Posts on ‘February 23rd, 2010’

From consultants to partnership committee boardrooms, the new mantra is: “The bar for making partner is being raised.” And existing partners may have new challenges too. Altman Weil’s Thomas S. Clay says current partners may be at risk of being pushed out “to make room for young blood.”

Alleging that the delay in their case has deprived them of their constitutional rights to due process, plaintiffs in a class action suit pending more than four years at the Texas Supreme Court have sued each of the court’s nine justices. Plaintiffs attorney Thomas R. Bray says the class claims total approximately $80 million, including $40 million in actual damages and $40 million in prejudgment interest. The plaintiffs say the appeal in their underlying suit is the oldest awaiting a decision by the state high court.

New York federal Judge Jed S. Rakoff on Monday “reluctantly” approved a $150 million agreement between the Securities and Exchange Commission and Bank of America, which settles allegations that the bank failed to make required disclosures in connection with its $50 billion takeover of Merrill Lynch in 2008. Rakoff said the settlement’s major defect was that it “advocates very modest punitive, compensatory and remedial measures.” Wrote the judge: “While better than nothing, this is half baked justice at best.”

The landmark 2008 Supreme Court decision in D.C. v. Heller, declaring an individual right to bear arms under the Second Amendment, may soon be eclipsed by its sequel: McDonald v. City of Chicago, set for argument March 2. McDonald may be the case that makes the right real nationwide, by applying or incorporating it as a shield against state and local restrictions on firearms as well. A major segment of the case began with the long-ago murder of a lawyer and judge in a Chicago courtroom.

The recession has clearly hurt Holland & Knight, with revenue down 10 percent last year and a 9 percent lawyer reduction, including 70 layoffs a year ago. The biggest headcount drop was in non-equity partners, with a one-year drop of 11 percent. “They’re taking care of the equity partners because the equities put the gas in the engine. Without rainmakers, you have no firm. Without clients, you have a social club,” said Joe Ankus, a longtime legal headhunter and a former Holland & Knight attorney.

For Howrey, 2009 was a rough year. The firm’s gross revenue fell from $573.2 million to $480 million, marking a decline of 16.3 percent. Revenue per lawyer dropped by 19.2 percent to $702,782. Net compensation to equity partners slid 28.3 percent to $128.6 million. And profits per partner sank from about $1.3 million to $846,053 — a 34.9 percent drop. Firm Chairman Robert Ruyak said that as the firm enters into more alternative billing arrangements, there will continue to be fluctuations in year-to-year revenue.

While the legal challenge to California’s ban on same-sex marriage — Proposition 8 — plays out on the West Coast, a direct constitutional challenge to the federal Defense of Marriage Act moves forward on the East Coast. Massachusetts Attorney General Martha Coakley last week moved for summary judgment in Commonwealth of Massachusetts v. U.S. Department of Health & Human Services, which was filed in July.

Attorney General Eric Holder Jr. struck back at critics Tuesday, declaring that the denigration of civilian federal courts to prosecute terror defendants “flies in the face of the facts” and is more about politics than independent analysis of cases. Holder was part of the DOJ team that announced the guilty plea entered Tuesday by Najibullah Zazi in New York. Zazi pleaded guilty to charges that include providing material support to Al Qaeda and to conspiracy to use weapons of mass destruction.

A federal judge in Philadelphia agreed to stay proceedings in a fight between Radnor, Pa.-based Airgas and its former law firm Cravath Swaine & Moore until Delaware’s Chancery Court decides whether the law firm should be enjoined from representing Airgas competitor Air Products & Chemicals in its bid to take over Airgas. Both companies had been clients of Cravath’s for years. Airgas alleges Cravath dumped the company as a client after nine years in order to represent a 40-year client, Air Products, in the deal.

It’s not often that the chairman of one major Silicon Valley law firm kicks dirt in open court on a fellow chairman/business rival. But in part of his opening statement Monday, Cooley Godward Chairman Stephen Neal claimed that former Brocade CEO Gregory Reyes could not be convicted of illegal stock option backdating because Brocade’s outside counsel, Wilson Sonsini, was fine with the practice. Wilson chairman Larry Sonsini sat on Brocade’s board and received backdated stock options himself, Neal said.