Partnering: The Future of Legal Services Has Arrived
Over 10 years ago, E.I. du Pont de Nemours and Company adopted a model for the procurement of legal services that is based on strict legal spending rules, including early case assessment measures, consolidation of law firms and service providers handling DuPont work, and implementation of numerous other cost-saving measures. The DuPont model, which is commonly referred to as "partnering," has become a platform for the efforts of an increasing number of companies to revamp their legal service expectations and implement changes that embrace partnering between in-house and outside attorneys. Despite the amount of time that partnering has survived and the increasing number of companies adopting a partnering model, most outside counsel still meet the concept of partnering with great skepticism. This skepticism is bred from both an inability to envision the future of the legal services market and the misconception that the sole goal of partnering is to reduce legal bills for corporations at the expense of law firm revenues.
Strategies to Enhance Cash Flow
Managing partners, financial partners, members of executive committees and administrators must devote more of their time today than in the past, to planning and managing their firms' finances and those functions that improve the cash flow. This article describes six aspects of law firm management and economics that the author has recommended to managing partners, financial partners, members of management committees and law firm administrators to assist them improve their firm's cash flow. These factors include: 1) cash flow; 2) a business plan; 3) budgets for revenues, expenses and client advances; 4) partner compensation; 5) a recommended new business and billing committee; and 6) partners' capital and borrowing.
Coverage for 'Restitution' Claims, Public Policy Notwithstanding
Insurance carriers frequently argue that when insureds face claims for "disgorgement" or "restitution," they need not defend or indemnify under a wide-range of liability policies. Carriers argue that, at least in California, public policy bars coverage for such claims including claims alleging failure to pay employees overtime, failure to pay taxes and penalties, and, in the intellectual property area, for disgorgement of "ill-gotten gains" or payment of a defendant's profits as a measure of damages. Insurance carriers advance this argument under various policies, including commercial general liability (CGL), directors and officers (D&O), employment practices liability (EPL), and errors and omissions (E&O) policies.
Collateral Damage: The Venture Capital Outlook and Potential
Joseph Schumpeter, in a celebrated phrase, noted that capitalism depends, for its foundation and longevity, on the "animal spirits" of the entrepreneurial class in a given region. Absent the turbo charge which the entrepreneurial culture has in the past projected into the U.S. economy, we in this country are in for an indefinite slide to economic stagnation. The national balance sheet is alarming, in the vicinity of insolvency; our manufactures are increasingly non-competitive; our labor force is displacing itself in favor of, eg, China, our currency is depreciating. I often use hypothetical benchmarks called (by me) the Fidelity Index ' an assumed list of factors professional investors are wont to use when rating and distinguishing between the debt of a AAA national credit and a Third World obligor state. Absent robust growth, look at our score card on the Index ' increasing debt as a percentage of GDP and GNP; balance sheet insolvency (in legal terms, insolvency 'in the bankruptcy sense'); extraordinary spending in the military sector growing rich/poor disparity; continuing barriers to women's rights; environmental indifference; wide spread tax evasion; attempts by both the Left and Right to politicize the judiciary; elections for sale; tainted election procedures; a state highly dependent on imported capital to recycle its debt.
The Hedge Fund Probes
On Sept. 3, New York State Attorney General Eliot Spitzer announced a $40 million settlement with Canary Capital Partners LLC (a multimillion-dollar hedge fund), Canary Investment Management LLC, Canary Capital Partners Ltd. and the managing principal, Edward Stern, for fraudulent trading of mutual fund shares. Because of suggestions that such schemes are widespread, the news has triggered a flurry of media attention and, more notably, significant regulatory inquiries, criminal probes and private class actions.
Court Rulings on Industry Attorney Fees
Depending on the circumstances and the law, parties on either side of an entertainment suit may ask a court for an award of attorney fees. Following are court rulings from recent months that deal with this and related concerns. In future issues, <i>Entertainment Law & Finance</i> will report on such relevant rulings in Attorney-Fee Updates.
In The Marketplace
Highlights of the latest equipment leasing cases from across the country.
