Category: News Feeds

* A lawsuit filed by McDonald’s alleges that its former CEO sent nude pics from his work email, destroyed evidence related to sexual relationships with employees, and committed other illicit acts. Looks like Ronald wasn’t the only clown at McDonald’s… [Business Insider]

* A federal judge in New York has allowed a lawyer to withdraw from representing Michael Avenatti in a criminal case. [Fox News]

* A disbarred Beverly Hills lawyer has pleaded guilty to stealing over $500,000 from a former client. [CBS News]

* Susman Godfrey has elected the first female managing partner in the history of the firm. [Bloomberg Law]

* A lawyer is apparently accused of billing his client 40 hours in one day. Maybe he had a time machine? [Texas Lawyer]

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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.

Ed. Note: Welcome to our daily feature Trivia Question of the Day!

According to data collected by Law.com for the A-List Law Firms ranking, which top 20 firm has the highest associate satisfaction score?

Hint: The Biglaw firm received an impressive 99.5 (out of 100) score on associate satisfaction, helping the firm take the number 8 spot on the list.

See the answer on the next page.

Headlines last week were touting the opinion Thursday on PACER fees by the Federal Circuit Court of Appeals. The judiciary “can’t use PACER as IT slush fund,” one said. “PACER Fees Are Too High, Federal Circuit Says,” another reported. “Federal judiciary is overcharging for access to public records online,” still another said.

While none of these headlines are wrong, they could lead a reader to conclude that the judiciary’s loss in the case is a clear victory for public access and will significantly reduce PACER fees. Unfortunately, neither is true. Rather, the opinion delivers only a partial win for plaintiffs and will reduce PACER fees only a limited amount.

Nothing about this opinion will change the fact that PACER is a 32-year-old system that is, as I once wrote, “cumbersome and crotchety to use, often cryptic in its naming and coding, and archaic in its document handling.”

Nor will anything in this ruling change the fact that PACER is not free to use. To the contrary, the ruling reaffirms the authority of the judiciary to charge Electronic Public Access (EPA) fees for its use sufficient to cover the expenses of operating both PACER and the corollary CM/ECF electronic filing system.

What the ruling does do, however, is open the door to a reduction in those fees — albeit a small one — and the repayment to users of excessive fees collected from 2010 to 2016.

Notably, the Federal Circuit affirmed in its entirety the 2018 decision in the case by U.S. District Judge Ellen Segal Huvelle, stating that she “got it just right.”

In her ruling, Huvelle had rejected the principal arguments of both the plaintiffs and the defendants. The plaintiffs had argued that the judiciary could recoup PACER fees only to the extent necessary to cover the total marginal cost of operating the PACER system. The judiciary had argued it could use PACER funds for anything related to “dissemination of information through electronic means.”

Of the $920 million that the judiciary collected in PACER fees from 2010 to 2016, Huvelle had found that the judiciary misspent some $200 million of it. That ain’t hay, for sure, but it is only 22% of the total collections.

Both the Federal Circuit and Huvelle agreed that the judiciary’s expenditures of PACER fees from 2010 to 2016 were appropriate for the following purposes:

• Public access services, which was money spent directly on the operation of PACER and totaled $129.9 million for the six-year period.
• Case Management/Electronic Case Files System (CM/ECF), which totaled $217.9 million for the period.
• Communications infrastructure, services, and security, which totaled $229.4 million for the period.
• Court allotments, which totaled $74.9 million for the period.
• Electronic Bankruptcy Noticing, the system that produces and sends bankruptcy notices to creditors, which totaled $73.3 million for the period.

The expenses that both the Federal Circuit and Huvelle deemed inappropriate were all unrelated to the direct operation of PACER and the CM/ECF system. These inappropriate expenditures were:

• State of Mississippi, a one-year electronic-access pilot in 2010 that cost $120,988.
• Victim notification, a program that electronically notifies local law enforcement agencies of changes to an offender’s case history, which cost $3.7 million for the six-year period.
• Web-based juror services, which cost $9.4 million for the period.
• Courtroom technology, which cost $185 million during the period.

Put those sets of numbers together, and we see that while the rulings invalidated expenditures of $198.2 million for the six-year period, they upheld expenditures of $725.4 million for that same period.

Now, this may be an overly simplistic analysis on my part, but if PACER currently charges 10 cents per page, and these rulings have invalidated 22% of the expenditures for which those fees were used, then it seems to follow that the judiciary can still charge nearly 8 cents per page.

All of that said, the Federal Circuit did open the door to one further possible reduction in EPA fees, and that involves the judiciary’s expenditures to operate the CM/ECF system. The circuit court said that the district court record lacked sufficient information for it to decide whether EPA fees could permissibly be used to cover all the costs of maintaining the CM/ECF system.

On remand, the Federal Circuit said, it would be up to Huvelle to decide whether to permit additional argument and discovery on this issue.

This case is far from over. On remand, Huvelle will have to decide whether to consider the CM/ECF issue and then go on to decide damages. Whatever she does, there will almost certainly be further appeals.

If PACER is ever to be fully free, it will happen only through an act of Congress. Three bills currently pending (H.R. 1164, S. 2064 and H.R. 6017) would do exactly that — make PACER free and also mandate development of a modern system.

Of course, if there is anything more dysfunctional than PACER, it is Congress. For the time being, that means this much remains true: The clunky PACER system will continue to operate as is, and we will continue to be charged fees for its use.

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Robert Ambrogi is a Massachusetts lawyer and journalist who has been covering legal technology and the web for more than 20 years, primarily through his blog LawSites.com. Former editor-in-chief of several legal newspapers, he is a fellow of the College of Law Practice Management and an inaugural Fastcase 50 honoree. He can be reached by email at ambrogi@gmail.com, and you can follow him on Twitter (@BobAmbrogi).

When we last checked in with Dan Shak, way back in 2013, the professional poker player, former hedge fund manager and petty ex-husband was settling allegations that he illegally gamed the gold futures market by banging the close at his old hedge fund, SHK Management. At about the same time (the time he was suing his ex for an equitable share of her high-heel collection), he was planning to get back into the hedge fund game, having shuttered his SHK Management abruptly two years earlier. Then, nothing. Silence. Now, thanks to an old friend and this article by his current employer about the eminently manipulable trade-at-settlement contracts, we may have an inkling why.

Your ability to grow your law firm, forecast cash flow, and identify operational challenges before they can cost you money counts on reliable accounting data. To make the right decisions, you need to have up-to-date and accurate data — every time. But often inefficient accounting processes and dated systems can cause inefficiencies and errors that cost you both money and time.

If your firm relies on rarely updated figures or accounting reports that contain hidden errors, you don’t have the information you need to make good management decisions. Streamlined, simple, and up-to-the-minute law firm accounting protects you from mistakes that can drag the firm down. You need processes and tools that will make law firm accounting simple, efficient, transparent, and, above all, accurate.

What if you could have accurate figures at your fingertips within minutes? What if you could track revenue trends, cost trends, and income trends quickly and easily? With the right tools and processes in place, you can move from just record-keeping to an accounting function that creates value for your firm.

To find how legal technologies, such as PwC’s InsightsOfficer, can help you get value from your law firm’s accounting function, download PwC’s new eBook below.

Weil Gotshal created the bankruptcy practice. We’re probably steadier in our results than some of our peers that might be weighted to a particular economy. We don’t plan for pandemic, but we do plan for recession, and we make sure we are well suited when a recession happens to make sure our results will continue to be strong, and knock on wood, that’s exactly what’s happening this year.

— Weil Gotshal executive partner Barry Wolf, commenting on the Biglaw firm’s successes during the coronavirus crisis. Weil has largely dominated debtor-side representation matters in its bankruptcy and restructuring practice, and the firm’s billable hours are ahead of budget for 2020.

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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.

Some associates at Snell & Wilmer have been let go from the firm. According to insiders, in an associate meeting, the firm characterized these terminations as performance based. But… when enough people are non-voluntarily exiting the firm that it gets folks talking, well, there’s a good chance there’s something deeper going on.

Of course, we’re talking about stealth layoffs. Biglaw is known for this particularly pernicious form of headcount management. If you’ve never heard of the phenomenon, consider yourself lucky. But the basic outline is that during economic downturns, firms will cut associates (that usually had good performance reviews until, coincidentally, the economy took a hit) all the while calling them performance-based cuts. These stealth layoffs allow firms to cut headcount without confirming that there were economic-based layoffs. Rather than signal some perceived weakness, a firm tries to cut overhead without making a splash. So, they’ll give the associates X number of months/weeks to find a new job and the firm may even couch the reductions in performance review terms, making those let go doubt their lawyering skills.

Of course, Snell & Wilmer, an Am Law 200 firm, previously cut associate salaries by 10 percent and furloughed staff who can’t work remotely. Now multiple tipsters from the firm are reporting there’s been some headcount management at the firm. And though they’re being told the terminations are performance-based (you know, exactly like the definition of a stealth layoff), the rank and file are deeply suspicious of the line they’re being told. Talk a look at a sampling of the tipsters’ reports:

Snell Wilmer has laid off associates in LA and OC, for, supposedly, underperformance. Definitely BS… we all know they were stealth layoffs.

Layoffs were confirmed by the firm on the last associate call. The reason given for the layoffs was because of “underperformance.” This is literally the definition of stealth layoffs.

Hi there, I’m an associate at Snell and Wilmer… the firm has been quietly making layoffs over the last two months during COVID. The firm is publicly stating that they are not doing layoffs, and has reduced all employees salaries as a way to “avoid layoffs” but had secretly been conducting layoffs anyways. Numerous associates in both Orange County and Los Angeles have been asked to leave despite having positive performance reviews, and other attorneys and associates have not been informed.

Snell Wilmer on an associate call … stated, after a question about layoffs, that “some” associates have been let go for “performance reasons.”

Snell and Wilmer conducting stealth layoffs. A few associates have been let go. Frustrating, since the EC stated that we were all in this together. Guess not.

Yeah, it doesn’t sound good. I have nothing but the deepest sympathy for anyone that finds themselves going through it. And let me reassure you — it isn’t you.

When reached for comment, a firm spokesperson did not immediately respond. We’ll update the story with any statement the firm may make.

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).

There’s a saying that the first rule of lawyering is that the answer is always “it depends.”

So when the Wall Street Journal asks “Would You Trust A Lawyer Bot With Your Legal Needs?” it kind of glosses over this rule. I’ve learned from experience that lawyers and the public freak out over robot lawyering, but the more you peel back the artificial narrative of robot lawyering then more mundane and inevitable it becomes.

Asa Fitch’s new article lays out the basic groundwork in the legal automation game, highlighting major players like Joshua Browder of DoNotPay and explaining the ethical challenges that face anyone entering the field.

But to the question presented in the WSJ headline? There’s a lot more to unpack first.

Would you entrust a personal-injury claim, divorce settlement or high-stakes contract to an algorithm? A growing number of apps and digital services are betting you will, attracting millions of Silicon Valley investment dollars but raising questions about the limits and ethics of technology in the legal sphere.

Did they pass an in-person bar exam during a pandemic? Because I’m told that’s the only way to trust any legal advice.

Would I trust a bot to litigate an injury claim? No. Would I trust a bot to screen an injury claim to figure out if there’s anything there or if I’m best served settling or if a class exists that can get me the recovery I want? Sure. Divorce settlements are probably a no go unless you’re looking at a Vegas stripper you met 15 hours ago while twisted on Rum Rickeys. A high-stakes contract? That’s actually one of the most fascinating questions because automating contract work is actually happening, sometimes under the auspices of Biglaw. Bots may not be replacing attorney conference calls, but they’re certainly working out the boundaries of what constitutes market language.

The latter point is alluded to when the article cites Professor Drew Shimshaw’s 2018 paper on the subject:

Drew Simshaw, a law professor at Gonzaga University, wrote in a 2018 paper that the legal profession had to balance the benefits of access to do-it-yourself justice offered by apps like DoNotPay against ethical concerns that arise when they veer into doing legal work autonomously. “The legal profession’s advocacy for crippling restrictions on legal self-help solutions could potentially stunt the development of the larger AI revolution in law in ways that would ultimately favor large firms over the public interest,” he wrote.

Lawyer AI is coming, but is it coming to get you out of parking tickets or to get Goldman Sachs a 4 percent better return on a multibillion-dollar long-term deal? Because the latter is happening no matter what.

“As soon as there’s some complexity or some resistance by the system, the automation is unable to handle it,” says Ryan Calo, a law professor at the University of Washington whose specialties include robotics and automation. “There’s an impression that this app will help you navigate the legal system, but it will only help you to a small extent.”

But this is the problem with the whole legal field. Someone walks in with a “simple 50-50 estate split” and walks out an extra in a high school production of Bleak House. Lawyers rarely have the crystal ball necessary to predict when a 95 percent routine transaction is going to turn into major litigation. It’s just a question of whether a consumer is paying a lawyer from jump or only after the bot runs into an unexpected wall. That’s why smart lawyers should be leaning into bots as screening devices and integrating them into their practices — it may forfeit some more expensive hours but being in place as the go-to in the marginal cases where things go wrong would seem to be worth it. Some attorneys probably disagree.

It all depends.

WOULD YOU TRUST A LAWYER BOT WITH YOUR LEGAL NEEDS? [WSJ]

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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.

There’s a difference between “It’s generally a good idea” and “It’s to our advantage.”

You’d be surprised how often lawyers confuse the two.

Example one:

I generally oppose asking courts to grant exceptions to page limitations. If the court wants 15 pages, make it fit in 15 pages. If the lawyers representing us want more than 15 pages, then take a good, hard look at the brief and see what can be cut without hurting our position. Generally, we can respect page limits.

Surprisingly often, our outside counsel say, “We’d like to ask for an exception to the page limits. Both we and the other side would get 25 pages instead of the usual 15.”

The client asks the obvious question: “How does that help us?”

“Both we and the other side could then present our arguments at greater length.”

“But how does that help us?”

“We’d have a chance to present our arguments more clearly.”

“But so would the other side. How does that help us?”

You can almost feel counsel scratching their heads. What would a decent answer to that question be?

The real answer usually suggests that we should not ask for more pages.

“In every brief we’ve filed to date, the other side has been wordy, and we’ve been concise. The other side is always banging up against page limits, and we’re not. So I guess having a 15-page limit actually restricts the other side more than it restricts us. We should not ask for more pages.”

Right.

Example two:

“We have to decide whether to conduct the hearing in-person or virtually.  We like an in-person hearing.”

“How does that help us?”

“If you do an in-person hearing, you get more of a sense of the environment and the judge’s reactions.”

“But how does that help us?”

“It’s more intimate and more meaningful.”

“But how does that help us?”

Are you starting to sense my frustration?

Example three:

“The question is whether we should insist on closing arguments at the end of the arbitration. We’re going to advocate having closing arguments.”

“How does that help us?”

“It gives the arbiters a chance to ask questions based on the evidence they’ve heard.”

“That helps both sides equally. How does having closing arguments help us?”

“It gives us a chance to summarize the evidence.”

“How does that help us? I assume that we write better briefs than the other side. We should thus be ahead on the briefs. Why do we want to have closing arguments, where we could lose our advantage?”

“The lawyer on the other side is actually a corporate lawyer. This will be the first closing argument he’s ever done in his life. In contrast, our lawyer is a world-renowned litigator, well known for his skill on his feet. We’ll crush them in closing arguments.”

Aha! That’s how it helps us. By all means, request closing arguments.

What’s good for the world is not necessarily what’s good for your client.

As to every decision, ask not what’s theoretically correct. Ask: “How does that help us?”

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Mark Herrmann spent 17 years as a partner at a leading international law firm and is now deputy general counsel at a large international company. He is the author of The Curmudgeon’s Guide to Practicing Law and Drug and Device Product Liability Litigation Strategy (affiliate links). You can reach him by email at inhouse@abovethelaw.com.