One of the nice things about the being a Justice of the United States Supreme Court is that you never have to explain yourself. You don’t have to ask questions at oral argument. You don’t have to read the briefs filed by the parties, not really, because you can interpret the facts stated and arguments
Although the big financial meltdown began around 2007, financial fraud lawsuits are still all the rage among trial lawyers these days. It usually takes a couple months for an investor to realize they’ve been swindled by a bank and a couple years for the lawsuits to be investigated, filed, litigated, and then sent to trial. …
[Update, December 2012: as predicted, case dismissed, and dismissal just affirmed by the Second Circuit. The court didn’t even reach the class action issue, it just denied it on the merits. “[P]laintiffs were perfectly aware that The Huffington Post was a forprofit enterprise, which derived revenues from their submissions through advertising. Perhaps most importantly,…
Fred Wilson, the always inspiring venture capitalist, posted yesterday A Challenge To Startup Lawyers:
We closed an investment recently. It was a seed round. Our firm priced the round and we were joined by a number of small VCs and a few well known angels. We agreed to close on a standard set of "light preferred" documents without negotiation. There was no investor counsel on the transaction. We just signed the standard documents which were tweaked to reflect the round size, share price, and board provision in the term sheet.
The legal fees for this transaction were $17,000. I talked this over with the entrepreneur and we agreed to pay the legal bill. We are both big fans of the law firm involved and felt they earned their fees on this transaction.
But I’ve been thinking about this situation over the past week and I’d like to issue a challenge to startup lawyers. When you have a seed stage company that needs to incorporate and close a seed round where all parties are willing to close on a set of standard docs without negotiation and where the investors agree to go without counsel, I think the legal fees for such a transaction should be $5000 or less. I just don’t see why it should cost more than that.
Down in the comments, DGentry asked:
Why have a lawyer involved?
If the documents are standardized and previously vetted, then what value does the presence of a lawyer provide?
To which Fred replied, "maybe that’s what we have to do. but there are filings to be made, the charter, the state forms, etc. i think you need someone to do this stuff for you."
There’s an unspoken requirement in Fred’s reply: Fred doesn’t want just anyone to do that "stuff," or else he’d ask someone at his office to do it. He wants a lawyer to do it.
The Wall Street Journal Law Blog points us to a typical deposition transcript out of Cleveland about a copy machine:
Plaintiffs’ lawyer: During your tenure in the computer department at the Recorder’s office, has the Recorder’s office had photocopying machines?
Deponent’s Lawyer: Objection.
PL: Any photocopying machine?
Deponent: When you say
But what is cool is third-party litigation financing. Don’t believe me? Binyamin Appelbaum at the NYTimes and the Center for Public Integrity did a whole…
Update, September 7, 2012: More than a year ago, I wrote “It’s possible KV will sue the FDA over [the decision not to go after compounding pharmacies] — arguing, in essence, that the FDA is disobeying its own statutes and regulations, and thus in violation of the Administrative Procedures Act …” That happened in …
The NYTimes had an article this weekend about the growing number of e-discovery vendors who can go beyond mere keyword searches into linguistic and sociological reasoning about millions of pages of documents:
[T]hanks to advances in artificial intelligence, “e-discovery” software can analyze documents in a fraction of the time for a fraction of the cost. In January, for example, Blackstone Discovery of Palo Alto, Calif., helped analyze 1.5 million documents for less than $100,000.
Some programs go beyond just finding documents with relevant terms at computer speeds. They can extract relevant concepts — like documents relevant to social protest in the Middle East — even in the absence of specific terms, and deduce patterns of behavior that would have eluded lawyers examining millions of documents.
It often comes as a surprise to non-lawyers and law students, but the bulk of litigation work (measured in hours) performed at big law firms doesn’t really involve legal training or legal reasoning. The bulk of the work — which is performed by junior associates and contract attorneys as part of the “leverage” business model — involves the dreaded “document review.”
As I have written many times before on this blog, and as I know from my own experience, defamation lawsuits against major media outlets are no joke. Defamation law across the United States has been mostly settled for the past generation, and so most newspapers, television stations, publishing houses, and film production companies have editors…