Paying 10% of your money to retired millionaires

Another of the many reasons you’re not getting your money’s worth when you hire a large firm.

How would you react as a client if you knew that 10%-15% of the money you pay to your firm is going to someone who isn’t even working at the firm any more.

Partners at some elite firms are often entitled to between 20% to 30% of their peak pay after retirement—in many cases, for life, according to partners and law firm consultants. For the most profitable firms, that could mean payments of $400,000 to $600,000 a year per retired lawyer…

“It’s a real problem in this environment for a law firm to pay 10 or 15 cents out of every dollar of revenue to partners who have retired from the law firm,” says a senior partner at one firm with a generous pension plan…

At Gibson Dunn, partners who serve there for 20 years get a retirement benefit at age 60 that pays out 20% of their top compensation. At current profits, that could amount to $500,000 a year for eight years or life—whichever is longer…

When considering where to get your legal services, consider whether or not you want to pay a 10% finders fee to a retired millionaire.

via The Wall Street Journal – Next Pension Clash: Law Firms

Man adopts his 42 year old girlfriend to evade judgment

In an amazing display of legal kung fu, a man adopts his 42 year old long-time girlfriend in order to insulate his money from a civil wrongful death judgment.

Goodman, who founded the International Polo Club Palm Beach in Wellington, legally adopted 42-year-old Heather Laruso Hutchins, as his daughter on Oct. 13 in Miami-Dade County, according to court documents….

[T]he trust set up for Goodman’s two minor children could not be considered as part of Goodman’s financial worth if a jury awarded damages to the Wilsons. According to the adoption papers, Hutchins is immediately entitled to at least a third of the trust’s assets as his legal daughter since she is over the age of 35.

The reasoning behind his explanation as to why he did this shows a lawyer with an outrageous display of cognitive dissonance trying to zealously represent his client

Dan Bachi, Goodman’s civil attorney, said Hutchins’ adoption was done to ensure the future stability of his children and family investments.

“It has nothing to do with the lawsuit currently pending against him,” Bachi said.

Can anyone seriously say that with a straight face?

via Sun Sentinel – Polo club founder Goodman adopts his adult girlfriend

Law school isnt a get rich quick scheme or lottery ticket

Law school is great if that’s what you want to do… Not so much if you think it’s a get rich quick scheme:

If you are going to go to law school, you better love the law so much that you’d practice it for free. If you expect to get paid for your services, take a number; it might be a long time before the legal economy gets around to serving law graduate 45,001.

-Above the Law, More Evidence That The Legal Job Market Is In Terrible Shape

The fact that the world might not need as many investment bankers and insurance brokers isn’t a problem per se. But the fact that it could need fewer lawyers is. Outside of a few elite MBA programs, not many people get a degree specifically to become the next Will Emerson. But roughly 45,000 students do graduate from law school each spring. Most of them have taken on significant debt. And despite the old saw about being able to “do anything” with a law degree, they don’t have the specific technical or quantitative skills to go into faster growing fields. While the overall unemployment rate for lawyers is a microscopic 2.1%, that doesn’t take into account the trouble recent graduates are facing to find work that will soon pay off their debt. The industry is entering a period where it will be well oversupplied with talent. Unless a whole lot of old lawyers start retiring ASAP, that situation probably won’t change.

via The Atlantic, What Do Lawyers and Bankers Have in Common? They Lost Jobs in 2011

World of Warcraft Mafiosos

In 2006, Blizzard Entertainment sued Michael Donnelly of MDY Industries over Glider, MDY’s trainer/gameplay-automation-software for World of Warcraft. Allegedly the software violated the game’s terms of service. Donnelly claims this is how Blizzard Entertainment announced their plans to sue him.

On the morning of October 25, 2006, three representatives from Blizzard appeared unannounced at Donnelly’s home, including in-house counsel Fritz Kryman, litigation counsel Shane McGee, and an unnamed private investigator. Donnelly felt threatened and intimidated as Blizzard’s representatives demanded that Donnelly immediately stop selling Glider and pay Blizzard all the profits that MDY had earned to date by 5:00 p.m. that day. They said that if Donnelly didn’t comply with their demands, that they would file a federal complaint that they presented to him.

Showing up at the guy’s house instead of a call or a letter? They don’t mess around with World of Warcraft.

See First Brief on Cross-Appeal, MDY INDUSTRIES LLC and Michael Donnelly, Plaintiffs-Appellants, v. BLIZZARD ENTERTAINMENT, INC. and Vivendi Games, Inc., Defendants-Appellees., 2009 WL 6382212 (C.A.9), 9-10

Default to Law School

A great explanation about why unhappiness seems so prevalent in the legal profession…

“[Law school] is a default position for many people. … If everyone went to sound engineering school, some would be happy, some would not—but not a lot of people are randomly going,” Rubin says. “But a lot go to law school that way.

“When you make a decision without deciding, when you go along with what others do, you drift. It sounds easy, but it’s the passive, lazy choice. [Law school] can be grueling; law school is hard every step of the way. It doesn’t mean you’re not drifting, and [people] can be fooled by that.”

Even those who are initially passionate about careers in law can veer off track, pursuing specialties that don’t match their values or dreams, and that subsequently fail to deliver job satisfaction.

“When students come into law school, about two-thirds express interest in public interest. When they get out, fewer than one-third go to public interest kind of jobs,” Levit says. “Is law school changing this ideal of success? Are folks buying into it? That is a concern.”

Between crippling loans, grueling hours, and challenging, detail-oriented work, law school may not be the best place to go just because you can’t figure out what else to do with your life.

via ABA Journal: Hunting Happy: In Grim Times, a Search for Joy in Law Practice Gains Ground

Consumer Protection Ruling Hijacked?

Recently, the California Supreme Court ruled that retailers violate a consumer protection statute when they ask their credit card-using customers for ZIP codes.

Faster than the ink could dry on that ruling confirming the danger of zip codes in the wrong hands, “more than a dozen new lawsuits have been filed against major chains that do business in California, including Wal-Mart, Bed Bath & Beyond, Crate & Barrel and Victoria’s Secret.”

Father-and-son legal team Edwin and Eric Schreiber, who filed two of the lawsuits — against Bed Bath & Beyond and Crate & Barrel — said they took on the cases because of the invasion of privacy that consumers were subjected to when asked for their ZIP Codes.

“A lot of the people we talked to felt very uncomfortable giving the ZIP Code but felt they had to,” Eric Schreiber said. “They felt they were in the middle of a transaction and weren’t going to tell the sales clerk no.”

What’s the motivation for all of this?

Is there really big money to be made here for folks like the Schreibers? Indeed. State law sets statutory damages of a maximum $250 for the first violation and $1,000 for each further violation.

A San Francisco plaintiff firm filed six proposed class actions Monday seeking to penalize retailers for requesting ZIP codes from customers paying with a credit card, less than a week after the state Supreme Court ruled that practice is illegal.

Kassra Nassiri of Nassiri & Jung filed the suits — targeting Old Navy, Target Corp., Macy’s Inc., Cost Plus Inc., Toys “R” Us Inc. and Trader Joe’s Co. — on behalf of named plaintiff Heather Robertson.

Why stop at six? Could they not find one other beleaguered plaintiff full of regret that he submitted his zip code to The Disney Store, The Gap or Best Buy?

This isn’t a rant about how “poor corporations” are getting the short end of the stick from “evil lawyers” and “scheming plaintiffs.” Not at all.

This is about opportunistic people turning consumer protection statutes in their own personal cash machines at the expense of the public.

When people act like this in the wake of a valid, probably very worthwhile consumer protection ruling, it gets the general public angry at rulings like this in general and makes them less likely to support necessary reforms in the future.

Easy money isn’t always good money. Remember other people have to live in this state, too.
via WSJ

Overrated / Underrated

Whether bigger firms are “better” is up for debate. What’s clear though is that bigger firms in bigger cities are more expensive.

Lawyers’ experience has little correlation to their hourly rate… [The rate is significantly correlated with] where that lawyer happened to be working and how big the lawyer’s firm happens to be,” Williams says.

A firm’s location in Chicago, Los Angeles, New York City, San Francisco or Washington, D.C., adds about $131 to a lawyer’s rate…

Clients also pay about $10 more for every 100 additional lawyers at a firm, says Williams, and about $100 more for a partner’s time, regardless of the partner’s experience.

Sometimes, you don’t always get what you pay for.

via ABA Journal: Study Shows Truths About Billing, But Do Clients Care?

Google Has Changed The Way The Lawyers Should Work

Law practice is changing so fast and so dramatically that wholesale groups of lawyers either need to change how they operate or face finding another line of business…”The development of artificial intelligence along with increased Internet search capabilities is making access to answers for complex legal questions easier and cheaper…Why is someone going to pay $700 to have a lawyer prepare a will when they can get it for $49 online?” Ury said. “We have had a monopoly on answering legal questions about the law. But the consumer—our former clients—can now get that information for free on Google.”

Before the Internet, clients paid lawyers to find scarce information. In the Internet age, clients need someone make sense of information overload.

via ABA Journal

Lawyers: Stop Going to Social Media Conferences

There should be a blanket prohibition on any more articles, conferences, lectures about the benefits and dangers of “social media” for lawyers. The average discussions range from entirely obvious (Really? I should enable privacy on my Facebook profile?) to entirely un-researched (social media consists of only Facebook, Twitter, LinkedIn, and Martindale Connected).

The term “social media” is almost entirely meaningless, but it’s even moreso when the people who talk whatever “social media” actually is can’t even articulate what makes it different than traditional media. If you’re conducting one of these lectures, tell me how the Internet creates new ethical questions for lawyers rather than treating personal blogs like magazine articles that happen to be posted online.

The ABA’s Journal article on the topic is well-researched and mostly non-reactionary. After reading it, feel free to fire any “social media experts” trying to make a consulting fee off of you or your school’s law students.

Another issue arises when an attorney seeks access to the social media posts of someone unrepresented by counsel, such as an opposing party’s witness: To what extent can an attorney use subterfuge to convince an individual to grant access to his otherwise private social media posts?

Model Rule 4.1(a) forbids a lawyer from making “a false statement of material fact or law to a third person,” and Rule 8.4(c) forbids a lawyer from engaging “in conduct involving dishonesty, fraud, deceit or misrepresentation.” Both these strictures are violated when an attorney friends an individual under false pretenses, according to ethics opinions from the New York City Bar Association and the Philadelphia Bar Association.

However, the New York City bar says an attorney (or agent) can withhold strategic information when making a friend request. “An attorney or her agent may use her real name and profile to send a ‘friend request’ to obtain information from an unrepresented person’s social networking website without also disclosing the reasons for making the request,” the bar’s Committee on Professional and Judicial Ethics stated in Opinion 2010-2 (September 2010).

Via ABA Journal