Thursday, November 29, 2012

Lottery Litigation

Article by Debra Cassens Weiss , ABA Journal

Litigation over rights to office-pool lottery winnings has become so common that it has created its own set of case law, according to a University of Louisville law professor.

In an interview with the Louisville Courier-Journal, law professor Russell Weaver said it’s important for people who participate in lottery pools to take precautions in advance. “One thing you don’t want to do is end up in litigation,” he said. “Attorneys will eat up quite a bit of your winnings.”
Weaver advises the person running the lottery pool to photocopy the group’s tickets and distribute them to everyone participating in the pool before the drawing.

In a couple recent cases, lottery players had claimed winning tickets were purchased for themselves, rather than their group. The argument didn’t work for Americo Lopes of New Jersey. In March, jurors awarded Lopes’ five co-workers $4 million each after he won a jackpot valued at $24 million, the New Jersey Star-Ledger reported at the time. After taxes and fees, the plaintiffs were expected to take home about $2 million each.

The newspaper called the verdict “the latest cautionary tale involving lottery pools, pacts often based on trust and a handshake.”

DTI Acquires Fios, Inc.

The big get bigger.

Atlanta-based DTI said that Fios was purchased to gain clients and staff. Based in Portland, Ore., Fios also brings software development skills and workflow expertise to the DTI portfolio.

Terms of the current deal — which is DTI's third this year — were not disclosed. In September, DTI acquired legal staffing company Provius, based in Houston. In July, DTI bought computer forensics specialist Data Forté, of Los Angeles.

Wednesday, November 28, 2012

Law school enrollment continues its decline

Article by Karen Sloan, National Law Journal
If the halls of law schools seem a bit emptier this year, it’s not your imagination.
Approximately 8,000 fewer first-year law students will show up nationwide this year compared to two years ago, when enrollment reached an all-time high, according to the American Bar Association. This year’s numbers represent a 15 percent decline since then and a 9 percent decline since last year.
The ABA released preliminary enrollment numbers from its annual law school questionnaire—an unusual move that leaders said was prompted by intense interest in admissions trends.
1L enrollment fell by 3,751 individuals last year and by another 4,216 this year, according to the ABA. Three-fourths of the 201 ABA-accredited law schools enrolled fewer students this year. Of the 149 schools that havefewer 1Ls, 90 saw enrollment reduced by 10 percent or more. Forty-eight lawschools saw increased enrollment this year, but only 10 saw boosts of 10 percent or more. The ABA did not disclose results for individual schools.
It’s not yet clear how declining enrollment is reflected in the academic credentials of 1Ls; the ABA will not release median undergraduate grade-point averages and scores on the Law School Admission Test until the spring. For the first time, schools’ reported LSAT and grade-point-average data is subject to review by the LSAC to confirm its accuracy. That change came after two law schools were found to be inflating those figures, which helped to improve their U.S. News & World Report rankings.

Tuesday, November 27, 2012

Poor Computer Forensics Investigation Allows Casey Anthony to Walk

Article by Josh Constine

A jury might not have acquitted Casey Anthony of the ‘drowning’ death of her daughter if they knew she Googled “foolproof suffocation” on the last day little Caylee was seen alive. It’s the latest example of Google search history becoming evidence in murder case. But this time the digital footprints were found too late and the suspect has already been set free. Are police paying enough attention to browser history? Clearly not.

But this last week Orlando’s WKMG TV station reported that police had overlooked a key piece of evidence. Someone had Google searched “foolproof suffocation” from the Anthony family computer on June 16th, the day Caylee disappeared. A book about the case by Anthony’s defense lawyer Jose Baez had previously reported that someone made the search, but had the timing off. The book suggested Caylee’s father had Googled the murder method.

Now WKMG reports that search happened an hour later, after George Anthony may have already been at work, and that Casey is likely to have typed it in. If the mother had Googled a way to suffocate someone on the last day anyone saw her daughter alive, the jury might have concluded differently.

 Dusting for fingerprints and DNA evidence may always be critical parts of detective work. But as the ways we learn and communicate increasingly move online, forensics must evolve as well.

Wednesday, November 21, 2012

Hewlett-Packard Claims Autonomy Cooked Books

Article by By

Hewlett-Packard Co. said Tuesday it will take an $8.8 billion write down related to its purchase of Autonomy PLC and alleged that Autonomy executives committed accounting fraud to inflate the company's value during the sale.

HP acquired the Cambridge, U.K.-based e-discovery and enterprise search stalwart in 2011 for $10.3 billion. In a statement,  HP said that "the majority of this impairment charge, more than $5 billion, is linked to serious accounting improprieties, misrepresentation and disclosure failures discovered by an internal investigation by HP and forensic review into Autonomy's accounting practices."

"HP launched its internal investigation into these issues after a senior member of Autonomy's leadership team came forward, following the departure of Autonomy founder Mike Lynch, alleging that there had been a series of questionable accounting and business practices at Autonomy prior to the acquisition by HP. This individual provided numerous details about which HP previously had no knowledge or visibility," despite acquisition due diligence provided by Deloitte and KPMG, the statement explains.

The news took the overall technology world and specifically the e-discovery industry by storm. The impact for Autonomy's customers and partners could be felt for years to come. Autonomy held 17 percent of the e-discovery market in Am Law 100 law firms in 2011, but that fell to just 4 percent in 2012.

Technology research giant Gartner Inc., in its May 2012 e-discovery report, noted that Autonomy is known for good technology but has poor service.

Someone has alot of explaining to do.

Friday, November 16, 2012

Bad Financial News for Large Law Firms

Article by Julie Triedman in AM Law Daily

Bad financial news continued for the legal industry Thursday, as yet another survey of large law firms showed demand for their services essentially flat through the first three-quarters of the year and revenue growth for 2012 likely to fall short of last year's single-digit gains. 

The Wells Fargo Private Bank Legal Specialty Group survey found that, on average, the 115 participating firms—a group that included 60 Am Law 100 firms, 40 Am Law Second Hundred firms, and 15 boutique firms—took in 3 percent more revenue during the first three quarters of the year than they did during the same nine-month period last year. Profits, meanwhile, were up just 1.5 percent. The findings were largely in line with a similar survey covering the first half of the year that Wells Fargo released in September

Wells Fargo's third-quarter report detected some other troubling trends, including declines in both billable hours and firmwide realization rates. Of additional concern: The surveyed firms reported that as of September 30, they were carrying balances on their lines of credit that were, on average, a third higher than they were a year ago at the same time. That, says Legal Specialty Group national managing director Jeffrey Grossman, suggests more firms than usual are relying on short-term debt to fund operations late in the year.

The Wells Fargo report, like those issued earlier this month by Citi Private Bank's Law Firm Group and Thomson Reuters's Hildebrandt Institute, found that in addition to seeing their revenue growth slow during the year's first three-quarters, firms continued to grapple with rising costs. On average, the firms surveyed by Wells Fargo saw expenses rise 3.7 percent, with nonpersonnel costs jumping 5.8 percent, and salaries—the largest line item—up 2.5 percent. 

The survey's findings, Grossman says, are more encouraging for a subgroup that includes about a dozen top-tier firms with profits-per-equity partner of $2 million and above. Those firms saw revenues grow 4.9 percent through the nine months ending September 30 compared to the same period last year, while profits rose 7.9 percent. On average, overall expenses within this elite group grew by 2.9 percent. 

More worrisome, Grossman says, is the survey's suggestion that firms are having trouble keeping their lawyers busy. Based on the number of hours billed as of September 30, equity partners at the surveyed firms are projected to work an average of 1,602 hours this year, or 1.7 percent fewer than they did in 2011. Nonequity partners find themselves in similar straits: Wells Fargo's survey estimates that they will work 1,530 hours on average this year—a 1.6 decline compared to 2011. That poses a structural problem, Grossman says, because the number of nonequity partners is growing at a time when they are being utilized the least. The nonequity tier at firms responding to the survey has increased 4 percent compared to last year. (Associates, meanwhile, are projected to put in an average of 1,768 hours this year, a 0.5 drop compared to 2011.)  

Among the top-tier group, however, equity and nonequity partners are all projected to work about the same number of hours, 1,734 and 1,733, respectively, both more than 100 hours above the survey average. (Associates at top-tier firms are projected to put in 1,787 hours this year.)

One way firms may be coping with the perfect storm of slackening demand, increased expenses, and falling realization rates is by raising their fees: Billing rates were up 3.4 percent through the first nine months of the year, and two-thirds of the firms surveyed said they plan to raise billing rates between 3 and 4 percent overall next year.

Fifteen percent of the firms surveyed by Wells Fargo Private Bank plan to cut partners in the first quarter of 2013, Reuters reports. The number is higher than the usual 5 percent typically reflected in the survey but lower than recession highs of about 25 percent.

Wednesday, November 14, 2012

Lawyers have specific duties with regard to e-discovery

Article by James Bernard, Michael Quartararo and Jason Vinokur

What are an attorney’s ethical obligations in e-discovery? This article lays out the responsibilities attorneys have when it comes to e-discovery.

Duty to Preserve ESI
Both in-house and outside counsel have an obligation to preserve documents relevant to a claim or defense that may lead to admissible evidence in the litigation. Counsel must make a reasonable inquiry, identify potentially relevant materials on a company’s systems and preserve those materials both: 1.) through physical sequestration of the discoverable material, including suspension of auto-deletion, backup tape rotation and record destruction policies, and 2.) by implementation of a litigation hold on the key custodians and information management personnel when litigation becomes reasonably anticipated. Few areas of electronically storied information (ESI) collection and production cause as much consternation as the duty to preserve, and with good reason. The failure to properly preserve documents has led to an award of sanctions in more than 230 cases in federal courts. But the key to avoiding problems is to bear in mind that the obligation is one of reasonableness, perfection is not required. Taking reasonable, timely steps to preserve will avoid problems down the line.

Duty to Collect ESI
A lawyer has an obligation to collect ESI (and, where appropriate, its associated metadata) in a sound and defensible manner. The duty ensures that electronic documents are collected properly and without spoliating information. This obligation does not require lawyers to become computer forensic experts, but practitioners should familiarize themselves with the correct procedures and employ forensic experts or professional litigation support personnel to supplement their knowledge if necessary.

Duty to Supervise
Lawyers are responsible for supervising nonlawyers throughout the e-discovery process. At least one court has held that lawyers are obligated “to sufficiently supervise or monitor their employees’ document collection.” Moreover, failure to adequately oversee outsourced or managed services, such as e-discovery service providers or contract review attorneys, could also result in sanctions. This duty is reinforced by the fact that an attorney is the one who signs discovery requests and responses, and that signature represents a certification that the requests, responses or objections are complete, accurate and not interposed for any improper purpose.

Duty During Document Review
Nowhere does a lawyer’s obligation to protect and maintain the confidences, privileged material and work product of a client come more into play than when reviewing ESI. The responsibility here is to review and produce relevant, nonprivileged material. But concomitantly, it means taking steps to avoid the production of privileged or proprietary information. If privileged material is inadvertently produced, Federal Rule of Evidence 502 provides some protection provided the lawyer “took reasonable steps to prevent disclosure” and attempted to timely retrieve the information.

Wednesday, November 7, 2012

Bye-Bye Blackberrys

Article by Debra Cassens Weiss in ABA Journal

The once-popular BlackBerry is losing ground at large law firms, according to a survey of 83 chief information officers and technology chiefs at the nation’s top law firms.

According to the American Lawyer survey, 88 percent of the CIOs expect a net drop in the number of BlackBerry users at their law firms in the next 12 months. And firms that allow lawyers to bring their own devices to work are reporting benefits; the biggest one, according to 70 percent of the CIOs, is more cheerful users.

The survey also found that 75 percent of the firms are using social networking technology. Of those firms, 90 percent use LinkedIn, 64 percent use Twitter and 61 percent use Facebook.

Blackberry has failed to keep up with the iPhone and Android. As a result they have lost the marketshare they once owned. It is only a matter of time before everyone makes the switch.

In-House Counsel Challenging Firms on Value, Service

Article in Corporate Counsel by Catherine Dunn

The 2012 Chief Legal Officer Survey from Altman Weil polled more than 200 general counsel on how they approach cost control and efficiency, along with how they view their relationship with outside counsel. Asked how serious they think law firms are about changing their model for service and fees to provide greater value to clients, the respondents weren't impressed.

"CLOs continue to express deep skepticism about law firms' willingness to change their service delivery model, rating firms' seriousness about change at a median 3 on a 0 to 10 scale for the fourth year running," according to the report.

IN addition CLOsalso  identified a number of service improvements and innovations they'd like to see from outside counsel. Their top picks included: greater cost reduction (according to 58.9 percent of respondents); non-hourly based pricing structures (53 percent); more efficient project management (53 percent); and improved budget forecasting (following closely with 52.4 percent).

Top legal officers also said they have become more proactive on cost control matters during the past year. The vast majority of respondents—71.1 percent—said they negotiated with outside counsel for price reductions, and nearly 63 percent said they have improved the efficiency of internal procedures.

And it's not just about making adjustments to the existing in-house/outside counsel relationship—according to the survey, many in-house counsel have been moving work away from firms: "In addition, 47 percent of law departments shifted work from law firms to in-house lawyer staff; 41 percent shifted law firm work to lower priced firms; and, 36 percent reduced the total amount of work sent to outside counsel. Ten percent of CLOs reported instituting a law firm convergence program."Within legal departments, CLOs addressed internal costs not only by improving procedures, but also by shifting work to paralegal and other paraprofessionals (36 percent); using contract attorneys (35 percent); and outsourcing work to non-law-firm vendors (25 percent).  "This is the first time in three years that the survey has found more departments decreasing than increasing their law firm spend," the report's authors note.

Tuesday, November 6, 2012

Ignorance is no defense on Twitter and Facebook, warn legal experts

Article in The Telegraph

Earlier today,in the UK District Judge Andrew Shaw ordered nine people to pay footballer, Ched Evan's, rape victim £624 (997.3392 US Dollars) after they admitted disclosing her identity on Twitter and Facebook. They were charged with publishing material likely to lead members of the public to identify the complainant in a rape case (an offence under the Sexual Offences (Amendments) Act 1992.

These days, whether it’s on a social media website or in relation to an online article, we all expect to have our say and post our own content. The legal position of an individual who posts content online (whether on Facebook, Twitter, on comment sections of online news pages) is clear. He or she is responsible for that content. Today's case is notable because the defendants were not aware that naming the lady was a criminal offence. This was irrelevant: ignorance was not a defense.

When we post material online, we act as publishers and our publications are subject to the same laws as those of professional publishers, such as newspapers. We are likely to see a proliferation of these sorts of cases, with the Attorney General and the Crown Prosecution Service taking action against individuals, teaching them the basics of publishing law. The message we are hearing from the courts is that the public cannot treat Twitter and Facebook as they would a casual chat in the pub.

Friday, November 2, 2012

Lit Support Vendors Suing Law Firms for Unpaid Bills

Article by

Thursday, November 1, 2012

Breaking Down Bank of America's "Brazen" Mortgage Fraud Allegations

Information provided by PRNewswire

Federal prosecutors in New York have just filed suit against Bank of America, claiming that its "brazen" mortgage fraud led to the housing industry's collapse and made the problems worse after the recession officially began. What exactly is Bank of America accused of? The allegations stem from a company that Bank of America bought out in 2008 called Countrywide Financial Corporation – and this isn't the first time Bank of America has been in hot water over Countrywide.

Back in the mid-2000's, Countrywide was very busy giving out home loans.  In fact, by the time Countrywide was bought out by Bank of America, it had given out $500 billion in home loans.  However, once the housing bubble burst, Countrywide went bankrupt – which is how Bank of America wound up with it.

The problem? In 2009, it was discovered that higher-ups at Countrywide had engaged in insider trading during the housing boom– which is how they had so much money to give out in the first place.  Their punishment was to pay nearly $70 million in penalties.  Since Bank of America now owned Countrywide, it was responsible for footing the bill.

Today, Bank of America is being sued for issues related to Countrywide.  Specifically, Countrywide is accused of defrauding the government-backed mortgage agencies by giving out loans without having the proper controls in place.  In layman's terms, it means Countrywide is accused of giving out home loans recklessly, without checking to see if it was going to people who deserved it or not – and doing so knowing that taxpayer money would be there to pay the bills if things went wrong. How were they able to get away with this, especially since there have been so many new regulations put into place ever since the housing bubble burst?

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According to federal prosecutors, it was all part of a scheme called "The Hustle".  Countrywide allegedly came up with the scheme.  Then, when Bank of America took over in 2008, they kept the scheme going for at least a year.

Federal prosecutors say "The Hustle" went to great lengths to keep Freddie Mac and Fannie Mae in the dark about risky borrowers.  According to the lawsuit, officials at Countrywide and Bank of America went so far as to replace experienced underwriters with unqualified ones, manipulate loan forms, write down higher income numbers for applicants, and even conceal the number of loans that were defaulting before selling them to the government.  Sources close to the case say it is one of the most "brazen" schemes they have ever seen. What does Bank of America have to say about all of this? In a statement, Bank of America said that it had repurchased some of the failed loans from Fannie Mae and Freddie Mac, but that it cannot be expected to buy back every single loan that defaulted during the recession. What kind of punishment does Bank of America face if it loses in court? Since the Department of Justice filed the lawsuit under the False Claims Act, Fannie Mae and Freddie Mac may be entitled to triple the amount of damages they suffered if they win.  In this case, that means Bank of America could end up owing them $3 billion.

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