Posts on ‘December 15th, 2008’

The stunning fraud that Wall Street pillar Bernard Madoff is accused of has raised questions about whether federal regulators were lax in failing to scrutinize his operations and respond to alarms raised about them. SEC enforcement attorneys were in federal court on Friday to seek emergency relief for investors, including an asset freeze and the appointment of a receiver for Madoff’s firm, in an alleged $50 billion fraud that could be the largest ever pinned on an individual.

A San Francisco jury has rejected a $17 million legal malpractice claim against Orrick Herrington & Sutcliffe in an eight-year-old dispute claiming breach of fiduciary duty by retired trusts and estates partner William Hoisington. Jurors found that Hoisington failed his obligation to his client by breaching a fiduciary obligation, but that it was not a substantial factor in harm to the client.

A federal judge sharply rebuked a team of Fox Rothschild lawyers for filing an “excessive” fee petition after winning an international custody case, saying their bill of more than $163,000 was too large for a “garden variety” custody battle. U.S. District Judge Lawrence F. Stengel said the fee petition “provides no real discussion of why five attorneys were necessary to present this case.” The firm argued that the five lawyers each handled an integral part of the case, but Stengel was not impressed.

The U.S. Supreme Court agreed Friday to consider reinstating a $500 million settlement of asbestos-related lawsuits against the Travelers Companies Inc. The insurance company has been named in dozens of lawsuits claiming that it tried to hide the dangerous health effects of asbestos. The settlement would also block any new lawsuits against Travelers stemming from its relationship with Johns Manville Corp., once the world’s largest producer of asbestos.

The Supreme Judicial Court of Massachusetts recently reversed a lower court order and ruled that Boston law firm Morrison Mahoney could deny deferred income to nonretiring partners who voluntarily leave the firm as long as the firm applies the same policy to all departing partners. Morrison Mahoney’s partnership agreement stipulates that only retiring partners, or those leaving after age 60 or 20 years as a firm partner, could cash out their annual partnership interest credits or deferred income.

There is little chance that the lawyers affiliated with Dreier LLP will be paid Monday morning, according to the receiver charged with preserving the firm’s assets in the wake of Marc Dreier’s arrest for a $380 million fraud. Many of the assets have been depleted and those remaining are subject to freeze orders or other legal restraints, Mark Pomerantz of Paul Weiss Rifkind Wharton & Garrison warned current and former firm employees in a notice after his appointment last week.

Apple Inc. is paring back the number of outside law firms it uses. Following in the footsteps of other large companies, like Sun Microsystems, Apple General Counsel Daniel Cooperman is compiling a list of “preferred providers” — go-to law firms for particular chunks of legal work, like corporate, IP, or labor and employment.

Even before the economic tsunami swept across the world’s markets, a variety of storm clouds hung over the law firm landscape. Collectively they suggested that serious changes might be in the offing for a market notable for two seemingly immutable traits: relentless success and an ability to dodge, defeat or co-opt genuine rebellion. Four key factors stand out as being the most likely to bring fundamental change.

The Supreme Court on Monday handed a surprising defeat to tobacco companies counting on it to put an end to lawsuits alleging deceptive marketing of “light” cigarettes. In a 5-4 split won by the court’s liberals, it ruled that smokers may use state consumer protection laws to sue cigarette makers for the way they promote “light” and “low tar” brands. The decision was at odds with recent anti-consumer rulings that limited state regulation of business in favor of federal power.

Chicago U.S. Attorney Patrick Fitzgerald is an old hand at political corruption trials. The initial evidence he’s brought against Illinois Gov. Rod Blagojevich appears to be overwhelming. But defense lawyers know that wiretaps often can be a double-edged sword, and that there are weaknesses to be exploited in the criminal complaint against Blagojevich. The Am Law Daily reached out to several former prosecutors-turned-defense-lawyers to see how they would proceed if tasked with defending the governor.