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After three years of law school, a hundred grand of debt and weeks sweating out a bar review and exam, it's time to start practicing law in earnest, right? At a handful of firms, the answer is fast becoming "not yet." These firms are putting new recruits through additional apprenticeship programs that they say will better train their attorneys for life at a law firm and for handling clients. The new programs may appeal to clients, but not everyone's buying the idea that they're better for new associates.
Emulex's suit accusing Broadcom of covering up a "decade of criminal behavior the likes of which has rarely been encountered in corporate America" will return to state court, thanks to a California federal judge's ruling this week. In his ruling Monday, Judge Andrew Guilford wrote, "As the Supreme Court stated in Grable, it is improper for district courts to use the mere presence of a federal issue as 'a password opening federal courts to any state action embracing a point of federal law.'"
A Florida businessman who merged his company with a bank that later collapsed claims that auditing failures and a subsequent cover-up by accounting giant Ernst & Young cost him hundreds of millions of dollars in damages. Alan Schein contends that he relied on E&Y audits that gave Illinois-based Superior Bank a clean bill of health for more than a decade when deciding in 1998 to merge his mortgage marketing company with the bank, whose assets were $420 million lower than reported.
Speaking at the conference of the 4th U.S. Circuit Court of Appeals on Saturday, Chief Justice John Roberts Jr. said briefs before the high court are running too long, while the justices themselves are asking too many questions at oral argument. "I think we're getting carried away" with questioning, Roberts said. "It is a little too much domination by the bench." He even suggested giving justices timers as in speed chess, so they can see how much time they are eating up with their questions.
Instead of bolstering its U.S. presence through a merger with a prestigious New York-based firm, Linklaters decided some time ago to build its New York office via lateral hires and recruiting -- a strategy that seems to be working, says the office's co-managing partner. The firm just hired bank regulatory partner Robin Maxwell from Goodwin Procter, the third major lateral hire Linklaters has made in the last year. The hire brings the office's head count to about 170.
Florida-based Ruden McClosky has imposed a 9 percent pay cut on its associates and non-equity partners and informed its equity partners that they are not likely to receive the holdbacks of 18 percent of their pay. The pay cuts have caused many Ruden McClosky attorneys to look for new jobs, legal industry sources said. Ruden's overdependence on real estate transactional work has caused it to be hit particularly hard by the economic downturn. The firm cut about 20 jobs earlier this year, including two attorneys.
A former partner at Latham & Watkins was sentenced Friday to 15 months in prison followed by three years of supervised release and ordered to pay a $10,000 fine and $350,000 in restitution to Latham for defrauding both clients and his own firm. Samuel A. Fishman, an M&A specialist in the firm's New York office from 1993 to 2005, admitted that he had billed fraudulent expenses to clients. In addition, he obtained reimbursement from Latham for personal expenses.
Schnader Harrison Segal & Lewis last week held what is becoming a common meeting at large law firms, to inform its associates, partners and staff that their salaries would be cut. It became the fifth Pennsylvania firm in recent weeks to announce some form of pay cuts. Though the firm said cash flow was not a main consideration in making the cuts, as more firms make these decisions, the issue of managing cash flow has come up as one of the factors that may have played a part in altering compensation models.
The 1st U.S. Circuit Court of Appeals on Monday waded into a growing circuit split over how tough judges can be on defendants accused of financial fraud. At issue is whether judges should count people who are reimbursed for financial losses from criminal schemes as victims when deciding whether to increase a defendant's sentence. Federal sentencing guidelines allow for a sentence enhancement for financial crimes like embezzlement and fraud if there are more than 250 victims.
The relatively recent movement to cut law firm associate salaries isn't likely to eliminate the dramatic compensation disparities between new attorneys, according to a National Association for Law Placement survey. The survey of starting associate salaries for 2008 law graduates found that the pay gap was wider than ever. A chart of the pay distribution shows a gradual bulge in the $40,000 to $65,000 range and a dramatic spike at $160,000, which was the starting pay at many large firms last year.
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