Taking it to the Mat

October 8, 2008 | Filed Under GC Liability 

Few corporate executives under federal indictment resist the temptation (and pressure) to settle. Fewer still take the case to trial and verdict.

Former McAfee GC Kent Roberts is one who did. And he won, with acquittal on two charges related to allegations of stock-options backdating. A third charge resulted in a mistrial, and prosecutors have decided against seeking a retrial.

Mr. Roberts was represented by a team from Cooley Godward that was led by Stephen Neal. SEC charges still linger, however.

Perhaps this outcome will result in fewer cases like this being pursued, particularly where there is no clear evidence of financial gain or intent to deceive.

That would be a hopeful sign for those tasked with preparing option documentation in an age of complex compensation systems and even more complex regulatory interpretations.

Quota Creep: Not This Time

October 3, 2008 | Filed Under Cost Control, The Client Speaks, Law Firm Trends 

The weekly ABA newsletter tells us that some firms are looking at increasing billable hour quotas as a “strategy” to combat the looming recession.

It is rather anecdotal, but if even partially true, it won’t work, not this time. I can think of three reasons:

1. Clients are looking at cutting all expenditures, and outside legal costs are near the top of any GC’s (or CFO’s) hit-list.

2. When clients are cutting back on work and they hear the word “quota” they parse the underlying meaning with a concern: padding (or its variant, platinum-plating).

3. When work gets scarce at firms, partners who can tend to hoard, and partners and associates who can’t look for any file/matter number to slam an 0.3 here and there. Clients will be particularly watchful for new names on invoices.

The sole bright spot in this dark cloud: economic events may finally push in-house counsel to the point where they actually experiment more with alternate billing arrangements.

And that is called progress for clients, day-of-reckoning for many law firms, and opportunity for a few others.

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