Law And More

NY AG Hires David A. Markowitz to oversee investigation of investment banks, credit-rating firms

Becoming governor of New York is looking better and better for the current state attorney general Andrew Cuomo.  His most recent shrewd move was to hire David A. Morkowitz to oversee the investigation of investment banks and credit-rating agencies.  Isn't this exactly the right AG mission at exactly the right time.

Reports THE WALL STREET JOURNAL writer Amir Efrati, Markowitz will be the chief of the AG Office's investor protection bureau.  Markowitz is presently an assistant director in the New York branch of the SEC.  Among his victories were charging New York Stock Exchange specialist firms for unlawful proprietary trading.  In addition, he prosecuted one of the early cases of fraud for short selling in "Pipe" transactions.

If Cuomo continues to make all the right moves, he could become the most influential state AG in the U.S.

Commoditization of Legal Services - Today could lead-paint defendants justify cost to corporate bean-counters

Had the lead-paint public nuisance litigation began in 2008 instead of the late 1990s, defendants Sherwin-Williams, Millennium Holdings, Atlantic Richfield and NL Industries might not have the top-drawer lawyers they do.  That's because the corporate bean-counters at the defendants' companies might not have approved such large expenditures on those legal services.

Reports Ursula Furi-Perry in CG MID-ATLANTIC, the "general counsel are increasingly called upon to explain their outside counsel hiring practices and the resulting costs to their clients" by the corporate purchasing and procurement departments. The driver is cost-reduction.

What is occurring is that some corporations are centralizing purchasing.  That means that legal departments in companies where this is happening are no longer autonomous in what outside counsel they want to select and the price they will have to pay.  In the worst-case scenario, law could be commoditized.  If centralizing purchasing morphs into a "best practice," this approach could become more or less standard in big business.  

This isn't new to other forms of professional services. In communications, for example, way back in the late 1980s, even for small projects, some large companies wanted a description of the services to be rendered and the cost.  It even happened, for example when GE Environmental was my client, those I had been dealing with for months asked for a cost reduction.  I balked and terminated that client. Already I was giving them what I perceived as a more-than-fair price.

What many of us in professional services have learned is to bill differently.  For instance, some of us no longer charge for background research, emergency service, and additional revisions.  This hasn't been all that much cost to swallow.  Primarily that's because of digital technology which reduces the time involved and makes handling emergencies easier on everyone in the global loop. 

In addition, we have changed how we work and what we offer. For instance, in my ghostwriting boutique I now make available the e-book.  That bills out to the client at one-fourth of a traditional full-length print book. I earn less for the project but do a lot more of these projects. The client perceives a "bargain" and I gross and net more.   

Outside counsel might have to figure out comparable ways to provide high-quality performance at prices the corporation would reject.  That might include providing and promoting new-for-the-firm kinds of mini- services, much like my boutique's e-book. 

Another solution is to appoint GCs who have plenty of power within the corporation and with the board and know how to pitch effectively to them.  The specs for successful GCs might be turned on their head. The new GCs might have to be more politician than legal sage.  Furi-Perry notes that there will be times when the GCs "have to stand by their choice for outside counsel" even if the price is higher than it would have been had they selected another law firm.

Brit THE INDEPENDENT Gloats: Food Stamps up 18% in 2 yrs. in RI

It is a headliner on Drudgereport.com.  The Brit newspaper THE INDEPENDENT carries a story titled "USA 2008: The Great Depression."  In it, the publication gloats over the myriad signs of economic suffering in its former colony.  One statistic the reporter David Usborne, based in New York, tracks is the rise in people receiving food stamps.  The number has gone from 26.5 million in 2007 to a projected 28 million for fiscal 2008.

Usborne singles out lead-paint territory - that is, the state of Rhode Island.  During two years, the number of residents of RI on food stamps has increased by 18 percent.  This is a tragedy in a state which has such a solid infrastructure, ranging from top-notch universities to a location near the Boston Metro area and not all that far from Manhattan.  The wrench in the works might be its anti-business reputation imprinted on economic developers' minds by the long-running lead-paint public-nuisance litigation. 

Some predict that could all be a wrap in 2009.  Let's hope so for the people of RI.

Legal Growth Area - Getting up-to-speed in bankruptcy

No newsflash, legal work in bankruptcy is the most promising area of growth in these recessionary times. In today's THE WALL STREET JOURNAL, Jacqueline Palank reports that a survey of 300 attorneys in large firms by Robert Half Legal found that 25 percent of them predict that's where the work is. And will be for at least 12 months.  That percentage, points out Palank, is larger than the percentage of BigLaw attorneys who speculate that growth will be in litigation or corporate governance.

The challenge is, as with every hot field, that hands-on experience is the price of entry. So, how does an attorney get that credential?  Here are my recommendations:

• Get some power-that-is to force-fit you into a group doing that work.  Several times, that's how my corporate godfathers saved me from layoffs.  My function - executive communications - was on the chopping block.  I was pushed into high-profile media-relations projects.  Not everyone on the team welcomed me.  But I could care less.  I found one or two who clued me in.  I observed. I volunteered for tasks no one wanted.  I wasn't cut.  The secret here is to be able to tolerate your stupidity and lack of status.  Soon enough you'll know what you're doing.  Thanks to that experience I will always be able to earn a buck in media relations, although I probably will never be a star in the field.

• Grab pro bono assignments.  Whenever I need to get experience and references in an emerging aspect of communications, I just start knocking on doors, literally.  Those opening the door are in shock just long enough for me to get out my proposition.  I offer a free strategic plan, free execution, and free follow-up for six months.  What's not to like.

• Take a seminar.  It's tax-deductible, provides the fundamentals, and is full of contacts.  Ask the instructor where you can try out your new knowledge, including for no charge.  As you're learning, begin a blog on some aspect of the subject.  In my field of communications, having a blog makes it easier to get full-time and contract work. In addition, consider knocking out a 35-page e-book.

• Read everything on bankruptcy you can.  In any discipline new to me I start out with understanding the fundamental assumptions and picking up on the language. A colleague snagged a $250,000 base pay, plus bonus/stock-option job in something he had never done before in an industry he never had worked in. He spoke the language. 

Since 2001, I migrated from a rigid specialization in speechwriting/ghostwriting for the Fortune 500 to earning the lion's share of my income from strategic planning, marketing communications, and career coaching.  It wasn't easy but it was possible. 

Horace Mann Yahoos - Jay Gatsby would call them "Careless People"

Do the students of elite Horace Mann grow up to become Eliot Spitzers - or worse?  Horace Mann is Spitzer's alma mater and is attended by all three of his daughters.

We have to wonder about the impact of Horace Mann, at least after we read the article by Gabriel Sheman in the current issue of NEW YORK Magazine.  The way Sheman captures that "Lord of the Flies" school environment in Manhattan, you have to wonder if any student there could have a shot at keeping on the right side of the law, employed, and not a menace to their future families. 

That whole bunch of Mannies appear to be, as Jay Gatsby would put it, "careless people."  They seem to be totally devoid of any awareness of other people and any consequences of their actions.  So oblivious are they to the normal constraints of civilized society that someone is going to file a child abuse complaint against the students' parents and the board of directors for neglect.  Those parents and board members aren't doing the job they are supposed to be doing. 

Because of this article, could it happen that Horace Mann on a college or job application would constitute a red flag, warning the powers-that-be to pass on this yahoo?

Can WI Prevent another "Thomas" - SC Election on Tuesday

The MILWAUKEE JOURNAL SENTINEL has come out supporting Wisconsin Supreme Court incumbent Louis Butler for re-election tomorrow.  As we lead-paint watchers know, it was Butler who allowed risk-contribution theory to prevail in WI.  The result was "Thomas," which the plaintiff lost.  Directly or indirectly, the "Thomas" personal injury lawsuit helped bring about the pile-on of more than 30 other lead-paint personal injury complaints in the state.  The plaintiffs are represented by Peter Earle, who also participated on the side of the plaintiff in "Thomas."

Justice Butler is opposed by Judge Michael Gabelman who rails against judicial activism.  Judge Gabelman is backed by the state's business interests, including the Wisconsin Manufactures & Commerce. 

A low turnout is predicted tomorrow.  Let's hope that those championing the end of suits like "Thomas" vote this Tuesday.

America: Land of High-Functioning Nuts

The "studies" show that almost half of us Americans are suffering from myriad forms of mental illness.  Some influentials, ranging from Walter Olson of the Manhattan Institute to Christopher Lane of the NEW YORK SUN, have questions about that number.  For example, they bring up the matter of the wonderful market this presents for use of such medications as antidepressants, services such as psychotherapy and spas, and stress-buster literature, DVDs and seminars. 

But not everyone is attempting to rebut the perception that we Americans are essentially high-functioning nuts.  Some, such as Ph.D. psychologist John D. Gartner, view a certain degree of aberrant thinking and behavior as a unique American strength. That personality trait was the platform for building our [once] powerful economy. In his breakthrough book "The Hypomanic Edge: The link between a little craziness and a lot of success in America," Gartner chronicles our beginnings. 

Unlike homogeneous nations such as Spain and Germany, Gartner points out, the U.S. was created by a God's Plenty of immigrants.  Many of them, even the buttoned-down Puritans, came here because they were not good fits elsewhere. Alexander Hamilton, who is featured in one chapter of "The Hypomanic Link," had a problem with conventional decorum and even kept his superior George Washington cooling his heals. Those arriving later, such as my family, were restless types who didn't cotton to the economic, social, and legal constraints of Italy and Poland.  My grandfather resented the Russians pushing him around, including constricting him into the army. 

If well-adjusted is taken to define mental health - as it was when I was in high school taking all those MMPIs - then it's impossible for the descendants of all those First Gen Americans to not be off.  In fact, most of my relatives have had their encounters with the mental-health system.  But those, including me, who didn't take their dire diagnoses seriously, have been unusually successful.  We could constitute a separate chapter in Gartner's book. 

Unfortunately, and this is the sad part of the capitalist conspiracy to market nuttiness, not everyone can blow off the psychiatrists and psychologists.  They seek "help" for their "condition."  That makes them suckers for every mental-illness product and service which comes along, underachievers, and often certified malingers.  Some of the best and brightest are on SSI.

To enable the high-functioning nuts to live with their "disease," we might have a mental-illness public-relations initiative to boast about all the lunatics who made it big. I recommend t-shirts printed up with "Out of it, And proud of it."  Mental illness has nothing to do with anything.  If we stop consuming the ancillary products and services, there will be no profit in attempting to diagnose and assist us.  We can go back to productive nuttiness. 

Blogs - 36% Increase in AmLaw 200 in last 6 months

According to a recent survey by LexBlog there has been a 36 percent increase in the number of AmLaw 200 firms which have blogs.  At those firms, there has been a 49 percent increase in the number of blogs operating at the firm. The most popular platform is Blogger, with 24 of the firms using it. 

Pets to receive same tax deductions/company benefits as people

The pet-food contamination crisis revealed the lag between the law and regulations and the reality that our animal companions are family members.  But that's just part of the problem.  There's also a long road to travel in getting IRS reforms for covering deductions for our pets, for example medical care.  In addition, companies which provide subsidies for adoptions could be extending that to when we take a new pet into our home.

I'm not kidding. Research clearly shows that a pet in the household is good for our health and longevity.  According to the American Pet Products Manufacturers Association, about 71.1 million homes have at least one pet. And that doesn't come cheap.  This year we will probably spend $43.4 billion on birds, cats, dogs, fish, and reptiles. 

About a fourth of that - $10.9 billion - is medical care, routine and emergency.  Last week I spent almost $600 to have my 10-year-old cat Carlotta's teeth cleaned, two pulled, a growth removed from her gums, and an annual distemper shot.  Next week, 12-year-old cat Point Pleasant goes for her annual and who knows what maladies that will turn up.  In the beginning of this year I invested plenty to try to save 14-year-old cat Callie and decided the humane thing to do was to allow her to let go. 

So, why aren't those medical expenses tax deductible?  With the intensity of our attachment to our pets, it's a wonder the IRS hasn't been flooded with lobbyists, white papers, and performance art to consider giving childless households this option for a deduction.  The medical-insurance industry should be a key third-party supporting this initiative.  Thanks to my four-legged friends, I'm rarely ill.

What's also amazing is that we have let companies off the hook.  They pitch in when we want to adopt children but there are no goodies when we reach out to an animal companion.  This is disturbing since there are so many of them to be rescued, particularly with the foreclosures taking place.  A truly useful perk would be for corporations as well as non-profits to subsidize part of the cost of adopting and care for a rescued animal.

I won't muddy my message with introducing landlord policies which bar pets but not children. In the past five years I have had to move twice because my landlords - Briarwood Apts. in North Haven, Connecticut and Colonial Apartments, Seymour, CT - changed their rules about pets.  How can landlords so abruptly reverse from being pet-friendly to pet-free? Believe me, I don't consider owning a house my piece of the American Dream but I might be forced to do just that if I want to take in animals made homeless by their owners who lost their homes.

 

Businesses "do not need pointy-headed lawyers who see a litigation matter as a science project," Mickey Pohl, PRACTICE PERSPECTIVES

We professional services vendors who got through the 2001 global recession found out one thing: Businesses wanted solutions, not PowerPoint Presentations on our pedigree, our client list, or our brilliant  and unique methodologies.

That was part one of the brutal learning curve.  Part two was that the solutions had to benefit the whole business, not just the department in trouble.  No, we couldn't save Happy Tea if that cheapened the business' premium branding or left no budget for promoting Rainy-Day Gum.

Those lessons are articulated for legal services in Jones Day's current edition of PRACTICE PERSPECTIVES: Product Liability & Tort Litigation.  In fact, that issue is themed: "Business-Focused Solutions."

The Letter from the Practice Chair, authored by Mickey Pohl of the Pittsburgh office, captures the key points of how to operate a law firm in the 21st century.  During this economic downturn, these new guidelines might be taken to heart by those in BigLaw who are still viewing work as isolated legal puzzles, not as just a piece of what could impact the whole business - or even an entire industry.

In the second paragraph of his letter, Pohl lets it rip:

"Our clients usually do not need pointy-headed lawyers who see a litigation matter as a science project.  Rather, they want strategies and solutions that are consistent with or do not disrupt the company's business plan. ... A victory that craters relationships with customers and consumers is probably not much of a victory.  At the other end of the spectrum, a case plan that winds up in a quick, inexpensive settlement but causes an avalanche of new cases was probably not a great result."

This could be paraphrased:  The client won the case but lost billions in brand equity.  As we lead-paint watchers realize, it was a mashup of many variables which figured into the decision for the former lead-paint companies to fight, not settle.

To make this systems approach an operational reality, Jones Day's Product Liability Practice has created its Product Response Team [You can read about it here].  That legal SWAT team is multi-disciplinary and global. That lets organizations in a crisis, such as a possible recall or ethics scandal, understand all the possible and probable business implications of the various legal strategies.

After deconstructing Pohl's letter, this came to mind: What if the U.S. meat industry, via its trade associations and/or companies, had called in the Product Response Team a few years ago?  That was when E-Coli re-emerged as a health, economic, and public relations risk.  But it didn't. The rest is the current mess.

That same sort of problem has evolved in what is called the "Raw-Milk Movement" [See HARPER'S, April 2008].  So much of the solution involves law but the approach has to take into consideration myriad other factors, be they community values, how dairy cows are maintained, and unbiased scientific research.

In this issue of PRACTICE PERSPECTIVES, there are hands-on discussions of complex situations which require for lawyers to parachute in a businessman's version of Solomon.  Those articles, some of which I will touch on in future posts and most of which you can find online, include:

• "The U.S. Consumer Product Safety Commission: What You Need to Know Today - and Tomorrow
• "Exposure Assessment in Personal Industry Litigation: Challenging the Data"
• "Sometimes a Good Defense Is the Best Offense: A Summary of Certain Useful Product Liability Affirmative Defenses"
• "Evidence Matters: Other Injuries, Accidents, and Complaints in Product Liability Litigation"
• "Expert Discovery: Does a Testifying Expert's Consideration of Attorney Work Product Vitiate the Attorney Work-Product Privilege"
• "The Appeal Bond - What It Is, How It Works, and Why It Needs to Be Factored into Your Litigation Strategy."

In future editions of PRACTICE PERSPECTIVES, I hope to be reading some articles about international legal issues such as "suing" China or alleged personal injury which occurred outside the U.S. being litigated in U.S. Courts.

Readers whose publications also advocate a systems approach are invited to send them for discussion to Mgenova981@aol.com.