Friday, August 29, 2008

Time May Be Money, But No Time To Think May Cost You More Money

In my bio, I said that one of my objectives was to get you to think about things that the preoccupation of your careers and family duties would prevent. Today, I realized that time to think might be more scarce than I might have imagined. It just may be that the frantic pace of our lives to increase productivity might actually start to become counterproductive when the consequence of the pressure to produce begins to preclude our ability to think about what we are doing.

For those of you who do not know—I am a big time tool guy. Not only do I have the full panoply of wood working machinery, commercial quality of course, but I also have a metal lathe, welding equipment etc. During my career I did a lot of work with my tools, designing and building cabinets and furniture among the numerous other repairs and improvements that a house requires.

In the last 10 years or so of my formal working career I did less and less of this work and the jobs requiring attention around the house accumulated. When I retired the jobs needing attention was overwhelming. In addition, I was older, and the ability to use brute force to move things was not the alternative it used to be.

Have you noticed the change in the profession the last 15 years or so—the fact that you appear to have less time to think about what you are doing because of the pressure to get it done or is just me?

Well today I was tackling the repair of my 100+ year old stable (really a shed) converted to a workshop. Rafters had to be replaced—and there I was with 12 ft water-soaked rot resistant 2X6s. Brute force to get these into place under an existing roof was not an option. But do you know what I had—I had time to think about how to do it by myself. And with time to think about a solution, it turned out to be quite a manageable task. I have found that time and again lately—the time to think about a problem made its solution manageable and quite efficient.

It occurred to me that the same might be true if I had to confront a legal problem. Rather than being forced to leap in by time pressure for a solution—if I had time to think that solution might be better and more efficient--any thoughts?

Shortly, I will begin to develop my theories about why lawyers automatically apply legal process to solve problems and do not think about alternative, more efficient solutions at a graduate school of business. Hopefully businessmen will be able to recognize and manage the problem. Law schools are part of the cause of this problem, but not taking or having time to think about solutions might well be another.

-Larry Salibra
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Thursday, August 28, 2008

A real win-win day for the privilege

It was a good day for attorney-client privilege junkies like me here at ACC
(and that means if you're corporate counsel, it was a REALLY good day for
you and your clients' rights): the DOJ finally issued its promised
revisions to the McNulty Memo and (are you seated?) actually reversed every
single issue we've protested in the Holder/Thompson/McNulty Memo process.
Every one. No more privilege waiver as a condition of cooperation; no more
assertion that work product claims aren't valid if the work product includes
otherwise non-privileged facts; no more forcing companies to fire employees
or revoke their right to attorneys fees before the facts are in and as a
condition of cooperation credit; no more tactics that suggest that companies
have to throw employees under the bus in order to defend themselves.

The link to the new document that governs US attorney consideration of the
criteria of corporate cooperation is not yet up on the DOJ's site, but we've
got a copy
. And we've had the DAG's assurances - he was looking us in the
eye when he said so.

Now here's the really interesting part: DOJ didn't issue a new memo. They
instead inserted this new guidance into the US attorney's manual as a new
section of the manual. In case you're not familiar with it, the manual is
not a policy which can reside at the bottom of the fifth file cabinet down
the hall. It is on every prosecutor's desktop and is the bedrock governing
prosecutorial conduct. US Attorneys take it very seriously and are very
proud of it, too. What this signals is DOJ's attempt to not only amend the
policy with words, but also to convey to prosecutors in the field that their
feet will be held to the fire for non-compliance with this policy. That was
clearly not the message that the previous memos (residing in the fifth
cabinet down the hall) conveyed to prosecutors prior to this announcement.

And so ... I still want legislation that provides finality and comprehensive
coverage across every agency of the US government with a copycat McNulty
policy (since DOJ reversing it's policy does nothing to reign in the SEC,
the DOL, the HUD, the IRS, and so on), but I am proud to announce that we
have won a DOJ policy with teeth (and trust me when I tell you that we've
fought hard for this for over 3 years, so I'm serious when I say we've
"won"). We have a DOJ policy that includes paragraphs on the importance of
the attorney-client privilege to the responsible behavior of well-governed
and well-counseled companies. We have a Department that is committed to
assuring the success of this policy. And we have an agreement that
privilege belongs to the client, and it is not the province of DOJ to
request, demand, or dismiss its waiver at will.

After watching so much political convention coverage in the last few days, I
feel like I should end my post as virtually every speaker for the last 3
days has: "God Bless You, God Bless DAG Filip, and God Bless the Our Legal
System and its Protection of the Fundamental Client Right to Attorney-Client

-Susan Hackett

The Emerald City

I’ve been doing a little research about the location of this year’s Annual Meeting- Seattle, WA. An interesting fact- Seattle was named one of the top ten green cities in the nation by National Geographic. In fact, the Washington State Convention & Trade Center (WSCTC) in downtown Seattle announced the availability of the nation’s first completely compostable water bottles available for convention center clients. The center’s new, .5 liter water bottles are made from corn-based resin (PLA) and the entire bottle, cap, label and contents are 100 percent recyclable, biodegradable and compostable. By contrast, traditional petroleum-based resin water bottles take up to 5,000 years to decompose.

We’re very proud to have our meeting in Seattle, as ACC continues to ‘go green’. Last year, we moved away from our printed course materials (books that were easily hundreds of pages of printed paper for each attendee) and gave everyone electronic versions of the materials. We’ll be doing the same this year.

I can see why Seattle is recognized as a clean, environmentally conscious city- they have wonderful national treasures to preserve. If you’re getting into Seattle before the meeting, take a walk through Pike Place Market, eat in the international district, or take an Orca spotting tour. Why not take in a Mariners/Seahawks game, or a dinner cruise on the Puget sound? Take a ferry ride, check out Discovery Park, the Space Needle or ride the monorail. And don't forget to take public transportation; all of the buses are either electric or run on biodiesel! These of course, are all things I hope to do while in Seattle. Do you have any other suggestions? Send them along!

Still haven’t registered for Annual Meeting? What are you waiting for? Register Now!

-Nichole Opkins

Wednesday, August 27, 2008

ACC’s Annual Meeting- Who’s Ready?

So we’re 7 ½ weeks out from the big show- The 2008 ACC Annual Meeting. This will be my 4th meeting with ACC, and I have to say, probably my most exciting since I’ve spent the last year working closely with 2 of our 16 committees- IT, Privacy & eCommerce, and New to In-house. These have been great committees to work with- the members are committed and interested in the monthly teleconferences, the creation of their programs for AM, and to the overall success of their fellow committee members. And, I am proud to announce that the New to In-house Committee won the Committee of the Year Award- A great accomplishment which they share with the Employment and Labor Committee. This was on top of a Sponsor of the Year Award given to NTI’s co-sponsor Womble Carlyle.

I look forward to attending the Leadership Dinner on Sunday, October 19th, at the Experience Music Project, where these awards will be presented.

-Nichole Opkins

Tuesday, August 26, 2008

Here We Go Again- And It's Not Even Father's Day Yet

In honor of the hard work, honesty and moral fortitude of my father and grandfather, I wrote an entry contrasting their behavior with the euphuisms bandied about Wall Street and the media to distract one’s attention from the fundamental causes of the credit crisis. Since then the government (both parties) have engaged in further conduct that disregarded the fact that people made blatantly bad choices and are now forcing the rest of us to bail them out. Bear Stearns was followed by foreclosure bailouts, and then Fannie and Freddie.

I suppose that I should not be surprised that the Detroit automakers are preparing to stick their hands out. For those of you in our profession who are helping them polish the cups that they intended to pass around Washington, you have my sincere condolences. But there is good news. I have found a solution that will solve all the problems that we face.

The solution is a comprehensive bailout for everyone. Rather than the piece meal approach, we simply prepare a bailout application form to be included in all the IRS form packages. The form will permit each US citizen to apply for a billion dollar bailout. They need simply fill out the form and answer a few simple questions to qualify for a check from Uncle Sam for a billion dollars.

Beyond the general identification information, they need to check one of four questions explaining their need for the bailout. The form will state as follows:

Please state your justification for requiring the bailout by checking one or more of the four boxes below:

1. I have run my business with the same skill as the CEO of GM, with similar results, but did not get anything near his salary.

2. I take private investors money, insuring them a great return by taking companies private and running them with my skill and judgment, and if things do not pan out, I will get my friends in DC to cover up my gross misjudgments.

3. Before I went to work on Wall Street I got a MBA from Harvard and no one there ever mentioned “risk” in the entire time I was at the Business School (My colleagues from Wharton, Yale and other business schools were not told about risk either).

4. None of the above applies to me, but they are such silly reasons, I deserve a bailout too.

Once every citizen gets his billion dollar check the housing crisis will disappear. People in foreclosure will be able to make their payments; prices will go up as the inventory is absorbed because everyone will be able to afford a minimum of four houses.

Admittedly, business in the US might suffer a little wage inflation because many will leave the workforce choosing a life of leisure. GM may have to move everything out of the country, but jobs for people in Michigan will be irrelevant.

Wait you say, we don’t have enough money to give out that kind of bailout. I thought about that –we are going to borrow it from China.

But what happens when it becomes clear that we cannot service the debt because we are not producing anything—China may threaten dire action—Got that covered too! We simply point out: “WE ARE TOO BIG TO FAIL.”

-Larry Salibra
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Monday, August 25, 2008

Why Federal Courts . . .Part 5

Part 5, Justification #3: Judges Need to Select The Proper Case As Vehicle to Announce A Principle Of Common Law Which Limits Its Misuse By Lawyers.

This justification is the most peculiar of the lot and to the extent I can determine is advocated largely by Judge Kozinski of the Ninth Circuit. His thesis is that by selecting the proper case to articulate a doctrine of common law one can minimize the improper use of opinion by lawyers to achieve a result unintended by the judges articulating that opinion.

There are a number of problems with this justification. First, research has demonstrated that judges are simply unable to predict which cases are likely to have long term precedential impact. See: Foa, Pamela, “A Snake in the Path of The Law: The Seventh Circuit’s Non-Publication Rule” 39 U Pitt Law Rev. 309 (1977-78). Thus the facts of the case you treat as non-precedential may have the most profound unintended consequences.

Second, there are costs to leaving an area of law unclear waiting for the perfect case. Any idea what the perfect case looks like?

Third, it is hard to believe that a reasonably competent judge can not explain why a result can be distinguished from or is comparable to a prior decision. If he is troubled by the quality of his explanation, perhaps as Judge Arnold (first blog on this topic) noted, this more likely signals a cause for concern about the quality of the decision rather than its potential for misuse.

Finally, who is to say it is a misuse. Would Anastastoff have been misusing a case because she felt that if a prior party was entitled to a refund even though the IRS received the application after the due date which was mailed before the due date that she was entitled to the same result if she mailed her application before the due date?

Seems to me she was simply asking for equal treatment under the rule of law.

-Larry Salibra
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Monday, August 18, 2008

Why Federal Courts . . . Part 4

Part 4, Justification #2- Federal Judges Are Overworked and Can Dispense With Cases Faster If They Are Unpublished and Non-Precedential

Read Justification #1

This argument posed by the late Judge Becker and his academic supporters can be viewed in full in “Controversial Cases Disappear”, CORPORATE LEGAL TIMES, November 1999, Vol 9. No.96. The late Judge Becker felt that as long as the court offered some explanation for the decision to the parties; it was otherwise fine for a case to be non-precedential because it relieved the court’s work load. The notion of speed of adjudication was supported by an Assistant Professor of Law at Auburn University, who cited a study that concluded that unpublished decisions speeded the resolution of cases. He stated in Corporate Legal Times Article: ‘“If justice is delayed justice is denied, then the limited publication rules do reduce the delay and denial of justice”…’

Both arguments demonstrate a profound misunderstanding of the common law. Precedential impact is important because at the very least it is a check on inconsistent judicial behavior. If a case is clear, undisputed then it should be a simple matter to describe the facts, the applicable law and the result, such that similarly situated parties are treated the same.

One could just imagine Vinny Gambini’s (My Cousin Vinny) response to these assertions applied to facts in the Anastasoff case that concerned Judge Arnold (Part 1): “ Are you telling me that plaintiff A, who mailed her tax refund at the same time as plaintiff B, before the deadline date and both refunds were received by the IRS after the deadline date, that A is not entitled to a judicial ruling that the IRS was compelled to honor the refund even though B got such a ruling because B’s ruling was non-precedential? Judge Becker says it’s OK because we explained the ruling to A—‘B’s decision was not precedential’ and the Auburn Professor says it was fast—therefore A got justice!”

I am done with this one!

-Larry Salibra
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Friday, August 15, 2008

PRO BONO—A Noble Endeavor . . .

. . .or How We Rationalize Our Maintenance of Artificially High Legal Costs

I want now to focus on another sacred cow of the profession—“pro bono”. I am not against insuring that everyone has access to legal services, I just don’t believe we should deprive people of the dignity of being able to pay for their own services by creating restrictions to practice that keep the cost of legal services artificially high.

For those of you who believe I alone have concerns about the economic-centric nature of this profession; it would be worth looking back more than 20 years ago to 1983 when I was a relatively young lawyer. The profession was trying to demonstrate to the world it was ethical, and ABA House of Delegates Approved the Model Rules of Professional Conduct. A then relatively young ethics professor at NYU, Stephen Gillers, wrote an article about those rules in 1985 in 46 Ohio St L.J. 243, 245-246 entitled “What We Talked About When We Talked About Ethics: A Critical View of the Model Rules. He summarized the article thus:

Close-up, I will argue, little that is flattering. The bar has drafted a code that proves the wisdom of its own precept against client-lawyer conflicts. The lawyers who approved the Rules looked after their own. They have given us an astonishingly parochial, self-aggrandizing document, which favors lawyers over clients, other persons, and the administration of justice in almost every line, paragraph, and provision that permits significant choice. It is internally inconsistent to the bar’s benefit. It continues the practice of using the language of ethics to mask the controls on the availability of services that in turn artificially inflate the cost of services.

My sense is that little has changed since then. Courts still impose artificial restrictions on practice by creating barriers to entry, even among lawyers. The Federal Courts are an embarrassment. If you wanted to try federal cases in the State of New York you have to get admitted 5 different times. The rules are not designed to protect the public; they are designed to protect the power and economic interests of the few, including the judges.

So what do we do; we lament that the lower income members of community do not have access to affordable legal services, because we have done everything we can to insure that is the case, and to make ourselves feel good we deprive them of their dignity by requiring them to take what we offer for free instead of letting the market provide affordable legal services tailored to their needs.

I recently got a request from my local chapter to participate in a pro bono effort they are arranging. I am not admitted in this state so giving advice to private parties would not be prudent, moreover, unless these people have created Superfund sites, have problems with international commercial transactions, or complex corporate tax issues, I would probably not be a lot of help.

-Larry Salibra
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Wednesday, August 13, 2008

Why Federal Courts Do Not Apply The Rule of Law

Part 3: Justification # 1—Outcomes in Non-Precedential Cases Are Not Subject To Reasonable Differences of Opinion

To my mind, the most persuasive justification for treating a decision in a non-precedential manner would be that the result is so obvious that there is literally no dispute concerning the nature of the outcome. Stated another way, no reasonable minded person would reach a different conclusion concerning who wins and who loses. Unfortunately, the objective data simply does not support this justification.

In an article in Forbes, entitled “Justice in the Dark”, October 10, 2000, the author debunks that myth with some startling statistics. In the 79% of the cases that are unpublished and non-precedential the district courts are reversed an astounding 37% of the time and there is disagreement among the panel that results in a dissent 24% of the time.

In the year these statistics were gathered there were 26,819 federal appellate decisions. There were 7,839 reversals in unpublished non-precedential opinions. There were only 5,682 precedential opinions in that year!

That great trial lawyer Vinny Gambini in My Cousin Vinny stated: “Are we to believe that water soaks into a grit faster in your kitchen than anywhere else on the face of the earth?” To paraphrase Vinny: “Are we to believe that there are more district court reversals in cases that are supposedly beyond dispute, than the entire universe of precedential cases, which presumably are intended resolve controversial situations?”

I am done with this one!

-Larry Salibra
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Monday, August 11, 2008

Why Does Historical Perspective Appear to Minimize the Impact of Change?

I looked at the ACC blog on e-discovery and read Nichole Opkins’ article, Online Social Networking and Your Career: Are You Staying Ahead of the Game?, ACC Docket, July/August 2008. Both describe dramatic changes in technology and their implications on the practice of law. I had heard these before over my career. No doubt I have seen much in the way of technological improvements in my career, and I am not that old. However, I can not say that I have the impression that a great deal has changed.

Lawyers fret today about the e-mails that people write because to an large extent people treat an e-mail like a telephone call, forgetting that an e-mail lives on. I have been in lawsuits where such e-mails were problems for our case, but, people being rather similar, I was also the beneficiary of similar e-mails from the other side. I am not convinced there was a net impact on the outcome of the case, the nature of the dispute or the justice system. I have not read the University of Denver materials referred to in the ACC blog that suggests huge potential for change as a result of e-discovery—they may convince me otherwise, but I have heard such claims before.

I recall a visit to ZEROX as the guest of Bob Banks, ACC’s first Chairman, who proudly showed me a new scanner, that was huge and expensive, and gobbling up documents fed to it by a battery of paralegals. The internet was in its infancy at the time; it would be years before we would get e-mail at my company. This ability to manage and sort all these documents was touted as something that was going to dramatically change the practice of law—it did in that everyone started collecting and collating thousands of documents, where before it may have only been hundreds. We all fretted about all those documents that were now accessible.

Believe or not, for you younger folk, we even fretted about the photo-copier. For those of us who remember carbon paper, the photo-copier was viewed as something that really impaired our ability to control troublesome documents because of the ease of proliferation; it was seen a portending huge changes.

I have won cases on very rare occasions because I was able to get the smoking gun through discovery. For those of you who, like me, still admire Perry Mason, we did not prevail like Perry because we were able to whip out the document at trial in a dramatic reversal of fortune, as we were on the edge of losing. Typically, the other side has the document too and congeniality returns to the litigation. What was notable about these documents is that they were the result of simple common sense document requests you would have requested and reviewed, even if the only technology was carbon paper.

Has technology resulted in changes in the profession-certainly? Has it been as profound as we might have thought it might be? Well, there is a possible answer in a very insightful observation that Nichole quotes from the CLO of Cisco at the beginning of her article: ‘[T]he legal industry seems to be “the last vestige of the medieval guild system to survive into the 21st century”.’ Does that need to change--certainly? Is technology likely to be a significant cause of the change—it has not been to date!

Whether the huge increase in available information will create untold potential impacts that Nichole outlines or whether in the end it will diminish the impact of any single piece of information by making readers and users more skeptical, less sensitive and more demanding in terms of confirmation is not clear to me, but it is definitely worth thinking about.

Wednesday, August 06, 2008

Why Federal Courts Do Not Apply The Rule Of Law Part 2

Click here to read Part 1

Part 2 In The Beginning

If you ask proponents in the federal judiciary to justify the practice of non-precedential, unpublished opinions, they list of serious sounding justifications—things like these cases have a clear and undisputed outcome and don’t add to the development of the law—things like that? Are these really the reason for the initiation of the practice?

Yes and no is the answer. We will review these explanations and the critical studies on their validity in future blogs. But the primary motivation for the practice was that books were too expensive. Presumably, there was some effort in selection to try to select the important cases for publication. However, trying to do that and successfully doing that are two different things and presumably, there can be some negative consequences if you are wrong—for instance when the facts of non-precedential cases prove to be more relevant to future circumstances than the case that is published.

The idea was that publishing all the cases put small practitioners at a disadvantage because they could not afford to maintain the libraries of large firms—by limiting publication the disadvantage would be minimized. Not such a bad notion if case law really had that much relevance to determining the outcomes of a case—a notion we will examine in a future blog.

However, not long after the policy was adopted its justification was eliminated by technology with services like Lexis and Westlaw, and now the internet generally. The potential technological impact of these new services was like solder-in vacuum tubes to make portable radios small (I have a few hanging around) that had a life span that was so short most people my age that lived through their existence, probably never saw one. Transistors eliminated the vacuum tube portable radio in a flash. Paper law libraries had a longer life span.

Paper libraries lived on in large firms long after technology made them irrelevant since they had become a marketing show piece for client tours as well as functional entities. Their cost was also hidden in law firm overhead and not separately charged, and of course, there was the ability to maximize associate billing time by making associates walk to the library and around it if the book they were looking for was out of the stack.

So why does the practice of un-published, non-precedential opinions live on? We will examine that in future blogs.

-Larry Salibra
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Monday, August 04, 2008

ACC Member Blogs

Last week, the chair of the ACC New to In-house Committee, Adam Palmer, was asked to be a guest blogger for The Washington Post. Thanks for letting us know about this, Adam. I encourage all of you to take a look at what he had to share.

Do you have a blog you'd like your fellow in-house counsel to know about? Let us know!

-Nichole Opkins
Assistant General Counsel, ACC.

Friday, August 01, 2008

Why Federal Courts Do Not Apply The Rule Of Law

This topic presented itself because of a phone call I received a couple of days ago from a lawyer who had a client that received second class treatment from the federal courts. Is it common? Last time I saw the number about 80% of federal cases treated the parties as second class citizens—the opinion is deemed non-precedential.

The lawyer called me because he believed I was a one man campaign against the practice of non-precedential opinions. There were a few others. The ABA opposes the practice, but not very loudly. Most law schools and law professors rather than being outraged and railing against the practice have largely been oblivious to the conduct, content to focus on the 20% of the cases that might appear in the case books.

In the next few blogs I will explore the history and review the attempts at judicial justifications for the practice. I will also try to pay tribute to a unique federal appellate judge who was equally troubled by this practice, and died tragically at far too young an age. Richard Arnold, was more than a fine judge—he was a fine person. Although I never met him in person, I enjoyed our numerous conversations on the topic.

Judge Arnold faced the consequences of this practice in its most blatant form. The government was arguing that the fact that a prior litigant whose position was factually indistinguishable had been found entitled to a refund could be ignored by the court who was free to rule against the present litigant because the prior decision had been designated by the Circuit as “non-precedential.” Judge Arnold expressed his concern like this:

If, for example, precedent is cited, and the other side offers a distinction, and the judges on the panel cannot think of a good answer to the distinction, but nevertheless, for some extraneous reason, wish to reject it, they can easily do so through the device of an abbreviated unpublished opinion, and no one will be the wiser… . Or after hearing oral argument, a judge in conference thinks that a certain decision should be reached, but also believes that the decision is hard to justify under the law, he or she can achieve the result, assuming agreement by the other members of the panel by deciding the case in an unpublished opinion and sweeping the difficulties under the rug…a system that encourages this sort of behavior, or is at least open to it, has to be subject to question in any world in which judges are human beings.

Anastasoff v. United States, 223 F. 3rd 898 ( 8th Cir. 2000); the opinion was vacated on other grounds.

-Larry Salibra
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