Monday, March 28, 2011

Employee "Cloaked With...Apparent Authority;" Firm May Be Sued

The New York Appellate Division for the Second Judicial Department affirmed an order denying a defendant law firm's motion to dismiss claims of fraud and negligent hiring:

In May 2008, the plaintiff Robin Shimoff, through her attorney, tendered a check in the sum of $710,000 to the defendant Mario A. Tolisano, an employee of the defendant Law Office of Howard R. Birnbach (hereinafter the law office), to cover the purchase price of certain parcels of real property. In July 2008, Shimoff tendered to Tolisano the additional sum of $502,500 as a down payment for the purchase of certain other real property. Shimoff apparently borrowed the aforesaid funds from the plaintiff Jacob Selechnik. No closings of title occurred on either transaction, and the plaintiffs later learned, among other things, that Tolisano, whom they believed to be an attorney representing the seller of the properties, was not a licensed attorney. The plaintiffs commenced this action in November 2009, inter alia, to recover damages for fraud and negligent hiring and retention, and the law office moved to dismiss the complaint for failure to state a cause of action pursuant to CPLR 3211(a)(7). The Supreme Court denied the motion. We affirm.

The court concluded:

Here, while the complaint contains no allegations of any affirmative misrepresentations by the law office itself, a fraud cause of action was sufficiently stated by the allegations contained therein which give rise to permissible inferences that the law office had certain knowledge or information regarding Tolisano's employment with it and his activities thereunder that were not ascertainable by the plaintiffs.

The complaint alleges, inter alia, that Tolisano was employed by the law office, held himself out as an attorney with the law office, and distributed his business card to the plaintiffs, which, while not explicitly stating that he was an attorney, indicated that he was employed by the law office. Furthermore, the complaint alleges that at the time Tolisano made his representations to the plaintiffs, which induced them to turn over their money to him, the law office knew or should have known "that its attorney-employee-impersonator, cloaked with the apparent authority that comes from employment at the [law office], would offer false representations." These allegations were supplemented by the affidavit of the plaintiffs' real estate attorney, wherein he stated that when he met with Tolisano, Tolisano said he was a lawyer and gave him a business card "that made it appear as if [Tolisano] was a lawyer at the [law office]," and that during the pendency of the transactions, the plaintiffs' attorney sent a certified letter to Tolisano at the law office and made several telephone calls to the law office asking to speak with Tolisano and left messages, to which he received no reply.

Based on these allegations, the complaint adequately states causes of action to recover damages from the law office for the torts allegedly committed by Tolisano under the doctrine of respondeat superior and on the theory of negligent hiring and retention, which are not required to be pleaded with specificity.

(Mike Frisch)

March 28, 2011 in Law & Business, Law Firms | Permalink | Comments (0) | TrackBack (0)

Wednesday, March 23, 2011

Witness Advocate Rule Applied

The New York Appellate Division for the First Judicial Department affirmed an order disqualifying counsel in civil litigation:

Plaintiff law firm demonstrated that defendant's counsel played a vital role in the final settlement negotiations flowing from a settlement offer that plaintiff had allegedly previously procured and that defendant client later accepted, that the negotiations were an important part of the underlying dispute, that defendant's counsel was likely to be a key witness at trial, and that his proposed testimony would be adverse to his client's interests.

While plaintiff improperly submitted the affirmation, rather than affidavit, of a partner, under the circumstances, "this defect was merely a technical procedural irregularity which did not prejudice the defendant" (citations omitted)

(Mike Frisch)

March 23, 2011 in Clients, Law Firms, Professional Responsibility | Permalink | Comments (0) | TrackBack (0)

Shpoonkle

Posted by Jeff Lipshaw

This is the dignified name of the online lawyer bidding service created by a New York Law School student, and which merited an article in today's Wall Street Journal.  Back when I was in the business world and e-commerce was just beginning, most sophisticated "supply chain managers" put in place online bidding systems for some of their purchased materials.  I'm pretty sure it tended to work best with uniform, commoditized products, and it certainly did not favor the seller with a unique value proposition.  I'll take $200 worth of summary judgment, please.

Kidding (and the usual knee-jerk "we're different" reaction) aside, there are no doubt relatively commoditized legal products for which this system would work.

March 23, 2011 in Clients, Law Firms, The Practice | Permalink | Comments (0) | TrackBack (0)

Thursday, February 17, 2011

Annoying Habits CLE

From the web page of the District of Columbia Bar:

On March 2 the Young Lawyers Committee of the Corporation, Finance and Securities Law Section will host a luncheon program titled “Annoying Habits of Associates: A Partner’s Perspective,” which highlights behaviors that can make a bad impression at a law firm.

The program will focus on the activities or habits of associates that could undermine long-term career prospects. To provide context for why certain habits are viewed negatively, panelists will discuss key attributes that partners value in associates.

Sara Hanks, general counsel of the Congressional Oversight Panel, and Martina E. Vandenberg and Scott B. Wilkens, both partners at Jenner & Block LLP, will lead the panel discussion. Thomas H. Kim, an associate at Jenner & Block LLP, will moderate.

The program is cosponsored by the Administrative Law and Agency Practice Section; Antitrust and Consumer Law Section; Arts, Entertainment, Media and Sports Law Section; Computer and Telecommunications Law Section; Corporation, Finance, and Securities Law Section; Criminal Law and Individual Rights Section; International Law Section; Labor and Employment Law Section; Law Practice Management Section; Litigation Section; Real Estate, Housing and Land Use Section; and Taxation Section.

It will run from 12 to 1:30 p.m. and take place at the D.C. Bar Conference Center, 1101 K Street NW, first floor.

For more information or to register, contact the Sections Office at 202-626-3463 or sections@dcbar.org.

Looking forward to the follow up session on the Annoying Habits of Partners: An Associate's Perspective. (Mike Frisch)

February 17, 2011 in Law Firms | Permalink | Comments (1) | TrackBack (0)

On To Texas!

The New York Court of Appeals has reversed the Appellate Division and granted a defendant law firm's motion to dismiss the complaint on the condition that the law firm waive any statute of limitations defense that might be available in Texas.

The law firm had moved (and lost) a forum non conveniens motion seeking that the matter be heard in Texas:

This case involves the alleged malpractice by Texas lawyers representing Alaskan clients, whose principal places of business are in Connecticut, in a transaction with Texas companies that involves land in Texas. Further, the documentary evidence is located in defendant's Texas office, as are most of the attorneys who allegedly committed the malpractice and most of the potential witnesses.

(Mike Frisch)

February 17, 2011 in Clients, Law & Business, Law Firms | Permalink | Comments (0) | TrackBack (0)

Tuesday, February 8, 2011

The Cobbler's Children PLLC

The North Carolina Court of Appeals reversed a number of rulings of the Special Superior Court for Complex Business Cases and remanded for further proceedings in a matter involving the breakup of a PLLC.

The court started the opinion with an old saying that "the cobbler's children have no shoes."

Then

Lawyers may suffer from the same problems, if they are too busy dealing with their clients' legal affairs to address their own. This cases arises because the members of a law firm organized as a PLLC did not adopt an operating agreement or any other documents governing the operation of the PLLC. In theit actions and communications relevant to the individual plaintiffs' cessation of practice with the indivual defendants, the parties at times seem to treat their business as a partnership and at other times as a PLLC, and certainly a PLLC has elements of both types of business entities.

The court addressed a number of standing issues stemming from the breakup of a firm founded in 2000. (Mike Frisch)

February 8, 2011 in Law Firms | Permalink | Comments (0) | TrackBack (0)

Friday, November 19, 2010

No Windfall

The Nevada Supreme Court affirmed the grant of summary judgment to a law firm defendant because the plaintiff had already achieved a full recovery in a claim against a departed firm partner. The court lays out the facts:

Elyousef, a client of the O’Reilly firm, entered into a business transaction with his attorney, C. Dean Homayouni, who was employed by O’Reilly during the early stages of the transaction.  The transaction resulted in Homayouni obtaining Elyousef’s interest in Nevada Oil and Land Development, LLC (NOLD), which in turn owns a gas station in Las Vegas.  Homayouni left O’Reilly because the law firm opposed the transaction due to a conflict of interest between Homayouni and the firm’s client, Elyousef.

            When the business relationship soured, Homayouni sued Elyousef.  Elyousef filed a counterclaim against Homayouni, alleging that Homayouni negligently caused him to lose his interest in NOLD.  The district court awarded Elyousef $150,000 in damages plus $225,631.22 in costs and fees.  Homayouni subsequently settled with Elyousef for $50,000 plus the return of his interest in NOLD.  Elyousef then sued O’Reilly for breach of fiduciary duty, negligence and legal malpractice, negligent supervision, respondeat superior, breach of contract, and breach of implied covenant of good faith and fair dealing.  The district court granted summary judgment in O’Reilly’s favor, concluding that the doctrines of double recovery and issue preclusion barred Elyousef’s ability to recover from O’Reilly.  On appeal, Elyousef maintains that neither doctrine bars him from further recovery.

(Mike Frisch)

November 19, 2010 in Law & Business, Law Firms | Permalink | Comments (0) | TrackBack (0)

Tuesday, September 14, 2010

No Summary Judgment In Suit Against Fen/Pfen Attorney

The Mississippi Supreme Court has concluded that partial summary judgment was improperly granted to an attorney sued by former clients who he had represented in diet drug litigation. The former clients had sought to pay on a quantum meruit basis rather than under a claimed 45% contingent fee. The court here held that questions about the authenticity of the contingent fee agreement and possible coercion created jury questions that precluded summary judgment. (Mike Frisch)

September 14, 2010 in Clients, Law Firms | Permalink | Comments (0) | TrackBack (0)

Thursday, August 26, 2010

Public Defenders And Imputed Disqualification

The web page of the Ohio Supreme Court reports:

The Supreme Court of Ohio’s Board of Commissioners on Grievances & Discipline has issued an advisory opinion addressing two questions that arise from the State Public Defender having a central office and branch offices.

Opinion 2010-5 addresses whether assistant state public defenders located in different offices are considered lawyers associated in a firm for purposes of imputation of conflicts of interest. The opinion also addresses whether there’s a conflict of interest when an assistant state public defender in the central appellate office conducts a merit review, prosecutes an appeal, or pursues a post-conviction remedy asserting ineffectiveness of an assistant state public defender from a branch office.

The opinion finds that assistant state public defenders in different offices are not automatically considered lawyers associated in a firm for purposes of imputing conflicts of interest. The association hinges on whether the appellate state public defender provides assistance to a trial branch state public defender in a trial matter.

The opinion also finds that there is not a per se conflict of interest between assistant state public defenders in different offices. A conflict depends “upon whether there is a substantial risk that the appellate lawyer’s ability to consider, recommend, or carry out an appropriate course of action for the defendant is limited by the appellate lawyer’s responsibilities to another client, a former client, or a third person, or by the lawyer’s own person interests.”

Several portions of two Ohio Rules of Professional Conduct were consulted in issuing this advisory opinion, including: Prof. Cond. Rules 1.10 and 1.7.

(Mike Frisch)

August 26, 2010 in Law Firms, The Practice | Permalink | Comments (0) | TrackBack (0)

Wednesday, July 28, 2010

Don't Mess With Texas

The New York Appellate Division for the First Judicial Department affirmed the denial of a motion to move a legal malpractice action to Texas. The case involves allegations that the defendant law firm identified the wrong entity entitled to payment from the client, causing the client to pay the wrong entity.

A dissent makes a powerful argument in favor of Texas, recounted in part below:

The motion court never expressly applied the factors that go into deciding a forum non conveniens motion but seemed to recognize that this case had little connection to New York. Instead, the court denied the motion because the parties represented that the Texas statute of limitations was shorter than New York's and defendant did not agree to the application of the borrowing statute. Nevertheless, this case clearly does not belong in New York. Defendant maintains an office here, but none of the attorneys at the New York office were involved in the events underlying this case. Plaintiffs' principal places of business are now in Connecticut and virtually all the underlying events occurred, for the most part, after plaintiffs had moved their offices. That plaintiffs previously maintained places of business in New York is not relevant, because the documents and witnesses are no longer within this jurisdiction.

More important, there will likely be a need for testimony from non-party witnesses, such as individuals from the two Apollo entities, who are located in Texas. Plaintiff argues that there will be no need to call anyone from Apollo. I cannot agree. Rather, testimony from Apollo witnesses may be integral to determine whether defendant law firm was negligent in confusing the Apollo entities. For instance, the determination could depend on what someone at one of the Apollo entities communicated to defendant. The lead attorney on the underlying transaction, who lives in Texas, no longer works for defendant, and as with the Apollo witnesses, it is unlikely a New York court itself can compel his live testimony without assistance from a Texas court. This case thus represents an unnecessary burden on the New York courts. In addition, all records that either Apollo entity has are located in Texas. Further, the events pertinent to this case all occurred outside New York, the documents are in Texas and, as this case concerns what defendant did or did not do, all of the relevant witnesses are in Texas. Finally, Texas certainly has an overriding interest in regulating the conduct of the lawyers admitted in that state. (citation omitted)

(Mike Frisch)

July 28, 2010 in Law & Business, Law Firms | Permalink | Comments (0) | TrackBack (0)

Monday, July 26, 2010

"Of Counsel"

An ethics opinion from Nebraska deals with ethics of the use of the "Of Counsel" designation. The summary:

An attorney may only be listed on firm letterhead and in firm advertisements as "Of Counsel" where there is close, ongoing, regular, and frequent contact with the firm for the purpose of providing consultation and advice.

A firm name may retain the name of a retired partner, but not if the retired partner resumes the practice of law elsewhere, even if he maintains an "Of Counsel" relationship to the former firm.

(Mike Frisch)


July 26, 2010 in Law Firms | Permalink | Comments (0) | TrackBack (0)

Monday, July 12, 2010

"DumpMySpouse.com"

Posted by Jeff Lipshaw

I drove up I-75 from the Detroit area to Charlevoix yesterday, and was listening to the baseball game somewhere near Flint (WTRX, 1330-AM, part of the Detroit Tigers Baseball Network*) and heard an ad that I have to admit caught my attention.  I've debated whether I really wanted to give this lawyer the free advertising that this post would entail, but what the heck.  I leave to Mike and Alan to tell me technically whether there's a professional responsibility issue here; I can't decide if the lawyer is doing a public service or not.

It was a pretty standard divorce lawyer's radio ad ("When Matrimony Turns to Acrimony"), but what caught my attention was that the URL for the website was "dumpmyspouse.com."  It went by quickly, so at first I thought that was the URL for a law firm, and that seemed pretty squirrelly to me.  Would you really be doing a service to your clients by sending out communications to the courts, lawyers, and the public with your e-mail as "joe@dumpmyspouse.com?" (I should add, by the way, that I looked at this particular lawyer's online resume, and he seems to be a fully qualified, upstanding guy.)

I was wrong, however, about the website.  "Dump My Spouse" is not a law firm, or a law firm's URL.  It is a private referral service, obviously originated by this particular Flint lawyer.  It has a map of the state of Michigan with all 83 counties outlined, and you are supposed to click on a county to find a lawyer who is part of the "Dump My Spouse" referral network.  You can register to be part of the network.  I wasn't going to click through all 83 counties, but I clicked on a random sample and, as far as I can tell, this Flint lawyer is still the only member of the network, which may answer the question posed in the preceding paragraph.

De gustibus non est disputandum.

* When I'm in Michigan, I get to watch my beloved Tigers to my heart's content on Fox Sports Detroit, but this pleasure has been sullied somewhat by the fact that 1-800-CALLSAM, the quintessential wee hours cheap advertising personal injury law firm of my professional youth in the Detroit area, has obviously prospered to the point that it is now the major sponsor of the ballgames, including the CALLSAM Post-Game Report.  I think it even has one of the advertising spots right behind home plate, so that you get to watch Justin Verlander aim his slider at the right side of the M in alternate innings.  By the way, just to make it clear that I'm an equal opportunity curmudgeon on this issue, I would get almost as disgusted (note the Latin root by the way) when I'd be listening to "All Things Considered" on NPR, and find out that it was underwritten in part by Silk & Stocking, the biggest law firm in town, and one to whom I was sending thousands of dollars of our legal business, with some goony slogan like "It's an Uncertain World:  Be Advised" or "We Know the Territory."

July 12, 2010 in Law Firms, The Practice | Permalink | Comments (11) | TrackBack (0)

When Law Partner Spouses Divorce

When a married couple enter into a law partnership, the divorce and resulting termination of the partnership is likely to wind up as a published opinion. The lawyers married in 1987 and commenced the partnership in 1988. The partnership lasted about a year before one spouse (here the plaintiff)left the partnership. A divorce action was filed in 1999.

After the divorce, one spouse sued the other claiming that the fee-splitting agreement that was incorporated into the decree covered workers compensation matters as "personal injury" cases. The claim, if sustained, would have entitled that spouse to a share of fees. The Connecticut Supreme Court agreed with the lower court that collateral estoppel (from the divorce) barred the claim.

A dissent would find that the issue in the present litigation was not barred by collateral estoppel and that a trial on the merits should go forward.

(Mike Frisch)

July 12, 2010 in Law & Society, Law Firms, Partners | Permalink | Comments (0) | TrackBack (0)

Wednesday, June 30, 2010

Both Sides Now

The North Carolina Supreme Court held that a trial court did not abuse its discretion when it revoked the pro hac vice status of two attorneys in litigation against Abbott Laboratories and a hospital when a child contracted a rare form of meningitis shortly after birth. The court reversed the Court of Appeals and held "that the North Carolina Rules of Professional Conduct do not limit the trial court's discretion to revoke pro hac vice status."

Abbott moved to disqualify counsel after admission had been granted. The issue related to a contact between plaintiff's counsel and defendant's expert in a case in Kentucky. Plaintiffs put into the record the state circuit court decision in that "factually similar" case. In that case, the circuit court found that the plaintiff's attorneys had contacted and retained the expert not knowing that Abbott had already done so. Abbott was not a party to the litigation at that juncture but was a potential defendant. The court found that plaintiff's attorney deliberately failed to advise the expert that Abbott might be sued in the case. As a result, the "expert found himself on both sides in [the case]." However, the Kentucky court denied the motion to disqualify.

The court here concluded that the trial court had the inherent authority to revoke the admission. The Court of Appeals had reached a contrary conclusion by focusing on the Rules of Professional Conduct and, in particular, the choice of law provisions of Rule 8.5. The court found that Rule 8.5 applies to a bar discipline matter. The trial court found an appearance of impropriety in the contact with the expert and that the conduct was "inconsistent with fair dealings as reflected by Rule 4.3 of the Rules of Professional Conduct." Those conclusions were sufficient to invoke the trial court's inherent authority to disqualify counsel.

The court also found sufficient evidence of involvement in the expert contact to justify disqualifying both attorneys. (Mike Frisch)

June 30, 2010 in Clients, Law Firms | Permalink | Comments (0) | TrackBack (0)

Thursday, June 24, 2010

Disqualification Ordered

An order denying the disqualification of Buchanan Ingersoll based on a former client conflict  was reversed by the West Virginia Supreme Court, which granted a writ of prohibition. The court recited the following facts:

Bluestone Coal and Bluestone Coal Sales, the petitioners herein, are companies engaged in the production and sale of coal. Both Bluestone companies are part of a conglomerate of twenty-nine affiliated closely-held companies owned and operated by James C. Justice, II (hereinafter “Mr. Justice”). These affiliated companies share one common General Counsel, Mr. Stephen W. Ball (hereinafter “Mr. Ball”), and the majority of these companies, including the two Bluestone companies involved in this case, are headquartered in the same office building in Beckley, West Virginia.

            Mountain State, one of the respondents herein, owns and operates a coke plant in Follansbee, West Virginia, and purchases coal to convert into coke; Mountain State's principal place of business is in Wheeling, West Virginia. On October 5, 2007, Mountain State and Bluestone Coal Sales entered into a coal supply agreement whereby Bluestone Coal Sales agreed to supply all of the coal required by Mountain State's Follansbee coke operations. Bluestone Coal served as the guarantor for Bluestone Coal Sales' obligations under this agreement. When Bluestone Coal Sales failed to deliver the requisite amount of coal in accordance with the agreement's terms, Mountain State filed suit against both Bluestone Coal Sales and Bluestone Coal in the Circuit Court of Ohio County on September 9, 2008.

            The law firm representing Mountain State in the underlying litigation, whose disqualification the Bluestone companies seek, is Buchanan Ingersoll. Buchanan Ingersoll is a large, nationwide, law firm, whose principal place of business is in Pittsburgh, Pennsylvania. At various times, Buchanan Ingersoll has been retained as counsel for certain of Mr. Justice's companies, including Dynamic Energy, Inc.; Harlan Development Corporation; James C. Justice Companies LLC; and Sequoia Energy, LLC, for which representations engagement letters were signed. Buchanan Ingersoll also has either directly represented or provided legal counsel to both Bluestone Coal and Bluestone Coal Sales; however, the exact nature of the relationship between Buchanan Ingersoll and the Bluestone companies, as well as whether there currently exists an attorney-client relationship between these entities, is disputed by the parties and will be discussed in further detail in Section III.B. of this opinion. See Section III.B., infra. It appears that Buchanan Ingersoll began
providing legal services for both Mountain State and Mr. Justice's companies in approximately 2005.

            Following Buchanan Ingersoll's institution of Mountain State's Ohio County lawsuit, the Bluestone companies moved the circuit court to disqualify Buchanan Ingersoll from continuing its representation of Mountain State. In support of their motion, the Bluestone companies variously contended that they were current clients of Buchanan Ingersoll such that continued representation of Mountain State in an adverse capacity would violate Rule 1.7 of the West Virginia Rules of Professional Conduct; that they were former clients of the law firm such that continued representation would violate Rule 1.9; and that, because certain, individual attorneys had formerly represented the Bluestone companies, their disqualification should be imputed to the entire law firm in accordance with Rule 1.10. By order entered November 20, 2009, the circuit court denied the Bluestone companies' motion to disqualify Buchanan Ingersoll, ruling that “no disqualifying conflict exists with respect to Buchanan Ingersoll & Rooney, LLP's representation of Mountain State Carbon, LLC, Plaintiff, in this action.”

The court found the matters substantially related:

...it is apparent that the nature of Buchanan Ingersoll's representation of Mountain State in the underlying proceedings is “substantially related” to its prior representation of Bluestone Coal insofar as both the former and subsequent representations concern the Bluestone companies' performance, or lack thereof, under coal supply agreements under the factual, circumstantial, and legal contexts of the two cases.

            Factually, the two representations are virtually the same. Both the Coal Sourcing case and the instant litigation involve the same type of contract: a coal supply agreement. The agreements both involve the same mine, i.e., the Keystone Mine, and the same coal from that same mine. In both proceedings, Bluestone Coal has been named as a party defendant with respect to the failure to deliver coal as specified by the subject coal supply agreements and is ultimately liable for any obligations arising thereunder.

            Circumstantially, the two representations also are substantially related and strikingly similar insofar as “the current matter involves the work the lawyer performed for the former client.” Both cases allege deficient performance of a coal supply agreement, which is precisely the type of case in which Buchanan Ingersoll formerly represented Bluestone Coal. Specifically, Buchanan Ingersoll formerly represented Bluestone Coal as a defendant defending against allegations of a failure to perform a coal supply agreement in the Coal Sourcing case, and now is currently representing Mountain State as a plaintiff claiming that the coal for which it had contracted has not been delivered pursuant to the governing coal supply agreement in the instant litigation.

Legally, the two representations are nearly identical such that “there is a substantial risk that representation of the present client will involve the use of information acquired in the course of representing the former client, unless that information has become generally known.” ...Under the facts of this case, not only is there a substantial risk that the attorney could have used information obtained from the former client in the prior representation, there is actual evidence that such knowledge has been used to the former client's detriment. In both cases, Bluestone Coal was named as a party defendant. During the course of the Coal Sourcing litigation, Bluestone Coal asserted a defense of force majeure to excuse its nonperformance of the subject coal supply agreement. Reliance on this defense required Bluestone Coal to reveal its confidential coal supply agreements to its counsel. During the litigation initiated by Mountain State, Buchanan Ingersoll, on behalf of Mountain State, requested documents from Bluestone Coal regarding its prior reliance on the defense of force majeurebefore Bluestone Coal had filed an answer to Mountain State's complaint or had indicated what, if any, defenses it intended to assert in response to such claims. Because Bluestone Coal had not yet attempted to rely upon the defense of force majeure, and had not even had an opportunity to respond to Mountain State's complaint, it is apparent that Buchanan Ingersoll, from its former representation, possessed sufficient knowledge of Bluestone Coal to anticipate the defense upon which it may have relied in response to Mountain State's complaint. This strategy indicates that Buchanan Ingersoll used information it obtained from its former representation of Bluestone Coal to the detriment of its former client. Thus, because the subject matter of Buchanan Ingersoll's former and subsequent representations are virtually the same, it is clear that the third criterion for disqualification has been satisfied.

The court found that the elements of a prohibited former client conflict had been established. (Mike Frisch)

June 24, 2010 in Clients, Economics, Law & Business, Law Firms | Permalink | Comments (0) | TrackBack (0)

Saturday, June 19, 2010

My "Dean Speech" on the Future of the Legal Academy

Posted by Jeff Lipshaw

Faculty_Wasserman,Howard The always insightful and interesting Howard Wasserman (FIU, left) provoked a discussion over at PrawfsBlawg on "student centered" teaching that, in the comment thread, turned into that ancient debate about all those theorist law professors at odds with their practical minded students.  I posted a comment, responding to "Vladimir" and "BL1Y", that I thought was worth re-posting here.  I think, as a long time practitioner AND law professor (me) interested in highfalutin' theory (that is, given my odd background, I think I could teach a jurisprudence class, a trial skills class, and a transactional skills class), I have some credibility on both sides of the issue.

How the legal academy came to its present configuration wasn't the result of some logical exercise, but a matter of historical happenstance. That's not uncommon. Most intractable social and political realities arise that way (see Northern Ireland or Israel-Palestine). The reality now is that you are both correct in your fundamental observations: there IS a gap between what most law students want (unless they go to Yale) out of their educations, and what most law professors want out of their careers. It may well be that something like the financial crisis of the last couple years, and the shrinking of big law firms engenders a complete restructuring of the legal academy into a Ph.D. like "department of jurisprudential studies" with its place in the College of Arts and Sciences, and more trade school like professional schools, but I doubt it for two reasons that undercut both polar positions.

1. Law professors can't merely be theorists and have their gravy train survive. What allows so many law professors to engage in theory is the fact that their students who have little such interest fund the theoretical pursuit. First, law schools are notorious cash cows. When is the last time you heard of anyone organized a proprietary or for-profit sociology department? The cost of providing the education, unlike in the hard sciences or med schools, is relatively low compared to the market price of the tuition. Second, it's the salaries in private law firms that by and large set the benchmark for law professor salaries. Even if you take a pay cut to move into academia from the big law firm that is the typical immediate pre-professor job, you aren't getting paid like an assistant professor in the English department.

2. Law students don't REALLY want to be trained in the legal equivalent of the barber college or truck driver school. While law students may get frustrated with the theory often foisted upon them by their professors, the present paradigm in the academy (and, honestly, this preceded the influence of US News, because the elite schools in US News were the elite schools when Bob Morse was still wearing short pants), they show over and over again that they are significantly influenced by the brand of the law school, regardless of the specifics of the pedagogical program. And the brand, as the institution of the legal academy has developed, has a lot to do with all that theoretical stuff law professors are churning into law review articles. I'm not arguing that is good or bad (although I wouldn't be a law professor just to teach; it's the theory that floats my boat after all those years of practice); it's just the reality. Seriously, tell me that a rational student, faced with the choice of Stanford or UCLA, with all those practice-challenged theorists, or an excellent "skills-focused" third or fourth tier school, and no significant difference in tuition (see point 1) (and maybe not even then, but that's an interesting econometric question), wouldn't choose Stanford or UCLA?

My "dean speech" (that nobody has asked me to give) is that this is an intractable polarity that the profession is simply going to have to manage by way of leadership that provokes empathetic perspective at both poles. The poles aren't coherent, and there is no rule of nature that says they have to exist, much less coexist. But they can, just like lots of polarities, continue to coexist. Faculties simply have to make concessions to the concerns and needs of students or their gravy train is going to disappear; students and alumni are going to have to acknowledge the driving forces of academic prestige and advancement, or they are going to lose that patina (and brand, and earning power) that comes with a law degree other than from ITT Tech, DeVry (which owns a med school on the island of Dominica, "a lush, classically Caribbean environment"), or the University of Phoenix, all of which would be perfectly capable of offering what BL1Y wants (InfiLaw already does).

June 19, 2010 in Law & Business, Law & Society, Law Firms, Lipshaw, Teaching & Curriculum, The Practice | Permalink | Comments (8) | TrackBack (0)

Friday, June 18, 2010

Dismissed For Cause

The New York Appellate Division for the First Judicial Department affirmed the dismissal of claims brought by a former partner against his law firm:

The Partner alleged in the first action, inter alia, that his former employer, KBTF, defamed him personally, as well as his business reputation, by KBTF's issuance of a press release stating that he had been "terminated for cause," ". . . because of extremely inappropriate personal conduct," and through a subsequent statement by a KBTF partner that the termination had occurred after a "thorough" and "weeklong" investigation by KBTF. The press release and statement were made after a certain publication reported that the Partner had joined his new firm "after jumping ship" from KBTF, taking with him certain important clients, and that the new firm had "nab[bed]" him. When the trade publication did not issue what KBTF regarded as a sufficient correction, KBTF published the allegedly defamatory statements quoted above.

The IAS court correctly dismissed the Partner's defamation claims upon finding that the Partner's pleading, and a December 2007 e-mail which he had sent to a senior partner at KBTF, effectively admitted that he was terminated for cause due to his inappropriate personal conduct while at KBTF. A review of the pleadings and documentary evidence submitted supports the motion court's conclusion that KBTF's alleged defamatory remarks were substantially true...KBTF's use of the term "extreme" to qualify the Partner's inappropriate conduct, when viewed in the context of KBTF's warranted response to the new firm's initial announcement, would be viewed by a reasonable reader as constituting opinion, and thus would be privileged.

The Partner failed to state a claim for tortious interference with business relations, inasmuch as his pleadings asserted that KBTF's alleged defamatory statements were made to gain, inter alia, economic advantage, and were not published solely out of malice; nor, for the reasons stated above, can the Partner prevail on this claim on the theory that KBTF employed "wrongful means" in making the challenged statements...The Partner's injurious falsehood claim was insufficiently pleaded absent viable allegations that false and disparaging statements were made which harmed the Partner's property or business reputation...The Partner's equitable claim alleging KBTF was unjustly enriched because he performed "transition" services for KBTF without pay was properly dismissed inasmuch as the parties' partnership agreement covered compensation issues for partners both in good standing with the firm, and those like the plaintiff, who had been expelled.

The court properly dismissed the causes of action in KBTF's complaint given the vague, boilerplate allegations of damages which were insufficient to sustain the causes of action asserted therein(citations omitted).

(Mike Frisch)

June 18, 2010 in Law Firms | Permalink | Comments (0) | TrackBack (0)

Monday, April 26, 2010

Another Disqualification Overturned

The Maine Supreme Court vacated a judgment disqualifying a Washington, D.C. law firm in a matter in which an employee claimed a hostile and discriminatory work environment while employed at the Maine Education Association.

The Association hired the law firm to conduct an investigation of the employee's allegations. The employee was interviewed by a firm attorney with her own counsel present. The attorney advised the employee that he did not represent the Association but was conducting an independent investigation. The employee claimed, but the interviewing attorney denied, that she was assured of confidentiality. The attorney later substantiated the employee's allegations of discrimination.

When the employee filed a complaint against the Association, two other law firm attorneys entered an appearance as pro hac vice counsel. The attorney who had interviewed the employee had departed. The trial court granted the employee's motion to disqualify the law firm in the litigation. 

Here, the court concluded that the moving party has the burden of establishing an affirmative ethical rule violation that would result in actual prejudice. General allegations will not suffice. The trial court must make express findings in that regard. The moving party had "failed to point to any particular prejudice she has suffered or will suffer and...the [trial] court made no such finding of actual prejudice."

A concurring justice would find the question closer than the majority and views it as "better practice not to have the same firm perform a discrimination investigation and represent the employer in any resulting litigation."

A dissenting justice would affirm the disqualification order, concluding that the interviewing attorney had misled the employee into believing he was an independent investigator and had disclosed information to the employer in violation of his commitment to her. The dissent also concluded that the attorney-investigator may be a necessary trial witness. (Mike Frisch)

April 26, 2010 in Interviewing, Law & Business, Law Firms | Permalink | Comments (0) | TrackBack (0)

Not Substantially Related

The New Jersey Supreme Court has reversed an order disqualifying a law firm from representing a municipality in defense of tax appeals during 2006-2007. The court concluded that the prosecution of individual taxpayer' 2009 tax appeals against the municipality was not "substantially related" to the matters handled on behalf of the municipality. The law firm had been disqualified by the Tax Court and the order was affirmed by the Appellate Division.

The court here found disqualification unwarranted because the law firm did not receive confidential information from the municipality that could be used against it in the taxpayer appeals: "In this record, the City has not met its burden of proving that, in fact, the current and former representations are 'substantially related. ' The superficial similarity of the subject matter of both representations-- the propriety of real estate tax assessments-- does not withstand closer scrutiny." The party seeking disqualification was unable to point to any confidential information that could be used against it. (Mike Frisch)

April 26, 2010 in Current Affairs, Law & Business, Law Firms | Permalink | Comments (0) | TrackBack (0)

Tuesday, March 9, 2010

Claims Against Referring Firm Reinstated

A law firm that had represented a client sued the client for unpaid fees. The plaintiff firm also sued the law firm that had referred the client, claiming that the defendant law firm had represented that their clients (the Nassers) guaranteed payment of their fees. Plaintiff appealed the dismissal of claims against the referring law firm.

The New York Appellate Division for the First Judicial Department held that the claims were viable:

The complaint alleges that defendants-respondents represented to plaintiff law firm that they had authority from the Nassers to promise payment of $75,000 of the legal fees incurred by plaintiff's client when, in fact, they lacked the authority to bind the Nassers. Thus, the complaint alleges a viable claim for breach of the implied warranty of authority. The complaint also alleges that defendants-respondents falsely represented to plaintiff law firm that they specifically discussed the subject matter of their authority and representations with the Nassers. Thus, the complaint alleges a viable clam for tortious misrepresentation of authority and assurances of payment.

To the extent the motion court relied on the principle of apparent authority, lack of consideration and the statute of frauds to dismiss these causes of action, such was error. The doctrine of apparent authority is irrelevant because the fourth and fifth causes of action are not seeking to hold the principals (the Nassers) liable on the ground that defendants-respondents had apparent authority from the Nassers to make promises of payment. Rather, these causes of action are seeking to hold the agents, defendants-respondents, liable for contracts or representations they purported to make on behalf of the principal (the Nassers) while acting without authority from the principal. Therefore, the fact that the Nassers never manifested to plaintiff law firm that defendants-respondents were authorized to act on the Nassers' behalf has no bearing on the viability of the fourth and fifth causes of action. Moreover, regardless of whether or not there was consideration running to the Nassers, defendants-respondents can still be held liable for their own tortious conduct in making deliberate misrepresentations of fact that they had authority to make the promises that the Nassers would pay $75,000 of the legal fees incurred by plaintiff's client (see Restatement (Third) of Agency §§ 6.10, 7.01 [2006]). In addition, the statute of frauds does not come into play since the fourth and fifth causes of action are not seeking to enforce the unwritten agreement by the Nassers to pay plaintiff's client's legal fees against the Nassers. These causes of action state a claim against the defendants-respondents regardless of whether there is an enforceable contract with the Nassers.

The sixth cause of action against defendants-respondents for tortious interference with defendant Jacques Nasser's contract with plaintiff law firm to pay $37,500 of the legal fees incurred by plaintiff's client was also improperly dismissed by the motion court. In order for there to be a viable claim there must be a valid contract between Jacques Nasser and plaintiff law firm. Pursuant to General Obligations Law § 5-701(a)(2), every agreement, promise or undertaking which is a special promise to answer for the debt of another is void unless it is in writing. Under a long-standing exception to the statute of frauds, however, the promise need not be in writing if it is supported by new consideration moving to the promisor and beneficial to him, and the promisor has become in the intention of the parties a principal debtor primarily [*3]liable (see Martin Roofing v Goldstein, 60 NY2d 262, 264 [1983], cert denied 466 US 905 [1984]; Carey & Assoc. v Ernst, 27 AD3d 261 [2006]). At the very least, the allegations in the complaint raise an issue of fact concerning whether Jacques Nasser agreed to act as a guarantor in the event plaintiff's client did not pay her legal fees, in which case there was no enforceable contract, or whether in seeking to secure the benefit of the cooperation of plaintiff's client in connection with the lawsuit against him by her employer, Jacques Nasser offered to lift the burden of the obligation to pay legal fees from plaintiff's client and pay the law firm directly, in which case the contract would not be barred by the statute of frauds (see Rowan v Brady, 98 AD2d 638, 639 [1983]). Therefore, the sixth cause of action for tortious interference with contract is reinstated.

Finally, the motion court erroneously dismissed the seventh cause of action against defendants-respondents which alleges tortious interference by defendants-respondents with the attorney-client relationship between plaintiff law firm and its client, defendant Srour. Insofar as the complaint alleges that defendants-respondents, knowing that Srour was represented by plaintiff law firm, met with Srour alone, without informing plaintiff law firm of the meeting, and approximately three days later, Srour discharged plaintiff law firm, it is sufficient at this stage of the proceedings, to state a viable claim, and therefore the seventh cause of action is reinstated.

(Mike Frisch)

March 9, 2010 in Billable Hours, Law & Business, Law Firms | Permalink | Comments (0) | TrackBack (0)