Keep your finger on the legal world's pulse

Group lateral hires are becoming a preferred method for growth among law firms, balancing the drawbacks of individual lateral moves and full-firm acquisitions. Recent industry reports by Law.com highlight notable shifts, including Latham & Watkins losing a team to Willkie Farr & Gallagher in Munich, Burns & Levinson seeing an IP group move to ArentFox Schiff in Boston, and a financial services investigations team from Bryan Cave Leighton Paisner transitioning to Norton Rose Fulbright. These strategic moves allow firms like Paul Hastings and Allen Matkins to quickly enhance their market presence and capabilities by integrating well-established teams. This approach not only facilitates smoother transitions of client portfolios but also leverages the inherent stability and proven track records of group hires. As the legal landscape evolves, law firms recognize the value of these group dynamics, which support strategic alignment and immediate impact in new settings.

 

The American Lawyer

Two proposed disciplinary rule changes in Texas aim to address the supervisory responsibilities of law firms and prohibited transactions with clients. The first proposed rule, Rule 5.01, imposes a duty on lawyers in firm management to create and implement firm-wide policies and procedures to supervise others in the firm. Unlike the American Bar Association model rule, this duty is not imposed on all lawyers in the firm. The second proposed rule, Rule 1.08, replaces the current rule on conflict of interest and prohibited transactions. It specifies the requirements for lawyers before acquiring ownership or a business interest in a client's property. The rule bans oral agreements, requires written agreements, and mandates that the client receive legal advice from an independent attorney. These proposed rule changes have received both support and criticism from legal professionals, with concerns raised about the responsibilities of supervisory lawyers and the impact on fee agreements. The Texas Supreme Court is currently reviewing these proposed rule changes.

 

Law

The Supreme Court has made it more difficult for the federal government to obtain court orders in cases involving interference in unionization campaigns. The court rejected a rule that allowed the National Labor Relations Board (NLRB) to seek temporary injunctions without proving other factors. Instead, the court established a higher threshold for issuing court orders. The case arose from a labor dispute with Starbucks, which fired seven workers attempting to unionize their Tennessee store. The NLRB obtained a court order to rehire the workers, but Starbucks appealed to the Supreme Court. The ruling has implications for workers' rights and labor practices across the country. Starbucks expressed support for consistent federal standards, while the union representing the workers criticized the decision. “It’s incongruous to want to build a productive, positive relationship with workers and at the same time lead an attack on one of the few mechanisms they have to defend themselves against unscrupulous employers,” Lynne Fox, president of Starbucks Workers United, said in a statement.

 

Bloomberg

Los Angeles Times

New York Times

The Oregonian

Littler Mendelson has dropped its lawsuit against former associate Uliana Kozeychuk, who was accused of uploading confidential law firm documents to her Dropbox. The firm reached a $950,000 settlement with Kozeychuk, which includes back pay, alleged emotional distress, attorney fees, and costs. As part of the settlement, Kozeychuk must remove mentions of the firm from her social media accounts and allow a forensics expert to remove firm documents from her electronic files. Littler filed a notice of dismissal in a Texas court, but a copy of the settlement agreement was available in a separate case in California state court, where Kozeychuk accuses Littler of breaching the agreement. Littler maintains that it did not violate the terms of the settlement.

 

ABA Journal

Napoli Shkolnik PLLC is set to earn over $100m by packaging and selling its fees from opioids cases as a security to investors. The firm is pooling its portion of approximately $1.3bn in settlements with major opioid manufacturers and pharmacies. This move reflects the growing intermingling of law firms and investors, particularly in litigation finance. Securitization allows law firms to access immediate cash while reducing risk. Napoli Shkolnik's asset report filing with the SEC provides insight into how the firm is being paid for its work and its plans to monetize future winnings. Fortress Investment Group has backed the firm in various cases, while litigation funder C Cubed Capital Partners is handling the securitization process. Companies targeted in opioid cases are expected to pay around $21bn to resolve the suits.

 

Bloomberg Law

Sidley Austin has hired Cooley partner Shane Goudey to lead its new venture capital fund formation practice in Palo Alto, California. Goudey, who has represented sponsor organizations in the formation of over 1,000 funds, will be responsible for building a world-class destination VC fund practice that supports a wide variety of funds and fund managers globally. Sidley Austin has been expanding its emerging company and venture capital offerings, positioning itself for a return of activity in the coming months.

 

Bloomberg Law

Norton Rose Fulbright has recruited a team of lawyers from Bryan Cave Leighton Paisner (BCLP) in the U.S. to enhance its regulatory and investigations practice. The team includes four partners, Jeff Kalinowski, Eric Martin, Jeff Ziesman, and Laura Perlov, along with two senior counsel, two counsel, and four associates. 

 

LawFuel

Skadden has announced the appointment of Annemarie Crouch as the firm's first Chief People Officer. Ms. Crouch, who previously served as the Chief Human Resources Officer at another global law firm, will oversee Skadden's people teams globally and lead the firm's people strategy for lawyers and business services professionals.

 

LawFuel

Couples whose lawsuits against fertility providers led an Alabama court to rule that frozen embryos could be considered children have asked a judge to toss out a new state law that provides legal immunity to in vitro fertilization providers. The couples argue that the law is unconstitutional and violates their due process and equal protection rights. Lawyers for the couples state: "IVF healthcare professionals should bear liability for medical negligence under the Alabama Medical Liability Act just like all other healthcare professionals." The new law shields providers from prosecution and civil lawsuits for any damage to or death of an embryo during IVF services. The Alabama case is part of a larger national debate over IVF, with Democrats in Congress pushing for legislation to guarantee access to fertility treatments while Southern Baptist delegates express concerns over the destruction of embryonic human life. The outcome of the case is likely to be appealed back to the state Supreme Court.

 

Law

A federal judge has granted temporary relief to the U.S. Conference of Catholic Bishops and employers in Louisiana and Mississippi from a federal rule that would have required them to provide workers with time off and other accommodations for abortions. The judge's ruling came in response to two lawsuits challenging the Equal Employment Opportunity Commission's rules, which stated that abortions are covered by the Pregnant Workers Fairness Act. The ruling prevents the Equal Employment Opportunity Commission from enforcing the abortion provision of its rules against the Catholic plaintiffs and employers in Louisiana and Mississippi. The decision follows a similar ruling in Arkansas dismissing a lawsuit filed by 17 states. The Louisiana ruling is a partial victory for the attorneys general of Louisiana and Mississippi, who had sought a broader emergency injunction. The ruling has been criticized by civil rights and women's advocacy groups, while supporters argue that it protects the rights of pregnant workers.

 

The Baltimore Sun

Microsoft President Brad Smith has testified before a House of Representatives panel on homeland security and addressed questions about the company's security practices following recent breaches by Russian and Chinese hackers. The Cyber Safety Review Board (CSRB) had criticized Microsoft for its lack of transparency over the Chinese hack, which it deemed preventable. Lawmakers examined Microsoft's security lapses, challenges in defending against cyberattacks, and plans for improvement. “Microsoft accepts responsibility for each and every one of the issues cited in the CSRB’s report,” Smith testified. Microsoft has pledged to prioritize security and has launched a cybersecurity initiative to prepare against increasing cyberattacks.

 

U.S. News

Washington Post

Cloud data and analytics company Snowflake plans to close its investigation into a hacking campaign that affected up to 165 customers. The company has not detected any unauthorized access into customer accounts since early last week. The full extent of the data theft remains unclear, but only a few customers have reported issues so far. Hackers used stolen credentials to access customer accounts, which lacked security measures such as multifactor authentication. Snowflake does not know how much customer data was stolen, and the company is working with law enforcement and cybersecurity firms to investigate the matter. Snowflake now plans to release tools to help customers adopt security measures such as multifactor authentication. The hacking group responsible for the attacks, UNC5537, exploited stolen credentials available on the dark web. Most members of the group are based in North America.

 

Bloomberg

The NFL is facing a federal court battle as a result of a class-action lawsuit filed by subscribers of the "Sunday Ticket" package. The subscribers claim that the NFL broke antitrust laws by selling the package at an inflated price and restricting competition. The NFL argues that it has the right to sell "Sunday Ticket" under its antitrust exemption for broadcasting. The case, which began on June 6 in Los Angeles, could have significant financial implications for the NFL, with potential damages of up to $21bn. The outcome of the case could also impact other sports leagues that offer out-of-market packages.

 

U.S. News

The newly adopted EU Corporate Sustainability Due Diligence Directive (CS3D) imposes significant penalties and increased compliance costs for international companies not adhering to environmental and human rights regulations in their supply chains. Starting in 2027, non-compliant companies face fines up to 5% of their global turnover. The directive initially targets large EU and non-EU companies with substantial employee numbers and turnover, expanding its reach by 2029. It aims to unify due diligence obligations across Europe, potentially benefiting companies already mitigating risks in their supply chains. However, the directive has sparked concerns regarding the feasibility of controlling entire supply chains and the realistic assessment of operational complexities. Notably, it empowers NGOs and rights holders to initiate lawsuits for non-compliance, significantly increasing the legal risks for affected companies.

 

Law.com

Group of Seven (G-7) leaders have announced an action plan to deal with the positive and negative effects of artificial intelligence (AI) on employment. The leaders of Britain, Canada, France, Germany, Italy, Japan and the United States plus the European Union said they welcomed the support from countries outside the G-7 forum for the Hiroshima AI Process, an international rulemaking framework for generative AI led by Tokyo which was established at last year's G-7 summit, saying that they recognize the importance of advancing the framework's outcomes. More than 50 countries and regions have signed on to the framework. This year's G-7 discussions have focused on the potential benefits of AI to labour and the risk of the technology depriving people of work. G-7 leaders said Friday that they will "work to ensure that AI enables increased productivity, quality jobs and decent work."

 

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