There's a couple reasons, most Chicago law firms are not really built for sales. They're built to be compliant and analytical and thoughtful, and in many cases, they're built to be kind of dominant and competitive.
But most sales people and actors - they fall in the same category - are built to be very experiential, very outgoing, and they want to meet everybody. Lawyers for the most part aren't built that way. Which is why they get into law. They don't want to go out and sell.
The other part of it is when you're an associate, especially at a bigger firm, they don't want you doing business development. The culture has been, just do the work, learn the law and crank out work, as many hours as we can get out of you. The last thing they want is people running around on the billable hour trying to create business. It's finally coming around where I think firms are starting to appreciate that both have to happen simultaneously, but that hasn't really been the case in the past.
Monday, July 4, 2016
Saturday, July 2, 2016
Russian cyber criminal has targeted nearly 50 elite law firms, including Chicago law firms
A Russian cyber criminal has targeted nearly 50 elite law firms, including four Chicago law firms, to collect confidential client information for financial gain.
The mastermind, a broker named "Oleras" living in Ukraine, has been attempting since January to hire hackers to break into the firms' computer systems so he can trade on insider information, according to a Feb. 3 alert from Flashpoint, a New York threat intelligence firm.
Kirkland & Ellis, Sidley Austin, McDermott Will & Emery and Jenner & Block all were listed on a spreadsheet of potential marks. It named 46 of the country's largest law firms, plus two members of the UK's Magic Circle.
A spokeswoman for Flashpoint said the firm had notified law enforcement and declined to comment further.
The FBI was investigating as of March 4, when it published its own industry alert detailing the threat. The agency's press office did not return a message seeking comment.
Kirkland was aware of the threat, and no client data was accessed, the firm's chief information officer, Dan Nottke, said in an email. The firm subscribes to several security information-sharing services, including ones operated by the FBI and the Financial Services Information Sharing and Analysis Center, the cybersecurity information clearinghouse for the financial services industry.
Spokesmen for McDermott and Jenner declined to comment. Messages to Sidley seeking comment were not returned.
Chicago law firms have largely trailed their clients in confronting the possibility of hackers accessing their networks for illegal profit. Though they hold vast repositories of confidential information, many firms are slow to adopt up-to-date defenses against malware and spyware, said Jay Kozie, principal at Keno Kozie Associates, a Chicago-based law firm technology consultancy.
"I've always been surprised, frankly, that the law firms have not been more aggressively targeted in the past," he said. "If you've got confidential information about a merger or a patent, it's going to be very valuable."
In this latest scheme, Oleras posted on a cyber criminal forum a plan to infiltrate the law firms' networks, then use keywords to locate drafts of merger agreements, letters of intent, confidentiality agreements and share purchase agreements. The list of targeted law firms also included names, email address and social media accounts for specific employees at the firms.
"Overall, Oleras wanted to know in advance which companies were going to be merged with the help of the stolen law firm documents and subsequently leverage this information to execute algorithmic insider trading activities," the Flashpoint alert says, with the money then laundered through front companies in Belize and Cypriot bank accounts.
The broker hoped to recruit a black-hat hacker to handle the job's technical aspects for $100,000, plus another 45,000 rubles (about $564). He offered to split the proceeds of any insider trading 50-50 after the first $1 million.
On Feb. 22, another Flashpoint alert noted that Oleras had singled out eight lawyers from top firms, including one from Kirkland's management committee, for a sophisticated phishing attack. The phishing email appeared to originate from an assistant at trade journal Business Worldwide and asked to profile the lawyer for excellence in M&A.
The mastermind, a broker named "Oleras" living in Ukraine, has been attempting since January to hire hackers to break into the firms' computer systems so he can trade on insider information, according to a Feb. 3 alert from Flashpoint, a New York threat intelligence firm.
Kirkland & Ellis, Sidley Austin, McDermott Will & Emery and Jenner & Block all were listed on a spreadsheet of potential marks. It named 46 of the country's largest law firms, plus two members of the UK's Magic Circle.
A spokeswoman for Flashpoint said the firm had notified law enforcement and declined to comment further.
The FBI was investigating as of March 4, when it published its own industry alert detailing the threat. The agency's press office did not return a message seeking comment.
Kirkland was aware of the threat, and no client data was accessed, the firm's chief information officer, Dan Nottke, said in an email. The firm subscribes to several security information-sharing services, including ones operated by the FBI and the Financial Services Information Sharing and Analysis Center, the cybersecurity information clearinghouse for the financial services industry.
Spokesmen for McDermott and Jenner declined to comment. Messages to Sidley seeking comment were not returned.
Chicago law firms have largely trailed their clients in confronting the possibility of hackers accessing their networks for illegal profit. Though they hold vast repositories of confidential information, many firms are slow to adopt up-to-date defenses against malware and spyware, said Jay Kozie, principal at Keno Kozie Associates, a Chicago-based law firm technology consultancy.
"I've always been surprised, frankly, that the law firms have not been more aggressively targeted in the past," he said. "If you've got confidential information about a merger or a patent, it's going to be very valuable."
In this latest scheme, Oleras posted on a cyber criminal forum a plan to infiltrate the law firms' networks, then use keywords to locate drafts of merger agreements, letters of intent, confidentiality agreements and share purchase agreements. The list of targeted law firms also included names, email address and social media accounts for specific employees at the firms.
"Overall, Oleras wanted to know in advance which companies were going to be merged with the help of the stolen law firm documents and subsequently leverage this information to execute algorithmic insider trading activities," the Flashpoint alert says, with the money then laundered through front companies in Belize and Cypriot bank accounts.
The broker hoped to recruit a black-hat hacker to handle the job's technical aspects for $100,000, plus another 45,000 rubles (about $564). He offered to split the proceeds of any insider trading 50-50 after the first $1 million.
On Feb. 22, another Flashpoint alert noted that Oleras had singled out eight lawyers from top firms, including one from Kirkland's management committee, for a sophisticated phishing attack. The phishing email appeared to originate from an assistant at trade journal Business Worldwide and asked to profile the lawyer for excellence in M&A.
Saturday, June 25, 2016
$1.25 Million Legal Malpractice Award Raises Liability Issue
A $2.6 million verdict-the largest ever in a wrongful-death case by an Indiana jury-jolted.
Now, a second verdict, this one for $1.25 million in a related case of legal malpractice, has shocked Midwestern lawyers and raised questions about professional-liability coverage.
Both verdicts by federal juries in Hammond went against Frank Galvin, a name partner in a now disbanded Hoosier law firm. His mistakes as defense counsel for a trucking company in the wrongful-death case of motorist Virginia Dickinson, egregious as they were, led to the record verdict and its ugly aftermath: the malpractice lawsuit by his client's insurer.
The Valentine's Day verdict in the malpractice case, tried before Magistrate Judge Andrew Rodovich, exposed Galvin to potential loss of personal assets-beyond his $1 million coverage. Rodovich ruled as a matter of law that Galvin was negligent. The jury question was whether that neligence contributed to the high verdict in the wrongful-death case.
It wasn't close.
Galvin's gaffes included failures to determine the cause of Dickinson's death prior to trial and to preserve an appeal. He also stipulated to the admission of 126 unrelated accidents by his trucking-company client.
Chicago law firms William G. Stone, together with Robert P. Vogt of Bullaro Carton & Stone, representing American International Adjustment Co. in the action against Galvin, criticized the refusal of Galvin's provider, CNA Insurance, to settle for substantially less than the $1 million coverage. It offered $300,000; American International Adjustment had agreed to take $700,000.
CNA's refusal to settle, Stone said, exposed Galvin "unnecessarily" to personal loss. Given the $1 million coverage, minus $250,000 in legal fees, what's left is $500,000 less than the jury's award.
Change of guard: The chief judge of U.S. District Court since 1990, James B. Moran, has let it be known he will take senior status this summer, 11 days after his 65th birthday.
He does so after two personal setbacks: the death of his wife, Nancy, and a mishap that left him with a broken foot and lots of unfinished paperwork. U.S. District Judge Marvin B. Aspen is in line to succeed Moran by virtue of age and length of service.
The departure of Moran, a district judge since 1979, and the elevation of Aspen creates a vacancy that's bound to set off a scramble among judicial wannabes.
Insiders predict Moran's seat will go to Scott R. Lassar, U.S. Atty. James B. Burns' top aide, who was a partner with Burns at Keck Mahin & Cate. Lassar had sought a judicial appointment a couple of years ago, observers said. He became first assistant U.S. attorney on the understanding that Burns, a close associate of U.S. Sen. Paul Simon of Illinois, a fellow Democrat, would help him become a judge, observers said.
Lassar is known for his even temperament and legal acumen, as well as a droll wit and not-so-slight penchant for self-deprecation.
Interstate victory: Veteran Chicago defense lawyer Julius Lucius Echeles may be retired in Florida, but he is still winning back in Illinois.
The state appellate court, responding to Echeles' appeal for post-conviction relief in the case of James Files, has reversed Lake County Circuit Judge John Goshgarian and ordered a hearing before another judge on the would-be killer's alibi defense.
Files claims he and a colleague, admitted car thieves, feared they were being chased by mob hitmen when they fired on two plainclothes policemen, wounding one in 1991. Echeles, happy to get the case reinstated and away from Goshgarian, now hopes to get Files' 50-year sentence reduced.
Now, a second verdict, this one for $1.25 million in a related case of legal malpractice, has shocked Midwestern lawyers and raised questions about professional-liability coverage.
Both verdicts by federal juries in Hammond went against Frank Galvin, a name partner in a now disbanded Hoosier law firm. His mistakes as defense counsel for a trucking company in the wrongful-death case of motorist Virginia Dickinson, egregious as they were, led to the record verdict and its ugly aftermath: the malpractice lawsuit by his client's insurer.
The Valentine's Day verdict in the malpractice case, tried before Magistrate Judge Andrew Rodovich, exposed Galvin to potential loss of personal assets-beyond his $1 million coverage. Rodovich ruled as a matter of law that Galvin was negligent. The jury question was whether that neligence contributed to the high verdict in the wrongful-death case.
It wasn't close.
Galvin's gaffes included failures to determine the cause of Dickinson's death prior to trial and to preserve an appeal. He also stipulated to the admission of 126 unrelated accidents by his trucking-company client.
Chicago law firms William G. Stone, together with Robert P. Vogt of Bullaro Carton & Stone, representing American International Adjustment Co. in the action against Galvin, criticized the refusal of Galvin's provider, CNA Insurance, to settle for substantially less than the $1 million coverage. It offered $300,000; American International Adjustment had agreed to take $700,000.
CNA's refusal to settle, Stone said, exposed Galvin "unnecessarily" to personal loss. Given the $1 million coverage, minus $250,000 in legal fees, what's left is $500,000 less than the jury's award.
Change of guard: The chief judge of U.S. District Court since 1990, James B. Moran, has let it be known he will take senior status this summer, 11 days after his 65th birthday.
He does so after two personal setbacks: the death of his wife, Nancy, and a mishap that left him with a broken foot and lots of unfinished paperwork. U.S. District Judge Marvin B. Aspen is in line to succeed Moran by virtue of age and length of service.
The departure of Moran, a district judge since 1979, and the elevation of Aspen creates a vacancy that's bound to set off a scramble among judicial wannabes.
Insiders predict Moran's seat will go to Scott R. Lassar, U.S. Atty. James B. Burns' top aide, who was a partner with Burns at Keck Mahin & Cate. Lassar had sought a judicial appointment a couple of years ago, observers said. He became first assistant U.S. attorney on the understanding that Burns, a close associate of U.S. Sen. Paul Simon of Illinois, a fellow Democrat, would help him become a judge, observers said.
Lassar is known for his even temperament and legal acumen, as well as a droll wit and not-so-slight penchant for self-deprecation.
Interstate victory: Veteran Chicago defense lawyer Julius Lucius Echeles may be retired in Florida, but he is still winning back in Illinois.
The state appellate court, responding to Echeles' appeal for post-conviction relief in the case of James Files, has reversed Lake County Circuit Judge John Goshgarian and ordered a hearing before another judge on the would-be killer's alibi defense.
Files claims he and a colleague, admitted car thieves, feared they were being chased by mob hitmen when they fired on two plainclothes policemen, wounding one in 1991. Echeles, happy to get the case reinstated and away from Goshgarian, now hopes to get Files' 50-year sentence reduced.
Wednesday, June 15, 2016
Most big Chicago Law Firms report revenue, profit increase in this year.
Almost all of Chicago's law firms outpaced the national increases in revenue and net operating income: 2.7 percent and 3.3 percent, respectively. The firm posted $24 million more in revenue in 2015 and, because of law's fixed-cost structure, that "falls to the bottom line."
Chicago law firms, said in a statement that the firm's profits resulted from "a combination of factors, including a focus on expense management, growth in strategic practices and an increase in the number of equity partners."
Chicago law firms, said in a statement that the firm's profits resulted from "a combination of factors, including a focus on expense management, growth in strategic practices and an increase in the number of equity partners."
Wednesday, June 8, 2016
Lawyer vs Lawyer becoming common corporate strategy
Now big Chicago law firms, which generate huge fees representing large corporations, have become prime targets for malpractice claims.
One of the biggest such cases recently involved Myron Cherry, representing health-care company Ventas Inc., taking on the prestigious New York law firm of Sullivan & Cromwell.
In late October, Louisville-based Ventas disclosed that its former counsel, Sullivan & Cromwell, agreed to pay $25.5 million to avoid trial in a 3-year-old malpractice suit alleging conflict of interest.
In an investor conference call a day after the settlement was made public, Debra Cafaro, Ventas' chairman and chief executive, would only say that the settlement "agreement includes confidentiality provisions, and, therefore, we cannot elaborate on our statement or answer your questions."
H. Rodgin Cohen, chairman of Sullivan & Cromwell, said he would not comment on the settlement, but contends that law firms are especially vulnerable to malpractice claims because dissatisfied clients take advantage of firms' eagerness to avoid potential damage to their reputations.
"There is a special vulnerability of having someone stand up in court for weeks or months and saying you are guilty of malpractice," Cohen said. "I would hope that most clients, the vast majority, would not look to the courts for a remedy for every perceived ill."
While the Ventas-Sullivan & Cromwell malpractice settlement was not the largest payment ever received by a law firm's former client, it fell well atop the highest category of payments cited in an April American Bar Association study.
That survey of legal malpractice cases showed that the number of payments for more than $2 million had increased to 19, compared with 10 recorded between 1996 and 1999. Payments included both out-of-court settlements and courtroom verdicts. Personal-injury cases comprised the largest number of legal malpractice claims, followed by cases involving family and estate law, and corporate transactions such as bankruptcy.
The fallout from high-profile corporate corruption cases, most notably Enron Corp. and WorldCom Inc., has placed greater scrutiny on executives to justify their actions, said Cherry.
Five or 10 years ago, Cherry said, corporate clients were unlikely to sue a large firm, especially one with which it had a long relationship.
"Now, shareholders are demanding that executives serve them," Cherry said. "Corporations, therefore, have a fiduciary responsibility to shareholders, and that could mean evaluating whether they have a claim against their own law firm."
In the Ventas case, the health-care company charged that it ran into severe financial problems specifically because of "incompetent and negligent" advice it received from Sullivan & Cromwell stemming from the company's 1998 spinoff of its hospitals and nursing home operations.
Ventas sued Sullivan & Cromwell for $186 million, alleging that it engaged in a conflict of interest by representing both Ventas, which became a real estate investment trust, and the spun-off health-care company, Kindred Healthcare.
After Sullivan & Cromwell repeatedly petitioned to have the case thrown out, a judge last year set a trial date. The settlement occurred several months before the trial was to begin.
The American Bar Association also revealed that claims against firms with more than 100 attorneys had more than tripled between the two time periods it studied.
"Quicker to sue lawyers"
"People are more cynical, they're quicker to sue lawyers and they think in larger dollar numbers than they ever had," said Thomas Browne, general counsel at Hinshaw & Culbertson often represents lawyers in malpractice suits.
Browne, who has represented lawyers for more than 25 years, said that until three years ago he had never been involved in a settlement for more than $1 million. Since then, he added, four of his legal malpractice cases have ended in settlements exceeding $1 million.
Browne and others point to corporate scandals and the Sarbanes-Oxley Act, which overhauled corporate governance rules, for making law firms more answerable to their clients' actions.
"When a big scandal occurs, the trend now is for board directors to see whether some big law firm handling its legal work may be to blame," said Stephen van Wert, an executive at Brown & Brown Inc., a Daytona Beach, Fla., insurance intermediary that offers legal malpractice coverage. "There's more scrutiny being placed on law firms."
At the same time, law firms usually want to minimize the time and money spent in a courtroom proceeding.
For that reason, "95 percent" of claims against law firms are settled before trial, van Wert estimated.
One of the biggest such cases recently involved Myron Cherry, representing health-care company Ventas Inc., taking on the prestigious New York law firm of Sullivan & Cromwell.
In late October, Louisville-based Ventas disclosed that its former counsel, Sullivan & Cromwell, agreed to pay $25.5 million to avoid trial in a 3-year-old malpractice suit alleging conflict of interest.
In an investor conference call a day after the settlement was made public, Debra Cafaro, Ventas' chairman and chief executive, would only say that the settlement "agreement includes confidentiality provisions, and, therefore, we cannot elaborate on our statement or answer your questions."
H. Rodgin Cohen, chairman of Sullivan & Cromwell, said he would not comment on the settlement, but contends that law firms are especially vulnerable to malpractice claims because dissatisfied clients take advantage of firms' eagerness to avoid potential damage to their reputations.
"There is a special vulnerability of having someone stand up in court for weeks or months and saying you are guilty of malpractice," Cohen said. "I would hope that most clients, the vast majority, would not look to the courts for a remedy for every perceived ill."
While the Ventas-Sullivan & Cromwell malpractice settlement was not the largest payment ever received by a law firm's former client, it fell well atop the highest category of payments cited in an April American Bar Association study.
That survey of legal malpractice cases showed that the number of payments for more than $2 million had increased to 19, compared with 10 recorded between 1996 and 1999. Payments included both out-of-court settlements and courtroom verdicts. Personal-injury cases comprised the largest number of legal malpractice claims, followed by cases involving family and estate law, and corporate transactions such as bankruptcy.
The fallout from high-profile corporate corruption cases, most notably Enron Corp. and WorldCom Inc., has placed greater scrutiny on executives to justify their actions, said Cherry.
Five or 10 years ago, Cherry said, corporate clients were unlikely to sue a large firm, especially one with which it had a long relationship.
"Now, shareholders are demanding that executives serve them," Cherry said. "Corporations, therefore, have a fiduciary responsibility to shareholders, and that could mean evaluating whether they have a claim against their own law firm."
In the Ventas case, the health-care company charged that it ran into severe financial problems specifically because of "incompetent and negligent" advice it received from Sullivan & Cromwell stemming from the company's 1998 spinoff of its hospitals and nursing home operations.
Ventas sued Sullivan & Cromwell for $186 million, alleging that it engaged in a conflict of interest by representing both Ventas, which became a real estate investment trust, and the spun-off health-care company, Kindred Healthcare.
After Sullivan & Cromwell repeatedly petitioned to have the case thrown out, a judge last year set a trial date. The settlement occurred several months before the trial was to begin.
The American Bar Association also revealed that claims against firms with more than 100 attorneys had more than tripled between the two time periods it studied.
"Quicker to sue lawyers"
"People are more cynical, they're quicker to sue lawyers and they think in larger dollar numbers than they ever had," said Thomas Browne, general counsel at Hinshaw & Culbertson often represents lawyers in malpractice suits.
Browne, who has represented lawyers for more than 25 years, said that until three years ago he had never been involved in a settlement for more than $1 million. Since then, he added, four of his legal malpractice cases have ended in settlements exceeding $1 million.
Browne and others point to corporate scandals and the Sarbanes-Oxley Act, which overhauled corporate governance rules, for making law firms more answerable to their clients' actions.
"When a big scandal occurs, the trend now is for board directors to see whether some big law firm handling its legal work may be to blame," said Stephen van Wert, an executive at Brown & Brown Inc., a Daytona Beach, Fla., insurance intermediary that offers legal malpractice coverage. "There's more scrutiny being placed on law firms."
At the same time, law firms usually want to minimize the time and money spent in a courtroom proceeding.
For that reason, "95 percent" of claims against law firms are settled before trial, van Wert estimated.
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