Legal Profession Blog

The Definition of Chutzpah or I've-Seen-It-All-Now: Being On Both Sides of Appeal. Cal Court Calls It A Disregard of Duties "Without Precedent."

Posted by Alan Childress

If it were a Hollywood script, I would laugh at its utter incredibility:  only Hollywood would unblinkingly make an attorney have a litigation interest in both sides of the appeal (and treat it as clever lawyering).  But it happened, yes in California, and the court there called it a disregard of a client's fiduciary duties that is "without precedent."  It certainly is, to my knowledge, and it as twistedly brilliant and stunningly nervy as it is stupid and in the "what were they thinking?" box.  [Thanks to appellate attorney Greg May for letting us know and pointing us to his (detailed and excellent) post on The California Blog of Appeal.]  My simplified but accurate version is this, re attorney Anthony Pagkas:

Civil defendant-client loses suit due to default judgment from Lawyer's alleged lack of diligence.  Client then sues Lawyer for malpractice and also appeals the default.  Lawyer then buys out the plaintiff's interest on appeal (gets an assignment of the interest from the prior plaintiff, for some "undisclosed consideration").  That's right:  buys into the other side of the appeal and, now represented as a litigant by another attorney in his firm, owns the default judgment if it is upheld.  On the other side from his barely-former client, in the appeal!

Brilliant:  if Lawyer loses "his" appeal, then there are no malpractice damages and no causation.  If he wins, he collects a $730,000 default judgment from the former client.

Stupid:  this requires Lawyer to move the appeals court to substitute him as "respondent" in his former client's appeal. 

Sort of predictable:  ”Finding that the proposed substitution violates multiple rules of Professional Conduct as well as the Business and Professions Code, we will deny the motion.”  Well, yeah. The court's stated astonishment to follow in explaining the denial and imposing sanctions is quoted by May, and its full opinion here as well, issued yesterday.  Suffice it to say that "if the substitution were allowed, it is conceivable that Pagkas could prevail in both the malpractice action and in this appeal, leaving him with huge windfall at the expense of his former client. Pagkas’s disregard for his ongoing fiduciary duties to his former client in favor of his own personal gain is without precedent." (Footnote omitted.)

How did Lawyer ever think he would get away with this?  The sanctions are merely $5260, but I am sure there is more to come.  The case is Styles v. Mumbert, civil H029767 (6th Dist. July 15, 2008).

UPDATE:  Not entirely without precedent, it has since occurred to me.

Oh To Be Pro Se: Still The Champ In Frank and Unprofessional Pleading?

Posted by Alan Childress

The Texas court pleading going around the internet that raises the "dumbass defense" against a plaintiff and calls him a "f---ing idiot" [without dashes] has been been revealed to be a fake by Ray Ward and his astute commenters at the new legal writer blog.  That leaves, Ray says in a comment, the 2006 notice of appeal of one George Swinyer, Jr. as "the champ in use of salty language in a court pleading."  Next week is its two-year anniversary and it has not been knocked off its block yet, has it? (George Swinyer, Sr. must be so proud.)

Here it is in its stark and handwritten glory, and it is not professional, but give it this:  it was sent to the right court.  Lots of real lawyers intuitively file the notice of appeal in the court of appeal (wrongly), or otherwise mess up the timing of it which may result in a huge malpractice lawsuit (or just a lawsuit that, luckily to the attorney, leads to a finding of no causation because the appeal would have been lost on the merits anyway).  I am not suggesting, however, that this one go into your forms-and-exemplar file.

Maybe the author of this notice of appeal is more ideally suited, personality wise, to become a pro se transactional attorney.  (At least that way, Swinyer would not have -- ahem -- "perfected an appeal" ... that was destined to be pretty much summarily remanded by the appeals court, and found "not in good faith" by the same district judge, as reported by Legal Juice blog with details about the underlying lawsuit and the obligatory use of "donut" to insult a prison guard.)

This certainly beats out for utter frankness and ethical candor the midwestern appellate attorney who asked for argument to be rescheduled on the grounds that his wife was making him take a 350-mile bicycle tour in Oregon, even though "Counsel assures this panel that Oral Argument would be more enjoyable than the aforementioned bike trip."

On The McDonald Spit

A dispute between two attorneys who co-owned vacation property as tenants-in-common at a place on the McDonald Spit worked its way to a decision from the Alaska Supreme Court.  The attorneys did not have a written agreement concerning their respective ownership rights. One of the partners wanted to build a guest cabin in a particular place  "below the bluff." The other disagreed and felt the location was an unsafe place to build. He was proven correct when that cabin was destroyed. Thereafter, one partner built and used his own cabin while the other took over an existing cabin. The litigation was over the concept of "owelty" after the parties had partitioned their respective interests in the property and were unable to resolve their disagreement through mediation. (Mike Frisch)

Required Recent Reading for Law Dean Candidates and Search Committees

Posted by Alan Childress

Jeff posted last week (here) on the frequent but surmountable "divide" between practice and theory in law school, or more precisely between practitioners and theoreticians within the larger law school world.  The mission of legal education has to serve several larger constituencies, and they all matter.  His post really serves, if you think about it, as sort of an open letter to law deans and dean search committees.  It's worth a read by academics who don't want to dirty "their" institution with law practice and practioners, and by practitioners and the real-life communities of a law school who may think egghead intellectuals miss the point of a "real" law school qua professional training facility. 

That theme is given an applied context in this new post by Michael Froomkin of the University of Miami--applied because these questions and concerns are not merely academic to those who, right now, need a new dean to take a really good law school and its faculty to the next level.  His view is entitled, Why A Practitioner Dean Sounds Like A Better Idea Than It Usually Is.  Although I don't agree with everything he says, it too should be required reading for dean candidates, search committees, and supportive alum.  It certainly explains well to those in the larger community what they are just not getting about the insides of a law school--the herding cat thing--when they so easily assume that good managers in the real world will translate to ivory towers like ours.  Law schools "are hard to administer — much harder, I’d think than a court (at the end of the day, there’s always a bailiff…), and very different from a law firm."

More Proof That Not All Lawyers Are Brilliant, On Several Levels: "It's My Wife's Marijuana, Officer"

Posted by Alan Childress

The blog Western Justice {"from a small town DA") shares its nominee for the "we've heard it all" file, which "is the elected DA who was pulled over, and had less than one ounce of marijuana. . ."

Now, this is probably not the first time it has happened to a corrupt/stupid DA. Here in my state, that is not a felony, and it rarely carries jail time if it is your first offense, so what was flabbergasting about the case is that normally, people mitigate their offense and cop to a lesser crime ("Oh, it's not that much marijuana"). This DA was not so smart. He told the officer (obviously not verbatim), "Oh, um, the marijuana? Ha ha . . . . eh . . . it's not mine!!! Yeah, that's it, it's not mine! It's for my wife. She's sick, and I'm bringing it home to her."

The poor fellow just copped to a higher charge--distribution of marijuana, a felony.

See, and I am thinking the second-level stupid thing is to ever, ever narc on your spouse.

Fischer on Controlling the Bar From Without, Especially By Insurers & Legislators

Posted by Alan Childress

James Fischer (Southwestern Univ. School of Law), shown left [Southwestern has the best faculty pics], has posted to SSRN his article, "External Control Over the American Bar."  It was first published in 19 Georgetown Journal of Legal Ethics, winter 2006.  Here is his abstract:

Professional regulation is primarily about self-regulation. Codes of Professional Responsibility and Rules of Professional Conduct promulgated by the American Bar Association are prime examples of forum and content of self-regulation. While this approach does much to inform lawyers of their professional obligations, it does so at the macro-level, focusing on general obligations and duties. Professional codes and rules are largely silent at the micro-level; they often fail to inform lawyers of their day-to-day obligations, which are building blocks of the larger professional obligations set forth in the codes. Historically, these day-to-day activities were left to lawyers to work out on their own. With increasing frequency and detail, however, non-professional regulators are stepping in to regulate and control lawyer conduct and much of their attention is focused on the day-to-day activities of lawyers that the professional bar has largely ignored.

In this paper, I examine two non-professional groups who have entered the field of profession regulation: insurers and legislators. While for the most part insurers and legislators complement professional self-regulation, both insurers and legislators are taking positions regarding required lawyer behavior that is different in degree and kind from that required by professional codes and rules. The trend has been for both insurers and legislators to assume more aggressive postures. To date, courts have tempered the most aggressive impulses, but whether they will continue to do so is unclear.

Update, FWIW: Yes, the Talented Mr. Phipps Went to Loyola-N.O.

Posted by Alan Childress

Last week, I posted this item on a lawyer, Roger Phipps, whom the Fifth Circuit admonished by name for being unprepared at oral argument, to the point where he flippantly argued without reading cases.  The Court asked where he went to school (BTW, no good ever comes of that question in this setting!). And the Court's opinion quoted his reply that it was "Loyola."  Yesterday, an administrator at Loyola-N.O. sent out a mass email denying in caps ("GOOD NEWS") that Mr. Phipps was their graduate (see comments to the earlier post); the email was -- obviously, foreseeably -- posted widely on the internet. 

Because that email publicly disagreed with this blog's (rather uneventful) statements that Phipps's Martindale-Hubbell entry was wrong and that he had indeed gone to LoyNO (not my main point), and because internal research rather than relying on the internet would have revealed the error, I expected a correction to be forthcoming.  When silence followed and it appeared I was supposed to just accept the implicit characterization that I was stating the facts falsely, I asked the registrar at Loyola-Chicago whether Mr. Phipps was their graduate as MarHub showed (and made clear I was asking for no other information, other than confirmation or not of the public listing as J.D., 1990, from Loy.-Chi.).  I identified myself and my purpose.

This morning, I received an email from the registrar at Loyola-Chicago confirming that Roger Phipps did not attend their law school.  The email added that the registrar had further contacted Loyola-New Orleans, which emailed her (per a dean) to "confirm that a Roger D. Phipps is a 1990 graduate of Loyola University New Orleans" after all.

I have all along suggested that I don't think it reflects much on Loyola (any Loyola) either way that some 1990 graduate is a poor advocate who spoke without doing his homework.  I stand by that, though the irony here is not lost on me.  I have taught classes at Loyola, proudly, and I admire many of their professors, students, and graduates.  I constantly read in the news about a clinical professor from the school fighting hard for criminal justice in a broken post-Katrina system.  I co-teach in Greece with a family law professor doing cutting-edge work on reproductive technologies.  One of their legal ethics professors literally wrote the book on Louisiana ethics.  I have even taught some of their professors (am I that old?), such as one just named full professor for his outstanding publications on civil law property.  I have hired, over the years, three of their graduates as attorneys to represent me in matters crucial to my life.  One of their graduates sat as a Judge on that Fifth Circuit panel (making the attorney Phipps's gaffe even worse) and is one of the finest judges and people I have ever known. I have justifiably recommended their students, my students there, to clerkships and graduate programs. 

Now I find that it is six hours four days after Loy.-Chi. received the private correction, and way more than 24 hours after the mass email.  And I still have heard nothing of a public correction.  So I will just post this.

The school's legacy is not defined by one graduate, obviously. And indeed I am surprised that the career services office went to such lengths to disavow the alumnus as if it would be such an awful thing for the school if it turned out -- as it will when they finally make their public correction -- that he graduated from their school.  I think it should have been left alone, as I wrote before, or at least used as an opportunity to tout their success stories and sources of pride (like those above) rather than a blanket, ill-founded, and now ill-fated denial. 

And, at any rate, all this is  not fair to Loyola-Chicago, who may regard LoyNO's public, continuing treatment of Phipps as having gone to Loy.-Chi. (despite their correspondence) as "BAD NEWS!" and not just "trivia."

Anyway, as Mr. Phipps made clear when he "defended" himself to the Court, at least he showed up wearing a suit.

Arrogance, Self-Deception, and Civility - A Thesis on the Balance between Principle and Learning

Posted by Jeff Lipshaw

I was already reeling, in a way, from the spin now coming out of the Clinton campaign, distinguishing between primary delegates and caucus delegates, all apparently in an effort to persuade superdelegates that Senator Clinton really is winning, despite the fact that she is losing.  This was consistent with the "let's make Obama" the VP move, which reminded me of the scene at the end of Searching for Bobby Fischer when the little chess master Josh Waitzkin sticks out his hand and offers a draw to the arrogant little snot who appears to be winning.   Except there was nothing cynical about Josh.  (Somebody please explain to me the "Obama is not qualified to be commander-in-chief now, but he may be by the convention" logic.)  It occurred to me in the middle of the night:  "I'll bet she has calculated that it's a no lose proposition to trash Obama.  Either she gets the nomination or he does, and then he loses to McCain, having been given fodder from Senator Clinton herself, and she's back in 2012 at the relatively young age of 64."  Who do they think they are fooling?

Then the Spitzer thing.  I have never been a big Spitzer fan (see Matt Bodie's comment over at PrawfsBlawg for an expression of that particular sense of betrayal) so I haven't followed it closely, but obviously there is a pattern of self-righteous (and foul-mouthed) combativeness, all in the pursuit of what he is sure is right.  The New York Times reports this morning that this is a fellow not particularly attuned to listening to somebody else, or learning.  What could he have been thinking?  Who did he think he was fooling?

And finally, I had already been thinking, after perusing the blogosphere this weekend, about the issue of civility in academic debate. 

It seems to me there is a common thread here, perhaps tenuously so, but I don't think so.  It has to do with arrogance and self-deception.  I wrote an article awhile back that concluded with this paragraph:

When I am faced with a difficult choice, I fear nothing like my ability to persuade myself.  Kant understood that we can never really tell if the principle of our action is determined by our material wants and inclinations, or by recognition of the universality of the rightness in what we are choosing.  I agree.  Whether in our own minds, or in a group of like-minded executives, we are wholly capable of mistaking what makes us happy or fulfilled for what is right.  And, the only check on the power of reason, and its thirst for rationality that produces lies, is openness to the insight and reality, however uncomfortable or distasteful or opposed to our own reasoned conclusions, that come from another.

Just how do you check your intuitions about right and wrong before they reach dogmatism?  Just how do you balance principle with learning?  I think consciously recasting one's visceral reactions into civil and temperate speech may be a start. 

More below the fold.

Last Saturday afternoon, I went to a session of an academic program at a well-regarded law school in my neighborhood.  I didn't stay long. As I described it to my next door neighbor (himself a well-regarded theorist in the physical sciences also at a school in my neighborhood) as we split a bottle of moderately cheap red wine, what was supposed to be social science (presented by someone who was supposed to be a "star") struck me as normative conclusions supported by statistical correlation to arbitrary and normative assumptions.  Moreover, the normative assumptions struck me as borderline offensive (it wouldn't be a far stretch to say that, say, Jack Welch, was put into the same analytical category for sociological purposes as, say, Heinrich Himmler).

As I drifted into a pinot noir induced fog, I wondered what I might have said had this been a lunch presentation in our faculty dining room.  What do you say when you think something is absolutely wrong-headed, indeed, even hokum?  I am pretty sure, without resorting to ad hominem, I could have suggested that perhaps there were some flaws in the attribution of characteristics in the assumptions that might have an effect on the conclusions.   But I don't think I would have needed to make the point by imputing anything into the mind or actions of the speaker. 

I typed "academic civility" into Google, and came up quickly with this interesting little post by someone who is apparently a young academic dean at a community college:

Apparently, a community college in New Jersey briefly floated a policy to encourage 'civility' that was anything but. The provisions were: 

1. Honesty, integrity, and respect for all will guide my personal conduct.
2. I will embrace and celebrate differing perspectives intellectually.
3. I will build an inclusive community enriched by diversity.
4. I am willing to respect and assist those individuals who are less fortunate.
5. I promise my commitment to civic engagement and to serve the needs of the community to the best of my ability. 

Yes, they overshot. I'd say, comically so. (Number 2 is my favorite. “I celebrate your staggering wrongness! I embrace your breathtaking, fundamental category error!”) But there is some value to the idea of civility that apparently animated the original idea. If we understand civility as something like “the rules for participating in the organization,” then it seems reasonable to me to go beyond “I know it when I see it.” The mistake wasn't in trying to write it down; it was in absurdly overreaching. 

My proposed code of civil conduct for higher ed, or speech code, if you prefer: 

I will separate the speaker from the speech.

It seems to me that there are at least several reasons in academia for temperate speech, even when facing staggering wrongness or breathtaking fundamental category error, and they are not all that different from the reasons we might suggest in other non-academic settings. 

    (1) You can make the point without the ad hominem.  Indeed, the point is stronger without the ad hominem.

    (2) The intemperateness says more about the critic than it does about the target of the criticism.

    (3) The intemperateness may shut down discussion altogether, or chill creative thinking in a way that blunt but temperate criticism does not.

    (4) "What you do speaks so much louder than what you say."  I suppose it's possible that some of us are teaching students who will go off to pursue careers in fields in which prefacing your remarks about someone else's argument with something like "you are a toad-sucking scumbag who obvious misses the point in everything you read" is SOP. Most of us don't, however.  I'd hate to think there was a spillover from academic debate to teaching style.

I am hardly suggesting that one take a measured view of the espousal of hateful things.  But as I learned from a wise mentor in the academy, there is something called the principle of charity of interpretation, and even if it weren't the right thing to do, deontologically speaking, it makes sense from a utilitarian debate standpoint because if you rebut the weak interpretation, you are open to the argument that you didn't understand the strong one!

Anyway, what's the thread behind this long ramble?  Arrogance, incivility, and self-deception all stem from "it's all about me." They are the antithesis of learning.  I suppose there is somebody in the world whose contribution to human flourishing entitles them to arrogance, incivility, and self-deception, but I have yet to identify any candidates. 

Plug: New Video Promotes Tulane Law School Post-Katrina

The message seems to be that the parts of New Orleans affecting students, and Tulane Law School itself, are back strong.  Here is the new video.  I have been noting that reality on this blog for over a year now, since we suspended classes for a semester in 05 and got all caught back up by summer 06.  Our recent classes and hiring are top notch by every measure -- and show no signs of post-Katrina regression.  But stereotypes and assumptions die hard, and it is impossible to go to an academic conference without somone in the elevator asking  if we are having classes yet.  (I want to say, "Yeah, since January 2006, and our 06 graduation featured former presidents Bill Clinton and George Bush, plus Ellen DeGeneres in a bathrobe.  You?")  Anyway, this youtube-style video makes the point well.  And here is a campus-wide slideshow.  (I am not on either show, so this is not directly a plug for me.)

But even if a reader has no interest in Tulane or New Orleans, or is already studying law elsewhere, I still recommmend our summer school in Spetses, Greece, where I will teach Comparative Legal Profession.  My former pics from the program are here.  (This is a plug for me.)

[Alan Childress]

The Last Lecture

Posted by Jeff Lipshaw

Jeff Zaslow has a moving story in today's Wall Street Journal about the "last lecture" of Prof. Randy Pausch at Carnegie-Mellon, who is forty-six years old, has three small children, and has terminal pancreatic cancer.  I can't imagine what courage and zest for life he must have.  What a way to see it tested.

Zaslow introduces the story as a particularly poignant and non-academic example of something gaining some currency:  the "'Last Lecture' series in which top professors are asked to think deeply about what matters to them and to give hypothetical final talks.  For the audience, the question to be mulled is this:  What wisdom would we impart to the world if we knew it was our last chance?"

This strikes a familiar chord, and perhaps more so if one has spent most of one's life chasing lucre instead of knowledge.  With a sigh, the Type-A lawyer or business person reflects, "you know, nobody ever says on their deathbed, 'I wish I had spent more time in the office.'"

What would you say in your last fifty minute lecture?

UNLV, Boyd School of Law is hiring!

Posted by Nancy Rapoport. 

I've blogged, on my own site, about the Boyd School of Law (see here for my latest post about Boyd).  Well, I'm on the faculty appointments committee this year, and Jeff very kindly said that I'm allowed to post our ad.  Please see below for our ad, and please consider applying.

UNIVERSITY OF NEVADA, LAS VEGAS—WILLIAM S. BOYD SCHOOL OF LAW invites applications for at least one tenure-track Associate Professor or tenured Full Professor of Law position, with appointment to begin with the 2008-2009 academic year. We have substantial flexibility in subject matter interests, with special interest in clinical teaching. We seek candidates with excellent academic records and experience and who have a strong commitment to scholarship and teaching. Candidates must have earned a JD from an ABA-accredited law school or an equivalent degree. Applicants for Full Professor must have records of substantial accomplishment and qualifications sufficient to be awarded tenure. Salary will be commensurate with the labor market. This position, like all faculty positions, is contingent on funding. Application review will begin immediately. The Boyd School of Law is a fully-accredited public law school in state-of-the-art facilities at the center of the UNLV campus. We have a diverse faculty of new and experienced legal educators drawn from top institutions. The Boyd School of Law has 473 students enrolled (346 full-time, 127 part-time) and 41 full-time faculty. For more information on the Boyd School of Law, see our website at http://www.law.unlv.edu/. UNLV is a premier metropolitan research university located in the nation’s fastest growing city. It is the state’s largest comprehensive doctoral degree granting institution, with 27,000 students and more than 850 full-time faculty. UNLV provides traditional and professional academic programs for a diverse student body and encourages innovative and interdisciplinary approaches to teaching, learning, and scholarship. For more information on the University, see the UNLV website at http://www.unlv.edu. Applicants should submit a letter of interest, along with a detailed resume, three professional references, and off-prints of your published works. Contact: Professor Christopher L. Blakesley, Chair, Appointments Committee, UNLV—Boyd School of Law, 4505 Maryland Parkway – Box 451003, Las Vegas, NV 89154-1003. UNLV is an Affirmative Action/Equal Opportunity educator and employer committed to excellence through diversity.

Character Screening for Fitness to Practice Law and the Playboy "Controversy"

Posted by Alan Childress
Over at Discourse.net, Miami's Michael Froomkin asks, "Does Posing Naked for Playboy TV Have Anything to Do With Your Fitness to Practice Law?"  In a word, No, says he.  Despite all the hype and hypothetical questions about the effect on bar admission, particularly at WSJ Law Blog, of one Brooklyn Law Student's posing, Froomkin has it right that protected First Amendment activity cannot be the basis for denying bar admission.*

Most of the WSJ comments (61!) also say it's about judgment and being taking seriously, not the NY bar screening process.  [Though one nicely asks the real question buzzing around law faculties these days:  "Did she use a laptop in her law school classes and was it online?"]

Even more insightful is Froomkin's ending:  "...well, really, who in the end cares?" 

Correction:  The photo left is of Froomkin, not the Brooklyn Law Student. LPB apologizes for the error and any initial confusion.

Froomkin has an even better post (admittedly unrelated to this blog), quoting a 1797 U.S. treaty with Tripoli and Barbary promising not to use religion as "pretext."  A unanimous Senate approved it, and this part, all read aloud:

Art. 11. As the Government of the United States of America is not, in any sense, founded on the Christian religion; as it has in itself no character of enmity against the laws, religion, or tranquillity, of Mussulmen; and, as the said States never entered into any war, or act of hostility against any Mahometan nation, it is declared by the parties, that no pretext arising from religious opinions, shall ever produce an interruption of the harmony existing between the two countries.

-------------

*But cf. Brad Wendel's excellent post (and comments) on Matthew Hale and bar prediction of unethical acts, linked here, e.g., for racist and sexist rants (now arising because of  "anonymous" xoxohth posts).  I still think the Playboy TV example would be distinguished from prior cases of denial where there is a common thread Brad sees:  "The bar committee was able to characterize speech as evidence of a propensity to violate the norms governing the legal profession." 

UPDATE:  More from Brad here, and he's tied it to the Playboy TV non-controversy:  "[E]ven given these deficiencies in the [C&F] process, there's no way the applicant in the Playboy videos should have any difficulty with the character and fitness process."  Still, he is right that Eugene Volokh and others overstate the First Amendment protection that state bar C&F committees (and courts) traditionally afford in matters more related to the practice of law, e.g., Hale, filing complaints, oaths of allegiance.

Conley on Racial Equity in Private Firms

Posted by Jeff Lipshaw

One of the wonderfully rewarding aspects about jumping into academia after so long in the practice is to realize that part of the job description of professional teacher is (or should be) to be a professional learner.  (That we are professional learners even in business was part of my management philosophy, so perhaps that says something, but I don't know quite what.)

That's an introduction to my recommendation of a tremendously interesting article, methodologically and substantively, by John Conley (North Carolina, left), who I featured in a post yesterday.  The article is "Tales of Diversity:  What Lawyers Say About Racial Equity in Private Firms," 31 Law & Social Inquiry 831 (2006).  Professor Conley is an anthropologist and law professor, so the first part of the paper is an explanation of the scholarly discipline of ethnographic narrative - what you can learn and just how much you can generalize from what people say about their culture - in this case, lawyers about their jobs and their firms.  The second part is a report on what lawyers in different kinds of firms actually say about racial diversity.  The abstract follows below the fold, but as Larry Solum would say: download it while it's hot!

Here is the abstract:

This paper reports on what a narrative study of the legal profession has revealed about diversity in private law firms. Since 1995 I have taught a course about the legal profession that revolves around interviews with lawyers representing the breadth of the legal profession. Over nine iterations, I have completed over 100 such interviews. They have yielded narratives on such topics as how various kinds of practice groups work, how legal careers evolve, how lawyers' professional and personal lives interact, how lawyers feel about their profession, and what they believe are their most difficult moral and ethical challenges. The topic of diversity in various practice settings has also figured prominently in most of the interviews. All of the lawyers interviewed have expressed enthusiasm for diversity as a value to be pursued. However, almost without exception, private-firm lawyers have admitted that their respective organizations have made unsatisfactory progress. When asked to analyze their firm's performance, most provide explanations that do not augur well for the diversification of the private bar in the near future. Their narratives implicate as causal factors the history of individual firms, the nature of intimate business associations, the profession's dominant hiring and promotion models, and, in most cases, the absence of external pressures to diversify

Moonlighting Law Professors Bring "The Wow Factor" to Law Firms

Santa Clara Law School's Eric Goldman blogs here on reports that some law firms are adding marquee law professor names as "Of Counsel," with an eye towarding creating "a 'wow factor.' "  Says a Quinn Emanuel partner about affiliating with Kathleen Sullivan:  "Honest to God, having Kathleen with you at a meeting is like walking in with Mick Jagger."

I am more interested, obviously, in that affiliation down the road with some law prof for whom, honest to God, dragging him to a meeting is like meandering in with Keith Richards.  Until then, I simply note that my own affiliation would bring the Woah Factor (right).  [Alan Childress]

UPDATE:  Here is the law.com story on such consulting.

New Carnegie Report Calls for More Law School Attention to Training on Practice and Ethics

How to become a more competent and ethical lawyer?  Says Carnegie, "Practice."

Not really.  There is actually a call for the law school to make a difference in the realistic training of young and aspiring lawyers to become socially responsible and focused on clients rather than just case law.  In a new report issued this week, the Carnegie Foundation for the Advancement of Teaching seeks more academic training in practical and ethical skills.  Their press release, Carnegie Examines the Education of Lawyers and Calls for Change, is here.  The full report can be ordered ($40) from Wiley here, and a 15-page summary in PDF format is down-laudable here.

As noted by the Chronicle of Higher Education, "By focusing on cases rather than clients, law schools offer too little practical training or grounding in ethics and social responsibility, the Carnegie Foundation for the Advancement of Teaching concluded in a report issued on Thursday."  [Alan Childress, with HT to Ray Diamond]

Winning, Burn-Out, and Other Random Thoughts in an Airport on Sunday Morning

Posted by Jeff Lipshaw

My philosophical musings several weeks ago on the joy of winning were tested severely last night as my beloved Wolverines fell to Ohio State 42-39.  I remember watching the Stanford moot court finals many years ago (in which, as I recall, Lewis & Clark Professor Jack Bogdanski, left, was a finalist) where one of the judges was the late A. Leon Higginbotham of the Third Circuit Court of Appeals.  Either in post-argument or pre-argument comments, the judge said "a well-prepared lawyer never loses; the client may not prevail, but the lawyer never loses."  Is it mere rationalization, am I getting more mature (unlikely if you have seen me teach!), or does the outcome just not matter as much to me as heart and valor, even in defeat, and respect for a great opponent?  Congratulations to the Buckeyes.  You earned it.

On a completely different matter, the New York Times Business section this morning has a profile on Philip Kent, currently the chairman and CEO of Turner Broadcasting.  What struck me was the peripatetic nature of his career, from ad sales in the media business, to producing and selling news inserts for TV stations, to being a Hollywood agent at CAA (of Michael Ovitz and Disney fame), to running a book publishing and video distribution business at Turner.  I don't think the track of the typical law professor's career encounters this, and perhaps it is just me, but I've concluded after all these years that spending an entire law career, as many do, in the same firm, doing the same kind of work, progressing in the level of oversight and client contact, is still not a natural act.  There was kind of an unwritten rule in the corporate world that three to five years in most jobs was about the time it took to learn the job, do it well, and then begin the slide toward boredom (or in the extreme case, burnout).  I don't know if there is empirical data, but it seems to me that career angst - boredom, combined with attractive incomes that make it difficult to change - is relatively more common among lawyers than perhaps other professions (though I wonder what keeps filling cavities as a dentist new and fresh year after year).  But it always seems like the ex-yuppies running a B&B in Maine were big firm lawyers.

Follow Up to Hricik Post on Facial Prosecutorial Misconduct

Posted by Alan Childress

Over on Legal Ethics Forum, David Hricik (Mercer) had previously posted, in "Naked Prosecutors, Oh My!," about a Ohio prosecutor arrested for wandering around his building without legal briefs.  Apparently a prosecutor in Seattle (or two) read David's post and determined to one-up the merely-naked Ohio prosecutor.  A post on CrimProf Blog reports (from the Seattle Times) that he (but not she) was arrested after patrons complained they were having sex in a bathroom stall at Qwest Field during a Seahawks game [editor's commentary: eww].  He is a senior deputy prosecutor, not unlike the title held by "Jack McCoy" (Sam Waterston) in Law & Order. Because NBC producer Dick Wolf always prides himself on taking the show's plots straight from recent headlines -- and fearful that the actors including Fred Dalton Thompson are method-trained Stanislavskians who always do their research before playing a role -- we at LPB are determined to simply 'hold it' at any future sporting event to avoid hearing that donk-donk musical cue coming out of the stall next door.

"Being Right Is Not All It's Cracked Up to Be": A Reply to Professor McGowan (with a nod to Professor Schneider)

Posted by Jeff Lipshaw

David McGowan (San Diego) over at Legal Ethics Forum has a thoughtful response to my earlier post on law and morality - in particular, my cryptic concern over the impact of what I called "reducto-empiricism" as the underlying world view of young lawyers going out into the world.  If I may fairly summarize it, David contests whether there are in fact any articulable moral universals that are useful in resolving legal-ethical dilemmas.  Indeed, as the human race has not been able to agree on any moral universals (except maybe one or two like "don't kill so many of your society that your existence is threatened") in all of recorded history, appealing to them constitutes a "crutch substituting for analysis."

David, of course, hits at the very heart of my dilemma - which is that I like the concept of Kantian derived universalisms, but I can't justify any of them, except the concept itself, which seems to me to invoke some kind of first principle, even if I don't know what it is.  (For that reason, people call it God, but that's way too concrete for me.  See my Yom Kippur post.)

One of the great benefits of Kantian schizophrenia is that I can critique undue empiricism, but I can also beware of fanaticism or dogmatism, and call it transcendental illusion - the mistake of belief for truth. (In my view, even Kant erred if he thought he had derived "Truth," say about lying, from the categorical imperative.  Reason can give you an ought but that is beyond or apart from truth or falsity.)

David called himself a Humean empiricist, and I'd certainly agree on form.  If you have read Professor McGowan's work, you know that, like Hume, he has a charming and witty skepticism about there being any right answer, so at least he feel pretty good about the law not necessarily giving us one.   (Recall that it was Hume's skepticism that shook Kant from his "dogmatic slumbers.")  His pragmatism is a fair successor to Hume's congeniality as the standard by which we conduct ourselves.  I think it gets to the same place Larry Solum would get in his aretaic philosophy - no sense worrying about the metaphysics, but trust that virtuous people (virtues being derived inductively from what has generally been considered good) make virtuous decisions.

More below the fold.

Indeed, if I thought reducto-empiricism led to the kind of thoughtful wrestling with ethical issues employed by Professor McGowan, I wouldn't worry about the world too much.  I'd be happy that there was modesty about asserting universal truths.  Indeed, Law as Rationalization was about exactly that:  how is it that we distinguish the power of our own self-justification from a genuine searching for the right thing to do?   I think we are both trying to walk the line between polarities - David just over there on the empirical side, and I just over here on the transcendental side. (If he were really that pragmatic, he wouldn't be a philosopher.) 

But if there can be too much universalizing (dogmatism or transcendental illusion), can there be too much reducto-empiricism? Yes, (1) if it is an analog to strident atheism over civil agnosticism, or (2) if it reduces completely to valueless cynicism and despair.

I referred to legal instrumentalists as becoming red-meat litigators; it turns out they are red-meat negotiators.  I happened to get Bill Henderson's SSRN Law & Society Journal e-mail a little bit ago, and the paper by Andrea K. Schneider (right, Marquette) and Nancy Mills entitled What Family Lawyers are Really Doing When They Negotiate caught my attention (forthcoming in the Family Law Review).  While the focus of this paper is on the behavior of family lawyers, even the more general conclusions about lawyer-negotiators are striking.  The data indicate that in twenty-five years (1976 to 2000), the number of lawyers perceived as being adversarial/competitive versus problem-solving/cooperative has risen from 27% to 36% as a percentage of the total bar, and the number of perceived ineffective lawyers has risen from 12% to 22%.  Moreover, the aggressive lawyers are getting "more negative and nastier.  Twenty-five years ago, the effective competitive lawyers still had plenty of positive adjectives describing them, including convincing and experienced.  Today, that situation is quite different - the top seven adjectives describing adversarial lawyers are stubborn, headstrong, arrogant, assertive, irritating, argumentative and egotistical."

I want to propose that there is a shrinking middle ground between "values as truth" to the extreme, on one hand, and consequentialism to the extreme, on the other.  While undue regard for "values as truth" may have marked the legal academy and the profession at one time (certainly before Holmes' The Path of the Law and the Legal Realists), it is certainly also a fair to observe that law as reductive social science has been the dominant approach over the period of the data in the Schneider & Mills paper.  David suggests one should "be prepared to defend one's views on the ground of one's own judgment," employing analytical tools like decision theory, instead of "laying it off on some universal you have no choice but to follow." While we may be humble about our ability to state the universals, we sense at least the notion of a first principle that by definition has to be universal.  Recall Ivan Karamazov's insight into first principles or universals:  if there is no God, everything is permitted.  That, I think, is consistent with a view that it is permissible to be stubborn, headstrong, arrogant, assertive, irritating, argumentative and egotistical, all in the cause . . . of being right.

"Them": Availability Heuristics and the Scholarship of Corporate Demons

Yesterday in my Business Enterprises I class, we moved into the fiduciary duties of corporate directors, a subject close to my heart, having counseled a public company board from 1999 to 2005, a period that spanned the burst of the Internet bubble, the Enron fiasco and its ilk, the passage of Sarbanes-Oxley, and the New York Stock Exchange's adoption of the governance standards in it revised listing requirements.  During that period, we did an partial IPO of an wholly-owned subsidiary, resulting in a controlled public company listed on NASDAQ, and later acted on behalf of all of the shareholders of the subsidiary to sell it in a cash-out merger.  We also pondered significant strategic redirection, saw the resignation of a CEO, and then merged the company out of existence.

So, as I observed to my class, I have perhaps a harder time seeing corporate directors as "them," and prefer to think not of directors as demons, or even as Richard Posner's faceless and automatonic "rational frogs," but as real human beings faced with difficult choices, and without the benefit of the hindsight that either litigators or law professors bring to the table.  Perhaps that is why I was taken with the even-handed approach of Professors Rasmussen and Baird in the article I highlighted several days ago.  I also suggested to the class, whether someday they are in the position of counseling, defending, or suing directors, they would be well served to appreciate the complexity of the ex ante decisions (whether or not it is a calculation) facing corporate directors.  Indeed, my pedagogical point is that this is at least some basis for the deference that courts give to directors, absent breach of the duties of care and loyalty, for actions taken in good faith under the business judgment rule.

Should we look at corporate directors with the glass half full or half empty?  I confess, having watched a white male conservative Republican director (one of our curmudgeons) argue that our non-discrimination policy should include a ban on discrimination on account of sexual orientation, and similar displays of independent-mindedness against type on a fairly regular occasion, I incline toward the former.  But I cannot deny the reality of what seems to me good judgment gone awry in what viscerally seems to be a non de minimis number of backdating cases.  (I have already expressed my view on that issue:  I would have criticized a general counsel who did not go beyond the strictly legal in pointing out the issues of truth-telling - or its opposite - in undertaking the practice.)

More below the fold.

So, as I was thinking about this before class yesterday, I got onto the SEC website in a frenzy to see if I could find out quickly the number of public companies in the United States, defined as those required to make annual and quarterly filings on Forms 10-K and 10-Q under the Securities and Exchange Act of 1934.  (By the way, that would include companies without public shareholders, but with public debt, for example, under Rule 144A.)  I couldn't find the number, but I did find out that Yahoo reports on over 9,000 companies trading on the NYSE, AMEX, NASDAQ and OTC exchanges.

The question is to what extent the scholarship in this area is affected by the availability heuristic.  (I don't care for behavior economics when presented as the way to a unified theory of human behavior, but I do think its tools provide tremendous insight into aspects of that behavior.)  As Jolls, Sunstein, and Thaler observed in their seminal Stanford Law Review article on law and behavioral economics:

A major source of differences between actual judgments and unbiased forecasts is the use of rules of thumb. As stressed in the pathbreaking work of Daniel Kahneman and Amos Tversky, rules of thumb such as the availability heuristic--in which the frequency of some event is estimated by judging how easy it is to recall other instances of this type (how "available" such instances are)--lead us to erroneous conclusions. People tend to conclude, for example, that the probability of an event (such as a car accident) is greater if they have recently witnessed an occurrence of that event than if they have not.

(50 Stan. L. Rev. 1471, 1477 (1998).)

It's not a stretch to say that Congress was overwhelmed by the availability heuristic in enacting Sarbanes-Oxley.  That's certainly a conclusion we may draw from Roberta Romano's canon The Making of Quack Corporate Governance (114 Yale L. J. 1521 (2005).)  As she observed, "the corporate governance provisions were not a focus of careful deliberation by Congress.  SOX was emergency legislation, enacted under conditions of limited legislative debate, during a media frenzy involving several high-profile corporate fraud and insolvency cases.  These occurred in conjunction with an economic downturn, what appeared to be a free-falling stock market [NB:  as I quote this on October 20, 2006, the DJIA has just closed above 12,000 for the first time ever], and a looming election campaign in which corporate scandals would be an issue."

So, as I mentioned a couple days ago, I was intrigued when I flipped through Professor Elizabeth Nowicki's The Unimportance of Being Earnest, recently posted on SSRN, which I interpret to advocate the gutting of the business judgment rule as it presently exists - i.e., that the judgment of the directors, taken in good faith, is presumed to have been taken in the best interests of the corporation and its shareholders, in the absence of fraud, illegality, or breaches of the duties of care or loyalty.  The particular manner of the gutting would be to recast the duty of good faith essentially as a duty of due care, the net result of which would something more akin to an ordinary negligence standard for director conduct than what is generally accepted as a gross negligence or egregious conduct standard under the BJR.

What caught my eye was not so much the proposed solution, but the statement of the problem:

The corporate landscape of the recent past is littered with corporate governance failures, corporate scandals, significant valuation depression, and disgruntled stockholders.  Enron went completely bankrupt – from shares of stock trading at $90 on August 23, 2000, to shares of stock trading at 22 cents on March 22, 2002.  And the Enron investors were not alone in their woes.  WorldCom investors suffered a similar fate as mismanagement and financial tomfoolery were revealed.  As did the investors in Tyco, Adelphia, and numerous other corporations.  This corporate upheaval did not only manifest itself in bankruptcies or financial ruin.  Rather, investors bore witness to sex scandals, executive gluttony, corporate lethargy, and outright crimes.  Hundreds of thousands of investors not only lost the stock they were counting on as their “savings,” to fund a new car or a child’s schooling, but they also lost the stock that was intended to fund their retirement (right around the corner for some investors).

If the denominator of the fraction for corporate scandal is, at a minimum, 9,000, I am also willing to concede that the numerator is larger than the three companies that Professor Nowicki cites.  I don't know how many companies have reported backdating issues (I don't count merely having disgruntled shareholders as putting a company in the numerator - most shareholders I ever met tended to fall on the dis- end of the gruntlement spectrum, even when things were going good.) 

Here is a call for empiricists!  Yea and verily, wade into the data and help us discover the truth!  Is my casual empiricism misguided, and should I conclude that I counseled, for all their human flaws, one of the few honorable boards left?  Or is the availability heuristic at work, albeit in the extended time that is appropriate to scholarly reflection (as opposed to frenzied and half-baked corporate legislation)? 

Teaching Future Board Counselors - World View?

Check back over the next few days as I will be blogging - in the Straddling series - on teaching corporate law to future counselors to corporate boards.  I am just now getting to Van Gorkom, Disney, Caremark, etc. in my syllabus, and I've been thinking about the world view implicit in The Prime Directive, by Rasmussen & Baird, on which I have commented previously, and that in The Unimportance of Being Earnest:  Reflections on Director Liability and Good Faith, recently posted on SSRN by Elizabeth Nowicki (I listened to Professor Nowicki give an overview of this paper at the Law & Society Annual Meeting in July as well).

To come:  reflections from my present academic perch on the good old days when I was counseling a corporate board. [Jeff Lipshaw]

Straddling: Reactions to Rasmussen and Baird on Corporate Governance

Posted by Jeff Lipshaw

It's Saturday afternoon and I could watch the Tigers-Athletics game over at Cooter Brown's or Fat Harry's or I can sit here in the faculty lounge and multi-task by following the game and reading The Prime Directive, posted last month on SSRN by Robert Rasmussen (Vanderbilt, left) and Douglas Baird (Chicago, right).  The paper has at least four things going for it off the bat:  (1) it is short; (2) it is highly readable; (3) it doesn't seem to be working off a political or theoretical agenda, and just wants to get it right; and (4) it makes a lot of sense.  Here's the abstract: 

Agency costs dominate academic thinking about corporate governance. The central challenge is to devise legal rules to align the interests of the managers (the agents) with those of the shareholders (the principals). This preoccupation is misplaced. Whether it is finding a baby-sitter or a dean, the challenge of hiring the right person dwarfs the challenge of aligning that person's incentives. The central task for corporate governance - its Prime Directive - is to ensure that the right person is running the business. In this essay, we suggest that the challenge of aligning the managers' incentives has been drastically overstated and the way in which legal rules affect hiring (and firing) decisions has been too often ignored.

Putting the emphasis on agency costs may lead to rules that slight what matters most. The current preoccupation with executive compensation runs the risk of inducing the board to worry more about the details of the employment contract rather than selecting the best person in the first instance. More important, the law can play an important role ensuring bad managers are fired. Once hired, all managers need to be mentored, monitored and, when necessary, replaced. There is little to suggest that a single entity is well-situated to perform all three. There is tension between the roles of confidant and policeman. Here, debt contracts play a crucial and largely neglected role. Covenants in debt contracts can insure that underperforming managers are called to task. Private debt holders' role in monitoring a business and ensuring that underperforming managers are replaced may be as important as the market for corporate control.

The fifth thing going for it is that the descriptive portion (I'll get to the prescriptive portion below the fold) comports with my own experience on the tensions that might exist between a board and a CEO.  (See "Background of the Merger" beginning at page 29 of the S-4 Registration Statement filed in connection with the merger between Great Lakes Chemical Corporation and Crompton Corporation.)  Board members are human beings.  I think the paper's attribution of perceived inaction to commitment bias is far more plausible than attribution by Bebchuk, Fried and others to capture of the board by the CEO.  There's an Occam's Razor aspect to this - does it make more sense that highly successful Type AAA directors are "captured" by another CEO, or that they are subject to the same bias as we would observe in any other group?  Capture is certainly a possibility - for all my regard for Sidney Poiter as a man and an actor, I wasn't quite sure what he would bring to the Disney board.  (I would have loved to see him stand up to Michael Eisner in the middle of a board meeting and announce:  "They call me... Mr. ..." Well, you get it.)  I agree with Rasmussen and Baird that capture ought to be the exception, not the rule.

For a little more, go below the fold.

I have more reservation about the prescriptive portion of the paper, which, consistent with Professor Baird's long-standing and iconic status in the creditors' rights area, suggests that the law somehow give lenders a place at the table in the board's deliberation over the retention or firing of the CEO.  The reservation is simple:  if, as the authors suggest, there is so little substance in the distinction between equity and debt investors in an enterprise, large institutional shareholders ought to have the same influence as lenders.  (Nothing in the securities laws prevents a large shareholder from bitching to the board about a CEO's performance, as far as I know.  Regulation FD deals with the flow of information in the opposite direction.)  Now it may be that large shareholders do not act like lenders unless they have very large positions, but I wonder if there is empirical work out there on the relationship between concentrated institutional ownership and CEO turnover.

(I would mention that the Tigers just scored two runs to tie the game up (go get 'em, Tigers!), but that would probably jinx them, so I won't.)

UPDATE (on Sunday, Oct. 15):  Well, I didn't jinx the Tigers.  It was probably a little bizarre that a grown man was jumping up and down in front of a TV in an otherwise deserted faculty lounge in an otherwise deserted law school at 7:00 p.m. CDT on a Saturday evening, but I don't care.

In looking at the post again, I realize I made an inadvertent pun about what the article had going for it "off the bat."  Let me add in retrospect, (a) the article does not come out of left field, (b) its position, in my mind, is right down the heart of the plate, (c) stylistically, it's a nice pitch, and (d) the topic is clearly right in the wheelhouse of both authors.   In short, a home run.

The Ultimate Blog Post: Backdating, Instrumentalism, the Good, Executive Compensation, the Right, Paris Hilton, and Delaware Law

Posted by Jeff Lipshaw

The front page of Thursday's Wall Street Journal features two stories as to which the horse is probably not only beaten (apologies to Ani Satz for this insensitve figure of speech) but has been sent to the knackers (why am I thinking of poor old Boxer?  "I will work harder" and "Napoleon is always right"): a redux of the general discussion of executive pay and the more specific discussion of backdating.

The debates continues to interest me, not so much for the specific criticisms and defenses of either, but for the gap between town and gown (with lawyers generally falling into a variant of gown).  While much in "town" values leave nothing to write home about (otherwise why would there be a Paris Hilton?), there's an underlying good sense out there somewhere.  Indeed, I wondered, looking at Brian Tamanaha's posts on his new book, whether his perception of "the spread of an instrumental view of law within the legal culture, concomitant with a loss of faith in the social good" is a thesis of intellectual history or social history.  I'd argue that Warren Buffett's use of the front page test to judge practices like backdating points to some shared notion of social right, if not social good.  The distinction here is between (a) the idea there is communal agreement on what makes all better off, and (b) the idea there is communal agreement on what is right, regardless of consequence.

More on this below the fold.

Let's look at the two juxtaposed articles on the front page of the October 12 Wall Street Journal.  The first was a story about how the effort to cause the market to limit executive pay through proxy disclosures backfired.  Instead of shaming executives into reduced pay packages, "[a]s it turns out, disclosure can push pay higher by revealing to CEOs what their peers receive.  Limiting one type of compensation often encourages new types of pay, such as stock options, which were pushed as a solution only to become tainted by scandal."  Even more interesting were comments from Charles Munger, the vice-chairman of Berkshire Hathaway, and long-time associate of Warren Buffett.  (Full disclosure:  I don't know Mr. Munger, but he and his wife Nancy have donated $45 million to my alma mater, the Stanford Law School, for new law student housing.)  Mr. Munger described executive compensation as "wretched excess" and says "he hears complaints from 'Republicans who grumble on the country-club porch' about the resulting political turmoil over the pay question."

The second was a report on more CEOs taking a fall over backdated options:  most recently, the CEOs of CNET Networks and McAfee, Inc. have stepped down after option backdating has been discovered.  More relevant to our little piece of the world here, GCs are taking the fall as well.

What does this have to do with "town versus gown" and instrumentalism?

It seems to me there is, out in the world beyond the academy, some shared notions of the social right that are more than mere instrumentalism, even though those shared notions may be buried in the otherwise unsightly moshpit of popular culture.

On one hand, the rich people on Main Street don't worry about the paradox or contradictions of a country club sensibility about taking care not to be too showy with one's wealth (either because it's just not right, because of some recognition that luck plays a role in the accumulation of wealth, hence noblesse oblige, or fear of unleashing just the kind of populist backlash we see now).  It's okay to be rich, but not too rich.  Or, it's okay to be rich, but not tastelessly rich.  The not-so-rich people on Main Street don't care about the contradictions.  I've said before that I think what passes for moral outrage on this is really a political argument about wealth distribution, and good old American populism.  In either case, nobody is seriously suggesting hugely radical solutions (we never get too close to killing the golden egg laying goose) - it's a debate about how much is too much.

A less reflective Mai