Here you have a two-fer: the Tribe unsuccessfully seeking to remove Joe Klock as counsel for Dexter Lehtinen.
Query -- did Joe receive an "unfair informational advantage" by representing a poor innocent damaged yacht owner by repping the ex-Tribal attorney in other matters:
In the underlying cause, it cannot be said, and no such allegation has been made, that Klock has obtained an unfair advantage in his representation of respondent in his defense of petitioners’ claims. Whether or not Klock obtains an unfair informational advantage in his representation of clients against respondent in other, unrelated matters is pure speculation at this time. Certainly, if petitioners believe at some point in the future that Klock has indeed obtained such unfair informational advantage in those cases, petitioners are free to seek Klock’s disqualification in the courts in whose jurisdiction the cases lie.
In other words, time will tell (it always does).
*"Resplendently Robed Ones" -- get with the lingo already!
But the deal was contingent on former partners accepting only 30 percent of their equity payments, an arrangement that has apparently collapsed:
The deal with Greenspoon Marder was contingent on 58 former Ruden McClosky equity partners accepting payouts of 30 percent on $3.5 million in outstanding equity payments, according to DBR. Ruden McClosky had stopped making payments to former partners in January, and many of those same partners faced a Monday deadline to reach a deal on the remaining $3.5 million obligation so that the agreement with Greenspoon Marder could proceed. The sale to Greenspoon Marder was structured as a sale, rather than a merger, so that the successor firm wouldn't acquire any of Ruden McClosky's liabilities, according to a lawyer familiar with the Chapter 11 case.
But the South Florida Business Journal reported Wednesday that the plan to pay dozens of former Ruden McClosky partners had collapsed prior to the firm filing its Chapter 11 petition, and that they would have to file claims with the bankruptcy court in order to recoup what they are owed. Lawrence Gordich, a former Ruden McClosky partner who left the firm last year to open his own shop in Miami, is representing a group of ex-partners in the case. Gordich did not respond to a request for comment.
You car crash gawkers can see the bankruptcy docket here and the Chapter 11 filing here.
Oh yeah, I forgot about this one(you'd be surprised how much business can get done with it).
So if you're like me and you have huge, heavy "books of business," you can apparently get hired by a big firm where nobody will ever try to steal or otherwise claim credit for your personal business books:
Law firms are hiring lawyers who can bring their "book of business," said Matt Gorson, president of Greenberg Traurig, which has offices in Miami, Fort Lauderdale, Boca Raton and West Palm Beach.
The firm has hired 20 lawyers so far this year, compared with 14 lawyers in 2010.
Other South Florida law firms have been adding to their legal staffs as well.
Holland and Knight has hired 15 lawyers so far in 2011, up from 11 in 2010 at its Miami, Fort Lauderdale and West Palm Beach offices. Morgan Lewis in Miami hired seven lawyers in 2010, and five so far in 2011; that compares with only one lawyer in 2009, said law firm partner Mark Zelek. Bilzin Sumberg in Miami has hired 9 lawyers in the past month alone, according to a spokeswoman.
Even some firms that were hard hit by the recession are adding lawyers. Fort Lauderdale-based Ruden McClosky, which specializes in real estate and land use, has hired seven lawyers in the past four months, according to a spokeswoman for the firm.
Ruden?
Yes, absolutely -- if your books of business are big you should head immediately to Ruden -- just ask Julie Kay!
I am pleased to provide you with the following confidential update.
Oh boy, that's a guarantee some angry partner will be emailing it around town.
Although we will continue to make sure that we are operating as efficiently as possible, we believe that our staffing level is now appropriate and do not anticipate that the firm will have any need to seek staff reductions in the near future and, hopefully, not for the long term. The inflow of new work is on the rise and our timekeepers are increasing their recorded time. This is a positive sign for improved revenues down the road.
Honey, I have great news! My boss says "our staffing level is now appropriate" and they don't anticipate "staff reductions in the near future."
Unlike last year, we're going to make it through Hannukah. Isn't that fantastic?
Financial troubles at Ruden McClosky are deepening, with the Fort Lauderdale-based firm suspending all capital payouts to former equity shareholders.
In a letter to about 50 to 60 former equity shareholders Saturday, co-managing partners Michael Krul and Carl Schuster said the firm was declaring a "moratorium" on all capital account repayments. The three-paragraph letter stated the firm would review the situation "later in the year."
The survival of the firm has been a subject of open debate for months. Sources at two law firms that were approached said Ruden has been shopping for merger partners.
Aren't the repayments a contractual obligation? How can you declare a "moratorium" on paying back a debt?
I love this consultant-driven trend to shorten law firm names -- you now have venerable institutions with long distinguished histories shortened down to within an inch of their professional lives -- Akerman, Ruden, Gunster etc.
Indeed, if you add an exclamation point you'd have a nice title for a Broadway play -- Akerman! starring Nathan Lane, previews start March 1......and coming this fall Ruden! with Christine Ebersole, tickets available September 1st....
Partner Roberta Stanley explains the thinking behind the change:
Stanley joined the Fort Lauderdale law firm 1996, back when at least a half-dozen partner names were stenciled on the door.
But over time as old partners leave and new ones join letterhead, business cards and logo designs have to be redone to reflect the changes. The cycle is never-ending and once again the firm has to reintroduce itself to the community.
So Stanley sought the advice of consultants and feedback from her co-workers. Simplifying, going back to basics was the consensus. The firm name now honors its founder: W. Michael Brinkley, who passed away this past November; and its managing partner, Philip Morgan, who joined the firm when it opened in 1975.
"It's what's in the best interest of everyone," said Stanley. "It's the future, to be recognized with a strong contemporary name." A streamlined website and logo accompanies the streamlined name.
The process became an opportunity for the firm to create a marketing campaign built around the rebranding, says Stanley. The new look and new name is more inviting and memorable, she says. That's important in attracting new talent as well as being transparent for clients.
Revamping the website allowed the firm to refresh attorney bios, ease navigation, and provide information.
Ok, I actually think this is an improvement, but why stop there?
The West Palm Beach office of Shutts & Bowen law firm has announced an end-of year expansion, bringing five new lawyers to the team. The firm has not yet named a fifth lawyer expected to join the practice at the start of 2011.
Among the arrivals are Ruden McClosky top producers real estate lawyer Steven Parson and business litigator Eric Christu. Both join Shutts as partners.
Call me crazy, but nothing shouts GROWTH louder than losing a top producer to a direct competitor.
In an interview last week, Krul said the firm is poised to grow and is looking to hire associates. He did not mention any impending layoffs.
Ruden, which was dominated by real estate work, was slammed by the recession, plagued with partner defections and the loss of entire offices, pay cuts and layoffs in the past two years. Ruden partners this year were asked to sign letters of guarantee to renew the firm’s banking line of credit.
The layoffs were announced Thursday morning. Employees were allowed to empty their desks before being ushered out. Ruden gave them severance packages including health insurance, a firm spokesman said.
"Some of these people were very, very senior," said a former lawyer who asked not to be identified. "I thought candidly to do this three weeks before Christmas was pretty terrible."
Ahh, a severance package -- makes a really nice gift under any staffer's Christmas tree.
Did I mention they're looking to hire associates?
Just for that, I'm subjecting you all to The Maccabeats.
The defendants who sought to recuse Bankruptcy Judge Olson have filed a second motion to recuse. They have also moved to disqualify Ruden McClosky and are seeking discovery on the circumstances of the judge's fiancé/spouse moving from Orlando to South Florida to go live with the Judge.
Thanks to the miracle of Scribd, you can read the second motion for recusal here, and the motion to disqualify is here.
Although many tipsters (thank you!) alerted me to this motion to recuse filed before Fort Lauderdale Bankruptcy Judge John K. Olson last week, I was reluctant to blog about it.
To be honest, I still am.
In any event, Judge Olson has now forcefully (in my view, persuasively) addressed the motion on the record.
He held an expedited hearing on the motion Thursday afternoon, and just entered his order denying the recusal request.
The order has a pretty good summary of the alleged grounds, which I won't repeat here, but Judge Olson really gets going when he discusses the type of "disclosure" the movants appear to be requiring of him:
The movants would have me engage in pointless record disclosure at the beginning of every matter in which Ruden McClosky represents a party:
For the record, I am getting married to an attorney who works for the Plaintiff’s firm. He is not involved in this case and recusal is therefore not required under 28 U.S.C. § 455(b)(5)(ii). He is a salaried attorney who has no interest which could be affected such that recusal is not required under 28 U.S.C. § 455(b)(4) or (b)(5)(iii). This record disclosure is required pursuant to § 455(a) and (e) to avoid any appearance of impropriety, but you are not entitled to withhold waiver because my fiancé’s employment is an insufficient basis for recusal under the case law applying § 455. Please confer outside of my presence and notify my law clerk when you are prepared to give your mandatory record waiver.
And this is no joke. This is quite literally what the movants are asking for. Their misunderstanding of § 455 was painfully betrayed at the August 26th hearing when movants’ counsel forcefully argued that I should recuse myself from any matter in which Ruden McClosky represents a party. Whether movants’ counsel did not adequately research the case law on this subject, or simply did not digest it, I do not know. But fiery, impassioned oral argument in the face of a glass mountain of precedent, with no acknowledgment of that glass mountain, and no hint at a good faith basis for a change in the law? This is normally sanctionable under Fed. R. Bankr. P. 9011(b). The only reason why sanctions are not warranted here despite this appalling lack of diligence is the “layman perception” rule.
Some of you.....less sensitive types....have objected to The Babs so early on a Monday morning, so I have found another, more hopeful clip to cheer our friends at Ruden on to renewed success.
There's so much good stuff in there you really ought to just break down and get a DBR subscription (not you guys still at Ruden -- you need to save some money).
Here's what a former insider said was the problem:
“They need to reach down in the ranks and get some young people,” said a former Ruden lawyer who did not want to be identified. “I think the problem is they refuse to change. Hildebrandt [the international law firm consultants] should be in there, cleaning the place out. The most critical thing a firm has to do is transition its leadership. That’s a critical failure.”
Hmm, wonder who he means -- firm leader Carl Schuster ran the ship for 23 years.
Could it be that all you guys did was real estate?
No way, according to partner Michael Krul, who's been there 35 years:
“I would say we did not make any mistake by not diversifying outside of real estate, period, end of story. If you’re going to be a major law firm in Florida, you better have a significant real estate practice. We have never failed to pursue other opportunities in other practice areas. We have hired intellectual property lawyers for 15 years. We have a very vibrant health care practice. The most available and strongest part of the economy has been real estate.”
So what was the problem, smart guys?
Of course:
The real problem, according to firm leaders, was the firm culture — essentially, Ruden was focused on being “nice guys.”
Isn't that always the problem?
Well, no more Mr. Nice Guy:
Some of the lawyers might have left after being asked to sign personal guarantees, Krul and Schuster said. “I think if you were already on the fence, you might not want to make the commitment,” Krimsky said. Krul said Ruden was asked for the personal guarantees after the firm needed to draw on its line of credit more heavily in the first two months of 2009 than in prior years. The assumption was the economy would turn around by early this year and they’d be able to pay the money back. That didn’t happen. When the line of credit came due in January, the firm wasn’t able to pay it off. So the bank — now under new ownership and unfamiliar with Ruden — requested the personal guarantees, Krul said. Ruden approached other banks for a line of credit, but they all wanted the guarantees, he said. Eighty to 85 percent of the lawyers who were asked to sign did, but no pressure was put on them to do so, firm leaders said. Schuster won’t say how much is owed except to say it’s “paltry compared to the size of the firm.” A law firm consultant who did not want to be identified said it is highly unusual for a bank to require personal guarantees of lawyers, and the odds are against a firm surviving after such a “critical juncture.” “I think that both people inside and outside the firm know that and sense that,” the consultant said. “Having partners sign guarantees is not in the mainstream at all. They need to look at what can be done to salvage the firm.”
Notwithstanding all this, Ruden -- believe it or not -- is in acquisition mode:
“Ruden is looking to acquire, not be acquired, if the right opportunity presented itself,” he said.
Right, like acquiring a firm with paying clients, a big line of credit, streamlined and well-run operations, this is just off the top of my head.......
Hi folks, I hope everyone gave something back yesterday and did a mitzvah of some kind for somebody else.
I'm going to work on one of my New Year's resolutions and go at least a day (part of a day?) and try to only write positive things, like how this Time Magazine story on Scott Rothstein really makes us all look credible as a legal community:
Scott Rothstein is your typical South Florida wannabe. Obnoxiously flamboyant by most accounts, the Bronx-born Fort Lauderdale attorney had to have the flashiest Rolexes (so he bought a local boutique watch shop), the most houses (luxury mansions and condos from Manhattan to Morocco), the hottest cars (Rolls-Royce, Lamborghini) and the coolest yacht (an 87-footer). He had to leave the heftiest tips, usually at the upscale restaurants he co-owned, and schmooze the most powerful politicians — like Florida Governor Charlie Crist, for whom Rothstein bought a $52,000 cake, as a contribution to the state's Republican Party, on Crist's 52nd birthday in 2008.
Good thing there are no other lawyers in town who act like that.
Remember that post from Friday which detailed efforts by RRA lawyers Steve Lippman and Riley Cirulnick to get an emergency enlargement of upcoming deadlines in a matter pending before Judge Cooke?
If you'll recall, Matthew S. Nelles at Ruden McClosky opposed the requested enlargement, basically arguing that the discovery deadlines date back to April and the RRA lawyers were dilatory in a number of respects and should have completed the discovery well before the whole Scott Rothstein stuff broke.
(Matt, if I missed something please feel free to chime in).
Well here comes the reply, filed Monday, which provides further insight into the difficulties faced by the RRA lawyers still at that firm trying to service clients:
GFM is accurate that ACE/Mr. Bennett/Ebway's counsel was "incommunicado" for the period their firm was undergoing this upheaval. Response at p.1. This is precisely why the extensions sought are appropriate. A receiver was appointed and questions about what counsel could and could not do had to be addressed. The computers were down; no email, no word processing, no research capability. Counsel are looking for new homes and making arrangements to move there. The short extensions sought under these circumstances are more than justified.
In a footnote these lawyers also note that Monday, the day of this filing, RRA's "entire computer system (including emails and phone) were disabled for approximately 2-3 hours."
Incidentally, it looks from the certificate of service that Steve and Riley landed or are landing over at Arthur Rice's firm.
Good luck fellas.
Oh, I almost forgot -- I managed to unearth a rare photograph of me taken with Scott and Kim Rothstein at an event we all attended last year.
Enjoy!
UPDATE -- Judge Cooke granted and denied the motion in part. She granted the enlargement as to the summary judgment deadline, but agreed with Matt as to the discovery deadlines, finding no causal relationship between the Scott Rothstein fiasco and failing to complete discovery within the court-ordered deadlines.
The roots of the discrimination case began when Young and 55 other plaintiffs sued BellSouth, alleging failure to promote blacks to management. Their attorneys at Ruden McClosky settled the case for $1.6 million with BellSouth in 1997, according to an exhibit accompanying the malpractice lawsuit filed against Becker & Poliakoff on behalf of Young. Plaintiffs split $300,000, or about $5,000 each. The plaintiffs later learned the settlement agreement called for Ruden to receive $120,000 a year for four years, enter a consulting agreement with BellSouth and agree to file no employment cases against the company for a year. Angered by that outcome, the plaintiffs hired Becker & Poliakoff to sue Ruden for malpractice and breach of fiduciary duty. Ruden settled for $8 million in 2002, and the proceeds were distributed among 54 plaintiffs, according to memos that became part of the court record in Young’s malpractice case against Becker & Poliakoff. Carl Schuster, managing partner of Ruden McClosky, declined comment, citing a confidentiality agreement with all parties. “We have been sworn to secrecy,” he said. “It’s bad enough that Becker & Poliakoff got hit with a $4.9 million judgment. We have a settlement agreement, and I could be sued for violating it by saying anything.”
So Becker's firm got involved in order to sue Ruden for malpractice, which settled for big money, and then itself got sued for malpractice.
A few things interested me about the story.
One -- B&P's alleged net worth:
Additionally, Palm Beach Gardens forensic economist Bernard Pettingil Jr. testified about Young’s projected wage losses at BellSouth. He estimated Becker & Poliakoff’s revenue for the last five years totaled $49 million per year. Zobel asked for Becker & Poliakoff’s total net worth, which the expert witness estimated to be $10 million.
They're only worth about 10 million, after taking in $49 million per year for the last five years?
Also, consider the settlement negotiations:
In mediation, Becker & Poliakoff offered to settle for $25,000, but Young walked out, Zobel said. A week later, the offer was raised to $100,000. In trial, it rose to $500,000. By closing arguments, Becker & Poliakoff offered $900,000, and Young turned them down, Zobel said in an interview. Jurors awarded Young $4.9 million, including $4.5 million in punitive damages and $394,000 in lost wages on Sept. 16. The punitive damages are especially harsh for Becker & Poliakoff as malpractice insurance generally does not cover these types of damages.
25k at mediation?
I know it's hard to value punis for settlement purposes, but these are very experienced lawyers and they didn't evaluate and quantify this risk? Or if they did they couldn't bring themselves to offer more than $100k before trial?
I also like Alan's explanation of what went wrong:
“Apparently, the jury did not believe me, the supervising lawyer who no longer works for us and came from Mississippi to testify and the written documents that supported everything we said,” he said. “Instead, they believed a rogue lawyer who had been disbarred.”
Hi kids, it's Monday all over again -- hope you had a nice three-day weekend, celebrating the violent, bloody birth of our nation -- plus hot dogs and fireworks!
Did you catch this story by Alana Roberts on more cuts at Ruden?
I like this part best:
The attorney said talk at the firm is that Ruden is $4 million to $6 million behind its budget goals for the year. The attorney said morale at the firm has declined because of the job and pay cuts and uncertainty about whether there will be more and added that many of the firm’s lawyers are searching for other jobs. “Everybody from the bottom up thinks it’s a matter of time for them; you don’t know what to believe,” the attorney said.
Now that's the kind of work environment that brings out the best in an attorney -- uncertainty, rumors, fear, a sense of impending doom -- keeps people on their toes, I always say.
