Author: TSA Press

For most lawyers, they have a goal in mind before they even take their LSAT: making partner at a firm. Making partner at a prestigious firm is the gold standard achievement for a young attorney looking to signal to the world that they’ve arrived. For many, the day they made partner felt like the day their practice of law truly began.

But partnership ain’t what it used to be. Making the transition from associate to partner in today’s legal market usually means new business cards, a press release, maybe an upgraded office. It almost certainly means a slew of new mandatory meetings and committee assignments. But at firms across the globe, it rarely means taking a share of ownership in the business.

What’s in a Name?

Most Biglaw firms have switched to a two-tier — or more — system of partnership. At the top of the system are the equity partners, the ones who take the firm’s leftover profits at the end of the year. The equity partners are generally the rainmakers of the firm, the profit-generators with the big books of business and working attorney collections. They’re also the ones who shoulder much of the firm’s heavy business lifting, generally waiting for payment until the end of the year, signing personal guarantees, and otherwise bearing the risk of loss.

Then there are nonequity partners. Some of these are young partners building their books, on their way to the equity ranks. Others are talented attorneys without significant books of their own, but whose work commands enough respect to merit calling them a partner. Still others are former equity partners who may be winding down their careers or working part time.

Despite the similar titles, there can be a world of difference between the tiers. Aside from the economics, some firms have cultures where nonequity partners are treated as second-class citizens — excluded from key meetings, not given access to key financial information, and not granted voting rights. This cultural divide is not always the case, and the firm I work at has gone to great lengths not to draw distinctions between its equity and nonequity ranks. But lawyers notoriously love hierarchy, and I suspect that our firm is probably more the exception than the rule on this point.

A Model Created by the Great Recession

The concept of nonequity partnership is nothing new, but it truly came to prominence in the wake of the Great Recession. As firm revenues fell and competition became increasingly cutthroat, rainmakers became more valuable than ever. The overall pie was shrinking, so firms, desperate for revenue, took extreme steps to keep business generators or attract new ones. Once the first firm made the move, others had to follow to avoid being raided by firms willing to throw gobs of money at lawyers with big books of business.

You can’t have a redistribution of wealth without someone going hungry. The way most firms came up with the premiums to pay the rainmakers was to shrink their equity ranks. If you divvy up the same profits with a smaller number of people, each person gets more. To accomplish this, some firms stripped equity from partners who were underperforming, or just not performing as well as the others. Still others dramatically cut back on the number of lawyers they promoted to the equity ranks. But most employed some combination of both changes, quickly realigning their partner ratios and profit distribution.

No matter how correct the decision to reallocate equity might be from an economic and competitive standpoint, it’s an unavoidably ugly process. It’s no secret that lawyers have big egos and that many, if not most, are driven by status. Almost by definition, these equity concentration moves have winners and losers. And when someone isn’t able to proudly wear the equity badge, they will often have a difficult time accepting it. From the outside, and even perhaps from within, it can look like the haves are getting greedy at the expense of the have-nots.

A Necessary Evil?

Trust me, I get why many disdain the two-tier structure. Why can’t firms just be more egalitarian, inviting everyone into the equity ranks to work together for the common good of the firm? There’s a real part of me that wishes this model could exist. But I also wish I could fly and shoot laser beams out of my eyes. In both cases, my wishes don’t matter. In the case of flying, gravitational forces keep me grounded. In the case of a single-tier system, market forces have dictated how firms need to adapt.

The truth is prudent firms do not have a real choice when it comes to whether or not they need to follow the market trend of embracing a two-tiered system. Like it or not, firms that fail to make their rainmakers happy will pay a high price. One of the chief problems defunct LeClairRyan faced in the years leading up to its spectacular collapse was its failure to de-equitize non-producing partners. That left the firm’s actual rainmakers feeling like they were subsidizing a favored few, which primed them to be poached by the competition. Those rainmakers then left, and the firm collapsed on itself.

But wait. What about firms like Cravath, which has a single partnership tier and seems to be doing just fine — consistently topping the Am Law profits-per-partner charts? Doesn’t Cravath’s success prove that a firm can thrive without having to adopt a two-tier system? In a word, no. Cravath has a unique brand that allows it to command market-topping rates that immunize it to the market pressures that most firms face. In fact, the Cravath model is even more draconian than the two-tiered approach. The stats tell the story. Cravath has 500+ lawyers, only 83 of whom are partners. So rather than pushing quality lawyers into nonequity ranks, Cravath refuses to even nominally promote any but the best of the best. Ouch.

Biglaw’s Challenge

The challenge for Biglaw management is how to keep both the firm’s biggest earners and its developing prospects content. Efficiently allocating the equity pool is an essential component of this process, but it cannot be the final word. Biglaw needs to understand and leverage the non-monetary benefits it can provide its partnership. There’s almost always going to be someone willing to pay more for any given partner’s book, but if that partner is getting paid decently in addition to receiving support they couldn’t get anywhere else, dislodging them is going to be a tricky task.

The path to equity partnership is a long one, and it’s only getting longer. Good managers will try to get their colleagues to the end of that path. Great managers will get those colleagues to enjoy the journey.

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James Goodnow is an attorney, commentator, and Above the Law columnist. He is a graduate of Harvard Law School and is the managing partner of NLJ 250 firm Fennemore Craig. He is the co-author of Motivating Millennials, which hit number one on Amazon in the business management new release category. As a practitioner, he and his colleagues created a tech-based plaintiffs’ practice and business model. You can connect with James on Twitter (@JamesGoodnow) or by emailing him at James@JamesGoodnow.com.

“Invoking the repulsive prospect of alleged forced labour is a new nomenclature for seeking to bar Zimbabwe’s diamonds from the international markets,” the southern African nation’s government said in a statement. “This move constitutes a grave and serious attack on Zimbabwe’s interests and is no less than a manifestation of undeclared sanctions.”

The Kimberley Process, which aims to ensure that the proceeds of diamond mining aren’t used to fund conflict, confirmed that it has no restrictions on trade in Zimbabwean diamonds. The body represents 81 countries, accounting for 99.8% of global rough diamond production.

Zimbabwe, suffering its worst economic crisis since 2008, is desperate to end sanctions imposed by the US and the European Union on politicians and state companies. The government blames the US measures, in place for almost two decades, for hindering investment in the country.

The US Customs and Border Protection agency announced the so-called withhold release order on the Marange diamonds in an October 1 statement, without giving details of the allegations against Zimbabwe.

News, allegations

“A WRO allows importers an opportunity to re-export their goods or to provide evidence that their goods are not produced with forced labor,” the agency said in a response to questions. The order can be imposed on the evidence of news reports or allegations made directly to it by non-governmental organizations, the agency said.

It also imposed the same measures on gold from artisanal mines in the Democratic Republic of Congo and a variety of products made by companies in China, Malaysia and Brazil.

“If they had concerns they should have contacted us, our doors are open,” Polite Kambamura, Zimbabwe’s deputy mines minister, said by phone. “If they request to go to Marange, our doors are open. It’s so disturbing that they made this announcement.”

Marange, in eastern Zimbabwe, is not without controversy. The field, by far the biggest diamond operation in the country, was seized by the government from African Consolidated Resources Plc, a U.K. company, in 2006. The company fought the decision in court for several years but failed to overturn the state’s decision.

Military control

After the seizure, Marange was overrun by thousands of informal miners before being commandeered by the military. Non-governmental organizations including Human Rights Watch and the opposition movement for Democratic Change accused the government of abuses including widespread smuggling — and of using revenue to fund ruling party militia during election campaigns.

New York-based Human Rights Watch accused the military of killing as many as 200 informal miners at the site and demanded that the Kimberley Process sanction the diamonds. The army has denied the allegation.

Between 2009 and 2016, Chinese and South African companies mined the deposit in partnership with the government. In 2016, then president Robert Mugabe ordered them off the deposit, saying that the state had been illicitly deprived of $13 billion in potential revenue.

The only company now mining at Marange is the state-owned Zimbabwe Consolidated Diamond Co.

“We are a responsible state miner that operates within the laws of the country and we observe strict adherence to critical tenets of corporate governance,” the company said. “ZCDC employs labour in terms of the Labour Relations Act and there is no compromise on that.”

Post published in: Business

Lions are classified as “vulnerable”, with only around 20,000 remaining in the wild

Officials have seized 342kg (754lb) of lion bones and arrested three people at Johannesburg airport in South Africa, the environment ministry said.

The bones, which are prized in Asia for supposed medicinal benefits and to make jewellery, were destined for Malaysia.

The 12 boxes of lion bones wrapped in aluminium foil were misdeclared and discovered upon inspection.

Exporting bones of lions bred in captivity is legal in South Africa, though a special permit is required.

Ministry spokesman Albi Modise said those arrested were foreigners, including two from Zimbabwe, with one suspect still in custody.

The average weight of a lion skeleton is 9kg, according to a report produced by South Africa’s EMS conservation foundation and the Ban Animal Trading group.

With skeletons of average weight, 342kg would amount to 38 lions.

It was not immediately clear whether the bones were from lions bred in captivity or from the wild.

Lion parts are often sold in Asian markets mislabelled as tiger parts, due to China’s ban on the sale of tiger products, according to the UK-based Environment Investigation Agency.

“Tiger bone wine” is used in traditional Chinese medicine, though there is no evidence it has any benefits.

More than 11,000 lions live in South Africa, with 3,000 of them located in national parks where hunting is forbidden.

Post published in: Environment

Mnangagwa said in his State of the Nation Address the country would set up an alternative stock market for small enterprise companies and allow companies to independently import fuel.

He said he was aware of the challenges faced by the nation.

“The government is fully aware of the challenges faced by the public in accessing cash, which has resulted in some unscrupulous traders selling cash in exchange for electronic money,” Mnangagwa said.

The address also came a week after authorities froze bank accounts of companies alleged to have been involved in black market foreign exchange dealings.

“We are determined to consolidate digital financial services which are contributing to the creation of financial inclusion by way of delivering banking services to previously unbanked and vulnerable groups of our population.”

Apart from contending with the financial sector disarray, Zimbabwe is working on a stock exchange for small to medium enterprises, with the Zimbabwean leader saying “measures will be put in place to establish an SME stock exchange with a view to unlock resources”.

The Zimbabwe Stock Exchange has become a haven for investors pursuing exit strategies from other portfolios, especially as challenges in remitting dividends and other capital gains out of the country remains difficult.

Zimbabwe’s capital city shut its main waterworks on September 26, potentially leaving the city dry and raising the risk of water-borne diseases.

The Harare water shortages follow months of drought in rural areas and fast-falling water levels in polluted dams around the country. Amid reports of soaring diarrhoea cases in the capital, concern is growing over the possible spread of cholera and typhoid – dozens died in cholera outbreaks in Zimbabwe last year.

An El Nino-induced drought has reduced water levels in the country’s dams, including Kariba, which supplies the biggest hydroelectric plant and hit the capacity of cities and towns to supply water to residents.

Harare City Council deputy mayor Enock Mupamawonde told reporters that the local authority required at least 40 million Zimbabwe dollars ($2.7 million) a month for water chemicals but it was only collecting 15 million Zimbabwe dollars in monthly revenue.

It is devastating, to say the least,” Mupamawonde told reporters, urging President Emmerson Mnangagwa’s government to declare the water crisis a national disaster.

Wealthier residents are able to buy tankers of water for a price well beyond the means of most people.

According to the International Monetary Fund (IMF), inflation in Zimbabwe is now the highest in the world.

Despite the nation’s hardships, questionable spending continues at the highest levels of power. President Mnangagwa reportedly took a bloated entourage of 90 people to the UN General Assembly session September 17-30 in New York, including Zanu PF youths who took part in an anti-sanctions demonstration there on September 26.

Mnangagwa’s wife, Auxilia, reportedly flew to the U.S. separately with her own sizable delegation, which included her security team, officials from her Angels of Hope charity organisation and a crew of journalists from the state media.

Both teams are reported to be enjoying hefty allowances funded by Government’s Treasury, at a time the government has been asking the citizenry to endure the pain induced by its austerity measures, which have severely eroded incomes and impoverished the majority of the population.

Meanwhile, Zimbabwean ex-leader Robert Mugabe was buried in his home village of Kutama on September 28. His family chose a private funeral after a weeks-long dispute with the administration. He was forced from power in November 2017 after presiding over the country for 30 years. A priest asked God to take pity on the independence.

Post published in: Agriculture

Ed. note: This is the latest installment in a series of posts from Lateral Link’s team of expert contributors. Sarkis Adajian manages marketing and business development for Lateral Link.

Lateral Link is one of the top-rated international legal recruiting firms. With over 14 offices world-wide, Lateral Link specializes in placing attorneys at the most prestigious law firms and companies in the world. Managed by former practicing attorneys from top law schools, Lateral Link has a tradition of hiring lawyers to execute the lateral leaps of practicing attorneys. Click ::here:: to find out more about us.

The pharmaceutical industry is influencing the drive to have President Donald Trump impeached because of his administration’s efforts to lower drug prices, the president suggested, without providing evidence, in a speech Thursday.

“Lowering the cost of prescription drugs, taking on the pharmaceutical companies, you think that’s easy, it’s not easy,” Politico quoted Trump as saying. “It’s not easy. … I wouldn’t be surprised if the hoax didn’t come a little bit from some of the people that we’re taking on.”

“They’re very powerful, spent a lot of money, spent, I think, more money than any other group in the world, actually, in terms of lobbying and lobbying abilities,” he said in a video clip of the speech, broadcast by CNBC. “And I wouldn’t be surprised if some of the nonsense that we all have to go through – but that I have to go through – wouldn’t be surprised if it was from of these industries like pharmaceuticals.”

Trump was speaking at an event in The Villages, Florida, where he signed a Medicare-related executive order. The president has dismissed as a “hoax” a complaint filed by an unnamed whistleblower over an alleged attempt to persuade Ukraine to interfere with the 2020 presidential election during a call in July with Ukrainian President Volodymyr Zelensky. The scandal has sparked an impeachment inquiry against Trump.

The Trump administration released its “blueprint” to lower drug costs last year, which included proposals like allowing some personal drug importation and ending rebates collected by pharmacy benefit managers from drugmakers. However, it withdrew the rebate proposal – one of the signature components of the blueprint – in July over reported disagreement between Department of Health and Human Services Secretary Alex Azar and other White House officials regarding the merits of the rule. Advisers in the administration objected to the estimated cost of $180 billion over the next decade and feared it would raise Medicare premiums.

An analysis in July by consultancy Rx Savings Solutions found that more than 3,400 drugs have seen price increases in 2019, compared with about 2,900 in 2018.

Photo: Win McNamee, Getty Images

The “rule of law” is no longer a concept that is practiced by the Republican Party. We see it from the executive branch, where the Republican President of the United States confesses to abusing his power on television and dares anybody to stop him. We see it in the legislature, where Republican congressmen and senators do nothing to arrest the president’s assault on the rule of law. And we are now seeing it at the Supreme Court, where the Republican justices are now poised to overturn precedent simply because Trump, McConnell, and the Republicans successfully installed an alleged attempted rapist on the Supreme Court.

The Supreme Court today agreed to hear June Medical Services v. Gee. The case is a challenge to a Louisiana law requiring doctors who offer abortion services to have admitting privileges in nearby hospitals.

If that all sounds familiar to you, it should. The Supreme Court decided exactly this issue in 2016, in the case of Whole Woman’s Health v. Hellerstedt. There, Stephen Breyer, writing for a 5-3 majority, ruled that a Texas law — a law which required doctors who offer abortion services have admitting privileges at nearby hospitals — was an unconstitutional “undue burden” on a woman’s right to choose. Breyer lodged Whole Woman’s Health squarely within the test provided by the Court in Planned Parenthood v. Casey. Whole Woman’s Health is precedent applying settled precedent about abortion.

And the Republicans don’t care.

The first court to not care was the Fifth Circuit Court of Appeals. With Gee, the Fifth Circuit looked at essentially the same kind of TRAP law in Louisiana that was at issue in Texas with Whole Woman’s Health, but found factual differences between the application of the Louisiana law justified ignoring the Supreme Court precedent established in Whole Woman’s Health. It’s the “I’m not getting on the plane, I’m getting in the plane” of circuit court opinions.

Gee should be summarily reversed. As Jonathan B. Miller — Chief of the Public Protection & Advocacy Bureau in the Office of the Massachusetts Attorney General — explains on SCOTUSblog, summary reversal is appropriate for a case that presents such clear error:

Summary reversal also is appropriate because the 5th Circuit went too far with its extensive critique of the physicians’ good-faith efforts to obtain admitting privileges. As an initial observation, a difference in scale seems to have allowed the 5th Circuit to engage in a tougher review than the Supreme Court’s inquiry in WWH. The Supreme Court had before it evidence that Texas’ admitting-privileges requirement reduced the number of abortion clinics in the state from 40 to less than 10. The impact spoke for itself, and any exercise seeking to call into question the basis for 30 clinic closures would have bordered on the absurd. Here, instead, the 5th Circuit had much more limited ground to cover and far fewer causal links to sever. As the decision explained, “[t]he paucity of abortion facilities and abortion providers in Louisiana allows for a more nuanced analysis of the causal connection between Act 620 and its burden on women[.]” Laws that are so similar, however, should not be analyzed so differently.

The intense second-guessing of the district court’s factual findings (which are supposed to get deference) was clear error. The district court fairly evaluated the efforts of doctors to come into compliance with a law that has never been in effect, that most of the physicians did not believe they could comply with as a practical matter, and that they knew was designed to have the same effect as H.B. 2 in Texas (because Act 620 was passed a year later). By contrast, the 5th Circuit’s review of the record impliedly required these physicians to prove a negative – that they cannot get credentialed at any qualifying hospital. In so doing, the 5th Circuit at times determined that particular physicians are not burdened or overly burdened by Act 620. Of course, the constitutional question is whether women experience an undue burden.

That’s right, the Fifth Circuit asked if doctors would be unduly burdened by the admitting requirements, AS OPPOSED TO WOMEN SEEKING ABORTIONS.

The only thing that has changed in the legal firmament between Whole Woman’s Health and Gee is that Brett Kavanaugh has replaced Anthony Kennedy on the Supreme Court. That is all. There is no other factor.

But that might be all that is needed to squelch women’s access to abortion providers. Instead of kicking this case and admonishing the Fifth Circuit for its gross refusal to apply Court precedent, the Republican Court will entertain the Fifth Circuit’s bad faith arguments. Three justices are already on record as being in dissent from the opinion in Whole Woman’s Health, and two more have been appointed by a president who vowed to only appoint judges who are against abortion. Will John Roberts change his legal opinion in Whole Woman’s Health to beat back this direct challenge to Supreme Court precedent that Gee represents? Or will he stick to his guns and let the addition of Gorsuch and Kavanaugh change the law just a few years after it was settled, because Republicans have the raw political power to do so?

If the Court chooses the latter, precedent means nothing. And that means the law means nothing, beyond who has the raw political power to bend it to their will. This case is an affront to the rule of law in this country. But, at this point, why should the Republican-controlled Supreme Court be different than all the other Republican-controlled institutions in this country?

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Elie Mystal is the Executive Editor of Above the Law and a contributor at The Nation. He can be reached @ElieNYC on Twitter, or at elie@abovethelaw.com. He will resist.

Hollywood has done a lot to romanticize the legal profession. From LA Law to Law & Order to Ally McBeal to How To Get Away With Murder, television has long been in the business of making lawyers look a lot cooler than the reality.

As anyone who actually spent time at law firms knows, there is just a ton of mindless, soul-crushing work that needs to be done. And rather than glorifying it, the ABC show Single Parents keeps it 100. In this week’s episode, Leighton Meester’s Angie D’Amato explains what reviewing depositions is all about to Miggy Park, played by Jake Choi.

Angie: Okay, now you’re going to go through each deposition. Every time you see the word propane, rectum, or shards. Highlight it.

Miggy: Propane, rectum, shards. Got it. Then what do I do?

Angie: You do it again. And again. Until the earth collides with the sun and our souls are finally free.

Miggy: Cool.

That sounds about right.

Watch the full clip below.

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Kathryn Rubino is a Senior Editor at Above the Law, and host of The Jabot podcast. AtL tipsters are the best, so please connect with her. Feel free to email her with any tips, questions, or comments and follow her on Twitter (@Kathryn1).