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In this week’s edition of The Jabot podcast, I talk with Kori S. Carew, Esq., Seyfarth Shaw’s chief inclusion and diversity officer and leader of The Belonging Project. The initiative is a nationwide collaborative effort to proactively combat the impact of the COVID-19 pandemic on diversity in the legal profession.

Kori and I chat about why the initiative is necessary during COVID-19, how the global pandemic overlaps with diversity issues, the goals of the initiative, why diversity in Biglaw is so important, and why “we must double-down on our efforts during this challenging time.”

The Jabot podcast is an offshoot of the Above the Law brand focused on the challenges women, people of color, LGBTQIA, and other diverse populations face in the legal industry. Our name comes from none other than the Notorious Ruth Bader Ginsburg and the jabot (decorative collar) she wears when delivering dissents from the bench. It’s a reminder that even when we aren’t winning, we’re still a powerful force to be reckoned with.

Happy listening!

This year may have begun solidly, but we are now in an unanticipated recession and the landscape looks very different for law firms in this second quarter and beyond. We anticipate that first-half results will be challenging. Managing cash flow—from recording time to collecting on inventory to managing expenses—will be key. And as we hear from many law firms, so will staying close to clients and finding ways to bring value to them in these unprecedented and troubling times.

— Gretta Rusanow, managing director and head of advisory services within Citi Private Bank’s Law Firm Group, noting that while Biglaw had a decent first quarter, many challenges lie ahead, with median projections of 15 percent declines in second-quarter demand and revenue, both of which are driven by an estimated 11 percent lengthening of the collection cycle.

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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.

This is an article we published in 2009, at the bottom of the last hiring market for attorneys. It seems apropos to update it now as some of the market dynamics are present during this time of economic duress during the Covid-19 crisis. As a historical note, 2009 turned out to be an outstanding year from the lateral partner recruitment perspective, and associate recruitment also returned with a vengeance in China as the Chinese government flooded the markets with liquidity. Today, we have the Federal Reserve and Congress quickly flooding the markets in the US with liquidity, so this may be an altogether different ride.

Partner recruiting season is never closed, and there’s normally no restriction on hiring capacity. [Back in 2009, we said there was “no season and no bag limit” in partner recruiting, but it occurs to us that this might be too folksy for these times.] Nevertheless, as new partner allocations (whether they be called shares, sharing ratios, points, or just cold hard currency) get set to be announced over the coming months, this is the time of year that many ultimately fruitful and plenty of fruitless discussions between law firms and potential lateral partners begin. The meat of these discussions varies little, whether in Asia, the United States, or Europe. Unfortunately, many of the partners who are looking at their options could be saved a lot of time for themselves and the firms that they are considering with some introspection. Particularly in this über-cautious economic environment, prospects for marginal players are slim. With this in mind, since many of our readers are partners and some of our associate readers ultimately will be partners, it seems that now is a particularly useful time to discuss what makes a partner a viable lateral candidate.

Every firm asks for some of the same data points which give them information about the financial picture of a lawyer’s practice. All of the relevant, basic economic factors can be determined using three critical pieces of information:  personal billable hours for each team member, working attorney collections for each, and billing and/or originating attorney collections for the partners. From these pieces of information, one can derive hourly rate, revenue per lawyer, and most other relevant raw data. But each situation is different and distilling the data to these simple figures is rarely enough. One example (not necessarily from Asia, but very possibly…) may illustrate the point. 

The candidate team was from an international law firm. The lead partner came to us with a sizable book of business and a loyal team. He was around 50 years in age. His skill set, the size of the business, his ability to move it to several of our client firms, and his well-constructed team all looked promising because it folded well into the business plan of a couple of our client firms, at least tangentially. 

The lead partner was billing and collecting about 2,000 hours per year and his team was nearer 2,300 hours a year. All this work was driving a sizable amount of business and the collections were strong in part because of a large governmental client. However, the group was cutting fee deals, such that the lead partner’s effective billable rate was $350 per hour on a rack rate of $675 per hour [Note: 11 years later, in 2020, these rates would not get a sniff at any firm in the Amlaw 100]. The effective billable rates of the team were also low. On behalf of our clients, we did a five year history on the billings and collections and we saw that the effective billable rate had dropped each year for the last five years, showing that the partner was losing pricing power in the market and competing for work more often on a commodity basis. The large governmental client was bidding out the work and driving rates downward as a result. 

Without having revealed their identities, we were able to determine that our international firm clients who might have been fits would take a pass on this group. We saved them the trouble of getting their names out into the market with many firms that would not have initiated discussions, and we ultimately placed the group at a firm that was much more suitable to their set of skills and practice structure. Naturally, the international firms we work with were not interested in a practice based on high hours and low billable rates with a trend line indicating that the practice was going to come under more pricing pressure in the future. The money collected was decent, even moderately appealing, but the view of the firms that were possible fits (not shared by all firms, I recognize) is that 2,300 billable hours from associates is not sustainable every year. And because this was a lateral move, the partners naturally wanted a raise. But at international firms, the partner’s pay expectations were not in line with what the practice was currently generating and where the trend line was pointing. 

It was clear in the end that the group in question had been “bought” by their existing firm without that firm having done enough work on what the trend might be in the practice. The pressure to have a foothold in a new market had been overpowering, and not enough diligence had been done. With the pressured rates and poor trend line on income, and the expectation by the group members of a steady increase in their own income each year, the business was looking worse and worse as the years went by. In retrospect, the likely catalyst for our discussions with the group was recognition by the group’s current firm that some painful changes needed to be made in order to prevent dilution of the overall profitability of the firm by this poorly performing group. 

I hope this example provides some insight into the thinking of some of our smarter clients and a window into some of the analysis you may need to do of your own practice before taking a step to discussing a move with a potential employer. Since the lows of 2009, we have had a decade of unparalleled law firm growth and many of our lateral partner candidates benefited with multi-year guarantees and tremendous compensation increases as a result of their timely moves in the marketplace. But in today’s marketplace, law firms are much more sophisticated in their economic analysis of lateral candidates and the components of their practice. Recognizing these foundational components within your own practice can ensure that the process of lateraling is as efficient as possible. In our representation, we also seek to drive efficiency, which largely results in saving you and our clients precious time.  

Please feel free to email us (asia at kinneyrecruiting.com hits our whole Asia team, or you can write to me at robert at kinneyrecruiting.com) or call so we can talk about some other examples of issues that arise in evaluating partners’ practices and, if appropriate, assist you confidentially with your evaluation of a practice (yours or someone else’s). If history shows us the way forward, now is the time to be evaluating your relative position within this quickly changing marketplace. 

Ed. note: This is the latest installment in a series of posts on motherhood in the legal profession, in partnership with our friends at MothersEsquire. Welcome Wendy D. Kalwaitis to our pages, with a brief introduction from Browning Coughlin, founder of MothersEsquire.

In 2013, I felt utterly alone in a firm of more than 200 attorneys. I looked around me and did not see other mothers who were associates, and didn’t have the first clue how I was supposed to simultaneously be the stridently ambitious, “work-above-all-else” attorney and the “perfect mom” at the same time, much less the devoted wife, community and school volunteer, devoted daughter, and all the other hats I wore. I looked for national guidance about motherhood and the law, and found little. It seemed to me that the societal pendulum had shifted far to the side of requiring women not to speak of motherhood and children, as if not speaking about the challenges of the motherhood penalty would make the unconscious bias towards mothers go away. Out of this moment, out of truly my own need for help, MothersEsquire was born. I started a small Facebook group with just five other moms I knew personally who were also lawyers, with the hopes that I would find some secret answers. What I found instead was friendship, joy, brilliance, humor, anger, hope, frustration, and thousands of women who often inspire me with their talents and brilliance. And that is why reading Wendy’s words fill me with immeasurable joy. At a time when we feel more disconnected than ever, MothersEsquire and other social media groups like ours provide needed connection and support. I know that I no longer feel alone, like the only person I know juggling untenable expectations. I’ve got my girls, my sisters, my mommas, my community — the moms of MothersEsquire. And they’ve got me, and my promise to always use my voice to fight for gender equity and an end to the motherhood penalty in the law.

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Few things in life come without work and determination, Law and motherhood are no exception. They both are more similar then many realize and for those who carry the title of both Attorney at Law and Mom, it can sometimes feel like you are sailing uncharted waters. The beginning quest to endeavor into either title requires willpower, stamina, determination, and emotional strength that few others truly get.  Sleepless nights, never-ending to-do lists, calendars that do not bend to your will, and duties or conduct that carry dire consequences should one not meet the minimum standards.

These roles of mother and lawyer are not interchangeable. One who takes on both roles does so with the idea that they must at all times carry both titles. What was it they told us in law school? “From now on you will always wear your lawyer hat.” And anyone who is a mom, knows that job is 24/7. The balance that both require is like a strictly choreographed dance, where one misstep can lead to the routine tumbling out of control. We live and die by our carefully crafted calendars and deadlines. Children and clients who look to us to guide and remedy all things from boo-boos on the knees to counseling them in the things that often times define their lives or businesses.

There are no breaks in motherhood and law. There is an expectation from both that we will give it our all and anything less is a breach of our fiduciary duties. This pressure can make mom attorneys feel isolated, especially from other moms and attorneys who do not carry the shared weight of the attorney’s oath juxtaposed with playdates, PTA, and parent teacher conferences.  It is a lot of pressure and few can empathize with just how demanding it can be except those who wake every morning and do the delicate dance daily.  But as I have found, social media is bridging that gap of isolation by connecting these alpha law moms where they can share, vent, question, and connect in ways I only dreamed of in the beginning of my career.

Twenty years ago when I graduated law school, I was lost in the maze of the inner workings of what was next.  How does this work and can I truly ask the questions that I am dying to know? I was single and did not have kids but I knew I wanted them.  There were rumors of what was required, which firms were good and which to stay away from as a female attorney who desired both accomplishment and motherhood. But they were just that, rumors. The very last thing on my mind was what would offer me the opportunity to also be a good mom. I naively thought that was implied and that I would just figure it out. The female partners were not approachable and there was a certain implied competition to rise above the fray and prove yourself as one of the boys. I am not proud that I played that game but I did not have female mentors to guide the decisions that best suited my future desire to have children.  At the most, what I witnessed or heard under whispered breaths was that kids derailed and postponed careers.

Social media wasn’t even a word. Back in the day, you would have networking lunches but many found it hard to pull away from the billable hours or work to meet up. There was the added issue of feeling somewhat more visible given you were face to face.  You could follow up those events with emails, but you were flying blind in that you didn’t really know if that female attorney had children and moreover if they even felt like taking the time to answer your question.  It was hard to connect without a social media profile giving out the subtle cues it does today.

But then social media platforms became our way to connect and sharing pieces of ourselves and even our daily lives became more commonplace. Likeminded people discovered each other and groups were formed. I recall stumbling upon MotherEsquire and thinking, “I finally found my people.” Women who truly understood the struggles and decisions I faced daily and an opportunity to ask “those” questions. I have seen the questions that I was dying to know 20 years ago fill in the gaps where rumors were all I knew. What was a doable billable hour as a mother of two? Was there really a chance to make partner and have more than one child? Was government work or in-house counsel that much less demanding? How do you handle breastfeeding and court? Here all of it is shared and it feels like a safe space where one can finally feel heard and understood.

It might not feel like the old stuffy networking roundtables of old where young attorneys did not dare speak and that is a good thing, I promise. My first job, I was hired straight out of law school by a female attorney with kids. She was a partner and I’m grateful she gave me a chance. But at the end of the day, she was my boss and I did not dare ask the tough questions that may paint me in an unprofessional or weak light.  In places like MotherEsquire, I see the tough questions asked and answered by women who know and who have been through this and understand what that female attorney who has kids is up against. There is power in knowledge and in numbers. Thru social media groups, I observe female attorney moms become more empowered every day to break that glass ceiling and redefine what it means to be both mom and counsel.  We were never alone, we simply needed to find “our people,” and I’m happy to report that I am enlightened a little more every day that I get to be a part of this distinct group of women who balance it all with power, grace, and humility.

Earlier: Mothers At Law: Achieving Meaningful Success In The Legal Profession

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Wendy Kalwaitis graduated from Syracuse University Whitman School of Management in New York before returning to Southern California to attend law school at Southwestern University School of Law. She has been practicing law in Southern California for 20 years, half of those which she has balanced as a mom to her three daily saviors, her children, ages, 10, 8 and 3. She has practiced in both large and boutique firms in the areas of litigation, business, employment, and worker’s compensation law. When she is not balancing all things law and motherhood, she lets her husband do the cooking while she escapes to woodworking, renovating, and moments of alone time at Target or the tool aisle at Home Depot. You can also find her irreverent musings or reach her on her Instagram @found_and_followed or email at wdm711@yahoo.com.

Oh, this is a fun one.

Massachusetts lawyer Ilya Liviz was suspended for failing to comply with a state bar misconduct investigation in April of 2019. And, according to the Supreme Judicial Court of Massachusetts, Liviz continued to render legal services, which led to his being held in contempt of court.

According to Bloomberg Law, Liviz argued he did comply with the misconduct probe because he wrote, “SILENCE. (BOOM SHAKALAKA).” Yup, that’s all.

Liviz argued that he did respond to the bar counsel’s investigation, the high court noted.

“The respondent alleged that he ‘DID COMPLY, and DID PROVIDE AN ANSWER, and my answer was provided in a form of SILENCE. (BOOM SHAKALAKA),’” the court said, adding, “He also stated that, to the extent an answer was required, he “formally den[ied], and demand[ed] a Jury Trial.”

But the court disagreed, finding Liviz made “no meaningful attempt to challenge on appeal the second single justice’s order adjudging him in contempt for failing to comply with the first single justice’s order of administrative suspension.” The court considered “the facts alleged in bar counsel’s complaint for contempt established for purposes of appeal.” And, “We need go no further.” Both the suspension and contempt order were affirmed.

And now I have this awful song stuck in my head. You’re welcomed.

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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).

Malpractice insurance is one of the most important purchases a law firm can make, but probably one of the last things it wants to think about. Insurtech company Embroker, the leading commercial insurance broker on the market, is on a mission to make the insurance buying process less dreadful, single-handedly offering law firms a better, faster, and cheaper way to get the malpractice coverage they need. We recently sat down with Matt Miller, founder and CEO of Embroker, to discuss how the company is changing the malpractice game and revolutionizing the way firms find and purchase coverage.

Why did you create Embroker?

Embroker was founded in 2015 with the mission of making it radically easier for businesses to get the right insurance coverage at a lower cost. Having served on the board of a large insurance broker, I was well aware of the crucial role insurance plays in our economy, but was taken aback by how little the industry had changed over the last 30 years, particularly for commercial insurance. 

The impetus behind the company was to build technology that would modernize and streamline the insurance value chain and, in doing so, provide buyers of insurance with a much easier, much more transparent way of getting the coverage they need.

What are the main pain points Embroker addresses?

The primary pain points Emboker addresses are well known to anyone who’s had to buy insurance for their company – it’s a highly inefficient, painful process with very little transparency to the buyer on almost every level. From an industry perspective, the inefficiency from all of the manual steps and the layers of intermediation in the value chain means that a higher percentage of the premium goes to paying expenses than it should, and policies, therefore, cost more than they should. By digitizing the entire value chain from end to end, we’re able to provide better coverage at a lower cost, with much less hassle for the buyer. 

How is Embroker different from the traditional ways law firms have applied for malpractice insurance in the past?

Ultimately, the buyer gets better protection and better expertise while spending less money and less time, thanks to technology. 

Let’s be honest – applying and purchasing insurance for law firms is awful. It’s been the same process for the past several decades, with the biggest technological enhancement being the PDF. Law firms are asked to fill out a tedious application year after year. It gets passed to brokers and insurance companies, all who review it, get paid, and settle on a price, often arbitrarily, while passing back to the firm the heavy overhead involved.

With Embroker’s approach, we strip out much of that old process and overhead, which translates to less time spent on purchasing and savings passed to the law firm. The application only asks critical questions that actually affect the cost. Answers are calculated algorithmically and qualified firms get a price immediately. Firms can alter limits, deductibles, and policy features in real time and see how they affect cost. 

They can be assured they’re getting a great deal because our cost structure is fundamentally so much more efficient. We do this without sacrificing the human touch, as our law firm brokers are always available.

Let’s discuss malpractice insurance. Why do lawyers need it and are there differences in coverage that lawyers might not know about? 

The ABA has said that 80% of lawyers will face a legal malpractice suit in their career, and the majority of suits are against small law firms. Without insurance, the lawyer’s personal assets are on the line. For that reason, malpractice insurance is often a new law firm’s first purchase.

Standard insurance has a typical deductible and a regular eroding limit for a set price. Altering limits and deductibles are known to be levers for adjusting price. 

But what about protecting your firm from costs on frivolous lawsuits? Or the exorbitant costs of defending yourself? Our program allows you to assess the price of either of those features by selecting options such as a loss-only deductible or a claims expense in addition to the limit. Unlike other insurance products, we make these risk mechanisms available, and often they’re more affordable than people might assume. Our program is one of the very few where lawyers are offered these features and the ability to adjust them.

What kind of savings do firms see with Embroker in terms of cost and time? 

For pure premium cost, we’re seeing average savings of 20% for qualifying firms. Clio users save an additional 10%.  

On timing, we’re often seeing new firms start and submit an application to purchase in 8-10 minutes. That time goes up slightly as the firm gets bigger, but not by much. Renewals are incredibly easy and even quicker, since all application data is retained and reused.

That said, we also work with plenty of complex firms who like a bit more of a personal consultation, which we absolutely welcome.

Does Embroker offer products other than malpractice insurance?

Yes, Embroker offers all lines of commercial insurance that businesses need, including standard lines like workers’ compensation and general liability, as well as specialty lines like D&O liability insurance and cyber insurance. We also offer health insurance and employee benefits through our same advanced digital experience. 

Is there anything new we can expect to see from Embroker in the near future?

We’re always working to improve our offerings. In the near term, we’re going to roll out a number of major improvements to the platform that should make it even easier and more intuitive for our customers to use. 

Why should lawyers turn to Embroker the next time they need malpractice insurance?

Since we launched our legal professional liability offering earlier this year, we’ve signed up hundreds of law firms, and each of them would attest to the benefits Embroker offers: expert service, an average of 25% cost savings, greater transparency on pricing, and a much easier process than what they’re used to.

The early contender for dumbest thing I have to deal with today is Trey Gowdy baying into the wind that he’s “never seen anything like this.” By “this,” he means the idea that a judge would appoint an independent actor to argue in favor of continuing the prosecution of a guy who HAS ALREADY ENTERED A GUILTY PLEA. Twice.

It’s almost like Gowdy has not paid attention to the Supreme Court for, like, a decade. The federal judiciary is more than happy to appoint counsel to argue orphaned arguments, and while that usually doesn’t happen in criminal trials, usually the federal government isn’t walking away from straight-up guilty pleas from sophisticated actors with competent counsel.

Judge Emmet Sullivan issued an order last night appointing Debevoise’s John Gleeson to serve as amicus on the case, and basically explain why Judge Sullivan shouldn’t throw Michael Flynn in prison for perjury since the former National Security Advisor took an oath in federal court to tell the truth and then admitted to all the elements of a federal crime. While represented by Covington.

Attorney General Bill Barr may not care about lying to law enforcement any more, having moved on to offering shadow support to his Republican cronies trying to make “unmasking” a scandal, which anyone with two brain cells and basic research skills can piece together isn’t a scandal, but maintaining the sanctity of the federal court as a place where people don’t lie willy-nilly is still a valid concern. The judge could, of course, just accept Barr’s half-hearted excuse and let this whole case disappear. That’s certainly the easy way out. But the federal judiciary used to have a backbone and Judge Sullivan managed to find it somewhere in the wreckage of the Trump tax case oral argument. There’s a good argument that federal judges wield too much power in this world, but “punishing people who lie to them” is exactly the power they need to prevent the whole system from becoming a joke.

Fox News has already started pretending that this is a crisis of the separation of powers, but it’s not. Unlike the Supreme Court keeping non-justiciable claims alive to please Tucker Carlson, Judge Sullivan is explicitly asking Debevoise to brief out whether or not he should use the judiciary’s contempt power to penalize someone who, if the Department of Justice is to be believed, lied to the court under oath. Because as I pointed out on Twitter as soon as the Flynn decision got announced, either he’s guilty or he perjured himself but it’s one or the other.

And Trey Gowdy is probably not stupid enough that he doesn’t know this distinction. He’s just positive the average Fox viewer is.

(Check out the order on the next page.)

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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.

Another day, another Biglaw firm announcing salary cuts.

The latest firm to make the move to COVID-19 austerity measures is Finnegan Hendersen. The firm, which made $309,940,000 in 2018 gross revenue making it 108th on the 2019 Am Law 200 ranking, has now gotten on board with the salary cuts that so many other firms have also done. Today the firm announced via email (available in full on the next page) the scheme, which sees all employees making $150,000+ taking a 20 percent cut, those making $100,000 to $150,000 will have a 15 percent cut, between $75,000 and $100,000 see a 10 percent cut, and those making under $75,000 go unscathed.

The firm provided the following comment about the cuts:

Finnegan’s managing partner, Anand Sharma, and chair, Mark Sweet, announced this week there will be pay reductions effective June 1. They acknowledged that the challenges COVID-19 presents are not unique to law firms in general or Finnegan in particular.

“None of the recent changes due to COVID-19 are decisions the firm has taken lightly. We are bringing everyone together for these conversations,” Sharma acknowledged.

“We are incredibly proud of how the Finnegan team continues to work together to meet the challenges presented by the pandemic and are asking many members of the firm to assist in a temporary financial sacrifice,” Sweet said.

While share partners will shoulder much of the resulting financial effects, because the duration and ultimate impact of this pandemic remain uncertain, the firm will temporarily reduce future pay for all members except personnel who earn less than $75,000 annually, effective June 1. Those earning $150,000 or more will see a 20% reduction, those earning between $100,000 and $150,000 will see a 15% reduction, and those earning between $75,000 and less than $100,000 will see a 10% reduction. Sharma said, “Our hope is that any impact from COVID-19 will be minimal and, if so, we commit to offsetting these reductions.”

“We are proud of the work the Finnegan team is doing to serve our clients and appreciate their patience, compassion, teamwork, and continued resilience during this difficult time,” Sharma and Sweet said in the statement. “Incoming work remains steady, we are financially sound, but given everything we are seeing across the economy, we feel these changes will protect the long-term success of our team members and protect those most vulnerable to the risks we now face.”

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).