Law And More

Fried Frank Cuts 41 Associates - But that's no longer the story in Post-Wagoner Era

Abovethelaw.com reports that Fried Frank has cut 41 associates.  In addition, it reduced its summer program from 12 to 10 weeks and requested incoming associates to defer their start date to the fall of 2010.

But layoffs, individual or industry-wide, are no longer the story.  Not since GM Chief Executive Officer Rick Wagoner got his walking papers.  GM was The Establishment.  Now the story is: Who among The Establishment or What Establishment institution is next?  Heads of BigLaw and well as BigLaw as an entity can vanish.

Today, for example, NEW YORK Magazine speculates that The Next could be Citigroup's Vikram Pandit and Newser.com counts out the final days of Pinch and The New York Times Co.

Clearly, The Establishment became so established that it ossified.  The new economy, especially since it's increasingly driven by digital, has a speeded-up [read that: Hypomanic] metabolism.  No The Establishment figure has the game to think/act so wired.

"CA SC has clear precedent precluding govt hiring private attorneys on contingency," Inside Beltway Attorney

Contingency, as used by government entities, continues to grab U.S. law by the throat, on both the defense and plaintiff sides. Pending before the California Supreme Court is a review of that in the Santa Clara lead paint public nuisance case.  Last week defendants submitted their replies to the plaintiff briefs.

Here the Inside the Beltway attorney opines, off-the-record:

"Unlike Rhode Island (and note that its expression is, practically speaking, dictum), the California Supreme Court has clear precedent which precludes municipalities hiring private attorneys on contingency (or, for that matter, rewarding local enforcement official monetarily based on the number of citations issues, etc.) where public policy and the duty of prosecutorial neutrality is going to be inherently skewed by the profit motive.

"The issue is whether it is inclined to now change California law, and accept the appellate court's reasoning that the government's claim of sufficient control over the contingency lawyer mitigates this inherent (pecuniary interest) conflict, especially in light of the need to employ 'expert outside counsel' to protect the public interest.  (Expertise, in this context, translating into the ability to market your service to the government as a financial and political 'no lose' proposition, constitutional and rational public policy strictures aside.)"

 

 

Skadden Brand - Going way of Heinz Ketchup?

Nine associates and two staff attorneys have joined other Skadden, Arps defectors.  They left that blockbuster brand for the financial-services boutique BuckleySandler, started by Andrew Sandler, former head of a Skadden division.  Initially, report Marisa McQuilken and Jeff Jeffrey in LEGAL TIMES, Sandler had only brought with him one Skadden partner.

Does this sort of migration signal the beginning of the end of branding in marketing?  Will BigLaw go the way of Heinz Ketchup and lose market share and pricing power to law firms which position and package themselves in ways that don't rely on and leverage traditional branding? In crisis times, trends already under way get speeded-up in how they take over.

This un-branding trend is well under way in packaged goods such Heinz Ketchup. Market share is going to private label food, beverages and other stables such as cleaning products.  As THE WALL STREET JOURNAL notes that to hold on, companies such as Heinz, Kraft and ConAgra have to postpone price increases or actually cut prices.  Brands have been all about being able to charge a premium price.

Will this phenomenon of the un-branding bleed into other categories such as professional services? My hunch is that we will increasingly put ourselves out there on the basis of just-in-time results.  "Today, and it's only 10:15 A.M., we helped Management Consulting Firm Y receive 66 contacts from prospects and current clients."  Digital technology allows that just-in-time kind of promoting.  And for peanuts.  One might say that Marler Clark law firm is doing something similar with its just-in-time blogging. [Disclosure: Now and then I pitch in with digital work at Marler Clark.]

Obama needed a head - Maybe Wagoner's was the right one

The President, who THE ECONOMIST this week told to start acting like a leader, needed a head. Tonight we find out it will be GM's Chairman and Chief Executive Officer Rick Wagoner.  And maybe that's the right head.

After all, GM was a top-down company.  That's in its DNA.  I know. I was a speechwriter there in the early 1980s.  It was those top-down decisions which landed the company in this mess and could not halt the downward trajectory.  The leader had to go.  This not only makes space for a real turnaround.  It sends the message to Detroit and to all corporate America:  This is a crisis. Bring on the transformation. Now. 

In fact, that's exactly what trusted management consultants like George Stalk are saying.  As Steve Lohr reports in THE NEW YORK TIMES, times like this one of severe crisis "can serve to sharply accelerate trends already under way."  Overhauling the ossified American auto industry should have already been a trend well under way.  From what has happened to it, either the strategic planning and/or the execution was lousy.  Better luck to the next GM leader.

Contingency & Govt Entities - High Noon in Dodge [CA SC]

One reason the plaintiff bar closely watched the Rhode Island Supreme Court review of the lead paint public nuisance trial was the contingency issue. If it becomes standard in most states, then the plaintiff bar has a shot at lucrative percentages of the class action suits primarily generated by the state attorneys general. The kinds and number of those suits could surge in 2009.  Just consider the outrage against financial institutions, the agitation over climate change, and the resurgent employee-rights movement.

The RI SC, although it overturned the verdict against the defendants, allowed contingency.  Here is that opinion. Download Statev.LeadIndustriesAssoc.,Inc.  Essentially the argument was the traditional one.  That is, without the mechanism of contingency, the public could be denied access to the courts.  After all, state AG offices are limited in manpower and funds.  How could those government entities bring the people's matters to justice without the assistance of private counsel?

Now all eyes turn to the California Supreme Court which is going to review the CA appeals court ruling allowing contingency.  Here is that decision Download H031540.  This issue is embedded in the Santa Clara lead paint public lawsuit.  

Given the influence of CA SC decisions, this is sort of high noon in Dodge for the plaintiff bar versus corporate America.  No surprise, when I posted last Friday that the defendants had filed with the CA SC their replies to the plaintiff, traffic was heavy.  Lead paint was not what was of interest. Contingency was and is.

The defendants ARCO, American Cyanamid, ConAgra, DuPont, and NL Industries filed a composite brief.  That is available free by contacting Mgenova981@aol.com.  The text runs about 16 pages.

Jones Day attorneys for defendant Sherwin-Williams filed a separate brief.  The text runs about 35 pages.  Here is a free copy of that brief. Download SW-SantaClara--ReplyBriefontheMerits. 

The argument that keeps getting hammered is the one of financial neutrality.  How can private counsel operating on contingency operate with a mindset of financial neutrality.  The attorneys for Sherwin-Williams state, "By outsourcing their responsibilities, government attorneys would have counsel stand in their shoes without the strict requirements of financial neutrality imposed by due process standards, rules of ethics, and the California Government Code."  A number of defense attorneys not associated with this review bet the ranch that the decision will rest on this constitutional notion of due process. The brief also stresses that the government entities have other options available to them.  They include "the ability to recoup costs against neglectful landowners." In addition, the brief points out that public nuisance complaints are a special category of suit in which financial neutrality is especially important.

Another major argument is the practical impossibility of the government entity maintaining full control of the litigation.  Private counsel will have influence, perhaps significant, over the decisions made before, during, and after litigation.  In addition, there is the matter of client confidentiality.  How can that be "controlled?" The CA appeals court allowed contingency, even though the CA SC had ruled against it in the now-famous "Clancy" public nuisance case, if the government maintained full control. In this brief that's positioned as an "illusion."

The brief goes on to point out that the RI SC meaning of control "is NOT the same 'control' envisioned by the Government entities here.  ... And the Rhode Island Supreme Court expressed considerable trepidation, saying that it might change its mind in the next case ... It is noteworthy that, unlike here, the Rhode Island Supreme Court faced the contingency fee issue at the end of the case - after nine years and two trials."  Attorneys for Sherwin-Williams state that the control test proposed by the plaintiff "would replace 'Clancy's' imperative of public trust with blind trust."  Because of the lack of trust in all society's institutions, this in itself could be a persuasive public-policy argument.

A third argument is against allowing "expediency to outweigh ethical and constitutional safeguards for impartial government decision-making."  Yes, contingency can make litigation possible and affordable to the state. However, the brief argues, "The public interest is not served when the government hires out its quasi-sovereign functions to private attorneys with a profit motive in the outcome of the case."  With a bit of a rhetorical flourish, the brief adds, "Allowing financially interested counsel to influence government prosecution is not a victimless violation."

If the CA SC does not allow contingency, tort reform will have a major victory. 

Fired Females - Forget gender suits: Pole-Dancers earn $160,000 in just tips, annually

Now we can assign a number to this alternative career track for females, at least those who are conventionally attractive and 20-something [even the latter part of the 20s].  Today in THE NEW YORK POST, Anka Radakovich reports that axed female Wall Street types, real estate agents, and chefs can pull down even more, with fewer hours, flexibility, and no sexual harassment, than they did in their former white-collar jobs. 

Randi Newton, 28, who formerly was a financial analyst at Morgan Stanley makes $160,000 in tips alone annually.  Her current employer is Rick's Cabaret in the Murray Hill part of Manhattan.  She didn't even have to apply for the pole-dancing gig.  It was offered to her when she went to Rick's to get sloshed after being canned. Other women in the article say they can make $1500 a night.  In addition to pole-dancing there are opportunities in stripping and administering massages. 

This line of work is no-collar.  Demand is there, at least as long as this downturn continues in the Northeast.  Men feel an uplift when they go to places like Rick's and the Sapphire Club.

The article didn't note specifically if any former female lawyers had switched to the no-collar career path.

Lead Paint - Will CA Be the Last Frontier for Novel Theory of Public Nuisance?

Public nuisance in product liability cases has taken a beating.  State Supreme Courts, ranging from Rhode Island to Missouri, have essentially tossed them.  Perhaps seeing the handwriting on the wall, the state of Ohio withdrew its lead paint public nuisance litigation.  It could be another story outside product liability, e.g. the possible ramifications of the public nuisance lawsuit "State of North Carolina v. TVA," which the plaintiff won.

The last frontier on pursuing this novel theory of public nuisance in product liability could be in the state of California.  Pending in that high court is a review of the contingency aspect of the Santa Clara lead paint public nuisance suit.  Here is the opinion of the CA appeals court allowing contingency in cases filed by government entities if full control is maintained by the government entity Download H031540.  

Yesterday, the defendants filed a brief with the CA SC and Sherwin-Williams, as a defendant, filed a separate one.  The defendants's is available free by contacting Mgenova091@aol.com.  Here is the brief filed by Sherwin-Williams Download SW-SantaClara--ReplyBriefontheMerits   The author of this blog will comment on the two briefs later this weekend.

The Santa Clara contingency review is important because of at least two reasons.  The CA SC is perceived as atypical.  There's no predicting what the Justices will rule.  Two, if the contingency is allowed and the case moves forward in CA, there's also no predicting what that could generate in other lead paint public nuisance lawsuits, particularly in CA.  Since CA is also atypical, if the plaintiff wins in Santa Clara, it's unlikely similar suits would catch fire nationally.  But it is likely that they could spread throughout CA, a state with extreme budget problems.  

The stakes in CA for the lead paint defendants, ranging from ARCO to Sherwin-Williams, are high. 

Deconstruction of defendants's briefs to come this weekend. 

" ... what I call the 'disrupters' of the economy," HBS prof Clayton Christensen

Today's big story in BUSINESS WEEK is, no surprise, innovation.  Harvard Business School professor Clayton Christensen refers to organizations which innovate as "the 'disrupters' of the economy."  BUSINESS WEEK journalist Dean Foust adds that those organizations "change the rules of engagement."

Question:  If more law firms were public corporations would they be on the BUSINESSWEEK 50 list of innovators?  You bet.  And they often do this by very old-fashioned, low-tech principles like extreme hard work and paying obsessive attention to the facts of the case.

On the plaintiff side is Marler Clark Law Firm which specializes in food-borne diseases.  Partner Bill Marler is saluted and criticized for his digital outreach, which has helped Marler Clark "own" this market.  But that's not why Marler Clark has become a powerful brandname in this niche.  Bill Marler, along with his team [I pitch in as a freelance writer], work.  They work harder than the opposition.  And they don't leave a fact unnoticed and unleveraged.  On K Street in Washington D.C., plaintiff firms like this one are respected for what they are: "'disrupters' of the economy."

On the defense side is Jones Day Law Firm.  Over nine years the product liability attorneys like Mickey Pohl, Chuck Moellenberg and Laura Ellsworth "changed the rules of engagement" on state attorney general initiated class action suits.  Instead of settling, like BigTobacco, they fought.  One key weapon was plain-vanilla facts.  Last July, they disrupted the lead paint part of the game by winning that litigation in Rhode Island Download Statev.LeadIndustriesAssoc.,Inc.

And it was a fact-based defense which helped Jones Day attorney Stephanie Parker bring home an unexpected victory in a BigTobacco case in Florida "Gelep v. R.J. Reynolds Tobacco."  As Alison Frankel reports in THE AMERICAN LAWYER, it took the jury only 90 minutes to acquit Parker's client Reynolds along with Altria.  This could change "the rules of engagement" in the 8000 pending tobacco lawsuits in Florida.

Observation:  Often the seeds of innovation are simply in not feeling entitled.  To anything.  Hard work and paying attention are blowing the old-line game of elite branding and pedigree into a million irrelevant pieces.  Here is a freeconomics e-book guide to that which has had a million downloads Download SavingSoulsJaneGenova.  [New-media consultant Scott Johnson at edellgfx@optonline.net pitched in, plenty.] 

"I will not be initiating investigations through press releases," WI AG Van Hollen

Today THE WALL STREET JOURNAL publishes an excerpt from an amazing letter, dated January 6, 2009, from Wisconsin Attorney General J.B. Van Hollen to Senator Chuck Grassley.  The excerpt is bold in its departure from what's become state AG politics as usual as in its clarity in marking the boundaries of authority of his office. 

Here are some quotes from Van Hollen:

• "I will not be initiating investigations through press releases

• Contractual obligations are generally to be fulfilled

• I will not use my office to threaten litigation in an attempt to micromanage Wisconsin's businesses."

THE WALL STREET JOURNAL editors describe Van Hollen as "The Un-Cuomo."  I call him "Ant-Hero of Media-Age Politics."  Let's hope he can survive.

"Gelep v. R.J. Reynolds Tobacco" - Win for Defense in FL

A jury took only 90 minutes in "Gelep v. R.J. Reynolds Tobacco" to acquit tobacco defendants R.J. Reynolds and Altria.  The 2-1/2 week trial was held in a state court in St. Petersburg, Florida.  Reports Alison Frankel in THE AMERICAN LAWYER, defense attorneys attribute their win to using a fact-based strategy.  The defense used medical records to document that the plaintiff's deceased husband told his doctor he didn't want to stop smoking.

However, this doesn't mean that difficult days aren't ahead for BigTobacco in FL where some 8000 suits are pending against it.  In February, a Ft. Lauderdale, FL jury awarded in an individual suit - post-Engle - $8 million.  And this month there was a $7 million verdict by a FL in an individual suit against Liggett Group.

The issue, says Frankel, was explained by Jones Day defense attorney Stephanie Parker who represented Reynolds.  Parker indicated that the future could rest on whether the 11th Circuit will stop that procedure which the FL Supreme Court had established.  Because of that procedure, individual plaintiffs don't have the burden of proof that smoking is dangerous, the tobacco companies knew of the danger and/or that the tobacco companies misled consumers regarding the dangers.

As yet, plaintiff attorneys haven't indicated if they will appeal the verdict.