Law Firm Dissolutions: When the Music Stops, Does Anyone Need to Account for Any Unfinished Business? 41
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116 Ethical Considerations in the Dissolution of a Law Firm Or a Lawyer's Departure from A
Formal Opinions Opinion 116 ETHICAL CONSIDERATIONS IN THE DISSOLUTION OF A LAW FIRM OR A LAWYER’S 116 DEPARTURE FROM A LAW FIRM Adopted March 17, 2007. Intoduction and Scope Many ethical issues arise in connection with the dissolution of a law firm or a lawyer’s departure or withdrawal from a firm. Such issues often arise in the context of determining who will represent partic- ular clients following the break-up. The departing lawyer and the responsible members of the firm with which the lawyer has been associated have ethical obligations to clients on whose legal matters they worked.1 These ethical obligations sometimes can be at odds with the business interests of the law firm or the departing lawyer. In such circumstances, all involved lawyers must hold the obligations to the client as paramount. The ethical considerations discussed in this opinion include the duty to keep the client reason- ably informed about the status of the legal matter and to explain a matter to the extent reasonably neces- sary to permit the client to make informed decisions regarding the representation, pursuant to Colo. RPC 1.4(a) and (b); the duty to provide competent representation to the client, pursuant to Colo. RPC 1.1; avoiding neglect of client matters because of a break-up, in violation of Colo. RPC 1.3; taking appropriate steps upon withdrawal from representation, in accordance with Colo. RPC 1.16(d); ensuring that any funds in which a client or a third party may claim an interest are maintained separate from the lawyers’ own property, in accordance with Colo. -
Scenes from a Law Firm
The Catholic University of America, Columbus School of Law CUA Law Scholarship Repository Scholarly Articles and Other Contributions Faculty Scholarship 1998 Scenes from a Law Firm Lisa G. Lerman The Catholic University of America, Columbus School of Law Follow this and additional works at: https://scholarship.law.edu/scholar Part of the Legal Profession Commons Recommended Citation Lisa G. Lerman, Scenes from a Law Firm, 50 RUTGERS L. REV. 2153 (1998). This Article is brought to you for free and open access by the Faculty Scholarship at CUA Law Scholarship Repository. It has been accepted for inclusion in Scholarly Articles and Other Contributions by an authorized administrator of CUA Law Scholarship Repository. For more information, please contact [email protected]. SCENES FROM A LAw FiRM* Lisa G. Lerman** INTRODUCTION What follows is one lawyer's description of his experiences at a law firm where he worked for fifteen months from the fall of 1993 through 1994. The lawyer, whom I call "Nicholas Farber," offered to share these stories because he was troubled by many things that had happened at this law firm. He agreed to allow me to publish the stories only if neither he nor the firm would be identified, because some of the stories involve serious misconduct. Farber determined not to report the firm to the disciplinary authorities, but instead to recount some of what happened at his law firm so that these practic- es could become the subject of discussion and policy development. Small factual changes have been made to obscure the identity of the * For other windows into otherwise private worlds, see generally Lisa G. -
When Can Law Firms and Lawyers Accept Stocks Or Stock Options for Services?
When Can Law Firms and Lawyers Accept Stocks or Stock Options for Services? by: Sheldon I. Banoff With increasing frequency, lawyers and law firms are being asked (or are aggressively seeking) to take equity ownership in their clients. For example, stock or stock options may be received in lieu of all or a portion of the cash legal fees to be received. Alternatively, stock may be negotiated by the law firm as a "premium" for legal services, in addition to its regular cash legal fees. In another scenario, lawyers who serve as members of boards of directors of their clients may receive grants of stock, restricted stock and stock options, pursuant to the company's directors' incentive compensation program. Pursuant to their law firm agreements, such lawyer-directors may be obligated to turn over the equity (and/or the proceeds upon disposition of the equity) to the law firm. (These situations differ from law firms that invest in their clients on the same terms offered to certain other investors.) Questions In these stock-for-legal fees scenarios, a number of questions arise: • Are there legal constraints on law firms owning equity interests in various types of businesses? • Are there ethical constraints (pursuant to bar association opinions, state court rules or otherwise) which preclude lawyers from accepting stock for fees in certain situations? • Does the law firm face increased potential legal liability in a malpractice or negligence case? • How would a jury view a law firm defendant, where the firm has a substantial ownership interest in the client? • Do the law firm's professional liability insurance policies cover situations involving clients in which the firm also has a substantial economic interest? Firms that receive stock for services may find themselves holding the equity for the long term. -
Lessons Learned from Law Firm Failures
ALA San Francisco Chapter Lessons Learned from Law Firm Failures Kristin Stark Principal, Fairfax Associates July 2016 Page 0 About Fairfax Fairfax Associates provides strategy and management consulting to law firms Strategy & Performance & Governance & Merger Direction Compensation Management Strategy Development and Partner Performance and Governance and Merger Strategy Implementation Compensation Management Firm Performance and Operational Structures & Practice Strategy Merger Search Profitability Improvement Reviews Market and Sector Merger Negotiation and Pricing Partnership Structure Research Structure Client Research and Key Process Improvement Alternative Business Models Client Development Merger Integration Page 1 1 Topics for Discussion • Disruptive Change • Dissolution Trends • Symptoms of Struggle: What Causes Law Firms to Fail? • What Keeps Firms From Changing? • Managing for Stability Page 2 How Rapidly is the Legal Industry Changing? Today 10 Years 2004 Ago Number of US firms at $1 billion or 2327 4 more in revenue: Average gross revenue for Am Law $482$510 million $271 million 200: Median gross revenue for Am Law $310$328 million $193 million 200: NLJ 250 firms with single office 4 11 operations: Number of Am Law 200 lawyers 25,000 10,000 based outside US: Page 4 2 How Rapidly is the Legal Industry Changing? Changes to the Law Firm Business Model Underway • Convergence • Dramatic reduction • Disaggregation in costs • Increasing • Process Client commoditization Overhead improvement • New pricing Model efforts models • Outsourcing -
Mayor Michael R. Bloomberg and New York City Law Department Launch Innovative Corporate / Public Service Pro Bono Initiative
NEW YORK CITY LAW DEPARTMENT OFFICE OF THE CORPORATION COUNSEL Press Release Michael A. Cardozo, Corporation Counsel Web: nyc.gov/html/law/home.html For Immediate Release MAYOR MICHAEL R. BLOOMBERG AND NEW YORK CITY LAW DEPARTMENT LAUNCH INNOVATIVE CORPORATE / PUBLIC SERVICE PRO BONO INITIATIVE MAYOR ACKNOWLEDGES PARTICIPATING FIRMS AND FIRMS THAT AIDED CORPORATION COUNSEL’S OFFICE AFTER SEPT. 11 WITH CITY HALL ENGAGEMENT Contact: Kate O’Brien Ahlers, Communications Director, (212) 788-0400, [email protected] New York, May 17, 2002 -- The New York City Law Department has joined with more than 30 leading law firms to form a unique public service initiative, the “Corporation Counsel Public Service Program,” that embraces Mayor Michael R. Bloomberg’s corporate/public service ideal while tackling the need for innovative solutions to the City’s budget crisis. The Mayor acknowledged firms participating in this program -- along with firms that aided the Corporation Counsel’s office after Sept. 11 -- with a City Hall engagement this morning. At the event, Chadbourne & Parke was honored for providing housing to over 100 City lawyers and staff for almost eight months, with Mayor Bloomberg proclaiming it “Chadbourne and Parke Day.” The Mayor also acknowledged several other law firms for the assistance they provided to the Corporation Counsel’s office after Sept. 11. Mayor Bloomberg’s engagement highlighted the two distinct elements of recent legal public service assistance offered to the New York City Law Department. The first initiative, the Corporation Counsel Public Service Program, is enabling New York City to better manage its mounting legal caseload while offering attorneys at major law firms a unique chance to participate in public service opportunities and bolster their legal and trial experience. -
Their Voices: Insights from Stereotypical, Well-Trodden Pathway to Law Is Far O Today’S Rising Lawyers, Chronicles from the Sole Entry Point to the Profession
1 | LEGAL500.COM WHERE BRIGHT MINDS MEET Grow your career with Clifford Chance, where the brightest minds work as one team for our clients. www.cliffordchance.com 2 | LEGAL500.COM THEIR VOICES Insights From Today’s Rising Lawyers INTRODUCTION ALEX SPEIRS ur latest collaboration with Clifford The collection of stories reveals that the Chance, Their Voices: Insights from stereotypical, well-trodden pathway to law is far O Today’s Rising Lawyers, chronicles from the sole entry point to the profession. In the the journeys and stories of a selection of past, anything but a complete commitment to the the next generation of lawyers, written and law – and nothing but the law – may have been compiled by the team at GC magazine. considered a detriment, whereas now diversity 2 | LEGAL500.COM of experience, both personal and professional, is or operating under the rigidity of the typical six- characterizing the next generation of entrants. month rotation, most new entrants now enter Those featured in the pages that follow embody a pool for a two-and-a-half-year period, during this change, hailing from a range of backgrounds which time they are exposed to assignments with law a second career for many – some in across the firm’s transactional practices. That tangentially related industries, others hailing from very exposure – to a broad selection of practices a past which couldn’t be further from the law – and practitioners – offers the opportunity to but all bringing with them an insight as unique as glean an insight into what their own future could it is valuable. -
Rethinking the Law Firm Organizational Form and Capitalization Structure
Scholarship Repository University of Minnesota Law School Articles Faculty Scholarship 2013 Rethinking the Law Firm Organizational Form and Capitalization Structure Edward S. Adams University of Minnesota Law School, [email protected] Follow this and additional works at: https://scholarship.law.umn.edu/faculty_articles Part of the Law Commons Recommended Citation Edward S. Adams, Rethinking the Law Firm Organizational Form and Capitalization Structure, 78 MO. L. REV. 777 (2013), available at https://scholarship.law.umn.edu/faculty_articles/90. This Article is brought to you for free and open access by the University of Minnesota Law School. It has been accepted for inclusion in the Faculty Scholarship collection by an authorized administrator of the Scholarship Repository. For more information, please contact [email protected]. Rethinking the Law Firm Organizational Form and Capitalization Structure EdwardS. Adams 1. INTRODUCTION The recent bankruptcy of large law firms has energized the debate over the viability of the traditional partnership model. Dewey & LeBeouf filed for bankruptcy in May 2012, becoming the largest law firm bankruptcy in U.S. history.' At its peak, Dewey employed 1,400 lawyers in several offices across the globe, causing some to ask whether Dewey's collapse was an iso- lated product of poor management or a symptom of greater systemic prob- lems. 2 But Dewey's bankruptcy was not the first to result in the dissolution of a large firm. The financial downturn of 2008 deeply affected the legal profession, and several firms went under. Many have already questioned the traditional business structure of the law firm in light of these bankruptcies and the manner in which they oc- curred.4 Partner defections and limited capital place criticism squarely on the partnership model as a major factor in these bankruptcies. -
Beazley Brief Update Risk Management Insights for Law Firms from Beazley
Beazley Brief Update Risk management insights for law firms from Beazley Finishing Some “Unfinished Business”— California And In the February 2012 and July 2012 issues of the Beazley Brief, we reported on how the “unfinished business” doctrine New York Courts Reject - based on the California Court of Appeals decision in Jewel v. Boxer (156 Cal. App. 3d 171 (1984) - had spawned a rash of “Unfinished Business” Claims suits by dissolving law firms against departing partners and their new firms for taking the old firm’s “unfinished business,” Involving Dissolved Law Firms or pending client matters, with them to their new firms. By Kevin S. Rosen, Christopher Chorba, and Peter Bach-y-Rita Fortunately, the tide has begun to turn against this troubling - Gibson Dunn & Crutcher LLP trend. Recent decisions by courts in California and New York have determined that dissolved law firms do not have a One of the most troubling trends in recent years has been the property interest in pending hourly unfinished business rise in trustee litigation following the dissolution of several matters. This Beazley Brief Update addresses these major international law firms. Bankruptcy trustees have significant rulings. brought claims to recover profits on “unfinished business” on behalf of defunct firms, asserting an entitlement to fees We are again pleased that Gibson Dunn & Crutcher partners earned on matters handled by new firms that hired partners of Kevin S. Rosen and Christopher Chorba and associate Peter the dissolved firm. In these cases, trustees and debtors of the Bach-y-Rita have graciously agreed to prepare this update. dissolved firms have sued both the former partners and their Kevin is in the firm’s Los Angeles office and chair of the firm’s new firms, relying on the California Court of Appeal decision Law Firm Defense Practice Group. -
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Case 3:08-cv-05322-LB Document 65 Filed 11/25/09 Page 1 of 23 1 2 3 IN THE UNITED STATES DISTRICT COURT 4 FOR THE NORTHERN DISTRICT OF CALIFORNIA 5 6 KENDRICK PATTERSON, ADAM BERGMAN, ) No. 09-3031 SC MICHAEL ATTIANESE, ANDREA LEVY, ) 7 DARYL YEAKLE, and RAYMOND R. ) And related case: 8 PLANTE, each individually and on ) behalf of all others similarly ) 09-5322 SC 9 situated and the general public, ) ) ORDER GRANTING DEFENDANTS' 10 Plaintiffs, ) MOTIONS TO DISMISS ) PLAINTIFFS' THIRD CAUSE OF 11 v. ) ACTION 12 ) STEPHEN V. O'NEAL, individually and ) ii 13 on behalf of those similarly ) situated; THOMAS HILL, individually ) 14 and on behalf of those similarly ) 15 situated; ELLEN L. BASTIER, ) individually and on behalf of those ) 16 similarly situated; MARK WEITZEL, ) individually and on behalf of those ) 17 similarly situated; JULIAN ) United States District Court For the Northern District of California 18 MILLSTEIN, individually and on ) behalf of those similarly situated; ) 19 JEFFREY STEINER, individually and ) on behalf of those similarly ) 20 situated; DAVID P. GRAYBEAL, ) individually and on behalf of those ) 21 similarly situated; ORRICK, ) 22 HERRINGTON & SUTCLIFFE LLP, a ) limited liability partnership; DLA ) 23 PIPER LLP, a limited liability ) partnership; NIXON PEABODY LLP, a ) 24 limited liability partnership; ) 25 HOWREY LLP, a limited liability ) partnership; and MORGAN LEWIS & ) 26 BOCKIUS LLP, a limited liability ) partnership, ) 27 ) Defendants. ) 28 ) Case 3:08-cv-05322-LB Document 65 Filed 11/25/09 Page 2 of 23 1 And related case: ) ) 2 ADAM BERGMAN, et al., ) 3 ) Plaintiffs, ) 4 v. ) THELEN LLP, a California limited ) 5 liability partnership, and DOES 1- ) 500, ) 6 Defendants. -
Strategist ®
The Bankruptcy LAW JOURNAL ® NEWSLETTERS Strategist Volume 31, Number 11 • September 2014 Law Firm Clients Defeat Bankruptcy Trustees in New York Court of Appeals By Michael L. Cook represent them, a major inconvenience for the ness.” 2014 U.S. Dist. LEXIS 81087, at *18. clients and a practical restriction on a client’s A law firm only owns unpaid compensa- The New York Court of Appeals, on July right to choose counsel.” Id. at *20. In addi- tion for legal services already provided with 1, 2014, in response to questions certified by tion, “clients might worry that their hourly fee respect to a client matter. In the words of the the U.S. Court of Appeals for the Second Cir- matters are not getting as much attention as New York court, “a client’s legal matter be- cuit, held that “pending hourly fee matters are they deserve if the [new] law firm is prevent- longs to the client, not the lawyer.” Id. at *15. not [a dissolved law firm’s] ‘property’ or ‘un- ed from profiting from its work on them.” Id. The Thelen and Coudert trustees’ litigation finished business’” under New York’s Partner- More important, New York has a “strong pub- will now return to the Second Circuit for dis- ship Law. In re Thelen LLP, _________ N.Y.3d lic policy encouraging client choice and, con- position. Because of this final ruling on appli- _________, 2014 N.Y. LEXIS 1577, *1 (July 1, comitantly, attorney mobility.” Id. at *21. Quot- cable New York Law, the court should direct 2014). -
United States District Court, SD California. QUALCOMM
Untitled Document 2/28/10 4:30 AM United States District Court, S.D. California. QUALCOMM INCORPORATED, Plaintiff. v. BROADCOM CORPORATION, Defendants. Broadcom Corporation, Counter-Claimant. v. Qualcomm Incorporated, Counter-Defendant. Civil No. 05CV1392-B(BLM) May 1, 2006. Adam Arthur Bier, Christian E. Mammen, James R. Batchelder, Day Casebeer Madrid and Batchelder, Kevin Kook Tai Leung, Law Office of Kevin Kook Tai Leung, Cupertino, CA, Barry Jerome Tucker, David E. Kleinfeld, Foley & Lardner LLP, James T. Hannink, Kathryn Bridget Riley, Randall Evan Kay, Brooke Beros, Dla Piper US, Brandon Hays Pace, Heller Ehrman LLP, Heidi Maley Gutierrez, Higgs Fletcher and Mack, San Diego, CA, E Joshua Rosenkranz, Heller Ehrman, Evan R. Chesler, Richard J. Stark, Cravath Swaine and Moore LLP, Richard S. Taffet, Bingham McCutchen, New York, NY, Nitin Subhedar, Heller Ehrman, Menlo Park, CA, Jaideep Venkatesan, Heller Ehrman, Menlo Park, CA, Jason A. Yurasek, Perkins Coie LLP, San Francisco, CA, Patrick Taylor Weston, McCutchen Doyle Brown and Enersen, Walnut Creek, CA, William F. Abrams, Bingham McCutchen, East Palo Alto, CA, for Plaintiff. Alejandro Menchaca, Andrew B. Karp, Brian C. Bianco, Christopher N. George, Consuelo Erwin, George P. McAndrews, Gregory C. Schodde, Joseph F. Harding, Lawrence M. Jarvis, Leonard D. Conapinski, Matthew A. Anderson, Ronald H. Spuhler, Scott P. McBride, Stephen F. Sherry, Thomas J. Wimbiscus, Jean Dudek Kuelper, McAndrews Held and Malloy, Chicago, IL, Allen C. Nunnally, Daniel M. Esrick, John J. Regan, John S. Rhee, Joseph F. Haag, Kate Saxton, Louis W. Tompros, Richard W. O'Neill, Stephen M. Muller, Vinita Ferrera, Wayne L. Stoner, William F. -
When Law Firms Go Bankrupt — What Secured Lenders Can Learn from the Dewey Bankruptcy
PLACE PDF @ 88% REPRINTED FROM THE NOV/DEC 2012 ISSUE, VOL. 10, NO. 8 BANKRUPTCY UPDATE When Law Firms Go Bankrupt — What Secured Lenders Can Learn From the Dewey Bankruptcy BY JEFFREY A. WURST, ESQ When law firm Dewey & LeBoeuf filed for Chapter 11 protection, it was obligated to its secured creditors, among many others, led by JP Morgan on a $75 million line of credit facility. Jeffrey Wurst explains what led to Dewey’s collapse and offers advice regarding key indicators of a potential creditor’s fiscal irresponsibility. ictims of bankruptcy come in many forms. Dewey filed for bankruptcy in the U.S. Bankruptcy They include the debtors themselves, as well Court for the Southern District of New York. Many theo- V as their secured and unsecured creditors. When ries abound as to the causes of Dewey’s collapse, but, law firms fall into bankruptcy, the secured lenders are essentially, the crux appears to be that Dewey guaran- often among the hardest hit. Typically, these secured teed an unsustainable amount of compensation to both lenders take security interests in all assets of the law newly acquired and longstanding partners. Hoping to firm when funding operations. The assets with the generate enormous fees off these highly compensated most value tend to be the cash and cash equivalents partners, Dewey subsequently took on debt to fund the and the accounts receivable. The problem with many failing business. However, the economic impact of the recent law firm bankruptcies is that cash on hand is recession forced Dewey to consolidate its debt. Further JEFFREY A.