Category: News Feeds

That Dan Kamensky fucked up spectacularly and disastrously is at this point fairly well-attested. His bank thought his demand that they not drive up the price of an asset he hoped to buy from a bankrupt company on whose creditors committee he served was bad enough to turn him in. The U.S. bankruptcy and the judge overseeing the case were certainly not amused; neither were the Justice Department or Securities and Exchange Commission. Even Kamensky himself has acknowledged how deeply he stepped in it, calling his instruction to Jefferies to “STAND DOWN” a “grave mistake” likely to send him to prison, and certainly serious enough to shut down his Marble Ridge Capital hedge fund.

* Looks like Netflix will be picking up the upcoming Lincoln Lawyer series. Not too newsworthy, but very excited about this! [What’s on Netflix]

* A federal judge may soon rule if Apple’s App Store runs afoul of antitrust rules. [Wall Street Journal]

* A Georgia court is allowing a couple to sue a sperm bank for allegedly misrepresenting the background of a sperm donor. [ABC News]

* A Massachusetts law firm is being sued for allegedly accepting money from a pharmacy in exchange for referring personal injury clients to the business. [Insurance Journal]

* A lawyer for President Trump’s campaign previously worked for Al Gore. Maybe this attorney can double as a climate change advisor… [NPR]

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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!

Which Biglaw firm was ranked #1 in Vault’s 2021 practice area rankings in bankruptcy and restructuring?

Hint: This was the top bankruptcy firm even before the economic turmoil (and accompanying need for restructuring) caused by COVID-19.

See the answer on the next page.

As a teenager, Sam Isaly lost the use of his legs and the partial use of his upper body to a wrestling injury. This did not stop him from getting to Princeton and graduating with honors, nor from studying at the London School of Economics. It did not keep him from founding and running his own hedge fund for three decades, nor from becoming the most successful investor ever in the life sciences space.

Indeed, Isaly’s is the sort of overcoming-of-adversity stories that keeps the American Dream alive, and with it the belief that anyone can do anything if they just set their minds to it. But, according to Isaly, that’s not entirely true: For instance, he says his paralysis prevents him from, say, embedding pornographic material in routine e-mails to his assistant, or creating a hostile work environment for the tiny handful of women working at his OrbiMed Advisors through verbal abuse and sexually explicit japery. At the very least, he says the Boston Globe didn’t do enough reporting on whether his condition might have prevented him from doing any or all of the gross things it reported he did and which led to his departure from OrbiMed—whatever that reporting might be, with what we’re sure would have been Isaly’s and OrbiMed’s full cooperation—and so: Money, please.

Access to justice has become a buzzword. While it sounds noble, many struggle to define it. Others use it synonymously with technology. So, I have been on a mission asking lawyers from all over the world what it means to them and how we collectively get there. For my interviewee, access to justice is the manifestation of the constitutional guarantee of equal access under the law and equal treatment for all of humanity no matter their walk of life.

Winter Wheeler, Esq. is an Atlanta-based mediator and arbitrator at Miles Mediation & Arbitration. She specializes in wrongful death, catastrophic injury, legal and medical malpractice, automotive and trucking liability, § 1983 actions, and entertainment. Most recently, Winter was a senior attorney at a prominent midtown Atlanta law firm. To say that Winter is skilled is an understatement. She handles complex matters involving a diverse range of cultures, including Spanish-speaking clients.

Winter’s view about access to justice and specifically the role of language is even more remarkable and rich. She is particularly attuned to accents and dialects and seeks to shed light on the stereotyped reactions to them as they affect litigants’ access to equal justice. She believes that by simply making people aware of these issues she can help to eradicate them and ensure that witness credibility is evaluated on an individual basis absent bias against the words used and how those words may sound as they are spoken.

OM: I know you are working on several issues related to access to justice and that language is one of the issues you address frequently. Why is discussing language access so important to you?

WW: If history is written by the victors, then one might say that justice is determined by the speakers. Or perhaps more accurately, the speakers and the listeners. In the law, oral testimony makes up a great deal of the evidence used to make binding decisions. So, it should follow that spoken evidence should be understood by the listeners if a fair outcome is to be reached — and that when speakers go misunderstood this presents a clear barrier to justice. This is, of course, why language interpreters are commonly used in legal proceedings, both in and outside of the courtroom.

OM: You speak specifically about the importance of African-American Vernacular English. Why is that aspect of language access so crucial?

WW: If I were to ask you what the most spoken second languages are in metro Atlanta — and therefore the languages in most need of these interpreters — you might say Spanish or perhaps Korean. However, there is one that you would most likely not even think of but should add to the list: African American Vernacular English (AAVE). Given the demographic makeup of the city, AAVE may very well be the language in the most need.

OM: Why do you think AAVE is overlooked?

WW: Unfortunately, the mostly negative attitudes toward AAVE held by the general public helps to prevent confirmation and the addressing of that need.

Language discrimination is rooted, in part, in the notion that there is only one correct dialect of American English, whose name betrays its elevated, privileged status: Standard English (SE). This widely held notion almost always dismisses AAVE as a bastardized version of SE. At best, many consider AAVE to be the grammatically incorrect daily speak of an uneducated underclass — though the truth is much more complex. Indeed, AAVE is not slang but a proven language dialect with clearly established grammatical rules and norms formed over the course of centuries. While it shares a lexicon with SE — just like other American English dialects, including Appalachian—it is quite linguistically distinct in several verified ways. Yet, its classification as a true American English dialect has not stopped the public from associating it with commonly held negative and demonstrably false stereotypes about Black Americans, such as laziness and a lack of intelligence. Notably, when AAVE-speaking children are offered learning support in AAVE, their test scores are much higher than native-AAVE speakers who only receive support in SE.

OM: What impact does this have on the legal system?

WW: We know that these stereotypical views have real consequences in our legal system. A 2019 study published in Language Magazine showed that key listeners in American courtrooms — including judges, lawyers, jurors, and court reporters — often assumed criminality on the parts of AAVE speakers. This held true no matter the ethnicity or race of the listener. The study also showed that the majority of court reporters were woefully incapable of understanding, paraphrasing, or accurately transcribing the testimonies of AAVE speakers. Think of the far-reaching ramifications this could have on litigants of every shade of the rainbow when the key witness happens to speak AAVE. Suddenly, not only have a litany of negative attributes been ascribed to a witness who likely does not deserve them, but any attempt by that witness to establish their credibility may be met with a severe lack of understanding. These eventualities have unfortunate effects on litigants’ ability to participate in and receive equal justice under the law.

Consider the 2013 trial of George Zimmerman, who was accused by the state of Florida of having murdered teenager Trayvon Martin. Now, recall if you can the racialized backlash against the state’s star witness, Rachel Jenteal, whose Creole background and AAVE-delivered testimony resulted in her carrying the double hurdle of having her credibility openly dismissed (by at least one juror after the trial) and having her character publicly questioned. News reports from that period show that Jenteal’s speech and delivery were described as “ghetto trash.” In the days and weeks following her court appearance, social media and blogs covered her lack of a high school diploma — as if that had anything to do with what she witnessed — instead of the actual murder of her friend. Keep in mind that the harsh criticism against Jenteal came from both Black and white Americans.

OM: What can mediators and arbitrators such as yourself do to eliminate this type of discrimination? 

WW: There are deep socioeconomic problems undergirding this somewhat hidden form of legal discrimination — and remedies will not be found until we develop and adhere to tactics that address and mitigate these effects within our professional legal circles. There are several practices that can be utilized to ensure a fair and just mediation.

Because AAVE shares the same lexicon as SE, many non-AAVE speakers genuinely believe they can fully understand the dialect. That is likely not the case. Remember, AAVE has a distinct grammatical structure that can fundamentally change the tense, and therefore the meaning of verbs. For example, AAVE speakers can swap the words have not, does not, and is not with just one word representing all three tenses: ain’t. So, despite the familiarity, I would not recommend guessing your way through someone giving testimony in AAVE.

Do not assume that because a lawyer is Black that they speak or understand AAVE. It is not fair, nor practical, to do so. Usage and fluency in AAVE vary wildly from person to person for any number of reasons, with one documented cause of variation being socioeconomic class. The wealthier a person is, the more likely they are to speak SE with more regularity than they speak AAVE. Members of higher socioeconomic classes are also more likely to “code switch,” which is to speak AAVE amongst peers while switching to SE with non-AAVE speakers.

It is fair to assume that a native AAVE speaker understands SE — do not worry about speaking to someone in SE even if they prefer to respond in AAVE. During mediation, you should do your best to make the parties feel comfortable enough that they are willing to speak to you in their native AAVE if they cannot or will not code switch — but I would not recommend trying to speak AAVE if you are not a native speaker. You do not want to sound as though you are mocking the dialect.

Repeat back what you heard. If a party speaks to you in AAVE, you can be sure you have interpreted their words correctly simply by doing what you would normally do as a good mediator. Summarize their points back to them and then ask for confirmation that you are correct in your summation and that you captured accurately what they are conveying.

Pay careful attention to determine whether the attorney is aware of any potential language barrier with their AAVE-speaking client, because the attorney very well may not be. As any mediator knows, there is always the chance of a rift between the attorney and their client. Since you should already be attuned to this issue, a natural next step is for you to note any linguistic gaps. A misinterpreted double negative or tense could have devastating consequences to a lawsuit if it goes unnoticed.

OM: What should the ultimate takeaway be for attorneys from all of this information?

WW: Ultimately, be respectful of those who choose to speak AAVE in your presence. The dialect is an important and often unifying cultural marker. It is not slang, it is not a trend, nor is it to be mocked. Because we know that AAVE is subject to negative stereotypes and discriminatory actions and attitudes, mediators and arbitrators can alter our own behavior and mindset to ensure equal access to justice.

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Olga V. Mack is the CEO of Parley Pro, a next-generation contract management company that has pioneered online negotiation technology. Olga embraces legal innovation and had dedicated her career to improving and shaping the future of law. She is convinced that the legal profession will emerge even stronger, more resilient, and more inclusive than before by embracing technology. Olga is also an award-winning general counsel, operations professional, startup advisor, public speaker, adjunct professor, and entrepreneur. She founded the Women Serve on Boards movement that advocates for women to participate on corporate boards of Fortune 500 companies. She authored Get on Board: Earning Your Ticket to a Corporate Board Seat and Fundamentals of Smart Contract Security. You can follow Olga on Twitter @olgavmack.

 

 

September brought a spate of three major acquisitions by private equity firms of companies with technology related to the management of smaller law firms. Was this coincidence or was the pandemic a factor?

The trend started Sept. 8, when news broke that the practice management platform MyCase has been sold by its owner, AppFolio, to the private equity firm Apax Partners for a whopping $193 million in cash.

Founded in 2010, MyCase had been acquired in 2012 by AppFolio, a company then new to the legal industry whose primary product was and remains a cloud-based property management platform for residential and commercial property managers. In 2015, AppFolio completed an initial public offering, raising some $74 million — one of the few-ever IPOs related to the legal industry.

The other two acquisitions both came to light last week (although both had privately closed at least several weeks earlier).

On Sept. 22, I reported on my LawSites blog that ASG LegalTech, the company that owns cloud practice management platforms PracticePanther, Bill4Time, and MerusCase, had acquired Headnote, the online payments platform that provides e-payments and accounts-receivable management for law firms.

ASG LegalTech is a relatively new company. Its parent, Alpine SG (ASG), is a portfolio company of the San Francisco private equity firm Alpine Investors. After ASG acquired Bill4Time in 2017 and PracticePanther in March 2018, it merged the two companies in February 2019 to create the unified legal technology business, ASG LegalTech. A month later, it acquired another practice management company, Merus Inc., developer of MerusCase.

The company it acquired, Headnote, was founded in 2016 by Sarah Schaaf, a lawyer who had formerly worked at Google, together with Thornton Schaaf, who was head of product at Headnote, and Matt Crampton, who was Headnote’s chief technology officer.

They created Headnote at a time when the payments business in legal was largely dominated by one company, LawPay, founded in 2005. They sought to distinguish Headnote through a mix of features that made it easy to use and ensured compliance with bar and IOLTA requirements, while charging the lowest fees in the legal industry.

The final acquisition, revealed Sept. 24, was of the practice management company Rocket Matter, which was acquired by the private equity firm Lightyear Capital LLC, which will make it part of a new company, ProfitSolv, that also includes two other recently acquired companies, TimeSolv, a provider of cloud-based legal billing and timekeeping software, and ImagineTime, a practice management and payments company serving accounting and other professional services firms.

Along with Clio, Rocket Matter was the first of the new breed of cloud-based practice management platforms, launching its commercial product on Jan. 6, 2009, just months after Clio’s launch on Oct. 1, 2008. As I wrote in 2018, the two companies “ignited a revolution in law practice management by bringing to the cloud what had always been a desktop technology.”

Is The Pandemic A Factor?

All of which begs the question: Were these three acquisitions, all within two weeks of each other, sheer coincidence, or was the pandemic a factor that led to this alignment of investments? I believe it was very much a factor, and that three pandemic-related reasons drove these acquisitions.

The first reason is also the most obvious. Not only has the pandemic accelerated the adoption of cloud technologies among legal professionals, it has also made it essential. I wrote here back in April:

In a matter of a month, any lawyers who still harbored fears of technology have of necessity come to see it as a lifeline to the survival of their practices and their continuing ability to serve their clients. Going forward, that will fundamentally reshape the legal profession’s use and adoption of technology.

While this is true of technology broadly, it is most true of cloud technology, as we have all adapted to working from home and where no clear end is in sight. Cloud companies tell me that their subscriptions have been soaring during the pandemic, and companies that have offered both on-premises and cloud software tell me they can barely keep up with converting their customers to the cloud.

In short, cloud practice management is a very good business to be in these days, and as so many lawyers adopt or convert to the cloud, there will be no going back. The pandemic has been a pivotal period, changing what had been gradual adoption of the cloud to a mass movement.

For private equity firms, this has created an appealing investment opportunity. Cloud legal tech is strong right now, and there is significant potential to grow these businesses much more over the next few years.

The E-Payments Factor

A second pandemic-related factor that has driven these investments is the need for electronic payments.

Before the pandemic, many law firms, especially smaller firms, clung to the old-fashioned method of getting paid, in which they sent out paper invoices and waited for their clients’ paper checks to arrive back in the mail.

But paper payments do not work in a pandemic. Clients do not want to deal with paper invoices and writing and mailing checks. Firms likewise do not want to deal with printing and mailing invoices, and may not even have easy access to mail delivery.

In all three of the acquisitions described above, e-payments is a significant part of their technology — and, no doubt, of their plans going forward.

The ASG LegalTech acquisition of Headnote is the most direct example of this. By acquiring Headnote, ASG LegalTech gets a modern and proven payments platform. On my LawNext podcast, ASG LegalTech’s CEO Soumya Nettimi told me that one of the aspects of this deal that she is most excited about is that they will use Headnote’s technology to build something their customers have been asking for — a fully native payment solution within each of their practice management platforms.

“So what this means is customers will have a seamless experience already built into their current workflows, so they never have to leave their practice management system in order to manage their payments,” Nettimi said.

They have already done this for PracticePanther, building a fully integrated, all-in-one payment system within the platform called PantherPayments. They will also keep Headnote as a standalone product.

MyCase had long ago offered integrated electronic payments options, starting with e-checks in 2015 and adding credit card payments in 2016.

Meanwhile, Rocket Matter earlier this year acquired LexCharge LLC, a payment processing company that specialized in handling payments for legal professionals. While it already had an integrated payments option, the LexCharge technology allowed it to create a more truly consolidated streamlined payments experience within its platform.

So not only has the pandemic made cloud technology in general more essential, it has made the specific category of payments technology more essential. As ASG LegalTech’s Nettimi said to me, in this year of the pandemic, “getting paid is synonymous with staying in business for many of our firms.”

On top of that, payments technology can be a very good business for an investor. For every payment processed, the company gets a percentage. While the amount in any single transaction is relatively small, all those legal bills getting paid by all those clients of all those firms add up.

Given this, I think it is no coincidence that all three of these acquisitions involved companies with payments technology.

“Trillion-Dollar Piggy Bank”

The third factor that has contributed to this alignment of investments, I suspect, is that private equity is sitting on what The Wall Street Journal described as a “trillion-dollar piggy bank” — a $1.45 trillion build-up of so-called dry powder, which is money that investors have committed to private equity funds but which has not yet been spent.

With all this cash at hand, private equity firms may be looking for opportunities in industries they previously paid little attention to. The pandemic presents an opportunity for new growth and even transformation among legal technology companies, and nowhere is that more so than in cloud-based legal technology.

The Impact On Customers

The combination of these factors — all exacerbated by the pandemic — have driven private equity firms to invest in cloud practice management technology. But the question I have received the most in the past two weeks is not why this has occurred, but whether this private equity ownership will be good for the customers of these companies.

With regard to both the MyCase and Rocket Matter acquisitions, the new owners have largely been mum, so we know little about their plans. However, Rocket Matter founder Larry Port described the investment as “superhero potion.”

“Rocket Matter still has the same team, the same quirky and caring company personality, and are still committed to our core purpose: ‘to make the lives of attorneys a whole lot better,’” he wrote. “And with our new superpowers, we’ll be able to do a whole lot more of that.”

The principals of ASG LegalTech have been far more transparent about their plans, and they seem fully committed to making their suite of products even better through continuing development, stronger customer service, and even more product launches or acquisitions down the road. Don’t take my word for it – I encourage you to listen to my interview with Nettimi and Schaaf and judge for yourself.

The fact of the matter is that the legal industry has changed dramatically since Clio and Rocket Matter rolled out their first cloud products a dozen years ago, and the pandemic has accelerated that change even more dramatically. For these companies to continue to develop and scale in keeping with these changes, they need money. I am optimistic that all of these acquisitions will prove to be good news for their customers.

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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).

The autumn of Biglaw special bonuses continues!

Cooley got the COVID appreciation bonuses ball rolling (even if the firm is happy to no longer be the market leader). But Davis Polk did not come to play, and they wowed with more money and others have matched that more generous scale.

Folks at got a welcomed announcement this afternoon from the powers-that-be at Shearman & Sterling. The firm announced they’d also be joining the elite of Biglaw in giving out COVID-19 appreciation bonuses. Payable on October 30th, the firm will give out between $7,500 and $40,000 depending on class year according to the following schedule:

2019 – $7,500
2018 – $10,000
2017 – $20,000
2016 – $27,500
2015 – $32,500
2014 – $37,000
2013 and above – $40,000

You can read the firm’s full announcement on the next page.
Please help us help you when it comes to bonus news at other firms. As soon as your firm’s bonus memo comes out, please email it to us (subject line: “[Firm Name] Bonus”) or text us (646-820-8477). 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, 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.

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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).

The Democrats are thinking that, if they maintain control of the House of Representatives and win both the presidency and the Senate, the Democrats should abolish the filibuster. A simple majority of the Senate could then vote in favor of admitting the District of Columbia and Puerto Rico as new states.  This would basically guarantee four new Democratic senators, which would give the Democrats long-term control of the Senate.

There may be reasons to grant statehood to the District of Columbia and Puerto Rico. The residents of D.C. and Puerto Rico are American citizens; they’re drafted; they pay taxes (if not, in the case of Puerto Rico, federal income tax); why shouldn’t they have senators?

Conversely, there may be reasons not to grant statehood to the District of Columbia and Puerto Rico. There may not yet be enough population in those territories to justify statehood; there may not be a local consensus in favor of statehood; perhaps the national capital should be administered by Congress; perhaps Puerto Rico’s economic condition weighs in the balance.

Those are rational arguments.

So they’re beside the point.

I’ll ask you to forget about all that stuff and start thinking like a politician.

Suppose the Democrats make D.C. and Puerto Rico states.

When the Republicans ultimately regain control of the Senate — as they surely would eventually, because the Democrats propose to add only four new senators — then the Republicans would retaliate. After we had the states of West Nebraska, North Montana, and East Alabama added to the Union, then the Republicans would have the upper hand for a while.

The Democrats know this, of course. The problem with political gamesmanship is that eventually the other party takes power, and the other party retaliates.

What’s a Democrat to do?

Don’t just add D.C. and Puerto Rico as new states. That would create only a small and likely temporary Democratic advantage in the Senate.

As long as you’re going to play this game, you might as well keep the Republicans out of power for a century or more.

The Democrats should naturally create the states of North, South, West, and East California, adding six more Democratic senators to the mix. The new states of Manhattan, Queens, Brooklyn, the Bronx, and Staten Island would add ten more Democratic senators (although this might give the Republicans an edge in what remains of the old New York). You could carve major cities out of existing states! The state of Atlanta would surely elect two Democratic senators; the rest of Georgia was Republican anyway; that’s a two-seat Democratic pick-up. Imagine how the residents of the Great States of Cleveland, Akron, and Youngstown would feel; finally, they gained the power they always knew they deserved!

And surely the Democrats could do better than this; they wouldn’t be constrained by my feeble imagination.

If we had about 75 states, and most of the 50 new senators were basically guaranteed to be Democrats, then the Republicans wouldn’t regain the Senate in our lifetime.

Eventually, of course, the Republicans would win back power. Either demographics would eventually yield a Republican majority or the Republicans would change their policies to appeal to different groups. When the Republicans at last reclaimed power, perhaps in the year 2150, revenge would be sweet. Republicans would naturally be duty-bound to retaliate for the dastardly Democratic deeds.

We’d soon hear about Mid-East, East, and Far-East South Carolina! Six new Republican senators right there! Each sliver of Mississippi and Arkansas would be granted statehood! (“Weather’s fine here in my state, honey. How is it over there, in the living room?”) It would be a triumph of democracy!

I’m glad I won’t be around to witness the show.

I have enough trouble remembering the names of the countries in the former Soviet Union.

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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.

John Oliver’s Last Week Tonight features are always informative and entertaining, but his forays into law and courts are consistently among his best. This week, he discusses the nomination of Amy Coney Barrett and how the pick represents the culmination of a broken political system that won’t be repaired by any quick fixes, but through a long, nightmarish slog through hopelessness.

And that description doesn’t sound like comedy, but trust us, it is.

Pay particular attention to his description of naked yoga.