|
||
|
|
Archive for February, 2009
Holland & Knight Happy Hour Invite
In 1 on February 25, 2009 at 11:02 pm
Five lawyers leave Holland & Knight in part because of conflicts of interest
In 1 on February 24, 2009 at 11:05 pmThe five partners who comprised Holland & Knight's media practice in Tampa are leaving to start a law firm. Gregg D. Thomas, who headed the Holland & Knight group, will be joined by Carol LoCicero, James L. McGuire, Susan Bunch and James B. Lake at the Tampa practice Thomas & LoCicero. While at Holland & Knight, the partners' client roster has included the New York Times Co., Tribune Co., Knight-Ridder Inc. and Media General Inc. The lawyers, all long-time Holland & Knight employees, said they were leaving in part because of conflicts of interest and a desire to practice in a smaller firm. Their resignations come a week after 12 lawyers from Holland & Knight's former St. Petersburg office joined Trenam Kemker. Source
Holland & Knight CMO Bruce Alltop answers Do Model Web Faces Misrepresent Law Firms?
In 1 on February 15, 2009 at 5:21 pmThe Bar's rules of professional conduct dealing with communications about lawyer services contain a section dealing with advertising prohibitions. Rule 4-7.2 (c) says that lawyers "shall not make or permit to be made a false misleading or deceptive communication about the lawyer or the lawyer's services" and that a communication violates the rule if it is deceptive or "contains a material misrepresentation of fact or law."
The rules, under "prohibited visual and verbal portrayals and illustrations," say that lawyers shall not include in their ads "any visual or verbal descriptions, depictions, illustrations or portrayals of persons, things or events that are deceptive, misleading, manipulative or likely to confuse the viewer."
Holland & Knight chief marketing officer Bruce Alltop also was unavailable for an interview on why the firm uses so many paid models on its Web site. However, in response to a question from the Daily Business Review, he issued a statement saying the practice is about to end.
"Holland & Knight is in the process of redesigning the firm's marketing materials," Alltop said in the statement. "The look and feel of our Web site will be compatible with the new marketing materials, which will not incorporate the use of models as a design element. When our existing Web site was redesigned in 2007, firm management decided to use models rather than our own lawyers so as not to divert our lawyers' time from serving our clients."
Holland & Knight spokeswoman Susan Bass added that the firm's new Web site — sans models — is expected to debut in the first quarter of this year.
By Bruce Alltop Source:
The Disappearing Associate… Valentine’s Day Massacre: Holland & Knight fired 70 lawyers and 173 staff
In 1 on February 14, 2009 at 10:42 pmThe disappearing associate
Well, that was ugly. In case you missed it, or you need a summary, here’s what happened on a day (yesterday) that the ABA Journal called Black Thursday and Above The Law readers have decided should be named (a little early) the Valentine’s Day Massacre:
- Holland & Knight fired 70 lawyers and 173 staff
- DLA Piper fired 80 lawyers and 100 staff
- Bryan Cave fired 58 lawyers and 76 staff
- Goodwin Proctor fired 38 lawyers and 36 staff
- Cozen O’Connor fired 61 staff
- Epstein Becker fired 23 lawyers and 30 staff
- Faegre & Benson fired 29 lawyers
- Dechert fired 19 lawyers
- Cadwalader fired 3 lawyers and 13 staff
This doesn’t include announcements of other cost-saving measures, like more salary freezes and Luce Forward rescinding its offers to new graduates and cancelling its 2009 summer program. If there’s one certainty you can take from this very unhappy day, is that this is just a sampling of what’s to come. (This morning, Peter Zeughauser agreed: “There will be more. Materially more. I’m aware of some big ones coming up.”) We’re at the beginning of this process, not the end.
And what process is this? Well, as previously noted here, it’s of course the marked decrease in client engagements; but it’s also the fallout from the 2008 financials finally becoming clear and the dire need for firms to keep partnership revenue and marketplace confidence as steady as possible. But I’m also coming to think it’s about something else: a serious, gut-check re-evaluation of the whole purpose of law firm associates. I count 297 lawyer firings in that list above; so far as I know, not one of them was a partner.
It’s becoming more evident that we’re not just looking at a normal recession with the usual coping tools (layoffs, salary freezes) from law firms. We’re looking at an extreme recession (or worse) that happens to be occurring at a time of particular vulnerability for law firms and an unprecedented willingness or necessity to reconsider traditional approaches. With every brutal update, the good folks at Citi and Hildebrandt are speaking more plainly:
[T]he current economic downturn can be viewed as an opportunity to make some fundamental changes in the way law firms are structured and do their business – changes that are not only long overdue but that will also serve the profession well as it emerges from the current recession. …
Among the measures that Citi and Hildebrandt strongly urge is the abandonment of lockstep compensation for associates:
In the current economic climate, it is irrational to have half or more of a firm’s highly compensated lawyers on largely seniority-based salaries…. Firms that have not already done so should seriously consider modifying their associate compensation structures to allow a substantial portion of compensation to be tied to individual performance in support of the firm’s goals and strategy. Firms should also be willing to consider moving away from locked-step associate advancement (and compensation) toward competency-based models. The legal profession is one of the last industries still to cling to this outmoded seniority-based method.
This would not be an unprecedented measure, of course. But as sensible a move as this would be for many firms, events are overtaking it. Some firms are already in the uncomfortable position of having clients refuse to pay for work billed by first- or second-year associates, on the premise that these novice lawyers add inconsequential value to the task at hand and that the client is not going to pay the law firm’s on-the-job training costs. A few others are facing up to the reality that Indian firms can and will complete associate-level tasks for dimes on the dollar, or that new software can streamline and automate the due diligence and document review process on which so many associate hours have been billed.
What we’re looking at here is the real possibility that the law firm associate, in its current form, will not survive this crisis. As the number of associate billable hours clients are willing to pay declines, so too does the need to develop and maintain these vast grazing herds of associates within firms. Partners are going to have to start thinking seriously about what purpose associates serve when they no longer constitute the bottom two-thirds of the profitability pyramid. If you can’t sell the billable hours they’ve been churning out, what do you do with them? What, exactly, is the law firm associate for?
The standard answer, of course, is that associates are future partners in training — that’s what the recruitment brochures maintain. That might be more convincing if attrition — natural and otherwise — didn’t slice off about three-quarters of all lawyers between first year and the partnership committee. It might be more convincing if more firms had a rational system for identifying, assessing and hiring associates, actively trained those associates from day one in the firm’s financial and culture realities, and had a strategy setting forth how many future partners are expected to come up through their own ranks as opposed to through lateral hiring.
Since all of these things are true at very few firms, and none of them are true at many, we’re left to conclude that as a general rule, associates are hired to be billing machines. If that machine stops working, then we have a serious problem.
Paul Lippe of Legal OnRamp noted in an American Lawyer piece:
[T]he recession will last through 2010. Law firms will use this period to substantially restructure, and beginning in 2011, things will start growing again. While there’s a lot of detail and nuance around the form this restructuring will take, it can be described in simple terms. A typical law firm bill in January 2011 will generate the same dollars for partner work as it does today, but it will generate half the revenue for associate work.
Paul’s article is titled in part: “The End of Leverage.” “Leverage” in law firm terms means associates. It’s not hard to see where this is taking us.
And in truth, not every law firm has been slow to figure this out. Calgary energy law boutique Thackray Burgess has 29 partners and 0 associates. The firm employs more than 20 “consultants,” independent contractors who look like associates but are paid by the hour, work however many hours per year they feel like, pay the firm a fee to cover their overheads costs and a percentage of the hourly rate they charge their clients, and keep the rest themselves. I don’t love the hourly billing aspects of this setup, but the idea of associates as independent contractors, retained for what the client requires and no more, makes perfect sense. Axiom Legal and Virtual Law Partners have also re-engineered the traditional associate position. I’m sure there are other examples, and more will come.
By the time this recession runs its course — and no one really knows when that will be — both client expectations about the manner in which rote legal work is done, as well as the technological and offshore solutions available to do that work, will be so different from today that there’ll no be going back. The idea that a firm can employ dozens if not hundreds of inexperienced lawyers primarily to generate revenue on low-value work will eventually be seen as a relic of the 20th century. Firms will still hire and retain associates — new partners, even laterals, have to come from somewhere — but there’ll be far fewer of them, they’ll be selected, evaluated and trained far more systematically, and they’ll be engaged, billed and compensated much differently than they are today.
We should make no mistake about how profound a change this will be, nor believe that its ramifications will be limited to big law firms. To a growing degree over the last decade or two, large multi-service law firms in urban locations have been completing the job of legal education that law schools and governing bodies have been haphazardly starting. We can complain all we want about overpriced, underskilled associates in firms; the fact is that these firms and their clients have been subsidizing the bar admissions process, providing the last three years of what amounts to a seven-year law degree. When modern marketplace economics finally puts an end to this practice, who will pay new lawyers with few skills and massive law school debts while introducing them to law practice? Who will be responsible for completing lawyers’ education and training them? We’re going to need answers to those questions, and fast.
Like I said, we’re at the start of this process, not the end. The fundamental restructuring of the law firm business model that Citi and Hildebrandt are calling for is at hand, and the changes we’re seeing now stand a very good chance of being permanent. There’s a reason I used “fired” instead off “laid off” at the start of this post.
Holland & Knight Lays Off 243
In 1 on February 13, 2009 at 6:24 pmTAMPA – Law firm Holland & Knight laid off 243 people, consisting of
lawyers and support staff, at its 21 offices Thursday.
The number of employees affected in the Tampa office was not immediately clear.
Word of the layoffs created a buzz among local lawyers and legal
blogs. Late Thursday afternoon, the company issued a statement saying
70 lawyer and 173 support positions had been eliminated. The firm did
not say how many layoffs were in Tampa and did not name any affected
employees.
Cuts were based on which practice sectors are shrinking and not likely
to recover quickly and which are growing, the statement said.
Employees who were laid off will be offered separation packages, a
continuation of health care benefits and job placement assistance, the
law firm said.
Michael Sasso
msasso@tampatrib.com
http://www2.tbo.com/content/2009/feb/13/sp-law-firm-holland-knight-lays-off-243/news-money/
Do non-legal subsidiaries of Holland & Knight LLP automatically have a fiduciary duty to H&K Clients?
In 1 on February 10, 2009 at 11:05 pm|
|
|
A Double Standard for Lawyer Dishonesty: Billing Fraud versus Misappropriation
In 1 on February 5, 2009 at 10:48 am
In client surveys about their concerns about lawyers, excessive fees and dishonesty in billing practices are near the top of the list of client concerns. Empirical studies suggest that a majority of lawyers who bill by the hour engage in dishonest billing practices at least occasionally.
200 During the last decade, we have seen a fairly long list of high-powered lawyers go to prison and get disbarred for billing fraud.201 Even so, the American legal profession has as yet failed to insist that lawyers be truly candid with their clients about matters relating to the lawyers’ hourly fees. Most lawyers who mislead clients about billing issues or who withhold information that clients might want to know do so to serve their own and their partners’ financial self-interest. We need to draw clear lines that prohibit deception and that require disclosure.
Whatever the courts decide are the proper standards for discipline of lawyers who have taken client funds to which they are not entitled, those standards should be enforced in a fair and equitable way. Judge Schwelb correctly noted in his dissenting opinion in
Lisa G. Lerman – Source
Holland & Knight – Martha Barnett – Reforming State Bar Disciplinary Systems
In 1 on February 5, 2009 at 10:31 am
K
EYNOTE: MARTHA W. BARNETT
PROFESSIONALISM: DEBORAH L. RHODE
Let me close by singling out a representative example: reforming state bar disciplinary systems. Current systems generally dismiss about ninety percent of complaints without investigation.66 Although some of these complaints are clearly unmerited and reflect unhappy outcomes rather than unethical conduct, other complaints are excluded because disciplinary agencies are understaffed and underfunded. As a consequence most agencies decline jurisdiction over performance issues such as “mere” negligence, neglect, or overcharging. In theory, clients could bring malpractice claims for such abuses; in practice, such remedies are too expensive to pursue except in the infrequent circumstances in which liability is reasonably clear, damages are demonstrably substantial, and the lawyer has adequate insurance or assets available to cover a judgment.67 The vast majority of cases fall through the cracks, and only a minority of state bars offer alternative dispute resolution systems to address these claims.68 Moreover, the limited available evidence on the performance of such systems suggests that they are often more responsive to the concerns of lawyers than clients.69
Not only does the disciplinary process fail to provide remedies for most complaints, the remedies that it does provide are demonstrably inadequate. For example, in California fewer than two percent of complaints result in public sanctions.
70 Seldom does the system impose requirements like reimbursement that could benefit clients or impose significant penalties that might antagonize bar leaders, prosecutors, or other powerful officials.71 Only a handful of states authorize permanent disbarment, discipline of law firms, public disclosure of complaints, or sanctions against lawyers who fail to report ethical violations.72 All of these practices must change. If an informed and disinterested agency were designing the process, they undoubtedly would. The challenge lies in finding ways to nudge a self-interested profession in similar directions.
The same point could be made about a host of other issues that should be the subject of professionalism initiatives. Many bar ethical standards are insufficiently demanding or overly self-protective. They do too little to prevent overrepresentation for clients who can afford it and underrepresentation of everyone else. Litigation and fee abuses are too frequently unremedied, and non-client interests are too seldom protected.
73 Obfuscation and obstruction are common features of trial practice,74 and money often matters more than merits.75 Yet despite the cottage industry of commentary identifying these problems, judicial, administrative and legislative officials encounter significant disincentives to address them. Judges depend on the bar for their reputation, advancement, and sometimes campaign support. Constraints of time and resources also work against adequate judicial review of lawyers’ performance.76 So too, most elected officials see little to gain from challenging an interest group as powerful as the organized bar on issues of regulatory reform, especially since consumers have not mobilized around these concerns. The same is true of disciplinary agencies, which depend directly or indirectly on bar support.
Holland & Knight surprised by low marks from associates
In 1 on February 5, 2009 at 10:05 amAdolfo E. Jimenez, the partner in charge of recruiting at Holland & Knight, was surprised when the midlevel associates survey published by The American Lawyer magazine ranked the firm so low.
The firm finished 142 out of 175 firms in satisfaction nationwide behind such firms as Greenberg Traurig; Hunton & Williams; Edwards Angell Palmer & Dodge; Morgan, Lewis & Bockius; and White & Case.
The firm finished 73rd of 75 firms in New York, 21st of 22 firms in Chicago and 56th of 59 firms in the District of Columbia.
The bleak numbers were for a firm that takes pride in creating a friendlier working environment than most large law firms. On its Web site, Holland & Knight touts its commitment to pro bono work, diversity and a balanced work-life program.
"We were very disappointed where we ranked nationally," Jimenez said.
The good news came in Miami, where Holland & Knight finished first among six firms in associate satisfaction. Jimenez characterized that as "great news."
A Miami associate wrote on the magazine survey that Holland & Knight's Miami office was characterized by "friendliness and [a] pleasant working environment" and was "a great place to work." The American Lawyer is an ALM Media affiliate of the Daily Business Review.
Jimenez said that there are several factors that make the Miami office stand out.
"We are a dominant player," he said. "We are significant, yet our size allows for a lot of interaction between partners and associates, a lot of opportunity for quality work."
David Shahoulian, an associate in the firm's litigation department in Miami, agreed.
"It doesn't hurt that we have always been one of the busiest offices," he said. "We have a lot of clients. We bring in a lot of money."
Shahoulian said the culture of the Miami office also stands out.
"We seem to have a nice culture here in this office, and that same kind of culture is not in some of the other offices that seem to be dissatisfied," he said.
But associates elsewhere submitted scathing comments about their employer.
"Our office [Tampa] is a miserable place to work," an associate wrote. "There is no leadership, and those in charge are completely unresponsive to associate needs."
Another associate said, "Several partners in Chicago have made disparaging remarks [about] the balanced-life or part-time programs and make it difficult for women to have families."
A New York associate wrote that partners give "lots of lip service to diversity and flexible work schedules without real action to retain these talented lawyers."
An Orlando, Fla., associate said, "Historically, our firm was a large law firm that respected the individual, family and community. Over the past couple of years, our firm has begun to mirror other large firms in terms of profit motives."
Several associates also expressed dissatisfaction with the firm's handling of the situation involving partner Douglas A. Wright, who was promoted to chief operating partner in Tampa in 2005 but resigned that position weeks later after news reports surfaced that nine female lawyers had accused him of sexual harassment.
"He got a slap on the wrist and then got promoted. Brilliant," a Los Angeles associate observed.
In an age of expanding national and international firms, it's not unusual that associates in different places would have different levels of satisfaction, said Joseph E. Ankus, a legal recruiting consultant based in Weston, Fla.
"It's very difficult to stereotype what it's like to be at any particular firm," he said. "These firms, they turn into monoliths, and I think to some extent culture becomes individualized and regionalized to whichever office you tend to be in."
Holland & Knight took the results of the survey seriously, and firm leadership has tried to address some of the issues raised by the associates, Jimenez said.
Holland & Knight has tried to better focus its professional training and improve mentoring and communication in its offices since the survey was issued last August, he said.
"Both in Chicago and New York, the level of communication that's taking place is much greater," he said.
Jimenez said firm leaders also have tried to expand their travel to other offices.
He noted the survey was taken just before Holland & Knight decided to raise the salary of first-year associates to $125,000 in Miami and $145,000 in New York. The firm just finished its best year financially, Jimenez said.
The firm recently announced it was stretching its partnership track from seven to eight years — a change Jimenez said was unrelated to the survey results.
An Orlando associate wrote in the survey that the firm needs "better communication on how to make partner and once achieved how to make equity partner."
The firm currently has 669 partners, 372 associates and 95 senior counsel.
Most major firms aim to have "less partners and more associates" than Holland & Knight because associates "are getting paid their compensation, and everything else that they return above their cost is profit that gets distributed to the shareholders," Ankus said.
By comparison, Miami powerhouse Greenberg Traurig had 738 partners and 705 associates, New York-based Weil, Gotshal & Manges had 304 partners and 829 associates, and New York-based White & Case had 396 partners and 1,277 associates last September, according to The National Law Journal, another ALM Media publication.
While conceding Holland & Knight was a bit top heavy, Jimenez said there is no formula for making partner and the idea that associates believe they have a low chance of making partner is false.
Daniel Ostrovsky, Daily Business Review Source
For A Few Dollars More: The Perplexing Problem of Unethical Billing Practices by Lawyers
In 1 on February 5, 2009 at 9:55 am
DOUGLAS R. RICHMOND
Introduction
In August 2006, Matthew Farmer, once a promising young partner in the Chicago office of Holland & Knight LLP, was featured in a Wall Street Journal
article on his firm’s billing practices. Farmer accused a senior partner in his firm of billing fraud in connection with the firm’s defense of a case in a
Minnesota federal court. In a letter to a judge in related state court proceedings, Farmer detailed the senior partner’s apparent practice of billing for no fewer than 450 “phantom hours” that the firm’s lawyers never worked. To accomplish this, Farmer alleged, the senior partner either inflated other lawyers’ recorded time or created fictitious time entries from whole cloth. As a result, the firm collected more than $100,000 in fees to which it was not entitled. Holland & Knight denied all of Farmer’s allegations of wrongdoing, asserted that the amounts it billed were reasonable and appropriate, and took no action against the senior partner. The firm did, however, reach a confidential settlement with the insurer that funded the defense of the Minnesota case (which alleged that the firm had committed billing fraud).
article on his firm’s billing practices. Farmer accused a senior partner in his firm of billing fraud in connection with the firm’s defense of a case in a
Minnesota federal court. In a letter to a judge in related state court proceedings, Farmer detailed the senior partner’s apparent practice of billing for no fewer than 450 “phantom hours” that the firm’s lawyers never worked. To accomplish this, Farmer alleged, the senior partner either inflated other lawyers’ recorded time or created fictitious time entries from whole cloth. As a result, the firm collected more than $100,000 in fees to which it was not entitled. Holland & Knight denied all of Farmer’s allegations of wrongdoing, asserted that the amounts it billed were reasonable and appropriate, and took no action against the senior partner. The firm did, however, reach a confidential settlement with the insurer that funded the defense of the Minnesota case (which alleged that the firm had committed billing fraud).
As Farmer’s story illustrates, the once forbidden subject of unethical billing practices by lawyers is now openly discussed. Reported cases in which lawyers are professionally disciplined or criminally prosecuted for billing abuses are disturbingly routine. Press accounts of lawyers’ alleged billing and expense fraud are similarly common.
The Florida Bar v. John L. Scott – Sexual Misconduct with Client
In 1 on February 5, 2009 at 9:29 amThe following is a real-time transcript taken as closed captioning during the oral argument proceedings, and as such, may contain errors. This service is provided solely for the purpose of assisting those with disabilities and should be used for no other purpose. These are not legal documents, and may not be used as legal authority. This transcript is not an official document of the Florida Supreme Court. Source
The Florida Bar v. John L. Scott
The next case for the oral argument this morning is the Florida Bar versus scott. It is my understanding that we have two cases which are consolidated here, and that you all have worked out the manner in which you are going to proceed. Is the florida bar going to proceed first?
Yes, your honor.
Okay. You may proceed.
May i be seated, your honor?
Yes, please.
May it please the court. Good morning, my name is edward iturralde. I am here before this court to ask that the referee's findings of fact be accepted but not his recommended 18-month suspension with reference to mr. Scott's misconduct. Mr. Scott, number one, engaged in sexual misconduct with his client, gloria lee. The record reveals that, on october 22, ms. Lee went to his office to discuss hrs termination of rights proceedings against her son. She went in the morning, with her husband and was asked to return in the afternoon. When she returned in the afternoon with $1,000 that she had borrowed from her mother-in-law, mr. Scott asked the husband to step outside. When the husband stepped outside he asked ms. Lee, how bad do you want to win this case? She said i will do anything f i have to pay $20, $25 for the rest of my life, i will do it. He unzipped his pants, approached her, had he erection, was fondling himself. Grabbed her head, pushed it forward, and got semen on her face and blouse. She left, distraught, after wiping herself, was made to return by her husband, to get a receipt for $1,000 that had been paid. The husband knew something was wrong. She was obviously very upset. She wouldn't tell him why. The young child was in the backseat of the car. Later on that night, she told the husband and he was very upset and they decided to go see the mother, who had given them the money. They eventually went to see another attorney and ended up in law enforcement. Law enforcement, with their consent, asked if they could put a microphone on her and asked if she would go back to mr. Scott's office and she did. On october 28, she went, these conversations were recorded and they were later france kribd. — transcribed. Here, and i apologize to the court, but i am quoting from the record, amongst other conversations, mr. Scott said "do you want to success my congress", and he implied that doing so might make him work harder. He waxes and wanes, maybe it will help me work harder on your case and said you still have to pay me but i am already giving you a discount. During this october 20 conversation, she said i can't do it. My father repeatedly raped me, and i can't do it. I don't even do it to my husband. I can't do it.
Let me ask you this. I think we know the facts. Why do you think the referee recommended 18 months, instead of disbarment in this case? It is pretty grievous case, as you are making the point. Why do you think there was this particular recommendation?
Yes, your honor. Obviously i could never know. My suspicion is perhaps the mitigating factor he found, of mr. Scott's alcoholism. He did cite several cases that reflect a discipline proportionate to what he imposed here, in somaha, but the facts in somaha, there was mere touching and photographing of seminude. It wasn't personal parts. It wasn't downright sexual, although there were overtones or undertones of sexual content, and in somaha, he did impose a one-year suspension. He had some other cases with life suspensions.
Hasn't the referee, in the past, treated alcohol as a sickness and as mitigating factor in discipline before? Isn't this what the referee was doing in this case, you gather?
Yes yes, sir. I think that is correct, and i think this court has found alcoholism to be a mitigating factor as well. However, while this court has said it is a mitigator, it is not an excuse t doesn't give you free license. It doesn't mean you are beyond discipline. Had this person in the past, although they have demonstrated the mitigating circumstance of alcohol.
What was the disciplinary history of this person?
He had one minor misconduct in 1992. It was a bankruptcy case, and, in which he had not communicated with his client and did not proceed diligently in that matter, and, when asked by the grievance committee to provide certain documents to substantiate the fee that he had earned, he was unable to provide those documents. He stated that it was due to his secretarial staff and he received a minor misconduct with admonishment.
What in this case, if any, of any previous relationship relationship between this lawyer and this client, personal or professional?
There was evidence — right. She had visited mr. Scott previously, in regard to her other child. Her other, older — i believe it was the older child, and i could be mistaken, but her other child had significant psychological problems, and she didn't know what to do. He had attempted suicide. He had run away from home. He was shop lasting. — shoplifting, and she went to see mr. Scott for a $25 consultation. What do you think i should do with my son, and after a conversation, i believe they reached an agreement that, if you can't handle him and he has all these major psychological problems, maybe you should give him duress, and they had the resources to do. That she testified that she thought mr. Scott was her attorney and he made it very clear that it was a one-time $25 representation fee and the representation was over. There was, also, evidence that ms. Lee came back to him. That was sometime after october 1, because it was regard to an automobile accident case and a police report for an automobile accident case, which was introduced into evidence, dated october 1, so she went back to see him about this automobile accident case. He testified that he did not retain her, that he thought it was a sham. She testified that he told her to go get a neck brace and to get estimates and so forth, and she thought, she received the contract. She signed the contract. There was no evidence that mr. Scott had ever signed the contract, and the representation was terminated officially on november 11, when mr. Scott delivered a letter to her, indicating that he was returning her records and wasn't able to proceed with the case. According to mr. Scott, he terminated the — never initiated an attorney-client relationship. There is, also, testimony by mr. Scott, which was not discussed by the referee and apparently did not believe mr. Scott, that at some point in time between the $25 consultation case and the automobile accident case, that on a date, on a thursday when his office was closed, and the lights were off, that she came and knocked on the window of his office. That he went up to see her, and his words, she offered and i accepted, meaning that they engaged in sex, because she was so appreciative of the advice that he had given her in regard to her son. There was no corroborating evidence to that, other than mr. Scott's testimony. In fact, the time line would seem to indicate that there was very little time for that to have happened. The child was signed over to hrs on september 30, 1997, and that document is in the record.
Excuse me. Go ahead.
Very briefly, you haven't mentioned the contempt of court issue?
No, sir, i have not. Not yet.
And how did that play into this?
Well, of the three things, generally, he has been accused of, the sexual misconduct, the lying about the sexual misconduct and the contempt of court, obviously the contempt of court is the lessee egregious, but i think mounting evidence is building a pyramid upon which this court could, should do nothing else than disbar mr. Scott. I discussed the facts. If you would like me to. I wasn't sure what the question was.
You are in your rebuttal. Thank you, counsel. Mr. Scott.
My turn?
I appreciate you all letting me come here today and this is the first time i have ever appeared before you all. I don't know really know what i am saying or doing, so if i say or do something wrong, please correct me. I was first denied an oral argument. I filed a motion for rehearing, and for some strange reason it was granted, and i appreciate it because i came here to tell the truth. There are two parts to this case. Now, i think i am supposed to look at this clock, right?
Right.
The —
The yellow light will come on and as i understand understand the way we are proceeding, the florida bar is then going to argue —
Ten minutes and then reserve fi. Yes, sir. Thank you. — five. Yes, sir, thank you. This woman came to me in august. She had been presented a proposal by the department of family and children, to terminate her oldest son's parental rights for her oldest son. Apparently he had psychological problems. We talked about it. I, at that time, had a basic $25 consultation fee. Okay. We discussed it. She decided that she could not take care of the child, and she left, and i explained to her profusely that it was the end of my representation with her. Now, at that time in my life, my secretary at that time, i did a lot of title work, a lot of real estate work respect and on thursday afternoons and some days all day thursday, she would be gone to the court houses, doing title work, but i would go down there and work on the books and everything, so sometime between this august date and approximately august, october 1, this woman knocked on my door. The lights in my office were off. My office was closed. I own my office outright. Okay. When it is closed and the lights were off and the door is locked, it is nobody's business what happens in there but mine, because i own it. Not the florida bar. Not the supreme court. Anyway, this lady knocked on the door. I went to the door, because a lot of my friend there, in town, happened to know that sometimes i am there doing my books or something there, even though the lights are off. This woman came in, and as ms. — as mr. Ity you are alleged' very gently said — mr. Iturralde so gently put it, i accepted. I am ashamed of it, because my mother had just died. I had had a stroke and a serious blood clot a couple of years before, and had not, to be honest with you — i don't know how to put this gently — had not been with a lady for a while. This woman offered and i accepted, but i was not — i did not represent her at that time. Okay. Then she came back, about october 1 or a little bit after that. She had had an automobile wreck. An uninsured motorcyclist had bumped into the back of her bumper. She came into my office with a neck brace on. She had somehow talked a doctor into getting one. She took it off and laughed and said, here, we will make some money on this. And i said, you know, i don't do that. I don't handle fraud cases. I said are you hurt? She said, well, i don't know. I don't think so. And i said, well, i don't want to have anything to do with the case. I did do her a courtesy of giving her some medical release forms. I said what you need to do is, you need to go see a doctor, really, and you probably have uninsured motorist coverage. —
Let me get this straight. Up until this point, was she ever a client? Did you ever consider her a client?
No, sir. My secretary, who had worked for me for six years at that time, when she first came in the office, she had called her in advance, in this first part of october, okay, and she had called her and told her what it was about. It was about a automobile case, and my secretary had worked for me for so long — yes, sir.
In any of your dealings that you ever had with her, did you ever consider her a client?
No, sir. I considered her a client in the last part of august, when i discussed, with her, the termination of her parental rights with her oldest child, and then i considered her a client on the afternoon of october 22. She and her husband, which i didn't find out until then that she was married, but she and her husband came in to see me, on the morning of october 22, and i told them that i would represent them, because the department of family and children were attempting to terminate the parental rights on the second child. But that i would need $1,000 fee. They came back on the afternoon of october 22. There were five people who were there in my office.
Is this the period when it is represented that you toll the husband he would — you told the husband that he would have to live and she would stay in?
No, sir. There were five people. Four of them testified at the trial, including my secretary at the time. One of them by affidavit at the grievance committee. He was sick in indiana and couldn't appear personally. There were five people in my office at that time, and they all testified, my secretary being the main one, robinted well, that she never — robin tidwell, that she never left the front of my desk. Bran forward is a town of 4,000 people. I am a country lawyer. I have a little tiny office, and my secretary testified, plus four other people in my office testified, either personally by affidavit or at the trial, that this woman, on the afternoon when she made the complaint and she said this happened, and she testified in her complaint and said this happened in the afternoon of october 22 that i sexually abused her, and my secretary and these other people said that this couldn't have happened, because my secretary and two of these two people were sitting in the front part of my office, and the other two people were sitting in my personal office.
But are you challenging the findings of fact by the referee at this point? Is that what you are challenging?
Yes, sir, and i know, as we say in the country, i am up against it, but i brought a 40-page brief here, and i can't go through that in 15 minutes. But i am asking you all, imploring you all to read it. This is the worst — this woman is, was an admitted schizophrenic, who did not take her medicine, who refused to take her author a sin, because she — her thorazine, because she didn't like the way it felt.
Let me put it this way. If we accept the findings of fact of the referee, why is the discipline in this case, why should it not be a more serious —
If you accept the findings of the referee, by god you ought to disbar me, because this referee came out and said, basically, that i had sexually abused this woman and done all these things and lied and done all this stuff. No. This is a case about facts. And like i say, as we say in the country, i know i am up against, because i don't think you all want to really consider facts. I know that that is not really what you all do. You really want to consider law, and i don't have a whole lot of law here, but i have got 40 pages of facts. I have got two police officers and the states attorney that admitted —
Mr. Scott, please. What about the tape?
The tapes? I will be honest with you, sir. Judge wells, i was a drunk then.
I would expect you to be.
I was a drunk then. On december 13, 18999, i — december 13, 1999, i quit drinking and hadn't had a drink sense. I was drunk then. I had had a previous nonrepresentational sexual relationship with this woman. Two police officers that sent her to my office, tape-recorded, to get me to talk about sex. And she started it, and i did it and i said some filthy things, and some ugly things that i am ashamed of. Not because of you, but like i said a minute ago, because my mother taught me better, and i did wrong on december 13 or a couple of days before that. I looked at myself in the mirror and i said i don't like what i see, and i checked into a rehab center, and i haven't had a drink since. I go to the gym everyday. And i have rehabilitated myself. The bar didn't ask me to do that. The bar didn't help me to do that.
But you were representing her though, during the, in october of 1997, when the tape-recorded conversation —
When the tape-recorded — yes, ma'am, when the dirty conversations — i guess.
Is that — how, in terms of those comments or remarks, are you saying, now, well, i did that, but i asked to be accused, because i was an alcoholic during that time?
I was drunk and i was alcoholic. I was sick, justice pariente. Yes, ma'am. I was a sick man. Alcoholism is a dreadful disease. Okay. I guess i will always be an alcoholic. We learn in aa that you, i guess you probably are always alcoholic. If i went out now and bought a bottle of liquor, it could be that i could again be drunk by tomorrow.
You are in your rebuttal on the cross-respondent's case.
Okay. I finished with my time?
Yes, sir.
Okay. Thank you.
Now, this is going to be your rebuttal and your statement on the other case, is that the way we are proceeding here?
I just thought it was going going to be rebuttal, and i will answer whatever questions the court has for me.
On my, on the sheet that i have, mr. Scott would have some additional rebuttal. Is that the way you are proceeding here?
Yes. That's correct. I filed, first, and then mr. Scott filed petition for review, so we are cross appealing each other. He does get the last word. He has the last five minutes.
Okay.
Mr. Scott just indicated that he voluntarily entered rehab and is going to aa and trying to take care of his problems with alcohol, and to what extent should we take that into consideration, when we are looking at the discipline, if there is to be discipline in this particular case?
I think you should look at it and i think the referee did look at it. But i think, at a certain point there is a line in the sand, where we say that is disbarment activity, and if you have just stepped over the sand, that line in the sand, you can weigh the mitigating factorors and say, well, alcoholism can bring you back, but when you have the sexual misconduct in this case, you double that over with the line about it in this case, and you add a little bit extra for the contempt in this case, the alcohol mitigation just doesn't fit the scales of justice back into line. You have 100 pounds on this side and maybe ten pounds of mitigation, and it just doesn't balance out, and that would be the bar's position. I understand that it is a mitigating factor. I accept that it is a mitigating factor. I agree that it is a mitigating factor, but it has to —
There, in the mitigating factor, and mr. Scott said whatever relationship he had with this lady started when she was not his client, and is that mitigation in this instance?
I do not believe so. I believe that is a fabrication on mr. Scott's part, and i believe that the judge found that to be a fabrication on mr. Scott's part. You find that the referee does not mention that testimony at all. He completely discounted it.
In terms of punishment, we have these acts occurring in 1997.
Yes, ma'am.
We are now in 2001.
Yes, ma'am.
And as far as the bar seeking the ultimate sanction of disbarment, meaning basically that we don't see that it is possible for mr. Scott to be rehabilitated, what is the bar's position that, once finding this out, instead of trying to seek a suspension, i mean, he was apparently practicing for over a three-year period, without any further incident, and the fact that he is now getting active treatment or had gotten treatment, again, sort of supporting this concept that the bar is seeking disbarment for an act that occurred years before. How do you respond to that problem?
With all due respect, your honor —
What i see as a problem. Maybe you don't see it as a problem.
No, your honor. It is a problem, but with all due respect, it is not just 1997. The sexual misconduct certainly was in 1997, but then in 1999, he lied about it to the grievance committee. In 2000 he lied about it to the referee, and in 2000 he got the contempt, so there is ongoing misconduct that is not just an isolated incident back in 1997.
But we have got to accept, for the purpose of our review of this competent, substantial evidence, that i guess ms. Lee testified one way and mr. Scott testified the other. He is telling us, again, as an officer of the court, that this didn't happen the way the referee found t the fact that someone says it didn't happen that way, how do we make the misconduct worse, because he doesn't admit to something that he says didn't occur?
Because it is not just a he said/she said. We have the tapes. We have the billing statement prepared by mr. Scott in response to the state attorney's office, which is exhibit 18 in the record, and in that billing statement, he puts in no charge for the initial consultation, which occurred in the morning of october 22, and he puts in, i forgot the amount of time, about a half-hour, i believe had, in the afternoon portion of it. If it occurred the way he stated why would he not bill her in the morning but bill her a half-hour in the afternoon, when it was such a short conversation that occurred in the vest buell of his office? He prepared that document, himself, on november 5, 1997, just a few days after the, these alleged incidents. He prepared it in response to the state attorneys office, where he was being, in the process of being prosecuted for a serious offense, which could affect not only his license but his reputation in the small community, and you know, there is, also, physical evidence, the receipts, which is exhibit 34 in the record. Those receipts show that the shores, the alibi witnesses, paid $1,000 to mr. Scott before the lease paid. These alibi witnesses, it is my impression and contention, left before the lees. The lees testified that, when they got there, they did see people waiting in the office, and they knew that mr. Scott had clients in the back. They went, with their kid, to get ice cream, and then they returned. That is why these alibi witnesses didn't see the lees. I understand that he has got a dispute with the evidence and the facts, but it is not just a he said/she said. There are physical evidence that dispute what he is saying.
So the state attorney prosecuted this immediately, in 1997?
Yes, ma'am.
The bar waited two more years to do something about it?
I don't remember exactly why that had not been prosecuted. I came into the florida bar in 1998 and inherited this case and we it took it to the grievance committee.
Do you agree that this is the worst of the worst situation? Again, in terms of public trust and confidence, for the bar to let something like this go, if they feel it was as egregious as now presenting, concerns me, but you are now bringing up that this second incident, the jacksonville incident, which you say wouldn't rise to the level of disbarment alone, could you just give us, did that occur after he was in treatment for alcoholism?
No, ma'am. That did not — that occurred in i believe, 1999. He was scheduled for a trial on monday. He had picked the jury with judge kenon and the state attorney. He was told, along with the jury and the witnesses to return on wednesday, to perform the trial. On tuesday, he called his secretary and asked her to call — i see that my time is up. May i finish this response?
You may complete your statement.
He told the secretary to call the office, and inform them that he was having a heart attack. He did not go, however, to seek immediate attention. He went to jacksonville for a settlement conference, and then did not seek any medical attention until the following day. Mr. Chief justice: thank you.
Thank you. Thank you, your honors.
Do i have five minutes more?
. Mr. Chief justice: i believe you have got about four minutes more. Four minutes.
Three? Okay. Okay. I am tired of being called a liar. I have got a motto — mr. Chief justice: mr. Scott, have you joined the florida bar program for alcoholism?
Yes, sir. I quit drinking —
Have you entered into a contract?
I voluntarily entered into a contract with fla in february.
February of what year?
2000. I quit drinking on december 13. I got out of the hospital, the rehab, vista rehab, on december 17. I had an aa sponsor the next sunday. I got out on friday. I had a sponsor that sunday. I started going to aa meetings twice a week, and then i found out about fla, and i joined them in either january the next month or february, the first of february. I can't remember the exact date. And i have called, every single day, to the number, and taken — sorry — an urine test, when required, and apparently done okay. I haven't had any complaints. Ill like to make a couple of — i would like to make a couple of comments, if i could. I drafted — the states attorney and the fdle agent, and the head of the detective department for the sheriffs department, investigated my case completely. They talked to every woman that i have ever known, probably, in the last 20 years. The best they could come up with was solicitation of prostitution is what i was charged with, and miss johnson admitted, under oath, it is in the trial record, and the fdle agent, mr. Daniel more or less admitted they had a really weak case. I am the one that drafted the pretrial intervention agreement. I am the one that put that part in there about that i would be required to go to a psychiatrist and i hired the most imminent forensic psychologist, dr. Cr
819 F.2d 1002 Glaeser class action against Holland & Knight et al
In 1 on February 4, 2009 at 3:47 am819 F.2d 1002
56 USLW 2013
Jean Ann CONE, as Personal Representative of the Estate of Evelyn M. Glaeser, deceased, and as representative
of a class of all persons similarly situated, Plaintiff-Appellant,
v.
The STATE BAR OF FLORIDA, the Florida Bar Foundation, Inc., and Holland & Knight, Defendants-Appellees.
No. 85-3993. United States Court of Appeals, Eleventh Circuit.
Ms. Glaeser, claiming to represent all persons similarly situated, sued Holland & Knight, the Florida Bar, and the Florida Bar Foundation, to recoup this interest. She claimed that the appropriation of the interest earned on her money constituted an uncompensated taking of private property in violation of the Fifth Amendment (as applied to the states via the Fourteenth Amendment), and deprivation of her property without due process, as well as a breach of fiduciary duty under state law. Her1 argument was simple: any interest earned on her portion of the Holland & Knight IOTA account belonged to her.
Zebersky on Holland & Knight conflicts and petition to amend Florida’s Rules of Professional Conduct
In 1 on February 3, 2009 at 6:54 pmIN THE SUPREME COURT OF FLORIDA
CASE NUMBER SCO5-1150
IN RE: PETITION TO AMEND
RULE 4-1.5(0(4)(B) OF THE
RULES OF PROFESSIONAL CONDUCT
/
RESPONSE TO PETITION BY EDWARD H. ZEBERSKY, ESQ.
This is a Response to the Petition filed by former Justice Grimes
seeking to amend the Florida Rules of Professional Conduct Rule
1.15(f)(4)(B). It is with great concern, as will be further discussed, that I
write this Response.
I have had an opportunity to review the petition along with the names
of all the lawyers that have signed the document. What strikes me right off is
that the petition is being filed by a paid lawyer (Former Justice Grimes) and
law firm (Holland & Knight) for the Florida Medical Association (FMA) as
well as other counsel that are directly employed by the FMA. What is even
more troubling is that a majority of the signatures on the Petition are from
either other members of the Holland & Knight firm or from paid lobbyists,
lawyers and consultants for the FMA or their allies. In short, after scratching
the surface of this Petition, it is clear that the document is
nothing more than an attempt by the FMA, through their paid lawyers and
allies, to eliminate any real responsibility for acts of medical malpractice. I
submit that this attempt creates a conflict of interest.
HISTORY BEHIND AMENDMENT 3
To more fully illustrate this point a brief history behind Amendment 3
is necessary. In, 2003, the FMA and its main insurance carrier FPIC launched
an all out assault in the Florida Legislature to effectuate caps on noneconomic
damages in medical malpractice cases. Some of the lawyers listed
on the Petition were either paid lobbyists or volunteers for the position taken
by the FMA during the 2003 sessions.
After the regular session and several special sessions, a cap on noneconomic
damages was eventually passed and signed into law by Governor
Bush. The cap was larger than what was advocated by the FMA and there was
a huge grumbling amongst the doctors that they should go on the ballot in
2004 to effectuate a hard cap on non-economic damages. The doctors
eventually decided that instead of going forward with a non-economic damage
cap, it would attempt to cap the amount of attorney’s fees that could be paid in
a medical malpractice action.
The reason for this change is simple; in 1986 and 1988 the doctors had
tried a cap on non-economic damages and lost. As such, rather than
2
fighting an uphill battle with the public by directly capping damages, they
would go forward with a simple notion to cap attorney’s fees. By capping fees
the hope was that it would become financially infeasible for a qualified
malpractice lawyer to accept a complex malpractice case on a contingency fee
basis.
The slogan for the Amendment 3 Campaign was “enough is enough”
and their campaign was nothing more that an attempt to smear the legal
profession and especially trial lawyers. Clearly this worked as Amendment 3
passed by almost a 2/3 majority. However, the goal of the campaign was not
to put more money in the client’s pocket, but to make it near impossible for a
lawyer to accept a medical malpractice case on a contingency basis. This way
the doctors would achieve their main goal; limit the ability for a person to
seek redress for medical malpractice.
Former Justice Grimes was hired by the FMA as its lawyer throughout
the Amendment 3 process. Indeed, he appeared as counsel of record before
this court with respect to the constitutionality of the amendment language.
Similarly, he was hired as counsel to oppose the constitutionality of two
amendments (Amendments 7 and 
which effected doctors.
Based on the history of Amendment 3 and the forces behind the
amendment, I submit that this Court should look at the Petition as little more
3
than a thinly veiled attempt to effectuate the purpose behind the FMA’s main
goal; eliminate any meaningful access to courts to redress medical malpractice
injuries.
PUBLIC POLICY CONSIDERATIONS
The Florida Bar has an independence that is not shared by many
professions in the State of Florida. The Bar polices its own for violations and
creates its own rules for professional conduct. There is little
dispute that this
type of governance has worked very well for a very long time. This Petition,
which is being pushed by people that have a conflict of interest based on their
or their firm’s involvement with Amendment 3, strikes at the very heart of the
independence that the Bar has enjoyed over decades. If this petition is
granted, the FMA will have succeeded in influencing Bar governance and will
surely open the floodgate to future attempts by interested lawyers to
undermine the independence of the bar.
Another policy concern is whether this Court wants to restrict a
persons’ ability to waive their constitutional right to contract with
a lawyer of
their choosing. Constitutional rights are waived every day. Miranda warnings
waive certain constitutional rights. The Right to Access to Courts is waived
everyday when arbitration agreements are executed. In fact, outside of life and
death circumstances it is difficult to find a constitutional
4
right that cannot be waived voluntarily. Based on the goals of the FMA, which
is to eliminate medical malpractice lawsuits, it should come as no surprise
that the FMA’s lawyers are asking this court to eliminate a persons’ right, not
only to contract, but to waive their constitutional right.
CONCLUSION
This Petition process is fraught with conflict of interest. Moreover, it is
little more than an attempt by the FMA to interject itself into Bar governance
to effectuate what it could not in the legislature or through the Amendment
process; eliminate medical malpractice lawsuits. This Court should not
entertain this request which will serve to limit and not enhance the rights of
Florida’s citizens and for those reasons and the reasons asserted by numerous
other lawyers the Court should deny the petition.
Respectfully submitted,
EDWARD H. ZEBERSKY, ESQ
Zebersky & Payne, LLP
4000 Hollywood Blvd
Hollywood, FL 33021
Telephone: ~2) 989 .333
Facs’ ile: (9 4 /• 89 781
EDWA H. ZEBERSKY, ESQ.
Florida Ba No. 908370
Bv:
5
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that a true and correct copy of the foregoing has
been furnished via U.S. regular mail this 23rd day of September, 2005 to: John
Harkness, General Counsel, The Florida Bar, 651 E. Jefferson Street,
Tallahassee, FL 32399-2300 and Stephen H. Grimes, Counsel for Petitioners,
Holland and Knight, LLP, P.O. Box 810, Tallahassee, FL 32302-0810.
EDWARD H. ZEBERSKY, ESQ
Zebersky & Payne, LLP
4000 Hollywood Blvd
Hollywood, FL 33021
Telephone: (95 4) 989-6333
Facsimile: (9 89-771
EDWA ~.b H. Z B ‘ SKY, ESQ Bar
No. ‘ i 8370
By:
6
Leigh Jones reports Holland & Knight lost 47 lawyers in 2008
In 1 on February 3, 2009 at 6:42 pmStaff growth at America’s largest law firms slowed in 2008, according
to new research, with a host of major firms contracting in the face of
the ailing economy. Holland & Knight lost 47 lawyers (4.1%).
Author: Leigh Jones
http://www.legalweek.com/Company/340/Navigation/18/Articles/1179139/Cads+and+Shearman+shrink+as+US+firms‘+growth+slows.html
Six Holland & Knight Partners Quit to Launch Boutique Firm
In 1 on February 3, 2009 at 11:39 amHolland & Knight suffered its first large partner exodus in years when six of its top lawyers announced that they were leaving to start their own firm. The new firm, to be known as Avila Rodriguez Hernandez Mena & Ferri, includes Alcides I. Avila, former head of Holland & Knight's banking and finance group. "We believe that there's a strong market for a small boutique firm that can provide personalized services," Avila said. "We're going to have a lot more flexibility in the type of cases we can handle." Source
Disbarment Sought for Former Holland & Knight Partner
In 1 on February 3, 2009 at 11:28 amBy Debra Cassens Weiss source
The District of Columbia Bar Counsel is seeking the disbarment of a former partner at Holland & Knight for allegedly forging signatures on an agreement for an easement.
Theodore Silva Jr. is accused of lying to the law firm and a client about the status of the agreement, then forging signatures and presenting the agreement to the client, Legal Times reports. The firm fired Silva in 2006 after the incident and reported him to the bar counsel, the story says.
Silva testified before a hearing committee that he didn’t consider himself to be honest and trustworthy, according to the story. "I think that I can get over on everybody and that I can manipulate people, and that is what led me to this, is that I can pull this out of the hat and I did it a thousand times," he testified.
Silva’s lawyer, Timothy Battle, is claiming his client's misconduct was caused by alcohol and cocaine addiction, depression and attention deficit hyperactivity disorder. Battle described the incident in a brief as a “single example of stupid conduct in an otherwise impressive and productive 18-year career."
Silva has also received a Jan. 31 reprimand (PDF) from the Virginia State Bar Disciplinary Board for failing to report a guilty plea to cocaine possession. The plea was vacated after Silva complied with court-imposed conditions. He is currently in a drug treatment program, Battle told the publication.
Holland & Knight sued for breach of contract and negligence by Johns Hopkins professor out $20 million
In 1 on February 3, 2009 at 9:58 amA Johns Hopkins Hospital neurosurgery professor alleges he is out $20 million because the company hired to pay the annual maintenance fee for a Japanese patent of a pain-relieving drug failed to do so.
Dr. James N. Campbell is suing the Channel Island branch of Computer Patent Annuities, which specializes in managing intellectual property rights for its clients, in Baltimore City Circuit Court. The suit also names the law firm of Holland & Knight, which employed the lawyer who hired Computer Patent.
Attorney Steven E. Tiller, who is representing Campbell and his company ARC 1 Inc., estimated that the renewal fee was less than $1,000.
The complaint further alleges that the law firm continued to bill Campbell for maintaining the patent, even after it had been terminated.
Computer Patent spokeswoman Charlotte Presse said yesterday that she was not aware of the lawsuit, while Christina Calhoun, a spokeswoman for Holland & Knight, said she has not had a chance to look over the pleadings.
The complaint refers to the medication invented by Campbell as Clonidine. Tiller said the drug is used to treat neuropathic pain, which is caused by nerve tissue damage.
It is being used in the U.S. and has been very successful [without] the debilitating side effects that sometimes occur in patients with the more traditional treatments, said Tiller.
The complaint explains that Clonidine is unique, because it is applied topically, or to the surface of the skin, thus affecting only the targeted area.
According to the complaint, the medicine can potentially benefit millions of diabetics and cancer patients.
Discovering the drug involved years if not decades of experience on his part, said Tiller in reference to Campbell, who graduated from Yale University School of Medicine in 1973.
A Georgia lawyer obtained patents for Clonidine in the United States, Australia, Canada, Europe and Japan, the complaint alleges.
The Japanese patent, issued in 1998, was valid until 2011, contingent upon the payment of annual maintenance fees, the pleadings state.
Campbell's patent counsel, according to the complaint, hired Computer Patent Annuities to take care of the renewal fees and then joined Holland & Knight in 2001.
In May 2002, Curatek Pharmaceuticals, which acquired an exclusive license to the patents, directed the law firm to pay the Japanese maintenance fee, the complaint alleges.
Holland & Knight instructed Computer Patent to do just that, the lawsuit alleges, but the company failed to do so.
But, when Computer Patent sent a letter to the law firm in June 2002, noting that a payment for the patent was overdue, Holland & Knight responded that the fee was paid and asked the agent to note that in its records, the complaint alleges.
The lawsuit faults Computer Patent for not independently verifying the law firm's claim. Holland & Knight, in turn, is accused of not properly supervising the company it hired to maintain the patent.
Upon information and belief, Holland & Knight was aware of similar incidents, prior to this one, in which [Computer Patent] failed to pay maintenance fees on a patent, the complaint alleges, adding that the law firm did not have an adequate internal tracking system in place to ensure that maintenance fees were in fact timely paid.
Indeed, neither the law firm nor Computer Patent discovered the error within the one-year period Japanese law provides for reviving a patent, the plaintiffs allege.
Campbell, in fact, was billed for the renewal of the patent after it was already abandoned and terminated in 2003 and 2004, the complaint says.
Japan is considered the second-largest pharmaceuticals market behind the United States, Tiller commented.
I don't know what, if any, use the drug has in Japan as of yet, he said.
Curatek no longer holds any rights to Clonidine and the lawsuit states that Campbell is currently negotiating with potential licensees.
The abandonment of the [patent] has dramatically reduced the potential value of this patent portfolio, the complaint alleges.
The pleadings accuse Holland & Knight as well as Computer Patent Annuities of breach of contract and negligence.
Lawyers and the criminal law – Stephen Warne on professional negligence, regulation and discipline around the world
In 1 on February 3, 2009 at 9:39 amReproduced below is a blog post about 'bill padding' from the US site, Legal Blog Watch. That is where lawyers say work took them longer than it really did, and so charge commensurately more, or even make up the fact that they did work, and charge for it. Sometimes I read articles like this and wonder whether lawyers don't think they live in a different world where, if they commit crimes, what will happen to them is that they will be dealt with by professional discipline. They think that, or course, because it's more or less true, unless you get caught stealing from your trust account. But the criminality of time sheet crime should not be allowed to be buried under anodyne euphemisms. 'Bill padding' sounds kind of cute, a necessary evil. It is a kind of newspeak. Time to do away with it. Let's call it 'rapacity fraud'. It is tolerated by the profession in this sense. There are generalised allegations of widespread bill padding. Talk privately to costs consultants and they will tell you all about it. But I have never heard of a firm which has even basic anti-fraud procedures to detect the practice.
My point kind of makes itself when the author says 'allegations of bill padding … drew … strong criticism about the practice from legal ethics experts'. Experts say fraud is bad? Well shit Sherlock! The 9th commandment does kind of feature relatively prominently in most systems of law. We're going to have the case one day when someone actually subpoenas a firm's electronic billing system and its metadata, and diaries, analyses when the billing entries were made, and cross-examines lawyers on how they could have billed 180 units in a day and still made it to the client function at 6 p.m., or why, having billed relatively consistently every day, they would suddenly remember on the 30th of the month some comparatively vaguely described units they had forgotten to record mid-month, or why given that they had used a precedent for similar documents three times previously in the same month, they decided to draft the document from scratch, only to end up with — you guessed it — the same document as the precedent. Now, that article:
'Bill Padding, Revisited
Unlike many traditions in the legal profession, it seems that bill padding never goes out of style. Two years ago, allegations of bill padding by a junior partner at Holland and Knight drew national coverage, as well as strong criticism about the practice from legal ethics experts. Now, the Edinburgh Evening News is reporting that an internal memo leaked from the depths of mega-global law firm Clifford Chance "has junior lawyers complaining that they are obliged to 'pad' their clients' bills." Among other things, the memo describes that "junior lawyers have to invent problems so they can bill 2420 hours a year and that 'under-houred' senior lawyers are given extra work to bulk up their hours." Reportedly, Clifford Chance leaders will convene an emergency meeting to make clear that the firm does not have a policy of encouraging bill padding.
I don't know whether Clifford Chance lawyers are really encouraged to pad their bills or not, or whether the memo exaggerated the policy. (Though as an aside, I note that Rees Morrison suspects that most firms with mandatory billing requirements inevitably engage in some type of bill padding.) Instead, I wonder whether those firms that do pad their hours can continue to do so in a declining economy, where clients are scrutinizing their legal costs more closely. At the end of the day, perhaps it's economics, rather than legal ethics, will drive the practice of bill padding into extinction.' Source
The Perfect Crime? “The amount billed by Holland & Knight in the litigation was reasonable and appropriate,” says L. Kinder Cannon III
In 1 on February 3, 2009 at 9:31 amPosted by Ashby Jones
William Ross, a professor at Samford University’s Cumberland School of Law in Birmingham, Ala., calls it “the perfect crime.” NYU legal ethics guru Stephen Gillers says there’s a “general consensus” that the practice is on the upswing. The practice? Law-firm billing fraud, and the WSJ’s Nathan Koppel takes a look at the issue through the lens of a series of incidents that allegedly took place in Holland & Knight’s Chicago office.
After Matthew Farmer, a 42-year old junior partner with the firm, suspected that his own hours on a trial for home builder Pinnacle Corp. had been inflated by the partner in charge of billing, 62-year-old Edward Ryan, he blew the whistle on the firm.
The firm took no action and denies Mr. Ryan or the firm did anything wrong. “The amount billed by Holland & Knight in the litigation was reasonable and appropriate,” says L. Kinder Cannon III, the firm’s general counsel. Mr. Ryan declines to comment. Last October, Mr. Farmer took a 7% pay cut to join Cohn Baughman & Martin, a 12-lawyer firm. He says he left because he was upset that Holland & Knight wasn’t acting against Mr. Ryan.
It’s a sensitive issue. But, lawyers out there, we’re curious: How prevalent is billing fraud at law firms? Have you seen it? Have you been pressured to pad hours? Have you suspected your colleagues?
Update The St. Petersburg Times on Thursday posted a copy of a letter that Matthew Farmer wrote to a judge earlier this year, detailing the alleged billing fraud that he discovered at Holland & Knight.
Comments
Report offensive comments to lawblog@wsj.com
This has always been fertile ground for scandal. Lawyers are judged not by the quality of their work but by the number of hours they bill; clients, often huge corporations, blithely pay these invoices without any oversight or parameters as to what is reasonable under the circumstances. So is it any surprise when bills are inflated? But soon, many companies, if they have not already, are going to get sick of being ripped off and start acting toward lawyers the same way they act toward the people they buy paper from.
This happens all the time, every day at law firms around the country.
With the extraordinary hours pressure placed on every lawyer at the big firms, from brand new associates to even mid-level partners (except perhaps (?) the biggest rainmakers), it should come as no surprise to law firm management that overbilling (or just plain over-working) of matters occurs. I’ve round-tripped from big firms to in house several times in the past 20 years, and the focus on hours seems to have grown significantly in the past few years – in many cases largely crowding out other values such as good lawyering, client management, mentoring, etc. If the big firms don’t figure out a way to balance these factors more appropriately, we are going to see more and more cases like H&K – and the big clients will be whistleblowers too.
Hourly billing causes firms to lose clients who fear they are being duped; to lose associates tired of being judged based on hours alone; to lose marketing power because marketing is undervalued when compared to to billables; and to lose efficient production of work product (can you imagine how much a toaster might cost if the people working the assembly line were told they were paid based on the amount of time they spent crafting the toaster, rather than based on the output and number of toaster purchases?).
When will law firms abandon an out-dated model that clearly has little or no relevance in modern times?
…when clients go to some sort of payment for value, not for objectively messured inputs. Some big clients startng doing this some time ago.
Those interested in the likely response of the Illinois Attorney Registration and Disciplinary Commission may wish to review the results of the ARDC’s investigation of the Chapman & Cutler attorney who (allegedly) billed 6,000 hours in one year. This was back in the 1990s, and was the subject of an article in, I believe, the WSJ. You can do the math, but to bill this many hours, you have to work 13-14 hours a day, 365 days a year (yes, that includes Thanksgiving, Christmas, Independence Day and New Year’s Day). This was reported to the ARDC, but to my knowledge, the ARDC did nothing.
What a surprise, a large firm is reported to the bar and nothing happens.
At most law firm, overworking associates is the problem, rather than overbilling itself; they usually have more than enough work to do. Of course, many lawyers are tempted by personal circumstance (trying to meet a billing quota, trying to make partner, etc.).
Overbilling is probably more typical at smaller firms that bill by the hour, when work becomes scarce and lawyers are tempted to inflate their timesheets.
I have done thousands of write downs, but never a write-up. The problem is that selling hours, like a ditch-digger, is a fundamentally wrong way of valuing legal services. Clients do not benefit from hours, they benefit from trial victories, completed transactions and resolved problems.
I have no problem if a law firm says to me “we only worked 10 hours on your problem, but we saved you a million dollars, so our fee is going to be two times (or three times) our normal amount.” But I have a very serious problem if a law firm says to me (through its bill) we worked so many hours on your problem and in fact did not work that many hours. Question: should inside lawyers be imposing on outside lawyers some kind of audit requirement, some check of the bills against the handwritten time sheets (I assume there are still are such things)?
Correction on the math: You’d have to work about 16.3 hours every day of the year to bill 6,000 hours. How the Illinois ARDC failed to find anything wrong with this boggles the mind, at least until one remembers that the attorney in question was one of the legal ubermenschen at a heavy-hitting, white-shoe, old-line Chicago firm. If the same hours had been billed by an untermenschen lawyer doing scutwork in the suburbs, you can rest assured that there would be another pelt nailed to the wall of the ARDC outhouse.
A description of the fraud by the Chapman & Cutler partner (and a similar fraud by his wife), see http://www.hofstra.edu/PDF/law_lerman2.pdf, starting with Part IV.
The funny thing about the ARDC case is that 6000 hour biller’s husband, who was the managing partner at Winston, was also accused of billing fraud. Shades of “Fun with Dick and Jane,” no?
See http://www.hofstra.edu/PDF/law_lerman2.pdf (starting with Part IV) for a full description of the Winston & Srawn and Chapman & Cutler husband & wife overbilling/fraud scandal.
Anonymous properly mentions the so-called “idiocy of the billable hour,” but there is no distinction between a ditch digger and a lawyer. When I hire a ditch digger, I don’t benefit from the hours spent, I benefit from the completed ditches. Yet the fact is that internal hourly compensation for employees is usually the norm WITHIN a firm, although when I hire the firm to dig my ditch, it usually bids on a non-hourly basis ($ per foot, whatever). Coase can probably explain why this distinction persists.
Doctors don’t charge by the hour. Auto mechanics may apply an “hourly rate” to services, but the disclaimer on the bill says that a certain service has a “flat” hourly fee, even if the actual hours spent are different.
What makes lawyers different? The “inherent uncertainty in the time required?” Sounds like special pleading.
Where is the client? It’s all about OPM: Other People’s Money. Overbilling (too many real hours, or fake hours) disputes are usually limited to a situation where someone else’s money is being spent. The HK dispute is triggered internally. In the late 80’s and early 90’s, legal auditors were the product of insurance companies: the party benefiting (the insured) was not the party paying (the insurer). Later, fee examiners arose in big bankruptcy cases, where debtor was (really) almost always insolvent, so debtor or trustee was in essence spending the creditors’ money–another disconnect between paying and benefiting. The fact that we seldom see a dispute between a real client and its counsel suggests that the market may be more effective than we acknowledge. If IBM balks at a Cravath bill, IBM is able to address it, and we don’t read about it in the blawgs.
Where was Pinnacle Corp. during all of this? I hope they were more careful with their other vendors/suppliers, especially in the honest construction business.
I wonder if this is the most comments any item on this blog has ever received? It’s clearly a hot button with many inside and outside lawyers. One comment on Anonymous’ post: This may be an arena where the bluest of blue chip firms (Cravath, Davis Polk, Sullivan, a few others) have a real advantage, in that they try hard to limit their work (transactional work anyway) to projects where they can bill a “success premium” and simply present a “for services rendered $xxx” bill at the closing – thus no worries about whether anyone padded hours or not. And of course small firms often have smaller, perhaps more vigilant, clients as a check against hours padding. So is it the firms in between those two models that have the most to worry about (and who we GC’s should worry about most)?
This has been going on forever and nothing is done because the big firms are in bed with company general counsel who, in turn, are alumni of the big firms. Shareholders of public companies paying the bills should be outraged. Yet, Milberg Weiss gets indicted because it allegedly allowed referring counsel to split legitimately earned attorneys fees (reviewed by the Courts) with clients. What a double standard!
To Inside GC — in our boutique firm with no committees and layers of uninformed review, the practice is to include a verbatim data entry version of the handwritten time sheets in every statement. It sounds a little old fashioned and cumbersome maybe, but no clients object to seeing their lawyers’ timekeeping diaries. As for auditing, a starting point or self-audit procedure that’s pretty standard among institutional clients is agreeing in advance on lineup card with substitutions made only on GC approval.
To Outraged — I don’t think you should assume that just because a court reviews time records that they are “legitmately earned.” The court is looking at the same thing the GCs are looking at—who’s to say drafting that motion should have taken 14 hours vs. 16? How do you second guess how much legal research was enough? What if you’ve found nothing after 10 hours, and then, boom, you hit the treasure trove in the 11th hour? You go to a system where you pay for results rather than time? What incentive does someone have to work that 11th hour and save the client millions, when they could just quickly work a settlement, collect the fee, then move on? It’s like the old story with real estate agents—they’re getting their 3%, why should they put in the extra 20 hours to sell your house for $5000 more when it’ll only make them an extra $150?
I have … always marveled at how many lawyers rob their clients by billable hour padding and get away with it. I personally experienced this many times. One of my most painful experiences was being grossly overcharged by my wife’s divorce lawyer. My lawyer, a very ethical one, condeded that the pill was padded but advised me to keep quiet about it. He said that all I could do was request the detail on the billable hours and her lawyer would fabricate it and the judge would uphold it. I love the phrase, “the perfect crime”. Hopefully this will stick and this chronic problem in many law firms will be brought to the public view.
Pilferring by lawyers is business as usual for many of them. Padding a bill is just one aspect of this. At the state and federal level they write the laws which enrich themselves. At the courtroom level, they only suffer if they expose wrongdoing within the profession, not for doing wrong themselves. That’s why you see very few lawyers ever held accountable, whether it’s for false billing, false accusations, or such. A profession that encourages specious arguments to advance an agenda is not one that can be trusted. None of this can be fixed as long as lawyers are voted into the legislatures.
. . . Neither the GC nor Ryan ever thought the bills would be seen by anyone else. . . . I will also point out that nobody should believe that Mr. Farmer is the hero here. He could have discharged his duty by reporting Ryan to the Illinois disciplinary committee. The fact that he also went to the press shows pure vindictiveness. He was always a disgruntled employee – the stuff about how he never thought he’d leave is bunk, pure and simple. Last thing – Farmer is now at Berkshire Hathaway’s captive law firm, where he need never look for a client again. Most people thought he had traded up when he left.
Has the WSJ Law Blog sought to ask the opinion of the client (Pinnacle Corp.)victimized by the greedy partner? What does Pinnacle think? Are they pissed?
This is precisely why our firm is so passionate about having abandoned the billable hour in favor of a fixed-price model. There are serious ethical concerns with billable hours, clients hate the model, lawyers hate counting their lives in 6 minute increments, and there really is no way for clients to know better if there is fraud. When things like this happen, how can clients ever “trust” their firms that bill by the hour? It is time for a call to action in our industry and among clients! Malcolm X said “If you are not a part of the solution, you are part of the problem.” To deny that billing fraud is widespread is to have your head in the sand. To admit it and not speak up and stop this outrageous practice is to be no better than the people who rip off clients and ruin what should be a noble profession. Will the leaders of this profession please stand up? Exemplar has taken its stand to make a difference in this profession and I hope that we inspire more professionals to do the same!
As a follow-up to my previous entry and as an expression of commitnent to solving these problems in our industry, I extend an offer to the attorneys in this country who are business savvy, socially normal, and passionate about making positive change in the legal profession to email me about opportunities to be a part of the solution and join an innovative firm with a fixed-price model. I promise to respond! cmarston@exemplarlaw.com
These types of issues are precisely why we started Exemplar Law Partners, which has abandoned the billable hour model in favor of a fixed-price model. I have interviewed hundreds of attorneys, partners and associates alike, from some of the largest firms in the nation and many of them readily admit that billing fraud and bill padding is a part of “daily business.” How can you ever trust a firm that bills by the hour when some of the largest firms engage in this ptactice regularly? Malcolm X said “if you are not a part of the solution, then you are part of the problem.” If you think that billing fraud is not widespread then you have your head in the sand. If you know it is happening and are not standing up for ethics in our profession then you are no better than the firms who are ruining an honorable profession by committing fraud on the people they claim to serve. Will the true leaders in this industry please stand up? Let this be a call to action for clients and attorneys alike. I welcome the attorneys who are passionate about positive change to contact me directly about opportunities to be a part of the solution at our innovative firm.
Malcolm X said “If you are not a part of the solution, then you are part of the problem.” To deny that billing fraud is widespread is to have your head in the sand. To admit it and not take a stand against a practice that is ruining a noble profession by commiting fraud on the people they claim to serve is no better than committing fraud yourself. Will the leaders in this industry please stand up? It is time for a call to action. I welcome the other leaders in this industry to stand with me in making positive change. . . the beginning of which is the end of the billable hour model!
I suspect junior associates subjected to a billing/bonus minimum have more of an incentive to overbill because, more often than not, a partner discounts their time and the client never gets charged. Of course, the firm gets screwed, I suppose, because they may be awarding bonuses to lawyers who never actually worked the requisite number of hours.
I’m a young attorney in New Orleans, and I am already looking to get out of the practice. I’ve seen so much game-playing and prattling and asshattery from people who are supposed to be respectable professional business attorneys to make me realize that this is not a place I want to be. And I’m sure that its very similar anywhere else. I wanted to help people, but that isnt happening. So goodbye, Bar Commission, and good riddance.
I had a great experience…represented the husband in a divorce..gave him a detailed bill of hours. After the divorce, wife calls him and asks for his bill to compare to hers. Given the slight difference in hourly, maybe there should have been a small difference in total. He billed twice as many hours for the the same deposition, twice as many hours for the same time we were in court, etc. The wife’s bill was double the husband’s when I actually did more work! Worse, he just gave a bill for generic services rendered. But he got caught. How? Told the wife’s father the day before trial “we have to settle because I didn’t prepare for trial,” then when she forced an accounting, he billed for 10 hours of trial prep. Dare I say he was promptly grieved and she was refunded the money. He was also in a large firm. I was a solo.
Did Holland & Knight ever deny (or even address) the specific allegations in the letter you link to at the top of this post? Has Martha Barnett, the firm’s former ABA president, weighed in on this one?
Holland & Knight – Rockdale County 911 – Conflict Waiver and Engagement Agreement
In 1 on February 3, 2009 at 9:18 amHolland & Knight – Conflict Waiver and Terms of Engagement
Holland & Knight is the sole owner of Holland & Knight Consulting LLC which is a partial owner of Corporate Integrity Services.
Critics worry that conflict-of-interest restrictions on lobbying aren’t tough enough
In 1 on February 3, 2009 at 2:03 amEven by Washington standards, Aurene Martin's spin through the revolving door was a quick one. On Sept. 10 of last year, the former acting head of the Bureau of Indian Affairs stepped down to become a partner in the Indian law group of Holland & Knight. Within weeks, according to Senate disclosure forms, she was lobbying her former agency on behalf of the Lower Lake Rancheria, a landless, 53-member tribe seeking to build a controversial casino in Oakland, Calif. She also began lobbying Congress on behalf of the National Indian Gaming Association.
Ethics laws ban senior-level government officials from directly lobbying their former agencies for one year. But Martin benefited from a special exemption: Since the 1970s, ex-BIA officials have been able to represent tribes before their former agency without waiting out the one-year cooling-off period. "People on the outside have the perception that it's a huge influence game," says Martin. "[But] I think you have to believe in the good of most people."
The revolving door is swinging as fast as ever: From 1997 to 2004 the 20 largest federal contractors alone hired 224 former high-ranking government officials to serve as lobbyists, board members, or executives, according to a report by the nonprofit Project on Government Oversight.
There are ethical controls in place aimed at restricting the ability of those officials to lobby their former agencies on behalf of industries and special interests. But Martin's move is one of many examples of ways around those controls. And, critics complain, the ones that are in place are largely toothless…Legal Times: Jason McLure – Source
Holland & Knight – skirting conflicts by creating subsidiaries and providing attorneys as “consultants”
In 1 on February 3, 2009 at 1:10 am
Amendment of CRA By-Laws
Motion
made by Commissioner Moore and seconded by Commissioner Katz to approve
amendments to the CRA By-Laws. Roll call showed: YEAS: Commissioners Hutchinson, Katz, Moore, Smith, and Mayor Naugle. NAYS: none. CRA Consultant A motion was presented to approve hiring Redevelopment Strategies LLC, as the CRA consultant effective as of May 1, 2000 for a period of 12 months. Commissioner Hutchinson was uncomfortable with giving away the attorney/client relationship. She understood Mr. Cardwell was not being hired as an attorney type of consultant, but his law firm dealt with a lot of development cases in Fort Lauderdale. Commissioner Moore was unclear on the issue. Commissioner Hutchinson explained that page 2 of the May 1, 2000 letter distributed in connection with this item indicated that this would not include any legal services, and no attorney/client relationship would be created by virtue of this agreement. The City Attorney said the reason the document was so clear in expressing the fact that there would be no attorney/client relationship was because the firm would not be performing any legal services for the CRA. Rather, they would provide only consulting services in terms of strategies to implement the program. He stated that Mr. Cardwell was a recognized expert in that aspect of CRA work. The City Attorney agreed the law firm of Holland & Knight did occasionally represent clients making presentations to the DRC, the Planning & Zoning Board, and/or the City Commission. In order to ensure there was no conflict, the law firm was not being retained by the City or the CRA for legal services, and Mr. Cardwell would be performing a specific set of tasks with a “wall” between the two types of services to keep them separate and apart. Fort Lauderdale CRA 5/16/00 – 2 Commissioner Smith understood the idea was to prevent any collusion between Mr. Cardwell and the firm. Mayor Naugle believed a situation could arise in which someone disagreeing with a City decision relating to a development issue in the CRA district, and Mr. Cardwell could end up testifying against the City. Commissioner Moore believed that would also be true if a separate consultant was selected. He understood Mr. Cardwell would provide information about how the CRA could be better operated, but the situation envisioned by Mayor Naugle could occur even if the consultant had no relationship with a legal firm. Commissioner Smith asked why Mr. Cardwell was being selected. Ms. Kim Jackson, CRA Manager, stated that the CRA would be entering into an aggressive, creative type of redevelopment activity in a very diverse area in terms of a strategic plan and its implementation. She explained it was very difficult to find anyone who understood how the CRA Statutes worked and how to implement strategic plans. Ms. Jackson stated that Mr. Cardwell was well respected in the field and had an enormous amount of experience in tax increment financing and could provide a Statewide perspective. Commissioner Moore recalled that when the County had tried to limit the CRA boundaries, Mr. Cardwell had been asked for his opinion and was well respected by all the CRA directors in the County. Commissioner Hutchinson was sure Mr. Cardwell was well qualified and could do a wonderful job, but she was uncomfortable waiving the attorney/client relationship. Mr. Cardwell explained that the statement pertaining to attorney/client privilege had been included because he was a consultant. However, even if he was retained as an attorney, the Supreme Court had indicated that when lawyers were hired by public agencies, with a few exceptions, attorney/client privilege was waived. Therefore, the statement on page 2 was really just to confirm the fact that as a consultant, there was not even a hint of an attorney/client relationship. Thus, the privilege was already gone. Mr. Cardwell stated that as far as conflicts were concerned, the policy of the firm was to follow the policies of the City. Therefore, his firm would not be able to represent anyone who came in and submitted a proposal for a project within the CRA boundaries because that would be a conflict of interest. Mayor Naugle noted that the City hired a lot of outside counsel. He asked if there was any policy that these outside counsel could not work against the City if a lawsuit was filed. The City Attorney replied it did, and there had never been any deviation from that policy. Mayor Naugle asked if this would be deviation because the City was hiring a subsidiary of a law firm. The City Attorney replied it would not. The City Attorney said he had briefly discussed with Mr. Cardwell the possibility that the City’s own consultant might end up as a witness. He advised that a separate letter agreement would be executed that Mr. Cardwell would maintain confidentiality to a certain extent and not testify under such circumstances. Motion hiring of David Cardwell, Holland & Knight Redevelopment Strategies LLC, as the CRA Consultant effective as of May 1, 2000 for a period of 12 months. Roll call showed: YEAS:Commissioners Hutchinson, Katz, Smith and Moore. NAYS: Mayor Naugle.
Blood is big business – Holland & Knight paid over $1 Million for legal services while employing Chairman Yates
In 1 on February 3, 2009 at 12:59 amTracking the big business of donated blood in Orlando
- Dan Tracy | Sentinel Staff Writer
Blood is big business.
It starts with Rebecca Zamrycki, 27, who lives in Orlando and has given a pint every eight weeks for a decade.
It ends with people such as Ed Havill, the 67-year-old Lake County property appraiser who needs blood transfusions to battle his leukemia.
In the middle is Florida's Blood Centers of Orlando, which draws the blood, tests it and sells it for an average of $300 a pint to hospitals and health-care facilities in 21 counties.
For its services, FBC expects to gross $100 million this year, making the nonprofit the fourth-largest independent blood bank in the nation.
Based in a four-story building once owned by the Planet Hollywood restaurant chain, the 66-year-old center employs nearly 1,000. That includes an administrative staff with nine managers paid more than $100,000 and a CEO — Anne Chinoda — whose compensation package tops $500,000 a year.
The 40-member board that oversees FBC is drawn from the region's top employers and community leaders, some of whom also do business with the agency. They have been involved in deals worth more than $2 million annually in recent years.
Such arrangements are common in blood banking, though the practice draws criticism from some nonprofit experts because of the potential for conflicts of interest.
FBC officials say they follow strict ethical standards that ensure those arrangements are aboveboard and financially beneficial to the agency.
Chinoda deferred comments to FBC board chairman Leighton Yates, who said, "We have to make sure it is all done in the open. . . . We feel what we have done is fair to all at the blood bank."
FBC's existence depends on the largesse of people such as Zamrycki. Reputable blood banks don't pay for blood out of a belief that those who sell it are much more likely to have communicable diseases and that the money would give donors a financial incentive to lie about their medical history.
Last year, she and thousands of other donors gave more than 320,000 pints of blood to FBC, which has offices throughout Central Florida and parts of South Florida.
"I may sound a little saccharine when I say this, but donating blood really is giving the gift of life. One donation can save three lives. Knowing this, how could I choose not to donate?" Zamrycki said by e-mail.
FBC technicians put donated blood through an expensive series of tests for diseases such as HIV, West Nile virus, hepatitis and syphilis. It is then split into red cells, platelets and plasma and sold, making FBC the critical link between blood donors and transfusion recipients such as Havill.
He owes his life to his numerous transfusions, including three in one recent 24-hour period, said his wife, Donna. "Ed can tell when his levels are getting low, extreme fatigue and the feeling of being out of breath," she said.
Directors' connections
As a nonprofit, the blood bank does not have to release details of its finances. Instead, FBC files annual disclosure forms called 990s with the IRS. Information in those forms is sometimes inconsistent — and at least a year old before it becomes public. But it's clear from the 990s that FBC does business with companies that employ its directors:
*Holland & Knight, the law firm that employs chairman Yates, has been paid more than $1 million for legal services since 2003, the first year the IRS pushed for such payments to be reported.
* Darden Restaurants, represented on the board by its senior vice president, Bradford Richmond, has sold almost $1.6 million worth of restaurant coupons to FBC in each of the past three years. The $10 gift cards cost FBC $5.50 each and are given to donors as a token of appreciation.
*Orlando-based Eidson Insurance agency has sold nearly $2 million worth of policies to FBC from 2004-06.
*The Orlando Sentinel, WFTV-Channel 9 and Sprint/Embarq, who at the time had executives on the board, also have received business.
Between 2004-06, WFTV was paid more than $367,000 for promotional work; Sprint/Embarq nearly $350,000 for phone services; and the Sentinel more than $35,000, in part for a marketing study. The Sentinel and WFTV no longer have employees on the board.
FBC officials say they don't allow board members to vote on transactions with their companies. And some of the contracts are bid, though Yates wouldn't identify them.
Yates also said that FBC board members' companies offer services at competitive or below-market rates. He would not provide an example.
"It seems unreasonable to exclude them from doing business with us," said Yates, whose firm advises FBC on contract and labor issues.
Holland & Knight, he said, handles only work for which it is qualified. FBC employs different firms for other legal issues, such as defending personal-injury allegations.
Eidson has done the most business with FBC recently, selling nearly $2 million worth of policies to the center from 2004-06, IRS records show.
Now retired from the agency and a trustee emeritus, agency founder Ted Eidson said he started selling insurance to FBC when he went on the board in the 1980s, when it was difficult for FBC to find affordable insurance because of the breakout of HIV/AIDS.
He said his former agency gets the best rates available: "We grind them every year and work them as hard as we can."
A spokesman for WFTV would not comment about its work with FBC. An Embarq representative confirmed the company was paid for phone services but said it's not allowed to give discounts.
Critics take issue
Officials at local nonprofits would not speak on the record about FBC's business practices, saying they did not want to upset the organization or its board. But several authorities outside Florida were critical.
Jeff Trexler, a nonprofit expert and professor of social entrepreneurship at Pace University in New York City, took particular issue with doing business with directors.
"Just because something is legal, it doesn't make it wise. . . . This doesn't pass the smell test. Basically, it stinks to high heaven," Trexler said. Many nonprofits prohibit such dealings because they could constitute a conflict of interest, he said.
By comparison, two blood banks of like size to FBC — one in Milwaukee, the other in St. Petersburg — do business with board members but not nearly as much as FBC does, their most recent 990s show. A third, in Houston, does not do business with board members, according to the 990s.
A spokesman for America's Blood Centers, an industry trade group with 77 members in North America, said the practice is widely accepted by its members.
In an e-mail, spokesman Mac Benton wrote: "As a practical matter, one individual board member can neither sway business their way, nor would it be fair for them to automatically be excluded from doing business with the organization."
Alan Weiss, a Rhode Island-based nonprofit consultant, said the policy could open an organization to charges of favoritism: "One hand feeding the other hand; it's not right," said Weiss, who has served on several nonprofit boards and is president of Summit Consulting Group Inc.
Community support?
Yates said the Darden gift cards are FBC's most popular giveaway, ranking ahead of T-shirts and gas coupons. Such gifts are important because FBC needs to daily attract as many as 1,200 donors.
Zamrycki said she likes the gift cards and saves them to use for a "special" meal at Seasons 52, an upscale Darden restaurant. Other Darden eateries include Red Lobster, Olive Garden and Bahama Breeze.
For Darden, the gift cards provide the chain with a promotional boost in addition to the $1.6 million in direct revenue.
They are a "very effective local marketing strategy," said Melissa Wilson, a principal at Technomic Inc., a Chicago food-research company. She said the coupons drive customers to the company's restaurants without cheapening its brand — because they are earned by giving blood.
Darden spokesman Rich Jeffers said his company is interested more in aiding FBC than in any marketing advantages. He would not say whether Darden takes a charitable contribution on the sale of the discounted gift cards. "We look at it as community support, and it's one of many ways we support the community," he said.
Executive compensation
FBC's board sets policy and votes on purchases of at least $100,000. It leaves day-to-day operations to Chinoda and her staff. Chinoda's compensation went from about $300,000 in 2003, when she took over the top spot, to more than $500,000 in 2007, an increase of almost 67 percent.
Yates said Chinoda, who started in FBC's marketing department, earns her salary. Since she took the helm, FBC's revenues have almost doubled, thanks in part to the acquisition of a failing South Florida blood bank.
"We've done well financially. In the pharma business, lots of people would like to steal Anne Chinoda from us. We believe we have to pay a competitive amount," Yates said.
Chinoda, and the CEOs at similarly sized blood banks in St. Petersburg, Milwaukee and Houston, were paid more on average than the top executives at the largest nonprofits nationwide, according to a 2005 compensation survey.
Guidestar, a reporting service that tracks charities through IRS 990 documents, said the median salary paid by nonprofits with a gross income of at least $50 million was $333,479. Chinoda was paid more than $412,000 in 2005.
Blood banks in Milwaukee and St. Petersburg paid their CEOs even more: $511,000 and $493,000, respectively. Houston paid slightly less: $401,000.
Nine other managers at FBC are paid more than $109,000 a year, based on the most recent IRS records available. That's roughly equivalent to Milwaukee (eight managers paid more than $100,000), St. Petersburg (seven) and Houston (six), IRS records show.
Yates, who has been FBC chairman for 14 years, says critics of the agency are misinformed.
"I love this organization," Yates said. "I believe we are the best in the world at what we do."
Dan Tracy can be reached at dtracy@orlandosentinel.com or 407-420-5444.
Motion to Disqualify Holland & Knight for multiple conflicts of interest.
In 1 on February 3, 2009 at 12:10 amMichael Katherein
Victoria Zaytseva
v.
City of Evanston, Illinois
Jack M. Siegel
Herbert D. Hill
Ellen Szymanski
Case No 05 C 3385
Third Big Firm Overbilling Scandal
In 1 on February 2, 2009 at 10:28 pmThe Holland & Knight story is terrifying for every big firm client. Stated baldly, allegedly a partner at the firm treated invoices as works of fiction, manufacturing new hours/entries to increase the bill. Allegedly, this added up to at least $100,000 of overbilling, but this could be massively understated.
Eric Goldman – Source
Holland & Knight Hourly Billing: The Perfect Crime?
In 1 on February 1, 2009 at 2:02 pmRon Baker – Source
The Wall Street Journal reported on August 30, 2006 that Matthew Farmer, a 42-year old junior partner in the Chicago office of Holland & Knight, accused the firm of padding its timesheet and billings on a trial for home builder Pinnacle Corp. You can find the article, and the Journal’s blog, with comments, here.
You can also read CEO of Exemplar, and VeraSage Fellow, Chris Marston’s reaction to the article at his blog.
The article quotes William Ross, Samford University Cumberland School of Law in Birmingham, Alabama, who calls hourly billing “the perfect crime.” I wrote about this extensively in my book, Professional’s Guide to Value Pricing, where I quoted Ross’ conclusion from his book The Honest Hour:
Despite its potential for abuse, time remains the best means for billing clients. Hourly billing therefore ought to be reformed rather than abandoned (Ross, 1996: 263).
He even goes so far as to suggest that lawyers keep track of every single minute of their time in order to keep billing by the hour honest. This reminds me of what George Orwell once wrote: “One has to belong to the intelligentsia to believe things like that: no ordinary man could be such a fool.”
Ethical problems arise in hourly billing due to the misalingment of interests created by the system. Attorneys may not have malevolent motives when engaging in padding their hours. Ross says that “much overbilling is the result of attorneys’ failure to understand the reals goals and needs of their clients” (Ross, 1996: 53). How sad is that?
The problem is that professionals pad their timesheets because they know that the value of the service they provide is worth more than the time spent. If that is the case, then the solution is not to try to cope with the ethical issues of hourly billing but to scrap hourly billing entirely and reach a price agreement with the customer before the service is provided. What a concept. Just like every other business on the planet!
You can apply make-up to a pig, but you still have a pig. The billable hour is flawed because it is based on the labor theory of value. There is no economically rational or sane way to “reform” it; it must be replaced with superior pricing strategies. One wonders whether two attorneys leaving a movie together would be timid about expressing their opinions on the movie. According to the labor theory of value, the movie should be equally valuable to both because it took the same amount of production time. Obviously, this is bad economic logic, and contradicts the subjective theory of value.
The value of any professional service is that which is agreed upon by the parties to the transaction. If both parties do not feel like they are benefiting from the exchange, it will not take place.
The strategies VeraSage advocates are the following:
- Ascertaining customer expectations up-front
- Agreeing to scope of work up-front
- Using Change Orders when that scope changes
- Agreeing to price up-front
The above are the rational alternatives to the ethical quandries raised by the obsolete hourly billing model. Value Pricing requires character, integrity, honest dealings, better communication, and a sense that the firm knows the value of the services it provides. These traits are far less likely to be cultivated with the use of hourly billing.
How many more ethical scandals must be uncovered before the legal profession changes it reigning paradigm from the labor theory of value to the subjective theory of value, and begins offering prices up-front to the customers it is privileged to serve? The billable hour is a Hobson’s choice. It’s time the profession chose Value Pricing.
The Illinois Supreme Court filed disciplinary orders against a number of licensed lawyers Wedneday, Jan. 21
In 1 on February 1, 2009 at 6:21 amSanctions were imposed because the lawyers engaged in professional misconduct by violating state ethics law, according to the court.
They include:
• John Deangelis of Skokie, whose practice was listed at 8820 Skokie Blvd. Deangelis, who was licensed in 1992, was suspended for one year, beginning Feb. 10. The court ruled he converted $6,582 from a client and $12,500 from his former law firm employer.
• Alan Hanson, whose practice was listed at 7151 W. Gunnison St., Harwood Heights. Hanson, who was licensed in 1979, was disbarred. The court ruled he converted client settlement funds, neglected a workers' compensation matter and abandoned his law practice. Hanson failed to participate in the disciplinary proceeding.
• Raymond Henehan, whose practice was listed at 1603 Burning Oak Trail, Barrington Hills. Henehan, who was licensed in 1976, was disbarred. The court ruled he misappropriated almost $100,000 in client funds and neglected a client's bankruptcy matter.
• Robert Kent, whose practice was listed at 427 Elm St., Deerfield. Kent, who was licensed in 1994, was suspended for 30 days, beginning Feb. 10. The court ruled he failed to preserve the identity of approximately $1,500 in escrow funds in a marriage dissolution case.
• Mark Kipnis, formerly of Northbrook, whose practice was listed at 889 S. Randall Road, Elgin. Kipnis, who was licensed in 1974, was disabarred on consent. While employed as general counsel to Hollinger International, the court ruled he created illusory non-compete agreements as part of a scheme to disguise kickbacks to management employees and Hollinger officers. Kipnis was convicted in federal court of mail fraud, and sentenced to five years of probation, with six months home detention.
• Charles Whelan Jr., whose practice was listed as 190 Old Sutton Road, Barrington. Whelan, who was licensed in 1968, was suspended for two years, provided he makes restitution. The court ruled he assisted his wife, who is a disbarred attorney, in the unauthorized practice of law. He also converted client funds, neglected two client matters, failed to refund unearned fees and did not return client records. Whelan failed to appear at his disciplinary hearing.
The Attorney Registration and Disciiplinary Commission, an agency of the Illinois Supreme Court, investigates alleged wrongdoing by Illinois attorneys, holds hearings on specific charges and recommends discipline where warranted. The Supreme Court is, however, the only authority that can discipline lawyers for misconduct. Source
