Keep your finger on the legal world's pulse

Dentons' global CEO Elliott Portnoy will be stepping down as leader of the global law firm next year. After more than a decade in the role, Portnoy will not be seeking another three-year term after his current term expires in November 2024, he said in a statement. Portnoy has been Dentons’ global CEO since the firm assumed its current name following the $1bn tripartite merger of legacy SNR Denton, of which Portnoy was global CEO, with French firm Salans and Canada’s Fraser Milner Casgrain in 2013. Since then, more than 50 law firms have joined Dentons. It became the largest firm in the world by lawyer headcount in 2015 following a tie-up with 4,000-lawyer Beijing firm Dacheng. Dentons said its global governing bodies were “initiating processes for both internal and external candidates for the appointment of a successor” and would hire an external consultancy to help with the search. “Elliott's input will be integral, and he will partner closely with the successor during the transition period. The firm is committed to its firmwide leadership diversity policy and is applying these principles and best practices to help identify a new global CEO," Dentons said. “Serving as global CEO and as one of the founders of Dentons has been a source of immense privilege and pride as we built the world's largest and leading global law firm,” Portnoy said.

 

Bloomberg Law

The Global Legal Post

A recent decision from the Southern District of Florida highlights the benefits of using written joint defense agreements in legal cases. The court disqualified a lawyer who had a former client in an oral joint defense agreement with another individual who later cooperated with the government. This conflict could have been avoided with a written agreement that allowed for the use of information obtained through the joint defense. Joint defense agreements are valuable tools for criminal defense practitioners, but they need to be handled carefully to prevent conflicts. Ethical guidance and case law indicate that lawyers do not owe ethical obligations to former non-client members of a joint defense agreement, but they do have a fiduciary duty of confidentiality if they received confidential information. A written joint defense agreement can address potential conflicts and provide a waiver provision for members who later testify for the government. Practitioners should consider the benefits of a written agreement, despite the time and energy required to negotiate the terms. Utilizing written joint defense agreements can help avoid conflicts and protect the interests of all parties involved.

 

Law

The National Association of Realtors (NAR) and leading U.S. real estate brokerages are facing expensive lawsuits alleging illegal collusion to inflate agent commissions. The recent $1.8bn verdict against NAR is likely to bring significant changes to how real estate agents are paid. A study by Clever Real Estate found that high commissions were the top regret for recent home sellers. The lawsuits focus on NAR's participation rule, which requires sellers to pay the buyer's agent's commission, and a rule preventing buyer's agents from negotiating lower commissions. Legal experts have criticized these rules as anti-competitive and price-fixing. If the verdict is upheld, government regulations could lead to a 30% reduction in commissions. However, some agents believe the commission system will remain largely unchanged, with potential renaming or rebranding. Discount brokerages and increased competition may also bring down commission costs in the future. Regardless of the outcome, it is likely that buyers and sellers will pay less in real estate commissions in the future.

 

Daily Report

Eighteen California children have filed a lawsuit against the U.S. Environmental Protection Agency (EPA) for allegedly violating their constitutional rights by allowing pollution from burning fossil fuels to continue. The lawsuit, filed by Our Children's Trust, accuses the EPA of intentionally allowing the U.S. to become one of the world's biggest contributors to the climate crisis. The plaintiffs, aged 8 to 17, say they have experienced the loss of homes, health problems, and education disruptions due to climate change-related issues. The lawsuit seeks to define children as a class uniquely harmed by the climate crisis. The plaintiffs are demanding a declaratory judgment and a heightened level of judicial review over the EPA's conduct. They hope to put forward evidence to prove their claims and prompt the EPA to change its conduct.

 

Los Angeles Times

Legaltech News interviews Baker McKenzie's Lothar Determann, author of the upcoming 'Determann's Field Guide to Artificial Intelligence Law,' to discuss cross-disciplinary compliance efforts to AI and the role of data privacy laws in regulating generative AI. Determann emphasizes the need for practical guidance in navigating AI global compliance requirements and advises companies to take action now rather than waiting for future regulations. He also shares insights on the EU AI Act, the tension between the GDPR and generative AI, and the under-covered aspect of accountability in conversations about generative AI. Determann proposes assigning a human "system steward" to monitor AI systems with substantial autonomy. He also comments on the proposed regulatory framework for automated decision-making technology by the California Privacy Protection Agency, expressing concerns about its broad scope and potential impact on smaller companies.

 

Legaltech News

McKool Smith principal Alfonso Chan has joined King & Spalding as a partner in Austin. Chan, an intellectual property litigator, represents public and private universities. He will be based in King & Spalding's Austin office and will continue to live in the Dallas/Fort Worth area. Andy Bayman, leader of King & Spalding's trial and global disputes practice group, said that Chan's strong relationships with universities and trial credentials add a “new dimension” for the firm. Chan handles IP litigation and licensing for universities, research institutes, and technology companies, with a focus on semiconductors and other electronic technologies, biomaterials, and medical devices. His clients include the University of Texas System, the University of Colorado, and Vanderbilt University. Chan said that King & Spalding is a good fit for his clients because of the firm's large team working in the life sciences, pharmaceutical, and medical device industries, as well as its corporate, finance, and transactional practices.

 

Law

Polsinelli, the Kansas City-founded law firm, has reported a 7.5% increase in gross revenue, reaching over $856m in 2023. The firm also saw profits per equity partner rise by approximately 12.8%, exceeding $1.9m. While transactional, real estate, and finance practices were slower, IP, litigation, labor and employment, and healthcare transactions made a significant impact. Despite a lighter year overall, Polsinelli is steadily moving towards the billion-dollar revenue mark. The firm's revenue per lawyer increased by 4% to $889,000, and its full-time equivalent lawyer count rose by 3% to 963. Polsinelli's CEO, Chase Simmons, attributed the firm's success to investments in artificial intelligence and balanced performance across various practice areas. The firm plans to cautiously expand into new markets and says it remains focused on maintaining a strong bonus culture for high-performing associates.

 

Law

D.C. law firms in Washington, D.C. are intensifying their efforts to collect payments on time. Steptoe, for example, has updated its financial systems and invested in financial and budget professionals to improve efficiency. The firm's chair, Gwen Renigar, stated that they now have a stronger infrastructure to support them throughout the year. While law firms across the industry are experiencing delayed bill payments, D.C. firms are taking proactive measures to speed up collections, such as using billing tools and encouraging lawyers to enter their time promptly. The use of e-billing systems by clients has contributed to payment delays, as these systems often complicate the invoicing process. However, D.C. firms have been successful in staying on top of their inventory and ensuring its conversion. Experts predict that their focus on collections will position them well for the fourth quarter. Overall, D.C. law firms are facing similar challenges as the rest of the industry, but they are taking steps to mitigate the impact of a tougher economy.

 

Daily Report

Jenner & Block is opening new offices in Los Angeles and San Francisco as part of its expansion in California. The firm's new San Francisco office is more than double the size of its current space. The Chicago-founded firm first opened its Los Angeles office 15 years ago and its San Francisco location in 2021. Since then, it has added 18 partners in San Francisco, including former SEC enforcement division assistant director Jennifer Lee and litigator Hong-An Tran. In Century City, the firm will move into new offices at 2029 Century Park East. Jenner & Block's co-managing partners, Katya Jestin and Randy Mehrberg, stated that the additional space in Century City will allow them to better serve their clients in the area.

 

Bloomberg Law

Holland & Hart has reelected Chris Balch to a second term as chair. Balch expects the firm to surpass its 2022 financial performance this year. Under Balch's first term, the firm experienced remarkable growth, with a 45% increase in revenue and a 64% increase in profits per equity partner. Holland & Hart has also expanded its team from 450 lawyers to 500.

 

Bloomberg Tax

The Commodity Futures Trading Commission (CFTC) has proposed new cybersecurity rules for brokerages and swaps dealers in response to a ransomware attack on Ion Trading UK. The CFTC plans to require firms it oversees to update risk evaluations and handle security risks posed by outside vendors. The proposal also includes assessing and monitoring risks related to possible disruptions from natural disasters or other events. The CFTC's chairman, Rostin Behnam, stated that the commission must strengthen its framework to promote operational resilience against cyberattacks and technological disruptions. The proposal is open for public comment until February 26, 2024.

 

Bloomberg

Adobe is being investigated by U.S. regulators over its software subscription cancellation rules. The Federal Trade Commission (FTC) has been conducting a civil investigation into the issue since June 2022. Adobe has been cooperating with the FTC and a settlement could result in significant monetary costs or penalties. Customers have long complained about the expense of cancelling Adobe subscriptions, which can cost over $700 annually. Subscribers must cancel within two weeks of purchase to receive a full refund; otherwise, they face a prorated penalty. The FTC has been focusing on digital subscriptions and proposed a rule in March to make it easier for consumers to cancel subscriptions. Adobe believes its practices comply with the law and is currently in discussions with FTC staff. The company is also working with regulators regarding its proposed $20bn acquisition of Figma. Adobe disagrees with findings released by the U.K.'s competition regulator, and the U.S. Justice Department is considering a lawsuit against the deal. 

 

Bloomberg

State officials and pension employees in Oklahoma are facing challenges in complying with a new law that requires the state to cut ties with financial companies that "boycott" the oil and gas industry. The law has created hurdles for the state's second-largest public pension, which found it would cost $10m to move its money out of funds managed by blacklisted companies. The Office of the State Treasurer also stated that ending its banking relationships with certain firms would be impractical. Oklahoma is among several conservative states that have passed legislation targeting financial firms that embrace ESG investing principles. The state's law has raised concerns about the impact on the economy and the movement to curb sustainable investing. Despite the challenges, the law has been seen as a symbolic success for the anti-ESG movement. "It slows down the ESG momentum," observed Joshua Lichtenstein, a partner at Ropes & Gray.

 

Wall Street Journal

Airbnb has agreed to pay €576m ($621m) to the Italian tax authorities to settle allegations of tax evasion. The settlement comes after Italy's finance police claimed that Airbnb failed to pay taxes on approximately €3.7bn of rental revenue, resulting in a debt of about €779m. Although Airbnb denies any liability, the company has decided to settle the dispute. The settlement amount, while lower than the initial demand, still represents about a third of Airbnb's quarterly adjusted earnings. This settlement highlights the increasing scrutiny faced by global companies operating in Italy regarding tax payments. In recent years, companies like Netflix and Meta Platforms have also faced investigations for alleged unpaid taxes. The settlement with Italy's tax authorities concludes the dispute for the years 2017 to 2021, while discussions for the years 2022 and 2023 are ongoing.

 

Bloomberg

Financial Times