LAWYERSCHILE EL MUNDO INTERNACIONAL DEL ABOGADO

Rodrigo González Fernández y un grupo de egresados de la Facultad de Derecho de la Universidad la Republica en Chile ha decidido poner al alcance de todo el mundo de la profesion legal importantes materias en Ingles para ir practicando el trabajo en materia de Tratados internacionales y que nuestra profesión estará en primera linea. Invitamos a todos a opinar, debatir, participar activamente.Es el primer blog legal en inglés de latinoamerica.

Friday, September 26, 2008

Law Bloggers Opine on McCain's Proposal to Postpone the Debate

Law Bloggers Opine on McCain's Proposal to Postpone the Debate

Though McCain's recent proposal to suspend his campaign and postpone Friday's presidential debate so he can focus on working out the details of the financial bailout in Washington is more of a political than a legal event, law bloggers are nonetheless taking sides on McCain's decision and Obama's response. Here's a sampling of what the legal blogosphere has to say.

• Whose Approach is Right - McCain's or Obama's? Law bloggers are split fairly evenly over whether McCain's decision to suspend the debate is an admirable and sensible approach, or a political ploy. Siding with McCain are Hugh Hewitt of Town Hall, who views McCain's proposal as "an example of great leadership" and sees Obama's refusal to go along as his "Katrina moment." Mike Cernovich of Crime & Federalism views McCain's approach as "audacious," likely leaving Obama's staff with a sinking "why didn't we think of it first" feeling.

On the other end of the spectrum, Al Nye, The Lawyer Guy says McCain's campaign suspension is "politics, pure and simple." Ann Althouse seems to be of mixed mind: She says that McCain's announcement showed leadership, but concedes that McCain went for political theatrics and "if McCain had really been serious about this, he should have worked it out with Obama in private."

Finally, Howard Wasserman at Prawfs Blawg and Michael Dorf both argue that irrespective of politics or what needs to be done in Washington, the debate must go on so that the public can learn more about the issues.

• Will Postponement Violate Fair Broadcast Laws? David Oxenford of the Broadcast Law Blog wonders whether McCain's failure to show up would violate the FCC's equal opportunity rules. He explains:

If Barack Obama were to appear at the debate and answer questions, and that appearance was televised, would the stations that carried the debates later be subject to a claim for equal opportunities by the McCain campaign? Under FCC precedent, the answer would be "yes." [...] What would this mean if a station was to cover a debate where Obama showed and McCain did not? If the McCain campaign were to timely request equal opportunities, stations would have to provide to McCain time equal to the amount of time that Obama appeared on screen, and McCain could do anything with that time that he wanted - he would not have to answer questions from the debate moderator. Thus, traditionally, if only one candidate shows up for a scheduled debate that is supposed to be broadcast, the debate (or at least the broadcast) is canceled.

• How Would Your Law Firm Juggle Two Important Clients? For me, McCain's proposal triggered the question of how a law firm might juggle two important client matters. For example, if a firm had an important Supreme Court argument scheduled, but another client needed a fire put out earlier that week, it's doubtful that the firm would cancel one matter to deal with the other. Though I wholeheartedly agree with McCain's insistence on focusing on the bailout and coming to Washington to do so (and believe that Obama should do the same), I don't understand why McCain can't address both the budget and still go forward with the debate. If law firms can multitask, why can't politicians do the same?

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Posted by Carolyn Elefant on September 25, 2008

CONSULTEN, OPINEN , ESCRIBAN LIBREMENTE
Saludos
Rodrigo González Fernández
Diplomado en RSE de la ONU
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Small Firms Gained in 2007, but What Does the Future Hold?

from legal blog watch

Small Firms Gained in 2007, but What Does the Future Hold?

As with their Am Law 100 counterparts, small firms ranging in size from two to 150 lawyers experienced a banner year of growth, reports a study by Incisive Legal Intelligence's survey group (Disclosure: Incisive Media is Legal Blog Watch's parent company). From the press release:

-- Average hourly billing rates for senior partners reached $352, a gain of almost five percent over the prior year, while billing rates for 5th year associates increased to $227, a three percent increase.
-- Average gross revenue per lawyer for respondents reached $430,483, an increase of four percent over the prior year, while overhead expenses increased by only two percent. Average law firm profitability increased this year by more than five percent to $260,120 per lawyer.
-- Equity partner/shareholder total compensation increased by three percent, from an average of $364,837 in 2007 to $374,049.
-- Starting salaries for new law school graduates rose to $85,000, a three percent increase from the prior year and a 22.3 percent increase over the past five years.

Whereas most generally assumed that the growth experienced by Am Law 100 firms would no longer be sustainable in 2008 and beyond, no such predictions have yet emerged for smaller firms. My own hunch is that these smaller firms may prosper in tough economic times, in large part because they provide a more affordable alternative. For example, while smaller firm billing rates rose by 5 percent to $352, that's a bargain compared to the $1,000/hour rates that some large firms charge. Moreover, based on the statistics, it appears that small firms have made an effort to keep overhead costs under control; in 2007, gross revenues increased by 4 percent, but overhead only went up by 2 percent.

Do you run or work for a small firm? How is 2008 stacking up so far and what are your predictions for the future?

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Posted by Carolyn Elefant on September

Wednesday, September 24, 2008

In Bailout Furor, Wall Street Pay Becomes a Target

By STEVE LOHR

Published: September 23, 2008

Congress wants Wall Street to feel it where it hurts: the wallet.

The New York Times

The stratospheric pay packages of Wall Street executives have become a lightning rod issue as Congress shapes a $700 billion bailout for financial firms. Proposals circulating on Capitol Hill vary, but they all would impose some limits or approval authority on salaries of executives whose firms seek help.

The moves in Washington mirror the popular outcry — in constituent e-mail messages and postings in the blogosphere — over the prospect of Wall Street's tarnished titans walking away with tens of millions of dollars a year while taxpayers pick up the bill.

But Wall Street, its lobbyists and trade groups are waging a feverish lobbying campaign to try to fight compensation curbs. Pay restrictions, they say, would sap incentives to hard work and innovation, and hurt the financial sector and the American economy.

"We support the bill, but we are opposed to provisions on executive pay," said Scott Talbott, senior vice president for government affairs at the Financial Services Roundtable, a trade group. "It is not appropriate for government to be setting the salaries of executives."

Yet some formal restraint on executive pay seems unavoidable, even sensible, some finance experts and economists said.

Arthur Levitt Jr., a former Wall Street executive as well as a former chairman of the Securities and Exchange Commission, said pay curbs on executives whose firms take part in the bailout were essential for Congressional approval and were reasonable.

The finance industry, Mr. Levitt added, will continue to offer handsome salaries for the successful, though not as high as in the boom years. "The golden egg has disappeared," he said.

Scott A. Shay, chairman of Signature Bank, which holds no high-risk securities, called a limit on executive pay for firms participating in the bailout only fair.

"If that doesn't happen, you are effectively advantaging the institutions that made those risky bets at taxpayers' cost," Mr. Shay said. "What sense does that make?"

Across the Atlantic, there is also an appetite for stepping into pay practices in the finance industry. This week, Prime Minister Gordon Brown of Britain called "unacceptable" the practice of linking bonus payments to high-risk investments that delivered hefty profits in the short term.

His Treasury minister, Alistair Darling, echoed that view by saying that Britain's main regulator, the Financial Service Authority, should take a hard look at regulating pay.

Angry sentiments on the issue in Congress were palpable on Tuesday, when Treasury Secretary Henry M. Paulson Jr. and Ben S. Bernanke, the Federal Reserve chairman, testified before the Senate banking committee.

Senator Christopher J. Dodd, chairman of the committee, said the "authors of this calamity" should not walk away enriched.

The presidential candidates, Senators Barack Obama and John McCain, have also called for pay limits.

The proposals in Washington are still tentative, and often vague. A Senate draft document calls for a ban on incentive payments that the Treasury deems "inappropriate or excessive" and a "claw-back" provision, requiring executives to give up pay or severance benefits if the firm's financial results are later shown to be overstated.

Other proposals call for a ban on severance payments and allowing large shareholders, with a stake of 3 percent or more, to propose alternative slates of directors. This would be an effort to tackle excessive pay practices by opening up and strengthening corporate governance.

Some corporate governance experts say hastily devised compensation curbs in the bailout package would be a mistake and perhaps open the door to unintended consequences.

"Clearly, the level of pay at some of the Wall Street firms was appalling, given the performance," said Charles M. Elson, a corporate governance expert at the University of Delaware. "But the bailout is about saving the economy, while executive pay is a separate, and complex, issue."

In 1993, Mr. Elson noted, Congress limited the tax deductibility of executive salaries to $1 million, unless it could be demonstrated that the extra pay was linked to performance incentives. That move, he said, contributed to the practice in later years of very generous grants of stock options, which helped drive executive pay to new heights.

In 2007, the total compensation of chief executives in large American corporations was 275 times that of the salary of the average worker, the Economic Policy Institute, a liberal research organization, estimates. In the late 1970s, chief executive pay was 35 times that of the average American worker.

Wall Street has been the top tier of the corporate pay range, with executives earning eight-figure salaries. Its bonus system, which rewards short-term trading profits, has been singled out as an incentive for Wall Street executives to expand their highly profitable business in exotic securities and ignore the risks.

"This financial crisis is a direct result of the compensation practices at these Wall Street firms," said Paul Hodgson, a senior analyst at the Corporate Library, a governance research group.

One possible answer, compensation analysts and economists say, would be to stretch out payments for several years, encouraging executives to pursue the long-term health and stability of the firms they head.

"I'm of a free-market, conservative bent, but I am sympathetic to some reshaping of executive pay on Wall Street," said Kenneth S. Rogoff, a professor of economics at Harvard. "For sure, I would consider very long-term payouts, up to 10 years out."

Whether Congress acts on executive pay or not, Wall Street pay levels are destined to come under pressure, said Michael Karp, chief executive of the Options Group, an executive search firm. The fallout from the financial crisis and the consolidation in the industry, he said, inevitably mean that more people will be competing for fewer jobs, dragging down salaries.

"Of course, superstars will always get paid," Mr. Karp said. "But they won't be the way they used to be."

Eric Dash, Landon Thomas Jr., Leslie Wayne and Ben White contributed reporting.

More Articles in Business »A version of this article appeared in print on September 24, 2008, on page A1 of the New York edition.

Free trial. Read the complete New York edition of The Times on computer, just as it appears in print.

Sunday, September 21, 2008

'Lebanon: Homosexuality in Lebanon'

'Lebanon: Homosexuality in Lebanon'
by Nash Suleiman

Homosexuality is one of the topics you would find on the black list of any Middle East government and almost in all of its societies and cultures. And while the presence of homosexuality can be spotted in every country in the region, governments and societies are still intolerant to such life style. Intolerance can even reach a point of denial as it was witnessed during Iranian president Mahmoud Ahmadinajad's speech at Columbia University in 2007.

Lebanon stands out as a more tolerant space for homosexuality in the region compared to Saudi Arabia for example where homosexuality is often punished by flogging, life imprisonment and even beheading. Lebanon's homosexuals enjoy the first association for gay people in the Middle East, called the Helem Foundation. In addition to that, Lebanon also has gay bars and nightclubs. But the real life for this section of the community is not paved with roses. A quick round up of blogs and spaces promoting this issue in Lebanon should give the reader a brief peek into how this community lives.

Mazaj at Majaz75 wrote about homosexuality in the Middle East and the role of religion in it, expressing his personal opinion on the matter:

Some people relate the attitude towards homosexuality in Arab countries to Islam, but that's not completely true. Arabs, Muslims and Christians, consider homosexuality to be a sin. All Arabs are attached to religion; the Church and the Mosque have a key role in Arabs lives. Born as a Muslim, I feel it is very important to explain Islam's and Sheiks'* views of homosexuality.

Some scriptures of the Quran, the Holy Book of Islam, were taken out of context, added to a Hadith** not correctly reported to Prophet Muhammad, and conveyed to Muslims by ignorant Sheiks to form a general look at homosexuality as a sin that is against the nature intended by god for humans. In this Hadith, gay guys caught in act are to be killed by throwing them down from the highest building in town. Considering that most buildings in most Arab peninsula's towns were about 5-7 meters high at that time, this Hadith seems very ridiculous.

Majaz adds:
Being raised in a strict Muslim family, I struggled with my homosexuality in my early adolescent years, but I also had access to some rare Islamic scriptures, which allowed me to have a great look to how Islam dealt with homosexuality. I had come to the conclusion that Islam considers sexuality to be an identity, something to be born with. I also discussed this conclusion with well-known moderate Sheikhs, who confirmed it to me. Nevertheless, even the most moderate ones insisted that it is not acceptable to convey this fact about homosexuality in Islam to people for so many unconvincing reasons.

GayMiddleEast.com, a news site that focuses on the homosexual communities in the Middle East, posts an article written in a local Lebanese newspaper about an architect called Danny and his daily struggle in Lebanon as a homosexual:

Danny said he was open about his sexuality in Europe, but has been forced to keep a low profile in Lebanon mainly for two reasons: a non-tolerant society, and fear of his parents' reaction.

"Being gay in Lebanon is very hard," he said."I come from a highly conservative family, and if my parents knew about my sexuality it would be devastating for the both of us," he said in a low, shaky tone. "I don't want to ever think about their reaction if they knew." Danny added that he has never tried to be open with any of his friends about his sexuality, saying he preferred to stay "in the closet" for the time being.

"I can never consider being open about my sexuality over here," he said, explaining it might cause him a lot of trouble, especially at work.

"I have seen how colleagues at work react when they encounter a person who they suspect is gay," he said. "They avoid him as if he has a disease, and even harass him sometimes."

Another post by GayMiddleEast.com refers to few incidents that occurred a couple of years ago regarding two social clubs known for their homosexual crowd:

On the night of November 12, 2005, 6 men were arrested in Acid nightclub, a known gay venue in Sin el Fil. No charges were pressed against them. The detainees were released after 3 days of detention. Although no physical abuse was reported, the police were verbally abusive towards the men.

A week later, another known gay club, X-OM, was raided. The police checked IDs and inquired about drug use in the venue. No arrests took place that night.

Acid and X-OM were probably targeted by the police for their openly gay clientele, although legally they had no pretext for any arrests. Article 534 of the Lebanese penal code explicitly states that "penetrative sex against nature" is punishable by law, and not homosexuality per se or the adoption of a gay identity. Laws against public indecency may be enforced if excessive displays of affection or other such behavior is witnessed, but this does not entail the same sort.

Meem, a community of lesbians, bisexuals, transgenders, queers and questioning women in Lebanon, moderates a blog where members can post and share experiences and news. Pazuzu, in her post, shares a personal experience she went through while walking home one night:

Well, I passed by a couple of guys, one those men that scare you (or is it any man that scares you when you are in my situation?). Anyway, typically the first sign of your vulnerability in these situations is that the predators start discussing you in your face:

- Bint yamma sabe hayda?

And for our non Arabic readers :

- Is he a boy or a girl?

But it's fine I guess, it wasn't the first time that my sexual identity was questioned, though I didn't look particularly boyish that day. The real treat was when the second guy opens his mouth. I guess he was encouraged by his friend's attitude, thinking maybe I am a boy that likes to look like girls, to be honest, I am not sure what he was thinking but he said to me:

-Baddak nitsalla? Ta3a nitsalla

Again, respecting the non Arabic readers:

-Wanna have fun? Let's have fun together

Al Jaras, a local Lebanese TV station, was commenting over some photos of Portia de Rossi and Ellen DeGeneres' wedding when Jexy at Meem's blog realized that in addition to pronouncing Portia's name wrong, the TV presenter went on insulting the homosexuals in general as she describes it:

The first thing that was on my mind: "Seriously you dummy! You wanna trash them? Fine! But at least get the names right!". And what added up, she was talking at the same time about the Indian man that married a certain animal! Is this where we belong? In the same category of man/animal marriage!? She kept displaying the photos over and over again, adding up "Hayda dod el din [this is a sin]!". The heavenly angels assigned her to label people and decide what's wrong and what's against religion! I wanted to call and ask her: "Honey, if the sight of Ellen and "Borita" sickens you this much…why do u keep displaying them?" But then again, every word she was saying was showing nothing but IGNORANCE.

Learn more about the gay community in Lebanon by visiting Helem Association and Meem Foundation.

Saturday, September 20, 2008

LEGAL WATCH BLOG Dumping on Contract Attorneys

Dumping on Contract Attorneys

Like Rodney Dangerfield, contract lawyers don't get no respect. While law firms earn substantial profits off the labor of contract attorneys, these lawyers have no job security, work long hours but aren't necessarily entitled to overtime and they don't have any bargaining power to demand better. To top it all off, contract attorneys also get the blame when things go wrong, reports The Recorder.

Apparently, two critical e-mails in a stock option prosecution against McAfee's former general counsel weren't turned over because temp attorneys had marked them as not relevant, Howrey partner Robert Gooding Jr. explained to federal district judge Marilyn Hall Patel. Gooding characterized the error as inadvertent, and said senior lawyers were supposed to have reviewed the contract lawyers' work but somehow the mistake was overlooked. Defense lawyers weren't convinced, and filed a motion to dismiss shortly after the hearing.

For now, Howrey hasn't been required to offer up the heads of the lawyers responsible for the gaffe. And that's fortunate for the contract lawyers, since firms are more than willing to harshly penalize contract lawyers for infractions.

For more coverage, see Gabes Guide to the e-Discovery Universe and WSJ Law Blog.

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Posted by Carolyn Elefant

The Economy and the Rest of the Legal Profession

The Economy and the Rest of the Legal Profession

By now, most of us have realized that the market downturn is taking a toll on large law firms, with Heller Ehrman as the most recent victim. But what about the rest of the legal profession? How are other non-Biglaw lawyers holding up as the market goes down? Here's a quick roundup.

• New York Personal Injury Lawyer Eric Turkewitz reports that the personal injury bar is not immune to recession. He writes:

[W]ith the meltdown of mega insurer AIG, we could see something different. Even if they get rescued, there will no doubt be other insurers that have problems. We see this from time to time on a small scale when the executives drop their business ball, but we could now see it on a larger scale if things continue to go south. And a bankrupt insurance company would mean that the business end of lawyering could see some issues related to actually being able to get paid on a claim.

Turkewitz also notes CLE provider Lawline's report that lawyers are signing up in record numbers for training courses in bankruptcy.

• Recession will take a toll on the quality of criminal representation, predicts Scott Greenfield at Simple Justice. While a small segment of the criminal bar -- the high profile (though not necessarily the best) lawyers will continue to do very well, the rest will compete for those clients who can still afford to pay for lawyers (Greenfield explains that previously, clients might take out a second mortgage to pay their fees, but that's no longer an option with the banks in crisis). Moreover, lawyers will start competing on price, and quality attorneys will find themselves losing out to "bottom dwellers" who "suck up felonies for $1,000." Greenfield advises criminal defense lawyers to find ways to branch out into different practice areas to keep the revenue stream flowing.

• Not surprisingly, legal aid lawyers are busier than ever, with record numbers of foreclosures and more families qualifying for legal aid services.

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Posted by Carolyn Elefant

LEGAL BLOG WATCH: Plaintiffs Win Only 15 Percent of Employment-Related Cases in Federal Court

Plaintiffs Win Only 15 Percent of Employment-Related Cases in Federal Court

A study commissioned by the American Constitution Society reveals that, based on data from 1979 to 2006, plaintiffs who brought employment discrimination suits in federal district courts prevailed only 15 percent of the time, compared to 51 percent for non-employment related cases. The Wisconsin Law Journal and Sharpy News offer additional analysis.

In many instances, federal judges will dispose of federal employment cases at the summary judgment phase -- and there's often not much relief on appeal. The study also showed that, during a 16-year span from 1988 to 2004, less than 9 percent of the 2,042 cases lost at trial and appealed to the U.S. Court of Appeals were reversed for plaintiffs in employment discrimination cases, compared with a 41 percent reversal rate for defendants who lost at trial.

Because of these trends in federal courts, many employment lawyers are bringing suit in state court, or turning to mediation to resolve employment disputes. Though state laws often don't allow punitive damages or damages for emotional distress, as is the case in federal court, the fact that state courts offer a greater likelihood of prevailing, for now, may make them a more favorable forum.

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Posted by Carolyn Elefant

Friday, September 19, 2008

Dissenting Judge Tells Lawyers to Take It to YouTube

Dissenting Judge Tells Lawyers to Take It to YouTube

Used to be that when dissenting judges didn't get their way, they could only get mad. But as federal judge Beverly Martin's dissent in Buckley v. Haddock (11th Cir. 2008) shows, dissenting judges can now also get even in the court of public opinion -- courtesy of YouTube.

Here's what happened. Understandably, federal judge Beverly Martin (N.D. Ga.) was upset when she could not convince her colleagues to agree with her view that "the Fourth Amendment forbids an officer from discharging repeated bursts of electricity into an already handcuffed misdemeanant -- who is sitting still beside a rural road and unwilling to move -- simply to goad him into standing up." (For more detailed analysis, see Appellate Law & Practice Blog). In fact, Judge Martin apparently couldn't even get the court to publish the opinion to make the facts of the case more widely known. So Martin did what any self-respecting 21st century jurist would do: She suggested in her dissent that "perhaps the lawyers for the plaintiff" could post a video of the taser incident that was the subject of the opinion to YouTube. Today, Howard Bashman reports that the video has since been uploaded -- and it is fairly shocking.

Is Judge Martin's decision the start of a new precedent? Will courts start making available all of the underlying evidence in a case online? And is it appropriate for a judge to suggest that litigants make the material available where the court won't?

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Posted by Carolyn Elefant on September 17, 2008 at 11:02 AM | Permalink | Comments (0)

Federal Bailout of AIG: Is It Legal?

As a practical matter, yesterday's historic $85 billion bailout of insurance company American International Group (AIG) is regarded by many as a necessary action to prevent more widespread damage to the economy. But practical or not, law bloggers want to know whether the takeover was legal. So here's a quick primer on some of the legal issues related to the AIG bailout, courtesy of the blogosphere:

What specific statutory provisions authorized the Federal Reserve to make an $85 billion loan to AIG?
The answer to this one depends upon who you ask. Writing at Balkinization, Marty Lederman notes that the Fed bases its authority on the Federal Reserve Act of 1932, section 13(3) which provides that "in unusual and exigent circumstances" the [Fed] may authorize any federal reserve bank to discount notes without limit.

However, David Zaring at the Conglomerate disagrees, contending that while the Section 13(3) might apply to loans, it doesn't authorize takeovers:

There's really no statutory authority for the AIG takeover...I won't bother noting that the DC Circuit, were it to sit in judgment on whether the Fed could buy the world's largest insurer, would undoubtedly conclude that the plain language of its governing statute (which is to make emergency loans, not require takeovers in exchange) would not permit the takeover under Chevron USA v. NRDC.

Which raises the next question...

Is the AIG deal a loan or a takeover?
Eric Posner tackles this issue at Volokh. Posner argues that in his view, "the deal is a loan in form but a purchase in substance." As part of the deal, the Fed will receive AIG equity as collateral for the loan, but "it's going to exercise the option more or less automatically." Posner believes that most courts would interpret the transaction as a sale, not a loan, and if that's the case, then the bailout is illegal.

Can a court review the Fed's decision to bailout AIG?
Most likely not, opines David Zaring at The Conglomerate, though there's not much case law. However, the 2nd Circuit has generally taken the position that "it is not for the courts to say whether or not the actions taken were justified in the public interest, particularly where it vitally concerned the operation and stability of the nation's banking system." Huntington Towers, Ltd. v. Franklin National Bank, 559 F.2d 863, 868 (2d Cir. 1978).

As a matter of policy, was the AIG deal the right thing to do?
OK, so a strict constructionist would never try to prop up an unlawful deal by resorting to policy arguments, but a couple of bloggers have raised some interesting policy issues worth including in this post. First, David Stejkowski at The Dirt Lawyer's Blog wonders where we draw the line on federal bailouts -- should the government save the auto industry? What about other distressed companies? And while Kelly Erb at Tax Girl is ultimately willing to resign herself to the necessary evil of the bailout to prevent broader damage, she's demanding accountability from the management teams that ran these companies into the ground.

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Posted by Carolyn Elefant

Thursday, September 18, 2008

WHARTON NEWS

Wall Street's Day of Reckoning: What's Next?

Fannie Mae and Freddie Mac, Lehman Brothers, Merrill Lynch, AIG: Given the gravity of the current financial crisis on Wall Street and its impact on global markets, Knowledge@Wharton is devoting this issue to the views of Wharton faculty and other experts on the origin of the crisis, what it might take for the economy to right itself, and what investors and consumers can expect in the coming weeks.

_________________________________________________________________

Finance and Investment
Will the Levee Break? An Ocean of Bad Debt Rises despite Fed Rescues
The rescues, bankruptcies and dizzying write-downs for Fannie Mae, Freddie Mac, Lehman Brothers, Merrill Lynch, AIG and other giants of international finance signal a reckoning for Wall Street wizards who engineered the ongoing credit crisis with opaque securities based on risky subprime home loans and the assumption that housing prices would never decline, according to a panel of Wharton professors. The flood of bad debt, they add, won't subside anytime soon.
http://knowledge.wharton.upenn.edu/article/2050.cfm

Finance and Investment
(Videocast)
Wharton Faculty Debate the Impact of the Financial Crisis
In a roundtable discussion on the fallout from a week of turmoil on Wall Street, Wharton professors Richard Herring, Susan Wachter and Franklin Allen discussed the ripple effect of the crisis across U.S. and global markets. They also speculated on the AIG bailout, which was announced shortly after this video was recorded on September 16.
http://knowledge.wharton.upenn.edu/

Finance and Investment
(Podcast with Transcript)
Jeremy Siegel on the Market: Rough Going for Now, but Stocks Still a Good Bet
The government's rescue of Fannie Mae, Freddie Mac and AIG demonstrated clearly that the financial turmoil continues on Wall Street. In an interview with Knowledge@Wharton, Wharton finance professor Jeremy Siegel says there are some positive signals in stocks and corporate earnings, but that it's too soon to conclude the market has hit bottom. Siegel also talked about inflation and commodities.
http://knowledge.wharton.upenn.edu/article/2052.cfm

Finance and Investment
(Article with Additional Videocast)
After the Bailout: How Can the Fed Clean Up the Fannie and Freddie Mess?
The government's refusal to save Lehman Brothers begs a question: Why did it step in only a week earlier to risk up to $200 billion in taxpayer money to shore up mortgage giants Fannie Mae and Freddie Mac? Wharton faculty say the government made the right move -- and offer suggestions for the next step.
http://knowledge.wharton.upenn.edu/article/2046.cfm

Insurance and Pensions
(Podcast)
AIG Rescued: Was an $85 Billion Loan the Right Answer?
After refusing to bail out Lehman Brothers, the government agreed to an $85 billion loan to insurance giant AIG, effectively taking over the company. Knowledge@Wharton talked to Wharton insurance professors Olivia Mitchell and Kent Smetters to find out how the world's largest insurer got into this situation and how it can be prevented from happening again.
http://knowledge.wharton.upenn.edu/article/2051.cfm

Leadership and Change
Eyes on the Wrong Prize: Leadership Lapses That Fueled Wall Street's Fall
Executives at AIG, Bear Stearns, Lehman Brothers, Fannie Mae and Freddie Mac may have ignored or failed to see the level of risk their companies were taking on in a crusade to enhance results and their own compensation, according to Wharton faculty and industry analysts. In some cases, the management crisis was fueled by managers simply choosing not to lead.
http://knowledge.wharton.upenn.edu/article/2048.cfm

Finance and Investment
Note to Investors: Don't Play Games with Asset Allocation
Big market downturns and jarring volatility have left small investors feeling whipsawed -- and nervous. But it would be a mistake to abandon classic long-term personal finance principles in the face of recent challenges. The 60% stocks, 30% bonds and 10% cash approach remains the best strategy. Wharton finance professors Jeremy Siegel, Richard Marston and Franklin Allen explain why.
http://knowledge.wharton.upenn.edu/article/2049.cfm
_________________________________________________________________

Election 2008
(Article with Additional Videocast)
Linking Commerce to Geopolitics: The Candidates' Views on Global Trade
With global financial markets in turmoil, trade will most likely be an urgent concern for the next president. As part of Knowledge@Wharton's ongoing coverage of the upcoming November election, we examine the candidates' views on trade issues. So far, both Republican John McCain and Democrat Barack Obama have tended to follow predictable party lines: McCain is a supporter of free trade and would back additional multilateral trade pacts, while Obama urges a reexamination of trade agreements and their effect on the environment and U.S. workers.
http://knowledge.wharton.upenn.edu/article/2047.cfm

Monday, September 15, 2008

Should Firms Test Lawyers' Substantive Knowledge in Interviews?

Should Firms Test Lawyers' Substantive Knowledge in Interviews?

When is the last time that you interviewed for a position with a law firm and the hiring attorney grilled you on the finer points of Federal Rule of Civil Procedure 26 or asked you to draft a short memo resolving a hypothetical legal problem or even required you to explain how you might go about researching a particular issue? Truth is, legal employers rarely ask substantive questions of prospective candidates or require them to demonstrate competencies like research and writing or thinking-on-one's feet.

Contrast that with the hiring practices that are common to the IT industry, and what an anonymous reader gripes about at Slashdot:

After having my university degrees, a couple of IT certifications, and over ten years of work experience in the industry, with 2-4 years of verifiable employment with each employer, working with a wide range of technologies, is it reasonable to ask me to take some test on a job interview? The same companies don't ask other professionals (lawyer, accountant, sales, HR, etc.) to submit to any kind of in-house tests when they are hired. Why are IT professionals treated differently and in such a paternalistic way?

While the commenter urges his colleagues to refuse to subject themselves to this insulting treatment, my own feeling is that law firms should consider actually testing lawyers' skills before hiring them. Though summer associate programs give firms some opportunity to evaluate a prospective attorney's skills, firms often hire graduates and laterals who haven't come up through a summer program and whose skills are untested. So I throw this question out to you: Would a substantive interview process result in better-quality hires, and would lawyers object to substantive testing during hiring? And if your firm has used this kind of process, how has it worked for you? Post your comments below.

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Posted by Carolyn Elefant

Sunday, September 14, 2008

Taking Paper Out of the Paper Chase

Taking Paper Out of the Paper Chase

If the pressures of law school are not enough to weigh you down, the books certainly are. It is almost as if that legendarily stern Harvard law professor from the 1973 Oscar-winning movie "The Paper Chase," Charles W. Kingsfield Jr., had designed the books himself merely to add to the burden of being a law student. I mean, could they have made them any heavier if they'd tried?

In this age of e-books, do hardbound law books make sense any more? Two legal scholars think not. They have organized a conference that will convene Sept. 27 in Seattle -- not far from the headquarters of Amazon.com and its popular Kindle e-book reader -- that will explore shredding the weighty paper casebook in favor of digital devices. "It's strange that kids that text message and carry iPods and BlackBerrys in their left hand carry in their right hands these heavy tomes called law school books," said Ronald K.L. Collins, one of the event's organizers and a scholar at the nonprofit First Amendment Center in Washington, D.C. "The left hand is the future and the right hand is the past."

As Andrea James reports on her blog and in the Seattle Post-Intelligencer,the conference will draw representatives from law schools and law-book publishers, not to mention e-book device makers including Amazon and Sony Electronics. "It's becoming increasingly clear that the halls of academia are full of opportunity for Seattle-based Amazon.com to market its Kindle e-book reader," James writes. As well they should be.

Organizers estimate that the typical law student lugs around 28 pounds of books costing about $1,000 a semester. A 1L confronts more than 8,700 pages of text, they say. "Law students are burdened by the cost, weight, excess and contents of print casebooks," write Collins and conference co-organizer David Skover of Seattle University School of Law in a recent memo. They hope that will change, but they say the biggest obstacle e-books face is opposition from the Prof. Kingsfields of the world. "The vast majority of my traditional colleagues are wedded to the printed case book," Skover said. "People often teach as they were taught." In other words: We suffered and so shall you.

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Posted by Robert J. Ambrogi on September

Saturday, September 13, 2008

from legal blog watch

Bankruptcy Act Violates Lawyers' Speech Rights

Separate rulings in the span of a week from a federal appeals court and a federal district judge found that a provision of U.S. bankruptcy law violates the free-speech rights of lawyers by barring them from advising clients to incur additional debt before filing bankruptcy. In both cases, bankruptcy lawyers challenged the constitutionality of bankruptcy law amendments enacted as part of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. One provision, codified as 11 U.S.C. section 526(a)(4), prohibits anyone considered to be a "debt relief agency" from advising clients "to incur more debt in contemplation" of filing a bankruptcy petition.

On Sept. 4, the 8th U.S. Circuit Court of Appeals, in Milavetz, Gallop & Milavetz v. United States, ruled that this prohibition applies to attorneys and, as such, is unconstitutional. Then on Wednesday, U.S. District Judge Christopher Droney in Hartford, Conn., reached the same conclusion, ruling that this provision unconstitutionally restricts the advice lawyers can give their clients ("Judge Says Part of Bankruptcy Law Unconstitutional"). The 8th Circuit explained in its ruling:

[T]his prohibition would include advice constituting prudent prebankruptcy planning that is not an attempt to circumvent, abuse, or undermine the bankruptcy laws. Section 526(a)(4), as written, prevents attorneys from fulfilling their duty to clients to give them appropriate and beneficial advice not otherwise prohibited by the Bankruptcy Code or other applicable law.

Judge Droney put it this way:

A lawyer who represents consumers contemplating bankruptcy bears the duty of zealous representation and the prohibition on giving legal advice unnecessarily interferes with this duty. If the government seeks to prevent manipulation of the bankruptcy system, a more narrowly tailored approach would be to penalize those who take on certain types of debts.

The 8th Circuit decision partially affirmed summary judgment entered in Minnesota on behalf of a law firm that practices bankruptcy law there. The Connecticut case resulted in a preliminary injunction barring enforcement of the provision against attorneys who sued from that state. No word from the Justice Department on whether it will appeal either case.

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Posted by Robert J. Ambrogi on September 12

Saturday, September 06, 2008

POLITICS-US: Aerospace Lobby Wages Its Own Election Campaign

POLITICS-US: Aerospace Lobby Wages Its Own Election Campaign
By John Lasker

COLUMBUS, Ohio, Sep 5 (IPS) - "In about the time it takes you to drive into a gas station, insert your credit card in the pump, fill the tank, take your receipt, and get back on the road, a foreign power can use a missile to disable the U.S. communications satellite that made your transaction possible."

This dire claim didn't come from the Pentagon. Rather, it is on the website of the Aerospace Industries Association (AIA), a trade and lobby group representing more than 100 of the nation's leading aerospace and aerospace defence manufacturers.

The scenario was echoed in a recent U.S. Air Force commercial that showed a missile obliterating a satellite -- a commercial the Centre for Defence Information (CDI), a Washington-based think tank that researches space weapons, says was not factually correct and constituted a "blatant exploitation of people's concerns about space".

The Air Force eventually admitted that a single missile shooting down one satellite would not send the United States back to the 19th century, and pulled the commercial, conceding that was "misleading".

Most modern communication satellites that handle bank transactions, GPS and cell phone calls orbit at 12,000 miles above Earth's surface. Satellites that beam television signals are in geostationary orbit, which is at 22,500 miles. No current anti-satellite weapon -- at least those that are not classified -- has been tested past low-Earth orbit, which is roughly 100 to 1,200 miles high, CDI says.

"The Aerospace Industries Association is being unnecessarily histrionic about the threat to satellites," Victoria Samson, a senior analyst for CDI, told IPS. "The GPS constellation was (also) built so that missing one satellite wouldn't bring down the whole system."

What is notable about AIA's claim is how it is being used -- as part of a stepped-up campaign to convince politicians, voters and aerospace employees that "America's future depends on maintaining space leadership". It is a broad statement encompassing several aspects of the U.S. space industry, such as educating the aerospace workforce of the future. But some experts say it also means the U.S. needs to somehow find a way to protect its 400-plus satellites -- an undertaking that could result in billions for aerospace industry defence contractors.

A powerful lobby in Washington, the aerospace industry accounted for over 650,000 jobs and 184 billion dollars in sales in 2006.

The AIA's president and CEO, Marion Blakey, was a former head of the Federal Aviation Administration. Her predecessor, John Douglass, is a former assistant secretary of the Navy, and was named one of Washington's top lobbyists last year by "The Hill", an influential congressional newspaper.

Patrick McCartan, AIA's director for legislative affairs, is a former aide to Maine Senator Olympia Snowe. He, too, was ranked a "top rainmaker" by The Hill.

With election season in full swing, the AIA is calling for "cutting-edge defence research", along with defence spending being "no less than 4 percent of the U.S. GDP", which was 13.8 trillion dollars for 2007, amounting to roughly 550 billion dollars. That is near the current level, if you include the spending for the wars in Afghanistan and Iraq.

It is widely known that "Star Wars II" -- resurrected this decade by George W. Bush administration "space hawks" -- has been a cash cow for aerospace industry giants Lockheed Martin and Boeing, the Pentagon's top two defence contractors. Together, they currently have 73 lobbying groups working Capital Hill, according to Opensecrets.org, which tracks campaign funding and its relation to public policy.

Also telling is the campaign money the aerospace industry has contributed during the 2008 election cycle. Historically, the industry has given more to Republicans than Democrats -- millions more.

Yet as of mid-summer, OpenSecrets.org reports the aerospace industry has split its staggering total of 6.9 million dollars down the middle: half to Democrats, and half to Republicans.

"We have met with every campaign staff for months now -- McCain, Obama and every other campaign," Matt Grimison, AIA's communications director, told IPS. "We are casting a wide net to make sure these issues are being considered by everybody."

Experts say this is because the Democratic Party currently controls Congress, as it did back in 1994. In both the Senate and the House, two Democrats chair each branch's Defence Appropriations committees. Meaning, Sen. Daniel Inouye of Hawai'i and Rep. John Murtha of Pennsylvania hold the keys to billions for future projects.

"The industry is realising it needs more access to Democrats," said Massie Ritsch, communications director for the Centre of Responsive Politics, which also runs Opensecrets.org. "The Democrats control Congress, and therefore defence policy. This election is the (aerospace industry's) most Democratic since 1994."

Democratic candidate Barack Obama has promised to not weaponise space, unlike his challenger, Sen. John McCain. Obama has also vowed to cut unnecessary missile defence funding.

However, the strategy of focusing on Congress could pay off, considering both Sen. Inouye and Rep. Murtha are considered "space hawks" by peace activists.

Over the last 10 years, Sen. Inouye has allowed the Pentagon to flood the Hawaiian Islands with billions in funding for dozens of projects related to blowing things up in space, says Kyle Kajihiro, programme director for DMZ Hawai'i, based in Honolulu. During the same time, the Pentagon's Missile Defence Agency (MDA), the successor to the "Star Wars" programme, has conducted high-profile tests around the islands.

The MDA's largest trophy so far was the shootdown of a disabled satellite in February. The test utilised Pearl Harbour's USS Lake Erie, a guided-missile cruiser equipped with the Aegis system, which allows the ship to take out targets in low-Earth-orbit. The USS Erie is arguably Earth's first "space battleship" and its transformation came about after Sen. Inouye in 2000 loudly called for a sea-based missile-defence system to counter North Korea and China, says Kajihiro.

"Sen. Inouye says it's about defending Hawaii," he says. "Our stance is the increasing missile defence tests are a destabilising factor. The tests are provoking an arms race in the region between nuclear powers."

Opensecrets.org shows that from 2001 to 2008, employees of Lockheed Martin and Boeing have consistently ranked in Sen. Inouye's top-five corporate contributors for re-election efforts.

So does the AIA's talking point of "maintaining space leadership" mean developing and deploying weapons in space? Besides billions of Pentagon dollars being shoveled into the aerospace industry, it could be an undertaking that many experts fear would ignite this century's greatest arms race.

The AIA does not specifically mention building a constellation of "killer satellites" to protect U.S. space assets, and they have no official policy on how to protect these assets. But is the writing on the proverbial cyberspace wall?

"It's hard to imagine a more dramatic wake-up call for U.S. space security efforts than China's stunning anti-satellite demonstration in January 2007," states AIA on its web site. "A ground-based ballistic missile scored a direct hit on a defunct Chinese weather satellite, proving China's capability of destroying space-based equipment."

"Some members of Congress, however, suggest that arms control treaties are the only answer to such threats," the group added, saying that it would work through its "National Security Space Committee" to "leverage the Chinese demonstration as an opportunity to educate members of Congress not only about our ever-increasing reliance on space-based assets but also on the vulnerabilities these assets face...[and] the need for sustained U.S. investment in national security space programmes."

(END/2008)

Saturday, August 23, 2008

FROM LEGAL BLOG WATCH

Will Technology Displace Lawyers in e-Discovery?

Remember the folk tale of John Henry, the railway worker who went head to head in a contest of efficiency with a steam-drill to prove that man was superior to machine? Henry beat the machine, but worked himself to death to do it.

I was reminded of John Henry in reading this Wall Street Journal article about law firms' efforts to stave off automation of the e-discovery process. As WSJ reports, tech companies are developing tools that can perform many tasks previously handled by teams of attorneys -- such as weeding out duplicate or irrelevant material and identifying privileged documents. Automation results in substantial cost savings since by culling documents, lawyers can review a smaller amount of material. According to Hewlett-Packard, automated e-discovery tools could reduce the cost of review of 100 gigabytes of data from $180,000 to $25,000.

But law firms aren't convinced that these new tools are effective and remain concerned that companies may wind up spending more money in the long run to fix mistakes. For example, Robert Brownstone, a partner at Fenwick & West, described a situation where a client declined to have attorneys oversee an e-mail archive search, relying on internal IT staff to handle the job for less. The IT workers disposed of files that legally, needed to be preserved -- and while the documents were recovered, the client also wound up paying Fenwick more to fix the problem than it would have cost to retain the firm for oversight at the outset.

Are today's lawyers the new John Henrys of discovery, a last line in the sand to preserve a way of doing business that's fast fading into the sunset? Like John Henry, lawyers correctly make the point that not everything can be automated and that by relying on machines, we lose some of the craftsmanship and judgment that individuals bring to a project. On the other hand, John Henry worked himself to death to prove his point -- is that really what lawyers want?

H/T EDD Blog Online.

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Posted by Carolyn Elefant on August 22