31.3.08

The Lateral Partner Power Play

Are law firms spending too much time and money branding the firm? We argue that in the age of the portable professional, strategies for promoting, retaining and attracting lateral partner talent — similar to the investment services model — is the path to long-term success.

How does a firm attract top lateral partners with large portable practices and at the same time retain its rainmakers? The solution is the same for both—demonstrate to potential and existing partners that the firm is focused on their success.

Wall Street clearly gets this. When Goldman Sachs reportedly paid out more than $16.5 billion in bonuses, The New Yorker explained, “talent is the most precious commodity on Wall Street; it’s what they sell, so it’s also what they have to pay for.”

At law firms, like all professional service organizations, talent is everything. But consider the difference in how much firms spend branding the firm versus what they spend branding the powerful business generators that are their individual partners.

Firms with genuine respect for their partners—and clients—never lose sight of the fact that clients hire the lawyers they trust, as opposed to law firms with letterhead they recognize. To this end, firms likely to succeed in today’s fluid market are those that view themselves as “brand marketers” rather than the “brand.”

Think of the way the Coca-Cola Company markets Coke, Diet Coke, Sprite, Dasani, or how Apple creates marketing campaigns for iPod, iTunes, and Mac. Just as General Motors bestows a hefty budget to its premier brand, Cadillac, the lateral that has been heavily wooed should expect, upon joining a new firm, to receive marketing dollars devoted to significantly increasing their value during their first year there.

Working with new laterals to develop and implement strategic, sophisticated marketing campaigns enhances their likelihood of success—and sends a clear message to other potential laterals that the firm is dedicated to helping its professionals grow their practices.

Law firms spend millions in branding campaigns in attempts to attract and institutionalize clients. Down the hall, the recruiting department, operating under the assumption that lawyers and their books of business are portable, has little or no marketing support devoted to recruiting partners.

Free agency has created a strong sellers’ market for laterals. Consider that The American Lawyer reported that between October 2005 and October 2006, 2,429 partners changed firms among the AmLaw 200—an average of 12 partners per firm!

This situation exists because clients control the state of play. As long as clients agree, lawyers are free to move as often as they like. To some extent, the legal market has always operated this way. Time and time again, in-house counsel say they hire lawyers not law firms. To avoid this attrition and client instability, firms must recognize where client loyalty lies. The key to obtaining and keeping top clients is keeping their lawyers happy.

When clients say they hire lawyers not firms, we know that practically speaking, what clients really mean is they hire great lawyers who work for “safe” firms. But what makes a firm safe? Safe means a firm with an established reputation for success; a reputation obtained by the results its individual lawyers achieve over time. By devoting marketing dollars to helping laterals solidify and expand their reputations, firms will find that clients come and stay too.

Smart firms should demonstrate to highly sought-after laterals that when they join the firm, an aggressive, sustained, customized marketing campaign will be immediately initiated on their behalf. This is an appealing commitment that’s hard to ignore.

Savvy candidates understand the importance of marketing support, and include marketing expectations in negotiations. They ask questions such as, “how many seminars will you help me produce this year?” And “how will you position my practice in the media?” And, “what will my personal branding budget be?”

Though the acquisition of lateral talent represents a significant investment in time and resources, oddly, many firms fail to engage in much business strategizing at the outset of the recruitment process. Firms frequently do not provide recruiters with enough guidance on the type of candidate likely to add true value to a firm’s current service offering.

In considering potential laterals, firm managers should carefully examine their long-term marketing plans, and identify and select candidates based on these needs. Procter & Gamble would not have purchased Gillette without a strategic marketing plan in place to leverage it. Smart firms ask difficult questions such as: “Where is our practice going, and what talent do we need to make it stronger?” “What will the debt market look like in five years, and who do we need to capitalize on that?” “What business could we get with partner ‘X’ that neither of us can get on our own?”

In an era of free agency, talent is everything. The firms that do the best job of articulating why lateral superstars will fare best with them—and then back up their plans with strategic, focused marketing support, will find they are able to successfully institutionalize the talent they need to attract the clients they want.

No Summary Judgment For WTC Defendants

A unanimous Second Circuit U.S. Court of Appeals panel ruled that the U.S. District Court for the Southern District of New York correctly denied federal immunity summary judgment for New York City, a port authority and contractors for personal injury claims filed by emergency responders arising from alleged exposure to toxins during the removal of debris after the September 2001 collapse of the World Trade Center towers (In re: World Trade Center Disaster Site Litigation, No. 06-5324, 2nd Cir.).

The plaintiffs are hundreds of construction workers, firefighters, police officers and other responders who allege respiratory injuries from exposure to dust and fumes. They sued New York City, the Port Authority of New York & New Jersey, World Trade Center Properties and dozens of companies with whom New York City had contracts to remove the debris at the World Trade Center site.

The defense motion for summary judgment based on immunity under the New York emergency response statutes and common law and federal statutes and common law was denied by Judge Alvin K. Hellerstein in October 2006.

The panel said the New York defenses do not attach because they are defenses against liability rather than immunity from litigation and do not create a right of interlocutory appeal. It said it has jurisdiction to hear an interlocutory appeal of denial of a Robert T. Stafford Disaster Relief and Emergency Assistance Act (Public Law 93-288) derivative immunity summary judgment.

The panel affirmed the trial court judge’s conclusion that the evidence supporting the motion for summary judgment is insufficient to determine which decisions at the World Trade Center site were federally instructed decisions and which were made by the defendants. It also said the judge erred in concluding that derivative Stafford Act immunity does not exist as a matter of law but affirmed the decision to deny the defense motion for summary judgment.

“Defendants contend that the Stafford Act immunity should be derivatively extended to nonfederal responders to allow these entities to ‘seamlessly implement the discretionary decisions and instructions of federal experts and agencies,’” the panel said. “The district court’s resolution of the defendants’ asserted federal immunity is somewhat ambiguous. To the extent it held that Defendants are not entitled to immunity under the language of the Stafford Act, we agree. Defendants are not federal agencies within the statutory definition, nor are they employees of the federal government.”

Article from Legal News Post

Law Firms Expect Rise In Bankruptcy Business

As the credit crisis deepens, law firms across the country are betting that bankruptcy work will be their most-promising avenue of growth, and are accelerating their recruitment of restructuring specialists. A survey of more than 300 attorneys from the country's largest law firms found that a plurality -- one out of every four -- expects bankruptcy law to be the fastest area of growth in the next 12 months. That number exceeds the tally of attorneys who think litigation or corporate governance will be hot growth areas.

"The number of bankruptcy proceedings is expected to increase in reaction to continued economic uncertainty," said Charles Volkert, executive director of Robert Half Legal, which conducted the survey.

The slump in U.S. housing prices over the past year triggered a financial crisis that some economists say is the country's worst in at least 50 years.

To ease the crisis, the Federal Reserve has cut interest rates and lent hundreds of billions of dollars to financial institutions on Wall Street. But the credit crunch persists, making it especially difficult for troubled companies to obtain loans.

Last year, Chapter 11 bankruptcy filings hit a two-year high of 6,236, according to Jupiter eSources, an Oklahoma company that tracks the data. The pace of Chapter 11 filings has accelerated further this year.

"We've just stayed extremely busy," said Laura Davis Jones, managing partner of boutique bankruptcy firm Pachulski Stang Ziehl & Jones LLP's Delaware office. "The way the market looks now, it doesn't look like that will be changing anytime in the near future."

Skadden, Arps, Slate Meagher & Flom LLP added 17 attorneys to its corporate restructuring team last year and expects to add three more to the ranks over the next two months, according to J. Gregory Milmoe, the team's co-leader in New York.

Mr. Milmoe said the group's attorneys billed 45% more hours in January and February of this year than they did in the same months a year earlier, thanks to a demand for the their services that "emphatically" increased.

At Davis Polk & Wardwell, the firm's "extremely busy" bankruptcy practice has looked internally to meet its need for more staff, according to Marshall Huebner, partner and co-head of the practice. The firm cross-trains attorneys in related practices, such as banking or litigation, so it may redistribute them based on demand.

He said there are between 30 and 40 attorneys who are "actively working on restructuring," whether or not that is their full-time focus. Of those, 15 are attorneys who wouldn't have been working in the area a year ago but may have been focusing on banking or litigation.

Mr. Volkert of Robert Half said the complex and fast-paced nature of bankruptcy leads most firms to seek attorneys who have at least three to five years of experience in the practice so they can hit the ground running.

"Hands-on experience really matters. Legal professionals who are able to demonstrate a proven track record in that area are in demand," he said.

Article Featured in:Breaking Legal News

Michael Khouri Featured in The Mercury News

Abuse, Embezzlement charges dropped; status of old job in unclear
By Elise Banducci – Mercury News

Stanford physician Cheryl Walker, cleared of charges she abused her elderly grandmother and embezzled from her estate, is once again free to practice medicine in California.

However, officials at Stanford Medical Center, which put the world-renowned reproductive science expert on unpaid leave after charges surfaced, did not return calls for comment on whether she would also be reinstated in her job.
The Medical Board of California suspended Walker’s license in May 2002, several months after she and her mother, Janice Walker, were indicted in what prosecutors said was a scheme to loot the estate of family matriarch Mary Lee Koleber, 95, and hasten her death with a “lethal cocktail” of drugs.

Prosecutors dropped charges against Cheryl Walker and cut a deal with her mother last month after a key witness against the pair admitted forging documents, shattering his credibility.

The medical board had 30 days after the charges were dropped –which was Thursday – to file papers to keep the suspension in place, said David Carr, deputy attorney general representing the medical board. Though the suspension expired, the board has up to three years after the arrest to investigate and take further action.

Friday, Walker paid the renewal fee for her medical license, which expired during the suspension, her attorney Mike Khouri said. Khouri said he did not know the status of his client’s discussions with Stanford.

“I would hope that since the criminal charges have been dismissed, and since her license has been reinstated, that Stanford would do the right thing and reinstate her to her position,” he said. Khouri also said Walker was weighing various academic and clinical opportunities elsewhere.

In her statement last week to the judge, before hoer mother was sentenced, Cheryl Walker said that her career had suffered irreparable harm and that she would have to move to start over.

Her mother, a 74-year-old retired nurse, pleaded no contest earlier this month to elder abuse and embezzlement and received a two-year sentence. She is expected to be releases on parole after no more than eight months in a minimum security prison. Walker, 45, has two young children.

About Michael Khouri:

Mr. Khouri has been practicing law in Orange County for over 26 years.
He is considered an expert in professional licensing defense and the defense of Medi-Care/Medi-Cal audits, and has tried in excess of 100 cases. An expert in representing health care providers, Michael has proven his abilities with a number of cases and has spoken at multiple events. He is recognized throughout California and the Country for his integrity and firm resolve to help his clients get the best possible resolution to their licensing or criminal matters.

Professional Licensing Defense Attorney