Facing ‘Unrelenting’ Price Pressures, Law Firms Turn to Outsourcing, Innovation-- By Debra Cassens Weiss

Law firms faced with “unrelenting” pricing pressures from clients are beginning to outsource basic legal work, create new categories of lawyers, and take a “loss leader approach” to pricing.

In an article for the Am Law Daily, Dan DiPietro and Gretta Rusanow of Citi Private Bank's Law Firm Group base their conclusions on roundtables with managing partners at more than 150 law firms, both here and in London. Law firms are trying to save money so they can compete on price, the article says, and they are trying to please clients with approaches that go beyond alternative fees and discounted rates.

Some law firms have already moved back-office functions to cheaper locations, either within the United States or overseas, according to DiPietro and Rusanow. Sometimes the firms are hiring offshore service providers and sometimes they are creating their own captive offshore operations.

Now some law firms are going further, the article says, and are beginning to outsource basic legal work. Within firms, new categories of lawyers are being created to do work at lower cost than traditional partner-track associates.

Firms taking the “loss leader” approach heavily discount fees early in the client relationship to get a foot in the door. The hope is that the client will accept higher fees after it sees a difference in quality. Some firms are also offering discounts to start-ups in hopes of a long-term profitable relationship.

Firms are also offering “value beyond price,” the article says. In some cases, associates are sent to work in the offices of corporate clients for a negotiated price. Some clients are being offered a set amount of free telephone consultations. Other firms are offering “knowledge tools” such as a database of client work product, or access to research help.

“Firms are embracing the challenges they've faced in this soft demand market,” the article concludes.

http://www.abajournal.com/news/article/facing_unrelenting_price_pressures_law_firms_turn_to_outsourcing_innovation/

Vee Technologies Launches New Website

New York, NY – Vee Technologies, a Strategic Services Company based out of Bangalore, India that offers world class quality in transactions processing is pleased to announce the launch of their newly redesigned website.

From Insurance to Engineering, Vee does it all. www.veetechnologiesusa.com will act as Vee’s new online store front, offering visitors a wealth of information about Vee’s various services and offerings. Visitors can now access brochures, videos, read client testimonials and see firsthand why Vee Technologies is the World’s Smartest Strategic Services Company.

About Vee Technologies – Vee Technologies is part of the Sona Valliappa Group – a name that is renowned in the Indian business firmament for over seven decades. The group was a pioneer in bringing IT to India. The group owns and runs a group of colleges from which it feeds talents in to Vee Technologies. Today, the BPO division of Vee Technologies has grown to over 700 FTEs and processes over 40,000,000 transactions annually.

http://www.veetechnologiesusa.com/resources/press-releases/120-vee-technologies-launches-new-website.html

Will U.K. Management Trends Influence U.S. Law Firms? by Gina Passarella

Editor's note: This article is part of a weekly series from The Legal Intelligencer examining how law firms adapted during the last two years and where they are headed as the economy recovers.
Between new players looking to provide legal services and pushback from clients over paying for routine work, law firms potentially have less to do.

In response, some firms have looked to retool their business models, adjust the roles they play for their clients and, in some instances, get out of certain businesses altogether. For many firms, staying ahead of the curve will mean recognizing these challenges and figuring out creative ways to adapt, consultants say.

"Underestimating your opposition is a really bad idea," Edge International consultant Jordan Furlong said.
Furlong recently heard a general counsel say that her job is not to produce or deliver services to her clients but to manage solutions -- a role law firms would be served well by if they chose to embrace the concept, he said.

Firms should think of themselves as the managers of solutions and recognize they will do some of the work and send some out to other providers, he said.

"Smart firms will say they still want to manage the process and sit at the client's right hand," Furlong said, adding however, that they need to realize there are some things the firm is good at and other things a legal process outsourcer (LPO) may better handle.

The real battleground for law firms in the near future will be over who will serve as the quarterback, or the solutions manager, Furlong said.

Law firms in the United Kingdom seem to have been the early adopters of this model. Furlong pointed to Lovells, now Hogan Lovells since its merger with U.S.-based Hogan & Hartson. Lovells had gone out to find regional firms to do certain work at a lesser charge while Lovells would serve as the guarantor of the smaller firm's quality and liability.

Hogan Lovells London-based partner Michael Stancombe said the firm created what it calls its WAVE process eight years ago after some large clients started asking for some of the "smaller" work to be handled in a more cost-effective fashion while keeping Lovells involved in the oversight of the whole matter


The firm came up with the idea of having clients give it all of the work, as opposed to the portion it had prior, and the firm would manage it with the goal of decreasing the client's legal spend by 20 percent. All matters came through Lovells and anything below a certain threshold would be sent out to two pre-selected regional firms to handle at a lower cost. In turn, Lovells was able to increase its rates for the high-end work it was doing given the fact that the clients were still saving money. That also made up for sending out some of the work, Stancombe said.

The clients could theoretically just contract with the two smaller firms and cut out Lovells, but they want the management capabilities and high-end work from the firm, he said. The key factor in the WAVE concept is that the lead firm maintains oversight of the entire matter. So far, around 9,000 matters have been handled under this system, Stancombe said.

Since Lovells merged with a U.S. firm, WAVE is still implemented, and Stancombe said his legacy firm is working with its new colleagues across the Atlantic to see if such a system might make sense for their clients.
London-based Berwin Leighton Paisner took that concept a step further. Rather than utilizing a variety of lower-cost regional firms, Berwin Leighton created one that it controls. Lawyers on Demand is a subsidiary of Berwin Leighton that provides less expensive, though still highly trained, lawyers to serve on an interim basis within a client's law department. The freelance attorneys have the support of, and are under the control of, Berwin Leighton, but they operate under a different cost-structure


"We understand that work volumes are increasing yet many clients are coming under pressure to reduce legal costs," the firm said on its website. "All LoD fees are agreed in advance using a daily rate that reflects the expertise of the lawyer."

Other firms in the United States are using a distinct, internal attorney tier in an effort to reach a similar result. Adam Smith Esq. partner Janet Stanton called the concept a "light division" of attorneys. These lawyers are still part of the same firm but are perhaps resident on a different floor or office building and have no anticipation of becoming partner.

The idea is to combat the competition from temporary staffing agencies and keep as much of the commodity work in-house as possible, Stanton said. But this is just one type of service model and not suitable for every firm, she said. Some firms may choose to give up that work altogether and let the LPOs handle it.

Other firms are providing certain outsourced services themselves rather than let an e-discovery or document review LPO do it, Stanton said. They have created "e-discovery mills" or information centers in which lower-cost attorneys are working in lower-cost markets to handle work formerly done by more expensive junior and senior associates.

In an effort to make the work of junior associates more palatable to clients, the Practical Law Company is looking to team up with firms rather than work against them. Ian Nelson, head of the company's U.S. business development, wouldn't jump to call his company an LPO and said it has never looked to compete with law firms, though it does have some law department clients.

PLC provides online support for law firms, mainly in the transactional realm, that includes drafts of documents such as letters of intent, acquisition agreements or closing checklists. The goal is to stop lawyers from spending hours of research on how to draft these documents and instead focus on the legal services that can't be outsourced.

"There's a level of information that all lawyers at a certain level should have," Nelson said. "Clients shouldn't be paying for it."

Most of PLC's attorneys are former large-firm lawyers. Nelson said this isn't a lesser alternative but just a different way of training and providing services. Now that clients are interested in working with smaller firms, Nelson said, they are still expecting the same caliber of responsiveness and resources. Companies like PLC look to get lawyers up-to-speed faster, he said.

As with many LPO services, some firms have found a way to bring this research function in-house. And as with many business of law innovations, the concept hails from the United Kingdom

Professional support lawyers started in the United Kingdom more than 10 years ago and some consultants say they may be migrating into U.S. firms. The role of a professional support lawyer is to serve the firm or a specific practice area by staying up-to-date on changes to the law and assisting or providing drafts of legal documents all in an effort to prevent younger associates from billing the clients for hours spent doing the same thing


This attorney, who isn't billing time and can often work on a flexible schedule, might focus on researching new laws, draft documents and manage document systems, hold training sessions for younger lawyers and answer questions for billing attorneys on institutional knowledge within the firm.

The role is a cost center for law firms, as these positions are generally paid at a senior-associate level, but they can also be viewed as a way to combat the unwillingness of clients to pay for younger lawyers to learn on the job.

In February, London-based Clifford Chance was seeking a professional support lawyer for its New York office to work with the mergers and acquisitions and corporate finance practices. Some of the job descriptors included gathering and disseminating "know-how," collecting precedents and creating, updating and managing standard legal forms.

Regardless of whether firms are bringing the competition in-house, working with outside vendors or holding tight to the traditional law firm model, clients have an increasing number of options when it comes to service providers.

"There used to be one monolithic legal services provider -- the law firm," Furlong said. "Now there are many and clients will choose among them."

The "huge role" for law firms, he reiterated, is the quarterback.

http://www.law.com/jsp/article.jsp?id=1202474333189&rss=newswire

Smaller Firms May Soon See More Laterals, Fewer Young Lawyers by Zack Needles

Just as the recession caused more large companies to turn their attentions toward smaller firms, it had a similar effect on lawyers who traditionally might have been thought of as "big firm material."


Slashes in compensation and questionable job stability at megafirms sent more top-tier law school graduates to midsize and small shops.

Similarly, increasing rate pressure drove some big firm partners to smaller firms.

Still, while the number of young, well-pedigreed job candidates has remained high at small and midsize firms over the past few years, the number of big firm laterals migrating to smaller firms has not reached the heights many first predicted.

But some in the legal community believe the apex of large-to-small lateral market activity is still on the horizon, along with a shift back to big firms for many young lawyers.

LATERAL MOVEMENT? NOT YET
It was widely predicted that the recession would cause a number of large firm partners to jump ship for smaller firms.

The logic was simple: General counsel at big companies would be operating with tighter budgets and big firm lawyers would find it more and more difficult to justify their high rates, so they'd move to smaller shops where there's less overhead.

But some in the legal community reported that, so far, this scenario has played out more in theory than in practice.

Peter R. Spirgel, managing shareholder of Flaster Greenberg in Cherry Hill, N.J., said he's been "surprised" by the lack of big firm lateral interest his firm has experienced over the past few years.


"I'm trying to figure out why and I've called some placement firms we've used and asked, 'Is it me?,'" he said. "But they said no. In fact, they see that partners with nice-sized portable books are less likely to move in troubled economic times. It's just another risk factor they don't want to bear."

Recruiter Frank D'Amore of Attorney Career Catalysts agreed that's part of it.

"Some people have decided, I think, that because of the uncertainties associated with the recession, 'If I can hold my own where I am, maybe now is not the time to take a risk,'" he said.

Both Spirgel and D'Amore said that much of the big-to-smaller firm movement that has occurred over the past few years has involved attorneys who were forced out of big firms because their practices couldn't be supported in tough economic times.

Big firm partners with solid books of business, however, have largely stayed put, according to D'Amore.
Those lawyers, he said, have recently been "protected in a cocoon" in which they've been allowed to offer their clients significant discounts and creative alternative fee arrangements as their firms fought to maintain business and weather the economic storm.

But a healing economy may prove to be worse news for big firms than an ailing one when it comes to losing partners, D'Amore said.

As the economy begins its upswing, he said, megafirms will likely try to return to something resembling their pre-recession selves by scaling back discounts and other client concessions and eventually increasing rates again.

General counsel, however, aren't likely to be as eager to go back to "normal."

If that happens, D'Amore said, partners who stuck it out with their firms over the last few years will have to decide whether they'd be better off somewhere smaller.

"Decision day will come for people who have kind of been in abeyance," he said.

In addition, he said, the recession forced many large firms to define their identities, leading to a market where international, national and regional firms are more clearly demarcated.

Because of this, according to D'Amore, partners with more rate-sensitive practices may increasingly begin feeling like they no longer belong at a firm whose overhead includes, for example, an office overseas.
Partners in certain practice areas may also begin to feel out of place at megafirms.

Patent prosecution and trusts and estates, as well as labor and employment work focusing on the public sector, employment practices liability insurance and individual cases are a few examples D'Amore gave of practices that may become harder to sustain at large firms.

BIG LAW BECKONS AGAIN
While the lateral partner movement has been sluggish, a number of midsize and small firms across Pennsylvania said the last few years have brought a wave of resumes from the type of highly credentialed young lawyers big firms typically scoop up first.

"In this year's summer class of 2010, we had representatives of the University of Virginia, Penn, Duke and George Mason," said David M. Kleppinger, chairman of Harrisburg-based McNees Wallace & Nurick. "In a typical year, we may have seen one or two from those types of schools. This year, it was the entire class."
Spirgel said he's had a similar experience.

"We were always very particular about who we hired," he said, explaining that his firm has long strived to hire attorneys who did well at top-ranked law schools.

The difference now, Spirgel said, is the firm has been hearing from "way more" young lawyers who fit that criteria.

Spirgel attributed this phenomenon to two factors: The shrinking compensation gap and the widening job-security gap between megafirms and smaller firms.

But as the economy begins to recover and large firms become more comfortable, D'Amore said, an increasing number of young lawyers may once again find themselves drawn to big firm life.

D'Amore said a number of large firms are beginning to "wade cautiously" into hiring again, planning summer programs with the hopes of bringing on new attorneys in the fall of 2011 and the fall of 2012.

Likewise, compensation may start to rise again, catching the eyes of both new graduates and young associates currently working at smaller firms, he said.

"When people have been [at a smaller firm] for three or four years and they graduated with a lot of loans and obligations and the market starts to go back, maybe firms won't be going crazy with starting salaries but the edge up will become very attractive," he said.

Kleppinger, however, was reluctant to solely credit the recession with the uptick in well-qualified hiring candidates at smaller firms.

Another component of it, he said, is generational.

"People know that the work requirements in some of the larger city firms are a lot larger than they are here in terms of time commitments and more and more young people are coming out of law school saying, 'I don't want that, I don't need that,'" Kleppinger said.
 
But D'Amore said that while this can be true, the workloads at midsize firms and large firms are not always that different.

For example, he said, while an attorney at a megafirm may be obligated to bill significantly more hours than a smaller firm counterpart, it will often be easier for the large firm attorney to find time to bill.

So the amount of effort required by each attorney in that scenario is basically equal, according to D'Amore.
More solid selling points for smaller shops hoping to sway young lawyers from going to big firms, he said, are the ability to offer more hands-on experience, a faster partnership track and greater flexibility in terms of work schedules.

http://www.law.com/jsp/article.jsp?id=1202474331627&rss=newswire

The City slowly discovers legal process outsourcing (LPO)

Following in the footsteps of the banking industry and their counterparts on Wall Street, a number of leading City law firms are beginning to seriously consider outsourcing as a way to further cut costs. However and while adopting some form of business process outsourcing (BPO) has become increasingly the norm, legal process outsourcing (LPO) has yet to significantly catch on.


According to a recent article in Legal Week, eight firms among the top 30 City firms are or were currently looking at introducing some aspects of LPO. These firms included Allen & Overy (A&O), Eversheds, Freshfields Bruckhaus Deringer, Linklaters, Lovells, Pinsent Masons, Wragge & Co and Simmons & Simmons while CMS Cameron McKenna and SJ Berwin are in the process of identifying what areas they would like to outsource. Meanwhile, another eleven of the top 30 firms said they had no plans to begin any type of LPO work and some of these firms had already looked at LPO as an option and had discounted it. Nevertheless, more than half of the firms in the top 30 had told Legal Week that they already outsource at least some of their back office functions.

So why is BPO more popular than LPO among City firms? A recent (November 2009) Legal Week Big Question Survey of partners from City firms in London found that half of those surveyed thought that the general standard of work on offer by LPOs could be better. In fact, no one rated LPO services as excellent while 14% rated such services as good, 27% thought they were ok and 7% rated the services as poor. Meanwhile, 36% of responding partners thought that service levels were “much better” in the UK than the standards abroad and another 38% thought that such services were merely “better” while 19% thought there would be “no difference” in terms of outsourcing location.


Despite some doubts though, a clear majority of City partners thought that the traditional law firm model will need to change or evolve substantially. In fact, 58% of City partners said that law firms will need to re-engineer their business models by considerably improving IT infrastructure and process management over the next 10 years while 24% foresee a “massive need” for such changes. However, there was unanimous agreement that outsourcing legal work as opposed to back office functions was much harder to credibly outsource. Hence, only 13% of City partners saw major prospects for the expansion of LPO into commercial legal services and another 34% predicted “considerable” expansion while 53% expected little to no growth.

However, The Times has recently pointed out that attitudes are likely to change given that a new recruit at a leading City law firm can expect a starting salary of about £60,000 which can rise to more than £90,000 at the best paying firms. The Times pointed out that there are studies that suggest that there are already 10,000 lawyers in India who are working for outsourcers and the total revenue for the LPO sector is expected to double in 2010 to US$1 billion and rise to US$4 billion within five years

In other words, LPO will likely catch on in the near future as the recent Legal Week piece had quoted one City law firm partner as saying that the days of paying for all types of work by the hour and having all of those hours under the same roof no matter what the task was are long gone. In fact, the partner even went on to say that there will only be one “profession” (the world’s oldest!) that will soon be left doing that.

http://outsourceportfolio.com/city-slowly-discovers-legal-process-outsourcing-lpo/

Legal Process Outsourcing (LPO): Giving lawyers a case of their own medicine?

For certain the legal profession, long despised for its sky high fees, is one profession that few Americans would be sorry to see outsourced to India resulting in large scale job losses – at least for lawyers that is. Hence, will the emergence of Legal Process Outsourcing (LPO) finally cut the legal profession and its fees down to size? Maybe. Or maybe not.


Fortunately or unfortunately depending on how much you love lawyers, the legal profession is one profession that seems to be largely protected from the full blown effects of outsourcing. After all, a lawyer in one country generally cannot practice law in another country as the legal profession is governed by intricate licensure and ethical rules that are set by jurisdiction. Hence, Forrester Research is quoted in the Wall Street Journal as estimating that only 35,000 USA based legal jobs will be moved offshore by 2010 and 79,000 by 2015 – only a tiny fraction of the estimated 1.2 million lawyers in the country.

Moreover, don’t expect any US$500 an hour lawyer to have his or her job outsourced to India any time soon as the brunt of any job shift will be felt by paralegals and junior lawyers as LPO type of work typically includes basic legal research, documentation writing and review and the drafting of legal briefs and pleadings. In other words, routine legal and corporate secretarial type of work that no US$500 an hour lawyer would do themselves.


However, the potential cost savings from LPO are enormous with a recent USA Today article stating that some LPO companies will charge only US$25 an hour for work that would otherwise cost more than US$125 an hour if it were done in the USA. Moreover, starting salaries for new associates at big law firms in the USA can be more than US$200 an hour or US$160,000 per year at large and prestigious law national firms while the national average annual salary for lawyers according to a 2007 Altman Weil survey is US$318 per hour and US$550 per hour at large New York City law firms. However, an experienced lawyer in India can be bill at US$75 to US$100 per hour, roughly what some experienced USA based paralegals charge; while a indian lawyer with five years of experience can be hired for just US$30,000 a year including benefits, half of what an experienced USA based corporate paralegal would earn. And not to mention there is the cost of office space in New York verses Mumbai or Manila.

Nevertheless, don’t expect much in the way of cost saving to trickle out of large law firms or the legal departments of large multinationals. However, LPO does have the potential to significantly level the playing field for smaller law firms, smaller companies and individuals who can now have an amount of legal work done that could not be affordably attained in the USA. In other words, LPO has the potential to free up and leverage resources that will allow lawyers and Americans in general to do what they have almost always done best: sue each other.

http://outsourceportfolio.com/legal-process-outsourcing-lpo-giving-lawyers-case-medicine/

Growth of Consumer Debt Litigation Keeps Small Firms Busy -- by Zack Needles

A logical chain of events has occurred over the past few years: The recession has caused more consumer debts to go unpaid which, in turn, has led to more legal battles between consumers and their creditors.
On one hand, debt collectors are suing consumers to collect the unpaid debts. On the other, consumer debtors are filing suits claiming debt collection harassment.

Attorneys across Pennsylvania said both types of litigation have been on the rise in the state over the past few years and it's typically been small firms and solo attorneys that have benefited.

Pittsburgh solo attorney Eugene D. Frank, whose practice includes defending consumer debtors against collection actions, said he's seen an uptick in debt collection suits against consumers in recent years, but not necessarily by the original creditors.

"I am seeing more and more of that as we move along, primarily because you're having a lot of junk debt buyers purchasing these delinquent accounts and using more and more aggressive tactics, including lawsuits," he said.

The term "junk debt buyer" refers to an agency that purchases charged off debt from creditors, often in bulk and for pennies on the dollar, and then attempts to collect from the debtors.

Philadelphia solo attorney Michael P. Forbes said this form of debt buying became an industry unto itself during the savings and loan crisis of the 1980s and 1990s and has grown considerably during the most recent economic downturn.

Forbes said junk debt buyers are filing suits against debtors at an increasing clip and, while he has seen his caseload increase, "most people don't know that they can defend the case and can probably beat it."
According to Forbes, these agencies often have poor documentation or no documentation at all to prove they own the debt and to confirm the amount of the debt.

Frank agreed, saying that because junk debt buyers purchase debt in bulk, they often fail to obtain or retain the necessary records.

Documentation tends to become even more shoddy when those agencies resell the debt to other debt buyers, Frank said.

As a result, attorneys defending debtors in collection actions can often get cases thrown out on the grounds that the collection agencies violated civil procedure.

In addition to the more aggressive collection tactics increasingly being used by junk debt buyers, Frank said debt settlement programs are also partially to blame for driving up collection lawsuits.

Often, the programs advise consumer debtors to stop making payments while a settlement is negotiated, operating under the premise that most creditors won't resort to a lawsuit until the four-year statute of limitations has nearly expired, according to Frank.

Typically, however, debtors find themselves being sued within a year or so of discontinuing payment, Frank said, adding that most suits go unanswered and result in default judgments for the creditors.

Both Frank and Forbes said it's often in the debtor's best interest to hire an attorney to fight collection suits because default judgments can result in bank garnishments and liens against real estate and personal property.
"There's no such thing as judgment-proof," Frank said.

Frank said that because consumer debtor defense work is "more volume-based," it's typically handled by smaller practitioners.

Forbes agreed, saying the defendants in those cases are usually represented by solo attorneys or two-lawyer practices.

The same can be said about the attorneys representing the collectors in those cases.
According to Forbes, most of the firms representing plaintiffs in collections actions against consumers have five or fewer attorneys.

Noah P. Fardo, managing partner of four-attorney Flaherty Fardo in Pittsburgh, which represents creditors and debt collection agencies in collections actions, said there's "no doubt" collection activity has increased over the past two or three years.

"I've said it for the last couple years: The worse the economy gets, the busier we get," he said. "Collections is a recession-proof business."

But while both Frank and Forbes blamed the recent spike in collections actions on so-called junk debt buyers, Fardo said his firm usually draws the line at taking those agencies on as clients.

"We've represented some of the debt buyers and those cases are so picked over, so worked, that I don't like to represent those types of clients," he said.

According to Fardo, debt buyers are "typically looking for lawyers on a strict contingency basis and we don't believe the success rate warrants taking on those types of cases."

Part of the reason for that, he said, is the difficulty many of those agencies have in documenting debt that is often four or five years old.

"We have typically stayed away from aged receivables without proper documentation," he said, but added that he has noticed more and more of the creditors his firm represents inquiring about debt-selling opportunities.

And while he said his firm's creditor clients are "very organized," he has witnessed poor record keeping by both debt buyers and original creditors from the other side of the aisle, defending debt relief companies from creditor law suits.

Fardo said his firm has recently seen an influx of those types of cases, which it accepts provided there are no conflicts with its existing creditor clients.

Through the course of doing that work, Fardo said he's also noticed a trend of creditors failing to present witnesses at arbitration or trial in hopes that debtors will testify against themselves.

"We will often instruct our clients who we represent not to attend hearings with us," he said, explaining that, without a witness, the creditor is unable to prove its case. "We're winning verdicts because credit card companies can be lazy."

But there's another type of creditor-debtor litigation that has kept both plaintiffs and defense lawyers busy recently: debt collection harassment suits.

Both Forbes' and Franks' practices include filing law suits in state and federal court on behalf of debtors who claim their rights have been violated by aggressive debt collectors.

Under the federal Fair Debt Collection Practices Act, consumers can sue third-party debt collectors, but not original creditors, alleging the use of abusive collection tactics.

Frank said those types of cases have remained "pretty consistent" in recent years and Forbes said he's been filing more of those suits since the recession hit.

Like debtor defense work, debt collector harassment claims are mostly filed on behalf of consumers by small firms and solo lawyers, according to Forbes.

But while debt collectors also tend to hire small firms to represent them as plaintiffs, Forbes said he's seen everything from two-lawyer shops to megafirms serve as defense counsel in debt collection harassment cases.
For example, Philadelphia-based Marshall Dennehey Warner Coleman & Goggin, which has more than 400 attorneys, has a consumer and credit law practice group devoted to defending lenders, financial institutions and debt collectors against consumer debtor lawsuits.

Philip B. Toran, a shareholder at the firm and chair of its executive committee, said the practice "has been busy in the last few years."

http://www.law.com/jsp/law/sfb/lawArticleSFB.jsp?id=1202472943270&Growth_of_Consumer_Debt_Litigation_Keeps_Small_Firms_Busy 

Justices Consider Limits on Employer Background Checks in NASA Case -- By Marcia Coyle

Lawyers for the federal government clashed with lawyers for a group of California scientists at the U.S. Supreme Court on Tuesday over how much information the government can demand in background checks on potential employees before violating their privacy rights.

And the justices themselves appeared to have conflicting concerns about background investigations. "Are there any limits on what the government can ask?" Justice Sonia Sotomayor pressed Acting Solicitor General Neal Katyal shortly after he opened his argument in National Aeronautics and Space Administration v. Nelson. Can the government ask someone about his genetic makeup because "we don't want someone prone to cancer?" she added.

"Does NASA have a right to know that an employee has a sign on his front lawn saying, ‘I hope the space shuttle blows up?' " Justice Samuel Alito Jr. asked the scientists' counsel, Dan Stormer of Pasadena, Calif.'s Hadsell Stormer Keeny Richardson & Renick.

Katyal wants the Court to overturn a preliminary injunctionissued by the 9th U.S. Circuit Court of Appeals (pdf). The appellate court agreed with the scientists -- 28 long-term, low-risk, contract employees at a NASA research facility in California -- that certain questions on the NASA background forms for contract employees were so intrusive as to violate their right to informational privacy.

One question involves illegal drug use in the past year. The scientists did not object to being asked whether they used, possessed, supplied or manufactured illegal drugs, but they did object to providing information about any treatment or counseling received. They also objected to an open-ended question on a second form, which seeks any information bearing on the person's suitability for employment -- "derogatory as well as positive information." The questions were not narrowly tailored to achieve legitimate government interests, according to the appellate court.

In answering questions from Sotomayor and other justices, Katyal stressed there is no constitutional limit on the government's collection of information in the employment context as long as there are adequate privacy safeguards. The federal Privacy Act, he added, contains the necessary protections against disclosure.

"This case doesn't force the Court to answer the outer limits of what the government can do," he said. If the 9th Circuit's reasoning is applied to a permanent injunction, he warned, it "could preclude the government from asking for all kinds of information."

Chief Justice John Roberts Jr. asked Katyal why the government needs information about drug counseling or treatment. When Katyal responded, "It's for the good of the employee," Roberts rejoined, "Whenever the government says that, you have to be suspicious. It's one thing to say, ‘I had a drink.' It's another to say, ‘I'm in AA.'"

Stormer, too, faced his share of skeptical questioning. In response to Alito's hypothetical about the sign hoping the shuttle would blow up, Stormer conceded that NASA had a right to know about it. Alito then said, "I don't see how to do that without open-ended questions. You would have to have a question on the form asking: Does the person have a sign on the front lawn saying, 'I hope the space shuttle blows up.'"

The alternative to open-ended questions, added Alito, would be to compile a list of everything that makes a person unsuitable for employment -- an "impractical" alternative.

Throughout the hour-long argument, Justice Antonin Scalia challenged the existence of a right to informational privacy. He noted that legislatures, including Congress, have acted in this area to protect private information. "Maybe you don't need us," he told Stormer. The scientists' lawyer said the right was grounded in the Fifth Amendment's concept of ordered liberty.

The Supreme Court has never used the term "right to informational privacy," but in two cases from the 1970s, the justices have said the right to privacy contains "the individual interest in avoiding disclosure of personal matters." As lower courts have dealt with related issues, that interest has come to be known as the right to informational privacy.

http://www.law.com/jsp/article.jsp?id=1202472929254

Hill Dicks pilots business outsourcing and reviews use of outside providers -- ByClaire Ruckin

Hill Dickinson is examining the role of its outside providers and has launched an outsourcing pilot as part of a cost cutting review being rolled out across the firm.

Managing partner Peter Jackson and financial director Colin Wardale launched a review of the firm's practices over the summer in a bid to cut back on expenses. As part of the project, the national firm is attempting to cut money spent on outside providers in areas including training, education and business development resources.

The firm stressed the process was not with a view to making redundancies but an attempt to go over budgets with each of the seven practice group heads.

The move comes after the firm kicked off a business process outsourcing pilot earlier in the year across part of its secretarial function to see if it can boost savings. The pilot, led by head of HR Andrew Rushworth, is being conducted in Hill Dickinson's claimant and professional services teams with two different outsourcers in the UK.

Jackson (pictured) commented: "When we first started our large expansion plans [six years ago] we didn't have the infrastructure to support the business; now we are thinking that we may have too much. We are not taking a knife to the business and cutting out major things but we are objectively analysing whether everything we are spending our money on is necessary."

Jackson and Wardale are likely to present their findings to the board at the end of the year.

The firm is also considering whether it should take advantage of its geographical position and act as an outsourcer for the major City firms.

http://www.legalweek.com/legal-week/news/1730605/hill-dicks-pilots-business-outsourcing-reviews-outside-providers

Banks to allow local groups to buy foreclosures -- By ALAN ZIBEL AP Real Estate Writer

WASHINGTON (AP) - Major banks are agreeing to give local governments and nonprofit groups the ability to buy foreclosed homes before they are sold to private investors.

The Obama administration says local officials could benefit from acquiring these properties and using the land for redevelopment projects. Congress has provided $7 billion in money to buy the homes.

These groups have been outbid by speculators who are snapping up foreclosures.

The administration says the largest mortgage lenders in the country, including Bank of America Corp. and Wells Fargo & Co. have agreed to let the groups purchase the properties ahead of private speculators.

http://news.findlaw.com/ap/f/1310/09-01-2010/20100901070502_07.html

Former Halliwells partners on the hook for further bank loans -- By Claire Ruckin

Second cash call and St James's deal leave some liable for £500k

Halliwells partners look set to be asked to repay more than £2m in additional bank loans taken in 2010 as further details of the now-defunct firm's finances and partner liabilities emerge.

The firm conducted a voluntary cash call at the beginning of the year which saw 28 partners contribute a total of £2.3m, facilitated by professional practice loans (PPLs) taken out from The Co-operative Bank.

Partners put in varying amounts depending on whether they had received a payout on completion of the firm's new offices in Spinningfields. Those who received the windfall contributed £20,000 per equity point, while those who did not put in £10,000 per point.

The capital raising was at the request of the Royal Bank of Scotland (RBS) and came at the same time that the firm renegotiated £19.8m of loan facilities with the bank.

The cash injection came in addition to a mandatory capital raising conducted in 2008, when partners doubled what they had in the firm. At the time PPLs were taken out with Handelsbanken.

Partners will now be expected to pay back outstanding loans with The Co-op, Handelsbanken and RBS - with some partners liable for in excess of £500,000.

A spokesperson for The Co-op commented: "We can confirm that The Co-operative Bank does have professional practice loans in place with Halliwells partners. However, due to customer confidentiality we are unable to discuss specific details."

News of the additional cash call comes as it emerges that the former 40-strong Halliwells equity partnership is facing liabilities of up to £3m on its former Manchester premises at St James's Court.

The firm agreed to a rental contract with a break clause in 2013; however, it left the premises in 2007 when it relocated to Spinningfields. A number of partners including litigation partner Paul Thomas and former senior partner Alec Craig acted as guarantors for the 40,000 sq ft space.

Thomas has sent letters of demand to meet rent liabilities to former equity partners. The firm is hoping to negotiate a discount with the landlord, but it is likely partners will owe at least £25,000 each.

Thomas has also contacted the London Court of International Arbitration and is hoping that former Halliwells partners will agree to participate in an arbitration process. He has instructed John McGhee QC of Maitland Chambers to advise on the matter.

In addition to Thomas and Craig, former Halliwells partners Matt Wightman and Chris Phillips are also named as guarantors on the St James Court lease. However, both are disputing this, given they left the firm in 2009 under the assumption their role as guarantors would be passed onto existing members within the firm.

Phillips left to become a consultant at Keoghs, while Wightman became chief executive of HL Interactive, the bulk legal services business which demerged from Halliwells last year. The duo have instructed Walker Morris to advise.

Halliwells issued notice of intention to appoint administrators in June, concluding the break-up and sale of its business the following month.

http://www.legalweek.com/legal-week/news/1730588/former-halliwells-partners-hook-bank-loans

Botox Maker to Pay $600 Million in Settlement Over Off-Label Uses -- By Sue Reisinger

Allergan, Inc. Wednesday said it has agreed to pay $600 million in criminal and civil penalties and plead guilty to one misdemeanor count of "misbranding" its drug Botox as part of a global settlement (pdf) with the federal government over off-label uses of the drug.

As part of the plea deal, the Irvine, Calif.-based drug company agreed to drop its First Amendment legal action against the U.S. government. This action, filed last fall, contended that the government's legal position -- that it's a crime for a drug company to communicate truthful information to physicians about off-label uses of its products -- violates the First Amendment and is inconsistent with the Federal Food, Drug & Cosmetic Act.

(Also See: Allergan Press Release (pdf))

At the time the action was filed, critics said it threatened the entire federal regulation of pharmaceuticals.

But one of the top First Amendment experts in the country, Harvard Law School professor Laurence Tribe, said at the time, "I think that Allergan has a strong First Amendment case for a right to market lawful but off-label uses for its drugs in a truthful and non-misleading way." But now the suit is dead.

Tony West, U.S. assistant attorney general in the civil division, said Allergan had also paid kickbacks (pdf) to doctors to try off-label uses. West trumpeted the size of the settlement as "impressive, to be sure."

But Allergan is paying only a fraction of the record $2.3 billion that Pfizer Inc. paid last year to settle misbranding allegations over its pain killer, Bextra. A Pfizer subsidiary also had to plead guilty to a felony in that case.

In Allergan's plea deal, the company admitted that between 2000 through 2005, its marketing of Botox -- not to be confused with its cosmetic cousin -- resulted in intended but off-label uses for the treatment of headache, pain, spasticity and juvenile cerebral palsy.

In March 2010, the Food and Drug Administration approved Botox for the treatment of adults with upper limb spasticity, and the company said clinical trials are under way to gain approval for the other uses.

Over 70 other countries already approve the use of the drug for juvenile cerebral palsy, and doctors in the U.S. can and do legally prescribe it. But it remains illegal for Allergan to discuss that off-label use with the doctors until the FDA approves it.

Of Allergan's penalty, $225 million will go to resolve civil claims asserted by the Department of Justice under the False Claims Act. The company continues to deny liability associated with the civil allegations.

"This settlement is in the best interest of our stockholders as it resolves all matters at issue in the investigation, avoids substantial costs of litigation, as well as the substantial risks to Allergan associated with government enforcement action," said Douglas Ingram, Allergan's executive vice president. Ingram was previously the company's chief legal officer dealing with the government's investigation and supervising the First Amendment suit.

The settlement still must be approved by the federal courts overseeing the criminal and civil cases. Allergan was represented by Paul Clement, a partner at King & Spalding in Washington, D.C., and a former U.S. solicitor general.

The deal also required the company to enter into a corporate integrity agreement with the Department of Health and Human Services. Under the agreement, Allergan will maintain its updated compliance program and undertake a series of compliance-related obligations, including additional monitoring, maintenance of specific written standards, auditing, training, education, reporting and disclosure, for five years.

The agreement also provides for an independent third-party review organization to assess and report on Allergan's compliance program.

Allergan estimated it will record pre-tax charges of between $610 million and $615 million in its third quarter in connection with the settlement. The amount includes interest and attorneys fees.

http://www.law.com/jsp/article.jsp?id=1202471484515

Calif. rejects ban on plastic shopping bags -- By ROBIN HINDERY Associated Press Writer

SACRAMENTO, Calif. (AP) - California lawmakers on Tuesday rejected a bill seeking to ban plastic shopping bags, after a contentious debate over whether the state was going too far in trying to regulate personal choice.

It would have been the first statewide ban, although a few cities already prohibit their use.

The Democratic bill had been the subject of a furious lobbying campaign by the plastic bag manufacturing industry, which called it a job killer.

The Senate took final action at the very end of the legislative session, reflecting how difficult it had been to muster support. The bill received just 14 votes in the Senate, seven short of the majority it needed.

Supporters of AB1998 said the 19 billion plastic bags Californians use every year harm the environment and cost the state $25 million annually to collect and transport to landfills.

Sen. Gil Cedillo, who carried the measure on the Senate floor, said it offered California an opportunity to emerge at the forefront of a global trend.

"If we don't solve this problem today, if we don't create a statewide standard, if we don't provide the leadership that is being called for, others will," the Los Angeles Democrat said.

A handful of California cities already ban single-use plastic bags, after San Francisco became the first to do so in 2007. Palo Alto, Malibu and Fairfax have since followed, while a ban approved in Manhattan Beach is tied up in litigation, said Matthew King, a spokesman for Heal the Bay, the Santa Monica-based nonprofit that sponsored AB1998.

The bill called for the ban to take effect in supermarkets and large retail stores in 2012. It would have applied to smaller stores in 2013.

Republicans and some Democrats opposed it, saying it would add an extra burden on consumers and businesses at a time when many already are struggling financially.

"If we pass this piece of legislation, we will be sending a message to the people of California that we care more about banning plastic bags than helping them put food on their table," said Sen. Mimi Walters, R-Lake Forest.

Sen. Lois Wolk, D-Davis, was one of half a dozen Democrats to vote against the bill. She said the state instead should offer incentives for reducing the use of plastic bags before imposing a statewide mandate.

http://news.findlaw.com/ap/f/1310/09-01-2010/20100901000501_02.html

Volvo asks Hausfeld to chase Pilkington for price-fixing losses -- Katy Dowell

Hausfeld has launched a High Court claim against Pilkington Group on behalf of motoring giant Volvo, almost three years after the car glass manufacturer was fined for price fixing.

Pilkington was handed a €140m (£100m) fine by the European Commission in 2007 for conspiring with three glass manufacturers - Asahi, of Japan; Guardian, of the United States; Saint-Gobain, of France - to fix the price of flat glass and allocate markets for car glass products between 1998 and 2003.

Volvo has instructed Hausfeld partner Anthony Maton to pursue Pilkington for losses it suffered as a result of the price fixing.

Maton said: “The car glass cartel was fined at record levels by the Commission and caused substantial damage to our client Volvo and others in the struggling car industry.

“Volvo has therefore instructed us to recover the significant financial losses it suffered due to these inflated prices over a period of five years.”

Litigators across the City have reported a significant rise in the number of follow on actions arising from cartel investigations.

Last month British Airways went to the High Court to request that a number of international airlines, including Air France, KLM, Cathay Pacific, Cargolux, Qantas and Emirates, be named as co-defendants in a lawsuit over a price-fixing cartel for air-freight services.

BA pleaded guilty to price fixing to regulatory authorities in the US, Australia and Canada and were recently fined by the regulatory authority in South Korea. The EC, however, is yet to deliver a verdict on its investigation into the airline.

Slaughter and May partner Richard Swallow instructed Kenneth MacLean QC of One Essex Court to represent BA. Maton, who is representing two flower importers  who claim to have suffered losses as a result of the alleged cartel, has instructed 20 Essex Street’s Iain  Milligan QC to bring the claim.

That case is currently awaiting judgment from the Court of Appeal to decide whether Hausfeld can bring a representative action against BA.

http://www.thelawyer.com/volvo-asks-hausfeld-to-chase-pilkington-for-price-fixing-losses/1005213.article

Federal Lawsuits Seek $30 Million in Madoff Family Money -- Larry Neumeister

The court-appointed trustee seeking to recover billions of dollars lost by jailed financier Bernard Madoff sued three entities Thursday to get back more than $30 million that he said the Madoff family had invested, mostly in oil and gas properties and technology companies.

The three lawsuits filed in U.S. Bankruptcy Court in Manhattan by Irving Picard are a follow-up to a lawsuit he filed in November seeking nearly $200 million from family members who he said lived lavishly while using the family finance business like a "piggy bank."

Picard wrote sarcastically in the latest lawsuits that Madoff was "quite generous" with the money he stole from thousands of customers in history's largest Ponzi scheme.

"Foremost among the recipients of Madoff's gifts of customer funds were his closest family members, including his wife Ruth Madoff, his brother Peter, his two sons Andrew and Mark and his niece Shana," Picard said.

"With respect to Mark and Andrew, the lawsuits are without merit, both factually and legally," said Martin Flumenbaum, a lawyer for Madoff's sons.

Peter Chavkin, a lawyer for Ruth Madoff, declined to comment.

Messages left with lawyers for Peter and Shana Madoff were not immediately returned.
The 72-year-old Madoff is serving a 150-year prison sentence after admitting that he never invested tens of billions of dollars he received from investors.

Defendants named in the lawsuits Thursday included Madoff Energy Holdings LLC, Conglomerate Gas Resources, Madoff Technologies, Madoff Brokerage & Trading Technology LLC, Primex Holdings LLC and Madoff Family LLC. Picard said the entities were controlled by Madoff family members, many of whom worked for Madoff.

The lawsuits sought more than $22 million invested in technology companies, more than $5 million invested in oil and gas properties and another $3 million from the Madoff Family Fund, which included investments in a hedge fund and a biotechnology company.

The lawsuits said the investments were used as vehicles to funnel money out of Bernard L. Madoff Investment Securities.

According to the lawsuits, the investment arm of Madoff's business generated account statements in early December 2008 for approximately 4,900 open customer accounts that claimed they were worth about $68 billion. In reality, Madoff had lost all but a trace of the original $20 billion invested by his customers, the lawsuits said.

Madoff confessed in December 2008 to his sons and later to the FBI that his business had operated for about two decades as a Ponzi scheme in which some investors were paid off with the money provided by new investors.

http://www.law.com/jsp/article.jsp?id=1202464114009

Lawyer's Indecent Proposals to Female Clients Bring One-Year Suspension -- By Michael Booth

The New Jersey Supreme Court on Thursday issued a one-year suspension to a Newark lawyer who offered discounted fees to female clients or their family members in exchange for sexual favors.

David Witherspoon might consider himself lucky. Two justices wanted him disbarred and said the court should set a bright-line rule like the one that mandates disbarment for trust-fund theft.

"One's bodily integrity is at least as important as the security of the finances one entrusts to an attorney," Justice Jaynee LaVecchia said in a dissent joined by Justice Barry Albin.

"The only appropriate measure of discipline that protects the public from respondent's intolerable behavior, and sends a zero-tolerance message toward lawyers who would consider preying on their clients, is disbarment."

But the rest of the court was more forgiving, saying the facts did not warrant imposing so extreme a punishment. This record … lacks the severity of the sexually-unethical behavior that we have previously considered to be worthy of disbarment," Justice Helen Hoens wrote for the majority in In the Matter of David Witherspoon, D-157-08.

For his part, Witherspoon says he disagrees with the court's assessment of what occurred between himself and his clients. "I have a decent record of providing affordable service to over 10,000 clients and will resume that level of service when this period is over," he says.

Witherspoon, a Newark solo, was charged with telling four female clients in bankruptcy cases that he would reduce or forgive fees in return for sexual favors. According to the stipulated fact record:

• In 2001, Witherspoon asked one client, S.S., about her personal life, asked if she would go out with him and made inappropriate sexual advances.

• In 2005, he told T.B., the daughter of a client, that he would forgive her father's debt of $300 in legal fees if she would meet him in a hotel room for three hours. Later in the case, he offered to forgive another $200 if she would dance for him in a bathing suit at his office.

• In 2005, when a client, S.B., visited Witherspoon's office accompanied by a female friend, he commented that many gay women "come on" to him and that if S.B. and her friend would "make out" he would file S.B.'s bankruptcy free of charge. Later, when S.B. told him that there was another creditor to be added to the petition, Witherspoon said he would do so only if S.B. lifted her skirt. On another occasion, he told her she could satisfy her outstanding legal fees by allowing him to watch her with her female friend or by letting him join in.

• In 2005, when a client, A.C., arrived for one of her appointments, Witherspoon said, "Oh, so you're the gay girl," and suggested that her lesbianism was caused by a bad experience with the male sex organ. On another occasion, he told her that he was a "breast man" and that if she joined him on his office couch, he would return to her $660 of the legal fees she had paid him.

None of the women accepted his offers. In his defense, Witherspoon said the atmosphere in his office was very relaxed and conversations on subjects of "a highly personal nature" were common. He also said the comments were made "purely in jest" and that he never intended to insult or demean any of the grievants. But the women all testified they believed he was proposing to exchange legal services for sex.

The District VI Ethics Committee that first heard the case found Witherspoon's respondent's explanations for his conduct unpersuasive and found he violated several Rules of Professional Conduct, among them RPC 1.7(a)(2) (conflict of interest) and RPC 8.4(g) (sexual discrimination or harassment).

The committee recommended a censure, along with mandatory sexual harassment sensitivity training and other supervisory measures.

The Disciplinary Review Board recommended, after de novo review, agreed with the committee on its findings but not as to discipline. The board urged a three-month suspension while two members would have imposed six months.

The DRB minority cited Witherspoon's prior disciplinary history. Admitted to the bar in 1994, he was on four prior occasions admonished, reprimanded and censured for shoddy recordkeeping and for failing to communicate with clients. That, together with his lack of contrition for his actions in the present case, evidenced "both arrogance and a lack of moral values," the minority said.

When the court heard his case last Dec. 1., Witherspoon offered apologies for his conduct. "I do want to express my regret for my behavior," he told the justices, admitting that until recently he did not take the attorney disciplinary system as seriously as he should have.

"It took me months to understand that the RPCs are there to help my practice," he said, recounting five steps he had taken to improve himself professionally. He said he had taken professional responsibility courses, hired an accounting firm, adopted a policy of immediately returning telephone calls and conducted his own audit of his business and trust accounts.

At the hearing, Witherspoon's attorney Bernard Freamon urged the court to impose the minimum suspension and consider appointing a proctor. "Mr. Witherspoon is trying to turn the corner," said Freamon, a Seton Hall University School of Law professor. "I don't believe you will see Mr. Witherspoon again."

In Thursday's opinion, Hoens said that the DRB majority's recommendation was "inadequate" but that there was no bright-line rule for the proper discipline to impose.

"Although we have cautioned that sexual offenses involving clients will be treated severely … there are few published decisions addressing such matters, and those decisions yield a variety of disciplinary outcomes,"

Hoens wrote.

Disciplinary cases involving sexual misconduct of a criminal nature have resulted in disbarment, she said, while others have led to periods of suspension ranging from three months to three years.

Only in certain cases -- such as willful misappropriation of funds or certain violent criminal offenses -- is there a bright-line rule mandating disbarment, Hoens said. Otherwise, "all discipline is fact-sensitive."
There were three reasons why the majority believed a one-year suspension was appropriate.

First, Hoens said, "As offensive as respondent's behavior was … none of the grievants accused respondent of forcing them to endure any unwanted physical contact or even attempting to do so; none of them felt sufficiently pressured that she even considered giving in; none sought therapy or treatment to overcome the experience; none has suggested the incidents were traumatic; and none pursued criminal charges."

Second, the record "lacks the severity" of behavior that in prior cases have led to disbarment. There was no evidence that Witherspoon was threatening or dangerous, Hoens said.

Third, while preying on clients goes directly to the heart of the attorney-client relationship, the majority could not go along with creating a bright-line rule mandating disbarment.

"[W]e cannot endorse the dissenters' automatic disbarment approach because of its broader implications," Hoens said.

"Carried to its logical conclusion, creating the zero tolerance' rule that they advocate based on this record would demand that we automatically disbar attorneys involved in non-criminal, non-threatening, non-traumatizing, purely verbal, sexual improprieties directed at other adults, simply because they are clients.
"In light of our disciplinary precedents making pain that not every conviction for a sexual offense will result in disbarment, we conclude that it would be disproportionate punishment indeed if respondent's behavior, although boorish, insensitive and offensive, but well shy of criminal, found itself on the far side of that bright line."

The Court said Witherspoon must undergo sensitivity training and institute accounting controls in his office before he can return to practice.

http://www.law.com/jsp/article.jsp?id=1202464064588 

Supreme Court Trims 'Miranda' Warning Rights Bit by Bit "Justice Sotomayor says the majority's latest decision 'turns Miranda upside down'" by Jesse J. Holland

 You have the right to remain silent, but only if you tell the police that you're remaining silent.

You have a right to a lawyer -- before, during and after questioning, even though the police don't have to tell you exactly when the lawyer can be with you. If you can't afford a lawyer, one will be provided to you. Do you understand these rights as they have been read to you, which, by the way, are only good for the next two weeks?

The Supreme Court made major revisions to the now familiar Miranda warnings this year. The rulings will change the ways police, lawyers and criminal suspects interact amid what experts call an attempt to pull back some of the rights that Americans have become used to over recent decades.

The high court has made clear it's not going to eliminate the requirement that police officers give suspects a Miranda warning, so it is tinkering around the edges, said Jeffrey L. Fisher, co-chair of the amicus committee of the National Association of Criminal Defense Lawyers.

"It's death by a thousand cuts," Fisher said. "For the past 20-25 years, as the court has turned more conservative on law and order issues, it has been whittling away at Miranda and doing everything it can to ease the admissibility of confessions that police wriggle out of suspects."

The court placed limits on the so-called Miranda rights three times during the just-ended session. Experts viewed the large number of rulings as a statistical aberration, rather than a full-fledged attempt to get rid of the famous 1966 decision. The original ruling emerged from police questioning of Ernesto Miranda in a rape and kidnapping case in Phoenix. It required officers to tell suspects taken into custody that they have the right to remain silent and to have a lawyer represent them, even if they can't afford one.

The court's three decisions "indicate a desire to prune back the rules somewhat," Kent Scheidegger, the legal director of the Criminal Justice Legal Foundation, a victims' rights group. "But I don't think any overruling of Miranda is in the near future. I think that controversy is pretty much dead."

The Supreme Court in 2000 upheld the requirement that the Miranda warning be read to criminal suspects.
This year's Supreme Court decisions did not mandate changes in the wording of Miranda warnings read by arresting police officers. The most common version is now familiar to most Americans, thanks to television police shows: "You have the right to remain silent. Anything you say can and will be used against you in a court of law. You have the right to speak to an attorney. If you cannot afford an attorney, one will be appointed to you. Do you understand these rights as they have been read to you?"

However, the court did approve one state version of the Miranda warnings that did not specifically inform suspects that they had a right to have a lawyer present during their police questioning.

The Miranda warning used in parts of Florida told suspects: "You have the right to talk to a lawyer before answering any of our questions. If you cannot afford to hire a lawyer, one will be appointed for you without cost and before any questioning. You have the right to use any of these rights at any time you want during this interview."

Lawyers -- and the Florida Supreme Court -- said that didn't make clear that lawyers can be present as the police are doing their questioning. But Justice Ruth Bader Ginsburg, writing the 7-2 majority decision, said all the required information was there.

"Nothing in the words used indicated that counsel's presence would be restricted after the questioning commenced," Ginsburg said. "Instead, the warning communicated that the right to counsel carried forward to and through the interrogation."

The next day, the court unanimously limited how long Miranda rights are valid.

The high court said for the first time that a suspect's request for a lawyer is good for only 14 days after the person is released from police custody. The 9-0 ruling pulled back from an earlier decision that said that police must halt all questioning for all time if a suspect asks for a lawyer.

Police can now attempt to question a suspect who asked for a lawyer -- once the person has been released from custody for at least two weeks -- without violating the person's constitutional rights and without having to repeat the Miranda warning.

"In our judgment, 14 days will provide plenty of time for the suspect to get reacclimated to his normal life, to consult with friends and counsel and to shake off any residual coercive effects of his prior custody," said Justice Antonin Scalia, who wrote the majority opinion.

And finally, the court's conservatives used their 5-4 advantage to rule that suspects must break their silence and tell police they are going to remain quiet if they want to invoke their "right to remain silent" and stop an interrogation, just as they must tell police that they want a lawyer.

All the criminal suspect needs to say is he or she is remaining silent, wrote Justice Anthony Kennedy. "Had he made either of these simple, unambiguous statements, he would have invoked his 'right to cut off questioning.' Here he did neither, so he did not invoke his right to remain silent."

But Justice Sonia Sotomayor said the majority's decision "turns Miranda upside down."
"Criminal suspects must now unambiguously invoke their right to remain silent -- which counter intuitively requires them to speak," she said. "At the same time, suspects will be legally presumed to have waived their rights even if they have given no clear expression of their intent to do so."

Police officers will look at these decisions and incorporate them into their training, said James Pasco of the National Fraternal Order of Police. "Officers are expected to adapt to changes required by the Supreme Court," Pasco said. "This will be no different."

But Fisher thinks the court's Miranda decisions will make it easier for police to get confessions out of people who don't want to confess. "Those decisions open up ways for cops to work around Miranda," Fisher said.

http://www.law.com/jsp/article.jsp?id=1202464143411&Supreme_Court_Trims_Miranda_Warning_Rights_Bit_by_Bit 

Financial Reform Keeps Law Firm Banking and Securities Practices Busy -- By Sheri Qualters

Regulations for the recently enacted financial reform law are months away, but law firms with strong financial services practices are rolling out the welcome mat for client conferences and filling their calendars with client meetings.

Debevoise & Plimpton of New York, for example, attracted 325 attendees to a July 8 conference organized with one week's notice, including the July 4 holiday weekend, said Greg Lyons, co-chairman of the firm's financial institutions group for the Americas.

The conference predated the July 21 enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act by a couple of weeks, but the firm assumed it wouldn't change much after it passed the U.S. House of Representatives on June 30.

"We're going to be doing more of that [kind of event]," Lyons said. "[The law] really is a fundamental shift in some of the oversight regulations."

Lyons predicted clients will frequently need further guidance and discussion during the next 18 months to two years. He's already got nine client meetings scheduled through the middle of August and expects to travel to Europe in the fall to meet with foreign banks with U.S. operations.

"If you look at the number of provisions and rules and the summary of provisions, [that's] over 170 pages long -- it's a staggering amount of work," Lyons said.

Clients' initial questions have largely focused on the so-called Volcker rule, which generally bans banking institutions from investing in private equity or hedge funds or engaging in proprietary trading, he said. Private equity funds that have banks as advisers or significant investors, or do joint ventures with banks to set up funds, also want to know what it means for them, said Lyons.

The law is designed to be somewhat painful for institutions, but there's a silver lining for some banks. Section 613 of the law will enable national or state banks to open branches in other states as if they were chartered in those states.

"It allows banks to branch interstate without regard to state law, and some of our clients are interested in that," Lyons said.

More than 200 attendees were signed up for Shearman & Sterling's panel discussion Thursday on the global business and legal implications of the financial reform bill, said partner Brad Sabel, who co-heads the New York-based firm's financial recovery and reform advisory group.

Like their Debevoise & Plimpton counterparts, Sabel and other colleagues are meeting with individual clients. "Several of us are a movable feast," Sabel said.

In addition to getting clients up to speed on the Volcker rule, Shearman & Sterling is helping clients set up a plan for complying with the Lincoln Amendment, which will require banks to establish a separately funded affiliate for swap trading activities in two years' time. Once agencies such as the U.S. Securities and Exchange Commission issue proposed regulations for comment, Sabel expects the firm to take an active role in helping clients draft comment letters.

"For big things like this, that can be quite a job," Sabel said.

In the past six months, New York's Proskauer Rose has held at least three webinars covering proposed legislation targeting private investment funds, including the Dodd-Frank bill and proposed European legislation, said Howard Beber, a Boston corporate partner and member of the firm's private investment funds group. Beber's group chiefly advises clients on the Private Fund Investment Advisers Registration Act of 2010 section of the financial reform bill. The private fund act calls for most hedge fund and private fund advisers to register with the SEC and implement compliance measures such as tapping a chief compliance officer, developing a written code of ethics and implementing policies to curb insider trading.

Beber said webinars are a good option for educating the firm's global client base of private investment fund clients. "The response to webinars has been tremendous," he said.

Although extensive regulatory scrutiny is a new phenomenon for private investment fund managers, the Investment Advisers Act dates back to 1940.

"While some particular rules [related to Dodd-Frank] have not yet passed, generally speaking the framework of what private investment fund managers are going to have to comply with is already in place," Beber said.
Aside from government scrutiny, financial services companies have to worry about bounty-seeking whistleblowers. The law calls for the SEC to pay whistleblowers cash rewards of between 10 percent and 30 percent of government sanctions from civil or criminal proceedings that top $1 million and are attributable to the whistleblower's information. The same standards apply to whistleblower information collected by the U.S. Commodity Futures Trading Commission.

"There's going to be an intense focus on compliance" over the coming years, Lyons said.

http://www.law.com/jsp/article.jsp?id=1202464109685&Financial_Reform_Keeps_Law_Firm_Banking_and_Securities_Practices_Busy

What It Takes to Succeed in Online Marketing -- By: Debra Regan

Sixty-five percent of people in need of legal representation begin their search for an attorney on the Internet, according to a 2009 report in the New York State Bar Association Journal. How difficult is it for these potential clients to find a particular firm online and, once they do, are they motivated enough by what they find to take the next step and contact that firm? Some lawyers embrace online marketing and do it well, while others make mistakes that cost them clients, money and time.

Lawyers are highly educated and trained to write for the courts, where complex legal jargon is expected and well understood. Writing for the Web (and for prospective clients) is an entirely different animal. A law firm administrator should consider asking his or her nonattorney friends whether they find the law firm's site content easy to understand and compelling. If the answer is "no," the firm should consider hiring someone with experience writing for the Web. An experienced writer can help the firm communicate with prospective clients more efficiently and effectively, as well as include a strong call to action. Experts can also improve a firm's positioning on search-engine results by incorporating keywords into the copy that are relevant to the firm's practice and that prospective clients are most likely to input into search engines.

A law firm's website is the centerpiece of its online marketing efforts. It tells the world who the firm is, what it does and why it does it well. If a firm builds it right, the website can create a favorable impression of the firm, while generating quality leads. If a firm has developed a website that clearly describes its capabilities in terms of client needs, but no one is calling, it should try a couple of quick fixes that could get the phones ringing. A firm should always put its location and phone number prominently at the top of the website. It should include a strong call to action that will motivate prospective clients to call, such as, "For a free consultation, contact us now." Not fancy, but it works.

Additionally, law firm management should recognize that it can be intimidating to call a law firm, so it should include a contact form right on the site for prospects to fill out so the firm can contact them. Again, the firm should put this high up, above the fold on every page. If a firm has a good message on its website, those three simple steps should provide it with a noticeable lift in response. It shouldn't cost much or take a lot of time.

Search-engine marketing encompasses all efforts to promote a website or business online within search engines like Google, Bing and Yahoo. There are two ways to employ search-engine marketing: through search-engine optimization, which works to improve a website's rankings within the body of search-engine results, and pay-per-click advertising, which allows the site owner to place sponsored messages along the top and right side of the main search-engine results. Lead activity (phone calls or e-mail contacts) increase by 45 percent when search-engine results are coupled with a pay-per-click campaign. See iCrossing Search Synergy Report, March 2007, www.slideshare.net/iCrossingDe/search-synergy-report. A law firm should hire an outside agency with expertise to help it establish a comprehensive strategy; then it should test it relentlessly and measure results.

A law firm administrator might see a few examples of high-ranking websites within an outside agency's portfolio and believe that the search-engine marketing (SEM) agency is good at what it does, but he or she would need to do further research before bringing an agency on board. For example, are the high-ranking websites ranking for the "best" (most traffic/leads) keywords? Are the high-ranking websites ranking for the right keywords for the law firm's marketing strategy? What is the SEM firm doing to drive higher rankings? Is it a breadth of SEM work or is it relying on only one tactic, thus putting the entire firm's SEM eggs in one basket? Finally, and most important: Is the agency employing legitimate and ethical practices to affect ranking? A firm should remember that, if it hires the agency, it is representing the law firm's brand: If the agency uses black hat (shady, unethical) tactics, the firm will have to deal with the fallout.

DON'T EXPECT IMMEDIATE RESULTS

Business owners who are unfamiliar with how search-engine marketing works tend to expect results in a matter of days. Law firm managers shouldn't get discouraged just because the phones aren't ringing off the hook after a couple of weeks. They should consider testing an SEM program on just one area of practice before investing the firm's money in all of them. From there, the firm can adjust and expand as needed. It should set reasonable goals and establish effective processes to track all phone and e-mail inquiries generated from the campaign. If a firm commits itself to the program, it will reap the rewards. Results from search-engine marketing take time; the firm will need to be patient. Typically, it will see results from a search-engine optimization program in approximately three to six months, during which time performance is monitored and the program is tweaked for optimal results. Although one can see immediate results from a pay-per-click program, it takes about one to three months to set it up properly.

In the legal services business, in which people work very closely with their attorneys, it is crucial for a firm to incorporate a video on its website so that potential clients can see who they might be hiring. The vast majority of U.S. citizens are accustomed to viewing online video, and including at least one video on the site can help bring a firm to life for prospective clients. An effective online video can also increase a firm's exposure on search engines, and adding the video to YouTube, legal directories and other video distribution sites can extend that reach. A firm should create a professionally produced video that runs up to two minutes and includes an actionable invitation to connect with the firm by phone or e-mail. It should include three key messages within the first 30 seconds, as viewers might not retain any more than that. A firm should measure pre- and post-publish statistics to identify page views, downloads and other metrics to determine how well the video is performing.

Each month, millions of people visit online legal directory sites to find information and local lawyers who can help them confront a pressing legal concern. That's why a paid profile on one of these sites should be part of a law firm's marketing strategy. The more information a firm includes about its expertise, the better. The firm should make sure to include information that is critical to prospective clients, such as years of experience, areas of practice, languages spoken, office hours and payment options. A firm should include a compelling tagline that can set it apart from others. Establishing a profile on one of these sites will drive more qualified leads to the firm.

A firm should make sure to tailor its tagline associated with search-engine sponsored results and sponsored links to the area of practice and geographic region the ad is targeting. For example, an ad for bankruptcy in Chicago should have a different tagline than an ad for personal injury in Dallas. Likewise, for sponsored results, the landing-page URL for the "view website" link should also be tailored to each specific ad. Ensuring that the taglines and landing-page URLs are distinctly relevant to the ad will present a better experience for the user and will increase the potential for more leads -- and better-quality leads.

LEVERAGING RATINGS AND RANKINGS 

Ratings are critical to driving new business in the digital age. Lawyers need to understand that "buyers" of legal services are turning to the Web in record numbers to research lawyers and read online ratings and reviews that include peer assessments, as well as client feedback regarding a lawyer's legal ability, cost, perceived value, ability to communicate and other factors. If a firm has established a favorable peer-based rating through a credible, third-party ratings resource, it should make sure that rating is featured prominently on its website and encourage satisfied clients to post reviews of the firm's performance on matters no longer before the courts. If the firm gets negative feedback through one or more of these sources, it should use that as an opportunity to assess weaknesses in its approach and as an opportunity to address the concerns of potentially unhappy clients. A firm is going to get reviewed, rated and ranked whether or not it actively pursues these assessments, so it's better to engage and leverage positive reviews to the fullest.

Lawyers are notoriously slow adopters of new technologies, but the general population is blogging, tweeting and flocking to sites like Facebook and LinkedIn by the millions. Limited time and resources make in-person networking more difficult than ever. However, involvement in social media offers limitless opportunities to find, connect and engage with prospective clients. If a law firm administrator is unsure how to start or needs help refining an approach, he or she should talk to an expert with a proven track record in helping lawyers leverage social media for business development. Then he or she should spend the necessary time up-front establishing concrete and reasonable goals.

A social-media expert can help a firm decide whether it should devote time to creating a blog, establishing a presence on one or more professional networking sites, setting up a Twitter account or all of the above and more. Social media are collections of "communities," each with its own culture and rules of conduct. A law firm administrator should take some time to observe and learn before throwing the firm into the mix. Once a firm does jump in, it should do so in the spirit of connecting with and helping others in the community by providing useful information. It should avoid any overt sales pitches. Business inquiries will come as the firm establishes trust and credibility in various online forums.

Debra Regan is a vice president at LexisNexis -- parent company of Martindale-Hubbell and Lawyers.com -- where she helps lawyers attract new clients with website development and search-engine marketing/optimization services.

http://www.law.com/jsp/law/sfb/lawArticleSFB.jsp?id=1202459200700

Closure of McDonough Holland & Allen Puts Lawyers in Play -- By: Cheryl Miller

Attorneys scrambled behind the scenes in the wake of Friday's announcement that McDonough Holland & Allen, Sacramento, Calif.'s second largest law firm, would shut its doors this year.

Firm leaders have not spoken publicly about the closure other than to issue a three-paragraph statement saying that a "variety of reasons," including attorney departures, had led to a decision to "wind down ... operations" with a Labor Day target date.

The 80-attorney firm, with a branch office in Oakland, did not use the word "dissolution," leading to speculation that a core group of attorneys may forge a new practice, albeit one that doesn't operate under the name McDonough Holland.

"Going forward, individual and small group announcements will be made as transition plans are finalized," the statement read.

Industry observers said Monday that the Sacramento firm of Boutin Gibson Di Giusto Hodell may pick up a number of McDonough Holland attorneys. Boutin Gibson has a significant real estate group, and McDonough Holland has a long history in real estate and construction practices. Boutin Gibson partners did not return phone and e-mail messages Monday.

Sources were also eyeing the Sacramento office of Stoel Rives as a possible destination for a number of McDonough Holland attorneys. The two firms recently discussed some type of merger, sources said, but talks did not produce a deal.

"Obviously, to bring them all in and integrate them with [Stoel Rives], the numbers didn't work out," said Tom Chase, a Sacramento area legal recruiter.

McDonough Holland maintains a large public law practice; its attorneys represent dozens of municipalities, including numerous redevelopment agencies. That group could be enticing to other firms, Chase said.
Donald Oppenheim, chief operating officer of Meyers Nave Riback Silver & Wilson, said his Oakland, Calif.-based firm, with its emphasis on public law practice, is "always" in the market for talented attorneys, but he declined to say if conversations had taken place with McDonough Holland partners.

Much of the debate on the reasons behind McDonough Holland's demise has focused on the March departure of the firm's 10-person health care group to DLA Piper. For years, McDonough Holland had been tied to regional health care groups and hospitals, including Northern California's Sutter Health.
"That was a huge hit for the firm," said Chase. "They were a very, very profitable group."

The group's leader, Stephen Goff, said Monday that he did not know about the firm's impending closure until after Friday's announcement and added that he had not spoken with anyone at the firm. He declined further comment.

Goff's departure followed the firm's May 2009 move to high-end office space on three floors of a newly constructed downtown Sacramento high-rise. The firm signed a 15-year lease for the space in 2008.
"That put a lot of pressure on the partners who were still at the firm," said Chase.

http://www.law.com/jsp/law/sfb/lawArticleSFB.jsp?id=1202462917757&Closure_of_McDonough_Holland__Allen_Puts_Lawyers_in_Play

N.J. Disciplinary Review Board Rejects Sanction Recommendation for Estate Lawyer -- By: Charles Toutant

It's rare indeed that a New Jersey district ethics committee recommends a sanction and the state Disciplinary Review Board disagrees, but it happened June 18 in the case of a Rockaway solo accused of dragging his feet in an estate case and then refusing to cooperate with substituted counsel.

Not only had Jeffrey Grow not neglected the case, but he actively tried to assist the client even after being discharged, the DRB found.

"In sum, we find no clear and convincing evidence that respondent's actions failed to protect the estate in any way," the board held, dismissing all charges.

Arthur Hoffman died on Feb. 22, 2007, leaving his estate in equal shares to his four sisters, including his executrix, Helen Mantooth. She retained Grow.

In April 2007, Grow supervised the sale of Hoffman's house for $425,000. The buyer's attorney held $67,000 of the proceeds in escrow, pending receipt of an inheritance tax waiver. In May, Grow filed an inheritance tax return. That November, after receiving the tax waiver, Grow asked the buyer's attorney to return the $67,000, but the funds were not received until February 2008.

On April 28, 2008, Grow received a letter from New Providence solo Juan Ryan, who said he was hired by the estate to recover the proceeds from the home sale. Ryan accused Grow of "inexcusable delay," asserting that he had ignored requests by Mantooth for an accounting and distribution of the proceeds. Ryan threatened to sue Grow and to report him to disciplinary authorities.

Grow replied on April 30 that he had not yet distributed the proceeds because of the late discovery of a second bank account belonging to Hoffman -- necessitating the filing of an amended tax return -- and the belated receipt of the buyer's escrow.

On June 30, sister Evelyn Whitley filed a grievance, accusing Grow of not complying with numerous written requests for information, and in July, Mantooth terminated him.

On July 15, Ryan wrote Grow to ask about what he saw as errors in a proposed final accounting sent to Mantooth. On Sept. 23, Grow sent Ryan an amended version of the accounting. On Nov. 24, Ryan wrote to Grow about checks from a pension plan and a life insurance company that did not appear in the final accounting, and on Dec. 18, complained to the District XB Ethics Committee investigator that Grow did not respond to his inquiry about the checks.

In testimony before the committee, Ryan said Grow overreported the estate's income by $100,000 on a tax return by failing to use a $25,000 deduction for each sister and overpaid estate taxes by $9,000. In addition, Grow's accounting lumped together assets, liabilities and expenses, Ryan said.

During his testimony, Grow, who appeared pro se, admitted he made the tax return error but said it was rectified when he obtained a refund.

He disputed the characterization of his accounting methods as improper and said he had sent Mantooth copies of all relevant documents. He also said he eventually realized that the sisters were not on speaking terms with each other and that was hampering communication in the case.

In addition, he said that before he was contacted by Ryan, he heard from at least two other attorneys on behalf of the sisters, but those attorneys were never heard from again and he assumed Ryan would "disappear" as well.

He said after Ryan contacted him, he called Mantooth to find out whether his representation was terminated, but was unable to reach her, Grow said.

The committee found Grow made "numerous mistakes" in his accounting and stuck his "head in the sand" when avoiding Ryan. The committee alleged that he violated New Jersey Rule of Professional Conduct 1.1(a), gross neglect, and RPC 1.16(d), failure to turn over a client's file to subsequent counsel, and it recommended censure.

But despite Grow's failure to respond to many of Ryan's requests for information, he performed the job expected of an attorney administering a will, the DRB concluded.

Grow did not neglect the case, "as evidenced by all that he accomplished during his tenure for the estate," the DRB wrote.

Grow presided over the sale of Hoffman's house, probated the will, prepared and filed numerous documents for tax purposes and "generally marshaled the assets of the estate," the DRB said.

While Grow should have replied to Ryan's November 2008 letter about the checks not included in the estate accounting, Ryan also could have investigated that matter with his client or the bank, the DRB said.

Grow says the committee members could have seen that the allegations were unfounded "but they chose not to. Thank God the central ethics committee saw it for what it is," Grow says.

"One thing is very clear -- in this day and age, people are way too aware that the way to control their attorney's behavior or to keep from paying them is to simply file an ethics charge," says Grow.

Ryan says he is not surprised that the charges were dismissed. He says Grow's acts were "clumsy" but "not particularly egregious."

http://www.law.com/jsp/law/sfb/lawArticleSFB.jsp?id=1202462918536&NJ_Disciplinary_Review_Board_Rejects_Sanction_Recommendation_for_Estate_Lawyer