Posts on ‘November 23rd, 2009’

The past year was unprecedented for the legal industry when it came to the spike in tough decisions law firms had to make, but there could be light at the end of the tunnel. According to the responses from the PaLAW 2009’s 14th annual Managing Partners Survey, law firms across Pennsylvania conducted layoffs and instituted cost-cutting measures with greater frequency than ever before. But the overwhelming majority of the responding managing partners predict that will be the end of some of those trends.

At a joint press conference last week, Fulton County Superior Court Chief Judge Doris L. Downs and District Attorney Paul L. Howard Jr. declared an “economic state of emergency” looming over the Georgia county’s justice system that could mean the dismissal of almost 1,000 employees. Downs said that the various segments of the county’s criminal justice system were informed Nov. 16 that a $146 million shortfall in Fulton County coffers meant those departments must cut 25 percent of their 2010 budgets.

Robert Kelley, the attorney for former smoker Cindy Naugle, who last week won a whopping $300 million verdict in a suit against Philip Morris, spoke to The Am Law Litigation Daily about why the award in Naugle’s case was so much larger than those in other so-called Engle progeny suits. One reason, Kelley said, was that this was the first trial in which the jury heard about the “real financial resources” of Philip Morris. “The jury was impressed by the numbers,” he said.

Seyfarth Shaw is cutting associate salaries by 5 percent to 10 percent for all first-years who start in 2010, according to J. Stephen Poor, the firm’s chairman and managing partner. The firm declined to comment beyond a statement Poor released in which he tied the salary reductions to “pressure” its clients are feeling to cut costs. The announcement came on the same day Seyfarth informed half of its 16 incoming first-years scheduled to start in January that they would not start until October 2010.

Calling someone a “douche” may be bad manners but it does not give an insurance company grounds to disavow a policy protecting against defamation claims, a New York judge has ruled. The dispute arose after public relations firm owner Drew Kerr, mimicking rival Ronn Torossian’s practice of purchasing domain names containing the names of competitors, purchased the domain “www.ronntorossianpr” and posted a photo of a package of “Summer’s Eve” douche product.

Dealing another major setback to the IRS in the ongoing litigation over how it handled a massive $8 billion refund for a now-abandoned telephone excise tax, a Pennsylvania federal judge has refused to dismiss a nationwide class action that says the agency’s public notices about the refund’s availability violated due process. The ruling comes on the heels of a scathing August decision from a Washington, D.C., federal appeals court that revived similar suits alleging the IRS violated the Administrative Procedures Act.

Dietary supplement maker Brain Research Labs has sued Ropers Majeski partner Thomas Clarke Jr. and his law firm, as well as the plaintiff named in a complaint against Brain Research, saying that comments made about the class action litigation on TV and in a YouTube video are defamatory and have hurt the company’s business. In a Friday hearing on a motion to dismiss the lawsuit, the company’s lawyers painted Clarke as an attorney who’d gone too far.

Two former Luzerne County, Pa., judges who are facing federal criminal charges have been granted partial immunity in a civil suit brought by a class of juveniles who claim their rights were violated in the wake of the Luzerne County “kids for cash” judicial scandal. Writing that judicial immunity does not operate on a “sliding scale,” U.S. District Judge A. Richard Caputo has ruled that Michael T. Conahan and Mark A. Ciavarella Jr. are protected by immunity from facing legal action for their courtroom acts.

Sutherland will shift from lockstep associate compensation to a performance-based system in January. The firm’s roughly 175 associates will be grouped into three tiers, with advancement and pay increases pegged to their mastery of various skills. “The driving force in the change is to be able to communicate to the client that an associate has a certain level of skills, and that’s what you’re paying for,” said the firm’s professional development director. “Now, the person is not a fourth-year just through inertia.”

Despite its recognition of the “frustration” among matrimonial attorneys regarding New York’s continued status as the only state in the country without no-fault divorce, a Brooklyn appellate panel has declined to broaden the grounds for divorce by recognizing a “social abandonment” cause of action. The plaintiff argued that her husband’s refusal to eat meals with her, celebrate holidays together or attend family functions should be recognized as a form of abandonment, one of the four grounds for divorce.