Monday, March 26, 2001
Hell No, We Won’t Pay - Sun Microsystems warns firms: Don’t raise first-year salaries to match Brobeck
Susan Beck - Corporate Counsel - April 2001
[This article is reprinted full text. No citations to a web-based version could be found. Ed.]
Ken Olsen wasn’t going to take it anymore.
When the senior in-house lawyer at Sun Microsystems, Inc., heard in January that San Francisco’s Brobeck, Phleger & Harrison was boosting associate pay by $10,000, he decided not to sit by silently. The increase -- which brought raw first-years up to as much as $170,000 – was, in Olsen’s view, out of line.
So one week after the news broke, Sun’s chief intellectual property counsel dispatched an email to outside lawyers who handle IP work for the company. In four blunt sentences, he warned that the Palo Alto-based computer-workstation maker might cut off any firm that followed Brobeck’s lead. “I intend to disfavor any firm for future intellectual property and other representation that moves to similar compensation structures,” he wrote. “Rather, we intend to focus our relationships with those firms that understand the importance of maintaining more rational policies.”
“I felt it was time for somebody on the other side of the equation to stand up.” Olsen explains. “Very seldom do firms think of clients when they decide it’s in their interest to raise fees and treat the client sector as having no choice but to swallow it. This time it was so unjustified.”
A year earlier associate pay had jumped dramatically when Menlo Park, California’s Gunderson Dettmer Stough Villenueve Franklin & Hachigian sparked a round of raises that many firms felt compelled to follow.
In particular, Olsen objected to Brobeck’s hour-based system, in which associates must log 2,400 annually to earn top pay. (First-year base pay is $135,000.) “It creates an incentive for lawyers to do nothing but bill hours and look for ways to charge clients more hours.”
Before the Sun lawyer sent his missive, he checked with his general counsel Michael Morris. Morris not only gave the go-ahead, but also sounds equally, if not more, outraged on the topic. “The thing that gets under our nerves is the blind assumption that companies like ours will pay those rates,” he fumes. “We’re just not going to do it! We’re just not going to do it! These law firms are building a cost structure that the market simply will not support. There’s a mindlessness to it.”
The January 19 email was transmitted to more than three dozen lawyers, including members of the New York-based Skadden, Arps, Slate, Meagher & Flom, Palo Alto’s Fenwick & West, Cooley Godward, and Washington, D.C.-based Howard Simon Arnold & White. Olsen says he’s heard from about half of the recipients. “They all applauded the stance.”
Over at Palo Alto’s Wilson Sonsini Goodrich & Rosati – the first firm to announce that it wouldn’t copy Brobeck – partner and firm general counsel Donald Bradley says he hadn’t heard about Olsen’s message. “It didn’t have an impact on our decision,” he says. But Cooley chairman and CEO Stephen Neal did see the email while the firm was formulating its response to the Brobeck raises. Cooley announced at the end of January that it wouldn’t raise base compensation, but would continue to reward exceptional effort with bonuses. Olsen’s message, Neal says, “was an affirmation but not a driver of [this] decision.”
At press time, only two firms had take the bait and joined Brobeck’s scaling the pay ladder: Gray Cary Ware & Freidenrich of Palo Alto and San Diego and Pilsbury Winthrop of San Francisco.
Brobeck chairman Tower Snow, Jr., says he was concerned by Olsen’s message. “of course, it disturbs me.” Still, he defends Brobeck’s action – stressing that his firm has not raised billing rates since the announced pay hike. Billing rates went up between 5 and 10 percent at the start of the year, with first-years now billed out at $165-$175 an hour. But that is still far below New York firms and is competitive with Brobeck’s technology-oriented competitors, Snow says.
.
In fact, Snow sees the raises for his first-years not just as defendable, but even laudable. “We get the best and brightest people and they produce a superior product and produce it more quickly and more cheaply. . . We are doing in the legal space exactly what Sun is doing in the technology space – increasing productivity.”
But what does this mean with Brobeck’s future with Sun? The firm has done IP work for the company for years. “I don’t want to get into specifics,” says Olsen. “But, clearly we’re not going to give people any more work” when they raise associate salaries like this.
Snow said he planned to contact Olsen and offer to meet with him.
…And Arbitrated Justice For All - So long court: The scales have tipped in favor of alternative dispute resolution.
S. Bahls & J. Bahls - Entrepreneur - December 2000
According to a 1998 study by the Cornell Institute's School of Industrial and Labor Relations, 90 percent of the corporations surveyed had used mediation, arbitration or both, and overwhelmingly preferred them to litigation regardless of the type of dispute.
Friday, March 23, 2001
Bottom Line Blues
Renee Deger - The Recorder - March 23, 2001
Cuts, but no layoffs, firms deal with economy's slide. So far, people's jobs are being spared, but the perks are out as law firms start belt-tightening in earnest. Trying to avoid associate layoffs, some law firms have put the kibosh on catered meetings, off-site retreats and jet-setting around the country for continuing legal education classes.
Read more...
Wednesday, March 21, 2001
Network Firms Appeared and Argued Before the United States Supreme Court in Three Landmark Cases Within the Last 12 Months
Characteristic of the high level of practice of our Network member law firms, three times during the past year Network member law firms appeared and argued before the United States Supreme Court.
Preemption of State Product Liability Laws
Mal Wheeler and his team at Wheeler Trigg & Kennedy (Denver) prevailed on a federal pre-emption issue in the U.S. Supreme Court last May. "The justices, by a 5-4 vote, said federal regulation of automobile safety pre-empts, or blocks, lawsuits in which people invoke state product-liability laws and contend air bags could have saved them from harm.
"American Honda Motor Co. successfully fought off [plaintiff's] lawsuit in lower courts by arguing that a federal law, the National Traffic and Motor Vehicle Safety Act, and a federal regulation shield it from liability. The Supreme Court said those courts were right."
Mal addressed that issue in his presentation to Network attorneys and inhouse counsel at our Scottsdale, Arizona seminar in April 2000.
And, today, the U.S. Supreme Court announced decisions in two more cases argued by Network attorneys and reported below in the Daily Log. Also, American Lawyer Media covers both decisions in a single article:
Non-consentual Drug-Testing of Pregnant Women Held to Violate 4th Amendment in U.S. Supreme Court Case Argued by Bobby Hood (Hood Law Firm -- Charleston, SC); and
Circuit City's Mandatory Arbitration Provision in Employment Agreement is Enforceable Says U.S. Supreme Court in Case Argued by David Nagle (LeClair Ryan -- Richmond, VA).
Non-consentual Drug-Testing of Pregnant Women Held to Violate 4th Amendment in Case Argued by Bobby Hood (Hood Law Firm -- Charleston, SC)
"More than a decade ago, at the height of the crack cocaine epidemic, a public hospital in Charleston, S.C., began to test the urine of some pregnant women and to turn any evidence of cocaine use over to the police. The Supreme Court ruled today, 6 to 3, that such testing was an unreasonable search in violation of the Fourth Amendment if a patient did not consent to the procedure.
"While the ultimate goal of the program may well have been to get the women in question into substance abuse treatment and off of drugs, the immediate objective of the searches was to generate evidence for law enforcement purposes in order to reach that goal," Justice John Paul Stevens wrote for the majority."
However, not all ears were deaf to Bobby Hood's arguments. In addition to the 4th Circuit Court of Appeals, which upheld the testing under the 'special needs' exception, Justice Scalia, in his dissent, asserted that the urine testing was neither coercive nor onerous, and that it fell under the special designation, as the Fourth Circuit had concluded.
"Justice Scalia said that today's majority decision, in opening the way for the women to seek damages from doctors and nurses, 'proves once again that no good deed goes unpunished.'"
Circuit City's Mandatory Arbitration Provision in Employment Agreement is Enforceable, Says U.S. Supreme Court in Case Argued by David Nagle (LeClair Ryan -- Richmond, VA)
The USSC has upheld the enforceability of a provision in an employment agreement requiring arbitration of employment related disputes. David Nagle of Network member firm LeClair Ryan represented Circuit City Stores, Inc., the employer in the case.
The case is expected to provide a big boost to the use of binding arbitration as a way to resolve job discrimination and other employment disputes, rather than resorting to litigation. An estimated 10 percent of the American workforce is covered by mandatory arbitration agreements. Expect that to jump in light of this decision and in reaction to the growth of employment litigation.
The case involved a lawsuit filed by an employee of Circuit City Stores Inc. in Santa Rosa, California. When he joined the company in 1995 he was required to sign a document agreeing to arbitrate ``any and all ... claims, disputes or controversies'' related to employment. The agreement read in part:
"I [the employee] agree that I will settle any and all previously unasserted claims, disputes or controversies arising out of or relating to my application or candidacy for employment, employment and/or cessation of employment with Circuit City, exclusively by final and binding arbitration before a neutral Arbitrator. By way of example only, such claims include claims under federal, state, and local statutory or common law, such as the Age Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964, as amended, including the amendments of the Civil Rights Act of 1991, the Americans with Disabilities Act, the law of contract and the law of tort."
In 1997 the employee sued Circuit City in California state court, alleging he had suffered on-the-job harassment because of his sexual orientation in violation of a state fair-employment law.
Circuit City went to federal court, saying the federal arbitration law required that the dispute be handled through arbitration rather than a state court lawsuit. The Supreme Court ruled (5-4) for the company.
David Nagle of Network member firm LeClair Ryan (804-343-4077) represented Circuit City in this landmark case. Congratulations to David Nagle, LeClair Ryan, and to Circuit City.
Read the Opinion and coverage by CNN and the New York Times.
Tuesday, March 20, 2001
Narrower Is Better - Niche Experts Increasingly Make Partner at Florida Firms
Tom Collins - Miami Daily Business Review - March 20, 2001
In the past, making partner at a top firm required big courtroom victories, booking new business and being a jack-of-all-trades. Those things still help, of course. But today, lawyers who never go to court, are not great rainmakers and are anything but versatile are breaking into the partner ranks. That's because they offer something just as valuable to law firms -- expertise.
Read more...
Friday, March 16, 2001
Snell & Wilmer Voted #1 by "Ranking Arizona: The Best of Arizona Business"
Snell & Wilmer was voted the #1 law firm by "Ranking Arizona: The Best of Arizona Business," the state's largest business poll of its kind.
Read more...
Snell & Wilmer Elects Partners and Senior Attorney for 2001
Snell & Wilmer announced the election of new partners in its Phoenix office:
Mike Christopher (practice concentrated in corporate and securities law, and mergers and acquisitions);
Dora Fitzpatrick (practice concentrated in health care litigation with emphasis in medical malpractice);
Robert A. Henry (practice concentrated in general commercial, securities, real estate, and environmental litigation matters along with OSHA defense);
and a Senior Attorney:
Catherine E. Wehling (practice concentrated in ERISA, employee benefits, and executive compensation).
Read more . . .
Ruden McClosky appointed General Counsel to Mt. Sinai Medical Center of South Florida, Inc, and Miami Heart Institute.
Peter Wechsler (Ruden -- Miami) will be overseeing all litigation, and will be sitting on the risk management committee, as well as the medical ethics committee of the medical center. Peter will also be supervising outside counsel, and selecting outside counsel on medical malpractice claims, if any.
Wednesday, March 14, 2001
The Swift Demise of OSHA Rules
Nickles led attack that took unions, Democrats by surprise
D. Davidson and T. Boncompagni - Legal Times - March 14, 2001
In a rare display of legislative agility, Senate Republicans managed to kill an intricate -- some say onerous -- set of federal ergonomics regulations that had taken a full 10 years to enact. Led by Assistant Senate Majority Leader Don Nickles, R-Okla., the Republicans and big business outmaneuvered and outworked a coalition of Democrats and unions that one union official conceded was "caught flatfooted."
Read more...
ABA TechShow 2001 - Chicago March 15-17 at the Sheraton Hotel & Towers
Law.com - March 14, 2001
The ABA TechShow meets this week in Chicago, with a look at the state of courtroom technology. Tour the courtroom of the future, View current litigation technology, get some ideas about how to create the most convincing graphics, and a jump-start on how to train staff and attorneys in the latest in trial technology.
Read more...
The ABC's of Appellate Law: A Guided Tour for Non-Specialists
Panel explores ins and outs of appeal process
Law.com Seminars - March 14, 2001
A litigator called on to challenge or defend a trial court judgment needs every edge possible. Learn from a group of appellate experts, including practitioners and California Court of Appeal justices, in an informative roundtable discussion that focuses on the essentials of handling civil and criminal appeals.
Read more...
Tuesday, March 13, 2001
Weinberg, Wheeler's Defense Verdict in Kelley v. Insignia
Billy Gunn, Ashley Nichols, and Chuck Clay of Weinberg, Wheeler, Hudgins, Gunn & Dial, LLC in Atlanta, Georgia, recently received a defense verdict in Kelley v. Insignia Corporation which was tried in Cook County, Illinois. The firm was retained by the excess carrier for the only defendant Insignia Corporation, a division of Aimco, one of the world's largest apartment complex managers. The firm was brought in after the deadline to identify experts had expired and the case was on a trial calendar. Shirley A. Irwin of Bollinger, Ruberry & Garvey was local counsel in the case brought by Plaintiffs' attorneys Robert S. Baizer, Joseph E. Kolar, and Brian J. Lewis of Baizer & Kolar.
Plaintiff, pregnant with her son, worked as a pool attendant at the Harbor anding apartment complex managed by the defendant, Insignia. Plaintiff claimed that on August 29, 1995, she received an electric shock of household current from a defective electrical switch which controlled the underwater pool lights. Allegedly, the hazard had existed since 1994 as another pool worker testified that she had previously received similar shocks and had reported it to management. Thereafter, she allegedly used a wooden stick to flip the on and off switch. Plaintiff claimed that after the shock, the fetus moved violently for a few minutes and then she felt no fetal movement for several hours. That evening, she alleged, she went to the emergency room and reported the shock and identified a burn on her index finger. On December 1, 1995, her child was born. Approximately five months later, he was diagnosed with right-sided hemiparesis, cerebral palsy, and global mental retardation, all of which was attributed to the electric shock. At time of trial, the child was five years old and asked the jury to award 39.5 million dollars for his injury. Although no medical literature had ever causally linked an electric shock to a pregnant woman causing cerebral palsy in the fetus, several articles reported fetal death, even with household current and no harm to the mother, as well as stroke. Insignia contested liability and causation. Insignia denied notice of the defective electrical switch and insisted that the child's cerebral palsy was due solely to a pre-existing condition that predisposed him to the formation of blood clots known as The Factor V Leiden Deficiency. In addition to the 39.5 million dollar request, Plaintiff sought punitive damages. The trial was bifurcated and the jury was to be told of the punitive damages count only in the event Plaintiff was awarded compensatory damages.
Liability was contested on the basis of a lack of proximate cause in this three week trial. Prior to trial, the lowest settlement demand was 26 million dollars with an offer of 1 million dollars in primary coverage. The jury deliberated for approximately three hours after three weeks of testimony and returned a defense verdict.
Associate Salary Race Cools
Law.com - March 13, 2001
Have first-year salaries finally topped out? Last winter, top law firms were falling over one another to raise salaries. But the only thing that's been falling recently is the stock market. In response to the sluggish economy, firms across the country are either opting out of the salary race, or substituting bonuses.
Read more...
Monday, March 12, 2001
Need Really, Really Private E-Mail? Company Says It Can Provide
Ross Hanig - The Recorder - March 12, 2001
There's still no way to make an e-mail completely disappear, but Disappearing Inc. can do the next best thing. The company helps cautious e-mailers send messages so encrypted they become indecipherable to even the most powerful computer forensics technology. The technology may look like a boon to corporate counsel and a headache for plaintiffs' lawyers, but the pros and cons aren't so simple.
The company's technology makes expired e-mails "more unreadable than paper shredded and in a landfill," says Dave Marvit, the company's founder. "It's gone, it's completely gone."
Kris Haworth, a manager at Deloitte & Touche's forensics investigative services group in San Francisco, agrees. And her team has some of the most powerful high-tech investigative tools in the country.
"[T]he methodology is such that the forensics world can't recover e-mail deleted in this fashion," she said in an e-mail.
Read more . . .
Lessons from GE's GC and a 775 Lawyer Inhouse Legal Department
Karen Hall - Corporate Counsel - March 12, 2001
1. Hire Smart -- "The only thing I've done," says Heineman, "is accumulate and hire a lot of great people, and that really is the truth." The ratio of GE work done by in-house counsel versus outside counsel is 60:40. There are now 475 outside firms on GE's roster, adds Suzanne Hawkins, senior counsel in charge of legal operations. And that's down from 500 since just last year. The winnowing is the result of an ongoing evaluation of firms on the basis of quality, cost, and efficiency. * * * You can help keep the overall legal spending relatively steady by hiring fewer, highly productive people -- even if you end up paying them a lot.
2. Business Focus -- Heineman has spread his 775 lawyers across GE's 13 divisions. Each has its own general counsel, chosen by the division's CEO from a list Heineman provides. In turn, each GC is staffed with high-quality specialists who serve each business division. These specialists meet periodically for training and to share best practices, but their responsibilities are primarily to their business groups -- GE Plastics, or Engines or Medical.
3. Advanced Business Course for Lawyers -- The program, dangled as a carrot for top performers, drilled 30 lawyers from all over the company (invitation only) in the GE Way of doing business. Courses taught by a faculty comprised of GE financial gurus and outside business school professors spanned five business days last May and included everything from global economics to risk assessment methods to e-business.
4. Central Intranet-based Infomation System -- On the department intranet, which was revamped and re-rolled out in February 2000, lawyers now can find everything from lists of preferred providers, to standard corporate forms, to rosters of in-house specialists around the world, to lists of negotiated discounts that outside firms have accepted. It's a finely tuned, robust portal outfitted with a carefully selected search engine that has, according to Hawkins, all but eliminated the importance of law books and paper files.
5. Move Work Inhouse -- In the past four years, the department has grown from 584 lawyers to its current complement of 775 (the number of GE Capital lawyers alone grew from 243 to 369 during that period). But its combined annual legal spending, excluding GE Capital, has remained relatively steady, growing from $175 million to $200 million from 1997 through 2000. Much of GE Capital's legal expense can be, excuse the pun, "capitalized."
6. Periodic Case Review -- All litigation involving more than $25,000 must be reviewed every three to six months to see if it can be pushed into arbitration, mediation, or settlement. "There are going to be some cases where we have a deep principle, or the other side is being impossible, that we are going to have to go to trial on," says Heineman. "But you can get rid of an awful lot of these cases if you use this
process."
7. Avoid Becoming a Plaintiffs' Target -- GE wants to end its litigation quickly and not leave unnecessary hard feelings. Avoid becoming an enemy of the plaintiffs bar.
Read more...
DuPont Facing New Benlate Attack
Darryl Van Duch - The National Law Journal - March 12, 2001
E.I. du Pont de Nemours & Co. thought years ago that it had seen the worst of its Benlate litigation. Latest attack is from shrimp farmers; so far, $22M in verdicts.
Read more...
Bankruptcy Resources Online
Robert J. Ambrogi - Law Technology News - March 12, 2001
The Internet is far from bankrupt when it comes to resources relating to the laws regulating insolvency and corporate reorganizations. Federal laws and regulations, bankruptcy court decisions, current news, educational materials, and even current case documents and notices are available online. Here is a guide to finding bankruptcy laws and information on the Web.
Read more...
The Lightness of Traveling
Carlyn Kolker - New York Law Journal - March 12, 2001
Imagine a typical Type A lawyer-on-the-go, carrying full-to-the brim briefcases, stacks of legal pads, a laptop with a mess of cables. These lawyers travel light -- a cell phone, a change of clothes, and two felt-tipped pens.
Read more...
Thursday, March 08, 2001
Legal Web Sites
Donna Tuke Heroy - Legal Information Alert - March 7, 2001
Below comments from the cited websites or by the Network of Trial Law Firms' editor:
http://www.lawbooks.com/ -- Law books [closed for business -- a dot.bomb?]
http://www.courtlink.com/ -- Federal, state, and local court records -- eAccess solutions - CaseStream® and Classic. Online access to current cases, federal and state court records. E-mail alerts about case activity. Case tracking. eFile solution - JusticeLink®. Online filing, processing and serving legal documents to courts and case parties. eFM - Backend technology solutions to enable courts for electronic filing and record retrieval.
http://www.lexisone.com/ -- [Products and services for lawyers. Online pay-per-view legal research to Lexis-Nexis, Sheppard's. Forms, Marketing, etc. Lots of stuff to pay for.]
http://www.findlaw.com/ -- [Pretty good search engine for lawyers.]
http://www.indexmaster.com/ -- An exhaustive collection of indices and tables of content from thousands of legal treatises, representing a coalition of large and small publishers. This single source research tool allows searches by Keyword, Title, Author, Publisher.
http://www.law.com/ -- [Law industry news -- the best].
http://www.lawcommerce.com/ -- [Products and services for lawyers.]
http://www.itislaw.com/ -- [Access to reported cases, statutes, forms, etc. and much less expensive.]
http://www.quicklaw.com/ -- Canadian and other Commonwealth legal materials: caselaw from courts, boards, and tribunals in Canada, the U.S., the U.K., and the Commonwealth; legislation; secondary legal materials; NetLetters™ with legal commentary and analysis.
Read more . . .
Tuesday, March 06, 2001
Part-time Lawyers Getting Matched with Part-time Inhouse Needs
Bruce Balestier -- New York Law Journal -- March 6, 2001
The fringes of the legal market are being nibbled by an enterprising NYC associate with two years under his belt who has set up a New York-based group of independent solo attorneys seeking part-time gigs with companies needing less than full-time attention. [Gee, I thought that was what law firms do.] The group "i>path" seeks "clients that have a need for basic day-to-day transactional work but are unwilling or unable to pay for either a law firm or a full-time in-house counsel."
CIGNA Names Judith Soltz as General Counsel
She replaces Thomas J. Wagner who is retiring after 21 years of service with the company, the last nine as its general counsel. CEO and Chairman H. Edward Hanway said, "Judy's 22 years of experience at CIGNA, her proven ability in the legal and tax arenas, and her knowledge of public policy will be great assets to CIGNA in her new role."
PR Newswire -- 3/1/01 -- Source: CIGNA Corporation
Sunday, March 04, 2001
Companies Get Access to the Identity of Pesky "Anonymous" E-Mailers By Filing Suit
law.com -- Jason Hoppin -- The Recorder -- 3/2/01
E-mail users seeking anonymity for their public postings of comment, rumor, rant, etc., often use Yahoo or Hotmail accounts in the mistaken belief that those accounts won't lead back to those users. Wrong O!' Subpoenas to Yahoo and Hotmail overload local federal officials.
"The success of Yahoo and Hotmail, the two leading free e-mail providers on the Internet, is causing the U.S. Attorney's Office and federal judges in San Jose, California a lot of extra work. The problem is with their servers -- or more specifically, the location of the servers, the large machines that store e-mails sent and received by customers.
"Across the desks of assistant U.S. attorneys working in San Jose come stacks of investigative reports from all over the country to be distilled into search warrants for review by federal judges there. Because federal prosecutors must approve any federal court filings in the district, lawyers there are working up search warrants for investigations across the country, even though they have nothing to do with the San Francisco Bay Area.
"A Yahoo spokesman said the e-mail accounts are not truly anonymous and that identifiable information about a user can be disclosed under court order -- and usually is.
". . . [C]ivil subpoenas are . . . controversial. The Electronic Frontier Foundation, a nonprofit group that advocates for individual rights in high-tech issues, has opposed the unquestioned disclosure of identities through subpoenas.
"Cindy Cohn, EFF's legal director, said companies often file suits against online personas critical of their business. Under a discovery order, companies can often learn the identities of their critics by issuing a subpoena. The companies will sometimes then drop the suit, Cohn explained."
Read more . . .
Thursday, March 01, 2001
Hiring Is up at N.J. Firms
Sandy Lovell - New Jersey Law Journal - March 1, 2001
Growth rate of 18.3 percent exceeds regional, national pace. If the economy's sagging, New Jersey legal hiring isn't showing any signs of it. An annual survey by the National Association for Law Placement [NALP] showed a 12.3 percent increase in the hiring of summer and first-year associates in 2000 in the state. And taking the summer associates out of the mix, the hike was even more dramatic. Better yet -- hiring professionals say the good times will continue.
Read more...
