YouTube, Brute?

Regardless of where you think their loyalty lies in the user privacy debate, it's hard to deny that YouTube is awesome.

That's why, I assume, NY law firm Cohen & Grigsby thought it would be so awesome to put their immigration seminar on the super-popular site. Though, I doubt they thought it would be quite as super-popular as it became (yes, that does say 300,000 views and 2 video responses - eat your heart out, breakdancing cat.) CNN's Lou Dobbs? Not a fan.

Why the attention? The video apparently instructs employers on how to make it look like they searched for qualified American workers before applying for work visas for foreign employees.

Well, the Department of Labor noticed all the media attention. And they're not happy. From the ABA Journal:

[A]fter auditing the law firm's filed permanent labor certification applications, beginning last year, the DOL announced today that it is placing the firm's pending applications into department-supervised recruitment over concerns identified by the audits.

Probably not what they had in mind. In law school they told us to really watch what we put on facebook, because law firms would see it. Apparently that is also true for the firms themselves. But with the government. Then the government has to worry about regular people reading what they accidentally put on there.

The circle of life.

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Let's play catchup...

In case you (we) missed it...

The jobs outlook keeps getting worse, the NLRB only has 2 members, TV is slowly coming back (with the right contract), it's not a great time to be looking for a legal legal job (which is super), and the Supreme Court* decided that 401(k) participants were actually entitled to their money, it doesn't take much to satisfy the EEOC, and Judge Alex didn't actually win.

There, now we're all on the same page. Keep up from now on, huh?

*(For a full[?] list of recent and pending SCOTUS employment law cases, see Ross' Employment Law Blog here).

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FirmSuit of the Day: The House Always Wins

Day 2 of Current Employment's week of law firm employment suits is one of those cases that make you wonder if someone at the plaintiff's attorney's office just missed a question on the client questionnaire. Now it's a cautionary tale, thanks to Legal Blog Watch.

The Story: Theresa Brooks worked for Boston's Peabody & Arnold for sixteen years. Then, one day in 2005 she didn't come in. The next day, still no Theresa. Obviously, the firm was a little worried. Brooks had a history of back problems - the firm had given her a special chair, and made some poor chump do her heavy lifting (probably a law clerk).

When Brooks informed the firm that she could no longer work because of her disabling back issues, Peabody decided a little more inquiry might be in order (back problems don't usually lead to trips to the happiest place on earth), so they sent her for an independent medical exam. But even the independent doctor diagnosed her with spondy-something (does this look like the DSM IV?) and agreed it was disabling. Still, 2&1/2 months after she stopped coming in, Peabody fired Brooks, and she sued.

At trial, Peabody showed a secret spycam video of Brooks... What? Oh, get off your horse - you know your firm's got one on you, too. Anyway, the video showed Brooks "working in her yard, repeatedly bending over, carrying heavy bundles, walking up and down stairs without difficulty, and walking without a limp or a cane," according to the court. But we all know that those videos are edited to make people in wheelchairs look like they spend their days surfing and competing in strongman competitions. That doesn't prove anything, right?

[The video shows that s]he was also physically able to drive forty minutes each way to a casino in Lincoln, Rhode Island, and to sit playing slot machines for three hours, while claiming that her back problems would not permit her to sit at her desk and type.

Oh. Well. Ok.

Advantage Peabody. Somebody greenlight whoever shot that footage - I smell an indie career. The moral of the story for those of us in the biz? Stick with craps, and it's high table, and let someone else roll.

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FirmSuit of the Day: Holland & Knight Blocks Jumps like Dikembe Mutombo

In case you missed it, this week is "well, you taught them how to sue" week at CE. Every day we're going to feature a little nugget of law firm internal strife that's ended up in court, and we're kicking things off with a couple of big names: Holland and Knight.

The story [via Blog of Legal Times]: Patricia Dillman, a former Holland & Knight litigation paralegal, is suing her old firm for mucking up (read: tortiously interfering with) her imminent transfer to another global powerhouse, Hughes Hubbard. Apparently, the gigantic firm responded to Dillman's 2-week notice by conflict-checking the paralegal's new position against her work at H-K. When a red flag came up based on some environmental work, Holland contacted Hughes, which promptly pulled the plug on the job.

The Good Parts: Most people's first question is what the big deal is about conflict-checking a departing employee. Well, nothing. When they're lawyers. But Dillman was a paralegal - she wasn't bound by the professional ethics rules that usually trip up travelling lawyers - and anyway, wall-offs are run-of-the-mill in firms the size of these two. Otherwise, no one could ever lateral. So, why did HK conflict-check her to begin with?

For the juice, keep reading.
First off, this was no ordinary paralegal. Dillman was the head of the litigation department's support group, and her new gig was set to bag her $200k a year in Hughes' NY office. Not the kind of person you want to let walk into another multinational firm and start shaking hands. Second, that "environmental work" she was allegedly a part of was the sinking of the oil tanker Prestige, the worst environmental disaster in the history of Spain. And her client was...well...Spain. From the BLT Article:

Spain said the [American Bureau of Shipping], which checks the structural fitness of ships, was negligent in classifying the 26-year-old vessel as fit to haul fuel. Six months after the bureau gave clearance, the Prestige became caught in a storm and Spain refused to give the ship port. The Prestige eventually split in half and sank.

So, Holland represents Spain. Hmm. [Insert joke of choice]. Anyways, guess who reps the bureau? Yep:

According to the complaint, Holland partner Brian Starer told Hughes Hubbard attorneys [representing the ABS] during a deposition in the Reino de Espana case that Holland might try to disqualify the firm from the lawsuit if Dillman began working there.

This case is a seesaw. If Dillman's telling the truth, she was a tragic victim of an underhanded litigation strategy. If not, then does that mean Holland was justified in notifying its opponent of a non-attorney's potential conflict? Dillman's alleging that she did little more than copies and letter writing in the Spain suit, which puts Holland's comments to Hughes in a bad light.

If she's telling the truth, she's a true tragic victim, complete with her own Shakespearean ending: a judge in New York dismissed the entire action by the Spanish government a few days ago, holding Spain has to pursue the case in its own courts.

More tomorrow.

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Well, You DID Teach Them How to Sue

It probably comes as no suprise that there are a few of us on the Current Employment staff that fancy ourselves trendspotters (Chad). The majority of the time, this self-assumption is patently wrong (once again). But since 1/1/08, there has been a pretty clear line of stories that can no longer be ignored, and so CE is ready to announce its official First L&E Trend of 2008:

It is, apparently, super-cool to sue your boss if your boss is a lawyer.

Now, obviously, law firm employment suits are not a new thing. Just ask Sullivan & Cromwell or Sidley & Austin. But since '08 started, it seems like I can't turn on the CE-puter without finding out somebody's suing some huge law firm for being intolerant or demanding or petty. Isn't there some kind of "par for the course" defense? Well, whatever. There should be.

Of course, just because these are law firm employees doesn't make these suits any different - they're just your run of the mill little guy/big company/ secret videotape/pedophilia/intervening foreign government/written on notebook paper type employment suits.

Since that's a lot of material to cover in one post (and we're in BarBri and this provides pre-determined content for the week) we're declaring this week "Well, You Taught Them How to Sue" week at Current Employment. Every day (maybe more) we're going to focus on a law firm law suit that we've run across since the beginning of the year. If you have any suggestions, feel free to pass them along.

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India Ready to In-source Outsiders? Clifford’s Chance is More than Cheap IT.

As we reported earlier, India is getting more and more foreign legal work from the States – cheap stuff here like document review that's even cheaper when done over there. Well, it's not just this side of the Atlantic that's hemorrhaging the boring stuff. The UK has been moving work to India, too, Law.com reports, and they are taking drastic steps to do so.

From the article:

Then there's Clifford Chance's more radical bid to cut costs. In 2004 the firm outsourced part of its document production function to an Indian center operated by Integreon Managed Solutions Inc., a global outsourcing specialist, which then advised Clifford Chance on setting up its own facility in New Delhi. To date, the firm has focused on moving basic accounting and IT functions to India, covering such things as payments to suppliers, invoices, expenses and IT system development.

In contrast to outsourcing efforts by other Magic Circle firms, Clifford Chance's Indian staff are all direct employees of the firm. "It's all fairly small-scale compared with what financial institutions have done, but having 100 people in New Delhi will be a big deal for us," Childs says. Two senior members of staff, operations director Wayne Phillips and financial controller Jo Harvey, have relocated to India to manage the office.

Wow. A whole office devoted to IT and support services. But wait – even if setting up a New Delhi office is cheaper than doing IT work in London, how is it possibly cheaper than outsourcing that work to a company like Integreon that is already equipped? The likely answer is that it's not – and I'm thinking Clifford Chance has another reason for investing a little capital in "the final legal frontier".

Here's a hint: ask yourself why a firm would outsource its doc review to a 3rd party even though it has an office in India, then click the jump.


Why? Because India doesn't let foreign lawyers practice law within its borders. And the UK (along with the rest of Europe) is doing everything they can to get it changed. From InsideCounsel:

In March key members of India's legal community converged in London on the invitation of the Law Society of England and Wales. The Society made its aim clear: it wanted to convince India's government to lift its ban on foreign attorneys practicing in India. As late as the end of August, the Press Trust of India reported India's government was discussing the matter with India's legal community, which opposes liberalization out of fear that Indian firms will lose business to large international firms.

***

"In many countries, [in-house counsel] can reach out to a White & Case or a Mayer Brown, but you're not going to be able to do that in India," says Greg Kalbaugh, director and counsel of the U.S.–India Business Counsel. "So you're going to have to build up a repository or a connection with a domestic law firm."

The "charm offensive" didn't work. The Bar Council of India (BCI) released a statement not long after the schmoozing saying opening the borders would hurt the Indian legal market.

The ban, based on a 1991 interpretation of Indian law, is being reconsidered by the Indian legislature, and the fight is definitely on over the country's "liberalisation". UK lawyers, obviously, support the plan to open India's borders, while the BCI has released a series of statements admonishing the legislature to confer with it before any decision is made. From LegalWeek:

The [latest] statement, which was issued last weekend (18 November) during a conference on liberalisation hosted by the BCI, calls on the Indian Government to delay relaxing its rules on foreign lawyers until further consultation with the body, which says liberalisation will damage the local market.

However, the conference did authorise the BCI to discuss restrictions on Indian lawyers abroad and reciprocal arrangements with the UK's trade and justice ministries, as well as the legal regulators of other countries.

The developments come as the Indian Government attempts to overturn a 1991 ruling that saw foreign lawyers banned from practising in India under the terms of the Advocates Act.

The Government filed a counter-affidavit in the Mumbai High Court this week arguing that the Act applies only to domestic lawyers and that no legislative changes are therefore required to allow foreign lawyers to practise in the country.

The UK firms argue that being banned from India is hurting their clients who want to do business in the company. Indian attorneys are quick to point out that there are lawyers in India they can call. So it's the lawyers against the governments of both India and the UK. We wish them well. And what's the prize? Well, that part's easy. From The Times Online:

In their quest to grow revenues and profits, European firms are disappointed to be missing out on an increasing amount of lucrative work coming out of India. With estimates of annual growth ranging between 7 and 9 per cent, its economy is one of the fasting-growing in the world. Even more importantly, the type of economic activity that European law firms are likely to profit from is growing even faster.

The firms want to work on large, cross-border deals. Last year, the value of acquisitions by non-Indian companies of Indian companies jumped 200 per cent. Since 2000, the value of takeovers by foreign buyers has grown from $4.4 billion to more than $30 billion so far this year, according to Thomson Financial. (This year's total has already passed last year's despite fears of a global slow down.)

There is a clear picture: European law firm's clients are buying in India but protectionist rules means their fees are going to Indian law firms.

So, ok, back to Clifford Chance. Hopefully by now it's easy to see why it may be worthwhile to open a Delhi office for administrative work, rather than truly sourcing it out. The day the High Court opens that gate, the Clifford Chance website is going to have a significantly more colorful map than any of its competitors. The real question in my mind is, how is it possible that they're the only firm with their name on a door over there?

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McDermott Develops Avant Garde New Tier System - Looks Conspicuously Like Old One

McDermott, Will & Emery is trying to jump onto the multiple-tier media hayride that Perkins Coie and Chapman and Cutler are enjoying. But the two-tier system actually seems to be well-received and effective for recruiting associates, so in true Big-big-biglaw fashion, McD-W-E tried to do it different and screwed the whole frigging thing up for everybody.

From the ABA Journal:

Instead of giving current partnership-track associates a choice between working more hours for more pay or taking a kinder, gentler approach to law practice at the same highly skilled performance level [what the other firms were doing], McDermott, Will & Emery is planning to create a second team of lower-paid, non-partnership-track associates. They will help handle work such as the deluge of discovery created by modern-day e-mail, reports the Recorder.

Yep. You read that right. MWE's Second-Tier? Contract attorneys. I know what you're thinking - there must be some reason for the second-class, I mean second-tier, system that benefits the associates. This is probably just a way for students of lower schools to work their way in to a big firm job, right? From the article:

Initially, McDermott plans to hire a group of about 15 associate alternates with "good pedigrees" and big-firm experience..."They'll have a status within our structure that's brand-new," says Robert Mallory, a Los Angeles partner in the firm's trial group, noting that the idea is so new that no one knows yet what the lawyers in the second team will be called. "The idea isn't that this will be a training ground. This isn't a path into the firm."

We tend to agree with the commenters, who made the following points:

1. This smacks of "Mommy Track", and could be a dumping ground for minorities and women who have children.
2. This B Team is going to be treated like crap by every ladder-climbing 27-year old who walks in as a summer associate.
3. Although both 1 and 2 are true, if you offered me $120k for 40-50 hours a week, I'd totally sift papers for 9 hours.

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Fullbright Report: Employment Law GCs' Greatest Concern

And all the associates deleted their vacations...

Fulbright & Jaworski’s influential Litigation Trends Survey just came out this week, and it has pretty interesting results that shrinking L&E departments should be blowing up poster-sized.

The “we’re-too-big-to-all-be-lawyering”-sized multinational law firm funds an annual survey of in-house counsel in the U.S. and U.K., asking them about their satisfaction with outside counsel and their greatest litigation-related interests. Topping the list of GC’s concerns this year?

You people.

Yep, as reported by Jay Shepherd at Gruntled Employees, the Fullbright Report (our term - we think it sounds official that way) cites employment disputes as the #1 concern of in-house attorneys, with 43% of the vote (contracts, regulatory and securities matters filled out the remainder of the top 5).

When asked about actual pending litigation, the results were the same: L&E followed by contracts, and then all the other stuff.

Also interesting: the stakes, and the number of class actions, are apparently rising considerably. Manpower’s Mark Toth:

More than 50% of companies face at least one class action, compared to only 34% in 2006 and 16% in 2005. In addition, more than 40% of companies now spend more than $1 million annually on litigation and virtually all companies reported having at least one $20+ million lawsuit pending.

So, tell your bosses – if they want to appease their clients, they clearly need to hire more labor and employment attorneys.

Conveniently, we know some interested parties about to graduate law school. Any resume requests can be sent to currentemployment@gmail.com.

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Big Law speaks...IRS listens

That collective sigh of relief you heard yesterday came from the community of Executive Compensation practitioners in response to the IRS extension of the 409A compliance deadline for nonqualified deferred compensation plans to December 31, 2008.

They have the Major Firms - and their clout with the IRS - to thank.

Buried deep in the 600 pages comprising the American Jobs Creation Act of 2004 (many like to say that the Act did, in fact, create jobs...for lawyers, HA!), are found 6 pages constituting 409A of the Internal Revenue Code. This section of the Code was passed to regulate the elections, distributions, and notice requirements of the nonqualified deferred compensation plans loved so much by executives. Congress passed this portion of the Act because it did not like the fact that these execs retained so much control with respect to this supposedly "deferred" compensation.

Bringing affected plans into compliance has proved to be no small task, however, because of a lack of understanding and the sheer number of affected plans. And it didn't help that the Final Regulations under 409A were just passed in April of this year. Those regulations required compliance by December 31, 2007. However, practitioners remained hopeful (and confident) that this deadline would be extended as it seemed unrealistic. Then, on September 10th, the IRS teased practitioners with Notice 2007-78, which allowed for a documentary compliance extension to December 31, 2008. Unfortunately, what really mattered, operational compliance, was not extended.

Finally, a letter was sent to the IRS signed by most major law firms asking for a realistic extension to the end of next year. The IRS listened. On Monday, Notice 2007-86 was published and, among other things, it finally extended the deadline for documentary and operational compliance until the end of next year. Until the deadline comes, plans may rely on "good-faith" compliance with the regulations.

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Law Firm Seeks to Clear its Name by Suing Partner, Airing Laundry.

Another day, another law firm debacle to report. First it was Sidley Austin's ostentatious settlement earlier in the week. Now Ballard Spahr's Baltimore office has apparently brought itself into court for discrimination.

From the Daily Intellegencer (via Law.com):

After attempting to resolve internally alleged issues of inequitable pay and the piecemeal removal of her practice over the course of a decade, Jane Ennis Sheehan had confidentially presented on May 9 gender discrimination claims and a demand letter to Ballard Spahr Chairman Arthur Makadon through her counsel, according to court documents from both sides.

Sheehan claimed that another partner who was supposed to be her equal in a two-person team took her practice from her over the course of several years and called it his own. That partner was ultimately paid more for doing the same work, she said in her demand letter.

She also claimed in the letter that she was retaliated against for bringing these claims to light internally, eventually resulting in her being taken from a percentage or equity partner to an income partner.

We know what you're thinking - another equity-to-income post? Yawn.

Come on, we wouldn't do that to you. This is not big-firm economics. This is straight up she-said/it/they/he-said, David versus Goliath-style mud-wading. But Goliath is supposed to stand there and get pelted, not throw his own stones. For an explanation, click the jump.

After a conference call to work out the details didn't produce, the firm sued Sheehan asking for a declaratory judgment that they did not discriminate, before she ever went to the EEOC on the discrimination claim. Again from the article:

"I wanted to keep it as discreet as possible. I never expected a suit by the firm," Sheehan said in an interview. "I expected an opportunity to sit down and discuss my concerns with the firm.

[Sheehan's lawyer] said Ballard Spahr did "everything wrong" when it came to dealing with an internal complaint, whether or not it agreed with the allegations. She said Sheehan wanted to keep the claims as quiet as possible, but the firm ultimately "advertised the suit" to the partners.

"It's interesting that I could raise the specter of discrimination claims and find myself the defendant," Sheehan said.

And elsewhere:

"I kept hoping incorrectly that things would straighten out," Sheehan said earlier.

Sheehan said she is still working for the betterment of the partnership through marketing the firm's practices and the Baltimore office, which now has 41 attorneys.

Yeah, we're pretty sure when the firm refused to pay us the measely $675k and reinstate our partner status, we'd get the itch to walk, but to each her own we guess.

Maybe there's an explanation in here somewhere -

In its response to Sheehan's preliminary objections in the declaratory judgment action, Ballard Spahr said Sheehan had explained her poor performance and low billable hours through a 2004 letter to the allocation committee. She said the reason for the performance was because of personal problems that affected her work life, according to Ballard Spahr's response filing.

Sheehan said in an interview that the firm encourages partners to write letters to explain poor performance. While everything in her letter was accurate, Sheehan said, she did not bring up some of the professional reasons that her billable hours were low because she "did not want to antagonize the partnership," she said she thought she would suffer ramifications she wasn't ready to handle.

"Antagonize the partnership?" Oooh-kay. CE is not setting the odds for this one.

One more quote from the article:

In 2004, Sheehan earned $358,681 for her share of the partnership profits. She said in court documents that that was 82.3 percent of Casey's pay for that year, which would mean he earned almost $436,000.

So we're not losing that much sleep over Ms. Sheehan's situation. Though CE thinks getting your hard-earned business snatched from under you is pretty crappy regardless of your gender or year end take-home.

Either way - we can't figure out what Ballard was thinking with this. They just hung the dirty laundry and expected eveyone to walk by without smelling it. I mean, when no one's calling you a sexist, don't ask the court to say you're not a sexist. That's all we're saying.

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How Many Years Does it Take for a Partner to be a Partner? The World May Never Know.

Earlier this week, Sidley Austin settled its lawsuit with the EEOC, pulling the plug on the burning-hot spotlight they've been under, but sadly offering no precedent on the plight of literally hundreds of other old, wealthy lawyers.

The EEOC investigation goes back to "Sidley & Austin's" 1999 "demotion" of 32 "partners" to counsel status, booting them from sharing in firm profits. The firm claimed it made the decisions based on performance (Profits per Partner are a key indicator of firm health surveys like the AmLaw 100), but the EEOC brought a claim alleging the move violated the ADEA, since most of the partners were in their 50s and 60s.

The fight between the agency and the law firm has garnered ridiculous amounts of attention in "Biglaw" circles, since a final judgment could either affirm the current corporate model used by most big firms or mandate a complete structural readjustment of billions of dollars in compensation. In the least, firms were eyeing their mandatory retirement policies with veins popping out of their sweaty foreheads.

With the settlement, nobody knows if partners are employees or if mandatory retirement is even legal - as with most settlements, both sides are using it to show how right they were all along.

For comments from both camps, click the jump.


From Law.com:

Sidley agreed that the affected partners were employees subject to the ADEA only "[f]or the purposes of resolution of this matter." But the decree does not constitute a finding on the merits of the case. Nor does it require the firm to admit any wrongdoing. Sidley said on Friday the settlement was strictly a business decision. "The Firm believes that settling this case is preferable to the costs and uncertainties of continued litigation," Sidley said in a statement.

So, clearly the settlement could not set any type of precedent, right? It's not like Sidley made any explicit concessions or anything.

Mark H. Alcott, a partner at Paul, Weiss who called for the end of law firm mandatory retirement policies ...said the size and public nature of the Sidley settlement amounted to an "explicit concession."

Oh. Well, whatever. The mandatory retirement debate rages on - the ABA just weighed in against the policies in the latest ABA journal.

What we care about is the drama (and intellectual discourse regarding the definition of "employee", of course). This is, after all, the government toeing up against one of the biggest law firms in the land. But regardless of Sidley's high-profile status in the legal community, it's still an "employer" right? So what's so weird about the EEOC challenging an "employer"?

Well, for one thing, usually the agency waits until an employee asks them to get involved. Here, none of the "partners" ever contacted the EEOC (some of them even bowed out once it was clear the agency was looking for payroll records, according to the Law.com article). And usually "employees" and "partners" aren't exactly synomous terms.

But that's a story for another time. Stay tuned. We'll post about the 7th Circuit cases and the "employee"/"partner" fight real soon...

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