July 1, 2008
Litigation or Transactional Law Career: Some Advice to Law Students
Posted by Jeff Lipshaw
A reader who is interning in a NYC corporate law firm, and about to enter law school, saw my earlier post alluding to the creative possibilities in transactional work, and sought advice about choosing between transactional work and litigation work. I'm happy to share some thoughts.
1. Mostly I will be talking about big firm practice, but I should issue a disclaimer. There's big firm practice, and there's mega-firm practice. The reason it's important to make the distinction is because I'm looking backwards at a career in which many of the fulfilling aspects came later, after I did my time in the trenches (both in litigation and corporate). So there is a substantial period of learning how to chop the wood before a new lawyer gets to build, much less design, the house. My perception is that period is shorter in big firms outside of the financial centers. You will probably take on more responsibility more quickly at a big firm in Detroit than Chicago, in St. Louis than Los Angeles, in Salt Lake City than New York. [UPDATE: See comment below on how this differs between transactional and litigation.]
2. Law school, at least the way it's mostly taught, does not tell you much about the way the transactional practice works. That's because of the case method. Cases are always about litigation. (Interestingly, business schools teach transactions in the case method, but they are cases in doing business, rather than litigating about it.) Even contracts class, as usually taught, is something of a bait-and-switch. Don't blow it off, because you'll need it for the bar exam, but there's not a lot of contract law that comes to the fore in transactional practice. I often say, and am probably not far off, that the practice of contracts is 90% interpretation, and 10% all other (offer and acceptance, consideration, duress, mistake), and the teaching of contracts is 90% all other, and 10% interpretation. Litigation tends to involve the LAW a lot more. The number of occasions for going to the library and doing extensive research on a legal issue is far greater in litigation, and when you do research an issue on the transactional side, it rarely turns into work product in the way a brief springs out of the cases. You might do corporate research, for example, on whether a transaction involves substantially all of the assets of a corporation, and hence require shareholder approval, but that will tell you how to structure the deal, not be the basis for an argument.
3. Are you a win-lose kind of person or a win-win kind of person? Great trial lawyers are sublimated warriors. Winning a trial or decimating a witness in cross-examination is the thrill of conquest and vanquishing. If you are not that kind of person, it can wear on you. Personally, I realized ten years into a litigation career, (a) I wanted to be liked (if not loved) too much to be a conqueror, (b) dealing with the opponents' conception of the truth (opening up the other side's brief and reading it, for example) was frustrating and hard on my blood pressure, and (c) as I discuss below, once you get beyond the adrenaline rush that causes your eyeballs to pop out of your head (some people like that), the way trials work in cases that big firms do can be kind of . . . boring.
On the flip side, negotiating transactions is also "adversarial" in a way, and a lot of it is about winning points. Just like a litigator can't win without good facts and good witnesses, a transactional lawyer can't make points without exogenous business leverage. For example, even in a "friendly" business combination involving public companies, there are a series of points negotiated between the acquirer and the target that have to do with how tied up the deal is. The task for the sellers is to maintain some wiggle room for future leverage, and the task for buyers is to make it as difficult as possible for the target's board of directors, short of violating their fiduciary duties, to get out of the deal if a better one comes along. But that's all less a matter of the lawyer's skill than the leverage the client has or lacks. (See the Bear Stearns - J.P. Morgan deal for an example of this.)
The bane of a transactional lawyer's existence, though, is an adversary who seems more intent on winning "lawyer points" than getting the deal done. One aspect of creativity in deal lawyering, it seems to me, is knowing when to hold 'em and when to fold 'em - how to concede the points you don't need, or trade them for the ones you do. Negotiating with a lawyer who, like a litigator, needs to conquer or vanquish, is tiresome.
One of my late ex-colleagues and dear friends told me that he found the give-and-take of negotiated deals tiresome in just that way, and that's why he "stuck to raising money in the public capital markets."
4. The first part of a career, whether in litigation or corporate, is a combination of doing the grunt work and learning professional techniques. Doing the grunt work, well, sucks. Learning the professional techniques, whether it's second-chairing a deposition, or attending the negotiation of the acquisition agreement, is a lot of fun, as long as you like to learn. Being creative with those techniques is something that comes later. Two examples. Litigation. An old saw of cross-examination is that you never ask a question for which you don't know the answer. That pretty much guarantees that you won't make a mistake. But great cross-examiners violate that rule all the time, because they know what questions to ask in which they either don't care what the answer is, or have a plan for whatever comes out. Corporate. Things like the shareholders' rights plan (the poison pill) are invented by creative lawyers. But generally that's by lawyers with cycles of learning in the transactions.
Moreover, technique in itself can get old. It's the context then that supplies the interest. I'll give two non-legal professional examples. When my daughter was born 24 years ago, I was (obviously) blown away by the experience. I said something to the OB about how thrilling it must be to deliver new babies. He said the physical aspect of it lost its wonder after a while, and the thrill came from dealing with the parents. Or to take a counter example, dentistry. I don't know how much professional satisfaction comes from doing fillings and crowns once you've mastered the technique. I do understand dentists have high suicide rates, compared to other professions, for whatever reasons.
Similarly, mere technique in high-powered litigation or corporate work can get old. As I've said, I didn't like litigation. We had a ten week trial in Cheyenne, Wyoming in 1986, litigating a whole set of complex contractual issues between a coal supplier and a utility. In the midst of what ought to be the most exciting time for a corporate litigator, I realized I was bored. I knew what every already deposed witness was going to say, and what the cross-examination would be. In corporate work, it got to the point that I negotiated the key business points of the deal, but was bored stiff by the lawyers' wrangling over the environmental representation or the interstices of the definition of the "knowledge" standard for representations that hinged on it.
5. (UPDATED) Get good mentoring on this. I don't take anything away from law professors (I am one, after all), but note that the experience (as opposed to mere knowledge or analysis) of mature practice occurs well after most professors have left practice to go into the academy. Indeed, at the 2-4 year level, which is pretty common, you are still moving from grunt work to learning technique. Obviously, thoughtful professors will have observed what senior lawyers do, and can be intelligent and insightful, but they haven't necessarily experienced what it's like to be a senior lawyer in practice. Many of those senior lawyers - corporate and litigation - have real passion for their jobs, and it pays to listen to them talk about why. Or talk to adjunct professors. One of my most rewarding classes was a mock litigation course taught by Charles Marson, who had been the Executive Director of the northern California ACLU.
As with many decisions in life, there's no silver bullet, or algorithm, or pat answer. You just pays your money and takes your chances!
June 30, 2008
Wall Street Partnerships and Public Service, circa 1970
I have been reading Paul Hoffman's 1973 classic, Lions in the Street: The Inside Story of the Great Wall Street Law Firms. Before writing the book, Hoffman was a reporter covering the legal beat for the New York Post. For someone reading the book in 2008, it is a fascinating contemporaneous account of Wall Street lawyers circa 1970. With the distance of nearly 40 years, it also reveals what is timeless about lawyers' preoccupations.
Here is a passage that I will use to explore the meaning of partnership in my course materials for our new Legal Professions course (from Hoffman's Chapter 4, entitled "Some Partners are More Equal than Others"):
There's a story told about a lawyer at Chadbourne who never spoke at partners' meetings. For years he sat silent while his colleagues debated and decided the future of the firm. Then, at one meeting, the promotion of associates to partnership was being considered. A name was put before the panel.
"I don't want him," one partner said. "I just don't like him."
The long-silent partner ahem-ed for attention, and the others bent forward, wondering what words of wisdom he had to utter at so long last.
"I don't see what that has to do with it," he said. "I don't like any of you."
There's nothing in the books--or partnership agreements--that says partners have to like each other. Some [Wall Street] firms manage to exist ... with the members barely even speaking to each other. But the partners have to find some sort of accommodation if the firm is to remain viable.
Most of the disputes come down to money (that may be a surprise to some, especially those who hold to ideas of the good ole days). Hoffman provides loads of anecdotes on "pie-hacking sessions."
Another striking feature of Hoffman's book is how many Wall Street name partners spent time in government, or left Wall Street and started a DC firm after a prominent political appointment. These partners were the paradigmatic "lawyer-statesmen" of Anthony Kronman's The Lost Lawyer (1993). But Hoffman's book, which reviews the lineage of virtually all the major Wall Street firms, implicitly makes the case that government service eventually produced a booming law practice. In an era in which talking to the press could open the door to charges of unethical solicitation (norms changed radically after Bates and the subsequent rise of the legal press in the late 1970s), newspaper coverage of public service presumably had special value. Not surprising, partners were willing to subsidize these activities.
Is it possible that the value of public service (as, essentially, a loss leader) became watered down by the courtroom and boardroom coverage of The American Lawyer, National Law Journal, and other publications? Questions like these come to mind as I flip through the pages of Hoffman's lively book, which reads like a novel. I highly recommend it.
Suspension For Assistant District Attorney
The Georgia Supreme Court accepted a proposed six-month suspension of an assistant district attorney who had assisted his boss, the then-district attorney, in a scheme to obtain funds to which the district attorney was not entitled. The sanctioned lawyer had no prior disciplinary record and had expressed remorse for the misconduct. (Mike Frisch)
The New York Court of Appeals ordered disqualification of an attorney retained to defend a police disciplinary action. The attorney had provided legal advice to the complainant in an earlier dispute between the two that the court deemed to be substantially related to the present case:
As an initial matter, those elements of the two parties' 2000/2001 interactions that are undisputed establish that some kind of attorney-client relationship existed between Lovett and Falk. The record shows that Falk sought Lovett's legal advice at least partly in a professional capacity. The record further establishes that conversations between Lovett and Falk touched on the matter of disciplining Chittenden. Lovett acknowledges that he rendered some legal advice on that issue, advising Falk to be wary of Officer Chittenden's First Amendment rights. Moreover, while disciplining Chittenden might have been a personal desire of Falk's, a request for legal advice as to whether discipline against an inferior officer is a viable course of action falls squarely within a commanding officer's professional responsibilities. Accordingly, Falk in his official capacity had an attorney-client relationship with Lovett, and therefore has standing as a prior client to bring this action for declaratory judgment.
The other prongs of DR 5-108(A) are satisfied as well. Seeking advice about a potential disciplinary case against Chittenden for insubordination in 2000/2001 is "substantially related" to actually bringing just such a case in 2003. More specifically, Chittenden's prior conduct might bear on the issue of punishment, and Falk's prior consideration of pursuing charges for insubordination might likewise be relevant. Together, these factors create a sufficient nexus between the two representations. And Falk's and Chittenden's interests are materially adverse in the disciplinary proceeding, which pits these two parties — obvious antagonists — against one another.
June 29, 2008
An Illinois attorney who had pleaded guilty with adjudication withheld to aggravated assault with a deadly weapon without intent to kill in Florida is subject to a hearing panel's recommendation of a one-year suspension with all but 90 days stayed. The attorney's version of the offense was reported by the doctor retained by the bar:
Respondent informed Dr. Henry that as he was driving through an intersection, his cell phone rang and, when he reached for it, his car veered to the right. When he looked up, he was surprised to see campaign workers holding placards supporting Congresswoman Katherine Harris. Respondent denied driving up on the curb and could not remember if the campaign workers were in the street or on the edge of the sidewalk. Respondent also denied knowing that Harris was present, or that he could even recognize her. Respondent told Dr. Henry that when he realized his vehicle was approaching the workers, he turned the steering wheel hard to the left to avoid them. He then proceeded on his way and gave no further thought to the incident.
Respondent reported to Dr. Henry that he later learned from one of his tenants that the police were looking for him. That evening he took his medication for depression, as usual, and then contacted the police. At their request, he went to the police station. Respondent recalled that when he was speaking to the police, he "rambled" and talked about situations that disturbed him. When the police asked about the campaign workers, he made a comment to the effect of "if I intimidated them, so be it." The police took Respondent into custody and he was incarcerated for several days before being taken to Sarasota Memorial Hospital where he was diagnosed with bipolar disorder.
According to the lawyer:
Respondent denied knowing Katherine Harris at the time of the incident or what she looked like. To his knowledge, the people standing on the corner with placards were campaign workers. He stated he feels he was a victim because the national media reported that he drove up on the sidewalk in an attempt to kill a Congresswoman. He denied driving up on the sidewalk or having the intention to cause fear to anyone. He acknowledged that he read Katherine Harris’ deposition and realizes that she was fearful. Respondent stated he received death threats after the incident and suffered a terrible ordeal. Occasionally he got reports from his probation officer that the FBI or the Secret Service were checking on him. He denied that the publicity of the incident included any reference to the fact that he was an attorney licensed to practice in Illinois.
The hearing board determined that the record established a sufficient basis to treat the criminal case as a conviction notwithstanding the withheld adjudication. One condition of the criminal disposition was a requirement that the attorney stay away from Congresswoman Harris. (Mike Frisch)
A Family Affair
An Illinois hearing board has recommended a two-year suspension of an attorney for misconduct that included aiding in the unauthorized practice of his wife, who had earlier been disbarred. The unauthorized practice involved the representation of a Skokie police sergeant who had been named in a television news report as a person with possible involvement in the murder of an heiress to the Brach candy fortune. The rather interesting particulars:
Reiter [the police sergeant] contacted Respondent and discussed the news report, and his contact with the State’s Attorney’s office. Reiter had known Respondent for some time prior to this date. Within a few days, Respondent advised Reiter not to submit to a polygraph test. He also told Reiter that if he returned to the United States, he could be jailed under the Patriot Act and not allowed bail. Respondent agreed to determine whether Reiter was under investigation in the Brach case, and requested that Reiter pay him a $5,000 retainer. On April 9, 2005, Gary Reiter, Reiter’s brother, gave Respondent a check in the amount of $5,000.
Subsequently, Respondent telephoned Reiter and advised him that he would be coming to Puerto Vallarta to discuss the matter because it was not safe to discuss it over the telephone. Respondent also told Reiter that Jannice [the disbarred spouse] would accompany him. Reiter knew Jannice from a friendship he had with her parents. On April 14, 2005, Respondent and Jannice arrived in Puerto Vallarta. Reiter picked them up at the airport, and with Jannice present, Respondent discussed the matter with Reiter. Sometime between April 14, and 18, 2005, Respondent and Jannice advised Reiter and Reiter’s wife, Connie, that Jannice was a criminal attorney and would be assisting Respondent in the representation of Reiter. At the time he made these statements, Respondent knew that Jannice had been disbarred and was no longer licensed to practice law. At no time did Respondent advise Reiter of these facts.
Between April 14 and 18, 2005, Respondent and Jannice met with Reiter and Connie on at least three occasions to discuss the Brach case, including Reiter’s knowledge of the case, the possibility of an investigation of Reiter by law enforcement officials, and the possibility of filing a lawsuit against the reporter and television station that made the report about Reiter. They also discussed the possibility of selling the story of Reiter’s claimed innocence to certain television media outlets.
On April 17, 2005, Respondent gave Reiter a retainer agreement which provided that Respondent would serve as personal counsel to Reiter and provide all necessary advice and counsel. Additionally, the agreement stated that full compensation would be determined and agreed upon by Respondent and Reiter, and did not include an hourly fee schedule or any other means of determining how Respondent’s fee would be calculated. At the same time, Respondent gave Reiter a second document entitled "Compensation Agreement" which was signed by Reiter and Jannice. This document provided that "any funds which would be realized from any source from the sale of Lee Reiter’s story of his innocence in regard to the Helen Brach murder shall be divided equally between Jannice Whelan and Lee Reiter." On April 18, 2005, Respondent and Jannice left Puerto Vallarta.
Between April 25, 2005, and June 20, 2005, Jannice sent numerous e-mails to Reiter in which she requested information regarding the Brach case, discussed testimony of previous witnesses and defendants, discussed the news report naming Reiter, and provided legal advice to Reiter regarding the Brach case and his potential civil claim against the reporter and television station. Sometime after returning from Mexico, Respondent advised Reiter that Reiter should place his Skokie residence into a land trust to protect it from any civil claim which might be filed against him. On May 14, 2005, Jannice sent an e-mail to Reiter stating, among other things, "I am finished with the lawsuit against Channel 7 and Goudie. We [are] asking for 2 million in damages. The grounds are slander, libel, defamation of character, invasion of privacy, intentional infliction of emotional distress." On May 16, 2005, Jannice sent Reiter an e-mail suggesting how information could be obtained regarding the alleged criminal investigation by filing the civil lawsuit. She also stated, "we have to do this now because there is a one year statute of limitations from the publishing of the 1st defamatory publication . . . let me know ASAP so I can email the completed lawsuit to you before it is filed."
Sometime before June 15, 2005, Respondent advised Reiter that the legal fees and costs to put Reiter’s Skokie residence into a land trust would be $900. Steve Reiter, Reiter’s son, provided Jannice with the deed and other documents requested by Respondent and Jannice to establish the trust. On June 15, 2005, Respondent e-mailed the land trust documents to Reiter for his signature. Also on that date, Steve gave Jannice a check in the amount of $900, made payable to Jannice, for the legal fees involving the land trust. On June 16, 2005, Jannice, or someone at her direction, deposited the $900 check into the bank account of Michael Whelan. Michael Whelan is Respondent and Jannice’s disabled, minor son. At no time did Respondent or Jannice have authority to use the proceeds of the check for their business or personal purposes.
During a trip to Mexico in June 2005, Gary, Reiter’s brother, obtained the original signed land trust documents from Reiter. Subsequently, Steve gave the documents to Respondent. Reiter’s signature was not notarized, and Respondent advised him that Jannice was applying for a notary, and would notarize his signature.
On June 20, 2005, Jannice sent Reiter an e-mail requesting $1,920 to obtain copies of law enforcement reports relating to the Brach case. On June 21, 2005, Steve issued Reiter’s check in that amount made payable to Jannice. Also on that date, Jannice or someone at her direction, deposited the check into Michael’s bank account. At no time did Respondent or Jannice have the authority to use the proceeds from the check for their business or personal expenses. As of June 27, 2005, prior to any payment for costs on behalf of Reiter, Michael’s bank account was overdrawn by $839.69. Accordingly, Respondent and Jannice had used the $900 and $1,920 given to them by Reiter for their business or personal expenses.
On July 29, 2005, Steve received a telephone call from Jannice advising him that she had located two unaired videotapes of a news report involving Reiter, and would need $1,000 for costs to obtain them. She also stated that the tapes would be vital to the civil action against the reporter and television station. Later that day, Respondent met with Connie and Steve at Reiter’s Skokie home, and obtained a check from Steve in the amount of $1,000 made payable to Respondent. He told Steve that the check would be used to obtain the tapes. He also advised Steve and Connie that Jannice was prepared to file the civil action, but he was "holding things up" because he had a "gut feeling" that there were a few more pieces of evidence that they could obtain before filing the lawsuit. On July 30, 2005, Respondent cashed the check, and used the money for business and personal expenses. Respondent had no authority to use the money for those purposes. Respondent knew or should have known of Jannice’s conduct in the case, and that he was aiding her in the unauthorized practice of law.
Between April 8, 2005, and July 29, 2005, Reiter or someone on his behalf, paid Respondent and Jannice approximately $28,000 for legal fees, costs, documents and tapes. At no time did Respondent provide Reiter with any evidence establishing whether he was formally under investigation by state or federal law enforcement authorities. At no time was Reiter indicted by state or federal officials in relation to the Brach case.
"Anybody Else Want To Mess With Me?"
A Kansas district court judge was censured for intemperate and undignified conduct during the voir dire of in a criminal trial. After one potential juror had indicated an unwillingness to believe the testimony of police witnesses, the judge required the juror to remain throughout the trial. The judge then addressed the jury pool as follows:
'All right. Anybody else want to mess with me?'
The judge continued to question potential jurors in a loud voice and later apologized to panel members for displaying anger and impatience with them. The Kansas Supreme Court concluded:
The respondent's failure to control her temper and frustrations and her conduct toward potential members of the jury in open court greatly detracted from the honor and dignity of the judiciary. Her actions negatively impacted the proper administration of justice in a felony criminal case over which she presided. While we recognize that the Commission's recommendation is not binding on this court, (citations omitted) our review of the entire record supports the Commission's recommendation that the appropriate discipline in the respondent's case is public censure.
An article from the web page of the Wichita Eagle describes the case and mentions two prior reprimands of the judge. (Mike Frisch)