Business Law Prof Blog

Hedge Fund Investors Still Bullish

Despite selected academic studies showing hedge fund investors that the investments do not "beat the market," the hedge fund investors themselves disagree.  The investors expect to put $200 billion in hedge funds this year and expect their funds to make 10% (with all funds to make 7%).  The survey, conducted by the Deutsche Banks' hedge fund group, is of over 1,000 investors in 500 institutions, the largest in the industry.   

Lawyer CEOs?

The firing of Prince at Citigroup and Cherkasky  at Marsh & Mclennan has some wondering whether lawyers make good CEOs.  Too much attentiont to process and not enough attention to results was common in both firings.  Is this a bias that lawyers must overcome to be good CEOs?  Some think so.

Backdating Suits

With the dismissal of the Apple lawsuit, lawyers have discovered that stock backdating suits are better presented as derivative actions that securities class actions.  In securities class actions, the plaintiffs cannot relate the offense to declining stock prices.  In derivative suits, on the other hand, plaintiffs can claim that all back dated stock options should be canceled and any profits off such options be returned to the firm. 

Democrats and Arbitration

This has to be tough for the ADR crowd.  Democrats, favoring the trial bar, have begun attaching routine riders to new laws that limit the use of arbitration.  A new House bill attempting to outlaw shady mortgage lending techniques, for example, bans pre-dispute arbitration agreements.  The trial bar's money has eclipsed left-leaning political theory.

Associate Salaries and Judges and Law Professors

The WSJ.com Law Blog reports that second year salaries at the larger New York City firms will top $225,000, which is higher than the pay of Supreme Court Chief Justice John Roberts ($212,000) and substantially higher than the average salary of federal district court judges ($165,000).  Comments to the blog worry about adverse selection on the bench. What kinds of folks will want to be judges? I have commented on this before here, mentioning a study of the politics of new judicial appointments (they are overwhelmly ex-public interest lawyers and ex-public officials and, to a far lesser extent, ex-academics).  There should also a concern about adverse selection problems for law professors.  What kinds of folks will want to be law professors?  Again the answer seems obvious -- public interest and social engineering types. 

Judges and Disclosure Control

Judge Strine, in an open hearing on the SLM Corp. buyout, refused to let a spectator leave his courtroom after a ruling from the bench.  The reason?  The spectator wanted to inform traders in Sallie Mae stock.  The judge wanted all traded to get the information "at once."  The Judge, in essence, was imposing his own version of Reg. FD on courtroom spectators.  This is over the top.  Spectators in open court should be able to pass on information as they please.  If a judge is sensitive to disclosure problems he does not hold hearings in open court (a practice I am not condoning; Judges are too quite to impose confidentially orders already).  This information control fetish is not healthy for the public functioning of our court system. 

B-Schools Rankings

There is a fascinating debate going on in the country's B-School that foresees what law schools will soon also be debating.  For some time the B-School ranking systems are heavily weighted towards post graduate employment.  Professors bemoan the loss of an incentive to teach the "intangible qualities."  B-School rankings are more market driven.  The purveyors of rankings, and there are several that compete for the attention of potential students, have discovered that students pay primary attention to how employment opportunities enhanced by an MBA at a given school.  The purveyors are just reflecting the market; they known they do not set or create the market.  So B-School professors are upset with market forces in which they operate-- a common complaint of academics who want to "mold" things.  I don't know about you but I'll throw my support in favor of the wisdom of the market. 

Lawsuit Against Deal Lawyers

The private equity firm that bought Refco, the company that collapsed with cooked books, is suing Refco's attorneys in the deal, Mayer, Brown, Rowe & Maw, for complicity in the fraud.  This suit bears close watching.  The PE firm alleges that Mayer Brown "knowingly" allowed its client to lie..."  Deal lawyers have become experts at taking fees from questionable clients and careful limiting their exposure to criticism when a client tanks ("CYA" in the the trade).  We shall see how a judge handles it.

Judge Jacobs Shows Some Common Sense

Judge Jacobs, Chief Judge of the Second Circuit, started Court watchers when he dissented from a First Amendment decision of a panel of his own court by noting that he could not and would not make any legal arguments against those in the majority because he had "not read [the majority opinion]."   He thought the case silly, "years of litigation over $2," and he was busy.  At stake was a remark made in a college newspaper in 1997.  Judge Jacobs has long argued that many cases in the federal courts, especially those over federal jurisdiction or other constitutional minutiae, make only lawyers, judges, and law clerks happy at the expense of judicial time and sensible doctrine.  A voice in the wilderness. 

Milberg Weiss's Woes

David J. Bershad, a former partner with the nation's leading plaintiff securities firm for over twenty years (now split into two firms), has pleaded guilty to a 20 count indictment detailing illegal kickbacks to named plaintiffs in the firm's lawsuits.  He has also agreed to cooperate with federal prosecutors in providing information that may be used against other high profile partners (William S. Lerach and Melvyn I. Weiss may be probable targets).  This is bad stuff, despoiling the name of lawyers, which needs no further rotting.  Folks in industry (and their lawyers) often suspected that the named shareholders where paid puppets of the plaintiff's lawyers but they could not prove it.  The government has (using a deal with one of the paid named plaintiffs would had other criminal troubles and agreed to sing). [I cannot get over the hubris of using the same named plaintiff in 150 or so suits! Did the lawyers think no one would notice???]  This is the big break in the case -- the facts are now out and confirmed; the prosecutors will now play out the string on the remaining targets.

The case is largely historical due to a change made in 1995 by Congress that permits large shareholders to take over securities class action cases brought by smaller ones.  The new larger plaintiffs often bring their own lawyers.  There is still an incentive to find (bribe) a small shareholder to bring the case and stimulate larger shareholder to take the case, but the incentive to bribe a smaller shareholder to sue initially is diluted substantially.  A final salutary change would be a minimum shareholder stake requirement for private litigation that is small (.01% in stock or $25,000 in value, whichever is less) but large enough to discourage the practice of holding one share in 500 companies or so solely to be available to plaintiff's firms as a named plaintiff.         

Difficult Federal Judges

The description of Judge Reggie Walton comments in the court room during the trial of Scooter Libby were not flattering.  Multiple times he made comments from the bench that are more correctly described as speeches; several of the comments were petulant.  His conduct reminds me of the Judge in the KPMG tax case.  A lack of judicial humility on the bench is not new but it seems to be growing in frequency, particularly in the newsworthy cases.  New data on the selection of federal judges illustrates a selection bias against main-line practicing attorneys and in favor of academics, public officials, and those who practice public law.  Are the two related?  Judges with a cause would seem to be more likely to be peevish to those with whom they disagree.

[New post]  In response to Judge Chidester's comment, I should note I agree with the potential unfairness of press accounts of judge's actions but occasionally judges do deserve a barb or two, especially when based on the judge's own language in an opinion or in open court that smacks of a loss of judicial temperament.  Here Judge Walton was very, very preachy in open court, suggesting he was riding his own horse in this notable case.  You have to be a judge to judge a judge??  Hardly.

Judge Spats: The Role of Blogs

Judges on the same bench routinely disagree and sometimes those disagreements turn personal.  The judges own stage in their public image (read legitimacy) --- judges are measured, thoughtful, and respectful-- usually restrains judges from taking their personal conflict public.  We hear about personal conflicts, if at all, through leaks from friends or clerks long after the fact.  Sharp exchanges on the bench in oral arguments are 1) a surprise, 2) judged harshly, and 3) assumed to be "purely professional" (the judges disagreements are reflections of personal animosity).  Disagreement in private, in conferences and correspondence about cases, are, historically, confidential.  But judges are human.  Within the last month there have been two illustrations of courts going public with personal spats.  The D.C. Circuit Court had a public spat over the acceptance of a amicus brief from retired judges (a split panel held that retired judges could not feature the use of the title "judge" in court proceedings).  I have mentioned it in an earlier blog.  Judges from the DC Circuit are still writing letters to the editor on the issue (a recent defense by a spurned brief writer noted that they used their titles as Judge on in the "bio" materials and in the body of the brief and that other judges had submitted similar briefs that had been accepted.) 

The Michigan Supreme Court now has been featured in the New York Times in a public spat over a disciplinary action against lawyer who was also an unsuccessful candidate for governor, Geoffrey Fieger. (Adam Liptak, Unfettered Debate Takes Unflattering Turn in Michigan Supreme Court.") [See also "It's Getting Ugly on the Michigan Bench," from CNN.com].  The defendant was charged with, get this, making negative comments about sitting judges.  The successfully candidate for governor had picked four judges on the bench and several of the judges had made negative public comments about the loser/defendant during the political contest.  The Michigan Supreme Court judges had a very rough conference on the case and one of the judges went public, on her blog, with the comments of one of her colleagues (he called her, among other things, "a child engaging in a tantrum").  Rosie O'Donnell and Donald Trump move over..

The court, characteristically, met to pass a new rule, on a 4 to 3 vote, prohibiting any member of the court from revealing the contents of inside judicial communications on pending cases.   The aggrieved judge called the rule a "gag order" and, characteristically, labeled it as unconstitutional.  She has started a blog, for pete's sake.  Next up -- a rule against judges having blogs. 

Fieger has sued the Michigan court in federal court.  Law professors and other judges have, characteristically, clucked their tongues, bemoaned the lack of decorum and supported the need for confidentially.

I, on the other hand, welcome and laugh and enjoy the public spectacle.  Increasing publicity about courts is and will be inevitable.  Judges had better get used to it.  Moreover, it is healthy.  Illusions about courts will be more difficult to sustain, judges will suffer public disgrace for poor behavior and be induced to behave better and we will all be better off for it.       

Judge Selection Economics: Business Suffers

The Chief Justice's Annual Report, issued Sunday, contains facts that demonstrate the economics of judicial selection.  First, federal judges are leaving the bench, not retiring, in increasing numbers.  Seventeen have left the bench in the past two years.  While Chief Justice Roberts worries about these numbers his concerns seem overblown.  This is not a large number, given the number of federal judges on the bench. Many judges leave to engage in for-profit arbitration groups.  The low number leaving is also explained, in part, by the second fact. Second, and more significantly, is the claim that fewer and fewer federal judges come from private practice.  Only forty percent of the new district court judges come from private practice, although, and, I am guessing here, well over 80 percent of all licensed lawyers are in private practice.  Judges come from the public sector or from law schools.  Judges are no longer the cream of the private bar.  The salary differential from private practice to a judge's salary is just to great.  The selection of judges will, of course, reflect a functional and political slant on how the judges decide cases.  I would suggest, subject of course to ridicule, that this explains why  many judges are so unsympathetic to context and culture of doing business in the United States.  Judges too often, with the best of intentions, do not and perhaps cannot reflect on or predict the effect of their decisions on the rigors of doing business (both on the operating side and the capital raising side) in a competitive environment.   

Litigation

Two recent studies on lawsuits in the United States provide detail for what we all know: We are a litigation happy nation.

The studies show that litigation in the United States continues to grow, with each year setting new records, and that no other country has costs even close to ours, even if normalized for population or GDP.  There can be no doubt: Litigation, suing or getting sued, has become a defining characteristic of doing business in the United States.

One of the country’s most respected law firms, Fulbright & Jaworski, recently released a survey of 310 in-house counsel on their litigation costs (2006 Litigation Trends Survey).  In-house counsel are lawyers employed by companies to manage their pending cases.  A selection of their findings demonstrates the volume and scope of legal actions against companies in the United States.

For companies with sales of $1billion or more last year, a United States company faces an average of 556 pending lawsuits, with fifty fresh suits filed each year for over one-half the companies.  Insurance companies report a average of 1,600 pending cases; energy company report 364 pending cases; retail companies 333, financial services companies 300, and manufacturers 206.

The size of the claims is staggering.  The seven in ten of the billion dollar firms were defending at least one lawsuit claim more than $20 million last year and several companies noted that they were facing over 50 new lawsuits of $20 million each (for a total exposure of over $1billion).

On top of the pending cases, companies face multiple pending arbitration and regulatory proceedings. A number of companies reported more than fifty pending regulatory proceedings. 

Legal fees in the survey averaged $12 million annually, with several companies spending over $35 million.

There were some surprises in the Fulbright & Jaworksi survey.  The in house counsel listed employment litigation has their top litigation concern.  As noted by Stephen Dillard, who presented the results of the survey, “the workplace has become a legal minefield over issues ranging from pay and promotion to harassment and discrimination, and claims of wrongful termination.”  Contract disputes were second more cited, followed by Intellectual Property Disputes, personal injury filings, regulatory actions, products liability claims, toxic torts, securities actions and antitrust issues. 

The securities and products liability class actions get most of the headlines but are not the top litigation concern of the in house counsel.

Similarly, the most recent survey (U.S. Tort Costs and Cross-Border Perspectives: 2005) by the Tillinghast business of Towers Perrin, a well-known financial consulting firm, found that payments in tort cases reached a record $260 billion in 2004 (its latest full year of data).  This is $866 per person in the United States.  Medical malpractice costs for 2004 totaled $28.7 billion and grew at over 11.7 percent since 1975, the highest growth rate for any of the torts over that period.    

The growth of tort costs in the United States is unique among the world’s developed countries.  Since 1950 tort payment costs, adjusted for inflation, grew at over nine times the rate of population growth in the United States.  The costs are 2.2 percent of United States Gross Domestic Product (GDP) as compared with 1.1 percent in Germany, 0.8 percent in Japan, and 0.7 percent in the United Kingdom.

At issue, of course, is whether our system of private litigation, producing results that are dramatically different than those in any other developed country, is better or worse than the systems of other countries.  Trial lawyers, who are not neutral observers, have long maintained that our system is superior, providing relief to those who deserve it.  Business leaders, who are also not neutral observers, believe the system facilities the equivalent of economic extortion.  The truth is probably somewhere in between.

All have to admit, however, that the newest numbers are staggering, both in their absolute amount and in their annual rates of growth.  There seems to be no top or equilibrium to the litigation.  This alone suggests that we need to think about taking more effective steps to contain the numbers.      

       

Darn Lawyers

Just hear a talk and small group discussion by two top lawyers from a top New York law firm. They took the following positions, in sequence:  All corporate lawyers should do pro bono work (defined as litigation for victims); outside corporate lawyers who worked with the 200 or so firms that backdated options did not facilitate the fraud (they just passed the paper and "trusted" insiders); on stock back- dating, "everyone was doing it" and the profession assumed it to be normal business practice; plaintiff's securities lawyers are in a "bad" business and are, among other things, "insane."  Good grief. Anyone else see the problems here. Good pro bono work ought to be in suing top law firms to create at least one case that shapes up the entire business.  I hold out a slim hope for the Enron litigation against Vinson & Elkins here.

"I shouldn't have asked..."

A Hewlett-Packard lawyer asked whether the company's investigation of it own board was on the up and up and was told -- "It is on the edge."  (See Damon Darlin & Matt Richtel, "Some at HP Knew Early of Tactics," NYT today).  His response, "I shouldn't have asked."  I assume he asked for no further details.  The lesson, apparently, is that by asking, the lawyer may have lost his ability for a "plausible denial" of knowledge of the illegal techniques used in the investigation.  He still can argue that he thought "on the edge" meant legal, I suppose, but the plausibility of his denial is now suspect.  He knew that he put a plausible denial a risk.     

He needed better training in the use of the technique, I guess.  I need to suggest to the Dean that we teach a course in the techniques of "plausible denial" for our law students; the skill seems to be very important nowadays.   Get just enough facts to offer a valid legal opinion (or other advise or services) with qualifiers and disclaimers, charge a nice fee, avoid investigating any red flags and put aside any suspicions, and then tell everyone after a scheme blows up that you were hook winked too and assumed that the limited facts as given in your opinion were the entire story.  Yup, that's the ticket. 

HP's Pretexting and Lawyers

The secret investigation of directors at Hewlett Packard necessarily involves lawyers.  One lawyer, Sonsini, was on the board and asked for assurances from the companies Chief Legal Officer, Baskins that the investigation was on the up and up.  Baskins assured him that it was.  She, we now know, was wrong and may have had a heavy hand in supervising the program.  Another lawyer in Boston,Kiernan, wrote an opinion letter for HP advising that the methods of the outside investigator were legal; he was mistaken and conflicted.  These kinds of assurances from lawyers are routinely requested by managers and without affirmative responses managers do not go ahead with their planned activities.  Lawyers then are often integral to any scheme of managerial misbehavior.  As participants, lawyers should be held accountable, both in criminal and civil prosecutions and in bar investigations.  Once a few lawyers are sanctioned, opinions and assurances on what turn out to be questionable actions will be harder to secure.

Grasso Case

The litigation in New York over the compensation of ex-NYSE chief Grasso is a classic example of what money-is-no-object defense lawyers can do to the litigation process.  The defense lawyers are paid to explore every defense, make every motion, take every edge in the litigation.  It puts very, very heavy pressure on the state court judge hearing the case (who, buy the way, having decided a few motions against Grasso now finds himself the subject of the motions for recusal.)  Those who are interested in the litigation process, and the effect of wealth on the process, should be following this case, blow by blow.  It will be an education. 

The Bar Attacks the Thompson Memo

I would be more sympathetic to the organized bar's attack on the Justice Department's Thompson memo if it did not reek of self-interest.  Corporate payments of executive's legal fees line the pockets of large firm lawyers (allowing the levying of extraordinarily large fees) and claims for attorney/client privilege when lawyers do "internal investigations" on serious charges guarantee that outside law firms will do all the investigations.  Convenient.

San Diego's Pension Scam and Lawyers

The Congressional report on tax scams noted the important contributions of lawyers.  On the heels of that report we have another, a report on the pension scam in San Diego, and again lawyers played an important role.  Modern financial scams require the help of outside professionals, lawyers and accountants, and enforcement authorities need to start focusing on these professionals in their prosecutions.  It is no longer enough to catch the crooks, we need to catch those who help the crooks, in order to re-instill come sense of professional discipline. 

Senate Report on Tax Cheats: Lawyers and Plausible Denial

A Senate investigation of tax fraud has concluded that tax cheating is rampant and that lawyers and accountants facilitate the fraud.  As with options backdating, lawyers are in an era of "plausible denial."  Here is how it works.  A lawyer is asked for an option on a scam, for draft documents on a scam, or for disclosure documents on a scam.  The lawyer does the work under an "assumption" of facts that give an argument for legality;  the assumptions are provided by a well-educated (and often well-schooled) client.  In a tax scam, for example, the lawyer issues an opinion on legality assuming that offshore transactions had "real economic" substance when in fact the transactions are shams.  The assumptions are carefully articulated and formalized in a written record.  But the assumptions are false and ignores substantial suspicions that they are false (deliberate ignorance).  Offshore transcations between multiple entities in tax havens, for example, are rarely legit, but the lawyer assumes that they are.  When the assumptions prove to be false the lawyer says, very simply, I gave services based on assumptions that I was given.  I did not participate in the scam.  This should no longer be a defense because lawyers have abused it.  Lawyers should have a "red flag" duty to investigate their "assumptions," just as accountants do when a deal smells.  The failure to investigate should be an ethics violation.  A part of the Senate Report's recommendations may make this a legal rule; the Report recommends that aiding and abetting statutes apply to lawyers in tax scams.  The definition of aiding and abetting may, and ought to, include a definition of deliberate ignorance.    

Link below:

Tax Haven Abuses: The Enablers, The Tools, and Secrecy

Vinson & Elkins: Enron

The last shoe to drop on Enron may be a discussion of the role played by its outside counsel, Vinson & Elkins.  The Enron bankruptcy trustee is negotiating to settle claims with V& E for $30 million.  The SEC is investigating V&E and class action lawyers have sued V&E for their role in the Enron collapse.  The suits will soon reveal a flood of documents and transcipts that focus on the role of outside counsel.  Early disclosures of some of the evidence reveal that V&E had doubts about Enron practices as early as 1997 even as the firm provided opinion letters to Enron on controversial deals.  The case may transform opinion letter practice.

Three General Counsel Caught in the Options Back-Dating Scam

I posted earlier a remark that the options back-dating scam would often need the aid of lawyers.  Lawyers prepare the documents for compensation options grants and then prepare the disclosure documents for the SEC.  The heavy involvement of lawyers makes their claims of ignorance at bit too, well, deliberate.   So far 15 senior executives and directors have lost their jobs as the result of internal investigations of back dating-options.  Three of the 15 are general counsel.

The Back Dating Scam

I hope the SEC is looking into the role of corporate lawyers in the stock options back-dating scam that has so far caught more than 20 companies.  Many of these compensation rackets cannot go forward without the complicity or, at minimum, the intentional neglect of lawyers.

Milberg Weiss Indicted

The indictment of Milberg Weiss as a firm for the activities of its named partners in paying plaintiffs in securities class action litigation will probably end the life of the firm.  The firm will lose the ability to represent named plaintiffs in future suits and may find itself replaced as a named plaintiff in existing suits.   A client using Milberg, now under indictment for misbehavior in class actions, cannot "adequately represent" any class under the charges have been concluded.  Either a client who is a class representative fires the firm and finds another or the client is replaced as class representative by the judge for not firing the firm.  Partners who are not indicted, seeking to keep clients, will leave the firm and take clients with them, hoping to argue before a judge that their new firm can represent a plaintiff class.  Associates will look for work elsewhere.  This firm has a very slim chance of surviving in its present form.   

Litigation Against Critics

Three separate stories caught my eye this week.  First, in Business Week a feature story on Jim Kramer noted that a blogger in Tacoma Washington was keeping track of Kramer's stock picks on his hit show Mad Money and was charting whether or not the picks made money.  The blog was popular.  CNBC lawyers shut the cite down with a "cease and desist letter.  Second, Gretchen Morgenson wrote a column in the Sunday NYT on Jay M. Meier, who, as a stock analyst, correctly projected in March of this year a falling stock price for Digital River.  The company sued Meier for technical errors in some of his reports (e.g., number of options held by executives) and forced him to stop commenting on the company.  The stock was 40 when he made his projection and is currently trading at 28.  Third, Special Prosecutor Fitzgerald indicted the Vice President's Chief of Staff, Lewis Libbby, for perjury in his investigation of a leak of the identity of a covert CIA agent.

The common thread?  If you do not like the essential message (and cannot contest it without difficulty), sue for a technical violation of something to stifle the messenger.  You could care less about the technical violation; it is just a tool to disable someone who is giving you trouble.

To err is human.  We all make mistakes.  Many years ago a prosecutor friend of mine told me that he could indict anyone, given enough time to inspect every aspect of their lives.  A tax mistake here, a false or unfilled record there, an exaggeration on a resume when young, a divorce document filed in anger ...  He himself relieved the stress of his job with some weed. 

Those in high profile jobs, especially when they criticize other high profile folks who do not like it, are busy and there jobs care complicated.  They, of course, are the most likely to skip a detail and the most likely to have an angry opponent sue them for it.  Once turned over to litigators these prosecutions have a life of their own, as those hired to prosecute or sue have an interest in results not the common sense of perspective.  Judges can operate around the edges of legal doctrine to bring reason to the process but it is hard to do once the charges are in proper form and in a public forum.   

Using litigation as a tool to attack critics has social consequences.  It would be a dull place if every high profile critic wrote in bland legalese to avoid litigation.   

Lawyers to Investment Banks: Hersch Leaves Firm Goes to JPM

Elizabeth Moyer at Forbes.com is reporting that the head of M&A at Davis, Polk & Wardwell, Dennis Hersch has decided to leave Davis Polk and head for JP Morgan.  According to the article, which can be found here, JP Morgan's COO, James "Jamie" Dimon has convinced Hersch to join JP Morgan in January as chairman of the firm's mergers and acquisition advisory group.  This move by JP Morgan is nothing new, Citigroup has hired Lewis Kadan, also from Davis Polk, as chief administrative officer, and Morgan Stanley hired David Heleniak, a senior partner and mergers expert from Shearman & Sterling.

Corporations Face Heavy Caseloads

According to the Fulbright & Jaworski 2005 Litigation Trends Survey:

Nearly 90% of U.S. corporations are engaged in some type of litigation, and the average company balances a docket of 37 U.S. lawsuits. For $1 billion-plus companies in the U.S., the average number of cases being juggled at home soars to 147.

Contract and labor/employment actions top the list of types of claims involved, for some companies representing as much as half of their litigation matters.  Next on the list is personal injury followed by products liability and IP disputes.  Click here for more details.

Document Games by Trial Lawyers: The Boies Version

It has always been one of the black eyes of corporate trial lawyers -- document production.  One side demands every document that could possibly be relevant, the other side provides a flood of meaningless paper (the document dump), retains critical documents with a litany of routine objections, and refuses to answer any clarifying questions (interrogatories) with any precision.  Force opponents to complain to a judge (who hate these hearings) and on the eve of the hearing slip a few more documents across the table to obscure the argument.  Moreover, at the hearings develop a blizzard of document complaints about the other side as well -- flood the judge with detailed, finger/pointing, he said/she said objections.  Even if a judge takes the time to sort out the wheat from the chaff (and many do not) and orders production, comply with a few more but not all the documents and force opponents back to court to ask for sanctions.  If an opponent is as dogged as a spawning salmon and the judge get its, pay the small fine.  Now there is a new twist.  The lawyer incorporates  document "management" company and, as lead lawyer, hires his own family-run company to help do the dirty and bills the client for his company's efforts.  Why not profit from the production document dump as well as do it???    One such lawyer happens is David Boise, one the best known lawyers in the country (and a frequent lecturer on ethics I might add).  The document production systems need a serious overhaul to restrain obstruction by lawyers;  it we are serious about discovery we need higher, different penalties (e.g., suspension of lawyers from practice) and specialized document magistrates that stay on top of document problems are all in order.  Lawyers have not distinguished ourselves.