Taking a Hint
February 22, 2005 | Filed Under General
Walter Olson’s excellent Overlawyered reports on an interesting sanction imposed by a judge in California against an entire law firm. The sanction requires every one of the firm’s 80 lawyers to undergo six hours of ethics training; the firm’s lead attorney on the case was ordered to take 20 hours of such training. The firm, the lead attorney and the client were also required to pay $5,000 each as monetary sanctions.
According to an article in law.com, the firm Lozano Smith was sanctioned by a federal judge for alleged repeated misrepresentation of facts and the law in a case involving aid for a learning-disabled student.
The plaintiff in the case was represented by solo practitioner Maureen Graves who “practices out of her garage”. She recovered $250,000 in fees and costs; no word as to whether she’s moving her office.
The firm tries to put things in perspective:
Firm managing shareholder Peter K. Fagen said that when the judge warned of potential sanctions a year ago, the firm “immediately engaged an expert in legal ethics to assist us in improving our quality control protocols and to advise us on augmenting our training.”
After Wanger’s order, Fagen said he scheduled a retreat for the entire firm to “take the case apart from start to finish … to look at what went wrong and to put procedures and mechanisms in place to make sure it won’t happen again.”
No mention of the sanctions on the firm web site as of this morning; clients of the firm still voice support, however.
I learned two things from this:
— always listen to a federal judge who uses the word “sanctions”; and
— never underestimate an attorney who practices out of her garage.
The GC and the SEC
February 21, 2005 | Filed Under Regulation
The weblog Deal Attorney notes that the SEC is increasingly targeting general counsel in certain enforcement proceedings. It points to a detailed report from the Fried Frank law firm that highlights a recent matter involving Google and its general counsel. A consent order has settled this dispute, without any admission of liability.
Legal Director also covers this story (30 day link). The article quotes SEC head of enforcement Stephen Cutler, who has noted that lawyers have been named in more than 30 of the SEC’s enforcement actions in the previous two years. This resulted from the SEC’s policy of focusing its limited resources on policing ‘gatekeepers’ to the capital markets, defined as:
“the auditors who sign off on companies’ financial data; the lawyers who advise companies on disclosure standards and other securities law requirements; the analysts who warn investors away from unsound companies; and the boards of directors responsible for oversight of company management”.
The Fried Frank report concludes somewhat ominously:
the Commission’s recent efforts confirm that securities lawyers, like accountants, will be held rigorously to high standards of conduct. Securities lawyers occupy a sensitive point in the regulatory process. By increasing its pressure on them, the Commission continues to reinforce the messages of its regulatory agenda and to leverage its enforcement capabilities.
Check your D&O policy and bylaws on indemnification…
A Gorilla Awakens…
February 15, 2005 | Filed Under In the News
An interesting story from IP Law & Business describes an evaluation of outside law firms underway at Microsoft.
Designating certain law firms as “preferred providers” is not news. I think this is:
Firms would have to renegotiate their billing structure, as well as provide detailed data on diversity and staffing, according to new uniform guidelines established by Microsoft. The company also imposed a rate freeze until the program is finalized sometime toward the end of the year. Details of the arrangements are confidential, said Thomas Burt, Microsoft’s head of litigation.
Renegotiate billing structure?
Rate freeze?
When a company sitting on over $30 billion in cash starts to take the axe to legal spending, what is the lesson for the rest of corporate America?
Another Law Firm “Merger”
February 14, 2005 | Filed Under In the News
After many weeks of speculation, the law firms Shaw Pittman and Pillsbury Winthrop announced a “merger”. Law.com wonders whether this combination will lead to additional mergers by large firms wanting to get bigger and smaller firms (such as those in Washington, DC) wanting to avoid being left at the altar.
The press release notes that combined annual billings will approach $600 million. It additionally quotes Pillsbury chair Mary Cranston about the client angle:
“In fact, we have already discussed the merger with a number of existing clients and the response has been uniformly enthusiastic.”
I don’t doubt this, but if one of the firms I use ran such a merger scenario by me, I would probably have two questions. Are you going to raise your rates? Are you going to raise your billable hour targets?
A question usually arises in law firm mergers as to whether all lawyers involved with the two firms will remain with the combined firm. Again Pillsbury’s Ms. Cranston addresses that issue:
“We could have potentially — because of client conflicts — attorneys who could not join the merged firm and would find another platform.”
“Platform”?
Bruce MacEwen at Adam Smith. Esq. had a more nuanced and informed take on this merger before it was completed.
The press release talks about the merger creating a “new legal brand”. Another way of doing that would be to license this.
I wish the combined firms and their clients good luck.
P.S.: I put the word “merger” in quotation marks because it seems to have a slightly different definition when applied to law firms. Such as #3?
UPDATE: The National Law Journal covers the issue of client conflicts in law firm mergers. Apparently some clients are forced to “transition” to other firms. To avoid this, the merging firms will seek to get “advance waivers” to permit limited conflicts.
Performance Review = Defamation?
February 13, 2005 | Filed Under General
Overlawyered notes an interesting law.com story about a recent Illinois appellate court opinion involving an in-house counsel who challenged his firing after a performance review. The appellate opinion is Popko v. CNA Financial; a summary from IICLE is #2 as you scroll down here.
When a court’s opinion starts out like this, it is often a sign of not-so-good things to come for an employer:
“Upon returning from a planned two-week vacation and honeymoon to his workplace of almost 16 years, plaintiff Daniel Popko learned that he had lost his job for poor conduct he displayed during a performance review.”
The appellate court agreed with the trial court that communications within the corporate environment (such a memoranda detailing the situation and seeking authorization for the termination) can constitute publication for defamation purposes. Also noted are questions raised at trial whether CNA properly investigated the alleged performance review conduct, given plaintiff’s prior positive performance reviews.
At some point in the case, CNA asserted “at-will” status for plaintiff, but the trial court did not grant the associated motion. The appellate court saw the question of defamation to be legally distinct from whether an employee is “at- will” and could therefore be discharged for “any reason”.
A helpful list of considerations relating to performance reviews is found here.
Your mileage may vary. And in this area of in-house practice, it almost certainly will.
Search
Powered By
Links
| ||||
 | ||||
| ||||
| ||||
|
||||
