Good morning. The year-end collections cycle might not be that bad for law firms despite - and possibly because of - the pandemic, Rudy Giuliani has tested positive for the cononavirus, President-elect Joe Biden has picked California Attorney General Xavier Becerra to serve as secretary of health and human services, President Donald Trump's campaign is spending millions as he suffers court loss after court loss, and Facebook is fighting at Massachusetts' top court against having to disclose the names of apps it suspects misused consumers' data. Let's get the week going!
Were you forwarded this email? Subscribe here.
Pandemic might not hurt law firms in collections crunch time
A greater focus by law firms on billing and collections amid a U.S. economy battered by the fallout from the COVID-19 pandemic appears to be paying off, helping Big Law position itself to end the year with higher revenues, David Thomas reports.
Law firms for the first nine months of 2020 collected about 89.4% of their negotiated rates, near what the industry accomplished a year earlier, according to data collected through Thomson Reuters Peer Monitor.
Getting clients to pay their bills during the year-end collections cycle may even go smoother this year, given the proactive attention firms have devoted to the effort amid the turbulence. "I think most of the low-hanging fruit that's normally been collected in the fourth quarter has already been collected," said Joe Mendola, senior director of sales for Wells Fargo Private Bank Legal Specialty Group.
Toby Brown, chief practice management officer at Seattle-based Perkins Coie, said collections are just one part of the equation. "Demand is up. We work, we bill, we collect," he said. "When I look at the broader economics level of it, I think law firms are headed into a favorable environment." Learn more about how firms' revenues are faring.
Rudy Giuliani tests positive for coronavirus, Trump says
President Donald Trump announced that Rudy Giuliani, his personal attorney and the face of the Republican's quixotic legal fight to overturn his electoral loss to Democratic President-elect Joe Biden, has tested positive for the coronavirus, Jan Wolfe and Karen Freifeld report.
"@RudyGiuliani, by far the greatest mayor in the history of NYC, and who has been working tirelessly exposing the most corrupt election (by far!) in the history of the USA, has tested positive for the China Virus," Trump said in a tweet, using a term for COVID-19 that has drawn backlash.
Both Trump and Giuliani have repeatedly claimed, without evidence, that the election's outcome was tainted by fraud. The 76-year-old former New York City mayor last month personally unsuccessfully argued a federal case aimed at blocking Biden being declared the winner of Pennsylvania.
Giuliani visited Georgia on Thursday, where he urged state lawmakers to stop certification of Biden's win after making similar pleas in Michigan on Wednesday and Arizona on Monday. Find out more about Giuliani's diagnosis.
Industry buzz
- President-elect Joe Biden plans to nominate California Attorney General Xavier Becerra as secretary of health and human services, two sources said. Becerra has been leading a coalition of Democratic state attorneys general defending Obamacare before the U.S. Supreme Court. (Reuters)
- One of the latest lawyers to jump into the Trump campaign’s far-fetched election litigation is Indianapolis sports attorney William Bock III, who once investigated disgraced cyclist Lance Armstrong for using performance-enhancing drugs. Bock and two of his colleagues from Kroger Gardis & Regas are representing the campaign in Wisconsin, where they sued Wednesday seeking to toss absentee ballots. (Reuters)
- Fifteen applicants who were told they passed the Kentucky bar exam have failed instead. The Kentucky Office of Bar Admissions discovered a scoring error in its online October bar exam. In (slightly) better news, three applicants who were told they failed actually passed. (Reuters)
- It's bonus season for law firm staff, too. Kirkland & Ellis will give administrative staff members an extra cash bonus equivalent to 5% of their 2020 salary and will add the equivalent of 1% of their salary to their retirement accounts. White & Case said it will give business services and legal services employees in practice support roles a special bonus of $1,500. (Reuters)
- Squire Patton Boggs, which instituted 20% pay cuts for associates from May to October, will make true-up payments in associates' next checks. (The American Lawyer)
- The slow rebound in legal services employment continued in November, with the sector adding 5,000 jobs, a 0.45% increase from October. (Reuters)
- Edward Vrdolyak, a former Chicago alderman and personal injury attorney, was sentenced by U.S. District Judge Robert Dow to 18 months in prison after admitting he evaded taxes on attorneys fees he earned in connection with the state of Illinois' $9.2 billion settlement with tobacco companies in the 1990s. Prosecutors said he made $12 million in the litigation without doing any work. (Chicago Sun-Times)
Trump campaign spends $2 million-plus on election lawyers
President Donald Trump's long-shot bid to overturn the results of the presidential election is not just producing mounting court losses but also millions of dollars in expenses, new records show.
Aram Rostom and Brad Heath report that a Trump campaign filing late last week with the Federal Election Commission disclosed about $8.8 million in "recount" related expenses from Oct. 15 through Nov. 23, including nearly $2.3 million spent on lawyers and consultants who pursued lawsuits.
Billings from lawyers on Trump's so-called "elite strike force" make up a small fraction of those bills. Jenna Ellis, an attorney who has become one of the most prominent faces of the Trump legal blitz, was paid $30,000 in November and $138,258 in October. Rudy Giuliani, Trump's personal attorney, doesn't even appear in the FEC disclosures.
Kasowitz Benson Torres, which has done extensive personal work for Trump, was the highest paid member of the recount team, receiving $600,000 in November, yet the firm is not listed as counsel of record on any post-election lawsuits by the campaign. Dechert, which has not been closely associated publicly with Trump's campaign, earned $164,000 for "recount" related work. Check out how else the campaign spent money.
Coming up today
- The U.S. Supreme Court hears Germany's bid to block it from facing a lawsuit in American court over medieval artwork that its former Nazi government pressured Jewish art dealers to sell in the 1930s. Sullivan & Worcester's Nicholas O'Donnell will be arguing on behalf of heirs of the art dealers and will face Jonathan Freiman of Wiggin and Dana, who on behalf of Germany contends the case is barred by sovereign immunity. The court will take the arguments after hearing Hungary's bid to on similar grounds avoid litigation brought by U.S. citizens who survived that nation’s World War Two-era campaign of genocide against its Jewish population. The arguments can be heard live on C-SPAN at 10 a.m. ET.
- The environmental advocacy organization Conservation Law Foundation will urge the 1st Circuit unpause a lawsuit that claims Exxon is putting neighborhoods at risk by not preparing its marine terminal in Everett, Massachusetts, for the risks posed by extreme weather events tied to climate change. Ian Coghill, a lawyer with the foundation, is expected to challenge how a lower-court judge indefinitely stayed the case pending the EPA's renewal of the terminal’s permit. Theodore Wells of Paul Weiss will argue for Exxon. The arguments can be heard on YouTube at 9:30 a.m. ET.
- The 9th Circuit will hear an appeal of the approval of a class action settlement in a lawsuit accusing ConAgra Foods of deceptively marketing its cooking oil as "100% natural" despite using genetically modified crops. Ted Frank, a prominent class action watchdog with Hamilton Lincoln Law Institute, represents an objector who claims the settlement is unfair because class counsel will receive $6.85 million while class members will receive less than $1 million. Samuel Issacharoff of NYU School of Law will argue for the plaintiffs, and ConAgra is repped by Alston & Bird’s Angela Spivey. The arguments can be heard online beginning at 9:30 a.m. PT.
- The 9th Circuit will consider whether to uphold a judge's decision to unseal and make public videotapes of the bench trial a San Francisco federal judge oversaw a decade ago that led to Proposition 8, the ballot measure banning same-sex marriage in California, getting struck down. Defenders of the gay marriage ban repped by John Ohlendorf of Cooper & Kirk will argue against the unsealing, which was sought by NPR affiliate KQED. The two lead attorneys who pursued the California case were Gibson Dunn's Ted Olson and Boies Schiller's David Boies. The arguments stream online at 1:30 p.m. PT.
- Investors in Uber Technologies will urge the 9th Circuit to revive their lawsuit accusing the ride-hailing company and former CEO Travis Kalanick of misleading shareholders in the run-up to several corporate scandals. Robbins Geller’s Joseph Daley will argue for the plaintiffs and will face A. Matthew Ashley of Irell & Manella for Uber and Sarah Harris of Williams & Connolly for Kalanick. Check the arguments out at 1:30 p.m. PT.
Later this week
- The U.S. Supreme Court on Tuesday hears oral arguments over a bid by Facebook to stave off a class action accusing it of violating a federal consumer protection law by sending certain unsolicited text messages. Paul Clement of King & Spalding will argue the case for Facebook and will face Bryan Garner of Garner & Garner for the plaintiffs.
- Trade associations for Puerto Rico's cockfighting industry will urge the 1st Circuit on Tuesday to strike down a federal ban on the territory's "national sport," which went into effect last year as part of the annual Agriculture Improvement Act. Edwin Prado-Galarza of Prado, Nunez & Associates will argue for the groups and will face Jeffrey Bossert Clark of the DOJ, who will defend the federal ban.
- Citigroup is expected to go to trial on Wednesday against a group of Revlon Inc lenders, including hedge funds, to recoup more than $500 million of its own funds that it mistakenly paid them. Citigroup, Revlon's loan agent, in August sent the cosmetic company's lenders $893 million that Revlon had not been due to repay until 2023. About $385 million was returned, but the remaining lenders say they're entitled to keep the rest. U.S. District Judge Jesse Furman in Manhattan will preside over the nonjury trial. Mayer Brown's Matthew Ingber and Quinn Emanuel's Michael Carlinsky lead the cases for Citi and the lenders, respectively.
- The U.S. Supreme Court on Wednesday hears an appeal by the Trump administration seeking to avoid a lawsuit by shareholders of mortgage finance firms Fannie Mae and Freddie Mac relating to the government rescue of the companies following the 2008 housing crisis. DOJ attorney Hashim Mooppan will face David Thompson of Cooper & Kirk for the investors and Brigham Young University law professor Aaron Nielson, who the court appointed to argue in favor of the structure of the Federal Housing Finance Agency, which oversees Fannie and Freddie, after the administration declined to do so.
- The Trump administration will urge the 9th Circuit on Wednesday to throw out a preliminary injunction requiring ICE to consider releasing thousands of immigrant detainees amid the COVID-19 pandemic. Orrick's Brian Goldman will argue the case for the detainees and will face Scott Stewart of the DOJ.
- Tobacco companies including R.J. Reynolds and Philip Morris on Thursday will push U.S. District Judge Janis Sammartino in San Diego to issue a preliminary injunction blocking California's ban on flavored vaping and tobacco products, set to take effect next year. Lawyers for the companies include Andrew Bentz of Jones Day for R.J. Reynolds and Lisa Blatt of Williams & Connolly for Philip Morris.
"I understand this is an enormous undertaking, and you may not have the resources to fight Facebook, but they've created an internal investigation that at least the case law seems to protect."
Justice Scott Kafker, who during arguments on Friday before the Massachusetts Supreme Judicial Court suggested a lower-court judge may have been wrong to conclude Facebook was not entitled to rely on attorney-client privilege to avoid turning over to the state's attorney general, Maura Healey, records identifying apps suspected of misusing customer data. Those records were produced during an internal investigation the law firm Gibson Dunn oversaw in the wake of the Cambridge Analytica scandal. (Reuters)
In the courts
- U.S. District Judge Nicholas Garaufis in Brookyn ordered the Trump administration to reopen to first-time applicants the Deferred Action for Childhood Arrivals, the Obama-era program which protects from deportation and grants work permits to hundreds of thousands of immigrants who live in the United States unlawfully after arriving as children. The U.S. Supreme Court in June blocked Trump's 2017 bid to end DACA, but his administration continued its policy of not accepting new applications. New York Attorney General Letitia James and groups including the National Immigration Law Center pursued the case. (Reuters)
- The Supreme Court has agreed to consider whether to revive pilot programs adopted by the states of Arkansas and New Hampshire and approved by the Trump administration that would allow work requirements to be imposed on people who receive healthcare under the Medicaid program for the poor. Seventeen other states are pursuing similar policies. (Reuters)
- Dish Network has reached a $210 million settlement to resolve a long-running lawsuit in federal court in Springfield, Illinois, by the U.S. government and the states of California, Illinois, North Carolina and Ohio accusing it of making millions of illegal telemarketing calls to sell and promote its satellite TV and programming services. Orrick’s Elyse Echtman advised Dish. (Reuters)
- U.S. District Judge Stanley Chesler in Trenton, New Jersey, became the second judge nationally to block a U.S. Department of Labor rule that would raise the minimum wage standards for foreign workers with H-1B visas, saying the COVID-19 pandemic did not provide an excuse to adopt the measure without seeking public input. The ruling came at the request of trade group ITServe Alliance, repped by Geoffrey Forney of Wasden Banias. (Reuters)
- The Cheesecake Factory has agreed to pay $125,000 to resolve SEC charges that it misled investors about the impact of the COVID-19 pandemic on its business, the first such case brought by the securities regulator. William Baker of Latham & Watkins advised the company. (Reuters)
- Drug industry trade groups including PhRMA and Biotechnology Innovation Organization filed a pair of lawsuits in California and Maryland against the Trump administration challenging new rule that aims to lower drug prices by tying payments for some medications made by Medicare to the lowest price paid by certain other countries. A Multiple law firms including Sidley Austin, Covington & Burling, Arnold & Portner, Manatt Phelps & Phillips and Hogan Lovells have signed up to pursue the cases. (Reuters)
- The 2nd Circuit rejected Utah-based brokerage Alpine Securities Corp's bid to reverse a $12 million civil fine imposed over its failure to adequately report suspicious transactions, rejecting the argument that the SEC does not have the authority to enforce anti-money laundering rules. (Reuters)
Columnist spotlight: Edelson filed an inflammatory complaint against Girardi. What's its evidence?
Chicago plaintiffs' firm Edelson received copious press coverage for the suit it filed last week against the prominent plaintiffs' lawyer Tom Girardi, his law firm, Girardi Keese, and his wife Erika Jayne Girardi of "The Real Housewives of Beverly Hills," which claimed that Girardi had siphoned money from Indonesian clients who lost family members in the Lion Air crash to stave off the financial collapse of his law firm. The lawsuit also included the splashy accusation that the Girardis, who are in the midst of a divorce, used the allegedly embezzled client money to fund a lavish lifestyle. Alison Frankel digs into the complaint and Edelson's noticeably less provocative show-cause motion in which the firm acknowledged that it doesn’t actually have clear and convincing evidence, sufficient to establish fraud, that Girardi Keese has misused client funds. So what's next? Read Frankel's full column here.
Check out other recent pieces from all our columnists: Alison Frankel, Jenna Greene and Hassan Kanu.
Lawyer speak: Are higher taxes coming for executive compensation?
Joe Biden is president-elect, the Democratic Party has retained its majority in the House of Representatives, and while the makeup of the Senate is yet to be determined, Biden will likely be able to get some part of his tax plan on the legislative agenda. Sidley Austin partners Matthew Johnson and Eric Winwood discuss how the Biden Tax Plan could affect executive compensation.
Copyright © 2020 Thomson Reuters. All rights reserved. 610 Opperman Drive, Eagan, MN 55123
Want to change how you receive these emails? You can unsubscribe from this list here.
|