Author: TSA Press

It’s finally happening. Law Jobs for Humans 2.0 is this Friday. We’ve already told you a bunch about it: it’s got more of what you liked and less of what you didn’t from the first Law Jobs for Humans; it’s got some of the “most interesting and innovative career renegades” in legal scheduled to speak at the event; we’ll even likely discuss Clio’s recent enormous fund-raising event in some way, shape, or form.  

We’ve also nailed down the list of speakers (mostly). We’ve got one or two still figuring out some specific logistics but expect this list and the associated agenda to be just about as final as it’s going to get. 

Innovators Runway 1: Early career edition

• Miguel Willis, Presidential Innovation Fellow, LSAC
• Felicity Conrad, Co-Founder & CEO, Paladin
• Rebecca Williams, DC Legal Hackers Founder and Board Member
• Jason Dirkx, Knowledge Management Counsel, Littler
• Nikki Shaver, Director, Global Knowledge Management. Paul Hastings LLP
• Selena Lucien, Founder, Small Claims Wizard

Innovators Runway 2: Mid-career edition

• Nicole Clark, Founder and CEO, Trellis Research
• Marla Decker, Managing Director, Lake Whillans
• Linda Tvrdy, Founder, Daisy Debt
• Tunji Williams, Co-founder and CEO, dealWIP and Director of Strategy for Transaction Management, Litera

Discussion: Building a Perfect Human

• Carlos Gamez – Client & Partner Lead – Legal Technology Innovation, Thomson Reuters
• Lori Lorenzo – Managing Director Chief Legal Officer Program, Deloitte
• Jacquie Champagne – Director of Talent Acquisition at Elevate Services

Between/in addition to these amazing panels, we’ll also have a speed networking event and plenty of time for attendees to connect and discuss the new legal employment landscape.

We’ve basically tripled attendance from the last go-round in Chicago, so only a few tickets remain. If you want to meet some amazing people and talk about future-proofing your career. This Friday is the time. Law Jobs for Humans 2.0 is the place. See you there.

Current tax laws are killing the buzz for legal marijuana sales dispensaries. Section 280E disallows any business-related expenses connected to the trafficking of Schedule I controlled substances, which includes marijuana. The IRS and the courts have consistently held that Section 280E is clear on its face when they mean all expenses are nondeductible. However, this next case takes an interesting twist as the taxpayer and its lawyers try to show the U.S. Tax Court that Section 280E is unconstitutional.

Last month, the U.S. Tax Court decided Northern California Small Business Assistants, Inc. v. Commissioner. There, the Court considered whether Section 280E of the Internal Revenue Code is an excessive fine in violation of the Eighth Amendment.

The facts are typical. The taxpayer was a corporation operating a marijuana dispensary business in California where it is legal. The IRS audits the taxpayer and disallows all of the taxpayer’s business expenses citing Section 280E. The IRS then proposes $1.5 million dollars in taxes and penalties for one year. The taxpayer disagrees and petitions the U.S. Tax Court.

The case was interesting enough to warrant a decision from all 15 judges. While all of them ruled that the IRS’s disallowance was proper, the judges were split on whether Section 280E implicates the Eighth Amendment of the Constitution. To do so, the court had to determine whether Section 280E had the effect of a penalty.

In the majority opinion, 10 of the judges held that Section 280E’s disallowance of marijuana-related business expenses was not a penalty. The majority acknowledged that Congress had the unquestionable Constitutional right to create tax laws. Furthermore, they also noted that the Supreme Court has held that tax deductions are granted only by Congress.

In the dissenting opinions, three of the judges ruled that Section 280E was a fine, although they joined the majority siding with the IRS because there was no finding of excessiveness. Judge Gustafson starts by stating that the Constitution allows Congress to tax income. The Constitution does not define income but Judge Gustafson states that income is defined as gain which is only determined after all relevant businesses expenses are deducted from gross income. To tax solely on gross income could lead to an unfair situation where the taxpayer may not have any money to pay the tax.

For example, if a taxpayer earned $100 but his business expenses totaled $150, he would realize a loss of $50 and under normal circumstances he would not be taxed because it would add insult to his financial injury. If only his gross income was taxed he would have to pay income tax on the $100 even though he has no money after expenses.

Judge Gustafson states that for a payment to be a penalty, it must be imposed as punishment for an unlawful act. It does not matter whether a payment is labeled differently, like a tax, a tariff, or a fee. In this case, according to the legislative history, Section 280E was enacted with the explicit goal of deterring and penalizing marijuana trafficking. By disallowing deductions, income taxes will increase and the profit motive will decrease. He believes this has the effect of punishment even though it is not explicitly stated as such.

Two judges had no opinion on whether Section 280E was a fine since there was no determination on excessiveness.

So while the majority of the Tax Court judges ruled that Section 280E was not a fine, three held that it was a fine and could be excessive in violation the Eighth Amendment of the Constitution. And two are on the fence. If they can disagree, so could other judges and even other circuits.

Professor Bryan Camp over at the TaxProf Blog believes that the majority got it right.

He believes that Congress has the Constitutional right to tax gross income even if business deductions are disallowed. Why? Because if Section 280E can be a penalty, then so can Section 163(h) which allows the ever-popular home mortgage deduction. In other words, the home mortgage interest deduction punishes renters for not owning a home. Also, since hobby losses are nondeductible, he believes that this would open the doors for tax protestor hobbyists to argue that they are being penalized.

In short, he’s arguing that this can open Pandora’s Box.

Should Congress have the “unquestionable” power to tax as the majority of the Tax Court judges believe? Most believe that it is better for the legislature to pass tax laws as they are directly accountable to the people. But what if Congress wanted to pass a law that taxes a certain group of people differently? For example, some believed that the Tax Cuts and Jobs Act’s $10,000 limitation on state tax deductions unfairly targeted high tax states where the residents predominately voted Democratic. It was so bad that it got to the point where New York and other blue states sued. That lawsuit was recently dismissed.

While any tax law can treat people differently, when does it get to a point of being a penalty that can implicate the Eighth Amendment? Perhaps a good place to start is to determine whether a tax punishes or subsidizes behavior. Some taxes are known to be penalties. For example, “sin taxes” are taxes imposed on certain goods (such as alcohol and cigarettes) that are known to be harmful to society.

But some tax laws act as subsidies. For example, the federal government provides tax credits for the purchase of alternative fuel cars in order to boost sales and promote use of alternative fuel. These credits do not covertly penalize those who purchase gasoline engine cars assuming the prices of the cars were fairly steady before the tax and will continue to remain that way.

Some tax laws can be neither subsidies nor penalties. It can just be a means to raise revenue. Or to curb abusive transactions.

Of course, the line can be difficult to draw. Reasonable people will have different opinions.

While the Tax Court’s majority decision dealt another blow to marijuana advocates trying to fight Section 280E, the split decision opened the door for courts to consider whether the Section may be unconstitutional. If enough judges disagree, the issue may end up being decided in the high court.

Steven Chung is a tax attorney in Los Angeles, California. He helps people with basic tax planning and resolve tax disputes. He is also sympathetic to people with large student loans. He can be reached via email at sachimalbe@excite.com. Or you can connect with him on Twitter (@stevenchung) and connect with him on LinkedIn.

Bonus season really is the best time of the Biglaw year. Sure, you probably worked a ton and had to sacrifice your personal life to do so, but at least you get a nice big bonus in recognition of all that hard work. But just how generous will those bonuses be?

That question was largely answered when Milbank acted first in announcing bonuses, then Cravath matched that scale. Now Cadwalader has announced that their associates will also be compensated on those market rates as well.

And the market scale that pretty much all the big firms will be following is:

Class of 2019 – $15,000 (pro-rated)
Class of 2018 – $15,000
Class of 2017 – $25,000
Class of 2016 – $50,000
Class of 2015 – $65,000
Class of 2014 – $80,000
Class of 2013 – $90,000
Class of 2012+ – $100,000

Plus, the exciting part for those who’ve notched a particularly busy year, is that associates and counsel who bill over 2,200 hours will receive bonuses of 120 percent of their class year. Which is a nice extra way to say thank you. Bonuses will be paid by the firm in February. (Full memo on the next page.)

Remember, we depend on your tips to stay on top of important bonus updates, so when your firm matches, please text us (646-820-8477) or email us (subject line: “[Firm Name] Matches”). Please include the memo if available. You can take a photo of the memo and send it via text or email if you don’t want to forward the original PDF or Word file.

And if you’d like to sign up for ATL’s Bonus Alerts (which is the alert list we also use for all salary announcements), please scroll down and enter your email address in the box below this post. If you previously signed up for the bonus alerts, you don’t need to do anything. You’ll receive an email notification within minutes of each bonus announcement that we publish. Thanks for your help!

(Click to enlarge)

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).

Some people enter the legal profession because they are truly passionate about the law. I’m sure all of us know individuals who genuinely love practicing law, and not to sound disingenuous, but I definitely count myself among these lawyers. Many people enjoy the advocacy, research, and writing involved with being a practicing attorney.

However, there are also a number of lawyers who simply go through the motions in their jobs as lawyers. Most people just work to pay the bills, and many attorneys view their jobs as 9-to-5 gigs about which they are not passionate. This phenomenon is found in every industry, and most people work jobs that they are not enthusiastic about simply to make a living.

Even if attorneys were once passionate about the law, it is also easy to get burned out in the legal profession. Constant conflict with adversaries, clients, and coworkers can take a toll on even the most hardened attorneys. Furthermore, most lawyers handle repetitive matters, and it is easy for numerous lawyers to fall into a routine without making any extra effort. Many firms also squeeze their attorneys to bill more hours with fewer resources in order to compete in the competitive legal market. All of these conditions can burn out overworked attorneys, and in many ways, the burnout plaguing lawyers is similar to the stress experienced by physicians, teachers, and many other professionals.

Of course, none of this information is new to many people within the legal industry. We all know how grueling legal work can be and are aware of the challenges many attorneys face. However, what may be less clear is that lawyers can use this understanding about the legal industry to better serve their clients. Knowing that most attorneys simply do the minimum when working on matters, and will likely not put in much extra effort, can give lawyers valuable perspective when facing off against adversaries.

For instance, at several points in my career, I have been involved with cases that could have been easily dismissed because of prior releases, service of process issues, and other matters. For some of these cases, other attorneys have refused to get involved with these matters, because they were nervous that the cases would be subject to a motion to dismiss or summary judgment motion, and the cases would be dismissed. Of course, some attorneys do not want to handle matters that might require more work than normal, and dealing with a dispositive motion can greatly complicate a case.

However, motion practice can be time-consuming, and many attorneys do not go the extra mile by filing motions, even if a case could be dismissed because of a well-researched motion. Indeed, motions to dismiss often need to be filed within a short time period, and attorneys sometimes do not have the time nor the willingness to file such motions. In addition, summary judgment practice can be extremely exhausting, and it is often difficult to assemble all of the exhibits and papers necessary to file such a motion. It can also can take a substantial amount of time and effort to be apprised of all of the facts of a case, so some attorneys simply do not have enough information about a matter to effectively file a dispositive motion.

On several occasions in my career, remembering that many attorneys are underpaid and overworked has given me valuable perspective about litigation. As a result of this understanding, I have accepted matters and formulated case strategies based on the belief that my adversaries would likely not devote extra energy to litigating a case. This perspective has benefited my legal work, since I have conserved resources and provided advice to clients based on what I expected my adversaries would actually do in litigation instead of simply discussing my adversary’s options in a given case.

I do not mean to fault any attorneys for not devoting their full attention to their matters. As I know firsthand from working at a number of different law firms, attorneys are often overworked and demoralized in many roles. In addition, working for someone else can eliminate a major incentive to give one’s all to their job. One of the reasons why Biglaw firms have many advantages is because these shops pay employees more money and can expect their attorneys and staff to devote more energy to their matters. In addition, now that I run a law firm with my brother, I see how reaping more benefits from good representation can incentivize attorneys to work harder.

However, it is undeniable that many attorneys, like people in other fields, are not too passionate about their jobs, and usually just devote a minimal amount of effort to get by. If attorneys apply this understanding to their work, they can better strategize for the benefit of their clients.

Jordan Rothman is a partner of The Rothman Law Firm, a full-service New York and New Jersey law firm. He is also the founder of Student Debt Diaries, a website discussing how he paid off his student loans. You can reach Jordan through email at jordan@rothmanlawyer.com.

* A Florida woman who has a law degree but never passed the bar has been charged with stealing the identity of an admitted attorney. This was funny in My Cousin Vinny but not in real life. [Tampa Bay Times]

* Sarah Palin said she first learned of her husband’s divorce plans in an email from his attorney. Jeeze, that’s cold. [San Francisco Chronicle]

* A U.S. service member is challenging a ban on active military personnel suing their doctors for malpractice. [NBC News]

* The Louisiana Supreme Court has refused to revive a lawsuit against the NFL regarding a missed call at a Saints game. Hope the plaintiff is not a sore loser. [ESPN]

* Massachusetts lawmakers are considering whether to make coerced suicide a crime after the suicide of Conrad Roy III at the encouragement of his girlfriend. [CNN]

* A Nevada attorney has been disbarred for letting clients use her cellphone during jailhouse consultations. Seems harsh — prisoners use cellphones in Orange is the New Black all the time… [Bloomberg Law]

Jordan Rothman is a partner of The Rothman Law Firm, a full-service New York and New Jersey law firm. He is also the founder of Student Debt Diaries, a website discussing how he paid off his student loans. You can reach Jordan through email at jordan@rothmanlawyer.com.

MDC speaks on economic meltdown – VIDEO

Dr Magumbeyi abudcted himself – Ziyambi Ziyambi (VIDEO)

Zimbabwe’s central bank chief said the new Zimbabwean dollar should help alleviate the need for people to queue outside of banks to get their hands on hard currency [Chris Muronzi/Al Jazeera]

Harare, Zimbabwe – Gason Mukuvadzi, a lanky man with boyish looks, sits behind a makeshift desk in Mbare’s Mupedzanhamo centre. An umbrella canvas shelters him from the blistering sun as he waits for customers looking to exchange electronic money for hard currency, neat stacks of which are perched on the table beside him.

Mukuvadzi is an EcoCash agent. He earns a commission by providing “cash-in, cash-out services” that allow customers on the EcoCash platform to convert the electronic balances in their mobile money wallets into hard currency, and vice versa.

But his business was badly hit in late September when the Reserve Bank of Zimbabwe temporarily banned and then severely restricted cash-in, cash-out services, saying that price gouging by agents was contributing to the rapid depreciation of the country’s currency, the Zimdollar, and exacerbating a chronic shortage of notes and coins.

“Mbare is a busy area and all transactions are cash-based. So there is strong demand for cash here,” Mukuvadzi told Al Jazeera.

“I used to cash out more than 20,000 Zimdollars [worth $1,000 United States dollars, at commonly used black-market exchange rates] daily here. Now, I dispense less than 10,000 [$500].”

On Tuesday, Zimbabwe’s central bank initiated its latest measure designed to alleviate the country’s physical cash crunch, releasing into circulation a new generation of Zimbabwean dollar notes and coins – the first of a planned one billion Zimbabwean dollars to be injected into the country’s financial system over the next six months.

But some economists say the infusion of new cash is not enough to meaningfully redress the underlying causes of the monetary dysfunction that has plagued Zimbabwe for years.

The next-generation Zimbabwean dollar hit the streets of Harare on Tuesday [Chris Muronzi/Al Jazeera]

Hard currency and electronic money

EcoCash agents have become an integral part of Zimbabwe’s payments system, with approximately 50,000 agents scattered throughout the country.

In the face of acute cash shortages – a persistent problem for years – most Zimbabweans have taken to using their mobile phones to execute financial transactions electronically.

More than eight in 10 transactions in Zimbabwe are made on mobile money platforms, according to the Reserve Bank of Zimbabwe. The platform with the lion’s share of those transactions is EcoCash, which is owned by Zimbabwe’s largest mobile phone operator, Econet Wireless Zimbabwe Ltd.

When the central bank announced a blanket ban on EcoCash on September 30th, Econet challenged the move in court, arguing it negatively affected millions of innocent customers.

The court challenge was only partially successful. Though the ban was lifted after three days, EcoCash customers have been limited to cashing out only 100 Zimdollars ($5) a day since October.

The restrictions have piled even more pain onto ordinary citizens dealing with an economic crisis including hyperinflation, stagnant wages, soaring food and energy prices and daily power blackouts.

“There is no money at the banks and everyone relies on us for cash here,” said Kundai Gohodza, an EcoCash agent who also operates a stall in Mbare’s Mupedzanhamo. “This is a busy area where most people don’t have physical money,” he told Al Jazeera.

For most Zimbabweans, the hard cash shortage is a daily obstacle that is expensive to surmount. Some EcoCash agents charge outrageous premiums of 40 percent to 50 percent for cash-out services.

But when those services are blocked, or the EcoCash network goes down during one of the country’s daily power outages, consumers can face even greater hardships because many businesses will only accept cash payments.

Charles Pilime, a pensioner, told Al Jazeera he was stuck in Harare without bus fare in September when EcoCash’s cash-out service was blocked.

“On those days, I had to ask for bus fare from friends who had cash,” he told Al Jazeera. “It was a very difficult time for me.”

The new Zimbabwean dollar coin went into circulation on Tuesday [Chris Muronzi /Al Jazeera]

A chronic cash shortage

Shortages of physical cash date back to 2015, when US dollars, which had been the currency of choice after the country ditched the hyperinflation-wracked Zimbabwean dollar in 2009, started disappearing from the formal banking system.

In a desperate bid to end the shortage, Zimbabwe’s central bank introduced bond notes- a form of surrogate currency. But black market speculation quickly eroded the value of bond notes, triggering a shortage that the central bank subsequently tried to offset by creating electronic notes.

Earlier this year, bond notes – both physical and electronic – were merged into the Real Time Gross Settlement (RTGS) dollar, or Zimdollar, an interim currency that also fell prey to speculative attacks.

A government decree that outlawed the use of foreign currencies in local transactions failed to shore up the faltering Zimdollar. In August, Zimbabwe’s inflation rate hit 300 percent, the highest in the world, according to the International Monetary Fund.

On Tuesday, the Reserve Bank of Zimbabwe’s latest salvo against the cash crunch, the next-generation Zimbabwean dollar, finally hit the streets.

“We will make sure that we drip-feed the physical cash into the market in order to ensure that there is sufficient cash in the economy,” central bank chief John Mangudya told the Sunday Mail. “We believe this will also help in eliminating queues at the banks where people spend countless hours of productive time queueing for cash.”

Mangudya said the newly minted Zimbabwean dollars would not stoke inflation because the new physical notes would take the place of existing electronic money.

But some economists say the new notes and coins are unlikely to redress the cash crunch because they fail to address the underlying cause of the country’s monetary travails.

“Our research has shown that there is more prevalence of barter trade among rural Zimbabweans where people use maize as a currency because of the cash shortages,” Gift Mugano, an economics professor at Zimbabwe Ezekiel Guti University, told Al Jazeera.

“If we don’t deal with the problem of corruption where a handful of people get cash, this billion dollars will be taken up by the same privileged few who get cash when everybody does not have access to it.”

When Mugabe stepped down unexpectedly in 2017, after 37 years in power, there was widespread jubilation, but that quickly dissipated as it became clear that it was business as usual for the new government.

His protests became popular and caught the attention of the Mugabe regime who detained him for “inciting public violence.” Mawarire was released a day later after mounting public pressure.

“Seeing Robert Mugabe step down was unbelievable,” said Mawarire. “The atmosphere was just euphoric. It was something none of us expected to see in our lifetime.”