading, and kneading, and kneading, and the case will become second nature.

But the real memorization for a trial begins before the pre-trial process. It begins during the litigation, in the drafting of discovery, in depositions and hearings, and in the preparation for them. That's where the taking of notes becomes critical, and why I quoted the Field Notes slogan above:

I'm not writing it down to remember it later, I'm writing it down to remember it now.

My practice is to take notes at depositions and hearings, to dictate my thoughts (while reviewing the notes) into a memo soon thereafter, and then to review and to clean up the memo after I've seen the transcript itself. By that point, I've committed the same information to writing three times: first at the event (through the notes), second in dictation, and third in review of the memo.

After that, I rarely need to review the notes or even memo in detail, because I've gone through it enough that I already remember it. The final memo is my memory theater: I skim it, and the depositions, notes, dictations, and transcripts come back to me. My memory refreshed, I can focus on the unknowns in the case. The dough isn't ready to rise, but it's been kneaded most of the way.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Yesterday Adrian Dayton commented on the three most common reasons why people fail at blogging:

In dozens of conversations with busy professional I hear time and time again similar excuses to the ones I made to my Father as a kid.

“I’m too busy.”
“I barely have time to respond to all my emails.”
“I don’t want to commit to something I can’t stick with.”

Most people who try to blog fail for three major reasons. 1. They aren’t sufficiently motivated to blog. 2. They aren’t organized enough to blog. 3. They don’t know what to say.

I'm no fan of blogging about blogging — and rarely do it here — but I've been asked a couple times lately about my thoughts on blogging, and I suppose I have been around long enough to have learned some valuable lessons. (For those of you who wrongly view traffic as an indicator of a blog's worth, my Alexa traffic ranking would put me around ~115th on Avvo's list of Top Legal Blogs, to which I have been too lazy to add myself.)

Yesterday I also came across a post on Lionel Messi, generally considered to be the greatest soccer player in the world, which I think sets up a useful framework:

I knew most of this Lionel Messi stuff before I got here. I read stories about him. I watched some highlights of him playing. I understood, on that surface level, just how good a player he is.

But then … I saw him play. Not highlights. Not a few of his greatest shots. Full games. And I saw him in context, with the World Cup buzzing, with vuvuzelas blowing, against the background of other players, excellent players, good players, OK players, who are trying to do the very same things he is doing.

Only they cannot. Messi simply does things — little things and big things — that other players here cannot do. He gets a ball in traffic, is surrounded by two or three defenders, and he somehow keeps the ball close even as they jostle him and kick at the ball. He takes long and hard passes up around his eyes and somehow makes the ball drop softly to his feet, like Keanu Reeves making the bullets fall in “The Matrix.” He cuts in and out of traffic — Barry Sanders only with a soccer ball moving with him — sprints through openings that seem only theoretical, races around and between defenders who really are running even if it only looks like they are standing still. He really does seem to make the ball disappear and reappear, like it’s a Vegas act.

Going back to Adrian, his four points — motivation, organization, figuring out what to say, and overcoming fear — can be consolidated into two main points: have the right mindset (motivation and overcoming fear) and adopt good habits (organization and figuring out what to say). The former is the "big thing" and the latter is the "little thing." To persist in writing a blog, and to write a blog that's worth reading, you need to be good at both. Some are great at both. Many can't do either, so their blogs fail.

A blogger's mindset is the most important determinant of success. Why do you want to blog? To bring in clients? If so, give up now, scrounge together some cash, and buy yourself an ad on the side of a bus or in a business magazine or where ever else your potential clients are. There's nothing wrong with advertising; the vast majority of people don't know any lawyers or don't like the lawyers they do know, and so might think to turn to you when they need one. An advertisement is a simple and easy way to get people to know your name and, maybe, give you a call.

Blogging, however, is not so simple. Remember back in high school or college when you had to write an essay or exam in a class you were only taking because you had to? That's what blogging-as-advertising is like, and you will quickly either learn to accept mediocrity in your posts or will burn out trying to force yourself to write something worth reading.

Put another way, you need to feel the need to blog, and you need to enjoy doing it. There is no substitute for that mindset.

Moving on to habits, even if you like to blog, it's still easy to end up either hating blogging or producing mediocre content if you don't develop good blogging habits.

First, figure out what kind of blog you want to write. Sure, everyone can imagine an idealized blog in their head, the blog that's always funny or always outraged or is always on top of news right when it hits, but don't too much stock in that. Put stock in experimentation. Consider what author David Mitchell — who knows a thing about writing and self-promotion, since he was recently the subject of a fawning portrait in The New York Times — said about his first book after an agent told him it was "god-awful" and had to be scrapped:

“I had doubts about its quality,” Mitchell told me. “But it had taught me the doubts. What writing it had taught me was that it’s not that great a novel after all.” And it taught him something more: “I had been trying to prove to myself that I could get over this incredible obstacle, this unscalable cliff face of—am I the sort of person who can get a novel written or not? Until you’ve written one, it’s just . . . wow. A feat that humans not like you achieve.”

Start a private blog that only you read so you can test out various ways of blogging. People like to tell themselves what kind of writer they want to be, but they have just as much control over that as they do over the types of foods they like: some things work and others don't. You will never know if you are a comedian or a stemwinder or a scholar until you've put in your hours actually writing. Start writing and keep writing.

Once you start writing and keep writing, get into the habit of it. You should not have to force yourself to put together a blog post. It should be just as much an ordinary habit as checking your voicemail, reading the paper, responding to client emails, or whatever else it is you do on a daily, weekly, or maybe monthly basis. Until writing becomes a habit, it will be a hard slog.

Finally, figure out your sources. As fascinating as I'm sure your daily legal practice is, odds are good that you won't be able to write about the most interesting parts of it. In the past week I've seen several amazing developments in a few of my cases, but, alas, I can't tell you a word about them. You thus will need a continuous source of new information and inspiration which you can report or upon which you can opine. Do you want to read your local newspaper and comment on local news? What about recent court opinions? How about other bloggers, and, if so, who?

Blogging is a pie eating contest in which the prize is: more pie. If you write well, you will get readers who will want you to write more. You will be contacted by those who run blogs, publish magazines and books, host radio shows, or organize CLEs with offers for you to contribute to those forums with your thoughts. Does that interest you, even though most of those pay nothing at all? If so, great! Blogging may be for you. I find contributions to other forums one of the more rewarding parts of my practice, but don't kid yourself that such is the path to fame and riches. It's just more pie, so you better like pie to start with.

• Email This
• Print
• Comments (1)
• Trackbacks
• Share Link

Even when I'm railed at, I get my quota of renown. —Pietro Arentino

The ABA Journal has an excerpt from Masters of the Game, a book profiling Williams & Connolly, the go-to firm for the Washington elite. The excerpt focuses on the career of the firm's founder, Edward Bennett Williams:

In 1950, Williams appeared at the office and announced to Chase that they had been hired to get deported gangster Charles “Lucky” Luciano back into the United States from his forced Sicilian exile. Chase was skeptical, but Williams figured the publicity would be terrific whether he won or not. Chase said he didn’t want to represent “skunks” and expressed concern that he would have to answer to his children for the type of people he represented. By the summer of 1950, Williams and Chase dissolved their partnership.

Over the years that followed, Williams’ representation of lowlife gamblers and tax evaders evolved into a higher-class practice that centered around labor union goons and Mafia figures such as Sam Giancana and Frank Costello. And just as he had become fascinated by the perpetually dark Atlas Club, Williams became enamored with the even blacker underworld. Petty criminal cases had led him to the defense of some of the most famous Mafia figures in the land. That, in turn, invariably brought Williams into contact with Washington politicians. He would often meet senators or representatives, some of them crooked, through a congressional hearing in which he was the lawyer for a suspected Communist or a suspected mobster. Later, as happens in Washington, it would be the politician who would need the lawyer, and Williams would be the first whom most would think of. In a sense, he had already auditioned before them.

...

The [Sen. Joe] McCarthy case and the [Jimmy] Hoffa trial had made Williams the most famous and successful trial lawyer in America. He had reached the status that Frank Hogan had occupied, as the living embodiment of Clarence Darrow on the East Coast. Invariably, Williams had achieved his victories by ignoring the case against his client and by attacking the prosecutors, the police or even the court.

Williams originated what would become the trademark of his law firm—finding outrageous arguments to make when all else failed. Once, when Williams complained that a prospective client was unable to provide a single mitigating fact in his case, the client reminded Williams why he was being hired. “If I had a defense I wouldn’t need you,” the client blurted.

For civil and criminal trial lawyers, that is probably the single most effective way to get the phone ringing: take a case — the tougher and higher profile the case, the better — and argue the dickens out of it.

Some lawyers have this technique so deeply ingrained in their minds that they don't realize why they started doing it in the first place. Earlier this week, I had three depositions that collectively should have taken about eight hours. Instead, they took 14 hours, and we did not finish the third, because opposing counsel could not resist arguing with the witness, arguing with the attorney for the witness, arguing with me, and arguing with the attorney for another party.

He argued with us about the meaning of "objection to the form," about the limits of human perception, and about metaphysical concepts, such as to the extent to which one person can truly comprehend the thoughts of another.

The witnesses didn't change their testimony. The lawyers didn't abandon their objections. The end result will be several hundred pages of mostly worthless testimony, only a small fraction of which will be comprehensible or usable at trial.

But you know what? Some clients eat that stuff up. Clients with bad cases really eat that stuff up. If they see you pound the table and bicker endlessly with a witness whose testimony is unhelpful, they will love you forever, win or lose. The sad truth is, a lot of people in a lawsuit or under indictment want to see a boxing match, even if a game of chess would serve them better. They'll forgive how bad your briefs are, and your absence of strategy, if you give them a good show.

Far too many trial lawyers look for an "edge" and find it in a billy club, which they swing at anyone and everyone they see. Experience often makes the problem worse: every bang of the fist generates another phone call, win or lose.

But at what price? It's easy to forget that most of these new calls are from cranks; when you're desperate or greedy, you start playing a volume game with dozens or hundreds of cases, each handled with a minimum of diligence, attention or time, since at least some of them will pay off, right?

But what if you don't have the savvy and judgment of a DC power player like Williams? What if you don't know when to raise your voice and when to open your ears?

Would you even notice the consequences? 

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Norm Pattis is weary of questions:

I realize this sounds harsh, but I am simply undone by the sorrow, the rage, the anger and sometimes the sheer irrationality of folks caught within the law's vice. My firm is a small shop, but we have one paralegal whose job it is to serve as the communication point for clients. He engages in a sort of triage with the thousand and one questions that arise in a day. Still, there are needs that go unmet, clients who believe that we do not pay enough attention to their needs.

The trickiest part of being a lawyer is knowing which cases to take. No lawyer can get along with everyone. There are simply bad marriages. I've had more than a few. I have moved to withdraw when some client's needs overwhelm me and my firm. We once represented a person who insisted they be consulted on each media call. The client wanted to write what lines we should recite when a reporter called. When we decided simply not to respond to media inquiries, fur flew. We were soon accused of working to undermine the client's interest. It was time to get out, and so we did. It was an unhappy parting.

In another case, I did not consult my client on each move in the case. I withdrew certain counts of a civil case when it became apparent to me that I could [not?] meet my burden of proof. I did not consult the client, who, early in the course of the litigation, started asking questions about whether the proceeds of the litigation were taxable. The client was counting chickens before they hatched; I was worried about the fox. I was grieved by the client in that case, and the federal grievance committee found probable cause to believe I had failed in my duty to communicate adequately. I moved to withdraw from that case as well. A later hearing before a District Court judge resulted in no discipline. The client now believes I was engaged in some [broad] and far-reaching conspiracy.

As Norm concedes, this failing makes him a "less than perfect lawyer." It does. A perfect lawyer informs the client of each and every event in the case, including informal correspondence with third parties or with opposing counsel.

But there are only so many hours in the day. Even if a lawyer obsessed about their cases every hour of the day — which we don't want them to do, since it will cloud their judgment — they still wouldn't be able to explain every hypothetical possibility to the client.

Fact is, if a client wants a perfect lawyer, they need to find one willing to devote their entire practice and personal life to their case alone.

The rest of us imperfect lawyers use two techniques: triage and ticklers.

Triage is just like in the hospitals: we attend to the most pressing matters first. David Dow, who represents defendants on Texas' death row, is one of the most respected lawyers in America, yet his The Autobiography of an Execution concedes letting cases go by the wayside for months, sometimes years. He's a less than perfect lawyer, and understandably so: he can't hunt down every trace of exculpatory evidence for a client whose execution is years away when another one of his clients is weeks, days or hours away from death. My triage in civil litigation doesn't carry as much gravity, but it's no less real: I must prioritize the most urgent matters. I do the same for every client when their matter becomes the most urgent matter.

A "tickler" (part of a "tickler file") is a funny name that lawyers dreamed up for "reminder." Litigators in particular are always on some sort of deadline, either by way of the statute of limitations, a deadline for filing or responding to a motion, the closing of discovery, the submission of expert reports, the preparation for a hearing, the taking of a deposition, or trial. Sometimes, the necessary work can be done in minutes. Sometimes it will take weeks. The ticklers are ways of interrupting the triage to point out that work due later needs to be started now.

In theory, it should be easy to incorporate client contact into this system by making ticklers for client conduct. There are, however, only so many hours in the day. More importantly, attention, like time, is a limited resource. I can only give a client a status update when I am in the office, which is only when I'm not at a court conference, a hearing, a deposition, on trial, or otherwise out. But when I'm in the office, I'm bombarded every day with dozens of calls, emails, letters, filings and, yes, ticklers for other matters. More distractions equals less attention.

I don't know the specifics of Norm's practice, but I presume that he, like most criminal defense lawyers, represents clients on a fixed fee. I represent clients on a contingent fee, and I bet Norm does, too, when he files civil suits. We are thus both not paid for our time, not paid to consult, not paid to teach; we are paid to fight the whole battle from start to finish.

If you want someone to teach you the intricacies and contradictions of the law, that's available, just be ready for $60 for each courtesy email. But if you've hired someone on a contingent or fixed fee to do battle, it's not unreasonable for them to contact you only as necessary and as useful for your case.

For my clients, if you haven't heard in a while and don't know the status, please write or call, and we'll put your call in the triage and the tickler file and get back to you. If we don't get back to you in a few days, call again. (Email is even better, since I get it outside the office.) If you've learned of or thought something interesting, please write or call, and I'll consider it. Otherwise, I'll contact you when necessary and useful for your case, such as when you need to review an allegation, prepare for discovery, or consider an offer, and I'll forward you the court filings I made on your behalf.

Norm considers this "harsh." I don't. The vast majority of my clients appropriately contact me when they genuinely have questions about the status of their case, then ask me a handful of questions. We discuss it until they understand, and then I get back to work. That's fine. It's reasonable and appropriate for clients to expect it.

My clients are, by and large, polite people with reasonable expectations. Indeed, some cases require substantial investigation pre-suit, are on appeal, or are delayed by the defendant's bankruptcy, leading to months of inactivity, and yet some of those clients apologize to me for interrupting my work when they check in after a few weeks. They don't have to; it's their case, their right.

Only a tiny fraction wear out their welcome. For those, there really isn't a question as to what should be done. The lawyer is unhappy with the client and the client is unhappy with the lawyer. Representation should not be undertaken or should be ended as soon as possible. Easy to say, hard to do.

• Email This
• Print
• Comments (2)
• Trackbacks
• Share Link

The Wall Street Journal (and their Law Blog) had an amusing piece recently about the jockeying underway for the position of lead counsel in the Toyota Motor Corporation Unintended Acceleration Marketing, Sales Practices, and Products Liability Multidistrict Litigation, which has been consolidated in the Central District of California:

Lawyer Daniel Becnel Jr. of Reserve, La., donated a kidney to his sick brother. Alexandria, La., attorney Richard Arsenault organized a symposium featuring a lawyer played by John Travolta in the movie "A Civil Action." New York lawyer Anita Jaskot's father is a doctor. She is also single and speaks Polish.

These are among the many personal morsels lawyers hope will help them win a lead spot in the litigation against Toyota Motor Corp., which has been consolidated in a Santa Ana, Calif., courtroom. ...

For the Japanese auto maker, which declined to comment for this story, billions of dollars in legal liability could be at stake as it fights suits tied to its recalls of vehicles because of sudden-acceleration issues. The lawyers' quest is a pot of as much as $500 million in fees. Only a few will share it.

For reference, here's David Becnel's, Richard Arsenault's, and Anita Jaskot's applications.

You can't blame them for pulling out all the stops. Judge James V. Selna specifically ordered:

[T]he Court presently intends to appoint plaintiffs’ lead counsel and liaison counsel. Applications for these positions must be filed with the clerk’s office on or before April 30, 2010. The Court will only consider attorneys who have filed an action in this litigation. The main criteria for these appointments are (1) knowledge and experience in prosecuting complex litigation, including class actions; (2) willingness and ability to commit to a time-consuming process; (3) ability to work cooperatively with others; and (4) access to sufficient resources to prosecute the litigation in a timely manner. Where appropriate, applications should also set forth attorney fee proposals, rates, and percentages that applicants expect to seek if the litigation succeeds in creating a common fund.

How intense and expensive can these cases get? 

Consider the class action filed back in 1996 on behalf of 300,000 Native Americans alleging the U.S. Department of the Interior mismanaged trust accounts and land under the Dawes Act of 1887. The suit tentatively settled for $3.4 billion a few months ago, but approval is being held up by the political process.

The case was driven by a team at Kilpatrick Stockton, which sunk more than $22 million in legal fees and expenses into the suit, through fourteen years of litigation, seven trials (totaling almost 28 weeks in trial), and 10 rounds of appeals against the most well-funded defendant in the world: the United States government.

But they weren't lead counsel.

That honor went to Dennis Gingold, a solo practitioner who used to represent big banks.

It wasn't easy:

Mr. GINGOLD: We gave [Blackfeet tribe leader and lead plaintiff Elouise Cobell] a commitment that no matter what it took, we would do what needs to be done to resolve this for the individual Indians, because it's the dark side of American history and we as lawyers have an obligation to correct it if we can.

SHAPIRO: How much of your time has this case taken up as a percentage of your total practice in the last 14 years?

Mr. GINGOLD: A hundred percent.

SHAPIRO: Really, this has been your sole case for the last 14 years?

Mr. GINGOLD: I haven't had a vacation since December of 1998. I've generally worked seven days a week on this case.

Twenty years ago Gingold organized the takeover of Baltimore Bancorp. That massive, hostile deal was like a vacation compared to the Indian Land Trust case, which swallowed up his whole professional and personal life for more than a dozen years.

But he did it, and did it well. You can't say he did the whole case by himself — Kilpatrick's $22 million contribution was essential — but you can say he managed the litigation by himself.

So what does it take to be lead counsel on a multidistrict class action? They need access to money, sure, but that can be effectively guaranteed by appointing multiple plaintiff's firms to the case.

What it really takes is dedication. As much as I'd like to see the Court adopt Philip Thomas' suggestion that the lawyers compete on an obstacle course — a process that would probably yield similar or better results to relying on the whimsical applications — my hope is that the most dedicated lawyer is chosen.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

On Sunday, the Associated Press published a background piece on Bob Bauer, the White House counsel:

White House counsel Bob Bauer, President Barack Obama's point man in the search for a new Supreme Court justice, manages to get credit both for an even temperament and his finesse with a sledge hammer.

...

Now Bauer, 58, is plying his mix of legal reasoning and tough-guy determination from a West Wing corner office. The White House counsel is leading the search for a Supreme Court nominee and planning how to steer that choice safely through the shoals of Senate confirmation.

It's a job that requires not just legal smarts but equal parts political and media savvy as well.

I don't mean to criticize Nancy Benac, the author of the article, for that last line. She's just trying to convey information to her readers in a clear and concise manner. She's not trying to make a deeper philosophical point to her readers about the divisions between law, politics, and public relations.

But it's a deeper philosophical point worth exploring. Bob Bauer is a lawyer by trade. A lawyer who represents politicians almost exclusively — who else needs the help of an election-law specialist? — but primarily a lawyer nonetheless, rather than a politician or a public relations consultant.

The line between those titles, though, is a lot thinner than many people assume:

For decades, Bauer has been the go-to lawyer for Democrats looking for advice on campaign matters and ethics questions. Past clients have included the Democratic National Committee, the campaign committees for House and Senate Democrats, congressional Democrats during Bill Clinton's impeachment saga, and a freshman senator named Barack Obama.

"We used to joke that we had Bob Bauer on speed dial," says former Senate Democratic leader Tom Daschle, who relied on Bauer's advice during the impeachment drama and used him as his personal lawyer for 15 years.

Bauer wasn't on speed dial because Daschle needed a lot of briefs or legal memos. He was on speed dial because of his judgment.

The primary difference between Bauer — and most other lawyers on speed dial in the corridors of power — and someone like David Axelrod is the intended audience of their work.

Axelrod tells a client how the public, the press and the other politicians will probably react to a given decision, and suggests strategies for making the reaction positive.

Bauer tells a client the same for courts and enforcement agencies.

It thus might seem, superficially, that Bauer has taken on a new role, but the truth is, a great lawyer is already by definition a great politician and a great public relations consultant.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

One of my most popular posts was "Investing in Lawsuits" - The Free Market Counterpart to Liability Insurance, which analyzed a New York Times article on Juridica, a company that finances business litigation on the plaintiff's side. The post drew a thoughtful comment from Richard Fields, CEO and Chairman of Juridica, about their business model.

Via Legal Theory Blog, Dr. Maya Steinitz at Columbia Law School has posted a draft of Whose Claim is this Anyway? Third Party Litigation Funding:

This article is among the first to address litigation finance by institutional investors in the U.S. It describes the empirical reality of the industry; identifies and addresses the emergence of a secondary market in legal claims and the prospect of securitization of legal claims; discusses third party funding of international arbitration and; applies a bargaining analysis to understanding the systemic effects of the practice. Specifically, the article asks what happens when, through litigation funding, litigation ceases to be expensive and uncertain and when parties “bargain in the shadow of financing.” Using bargaining theory the article offers a three-step argument for a move away from a prohibition of litigation funding towards nuanced regulation of the industry.

After reading the abstract, I started rolling my eyes, and was sure that I'd have to drag out the most common tool in the lawyer-blogger's toolbox: the accusation that some pointy head ivory tower academic doesn't know how the real world works.

Here's why. As I wrote before:

[W]e already have an industry in which billions (potentially trillions) of dollars of investments are pooled to fund litigation directed towards a particular result. We call it "insurance."

There is a good reason that plaintiff's trial lawyers up against insurance companies (not just in personal injury cases like wrongful death or medical malpractice, but also a variety of "b2b" claims like director & officer liability) accept it as an article of faith that they will not get any reasonable settlement offers until the eve of trial. The economic relationship between insurance companies, defense lawyers, and policyholders creates a situation in which no one mentally accepts the legitimacy of the claim — much less a reasonable value of it — until they are staring down the barrel of a verdict.

Thanks to defense liability insurance, even the most obvious of cases will be met with denial and furious litigating of any and all liability, including a denial of basic common sense principles such as a truck driver being the "agent" of the trucking company or a hospital having a duty to its patients.

Virtually none of the articles about litigation funding even mention — much less to fairly evaluate — the fact that we are ready have a multi-trillion dollar market for litigation funding on the defense side. Such blindness makes it hard for plaintiffs' lawyers like me to see the articles as anything more than ignorance or propaganda.

I was thus pleasantly surprised to see Steinitz's article note,

Third party litigation funding is “a group of funding methods that rely on funding from the insurance markets or capital markets instead of, or in addition to, a litigant’s own funds.” In other words, it is the provision of funds by companies who have no other connection with the litigation. When provided to plaintiffs, third party funding promotes access to justice by enabling plaintiffs who have meritorious cases to bring litigation they would otherwise be unable to bring and to avoid premature settlements at a discount due to exhaustion of funds. When provided to defendants, it allows corporations who can afford to litigate but who do not want to incur any of the costs or risks associated with litigation to shift the costs and hedge the risks.

The door swings both ways; if we're going to worry about funding the plaintiffs' side of litigation then we need to worry about funding the defendants' side, too.

The most interesting development mentioned by Steinitz's article is this one:

The rise of the litigation funding industry i.e., of a primary market in legal claims, had an additional effect besides competitive pressures on global law firms. The last couple of years have also ushered in a secondary market in legal claims. Predominantly, this secondary market takes the form of litigation funding firms going public – selling shares to the public and listing on stock exchanges. But it is possible that in the foreseeable future we will also be witnessing the creation of a new form of securities—legal claims-backed securities. Reportedly, some tort litigation lenders are already in the practice of aggregating the claims they acquire and selling shares of the composite funds i.e., are engaged in a rudimentary form of securitization.

Now that's an interesting idea. And why not? We already have a secondary securitized markets for everything else — including liability insurance, which is often sold off through re-insurance — so why not for litigation, too?  

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Scott Greenfield isn't happy with people wasting his time:

Marketers teach lawyers who turn to them because they need business ways to "sell" the client.  We offer free consultations, which clients interpret as a free hour of a lawyer's time to provide free legal advice which they can then take away and use.  I get many inquiries from people asking if I give free consultations.  There's only one reason for them to ask.  I don't.  But they expect lawyers to do so, and will be happy to enjoy a free consultation when they need answers from a lawyer.  This is because we teach them to expect free consultations.

Clients call or write for a free answer to a legal question.  They've been taught to expect that too.  Think Avvo Answers.

When a question or consultation won't suffice, they want to negotiate, or pay the fee over time, as they would on replacement windows.  Many lawyers will negotiate their fees, lest a potential client walk away. Others will take payments over time, praying that the second, then third payment will come. 

The questions that Brian writes about are rarely a problem for me anymore.  I vet potential clients before making an appointment with them.  It's quite common for callers to tell me that they have a problem and would like an appointment.  I ask them what the problem is.  Most are refused an appointment.  There's no reason to sit down with someone when there is no possibility of my taking their case, whether because the nature of the case isn't suited to my practice or they aren't able to pay the legal fee. 

Callers are shocked that they can't have an appointment; they have been taught to believe they are entitled to one.

As Abraham Lincoln said, "a lawyer's time and advice is his stock in trade."  (I've always seen that attributed to Lincoln but have never seen it verified.  As Lincoln also said, "the problem with quotes on the Internet is that it is very hard to authenticate them.")

Lincoln was, like Greenfield, a defense lawyer, though Lincoln was a civil defense lawyer.  In both situations, it's a misnomer to call the initial client contact a "consultation." There is little upon which the potential client needs "consultation:" the potential client has been sued or indicted, and has no choice but to enter the legal system and defend themselves. If they're going to defend themselves at all, they're going to need a lawyer for a lot more than a mere "consultation."

Lincoln and Greenfield thus have every reason to demand compensation for all of the time and advice they contribute to a potential client's cause: that's their business.

The same isn't true for contingent fee plaintiff's litigation, like personal injury, medical malpractice, class actions, antitrust, false claims act, copyright / patent infringement, business torts, and the dozens of other claims available to vindicate the legal rights of the injured. In those cases, there is an issue worthy of "consultation:" whether or not a lawsuit should be initiated.

In contingent fee litigation, the attorney has chosen to offer as their stock in trade something other than their time and advice. Instead, the lawyer offers their firm's resources. The contingent fee lawyer agrees to provide all attorney attention and firm funds available as the lawyer believes is necessary and appropriate to achieve a financial recovery that is satisfactory to the client. 

My time is, for better or worse, irrelevant. This bargain is immensely profitable when I achieve a large recovery with a comparatively small investment of time and money; this bargain is also profoundly unprofitable when I'm forced to litigate a case for years without end, paying costs the entire time, without any recovery at all. At the initial "consultation," I try to figure out which the case is likely going to be.

That's the nature of the business.  In such a business, it's foolish for me to charge for consultations, since the money I would recover from that initial fee would be trivial in comparison to the overall profit or loss. For us, a consultation fee is little more than a barrier between me and potential clients — many of whom have minimal resources due to the injury in question — who know they have been wronged, but do not know if they have any legal rights or remedies, and so are indeed in need of a "consultation."

Thus, I suppose I am guilty as charged by Greenfield: though I have never told anyone they can get criminal defense advice for free, I have contributed to the impression that a lawyer's time is not a central component of their representation. To me, it isn't.

• Email This
• Print
• Comments (2)
• Trackbacks
• Share Link

Scott Greenfield recently featured an email exchange between a student and a professor at New York University's Stern School of Business that's been making the rounds lately.

One email is polite and concise.

The other email is an unfocused ramble. Instead of sentence stress, the author emphasizes their points through profanity, sarcasm, ALL-CAPS, and scatological references.  Instead of proper sentence construction, the author joins thoughts with ellipses.

I don't understand why the former author started the correspondence in the first place. Maybe the latter author is right about the issue at hand. Problem is, it's too hard to tell amongst the many distractions and it's psychologically harder to give credence to a person who is unable to maintain an appropriate tone for the situation.

• Email This
• Print
• Comments (2)
• Trackbacks
• Share Link

I was going to write about how the Securities Industry and Financial Markets Association (SIFMA) had hired Carter Phillips of Sidley Austin — perhaps the most experienced Supreme Court advocate in the country — to "study" the constitutionality of President Obama's proposed tax on the big banks, which is really just code for "SIFMA hired Phillips to create grounds for a 5-4 Supreme Court decision invalidating the tax."

Then something funny happened.

When I typed "Carter Phillips" into Google News to find an article about the SIFMA representation, I saw another story posted around the same time, "Joe Arpaio's Lawyer for Records Dispute Costing Taxpayers $990 -- Per Hour."

The $990 per hour lawyer for Sheriff Joe Arpaio is, indeed, Carter Phillips.

For those of you who don't know about Sheriff Joe Arpaio, here's an introduction:

A federal grand jury is investigating Joe Arpaio, the Arizona sheriff known for his aggressive stance on illegal immigration, for possible abuses of power in launching investigations of local officials who disagree with him, authorities said Friday.

Two Maricopa County officials have been subpoenaed to appear before the grand jury to testify about Arpaio's actions against county officials since they moved to cut his budget in late 2008.

Since then Arpaio and County Atty. Andrew Thomas, an ally, have filed criminal charges against two county supervisors, have said dozens of other county workers are under investigation and have filed a federal racketeering lawsuit accusing the entire county political structure of conspiring against them.

A walk through the "Joe Arpaio" tag at the Phoenix New Times will appall you for hours.

The United States Constitution rightly ensures criminal defendants the right to assistance of counsel. Common law in all fifty states rightly holds the attorney-client relationship to be as sacred and protected as any other. And we all have bills to pay, even Jay Leno, even top-drawer Supreme Court lawyers.

I'd understand if Phillips was part of Arpaio's criminal defense team. But he's not: Phillips represents Arpaio in a vindictive attempt to dig into Maricopa County judges' and administrators' emails following their investigation into his abuses. There's no right to that.

We can't judge a lawyer by their clients — consider public defenders, the unsung guardians of liberty — but a lawyer is only as good as the causes he or she represents.

No matter how effective Carter Phillips is as an advocate or counselor, he'll never be a great lawyer.

Not while doing Joe Arpaio's dirty work.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

The ABA Journal reports about Mohawk Industries v. Carpenter:

Personal injury associate J. Craig Smith couldn’t turn down his father’s request to take on the case of his cousin Norman, who was fired from his job as a supervisor in a carpet manufacturer after alleging the company was hiring undocumented aliens.

"When my father called me from Georgia [in 2006] about Norman being fired, I didn't know if I could do anything for him," Smith told the Connecticut Law Tribune. "But my Dad said, 'Remember who you are, and where you're from--we stick by our own.' I knew I had to do right by Norman.”

Smith stuck with cousin Norman Carpenter, all the way to a U.S. Supreme Court victory on a privilege issue.

At the time of the call, Smith was a fourth-year associate at personal injury law firm Koskoff, Koskoff & Bieder in Connecticut. He worked on the case along with a two-person employment law firm in Atlanta—until cert was granted. Smith began getting calls from Supreme Court specialists, who warned he wouldn’t stand a chance unless they got involved, the story says. Smith turned them down and hired Yale law professor Judith Resnik; they sat together at the counsel table when the case went to the Supreme Court.

Lawyers like to believe we're really smart. We like to believe that we can predict which case will make a lot of money. We like to believe we can tell which cases are really important. We like to believe we can tell when a landmark unanimous Supreme Court opinion has walked in the door.

James E. Beasley, Sr., the late founder of our firm, believed that, if lawyers did the right thing, everything else would take care of itself. He took a lot of cases that offered little more upon presentation than years of bruising litigation, despite the risk and the cost, because he believed that taking up that person's cause was the right thing to do.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Two days ago, Ashby Jones at the WSJ Law Blog approvingly cited these remarks in Legal Week by Alex Novarese:

[W]hat surprised me was that there appeared to be a consistent anxiety regarding the pressures or expectations of winning business. On one hand, associates want early access to clients; indeed, they resent law firms that don't give them that access. But the idea of bringing in clients doesn't seem to be one that drives young lawyers, at least those at large commercial law firms. In some cases an ambivalence about partnership appears to be strongly connected with the belief that the role comes with an expectation of rainmaking prowess. A considerable number of aspiring lawyers fear they'll hit five years' PQE, bump up to senior associate and then find themselves unequipped for a world in which they must hunt what they eat.

Viewed from outside of the legal industry, this mindset is odd. In many commercial walks of life, especially service industries, aspiring professionals are benchmarked on their ability to bring in new work or relationships. It's one of the primary factors that marks people out for promotion and those entering such careers tend to seek out opportunities to prove themselves in this respect.

Except in law, apparently. I guess this is part of the institutionalism of young lawyers. At the best firms, they are the top performers in academic institutions, before moving on to well-established providers of vocational education and then into corporate law firms - which are themselves highly structured institutions. Little wonder these young workers are not programmed for a world of risk. Such sentiments are also a reminder that - for all the talk of law firms becoming businesses, the mindset of lawyers remains, to a considerable extent, that of a profession.

First, most associates at BigLaw don't care much for their work or for making partner. They want money to pay loans and to live well in a major city, and then they want to use the big firm's name to help them land a job they actually want.

Second, for those who want to be partners, the firm traps them in a Catch-22 by imposing absurdly high minimum billable hour targets at premium rates.

Clients, however, are not saps. They will pay premium rates only for experienced counsel.

Allow the great thespian Bruce Campbell to explain the dilemma:

So how does an associate build a book of business? Like Campbell said: "it." 

Experience.

Experience drives word of mouth, drives referrals, builds ability, builds confidence, and enables your practice to grow.

So how do associates get "it?"

Novarese mentions other industries. Let's talk about other industries. Like marketing, where Seth Godin recommends "consistent, persistent generosity." Or music, where Trent Reznor tells upcoming bands they need to make their music cheaply and "GIVE IT AWAY." Or venture capital, where Fred Wilson's favorite business model is to "give your service away for free."

That's how to get "it." Get clients in the door. You can't compete on experience, so compete on price, on selectivity, on service, on anything you can.

Maybe that means cutting rates. Maybe that means billing fewer hours. Maybe that means taking difficult, frustrating, unprofitable cases. Maybe that means jumping into other fields and wasting dozens of unbillable hours just making sure you've got the basics right. Maybe that means spending some time, off the clock, figuring out how potential clients in your field find lawyers, and figuring out how to make their name the first that a potential client hears.

That is to say, associates need to use the methods other entrepreneurs use to build business.

Yet, few of those methods are available to associates at BigLaw firms, because the business model — which generates most of its profits by creating unnecessary work for recent law graduates — is designed for the short-term compensation of the partners, not the long-term career of the associates. Experienced rainmakers can squeeze every last penny of profit out of a case by having you spend all weekend reviewing documents. You don't even have a case at all.

Which is why so many associates give up on rainmaking. After a few failed attempts (which likely got them reprimanded for falling below target billable hours, for interfering with client relations, or for setting rates or taking cases without approval), learned helplessness kicks in and they give up building outside business. Instead, they focus, like the firm encourages them to do, on pleasing partners and existing clients.

I.e., someone else's rainmaking.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Yesterday, after posting a link to a productivity guide recommending email be checked twice daily, I saw this leaked email from a big name at a litigation powerhouse:

Now more than ever there are many talented lawyers and law firms competing for our business. Doing really good legal work is not enough. Clients expect that and well they should given what we charge for our services You must all realize that we are in a service business. In this day and age of faxes, emails, internet, etc. clients expect you to be accessible 24\7. Of course, that is something of an exaggeration—but not much.

LESSON NUMBER ONE: You should check your emails early and often. That not only means when you are in the office, it also means after you leave the office as well. Unless you have very good reason not to (for example when you are asleep, in court or in a tunnel), you should be checking your emails every hour. One of the last things you should do before you retire for the night is to check your email. That is why we give you blackberries. I can assure you that all of our clients expect you to be checking your emails often. I am not asking you to do something we do not do ourselves. I can assure you that [other big names at the firm], etc. all check their emails often.

I check my email frequently except when I don't.

There's two reasons for those times that I don't.

First, to follow the advice of Seneca, himself a great trial lawyer, on keeping a law practice in perspective:

Look at those whose prosperity men flock to behold; they are smothered by their blessings. To how many are riches a burden! From how many do eloquence and the daily straining to display their powers draw forth blood! How many are pale from constant pleasures! To how many does the throng of clients that crowd about them leave no freedom! In short, run through the list of all these men from the lowest to the highest—this man desires an advocate, this one answers the call, that one is on trial, that one defends him, that one gives sentence; no one asserts his claim to himself, everyone is wasted for the sake of another.

But there are also less lofty reasons to avoid the siren song of the crackberry.

The second reason I take time off from email — both scheduled time and time as needed — is to follow Sun Tzu's command: "Ponder and deliberate before you make a move."

Cognitive science agrees:

After a 30-minute study period, the students were separated into three groups to test their understanding of the larger "big picture" relationship between the individual patterns: Group One was tested after a period of 20 minutes; Group Two was tested after a 12-hour period; and Group Three was tested after a 24-hour time span. In addition, approximately half of the students in Group Two slept during the 12-hour period, while the other half remained awake. All of the students in Group Three had a full night's sleep.

The test results showed striking differences among the three groups, especially between the students who had a period of sleep and those who remained awake.

"Group One, the students who were tested soon after their initial learning period, performed the worst," says Walker. "While they were able to learn and recall the component pieces [for example, Shape A is greater than Shape B, Shape B is greater than Shape C] they could not discern the hierarchical relationships between the pieces [Shape A is greater than Shape C] -- they couldn't yet see 'the big picture.'"

Groups Two and Three, on the other hand, demonstrated a clear understanding of the interrelationship between the pairs of shapes.

"These individuals were able to make leaps of inferential judgment just by letting the brain have time to unconsciously mull things over," he says. But, perhaps most notable, he adds, when the inferences were particularly difficult, the students who had had periods of sleep in between learning and testing significantly outperformed the other groups.

Strategic planning and tactical maneuvering in litigation requires a lot of thought, including the serious application of inferential judgment and relational memory, the types of cognitive work that demand contemplation and downtime.

Make room for that cognitive work. The crackberry can wait.

• Email This
• Print
• Comments (2)
• Trackbacks
• Share Link

Marc Andreessen, one of the more successful entrepreneurs of Silicon Valley, has an interesting post in which he lays out his productivity tips. A sample:

• Don't keep a schedule.
• Keep three and only three lists: a Todo List, a Watch List, and a Later List. 
• Each night before you go to bed, prepare a 3x5 index card with a short list of 3 to 5 things that you will do the next day.
• Structured Procrastination.
• Do email exactly twice a day -- say, once first thing in the morning, and once at the end of the workday.
• Don't answer the phone.
• Only agree to new commitments when both your head and your heart say yes.
• Do something you love.

Well worth considering — I keep similar lists, prioritize my tasks for each day, utilize 'structured procrastination,' and do my best to avoid being bogged down by email and phone calls. Read the post for the details of each, and for a few tips specific to particular organizational contexts.

Andreessen took a lot of flack for the "don't keep a schedule" part, and, by and large, such isn't practical for lawyers or for anyone who isn't a wealthy entrepreneur with the ability to determine their scheduling.

That said, there's a lesson to be learned from it: meetings, travel, and planned conversations in general have the potential to be huge time-wasters, not least due to the collateral damage they cause by interrupting and slowing down your work before and after the actual meeting.

As such, substantial effort should be made to avoid or to limit travel and meetings. Similarly, if you have to have a meeting, make sure you've got ample boring or simple work to do before or after it so that you can use 'structured procrastination' to your advantage.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

I don't update the "productivity" topic you see to the right as often as I thought I would. As I wrote three months ago, in my most recent "productivity" post (about "batch processing"):

[L]ike Merlin Mann, after an extensive time following the productivity genre/industry in details, I have generally soured on the relentless gadgetry, listmaking, fickleness and obsessiveness of most productivity websites and communities ...

That's not to say studying productivity is a waste of time. Far from it; Benjamin Franklin did it, and look how productive he was.

Maira Kalman, who authors a whimsical biography blog at the New York Times, had a recent piece on Ben, including this fascinating scan from his Almanac:

But how does one arrange that "work" to enhance productivity?

I'm fond of establishing for each day at least one "Most Important Task," a task (or tasks) you absolutely must get done today. Like Zen Habits says, you should probably do your MIT first thing in the morning.

But not all MITs are the same. Some MITs involve mindless, repetitive tasks. Some involve casual conversations or status updates. Some involve reviewing materials to get a sense of them.

Some MITs, however, require real clarity, precision and concentration, like drafting briefs or preparing for depositions. For those, an important observation:

Professional writers spend most days of their adult lives writing. For those among them who specialize on long form non-fiction, their writing is not that different from the types of research papers that plague college students. Assuming that these writers do not want to spend most of the days of their adult lives hating what they are doing, it stands to reason that, over time, they have figured the least painful possible way to schedule a large amount of writing.

With this in mind, I dug up interviews with [ten] masters of long form non-fiction ...

I went through each interview extracting any discussions about the writer’s habits. ...

Nine out of ten writers discussed when during the day they write. All nine worked in the morning. Four also worked during the afternoon. Three worked during night. Only one worked in all three times. Several writers described the afternoon as a mental dead time useful only for exercising and, maybe, editing. ...

Five out of the ten writers provided a specific start time. The latest was 8:30 am. Four other writers who didn’t give a specific time said, in so many words, “in the morning.” No writer described starting their work in the afternoon or evening.

And it's as simple as that: divide up your work by doing the tasks that require the most thought in the morning. Save the calls, meetings and document review for the afternoon.

• Email This
• Print
• Comments (2)
• Trackbacks
• Share Link

The Inquirer reports on a hearing I attended on Tuesday in The Inquirer's bankruptcy:

In a scathing rebuke, the judge overseeing the bankruptcy of Philadelphia Newspapers L.L.C. yesterday described the investigation of an unauthorized taping of a meeting between the company and its senior lenders as a "fine mess."

The investigation of the taping, done by one of the officers of the largest creditor, was directed by a committee of the unsecured lenders, or second-tier creditors. By failing to take sworn depositions and seek key e-mails, the committee left its interim report on the taping open to questions and criticism, Superior [ed - I don't know what they mean by "Superior," though he is the Chief] Bankruptcy Court Judge Stephen Raslavich said.

* * *

[The investigation] stems from a meeting between the company's senior lenders and its top managers at Philadelphia Newspapers' offices at 400 N. Broad St. on Nov. 17, 2008. Vincent DeVito, a managing director of CIT Group Inc., was found taping the meeting without the knowledge or permission of everyone in the room, a violation of Pennsylvania law.

Philadelphia Newspapers, in court filings, contends that its relationship with its senior lenders deteriorated dramatically after its officials made an issue of the taping. The company has asked the court for permission to hire the firm of Elliott, Greenleaf & Siedzikowski P.C. to investigate the incident to see if its interests had suffered.

That request was initially rebuffed by the court, which appointed the committee of unsecured creditors to conduct the investigation. The company asked the court to reconsider, given what it contended were inadequacies in the investigation directed by former Pennsylvania Superior Court Judge Robert A. Graci, who now works for the firm that represents the unsecured creditors' committee.

Yesterday, Raslavich made it clear that he shared those concerns, dressing down Graci for failing to take sworn depositions and issuing his interim report before seeing key e-mail files requested from DeVito.

An important piece of background that Graci himself brought up, albeit fairly late in his colloquy with Judge Raslavich: Graci's background is in criminal work, specifically in representing the Commonwealth of Pennsylvania in appeals.

Civil litigators wouldn't dream of conducting an investigation through unsworn interviews, and most litigators start with requests for important documents, like emails, then follow up with depositions. Typically, only one deposition is permitted for each witness, so you need to make it count. From that perspective, Graci's investigation looks like a joke.

Yet, most criminal investigations are performed exactly the opposite way, through informal interviews followed by document requests and possibly more interviews. Typically, prosecutors don't even get to talk to the defendant at all, given the defendant's right to remain silent, much less depose them.

That's what Graci's used to. As he said at the hearing, he initially contemplated using depositions or sworn statements, then figured that would have added another layer to the proceedings (such as endless objections by the attorneys representing the witnesses) and would have delayed everything without providing any clear benefit. So he switched gears and conducted it like a criminal investigation.

That is to say, his technique was in no way evidence that the investigation was a sham, in bad faith, or the result of incompetence. Judge Raslavich told him as much.

But there's a problem: Graci wasn't there just to get to the bottom of what happened, but to ensure the appearance of propriety. As it stands now, Judge Raslavich has to grapple with the Inquirer's legitimate complaint that, whatever the merits of the investigation, there's no record for them and their lawyers to review, just the conclusions.

The odds of there being an inadequacy or impropriety in the investigation are slim, but they're not zero, which may render the whole thing a nullity.

A good lesson and question for all lawyers -- what does your paper trail look like?

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Following up on their own post a month ago, the dynamic defense duo at Drug & Device Law posted:

A couple of weeks ago, Herrmann noted in passing that, although many big firms now sponsor blogs, none of the ten firms with the highest profits per partner (that much-despised, but oft-cited metric) do. ...

Many folks contacted us, on or off-line, to suggest why lawyers at the most profitable firms don't blog.

Those ten most profitable large corporate firms -- Wachtell, Quinn Emanuel, Boies Schiller, Sullivan & Cromwell, Paul Weiss, Cravath, Simpson Thacher, Cleary, and Schulte Roth -- "have no apparent affiliation with any blogs at all."

D&D Law summarize the opinions offered to them as:

1. Lawyers at the most profitable firms are stupid.

2. Lawyers at the most profitable firms are too busy.

3. Lawyers at those firms won't stoop to blog.

4. Lawyers at those firms don't want to give away their product for free.

5. Lawyers at those firms lack the necessary skill set.

6. Lawyers at those firms believe that blogging is unlikely to yield a decent return on investment.

A little more detail at their site; sadly, they keep their conclusions to themselves. Maybe next time. Legal Blog Watch links to a few other arguments on the subject.

Let me take a page from another arena: content publishers. There's been a big hoopla in the blogosphere lately over Malcolm Gladwell's highly critical review in The New Yorker of Free, the new book by Wired Magazine's editor-in-chief Chris Anderson, whose blog ("The Long Tail") is here. If you're interested in that debate, Anderson's response is here, Seth Godin's take is here ("Malcolm is wrong"), and Clay Shirky's ruminations on the inevitable end of the newspaper is here.

More useful for our purposes is Michael Nielsen's thoughtful examination of the scientific publishing industry, in which he argues that "even smart and good organizations can fail in the face of disruptive change, and that there are common underlying structural reasons why that’s the case:"

[S]ome of the forces preventing change are strongest in the best run organizations. The reason is that those organizations are large, complex structures, and to survive and prosper they must contain a sort of organizational immune system dedicated to preserving that structure. If they didn’t have such an immune system, they’d fall apart in the ordinary course of events. Most of the time the immune system is a good thing, a way of preserving what’s good about an organization, and at the same time allowing healthy gradual change. But when an organization needs catastrophic gut-wrenching change to stay alive, the immune system becomes a liability.

Elite law firms' hostility to the concept of "blogging" is a function of those law firms' highly effective immune systems. The most profitable firms on those lists earned their way to the top by building effective, reputable practices that can command top fees for unique talent and experience. They are diversified, in demand, and have remained at the top of the field through multiple changes in leadership and in the marketplace. They have proven themselves.

Consequently, elite corporate law firms have built over time strong organizational immune systems, systems that, for example, quite literally reject foreign bodies from entering by way of resistance to lateral partners.

Mention blogging, social media, or the like and watch the immune system kick in. Why waste time messing with success? AmLawDaily picked up the phone, called the firms, and got exactly that answer:

[W]e put out calls to managing partners and spokesman at nine of the ten firms (we excluded Kirkland & Ellis, because, as Beck and Herrmann note, a Kirkland associate played a role in creating the popular Sports Law Blog) to ask them about their stance on blogging. The conversations we had centered on a general theme: The firms just don't see the point. They are already successful, so they don't feel the need to market themselves or prove their grasp of a particular subject matter in the limited spare time they have. 

We'll let Jonathan Schiller of Boies, Schiller & Flexner sum it up: "I think the lawyers here are just too busy," he says. "I'm too old to blog. I'd rather play golf if I have a bit of free time."

The real question is not why big firms don't "blog;" the answer is "because they don't want to blog." The immune system rejects blogging, much as it rejects changes to alternative fee arrangements and compensation structures.

The real question is if elite corporate law firms should blog and the answer is yes.

How do I presume to know that? Because, as the AmLawDaily further points out, most elite firms effectively blog and have blogged for some time:

We wonder, though, whether there is much difference between blogging and putting out so-called client memos and (often) displaying those memos on a firm's Web site. Wachtell, Lipton, Rosen & Katz, for instance, has about as austere a Web site as exists online anymore, and thus seems perhaps the least likely candidate in the Am Law 100 to produce an opinionated or less formal blog. But the firm regularly releases memos that are quite opinionated, including one in the fall that implored the SEC to reinstate the Uptick Rule to limit short-selling. That could just as easily have appeared on any high-brow economic law blog. (A firm spokeswoman and name partner David Katz did not respond to our messages seeking comment.)

You can read many of these Wachtell memos, along with memos from heavyweights at Cravath, Sullivan Cromwell, Latham Watkins, Gibson Dunn, et al, at The Harvard Law School Corporate Governance Forum, which refers to itself as a "blog." Skim down the list of "guest contributors" (not "guest bloggers") on the left side of the "Forum's" website -- might as well be a Wall Street Christmas party.

But they don't call it "blogging." They call it "updates" and "newsletters" and "forums" and "panels" and "discussions." 

The wording doesn't matter. They're out there every day showing off their expertise for free. Welcome to blogging, you blogging bloggers.

One more issue before we go. As Nielsen also noted:

The problem is that your newspaper has an organizational architecture which is, to use the physicists’ phrase, a local optimum. Relatively small changes to that architecture - like firing your photographers - don’t make your situation better, they make it worse. ... Unfortunately for you, there’s no way you can get to that new optimum without attempting passage through a deep and unfriendly valley. The incremental actions needed to get there would be hell on the newspaper. [Ed by MSK - more on this concept's application to business here]

Thus, the real real question is if this blogging or crypto-blogging is the major shift itself or merely a small experiment as part of a much larger "disruption" in the legal industry comprised of, inter alia, blogging, social media, transparency, alternative fee agreements, telecommuting, virtual workers, outsourcing, and collaborative / cooperative practice?

Put another way, are elite corporate law firms sitting in a "local optimum" that works now but keeps them from getting to where they want to be in the future? Elite firms are certainly considering the possibility, hence finding their "client memos," for free, alongside competitors' free "client memos," on a law school blog. They're also upending the structure of their compensation and associate training, even if clients don't believe them.

We may have to wait and see what the answer is. As described in Clay Shirky's piece linked above, in which he summarizes the turbulent transition following Gutenberg's invention of the printing press as "chaotic:"

When the Bible was translated into local languages some people saw it as an educational boon, others as the work of the devil. Erotic novels appeared, prompting the same sort of response. Copies of Aristotle and Galen circulated widely, but direct encounter with the relevant texts revealed that the two sources clashed, tarnishing faith in the Ancients. As novelty spread, old institutions seemed exhausted while new ones seemed untrustworthy; as a result, people almost literally didn’t know what to think. If you can’t trust Aristotle, who can you trust?

Only in retrospect were experiments undertaken during the wrenching transition to print revealed to be turning points. Aldus Manutius, a Venetian printer and publisher, invented the smaller octavo volume. What seemed like a minor change—take a book and shrink it—was in retrospect a key innovation in the democratization of the printed word. As books became cheaper, more portable, and therefore more desirable, they expanded the market for all publishers, heightening the value of literacy still further.

That is what real revolutions are like. The old stuff gets broken faster than the new stuff is put in its place. The importance of any given experiment isn’t apparent at the moment it appears; big changes stall, small changes spread. Ancient social bargains, once disrupted, can be neither mended nor quickly replaced, since any such bargain takes decades to solidify.

 

• Email This
• Print
• Comments (1)
• Trackbacks
• Share Link

The AmLawDaily reports Study: Law Firms Have "Little or No Interest in Change," CLOs Say:

Altman Weil's 2009 Chief Legal Officer Survey received responses from 183 CLOs--about 15 percent of the 1,222 corporate law departments invited to participate. Sixty-two percent of respondents worked for companies with over $2 billion in revenues. ...

The study revealed that 25 percent of CLOs surveyed said they were putting a 'high' amount of pressure on their outside panel firms to change "the value proposition in legal service delivery," as opposed to simply cutting costs. Another 37 percent rated the pressure as medium, while 38 percent said there was a low degree of pressure on outside law firms to change.

When asked how serious firms are in changing their service models, only five percent of CLOs surveyed said firms are serious about changing their structure. Another 20 percent gave firms some credit for implementing efforts towards change, but an overwhelming 75 percent rated firms as having "little or no interest in change."

Simultaneously, Legal Blog Watch reports on the many firms in fact 'changing their structure' by moving to an apprenticeship model:

With the economy down, law firms have less work. That means they've got more time -- or at least, slightly more appetite -- for training new associates. As the National Law Journal reports, a number of firms -- most recently, 659-lawyer firm Howrey -- are moving toward an apprenticeship model, with new associates spending time attending classes and shadowing partners on client matters. Associates participating in the Howrey program are still expected to generate billable hours, though the requirements are reduced to 700 hours in their first year. And to help subsidize the costs of the $3 million training program, the firm is cutting first-year salaries from $160,000 to $100,000, with a $25,000 bonus that can be applied to repay student loans.

Several other firms have launched similar efforts, including Drinker Biddle & Reath, Dallas-based Strasberger and Price, which recently introduced apprenticeship-type programs, and Atlanta-based Ford & Harrison, whose "Year One" training program was rolled out last year.

Law Marketing Portal goes into the details of the CLO survey:

“This combination of inside and outside reductions means not only that in-house lawyers will assume greater workloads, but also that Chief Legal Officers will need to become more strategic about triaging work, allocating resources, and, in some cases, tolerating higher levels of risk,” says DiLucchio.  “And when they do hire outside counsel, you can bet that they will be shopping for value.”

 

The importance of price when hiring outside counsel declines as the importance of the work being done increases, according to the survey.  In addition, there is a direct correlation between the importance of a firm’s capabilities and the importance of the matter to the corporation.

In normal industries, increasing value is often a matter of increasing productivity, and Law21 has a thorough post on the many new approaches for measuring lawyer productivity. On the whole, the legal industry is furiously searching for ways to provide better value to the client through new billing and compensation models -- they're even exploring a novel approach to training new hires.

Of course, I never miss an opportunity to criticize corporate law firm culture or the billable hour, but it sure looks like the big firms are trying to change. As noted by this insightful piece about the news and scientific publishing industries, it is extraordinarily hard even for a smart, adaptive, and willing organization to radically change and survive disruptions.

As also reported today, a number of corporate firms around here in Philadelphia are reducing associate and partner salaries; as I've discussed before, given the BigLaw business model, cutting salaries is a dangerous and desperate move. BigLaw is worried and trying to change.

Thus, I'm going to blame businesses for their unhappiness. Moreover, if you're still unhappy with BigLaw, stop using it. Are you defending a national antitrust case? Multi-district mass torts litigation? Are you acquiring a billion-dollar public company and taking it private?

No?

Perhaps you don't need a whole team of lawyers working day and night. Think about it.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

At The Legal Intelligencer:

Moving beyond all the talk of alternative fee arrangements, Saul Ewing has put its fixed-fee programs in writing -- on its Web site at least.

 The firm launched this week its "cost certainty commitment" with two different programs in which either a fixed fee or a cost per-attorney, per-day will be used on specific types of matters the firm identified as lending themselves to such arrangements. ...

To start, Saul Ewing is offering a fixed, daily blended rate per attorney for due diligence work for investors, companies looking for capital and venture capital or private equity firms looking to have their portfolios evaluated.

The second program offers a fixed fee for representation at administrative hearings before the Pennsylvania Insurance Department. There are two packages under this plan, with the second having a higher cost to include some post-hearing work.

Antzis said the arrangements could be offered for certain types of labor and employment, intellectual property and litigation matters as well. ...

Law firms have been offering fixed fees for things like patent filings and the drafting of wills for years, Antzis said. But the firm's first significant foray beyond those areas came this year before the "cost containment commitment" had even been thought up.

Saul Ewing stole away work for a large grocery chain from a larger, national firm. Antzis said the chain brought its business to Saul Ewing because the firm agreed to a fixed cost for handling all of the chain's single-plaintiff employment discrimination claims in the region.

In other industries, they call this "meeting customer demand."

It has long been ridiculous to bill by the tenth of the hour for representation across hundreds of substantially similar matters which all follow the same procedures and all apply roughly the same law, like insurance regulator hearings. Large corporate law firms have inexplicably been able to resist billing and pricing reform for decades, but no longer, as revealed by that last quoted paragraph above.

Modern mid-size and large businesses are kept profitable in part by compartmentalizing costs and making them consistent over time. Just like how few businesses these days accept the risk of self-insurance or vertical integration, fewer and fewer will tolerate endless swings in legal costs they barely understand and can barely audit for performance.

The challenge for firms, then, is no longer figuring out the precise amount by which they can increase their hourly rate each year without driving off the client, but rather figuring out how to meet their clients' demand for bills that are regular and predictable.

• Email This
• Print
• Comments (2)
• Trackbacks
• Share Link

Two posts on the same day. Sarah Randag at ABA Journal Law News Now:

Jordan Furlong wonders in a recent post at Law 21 if "we’ll soon be closing the book on one of the legal profession’s most-used and least-understood phrases of the last decade: 'work-life balance.' "

With 10,000 law firm jobs lost in 2009, not to mention waves of announcements of pay cuts and associate deferrals, work-life balance has become a touchy subject.

"Even the most active WLB boosters have toned down talk that might earn them the dreaded 'entitlement' label," Furlong writes. "Realist observers like Dan Hull and Scott Greenfield have gained the upper hand in the WLB discussion," perhaps referring to a InsideCounsel SuperConference panel at which those two lawyers took on Millennials.

...

"If WLB stood for anything, it was for the fact that we all have the right and the obligation to make that tradeoff on the terms we want."

But Furlong agrees with work-life balance proponents that in their first few years of practice, saddled with increasingly high debt, lawyers understandably feel compelled to seek jobs with heavy workloads. And "billable-hour targets for associates at more than a few firms simply can’t be achieved without damage to one’s health or ethics, or both," he writes.

Furlong worries, that now that the moment has passed, "WLB will be relegated to the status of a mere generational quarrel during a freak economy."

Denise Howell at The American Lawyer (at law.com):

It's thus tempting to view balance as a fair-weather topic, brought up only when lawyers feel secure about their jobs and alternatives. ...

It's nothing short of depressing, and things seem likely to get worse before they get better. But even in a recession it's important not to shelve these policies completely.

It may seem counterintuitive, but flexibility and balance-oriented policies are tools that can help firms survive the conflagration. "Eat what you kill" is traditionally associated with the most cutthroat, internally competitive firms. A compensation system where one's career survival depends directly and constantly on the dollars one brings in the door has been seen -- historically, anyway -- as inflexible. But "eat what you kill" and "work/life balance" (with its "work less, make less" compensation system) share one goal: to pay lawyers only for work that enhances the bottom line.

As a result, the two systems can live together very well. Layoffs cost firms, both financially (the lost investment in laid-off lawyers, and the premium often paid in ramping back up) and in terms of reputation (from "They're going under" to "Remember what they did to associates back in '09?"). When those costs are taken into account, scaling back lawyer hours starts to look better and better.

Deborah Epstein Henry, founder and president of consulting firm Flex-Time Lawyers, urges firms to open their eyes to the reality that, unlike layoffs, promoting reduced hours cuts costs now, prevents future recruiting and training expenses, engenders loyalty, improves morale and quells the burnout and lack of productivity that may otherwise plague those left in a fragmented workplace.

If there's one lesson from the latest disruption in the legal world, it's there is no one way to run a law firm. Whether that disruption is from technology, demographics, or economics, there comes a time when you have to start finding 1,000 ways not to build a light bulb.

The NYTimes is overstating the change -- "Big, as a business model (let alone as an expression of the national mood), seems bound for obsolescence." -- but so are critics of "WLB" suggesting that efficiency or value-based lawyer employment is gone.

Indeed, a clear lesson from the "risky, transient" nature of big firms I discussed yesterday, is the danger of expanding too quickly, particularly expanding high fixed costs or becoming too reliant on unstable practice areas. 

"Work-life balance" has never been about being lazy or overpaid -- it was about matching what workers had to offer with what the market needed. Right, it seems a lot of firms "need" a lot less than they thought, something which many employees are more than happy to offer.

• Email This
• Print
• Comments (1)
• Trackbacks
• Share Link

Buried in this NYTimes article about the massive layoffs at White & Case, and the general reductions at big corporate law firms, is this critical fact:

That wall [i.e., the slowdown of work after Lehman Brothers' collapse] was especially hard because — remarkably like such ventures as the Mafia or the ice-cream vendor — many large firms operate on a cash-in-hand basis, with insufficient reserves to weather a slump.

With Wall Street in a meltdown, Big Law suddenly found it not just indecorous but impossible to pay young lawyers six months out of law school $160,000 a year to stare at their hands. (Indeed, after offering jobs to dozens of third-year law students last fall, White & Case told 60 percent of them they would have to wait a year to start.)

That's an insult to ice-cream vendors, who at least recognize the seasonal nature of their product.

Law students and young lawyers, burn that fact into your brain and never forget it: big corporate law firms are transient, risky businesses. Your first sign of a problem may be a friend texting you "sorry to hear about your firm."

Indeed, it's often worse than cash-in-hand, with many firms going deeply into short-term debt at the end of the year to fund the bonuses, debt which they then pay down throughout the year.

Don't let the big buildings, fancy summer associateship, corporate clients, or even decades-old names fool you. To the extent these firms remain extant these days, it is by swiftly firing people just like you.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

I've written before about Contingent Fee Business Lawyers As Venture Capitalists and Lawyers Who "Don't Take Possible Losers," so I was thrilled to read the NYTimes yesterday:

Richard W. Fields says he has come up with a win-win financial strategy for the downturn. He is investing in lawsuits.

Not in trip-and-fall cases, mind you, but in disputes that are far larger, more costly and potentially more lucrative, often pitting major corporations against each other.

Mr. Fields is chief executive of Juridica Capital Management. which runs a fund that invests in one side of a lawsuit in exchange for a share of any winnings.

Larry Ribstein has the most thorough commentary on it:

Litigation financing can be viewed as simply another way for the capital markets to help firms exploit productive assets. Of course there are special problems relating to outsiders stirring up claims by simply funding actions by others (maintenance), particularly where the investor gets some of the proceeds (champerty) or the claims are groundless (barratry).  Also, confidentiality and privilege rules may forbid disclosure of litigation information to outside funders, making these particularly difficult investments. The basic problem, as discussed in my earlier blog post, is that "it turns litigation into a business rather than the search for corrective justice."

With respect to the excessive litigation point, it's worth noting that the hedge funds aren't financing the most abusive types of strike suits. These aren’t consumer class actions, but b2b litigation. ...

I asked Larry in comments for some support for that latter point, to no avail, and I stick by my point that "There's no shortage of patent, copyright, antitrust and securities regulation defense attorneys willing to opine that those 'b2b' areas are as ripe with abuse as any other legal field."

In any event, we already have an industry in which billions (potentially trillions) of dollars of investments are pooled to fund litigation directed towards a particular result. We call it "insurance."

There is a good reason that plaintiff's trial lawyers up against insurance companies (not just in personal injury cases like wrongful death or medical malpractice, but also a variety of "b2b" claims like director & officer liability) accept it as an article of faith that they will not get any reasonable settlement offers until the eve of trial. The economic relationship between insurance companies, defense lawyers, and policyholders creates a situation in which no one mentally accepts the legitimacy of the claim -- much less a reasonable value of it -- until they are staring down the barrel of a verdict.

Thanks to defense liability insurance, even the most obvious of cases will be met with denial and furious litigating of any and all liability, including a denial of basic common sense principles such as a truck driver being the "agent" of the trucking company or a hospital having a duty to its patients.

Why?

To roll the dice: spending a couple thousand dollars litigating the issue could save them the cost of the entire judgment, or at least cause the plaintiff and their lawyer to worry and accept a smaller settlement.

So count me as deeply unimpressed by fears that these hedge funds will spur frivolous plaintiff's litigation: we've already got plenty of frivolous defense litigation and no one raises a peep.

Moreover, as I've mentioned time and again, investing in lawsuits is a risky business. The potential downside is 100%. Look at Juridica's cautious business model:

The investing companies say that because they do not take control of the lawsuit from the company and lawyers waging it, their most important task is identifying cases likely to produce a substantial return. That means, for example, rejecting claims that raise novel legal questions or that will probably end up before a jury, Mr. Fields said.

“Juries are a coin toss,” and that is too much uncertainty, he said. The company also avoids cases where the outcomes are difficult to predict because they could draw political attention or could be reversed on appeal, and cases in which the other side lacks deep pockets.

Let me reiterate that: these litigation investment hedge funds only take non-jury cases with simple issues and low odds of appeal.

That's a small fraction of the litigation and trial market, one with no "frivolous" cases at all. The funds are investing solely in the cases they believe are very likely to win.

The "danger" of frivolous cases is thus non-existent: the real "danger" is when plaintiffs with meritorous cases can't afford to pursue them.

• Email This
• Print
• Comments (1)
• Trackbacks
• Share Link

  

  

There is no shortage of productivity advice on the internet. Notable examples include Getting Things Done, 43 Folders (inventor of The Hipster PDA) and Zen Habits, and David Seah (inventor of  The Printable CEO).

Truth is, most of these systems are notoriously difficult to fully implement and, like Merlin Mann, after an extensive time following the productivity genre/industry in details, I have generally soured on the relentless gadgetry, listmaking, fickleness and obsessiveness of most productivity websites and communities, and so don't closely follow many of those blogs anymore. (Let me craft a specific exception for Lifehacker, which never claimed to offer readers a “system” but rather a digest of tools and possibilities.)

That said, the productivity industry has a lot to offer, and the odds are good that most readers will find something on these websites which they can integrate into their life for increased efficiency and decreased stress. One idea I’ve found useful is clustering similar tasks together, a.k.a. "batch processing."

Research has confirmed that multitasking does not work, and that the time it takes to shift mental gears between tasks causes multitasking workers to be less productive on the whole. It is easy to verify this finding empirically in the legal world: next time you are deep into a brief, jump over to discovery requests in another case, and note how long it takes for that stunned and confused feeling to go away.

The “mental gears” analogy can be extended to other circumstances, too, and most office workers feel a need to “warm up” when they begin work before they can be the most productive, hence the ubiquity of caffeine and the idealized Dunkin' Donuts world referenced in the video above, which is not too far from the truth.

Thus, many productivity gurus have recommended clustering tasks together and doing them in succession, as well as breaking up large tasks into multiple chunks each of which can be completed without interruption by another task.

The problem for lawyers is that the reality of law practice strongly encourages living by the calendar. The impulse is to adopt “first in, first out” system of completing tasks, with exceptions made for urgent matters.

For example, if in the past week four motions, six discovery requests, and ten phone calls came in, and in the next week a complaint and two dispositive motions are due, then the natural inclination for the lawyer is to arrange these tasks in the order they are due, making an effort to fit in other matters that should, but do not need, be done within that same time frame.

The end result is thus an assault from all directions, leading to the managed chaos present at most law firms and the much-lamented feeling of constantly “putting out fires.”

Nothing will ever make that feeling go away (you knew what the job entailed when you signed up), but it can be reduced through better practice management.

Don’t let the calendar determine how you schedule your work. Instead, take the little bit of time to schedule tasks so that you perform similar tasks at the same time, thereby reducing the loss of productivity due to switching mental gears.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

In the middle of an otherwise good article in The Legal Intelligencer about the creative solutions local biglaw firms (Eckert Seamans, Ballard Spahr, Fox Rothschild) have taken to the shrinking supply of corporate legal work is this absurdity:

In response to the current economy and a clear shift to a buyer's market, firms are moving from the pyramid model of a few partners at the top and hoards of associates at the bottom to a diamond shape in which several senior associates and junior partners make up the bulk in the middle in an effort to maximize value for the client.

When you bill by the hour, the last thing you want to do is "maximize value for the client." It translates directly into "minimize profit for the law firm."

And that's what's so wrong with the "leverage" model, which is built on hourly billing: just like a "cost-reimbursement" (aka "cost-plus") contract, it creates a disincentive towards productivity, which is why the government has moved away from them. The incentive is to continually add resources -- particularly resources with a big spread between billing to client and cost to firm, like junior associates -- up until the very highest point tolerated by the client, and then to keep the matter going as long as possible.

Fact is, even when business is modest, junior associates at corporate law firms are very profitable. A top-of-the-market junior associate making $150,000 annually plus bonus will still, after bonus, benefits, malpractice insurance premium, and even 'lost opportunity' costs like office space, still need only bill a modest 1,750 hours annually at an abysmal $150/hour to return a substantial profit. Keep in mind that's a low rate for an associate working nowhere near the 2,000 hours most firms expect these days. Most do much better, frequently returning 30% profit margins or better on the firm's expenses on them.

The problem now is that businesses are unwilling to let firms overwork cases like before, leaving the hours available for the junior associates uncertain. The firm can no longer "make work" for them.

So, what to do? Simply removing the excess capacity is one solution, but it won't generate the same profits as before.

Hence the interest in alternative fee arrangements like fixed billing and the unique methods for dealing with first year associates. Particular credit goes out to those who, looking back to the history of the profession, have restored the "apprenticeship" model, which is likely fairer to clients and more useful for associates. (I've known many biglaw associates who, for their first year, learned absolutely nothing as they did "document review," often nothing more than unnecessary checks for attorney-client privilege among thousands of banal, irrelevant documents.)

There will always be a market for companies like, say, Comcast, hiring an armada to repel a legal invasion. We're not talking about them.

The million-dollar profit-per-partner question for everyone else, for the lawyers who represent companies with "only" millions in annual revenue is: who in biglaw can go from a culture of excess to a culture of frugality? Adopt the 'lean and mean' approach that contingent fee firms have been doing for years, thereby earning their profits the way most businesses do, through improve productivity?

Who, and how quickly?

• Email This
• Print
• Comments (1)
• Trackbacks
• Share Link

In the world of venture capitalism, Fred Wilson’s blog, “A VC” is essential reading, and Fred is particularly generous with his insight and information about the field.

I read Fred’s blog partly because it’s darn interesting and partly because there are a lot of parallels between venture capitalism and contingent fee litigation. We both take on a lot of risk and invest a lot of time and money for the potential of a big payoff down the road, as compared to regular and steady income.

Yesterday, Fred wrote an interesting post about the venture capitalism industry as a whole, and how the math doesn't add up. There are just not enough “exits” (through a merger / acquisition or an initial public offering) to justify the size of the venture capitalism industry as a whole.

So I commented, he responded, and we had a short conversation about the economics of contingent fee litigation and the potential for creating a market for contingent patent infringement defense.

But that’s not what this post is about. At the end, Brad Feld chimed in: 

If they did one-way loser pays (e.g. plaintiff has to cover defendants cost if the plaintiff loses) and they prohibited contingency fee relationships that would solve a lot of problems.

That’s a common sentiment among businesses, from big corporations to entrepreneurs to mom and pop stores, a sentiment that usually disappears the moment they need an attorney but can't afford the risk of paying for years of litigation without a guaranteed return.

I’ve written before about loser pays and how it’s unfair to penalize the party that bears the burden of proof on an issue from failing to meet that burden, and that loser pays serves as a strong deterrent against meritorious claims.

But let me focus on the contingent fee aspect. As part of my discussion with Fred, I talked about some of the numbers when the plaintiff wins a big case:

[A big win in the litigation business] depends on the resources devoted to it, so let me give some examples based on actual costs and number of attorneys on the case.

(Someone might ask, "why not use billable hours for resources?" Well, contingent fee attorneys almost never devote themselves entirely to one case, and each minute spent on the case instantly becomes a sunk cost, so we generally ignore time already spent on a case and focus on two things: actual costs and opportunity cost due to the lawyer(s) having to turn down other work. I refer to the latter as "bandwidth," i.e. the availability of a lawyer to take on other work. Keep in mind also you're paying these attorneys (including yourself) a salary, and thus have a significant carry cost, although the salary on a 'per case' basis is quite low given how most attorneys have over 10 cases, even those on substantial matters.)

A large-damages personal injury / product liability / medical malpractice lawsuit can be done by one or two attorneys and costs below $250,000, with recovery of $5-$10m within 1.5-3 years. That's a big win: you put in $250k out of pocket, likely didn't impair bandwidth, and recovered $2-$4m in attorneys' fees.

The numbers aren't too much different for most small business cases, with breach of contract, unfair competition, etc.

A regional-market antitrust / mid-sized patent infringement case can be done with 3-6 attorneys, $1-$5m in costs, with a recovery of $15-$50m in 2-4 years. Another big win: you put in $1-$5m out of pocket, moderately impaired bandwidth, and recovered $7-$20m in attorneys' fees.

A massive shareholder class action / national antitrust / large patent infringement case can be done with 10-40 attorneys, $10-40m in costs, and a recovery of >$100m in 4-10 years. Think of the Blackberry patent infringement case, which ended with a $612m settlement and over $200m in fees (resulting in profits-per-partner than year over $4m).

Big money, right? Why not file lawsuits all day long?

The difference is, those are the big winners, the venture capital equivalent of starting a company that gets bought out by Microsoft or which enters the public market with a heralded IPO proceeded by weeks of favorable press, like Google. It’s great, but it’s also rare.

Day in and day out, the primary thing a contingent fee law firm does is spend lots of money. In addition to all the normal costs of a business (rent, staff, etc.), you have to pay your attorneys salaries which are competitive in the market, even against hourly billing firms, and you have to dump loads of money and time into cases for experts, motions, discovery, trials, appeals and negotiations, none of which earn you a dime until the very end.

So I'd say it's no different from Brad's or Fred's ventures: we have as strong an incentive against taking frivolous or vexatious claims as they have against investing in unprofitable businesses. The last thing I want to do is spend years of my life and five, six or seven-figures pursuing a case that returns nothing. Like a venture capital fund, our contingent fee law firm turns down far more cases than it accepts.

Do vexatious or extortionate law suits happen? Sure, potentially more for cases which are high stakes and expensive to defend, like shareholder class actions or patent infringement. That's why I think a limited form of fee-shifting is appropriate, like when the patent being sued upon is declared invalid as a matter of law.

But loser pays and no contingency would close the courthouse doors to all but the wealthiest of parties, since no one would be able to afford pursuing even the best of claims without a massive war chest, particularly in the extremely-expensive shareholder class action, antitrust and patent infringement contexts.

It'd be like stripping venture capital funds of limited liability and restricting them to using secured debt, not equity, to fund investments, forcing them to do little more than invest in the biggest companies in the world.

• Email This
• Print
• Comments (3)
• Trackbacks (2)
• Share Link

Tim Ferriss, author of The 4-Hour Workweek, has been covering Soticism lately, most recently with a post on Seneca's "On The Shortness Of Life," including this passage:

Vices beset us and surround us on every side, and they do not permit us to rise anew and lift up our eyes for the discernment of truth, but they keep us down when once they have overwhelmed us and we are chained to lust. Their victims are never allowed to return to their true selves; if ever they chance to find some release, like the waters of the deep sea which continue to heave even after the storm is past, they are tossed about, and no rest from their lusts abides.

Think you that I am speaking of the wretches whose evils are admitted? Look at those whose prosperity men flock to behold; they are smothered by their blessings. To how many are riches a burden! From how many do eloquence and the daily straining to display their powers draw forth blood! How many are pale from constant pleasures! To how many does the throng of clients that crowd about them leave no freedom! In short, run through the list of all these men from the lowest to the highest—this man desires an advocate, this one answers the call, that one is on trial, that one defends him, that one gives sentence; no one asserts his claim to himself, everyone is wasted for the sake of another.

Ask about the men whose names are known by heart, and you will see that these are the marks that distinguish them: A cultivates B and B cultivates C; no one is his own master. And then certain men show the most senseless indignation—they complain of the insolence of their superiors, because they were too busy to see them when they wished an audience! But can anyone have the hardihood to complain of the pride of another when he himself has no time to attend to himself?

After all, no matter who you are, the great man does sometimes look toward you even if his face is insolent, he does sometimes condescend to listen to your words, he permits you to appear at his side; but you never deign to look upon yourself, to give ear to yourself. There is no reason, therefore, to count anyone in debt for such services, seeing that, when you performed them, you had no wish for another’s company, but could not endure your own.

What Seneca would think of Above The Law's 2008 survey, in which more than half of ATL's BigLaw associate readers broke 2000 billable hours?

The Attorney Work / Life Balance Calculator shows that, assuming two weeks vacation, eleven holidays, five personal days, a half-hour commute and an unbillable hour a day (lunch, administration, water cooler, etc), then those associates are spending at least the 10.5 best hours of every workday in the office, car, courtroom, or conference room.

Throw in 6.7 hours of sleep every workday, a quarter-hour getting ready before and a quarter-hour decompressing after, a half-hour finding or making dinner, and they're left with, at the most generous, 5.8 tired hours a weekday to themselves, plus the weekends, unless the partner calls them in.

Maybe that's enough. Maybe they like what they do and where they're going, they owe no apologies for that. I like what I do. So do many lawyers.

But life's too short to do anything because you "should."

• Email This
• Print
• Comments (1)
• Trackbacks
• Share Link

Pop quiz for law students in Pennsylvania, New Jersey and Delaware. Other than pay, what's the difference between:

Ballard Spahr Andrews & Ingersoll; Blank Rome; Buchanan Ingersoll & Rooney; Cozen O'Connor; DLA Piper; Dechert; Dilworth Paxson; Drinker Biddle & Reath; Duane Morris; Eckert Seamans Cherin & Mellott; Fox, Rothschild, O'Brien & Frankel; Hangley Aronchick Segal & Pudlin; Klehr, Harrison, Harvey, Branzburg & Ellers; Klett Lieber Rooney & Schorling; Marshall, Dennehy, Warner, Coleman & Goggin; McCarter & English; Montgomery McCracken, Walker & Rhoads; Morgan, Lewis & Bockius; Obermayer, Rebmann, Maxwell & Hippel; Pepper Hamilton; Reed Smith Shaw & McClay; Saul Ewing; Schnader Harrison Segal & Lewis; Stevens & Lee; Stradley, Ronon, Stevens & Young; Thorp, Reed & Armstrong; White and Williams; Willig, Williams & Davidson; Wolf, Block, Schorr and Solis-Cohen; Woodcock Washburn Kurtz Mackiewicz & Norris; and, Zarwin, Baum, Devito, Kaplan.

I saw a hand go up in the back. Wolf Block dissolved last week.

Oh. And what indications did you have that was going to happen? They cut associate salaries the month before.

The Legal Intelligencer has an article today about the biglaw recession hitting Philadelphia:

Managing partners have been complaining for years about increasing associate salaries, though in Philadelphia it ultimately became a good marketing tool to be the first in town to raise them.

The same rules don't apply now that the pendulum is swinging the other way. The first to take an ax to associate compensation risks falling out of favor with law schools and future recruits. However, many see a compensation cut as an otherwise smart business decision that would serve as a "market correction" rather than an unfortunate result of the bad economy.

The article is filled with anonymous quotes from managing partners:

• One firm leader said, "I could see $145,000 go to $100,000 in a nanosecond," though he wouldn't be the first to do it.

• "I don't think it is cataclysmic," he said. "It's just a market correction. It's just the way, in merit-based compensation systems, some partners' [compensation goes] down even when the firm is doing well."

• "I think it just sends a bad signal," he said. "It's a lot easier to put in a zero increase than to put in cuts."

The "nanosecond" partner doesn't get it. If his firm drops salaries contemporaneously with anyone else, it won't matter who went "first," it will be translated by associates as a warning that the firm is in financial trouble.

The "cataclysmic" partner doesn't get it either. A merit-based compensation system that only adjusts downward, and only in times of economic distress, will not be construed as rewarding "merit." It is just a cost-savings measure aimed at less-productive associates; not necessarily a bad idea, but certainly not good from a marketing standpoint, and will also be translated by associates as reflecting stingy or distressed management.

And the reason why is reflected by the third quote. First, bonuses fall. Second, raises are postponed or frozen. Third, hiring is slowed. Fourth, associates are laid off. Fifth, new hires are delayed. Sixth, the firm starts cannibalizing its own resources. Do firms really want to broadcast to their current and potential associates that the firm has already gone through five different assaults on associates to no avail?

The BigLaw "leverage" business model lives and dies on churning through associates. Associates work the hardest, followed by equity partners, followed by income and non-equity partners. Without fresh blood, a BigLaw leverage-model firm stalls and crashes as rainmakers leap elsewhere.

I do not agree with this business model. I do not practice this business model. But I do know that wishing away its complexities and complications, such as the difficulty with which you reduce the salary of non-partners (a problem in every industry), will not make them go away.

Every firm that considers jumping on this bandwagon needs to understand that associates and potential associates will not see things as the partners do. You see prudent cost-cutting to clear a path for long-term success. They see Wolf Block.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

You can't click two links on a law practice website these days without getting a good dose of how important it is that lawyers get up to speed with social media. Kevin O'Keefe, head of LexBlog (which hosts this site), suggests focusing on the big three: blogs, Twitter, and LinkedIn.

I got my blog. I got my Twitter.

LinkedIn?

Here's how Gina Rubel, as part of her extensive "Social Media for Lawyers" series at The Legal Intelligencer's blog, described LinkedIn:

Linkedin is one of the oldest and most established professional networking sites on the Web. ... Linkedin is conservative, professional, adheres to a strict set of rules, business-oriented, highly visible in search engines and an easy point of entry for lawyers. For the most part, it serves as an online curriculum vitae (C.V.) or resume which can be linked to your firm’s Web site.

True. It's also true that LinkedIn treats users with same respect in drafting its terms of service that consumers have come to expect from used car dealers, credit card companies, and subprime lenders.

Read their User Agreement:

1.  Your Obligations — What You Must Do

License and warrant your submissions: You do not have to submit anything to us, but if you choose to submit something (including any User generated content, ideas, concepts, techniques and data), you must grant, and you actually grant by concluding this Agreement, a nonexclusive, irrevocable, worldwide, perpetual, unlimited, assignable, sublicenseable, fully paid up and royaltyfree right to us to copy, prepare derivative works of, improve, distribute, publish, remove, retain, add, and use and commercialize, in any way now known or in the future discovered, anything that you submit to us, without any further consent, notice and/or compensation to you or to any third parties. By submitting any information to us, you represent and warrant that such submission is accurate, is not confidential, and is not in violation of any contractual restrictions or other third party rights. You further agree to inform LinkedIn in the event that any such information has changed since your registration with LinkedIn and, if appropriate, you agree to make such modifications yourself to your profile.

It's just as bad as Facebook's hated and rescinded Terms of Use, which claimed to own all of your content forever, with an added bonus in the last two sentences: you agree that everything you submitted is accurate and you agree to keep LinkedIn's information up-to-date.

Got that? Apparently most people don't; I found only one blog post on the subject, a month ago at Web.Tech.Law. Technorati says no one has linked to it. I found one link on a "social media roundup."

That needs to change.

LinkedIn is building its Web 2.0 Yellow Pages, and by ever submitting anything -- like your name, address, place of business, connections, recommendations and content like forum posts -- you agree to let LinkedIn use it forever and that you will take the initiative to update all of it if any of it ever changes.

But what if I terminate my account?

You granted them an "irrevocable" and "perpetual" license to all content and information you ever submit to the site, and imposed a duty on yourself to keep that content and information accurate and current, so what makes you think it could really be a "revocable" or "limited duration" license?

Before you turn those wheels, note that their User Agreement details exactly what happens when you terminate:

7.  Consequences of Termination

Upon termination, you lose access to LinkedIn. The terms of this Agreement shall survive any termination, except Sections 2 and 3 hereof.

The perpetual duty for users to supply accurate and current information for LinkedIn's business is in Section 1. It "survives."

What gets terminated? Section 2, "Your Rights — What You May Do" and Section 3, "Our Rights and Obligations — What We Must And May Do." Termination ends only "Your Rights" and Their "Obligations."

Will LinkedIn ever exercise these rights in an adversarial fashion? 

Probably not. Like I wrote yesterday, "A right with a remedy worse than the harm is not a right anyone will enforce." Trying to enforce these rights would likely cause a mass exodus from the platform.

But that's just theory, contradicted by the plain meaning of the words in the agreement. Moreover, all bets are off if the company goes into distress. Regardless, the core question remains: if LinkedIn doesn't plan on compelling users to keep its professional database accurate and current or to use its users' content commercial without permission, then why does it need these terms?

Ask a used car dealer.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Craig Ball tells it how it is:

Ambling along the back roads of listservs and blogs, I often come upon a flea-bitten claim that, "Top notch computer forensic examiners have special tools and techniques enabling them to recover overwritten data from a wiped hard drive so long as the drive was wiped less than 3 or 7 or 35 times."

Nonsense!

...

You only need one complete pass to eviscerate the data (unless your work requires slavish compliance with obsolete parts of Department of Defense Directive 5220.22-M and you make two more passes for good measure).

No tool and no technique extant today can recover overwritten data on 21st century hard drives. Nada. Zip. Zilch.

Hopefully he'll do similar column on encryption which, despite what you see on television, is safe and effective so long as you stick to the public algorithms (like AES, Serpent, Twofish, or Blowfish) implemented in an open-source platform like TrueCrypt. Everything else (i.e., closed or proprietary systems) should be presumed snake oil.

Fact is, data breaches generally occur not through esoteric means like unwiping drives or breaking encryption, but through ordinary oversights like human breach (inadvertant or intentional) or failure to delete properly (like the failure to wipe a hard drive, or failure to wipe backups and copies retained by other users).

• Email This
• Print
• Comments (1)
• Trackbacks
• Share Link

At The Legal Intelligencer:

The Philadelphia legal community is abuzz with talk this weekend about the future of Wolf Block.

Several sources have said members of the executive committee met Saturday to discuss a possible dissolution of the firm. The matter is said to be set for a full partnership vote as early as Monday. A decision to dissolve the firm would need to be approved by at least 75 percent of the partnership, one source said.

...

The potential disappearance of Wolf Block and its storied name was described by many in the community as a “sad” turn of events. The 300-attorney firm, once one of the largest and most prominent in the city, has been looking for a merger partner for more than two years.

Change always brings feelings of nostalgia. But a law firm really is just the sum of its parts. The partners' current arrangement isn't working to their satisfaction, so it's time to walk their separate ways.

The lawyers will go elsewhere, some big, some small, some solo. The clients will, in general, follow their lawyers. No expertise has been lost, minimal capital wasted. Indeed, it's hard to see how the legal market for either providers or customers will be affected. If you didn't tell the client, they probably wouldn't even know.

Something to keep in mind at all times -- the legal market is just plain different from most.

[UPDATED: To clarify, of course this is sad for all the employees, like associates and, moreso, staff, who have at the very least been disrupted and possibly put out of work, but that's not what all the sources quoted and articles were "sad" about. They were "sad" that the partners at an old law firm voluntarily sought more profitable opportunies. That's not "sad" in the same way as when the manufacturer of a particular good, or the only provider of a particular service, goes out of business.]

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Paul Lippe at the AmLawDaily opines that corporate spending on BigLaw will go down over the next few years, imperiling the "leverage" model whereby equity partners "leverage" their own time by delegating much of their work to associates, whom they bill out at a substantial premium. BigLaw leverage runs from one associate for each partner up to eight(!) associates per partner. Here's two of Lippe's reasons why:

First, associate time is a pricing mechanism, not an indicator of value. Like so much in the modern law firm model, the explosion in associate hours, rates, and leverage began with the Cravath IBM antitrust defense in the 1970s and 1980s, when the firm discovered that in the quintessential "bet the company" case IBM would willingly pay full freight for associate time on massive and pretty routine document review, and that in turn would drive up Cravath's profits dramatically. Since this wasn't particularly compelling work for the associates, the firm had to raise salaries to hold onto folks, triggering the great associate salary escalation.

Second, clients have always recognized that associate time is overpriced. Every client I know views associate time as the price for getting access to partner time and to the firm "brand." In truth, there are two billable hours: the partner's, which should reflect deep expertise and judgment about the client, the law, and best practices, and the associate's, which is generally spent on some form of information processing, which clients recognize as relatively poorly managed compared to other arenas of information processing. As Susan Hackett, general counsel of the Association of Corporate Counsel, recently put it, "I don’t have a problem with the $1,000-an-hour lawyer, but the $350-an-hour junior associate isn't worth it."

(emphasis mine)

I agree with Lippe's final conclusion that firm revenues will go down, forcing firms to look for profit elsewhere through alternative fee arrangements (contingent fee, fixed fee, blended fee, etc), as I've discussed before.

But the two reasons given above are fundamentally inconsistent with one another. If IBM will "willingly pay full freight for associate time on massive and pretty routine document review," then they obviously find it "worth it" to pay a junior associate $350-an-hour to comb through documents. It's not like these arrangements developed by accident; leverage has been a long, slow dance between BigLaw and Corporate America.

But why are companies willing to pay such outsized attorneys' fees? Because if you're the type of in-house counsel or executive who demands a "$1,000-an-hour lawyer" at the century-old firm in a famous building in Manhattan, then you're almost certainly the type of person who would throw a fit if you learned that some loser from Fordham or Vanderbilt or -- the horror! -- a state-supported law school was doing document review in a third-rate hillbilly village like Cincinnati or Albuquerque.

But the bigger issue is: big companies that hire big firms aren't looking for "value," they're looking to show to their opponents, competitors and themselves that they hired "the best."

Sure, there's internal pressure for executives and general counsel to keep legal costs in line, but there's far more pressure to "spare no expense." Even moreso, if things go wrong -- as they often do in corporate transactions or corporate litigation -- then who takes the blame?

An executive or vice president who put down six, seven or eight figures to get "the best" firm "to go all out" will rarely shoulder the blame when the bigshot firm adds 179 contracts to the billion-dollar Lehman / Barclay deal or reveals the $65 million-dollar confidential Facebook settlement.

What if that had happened after a VP or general counsel had smartly set up a monthly flat fee with a non-Manhattan boutique? The fear alone keeps many big companies firmly in BigLaw's grasp.

And that's just basic errors -- what about "bet the company" or big ticket litigation? No one ever got sacked for hiring Cravath, Wachtell or Sullivan & Cromwell and losing miserably. The same cannot be said for executives or VPs who were "cheap" and hired some "lesser" firm.

Finally, there's the psychological "leverage" that clients think they have when name-dropping a big firm with hundreds of lawyers, as if the whole firm is prepared to storm the bastille. Given the way people talk about some of these firms, I sometimes wonder if companies believe that judges decide cases on numerical superiority alone.

Overall, the internal dynamics in big corporations are far more important in determining the biglaw market than objective evaluations of "value." When all is said and done, complaints about leverage are largely that -- complaints. If they wanted to do something about it, there's an ample market of boutique firms ready and waiting, firms which, like mine, have no trouble picking up corporate clients where the leadership is focused protecting the company, not their own backside.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

A VC (a.k.a. Fred Wilson, a venture capitalist and principal of Union Square Ventures), commenting on a WSJ story, makes a simple, but powerful point about many of the tech startup companies floating around:

As Chris said in his WSJ piece, Facebook has been widely derided for the low CPMs it generates (pennies in Chris' words). But instead of deriding the revenues that Facebook is generating, maybe we should be in awe of a $350mm revenue stream coming from a company that produces no content of its own. Why does Facebook need 1000 employees? Why does it need to spend $300mm per year?

...

The web can create incredibly high operating margin businesses. Craigslist has an operating margin of 90%. Google's keyword business has an operating margin north of 60% (based on net revenues) and possibly higher. Could Facebook and Digg copy those models and create a lot of value on revenue numbers that many think are pitifully small? I think so.

...

I think that's an important part of the economics of the web that are left out of most discussions of Internet business models. Yes, we are turning analog dollars into digital pennies in many cases. But we are also doing the same thing on the cost side, maybe even more so. And I think that "operating leverage" is going to create a lot of value.

It's true for every business except for the hourly-billing law firm: reducing costs improves profit just as well as increasing revenue.

In the hourly-billing law firm, "costs" take on a much more narrow form than in other businesses, since the bulk of them are charged directly to the client, often at a premium. In an hourly-billing law firm, "cost" on the firm's bottom line usually only represents the money spent keeping the office open -- e.g., staff salaries, rent and insurance -- and not the money spent actually doing the work, like copying charges, filing fees, and, most importantly, the time spent on the task at hand.

Worse, since these costs, particularly the cost of attorney time, are charged to the client, they actually show up as revenue on the firm's balance sheet.

Reducing such costs is effectively the responsibility of the client, who is not in any position to know how to reduce them or to improve productivity. The end result is a system that encourages waste and everyone complains about, just as behavioral economics would suggest.

But there's a hidden problem to this system: the billable hour imposes boundaries on the degree to which lawyers' profits can be improved by reducing costs.

Bruce MacEwen at Adam Smith Esq. caught this same critical point in response to a NYTimes article ("Billable Hours Giving Ground at Law Firms") talking with Evan Chesler, Presiding Partner at Cravath, about the (long-predicted) demise of the billable hour:

Ultimately, it limits law firms' revenue. (Clients--you can skip this paragraph.) Each of the variables that goes into revenue under the billable hour model has intrinsic limits: Rates, hours, realization, and leverage.

Exactly right, but I wouldn't limit it to just "revenue" -- the billable hour limits profits as well.

Since I generally work on a contingent fee, it's easy for me to improve profits by reducing costs: I find ways to improve productivity. It's why I use digital dictation and voice recognition software, and why I scan everything and use document management. Because that's how I work faster, so I can both take on more cases and devote more time to each case to improve my results.

That equation does not exist in the hourly-billing firm. A lawyer who, say, comes up with a faster way to get briefs in order is rewarded with marginally less work. Sure, there is a supposed economic incentive towards this improve productivity by making clients happier, presumably enabling the lawyer to increase rates in the future, but that's not how it works in practice, particularly not at big law firms where it is exceedingly unlikely the client will even recognize minor improvements in productivity.

And that's where Evan Chesler is going: his clients are tired of him increasing hourly rates, while he and his associates are tired of increasing partner-to-associate leverage or associate hours. So he wants to stop looking at the top number -- revenue -- and look a line down to costs.

That's the new frontier driving the demise of the billable hour: alternative fee arrangements enable lawyers to bill clients the same (possibly less!) while taking home more because they're working faster. A win-win.

 

After drafting the above, I saw that Patrick J. Lamb had unethically and irresponsibly stolen my idea the day before I had even published it:

If a firm pays associates (or advances them) based on work quality and hours, associates will be committing career suicide by working more efficiently.  (See here for an example.)  If the firm doesn't reward associates for performing "good enough work efficiently" when that kind of work is all that is required, how can a client have any comfort that the fee proposal reflects the cost savings that such an approach generates?

This telepathic piracy will not be tolerated!

• Email This
• Print
• Comments
• Trackbacks (1)
• Share Link

Legal Blog Watch links to a post by Larry Ribstein at Ideoblog about the decline and collapse of several big law firms:

Most other industries could evolve to meet the new challenges. But the law business can’t change as easily because it’s choked by ethical rules that developed based on a century-old model of law practice that seeks to preserve the illusion that law practice is a “profession” rather than what it plainly is – a business. …

 

These rules have been developed by lawyers, for lawyers. They are not in clients' long run interests.

 

The obvious retort is that, while the ethical rules governing lawyers are old (at least as a matter of practice – as a matter of codified rules, the American Bar Association’s Model Rules of Professional Responsibility are less than 100 years old, younger than some of the firms which have collapsed), they are no more “archaic” than the Code of Hammurabi or the Ten Commandments.

 

That is, the passage of time has not shown the criminal prohibition of, say, theft to be any less a good idea than it was thousands of years ago. Similarly, the ethical prohibition on representing clients with a conflict of interest is still the primary mechanism we have for insuring the legal system functions smoothly without even an appearance of impropriety.

 

But Ribstein’s post is first an empirical argument – that ethics rules are “choking” law practices in a way that is detrimental to clients – and so deserves first an empirical analysis. Let’s take a look at some of Ribstein’s evidence (which he quoted from a WSJ story):

 

"Many law firms are susceptible to the phenomenon that led to Heller's collapse. Their main assets are their senior lawyers. * * * [L]awyers with big books of business now commonly shop themselves to more profitable firms that can offer larger compensation packages."

 

"The economic downturn has prompted lawyers to jump to firms perceived to be more financially stable. If enough partners head for the exit, a firm can crater in a hurry."

 

I look at that and reach opposite conclusions from Ribstein. Note how the “senior lawyers” with “big books of business” have no trouble jumping from firm to firm. Does that sound like a "choked" market?

 

Indeed, as the chairman of Sullivan & Cromwell recently noted “clients are extraordinarily understanding.” If a client wants a particular lawyer, odds are they’ll get them, no matter where they are.

 

The sole “problem” appears in the context of one massive law firm attempting to merge with another. But that’s to be expected – the world of corporate America, billion-dollar deals, and eight-figure-plus litigation is a finite size. What are the odds of one major firm not having multiple direct conflicts of interest with another firm?

 

Continuing down that rabbit hole, what, exactly, is the benefit to consumers of legal services by permitting every last proposed merger to occur? The firms involved have every opportunity to locate these conflicts and then, if needed, ask certain lawyers with irreconcilable conflicts not to come along.

 

Off the top of my head I can recall a recent instance of that in the Philadelphia area, when Eckert Seamans absorbed the bulk of McKissock & Hoffman, which dissolved, unable to bring aboard all of M&H’s attorneys due to conflicts. Certainly tough for the lawyers, but definitely not tough for the clients – any client who wanted their lawyer to go along could have waived the conflicts and let them go.

 

Indeed, I see the question to be exactly the opposite: how do consumers of legal services benefit from rampant mergers and acquisitions creating ever-larger law firms? Rarely does the consumer gain from M&A activity in a mature market; just look at telecommunications.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Kottke.org links us to a thrilling moment in the early weeks of a videogame startup company:

In the main engineering room, there was a whoop and cry of success.

Our company financial controller and acting HR lady, Jen, came in to see what incredible things the engineers and artists had come up with. Everyone was staring at a television set hooked up to a development box for the Sony Playstation. There, on the screen, against a single-color background, was a black triangle.

“It’s a black triangle,” she said in an amused but sarcastic voice. One of the engine programmers tried to explain, but she shook her head and went back to her office. I could almost hear her thoughts… “We’ve got ten months to deliver two games to Sony, and they are cheering over a black triangle? THAT took them nearly a month to develop?”

Of course, it was no ordinary black triangle:

It wasn’t just that we’d managed to get a triangle onto the screen. That could be done in about a day. It was the journey the triangle had taken to get up on the screen. It had passed through our new modeling tools, through two different intermediate converter programs, had been loaded up as a complete database, and been rendered through a fairly complex scene hierarchy, fully textured and lit (though there were no lights, so the triangle came out looking black). The black triangle demonstrated that the foundation was finally complete – the core of a fairly complex system was completed, and we were now ready to put it to work doing cool stuff.

Sometimes lawyers just hold people's hands. Criminal defense lawyers sometimes walk the guilty through to a fair plea. Corporate lawyers sometimes translate a client's phone call and napkin scribblings on a done deal into better formatting. Estate lawyers sometimes change a few lines about a piano and a car and execute the will again.

For that, draw a triangle on the screen.

Other times, lawyers solve problems. As a trial lawyer, I spent a lot more time solving problems than holding hands.

Drawing a triangle on a screen rarely solves problems. Problem-solving requires most of the work be done before you see anything tangible at all. Here's how the videogame startup described it:

Afterwards, we came to refer to certain types of accomplishments as “black triangles.” These are important accomplishments that take a lot of effort to achieve, but upon completion you don’t have much to show for it – only that more work can now proceed. It takes someone who really knows the guts of what you are doing to appreciate a black triangle.

Exactly right. Not too long ago, I was dozens of hours deep into a complicated memo going out to a business client paying by the hour. The memo was sprawling all over the place, reaching well beyond my initial task.

Then I deleted everything and started again.

Billed every penny, too. Why?

Because I needed that time. Because the matter was very important to my client, who didn't want me to draw a black triangle. They wanted me to solve the problem. A couple dozen hours into it, I had finally fought long enough with the whole universe of issues to realized how to line up all the work on the backend to create the black triangle the right way.

A black triangle I could "put to work doing cool stuff." A black triangle that would still look like a black triangle after going through business and negotiations and lawsuits and trials and appeals.

The client loved the black triangle and, better yet, loved how low my bills were after that as the black triangle held up under scrutiny. No surprises down the road, no need to throw another a couple dozen more hours at it.

Trials, depositions and briefs are problems just waiting to be solved. Get the black triangle working before you go in and you'll be amazed how "lucky" you get.

• Email This
• Print
• Comments (1)
• Trackbacks
• Share Link

Tech guru Tim O'Reilly has a great new post: Work on Stuff that Matters: First Principles.

I spent a lot of last year urging people to work on stuff that matters. This led to many questions about what that "stuff" might be.

There are a number of half-unconscious litmus tests I use in my own life. I'm going to try to tease them out here, and hope that you can help me think this through in the comments.

Work on something that matters to you more than money.

It's easy to get caught up in the heady buzz of making money. You should regard money as fuel for what you really want to do, not as a goal in and of itself. Money is like gas in the car -- you need to pay attention or you'll end up on the side of the road -- but a well-lived life is not a tour of gas stations! Whatever you do, think about what you really value.

Create more value than you capture.

It's a matter of balance. Every business needs to pay attention to its bottom line; every individual needs to put a roof over his or her head and provide food for loved ones. But take a look inside: how much are you thinking about yourself and what you might gain, versus what you might create?

Take the long view.

It's very easy to make local optimizations, but they eventually catch up with you. Our economy has many elements of a ponzi scheme. We borrow from other countries to finance our consumption, we borrow from our children by saddling them with debt and using up non-renewable resources.

It's hard to see beyond the "small here" and the "short now," especially if you live in a favored place and time. That's why so many of the really important things do end up on the plates of non-profits.

That's why a time like this, when the bubble is bursting, is a great time to see how important it is to think about the big picture, and what matters not just to us, but to building a sustainable economy in a sustainable world.

 

I made liberal edits. The whole post is worth the time to read.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

The American Lawyer describes the case:

Quinn Emanuel Urquhart Oliver & Hedges has been hit with a malpractice lawsuit that claims the firm botched a $48.8 million settlement even as it took in some $12 million in contingency fees.

... The complaint against Quinn Emanuel highlights how -- as a result of a contingency agreement that essentially guaranteed Quinn Emanuel half of any amount recovered up to $20 million and 20 percent thereafter -- the firm has received approximately $12 million in fees for representing Kurtin. That amount is equal to what Kurtin himself has gotten to date from the settlement, which was reached a little more than four months after Quinn Emanuel took on the case.

... An initial payment of $21 million, which Quinn Emanuel essentially split with Kurtin, was received. But, according to court documents, a payment due June 30, 2006, of $13.1 million, as well as an additional payment outlined in the settlement agreement, was never sent.

... Kurtin initially retained Quinn Emanuel again to try to enforce the settlement agreement through arbitration. The firm even offered up the services of litigation partners Ken Chiate, Jeff McFarland and Bruce Van Dalsem at its "half-rate" of $300 per hour. According to the amended engagement agreement, those partners usually bill out at between $650 and $775.

I've written about Quinn Emmanuel's contingency-fee practice before; it's not quite the plaintiff's firm writ large it's reputed to be, since the bulk of their work is not on a contingency fee.

I'm baffled by this new story. Under the fee agreement as described, Quinn is entitled to another 20% of the remaining $27.8 million, yet they were unwilling to enforce the agreement except on a discounted hourly rate?

Maybe I'm charitable, but I don't think I would need someone to pay me more by the hour to chase down $5.56 million in fees via arbitration of an iron-clad settlement agreement. In fact, it sounds like the additional hourly fees with be comparatively small even at >$650 -- you're arbitrating a settlement agreement you executed! -- and would cause more client dissatisfaction than they would be worth.

There's another wrinkle:

A public relations representative at SunCal Cos. did not return calls seeking comment. In an interview in March with the Orange County Register, a company executive said that Kurtin's suit was without merit and that the company had previously met all its obligations to him.

In general, a lawyer's comment to the media is one of three possibilities: 

1. The other side's case is frivolous garbage.
2. There may be legitimate issues, but I'll win.
3. No comment.

I would expect a party that was knowingly in default of a settlement agreement to go with #3 since a properly drafted settlement agreement should be easily enforceable. To hear the settlor go with #1 suggests they really don't think they are in default, which makes me wonder how the two parties to the settlement could have such radically differing views of their obligations. Sure, commercial litigation settlements can be complicated, but this settlement seemed pretty simple: it's just money instead of a continuing relationship.

Which leaves us to ponder only two explanations for Quinn Emmanuel's proposed hourly rates:

1. Quinn Emmanuel thought their client's settlement enforcement action had merit, but chose to let $5.56 million in their own fees sit unless they could bill $300 an additional hour recovering them.
2. Quinn Emmanuel thought their client's settlement enforcement action had no merit but were willing to fight it anyway, on a discount.

#1 does not make any sense. #2 could have a lot of possible explanations, none of them flattering.

Maybe the story is incorrect or incomplete. Maybe the case will reveal some more important facts. As it stands, this case does not look good for them.

• Email This
• Print
• Comments
• Trackbacks (1)
• Share Link

Yesterday’s Wall Street Journal included an editorial by Dan Slater (who runs the WSJ Law Blog) called "The Debate Over Who Pays Fees When Litigants Mount Attacks," suggesting reconsideration of the “English Rule,” in which unsuccessful litigants are required to reimburse their opponent's legal fees and costs (a/k/a the “loser pays” system), as contrasted to the “American Rule,” in which each party bears their own legal expenses: 

Legal experts think a loser-pays system cuts down on frivolous suits. Those clearly hurt the U.S. The nation's tort system cost $245.7 billion in 2003, amounting to about 2.2% of total gross domestic product, according to a report from professional services firm Towers Perrin. The percentage of GDP spent on litigation was at least twice those in the U.K. and Germany.

At the same time, say experts, the insurance helps mitigate the pitfalls of a loser-pays system. "Insurance does move in to fill the gap for those suits that might not otherwise be brought in a loser-pays system," says Paul Lomas, a London-based litigator at Freshfields Bruckhaus Deringer.

Initially, a few factual corrections are in order.

First, the Towers Perrin study claiming that litigation costs amount to 2.2% of total gross domestic product has been roundly criticized as being baseless and inflated. For example, the study unfairly lumps together actual litigation costs, like attorneys fees, with the routine functioning of our torts and insurance system. As the Wall Street Journal itself noted over two years ago,

But here's the problem: critics of past years' studies -- and there are many -- say the number and the projections that come with it are deeply flawed. For instance, they include payments that don't involve the legal system at all. Say somebody smashes his car into the back of your new SUV and his insurance company sends you a $5,000 check to fix the damage. That gets counted as a tort cost in Tillinghast's number. Critics say it's just a transfer payment from somebody who wasn't driving carefully to somebody who has been legitimately wronged. How is that evidence of a system run amok?

"It's just so inflated," J. Robert Hunter, the director of insurance for the Consumer Federation of America and a former Texas insurance commissioner, says of the Tillinghast figure. Critics also argue that other insurance-industry costs that aren't the fault of a burdensome tort system -- such as the salaries of insurance-industry CEOs -- show up in its calculations.

"Math Divides Critics As Startling Toll of Torts Is Added Up," By LIAM PLEVEN, March 13, 2006; Page A2.

Second, plaintiff’s lawyers are in no sense “accustomed to being the exclusive financier of litigation.” The primary "financier" of litigation in America is the insurance industry, turning its good hands into boxing gloves when injured parties seek more than nominal compensation. Even in the context Slater is thinking about – the plaintiff's side of personal injury tort suits – there are hundreds of companies willing to loan money to plaintiff’s firms and/or plaintiffs for a piece of the eventual recovery. Ordinary business banks also loan to firms after performing the same due diligence they would with an company.

All of these companies, however, have the same restriction that would have to be imposed in a loser pays insurance system: the financier has absolutely no say as to whether the case will be settled or not. Such limitation is appropriate to ensure uncompromised decision-making and is analogous to similar barriers on the defense side, in which the defendant, with limited exceptions, retains control over whether to settle and where the defense lawyer nominally represents only the defendant and not the insurance carrier as well, so as not to divide the lawyer's loyalties and prejudice the defendant.

Third, most states already recognize a form of “loser pays” in the claim for wrongful use of civil proceedings, which permits the victims of frivolous lawsuits to recover damages caused by such frivolous lawsuits. It has bite here in Pennsylvania -- the "Dragonetti Act" has resulted in multi-million-dollar outcomes.

There's also, of course, the "loser pays" already at the heart of contingent fee cases: if I lose a case, I get nothing. No reimbursement for my time. No reimbursement for my expenses. Nothing. A total loss.

Which brings me to my primary objection to the loser pays system. I would not object to receiving a guaranteed income like my brethren of the defense bar instead of bearing the risk that years of effort and tens of thousands – potentially hundreds of thousands – of dollars will be spent in vain, but I would object, on grounds of fairness, to penalizing a party that brought a valid claim merely because they did not meet their burden of proof.

Consider a typical medical malpractice case. Most of the facts are uncontested. The dispute centers on whether the physician-defendant breached the standard of care, whether such breach caused any harm, and what damages resulted.

In all states of which I am aware, the first two elements require expert medical testimony. To even start a lawsuit here in Pennsylvania, I need a certificate of merit from a qualified physician establishing those two elements. To prevail at trial, obviously, I need in-court credible testimony from a qualified physician establishing those elements to a reasonable degree of medical certainty.

No expert testimony, no claim. Period. That is to say, by law the first two elements are matters entirely outside the understanding of any plaintiff except for physicians who happen to be victims of malpractice in the specialty they currently practice or teach.

If, in good faith, my client and I believed our qualified expert's opinion on matters the law says are beyond our understanding, why should we be punished if a jury accepts the defendant’s version instead of our's?

Deterrence? Of what? Claims a qualified expert physician thought were valid? Should I be deterred merely because the defense found someone to say otherwise? In medical malpractice, there's always some doctor somewhere willing to say that my client coincidentally suffered a heart attack or stroke or spontaneous decapitation regardless of the record or the probabilities.

Why would we want to deter valid claims? Isn't the point of a civil justice system to offer people the opportunity to present their claims in fair and open court?

I'm wary, too, of considering the lower litigation costs in Europe as a positive sign of judicial health (if, indeed, they are lower, given the inflated numbers of the US study). Many European countries routinely apply legal doctrines we consider abhorrent in the United States, such as the onerous standards applied to publishers in libel cases in the United Kingdom, standards incompatible with First Amendment principles of free speech.

When all is said and done, the effective result of loser pays, whether insured or not, is to change the civil system from one in which a plaintiff must convince a jury of the rightness of their cause with the preponderance of the evidence to one in which a potential client must convince a lawyer and/or insurance company of the rightness of their cause beyond a reasonable doubt. The client must convince the lawyer/insurer not only that their case is worth their damages, but that their case is worth well beyond their damages, to mitigate the direct loss the lawyer or insurer will incur if they lose.

The practical effect, then, would be to intimidate plaintiffs' lawyers like me into rejecting the vast majority of legitimate cases because, even though I may feel they have a strong likelihood of prevailing, I simply can't afford to test my luck with anything other than the handful of cases I'm sure will win.

UPDATE: Dan Slater got plenty of email, as he relates on the WSJ Law Blog.

• Email This
• Print
• Comments (1)
• Trackbacks (1)
• Share Link

Yesterday we discussed the outrageous attorneys fees in the Robertson v. Princeton suit, which amounted to $80 million in pre-trial litigation costs and $40 million in projected trial costs. Based on those fees, it seems each side had a team of 6 lawyers working all day, every day, for all 6.5 years of the litigation, all for a case more comparable in size to a complicated personal injury / wrongful death case than a major commercial or business case.

It's time to ask some basic business / commercial litigation questions.

Did the lawyers engage in 'total war' litigation? Did the clients understand that decision?

Unfortunately, Mercer County (in New Jersey, where the litigation took place) doesn't keep its hearing and docket lists up permanently or publish its orders. Did the Robertsons decide it would be tactically advantageous to pummel Princeton with discovery requests? Did Princeton decide it would be tactically advantageous to stonewall every discovery request? Did everything require a motion or two?

When there's a paying client (as opposed to an insurance carrier or a contingent fee agreement), most litigators will sit down with their client early in the case and ask: how do you want me to handle it? If a client asks for 'the works,' an experienced, tough litigator would have no trouble churning through $500,000 in fees on a simple bread-and-butter business contract dispute. Add in any variables -- like sophisticated accounting, extensive documentation or novel issues -- and you'll start the process at $1 million, breaching $5 million well before trial.

But that's still not $40 million apiece.

Did the clients understand the workflow at the law firms?

Even if we generously assume that some of the $80 million comes from work in the years preceding the actual lawsuit, we still have whole teams of lawyers working full time.

Pareto's 80/20 rule applies just as much to litigation as it does to any other business. Did either of these clients recognize what, exactly, the firms were doing?

• Did the lawyers assert privilege as broadly as possible and then force litigation on every issue?
• Did the lawyers apply any thought to whom they should depose, or did they depose everyone who arguably was aware of discoverable facts?
• Was every brief right at the page limit, chock full of barely-relevant cases that took hours to track down even on issues where the judge had considerable discretion?

That is to say, did either party hire a liitigation consultant, ask their in-house counsel, or use their common sense to assess if the work was really needed or if the litigation attorneys were churning through hours as fast as they could?

Did the lawyers and clients consider alternative dispute resolution?

The core of Robertson involved dry and technical issues of legal interpretation, accounting and oversight. There was no "pain and suffering" component. Witness credibility was not the critical factor. All of the main reasons a party would either want non-lawyers or a jury of twelve reviewing a case were absent.

Why, then, did the parties subject the Mercer County Superior Court to this punishment? Did the clients really understand the ramifications of staying in state court and the delays and additional attorneys' fees that usually come with such a decision? Did the parties even consider arbitration?

In an antitrust case much larger than Robertson (a different antitrust case from the one mentioned above), Visa, Mastercard and AmEx resolved their multi-billion-dollar largely-legal dispute in arbitration. Why not here? Discovery probably would have gone much more smoothly, with Princeton more easily obtaining confidentiality and the Robertsons more easily obtaining documents.

Did the lawyers and clients consider alternative fee arrangements?

The Robertsons, as plaintiffs, paid an effective fee of 44% of their total recovery of $90 million.

A 40% gross-recovery contingent fee agreement is not uncommon in complex, expensive and/or risky business disputes; here, however, the client received none of the benefits of a contingent fee. As best I can tell, the lawyers bore no risk and paid no expenses out of pocket -- the clients did.

Did the Robertsons consider a contingent fee agreement? 40% would have been cheaper and during the six years of litigation their foundation could have held onto the money, investing it tax-free. They could also have done a blended agreement, with the Robertsons covering costs and expenses and the attorneys claiming, say, one-third of the recovery.

Princeton, in turn, paid $40 million over six years to defend a claim they later settled for $90 million. Making matters worse, the $40 million likely came in the unpredictable form that managers hate, with huge swings depending on the litigation, invoiced in a manner completely opaque to non-lawyers and lawyers not familiar with the case.

Did Princeton consider, say, a flat fee? The controversy had been brewing for almost forty years, with Princeton well aware of the major factual issues. The major legal issues are all apparent on the face of the complaint, which is only 68 pages long. Obviously, there will be an extensive accounting, lots of discovery and document review, and a couple big motions for summary judgment with regard to characterizations of various payments and the duties of your clients.

It's a big case but it's not unbounded in scope. It's not a class action or antitrust case sprawling over dozens of parties and whole industries; it's a dispute between a university and a foundation over a specific sum of money and a specific grant.

You could do it with the "feeding frenzy" team: two lead attorneys and a handful of associates and paralegals.

They could have blended that fee as well: Princeton covers external costs and expenses, like the accounting firm and deposition costs, with a flat fee payable every six months for attorneys' fees. Going off of our big firm average hourly rate of $348, estimating the case will take up half of their 12,000 billable hours per year available time, puts us at $1 million every six months. Princeton would have ended the case for less than $18 million, including all costs and expenses. 

These are all just ideas, any one of which would have likely saved millions.

Was anyone really looking out for the client? Are non-profits the new profit centers for lawyers?

Maybe in the end we have another example of the dangers of using "OPM." No individual or for-profit enterprise paid a dime for this excess and waste; it all came out of "charity."

The Robertsons paid for the suit via the Banbury Fund, which they control. As best I can tell, they exhausted most of the Fund's assets on this suit, though they are being reimbursed under the settlement.

Princeton paid for it out of their multi-billion-dollar endowment; as part of the settlement, the funds expended will be deducted from the Robertson Foundation as it is dissolved into Princeton's general endowment.

So, there you have it. $80 million in litigation fees to move $50 million from one charity to another. Princeton President Shirley M. Tilghman called the whole case "a tragedy" because the legal fees could have been spent on education. I'd agree, except that I can't help but wonder what steps Princeton could have taken to reign in their costs; you can't blame the other side for everything.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

The blog "How Appealing" has plenty of links on the $90 million settlement of the donor-intent suit brought against Princeton University by the heirs to the Great Atlantic & Pacific Tea Co. (and now A&P supermarket) fortune, alleging misuse of a 1961 donation of $35 million which had swelled in value to over half a billion dollar.

The case was scheduled to go to trial in New Jersey state court in January. Pretrial litigation costs were $40 million for each side. Princeton expected its own trial costs to reach $20 million; it's fair to assume that the Robertson's trial costs would have been the same if not greater.

$80 million to litigate and another $40 million to try a breach of fiduciary duty, accounting and breach of contract dispute between two parties. No appeals, certs, or retrials included.

How could that be? Let's look at how those numbers compare to other complicated cases like patent infringement, white collar criminal defense, and antitrust.

According to the American Intellectual Property Law Association, the average per-party cost to take through litigation and trial a large (over $25 million at stake) patent infringement / dispute is $5 million. (For all patent cases, the average is $1 million). Patent cases are document intensive, involve numerous expensive experts, and typically require dozens of depositions and motions. They're often more complicated than large commercial litigation or breach of fiduciary duty cases.

Yet, the Robertson case would have cost twelve times what the biggest patent cases typically do.

Remember the white collar criminal defense that got WilmerHale sued? That "feeding frenzy" of billing was over $12 million in hourly fees, less than one-third what either side here charged, and it involved more than double the documents of Robertson.

So what happened in Robertson?

Sure, the case wasn't a slip-and-fall:

The university says it produced more than half a million pages of documents in pretrial discovery. The trial witness list had 124 names, 80 witnesses had been deposed, 3,000 pages of briefs were required and 5,000 trial exhibits were identified.

But it wasn't that big. Here's how the District Court described the Visa / Mastercard merchant and debit card antitrust case, which settled just before trial a few years ago:

Class Counsel have litigated this case -- which did not culminate in settlement until the eve of trial -- for seven years. During that time, there were almost 400 depositions of witnesses, including 21 experts who issued 54 expert reports; four rounds of class certification briefing (through the Supreme Court); 16 summary judgment motions, 31 motions in limine, and three Daubert motions; and a pretrial order identifying 230,000 pages of trial exhibits, 730 trial witnesses, and more than 17,000 deposition designations

In re Visa Check/Mastermoney Antitrust Litig., 297 F. Supp. 2d 503 (E.D.N.Y., 2003). Now that's big.

Yet, that much work -- several orders of magnitude larger than Robertson -- resulted in a "lodestar" (hours times prevailing rates) fee calculation of $62,545,603 for plaintiffs' counsel, or one and a half times each side's bill in Robertson.

The Robertson case was filed July 17, 2002. In the 6 years, 4 months, and 24 days leading up to the settlement announcement, the parties averaged $34,202.65 in costs every single day, or about the same as if each side had one of the most expensive partners in the country (each at $1,000 an hour) and two of the most expensive associates in the country ($600 an hour per associate) working every single day, including weekends and holidays, from 8am to 6pm, taking no more than 2.2 hours in their work day to do anything else, including eating, twittering or answering angry phone calls from their abandoned spouses.

Using more reasonable numbers, like an average rate of $348 an hour, and seven hours of actual, billable hours per day, we still end up with the ridiculous conclusion that each side had seven lawyers working full time for them every day, including weekends and holidays.

Some of these numbers may be unfair. For instance, both sides hired major accounting firms to prepare extensive expert reports. So let' s very generously assume that these firms performed the same level of accounting work as required for companies with under $1 billion in annual revenue to ensure complete Sarbanes-Oxley compliance: $2.8 million (which I think is a high estimate) for each side.

Let's also assume "costs," like copying, postage, phone calls and research equal about 5% of overall billing, as is often the case in business representation. I think that's actually generous here -- $2 million per side will get you an awful lot of copies.

Adding in those expert fees and costs drops the attorneys' fees to $70.4 million, or a mere $30,098.33 every single day. Using our "reasonable" hourly rates and billable hours, that's a team of six lawyers working full time every day, including weekends and holidays. For each side.

That's outrageous: other than the fees, Robertson was closer in size to complicated personal injury litigation than a large, complex commercial dispute like a patent, antitrust, or securities case.

Multi-defendant, multi-claim personal injury cases -- e.g., a catastrophic injury or wrongful death at a construction site that raises both product liability and negligence issues -- frequently exceed 100,000 documents, 100 potential witnesses, 50 depositions, and 1,000 trial exhibits. I can't judge what the article meant by 3,000 pages of "briefs," but, based on the motions and orders available online, I assume that number includes pleadings, motions and exhibits, which is not at all impressive.

Tomorrow we'll look at how not to spend $120 million bringing a case to trial.

• Email This
• Print
• Comments
• Trackbacks (1)
• Share Link

Cal Biz Lit tips us off in a great how-to post for defense lawyers about an early step in the process:

This first step is not unique to California, and not unique to product liability cases.  In fact, Phone the phrase “stupid call” wasn’t even invented in California.  As far as I know, the phrase was invented by a friend of mine who practices product liability nationally but is based in Montana.

The elements of the first step are incredibly simple:

1.    Pick up telephone;
2.    Dial number of plaintiff attorney;
3.    Engage him or her in pleasant, or at least civil, conversation;
4.    Act stupid about his or her case (this is easier for some of us than others);  and
5.    Try to get him or her to tell you as much about the case as possible.

The theory of the stupid call is really simple:  first of all, more information is almost always better than less information.  And while you can expect that the other side is going to posture, exaggerate, and, dare we say it, confabulate, the odds are that they are also going to tell you some things about the case that you wouldn’t otherwise know.  And since the California complaint may have told you very little – in fact, if it’s a Judicial Council Form Complaint, it told you nothing at all – this is your chance to at least learn something about the injury and how much the plaintiff’s attorney knows.

Now, it may be that the other side won’t give you any useful information.  It may be that he or she won’t even talk to you;  there are plenty of jerks in this world, and a representative number of them are lawyers.  But the other side isn’t going to give you any useful information if you don’t call, either, so you aren’t going to be any worse off for trying.

That's pretty common and it's not a bad idea for defense lawyers, but there are some caveats.

First, I'm usually candid about my theories, to a degree, because I want to frame the whole case on my terms, not your's. Letting me infect your brain with my memes is sometimes in my best interest.

Second, if you act really stupid -- you "don't understand" a common legal issue or you "haven't heard" a particular industry standard -- I will take that as a sign that you are a lying snake and I will suspect and treat you accordingly.

Third, we're all one big community of lawyers. Maybe you think I'm some nobody in your world and you'll never encounter me again. Maybe that's true. But maybe, just maybe, someday someone whose opinion you care about is going to ask me about you and I'm going to say, "he called me at the beginning of the case and either acted like he was stupid or really was just STUPID." Is that the reputation you want?

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Above The Law refers us to Newsday's coverage of the ugly mess that has become of the Martin Garbus, Esquire vs. Samantha Ronson vs. Perez Hilton suits, which now stand a good chance of becoming far more embarrassing for Lindsay Lohan than the blog post which prompted the original defamation suit.

Here are the facts in the underlying dismissed Ronson vs. Perez suit:

At the bottom of the failed libel suit and the pending malpractice action is a one-car crash: Lohan's Mercedes-Benz versus some shrubs in Beverly Hills on May 26, 2007. Police reported finding a small amount of cocaine in her car. The actress eventually entered rehab and pleaded guilty to driving under the influence.

About a week later, according to the libel suit, Hilton, whose real name is Mario Lavandeira, posted an item on his blog linking to a juicy story on an another blog called Celebrity Babylon. Citing unnamed sources, Celebrity Babylon reported the cocaine belonged to Ronson. Additionally, according to the suit, the story said Ronson "has accumulated a substantial side income taking her pal in front of paparazzi cameras for money."

"With friends like Samantha Ronson, Lindsay doesn't need enemies," Hilton blogged. Two weeks later, he posted a picture of himself on perezhilton.com wearing a sweatshirt emblazoned with "Blame Samantha" and referred to her as a "lezbot dj", according to the libel suit.

There's fodder there for a defamation suit, but not much. Hilton didn't post the original defamatory facts, he linked to them with some of his own comments. As a journalist -- and Hilton absolutely is a journalist, he reports more than full-time with substantial resources for investigation -- Hilton has some duties to assess in his own mind the likely veracity of the story, but he doesn't have to confirm it's entirely true unless he gives the story's facts his own stamp of approval. As far as I can tell, he didn't, he linked to it. (In an affidavit, he asserted his own good faith in linking to the story based upon dozens of reports he had received of Ronson's drug use).

"Blame Samantha" sure is obnoxious, but it's hard to see what defamatory facts are implied there given the context of Hilton publishing the story as coming from a separate source.

First, a word on the unusual and apparently excessive fees here. I typically represent defamation plaintiffs on a contingent fee basis; doing so presents a substantial risk of losing money given the nature of defamation cases (more on that later), but it's also par for course. Ronson hired Garbus at $750 an hour. Based on the little bit that comes through the article, Garbus seems to have billed her at least $142,000 without even getting to the anti-SLAPP hearing (part of California's preemptive strike against wrongful use of civil proceedings) or taking Perez Hilton's deposition.

Which is to say, Garbus charged her a boatload for nothing, as he did not even get past the very first hurdle in the case, the anti-SLAPP hearing, the equivalent of a motion to dismiss in other state courts.

Garbus also allegedly promised the whole case would cost $75,000; I suppose that's possible at $750 an hour (i.e., 250 hours once you consider that an associate at half the price will be doing two-thirds of the time) if you streamline the process and the other side doesn't go crazy with motions or discovery. Given the parties and issues here, I don't see how that would have been possible. Obviously, Hilton's lawyers are going to go straight to the drug use and will do their best to dig into Ronson and Lohan's personal lives (as Garbus himself is now doing). For comparison, Hilton's attorneys made it up to $85,000, or at least that's how much Ronson was ordered to pay for Hilton's attorneys' fees.

Second, what did Garbus and Ronson, respectively, expect to happen? Perez Hilton did not originate the story, Celebrity Babylon did, and Ronson was arguably at least a limited-purpose public figure (and/or Lohan was with regard to the source of the cocaine found in her car), making it much harder to prove the requisite intent ("malice") to get by First Amendment protections.

So it was a tough case from the start, which Garbus should have known and should have told Ronson. Given Hilton's hearsay repetition of the actual defamatory facts, odds were high he'd get out on anti-SLAPP, which Garbus should have told Ronson. Moreover, Ronson should have been told that, even if she had "won," she could have "lost" once Hilton started digging into her personal life and, perhaps worse, Lohan's personal life.

Maybe Garbus did tell her all of that. Yet, in the article, Hilton's lawyer is quoted as saying that Garbus' anti-SLAPP motion response was garbage. There are also references to Garbus not "worrying" about Ronson's case until Hilton's lawyers filed their motions. If true, those cast doubt on Garbus' whole story, since he should have recognized the anti-SLAPP problems from the start and should have been preparing for that from the start. If I had pursued Ronson's case here in Pennsylvania, from day one I would have been working on my First Amendment arguments.

But let's give Garbus the benefit of the doubt and assume that the truth lies somewhere in the middle between Garbus and Ronson's allegations. If so, there still seems to be a fundamental problem that Ronson, no matter what she was told, did not recognize just how tenuous the case against Hilton was. Nothing else explains her conduct, even if she was at times out of touch or hard to reach.

Which brings me to the main point here: defamation cases present a unique problem in client relations for trial lawyers, as they are among the hardest cases to win and usually involve the most emotionally-invested clients.

Defamation cases frequently lose. Indeed, sometimes even when they win, they lose, in the form of lost privacy or nominal jury verdicts.

Did Ronson know that? Regardless of what Garbus told her, the facts strongly suggest that she didn't get it, and that this whole mess could have been avoided if she had a better understanding of the issues and the case from the start. That presents a lesson for all of us trial lawyers -- do your clients really get what's going on?

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Tired of your current software? Check out Lifehacker's "Most Underhyped Apps of 2008," part of a whole bunch of great Best of 2008 posts worth checking out for anyone who wants to get the most out of their technology.

Back to the apps, I'm a big fan of Picasa, and I wish it was available for the Mac so I could ditch iPhoto.

VLC is the only audio/video program I've ever used that just plain worked. No frills, no complications.

It's not on this list but the big stunner to me this year is Google's voice and video chat, which blows the doors off every other videoconference software I've ever used, including the insanely expensive dedicated setups used by court reporting services. Simple and effective.

 

• Email This
• Print
• Comments
• Trackbacks
• Share Link

David Giacalone has kept the conversation about alleged client concerns over associate bonuses at firms like Cravath going at his site, f/k/a, where I have replied in comments. My reply is also below in the extended entry if you're interested.

Continue Reading...

• Email This
• Print
• Comments
• Trackbacks
• Share Link

So I was talking with the Kevin at LexBlog about what he pays those support people I interact with when -- wait, no, none of that happened, because I don't care and it's none of my business.

LexBlog provides a service. I thought the fee was fair and reasonable and that I got a great service. So I paid the fee and got the service. If the salaries or working conditions LexBlog provide intentionally violate labor, employment or discrimination laws, then we've got a problem. Otherwise, I have better things to do than micromanage my service provider's business.

Same for most clients, though that doesn't stop the inevitable rumors -- present in both good and bad economic conditions -- that clients are demanding their law firms cut back on associate salaries (via Above The Law, which routinely spills the beans on bonuses).

Baloney.

What About Clients? agrees. In this economic climate, a business client fretting about excessive law firm associate bonuses -- which have never been billed to them -- is a business about to go under for mismanagement. A business client who drops a supposedly trusted, effective law firm for "excessive associate bonuses" is being polite. What they mean is: you're not worth your fees.

A partner who says "clients don't like bonuses" means "I don't want to pay you a bonus since it comes out of my pocket, not the client's."

What about, say, the evidence that bonuses don't increase productivity? Shouldn't clients be concerned?

Maybe that's something worth forwarding to Kevin, just like how I frequently tell my clients or providers about technology or management techniques that I've found useful. But let's be serious here: if I find his service is not living up to expectations, I'll tell him and we'll figure out a solution. It's none of my business how he splits his profits.

I've got better things to do. So do clients.

[Update: Carolyn Elefant at the Legal Blog Watch links here alongside other posts and an American Lawyer article on Cravath's decision to reduce bonuses. Feel free to join the conversation in her comments section.]

• Email This
• Print
• Comments
• Trackbacks (1)
• Share Link

I'm taking the Canadian legal press by force:

...

Productivity is, of course, the main attraction. But litigator Maxwell Kennerly discourages people from using traditional measures of productivity to evaluate these tools.

“If you simply ran a stopwatch and compared how long it took to dictate and correct a document versus simply typing it, voice recognition doesn’t seem much faster and, indeed, is sometimes slower,” wrote Kennerly of the Philadelphia, Pa.-based, Beasley Firm LLC in an e-mail. “The critical difference is fatigue. After I type a document, I usually feel tired and unwilling to move on to my next task. Voice recognition software dramatically reduces that fatigue.

“The difference is often greatest at the end of the day. Instead of leaving your office with pain in your hands, wrists, and forearms, you leave feeling productive and ready to go back the next day.”

...

Kennerly added the following advice: “For improving performance in daily use, the question is not if you can get 100 per cent accuracy, because you usually will not,” he wrote. “But rather if you can adapt to checking and correcting the words on the page as they appear, which you normally do not do when typing.

“For me, adaptation took about a week of frustration, after which I fell into a groove,” he said.

Kennerly’s experience led him to the following conclusion: “Voice recognition is not for the computer illiterate,” he wrote. “You need some computer savvy to use it effectively, since your performance depends on your ability to quickly detect and correct errors, your ability to enable the more robust features of the program, and most importantly, your general comfort level with technology.”

See the linked article by Luigi Benetton at The Lawyers Weekly from more.

• Email This
• Print
• Comments (2)
• Trackbacks
• Share Link

Over at the wonderful gCaptain blog:

While traveling to destinations around the world my setup is a black macbook (however, due to an unfortunate incident involving wine it is now the new macbook) and my iPhone. I tend towards lengthy email replies when using the Macbook so I much prefer the iPhone to make them short and quick.

On the ship my primary computer is a windows box which I need for my day job. Because of restricted permissions I rely heavily on a Portable Application Suite I launch from my waterproof USB drive and VNC to access my office computer. 

 

...

I work a schedule of 3 weeks at work and 3 weeks home so I get 6 months vacation per year. To facilitate this each position on the ship is filled by two people, the person on and the person off. This is nice because while at home my relief answers all emails, phone calls, ect., leaving me 100% disconnected from work. But regardless of where in the world my ship is located on the globe I must fly to it every 3 weeks. Staying connected on the road is important. To accomplish this I have set-up a custom SSH tunnel solution that I use with Apple Remote Desktop to connect back to my office network. I also have setup automatic back-ups with the Amazon S3 based app JungleDisk and use Transmit to retrieve my files. Storage is important while traveling  so I cloned my MacBook‚ hard drive using SuperDuper and replaced it with a 250gb laptop hard drive.

More at the site, including his favorite apps -- a list very similar to my own. E.g., TrueCrypt is the way to secure files.

In fact, his Mac-travel, PC-work, dual-monitor & setup is quite familiar to me, though I use 37signal's Backpack for GTD / task management, plus digital dictation and voice recognition given the volume of paperwork I create. I'm also content with FreeMind over Mind Manager for mind mapping.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Carolyn Elefant kicks off a discussion on "The Deterioration of Legal Writing," beginning with a Financial Week story, concluding:

While I believe that both factors -- the informality of e-mail and lack of quality teaching -- have contributed to the decline of legal writing skills today, I think the main problem is  the easy availability of low-cost, computerized legal research tools. These days, both students and lawyers can gorge on a glut of cheap reference sources, from today's less expensive LexisNexis and Westlaw, to tools like Casemaker or Versuslaw, to Google and other Internet search engines. Consequently, legal research has devolved into an exercise in "piling on", with lawyers adding cases and quotes merely to show strength through quantity of cases rather than quality.  At the end of the day, with so many resources available, legal analysis is suffering, and as a result, so too is the quality of legal writing, which relies on the quality of the underlying analysis for its impact and effectiveness. 

Evan Schaeffer chimes in with links to many of his great legal writing posts.

I had two "legal writing" classes in law school. Both were terrible; I encountered one teacher later who said she was glad to have moved back to consulting because it was "more funner" than teaching.

I'm not kidding.

Two points.

First, I challenge the notion that today's law students write any worse than their predecessors. It may be true, but I have seen no objective evidence of that. Complaints about writing ability are common for all employers, and complaints about the upcoming generation are as old as written history. Take this complaint:

On the matter of overwork they are particularly stern. They want to work hard, but not too hard; the good, equable life is paramount and they see no conflict between enjoying it and getting ahead. The usual top executive, they believe, works much too hard, and there are few subjects upon which they will discourse more emphatically than the folly of elders who have a single-minded devotion to work. Is it, they ask, really necessary any more? Or, for that matter, moral?

....Out of necessity, then, as well as natural desire, the wise young man is going to enjoy himself — plenty of time with the kids, some good hobbies, and later on he'll certainly go for more reading and music and stuff like that. He will, in sum, be the apotheosis of the well-rounded man: obtrusive in no particular, excessive in no zeal.

That's from 1956; Kevin Drum dug it up in response to an article just posted that was virtually identical.

Second, while great legal writing requires a career-long dedication to excellence, not-bad legal writing just requires keeping in mind a couple points:

1. There may be rules for the formatting of legal arguments, but there are no rules for the content — do not force the content of your writing into an artificial form.
    
2. Remember and use the twenty-odd years of writing education that preceded law school. Write sentences in which nouns perform specific actions upon direct objects. Use topic headings and thesis sentences and appropriate paragraph divisions. Present information in a logical form. Read what you wrote aloud; does it sound confusing? If so, then it's confusing to read, too.
    
3. The very worst examples of legal writing are the edits of cases in law school textbooks. Judges usually do not write opinions with frequent leaps in logic, sentence fragments, and the generous use of the ellipsis.
    
4. The second worst examples of legal writing are Supreme Court opinions, which are the product of a delicate compromise amongst multiple Justices and which are deliberately limited in scope so as not to exceed the actual holding.
    
5. The third worst examples of legal writing are law review articles, which must conform to multiple literary conventions that have nothing to do with ease-of-reading or persuasion.
    
6. The best examples of legal writing that are easily accessible are trial court and intermediate appellate court opinions. These opinion state facts and then apply them to law, with little interference (at least apparent on the face of the opinion) from politics or compromise or convention.

In short, writing not-bad requires reading a few short books on writing, like Strunk & White's Elements of Style and Joseph M. Williams' Style, then reviewing some basic court opinions, and then applying the same principles to your own work.

Finally, never be afraid to disregard your writing instructor's advice; odds are they're looking to move on to something "more funner" anyway.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Another great post at Build A Solo Practice, LLC:

Do you know how your potential client will find you?  Have you done a survey of your existing clients or studied secondary information if you are just starting out to determine the best marketing/advertising vehicles to reach them?  With money tight, the scatter shot approach is foolish and wasteful of scarce resources.  The old approaches may just not be effective at all.

Here are some interesting statistics for you.

The statistics are worth reviewing,  particularly the rapid decline of the yellow book as a source for finding lawyers, which nicely dovetails Susan's next post on worthless lawyer directories.

In my experience, clients find you one of three ways:

1. they already know you,
2. they stumble upon you, or
3. they are recommended to see you.

That is to say, the client either knows you, knows nothing of you before asking for your help, or they ask someone they do know for help and that person recommends they go to you.

I deliberately used the word "stumble." It's hard to say that a client ever seeks you out unless they already know you, even if they spend several days googling around for information on attorneys, because clients who don't have an attorney in mind usually want "the best" yet they rarely have the information to know who is "the best."

Heck, I don't even know who is "the best" in my own field, much less in any other. Very, very little information is available to clients except for bits and pieces or word-of-mouth.

As such, I have three marketing goals:

1. improve my favorability among my clients,
2. increase the likelihood of being stumbled upon (and looking good when that happens), and
3. improve my favorability and visibility among the likely recommenders (e.g., referral counsel).

Will it work? I don't know — 4 and 5 of that plan feel a lot like:

        4.  ???
        5.  PROFIT!

At least it's cheaper than a directory, professionally fulfilling, and a lot more fun. Got any better ideas?

• Email This
• Print
• Comments (1)
• Trackbacks
• Share Link

Love or hate his political leanings these days, the man is very prolific and influential, and his early work is so impressive as to be lauded even by his harshest critics. Here's a great introduction to his work, if you're so inclined.

He wrote, a while back, "How I Work," with four tenents that work just as well for lawyers as they do economists:

Here are the rules:

1. Listen to the Gentiles

2. Question the question

3. Dare to be silly

4. Simplify, simplify

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Enrico Schaefer (a.k.a. The Greatest American Lawyer) has an article in Law Technology News about digital dictation, with a number of resources and products to check out.

A good time to make one thing clear:

• Digital dictation is one of the easiest and most effective ways to make a litigation or trial practice more efficient.

Seriously. "But I'm a solo! I don't have a full-time secretary." Fine - get yourself a virtual assistant, a dictation transcription service, and/or a voice recognition program.

Big firm? Even less of an excuse.

You will use it immediately to review files, to shoot off letters, to prepare pleadings -- all at your pace, with the ability to change dictations instantly and insert speech into the middle of a recording.

Really, the fact that he's publishing that article at all shows that some of you don't get it. Get with the program.

• Email This
• Print
• Comments (1)
• Trackbacks (1)
• Share Link

This isn't a political post, at least not intentionally.

The Wall Street Journal on Saturday carried a story about the legal troubles of the Wasilla sports complex which was built under Sarah Palin's watch (the story isn't new, see these links). It gives us a good window into the two main types of "legal advice" a lawyer can give to an organization or business -- i.e., advice for avoiding certain legal risks and advice that weighs different possible legal outcomes -- and how organizations and businesses should respond to that advice. The story's been picked up as an example of poor executive judgment by Sarah Palin; it may be, but it's not that simple.

Short story: in the late 1990s Wasilla reached an agreement to buy a 145-acre lot for $126,000. The seller then went with another buyer, Wasilla sued, won initially, began construction, was reversed, and had to eminent domain the most important 80 acres. At the end of the day, Wasilla paid $250,000 in legal fees and was ordered by an arbitrator to pay $836,378, plus $336,000 in interest, for the land.

Since all land is unique, failed-and-repurchased real estate deals rarely fail for a fraction of the original price. They fail for a multiple of the original price. So it's not surprising that, once the deal failed the first time, Wasilla ended up getting a little over half of what they "bought" for ten times the price they negotiated. Lawyers and real estate brokers know that happens.

In essence, two things went wrong for Wasilla:

• Wasilla never finalized the initial deal;
• Wasilla relied on a federal district judge's order in 2001 in their favor, which was later reversed.

The former is a classic example of an avoidable legal risk. When lawyers study for the bar exam, few things are pounded in their heads so forcefully as the need to follow precisely the requirements for the transfer of real estate. For example, the failure to 'record' a real estate purchase typically voids the putative buyer's title. It's that serious.

So it's a bit surprising to see this paragraph:

City officials negotiated a price of $126,000. Months passed without the city's securing a signed purchase agreement, according to the city's attorney, Tom Klinkner of Birch, Horton, Bittner & Cherot.

An oral agreement to purchase real estate is unenforceable, barred by the statute of frauds every state, including Alaska. Little wonder the seller (the Nature Conservancy) thought it could sell it to another buyer, and the buyer thought they could buy it.

The real question is: who let a fully negotiated real estate deal sit around? Did their lawyer fail to tell them they had to get moving if they wanted to make it enforceable? Did the city sit on its hands, perhaps fretting about tendering the cash? Someone dropped the ball; it's that simple.

After Wasilla sued to enforce their unenforceable deal, I haven't the foggiest clue how they convinced the Federal District Court Judge to rule anything in their favor, but apparently they did.

Which brings us to the latter, which was likely either a failure of the lawyer to weigh the legal risks appropriately or a failure of the executive to appreciate the consequences of those legal risks once presented to her. After the order in Wasilla's favor,

Ms. Palin marched ahead, making the public case for a sales-tax increase and $14.7 million bond issue to pay for the sports center, which was to feature a running track, basketball courts and a hockey rink. At the time, the city's annual budget was about $20 million. In a March 2002 referendum, residents approved the mayor's plan by a 20-vote margin, 306 to 286. The city cleared roads, installed utilities and made preparations to build.

Not necessarily the wrong decision. They had an order in hand, plus unlimited eminent domain power if something went wrong. If they wanted the land, they were going to be able to get it, the question was just how much they would pay (including legal fees) and how long until the ordeal was over.

But recall the circumstance -- a failed real estate deal -- in which the eventual price may need to be many multiples of the original deal. Those numbers aren't insignificant in this context, and they had the capability to explode into a significant fraction of the city's budget. Order or not, both the lawyer and the city should have been concerned.

"[T]he city believed it would prevail ..." I haven't seen the briefs or the order, so I have to speculate. Wasilla had prevailed in the first instance, which itself makes it reasonable to think it could hold up on appeal.

But a lawyer is held to a higher standard than what could be reasonable; they're hired not to make plausible judgments, but to make sound ones. Did the lawyer not advise the city of the high odds of reversal of their enforcement of an oral real estate agreement? Did the city ignore that advice and then not bother with less risky/costly solutions, like settling with the other buyer before committing $14 million to that lot?

Maybe the City was advised of, and considered, the risk of reversal followed by an expensive eminent domain process, and charged through anyway, firing up the bond issue, construction, et cetera. That's not necessarily a bad decision, though it may be rash given the numbers involved.

At the end of the day, I just can't help but think that at least one, and possibly two or more major mistakes in judgment were made in this whole endeavor.

Someone let the initial purchase agreement lapse, as simple and plain an error as ever was. It wasn't even a bad judgment call; it was a failure to minimize an obvious legal risk.

Then someone didn't properly weigh the risks of the litigation, a more subtle, but here more costly, error.

There's a distinction between "weighing the risk of litigation" and "predicting the outcome." No one can do the latter, nor should they try. The former, though, must be done, and it involves two separate exercises of judgment: the legal judgment of the lawyer in determining the possible outcomes and their likelihood, and the business / administrative judgment of the city in assessing the effect of those outcomes on the city and the best course in context.

One of those two was missing here. Which one?

• Email This
• Print
• Comments
• Trackbacks
• Share Link

A nice list of 11 free mind mapping applications was just posted at Lifehack.org.

If you've never heard of the concept, you can check out this thorough introduction by Dennis Kennedy.

Personally, I find that if I'm dealing with a lot of issues at once -- as is frequently the case in business litigation, multi-defendant personal injury cases, or cases involving a lot of documents -- there are few better ways to get everything in your brain down onto paper in a coherent form.

There are only really two secrets: 

1. Mind mapping requires too much of an investment of time to use all the time, so save it for when you start having trouble juggling issues in your head; and,
2. Don't worry about making it perfect. A perfect mindmap is a bad thing, as it usually means you've missed something.

The end result should be coherent enough to help you organize your thoughts but flexible enough that it doesn't hinder those same thoughts by forcing a rigid structure on them.

The first time you make it work you'll wonder how you ever lived without it.

• Email This
• Print
• Comments
• Trackbacks (1)
• Share Link

Carolyn Elefant picks up Dan Hull discussing the tendency of lawyers to be risk-averse. She asks:

Not sure about the answer to Hull's questions, but Los Angeles-based Quinn, Emanuel, Urquhart, Oliver and Hedges is one firm that doesn't sit on the sidelines, at least as it's described in this Fast Company profile. (For more background, see The American Lawyer's 2006 profile of the firm.)  As the article reports:

Quinn Emmanuel has adopted the strategy, attitude, and accoutrements of a Red Bull-fueled startup. It focuses only on business litigation: no tax, real estate, or other common corporate practices. Even more galling to the tradition-bound large full-service firms that are its competitors, the firm takes some cases on contingency, meaning that it doesn't get paid if it doesn't win. That forces Quinn Emanuel to cast the wary eye of an investor on potential cases, in search of the ones that can strike gold, and it's unafraid to use litigation's nuclear option -- a jury trial -- to get outsize results.

So why aren't more firms adopting the Quinn Emanuel model?  Is the answer -- as Hull suggests -- that they've become too risk averse?  Or is it that the Quinn model is unique to business litigation and more traditional types of law demands traditional lawyers who are willing to remain behind the scenes?

Quinn Emanuel isn't a swashbuckling contingent-fee firm by my standards: Fast Company says "Quinn Emanuel's contingency business makes up less than 10% of total hours."

I'd call that "risk-averse." More importantly, their own website says half of their litigation work is intellectual property litigation, an area ripe for contingent fees because it combines big verdicts with extraordinary costs that can frequently exceed $1 million pre-trial.

So, primarily working in an area ripe for contingent fees, Quinn Emanuel devotes at most 20% of its time even in that area to contingent fee work.

Contingent-fee makes up >90% of my hours. It's a specialized economic proposition that requires a situation involving substantial risks, substantial costs, and the potential for substantial recovery. Take out any of those, and either the client or the lawyer won't go for it (or, if they do, they did so in ignorance).

Fact is, the vast majority of legal work fails one of those criteria, and the swings in capital inherent in the business would inevitably destroy a "contingent-fee" firm the size of the AmLaw 100 players, just like how the swings in financial markets routinely crush investors who don't hedge properly. A 200-person contingent-fee business litigation could easily find itself more than $50 million in the red during the normal course of business; it wouldn't be that hard to double or triple that amount in rough times.

Let's run a really generalized calculation, using a random equity curve simulator. Assume that the cases you win earn 3 times the cost of the cases you lose, and that you win half of the time.

Odds are, after 200 cases, you'll likely have three times the capital you started with, not including salaries, rent, taxes, or any other cost not reimbursed by the cases.

Ouch -- how long would it take to finish 200 cases? Long enough not to be eaten alive by the salaries, rent, and taxes?

Plenty of lawyers take risks, look at all the fine solo and small firms out there, just not with their money.

• Email This
• Print
• Comments (1)
• Trackbacks (4)
• Share Link

Vault's annual survey has been 'updated,' at least with new numbers, if not any new rankings.

Corporate counsel has updated its annual survey of who represents the Fortune 100, and in what fields.

Shall we cross-reference Vault ranking by corporate clients?

1    Wachtell, Lipton, Rosen & Katz   

Corporate Transactions for Altria; Bank of America; Cardinal Health; Home Depot; Sears Holdings; Walgreen's;

Labor Litigation for Citigroup; Travelers;

2    Cravath, Swaine & Moore LLP

Corporate Transactions for Citigroup; IBM; JP Morgan Chase; Kraft; Pfizer;

Commercial Litigation for Alcoa;

3    Sullivan & Cromwell LLP

Corporate Transactions for Goldman Sachs; Medco Health; United Technologies; Wachovia; AT&T; AIG;

Torts / Negligence for Goldman Sachs;

IP / Patent Litigation for Morgan Stanley;

4    Skadden, Arps, Slate, Meagher & Flom LLP and Affiliates

Corporate Transactions for AT&T; Abbott Laboratories; Alcoa; American Express; Bank of America; Citigroup; Coca-Cola; Delphi; Ford; Merrill Lynch; News Corp; PepsiCo; Travelers; Disney;

Commercial Litigation for Merrill Lynch; Washington Mutual;

Torts / Negligence for Chevron;

Employment / Labor Law for Citigroup;

IP / Patent Litigation for Morgan Stanley;

5     Davis Polk & Wardwell

Corporate Transactions for Aetna; Altria; American Express; CVS Caremark; Comcast; Hartford Financial Services; Honeywell; IBM; Kraft; Morgan Stanley;

Torts / Negligence for Altria;

Employment / Labor Law for Bank of America;

Commercial Litigation for Comcast;

IP / Patent Litigation for Comcast;

So there you go. All the cool firms represent banks in corporate transactions, notwithstanding the late labor law talk.

Probably the most intriguing chart is this one, tabulating overall mentions of firms in particular areas. Wachtell is mentioned once, at the bottom of corporate transactions. Cravath doesn't appear at all.

That says a lot about the role of prestige in legal business. Based on Vault alone, you'd think Wachtell and Cravath would have a lock on certain segments of the market, or at least would keep up contacts amongst all the largest corporations.

In fact, they both have the same mix of clients -- some blockbusters, some low-profile repeat customers, some one-time-only (e.g., Walgreen's for Wachtell) -- rolling through like the rest of us. Indeed, the most profitable company in America has most of its connections well down the "prestige" list, and Wachtell actively focuses on single-transaction representation.

There's a lot to be said on this score, in due time. For now, the key point is: these firms don't make their money and prestige off of "position" alone.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Victoria Pynchon has responded to my question about getting parties to the settlement table pre-trial, although she hasn't had a chance to answer it fully since she apparently has a real job outside of blogging.

While we're waiting, I do want to address the study (to be published in the Journal of Empirical Legal Studies, covered by the New York Times) that originally prompted her post.

Here's the punchline:

Defendants made the wrong decision by proceeding to trial far less often, in 24 percent of cases, according to the study; plaintiffs were wrong in 61 percent of cases. In just 15 percent of cases, both sides were right to go to trial — meaning that the defendant paid less than the plaintiff had wanted but the plaintiff got more than the defendant had offered.

...

On average, getting it wrong cost plaintiffs at about $43,000; the total could be more because information on legal costs was not available in every case. For defendants, who were less often wrong about going to trial, the cost was much greater: $1.1 million.

First, a caveat: I haven't seen the study, and I am always wary of commenting on the way a study was reported, which usually differs greatly from the study and its results, even with the best of reporting. Further, based on what I can gleam from the article, the authors may have conflated too many types of disparate cases together -- few trial lawyers would say that soft-tissue automobile accident cases are litigated, tried or settled the same way as wrongful death medical malpractice suits -- so the data may not be as useful as the article claims. 

That said, I think many of the conclusions around the blogosphere (e.g., "Settlement is Better than Trial") are off the mark, given what we know.

Based on those numbers before, plaintiffs should always take big cases to trial. Here's why:

The numbers show that, 61% of the time, plaintiffs get less at trial than they were offered. 24% of the time, they get more. Ergo, if you take a case to trial, the odds roughly 3 to 1 that you'll do worse for it.

But look at the difference in the money! 3 out of 4 times, a plaintiff loses on average $43,000 by going to trial. 1 out of 4 times, a plaintiff gains on average $1.14 million!

Thus, every single "win" cancels out a whopping 26.5 "losses!" Yet, based on the data above, as a plaintiff you don't "lose" 25 out of 26 cases, you "lose" 3 out of 4 (keep in mind that we've excluded the 15% of cases were both sides were right to go to trial).

The expected value / expected return for choosing trial over settlement is a whopping $1.01 million!

Based on those numbers, why on earth would I ever settle anything again?

Let me conclude: I'm assuming, as noted above, the study was either misreported or in fact jumbled disparate or outlying data together. Based on what we have, though, settlement is never the right choice unless you get every penny you've demanded.

• Email This
• Print
• Comments
• Trackbacks (1)
• Share Link

"Schiess's basic document design for lawyers" at Legalwriting.net.

Although I agree in principle, I don't think it works in practice.

For example, I don't think it is practical to use more than one font in a given document, since too many readers will not expect it and will be momentarily confused when they see it, making skimming harder, not easier.

The same goes for using hyphenation with the justification of text. If you are not expecting that, it takes a minute for your brain to connect the single word split across the end of one line and the beginning of another.

By and large, if you follow Schiess' advice, you'll end up with work that looks a lot like a formal appellate court opinion, with a professional appearance that rewards speedreaders (particularly when you use wide margins and single spacing). Problem is, while lawyers (especially appellate lawyers) may be used to reading that, judges themselves are not -- they are used to reading what lawyers submit to them, which usually defaults to Times New Roman 12-point, double spacing, full justification without hyphens. Most of us are stuck only making subtle changes to that framework.

As an aside: I completely agree with underlining, italics and boldface. I particularly dislike underlining case names, which causes the eye to focus on a bunch of irrelevant proper nouns in the citation rather than the real focus of the document, which is the argument presented. Yet, very few judges expect bold in briefs and many believe that case names must be underlined. So, without a formal order (most local rules require only 12-point font and double spacing), we carry on...

• Email This
• Print
• Comments (2)
• Trackbacks
• Share Link

Most attorneys I know keep a "legal research" file. As they have continued on their careers, they have come across numerous issues that took a considerable amount of time to research. After spending that time, in hopes of increasing productivity, the attorneys then dump the core parts of the research into a really long Microsoft Word file (or a really large folder or finder).

I don't. Why? Because of the Brontosaurus.

There is no such dinosaur as a Brontosaurus. The term arose from a mistaken identification of fossils in 1877, later generally corrected among paleontologists in 1903. The "Brontosaurus" was an apatosaurus skeleton that a paleontologist mistakenly associated with a camarasaurus skull.

Surely everyone knows this old, obvious, easily-confirmed fact? WIRED is a tech-savvy, research-friendly magazine. In April 2006, it published "Bringing back the Brontosaurus," an article about reconstructing animals via their genes, without bothering to note the distinction.

Why? Most likely because the author learned it as a "brontosaurus," as did his colleagues. A simple Google search would have revealed the error.

And that's why I don't keep a legal research file: it'll have something wrong with it. Maybe you put it in wrong, maybe you took it out of context, maybe the cases have been overturned, or maybe you messed up the first time around, too. I've always lost more time relying on a "research" file than I've gained.

Moreover, some of my best arguments come from reading recent court opinions, watching as a court grapples with an issue either similar or analogous to my own. The law is your tool - why let it go dull?

• Email This
• Print
• Comments (1)
• Trackbacks (1)
• Share Link

Most everything you need to know to be a Google, Windows, Mac and Firefox professional. Nice.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Bruce MacEwen, great as ever, on assessing the quality of legal representation in the general counsel / big firm context:

On a 1 to 5 score, from unacceptable through mediocre, good, and very good to excellent, the criteria [for evaluating all lawyers a company uses] are:

• Understood client's goals
• Expertise
• Efficiency
• Responsiveness
• Predictive accuracy (about budget and results); and
• Effectiveness.

Then there is the uber-question:  "Would you recommend that we use this attorney/firm for similar work in the future?"

Really, what more do you need to know to assess performance? Any more 'detail' would be an illusion -- legal representation is too complicated for more precision.

There's nothing limiting this approach to corporation / business legal representation. Use it in a personal injury practice. You can assess your own expertise, among others, and your effectiveness. Then, after a while, look at the data itself, not just your recollection that you've done well on, say, corporate negligence claims.

The beauty of self-assessments, usually real data, is that they never fail to reveal something surprising. Perhaps a particular type of case or a particular client makes you far less efficient -- what would happen if you stopping taking those cases and focused on your strengths?

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Lifehacker.com provides Twitter Users Worth Following.

I don't twitter, but some of those look just intriguing enough... like tinybuddha, which has recently twittered, inter alia:

"Do not seek to follow in the footsteps of the men of old; seek what they sought." ~Basho

"Our greatest glory is not in never falling, but in getting up every time we do." ~Confucius

"I feel the greatest gift we can give to anybody is the gift of our honest self." ~Mr. (Fred) Rogers

"Time you enjoy wasting, was not wasted." -John Lennon

Lovely. Good thing twitter also provides RSS feeds for us non-twitterers.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

How many e-mails do you have in your inbox? I was doing great, then had the five-week trial, and as of this morning it was 3682.

Time to re-implement Inbox Zero.

Really, if you do one thing today, get your DMZ going:

1. Open your email program and create a new folder called “DMZ”
2. Go to your email inbox and Select All
   • You might alternatively choose all email older than n days
3. Drag those emails from your inbox into the DMZ folder
4. Go, and sin no more.

I just did it again. Like a warm bath after a triathlon.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

At Barista:

But the Indians still didn’t drink it, unless they were closely associated with the Raj. In 1901, the British Tea Association employed a superintendent and two “smart European travellers”, to hawk the stuff to grocers. They sold cheap packets, while the Association organised free tea in government and business offices. But, as Collingham notes with a touch of poignance,

“Nevertheless, marketing tea in India was a dispiriting project. In 1904, it was reported that even after three years of hard work there was little to indicate ‘the existence of a proper tea market in India’, and every year from 1901 to 1914, there were complaints that ‘increasing the consumption of tea in India is undoubtedly the most difficult branch of the work.”‘

Then, in World War One, employers introduced the tea break. In the north, where Muslims were less bothered by caste restrictions, the Association equipped small contractors who supplied tea at railway stations. As it spread, separate stalls catered for Muslim and Hindu patrons.

The Association also set up tea shops, which attracted hawkers who undercut them but spread the habit. It employed its own hawkers, to discourage the use of spiced tea, which used less leaves. Then the Association employed an army of tea demonstrators who spread out across the country to brew tea inside people’s homes, in the manner of vacuum cleaner salesmen. By the 1930’s, the older generation was complaining that their children were rejecting tradition in favour of the new fangled foreign habit.

Emphasis mine. That's certainly one way to make your product accessible and to associate it with positive thoughts and feelings.

So, good lawyers, are you a 'break' in your client's life or a source of continual stress and frustration?

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Build A Solo Practice leads us to Small Business Trends, which has such great 'secrets' as:

Seth Godin, SethGodin.com – “Make promises and keep them. So obvious, it’s become a secret.”

Scott Shane, Author of “Illusions of Entrepreneurship” – “The data show that most entrepreneurs compete on price, but doing this leads companies to perform worse. New companies are better off competing on service, quality or some other dimension.”

Michael Port, Author of “Book Yourself Solid” – “All sales start with a simple conversation. It may be a conversation between you and a potential client or customer, between one of your clients and a potential referral, or between one of your colleagues and a potential referral. An effective sales cycle is based on turning these simple conversations into relationships of trust with your potential clients over time. We know that people buy from those they like and trust. But as Sir Winston Churchill once said, ‘It is a mistake to look too far ahead. Only one link in the chain of destiny can be handled at a time.’”

There's a really interesting 'secret' by the editor of Search Engine Guide about using Flickr for marketing by way of its highly active community. The point there is worth generalizing: if you can find your way into an energetic community, the rewards can be tremendous, providing you with a continual stream of loyal, happy customers. Flickr's only the beginning.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

That's odd. A good number of my links have become JavaScript errors, even when I try to fix them.

It's being looked into. If you need to know a particular link, ask in the comments.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Martin Lipton, who knows a thing or two about corporations, presents:

On June 25, I presented a paper entitled “Shareholder Activism and the “Eclipse of the Public Corporation”: Is the Current Wave of Activism Causing Another  Tectonic Shift in the American Corporate World?” at the 2008 Directors Forum of The University of Minnesota Law School. The paper discusses the pressures that have been pervasively eroding the centrality of the board of directors and transforming its role in the governance structure of public companies, with the end game being a new conception of the corporate organization. Against the backdrop of the subprime and leveraged loan financial crisis and other recent events, the paper addresses what I regard as the crux of the issue affecting public companies today: whether the institution of the corporate board can cope with these pressures and survive as the vital governing organ of public companies. Or, will a forced migration from director-centric governance to shareholder-centric governance, along with a concomitant transformation of the role of the board from guiding and advising management to ensuring compliance and performing due diligence, simply overwhelm American business corporations?

• Email This
• Print
• Comments
• Trackbacks (1)
• Share Link

Legalwriting.net is unhappy with this advice:

“Do not ever for the second time give your senior a piece of writing with a typo or a grammatical mistake,” says Berry. “I will take it once and I will tell the junior my set speech.” But if it happens again? Well, find out for yourself.

We can all agree typos are bad and, in some circumstances, unprofessional.

But Berry gives no advice whatsoever for how to accomplish that; he just threatens associates with their livelihoods and careers.

Was the client the focus of that advice? Do they really want to pay lawyers $250-$500 an hour to obsess in fear over typos?  Does that do anything more than rack up billable hours?

How about some more client-centric thinking: let's encourage and reward peer-review of documents before they go out. Would Berry be happy if an associate sent a "final" draft to an associate in a completely different department, whose brain is clean of any preconceived ideas about the document, for a review? That would sniff out typos promptly; it would probably also get both associates in trouble.

Does that advance the client's interests?

• Email This
• Print
• Comments
• Trackbacks (1)
• Share Link

At Concurring Opinions, The Truth about Multitasking:

I've been of two minds about multitasking for some time. But growing evidence is suggesting that the very concept is a myth:

Dr. Edward Hallowell, a Massachusetts-based psychiatrist who specializes in the treatment of attention deficit/hyperactivity disorder and has written a book with the self-explanatory title CrazyBusy, has been offering therapies to combat extreme multitasking for years; in his book he calls multitasking a “mythical activity in which people believe they can perform two or more tasks simultaneously.” In a 2005 article, he described a new condition, “Attention Deficit Trait,” which he claims is rampant in the business world. ADT is “purely a response to the hyperkinetic environment in which we live,” writes Hallowell, and its hallmark symptoms mimic those of ADD. “Never in history has the human brain been asked to track so many data points,” Hallowell argues, and this challenge “can be controlled only by creatively engineering one’s environment and one’s emotional and physical health.” Limiting multitasking is essential.

Walter Kirn concurs: "Neuroscience is confirming what we all suspect: Multitasking is dumbing us down and driving us crazy."

I'm fond of the "Getting Things Done" method and its permutations. Get "stuff" out of your head into a simple form on paper/computer. Then do one thing at a time, and try to do it until it's done.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

After my prior post, I caught this breakdown at AmLawDaily:

The decision comes 19 years after the Exxon Valdez tanker spilled 11 million gallons of oil into the Prince William Sound off Alaska. A jury in 1994 imposed $5 billion in punitive damages against what is today Exxon Mobil Corporation. Since then, the award has bounced back and forth between the district court in Alaska and the Ninth Circuit, which in 2007 cut the already-reduced $4.5 billion punitive award to $2.5 billion.

The Supreme Court's ruling limits any award to no more than $507.5 million, which includes the $287 million in compensatory damages from the trial as well as other settlements. It also remanded the case to the Ninth Circuit for further consideration.

A final award would include 5.9 percent annual interest starting from late September 1996, bringing a maximum possible award today to about $995 million. More than 32,000 Alaskans stand to get a share of the award.

The lead firm, Davis Wright Tremaine, which put in the most time, tops out at $28 million, which doesn't include costs.

Perhaps the Supreme Court would like to extend its boundless mercy to the "unpredictability" of representing the victims of willful, wanton and reckless conduct? Why not a due process rule requiring the defendant subsidize the plaintiffs' appeal work -- as it is performed, not decades later -- until the defendant prevails on the merits?

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Via How Appealing:

The Boston Globe today contains an article that begins, "The Wilmer Hale law firm, one of the largest and most respected in Boston, has a reputation for championing unpopular causes: President Nixon during impeachment. The US Army during the McCarthy hearings. Even defending serial killer Ted Bundy. But the firm's past efforts pale in comparison with the free legal assistance that it has given to six Algerian terrorist suspects held without charge at Guantanamo Bay. Since 2004, lawyers with the firm have provided 35,448 billable hours of legal help, worth an estimated $17 million, making this case the largest pro bono effort in the 90-year history of the firm."

First, good for them. Injustice anywhere is a threat to justice everywhere.

Moreover, it looks like they used a particularly honest method for calculating the lost services. Last year Wilmer Hale's revenue per lawyer was $970,722; presuming 2,000 billable hours per lawyer, that's an effective rate of $485/hour.

Doing the math on their habeas estimate (35,448 hours = $17 million) puts them at $480/hour.

That's so close I imagine it's the source of their number, which means that they're smart enough to do internal calculations based on actual, realized revenue rather than the sticker price for hourly billing.

Interestingly, they admit the business benefits of the representation:

Despite the huge investment, Oleskey says that the controversial case is not bad for business. "We think our [paying] clients feel that if we can vigorously represent people in Guantanamo . . . we would probably do a pretty good job representing them," he said.

I'm not criticizing them -- I think it's very forward-looking for a law firm to look beyond the balance sheet to the bigger picture. If they can do justice at the same time, it's a win-win.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

A debate between Home Office Lawyer and Real Lawyers Have Blogs on the merits of LinkedIn.

Down in the comments at HOL, Grant asks:

I don't doubt what you are saying as I am on Linkedin also and have form a couple of groups myself. Are there any stats out there which show lawyers are actually getting a ROI of their time they spend using Linkedin?

I'm always skeptical of ROI as applied to law firm marketing. Unlike, say, toothpaste, we can't point to a particular campaign and then follow the rise or fall of sales. The retention of clients may, at the end of the day, look like a bell curve, with more clients going to the firms that plaster their names on the sides of transit buses, and fewer going to the solo in his office with no website, but the client retentions themselves follow Poisson distribution, i.e., with each event fairly unconnected to another.

LinkedIn is, to me, similar to a blog: it's another part of "presence," showing the random lawyer name to be an actual person with actual experience and connections. Potential clients can get a sense of what a lawyer is like from reading their blog, and a sense of how the lawyer fits in with the business community by looking at their LinkedIn profile. I don't think you'll be able to quantify that well, except to note that most users don't know/care about it but, every now and then, it really mattered to someone, if they know it or not (keep in mind most customers vastly underestimate the the impact television advertising had on them).

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Adam Smith, Esq. hosts a high-level discussion on competition in the legal market and whether general counsels really want change.

I am, obviously, neither a general counsel of a large company nor an attorney at a large corporate firm, so I won't speak to that. Some comments (not necessarily by Bruce, he quotes others liberally there) bear comment. If you care, continue on... Continue Reading...

• Email This
• Print
• Comments
• Trackbacks
• Share Link

I think I'm supposed to link to articles like How to Build a Book of Business as a Young Lawyer and How Associates Can Blow the Business-Development Bell Curve.

Problem is, I don't get anything out of them and I can't pretend they'll help anyone else, either. Work hard. Develop relationships. Be a good lawyer, particularly with regard to client contact.

Then what?

Fact is, I don't know of many successful lawyers who can explain, even in retrospect, their path from law school to "success." The tips above certainly help. Instinct, like knowing which clients are worth pursuing and which are not, helps. Luck helps. Your 'position' -- e.g., the contacts you started with, the school you went to -- helps.

At the end of the day, all the successful lawyers I know got there due to a mixture of luck, skill, position  and dedication. You can't change your luck or your current position. You can, however, strive for excellence, hone your instincts, and be ready to pounce on luck. Chance favors the prepared mind.

...which I guess is what the articles are saying, but they never admit it!

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Via Boing Boing:

The researchers compared sleeping in for 90 minutes each morning to taking a 20-minute nap at 2:30 p.m. or taking 150 milligrams of caffeine (equivalent to about two cups of coffee) at 2:00 p.m...

When the volunteers did nothing, they fell asleep within nine minutes on average when tested at 3:30 in the afternoon. Sleeping late kept people awake only a minute longer on average than did doing nothing. Caffeine worked better, keeping people awake for about 12 minutes longer on average.

But nothing beat a nap. After a 20-minute nap, people nearly doubled the amount of time it took to fall asleep when tested later in the afternoon, indicating that they were no longer sleepy. None of the measures impaired people’s ability to fall asleep at night.

That's been my experience, too. You can go with low levels of sleep for a long time if you take 20 minute naps during the day.

When it comes to the low levels of sleep, my secret for waking up is taking acetaminophen the night before. It's a lot easier to talk yourself out of bed if you're not also in pain.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

An exceptionally useful weekly review post at Home Officer Warrior.

My favorite is the link to the 30 VoIP ideas.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Nice tip via the [non]billable hour:

Haven't read this one yet, but it saw a review of Mistake-Proofing: Designing Errors Out on Kevin Kelly's "Cool Tools" Blog. One of the excerpts really made me say, "Wow!" because it is so head-slappingly obvious:

Employees experience a continuous stream of encounters - one defect is a low failure rate. Customers experience a single defect as a 100% failure rate.

Think about that for a minute in the context of your law practice: if you fail to keep just one of 100 client commitments, you're batting .990. However, to that client you let down, you're batting .000.

One of the joys of contingent-fee work is that you always have the incentive to hit every ball.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

There I was, reading an ABA Journal article on how Stephen Susman, contingent-fee business trial lawyer extraordinaire, green with envy, when I spotted this gem:

Every lawyer in the firm votes on whether to accept cases pitched by others in the firm. They don't take possible losers, or those without significant profit potential.

Really? Then I guess they don't take any cases at all. Why would you ever hire a lawyer if you have a case with a significant profit potential that's impossible to lose?

As with any business, you always need to recognize what value you are providing the customer. Either the most profitable firm in the country offers no value at all, or the author didn't quite get the message...

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Snipped from a WSJ Law Blog note on starting an plaintiff's intellectual property practice:

... the new IP group willl focused on enforcing the patent rights of inventors and universities against big business. “It’s actually quite consistent with our traditional practice,” says founding partner Darren Robbins. If you think about it, he’s right. A patent plainitiff needs the financial resources to go after large corporations — something that a plaintiff’s firm used to working on contingency is able to provide. As Robbins put it: “We can go eight years and pony up $30 million.”

• Email This
• Print
• Comments
• Trackbacks
• Share Link

At Law.com:

Here's just one example: At Arent Fox, Chairman Marc Fleischaker says senior associates can earn as much as $280,000 in base salary and -- if they meet targets for generating business -- an additional $100,000 in bonuses. Total: $380,000. First-year nonequity partners start off with a pay rate of $310,000. But they subtract $20,000 to cover their own benefits. Their total: $290,000.

Whoops.

Actually, it is not a mistake, and there is a "good" business reason for the dichotomy. Anyone who wants to be partner is willing to invest for the long term, so, if you are a higher ranking partner, you have an opportunity to take a cut out of their income and they are very unlikely to complain (or not to seek partnership) because they want to end up in the same position you are in.

The problem, as I see it, is that you guarantee everyone at the firm sees their relationship in purely business terms, with no real sense of loyalty or commitment but rather a standard market transaction. Far be it from me to bemoan the loss of professionalism at corporate law firms -- I doubt corporate firms from decades past had any stronger sense of communalism -- but I don't think unbridled intraoffice competition is a good business model in terms of professional satisfaction or professional service.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Given the endless whining and hand-wringing over the recent bump in biglaw associate starting salaries, one would think those managing partners would seek to avoid seasoning their piety with a splash of hypocrisy. Not so:

We just got off the phone with Paul Tvetenstrand, managing partner at Thacher Proffitt. As reported on Above the Law, his law firm today notified 24 associates in the real estate and structured finance groups that unless the market improves substantially, they will almost certainly be laid off in January. Also, first-year associates in those groups are being offered buyouts with four months of severance. He said there are about 280 associates in the firm. (Structured finance is the securitization of assets, from mortgages to credit cards.)

Tvetenstrand explained to us that those practice groups make up about 60% of the firm. Plus, “a good percentage of our structured finance practice is in the residential mortgage-backed securities area,” he says. That market, he notes, has hit a dead spot. “It’s unknown how long that is going to last.”

Given the slowness, he notes, “”it’s unfair for these associates to put their career on hold.” Tvetenstrand added that, where it was able to do so, the firm has transferred people to other departments. “We’re getting to the last measures here,” he said of the buyouts and potential layoffs.

What are partners doing? Marketing and retooling, says Tvetenstrand. “People are not idle and many of the partners are very busy.”

Apparently partners with decades of experience in and only in these fields with connections in and only in these fields are "busy" "retooling."

But the first-year associates who knew nothing about the fields a year ago but still retain everything they learned in law school and for the bar are apparently so stuck in their ways it would be "unfair" to keep them around.

Et tu, Thatcher? Does anyone really wonder why biglaw firms have a >70% attrition rate?

• Email This
• Print
• Comments
• Trackbacks
• Share Link

At Law Technology Today: Talking to Yourself: Is Speech Recognition Ready for Prime Time?

Apparently not, as this article is only available as an audio podcast, not as written text.

I think speech recognition is more than ready for prime time. In fact, more than half of the content you see here was dictated by the use of Dragon Naturally Speaking, the program they reference.

By my experience, the program is about 90 to 95% accurate, which is pretty good, except that the mistakes are astonishingly frustrating when they occur, creating the impression that dictation is no faster than merely typing it. But let there be no mistake: the proper use of speech recognition is unambiguously faster than any method of typing yet devised.

Even with those mistakes, I can go on for pages and pages and pages without end, writing and revising and -- best of all -- seeing exactly what I am working with, a luxury unavailable to those who dictate for later transcription by a secretary or service. Yet, I rarely become tired of writing. In contrast, when I type, I can feel myself slowly becoming depressed as I think of each new paragraph that I will have to type, as my hands and fingers start to recoil and my breathing becomes labored. If you've typed a lot, you know what I mean -- it's exhausting!

Frankly, the question is rarely whether a particular technology is ready for prime time. The questions are: can you see the strengths of the new technology, and can you adapt to leverage those strengths?

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Some excellent resources:

• Mashable.com's "5000+ Resources to Do Just About Anything Online"
• The "Hack Attack" category at Lifehacker
• "Better than Batman's Belt: Our Favorite Utilities" at Law Technology Today
• The Practice's Top 25
• Home Office Lawyer's "Business Applications for the Mac," "10 Must-Have Apps for the Mac Using Solo Practitioner," and "Programs to Help the Mac Lawyer be More Productive," itself a response to South Carolina Trial Law Blog's Programs to Help Lawyers be More Productive.

I'll post my own list and method later. If you suspect you're not living up to the productivity computers can offer, you're right. You could do worse than reading those links carefully and trying something new.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

If you didn't catch it elsewhere, the WSJ Law Blog picks up Romney's "lawyer" quote from the debates:

During Tuesday’s Republican Presidential debate, Romney was asked whether he’d have to ask Congress for authorization to take military action against Iran. His response, says the WSJ editorial board provided a “revealing — and dispiriting” glimpse into “modern political life.” Said Romney:

 “You sit down with your attorneys and tell you what you have to do. But obviously the President of the United States has to do what’s in the best interest of the United States to protect against a potential threat. The President did that as he was planning on moving into Iraq and received the authorization of Congress.”

Follow-up question: Did President Bush need such authorization? Romney: “You know, we’re going to let the lawyers sort out what he needed to do and what he didn’t need to do.” Egad, says the WSJ:

Frankly, I'm surprised Romney had such a reasonable answer, given the needs of his base to hear chest-thumping. The Constitution clearly requires Congress' authorization prior to launching a war. The real question is if a given act is war, police action, or one of the exceptions under the War Powers Act. It's horrifying to think that a President would ever launch any military action without extensive consultation with Congress or, at the very least, his own staff.

For our purposes the real meat here is: be wary of calling yourself a "lawyer" or having clients or anyone else think of you as just a "lawyer." The term frequently connotates a hired gun who greases the wheels for wrongful conduct. Other candidates got away with "advisors" and "consult Congress," which are exactly the same answer.
 

• Email This
• Print
• Comments
• Trackbacks
• Share Link