European law firm, Field Fisher Waterhouse LLP, has announced the successful recovery of £550,000 in compensation for a labourer injured at work.

In December 2005, the labourer was instructed by his foreman to collect waste materials from a large open shed. On entering the shed, a large mechanical digger with a sharp bladed shovel drove into him. The shovel hit both legs causing a severe injury at work. As a result, he had a below knee amputation of his left leg. This has meant that while he can now walk using a prosthetic limb, he is unable to return to his former employment or any other manual labour.

Paul McNeil, partner in the Personal Injury Group at Field Fisher Waterhouse, was given legal instruction by the client at the end of 2005.

Although the labourer’s former employer quickly accepted that they were primarily responsible for the accident, they argued that he was also partially responsible for the negligence. They alleged that he had actually gone into the shed against instructions by the foreman.

Field Fisher Waterhouse succeeded in obtaining substantial interim payments to fund medical treatment and rehabilitation. The initial case to decide the issue of fault was fixed for trial in March 2007, however a few days before this date the employers accepted that they were fully liable for the accident.

In the meantime, there was a dispute between the employer and their insurer, which resulted in the insurer cancelling the policy. The meant that Field Fisher Waterhouse then had to bring proceedings against the employer directly.

Due to a significant difference in opinion between the employer and Field Fisher Waterhouse’s valuation of the injury compensation claim, another trial needed to be fixed for December 2007 to settle the matter. Eventually after extensive negotiation, the claim was settled out of court in the sum of £550,000 plus costs.

The labourer received his damages in full as the case was conducted on a no win, no fee basis.

Paul McNeil said: “I am happy that we were able to recover this compensation for our client, who was injured through no fault of his own whilst at work.”

A new type of legal service provider emerges through innovation.
When it comes to technology, let me confess, I am definitely not an expert. Nevertheless, I am fascinated by the two types of creativity involved with technology. The most obvious is the technical creativity required to invent and develop a new product or system. But the other, less-obvious type is the client-focused creativity that innovative lawyers demonstrate in developing new products and services as the result of existing technology.

One recent example of this is a product developed by Nova Legal and Advisory, which is located in Sydney, Australia, and consists of both a traditional law firm and a consulting firm. The law firm specializes in commercial legal services and complex corporate transactions, while the consulting firm specializes in corporate governance and risk management. The lawyers worked with the consulting firm’s technology staff to come up with a product called Nova Solutions. As Nova Legal and Advisory describes it, the product is “an integrated online management tool for the governance infrastructure needs of organizations.”

Lawyers and Technicians Collaborate
Basically, Nova Solutions is an online training and compliance program. The firm’s lawyers had developed an extensive understanding of client needs in human relations, compliance, governance and training. They then collaborated with the consulting group’s researchers, technical writers and technicians to convert basic systems into, as the firm summarizes it, “an Internet package tailored to each company, where users can click on a screen to see the company’s policies in relation to a range of regulatory and compliance issues.”

But this product goes even further. Users can click again “to complete a training course to bring them up-to-speed on the company’s requirements in these areas.”

This is at least the fourth such online training and compliance product developed by a law firm. Blake Dawson Waldron, one of Australia’s largest firms, offers Salt TM Enterprise, a fully managed, Internet-delivered service supported by the professional team at Blake Dawson Technology Pty Ltd.

Salt TM Enterprise is quite an extensive program. In Australia, it currently offers 14 courses covering key areas of the law, including corporate governance, environmental compliance and insider trading. There is also a module for information and communication technology companies to help them benefit from Australia’s Free Trade Agreements with the United States, Singapore and Thailand.

And recently Blake Dawson extended Salt TM Enterprise to New Zealand through an affiliation with Kensington Swan, a full-service commercial law firm. Among the 12 courses offered there, several are different from the courses offered in Australia, including “Consumer Guarantees,” “Money Laundering” and “Resource Management.”

There are Stateside examples, too.
“Down Under” law firms aren’t the only ones that offer online training and compliance programs. Holland & Hart offers the Holland & Hart Compliance Management System (HHCMS). Developed in collaboration with My Learning Advantage, Inc., an e-learning software provider, HHCMS is offered as a “fully hosted,” customizable and continually updated service. Its design utilizes a multimedia approach, with video segments at the beginning and end of each course.

A similar training program, but without the compliance component, has been developed by the multi-office law firm Howrey in the form of its Howrey Virtual University, which is a system designed for a group of internal clients—the firm’s associates. Located on the firm’s intranet, this program
allows associates to manage their
training individually, on their own
time schedules.

Applying Preventive Legal Medicine
The point here isn’t the technical creativity. The underlying technology already existed. What is noteworthy is the client-focused creativity employed by the lawyers in these firms. They took an existing system and, with the assistance of technology experts, developed it into a product that not only provides clients with information and knowledge 24-7, but also provides the ability to anticipate and resolve issues that otherwise could grow into major legal problems.

In other words, just like many doctors do with their patients, these firms don’t just “cure” their clients-—they try to keep them healthy by providing preventive legal medicine. And in the process, by applying creativity to technology, they have created a new type of legal service provider. To me, that is really fascinating.

Practice Areas

Hot
Intellectual Property. Not only patents but also copyrights, owing to Internet issues. Proposed legislation may provide copyright protection against knockoffs of high-fashion designs, too, because the devil does not always wear Prada. Also the PTO has adopted new rules.

Immigration. So hot that a few firms are separating it from labor and employment.
Labor and Employment. More complex than ever, not just owing to immigration, but also because of new EEOC rulings, continuing discrimination claims and possible new organization drives by unions.

Corporate Investigations. Fastest growing area of white-collar crime.
Complex Litigation. But see “Getting Hot—Mediation.”

Global Warming. California firms were the first to form this environmental subgroup that includes regulatory and insurance issues. Now Greenberg Traurig (which has offices and alliances around the world) has done so.

Domestic Relations/Family Law. Determination of parentage is now a hot issue in fertility law as the result of in vitro fertilization and embryo storage.

Pro Bono. Not only as a payback to the community, but also as a recruiting attraction and a professional development strategy to provide courtroom experience for associates.

Estate Planning and Administration. Particularly the latter, now that the baby boomers are starting to retire.

Elder Law. As part of the estates practice, mostly in smaller firms.

Animal Law. A niche that was heating up before the Michael Vick case and the Animal Fighting Prohibition Enforcement Act was signed last May. There are anticruelty laws in 43 states.


Getting Hot
Mediation. As well as other forms of alternative dispute resolution.

Libel. Suits against bloggers and message board postings are still increasing.

Foreclosures. Small firms overcome the low rates with staff-to-lawyer ratios as high as 10:1.

Art Theft and Fraud. A small but growing number of lawyers in the U.S. and Europe are focusing on the recovery of stolen art and historical pieces.

Bankruptcy. The cycle is swinging back. May be hot again by spring.

Insurance Coverage. Owing to global warming. Area was cool a year ago.

Post-arbitration Litigation. Some experts are seeing an increase.


Cooling Off
Structured Finance/Securitization. Largely owing to subprime mortgages. But a few firms, including Patterson Belknap, have started subprime counseling practices to help clients deal with problem loans.

Mergers and Acquisitions. Deals are being cancelled or at least deferred.

Cold
Medical Malpractice. Filings continue to decline owing to tort reform in many states, while the percentage of verdicts in favor of health-care professionals has increased in some parts of the country. As a result, insurance defense practices are shrinking and some firms have dissolved.

Workers’ Compensation. Here, too, the number of cases being filed continues to decline.
Geographic Market

Phoenix. Firms from the Upper Midwest and more recently the East continue to expand with offices here because it is the logical market in the booming Southwest. Ballard Spahr Andrews & Ingersoll is the latest.

China. Still hot despite a shortage of legal talent and regulations that limit the work foreign lawyers may do. McDermott Will & Emery may have found a way around these hurdles by the strategic alliance it entered into a year ago with Yuan Da Law Offices of Shanghai—reported to be the first formal arrangement between a Western and a mainland China firm.

United Arab Emirates. Dubai is white hot. Patton Boggs and Gibson, Dunn & Crutcher are opening offices there, following other firms that opened there in the past few years.
Spain. Has continued to be strong for U.S. firms.

Marketing and Business Development CRM. As we reported a year ago, firms continue to struggle with business development activity reporting.

Marketing Technology. Jeanne Hammerstrom, CMO at Benesch Friedlander, has hired a marketing technology specialist to drive the CRM and competitive and marketing intelligence systems, as well as to work with recruiting and IT on project and practice management for practice groups.

Television Advertising. While still frowned upon by most of the legal profession, it continues to be the medium of choice for personal injury firms and others in the consumer legal market. (Radio is second.) Now LexisNexis Martindale-Hubbell is partnering with Spot Runner, an Internet-based advertising agency, to create ads specifically for smaller M-H clients. Ads developed to date cover areas such as family law, drunken driving, personal injury and general practice. Commercials for criminal and immigration are being developed.

Print Advertising. Continues to be a medium of choice for large firms. Some have shifted their strategy from an institutional approach (i.e., the firm itself) to featuring practice areas. Cozen O’Connor and Winthrop & Weinstine were among the first. Now Benesch Friedlander has launched an interesting campaign, “My Benesch, My Team.”

Advertising and Solicitation. The distinction is specifically addressed within the rules in some states. However, as ABA counsel Will Hornsby has written, “The ABA Model Rules and the states that base their regulations on those rules do not set out the distinction clearly. The difference is important, however….” Therefore, marketers and lawyers must be certain of the rules in their states. This gets even more complicated for firms with offices in more than one state.

Martindale-Hubbell. A new surge of challenges from firms questioning the cost of listing in M-H.

Marketing Budgets. Continue to increase as a percentage of firm revenues at both large and midsize firms, with many now going beyond the historic 2 percent. In the U.K., marketing budgets have always been much larger, running as high as 10 percent in some “white circle” firms. In the U.S. and the U.K., the big accounting firms have been spending that much for years.

Marketing Department Staffs. Increasing in size along with the budgets.
Role of the Marketing Professional. Appears to be changing in several different directions. Some firms have recognized that their chief marketing officers’ role should be strategic. However, as their departments have grown, a high percentage of CMOs are having to spend more time on department administration and staff management. And some firms now expect their CMOs to produce new business—i.e., concentrate on sales and business development.

Marketing vs. Business Development. Many firms have not yet realized that these are separate but symbiotic functions. As we stated in last year’s report, corporations long ago recognized this and have combined marketing and sales under one senior executive so that the functions supplement and complement each other. This is another area where law firms should learn from their clients.

The Court of Appeals for the 10th Circuit in United States v. Nacchio has recently reversed an insider trading conviction in the high profile criminal case, finding, in short, that the trial court improperly denied the defendant an opportunity to call an expert witness. The Court ordered a new trial. "The Court based its holding on the improper exclusion of expert testimony, specifically, an economic analysis of Nacchio's stock trading patterns," says Joseph Martini, a partner with Wiggin & Dana LLP and a member of the firm's White-Collar Litigation and Appellate Practice Groups. "From a review of the cases, it appears that issues concerning the introduction of expert testimony are coming up in more and more white collar criminal cases," he observes. Wiggin and Dana partner James Glasser also notes that during his tenure as former Chief of the Criminal Division of the U.S. Attorney's Office in Connecticut, "defense counsel in white collar cases often argued against federal charges by pointing to experts opinions on such issues as the application of complex accounting principles. These issues are now coming up at trial," says Glasser. Martini and Glasser are available to write or comment on expert testimony issues in white-collar criminal cases including the Nacchio trial.

The parents of a Michigan teenager who killed herself while on the antidepressant Paxil cannot sue the drug's manufacturer because a state law grants immunity to the maker of any drug approved by the Food and Drug Administration.

U.S. District Judge Paul L. Maloney of the Western District of Michigan said FDA approval of Paxil use by adults was enough to shield manufacturer SmithKline Beecham Corp., even though the agency never approved the drug's use by teens.

He therefore dismissed Nadine White and David B. McCullough's lawsuit against SKB over their 16-year-old daughter Moriah's 2001 suicide after taking Paxil for three months.

Michigan is the only state with a law providing drugmakers immunity from state tort suits if the FDA has certified their products as safe and effective. The only exceptions to the statute are for fraud on the FDA or bribery of an agency official.

In this case, White and McCullough filed a negligence and strict-liability suit against SKB in a Pennsylvania federal court because the company is located in that state.

The drugmaker won a change of venue to the Western District of Michigan because the plaintiffs are residents of that state. It then filed a motion to dismiss.

In their opposition to the motion the plaintiffs argued that their suit is a failure-to-warn case because SKB never warned doctors not to prescribe Paxil to teens or children and, in fact, conducted a secret campaign to promote such "off-label" use.

Moreover, since the company never applied to the FDA for marketing approval to prescribe the drug to teens and children, it cannot argue that it has immunity under the Michigan statute, they said.

Judge Maloney rejected that argument, saying the Michigan Legislature provided immunity to drug manufacturers for FDA-approved products and that it is uncontested that Paxil was approved by the agency for use in adults.

"The statute does not limit the protection to situations when the drug is used for approved purposes," he said. "Should the Legislature wish to limit the protection available to "off-label" uses of the drug, it may do so."

A former partner at Latham & Watkins pleaded guilty Friday to defrauding both clients and his own firm by charging them more than $300,000 in personal or false expenses.

Samuel A. Fishman, a mergers and acquisition specialist in Latham's New York office from 1993 to 2005, was designated billing partner for a number of firm clients. According to prosecutors at the Southern District of New York U.S. Attorney's Office, Fishman, 51, used his position to carry out a fraudulent scheme over the course of several years.

Responsible for supervising and approving invoices sent to clients, Fishman added to the bills a number of inappropriate items, mischaracterizing them as charges for photocopying or express mail. He also fraudulently sought reimbursement from his firm for a number of personal expenses he claimed were for business.

The U.S. Attorney's Office did not identify Latham as Fishman's firm in a criminal information filed with the guilty plea, nor was the firm's name mentioned in court Friday afternoon when Fishman entered his plea to one count of mail fraud. But in a statement Friday, the firm acknowledged Fishman as a former partner and said his misconduct had come to light in 2005.

Latham "immediately acted to protect our clients fully, and disclosed the matter to appropriate law enforcement authorities," said David Gordon, Latham's New York managing partner. "Mr. Fishman resigned from the firm at the time the issues were discovered. Since that time, we have cooperated fully with the investigation."

In announcing Fishman's guilty plea, prosecutors noted that the firm had reimbursed its clients hundreds of thousands of dollars that had been fraudulently charged. A firm spokesman Friday declined to identify the clients defrauded by Fishman.

The criminal information said Fishman's clients were in the banking, utilities, telecommunications and entertainment industries. He has previously acted as lead counsel for companies including movie theater chain AMC Entertainment Inc. and JPMorgan Partners, the private equity arm of JPMorgan Chase & Co.

Accompanied at Friday's hearing by defense lawyer Jack Litman of Litman, Asche & Goiella, Fishman expressed remorse to Southern District Judge Victor Marrero.

"I am very sorry for what I did," he told the judge.

Fishman's sentencing is scheduled for June 27. The mail fraud charge carries a maximum sentence of 20 years in prison. Fishman also has agreed to forfeit $350,000 in ill-gotten wealth. He also faces likely disbarment.

A number of major firms have had to deal in recent years with fraud by partners, though most instances have resulted in disbarment or other disciplinary sanction as opposed to criminal prosecution.

In 2006, former WilmerHale intellectual property partner William P. DiSalvatore resigned from the bar after admitting to a litany of misconduct, including falsifying expense reports and assigning associates to perform "pro bono" work for friends and family. He claimed more than $109,000 in false personal expense.

Willkie Farr & Gallagher and the former Kronish Lieb Weiner & Hellman are two other firms that have also terminated partners for fraudulently seeking reimbursement for personal expenses.

In most such cases, including that of Fishman, the defrauded amounts have been small compared to what the perpetrators earn as partners. Last month, Latham said it had profits per partner of $2.3 million in 2007.

Steven Lubet, a legal ethics professor at Northwestern University School of Law, said he always found it "incredible" that highly paid partners would resort to fraud. He said he could only imagine that such people were overspending trying to emulate the lifestyles of those they represented.

"The clients have that kind of money, the lawyers don't," said Lubet. "Sometimes, lawyers decide they want to live like their clients and that extra money has to come from somewhere."

Perhaps the most well-known case of a lawyer bilking his clients and firm was Webster Hubbell, the former associate attorney general under President Bill Clinton.

Hubbell was forced to resign his position in 1994 after his former partners at Arkansas' Rose Law Firm discovered billing irregularities. He later pleaded guilty to fraudulently charging almost $500,000 for personal expenses and legal work never actually performed. He served 16 months in prison.