Category: News Feeds

Firms are getting to grips with the idea that the economy will stay down for a while. The next step is structural change. Clients are thinking about how to lower legal costs and still meet their needs, and as we get into the fall, two things will happen: firms don’t want to be seen doing layoffs until they have to, but they’re also realizing the economy will be down for a while, maybe the next year and a half. This is all coming at the normal timing of annual associate reviews.

I think that layoffs are coming. It’s cruel to let someone go in the middle of a pandemic, and it’s really hard to fire someone over Zoom. Nobody wants the stigma of doing something like that.

— Hugh Simons, a law firm strategist who formerly served as chief operating officer at Ropes & Gray, commenting on the likelihood of law firm layoffs other serious austerity measures that could take place in the third quarter of 2020. Some firms have already conducted associate and staff layoffs (see here and here) as they assess the damage the pandemic has done to their bottom lines.

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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.

We still don’t know how to deal with the novel coronavirus ravaging the country, and that continued economic uncertainty continues to have an impact on law firms. A lot of firms are cutting expenses as they try to get a handle on exactly how they’ll deal with ramifications on their bottom line.

That’s true for NYC boutique, Frankfurt Kurnit Klein & Selz.

The firm, ranked #9 in Vault’s 2020 Best Law Firms for Media, Entertainment, & Sports is instituting a number of austerity measures to deal with the economic downturn caused by the global pandemic. At Frankfurt Kurnit, those measures include almost a complete hiring freeze, cancelling their summer program, eliminating most overtime, cutting partner salaries by 25 percent and slashing all other attorney and staff salaries by 20 percent. In the internal announcement firm managing partner Jeffrey Greenbaum said employees should plan on the cuts lasting the rest of 2020 (they were effective May 1), and whether there will be any year end bonuses this year is still uncertain.

We reached out to the firm for comment, but haven’t yet heard back.

You can read the full internal email on the next page.

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).

The Lizzie Borden trial was a media sensation, but everyone chose the media narratives that confirmed what they already believed. In this episode, we explore the threat of polarizing group dynamics and how lawyers can be positive voices in their communities.

Make sure you take advantage of the show’s Q&A feature. You can ask Mike questions about the latest episode and he’ll answer at the end of the next episode. Just submit your question in the form at the bottom of this post.

Episode Resources:

The Trial of Lizzie Borden by Cara Robertson
“Conspiracy Theories”
“White Lawyering“

WASHINGTON: A top US diplomat today urged allies to reject electing a Chinese official to sit on the International Tribunal on the Law of the Sea, likening it to “hiring an arsonist to help run the fire department.”

The remarks by David Stilwell, the State Department’s assistant secretary for the Bureau of East Asian and Pacific Affairs (and a retired Air Force general), came a day after the US formally rejected most of China’s expanse territorial claims in the South China Sea, marking a significant new chapter in the worsening relations between the two superpowers.

Beijing has not only laid claim to practically all of the 1.3 million square mile South China Sea — putting it at odd with most of its neighbors. It has built runways and placed rocket batteries on several islands also claimed by neighboring countries like the Philippines, Vietnam, Malaysia, Indonesia, Brunei, and Taiwan. The US on Monday called Beijing’s claims “completely unlawful.”

Appearing on an online event hosted by CSIS, Stilwell said the US would “urge all countries involved in the upcoming International Tribunal election to carefully assess the credentials of the PRC candidate and consider whether a PRC judge on the Tribunal will help or hinder international maritime law. Given Beijing’s record, the answer should be clear.”

The Chinese Embassy in Washington pushed back against the State Department criticism, calling the US accusations “completely unjustified,” and accusing Washington of “flexing muscles, stirring up tension and inciting confrontation in the region.”

In his remarks, Stilwell denied suggestions that the US policy outlined Monday was a departure from Washington’s previous stance on China and its claims in the South China Sea. 

Instead, “I would say primarily that we are no longer silent” on the matter of Chinese encroachment on islands claimed by other countries in the region. “We acknowledged it but we didn’t actually make any policy statements or adjustments. What has changed is the US has made a more active statement about what this actually means on specific maritime claims.”

What Washington wants to support more vocally is the July 2016 ruling by the U.N. Convention on the Law of the Sea Arbitration Tribunal, which ruled against China by holding the Scarborough Shoals belonged to the Philippines, giving China no rights to the small islands and outcroppings. Beijing has ignored the decision, and Stilwell said “we’re no longer going to say we’re neutral” in these matters.

It’s not clear what this means for American policy going forward, but the US currently has two aircraft carriers operating in the South China Sea and has ramped up its naval activities in the region. 

China has also kept up its activities. Last month, the PLA Navy warned ships away from the Paracel Islands as it prepared to conduct four days of military exercises there, making the announcement one day after the US Navy sent two aircraft carriers into the Philippine Sea, and regional governments criticized Beijing’s island grab. The Chinese have no legal claim to the area.

The warning came just a day after regional leaders backed up complaints by Vietnam that China has encroached on areas within its influence, issuing a statement saying they “reaffirmed that the 1982 [United Nations Convention for the Law of the Sea] is the basis for determining maritime entitlements, sovereign rights, jurisdiction and legitimate interests over maritime zones,” an ASEAN statement said.

The rare rebuke of Beijing by its smaller neighbors came as a surprise to many, but is tangible evidence of a growing wariness of Chinese actions across the globe. On Monday, the UK banned Huawei from its 5G telecom network, reversing a January decision to allow the Chinese tech company to play a role in building the country’s new wireless infrastructure.

In May, two Navy ships sailed into the middle of a simmering dispute between China and Malaysia in the South China Sea, shrugging off a shadowing Chinese warship in an attempt to uphold the norms of transiting in international waters. The Littoral Combat Ship USS Montgomery and supply ship USNS Cesar Chavez sailed close to the Malaysian drillship West Capella, signalling their support against Chinese warships who have spent weeks harassing the commercial vessel looking for oil deposits.  

Just days before the maneuver, Secretary of Defense Mark Esper told reporters at the Pentagon the US continues to see “aggressive behavior” by the PLA Navy in the South China Sea, from threatening a Philippine navy ship to sinking a Vietnamese fishing boat, and intimidating other nations from engaging in offshore oil development.

Stilwell today sought to tie actions in the South China Sea to a wider global effort by Beijing to intimidate other nations, claiming Beijing’s actions “pose the greatest threat to freedom of the seas anywhere on the planet. South China Sea issues have direct bearing on the future of the Arctic, the Indian Ocean, the Mediterranean, and other vital waterways.”

Compared to the intense interest paid to compensation trends within the large law firm market, solo practitioner and small-firm attorney compensation is, by contrast, a matter of far less transparency and attention.  Yet the solo and small-firm compensation landscape is of much greater actual relevance to most lawyers. Law firms employ three-quarters of all attorneys, and 95 percent of firms have 20 lawyers or fewer. 

Reliable, detailed information on compensation for this majority of the profession is scarce. So, mindful of this gap, we’ve drawn upon our ongoing survey efforts of our practicing attorney audience and present the third installment of our ATL Solo and Small Firm Compensation Report, in partnership with our friends at Thomson Reuters.

• Total annual compensation
• Target bonus (as a percentage of base pay)
• Actual bonus
• Average raise
• Percentage of total compensation based on collections and/or origination fees

Sign up below to get your free copy

Associates at Ropes & Gray recently received a mandate from firm leadership telling them to delete TikTok. It doesn’t matter if it is firm issued or their personal electronics — any device that has access to their firm email has to be rid of the social media app.

In an email to associates, the firm said this mandate came after at least one client request. Last month, it was revealed that TikTok, along with a host of other apps, was snooping on anything on your device’s clipboard — which could include sensitive client information. TikTok, as well as some of the other apps, promised to do away with the practice. However, according to an Ars Technica report, at least TikTok was caught snooping even after they said they’d do away with the practice. So, now Ropes associates can’t have TikTok on their phones.

But though TikTok, with its Chinese ownership and Gen Z fan base, has gotten a lot of headlines over the practice, it is certainly not the only app that employs this security loophole. As of June 30, the following apps still reportedly read the data you have on the clipboard: Fox News, New York Times, Reuters, Vice News, Huffington Post, The Wall Street Journal, Fruit Ninja, Plants v. Ninja Heroes, Bed Bath & Beyond, Overstock, Accuweather, Zoosk, and more.

No word yet if any other apps will be banned by Biglaw.

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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).

Last month, I wrote an article about how some law firms may reopen their offices as soon as they are legally able to do so, even if it may be safer for people to stay home. Many law firm managers are likely upset that they have to pay high rents for offices that are not occupied and may also think that returning to the office may lead to greater collaboration among employees. However, perhaps the biggest reason why many law firms might be looking to reopen their offices as soon as possible is because productivity and billing are down at many firms due to the COVID-19 pandemic. Some managers may think that employees will work more efficiently and bill more hours if they return to offices. Nevertheless, there are many reasons to believe that forcing employees back to offices too soon may not increase productivity, and managers should not rush to reopen workplaces for the sake of productivity.

One of the biggest reasons why returning to offices may not increase productivity is that employees need to waste time commuting to offices when they can log onto work almost instantly at home. In many metropolitan areas, it regularly takes an hour or more to commute to the office and to return home after the workday. In addition, many public transportation options have been curtailed because of the COVID-19 pandemic, which can lead to even longer commutes and many headaches for people who do not have alternative transportation.

Although attorneys and staff can perform some work tasks while commuting, it is nearly impossible to conduct most legal tasks while in a car, train, or bus on the way to work or back home. As a result, by forcing employees to return to their offices, firms are likely eliminating several hours a day that attorneys are able to bill and be productive. As such, keeping people at home may actually increase the amount of billing opportunities available to employees and lead to a higher productivity level than can be achieved in the office.

Another reason why forcing employees back to the office may not improve productivity is because this might increase stress levels in an already difficult time for most people. It is safe to say that life has become much more complicated over the past several months than it was before the pandemic. For instance, many people need to arrange childcare and oversee schoolwork in ways they did not need to before schools and childcare programs were closed. In addition, it is much more difficult for people to obtain goods and services due to social distancing guidelines. Requiring attorneys to come to work in this environment may drive down productivity, since this may impose an additional burden on many employees. Allowing workers to stay at home may afford the flexibility people need to satisfy all of the responsibilities they must fulfill in their private lives and bill the most amount of hours possible.

In addition, forcing people back to offices may decrease productivity because morale may be impacted by this move. Individuals are justifiably concerned that returning to work puts them at a greater risk of being exposed to COVID-19 than if firms just continue stay-at-home procedures. Even if employees themselves are healthy and are unlikely to develop complications from COVID-19, it is possible that they live with people who may have issues or visit regularly with such individuals. No one wants to work hard for a firm that seems like it is putting productivity over the health and welfare of employees, and allowing attorneys and staff to work from home might boost morale and productivity. In addition, forcing employees back to offices most likely increases the chance that workers will be exposed to COVID-19, which could lead to substantial interruptions and may greatly affect the productivity of infected employees and anyone who might have been in contact with them.

Of course, there are situations in which reopening offices may increase productivity among attorneys and staff. For instance, some attorneys and staff may not have a good home office available and can be more efficient if they come to work to conduct tasks. In addition, some employees may want to come to the office in order to get away from kids that may distract them from conducting work at home. Still others genuinely like going to the office in order to see colleagues and be social, and this can increase their morale and productivity.

Many firms in the New York and New Jersey area (where I practice) have begun making a return to the office optional, which has been welcomed by numerous associates. So long as being in the office is truly a choice, and there is no pressure if employees stay home, this can allow associates to make informed decisions about how they can be most productive. However, forcing many attorneys and staff to work in an office full time right now might lower productivity, since it may increase stress and decrease the time employees have to work on matters.

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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.

Everyone is now assessing risk: to themselves, to family members, to the community, to friends, and so on. Every decision is now fraught with deciding whether it’s worth the risk to go to the store, to get gas, to hang out with a few friends while socially distancing, to run an errand or two. Do we send our kids back to school? Do we get tested? Do we mask up? How to evaluate risk in each one of those situations? “What do you think?” “What do YOU think?”

Everyone is worried about the coronavirus and with good reason. How do you determine what your risk is just by doing normal, or at least what were normal, things pre-pandemic? We didn’t give a second thought to grocery shopping, going to the ATM, opening packages from Amazon, going to work, or going to court. Now, every decision is fraught with some sort of risk assessment as to the possible jeopardy of doing those very mundane tasks. We took for granted hanging out in the courthouse hallways, the cafeteria, schmoozing with counsel that we saw in the courtrooms, and standing in line at the Starbucks without a second thought as to whether there was any risk. There was then. This is now.

The internet has exploded with articles about assessing risk in this time of the pandemic. Just Google “risk assessment” and links abound about the coronavirus and risk. There are lots of questions and no good answers, at least for those who are trying to wend their ways through thickets of information, some good, some not so good.

Deciding how to manage your practice and your clients during this time is not easy. Lots of courts are encouraging counsel to appear remotely, which, while attractive to some, is not appealing to all. Thinking of my court system — the largest trial court system in the country — and how to navigate in-person appearances can be daunting. Only those with business before the court should be there. While masks are required, the court is not requiring temperature checks, but hospitals and medical offices are.

Pondering risk and possible outcomes has taken different meanings now. We have always told clients the “risks versus rewards” of going to trial or resolving it. Risk looks different now. Do we continue working from home as the virus spikes across the country?

In assessing risk, what are the options? Is the client better off rolling the dice at trial? What does the client think will happen? As we all well know, client expectations often have little to do with the reality at hand. Getting the client off that ledge is often an essential part of our jobs.

What are the possible outcomes? It’s often good to create a decision tree, but in the case of coronavirus, which is akin to whack-a-mole, outcomes can be hard to predict and even more uncertain today when prospective jurors are more loathe than ever to report for jury duty.

What does the client believe about the possible outcomes? If your client thinks that you will win summary judgment and wants to be in the courtroom with you when you argue the motion, then you will be in that courtroom, whether you want to be or not. Perhaps telling the client that the court strongly urges the use of technology for remote appearances might help.

Every decision carries some degree of uncertainty. The issue then becomes — and this is personal to everyone — what is your tolerance for ambiguity, for risk? That’s the question we ask every client and ourselves.

The presiding judge here in Los Angeles has issued a new emergency order continuing matters until August 8, 2020. Given how the virus has exploded in Los Angeles County, that date may be extended. Notice the headline in the news release: “Covid 19 pandemic continues unabated.” How does that headline affect your definition of risk?

Wear a mask? It’s required in the Los Angeles County courtrooms, but there are inconsistencies in other courthouses around the state. For example, in San Joaquin County, in the middle of the state’s farmland, a deputy public defender toured every open Superior Court department to check for compliance. Although there’s a statewide mask order extant, compliance has not been 100 percent, especially among law enforcement. When you go to court, do you take an inventory of compliance? Perhaps you should, since the risk of going without a face covering is high.

Is it safe to sit for a bar exam in one of those states that insists on going forward with a July bar exam? Your future or your life? Which is it?

The Los Angeles Times has endorsed the concept of provisional “diploma privilege” for the 2020 law school graduates. The newspaper, echoing the words of many law school deans and professors, opines that “graduating from an accredited law school must surely count for something.” Yes, it should, but there are a number of unaccredited law schools in California. What happens to those graduates?

And then, after the dust has settled on this year’s exam agonies, the Times suggests that it is time to rethink the entire rationale for the bar exam.

It’s up to the California Supreme Court and the Committee of Bar Examiners to decide what to do about this year’s bar exam. Those two groups are surely doing a risk assessment as well. Access to justice or public protection?

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Jill Switzer has been an active member of the State Bar of California for over 40 years. She remembers practicing law in a kinder, gentler time. She’s had a diverse legal career, including stints as a deputy district attorney, a solo practice, and several senior in-house gigs. She now mediates full-time, which gives her the opportunity to see dinosaurs, millennials, and those in-between interact — it’s not always civil. You can reach her by email at oldladylawyer@gmail.com.

Susman Godfrey founder Stephen Susman has passed.

The famed trial lawyer was in a coma earlier this year after a cycling accident and later contracted the coronavirus. His wife announced yesterday that “the combination of COVID and his weakened lungs were finally too much for his body.”

Susman founded the legacy firm in the 70s and over time the shingle grew into a 150 attorney firm securing over a billion in verdicts a year. The megaboutique — because you can’t just use “boutique” after a firm opens multiple offices — attracted all-star talent over the years. Some of that talent went on to politics. And the driving force behind the outfit was the Susman. From a Lawdragon profile:

He started out clerking for U.S. Supreme Court Justice Hugo Black and teaching at University of Texas Law School before helming an antitrust case for purchasers of corrugated boxes. He won $550 million and understood that his success should come from his results rather than his effort. There’s a sturdy Chevy truck in that recipe: federal clerkship, Texas and bet on yourself, even if there are today Rauschenbergs hanging on the wall.

Others quickly signed on. Rather than joining the big Texas firms, Lee Godfrey, Parker Folse, Mark Wawro, and a rustle of other smart graduates of, primarily, the University of Texas School of Law, bought into the Susman vision in the early days. It was big and bold, like Susman, and leavened by the elegant Godfrey. The contingent fee work had swagger, but necessitated the firm taking some small, not necessarily good cases to keep the lights on and everyone occupied. The vision was awesome, but the business model was a work in progress.

The business model worked out, with a heavy dose of contingency fee work, which was a novel concept for a firm doing that kind of work.

It’s a sad loss for the profession and a reminder of the stakes as we struggle against this virus. Above the Law’s thoughts are with Steve’s family and his friends at the firm in this difficult time.

Trial Bar Titan Stephen Susman Passes Away After Cycling Accident, COVID-19 Battle [Texas Lawyer]

Earlier: A Deep Dive Into The History Of One Of America’s Premier Law Firms

No matter how simple or minimalist you want your practice to be, certain costs must be paid periodically. For today’s column (and future ones), I will cover some of the more common recurring expenses every law practice should consider.

Practice management software (optional). Personally, I don’t use practice management software. But many attorneys have recommended getting it as soon as possible because it is better to be familiar with it as your practice grows. This makes sense as you don’t want to switch your massive files to a new system. But on the other hand, if you don’t have clients, you don’t need software to manage your zero clients. Letterheads and billing templates can be found and downloaded online for letters and billing purposes. Some older attorneys may even send you a copy of their billing templates.

Once you start forgetting clients’ cases or forget to collect, that is a good sign that you may need a practice management software to help manage your caseload.

You can pay several hundred dollars up front for the software or have a monthly subscription. I would recommend trying out some of the more popular ones to see which fit your practice style better.

Phone and internet. These two expenses are mandatory for the modern, mobile lawyer. At a minimum you will need a smartphone with internet and email capabilities.

If you have an office at home or in a separate location, you probably won’t need a separate land-line service. But you will need a dedicated high-speed internet service.

Your smartphone should also be able to act as a mobile wifi hotspot for your laptop and your home desktop but should only be used for emergencies. It should not be a substitute for a dedicated wifi internet service because using your mobile phone’s wifi hotspot will drain the battery quickly and possibly overheat it, thus damaging the phone. Also, the download and upload speeds are very slow.

It is generally a good idea to have a separate line for your practice. Google Voice is free, easy to install, and for the most part gets the job done. However, other paid services may provide more or better services.

Pick the phone service that provides the best reception coverage where you work and where you live, even if it means paying more. A dropped call or bad reception can leave a bad first impression with a client.

As far as the monthly phone bill is concerned, most people have their own phone plans. But some opt to be a part of a family plan. This is a cheaper option because most companies charge up to $50 for an additional line.

Lastly, most people replace their phones every few years for various reasons. Due to the high cost, the phones are usually paid through installment agreements. This cost should also be factored into the costs.

Cloud storage expenses. More lawyers and clients are using the cloud to share documents. In light of the COVID-19 pandemic’s resulting in more business closures, electronic file-sharing will be used more frequently. It is also likely that more people will store their files in the cloud in order to avoid spending large amounts of time transferring files between computers.

Some of the more popular cloud sharing services are Dropbox and Hightail. Most of them have free services, but they have limitations on file storage and downloads. You may one day need to upgrade to a pay version if your practice requires large storage space. Most cloud storage services charge on average $12 to $30 per month.

Student loans. While some consider a student loan a personal loan, these payments should be factored into your budget because your student loan lender will want their monthly cut. Even if you don’t have the money.

If you are on an income-based repayment plan, you may be able to get your payments reduced by sending your loan servicer a profit and loss statement showing how much money you don’t make. This is much better than ignoring your debt and being placed in default status.

However, if you are on track to pay off the loans in full, I highly suggest paying more than the minimum payment. This way, you can skip a payment if you are short in the future. Also, if you just started repaying the loans, paying extra will reduce the loan principal which will also reduce future interest payments. Ideally, you should pay at least two years ahead, which should be enough time to get you through a recession.

Rent. At some point, you will need to pay rent, either for office space, a virtual office, or a mailbox address. While it is possible to work completely from home, most do not like the idea of clients or opposing counsel (particularly upset ones) knowing where they live.

You might have heard about all kinds of formal and informal rental arrangements for new attorneys or ultra-small practices. Generally, they involve using the office for limited purposes and only during certain days and times.

If you enter one of these arrangements, I highly recommend getting a key and being able to access the office during reasonable business hours. It is a major, frustrating pain when a time-sensitive document or a payment arrives and you have to wait for your landlord to be in the office to get it. Also, make sure that you have access to the office wifi at all times.

Also, some people might offer to let you use their office space for free. This might be from a friend, a grateful clien,t or another attorney. While this sounds generous and very tempting, I do not recommend accepting this arrangement at least for the long term. While I won’t get too much into the legal reasons for this, I should point out that your use of the space might violate the tenant’s lease contract, and landlords are itching for a reason to raise the rent.

But if there is a problem, you will be at your landlord’s mercy. You see, if your simple practice grows, you start to get more mail, and clients come to the office more frequently, at some point it will interfere with your landlord’s own operations. The landlord can be especially annoyed when he learns that you are making $8,000 per month while he is making $7,000 per month and paying $2,000 in rent and utilities. He will one day pull rank by demanding that you pay your share of the rent or move elsewhere. Since you are not paying, you may not have legal recourse due to lack of consideration.

Finally, these free arrangements hurt you in the long run because they delay the inevitable lesson: rent is a very common business expense and most people have to get used to paying it to have a legitimate business. You should eventually offer to pay rent as it will give you some recourse in case of a conflict. Also, it displays gratitude and respect, and you won’t come off as a freeloader.

Whatever rental arrangement you enter into, make sure that you have flexibility to do whatever you need to do to run your business.

A simple practice should keep costs as minimal as possible. But don’t be too cheap, especially if it will reduce your productivity.

Next week, I will cover more recurring expenses such as staff and malpractice insurance. If you have any other suggestions, please contact me.

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Steven Chung is a tax attorney in Los Angeles, California. He helps people with basic tax planning and resolve tax disputes. He is also sympathetic to people with large student loans. He can be reached via email at sachimalbe@excite.com. Or you can connect with him on Twitter (@stevenchung) and connect with him on LinkedIn.