Posts on ‘February 12th, 2009’

The current economic environment will cause executives, particularly those in the hard-hit financial sectors, to explore ways to cut legal expense. Innovative legal departments, by aggressive pursuit of “recoveries,” have transformed what was once viewed as a cost center into a revenue source for their companies. Equal attention, however, should be focused on maximizing returns from recovery efforts and dampening the financial risk of those undertakings, says attorney John F. Brown Jr.

Peter Baron, director of technology at Stradling, evaluated VoIP systems and many products used to enhance the interface between the telephone system and computers. He used a spreadsheet of key criteria as a starting point and distilled the overall purchasing process into seven steps.

In a decision of first impression for the circuit, the 1st Circuit ruled that an employee’s lawsuit about a financially inefficient corporate process did not qualify for the Sarbanes-Oxley Act’s whistleblower protection. “An important takeaway, regardless of the nature of an employee complaint, is if you take it seriously and respond to the employee, you can essentially give yourself a defense under the whistleblower provisions,” said Seyfarth Shaw’s Ariel Cudkowicz, a lawyer for Staples in the case.

The London legal market is being gripped by unprecedented economic turmoil: On Monday, Lovells became the latest major firm to announce cuts to attorneys and staff, while Freshfields Bruckhaus Deringer revealed that it was freezing associate salaries at 2008 levels. Against this backdrop, a number of U.S. firms’ London offices have started to report their financials for 2008. For some of them, the picture is not as gloomy as might have been predicted.

DLA Piper is laying off 80 associates and about 100 staffers in its U.S. offices. The announcement, made to attorneys and employees on Thursday, followed the firm’s decision earlier in the week to let go of 30 attorneys and 110 staffers in its U.K. offices. The downsizing will affect the New York office the most, where the firm will trim 16 associates. It is laying off 12 associates in Chicago, with the other reductions primarily on the West Coast.

A prominent general counsel at Taiwan Semiconductor Manufacturing Co. didn’t fraudulently doctor a settlement agreement after the fact, Alameda County Superior Court Judge Steven Brick wrote in a proposed ruling on Tuesday. In-house veteran Richard Thurston had been accused by Semiconductor Manufacturing International Corp. of making changes to a 2005 settlement in which SMIC agreed to pay TSMC $175 million to end a nasty patent and trade secret fight.

For over a year, ever since the financial crisis began, there has been a succession of layoffs, bonus cuts and salary freezes involving law firm associates. And more associate cuts seem likely to follow this year. So far, so typical of law firms’ responses to economic downturns. But will this be the year when firms aggressively cut their partnership ranks, both equity and non-equity? The partner-level bloodletting has already begun, and the future is looking grim on both sides of the Atlantic.

Perkins Coie is suing former associate David Xue, claiming he breached a contract by refusing to repay the firm more than $36,000 that Perkins Coie advanced for law school tuition and related costs. A January 2007 letter of employment attached to the suit notes that Xue would have to repay any advances if he left the firm within three years. According to court documents, Xue left for Goodwin Procter in September 2008. A Perkins Coie spokeswoman says the firm made “numerous requests” for repayment to no avail.

Federal contractors can expect to face more scrutiny from the federal government this year — and stiffer fines for discriminatory practices. So predict corporate defense counsel, responding to recent statistics that show that the Department of Labor won a record $67.5 million in settlements in 2008 for an unprecedented 24,500 workers who were discriminated against by federal contractors. The figure reflects a 133 percent increase over financial remedies obtained in 2001 by the DOL.