CYA: The Best Gift You Can Give A Business Partner This Holiday Season

Wondering what to get your business partners this holiday season? Yeah, me neither. The mere fact that I am still present after these yearlong shenanigans is gift enough.

But if you were going to get your business partners something and a crash course in why MFNs are the biggest letdowns since New Coke is out of your price range (I mean, time is money, right? And how many times have you already given that speech?), then consider giving them the gift that keeps on giving.

And one so many of them desperately need.

When I think about the fine art of CYA, I always think of Ronin, one my very favorite (and vastly underrated) heist movies in which a pre-GOT Sean Bean turns to Robert DeNiro and says, “You’re worried about saving your own skin?” To which a smirking DeNiro replies, “Yeah, I am. It covers my body.” Bah-zing.

CYA is Attorney 101. It’s instilled in us early and often from our very first Contracts class: GET IT IN WRITING. Because when the chips are down and recollections fail you, somewhere there is an email that will set you free. Or damn you to the pits.

I never kept a diary as a kid. I find day planners intimidating. But man, do I keep stellar email records. Particularly on deals where I advocated for one thing and the business decided to go in a different direction. Of course, I document that with the partner on copy. Why? Because while I respect the ultimate decision of my partners to make their own (bad, so bad) decisions, I’m not taking the fall for them. If I indicated a clear preference for one course of action based on sound legal reasoning, then if something does go wrong, I’m not going into “the sky is falling, fall to your knees and grovel for your job” mode. I’m more “sweep in and save the day” mode which is a much more advantageous position. Sure, I didn’t cause the problem, but I’m honored to be part of the resolution. And that’s an important distinction — if you like keeping your job.

So, I find it rather surprising that more business partners don’t do this. I find myself asking over and over again if the partner kept notes from that meeting or call. And the responses I routinely get?

“I trust them not to screw me.”

“Sending a follow-up email shows a lack of faith.”

“That’s now how business deals work.”

“Who has time for that shit?”

“I don’t know if you know this, but emails don’t hold up in court.”

I do really love that last one. I don’t know about you, but I love it when my people bizsplain me what’s legal and what’s not…

Gag-reflex-inducing excuses aside, I always take a deep breath (and remind myself to think of my bonus, think of the money) and explain that sometimes it’s not a matter of one side engaging in gamesmanship or bad faith. Sometimes, it’s just the he said/she said/they said one thing and you heard another. It’s the lack of agreement, the ghost of law school classes past — we don’t have a meeting of the minds — looming over a conversation. Or, if I’m in a rush, I just tell them that memories are fleeting, but emails are forever. I also use that same explanation for why we don’t document certain things. I’m a contradiction, wrapped in a Snuggie, with law school loans to keep me warm.

But, just think of what a better, less whiny world we’d live in if our business partners bothered to document their conversations once in a while. Think of the time we’d save if business partners would exercise an ounce of self-preservation.

I’m just saying, be the change you want to see in the world. Give your business partners the gift they really need this holiday season.


Kay Thrace (not her real name) is a harried in-house counsel at a well-known company that everyone loves to hate. When not scuffing dirt on the sacrosanct line between business and the law, Kay enjoys pub trivia domination and eradicating incorrect usage of the Oxford comma. You can contact her by email at KayThraceATL@gmail.com or follow her on Twitter @KayThrace.

Come Party With Above The Law!

It’s that time of year again where we look back, take stock of the year in law, count the bonuses rolling in and order another round. With that in mind, we’re throwing a holiday party here in New York, and you’re invited!

So, if you want to grab some drinks and food on ATL, RSVP here! This year we’ll have our party on December 10th at Houndstooth Pub on 8th Avenue at 37th Street.

Want to brag about your bonus? Share a war story? Take a break from studying for finals? Catch up with your favorite (it’s me, I know it is) ATL editor? All are welcome!

Here are the details:

When: Tuesday, December 10th
Where: 520 8th Avenue, New York, NY 10018
Time: 6pm – whenever we stop drinking

Remember to RSVP soon to guarantee your spot and we’ll see you in December.


headshotKathryn 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).

Tucker Carlson Draws A Line

Tucker Carlson (Photo by Chip Somodevilla/Getty Images)

Although principled and academic voices regularly criticize Tucker Carlson, he nevertheless commands one of the largest right-wing populist followings. Accordingly, Carlson’s recent rhetorical support for Vladimir Putin in any foreign policy arena should be viewed as representing one of the great political shifts by a large section of the right of the 21st Century. I will not pretend to know what it forebodes that the national Republican Party within living memory of Ronald Reagan appears, in parts, to be aligned and furthering Putin/Russia propaganda — nothing well. And to make matters worse, it appears that such drastic shifts where they exist on the right represent a long-term trend, not limited to this president or Tucker’s presence. In other words, although he commands widespread influence, neither Carlson nor this president represent “the Hokey Pokey,” they are not what it is all about.

It is the millions who put this president and Tucker Carlson in positions of power that are the issue. Not only has this support openly embraced a version of socialism that drastically raises taxes and government handouts to favored industries that are damaged by said tax increases. It more destructively continues to maintain vile, racist elements. In the end, however, the support for Carlson may only succeed in ushering in a great irony. Unless this support, and these elements, can establish a thousand-year Reich here in the United States (come get some), the Democrats will again take power. And members of Congress such as AOC might have a lot to thank this administration for in the end, for the revenue streams this administration has opened up — including arguments for the expansion of executive authority to utilize these streams — are going fund and execute a lot of the “progressive policies” of the future. Much to the continued frustration of those who value a more constrained executive.

In the meantime, I don’t believe this support for the president, nor Carlson, will ever crack. No matter the evidence, no matter the act. I believe this support when it states that it views matters as a rush the cockpit time or die, burn it all (the country) down, lest inevitable ruin strike anyway. That the Constitution is not enough to stand in the way of reorienting society in the way that a select group of others (of a particular or subset religious view, mind you) view as “moral law.” Any student of history has seen these elements before, including with Putin, but perhaps the most effective point to be made in response today is that ruin is not happening. For centuries now, the world has been steadily improving in a general sense, and shows no signs of stopping; in fact, just the opposite is happening the more these elements have decreased in power.

I submit the establishment system of market capitalism and our constitutional system of civil liberties has worked for more Americans today than it has harmed. Has it been a gruesome time here for many in the past, yes, but that can only logically change when the human struggle over limited (Earth-based) resources ends. Accordingly, I believe a majority of this country does not want to rush the cockpit and burn everything down, and thus we outnumber those who do. In this set of circumstances, no law will save us, other than the right to vote.


Tyler Broker is the Free Expression and Privacy Fellow at the University of Arizona James E. Rogers College of Law. His work has been published in the Gonzaga Law Review and the Albany Law Review. Feel free to email him or follow him on Twitter to discuss his column.

On The Retirement Of Miles Ruthberg And The Rise Of Litigation At Latham & Watkins

Miles Ruthberg (courtesy of Latham & Watkins)

“Back then, if you worked 1500 hours in a year, you got a lecture on how you were ruining the place.”

That’s how Miles Ruthberg — one of the nation’s top trial lawyers, a senior partner and former Global Chair of the Litigation & Trial Department at Latham & Watkins — recalled his earliest years as a law firm associate. Today, of course, an associate who billed 1500 hours in a year would also get a lecture — of a very different sort.

On January 1, 2020, Ruthberg will retire from the partnership of Latham & Watkins. During more than 40 years in practice and almost a quarter-century at the firm, he has witnessed the world of large law firms, aka “Biglaw,” change dramatically — in some ways for the better, in some ways for the worse, and in some ways whose import remains to be seen.

When I learned of Ruthberg’s planned retirement, writing a retrospective of his long and distinguished career struck me as an excellent opportunity to explore several interesting and important subjects: the rise of Latham’s world-class litigation department, the transformation of Latham from what Ruthberg called “a small L.A. firm” into a global giant, and the evolution of Biglaw more generally.

On an individual rather than industry-wide level, Ruthberg’s rise is fascinating and valuable as well. It shows how it’s possible to achieve spectacular success in a dynamic, often difficult profession, while still retaining every ounce of one’s decency, integrity, and humanity.

*            *            *

One may as well begin with Harvard Law School. After graduating from Yale in 1973, summa cum laude and first in his class, Miles Ruthberg made his way north and matriculated at HLS.

Peter Wald first met Ruthberg in the summer of 1975. They’ve been best friends ever since.

That summer, after his 1L year at Harvard, Wald learned that he had made it onto the Harvard Law Review. He returned to campus in August, before the start of classes, to begin his work as an editor. Ruthberg, a year ahead of Wald, was one of the 3Ls who was supervising and training the new editors.

“It was a beautiful Saturday afternoon in Cambridge,” Wald said, “and everyone was reporting for duty. And there was Miles, in shorts and a white Lacoste shirt, carrying the Columbo-esque briefcase that he’s had for 40 years.

“This was Harvard Law School, and the Harvard Law Review, in the mid-1970s. There were a lot of people there who were quite full of themselves. But my first impression of Miles — which stood in such stark contrast to the rest of us, these pumped-up masters of the universe — was his humility and kindness.”

Ruthberg was the Developments Editor, and based in part on his first impressions of Ruthberg, Wald decided to join the Developments team. Over the next ten months or so, the two worked together closely, holed up in the rabbit warren of rooms on the third floor of Gannett House, on what would become the seminal law review article addressing class actions. (Working across the hall from them was another member of Wald’s class, an Articles Editor who would go on to fashion an impressive career of his own: one Merrick B. Garland.)

Justice Thurgood Marshall and Miles Ruthberg, at the Supreme Court of the United States, in 1978 (courtesy of Miles Ruthberg)

In June 1976, Ruthberg graduated from Harvard Law School, magna cum laude, and moved down to Washington to clerk, first for Judge Carl McGowan of the D.C. Circuit and then for Justice Thurgood Marshall on the Supreme Court. After Ruthberg was done clerking, he and his then-girlfriend faced a choice: where to live?

Originally from the D.C. area — specifically, Rockville, Maryland — Ruthberg wanted to remain in the region. His girlfriend wanted to move to New York to pursue her acting career. They compromised on a city where they could pursue both of their careers at a high level (and enjoy better weather to boot): the City of Angels, Los Angeles.

In 1978, Ruthberg joined what was then one of L.A.’s leading law firms, Tuttle & Taylor. Numerous luminaries passed through its halls over the years, including Governor Jerry Brown and two future Ninth Circuit judges, William Norris and Raymond Fisher. It was an intellectual, civilized place to work, where 1600 billable hours was more than enough. But Tuttle & Taylor no longer exists, having closed its doors in 2000.

“It’s indicative of what has happened in the profession,” Ruthberg said. “When I went to L.A., there were a dozen or more excellent boutiques in the city. They’re now all gone, except Munger Tolles, the sole survivor.”

One challenge for Tuttle was trying to be an elite boutique in an age that was coming to be dominated by Biglaw. Another challenge flowed from its focus on the L.A. legal market, which has shrunk as a general corporate market over time.

“It’s no accident that so many L.A.-originated firms have become global,” Ruthberg said. “Latham, Gibson Dunn — we expanded nationally and internationally because we had no choice. Quinn Emanuel wouldn’t be what it is today had it stayed only in L.A. and depended on L.A.”

By the time Tuttle & Taylor folded in 2000, Miles Ruthberg was long gone. He left in 1988, as a young partner, for a San Francisco-founded firm that was expanding regionally by opening a Los Angeles office — a firm by the name of Heller Ehrman.

Who brought Ruthberg over to Heller? None other than his old friend from his Harvard Law Review days, Peter Wald.

After his own graduation from HLS in 1977, Wald moved to San Francisco to clerk for then-Chief Judge James Browning of the Ninth Circuit — and, after falling in love with California, Wald never looked back. In 1978, he joined Heller Ehrman, then one of San Francisco’s top firms, and embarked upon a successful litigation career.

By the late 1980s, Heller had settled on a strategy of geographic expansion, to go from being a San Francisco firm to at least a West Coast regional firm. The management committee decided to open a Los Angeles office — and Peter Wald knew the perfect lawyer for the launch. He said to his Heller colleagues, “My best friend is a partner at Tuttle & Taylor and a great lawyer. Shall I call him and see if he’d be interested in opening our L.A. office?” The answer: absolutely.

Miles Ruthberg and Peter Wald in 1986 (because of course it was), at the rehearsal dinner for Ruthberg’s wedding to Catherine Schreiber (courtesy of Catherine Schreiber)

In 1988, recruited by Wald, Ruthberg left Tuttle to launch the new L.A. office of Heller Ehrman. Over the next eight years, the office expanded rapidly, growing to 70 lawyers from three. Heller’s California litigation practice — featuring Miles Ruthberg and fellow Tuttle alum Ray Fisher in Los Angeles, Peter Wald and legendary antitrust litigator Larry Popofsky in San Francisco, and a host of other talented litigators up and down the coast — flourished.

The firm as a whole, however, was experiencing certain issues. Heller was known for having superb lawyers and a collegial firm culture but was never viewed as the best-run business. And by the early 1990s, Peter Wald was getting concerned. (Wald turned out to be prescient; Heller later tried to revamp itself, but failed, and in September 2008, the firm dissolved, more than a century after its founding in 1890.)

In 1993, Wald came close to leaving Heller for a rival firm, but ultimately decided not to make the move (in large part out of loyalty to Popofsky, his mentor and friend). But by late 1995, Wald had decided it was time for him to move on. In December 1995, Wald called Ruthberg to share this thinking — and to see if Ruthberg might be interested in moving too. And Wald had a particular destination in mind: Latham & Watkins.

Founded in Los Angeles in 1934, Latham & Watkins grew slowly at first. By 1960, more than 25 years after opening, it was still an L.A. boutique, with only 19 lawyers. But starting in the 1960s, Latham embarked upon a path of growth and expansion. By the time that Robert Dell took over as managing partner in 1994 (at the tender age of 42), the firm was in the midst of going global, with offices in San Francisco, London, Moscow, and Hong Kong.

One of the founders of Latham’s San Francisco office (along with Bob Dell) was Christopher “Kit” Kaufman, a prominent M&A lawyer. Also a Harvard Law School graduate, Kaufman had recruited Wald to Heller out of HLS. But in 1990, Kaufman left Heller to launch Latham’s San Francisco office. By 1995, the new office was thriving — and hungry for more talent. It didn’t take long for Kaufman and Dell to woo Wald and Ruthberg over to Latham.

Miles Ruthberg in 1996, when he joined Latham & Watkins (courtesy of Latham & Watkins)

In April 1996, Ruthberg and Wald “crossed the street,” in the parlance of the time. They left Heller Ehrman to join Latham & Watkins in Los Angeles and San Francisco, respectively.

And the rest, as they say, is history. Over the next 25 years, the two best friends, working with each other and with wonderful colleagues across the globe, helped build one of the world’s great litigation departments — and one of the world’s great law firms.

And the seeds for that success were sown decades ago, back when they were both still law students.

“The law is a puzzle, a paradigm,” Peter Wald said. “You peer over the edge, trying to understand the hierarchies and relationships of different principles and values. That’s the work that Miles and I tried to do at the Harvard Law Review, toiling on the cramped third floor of Gannett House beneath that pitched roof for a full year, trying to make sense of Rule 23 and class actions.”

“It was hard work, interesting work, great work. It’s work we carried over into our future careers, our decades together at Heller and then Latham. We handled major cases, like Enron for Arthur Andersen, and Lehman for Ernst & Young. And we got to do that work together.”

*            *            *

Twenty-five years ago, in 1994, Latham’s litigation department had 166 lawyers, and the entire firm had under 700 lawyers. Today the firm has 2,800 lawyers, including almost 800 in litigation — making the Litigation & Trial Department alone bigger than many a Biglaw firm (e.g., Debevoise & Plimpton, a few doors down Third Avenue from Latham here in New York).

As for revenue, if Latham’s litigation department were a standalone law firm, it would be in the Am Law 50. For 2019, departmental revenue will exceed $1 billion, again larger than all but the biggest of Biglaw firms. (For more data points, see the addendum to this post, “Latham & Watkins Litigation — By the Numbers.”)

Latham’s Litigation & Trial Department has accumulated ample accolades and awards over the years. Most recently, it scored a spot on BTI Consulting’s Fearsome Foursome list — the four firms that general counsel and other in-house leaders would least like to see as opposing counsel in litigation.

Miles Ruthberg himself has also earned many honors. He has been recognized for his excellence by Chambers and Partners, described as “brilliant” and “the epitome of the trusted adviser.” He is an elected member of the American Law Institute. After being named repeatedly to the Lawdragon 500, he was inducted into the Lawdragon Hall of Fame earlier this year. (For praise of Ruthberg of a more personal nature, see the addendum, “Testimonials and Tributes for Miles Ruthberg.”)

How did Latham’s Litigation & Trial Department achieve that prominence, prestige, and profitability? The transformation of the firm’s litigation practice over the past 25 years was driven by, and emblematic of, certain key developments in both the practice of litigation and in Biglaw writ large.

First, the expansion of the litigation department that was already underway when Ruthberg and Wald joined in 1996, which they then helped accelerate, reflected the rise of full-service law firms — of which today’s Latham is a preeminent example.

At Latham’s founding in 1934, it was far from full-service. Dana Latham was a tax lawyer (and future Commissioner of the IRS under President Eisenhower), and Paul Watkins was a labor lawyer. But over the ensuing decades, the firm grew dramatically, especially in the transactional practices for which the firm is so widely known today.

In the 1980s, the firm represented such names of the age as Kohlberg Kravis Roberts and Drexel Burnham Lambert, developing a national reputation in M&A and high-yield debt work. But when the economy turned, and the takeover business went south, Latham suffered accordingly — and had to remake itself.

The hiring of Ruthberg, Wald, and other leading litigators reflected a conscious decision on the part of Latham to transform itself from a deal-focused to a diversified firm. This would allow the firm to better serve its clients, assisting them with the full panoply of their problems — and it would be better for Latham too, helping it to access new revenue streams and to diversify itself.

Second, the evolution of Latham’s litigation department reflected another critical Biglaw trend: specialization.

“I remember being at Heller in the early 1980s, and the head of our corporate department would still occasionally go into court for clients,” Wald recalled. But as the years passed, as laws and regulations proliferated and grew more complex, and as the litigation market shifted, practicing as a generalist to that degree become more and more untenable, at least in Biglaw.

“GCs were becoming increasingly sophisticated consumers of legal services,” Wald explained. “They had been partners at firms like Latham, they understood the economics of law firms, and they didn’t want to pay to train a very good litigator who didn’t know securities or antitrust or IP. Instead, they wanted great litigators who were also steeped in a particular area or areas of law.”

“When I joined the firm in 1996, the litigators saw themselves as fighter pilots: We can do anything, we’re trial lawyers,” Ruthberg recalled. “That model was great for the time, but I knew it wasn’t where we needed to be.”

Three years later, when Miles Ruthberg took over as Global Chair of the Litigation & Trial Department in 1999, he knew things had to change.

“We had to become leaders in certain specialties within litigation, not to claim that we’re good at everything,” he said. “In 1999, we put a practice-group strategy in place.”

The early major practice groups included antitrust, intellectual property, securities/professional responsibility, white-collar defense and investigations, and mass torts/environmental. A somewhat smaller but very high-profile and elite practice group was Supreme Court and appellate litigation, founded by the estimable Maureen Mahoney and now led by another leading SCOTUS advocate, Gregory Garre.

Transforming a far-flung department with hundreds of lawyers, getting them to think of and organize themselves along practice-group rather than geographic lines — e.g., I’m a securities litigator, not just a New York litigator —  was no easy task. But Ruthberg had both the intellectual vision to develop the strategy and the interpersonal skills to implement it.

“Law is a traditional profession and industry,” Wald said. “Requiring lawyers to excel not just in their chosen venue but in a specialized practice area was new. Miles, with his incredible skill set, was able to get people comfortable with that change.”

“During Miles’s reign as chair, we worked very hard to move the department toward a practice-area orientation. It started on his watch, and it became the law of the land during my seven years as chair,” said Wald, who succeeded Ruthberg as Global Chair in 2004. “Associates wouldn’t be promoted unless they were supported not just by the global and local department chairs but by the global practice group as well.”

The practice-area strategy was a smashing success. As Wald put it, “It moved our litigation practice into the next tier — where we didn’t just have excellent lawyers, but we were working for the biggest clients, on their most dangerous cases, in the most exciting practice areas.” In 2004, just five short years after institution of the practice groups, Latham was a finalist for the American Lawyer’s Litigation Department of the Year.

Third, Latham’s litigation practice participated in the trend of globalization: the need for major, full-service law firms to grow alongside their clients, in an increasingly international and interconnected world.

While certain smaller firms and boutiques, generally with a certain specialization or expertise, can survive and even thrive without going global, firms of a certain size, scope, and scale will have no choice but to expand. A firm can be a Wachtell Lipton or a Latham & Watkins, but it will get harder and harder to be a “biggish” Biglaw firm with no particular identity, specialty, or strength. Bruce MacEwen calls these doomed institutions the “Hollow Middle” in his law firm taxonomy. Some of them — Heller Ehrman, arguably — are no longer with us.

“When I took over as Chair, and Miles moved on to the Executive Committee, we worked together to make the department truly global,” Wald said. “We looked for the best and the brightest, in the United States, in Europe, and later in Asia, so we could serve clients by managing their litigation risk globally, both in the courts and through international arbitration. Miles was front and center in that change.”

“When I first joined Latham in 2006, someone from a competitor firm asked me, ‘Why do you want to go to a satellite office of an L.A. firm? That misapprehends who we are,” said Sean Berkowitz, the former federal prosecutor who rose to fame for his work on the Enron case and joined Latham shortly thereafter. “Although I live in Chicago, I practice on a global basis. I’ve flown over 100,000 domestic miles this year, going to Boston, New York, Los Angeles, Houston, Washington (D.C.), San Diego, and San Francisco. I work with people in all of these offices, on a daily or weekly basis.”

“A competitive advantage of Latham is that we are one of the largest of our peer firms, with more A-plus talent in more places than most of our competitors,” said BJ Trach, another former federal prosecutor, who joined Latham in 2012, after it opened in Boston. “We then put the best lawyers for a given problem in front of the client, regardless of where those lawyers might sit.”

Consider one headline-making matter that Berkowitz and Trach are handling together now: representing actress Lori Loughlin and her husband, clothing designer Mossimo Giannulli, in the “Operation Varsity Blues” college admissions case. They work on the case with colleagues across the country, including Perry Viscounty (Orange County), a veteran trial lawyer, and Roman Martinez (D.C.), a former Supreme Court clerk and assistant to the solicitor general.

So the days of Latham as “an L.A. firm” are long gone. Los Angeles is not the firm’s largest office, and it hasn’t been for quite some time. Today the three largest offices by headcount are New York, London, and D.C., with Los Angeles and Chicago going back and forth for fourth place. (As for the largest litigation departments by headcount, the order is actually D.C., New York, San Francisco, Chicago, and Los Angeles.)

As globalization has taken hold throughout Biglaw, many firms no longer have their founding office as their largest office. Gibson Dunn, Latham’s fellow “Los Angeles gone global” firm, also has its largest office in New York. Two Chicago-founded global giants, Kirkland & Ellis and Sidley Austin, still have their largest offices in the Windy City — but their New York offices are second, catching up quickly. Dechert and Morgan Lewis, both founded in Philadelphia, now have their largest offices in New York and D.C., respectively. And the list goes on.

Fourth and finally, in terms of trends shaping the Litigation & Trial Department, in the past decade or so we have seen what could be called “the rise (or return) of the trial lawyer.” In response, Latham litigation has stayed successful by maintaining, growing, and promoting its excellence as a firm that knows how to try cases.

“Maybe eight or ten years ago, the litigation world evolved to a point where firms known as ‘trial-ready’ firms became huge players in the market,” Ruthberg said. “Think of Bartlit Beck, Boies Schiller, or Quinn Emanuel.”

(Or, for that matter, other great litigation shops like Holwell Shuster & Goldberg, Kaplan Hecker & Fink, Keker Van Nest, Kellogg Hansen, Kobre & Kim, Lankler Siffert & Wohl, MoloLamken, Spears & Imes, Susman Godfrey, Wilkinson Walsh + Eskovitz, and many more.)

“We were doing tons of trial work,” Ruthberg said, “but we weren’t marketing it separately. Under the leadership of Sean [Berkowitz], Jamie [Wine], and now Michele [Johnson], the last three Global Chairs, we started doing that — and it’s now probably the fastest-growing part of our practice.”

Latham took two concrete steps to promote its trial work. First, the department adopted a new name, the “Litigation & Trial Department.” Second, it launched a new practice group, Complex Commercial Litigation, since so many trials and arbitrations arise in this space. After Sean Berkowitz transitioned the role of Global Chair over to Jamie Wine, he assumed leadership of the new CCL practice.

It might seem surprising to some, in the age of the supposedly vanishing jury trial, to focus even more on trial work — but it actually makes a certain kind of sense.

“There has been an undeniable decrease in jury trials, but this just places a premium on the small number of lawyers who know how to do them,” Berkowitz said. “You never know where a case might end up, and if you hire someone to settle a case, you’ll end up paying more.”

“And you can’t overlook arbitrations,” he added. “Although many of them are confidential, they can involve billions of dollars, and they are basically bench trials.”

What does the future hold for the Litigation & Trial Department? Michele Johnson, who became Global Chair in April, identified some areas of focus for her tenure.

“One of my priorities as Chair is simply for the world to know what we are already doing, as one of the top litigation practices in the world,” she said. “We’ve built it; we want people to know about it. I want our brand to be commensurate with our talent, the matters we’re handling, and the results we’re getting for our clients.”

“Some of the most well-known litigation firms operate on a ‘star system,’ but we have more of a ‘constellation system.’ We have at least 30 stars, including many first-chair trial lawyers, who operate across practice groups. We don’t have a ‘trial group,’ because we’re all trial lawyers. And we have lots of women, kickass women. Six of our biggest wins in litigation have been led or co-led by women.”

(For more, see Jenna Greene, Latham Leads With First-Chair Women Litigators. As Greene notes, Latham’s litigation department has now been led by two women in a row, since Johnson was preceded by Jamie Wine — definitely one of the firm’s “kickass women,” who obtained a massive $666 million arbitration award in August.)

“In terms of areas for strategic growth, we are looking at data privacy and cyber security, as well as copyright and its intersection with antitrust — for example, how to price music,” Johnson said. “We are trying more cases, for both plaintiffs and defendants. We are increasingly partnering with our clients on alternative fee arrangements, working on partial or even full contingent-fee arrangements. We are eager to bet on ourselves.”

“In terms of our future priorities, we take the long-term view. A lot of firms are focused on next year’s PPP. We are focused on the next generation.”

*            *            *

The evolution of the Litigation & Trial Department must be understood not just against the backdrop of changes in Biglaw and in litigation, but in the context of Latham as a firm. Much of the department’s success flows from having great lawyers, but much of it is can be traced to Latham’s firm culture. Having great lawyers is a necessary but not sufficient condition for a successful firm; just ask Tuttle & Taylor, or Heller Ehrman.

Because of Latham’s size, scale, and success, its status as a Biglaw behemoth, some outside observers imagine the firm as an “aggressive” or sharp-elbowed environment. But nothing could be further from the truth. Although Latham is ambitious in its desire to be the biggest and best, and its lawyers are aggressive in protecting and advancing their clients’ interests, the firm’s internal culture is very team-focused, a little touchy-feely, verging on “Kumbaya.” (Actually, if I had to pick a Latham theme song, I’d probably go with “Shiny Happy People.”)

“We don’t have internal jostling,” as Miles Ruthberg put it. “Instead, we’re like the Washington Nationals, hugging each other in the dugout.”

The firm is run by a nine-member Executive Committee, consisting of two junior partners, two senior partners, two at-large partners, two vice-chairs, and a chair. The EC appoints department chairs and sets partner compensation, but it is not as powerful or dictatorial as its counterparts at many other firms.

“Management at Latham is not very top-down,” Ruthberg said. “Instead, things bubble up through multiple channels, many matters get handled by the committees, and the firm proceeds through broad consensus.”

“We do have great management, but individual lawyers at the firm retain a lot of autonomy,” said Michele Johnson, a former Executive Committee member. “At certain other firms, there’s a guy at the top — almost always a guy — and you have to be in his orbit to have power. At Latham, we have a diffuse and democratic distribution of power.”

This decentralized approach explains how a firm as large as Latham isn’t lumbering. It encourages individual partners to act entrepreneurially, supported but not controlled by firm leadership.

“Leadership at Latham is in many ways about letting lawyers run their own practices, rather than telling them what to do,” Sean Berkowitz said. “It’s like the formula for success on D-Day: empower the people on the ground to do what they feel is necessary to be successful, and give them the tools they need to accomplish their goals.”

Instead of being about power, as it is at many other firms, leadership at Latham is about service.

“It’s like being dean of a college,” Ruthberg said. “Your job is to establish a system that promotes other people’s opportunities, to figure out how to help them succeed. You’re also expected to maintain your practice; we don’t have a ‘management class’ here at Latham. The only people at the firm who are full-time managers are the chair and two vice chairs.”

Viewing management as about tendering service rather than exerting power shapes how Latham partners select their leaders. It’s not about who has a big book of business, but who can do a good job.

“At Latham, we focus on leadership qualities when electing the Executive Committee,” said Jamie Wine, a former Committee member. “At many other places, the executive committee members are just the top business generators. This often doesn’t allow for diversity — not just gender or racial or ethnic diversity, but other forms of diversity as well, such as in practice areas, geography, or seniority.”

“One important development in the evolution of the firm is the increase in diversity in leadership. When I joined in 1995, a woman had never served on the Executive Committee. A number of women have served on the Executive Committee since then, and today three of the nine members are women.”

Latham’s emphasis on teamwork, promoted by its view of leadership as service, gets further reinforced through its compensation system.

“Many firms talk about their culture as being collaborative and collegial,” said BJ Trach, a current Executive Committee member. “Latham puts its money where its mouth is, using a compensation system that makes sure people are collaborating.”

“Our compensation system is one of the most important factors in our firm’s success,” Ruthberg said. “It’s the best system I’ve seen, and I’ve been in the compensation function at every firm I’ve been in.”

Latham’s system contains both lockstep and incentive elements, seeking to combine long-term stability with short-term scrutiny. The lockstep portion involves partnerships units, a minimum of 300 and a maximum of 900, for a 3:1 spread. The incentive portion comes in the form of bonuses or “fund awards,” which come from a pool amounting to 15 percent of firm profits. (It’s like the Paul Weiss system of lockstep plus bonuses, although the Paul Weiss bonus pool is smaller than the Latham bonus pool.)

Units are stable, while bonuses go up and down. Fund awards can be larger than unit compensation, which allows Latham to compete for talent at the high end. And competing for talent is critical in this age of lateral movement.

“We have not lost any of our top partners over the past few years, but it has gotten relentlessly competitive,” Ruthberg said. “That’s why you have to remain extremely profitable — if you’re not, you start losing your people.”

The Executive Committee sets partner pay. Its compensation decisions are informed but not controlled by Latham’s credit system, a “double-credit” system with an origination credit for bringing in the client and a proliferation credit for generating more business from the client. Either credit can be split, in two or more ways; if three partners pitch and land a new client, the origination credit can be split three ways.

“Over the years, the system has gotten more complicated, but the principles remain the same,” Ruthberg said. “You’re rewarded for creating the client relationship, and you’re rewarded for deepening the client relationship. The system promotes bringing in younger partners, cross-selling practice areas, and teamwork.”

And teamwork, in the end, is what it’s all about — at Latham, and in life. Just ask Peter Wald.

“Back in our Harvard Law Review days, when Miles and I talked about possibly practicing together someday, we made a commitment to help each other and support each other always, so that together we’d be better than either of us could be standing on our own. That’s the ethos of both the Latham litigation department and the entire firm.”

Peter Wald and Miles Ruthberg, in San Francisco, August 2015 (courtesy of Peter Wald)

*            *            *

For Miles Ruthberg, what will life look like after January 1, 2020? Upon his retirement from Latham’s partnership, Ruthberg will become “of counsel.” He will serve as a resource and strategic advisor to the firm’s lawyers and clients, but he will no longer be in the litigation trenches. So perhaps he will come full circle and return to the days of billing just 1500 hours a year, like when he was a junior associate at Tuttle & Taylor.

Should he cut back to that degree, Ruthberg will have earned it. He has certainly spent more than enough years at the firm. Latham has no mandatory retirement age, but most partners retire by 65 — making Ruthberg, at 67, one of the five oldest partners out of some 700 partners worldwide.

And he has certainly given the firm more than enough hours. During his busiest years as a Latham partner, including his entire time as Litigation Chair and on the Executive Committee, he worked 3200 to 3500 hours a year, roughly twice the 1600 or so hours he worked as a young associate at Tuttle. That difference in total hours reflects the difference between Tuttle and Latham as firms, the increasing demands of Biglaw over time, and Ruthberg’s assumption of management responsibilities at Latham, which can add 1000 or more hours in a typical year.

Of course, people’s retirements don’t always turn out as planned — and considering how much he loves his work and how much his clients and colleagues love him, don’t be shocked if Ruthberg finds himself busier than expected in his “retirement.” To paraphrase an old saying, you can take the boy out of Biglaw, but you can’t take the Biglaw out of the boy.

That said, Ruthberg will have plenty of other ways to spend his time. He’s a white male Biglaw partner in his late 60s, so yes, he enjoys golf. He has two children, a son and a daughter — both in medical school (go figure) — and he plans to spend more time with them and their families. But most notably, Ruthberg told me, “I plan to follow my wife around” — which could itself be a full-time occupation.

Catherine Schreiber and Miles Ruthberg at the Tony Awards, June 2019 (courtesy of Larry Rogowsky)

Ruthberg’s wife, Catherine Schreiber, is an acclaimed theater producer who works in both the United States and the United Kingdom. She has earned two Tony Awards (for Clybourne Park in 2012 and Angels in America in 2018), four other Tony nominations, four Olivier nominations (for her work in London), and the Broadway Global Producer of the Year award in 2017. (For my first interview with Ruthberg, I caught him right before he left for London for the opening of Schreiber’s latest production, The Lion, the Witch, and the Wardrobe — which has garnered excellent reviews.)

In Biglaw, Miles Ruthberg is a big deal. But in the theater world, he’s “Mr. Schreiber” or “Catherine’s husband.” And that’s fine with him: “Having spent so many years as Miles Ruthberg the lawyer, with Catherine’s support, it’s a beautiful thing for me to reciprocate and support Catherine as she continues to soar.”

Earlier this month, on December 7, Miles and Catherine celebrated their 33rd wedding anniversary. Perhaps reflecting Ruthberg’s continuing dedication to his clients, they dined that evening with the general counsel of Ernst & Young and his wife. (Ruthberg and his client were coming from a golf game that afternoon; the two couples had a lovely dinner, and Ruthberg and Schreiber agreed to celebrate their anniversary again privately on a different night.)

Looking back over his more than two decades at Latham & Watkins, Miles Ruthberg has no regrets, only gratitude: “I feel blessed beyond belief, getting to work every day with people I love working with.”

And in typical Miles Ruthberg fashion, when asked to describe his greatest accomplishment at the firm, he made it not about himself.

“When I get up in the morning, I have no internal conflict or concern about this transition, because the firm is in fabulous shape and will only continue to ascend. And as I approach my retirement as a partner, I’m most proud of the people that I have worked with and recruited to Latham.”


LATHAM & WATKINS LITIGATION — BY THE NUMBERS

Department headcount (as of November 30, 2019): 761

Partners: 219

Counsels: 44

Associates: 498

Headcount growth, 1994-2019: 358 percent

Largest Litigation & Trial Departments by headcount: D.C., New York, San Francisco, Chicago, Los Angeles

Estimated revenue for 2019: over $1 billion

Revenue growth, 1994-2019: 1400 percent


TESTIMONIALS AND TRIBUTES FOR MILES RUTHBERG

Peter A. Wald (courtesy of Latham & Watkins)

Peter Wald

Partner, Litigation & Trial Department, San Francisco
Global Chair, Litigation & Trial Department, 2004-2011

“There is no one else I have met who combines such raw brainpower with the deep wellspring of humanity that Miles exhibits in every minute of every day. His empathy, his compassion, his concern for other people — these qualities alone would make him a huge contributor, but combining them with his sheer brilliance is what makes Miles the extraordinary individual he is.”

“Teamwork, collegiality, mutual support and respect — Miles embodies all of these things. And he inculcates those values in other people — not by telling them how to act but by setting an example himself.”

Sean M. Berkowitz (courtesy of Latham & Watkins)

Sean Berkowitz

Partner, Litigation & Trial Department, Chicago
Global Chair, Complex Commercial Litigation Practice
Global Chair, Litigation & Trial Department, 2011-2016

“Miles is a lawyer’s lawyer. He is who I would call if I were in trouble, and he’s who I would hire for an enterprise threatening matter if I were a general counsel. I am a better lawyer and better person for having had the opportunity and privilege of working with him. We won’t see someone with Miles’s combination of brilliance, warmth and perseverance again in my lifetime.”

Jamie L. Wine (courtesy of Latham & Watkins)

Jamie Wine

Partner, Litigation & Trial Department, New York
Global Chair, Litigation & Trial Department, 2016-2019

“On issues of culture and diversity, Miles has always been ahead of his time. Every firm needs a Miles Ruthberg. From day one, he was all about surrounding himself with the best people, mentoring them, and giving them the best opportunities. And if you look at the people he has mentored, like looking at a coaching tree in the NFL, so many of them are women or diverse — like me, Michele [Johnson], and BJ [Trach].”

“I had a trial with Miles when I was a sixth-year associate. This wasn’t my first trial, but it was my biggest to date, for Ernst & Young, a longstanding client of the firm. It was important enough that the general counsel was there, sitting through the whole trial.”

“I was given the opportunity to handle some witnesses, even though I wasn’t a partner yet. I was almost done cross-examining a witness, and then we had a break. There was one more question I wanted to ask before the witness got off the stand — a risky question, but if we got the right response, it could be devastating.”

“Miles and the client and I discussed it during the break. Miles noted how risky it was, and he seemed to be leaning against asking the question. But I made my case for asking, and in the end he said, ‘You know the case and this witness best — I defer to you.’ After the witness took the stand again, I got up and asked the question. I got exactly the answer I wanted, and it was devastating.”

“Miles let me make this important judgment, on the fly, as an associate, in a major trial with the GC in attendance. That’s what it’s like working with Miles: he trusts you, he respects you, and he empowers you.”

Michele D. Johnson (courtesy of Latham & Watkins)

Michele Johnson

Partner, Litigation & Trial Department, Orange County
Global Chair, Litigation & Trial Department, 2019 – present

“I remember working with Miles on the reply brief for a summary judgment motion, back when I was a fourth-year associate and he was a partner. We were on the phone, going over the draft, and on every critical issue, Miles asked, ‘Michele, what do you think?’ As a young associate, that meant so much to me. I thought to myself, ‘If Miles cares what I think, then what I think must have value.’”

BJ Trach (courtesy of Latham & Watkins)

BJ Trach

Partner, Litigation & Trial Department, Boston
Member, Executive Committee

“Shortly after I joined Latham, I had the chance to pitch for a relatively small matter, but my first at the firm. I called Miles in New York to get his advice. After hearing a bit about it, he said to me, ‘This sounds like a great opportunity — I will fly up from New York and pitch it together with you.’ At the time he was one of Latham’s most senior partners, but he was willing to go out of his way to help me, a junior colleague who had been at the firm for all of a month. That’s just the kind of colleague he is.”

“Miles is a great lawyer, a brilliant legal thinker. It’s amazing to see him in a courtroom arguing. These incredible insights come out of his mouth in the exact way they’d be written in a brief that would take us normal people days to get right. His standards could not be higher. He is constitutionally incapable of not making sure that work product is perfect before it’s circulated to the client or filed with the court. It makes all of us better at what we do.”

“But he’s also a wonderful mentor. He cares deeply about the development of younger lawyers in his practice, and he’s so generous with his time. He knows that Latham gets super-smart people at every level, and he wants everyone’s input to be valued.”

“Miles has just done such a great job of embodying the Latham culture, everything that is the best of the firm. I have never heard him say a bad thing about anyone. He is cool all the time, even under the highest-pressure situations. And on the matters he oversees, he creates a culture of collaboration and enjoyment, where everyone feels welcome and is having fun.”

“It makes such a huge difference to have leaders like Miles. I’ve learned so much from him, and his retirement, while deserved, is bittersweet for me and many others.”


DBL square headshotDavid Lat, the founding editor of Above the Law, is a writer, speaker, and legal recruiter at Lateral Link, where he is a managing director in the New York office. David’s book, Supreme Ambitions: A Novel (2014), was described by the New York Times as “the most buzzed-about novel of the year” among legal elites. David previously worked as a federal prosecutor, a litigation associate at Wachtell Lipton, and a law clerk to Judge Diarmuid F. O’Scannlain of the U.S. Court of Appeals for the Ninth Circuit. You can connect with David on Twitter (@DavidLat), LinkedIn, and Facebook, and you can reach him by email at dlat@laterallink.com.

Meet The Lawyer Who Turned A Grocery Bag Into A Professional Fashion Statement

(Steve Castor, who serves as a counsel for Republicans on the House Judiciary and Intelligence committees in the impeachment inquiry against President Donald Trump, made headlines and became a viral Twitter sensation after he carried his files in a reusable grocery bag instead of a briefcase. The Fresh Market later announced itself as “the official briefcase maker of Steve Castor.”)


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.

Law Professor Found Dead, No Foul Play Suspected

(Image via Getty)

We have some unfortunate news to report out of Indiana, where a beloved law professor was found dead.

David Welter, 59, was a longtime professor at Valparaiso University Law School, and had recently celebrated his 25th year of teaching there. His cause of his death is unknown at this time, but police do not suspect foul play. The Chicago Tribune has some additional details:

Valparaiso police were called around 7:40 a.m. Monday to the 1300 block of Bullseye Lake Road on Valparaiso’s north side for a report of a man down, and police and medical personnel determined he was deceased, according to a release from that agency.

An autopsy is scheduled for Wednesday, according to the coroner’s office.

Valparaiso Law released the following statement after learning of Welter’s death: “We would like to express our deepest condolences to Professor Welter’s wife, Alissa Kohlhoff, his three daughters and to his family, friends, colleagues, students staff and others who mourn the loss of this special person.”

We here at Above the Law would like to extend our condolences to Professor David Welter’s family, friends, and colleagues during this difficult time.

Valpo law professor ID’d as man found dead in Valparaiso [NWI Times]
Police: Porter County Election Board president found dead in Valparaiso, but no foul play suspected [Chicago Tribune]


Staci ZaretskyStaci 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.

The Unrealized Value Of Contract Lifecycle Management

This year, the Legal Department Operations survey asked respondents to rate their maturity in various areas of operation, including Contract Lifecycle Management (CLM) technology.

Among those respondents who used CLM tech (just over 80 percent said they did), half put their maturity at either a 1 or 2 on a scale of 1-5. Conversely, less than 1 percent of respondents who use CLM technology consider themselves power-users, rating themselves 5 out of 5 for maturity.

In other words, while many legal departments have adopted CLM, many are just beginning to leverage the technology in their practices. Some departments are in their infancy, using CLM technology solely as an electronic repository post-execution.  More mature departments will use CLM for pre-execution activities, like template management, clause libraries, and automated approval workflows.

Another indicator of CLM maturity is found within the survey in response to questions about the collection and utilization of metrics.  Asked which contract management metrics departments track with their CLM, the most common response is “contract volume by customer, partner, program type, and geography.”

This is important data to gather as a starting point for a company. But it is very basic information and telling of the unrealized potential of CLM in today’s legal departments.

In truth, this is totally to be expected with new technology, especially when that technology handles something as sweeping and complex as managing contracts across highly matrixed, global enterprises.

Contracts are language-based and unstructured, meaning they do not lend themselves to straightforward data analysis the way, say, external legal spend does. On account of this challenge, early CLM systems were little more than a repository to store and share contracts across the enterprise.

However, today’s contract management software, leveraging the power of artificial intelligence and cloud computing, can do much, much more.

Best-in-class CLM technology can extract contract data and metadata at scale to give enterprises deeper and wider views of their contract landscape. This means business can be done faster, risk can be reduced, and operations can be optimized.

But it doesn’t happen overnight. To fulfill their goals regarding CLM maturity and use of CLM data, legal department operation professionals should take a “crawl, walk, run” approach to enterprise contract management.

Such a progression might look something like this:

Crawl: A common early step for legal departments adopting CLM is to measure contract volume to get a comprehensive baseline for what your contract landscape looks like. How many contracts are touched by your legal department? The survey suggests that many legal departments are already at this stage, but if you are part of the 20 percent not yet using CLM technology, this is a good early project to start on.

Walk: With contracts digitized and quantified, legal departments can start to measure things like contract turnaround time and delays in approval and contract value. With this data, LDOs can identify bottlenecks, revise workflows and measure improvements over time. For instance, armed with this type of information, high-value contracts can get automatically routed for review to the pertinent attorney or subject matter expert; executives gain instant insights into the company’s most important contractual relationships; and risk can be more quickly surfaced and addressed.

Run: Finally, legal departments can begin to mine contract clauses for a global understanding of how contracts are deviating from standard terms and how the company is doing at fulfilling obligations and extracting maximum value from their contracts. At this point companies can leverage the technology to reduce litigation and improve outcomes — thereby becoming a true, strategic partner in the business.

Contracts form the foundation of commerce, governing every dollar in and out of the enterprise. Legal department operations professionals can accelerate, protect, and optimize their businesses with mature, robust contract lifecycle management technology.

Student Expelled After Posting ‘IT’S OKAY TO BE WHITE’ Flyers At Law School

What’s something you’d never expect to see plastered across the entryway of a law school? If you guessed it would be something as obtuse as this, then you win.

(Image via Facebook)

These flyers, which contain a phrase that’s been promoted by white supremacist groups, were found at the Oklahoma City University School of Law — one of the most diverse law schools in the country — the day after Halloween. More flyers like this were found scattered across the law school campus:

In response, Dean Jim Roth sent the following message to all law students:

This morning, our administrative team was alerted to the presence of flyers around the law school campus. I want to thank every student, staff, and faculty member who took the time to remove them and bring them to our attention. We are currently in the process of investigating this matter and hope to have this resolved quickly.

In the meantime, I want to address the message that was posted. As you may have noticed, OCU Law has been intentional and relentless in celebrating the voices, achievements, and culture of our diverse community. We enjoyed celebrating Hispanic Heritage Month, LGBTQ+ History Month, Dia de los Muertos, and are excited to kick off Native American Heritage Month. And we will continue to celebrate our diverse community throughout the year.

Despite what the intentions of that message may have been, the message reminds me of one fact that I know our community embraces — it’s okay to be EVERYBODY. Exclusion and hate will not be tolerated here. You are accepted at OCU Law no matter how you pray, what you look like, or who you love. And you always will be.

Kudos to Dean Roth for handling a disgusting situation in the most gracious way. This is how you lead and embrace diversity and inclusion in times of division.

But who would have committed such an insensitive act? As it turns out, a law student was allegedly behind it. The Oklahoman has more information:

OCU Police Director Bill Citty said the male student was already on suspension from the law school, 800 N Harvey, and was not allowed to be on school property. The student violated the terms of his suspension when he posted the flyers on the door and exterior of the law school building the night of Oct. 31, Citty said. …

Citty wouldn’t confirm whether investigators determined the student to be a member of any white supremacist groups.

While Citty said the student isn’t considered a threat, a thorough investigation was needed nonetheless. “The reason you look into those types of things is you want to make sure the individual is not a threat to other students,” he said in an interview with the Oklahoman. “You have to look into those issues in this date and time. People worry, students worry, staff worry, parents worry. You have to make sure.”

As law students, we hope you hold onto your ideals and that you continue to believe that the legal profession is a noble one, in spite of events like this. Please treat each other with respect and value your classmates for who they are — you’ll be happier.

Suspended student expelled after posting “IT’S OKAY TO BE WHITE” flyers at OCU [Oklahoman]


Staci ZaretskyStaci 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.

Law School Student Wins $100K To Pay Off Loans In Dr. Pepper Football Challenge

We have finals this week and next week and I’m not prepared at all right now. I’m trying to work on getting caught back up…. I have a lot of debt and can’t wait to send a check out to my loan provider.

— Tyler Gordon, a third-year student at West Virginia University College of Law, in comments given after after winning $100,000 in the Dr. Pepper Tuition Giveaway during the Big 10 championship game in Indianapolis Saturday night. Gordon thinks he was chosen for the contest because his application included his future career plans. “I want to serve West Virginia and fight the opioid epidemic that we currently face,” he said. “I want to do that by working in the U.S. Attorney’s Office and hopefully becoming a U.S. Attorney someday.”


Staci ZaretskyStaci 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.

In-House Counsel Make Increasingly Arcane Billing Demands And It’s Costing Firms Money

Every quarter we report on law firm financials and every quarter we see some kind of milquetoast improvement — revenues up, expenses up just a shade less, demand down, confidence… meh. One factor in every one of those reports is the collection and realization rate, the figure that explains the gap between billing the time and getting the check from the client. For years, we’ve chalked up low realization to a combination of attorney laziness and the disconnect between lawyers as practitioners and lawyers as businesspeople. But perhaps the real culprit in keeping firms waiting on their money is the out of control in-house legal department.

The Association of Legal Administrators and Bellefield Systems released a report last week on the nature of outside counsel guidelines and examining how firms deal with getting all their bills in. It’s not a surprise that in-house counsel are trying to keep bills low — that’s a given. Nor is it a surprise that legal departments internalize more work than ever to manage spend. But what receives less attention in the world of billing is the Byzantine guidelines clients concoct to delay paying the bills they owe.

And these delays can be significant:

Invoice rejection is universally experienced and varies by degree. Most firms experience 5-10% of e-bills getting rejected or reduced (43.24%). Almost a quarter of firms experience 11- 20% of e-bills getting rejected or reduced (21.62%). Over one third of firms (35.81%) experience 21% or greater of e-bills getting rejected or reduced.

15% of firms do not appeal rejections either because of lack of staffing power or writing off as a cost of doing business.

The report tells us that 88.83 percent of firms receive outside counsel guidelines from clients but 25 percent of firms have no process to synchronize their work with these guidelines and around 63 percent only have an ad hoc process for doing so. That’s unfortunate because there is zero effort to harmonize guidelines and every client creates their own inane rules for billing compliance. These rules can be as arbitrary as “don’t use X word in your descriptions even if we all know you’re doing X” with the result being an outright rejection of a monthly bill.

In addition to lack of staffing to handle client guidelines, the majority of firms feel that OCG are simply too complex as their top compliance challenge (66.04%), and nearly half report that they are simply too long with too much info, and they didn’t read them (43.4%).

On the one hand it’s amusing to see corporate attorneys hoisted by the petard of their own onerous quasi-adhesion contract language that no one really reads, but that’s no justification. The clients might say that they have enterprise-specific, nuanced needs that they want counsel to address. Oh, come on! You are not a beautiful or unique snowflake. You’re a random company in need of attorneys willing to tell you what they did and for how long. Get over yourselves.

Note that I said clients might say that. In this case, “might” is doing a lot of work because clients seem pretty comfortable just admitting they’re trying to force a write-off.

In 2019, clients are now pulling back on outside counsel spend and the overwhelming majority (81%) report utilizing Outside Counsel Guidelines as one of the most effective tools for controlling costs.

Firms lack the staffing to stay on top of all of this and attorneys lack the time to learn how to comply with every client under the sun. While that may save some money today, it’s not an effective long-term strategy because eventually firms will staff up and just pass the cost on to clients — congratulations on just making everything more expensive!

In the meantime, one thing firms can do to avoid getting hung out to dry by outside counsel guidelines is consider Bellefield’s own product. Their iTimeKeep system is set up to provide compliance guidance at the point of time entry. Basically, if you’re writing a description that violates the guidelines programmed into the system it’ll let you know right then and there. Frankly, clients should probably be demanding firms get this system before a bunch of admins get hired.

That might be a pretty smart guideline to add.


HeadshotJoe 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.