Category: News Feeds

School’s out, probably for the spring and summer, possibly forever. B-schools are trying (and failing) to justify their existence in absence of their real raison d’être, networking through the medium of alcohol. The SAT’s cancelled and Advanced Placement exams have been turned into online tests of how well students can cheat in 45 minutes. University exams have either been called off or turned into opportunities for academic dishonesty.

Given all of the above, and given what good boys and girls they’ve been, and despite their eagerness to totally crush the now very-easily-crushable Federal Reserve stress tests, America’s biggest banks are wondering if they can’t just get practical credit for this year’s exams.

Twenty-first century politics has been a tug-of-war between “We’re all in this together” and “You’re on your own, Jack.” It’s no secret which side of that rope Donald Trump has been pulling for most of his presidency.

The only age group John McCain won in the 2008 election was the over-65 crowd (to be fair, a lot of those who were over 65 in 2008 are no longer with us). In 2012, apparently outraged that Obamacare was helping get healthcare to people who weren’t old enough to qualify for Medicare yet, a majority of those older than 65 voted for Mitt Romney (he won that age group by 12 points). Among validated voters in the 2016 election, even though Clinton won the most votes overall by three points, the 65-plus crowd preferred Trump over Clinton, 53 percent to 44 percent.

As of early 2020, there was majority support for “Medicare for All.” Guess which age group had the lowest level of support for Medicare for All though? Among those 65 and older (who already have regular Medicare for themselves, of course), only 35 percent supported Medicare for All — 55 percent opposed it.

A graph with level of support for cancelling student loan debt on the y-axis and with age on the x-axis is a quarter pipe skateboard ramp. It’s worth remembering that today a student comes out of law school with something like $123,511 in student loan debt, but law school tuition in the mid-1980s was about $2,000 a semester and could be largely paid off in real time with a decent part-time job.

A 2019 NPR/PBS NewsHour/Marist Poll found overwhelming majorities of Millennials and Gen-Xers thought “a Green New Deal to address climate change by investing government money in green jobs and energy efficient infrastructure” was a good idea. Substantially fewer baby boomers and their surviving elders supported the idea, although more people in every age group supported a Green New Deal than opposed it. Good job on that one anyway, most old people.

You get the idea. While there are always substantial minorities of older Americans who support progressive policies that, versus the status quo, would disproportionately benefit younger Americans, the collective level of support among older Americans is almost always the lowest of any age group for any policy that would help younger people more than themselves.

Meanwhile, the health effects of coronavirus have been borne extremely disproportionately by older Americans. Last week, the Centers for Disease Control and Prevention released a report looking at over 4,200 US cases reported from February 12 to March 16. Approximately 80 percent of COVID-19 deaths occurred in people 65 and older. Not a single child died during that period. More than half of the coronavirus patients who wound up in intensive care units were 65 or older. Not one coronavirus sufferer under the age of 19 was admitted to an intensive care unit from February 12 to March 16. The report mirrors findings in other countries that have been dealing with coronavirus longer than the United States has. Based on research on the death toll in Wuhan, China, where the virus began, the fatality rate for those with symptomatic COVID-19 appeared to be about 0.5 percent for those aged 15 to 64, but about 2.7 percent for those over 64. The chances of those younger than 15 being seriously harmed were so low that scientists estimated a fatality rate of zero for that age group.

There are plenty of examples of coronavirus felling people younger than 65, I get that it’s a real threat to everyone, please don’t write me angry emails. Still, anyone with even a rudimentary understanding of probability realizes that coronavirus is a way, way bigger threat to people 65 and older than to anyone younger, and the threat gets less serious the younger you are.

In response to this threat — almost exclusively a threat to old people — we have closed schools, shuttered bars and restaurants, utterly destroyed a good economy (to largely benefit people who are mostly retired and no longer working in it), and put a complete stop to public gatherings of any kind throughout nearly the entire country (getting together is a constitutionally safeguarded right, by the way). People like me in their mid-30s aren’t doing all this to protect ourselves. If a maybe one-percent chance of encountering my own death scared me, I probably wouldn’t ride around on a motorcycle all summer. No, we’re doing all this for our elders, especially those over the age of 65.

So, if you’re an antiprogressive older American, and you don’t die from coronavirus over the next year, maybe recognize the sacrifices the rest of us are making, for you, and show us some goddamn respect for a change. Consider that in the voting booth this fall too and support some policies that will actually make the earth a better place for the generations that follow you.

---

Jonathan Wolf is a litigation associate at a midsize, full-service Minnesota firm. He also teaches as an adjunct writing professor at Mitchell Hamline School of Law, has written for a wide variety of publications, and makes it both his business and his pleasure to be financially and scientifically literate. Any views he expresses are probably pure gold, but are nonetheless solely his own and should not be attributed to any organization with which he is affiliated. He wouldn’t want to share the credit anyway. He can be reached at jon_wolf@hotmail.com.

As the spring semester begins to draw to a close, with commencement almost upon us, third-year students are usually looking out to their futures in the legal profession with hope and excitement. We’d normally be compiling our annual list of the most prestigious and powerful commencement speakers. Thanks to the COVID-19 pandemic, this is no normal year, and nothing is proceeding as usual.

With the health and safety of students and families at hand, law school commencements are now being postponed, leading to extreme frustration and disappointment for those who have worked so hard for the past three (or four) years to reach this achievement. We’re so sorry that it had to happen this way.

While some of the nation’s most prestigious law schools are opting for virtual commencement exercises (like Harvard) and delayed celebrations (like Georgetown), others’ plans are unclear at this time due to woefully out-of-date websites (like Yale).

What is your law school planning to do for its 2020 commencement? Please email us or text us (646-820-8477) and let us know.

---

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.

It looks like staff layoffs aren’t the only way law firms are dealing with the financial ramifications of the global pandemic. U.K.-based law firm Gateley, which is a publicly traded entity, announced that they would not be giving its shareholders their interim dividend due to the economic fallout from the coronavirus.

As reported by Law.com, the move is designed to maximize liquidity:

A dividend of 2.9 pence per share was due to shareholders on March 31. However, in a protective move, the firm announced via the London Stock Exchange on Tuesday that it was now “prudent” to cancel the payout in order to “maximize the group’s short-term liquidity.”

It also said that it would “suspend financial guidance going forward until both the impact and duration of the COVID-19 pandemic becomes clearer.”

Michael Ward, the firm’s CEO, said the firm’s financials are poised to weather the financial turbulence:

“As a board, we consider these measures to be in the best interests of all our stakeholders. Gateley is a resilient and well-balanced business and our economic and geographically diversified business model is well-placed to withstand difficult economic conditions.”

And despite the firm’s stock prices taking a COVID-19 related hit — 20+ percent of the firm’s value was depleted over a two-week period — the financials seem solid. In the firm’s statement on the suspension of dividend payments they also touted their low levels of debt and “a solid first half performance.” This past year saw Gateley’s revenue climb an impressive 19 percent, breaking the 100 million mark — revenue was £102 million — for the first time.

---

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).

Ed. note: Litigation finance is transforming the fields of both law and finance. To help our readers gain a better understanding of what litigation finance entails, we’ve partnered with Lake Whillans to present a new series so you can better understand how litigation funding works, its pros and cons, and its past, present, and future.

In our first article in this series, we explained what litigation financing is and the various structures or “flavors” that are typical in the market.   But why are companies using it? Is it only cash-strapped companies that look to litigation funding? While filling the budget gap is certainly one benefit, there are multiple reasons why litigation finance is gaining in popularity with corporate general counsels’ offices

Risk Mitigation 

First, using outside financing allows companies to mitigate the risk from litigation. It’s a fact of life for large companies that they will eventually have to sue somebody. But even when the claim has merit and it’s important to protect the business, it’s not news that the C-suite will not cheer the budget drain, even if it’s a healthy company.  Further, litigation is inherently unpredictable; there may be unpleasant surprises during discovery, and in the end, the case is in the hands of a judge or jury. Corporate officers don’t like that risk, or the unpredictable costs that come along with litigation, which make budgeting difficult.

Litigation finance solves those problems. In the typical litigation finance deal, the plaintiff in a complex commercial lawsuit (or portfolio of claims)  with a high value — Lake Whillans looks for cases or portfolios with damages in excess of $20 million — receives capital in exchange for allowing the financier to share in the proceeds of the litigation.   The capital can be used to pay the legal fees and expenses of the litigation, and in some instances, used by the company for other corporate purposes. Lake Whillans typically supplies $1 million to $15 million for single case financing. The financing is non-recourse, meaning that the company has no obligation to the funder if the claim isn’t successful or doesn’t yield a sufficient amount.

The Benefits of Off-Balance Sheet Financing 

Litigation financing has clear advantages for the plaintiff company, starting with the fact that it enables the company to take the litigation cost off its balance sheet. At a publicly traded company, litigation costs are reported on the company’s statement of profits and losses as an expense against profits. Any eventual financial recovery from the litigation would be reported too—but it would be reported as an “extraordinary event” rather than profit, and that could be years down the road. Thus, litigation drags down the company’s profitability without a corresponding benefit at the end. By financing the litigation, however, a corporate law department can cover its legal costs using the litigation funder’s capital and take the litigation expense off its balance sheet entirely. That means the statement of profits and losses more accurately reflects the company’s true profitability.  For companies focused on valuation, for example if the company is anticipating a capital raise, acquisition, IPO, or other strategic transaction where its valuation is important, keeping costs off-balance sheet has huge benefits. Especially when valuation is calculated by applying an earnings multiple, every dollar not subtracted as legal costs means multiple dollars of value in a valuation.

Optimal Pursuit of the Claims

Litigation finance can enable companies to make optimal decisions with respect to litigation.  To start, a company can choose the best lawyers suited for its case, rather than ones that fit within a constrained budget or are willing to work on a contingency.  Further, with the department’s legal costs covered, it no longer has to weigh its legal strategy against the costs created by a hostile opponent, such as extended discovery or aggressive pretrial motions.  Every decision can be made according to the best interests of the litigation, even if that means spending that might have otherwise pushed the legal budget into the red. A company can avoid being forced to accept an under-value settlement offer because the legal spend is ballooning at an inopportune time for the company and/or the litigation is dragging on longer than expected.  And if the case unexpectedly ends with a loss, the department loses no money, because the legal fees were already paid through litigation financing.

Raising Capital

Furthermore, because litigation finance raises capital, it can allow the company to pursue priorities that it might otherwise not be able to afford. That starts with the litigation itself. Sometimes, a lawsuit may be meritorious but too expensive to pursue, particularly for a smaller company without a lot of excess capital.  Or, for some larger companies, where legal spend is apportioned or siloed among different business entities, one business line’s budget may be insufficient to fund the litigation. Litigation finance can fill that gap, freeing companies to vindicate their rights without stretching themselves thin financially.

Even without that issue, extra capital (either as saved litigation expense or infused capital) can fund an expansion of a business, cover operating expenses or finance any other company priorities that might otherwise be out of reach. By monetizing its litigation asset, companies can unlock the value of that asset at a time that fits their needs.

An Experienced Ally

Finally, litigation finance can provide more expertise to bear on litigation decisions, validating a corporate legal department’s decision to pursue claims. Because litigation finance firms have every incentive to value a claim properly and accurately predict its success, you can be assured that we will thoroughly and critically analyze your claim’s chances as well as collection and enforcement risks. Lake Whillans employs a team of lawyers experienced with the kinds of claims we finance, so that opinion will be highly informed, providing an objective opinion before the company makes a decision to pursue litigation, which may have economic, reputational, and opportunity cost risks.  The funder’s imprimatur on a case may help a GC or other advocate of the litigation overcome internal skepticism and disputes within the organization about the worthwhileness of pursuing the claims. An experienced funder can also add value in selecting counsel, setting and negotiating realistic budgets with law firms, and can help prepare the attorneys litigating the case by asking the hard questions during the diligence process, and can be a knowledgeable sounding board for strategic and settlement decisions. (Lake Whillans does not control settlement or strategy of the cases it funds, but will offer its input when asked). By partnering with a litigation finance company like Lake Whillans, the corporate legal department is recruiting an experienced ally that shares the same incentive to maximize the value of the claims, which is ultimately the goal of any litigation.

To learn more about how litigation finance could help your company, please contact us at drucker@lakewhillans.com.

You probably already know how tough it is to keep your practice going when people are hunkering down in their homes. It’s why companies are out here offering $1M in aid to keep clients covered in these times. But every attorney’s experience practicing in the age of COVID will be a little bit different.

Bloomberg Law put together a short video interviewing attorneys coming at this from a lot of different angles and it’s a nice slice of life for the profession.

More than ever, we need to be there for our colleague’s friends and loved ones. There is a huge difference between solitude by choice and being forced into it. The latter can result in intense feelings of loneliness that can exacerbate underlying mental health issues in a profession already beset with mental health issues higher than the national norms. Being an active participant in a compassionate community is more important than it ever has been in most of our lifetimes. I am particularly concerned about those who may consider suicide. I’ve already received several suicide-related social media messages. I’ve struggled with my own feelings of despair and hopelessness. I get it.

It seems that at least once a month I read about a lawyer dying by suicide. Tragic, but unfortunately, not surprising in a profession that is third in terms of suicide (out of professions adjusted by age). I  may see it on Facebook, Twitter, or a news article. It is rare that suicide is specifically mentioned, but there may a request to in lieu of flowers for a donation to a mental health organization or and there will be a commentary about the person’s struggle with depression, substances, or both.

We just can’t bring ourselves to say the word. We make the donation. Grieve for our friends or colleagues. Maybe we tweet out or Facebook post a suicide crisis line. We talk about reaching out. Then we lose another. And another.

Of course, whether it’s depression, addiction, or any other mental health/environmental variable that plays into these issues, the hard reality is that we can love, monitor, and even intervene if everything comes together at the right moment as it, fortunately, did when my friend and brothers saved my life. We, however, can’t be there every moment, and those tragic and life-changing/ending thoughts can come quickly, without warning.

What to do? Not only about our profession but against the backdrop of overall suicide rates that have risen twenty-eight percent over the past twenty years. According to the study, middle-aged adults are at the highest risk.

Unfortunately, I don’t have a magic cure for what ails the human condition, and I don’t see that solution, if there is one, happening in my lifetime. I, however, do believe that we, as a profession and society, can do little things that can have a huge impact. Whether it’s a struggle with depression, anxiety, addiction, or the next crisis we will face, supporting our baby boomer legal colleagues for whom aging has taken a toll on mental acuity must begin at the most basic human level. We can look within ourselves and pledge to pay attention and open ourselves up to being part of a compassionate community.  To not mind our own business.

If you need to talk, email me, and we will set up a Zoom chat. I am here for you.

---

Brian Cuban (@bcuban) is The Addicted Lawyer. Brian is the author of the Amazon best-selling book, The Addicted Lawyer: Tales Of The Bar, Booze, Blow & Redemption (affiliate link). A graduate of the University of Pittsburgh School of Law, he somehow made it through as an alcoholic then added cocaine to his résumé as a practicing attorney. He went into recovery April 8, 2007. He left the practice of law and now writes and speaks on recovery topics, not only for the legal profession, but on recovery in general. He can be reached at brian@addictedlawyer.com.

There will be no Olympics this year. No more opera or orchestral performances. No March Madness. No Eurovision Song Contest, although that’s probably for the best. No St. Patrick’s Day parades. No South by or Glastonbury (and no Coachella until October). No Google I/O or E3. No Sohn or really any other conferences, at least for now. And now, for the second time in three years, albeit for somewhat different reasons (albeit not entirely, given the Donald Trump factor in both cases), no SALT.

“The well being of the SALT community is our first priority, and after consulting with numerous experts, we determined cancellation is the best course of action,” spokeswoman Jami Schlicher said in a statement Monday. The event, in its 11th year, was to be held May 19-21.

It is hard to overstate how significantly the ongoing COVID-19 pandemic has affected the legal industry. Most courts are all but closed, and many states are suspending jury trials for both civil and criminal matters. In addition, numerous law offices are shuttered as attorneys and staffers are forced to get by from working at home. Firms of all sizes are being impacted by the COVID-19 pandemic, and many small firms are experiencing a number of unique consequences from the unfolding crises.

Impact Of Court Closures

As many people within the legal industry are already aware, most courts have suspended in-person appearances for the foreseeable future. The last court appearance I attended in person was on March 13th, and the courthouse at that time was so deserted, it looked like The Shining. Although many courts are still deciding motions on submission, and are holding hearings, conferences, and the like through remote means, court appearances are not happening in all but emergent matters.

Most big firms can get by without court appearances. Indeed, many Biglaw firms and other larger shops do not rely on court appearances for significant billable hours and rather churn their bills mostly on memos, letters, and briefs that need to be written even if physical court appearances are suspended. However, a number of smaller firms rely on volume in order to make money, and need physical court appearances, and travel time to and from those appearances, for a huge chunk of their billable work.

When I was a “street lawyer,” I regularly had three or four court appearances a week, and a deposition every few weeks. Since most of my 44 cases were not too complicated, the vast majority of the hours I billed on these matters were related to court appearances. The average court appearance would take two or three hours, and usually I could bill at least half of my travel time too, so I ended up billing a substantial sum for each appearance. In addition, there are numerous per diem attorneys that almost exclusively rely on court appearances to make a living. Without physical court appearances, many small firms and per diems are only going to bill a fraction of the hours they billed during normal operations, and such attorneys are going to be hardest hit by the COVID-19 pandemic.

Increases In Certain Types Of Work

Although many firms are experiencing business interruptions and other negative effects from the COVID-19 crisis, ironically, one type of legal work has seen an uptick of activity in recent weeks. Many businesses and people hoped to hold events over the next several months, whether it be conferences, weddings, or other types of gatherings. Because of crowd restrictions that have been put into place in many jurisdictions, and other impracticalities, numerous parties are attempting to terminate a variety of event contracts.

Most landlords and licensors have been relatively agreeable to cancelling events or postponing them free of charge to a point in the summer or fall. However, some of these parties are less willing to cancel agreements to hold such events. In addition, even if parties are willing to cancel events, there are oftentimes disagreements about how much deposit money should be refunded because of the COVID-19 pandemic. My firm and other small shops have seen an uptick in inquiries about event cancellations, and this work can somewhat help blunt the immediate financial impact of the COVID-19 pandemic.

Business Development

The COVID-19 pandemic is also having a substantial impact on the way that small law firms conduct business development. Under normal circumstances, small firm lawyers will typically take business contacts to coffee, lunch, or dinner in order to talk about the potential client’s legal needs and how the firm can help. Now that most restaurants, coffee shops, and other establishments are closed because of the COVID-19 pandemic, face-to-face meetings to discuss new business have become extremely difficult to arrange. Of course, this development is also impacting larger firms, but bigger shops are more likely to have a few large, institutional clients who may go through a traditional request for proposals and pitch process. However, smaller firms that often rely on a variety of clients in order to stay busy are facing a number of challenges in developing new business.

Better Ability To Adapt

It should be noted that on a certain level, smaller law firms may be able to better adapt to the COVID-19 pandemic than many Biglaw shops. For instance, numerous solo practitioners and small firm lawyers already work from home to save on real estate costs and because of convenience. As a result, the home confinements required by the COVID-19 pandemic may not create as much of a disruption for small firms as many Biglaw shops currently face. Furthermore, smaller law firms often have fewer redundant employees and are financially leaner than many larger shops. This may allow smaller firms to better deal with harsher economic realities that everyone may soon face as a result of the COVID-19 pandemic.

In any case, the COVID-19 pandemic is affecting firms of all sizes, and each shop faces its own challenges based on its practice area, size, and a number of other factors. Solo practitioners and small firm lawyers are facing unique difficulties due to the pandemic. However, because smaller firms are often more flexible in their operations, these shops may be better able to weather the storm caused by the COVID-19 pandemic.

---

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.