Law And More

Apollo Continues Pivot into Sustainability - Focus on Transition to Non-Fossil Sources of Energy and Game Theory

Recently, Apollo Global Management had announced it was creating the function of Chief Sustainability Officer.

The mission has been to review all investments in terms of its compliance with ESG criteria for Environment, Social and Governance principles. This Law and More article analyses the rewards and risks of that move.

On Friday, October 22nd, the financial giant expanded its reach and branding in sustainability. As it details in its press release it has bet big money on the energy transition to non-fossil sources. Here is the financialese:

"Apollo (NYSE: APO) today announced that funds managed by its affiliates (the “Apollo Funds”) have agreed to invest $824 million in a convertible equity portfolio financing agreement with NextEra Energy Partners, LP (NYSE: NEP) in a 2.5 GW renewable energy generation portfolio (the “Portfolio”). The Apollo Funds committed to the investment as part of the sale of 50% of the Portfolio from NextEra Energy Resources, LLC, a subsidiary of NextEra Energy, Inc. (NYSE: NEE) to NextEra Energy Partners."

That portfolio contains 13 utility-scale wind and solar assets. Of those, three facilitate battery storage. 

The transaction had been handled by law firms Allen & Overy and Paul Weiss. 

What does this mean?

Well. to begin with, it's a kind of what's called "virtue signaling." That is, the message is: We are on the right side of global values. Salvation for mankind entails the battery's replacing gasoline.

In addition, Apollo is leveraging its influence to confirm the importance of energy transition. That includes how investors should make their choices. Yes, investors, non-fossil fuels are the horse to bet on.

And, Apollo is positioning and packaging itself as being in the front lines of a business philosophy that goes by the umbrella term "ESG." Apollo publishes an annual report "The Apollo ESG Effect." Here you can read it. 

The stars are aligned that Apollo will impact the energy sector in a major way.

In the global corridors of influence what moves the dial on getting things done are the connections among the movers and shakers. Journalist Hedrick Smith explained those dynamics in his book "The Power Game."

It is interesting to note in Apollo's journey toward being the player in sustainability its long-time legal counsel has been law firm Paul Weiss. Yes, that firm oversaw this most recent transaction. 

The Paul Weiss Chairperson Brad Karp has been a first-mover in the law firm sector's embrace of ESG values. For example, it established the first ESG practice.

Also, on personal level, Karp has mobilized collective action throughout law firms to support causes associated with ESG values. They include push-back against suppression of voters' rights. Those initiatives reinforced Paul Weiss' presence for being a force field in social justice. That fits nicely where Apollo is heading. 

It also can be useful to observe that Apollo's actions may be based on a version of game theory. The genius John Nash brought the erudite discipline mainstream. Recently I have created material for a client on the implications of game theory for the crypto market. 

Essentially, game theory strategy is about optimizing outcomes through ensuring cooperation among those in the loop. That seems to be underlying how Apollo is going about sustainability. The self-interest of all the players is brilliantly locked in. 

Game theory is becoming an increasingly useful lens for assessing investing initiatives. Meanwhile, green is good. It's in the public interest. 

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Law Firms Focused on Recruiting/Retaining Talent: Talk Up Job Security

Job security has become the holy grail for lawyers. That's what Zeughauser Group found.

Maybe they had heard what happened to all those lawyers in 2008 - 2209. Even "The Good Wife" had an episode of a reduction-in-force. Probably it was an underestimate that 6,000 got put out on the street.

And there were also all those new graduates whose offers had been rescinded.

Or who received no offers and had to find another career path. By time the recovery started they were perceived as damaged goods. The law firm sector judges quite harshly.

It's business common sense to know that what goes up will likely come down. The current boom in Big Law could deflate. 

So, for now, law firms determined to keep recruiting and retaining talent will talk up how the organization does backflips to keep its lawyers working, no matter what. 

Sure, though, "they" may say that. But verify. Check with Abovethelaw, Reddit, Glassdoor, and networks from law school. kk

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Law Firms - Of Course, You'll Need a Chief Metaverse Officer

The metaverse is already a reality. Here is Law and More's introduction to it.

Its platform is the videogame. And, as The Wall Street Journal reports, businesses focused on getting into the metaverse or expanding their reach will likely be acquiring videogame enterprises. Already Microsoft this year acquired Zendi Max Media for $7.5 billion. That means law firm's M&A practices will have to be geared up to handle these kinds of deals.

There are bound to be plenty of them, given the metaverse's potential for transforming how human beings work, shop, attend events, and socialize. It's the post-internet.

Of course, over at the FTC and Department of Justice the antitrust folks will be watching. They could even halt the deals for a review. Law firms will have to know exactly what they are doing in this relatively new category of business.

In addition, as Reed Smith's white paper "Reed Smith's Guide to the Metaverse Universe" details, the virtual realities introduce new legal complexities. Here is an excerpt:

"The metaverse will challenge these [traditional legal] 
principles and ask questions such as whether its
information landscape and virtual creations qualify for
legal protection and ownership at all; where content built
on underlying layers of third-party information falls within
existing notions of modified or derivative works; and how
exceptions to copyright protection such as quotation or
private copying may be applied."

What should be obvious is that eventually law firms will need a Chief Metaverse Officer. That could be a partner or an associate. Likely the latter is better since that age demographic is more comfortable with digital technology. They might have grown up with videogames.

Doing that right now will provide the law firm with the early-adopter advantage. Sure, because the metaverse is hot there will be the buzz and aura branding. Nice. But, being in the front of all this could also create a new form of value for that particular law firm. 

Example of that kind of edge had been Paul Weiss' April 2020 creation of its then-unique ESG (Environment Social Governance) practice. Yes, there were the usual benefits of being first in a market. In the process, though, the Paul Weiss Chairperson Brad Karp also picked up insight about how ESG would not only upend corporate clients. In addition, as with the Mayer Brown crisis in China, it would immerse law firms in their own pile-up of trouble. As came out in this Bloomberg Law interview, Karp has proven himself a visionary. 

Law firm leaders early in this game of creating the the function of Chief Metaverse Office could also be saluted as a visionary. And, in tech. It doesn't get better for branding than that. Also, notice how much attention Reed Smith has received through its metaverse white paper published last May.

Beyond facilitating how clients are served in what they need to do in the metaverse universe, the Chief Metaverse Officer can establish metaverses for the law firm itself.

It's the the superior way for collaboration. So much so that the leadership of the law firm could, like PwC, opt for working anywhere. 

Also, in this era of stiff competition for talent, there could be one of those virtual reality walled gardens custom-made for recruiting associates and poaching partners.

The law firm can treat them to complimentary virtual visits to museums and provide them with the funds to purchase Non-Fungible Assets (NFA). Within the garden there would be a challenging video game operating on IP law.

Since interaction is quite special in the metaverse, they can also meet up with avatars of the chairperson, partners, associates, and even clients. And, if there are an application for a job and an offer extended/extended, in that metaverse that new member of the law firm can be fitted for the proper attire for court. 

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It's All in the Language (as lawyers well know)

This help-wanted ad on Craigslist is for, yes, that frustrating low-status gig of telemarketing. 

This is how it is positioned and packaged:

"Top Tier Company Needs experienced communicators: $450-$875/WK- P/T (Gaithersburg)"

Yes, it's all in the language. In "Us v Elizabeth Holmes," the defendant can be presented as an unexperienced businesswoman bullied by her lover-colleague, and let down by subordinates. 

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The Return to the Office Before the Reopening of the Office - Baker & Hostetler, et al.

That shift to power to associates really didn't happen, did it.

Increasingly, reports Reuters Legal, law firms are mandating associates back to the office.

The latest to make the announcement is Baker & Hostetler. Officially, the office will reopen January 4, 2022. But, there's also an encouragement to lawyers to be in the office, as of October 18, 2021, on Wednesdays and Thursdays.

That law firm made it explicit that it sort of expects lawyers to be in the office even before the official reopening. Other law firms have put in the memo only a nice welcoming to associates who "want" to be working in the office before the official reopening date.

If this talks and smells like a form of gaslighting, maybe it is. I vividly recall how Corporate America played with my head when I worked there full-time. 

Meanwhile, Kirkland & Ellis seems to be sending the "let them eat cake" message to returning to the office lawyers.

It announced that there will be free eats at the office for them. Breakfast, lunch, and snacks.

What most of us know about high-pressure deadline-oriented tasks is this: Forget about eating. That just can't be on our minds. Any way, eating makes us sleepy. 

What might have demonstrated authentic caring could have been folding into the paycheck an allowance for away-from-home meals. After all, they had been liberated from those expenses when operating remotely.

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Mental Illness & Racism in Diagnosis - "Chicago Med"

Producer Dick Wolf achieved success by configuring the plots of his television franchises "ripped from the headlines."

Well, there aren't enough headlines about assigning the diagnosis of schizophrenia more often to blacks than to non-blacks. On the Wolf series "Chicago Med," that was played out. The young black had been misdiagnosed and therefore not effectively treated. Dr. Charles took the time to evaluate the situation. The new diagnosis was bipolar. That has a more promising prognosis and carries less stigma.

The good news is that this issue is getting more attention. The New York Times published an article on how frequently blacks in nursing homes are assigned that label. 

With good reason, blacks and their loved ones shouldn't trust the mental health system in America. 

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The Great Firing & Suspected Leaks: Will This Shut Faucet Gush to Media and Other Reflections on Turbulent Times

What may have begun is The Great Firing associated with alleged leaking to the media.

Consequently, media outlets could find that the usual insider tipsters might go silent.

Legal tabloids like Abovethelaw in the U.S. and RollonFriday in the UK had developed their brand and business from leaks from internal sources. If those go kaput so could lots of their traffic.

Simultaneously, employers could establish more effective detection systems to identify leakers. 

At Netflix, the black pregnant leader of the trans resource group has been fired, reports The Verge. That's because of a supsicion of an unauthorized transmission of confidential data to Bloomberg. It had been allegedly related to how much Netflix paid for Dave Cahppelle's "The Closer" and the audience reach. The group had planned a walkout on October 20. Usually Netflix is a transparent player which encourages candid conversations. This development may be atypical. Or it could signal a shift in the culture.

Earlier, Ashley Gjovik, a former senior engineering program manager, was terminated in relation to Apple's antileak stance, reports 365NewsChannel. The specifics of this had been vague at the time of her termination.

But a week after that on September 15, a letter arrived fom law firm O'Melveny & Myers. Its spelled out details of intellectual property she had been accused of leaking.

However, she is in her final year of law school and asserts that the antileak employee policy as well as the strict employee handbook is illegal. Prior to her termination she had been outspoken in her criticisms of Apple. One beef had been about its association with alleged toxic chemicals.

Accusations about leaking, particularly data related with trade secrets, could be the legal tool employers leverage to tame activist employees.

Meanwhile, as the Rock Center for Coporate Governance at Stanford found in its research, that worker unrest is a major concern to the general counsel. Here is my article on such an issue published in O'Dwyer Public Relations. 

Both corporations, including its in-house legal department, and the employees are swept up in the chaos of changing values related to capitalism.

The Milton Friedman orthodoxy of the primacy of shareholder value is breaking down. There are growing demands for a broader focus. That is, there should be accountability for stakeholders ranging from employees to planet earth. Those frequently are summed up under the umbrella term "ESG,' that is, Environmental Social Governance.

Among the many understandings of “ESG” Investopedia’s is the most user-friendly. Essentially, it classifies ESG as a set of criteria for producing metrics on:

• The company's environmental imprint on planet earth.
• Its accountability for the needs of all stakeholders.
• The rules for operating the macro affairs of the corporation. That is, governance. (Be it WeWork or Theranos the alleged lack of proper govenance has become high profile.)

This confusion and its legal, political, stock price, branding, employee relations, and community implications have set in play a new kind of practice in large law firms. The shorthand title for it is "ESG."

The first in that niche had been Paul Weiss. That had been way back in April 2020. Its chairperson Brad Karp picked up on the perfect storm brewing. Here is how Paul Weiss had configured its ESG practice:

"Business leaders face greater pressure to increase their organizations’ resilience while simultaneously addressing social issues of importance to stakeholders. Our advisory practice helps companies navigate the legal, business and political ramifications of developing and implementing ESG initiatives. We advise on matters such as stakeholder engagement, corporate governance, crisis management, corporate social responsibility, sustainability, diversity and inclusion, ethics and compliance."

During an interview with Bloomberg Law, Karp added that ESG was not only impacting corporations. It was also going to be a force field in law firms. He noted: "'ESG is going to affect every aspect of the law firm world, law firm operations, and the interaction with their clients going forward,' Karp said. 'The law firm community hasn’t picked up on how profound that will be.'”

A sign of this upheaval about the purpose of a corporation, my recent article in ST Magazine on sustainabiity is receiving  considerable attention. 

Another aspect of employee unrest is striking.

In a very open manner - not through supposed stealth leaking - workers again are resorting to walkouts. Those, such as at Deere, are stragetically timed for the worst time for the employers. This is the season of harvest for Deere customers and they could be left out there without the parts their equipment needs.

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Big Law - Some Rashomon Moments

From the time of Jeremy Blackman's satiric blog "Anonymous Lawyer" to current best-seller "The Caesars Palace Coup" Big Law has been vilified. That's the way it has been.

The partners are depicted as feudal lords.

Law firms defending the likes of Harvey Weinstein become fodder in media such as The New Yorker. 

The up and out system which results in only about one out of 10 associates making it to partner is interpreted as a destroyer of souls. There is no type of Greek Chorus chanting: Hey, you knew the deal when you looped in. 

Netflix is having a 10-part series derived from the novel "Partner Track." Negative, of course. 

And media sites such as RollonFriday and Abovethelaw which accept insider leaking from law firms are on side of the angels.

But that dark lens for viewing large law firms is only one. And Big Law isn't doing such as hot job pushing back on it through pro bono assignments, social justice outreach, and public-interest op-eds in The New York Times and The National Law Journal.

What those firms haven't unleashed is The Rashomon Factor.

As the Japanese film "Rashomon" showcased, there are myriad perspectives for interpreting just about everything. In that movie about a murder and a rape, the takeaway is how differently a number of people experienced it.

More recently, the film about flawed justice  in the 14th century "The Last Duel" also uses the Rashomon style. What is claimed to have happened - a rape - and the background events are configured into a variety of scenes of the same events. The story, incidentally, is true. 

Big Law has the resources to conjure up its own engaging Rashomon moments.

Do a 24/7 TikTok video of what goes on in law firms. Sure, block the confidential. And let the world decide if that's so bad. Viewers could be enchanted by the analogue of Tom Brady-type strategic planning and actual plays.

Follow a summer from the law office, back to law school, and back to the law office. Pan in on the struggles. Public opinion can assess the values of that world. The interesting part could be the shaping of a legal mind and resistance. Are humans wired not to think like lawyers? Add on a public interest tutorial on how do just that: Think like a lawyer.

Humor also is back in marketing communications. It's always been a power tool in messaging. Some will recall how presidential candidate Ronald Reagan blew up the age issue with a quip about Walter Mondale's "youth and inexperience." Here is a clip of that game-changer in the campaign.

Perfect would be an action-figure comic book. Let the world become engaged in how a chairperson like Larry Sonsini at Wilson Sonsini protects startups or Brad Karp at Paul Weiss mobilizes thousands of lawyers from law firms throughout America to work free on behalf of the victims of COVID. It's not only a prosecutor such as Jack McCoy from "Law & Order" who fights the good fight. 

And, yes, contract with designers (hopefully on a pro bono basis) to create video games about the weapons defense lawyers carry into combat. Empower players to make genius moves. Selling those games can provide funding for scholarships to law school for diverse students. 

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Politico, Under Alex Springer Ownership, Putting Up Paywall, Expanding - And Other Shifts in the Influence Game

Large law firms are not only inherently highly political. Those making partner have had to master the politics. 

They also usually officially or unofficially are engaged in lobbying. On its website, Squire Patton Boggs positions itself this way: Global Connections, Global Influence. 

Therefore, it should matter to them that Politico will be changing in two major ways.

The Wall Street Journal reports that after Alex Springer completes its $1 billion acquisition there will be a paywall and also expanded coverage. Regarding the latter, it will be increasing its manpower by 10%.

The paywall could be the tipping point cutting out some of the constituencies law firms have targeted for influence. They will have to research what the readership, post-paywall, consists of. 

And, more news provides an opportunity to expand their reach. They can pitch more content and opinion pieces. 

On the other hand, The Hill remains without a paywall. Getting material into it can be a powerful placement. What had resonated for months in the worst of times for America had been Dentons global head Joe Andrew's op-ed on how many low-income had no choice but to go into the workplace when COVID began. That was in April 2020.

Like everything else, the influence game keeps changing.

Big Law, especially those with Wall Street clients, has to rethink its dependence on establishment media, ranging from The New York Times and The Wall Street Journal. Instead it has to figure out the right tone and content for sites such as Reddit and TikTok. Most firms also don't know how to get attention on the professional social network LinkedIn. When they post they rarely engage readers. 

In addition, are the progressive players in Big Law preaching to the choir?

So much of their outreach is to like-minded progressives. Not enough bridges are being built with conservatives. Yet, that force field is growing in power and reach. They have their messaging down cold. Also, there's no counting out former U.S. President Donald Trump for 2024. The Harvard CAPS - Harris poll found that 58% of those surveyed would vote to return him to the White House. 

Yes, Big Law has funds to invest in advancing its and its clients' points of view. But there is so much money floating around. In itself the money is simply the price of entry. It has to do more than just put up the bucks. 

Of course, the midterm elections are already being written off as a disaster for progressives. But so also could be 2024 and beyond.

Yes, conservative messaging is winning out.  "Woke Inc.," which contends liberalism is destroying democracy, is a best-seller: 734 ranking on Amazon. Authored by successful entrepreneur and first-generation American Vivek Ramaswamy it argues persuasively against just about every manifestation of the current social justice movement.

Yet, as Bloomberg Law points out, many law firms are competing to pile on more and more social justice cred. Again, they might seek more common ground with those who support Ramaswamy's reform of not only politics but also business. As for the latter, he wants business to return to all-business and away from stakeholder capitalism or ESG.

Meanwhile, the very notion of what's in the public interest is in play. 

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Corporations Woke to the Profits in Social Justice, Hammers Vivek Ramaswamy: But That Is Money Hard-Earned

Vivek Ramaswamy's manifesto against business' supposed embrace of social justice, published in August, is a best-seller. The book is "Woke, Inc.: Inside Corporate America's Social Justice Scam." On Amazon, it ranks 705. 

Right from the get-go Ramaswamy, a successful entrrepreneur and first-generation American, is persuasive. He provides an example that resonates. It's Coca-Cola.

Lawyers will vividly recall how the chief legal officer there created a radical initiative for increasing diversity. That imposed quotas on outside law firms for having minorities on the account and docked those which didn't conform. Coca-Cola also took a stand against voter suppression in Georgia. In addition, it implemented anti-racisim training for employees.

Ramaswamy assesses all that as a kind of protective coloring that allows it to actually do "bad things" and make big profits. In the chapter "The Goldman Rule," he writes:

"Coca-Cola fuels an epidemic of diabetes and obesity among black Americans through the products it sells. The hard business decision for the company to debate is whether to change the ingredients in a bottle of Coke."

This approach to doing business is called "Stakeholder Capitalism." Another term for that is ESG (Environmental Social Governance). But the real game, he contends is: "pretend like you care about something other than profit and power, precisely to get more of each."

Those buying his book give it an almost "5" rating out of a possible "5." And the author is receiving glowing reviews from thought leaders such as Glenn Greenwald, journalist and constitutional lawyer, Ambassador Nikki Haley, Bill Ackman who founded hedge fund Pershing Square, and N. Gregory Mankiw of the Harvard Economics Department. 

So, "Woke, Inc." has touched a nerve. But what Ramaswamy doesn't get is that already there have been severe questionings of the tenets of Stakeholder Capitalism or ESG and various forms of push-back. Trying to make a buck off it doesn't go all that smoothly.  

The now-classic example has been the unraveling of Allbirds. Incidentally, it's yet to make a profit and is racking up large losses.

Among Allbirds' Woke efforts had been in governance. It gave permission to its board of directors to factor in other stakeholders, not just shareholders. Its marketing platform was sustainability-centric. For its IPO it established a sustainability framework which could be a model for others to leverage in their IPOs.

Then came the lawsuit seeking class action certification "Patrica Dwyer, et al.  v Allbirds" challening the claims. Here is a copy of the complaint. Allbirds has modified much of the sustainability material for its IPO filing. Media outlets have turned on it.

The raw reality is that many corporations are struggling to navigate the legal, public relations, stock price, employee activism, political, and community challenges associated with stakeholder capitalism. If they are making money from ESG, it's well-earned.

In response to the pickles corporations can get into during this era of stakeholder capitalism, most large law firms have established special ESG practices to guide them. The first of the law firms to anticipate the chaos had been Paul Weiss. Way back in April 2020 it had custom-made an ESG practice. 

Last August, a sign of these confusing times, Reuters Legal presented a case study of a corporation mired in ESG troubles and had law firms size up the situation and respond.

And Coca-Cola actually lost money on how it positioned and packaged its social activism outreach. Forbes reports that both those supporting and those opposing its middle-of-the-road stance on Georgia's voting law, threatened to boycott the corporation. The latter actually went through with that. Also, there was plenty of bad media.

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