DeweyLeBoeuf.com Screenshot as of today

The filing discloses $315-million in liabilities, $225 of which are owed its banks.  Among some other noteworthy creditors:

• The firm’s Sixth Avenue (NYC) landlord, $3.8-million
• Thompson Reuters, $2.4-M
• Bank of America (for “credit card” debt—not the bank debt mentioned above): $2.1-M
• Lexis-Nexis, $1.4-M
• Flik International (for “dining services), $673-thousand
• Hildebrandt Consulting, $656-thousand
• And a variety of headhunters, totaling (ballpark) over $5-M.

Cause of death?

Peter brings in two experts in law firm economics (disclosure: both of whom I know quite well).  Here are their post-mortems:

1)

“Because the partnership lacks any shared cultural values or history, money becomes the core value holding the firm together,” said William Henderson, a law professor at Indiana University who studies law firms. “Money is weak glue.”

2)

Some industry experts say that, in many ways, the turmoil at Dewey reminds them of Finley Kumble, a large, fast-growing New York firm that imploded in 1987. The causes of Finley Kumble’s failure — expanding too quickly, borrowing heavily, and paying dearly for prominent talent — mirror the reasons for Dewey’s woes.

“Finley Kumble was the canary in the coal mine that now seems forgotten,” said Steven J. Harper, a retired partner at Kirkland & Ellis and adjunct law professor at Northwestern University.

Firms that know who they are can of course avoid the Dewey fate.  Indeed, the grandson of Thomas E. Dewey seems to be following that path:

Other successful practices have remained decidedly small. The grandson of Thomas E. Dewey, for example, has his own firm, Dewey Pegno Kramarsky, a litigation boutique in Manhattan that he started in 1998. Thomas E.L. Dewey’s 14-lawyer shop, which represents large corporate clients like Credit Suisse and Time Warner, markets itself as a cost-effective alternative to large, expensive firms.

Mr. Dewey, 48, and his relatives no longer have any ties to the firm. Reached this month, he declined to comment on the disaster that befell the firm bearing his grandfather’s name.

“Sorry,” Mr. Dewey said. “I know you will understand.”

Thanks, Adam!

More important: Let us know if you’d like to give it a go.  Painless, we promise.  There’s even some swag in it for you.  Contact us for details.

• 20th-ranked George Washington cutting;
• 44th-ranked Hastings cutting; and
• Everybody’s laughingstock, bottom-ranked Cooley, opening a new campus in Florida to add to its Michigan campuses with 4,000 students spread between Lansing, Grand Rapids, Auburn Hills, and Ann Arbor.

GW and Hastings are being rational and reacting to the oversupply of newly minted JD’s; not much requires profound explanation about that.

But Cooley?  What gives?

The plan seems to be to bolster Cooley’s revenues by diversifying out of recession-clobbered Michigan.

I get it.

Too bad it elevates the school’s self-interest above that of hundreds of students.

The joke among associates and junior partners (people don’t get to be senior partners unless they know better) is that “I didn’t go to law school to be a used car salesman.” This hoary bromide is trotted out whenever they’re urged to market themselves and their firm.

Get over it.

Or, if you prefer Cher’s interpretation in Moonstruck, “Snap out of it!”

The fact is in today’s economy you need to know how to market yourself and your firm, if for no other reason than self-defense.

Prof. Silvia Hodges

Now to the rescue comes Prof. Silvia Hodges of Fordham Law (disclosure: a friend in whose classes both Bruce and Janet, the folks behind JD Match, have guest-lectured) with a new course in Marketing for Lawyers.

“Marketing is really important to your career,” says second-year student Jordan Franklin. “It shouldn’t be a dirty word.” Though Franklin has lined up a summer associate position in Florida, he says he eventually will want to start his own firm. Law schools, including Fordham, he says, tend to assume that everyone wants to work for Big Law. “No one says you should start your own firm,” says Franklin.

The students seem to love the fact that the class is steeped in reality, but I wondered whether other law schools—especially the top ones—are ready for a course that blatantly acknowledges that salesmanship is critical to success in law.

Hodges admits that teaching anything practical in a law school meets resistance, though she says she had no problem convincing Fordham. “Many schools hesitate offering too [many practical courses], perhaps fearing that might have too much of a vocational touch.”

Ah, yes, the myth that people don’t attend law school for jobs—which also feeds into the myth that law is not a business.

Would I have signed up for this course when I was in law school?

I hope I would have had the good sense to realize that solid business skills are complementary, not antithetical, to practice.  Then again, those were palmier days on the economic front.  Still, I wish I’d had the option.

• Credit and Savings — depositaccounts.com will find banks or credit unions near your home with the best rates for a checking account. If you follow the requirements, you can get a credit union account for 4% savings.
• Credit Rewards — NerdWalletcom — I am in awe of anyone who coupons religiously, participates in credit card loyalty programs and actually gets some perks out of them. If you have a credit score of 700 or higher, then you should get a rewards rate of 1.5% or more. Hit this site to see how you can play the game a bit more beneficially.
• Daily Credit Card Offers for Points, miles, etc. — MyBankTracker.com — several times a year, there are cards that offer a 30,000 miles bonus. Don’t miss out on these; hit this site or NerdWallet.com and watch.
• Free College Courses — ocwconsortium.org — Open Courseware Consortium provides a list of free online college courses including 1800 offered at M.I.T. Of special note is UC-Irvine that offers “The Fundamentals of Personal Financial Planning.”
• Make a Purchase using Decide.com which helps you time your buy based on a pricing history algorithm, among other factors.

From Kiplinger’s Personal Finance, I picked up a few more:

•  Healthcare.gov has all health insurance plans listed with detail about benefits, deductibles, payments and more.
• Looking for a smartphone? Kiplinger’s says the Samsung Galaxy S II and Epic 4G Touch (Sprint) are the best phones for the money…about $230 with a two-year contract.
• Enjoy a good podcast? Check out Freakonomics with topics ranging from parenting to hitchhiking. It’s available on iTunes  or at Freakonomicsradio.com.
• Cheapism.com lists low-priced products in nine categories and offers tips on which make for a good deal.

These were some of the ones I found most interesting and general for a wide range of audiences. Which sites might you add to this collection?

The always hyper-articulately entertaining Elie over at Above The Law has the whole story, but we wanted to point out something that seems intriguing to us given the skew of those who are dropping out from taking the LSAT: The best and the brightest are fleeing in droves compared to the, well, not-so-good and not-so-bright.

What could possibly explain this?

Here are a few theories:

This is courtesy of the Atlantic:

So the smart kids got the memo. Law school is largely a losing game, and they’re not going to play, even though they can probably count on a better hand than most. Meanwhile, the number of laggards applying has barely budged.

Maybe that’s just what makes the smart kids the smart kids.

Here’s Elie’s theory:

But there’s another reason the dumber people are being left behind in law school. It’s because the smarter people have more options. For most people, being a lawyer sounds like a boring thing to do. Safe and relatively well-paid, but boring as all hell. As the economy gets better, people with skills — even if their only skills are being awesome at taking tests — find that there are other, less boring options out there. In a good economy, smarter people feel better at taking risks. Hell, if things don’t work out, they can always go back to law school.

What we’re seeing here is a bit of a legal brain drain. It’s a drain that will continue to happen as the economy improves, and legal education continues to be wildly over priced relative to the expected value of the education. If law schools want to attract smarter people, they’ll have to start offering a better deal.

But in the meantime, there appear to be plenty of people dumb enough to continue buying what law schools are selling.

Wouldn’t it be funny if we get to the point where law school is what you do when you aren’t smart enough to do anything else? Wouldn’t it be a riot if it’s actually been like that all along?

What if there’s another explanation?

I like the analogy to state-run lotteries, which economists gleefullly, and PC-incorrectly, describe as “taxes on poor people.” (Sorry, folks, I’m just the messenger here.)

Paul Campos, author of the addictive, radically heterodox, and brutally insightful Inside the Law School Scam, floated something like this hypothesis in a different context a few days ago.

In the case of both lotteries and law schools, the crucial ideological justification for the game is that the participants are entering into it voluntarily. This is why the one thing on which even the most dedicated defenders of the legal academic status quo agree is that law schools should be transparent about outcomes. Nobody is willing to defend a gamble in which those who run it lie about the odds. But here is where the analogy between lotteries and law schools is most troubling. After all, the state doesn’t need to lie about the odds to get the poorest of its citizens to spend nearly one out of every ten dollars on lottery tickets. “All you need is a dollar and a dream!” appears to work just as well, in at least some social contexts, as “98% of our graduates have jobs nine months after graduation.”

In other words, what if you give people good information about the extent to which you’re ripping them off, and they insist on getting ripped off anyway? Of course in the world in which rational agents maximize their utility on the basis of adequate information regarding costs, benefits, and risk this can’t happen by definition. But it turns out we don’t live in that world. We live in a world of markedly bounded rationality, where people are prone to optimism bias, have short time horizons and poor options within them, and are therefore more than willing to spend a dollar on a dream — or $150,000 that they don’t have as the case may be.

What if law school is, for those who can’t do much better than the low 140s on the LSAT, a form of particularly pernicious regressive tax?

What could be more devastating to $150,000 and a dream than that?

Across the country, there are 14 law suits brought by law students against their law schools that accuse the schools of “luring students with misleading postgraduate job statistics and leaving them saddled with debt at a time of contraction in the legal industry.”

Nine New York Law School graduates alleged in a lawsuit that New York Law School’s marketing materials stated that between 90 percent and 92 percent of law students secured full-time jobs with law firms after graduation.

A judge in New York sided with the law school and threw out the case suggesting the students were smarter than that and could ascertain their options before making choices about where to attend post-graduate college and for which advanced degree.

The students sought $225 million in damages from the school. The plaintiffs’ lawyer David Anziska is going to appeal, and he has led efforts to sue other law schools across the country, as well.

So, I need to ask, law student readers, is this a waste of time, good practice for your future as a trial lawyer, or will it put a black mark on your curriculum vitae when you interview for a position with a law firm?

It seems to me that anyone entering law school is highly intelligent. They conduct extreme due diligence to research law school options, rankings, cost, scholarships, and more. People entering law school know the situation in the legal sector is dire for employment directly from school. That’s a risk everyone takes upon making the decision to enter law school, right?

How then should these plaintiffs across the country expect to win especially in light of the New York Supreme Court justice’s decision to toss this case out? And, a final question…if these law student graduates are saddled with exorbitant debt from law school, how then are they paying Mr. Anziska for his legal fees to bring this case and appeal?

Just asking.

Credit: SmashingRobots.com

The robots are coming to a hospital near you. The graying of America is adding more pressure on the nation’s hospitals with nurse and physician shortages imminent. What that also means is cost pressures and a shortage of hospital workers to cover 24/7 shifts and a full-house of patients.

Enter robots; there are surgical droids that suture wounds (better than humans) and ones that swim in the blood stream, too (called nanobots). Next up are the service robots trained to carry laundry or a tray of meds down corridors ala the robot celebrities in Star Wars.

One robot in particular called TUG is built by Aethon. Silicon Valley’s El Camino Hospital uses 20 of these already. Each has hauling power up to 500 lbs, continuous operation up to 10 hours, and runs on four 12-volt batteries.

Its features are amazing — two button operation, navigates around obstacles and detects obstacles with sonar and laser range finders, and uses wireless signals to select floors on elevators.  Here are some of the companies active in the robotics space in health care:

• Aethon in Pittsburgh that makes the droids (as stated above)
• iRobot Corp, Bedford, Mass. (recently announced its foray into the health care sector)
• InTouch Health, Inc., Santa Barbara, Calif. (makes video-enabled robotic devices)

This story first appeared March 15, 2012 in the Wall Street Journal.  One of the hospital executives featured in the article said while physicians and nurses “love the droids,” patients and visitors see the robots as a novelty and sometimes want to “jump in front of them.”

Segue.

Should there be an area of legal practice called robotic law? Imagine this scenario — a visitor jumps in front of a robotic droid that malfunctions (it doesn’t “stop on a dime” as the story alludes). The droid continues to run over the human, and the human suffers injuries. Human sues the robot and the robot manufacturer and the hospital for damages, bodily injury and the like.

Would the robot manufacturer adopt all culpability in this situation and represent all the non-human entities put to work in hospitals? Or, does each robotic droid carry insurance of its own? Or, does the hospital cover each robot as if it were a human employee?

This scenario is far fetched…or, maybe not! What do you think, law students and law firms? Is this a burgeoning area of law that may need to become a legitimate practice area? As Bruce MacEwen, JD, president of JD Match says, “As long as the harm is foreseeable it’s actionable…see this…Palsgraf v. Long Island Railroad Co.

As an aside, the story also said robots are a boon for software and application developers to write new programs that mirror those developed for smartphones, gaming and other consumer electronics. While robotic law may not be real today, there certainly is opportunity for law school grads to enter immediately into the world of intelligent tech…carpe diem!

Since when should employers gain access to a job candidate’s personal Facebook account?  When someone goes through the customary interview process that includes:

• Resume review
• Skype interviews
• Reference checks
• In-person interviews
• Background check
• School transcripts
• Writing samples
• Personality/behavioral profile assessments
• Review of bar exam scores and law school documents
• Etc.

…then why on earth should having access to a Facebook account tip the scale towards a to hire/not to hire decision?

What about this option?

The job applicant allows someone from the recruiting team to like their Facebook page for 24 hours and that person can go take a gander around the applicant’s timeline.  Then, everyone agrees to unlike the relationship. This is not my preference; in fact, I have zero preference for abiding by these requests.

What opinion might you have on this, law students?

If you’re the final of two candidates for a choice position in a law firm and you get asked for your Facebook password as the final step before an offer, what will you do? There’s no certainty this will happen, but it’s a question you ought to prepare for.

Twitter, Too

There’s one more thought to share about the boundaries of social media, and this story comes courtesy of Above The Law:

A high school senior (with three months to go) was expelled, not suspended, due to his use of an f-bomb laden tweet he alleges was posted from home and not from school. The principal apparently monitors all tweets of all students at Garrett (IN) High School; this act was allegedly considered seriously egregious and the boy fell victim to the zero tolerance rule.

Hard core? In my opinion, absolutely…as said in Above The Law, the tweet (with  a majority of f-bombs) was not bullying, did not attack a certain person, was not blaspheming faculty or the school and was written by a teenage boy with three months to go until graduation.

Watch for what the parents will do next to get their boy reinstated; should be interesting.

What these several examples boil down to are more of what’s to come. Those of you entering internet law, rights to privacy, protection of identity and, the scope of “fair use” and the boundaries of the Digital Millennium Copyright Act have a world of opportunity ahead with the convergence of social media on all aspects of employment, education, careers, personal and professional branding, and life in general.

Thoughts from Bruce MacEwen

I invited Bruce MacEwen, Esq., president of JD Match and founder of Adam Smith, Esquire to weigh in, and he shares:

“The real problem here is that “zero tolerance” mentality.  Were these authorities never young?  Did they never make a mistake?  Did they never do anything they regretted later—possibly years later?

How about a small dose of plain old human perspective and common sense?  Let’s face it: The overwhelming majority of private, personal activities are just that:  Private and personal.  They have nothing to do with job performance or job potential.

Of course, if those authorities can’t see their way to a modicum of temperance on this front, I have another idea:  Job seekers can reveal their Facebook passwords on condition the children of the authorities do the same to the job seeker.”

What’s your thinking, dear readers?