Posts on ‘October 27th, 2008’

A New York state judge concluded the politically charged litigation between the New York Senate and former Gov. Eliot Spitzer last week, but not before condemning the parties for their “cavalier” and “shameful” wasting of court time and taxpayer money. Republicans in the Senate had sought to subpoena communications related to efforts by the Democratic Spitzer administration to use the state police to gather records on state-funded travel by Spitzer’s former chief rival, Senate Majority Leader Joseph Bruno.

The U.S. Securities and Exchange Commission initiated 671 enforcement actions in fiscal year 2008, the second-highest total in the agency’s history. The SEC also repeated last year’s total of distributing more than $1 billion to investors harmed by others’ actions during fiscal year 2008. The agency’s higher enforcement caseload included a more than 25 percent increase in insider trading cases and more than 45 percent in market manipulation cases compared with fiscal year 2007.

The crisis at Thelen reached a new level Friday as it appears that even firm Chairman Stephen O’Neal is out looking for a job. O’Neal and 30 or so lawyers from the signature construction and mass torts practice are currently in talks with Washington, D.C.’s Howrey, with hopes of closing a deal soon, a person familiar with the situation said. “Most people are kinda pissed off that he’s spending more time on his own situation than the firm’s situation,” said one Thelen partner who did not want to be named.

Baker Botts has fired the latest shot in the ongoing battle over whether the Public Company Accounting Oversight Board, a key cog in the Sarbanes-Oxley machine, violates the Constitution by robbing the president of his appointment powers. A D.C. Circuit panel ruled for the board in a contentious 2-1 decision in August, and the challengers last month asked that the court rehear the case en banc. The board responded last week, calling on the same Baker Botts team that won the first appeals case.

A deeply divided Pennsylvania Commonwealth Court has ruled that testimony by two doctors was enough to prove that a workers’ compensation claimant was feigning symptoms. The dissenting opinion said the ruling would open the floodgates for “unending litigation.” The majority upheld a workers’ compensation judge’s decision to terminate the claimant’s benefits. The judge also noted that during a hearing the claimant demonstrated apparent balance problems only when he was aware the judge was watching him.

Proof positive of the standardization and commoditization of legal services is in the behavior of corporate counsel toward their outside law firms: They are taking bids, asking for discounts, shopping around for lower-cost options and doing more work themselves — much the same way their operational counterparts make purchases from other vendors. And that trend — boosted by rising rates and falling stock prices — ultimately will affect how law firms are run.

Many solos and small firms do without practice management software due to high costs and administrative overhead. Now, software as a service, such as Clio and Rocket Matter, gives small offices other options. Legal Technology editor Sean Doherty takes Clio for a free 30-day evaluation.

Martin Lipton, the legendary Wachtell M&A lawyer and firm founding partner, said last week that a full economic recovery could take three to five years. Lipton, retired Goldman Sachs Chairman Stephen Friedman and Joseph Rice III, chairman of Clayton Dubilier & Rice, were on a panel at NYU School of Law, where they discussed the global economic crisis and offered predictions on what the future might hold for lawyers and businesses.

O’Melveny & Myers has reduced its associate and staff headcount amid cost-cutting measures that were announced last week, according to the firm and other sources. In a prepared statement, a firm spokeswoman said there were no plans for “economic layoffs” of associates and that it would be “inaccurate to infer a layoff from performance reviews given to less than 1 percent of our associates and counsel headcount.”

The federal financial bailout contained a small inroad on the national dominance by Delaware law and courts on corporate governance issues, but that state may see larger federal vehicles barreling toward it because of the economic crisis. “The possibility of federalization is greater today because of this crisis,” said Charles M. Elson of the University of Delaware Corporate Governance Center. “The storm clouds are there and they have come together to make this much more possible than even two months ago.”