Category: News Feeds

Just because it is Friday afternoon and the week is almost over, doesn’t mean that Biglaw cost-cutting measures have taken a break. Austerity, particularly in the time of COVID-19, waits for no one.

Akerman LLP, ranked 88th in the nation on the 2020 Am Law 100 ranking, is not immune to the COVID-19 austerity measures. The Chair and CEO of the firm, Scott A. Meyers, delivered a video message to employees last night, and tipsters say the message was focused on salary cuts.

So what are the salary cuts? According to multiple tipsters, they’re tiered by position with equity partners seeing a 35 percent cut to their draws; nonequity partners, of counsel, and consultants making over $150,000 will have a 25 percent salary cut; consultants making less than $150,000 are getting a 15 percent pay cut; associates are also seeing a 15 percent pay cut, as are staff making $150,000+; and staff making less than $150,000 are seeing a 10 percent cut.

Though salary cuts are becoming increasingly common in Biglaw, that doesn’t mean folks aren’t pissed about it. Especially when it’s a top 100 firm known for paying associate below top of the market:

Scott A. Meyers, Chairman and CEO at Akerman LLP just send a video message to all Employees from announcing salary cuts. Employees are devastated; Akerman salaries were already less than what firms of that level are paying.

Additionally, multiple sources note that Meyers’s message about the austerity measures included a reference to “adjustments to right size our workforce,” which tipsters rightly characterize as “layoffs in other words.” But exactly who or how many or even which positions were impacted by the layoffs was left unsaid.

We reached out to the firm for comment, but have yet to hear back.

If your firm or organization is slashing salaries, closing its doors, or reducing the ranks of its lawyers or staff, whether through open layoffs, stealth layoffs, or voluntary buyouts, please don’t hesitate to let us know. Our vast network of tipsters is part of what makes Above the Law thrive. You can email us or text us (646-820-8477).

If you’d like to sign up for ATL’s Layoff Alerts, please scroll down and enter your email address in the box below this post. If you previously signed up for the layoff alerts, you don’t need to do anything. You’ll receive an email notification within minutes of each layoff, salary cut, or furlough announcement that we publish.

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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).

In the short-term, going to professional school—be it business school, law school or something else—is a good idea because it’s a refuge from an inhospitable job market, and the job market will be better three years from now. And I believe the legal job market will be better. It’s going to be very bad this fall, and then it will improve.

— Bernie Burke, a former University of North Carolina law professor who studies the economics of legal education, commenting on the fact that law schools may see more applicants over the course of the next two years, just like they did during the last recession, due to the dreadful state of the current job market.

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Staci Zaretsky is a senior editor at Above the Law, where she’s worked since 2011. She’d love to hear from you, so please feel free to email her with any tips, questions, comments, or critiques. You can follow her on Twitter or connect with her on LinkedIn.

Let’s be honest – insurance is one of those things no one likes thinking about. It’s also one of those things everyone knows they need. Law firms are no exception – the ABA estimates that 80% of lawyers will be sued for malpractice at some point in their careers, with the biggest targets being small firms and solo practitioners.

No firm wants to be caught without professional liability insurance when something goes wrong, but the process of obtaining it has always been time-consuming, antiquated, overly expensive, and just downright dreadful.

Until now. Insurtech company Embroker is radically changing the way companies, including law firms, find insurance. By replacing antiquated processes and high overhead costs with technology and algorithms, Embroker allows law firms to find the right coverage at a fraction of the hassle and cost they’re used to.

If you’re like most firms, you’ve incorporated plenty of legal tech into your practice because it saves time and money. Now it’s time to add some insurtech to your arsenal and break free from the dreaded insurance cycle.

The Old Way of Doing Things

If you’ve ever applied for insurance for your firm, you know how it goes: a broker sends you a PDF of the application that ranges anywhere from 9 to 40 pages long, you spend up to 10 hours answering questions and providing information that will never be used (or a lot more if you’re a large firm), you send the PDF back to the broker, the broker sends it to the underwriter, then you wait weeks until you eventually receive a quote. If you want to make any modifications, the cycle repeats, and you finally end up with coverage a month or more later. 

While the ultimate cost of your insurance depends on factors like how many lawyers you have, where you practice, and the kinds of law you practice, only half of the money you’ve been spending on any insurance policy has been going toward actually paying claims.

That’s right – half. So, what’s the other half? Overhead and distribution costs – personnel and manual, antiquated processes like all that back-and-forth with the brokers and underwriters. 

This other half is where Embroker comes in. By injecting technology, Embroker eliminates the processes that have long been overly expensive and allows you to pay just for the thing you really want – the insurance.

How Embroker Works

Remember that tedious, lengthy PDF application? Embroker has done away with that. Instead, Embroker’s landing page for legal customers takes you straight into the online application.

First, you provide your basic, high-level information, like your name, address, industry, revenue details, and contact information, and Embroker immediately analyzes and confirms your business profile to make sure you’re eligible as a law firm for professional liability insurance. Once you pass that initial step, you answer some simple questions about your law firm’s practice, including areas of law, how many attorneys you have, where they practice, the kind of cases the firm handles, the firm’s risk management processes, and past legal incidents. These questions aren’t designed to disqualify you from coverage, but rather to quantify your risk and determine your coverage qualifications. If you currently have insurance, Embroker will try to align any new policies with your current coverage.

The entire application process takes about 10 minutes – a fraction of the time even the simplest PDF application has historically taken. Your application then goes through an automated underwriting process and you get an actual premium quote in a matter of seconds. From there, you can tweak your requirements by increasing limits, decreasing deductibles, requesting loss-only deductibles, designating your claims expense treatment, adding claims and defense limits, and much more – adjustments you might not have even known were options for lowering your incremental costs and better protecting your firm and its finances.

The automated underwriting process again quickly generates your premium quote. You can print a PDF of the customized quote and your specimen policy if you need to obtain approval, or you can bind your policy then and there, digitally paying through the Embroker website. Your policy is immediately available and accessible at any time.

Better yet, this speedy process is even faster if you’re a returning customer. Your renewal application will have your basic information pre-filled for you, and the underwriting process takes as little as three to five minutes.

What’s glaringly missing from this process is all the back and forth you’re used to with traditional insurance applications, and that’s a great thing. Even with multiple rounds of tweaking coverage requirements, you can still obtain a quote in well under an hour and get coverage that’s binding today. 

By now you might be asking yourself why you would ever apply for insurance the traditional way again. The answer? You wouldn’t, and you shouldn’t.

The End Result

Professional liability insurance is usually one of the first purchases law firms make, and one of their largest expenses. Having 50% of that expense go to overhead, distribution, and costs that have nothing to do with actual coverage just makes no sense. The cost of insurance that represents actual claims you face will always be a reality of practice, but Embroker’s technology and algorithms can dramatically reduce the other half.

You still get quality insurance from the same top, A+-rated carriers, and you often get better coverage because you can easily pick the policy terms you want. You just spend a lot less money to get it. If you’re a Clio user, you save even more – as the endorsed broker for Clio, Embroker offers Clio users a 10% discount.

In addition to professional liability coverage, Embroker offers digital products for law firms’ other property and casualty needs, handled the same way through Embroker’s fast, automated underwriting algorithms. With it all, you get technical support and helpful risk management resources. 

When it comes to running a law firm, you want all your processes to be better, faster, and cheaper. For malpractice insurance, Embroker fits the bill. You get a more cost-effective product without sacrificing coverage.

No one earned a law degree to spend time getting bogged down in administrative tasks like applying for professional liability coverage. With Embroker on your side, insurance is one less hassle to worry about. With the time you save, you can focus on serving your clients and growing your firm.

As is true of many, from the president of the United States on down, who enjoy a good courtroom scrape, Highland Capital Management has won some and lost some. But the former hedge fund doesn’t sweat the latter, because it has an uncanny ability to avoid paying anything when it does lose. Unfortunately for James Dondero & co., two can play at that game, and its $351 million real-estate fraud payday from Credit Suisse just got a major trim by the Texas Supreme Court.

Credit Suisse Securities USA won’t have to pay a unit of hedge fund Highland Capital Management LP $287.5 million for a bungled land appraisal ahead of a 2007 Las Vegas real estate deal, but it can’t shake a jury’s $40 million fraud verdict, the Texas Supreme Court ruled Friday. The high court wiped out the $211 million in damages and $75 million in prejudgment interest awarded to highland subsidiary Claymore Holdings LLC after a Dallas County District Court bench trial, finding the award overcompensated Claymore for the fraudulent appraisal.

It’s always good to keep up with Legal Evolution, a blog edited by Indiana-Maurer’s Professor Bill Henderson. A great repository of commentary on legal industry innovation, often with a heavy dose of hard data which is generally lacking when lawyers talk about themselves.

With layoff stories coming at us from every angle these days, a video posted on the site this week offers a nice change up and reminds everyone to put things in perspective and do something nice. It’s a “call to action” video from Professor Henderson’s class and it asks everyone to take the time out of their day to remember to reach out to older folks — an important message generally but an especially poignant one now, with seniors often locked away from contact with the outside world.

As we close out the week of bad news and snark, here’s something nice and genuine.

A nursing home changed this law student’s life (149) [Legal Evolution]

COVID-19 is slicing through our densely populated prisons and jails, where people are unable to practice social distancing or good hygiene. In Ohio, for example, five percent of the state’s prison population has tested positive, including more than 1,800 people at one facility. As the infection rate and death toll rise, pressure is building on governors, sheriffs, and other elected officials to thin the incarcerated population by releasing sick and elderly prisoners who are most at-risk from the disease, as well as people who have been arrested for lower-level offenses.

Sadly, most elected leaders are resisting this pressure, and it’s clear the reason for their hesitancy is fear. They worry that someone released will commit another crime. Actually, it’s more accurate to say that they worry someone released will commit another crime and they, the elected leaders, will get blamed for it. We already have seen everyone’s nightmare play out. Last week, a man arrested for drug possession and held on a $2,500 bond was released on his own recognizance in order to combat the spread of COVID-19 in a county jail. The next day, the man allegedly murdered someone.

The fact that a tough-on-crime Florida sheriff permitted the release or that the man could have easily found the $250 required to post bond and secure his own release did nothing to quell the howls from the usual corners. This individual tragedy would be used to make a broader argument. No one should be released, we are told, lest anyone commit another crime. Or,
as Baltimore’s police commissioner said recently, “One murder is one too many. Zero murders should always be the goal.”

That sounds good. After all, who is willing to risk the deaths of innocent people?

It turns out we all are.

Everyone supports policies that result in the deaths of hundreds of thousands of Americans every year. Roughly 40,000 people die every year in traffic accidents. Thousands of others are permanently injured. We could almost certainly could eliminate at least 90 percent of traffic-related deaths if we reduced the speed limit to 5 miles per hour and banned left turns. Think about it: We could save 36,000 innocent lives every year if we all were willing to add some time to our daily commute. But are we?

The list of activities that result in unnecessary deaths is long. Air pollution cuts short the lives of 90,000 to 360,000 people every year in the United States. Pools, trampolines, and motorcycles kill and maim thousands more. Sugary drinks are associated with a higher risk of early death. Alcohol’s death toll is higher than deaths due to guns, cars, drug overdoses, or HIV/AIDS ever have been in a single year.

There are policies could reduce every one of these death totals dramatically, but we recognize that the cost would be too high, so we tolerate them. We don’t do it out of callousness or mean-spiritedness. We all just accept that life comes with risks and rewards, costs and benefits, and we must weigh these things when making policy. We are not indifferent to loss, but we recognize that we cannot eradicate risk.

Except, it seems, when it comes to justice policy.

The idea that we can prevent all crime is no more reasonable than the idea that we can eliminate all traffic accidents and alcohol-related deaths. But in an effort to pretend they can achieve the unachievable, leaders from both political parties have pursued extreme sentencing policies — mandatory minimums, “Three Strikes” laws, etc. — that are the cost-benefit equivalent of a five-mile-per-hour speed limit, or the prohibition of alcohol.

The result? The United States now has the world’s largest prison population. Like a 5-mph speed limit, our radical experiment in mass incarceration comes with significant costs. Lengthy incarceration breaks up families, ends relationships, and is correlated with poorer health outcomes and earlier death. But the costs aren’t limited to the incarcerated or their innocent families. Politicians’ irrational approach to crime ironically leaves the public less safe, as resources that could be invested in successful crime prevention efforts are instead wasted on unnecessary incarceration.

The same goes for releases from jails and prisons in the wake of COVID-19. The fear that anyone released might commit another crime has led some politicians to oppose all such releases. But, again, this approach could leave the public less safe. After all, refusing to release low-risk people leaves them in prison, where they are at relatively higher risk of sickness from the coronavirus. Treating them adds to the burden of an already overtaxed health care system; a ventilator being used by a would-be releasee left in prison is a ventilator unavailable for your grandmother. As a result, it’s possible that failing to release relatively low-risk people from prisons and jails threatens more lives than it will save.

It’s time to grow up. We need to recognize that no public policy is perfect. Every proposed solution comes with costs and benefits, and tradeoffs are unavoidable. Justice policy is no different. Thinking clearly about crime and punishment does not require indifference to the suffering of victims of crime; their experience is an important part of the relevant balance. The best way to approach these issues with the same dispassionate analysis we use in every other area of life that involves risk.

Our leaders should not be paralyzed by fear, especially now. As the death toll in prisons and jails rises from the spread of COVID-19, their intolerance of any risk is going to cost many more lives than it will save.

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Kevin Ring is a former Capitol Hill staffer, Biglaw partner, and federal lobbyist. He is currently the president of FAMM, a nonprofit, nonpartisan criminal justice reform advocacy group. Back when ATL still had comments, “FREE KEVIN RING” was briefly a meme. You can follow him on Twitter @KevinARing.

The COVID-19 outbreak is really getting the best of us. More than 50,000 people have died from the virus in the United States. The availability of toilet paper is a thing of the past. With social distancing measures in place, professionals are working from home, business on top, pajamas on the bottom, all while fearing for their job security. People have been quarantined for a month (or more), and they’re going stir crazy.  Instead of obeying stay-at-home orders, with some questionable direction from the president to LIBERATE their states, some are out protesting in the streets to reopen their local economies.

What more can we possibly do to protect ourselves from the coronavirus? Russell Hedman, a senior associate at Hogan Lovells, has the answer — in song.

Before you go and inject yourself with bleach, watch the video below:

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Staci Zaretsky is a senior editor at Above the Law, where she’s worked since 2011. She’d love to hear from you, so please feel free to email her with any tips, questions, comments, or critiques. You can follow her on Twitter or connect with her on LinkedIn.

The COVID-19 austerity measures continue to spread through Biglaw. The uncertainty of dealing with the global pandemic has impacted nearly every facet of our society, and the legal profession has been far from immune.

Nelson Mullins, the Biglaw firm that captured the #68 spot on the 2020 Am Law 100 ranking, is the latest firm that has implemented cost-cutting measures. According to multiple tipsters, the firm is anticipating revenue shortfalls. Though they worked on reducing expenses, the firm still needed additional measures.

Ultimately, Nelson Mullins settled on a salary cut system that might result in an associate being “made whole” by the end of the year. A tipster described the salary cut scheme (the firm email on the subject is available on the next page):

Nelson Mullins (2019’s fastest growing AmLaw 100 firm) associates will have a temporary 9% salary reduction per annum (ie ~13.5% gross reduction per remaining paycheck) starting with May 15 paycheck and going through December. Good news is that associates who meet collections goal will “earn” their reduction (aka “holdback”) back within a month of meeting their collection goal. (Nelson Mullins has long had a collections goal in addition to an hours goal. Collection and hours goals must be met by Nov. 30th.) Further, this is separate from bonuses that are given annually for meeting collections and hours goals. Thus, if I meet all my goals, I could get two large paychecks in December.

But, you know, associates have virtually no able to influence collections, so associates can’t really do much more than bill and cross their fingers that clients pay:

On the other hand, in this climate, fewer associates will be able to meet their collection goals even if they bill like crazy–clients are just going to take longer to pay. And associates have little to no agency re collections.

Plus staff has been told they will be furloughed for a week of their choosing between June 1 and September 30. (Firmwide email on staff furloughs available on the next page.)

We reached out to the firm for comment, but have yet to hear back.

If your firm or organization is slashing salaries, closing its doors, or reducing the ranks of its lawyers or staff, whether through open layoffs, stealth layoffs, or voluntary buyouts, please don’t hesitate to let us know. Our vast network of tipsters is part of what makes Above the Law thrive. You can email us or text us (646-820-8477).

If you’d like to sign up for ATL’s Layoff Alerts, please scroll down and enter your email address in the box below this post. If you previously signed up for the layoff alerts, you don’t need to do anything. You’ll receive an email notification within minutes of each layoff, salary cut, or furlough announcement that we publish.

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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).

It must suck to announce to the world “we’re making major changes” and still having to deal with a constant drumbeat of stories sharing deep concerns that the firm might be changing. It seems like every time a group of partners leaves Boies Schiller, the accompanying media write-up frets that this might be the product of some sort of financial trouble brewing for the firm, or a calculated lateral raid by peer firms, or some kind of rejection of David Boies himself.

Here’s a radical thought… maybe it’s because they told you this was going to happen from the start.

In the latest iteration of Chekhov’s Departure Memo, 15 California-based attorneys announced that they’re leaving the firm, resulting in stories characterizing the lawyers “defecting.” Indeed “defect” is the most popular term when it comes to covering Boies Schiller — you see it here, here, and in here… as legal journalists, we really need a thesaurus. But digging deeper, most of the attorneys in this move are products of the 2017 tie-up with Caldwell Leslie & Proctor, which would make them fairly likely candidates to move on if the stated goal of the firm’s new leadership is to scale back and bring the firm back to its core.

Which is exactly what the firm’s managing partners, Natasha Harrison and Nick Gravante, have been saying out loud for a while now. “With 350 litigators it was difficult to be a firm that limited itself to only the best and most important matters,” Gravante told the Financial Times. Over the years, the firm has built an eclectic group of partners seemingly tied together only by the fact that they’re all talented. And while that’s been true within the big city offices, it’s also the big reason why the firm has outposts in places like Albany and Hanover, New Hampshire. It’s somewhat to be expected of a firm with a well-known entrepreneurial comp structure — when pay is so heavily eat-what-you-kill it can create a “gathering of fiefdoms” where everyone’s off doing their own thing without a unifying vision. As the firm grew, it left you wondering whether it was trying to craft itself as a DLA Piper with offices everywhere and prepared to take on matters great and small or a Williams & Connolly with a narrow focus on the most high impact of cases. There are merits to both approaches, but in the end a firm needs to choose.

That’s not to say that the firm isn’t losing incredibly talented attorneys, but feeding that many mouths requires a lot of far-flung work for a firm that doesn’t have a transactional arm generating a steady flow of cash. While it’s potentially the biggest and most consequential litigation of the next few years, the fight for pandemic insurance coverage isn’t going to support everyone on the BSF roster, but it’s the fight the firm wants to be in. That’s the brand.

It feels as if attorneys with more routine business litigation portfolios that fit within the confines of traditional Biglaw firms are seizing the opportunity to decamp for there, while the attorneys focused on — no-pun intended — David and Goliath insurance fights with far-reaching repercussions for the economy are staying. In fact, if this is what’s happening, we shouldn’t be shocked to hear of more departures before all is said and done. Everyone’s just flowing to where their books are best served, which isn’t cause for concern on anyone’s part.

Considering the alternative interpretations of these moves getting tossed around, this makes the most sense. “Financial trouble brewing at the firm”? We can’t go 10 minutes without another report of a layoff or pay cut, meanwhile Boies Schiller is still running its summer program, hasn’t laid people off, and hasn’t cut compensation. “Calculated lateral raid”? It’s not like when Morgan Lewis swiped 75 percent of Bingham’s partners. The folks leaving BSF are going to a wide variety of firms. “Rejection of David Boies”? This is the weirdest theory being bandied about. The American Lawyer story tosses in a non-sequitur about a New York Times article about Boies’s work going after Jeffrey Epstein as if that’s why the firm has new managing partners and suggests the California lawyers — who reportedly had issues meshing their business with BSF’s rates — were unhappy with the firm having represented Harvey Weinstein in the past, which seems a gratuitous jab since the Weinstein stuff came to light almost three years ago at this point. Theranos has been defunct for two.

Look, Boies Schiller has lost a lot of attorneys. But instead of trying to read some deep meaning into individual lateral moves, maybe consider that what’s happening is “that thing they said was going to happen.”

15 Boies Schiller Flexner Partners Defect in California, Most to King & Spalding [American Lawyer]
Boies Schiller law firm restructures during pandemic [Financial Times]

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Joe Patrice is a senior editor at Above the Law and co-host of Thinking Like A Lawyer. Feel free to email any tips, questions, or comments. Follow him on Twitter if you’re interested in law, politics, and a healthy dose of college sports news. Joe also serves as a Managing Director at RPN Executive Search.