Legal Pad

Sheriffs 'Done Playing Defense' on Court Security Funds

As the next state budget season quickly approaches (I know, doesn’t it seem like we just ended that last drama a week ago?), there’s been a fair amount of chatter about the future of courthouse security.

That talk kicked up a notch over the weekend when the Bakersfield Californian reported that the Judicial Council in January will consider shifting security control from sheriffs to a new branch force.

Council spokesman Lynn Holton said Monday that “there are no plans” to put the idea up for a vote in two months. “Our only plan,” she said in an email, “is to continue to work with the sheriffs for adequate funding and appropriate security standards.”

Was there a Kernel of truth in the Californian’s report?

Will Marin Budget Cuts Speed You Through the Metal Detector?

A budget-saving move at Marin County Superior Court could also be an antidote to perniciously long courthouse security lines.

The court started this week trying out staggered start times for its courtrooms — some morning calendars start at 8:30 a.m. now, some at 9 and some at 9:30.

“We’ve been strategizing in this very difficult, perilous budget year on how we can try to use all of our budget resources more efficiently,” said Kim Turner, the court’s executive officer.

The idea is to be more strategic about covering assignments, rather than having bailiffs, court reporters and interpreters in all courtrooms starting at the same time. The court hopes in this way that it can use fewer resources to cover the same departments.

“This is going to be a bit of a change” for the legal community, Turner said, but she hasn’t heard any grumbling so far: “Usually the grumbling is the first thing you hear, so we’ll take this as a victory.”

The change doesn’t affect the afternoon calendar, which still starts at 1:30, so attorneys can still count on the post-lunch rush to make them late.

— Kate Moser

Allen Matkins Cuts Pay, Lays Off Associates (Again)

We saw a post on Above the Law today that said Los Angeles’ Allen Matkins had made another cut to associate salaries. Oh, and some layoffs. ATL recaps the rough year the 200-something-lawyer firm has had, but was stonewalled by management when it called for confirmation/response/defense.

Mike Palmer, the firm’s executive director called us back late this afternoon and confirmed that Allen Matkins has cut the salaries of a number of associates at all levels in slow practice areas, primarily real estate and corporate. Some of them had already had their pay reduced in March, but Palmer said it was the first cut for most. He confirmed the reductions ran between 15 and 30 percent of pay and would be effective Nov. 1.

More, after the jump.

Gov to Federal Judges: You're With Me or You're Ruining California

If you’re a federal judge, don’t expect a Christmas card from the Schwarzenegger administration this year.

You see, he’s not happy about recent decisions that blocked budget cuts to in-home health care, required billions in new spending on prison hospitals and curbed water deliveries to the Central Valley.

“They are going absolutely crazy,” Schwarzenegger said at a press conference Wednesday. “So we have to have a very serious conversation with the federal government, because they’ve got to let us run our state.”

How can it be illegal if my lawyers are telling me it’s not illegal? Huh? … After the jump …

Big-Deal Firms Hang On In Small-Deals Era (And Cooley Rallies)

The number of deals law firms have been working on is woefully down from the 2007 peak, a recent MergerMarket report (.pdf) shows.

But even though there’s half as much work, the big deals firms are hanging on to their market share. And some interesting news is that Cooley Godward is moving up in the rankings, despite the recent loss of star rainmakers.

Latham & Watkins, Jones Day, Cooley, and Wilson Sonsini Goodrich & Rosati lead the pack in the number of deals completed on the West Coast in 2009.

Cooley’s surge, and the deal landscape, after the jump

Cooley Lays Off 58 Staffers

For the second time this year, Cooley Godward Kronish is axing employees.

Fifty-eight staffers were cut today, although no attorneys were let go, according to an all-hands memo (.pdf) from Cooley COO Mark Pitchford.

“This reduction was conducted to eliminate pockets of staffing overcapacity throughout the firm,” wrote Pitchford.

The firm laid off 52 lawyers and 62 staff in January amidst the deluge of law firm layoffs.

Cooley has had a rough go of it lately, losing a string of partners, including some of its top M&A lawyers.

— Zusha Elinson

San Jose Litigation Shop Scores Big Win in Adverse Climate

Hopkins & Carley litigators Jeffrey Essner and Allonn Levy were advised this was a bad economic climate to try a case on behalf of a bank client.

“They said not to expect a jury to award a multimillion-dollar verdict,” Essner said.

But that’s exactly what they did.

The duo from the 50-lawyer San Jose firm represented Mehrdad Elie, the founder and CEO of Alliance Bancorp, now a defunct mortgage company, in a dispute with cofounder Kathleen Smith over loans the two had made to keep their company afloat when the mortgage crisis hit.

They managed to get their client a $5.8 million award from a unanimous jury on Aug. 3. Today, a San Mateo County Superior Court judge backed the award.

“This is a big win for us,” Essner said. “There was a lot of money at play.”

Levy and Essner said it wasn’t easy to get the jury to be sympathetic to a bank owner who was part of an industry-wide failure. “It took about three weeks to do it,” Essner told Legal Pad. They had to explain why banks were failing and why Wall Street investors stopped buying collateralized packaged loans. Levy said another challenge was helping the jury to grasp the huge amounts of money banks like Alliance were dealing with.

Because there was no written agreement about more than $25 million that Elie had wired out, the case wound up one executives’ word against another. Essner’s advice: “Send an email or write a letter or get a contract. If those documents had existed, we may not have had a jury trial.”

— Petra Pasternak

Thelen Files For Bankruptcy

Thelen LLP filed for Chapter 7 bankruptcy in the Southern District of New York on Thursday night. See the petition here (.pdf).

Many expected the bankruptcy to come before the end of this week. A New York landlord had obtained writ of attachment in Los Angeles Superior Court in June that guaranteed it $25 million of Thelen’s assets. The firm had 90 days to void the writ with a bankruptcy.

A similar writ forced Heller into bankruptcy last December.

Thelen voted to dissolve last October. The firm had paid off most of its debt to its banks by the summer, when the writ arrived.

Thelen filed the bankruptcy in New York because that’s where its assets and major creditors are located, said Peter Gilhuly, Thelen’s bankruptcy counsel at Latham & Watkins, in an e-mail.

“Thelen believes that its principle remaining assets (receivables) are located in NY as is its bank, and two largest unsecured creditors (landlords).”

Update: A little more detail from the bankruptcy filing is in the version we've just posted on CalLaw.

—  Amanda Royal

Brown Puts Credit Agencies on Hot Seat Over Securities Crisis

Attorney General Jerry Brown today issued subpoenas to three leading credit rating agencies to find out why they slapped top-notch ratings on mortgage-backed securities that would eventually crash and burn.

"Standard & Poor's, Moody's and Fitch put their seal of approval on high-risk mortgage-backed securities, recklessly giving stellar ratings to shaky assets that proved toxic to the entire financial system," Brown said in a prepared statement. "This investigation is meant to determine how these agencies could get it so wrong and whether they violated California law in the process."

If this type of legal crusade sounds familiar it should. At least three other states’ attorneys general have investigated the relationship between the rating agencies and the securities issuers they evaluated. And numerous pension funds have filed lawsuits, some dating back to 2007, over their losses.

But if Brown is simply jumping on the bandwagon, there’s plenty of room, said Nanci Nishimura, a partner with Cotchett, Pitre & McCarthy, the Peninsula firm that’s handling plenty of credit rating-related litigation these days.

“All the smoke hasn’t even come out of this volcano yet,” Nishimura said. “It’s about time the state started taking notice and started doing something about this.”

Representatives of the three rating agencies either declined to comment or said their companies would cooperate with Brown’s investigation.

Brown has given the agencies until Oct. 19 to respond to his request for information.

— Cheryl Miller
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Court Closure Protests, Or Early Halloween?

A marcher in a Ronald George mask is carrying a large bag of fake money protests the closing of courts in San Francisco. Dozens of court employees rallied outside the Administrative Office of the Courts today (see the Recorder’s story on Bay Area closures, here). No Bill Vickrey masks were seen.

— Jason Doiy, text/photo