Category: News Feeds

This morning, “Full House” star Lori Loughlin and her husband Mossimo Giannulli pled guilty via Zoom to one criminal conspiracy count in the college admissions scandal dubbed Operation Varsity Blues by the FBI. To wit, Loughlin and Giannulli conspired to pay $500,000 to get their daughters Olivia Jade and Isabella Rose Giannulli into the University of Southern California by disguising them as recruits to the rowing team. Neither daughter rowed crew, and neither is currently enrolled in school.

Olivia Jade, who presumably understood why she was being posed for photos in a borrowed rowing uniform, is reportedly “devastated” at the prospect of her parents going to jail. But not as devastated as she would have been had they been sentenced to the decades in prison sought by prosecutors in the original 12-count indictment.

Under the terms of the recently announced pleas, Loughlin, who admitted to “conspiracy to commit wire and mail fraud to obtain property,” agreed to just two months in jail, $150,000 in fines, and 100 hours of community service. Giannuli, who also copped to “honest services wire and mail fraud,” accepted five months behind bars, $250,000 in fines, and 250 service hours.

Good to see the couple finally practicing that personal responsibility they preach. AHEM.

The couple’s pleas are conditional on acceptance by U.S. District Judge Daniel Gorton, specifying that “If the Court rejects any aspect of this Plea Agreement, the U.S. Attorney may deem the Plea Agreement null and void.”

It remains to be seen whether Judge Gorton will sign off on the pleas, making Loughlin and Giannulli the 23rd and 24th parents to plead guilty in the scheme. Despite defense attorney William Trach’s request for expedited sentencing to give the couple “finality,” the court scheduled the sentencing date in three months.

Assuming Bill Barr doesn’t swoop in to rescue the Trump supporters from their own guilty pleas, look for defense counsel to argue on August 21 that Loughlin and Giannulli can’t possibly serve a custodial sentence during a pandemic and must be granted home confinement. Because that train is never, never late!

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Elizabeth Dye (@5DollarFeminist) lives in Baltimore where she writes about law and politics.

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

According to data collected by ALM for their 2020 Am Law 200 ranking, which firms fell out of the top 200 ranking?

Hint: Three firms, including one that is now defunct, are off the list. 

See the answer on the next page.

Salary cuts are always shitty. I mean, hopefully, they spare folks’ jobs but they are never fun to deal with. And they’re extra annoying when announced the Friday afternoon before a three day weekend. But I guess COVID-19 doesn’t take a break for the holiday, so neither do austerity measures. And that’s exactly what happened at Troutman Sanders — no wonder we’ve gotten so many angry emails.

So, what’s going on at the firm? 20 percent pay cuts for associates and even more for partners. As a tipster explains:

We just learned that equity partners are receiving an annualized 18.5% pay cut, non-equity partners are receiving a 14% cut, and associates are receiving an 11.7% cut, but this equates into a minimum 30%, 25% and 20% cut, respectively, per paycheck going forward from June 1 through end of year.

Which considering their soon-to-be merger partner, Pepper Hamilton, has already made similar cuts, it shouldn’t be too much of a surprise. (Yes, the merger is still a go for July 1.) But that doesn’t mean folks at the firm aren’t pissed. Here’s a sampling of some of the reactions we’ve received about the pay cuts:

This is across the board, taking no consideration of whether a group is busy or not. I’m extremely upset as an associate in a group that has not slowed down, but is just as busy or busier than before— yet I’m expected to work that amount above expectations at 20% less pay? We keep being told our firm is healthy financially and better suited to weather the storm than others, yet we just got a cut that’s at the very top end of what other firms are doing. There is no insight into how they will compensate us for that, but we already know the Troutman bonus structure is already a total joke, so I’m not expecting that the right thing will be done then either and I’ll likely be making a move. Oh, and we are still merging with Pepper Hamilton in July 1…

TL;DR: everyone is pissed and management needs to take a course on how to deliver bad news to people.

Everyone is livid.

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).

My latest mental exercise is what I call the Five-Second Rule. The Five-Second Rule is that I only want people working for me if they would pass the following test, which I call the Five-Second Test because I am not especially creative today:

(1) A wizard, angel, genie, dragon, or other magical creature that is both credibly capable of granting wishes on a whim and has a reputation for capriciousness, walks into the room the subject is in.

(2) The magical creature offers the subject a choice between two options:

(a) At the subject’s request, the magical creature snaps his/her/its fingers, in which case there is a 1 in 1,000 chance that the subject will become one of the 10 best people of their generation at whatever they wish. Lawyer, baseball player, rock star, scientist, whatever they like. The other 999 out of 1,000 cases, the subject will instantaneously and painlessly die.

(b) The magical creature doesn’t snap any fingers, the deal is off the table, and the magical creature will not return.

(3) To pass the test, the subject must request that the magical creature’s fingers snap within five seconds or less after the creature finishes explaining the terms of the choice.

This is, importantly, not a test of one’s work ethic, dedication, or even whether the person likes being a lawyer at all. It’s instead a test of complacency, status quo bias, risk tolerance, and the ability to make important decisions quickly.

I’m still figuring out a way to work this into job interviews, as I figure if I ask people outright, they’ll just tell me what I want to hear. So, I need some way to simulate it, but realistically I’d probably need at least a smoke machine and some very elaborate costumes, and if nothing else, this would never play over Zoom.

Why The Five-Second Rule Is An Important Test

I’d be willing to be flexible here in some circumstances — as people get older, they tend to lose their edge for various reasons, plus the cost-benefit structure of the magical creature’s deal shifts — but attorneys in the first few years of practice really have no excuse. And it’s a great test because it hits four separate character traits that are important in order to be a good litigator.

First, the Five-Second Rule most directly tests complacency. No one wants lawyers — or anyone else — who are satisfied with mediocrity. As always in life, you have to go big or go home. You goals need to be total victory.

Second, it tests status quo bias. The expected value of asking the magical creature to snap his, her, or its fingers over not snapping them is objectively higher. Really, it’s all upside from the subject’s point of view because if they lose, they’ll be dead and will never know. But the test is set up so that the lower expected value position is an easy default to fall back on. Part of the magical creature’s presence in the test is to sell the credibility of the offer, but it’s also to shock the subject out of their comfort zone. Someone with an overly strong status quo bias will instinctively retreat to the safety of the default position, failing the test.

Third, the Five-Second Rule tests risk tolerance. Someone who is risk-averse will instinctively overweight the value of the the safe choice of no finger snapping, instead of correctly weighting the risk of each. Such people also will likely underweigh the cost of the years, even lifetime, of regret if they turn down the offer.

Fourth, and perhaps most importantly, the Five-Second Rule tests the subject’s ability to make decisions quickly. Five seconds is recognized by multiple other scientific rules as the time in which the human brain effectively makes quick decisions unhindered by further analysis. This also dovetails with Dan Kahneman’s System 1 versus System 2 thinking. And quick decision making is, of course, a crucial skill for litigators.

Applying The Five-Second Rule To Your Practice

Another great thing about the Five-Second Rule is that it’s easy to apply to your own practice. While a practical test is especially difficult in these times, you probably know your staff well enough to make an educated guess at how they would respond if put to the test. If you think they’d fail — or if you think you’d fail — take this opportunity to make some adjustments.

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Matthew W. Schmidt has represented and counseled clients at all stages of litigation and in numerous matters including insider trading, fiduciary duty, antitrust law, and civil RICO. He is a partner at the trial and investigations law firm Balestriere Fariello in New York, where he and his colleagues represent domestic and international clients in litigation, arbitration, appeals, and investigations. You can reach him by email at matthew.w.schmidt@balestrierefariello.com.

These are challenging times for the legal profession, especially Biglaw firms and lawyers. But in-house counsel are not immune from the downturn, with many lawyers at major companies losing their jobs as well.

Contrary to the view of some Biglaw lawyers, in-house life is not some sort of professional paradise. In-house lawyers face many of the same challenges that their counterparts at law firms face, including layoffs.

That said, there will always be many Biglaw attorneys who wish to jump to the client side. Even during the current crisis, there are some in-house jobs out there. And once the current tough times are behind us, there will be even more such opportunities.

How can you get an in-house legal job? Here are three tips.

1. Network, network, network.

Yes, this advice is clichéd, but that’s because it’s true. Many of the best in-house positions get filled through networking. Sure, a Fortune 100 company looking for a general counsel might hire a headhunting firm to fill the role (and here at Lateral Link, we are happy to help companies find in-house talent). But a startup or emerging company looking for its first GC — a job that many Biglaw lawyers view as their “dream job” — will often fill it with someone known to a founder or someone in the founder’s network.

As longtime ATL columnist and in-house lawyer Mark Herrmann correctly points out, networking is no guarantee that you’ll find that job, but it certainly increases the chances. So even if you’re fairly happy at your current law firm, you should let your network know that you would be open to the right in-house opportunity if it came along. If your network doesn’t know, then they might not mention it to you when they see a great in-house job, thinking (erroneously) that you are firmly planted at your firm.

And when thinking about who’s in your network for this purpose, don’t draw the circle too tightly, e.g., by limiting it to your closest friends. Research shows that people frequently find new jobs through their weak ties as opposed to their strong ones. And of course you should try to expand your universe of connections — through networking.

2. Check the major job sites on a regular basis.

Whenever I meet an in-house lawyer, I ask her how she landed her job. And despite the importance of networking, as just discussed, you’d be surprised at how many in-house attorneys found their positions through responding to online postings — on sites including but not limited to LinkedIn, the Association of Corporate Counsel (ACC) jobs board, GoInhouse, Monster, and Indeed.

Not every in-house legal job gets posted on such sites, but the ones that do get posted are (for the most part) real jobs. When I helped a friend of mine, the GC of a small but publicly traded pharma company, find a deputy GC last year, I posted the position on both LinkedIn and ACC.

When you’re slammed at work because of a deal or trial, it can be difficult to remember to check these sites. But the problem is that sometimes the best in-house opportunities are advertised online only for a limited time. Set a calendar reminder for yourself to check for online in-house jobs at a certain time each week or every other week and try to stick to it, even if you’re extremely busy.

3. Situate yourself at an in-house “feeder firm.”

When it comes to sending their lawyers into in-house jobs, not all firms are created equal. And perhaps surprisingly, it’s not the most prestigious firms that are the best at generating in-house exit options.

In fact, many of these firms are rather poor at preparing their lawyers for the in-house jump. These firms often engage in highly specialized work, while many corporations want their lawyers to have some breadth in their knowledge and skill sets. Also, the top firms often focus on “bet the company” deals or cases — but companies are often looking for lawyers who have familiarity with the more typical events in a company’s life cycle.

So if you’re at a firm that doesn’t seem to send many lawyers into in-house positions, consider moving to a firm that does — i.e., an in-house “feeder firm.” One of the most common ways for a Biglaw lawyer to make the transition to in-house life is to join a client, and in-house feeder firms are those with the best track records of sending their lawyers to clients (or to similar in-house opportunities). A knowledgeable legal recruiter can help you identify — and get hired by — an in-house feeder firm, so you can eventually move into the in-house job of your dreams.

If you’re already in-house and looking to add to your legal department, whether on a permanent or temporary basis — in times of tight budgets, hiring temporary lawyers on a contract basis can be especially attractive — recruiters can help as well. For assistance with your in-house hiring needs, please reach out to Monique Burt Williams, who recently assumed the role of CEO at Cadence Counsel, the in-house division of Lateral Link. She would be delighted to help you find top talent, especially candidates who would enhance the diversity of your organization to reflect a global economy, and she looks forward to hearing from you.

Ed. note: This is the latest installment in a series of posts from Lateral Link’s team of expert contributors. David Lat is a managing director in the New York office, where he focuses on placing top associates, partners and partner groups into preeminent law firms around the country.

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

Things are changing in a big way over at Irell & Manella. According to an in-depth report at Law.com looking at the future of the firm, Irell is pivoting to focus on its intellectual property litigation practice, with most of the rainmaking falling on partner Morgan Chu and eschewing their transactional practice.

It seems the firm’s back was again the proverbial wall. Since 2014, the firm has lost 48 percent of its attorneys, down to just 82 lawyers from 159. That change has coincided with plummeting gross revenue from $247.5 million in 2014 to just $151.6 million last year. So yeah, some sort of change is needed.

“The writing was on the wall,” as one former Irell partner put it, when Jonathan Kagan, a member of Irell’s executive committee and chair of its hiring committee, wrote in an internal memo in early February that the firm would now focus solely on high-end IP and commercial litigation, abandoning most of its transactional practices.

It wasn’t an entirely deliberate pivot, as interviews with former partners, legal consultants and Kagan himself indicate. These sources describe a firm that has been struggling for years to define itself and trying to rebuild after a devastating spinoff that has led some partners to explore potential merger opportunities.

The struggle to define what is next for the firm is real. Kagan notes:

“For years we’ve been trying to evaluate what the options are for us,” he says. “There is a difference between exploring options and making actual decisions.”

He adds, “We’ve been gradually moving in this direction, then people figured out what we were doing.”

This isn’t the first time in fairly recent memory that the firm has had to switch up its strategic vision. In 2015, the firm lost ~1/6th of its attorneys over a two-day period when the litigation boutique of Hueston Hennigan was born.

The spinoff put Irell at a crossroads of sorts, with three paths emerging: It could have grown its transactional and commodity litigation practices, merged with another firm or retrenched. At the time, [former Irell executive committee member David Siegel] hinted to The American Lawyer that there was disagreement among the firm’s partners about the right approach: “Some of us would prefer to focus now on growing but doing it in a careful way,” he said. “Most of us—but not all of us—have that mindset.”

Since then, the firm’s strategy toward lateral partners is described by Law.com as “piecemeal” and that’s resulted in a partnership revolving door, with whatever attempts the firm made to build its transactional practice being thwarted. There’s been downward pressure on the firm’s revenue (though their profitability has remained stable at around 65 percent) and so, a change in direction and focus is needed.

Firm leaders remain optimistic about the new and improved focus, particularly in light of COVID-19:

The recent changes may leave the firm in a better position to weather the economic storm caused by the COVID-19 pandemic, sources say. As of early May, Irell had avoided cutting pay or staff like many larger, higher-grossing law firms have done. The pandemic has affected some of Irell’s cases—Kagan says one of his trials was postponed—but every attorney at the firm is busy, which might not have been the case had Irell kept its transactional practice, Kagan says.

“In light of the coronavirus and the dislocation of the economy, Irell might have the last laugh on this whole thing,” one former partner says.

Best of luck to the firm as they try to weather the latest changes.

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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).

We’ve talked for many years now about the overreach of the GDPR and how its concepts of “data protection” often conflict with both concepts of free expression and very common every day activities. The latest example, first highlighted by Neil Brown, is that a Dutch court has said that a grandmother must delete photos of her grandkids that she posted to Facebook and Pinterest, because it violates the GDPR. There is, obviously, a bit more to the case, and it involves a family dispute involving the parents and the grandmother, but, still, the end result should raise all sorts of questions.

And while many EU data protections folks are saying this was to be expected based on earlier EU rulings regarding the GDPR, it doesn’t make the result any less ridiculous. As the BBC summarizes:

The case went to court after the woman refused to delete photographs of her grandchildren which she had posted on social media.

The mother of the children had asked several times for the pictures to be deleted.

The GDPR does not apply to the “purely personal” or “household” processing of data.

However, that exemption did not apply because posting photographs on social media made them available to a wider audience, the ruling said.

There are a few interesting elements in the actual ruling. First, the court notes that since no one made a copyright claim, it doesn’t sound like the parents hold the copyright on the images — which is notable only in that the court seems to think it’s natural to use copyright to censor a grandma proudly posting photos of her grandkids.

But on the GDPR question, it notes that the lack of evidence regarding the privacy settings the grandmother used leads the court to assume they were posted publicly:

The General Data Protection Regulation (hereinafter: AVG) protects the fundamental rights and freedoms of natural persons and in particular their right to the protection of personal data. However, this Regulation does not apply to the processing of personal data by a natural person in the exercise of a purely personal or household activity. Although it cannot be excluded that the placing of a photo on a personal Facebook page falls under a purely personal or household activity, in the preliminary opinion of the Court in preliminary relief proceedings, it has not been sufficiently established how [defendant] set up or protected her Facebook account or her Pinterst account. It is also unclear whether the photographs can be found through a search engine such as Google. In addition, with Facebook it cannot be ruled out that placed photos may be distributed and may end up in the hands of third parties. In view of these circumstances it has not appeared in the scope of these preliminary relief proceedings that there is a purely personal or domestic activity of [defendant]. This means that the provisions of the General Data Protection Act (AVG) and the General Data Protection Implementation Act (hereinafter: UAVG) apply to the present dispute.

And, then you combine that with the fact that children are involved, and the court says, yup, GDPR requires takedown:

The UAVG stipulates that the permission of their legal representative(s) is required for the posting of photographs of minors who have not yet reached the age of 16. It has been established that the minor children of [plaintiff] are under the age of 16 and that [plaintiff], as legal representative, has not given permission to [defendant] to post photographs of her children on social media. In the case of [child 1], his father did not give [defendant] permission either. In view of this the Court in preliminary relief proceedings will order [defendant] to remove the photo of [child 1] on Facebook and the photo of [plaintiff] and her children on Pinterest. In addition, [defendant] will be prohibited from posting pictures of the minor children of [plaintiff] on social media without permission (as referred to in the AVG and UAVG). The emotional importance of [defendant] to be allowed to place photographs on social media cannot lead to a different judgment in this respect.

Neil Brown, who highlighted this situation in the first place, has pondered that even if grandparents posting pictures of their grandkids is normal behavior, that doesn’t mean it’s good and it removes “autonomy” over our own data. I have a ton of respect for Brown, but this is a very European view that includes an assumption that we should have “autonomy” over anything about ourselves — which, when judged against the harsh light of reality, seems incredibly silly.

Yes, there are cases where people will have things posted online about themselves that they’d rather are not there. And I understand that this is an even more fraught area when it comes to children. But there are very real free expression concerns as well, and the ability to use this as a tool of blatant censorship seems way too likely.

Court Tells Grandma To Delete Photos Of Grandkids On Facebook For Violating The GDPR

More Law-Related Stories From Techdirt:

Let’s Talk About ‘Neutrality’ — And How Math Works
After FBI Successfully Breaks Into IPhones, Bill Barr Says It’s Time For Legislated Encryption Backdoors
More Than A Game: The COVID-19 Pandemic Has Turned Esports Into An Economy Of Its Own

First you hate ’em, then you get used to ’em. After long enough, you get so you depend on ’em. That’s “institutionalized.” — “Red” Redding

Former Donald Trump lawyer Michael Cohen entered prison in May 2019 to begin his three-year sentence for tax evasion, false statements to a bank, and campaign finance violations. At the time he told reporters that “I hope that when I rejoin my family and friends that the country will be in a place without xenophobia, injustice and lies at the helm of our country.” So, that didn’t work out for him.

Instead, Cohen, like so many that society has locked away, has emerged prematurely into a world that passed him by while he’s been on the inside. Since he’s become an institutional man, the streets of his New York City home are now largely empty, those high-priced restaurants where Cohen used to make power deals have all seemingly shuttered, and people have embraced a baffling fashion trend of growing out their hair and donning surgical masks while out on the town. This just isn’t the world he remembers.

Cohen will serve out the rest of his sentence in his family’s apartment. We wish him luck transitioning to life on the outside.

Seriously though, prisons are facing widespread outbreaks of COVID-19 because of the system and a serious purging of the inmate rolls is warranted. Back in March, I criticized attorneys for talking about the threat of COVID in prisons, not because it wasn’t a serious threat, but because prison conditions are already abysmal and deserve serious reform on their own merits and shouldn’t need a hot-button issue to spark changes. At least the Bureau of Prisons seems to be getting the memo. And while the federal system is broken, it’s a dream compared to the states. Exactly how responsibly are all those private prisons taking this? And where are the re-entry services for people coming out? They seem to be largely unavailable too.

And while the BOP should be commended for letting people out under these conditions, just watch as they inevitably release all the white-collar criminals in better-equipped prisons before worrying about the random non-violent marijuana possession guy. If for no other reason than people like Cohen, and Paul Manafort before him, have the crafty lawyers still fighting for them to seek release. Having expert witnesses in the form of medical specialists able to argue that they face a “heightened risk” is just icing on the cake. It’s as if the usual flaws of the criminal justice system are playing out in reverse: affluent white people get lighter sentences on the front end… and now they get first dibs on getting out.

It’s easy to chuckle at Cohen’s brief stay in prison, but it highlights the more important problem of dealing with the sorry state of the incarceration system that puts people at risk.

Former Trump lawyer Michael Cohen released from prison into home confinement due to coronavirus concern [CNBC]

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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.

Thanks to COVID-19, no one in the legal profession seems to be immune from layoffs. To that end, if you left a law firm to go in-house because you thought the grass would be greener, the novel coronavirus is here to let you know you were very, very wrong.

You may recall that Technologies Inc. has been on a layoff spree, eliminating thousands of jobs — about 6,700, to be exact — over the course of just a few weeks. Among those who lost their jobs were members of the company’s in-house legal team. According to Corporate Counsel, earlier this week, at least people who worked in the legal department received their ride-hailing walking papers.

“I’m deeply sorry we’re facing these unprecedented circumstances that have required us to make some very hard, very tough decisions,” Chief Legal Officer Tony West said in an email to his team Monday. “Yet those decisions don’t diminish the important contributions our former teammates have made to building Uber, and I know the talent, skill, grit and optimism that made them valued members of Team CLO are qualities that will always be in demand—global pandemic or not.”

Not all members of Uber’s legal team were thrilled with West’s words. “I received a generic email and was only given a quick 15 min conversation without a chance to ask questions,” former product counsel Karen Kopel wrote on LinkedIn about the way she was let go. “My manager did not reach out to me to say goodbye or thank me. No reasoning was offered. I feel like someone gut punched me.”

Best of luck to those who lost their livelihoods during a pandemic.

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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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.