A daily look at legal news and the business of law...
Diebold Cooked Its Books and Pays Price
Diebold (DBD) is the company that made the controversial electronic voting machines some suspect of rigging the 2004 Ohio vote in favor of President George W. Bush. Whatever the merits of the vote-fraud charges may have been, Diebold was unequivocally guilty of accounting fraud, according to a settlement reported by the Washington Post.
Diebold agreed to pay the Securities and Exchange Commission $25 million, and its former CEO Walden O'Dell also took a hit, giving the company back $470,000 cash, $1 million in stock and $85,000 in stock options. (O'Dell infamously promised to help "Ohio deliver its electoral votes" to Bush in 2004.) The SEC notes that charges against three other Diebold executives are still pending.
Conflicts Force New Orleans Judges Off Spill Cases
Seven of the twelve judges that sit on the Louisiana federal court in New Orleans have already recused themselves from oil-spill litigation because of their ties to the spill companies, those businesses' defense firms, or plaintiffs' firms suing the spill corporations. And rumors are flying that the other five will have to do so as well, reports the National Law Journal.
When the myriad pending claims are eventually consolidated, the resulting multi-district litigation (MDL) needs to be heard by somebody. New York judge Shira Scheindlin's name is being floated because of her MDL experience and knowledge in dealing with gasoline leak cases, but it's too early to have a real sense of where the cases are headed. The hearing to decide who will oversee the cases is scheduled for next month, notes The Wall Street Journal Law Blog.
JPMorgan Pays Big for Co-Mingling Client Money
One of the easiest ways for a lawyer to get in trouble is by mixing client cash with his or her own. Now it seems bankers can get in trouble for it too. JPMorgan Chase's (JPM) London unit was hit with a record $49 million fine by Britain's financial regulator for not keeping approximately $8.6 billion in client cash separate from its own, reports Bloomberg. The Wall Street Journal adds that the co-mingling was apparently a mistake that happened as a result of the JPMorgan and Chase merger seven years ago.
And in the Business of Law...
The American Lawyer reports on the 2009 financial performance of the firms it ranks 101 to 200. In short, they did much the same as the top 100 -- they struggled. Gross revenue was down overall, although individual firms showed increases: Cahill Gordon was up 9.1% to $269.5 million, and Lewis Brisbois was up 17.6% to $250 million. Profits per partner (PPP) across the 101-to-200-ranked firms were down slightly, but two second-tier firms did well enough to rank in the top 10 profits per partner across all firms -- Cahill Gordon and Irell & Manella. Cahill came in seventh, with PPP of $2.53 million, an increase of almost 20% over last year, and Irell was ninth, with PPP of $2.49 million, a 27% gain over last year.
Corporate Counsel reports that the big firms may face more trouble next year, as 25% of companies...er, clients...intend to keep more work in-house, while only 10% intend to send more to outside firms.
Above the Law relates that incoming Bryan Cave associates just got deferred. Some class of 2010 attorneys will start in January 2011 and others in 2012. Or at least they hope they'll get to start in 2012.
Like some deferred attorneys, Lance David Lewis got paid for not working for the firm that hired him. However, as Above the Law reports, unlike deferred attorneys, Lewis was supposed to be working. Lewis has now been disbarred for billing about $80,000 for 2,600 hours of not working.
A small bright spot in the legal market: The ABA Journal reports that Perkins Coie has opened a new San Diego office with four intellectual property attorneys and plans to scale up to 50 within 3 years.