The Wall Street Journal-20080116-Best of the Law Blog - Excerpts from Recent Entries at WSJ-com-s Law Blog
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Best of the Law Blog / Excerpts from Recent Entries at WSJ.com's Law Blog
Structured Finance Proves
To Be a Vulnerable Area
With the credit markets convulsing and merger activity slowing, what, pray tell, is the fate of law-firm associates who serve the titans of Wall Street?
For sure, the most vulnerable are lawyers in so-called structured- finance practices. These are attorneys involved in the process of packaging assets such as mortgages, auto loans or credit-card debt into securities. But will layoffs creep into other practice areas as well?
In October, McKee Nelson LLP, a firm with a large practice in structured finance, encouraged its lawyers to take sabbaticals, consider changing practice groups or leave the firm. In November, Thacher Proffitt & Wood LLP, another such firm, initiated buyouts for 23 lawyers. Also in November, Clifford Chance LLP, a much larger law firm, laid off six associates in its structured-finance area.
The more surprising news came last week, as Cadwalader, Wickersham & Taft LLP -- the nation's fourth-most-profitable law firm, according to American Lawyer magazine -- laid off 35 attorneys, just under 5% of its lawyers. Again, the firm cited its large structured-finance practice as a reason for the downsizing.
Still, reports have yet to emerge of widespread layoffs at the nation's big firms.
Dan Weiner, co-chair of personnel at Hughes Hubbard & Reed LLP in New York, which has no plans for associate layoffs, says that young lawyers at firms with diversified practices are safer, but the business slowdown is something firms are keeping a close eye on.
"We expect the effects of this downturn to be more like a tornado than a hurricane," Mr. Weiner said -- "localized severe damage in specific practice areas as opposed to across-the-board destruction."
Mississippi Mix
An extraordinary game of "musical Mississippi lawyers" has emerged as a subplot in the judicial-bribery case against high-profile plaintiffs lawyer Richard "Dickie" Scruggs and a handful of others. (Pay close attention -- we recommend a legal pad and pen.)
When Mr. Scruggs, along with four others, was indicted in November on charges of trying to bribe a judge, he retained Joey Langston to represent him. Mr. Scruggs's son Zach, who was also charged, hired Tony Farese. Another co-defendant, Steven Patterson, retained Kenneth Coghlan. Then the withdrawals started. Mr. Coghlan withdrew from representing Mr. Patterson, who recently agreed to plead guilty to a conspiracy charge. Mr. Langston withdrew from representing Mr. Scruggs, and has now himself agreed to plead guilty to conspiring to improperly influence a different Mississippi judge in a separate case in which he was representing Mr. Scruggs.
Who is Mr. Scruggs trying to hire to replace Mr. Langston? Mr. Coghlan. Who represents Mr. Langston? Mr. Farese, who last week asked to withdraw from representing Zach Scruggs.
Who will represent Zach Scruggs? Attorney Todd Graves of Kansas City, Mo., Monday made an appearance on his behalf. If the name rings a bell, it's because Mr. Graves, a former U.S. attorney in Kansas City, made headlines last year when he said he was one of the federal prosecutors asked to resign by the Justice Department for political reasons.
"Zach Scruggs is a young man with bright future," said Mr. Graves. "I look forward getting to work on the case."
Fashion Police
It might be an issue of first impression in a U.S. court: Is an ascot a tie?
Last spring, the state courthouse in Milwaukee issued a rule ordering that "men will wear coats and ties and women will wear dresses, suits or pantsuits" to court. Last week, Warren Zier, a local prosecutor there, wore a red ascot to a court hearing.
Mr. Zier's sartorial choice roiled Judge William Sosnay, who said Mr. Zier's neckwear bordered on "contempt." Judge Sosnay, who had previously expressed his dismay with Mr. Zier's ascots, delayed the hearing out of frustration with the lawyer.
"This is an issue which I believe deals with the integrity of the court," said Judge Sosnay during the hearing, which was reported in the Milwaukee Journal-Sentinel.
Apparently, Judge Sosnay and Mr. Zier have settled their differences. Judge Sosnay couldn't be reached for comment, but Mr. Zier says he was never held in contempt and still wears ascots.
"I've been practicing in these courts for 24 years, and I've always been respectful of the court," Mr. Zier says. "I believe that an ascot worn with a suit and an appropriate shirt is respectful to the court."
This blog checked in with a haberdasher, who begged to differ.
"An ascot is not a tie," said Sandy Neiman, a spokesman for Paul Stuart, a high-end men's clothing store in New York. "It's part of a gentleman's wardrobe, and we sell plenty of them here, but we wouldn't recommend that a lawyer wear one to court."
