Friday, December 15, 2006

More on Option Backdating: A Reaction to the "Lucky CEO" Data

Posted by Jeff Lipshaw

Shield_1 I have harped on the need for empirical data rather than political hyperbole on the prevalence of option backdating.  The Harvard Program on Corporate Governance, operating within the John M. Olin Center for Law, Economics, and Business has announced a new paper on the subject, entitled "Lucky CEOs" (which is posted on SSRN), authored by Lucian Bebchuk, Yaniv Grinstein, and Urs Peyer.  Here is the abstract, after which I have some commentary:

We study the relation between corporate governance and opportunistic option grant manipulation. Our methodology for studying grant manipulation focuses on how grant date prices rank within the price distribution of the grant month. Investigating the incidence of "lucky grants" -- defined as grants given at the lowest price of the month – we estimate that about 1150 lucky grants resulted from manipulation and that 12% of firms provided one or more lucky grant due to manipulation during the period 1996-2005. Examining the circumstances and consequences of lucky grants we find:

- Lucky grants were more likely when the company did not have a majority of independent directors on the board and/or the CEO had longer tenure -- factors that are both associated with increased influence of the CEO on pay-setting and board decision-making.

- Lucky grants were more likely to occur when the potential payoffs from such luck were high; indeed, even for the same CEO, grants were more likely to be lucky when granted in months in which the potential payoffs from manipulation were relatively higher.

- Luck was persistent: a CEO's chance of getting a lucky grant increases when a preceding grant was lucky as well. 

- In contrast to impressions produced by cases coming under scrutiny thus far, grant manipulation has not been primarily concentrated in new economy firms but rather has been widespread throughout the economy, with a significant incidence of manipulation in each of the economy's 12 (Fama-French) industries.

- We find no evidence that gains from manipulated option grants served as a substitute for compensation paid through other sources; indeed, total reported compensation from such sources in firms providing lucky grants was higher.

- We estimate the average gain to CEOs from grants that were backdated to the lowest price of the month to exceed 20% of the reported value of the grant and to increase the CEO's total reported compensation for the year by more than 10%.

- About 1,000 (43%) of the lucky grants were "super-lucky," having been given at the lowest price not only of the month but also of the quarter, and we estimate that about 62% of them were manipulated.

- We identify certain pools of grants with an especially high probability of manipulation. For example, we identify a pool of 600 grants out of which 88% are estimated to be manipulated.

Larry Ribstein has already commented on the article, thus providing an initial reaction at the other end of the ideologicaI continuum (Professor Bebchuk's shareholder activism being a matter of public record).  Being the wishy-washy and anal type I am, I have a slightly different take.

If you look at the body of the article, the great value here is that the authors had access to the entire database of options granted by public companies from Thomson Financial's insider trading data base from 1996 to 2005, which in turn is based on all of the Forms 3, 4, 5 and 144 filed with the SEC.  And I am not in a position to argue, at this point, with the authors' statistical work.  I am, however, still trying to figure how, if at all, this data speaks to the prevalence of manipulation, even if we take the statistics as correct.

The reason for my hesitance goes back to the creation of the sample set, and the assumptions for inclusion and exclusion of certain grants.

1.  "The universe of grants we study contains all at-the-money unscheduled grants awarded to public companies' CEOs during the decade of 1996-2005."  (Bebchuk, et al., p. 2)  Almost by definition, an unscheduled grant in the corporate world is manipulated; I'm surprised so few were lucky!  That is, we are studying now a sample set of manipulated grants, trying to find the super-manipulated grants (and super-super-manipulated grants).  What I cannot tell from the data present is what percentage of all grants, either to CEOs, or to all insiders were unscheduled versus scheduled.

2.  In my experience, the reason for unscheduled grants would be hiring.  Again, while the CEO had the authority to grant options in small number for lower level hires, more senior executives, including the CEO, would require board or compensation committee approval for the grants.  So an unscheduled grant would still correlate, generally, to a board meeting.  I cannot tell from the data how many of these quasi-scheduled grants were included in the sample set.  Indeed, I cannot tell how many of the grants were those given on the CEO's initial hiring.

3.  "From this sample we eliminate grants that are scheduled, which might be less likely to have been manipulated.  A grant is defined as a scheduled grant if the CEO received the grant on the same date plus/minus one day in the preceding years." (p. 10.)  My experience (and intuition) is that scheduled grants are based on board meeting or compensation committee meeting scheduling, and not calendar scheduling.  At Great Lakes Chemical and AlliedSignal/Honeywell, where I worked (and I suspect GE and other companies), options, including those to the CEO, were regularly considered, granted, and dated as of a board meeting held some time after the first of the year.  I have not gone back to study whether board meeting dates could meet the Bebchuk definition of "scheduled," but in fairness, the sample, in my mind, is flawed, if it counts these as "unscheduled."

Good start.  But, as they say, needs work.

December 15, 2006 in Abstracts Highlights - Academic Articles on the Legal Profession | Permalink | Comments (0) | TrackBack (0)

Asimow on Pop Culture's View of Adversarialism, Truth, and the Profession

Posted by Alan Childress

Michael Asimow (UCLA) continues his examination of the public perceptions of the legal profession through the lens of pop culture's TV, movies and books, which in turn influence those perceptions.  We had earlier posted his coauthored article (with Richard Weisberg) on literary presentations of adversarialism and the guilty client.  This one, posted on SSRN as "Popular Culture and the Adversarial System," looks more at the influence of Perry Mason [played by Raymond Burr, below, before Ironsides] and Mason's current analogs on the public view that trials and adversarial cross-examination are about getting at truth--and the hope that there is an actual "truth" payoff as the product of the process.  Its abstract is:

This article addresses a puzzle: lawyers are the most distrusted and despised of all American professions, whereas the public has a much higher opinion of judges. Yet Americans believe strongly in the adversary system in which all the important procedural decisions during civil or criminal trials are made by lawyers. Even though people crave a justice system that discovers what really happened, they accept one that delivers only trial truth and procedural justice, not factual truth or substantive justice.

This article explores various reasons why people might favor the adversary system despite their distrust of lawyers and their craving for truth, such as a belief in personal autonomy, a distrust of government officials, and a lack of knowledge about alternatives. However, the article suggests another possible reason: the influence of popular cultural portrayals of the trial process. Dating back to the days of history's greatest teacher of trial tactics - Perry Mason -Banner_pmpix  media consumers have been taught that the adversary system delivers the truth. We can count on a great lawyer's cross-examination to reveal the identity of the real killer. Even though we hate and distrust lawyers, we want a good one by our side when we're in trouble or an aggressive one prosecuting the crooks. Countless films and television shows since Perry Mason's day have conveyed the same basic message, although in more sophisticated form. According to “cultivation theory,” people often extract information and form opinions based on fictitious stories told by pop culture media. Perhaps we derive our bone-deep belief in the adversary system from Perry Mason and the other great lawyers we've watched over the years.

December 15, 2006 in Abstracts Highlights - Academic Articles on the Legal Profession | Permalink | Comments (0) | TrackBack (0)

Thursday, December 14, 2006

Reality TV & the MPRE - Episode 3 - Freedonia Revealed; Lipshaw Going to Suffolk

For those of you who had so little to do that you played Alan's parlor game, the answer is Freedonia is SargenthallMassachusetts.

I have accepted an offer to join the Suffolk Law School faculty beginning with the 2007-08 school year.  Alene and I will be moving to the Boston area this summer.

One of the great benefits, among others, is that I will join friend and fellow blogger Andy Perlman of Legal Ethics Forum.  Dueling blogs under the same flag, as it were!

[Jeff Lipshaw]

December 14, 2006 in Blogging, Lipshaw, Professional Responsibility | Permalink | Comments (0) | TrackBack (0)

Beyond Zealousness

In his "very first case handled on his own" a Pennsylvania attorney was disbarred for his representation of a client in a child support matter. The lawyer came to believe that audiotapes of court proceedings had been altered and that the transcripts failed to accurately reflect what had been said in court. After failed motions to "correct the record" he began to accuse the presiding judge of criminal alteration of the tapes in a series of letters, pleadings, court filings and affidavits and in internet posts. The Disciplinary Board found that his accusations were false. The attorney was "truly unfit to practice law" and "was prepared to fight his case in any way possible, including making false and injurious accusations against a judge in a persistent manner through a number of years and to a variety of audiences."

The Supreme Court adopted the Disciplinary Board's report, ending a brief but turbulent career at the Bar.

[Mike Frisch]

December 14, 2006 in Ethics | Permalink | Comments (0) | TrackBack (0)

Kant on Voicemail and E-Mail

Immanuel Kant (Koenigsberg, below left) has posted Concerning the Common Saying:  "Amend Before You Send" or Thoughts on Voicemail and E-MailThis essay is the lost Part V of Kant's Lectures on Ethics, and recently surfaced on a sheaf of vellum preserved in the bock beer at the bottom of a keg Kant_2in a small town in what is now Poland but used to be East Prussia.  Here's a taste:

This essay I find useful in making suitable for the common understanding that portion of my metaphysics of morals; being that study of pure practical reason that proceeds analytically from common cognition to the determination of the supreme Moral Law, and hence its application in the treatment of persons by means not presently known in our day, but which might be contemplated were the groundwork laid by Professor Newton in recent days to means of communication yet to be discovered.

We have previous shown there to be a supreme practical principle, and with respect to the human will, a categorical imperative, not the least of which is that necessary duty to others by which we are obliged not to intend to make use of another person merely as means, but only as beings who must be able to contain in themselves the end of the very same action. It being then in accordance with the principle, the maxim we shall only criticize or get mad or give bad news or fire somebody or be sarcastic or irritated in a manner by which the object of our wrath is, in that moment, wholly an end and not a means.  Such being the protection of distance, whether by e-mail or voicemail, it then becomes the natural inclination to treat the other as means and not end.  Verily, this is not a universal law with regard to the use of such device; we may praise the bejesus out of another by such means, but not the reverse.

Yet it is possible that which is called for by our will in response to the Moral Law is also that which is conducive to happiness (or the pursuit thereof) in the heteronomous and empiric world; for the application of this principle serves well for explanation why the autonomous and free will directs us not to into long involved pissing contests on the VM or the e-mail.  Perhaps even the esteemed David Hume would agree, were he to think on it for a passing moment, that our lives would be more congenial for no other reason than the fact that the object of our displeasure is live and in person tends to moderate one's invective.  Hence, we find ourselves far more likely to e-mail "dear mush for brains" or to deliver such message by recording on a voicemail to another than to say it.

[Jeff Lipshaw]

December 14, 2006 in Ethics | Permalink | Comments (1) | TrackBack (0)

Representing Criminal Defendants in New Orleans: Student Cavalry Is Coming

Posted by Alan Childress
An interesting and inspirational holiday-time story here in The National Law Journal, "A 'Big Easy' Mission That Won't Be So Easy."   That at the bottom becomes infuriating.  It is about the efforts of the Tulane criminal defense clinic's work to represent accused clients against the flood (sorry to use Paper_1 the ambiguous term "flood") of backlogged and waterlogged cases post-Katrina.  They are now being joined by 150 students from several law schools volunteering their post-exam vacations away to pitch in.  We previously posted here on the defense crisis and the efforts of Tulane's Pam Metzger and Katherine Mattes and others -- as well as Loyola's Steve Singer and the Student Hurricane Network here -- to alleviate the problem and coordinate student help.  We particularly noted here the generous contribution of 70+ McGeorge law students and alumni PDs (now that's a flood), and the NLJ story recognizes that and plenty more.  Such laudatory and educational efforts have the side benefit of556619_from_out_of_the_past being fun, or at least it looks that way as to Golden Gate students here.  We'll try to track down some student accounts of the current cavalry.

One sentence in the NLJ story that would have been amusing had it not been infuriating:  a quote from a local assistant DA that tries to blame the backlog on defense tactics of delay, and pitches Katrina as some kind of excuse for that.  "It's about people wanting to do the work," he said. "It's the best strategy for a defense attorney to delay and we think that is what is happening. They have investigators and a public defender in each court.  A lawyer just needs to pick up a file and read it and determine what should be done."  Pick up a file?  What lawyer?  Where files?  The disarray of evidence and numbers of PDs don't match up to such blameshifting.

Tell it to the defendants who waited more time in jail than their possible sentences would be and were only let out when the few defense attorneys made the motions.  Tell it to the handful of paid PDs who are struggling to do the work of what 100 should be doing.  Tell it to the state and federal governments who have not treated this aspect as a national crisis and shame, deserving massive attention and funds -- all while we criticize other countries for their broken justice systems or pretend that the only Americans languishing in jail awaiting representation are enemy combatants.  This country should not need student volunteers to provide what Gideon guaranteed its citizens over 40 years ago.   

I understand that public-posturing DAs are supposed to blame everything on defense attorneys and that is ' how convenient' talk from him.  But not only does it ignore the reality of missing evidence and witnesses and a tireless and sacrificing skeletal crew of PDs -- as well as diminish the sacrifice of students like these -- but it lets the rest of us off the hook for our obligation to keep the pressure on, everywhere, to fix a broken system that cannot be blamed on the sloth of its finest contributors.  Put another way, if this prosecutor believes that justice is being delayed as a defense strategy, let him support bills in the government, and motions in the court, to pour some minimal money into the system to hire defense attorneys to take up the slack he seems to observe.

In heartless Pottersville, they may lock up accused neighbors for months beyond their possible91mcapra_1 sentences and tell them a lawyer will get to their case if one ever gets hired.  And then try to blame it on Jimmy Stewart for his carelessness and inattention.  We deserve better, at least an attempt to act more like how Bedford Falls would.

I got over my tiff by assuming the DA guy was quoted out of context--no one is that tone deaf to this disaster--and by watching this 30-second Cliff-notes version of a movie of It's A Wonderful Life, told all in bunnies.  I thought there's more to the movie than that Wonderful_thumb2gif but this seems to capture it quite efficiently.  [All bunny clips here; I like The Big Chill and Pulp Fiction in Bun-O-Vision too.]  Looking forward to the real deal on TV this time of year, and they play To Kill A Mockingbird too. What would Atticus Finch do?  I bet he'd pick up a file and read it.  I hope the assistant DA doesn't think it's called How To Kill A Mockingbird.

December 14, 2006 in Clients, Professional Responsibility, The Practice | Permalink | Comments (0) | TrackBack (0)

NOBC on Model Judicial Code

The National Organization of Bar Counsel has submitted comments on the proposed revisions to the ABA Model Judicial Code. The NOBC strongly believes that the "appearance of impropriety" language should remain a basis for judicial discipline and that "stronger language about acceptance of gifts and reimbursement of expenses for attending seminars" is advisable.  [Mike Frisch]

December 14, 2006 in Ethics | Permalink | Comments (0) | TrackBack (0)

Congratulations to Jim Chen and Louisville

Our blogging colleague, Jim Chen, the MoneyLaw maven, has accepted the deanship at the University of Louisville's Brandeis School of Law.  Mazal tov!  We'll be there during Derby Week.Sanderscafe4

I should also note that I represented KFC Corporation early in my career, and spent many days in Louisville.  The Colonel Sanders Museum down in Corbin (right) is not to be missed.

Once again, best of luck from LPB!

[Jeff Lipshaw]

December 14, 2006 in Blogging | Permalink | Comments (1) | TrackBack (0)

My Grading System is More Accurate, and You Can Use It in the Pub Too

Dan Solove has a hilarious post over at Concurring Opinions on his tried and true grading method.  IDartboard_1 don't want to take anything away from Dan's scientific turn on a classic pedagogical tool, but I do feel compelled to reveal my system in the picture at the right.  I believe this has a number of benefits over the Solove method:

1.  It is more rigorous in that the dartboard will give a separate score for each answer on an exam.

2.  The dartboard is movable, so one can grade in pleasant surroundings, as opposed to an abandoned stairwell.   Indeed, with a well-placed table at Starbucks or the local pub, grading takes on a certain ambience.  It also ameliorates the professor's particular subjectivity because any number of people are able to participate in the grading.

3.  The system is more transparent to students.  The dartboard hangs in my office.  (Indeed, I just snapped a picture of it with my cell phone.)  So there's no issue about fairness.  There was some question at Wake Forest (where I purchased it) when it was simply a dartboard, so I have inscribed "Lipshaw's Handy Grading System" to make the purpose of the device completely clear (it is difficult to see in this picture).

4.  We don't have the ambiguities of the paper hanging over the edge of a step.  Any dart that lands on a line is averaged according to the adjacent spaces.

5.  The system can be adjusted mathematically to account for any number of points on a particular answer.

This grading was NOT endorsed by the faculty or administration of the Wake Forest School of Law.

[Jeff Lipshaw]

December 14, 2006 in Blogging | Permalink | Comments (1) | TrackBack (1)

Too Lenient for Misappropriation?

by Mike Frisch

The Alaska Supreme Court imposed discipline based on a stipulation that suspended the attorney for three years but stayed one year of the suspension. Chief Justice Fabe dissented as to the sanction, noting that the Board of Discipline had rejected Bar Counsel's report finding that the accused attorney did not misappropriate client funds. The Chief Justice would have imposed the full three year suspension for the misappropriation. The delay in disbursing the client's seetlement proceeds prevented the client from refinancing her house and "wasn't the first non-sufficient fund check written in this six-month period."

The case raises a question about discipline by consent that I want to address at greater length in the context of pending proposed revisions to the procedural rules in District of Columbia bar discipline cases. Consent discipline is a useful tool in the swift resolution of allegations of misconduct but should not minimize misconduct to the detriment of the protection of the public from unfit lawyers. While I do not know the particulars of this case, the concern that the sanction agreed to by Bar Counsel was too lenient seems to motivate Chief Justice Fabe's dissent.

December 14, 2006 | Permalink | Comments (0) | TrackBack (0)

Wednesday, December 13, 2006

Relis on "Consequences of Power" in Client Relations During Mediations

Posted by Alan Childress
Tamara Relis (Columbia and London School of Econ. [Law]) has posted on SSRN her article, Shieldgif_1 "Consequences of Power," about the different perceptions and goals that lawyers have, as compared to the parties, in the context ofLawdeptgif litigation-track mediation processes.  It is also to be published in 2007 in Harvard Negotiation Law Review, volume 12.

Relis argues, through empirical study of medical malpractice mediations, that the legal actors in that process think more similarly to each other than to their own clients.  And often the clients--whether plaintiff or defendant--similarly have more consistent views to each other than to the legal actors, including their own lawyers.  This plays out in particular as to the perceived and actual need for the defendant's attendance at mediation.  The complete abstract is below the fold.

Continue reading

December 13, 2006 in Abstracts Highlights - Academic Articles on the Legal Profession | Permalink | Comments (0) | TrackBack (0)

Starting in December for the March Madness (i.e., the MPRE)

As I read Jeff's posts, he went into the bookstore to buy either a three-ring binder or an out-of-print562982_book jurisprudence text, and left the store with what I depict in the right margin, all in anticipation of a multiple choice exam he will take in March. 

Can you tell he was destined to be a professor?  Go for it, Jeff, and thanks for reminding the rest of us how wonderful it feels knowing we may never take another bar exam again.  Looking forward to Part III of the Biggest Loser.  Joe Thousandaire.  Fear Factor Freedonia.  Cannon.  your MPRE reality TV show.  [Alan Childress]

December 13, 2006 in Blogging, Lipshaw | Permalink | Comments (0) | TrackBack (0)

Reality TV - Episode 2 - MPRE Study Aids

I just went over to the Tulane Bookstore, intending when I left to buy nothing more than a couple three-ring notebooks for my class notes for next semester's classes.  The bookstore is rearranging Tulaneitself for the next book rush, and had completely cleaned itself out of what I wanted.

But I strolled over to the law book section, thinking maybe by chance I would find a used copy of J.W. Harris' Law & Legal Science (yeah, right), which you cannot even find on the Internet used book market.  Instead, I found myself staring at the commercial supplements for law courses, all of which I bar from my otherwise open book exams.  And I considered the gauntlet thrown down by co-editor Childress.  I pulled out and flipped through Professional Responsibility:  Examples and Explanations by my friend and legal ethics guru, Brad Wendel (Cornell) of Legal Ethics Forum fame, and thought "this is way more than I need."  But I was stopped in my tracks by Professor Wendel's warning:  "The new test is not a blow-off."  Indeed, I was heartened by the following statement:  "If you understand the discussion in the book, you will be well-prepared for the MPRE, but in addition you will understand the law of professional responsibility at a deeper level, rather than having simply memorized a bunch of rules."  So into the shopping cart it went.

But I didn't stop there.  The Emanuel series publishes Strategies and Tactics for the MPRE, advertised as "A quick, easy-to-use guide that tells you exactly what you need to pass the MPRE!"  Now this looked more like test-taking strategy than substance, but what the hay?  The forearmed is the, well, whatever.  Cha-ching!

[Jeff Lipshaw]

December 13, 2006 in Professional Responsibility | Permalink | Comments (0) | TrackBack (0)

Reality TV Comes to Bar Admission

Posted by Jeff Lipshaw

For reasons that will, I suppose, become clearer in the fullness of time, I have decided to apply for Thfcstil_0284 bar admission in the state of Freedonia (the name is changed for a reason that is not wholly clear even to me). I am already admitted in Michigan (1979) and Indiana (2001).  Fortunately I do not have to deal with the vexing problem, already addressed here, whether being a law professor constituted having practiced five out of the last seven years in a particular jurisdiction.

Having made this decision, it was easy enough to figure out what to do.  Not only do we here at LPB supply links into the ABA professional responsibility websites that show the requirements, but if you type "Freedonia bar admission" into Google, you also get to the specific application Freedonia instructions and application form.

First, I have established that I am qualified by years of practice for admission by motion in Freedonia.  It's going to cost me just over $1,000 in a non-refundable application fee, which I must pay by certified bank check or money order (where is PayPal when I need it?).

Second, three people who are willing to say they know me well enough to attest to my moral character and fitness to be admitted to the Bar of the State of Freedonia are going to have to go on record in writing to that effect, and those letters must be included in my application package, and not submitted separately.  It would be good if one of those people is a member of the Freedonia bar.

Third, and this is a change since I was admitted by motion in Indiana a number of years ago, I have to take the Multi-state Professional Responsibility Examination (MPRE).  This is administered by the250x147_ncbeoffice ACT organization on behalf of the National Committee of Bar Examiners (NCBE), and, unlike Freedonia, it takes credit cards online.  It is a 150 minute exam with 150 questions, and a scaled score possible of 150, of which 85 is a passing grade in Freedonia.  The NCBE is kind enough to provide 25 sample questions, which I have duly answered without benefit of any study or preparation whatsoever, and I am pleased to say that, on a raw score basis, I exceeded 85 by a wide margin (the bulk of my wrong answers being related to the arcanities of judicial ethics, the obligations of a lawyer who is either lobbying for a client, or testifying on the client's behalf before a legislature, and the commingling of funds in an IOLTA account, all things about which I have minimal knowledge). 

So that fear being overcome (and knowing that I have a good supply of sharp number two pencils), I  forked over the $55, and signed up for the March 10, 2007 sitting.  (Like Dick Cheney, I prefer to keep this an undisclosed location.)  Nevertheless, I am now on the look-out for a MPRE review book.

Fourth, I have to get certificates of good standing from Michigan and Indiana, but they have to be within ninety days of my application, so that will have to wait, because I have to include my MPRE score with the application.

Fifth.  Oh jeez.  I knew I was going to have to fill out the NCBE Request for Preparation of a Character Report.  I did that for Indiana, and, as I recall, I was looking up speeding tickets and Homertophomermich_com summer jobs from thirty years ago.  But fortunately I still have a copy of that one, so I will just have to update, and, as far as I can recall, I have not gotten a ticket in the last five years (depending on when I got the speeding ticket in Homer, Michigan late at night (M-60 on the way to Ann Arbor)).  But that's another $250 on top of the $1,000 plus.

Stay tuned for our next episode.

December 13, 2006 in Professional Responsibility | Permalink | Comments (1) | TrackBack (0)

The Privilege of Further News About Revised DOJ Policy: It's Only The McNulty Pocket Part? It's Mainly A Publicity Stunt?

Posted by Alan Childress

In addition to sources we linked yesterday, consider also a very good account by AP's Lara Jakes Jordan here. She points out that the new DOJ policy means a prosecutor "[c]annot bring charges against corporations simply because they refuse to hand over confidential and so-called 'privileged' 631904_carrots_1 attorney-client information. Firms that do, however, will receive credit for cooperating." 

Although Jordan reports on and quotes whistleblower and corporate watchdog groups that are quite unhappy with Paul McNulty's revised policy, I'd say that the change in this regard is more semantics than overhaul--it is tweaking at best, as to the powerful waiver provision of the Thompson Memo, because the carrots and sticks remain much75pxstyx__styx_ii the same.  I doubt before that AUSA's were citing the failure to waive very often as the reason to charge, but I am certain they demanded [now request?] waiver to earn the carrot of being "cooperative."  Being labeled "uncooperative" is still a big stick no matter how much softer the McNulty speech

It also appears that ultimately a corporate payment of employees' attorneys' fees will still be considered pejoratively--or at least the risk of it is enough that it may well affect corporate behavior on this front too.  As AP notes, "the deputy attorney general could approve harsher charges in rare cases where the payments result in blocking the government's investigation."  I wonder how "rare" it will be that attorneys zealously protecting an individual client's best interest will be perceived by DOJ as "blocking the government's investigation"--for example by not waiving privilege, of course.

The announced revision certainly does not "protect" the attorney-client privilege in the way that the Specter legislation is meant to do.  Unless it works as a misdirection public-relations gambit, I predict that the McNulty Pocket Part will not forestall such legislation from at least trying to put this genie --> bottle.

Whether or not real reform is needed in this area, or the corporate watchdogs are right that these aspects of the Thompson Memo were [are, I'd say] good, the McNulty tweaking comes off to me as more publicity stunt than substantive reform.

UPDATE:  Excellent debate starting here at White Collar Crime Prof between its two editors, Peter Henning and Ellen Podgor.  First up:  is there any real remedy for violating the new policy?  Or the [proposed] legislation?  I'm looking forward to their hashing out all sorts of issues.

December 13, 2006 in Privilege | Permalink | Comments (0) | TrackBack (0)

Law School Branding and the Internal Focus

Posted by Jeff Lipshaw

I'm moving to a new apartment in New Orleans, and my Wall Street Journal subscription has not caught Fearlessleader up with me.  So I am indebted to Fearless Leader Caron (Cincinnati, pictured left*) for his picking up the article yesterday on the efforts of business schools to define their "brand."

Let's note a couple things here.  First, the focus of the article was not the Podunk Business & Bible College.  It was the Haas School of Business at California-Berkeley, and the Kelley School of Business at Indiana University.  Second, why is it that business schools seem to worry up front about things like leadership, creativity, value propositions, and having students who are NOT arrogant?  Here's an additional squibbet from the Wall Street Journal article:

"Business schools need a clear, compelling value proposition," Dr. Smith says. "But it can't be vacuous. It has to be backed up by proof points in the curriculum and the school's graduates."

Berkeley's Haas School believes its "Leading Through Innovation" slogan is already well supported by its strengths in technology and entrepreneurship and by its students' creativity. But it plans to put even more substance behind its new brand.

Professors and industry experts are teaching seminars on innovation, and the curriculum includes new courses on leadership, managing innovation and change, and creativity and innovation in marketing and finance. Faculty members also are writing new case studies and articles for the California Management Review, which is published by the Haas School, about leadership and innovation.

To attract the right kind of student, the Haas School has added an essay question to its application that asks people to tell how they have demonstrated innovation and creativity in their professional or personal lives. "We're looking for intelligent students without arrogance, who can lead and manage in a changing environment," says Tom Campbell, the Haas School's dean.

We used to talk in the business about "internal focus" and "external focus."  External focus was generally on getting the job done, being concerned about the growth and vibrancy of the institution, and on serving customers (the sine qua non of everything else we aspired to do).  Internal focus was on US:  our compensation, our needs, our careers.  Having shuffled back and forth between law firm and corporate, my casual empiricism was that external focus was a moderately unnatural act for lawyers.

Russell Korobkin (UCLA, right) has written extensively on what I think is the closest thing to aRkorobkin1 branding analysis** for law schools, both in the Texas Law Review and the Indiana Law Journal (the latter as a keynote address at the symposium on law school rankings at IU a couple years ago).  To summarize quickly, Professor Korobkin sees the rankings as a coordination mechanism by which schools more efficiently compete in the market for status.  Not to take anything away from the scholarship (and the somewhat prurient appeal of the rankings), but it seems to me this is indicative of an internal focus - our competition for status - rather than an external focus - how do we make the education we offer distinctive?  Perhaps the mega-elite law schools need not worry about it - the brand is established - but the rest of us might want to take a lesson from the premier business schools.

*We here at LPB are indebted to, where you can order all the Fearless Leader collectibles you want.  My own Fearless Leader stuffie is sitting on my shelf, right next to the Dancing Hasid, my stuffed Sigmund Freud, and my great philosopher (Kant, Plato, Nietzsche, and Hegel) finger puppets, all of whom served as participants in my recently concluded Secured Transaction class.

**I also want to acknowledge Vic Fleischer's (Colorado) work on branding in the IPO context.

December 13, 2006 in Abstracts Highlights - Academic Articles on the Legal Profession, Economics, Law & Society, Lipshaw | Permalink | Comments (0) | TrackBack (0)

Work Product of UNLV Conference on Representing Children Posted on SSRN

Posted by Alan Childress

Dangling modifier patrol:  actually the children are not posted on SSRN, just the work product.  Anyway:  The Legal Scholarship Network announced that Annette Ruth Appell (UNLV) has posted here on SSRN the conference papers from UNLV's Jan. '06 "Conference on Representing Children in Families: 579516_hopscotch_1  Children's Advocacy and Justice Ten Years After Fordham."  We previously posted details on the conference (and linked to a group photo). 

For the UMKC Law Review's call for papers on "Ethics in Representing Families," see our related post here.  Their deadline to submit articles is coming soon.  [Alan Childress]

December 13, 2006 in Abstracts Highlights - Academic Articles on the Legal Profession | Permalink | Comments (0) | TrackBack (0)

Tuesday, December 12, 2006

Thompson Memo Revised by Deputy AG Paul McNulty

The new DOJ policy, destined to be called The McNulty Memo, is discussed by the WSJ law blog here Stack_newspapers_1 and by the White Collar Crime Prof Blog here.  It does not abandon the earlier policy so much as centralizes it and creates pre-screening in DOJ.  No word yet on whether this move will preempt the proposed legislation by Arlen Specter meant to reverse, and not just reform, the earlier Thompson Memo policy.  [Alan Childress]

UPDATE:  Much more LPB on the McNulty Pocket Part here.  Is it just a PR move?

December 12, 2006 in Privilege | Permalink | Comments (0) | TrackBack (0)

How To Stump A Corporate Lawyer

The cartoon of "how to stump a corporate lawyer" by Wiley Miller (Non Sequitur), reprinted on the106176_99337457 GoComics site here, is funny enough, but actually does not make a lot of sense to me.  Maybe it would be a good PR essay question, with just "Discuss."  It was linked on the QuizLaw blog.  [Alan Childress]

December 12, 2006 in Blogging, General Counsel, In-House | Permalink | Comments (0) | TrackBack (0)

Legal Aid Attorneys and Others Get Easy Access to Federal Practice Manual

Posted by Alan Childress
The Shriver Center on Poverty Law has this announcement for legal aid attorneys and interested parties:

The first five chapters of the 2006 Federal Practice Manual for Legal Aid Attorneys, edited by Jeffrey S. Gutman, Professor of Clinical Law and Associate Dean of Academic Affairs at George Washington University Law School and published by the Sargent Shriver National Center on Poverty Law, are available now in HTML format. This is the updated version of the Federal Practice Manual for Legal Aid Attorneys published in 2004. This version of the Manual includes hyperlinks to federal statutes, Supreme Court Case citations, and case pleadings available through the Shriver Center’s Poverty Law Library. Chapters Gutman6-9, as well as a documentary supplement that includes annotated model pleadings, are still being edited and will be posted online soon.

The HTML format with highly practical links is found here.  For example, chapter 4 takes readers step-by-step through drafting and filing a complaint. The document supplement contains a detailed annotated sample complaint.

A PDF format of the book (including  2004 versions of the remaining chapters) is linked here.  Congratulations to my GW colleague Jeff Gutman [pictured] for this important project. (And HatTip to Elder Law Prof for its letting us know.)

December 12, 2006 in The Practice | Permalink | Comments (0) | TrackBack (0)