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Nearly a year after an Australian law firm went public, many in the legal profession are still tittering over whether any American players would follow suit.

By necessity, law firms are fairly tight-lipped about much of the work they do. That would have to change if any were to become a publicly traded company, what with the disclosure requirements and the probing questions of shareholders.

In the midst of earnings season, Above the Law’s David Lat pens a mostly tongue-in-cheek piece for The New York Observer speculating on what a quarterly earnings report by an American firm would look like. (A hint: It wouldn’t say much.)

Mr. Lat, a former corporate lawyer himself, gently jabs the pampered-partners culture of Big Law, which may take a hit as corporate profits slide. Niceties like $160,000 starting salaries for first-year associates, 18 weeks of paid parental leave and Friday Swedish massages, he imagines, would go out the window.

And how would the firm describe secrecy-shrouded practices like mergers and acquisitions work or criminal defense? Perhaps thusly:

The M&A department spent a significant amount of time on several potential transactions for a client in the energy sector that were never consummated. Unfortunately, the firm was unable to bill for most of this time …

The firm cannot provide additional details about this representation, due to client confidentiality rules.

As a point of comparison, consider the semiannual disclosures of Slater & Gordon, the personal injuries firm that now resides on the Australian stock exchange. Its recent annual report (PDF) resembles virtually any other public firm’s, with general income statements and descriptions of its business.

Which is not to say that public law firms would ever fully open their kimonos, much as representatives of another industry tend to play their cards close to the vest. Alternative asset managers — including private equity firm Blackstone Group, buyout- and hedge-fund manager Fortress Investment Group and hedge fund Och-Ziff Capital Management — have been criticized by some analysts and investors as presenting opaque looks into their businesses.



Same-sex marriage on court docket

  Practice Focuses  -   POSTED: 2008/03/03 08:57

As gay-rights groups call for marital equality and opponents warn of a public backlash, societal decay and religious conflict, the California Supreme Court is prepared for an epic three-hour hearing Tuesday on the constitutionality of the state law defining marriage as the union of a man and a woman. It shapes up as the most momentous case the court has heard in decades - comparable to the 1981 ruling that guaranteed Medi-Cal abortions for poor women, the 1972 ruling that briefly overturned the state's death penalty law, and the 1948 decision, cited repeatedly in the voluminous filings before the court, that struck down California's ban on interracial marriage. The arguments on both sides are weighty.

Supporters of same-sex marriage invoke the state's commitment to equality regardless of gender or sexual orientation, the needs of the children of gay and lesbian couples, the persistence of societal discrimination, and legal rights such as freedom of expression, association and privacy.

In defense of its law, the state cites a cultural tradition far older than statehood, the will of the people as expressed in a 2000 initiative, the steps California has already taken toward equal rights for gays and lesbians, and the power of lawmakers and voters to determine state policy.

Beyond those arguments, groups opposing same-sex marriage want the court to justify the state law on moral or scientific grounds, as an affirmation that limiting matrimony to a man and a woman is best for children and society.

A ruling is due within 90 days. The case combines four lawsuits - three by nearly two dozen couples who want to marry and the fourth by the city of San Francisco, which entered the dispute after the court overturned Mayor Gavin Newsom's order that cleared the way for nearly 4,000 same-sex weddings in February and March 2004.

The suits rely on the California Constitution, which state courts have long interpreted as more protective of individual rights than the U.S. Constitution. The plaintiffs invoke a passage in the 1948 ruling on interracial marriage - the first of its kind by any state's high court - in which the justices recognized a "right to join in marriage with the person of one's choice."

Judge Richard Kramer of San Francisco Superior Court echoed that language in March 2005, when he ruled that the state's ban on same-sex marriage violated "the basic human right to marry a person of one's choice." He also said the marriage law constitutes sex discrimination - prohibited by another groundbreaking California Supreme Court ruling in 1971 - because it is based on the gender of one's partner.

But a state appeals court upheld the law in October 2006. In a 2-1 decision, the court rejected Kramer's findings of discrimination and said California was entitled to preserve the historic definition of marriage while taking steps to protect the rights of same-sex couples who register as domestic partners.

Advocates crowd in

As the case reached the state's high court, the participants and the arguments multiplied. Conservative religious organizations, including sponsors of the 2000 ballot measure that reinforced the opposite-sex-only marriage law, accused the state of making a half-hearted defense of its law and sought to justify it as a pro-family measure. Marriage is for procreation, and children fare best with married fathers and mothers, they argued. They also said the definition of marriage is so deeply engrained in the law that judges have no power to change it.

The coalition of conservative religious groups warned that a ruling against the state law would "fracture the centuries-old consensus about the meaning of marriage."

An opposing assortment of liberal denominations counseled the court against a state endorsement of "the religious orthodoxy of some sects concerning who may marry."

The court also heard from hundreds of organizations representing psychologists, anthropologists and other professions, city and county governments, law professors, businesses, civil rights advocates and social institutions.

Judges and limits

Underlying all the arguments is a debate about the proper role of courts in a democracy, particularly on contentious social and political issues. It's the same question - how far, and how fast, judges should move to correct injustices they perceive in the actions of elected officials - that has confronted jurists pondering such issues as segregation, school prayer and abortion.

The subject was raised with unusual frankness in written arguments by Attorney General Jerry Brown's office, which is leading the defense of the marriage law that Brown signed as governor in 1977.

"One unintended and unfortunate consequence of too radical a change is the possibility of backlash," said Deputy Attorney General Christopher Krueger. Same-sex marriage may someday be legalized in California, he said, "but such a change should appropriately come from the people rather than the judiciary as long as constitutional rights are protected."

Brown said last week he wasn't asking the court to sacrifice principles to politics, only observing that rulings that "ride roughshod over the deeply held judgments of society" can have unintended consequences.

He noted that the court majority swung from liberal to conservative after three of his appointees, including Chief Justice Rose Bird, were unseated in a 1986 election that centered on their votes to overturn death sentences.



How to find a good lawyer

  Practice Focuses  -   POSTED: 2008/02/29 04:50

Q: I am looking for a lawyer and would like some tips on how to find a good one. Do all Illinois lawyers receive the same training?

A: In order to be licensed to practice law in Illinois, a lawyer must receive a law degree from an accredited law school and pass the state bar exam and an ethics exam. Law school is typically a three-year program after undergraduate school.

Once a lawyer passes the bar and is licensed by the Illinois Supreme Court, the lawyer can practice all types of law - from real estate to estates to divorce to contracts to civil and criminal litigation in the courtroom. There really is no limitation as to the areas of practice except patent law.

As a practical matter, in my experience most lawyers fresh out of law school know little about the practical aspects of practicing law and usually learn how to practice law on the job, often working at a law firm with experienced lawyers or reading how-to books in the law library.

If you have a matter that involves significant dollars or important legal issues, the first question you should determine is the attorney's experience in the applicable area of the law. That is not to say that an inexperienced lawyer will not do a good or adequate job, but it is common sense that, as in most occupations, experience matters.

It is also important to find a lawyer you trust because you will want the lawyer to give you objective and unbiased advice. Practicing law is a business as well as a craft, and some lawyers are more interested in your money than your case.

A good way to start a search for a qualified lawyer is to ask a relative, friend, business associate or someone you trust for a recommendation based on their personal experience. Also, if you have a lawyer whom you trust who does not practice in the area in which you need legal representation, ask the lawyer for a recommendation on a lawyer who is familiar with that area of practice.

When you decide to retain a lawyer, make sure that she carries malpractice insurance. Illinois lawyers are not required to carry malpractice insurance, but they are required to report whether they have such coverage.

You can find out whether a lawyer has malpractice insurance at www.iardc.org - the Web site of the Illinois Attorney Registration and Disciplinary Commission, an agency of the state Supreme Court that keeps records for lawyers in Illinois and handles complaints of professional misconduct.

This Web site also can tell you if the lawyer has been disciplined or whether there are any disciplinary actions pending against him. It is a good resource for the public and should be utilized in the process of hiring a lawyer.



Photo Tech Complicates Child-Porn Cases

  Practice Focuses  -   POSTED: 2008/02/26 03:49
Each week, about 100,000 sexually explicit images of children arrive on CDs or portable disk drives at Michelle Collins' office.

They are sent by police and prosecutors who hope Collins and her 11 analysts at the National Center for Missing and Exploited Children can verify that the graphic pictures are real, not computer-generated. When they can't, officials sometimes turn to outside experts.

All this is being done — at an annual cost in the millions of dollars collectively in child-pornography cases alone — as software like Photoshop makes it easier to fake photos and as juries become more skeptical about what they see.

Although challenges to digital photos come in all types of criminal and civil cases, they are especially pronounced in child-pornography cases because of a 2002 U.S. Supreme Court decision striking down a ban on computer-generated child pornography. Defense attorneys are trying to use the ruling to introduce reasonable doubt in jurors' minds about the images' authenticity.

Prosecutors still generally prevail, but "this has certainly created an additional burden," said Thomas Kerle of the Massachusetts State Police. "I can say that unequivocally, it has made the prosecution of these types of cases more difficult. It takes ... resources I think could be better applied to investigating" more cases.

Drew Oosterbaan, who heads the U.S. Department of Justice's Child Exploitation and Obscenity Section, said prosecutors sometimes submit only photos they can easily verify because outside experts can be expensive — with travel, hotels and consulting fees, along with possible delays.

"This can affect the sentence the defendant gets," he said. "Before (the 2002 ruling) we would generally charge all the images."

Oosterbaan added that although defense lawyers have the right — and duty — to challenge evidence, they are doing so without "any shred of evidence there are wholly computer-generated images being generally circulated and passed off as real children out there."

And many law-enforcement officials worry that the time and money needed to withstand any challenges will only grow as technology improves and makes it more difficult to tell a computer-generated image from a real one.

"I feel that pretty much we can tell the difference right now," said Karl Youngblood of the Alabama Bureau of Investigation. "How much longer that's going to last, I don't know with the technology going at the rate it's going."

Of course, there's a cost to defendants as well — sometimes more so because federal law limits where and when the defense may review images to restrict their distribution, meaning experts must often travel with expensive equipment to a police lab in another city.

"If something becomes more difficult for the government to prove, so be it. They have the burden of proof," said First Amendment lawyer Louis Sirkin, lead counsel in the challenge that led to the 2002 Supreme Court ruling.

Child pornography is illegal in the United States, but the Supreme Court in 2002 struck down on free-speech grounds a 1996 federal ban on material that "appears to be" a child in a sexually explicit situation. That ruling covers computer-generated images, though morphing — such as the grafting of a child's school picture onto a naked body — remains illegal.

Collins' Child Victim Identification Program in Alexandria, Va., grew out of that ruling. After officials submit seized photos, the center uses software and visual inspections to look for matches. It can usually verify that children in some or all of the images are known and real.

The program, which costs about $1 million a year to run, now has about 1,300 children in its database, up from 20 in 2002. Staff grew from just Collins then to 11 full-time analysts who now work under her. The program reviewed 5 million images last year, up from about 450,000 in 2003, the program's first full year.

Because of the graphic nature of the images, a psychologist visits each week, and analysts must undergo counseling at least quarterly.

"Not everybody can do it," said Raymond Smith, a longtime investigator who oversees child-exploitation cases at the U.S. Postal Inspection Service. "You have to be able to come to grips with seeing children be victimized and abused. It can tear you up, (but) through your efforts you are identifying the people that hurt these children."

When the center cannot make a match, prosecutors can turn to outside experts. Sometimes, it's a pediatrician who can say a real child has characteristics matching those seen in the photo. Other times it's a computer expert who can talk about how difficult it is to produce images and video of that quality.

Hany Farid, a Dartmouth College professor who has testified for the prosecution in some cases, said he has been getting more inquiries about authenticity — not only for child-pornography cases but also civil lawsuits questioning medical images in malpractice cases or signatures in contract disputes. News organizations have also looking for ways to authenticate photos.

"Because so many people get photographic fakes in their (electronic) mailboxes, to the average juror it resonates," he said.

The challenges can be costly, even if a case never goes to trial — the majority end in plea agreements.

Farid said he charges up to $25,000 a year for software he produced to look for signs of tampering, such as inconsistencies in shadows. He also charges as much as tens of thousands of dollars to work on a case.

Even when there is a match and an expert isn't needed, a prosecutor must seek out the detective who initially identified a child for the center. That detective must often be flown in and be ready to testify if the defense raises a challenge. In one case in Portland, Maine, a Russian detective couldn't be reached, so the prosecutor had to spend $5,000 on an expert anyway. Trials get postponed if a key witness has a scheduling conflict.

Sam Guiberson, a defense attorney who specializes in technology and digital evidence, said challenges to evidence are to be expected, digital or not.

"Every good trial lawyer is always going to subject every part of his adversary's exhibits to that sort of scrutiny," Guiberson said.

Kebin Haller, deputy director of the Wyoming Division of Criminal Investigation, said that in most cases, a large quantity of images are seized such that enough hold up.

How much proof a prosecutor needs in child-pornography cases can vary from region to region and even from judge to judge. Recent federal appellate rulings have eased the burden on prosecutors, essentially saying that in lieu of definitive evidence, they can let jurors make up their own minds about whether an image is real or computer-generated.

Many prosecutors, though, don't want to take that chance and would rather submit proof.

"It's difficult to prove these are real children," said Mary Leary, a Catholic University law professor who previously worked on child-abuse and child-pornography cases. "Is the defense exploiting this? Absolutely they are."



Big-Law Associates Facing 2008 Salary Cap

  Practice Focuses  -   POSTED: 2008/02/17 13:07

When in 2006 big law firms bumped up the starting salary for first-year lawyers $20,000 to $145,000, we thought, those lucky associates! When, last year, they told us it was going to $160,000, we thought, those darn associates! But this year, things might be different. In recent years, announcements of associate salary bumps have come out in January or February. And here we are, mid-way through February, and nothing’s doing. We’re not necessarily surprised: with the economy slumping, work (especially the transactional type) is down at a lot of law firms, and the short-term horizon looks pretty grim. “2008 is shaping up to be really tough,” said one big-firm managing partner to the Law Blog earlier today.

We called around to firms to find out whether associate salaries, called economically-irrational in some quarters, have finally (or, at least, for now) hit a ceiling. The answer seems to be yes.

“We’re not going to do anything,” said Orrick spokeman Allan Whitescarver, noting that law firms compete for talent with investment banks and consulting firms. “Times aren’t good for them either,” said Whitescarver. “We’re going to sit tight and keep the salaries capped.”

We’d venture to guess, however, that few big firm chairmen wake up on Jan. 1 and say, “you know what, our associates don’t make enough money; let’s bump their salaries!” What typically happens is that a single firm, in an attempt to flex its muscles, raises salaries, and everyone else follows, fearing the fallout if they don’t. Simpson Thacher was the eager beaver last year.

Whitescarver leaves room for this possibility. “If other firms move up, we and others will follow.”

Other firms, including WilmerHale and Milbank, also told the Law Blog that, for now, first-year salaries will stay at $160,000.



Office Romances & The Law

  Practice Focuses  -   POSTED: 2008/02/15 03:56

Recently, on the American version of the TV show “The Office,” two of the main characters — Jim and Pam — confess to their co-workers that they’ve become romantically involved. In the spirit of openness and responsibility, the couple goes to the head of human resources, Toby, to ask whether they need to sign something attesting to their relationship. Toby (Paul Lieberstein), who also has a thing for Pam, tells them that won’t be necessary.

With Valentines Day upon us, we found ourselves asking: What would’ve happened if Jim and Pam were lawyers? Would they have insisted on signing a love contract to establish their rights and remedies in the event of a break-up? If Jim and Pam were both hard-working associates, would their relationship be more susceptible to trouble?

To work through these relationship issues — and the law that governs them — we caught up with Ashley Brightwell, a partner at Alston & Bird in Atlanta. Brightwell, who focuses on employment litigation, filled us in on the rise of love contracts, the phenomenon of lawyers who date lawyers and best practices for conducting a firm romance.

Hi Ashley. Thanks for chatting. So you’re a specialist on office romances. Talk about that a bit.

I do a lot of sexual harassment cases, mostly defending the company. Of sex harassment cases, I’d say a third stem from something that arguably began as a consensual relationship – either formal dating, or an affair — and then morphs into a bad break-up or something that’s no longer consensual. Or, just something as simple as inter-office flirtation where one party thought it was mutual, and the other party either never thought it was, or things progressed into it becoming unwelcome.

What are “love contracts”?

It used to be that many companies had strict prohibitions on office romances. Then they recognized that wasn’t going to work, and that no matter what the policies were, employees were going to get involved. That’s when the idea of a love contract came along. It’s a tool that employers use to protect themselves when an office romance goes sour. It’s a document that confirms that a relationship is voluntary and informs the parties of the company’s sexual harassment policies. It sets out a procedure if, at any point, the relationship goes south.

Let’s focus on law firms. We’ve heard a lot about the concept of “firm boyfriends” and “firm girlfriends.” Not romances, but the kinds of close relationships that develop between lawyers who spend more time with each other than they do with their families. Do a lot of law firm affairs begin like that?

I don’t have hard stats to back this up, but the number of affairs in law firms and romances that end up in marriage seem to be greater than in the general population. In large part, it’s because you’ve got a lot of people who are close in age, doing the same work, working alongside each other and putting in long hours. It’s inevitable, in those circumstances, that you’re going to have a lot of office romances.

What are the major pitfalls for lawyers who date lawyers? Take a partner dating an associate, for example.

I think when you’ve got a partner and an associate you’ve got two big issues. First is the fact that a partner can control the associate. Whether the relationship is going great or whether it goes south, the partner can really affect the person’s employment – in terms of the work they get, their reviews, and possibly even their salaries. The other issue is this: the perception among other associates and partners. For instance, if a female associate is getting great benefits because of a relationship it can result in hostile work environment claims from those outside the relationship.

Let’s try a hypothetical. I’m a sleep-deprived second-year associate who can’t find much time to socialize outside of work. One day I come running into your office, jump up and down on your couch, and confess that — on a firm-sponsored booze cruise — I fell in love with a summer associate. Advise me.

First you look and see what your firm’s policies say. If relationships are permissible in your organization, then there shouldn’t be a problem as far as HR or management are concerned. But I’d still advise informing someone higher up that it’s going on. And if that summer decides to become a lawyer at your firm, I’d take whatever steps I could to make sure you’re not working with that person. I’d avoid day-to-day interaction.

But I don’t need to fight my feelings, right?

Well, firms and companies are recognizing that if you have a policy against office romances, it’s just going to be broken. So they’re dealing with them in different ways – whether you call it a love contract or something less cheesy. So often I see things go bad, and then one person comes in and says it was never consensual to begin with. Typically, that person can produce a big stack of emails which look quite bad. But you can prevent a lot with a love contract in which the parties agree it’s voluntary.



Have 2 firms? Make sure they relate

  Practice Focuses  -   POSTED: 2008/02/11 03:24
For some entrepreneurs, opportunity knocks again and again.

While practicing corporate real estate law at Jenner & Block, Jennifer Sara Levin saw an opportunity to make a difference in the lives of other professionals by sharing what she had learned about building a client base.

So she launched a business-relationship consulting firm, NateandDot.com, in January 2006 and left the law firm seven months later to focus on it. Last year, the self-described multitasker launched a concurrent business, Legal Intelligence, an online platform connecting law school students with top-tier firms, in part by applying what she had learned about recruiting at major law firms.

Many people have asked Levin how she juggles both start-ups.

"I'm one of those people who is significantly more efficient when I'm busy," she said. "I try to stack my days for efficiency."

She schedules several downtown meetings on the same day, works nights as needed and relies heavily on communicating via her BlackBerry, Levin said.

While unusual, it's not unheard of for business owners to run two enterprises simultaneously, experts said. The phenomenon occurs most often when entrepreneurs see an opening in the marketplace that is somehow related to their first business and go for it.

They are more likely to succeed when the second business is strategic and not just opportunistic, said Linda Darragh, director of entrepreneurship programs at the University of Chicago.

"Look for a strategic link and a reason they fit together," she said.

For example, Darragh said, a holding company with three separate enterprises all supporting the restaurant industry, offering management, financing and data-processing services, could be effective.

"They link together in terms of cross-selling and some systems," she said.

But with no synergy, managing two enterprises at the same time could be a recipe for disaster, Darragh said, because most entrepreneurs are limited in time and money.

"If you're dividing your resources between two companies, you may be jeopardizing both at the same time," she said.

Levin's two companies have target markets with some overlap and share many core competencies, she said. She researched emotional intelligence and hired an industrial psychologist and cognitive behaviorist to learn the best way to teach networking and communication skills, which apply to both businesses, she said.

Client Sherwin Brook of Chicago accounting firm BrookWeiner said Levin did a stellar job developing a seminar for its young professionals on developing contacts and client relationships. The niche Levin has carved out has great potential, he said, because it is largely overlooked.

Pilot at Northwestern

Levin is just gearing up a pilot program for Legal Intelligence LLC, involving three law firms and her alma mater, Northwestern University School of Law, that will run online at http://www.legalintelllc.com from May 15 to Oct. 15. The idea is to help students find the law firm that fits them best, partly through online video conferences.

"It's like a Match.com for law students," Levin said of her second start-up.

Law firms pay to participate, Levin said, because they want to find law school graduates who aren't just qualified but who also share their firm's values. Often, Levin said, top-tier law firms end up with graduates who don't fit their culture.

"There's no way to do it in a 20-minute interview. You can't get enough information to know if this person is the right cultural fit," she said.

Still, growing two companies at once can be difficult, especially if investors react with skepticism, said Scott Meadow, professor at the University of Chicago Graduate School of Business.

"Unless I had Steve Jobs for both companies, I doubt I would consider backing someone who was working on two different deals," Meadow said.

So what should entrepreneurs do when they are enticed by a new opportunity? Before launching a new business, Meadow said, "you ought to sell that first one, get that off your mind. Then turn to something else." If you make money on the first enterprise, the second one will be that much easier to fund, he said.

Jay Goltz, president of the $15 million-plus Goltz Group, runs three separate operations, with design as the common thread.

He started Artists' Frame Service in 1978, then opened Jayson Home & Garden, a combined home and garden furnishings store, in 1996, in part to give Artists' Frame Service customers a place to shop while their art was being framed. Meantime, his 15-year-old Chicago Art Source aims to tap the corporate market.

"It always started from seeing an unfulfilled need in the marketplace and thinking I could do that better," he said.

Goltz said each time he came up with the new business concept, he thought it would be easy to make it work.

"I tend to jump into the deep end and figure it out later," he said.

Leaps sometimes painful

The process is sometimes painful. He faced several learning curves before he began to identify important differences among the three operations and adapt accordingly, he said.

"The same thing that can be a great asset also can be a liability," Goltz said.

Jayson Home & Garden has seasonal inventory challenges that Artists' Frame Service doesn't have. And Chicago Art Source requires a different type of sales representative than the two retail operations need.

"It has to be someone who understands the corporate market," said Goltz, who employs 115 workers.

Goltz also made some mistakes. For example, he tried opening another business that sold wholesale frames to large department stores, but differences in the market, receivables and inventory proved too great.

He closed it six months after its launch, he said.

Still, Goltz embraces the concept of leveraging core competencies to pursue new business.

"Some people say to stick to the knitting, but if you just stick to the knitting, that would leave enormous opportunities," he said.

Today, Goltz's three operations are successful, he said, because he has the right people in place to manage them.

"It's about finding talent and developing it," he said. "I have less stress today than I've ever had because I have hired key people to run these businesses, and they are doing a good job."


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