Reported by:  Gregory P. Bufithis, Esq. (with special thanks to Johann Jurgens who is a telecom analyst for a hedge fund and is an advisor to The Posse List on the telecom industry) 

21 March 2011 — Late yesterday AT&T and Deutsche Telekom announced an agreement for the sale of T-Mobile USA for $39 billion in cash and stocks.  It will yield the largest U.S. mobile phone customer base of 130 million users but all commentators agree: the deal will have to pass very tough regulatory review and other closing hurdles before becoming complete.  And the antitrust issues are enormous.  Even the press releases issues by each company said it’ll take them 12+ months to get through all the bureaucracy — if they get through.  In fact AT&T and T-Mobile issued a twenty-eight page PDF to convince regulators that their acquisition wouldn’t violate antitrust law. 

Morgan Stanley acted as lead financial advisor and issued a fairness opinion to the supervisory board of Deutsche Telekom. Deutsche Bank and Credit Suisse acted as financial advisors for Deutsche Telekom. 

Deutsche Telekom was advised by Wachtell, Lipton, Rosen & Katz (the mergers & acquisitions practice group in New York), as well as Cleary Gottlieb and Wiley Rein (antitrust and regulatory law practice groups, Washington D.C.).

Greenhill & Co., J.P. Morgan and Evercore Partners acted as financial advisors and Sullivan & Cromwell LLP (New York), Arnold & Porter (D.C.), and Crowell & Moring (D.C.) provided legal advice to AT&T.

[ CONTRACT ATTORNEY STAFFING AGENCIES: START YOUR ENGINES!! ]

The proposed network merger will create a de facto GSM monopoly within the U.S.  But no worries.  AT&T envisions it as a rosy garden of “straightforward synergies” thanks to a set of “complementary network technologies, spectrum positions and operations.” 

In the event of the deal failing to receive regulatory approval, AT&T will be on the hook for $3 billion to T-Mobile – the breakup fee — along with transferring over some AWS spectrum it doesn’t need for its LTE rollout, and granting T-Mo a roaming agreement at a value agreeable to both parties.  If you do some Google-ing you will find a boatload of technical commentary on the deal. 

The cost to consumers?  It could be significant.  In its press release AT&T pointed to a recent report from the federal Government Accountability Office that said cellular subscription costs fell 50 percent from 1999 and 2009, a period in which the industry has consolidated.  But the reaction was swift.  The New York Times quoted Senator Herb Kohl who heads the subcommittee on antitrust, competition policy and consumers rights who said Sunday night “The explosion of cellphone usage — especially smartphones — makes competition in this market more important than ever as a check against rising costs.  Consumers have borne the brunt of the increasingly concentrated market for mobile phone service”.

AT&T customers, though, could benefit in one notable area: service. Both AT&T and T-Mobile operate on the same technology, known as GSM, so the combination should provide better coverage. That has been a sore point for AT&T, which has been ridiculed over dropped calls and slow data services, especially on Apple’s iPhone.

Our favorite Tweet so far:  “Oh for Jebus’ sake! I left AT&T for T-Mobile and now this??? What have I done to offend thee, Malevolent Overlords?”

The deal has long been anticipated in the telecom community and Sprint (who will fare the worst if such a transaction was completed) had its response locked and loaded, and released shortly after the AT&T and Deutsche Telekom press releases went out.  Quoting in part from the Sprint reaction:

The combination of AT&T and T-Mobile USA, if approved by the Department of Justice (DOJ) and Federal Communications Commission (FCC), would alter dramatically the structure of the communications industry. AT&T and Verizon are already by far the largest wireless providers. A combined AT&T and T-Mobile would be almost three times the size of Sprint, the third largest wireless competitor. If approved, the merger would result in a wireless industry dominated overwhelmingly by two vertically-integrated companies that control almost 80% of the US wireless post-paid market, as well as the availability and price of key inputs such as backhaul and access needed by other wireless companies to compete. The DOJ and the FCC must decide if this transaction is in the best interest of consumers and the US economy overall, and determine if innovation and robust competition would be impacted adversely and by this dramatic change in the structure of the industry. 

We’ll try to report more as the story rolls out, especially if the deal gets to the point of launching subjective document reviews.

Reported by Gregory P. Bufithis, Esq. and Eric Fell, Esq.

18 February 2011 — It’s been two weeks since LegalTech New York and it’s taken that long to digest most of the information we collected. We stayed an extra week after LegalTech for follow-up with interviews and product demonstrations.

As always, LegalTech can cause info-saturation (see, for instance, the reports from Gabe Acevedo and Donna Seyle on the show) so unless you have a game plan it can overwhelm you.

For new readers: LegalTech New York is the largest legal technology conference/trade show in the U.S. It’s an excellent opportunity to get hands-on practical information in all legal technology areas with 600+ vendor exhibitions and 50+ substantive programs. It really does have the most extensive gathering of vendors/products for just about every legal technology need.

It was an interesting LegalTech this year and though I spent little time at the actual event but at meetings and presentations around and outside the venue, I came away with a few observations/themes/ideas … plus one big “new new thing” – real information management (more below).

I had the chance to wear a few hats: covering the technology side as the CEO of The Posse List, meeting with our European clients as CEO of Project Counsel, and launching our new venture Project Counsel Media. And it all came together. As Goethe said “At the moment of commitment, the universe conspires to assist you”.

We had a 6-person team at the event this year. The team covered about 15 of the substantive presentations/sessions offered amongst the various educational tracks, and they conducted 40+ video interviews with vendors and participants. Those videos have started to roll out on our YouTube site and will continue to roll out the next few weeks (editing has been a task). We will also have a long post early next week on the substantive educational sessions we covered with a synopsis and links to the materials presented.

The high-point for us was our 30-minute video interview with the keynote speaker Gonzalo de Cesare (political advisor with the European Union Police Mission in Bosnia & Herzegovina) whose keynote was entitled “United Nations War Crimes Investigations – Information Management in High-Volume Legal Proceedings.” He discussed the UN’s process for managing some of the largest and most complex cases in the world with information management and e-discovery management software (all provided by industry goliath ZyLAB) for the Khmer Rouge trials, the criminal tribunals for Rwanda, and the trial involving Slobadan Milošević and the former Yugoslavia.

We conducted the interview in Mr de Cesare’s native language of Spanish and we are in the process of preparing subtitled versions with downloadable transcripts in 14 languages for presentation to the United Nations. All versions will be available on the ZyLAB website as well as our YouTube Channel and the new Project Counsel Media website. For the ZyLAB press release on Mr de Cesare click here.

So, some observations/ideas/themes from LegalTech New York 2011 as gleaned from my staff and my own activity:

1. Optimism and maturation. I got a rather “warm & fuzzy” feeling this year in that I sensed more optimism about the financial strength of the e-discovery market. Presentation events and demo-rooms were almost all pre-booked before LegalTech even started, vendors scrambling to set-up additional sessions as the event commenced. Deals were being made left-and-right (I had the privilege of watching two transactions as an undisclosed observer). As Ari Kaplan has pointed out this “measured optimism” and maturation of the market was reflected by less flashy presentations, more case studies of “what-we-have-done-for-our-clients”, how vendors are executing on innovation, etc. For my video chat with Ari please click here.  .

2. Vendor partnerships and industry consolidation. There were lots of partnerships and tie-ups announced and cross-marketing ventures, too numerous to mention. These allow a vendor to in effect “leverage the power of its partner” (a phrase I stole from Ari Kaplan, by the way). For a list of those announcements (and as an overall great source on staying current on the overall legal technology market) I recommend following the folks at Inside Legal.

And for detailed “all-things-technology” in both the specific product sphere as well as market analysis I suggest a subscription to The 451 Group.

Also, a new resource on e-discovery providers: the Socha-Gelbmann team have announced the launch of a new online service called Apersee which was created in response to the many requests they have received for a better way to search for and select e-discovery providers and products, and built on the foundation established by their Socha-Gelbmann Electronic Discovery Survey. We have reviewed the Beta site and it’s a rather interesting tool to independently evaluate which providers and products potentially match your particular needs. To access the site click here and more background information click here.

These partnerships and tie-ups often precede an eventual merger and acquisition. This comes as no surprise because it follows what is happening in other industries. For instance both Coke and its rival PepsiCo completed their respective analysis of the beverage markets and bought their North American bottlers last year along with other distributors (and brands) as a way to improve performance by cutting costs, speeding innovation, and give themselves more control over distribution. All of those elements apply to the legal technology industry as well.

3. An alignment of in-house counsel and their outside counsel with respect to e-discovery. Over the last year we have seen corporations making a serious move toward managing e-discovery and treating it as a core business practice. This is a sea change, but it something we have seen developing very quickly across Europe (for our recent analysis click here). Many at LegalTech told us they still need a major “trigger event” (litigation, regulatory review or investigation) to get the process rolling and force their in-house law departments to focus. But what was “new” or at least more evident at LegalTech this year was a greater presence of law firm litigation support managers escorting their corporate clients through vendor exhibits and presentations (as well as substantive sessions) with the focus on how in-house law departments can go through the process of deciding whether/how to build an in-house e-discovery facility.

As we discussed with a number of in-house counsel, it is a cost analysis. Where is the company spending most of its e-discovery budget (if it has one) now? Are those portions of the workflow good candidates to bring in-house?

Note: typically, processing data and review are the most expensive phases of any e-discovery project. We have found that Project Counsel’s corporate clients have determined processing, analysis, and first-pass review are the best candidates to be brought in-house from an ROI perspective.  

4. Vendors and the art of differentiation. With 6 billion e-discovery vendors (only a slight exaggeration) the continuing challenge is still “how-do-we-differentiate-ourselves-from-the-pack?” and it is difficult for the client, the customer to make the evaluation. Just stagger through 2 floors (about 8 ballrooms) at LegalTech of vendors and try to find one who didn’t offer data-collection-data-processing-early-case-assessment-subjective-review-production … and phenomenal cost savings. And it’s not easy when everybody uses the same buzz words: cull-image-duplicate-document-early-case-assessment-production, etc.  

Today the marketing buzz word is “speed” with vendors regularly throwing around impressive-sounding numbers about the speeds at which their software tools can index and search data, though these numbers often lack context. In practice, e-discovery processing depends on a number of factors, such as the computing platforms data resides on, the types of media it is stored on, and the types of attachments and associated information included in a data set.

In 2005, George Socha and Tom Gelbmann launched the Electronic Discovery Reference Model to address a lack of standards in e-discovery. By creating a common model and framework for discovery the goal was to make the process more predictable. In 2006, they launched the EDRM Metrics project to provide a standard approach and a generally accepted language for measuring the full range of electronic discovery activities. The project includes a data set that vendors can use to test their systems.

All of this led to their launch of Aspersee. My suggestion is your starting point should be the links in paragraph #2 above: use The 451 Group and Aspersee to understand/compare vendors and products.

5. And just a view words about early case assessment. Early case assessment: a favorite concept/phrase in the e-discovery world. Simply put, it’s used to refer to estimating the risk (cost of time and money and probability) to prosecute or defend a legal case by assessing a case through an initial review of documents. It’s not new. Every trial attorney has done it. Nowadays, however, the document review is much more complicated, considering the volume of documents has exploded a million-fold. Global organizations deal with legal discovery and disclosure requests for electronically stored information “ESI” and paper documents on a regular basis.

But the phrase has become overused, warped and misused. For a nice, succinct “state-of-the-art” we turned to Morgan Sheehy, CEO of Nuix.

For a link to the early case assessment article to which we referred in the video click here.

And for a link to the recent IDC update on the entire early case assessment market click here:

6. Predictive coding and automated document review. The concept is simple: systems, methods, and computer program products for improved electronic discovery. They are geared for the predictive and automated coding of identical or highly similar documents for the purpose of limiting the volume of documents requiring review and thereby increasing the overall efficiency of the document review process. And it is growing in importance in the e-discovery market. For details we went to Craig Carpenter, Chief Technology Officer for Recommind:

7. On-line e-discovery education. There has been a surge in the recognition of the need for proper e-discovery training. And the answer has been online training in e-discovery law, training that harnesses the new capacities of technology and the Internet, yet still preserves the best interactive elements of the traditional legal apprenticeship tradition. This kind of online training can fast-track the knowledge base and skills of a few technology-minded lawyers in every law firm. It is no substitute for traditional in-firm apprenticeships for the few firms that have the requisite knowledge base. But it can help. Attorneys who spend the time and effort to be trained online can then more quickly acquire the full skills required for competence.

Two of the biggest proponents of the need for a change in e-discovery training are Ralph Losey and Jason R. Baron. We had time for an informal chat with both of them:

And for a link to Ralph’s program click here.

Very shortly The Posse List will be rolling out a special offer (for our promo click here) to its members for Ralph’s program, and Project Counsel will be doing the same for its European membership base.

To join the U.S. list send an email to list.subscription@theposselist.com and we’ll subscribe you.

To join the European list send an email to membership@projectcounsel.com and we’ll subscribe you.

8. Cloud computing and e-discovery.

It was a fairly large part of the program at LegalTech, and much discussed at the sessions. In our post next week that covers the substantive educational sessions we’ll provide some links.

But for a good summary of what cloud computing and e-discovery is all about here’s my chat with Steve D’Alencon of CaseCentral:

Also interesting was my chat with some of the International Data Corporation folks I met during the show and their recent report on the over all cloud computing market. The steady rise in popularity of cloud computing means the technology is about to reach a tipping point as more businesses realize the huge benefits it has to offer. Many IT customers are expecting to manage a varied host of cloud computing technologies in the near future. And, it appears that this flexibility, which allows businesses to mix a variety of private, public and hybrid cloud computing solutions, is only adding to the technologies popularity. IDC believes that over the course of the next few years, the worldwide cloud systems management software market is set to undergo massive growth. The firm believes that by 2015 the industry will be worth $2.5 billion.

The rapid growth will be down to the increased need for automation and integrated system management solutions that can optimize the performance of relatively disparate technologies. At the moment, debate over whether to use public or private cloud computing technologies is a major oversimplification of the situation. According to IDC, firms are not willing to part company with legacy equipment until they have seen a concrete return on investment. Therefore, cloud systems management software will be required to make increasingly complex infrastructure manageable – hence the expected growth in the marketplace.

Interestingly, according to IDC, last year 70 per cent of the world’s cloud computing management software was deployed on private infrastructure. This figure is likely to change, however, when major issues – such as privacy and security – are dealt with by public clouding computing providers. And that still remains the biggest issue: the major concern for businesses deploying cloud computing technologies is security. IDC says that data leakage and outright theft weighs heavy on many chief information officers minds and, as a result, many companies are attempting to plan ahead when it comes to security solutions for cloud computing.

We’ll go into this area in more depth next week when we discuss the substantive programs at LegalTech.

9. Those fabulous folks from IBM, technology … and my big take-away this year: what “real” information governance is all about. Technology. It never ceases to amaze. Just look at this week’s over story in The Economist on the manufacturing technology that can “print” a Stradivarius … and it plays beautifully.

Much attention was focused this week on IBM’s Deep Blue computer defeat of the “humanoids” on Jeopardy! (see story by clicking here). But my experience with IBM goes well beyond that. In December I attended the IQPC e-discovery conference in Munich. Going on at the same time was a software developer mini-conferences on semantic technology, virtualization, media, etc. with Google, IBM, Microsoft, Thomson Reuters and others in attendance. I was able to skip out of IQPC for a bit and attend a few sessions and grab a dinner with some folks (my CTO is an ex-Google employee and gets these invitations all the time; always best to tag along).

Search technology in the e-discovery/litigation game is a bit different than the search/semantic technology field I follow and am involved with in the web and media world and which I recently covered at LeWeb. The e-discovery folks are somewhat wrapped up right now in artificial intelligence, predictive coding, non-linear vis-à-vis linear approach to the review of document databases, etc.

What these folks are doing with search is an eye-opener. Of course with $8 billion R&D budgets, why not. Themes/discussion: semantic search, metadata, semantic web, ontology, BI 2.0 (which has been retagged “advanced analytics” of late), etc., etc. Just a sample of something I saw: IBM has this analytics that identifies the “alpha” individual in its customers’ calling circles — those people who’d be most likely to take other customers with them should they switch carriers — so that it can cater to those individuals. They also have text analytics they apply to all forms of social media to “detect sentiment” (not just chase keywords) in order to gauge customers’ reactions to brand advertising and then adjust marketing channels and messaging accordingly. It’s industry-specific — healthcare, insurance, telecom, consumer goods, etc. – and they are in the process of applying it to the litigation world.

The IBM analytics are quite amazing. The various programs can integrate gigabytes, terabytes, or petabytes of unstructured data from web-based repositories, collect a wide range of unstructured web data stemming from user-defined seed URLs and extracts/enrich that data using unstructured information management architecture. While its purpose is to leverage unstructured data strategies/support decisions (business intelligence) its application to text analytics for litigation is a step away.

But these “advanced analytics” are not lost on several e-discovery involved vendors and companies we met with at LegalTech. Today’s e-discovery is more focused on the regulatory and investigative side of a business, less the litigation side, where managing e-discovery and information must be part of the core business practice. This is a sea change, but it something we have seen developing very quickly with all of our corporate clients. And some of the forward thinking vendors understand this. ZyLAB certainly “gets it”, as does Recommind, and Ernst & Young and Nuix and CaseCentral. But the one to watch is FusionLegal who made numerous presentations at the show.

The mantra — very simply put — is this: investigations are a unique business process where a company puts unstructured corporate data through a comprehensive analysis and classification process, adding a wealth of “contextual” metadata to documents. These can be leveraged for initiatives outside of the individual immediate case but rarely ever are. This is not a “one-off” situation. Corporations rarely take time to see it is part of a matrix. A corporation needs to couple the investigation process with advanced data analytics to create a new quantum of analysis to help make informed decisions about the future and thereby drive performance and lessen risk. They can learn from the past. The technology to do so is out there. A corporation will finally be able to exhaust the potential of that technology and the discovery/investigation process to deliver a real ROI, especially companies that exist in highly litigious and highly regulated industries. It is more than just cutting costs. It is taking that past, all that “contextual” metadata and improving performance.

I will have more after my meetings with FusionLegal and other vendors in London in the coming weeks.

I’ll end with my informal chat with Mary Mack and Johannes Scholtes of ZyLAB who do a nice job of putting together all the main elements of world-wide e-discovery and who, as mentioned above, provided Gonzalo de Cesare the information management and e-discovery management software he used for his war crimes trials.

For more information or questions about The Posse List  contact us at manager@theposselist.com

19 January 2011 – A Connecticut state legislator is concerned that the outsourcing of legal work has taken jobs away from recent law school grads and introduced a bill to address the “doc review” situation.  Under her proposal “unlicensed” offshore workers who engage in the drafting, reviewing or analyzing of legal documents for clients in Connecticut could be charged with unauthorized practice of law.

The general consensus is that overseas legal work is here to stay.   But not everyone is happy about the legal outsourcing trend.   Well, duh.   Scott Bullock, a contract lawyer who has blogged about the woeful economics of non-big-firm practice, prertty much sums it up:  “It’s just preposterous that we have to go to an American law school and pass a bar exam and then see our jobs shipped overseas. Why even require people to go to law school?”

For full article from The Connecticut Law Tribune click here.

9 December 2010 – As the U.S. economy shows a slight pick up in activity, companies have started to hire temporary workers.  But with a difference.  After the trials and tribulations of being forced to lay off people during the recession, many companies do not plan to use temporary workers just for the recovery’s shaky beginnings – they plan to keep a large percentage of their workforce temporary permanently. 

Last week’s payroll data was grim — the unemployment rate rose to a seven-month high of 9.8 per cent.  But they also showed that the number of temporary workers continued to climb in the US last month. The economy added 40,000 temporary workers in November while the total workforce expanded by 39,000. Since temporary work reached its recent low in September 2009, 494,000 temporary jobs have been added, compared with an increase of 901,000 positions in the same period. 

Welcome to a structural shift, say the economists.  Temporary workers will be making up a larger proportion of the labor force.   Temporary employment is usually one step towards a permanent hire but this time around the use of temp workers looks a bit more permanent. 

This “resizing” of the economy includes the legal profession.  The recent Hildebrandt survey of the legal industry, the National Law Journal survey and ALM survey all showed a significant increase in “other” attorneys, defined as nonpartner and nonassociate lawyers.  Most of those surveys include temporary or contract attorneys.  

As we had previously reported, we heard from the temporary attorney war rooms that during the recession, in order to keep the troops busy, law firms gave their associates work that would have normally gone to contract attorneys.  But now, even as the economy continues to improve, the ranks of “other” attorneys continue to swell due to their lower cost and often more targeted experience. We have seen that as many contract attorneys with specialized experience move out of the document review rooms and into more substantive work. 

And — surprise! — employment agencies will be one major beneficiary of this change. Kelly Services has so far seen a 20-25 per cent rise in people placed in temporary work, compared to last year, a big chunk coming from the Kelly Law division.   Speaking about an across-the-board trend Carl Camden, chief executive of Kelly Services, was quoted as saying he thinks the temporary portion of the workforce will be higher at the top of this cycle than it was at the peak of the last:  “Chief executives around the world often say to me they had too high of a proportion of fixed rather than variable labor costs.  I see a pretty strong commitment by management to increase the proportion that are variable.” 

The FT recently chronicled the story of Stacey Mungo, a lawyer who started working on a temporary basis through Kelly Legal Services after she lost her job in a bank merger.  She plans to stick with temporary work because it enables her to work closer to home, giving her more time with her nine-year-old son.  

Yes, the downside.  It is not the same pay as her full time job.    But, she’s working.  And the adjustment is necessary.  Anthony Carnevale, director of the Georgetown University Center on Education and the Workforce, says this recovery is continuing the pattern of the last two by making more and more jobs temporary:  “Employers have shifted risk to employees and as many other employers as they can. What the system has learned to do is to be enormously more productive,” he said. “If you think this is temporariness you haven’t seen anything yet.”  

Shocking.  It’s all about money.

From the SEC:

Tuesday, September 28, 2010: “An Evening with the SEC”

You are cordially invited to attend a panel discussion and networking event at the Securities & Exchange Commission. This is an opportunity for you to hear from SEC attorneys, economists, accountants, and examiners about their experiences working at the SEC.  You will also learn about upcoming employment opportunities with the Commission and the application process.

Tuesday, September 28, 2010, 6 pm – 9 pm

Securities & Exchange Commission’s Auditorium

100 F Street NE

Washington DC 20549

Event is Metro Accessible: Union Station

The SEC is an Equal Opportunity Employer and is seeking to attract candidates with diverse backgrounds, experiences and knowledge.  Participating in this event is not a guarantee of employment.

Please RSVP by September 24th at events@washingtondc.alpfa.org

Light hors d’oeuvres will be served / Free admission / Bring a friend and Government ID

As you have undoubtedly followed in the media, the chairman of the S.E.C. (Mary Shapiro) has just set the framework for the first 12 of about 100 planned regulations called for by the recently passed Dodd-Frank financial reform act which became law last month.  Within a year, the SEC needs to write a total of about 100 rules and complete 20 studies to implement the voluminous legislation – roughly half as much again as its regulatory output in the 18 months since Schapiro became its head.

The extra 800 staff she intends to hire to cope with the rule-making mountain will have their work cut out to meet the congressionally imposed deadlines.

The S.E.C. agenda is if nothing else … well, daunting.    And the S.E.C. has been beaten up pretty badly due to its apparent ignorance of the toxic debt time-bomb building up on Wall Street ahead of the financial crisis which exposed weaknesses in its market intelligence. The agency’s failure to act on repeated tipoffs about fraudsters such as Bernie Madoff has raised questions about its effectiveness even on such bread-and-butter cases.   And there was the highest-profile enforcement action of Schapiro’s chairmanship, the Goldman Sachs case, which drew fire against the SEC from opposite ends of the political spectrum. Critics of the decision to bring charges asserted that regulators should not be interfering in decisions taken by institutional investors such as the victims of Goldman’s alleged mis-selling of a mortgage-backed security. Others attacked the SEC for agreeing to settle the case for $550m – a record fine for the regulator but less than a month’s revenue for the bank – rather than go to court.

As related in a series that recently ran in the Financial Times, S.E.C. senior management say they now have better “tentacles out into the world”.  The “tentacles” refer to Wall Street veterans, brought in to address long-standing criticisms that the regulator has operated in a vacuum, divorced from market practices.

And there has been a wholesale restructuring of the S.E.C.   A layer of management has been stripped out of the 1,350-strong enforcement division.  Senior staff now have the power to initiate investigations, issue subpoenas and start settlement negotiations without first gaining approval from the agency’s five presidentially appointed commissioners. Five new specialized units, created in part to match the increasingly complex financial products market, will “act like law enforcement fly-paper, drawing in leads from across the country”

The enforcement division plans to use experts hired from industry to target areas ripe for “sweeps” of a series of banks or other financial firms when it believes there may be an industry-wide issue. This policy of trying to head off crises, rather than simply react to complaints, is a fundamental element in the SEC’s new strategy.

The agency must also marry this more aggressive enforcement program with the implementation of dozens of new responsibilities imposed by the Dodd-Frank act.

So a hiring binge is on.

There have been hundreds of contract attorneys who have worked the government side of document reviews including work at the S.E.C.   One of the premier staffing agencies in D.C. that is behind many of these placements is Pat Taylor and Associates (click here)  who have placed numerous attorneys in substantive financial and litigation positions with other government agencies because they are a certified small, woman-owned business entity on the GSA schedule.  Another is Legal Placements (LPI) (click here).  We speak with  Pat Taylor and Legal Placements on a regular basis about government work (for our previous posts on government work click here) and they have told us this about working with the government:

1)      they tend to be relatively long term contracts

2)      for contractors, the hours tend to be fairly stable at about 40 per week unless there are deadlines

3)      the pay rates tend to be slightly lower than in the private sector for doc review

4)      the work tends to be more substantive;

5)      public trust clearance is necessary for positions longer than 3 months so contractors need to be prepared for at least a criminal and possibly a financial background check

6) most agencies are looking for specific past experience for the substantive work.   Whereas new attorneys at government agencies often get thrown into trials and depositions right out of law school, a government contractor without past litigation experience is unlikely to do more than document review and maybe some basic research. 

We have seen contracting as a transition from private practice to the government (e.g., a downsized law firm associate will contract for the government and then use that experience in future interviews to rebut the government interviewer’s thought that they will regret giving up $50k+ a year when in fact they are gaining 15+ hours per week of their life). One thing we have heard repeatedly within the last year is that past government experience is definitely a plus when competing for a permanent government position.

So if you are interested in working for the S.E.C. we urge you to attend the September 28^th event. 

27 August 2010 — The Posse List team was in Las Vegas this week at the annual International Legal Technology Association (ILTA) conference, led by our Chief Technology Officer Scott Madsen.   It is a four and a half day event with a packed agenda and we find it to be the best event of the year (and each year seems to have a tsunami of legal technology events) because its educational content (the educational content is entirely peer-developed) crosses 50+ areas of the law and technology through 160 educational sessions.  As attendees will attest it has become  THE place to further your professional development,  and make valuable connections.   To get an idea of content here is this year’s agenda (click here).

Plus the exhibit hall featuring over 150 key vendors to the legal market.  There was a slew of vendor announcements at ILTA this year and our colleagues at InsideLegal put together a list with links which you can access by clicking here. 

Note:  we interviewed the folks from InsideLegal and we’ll have that interview next month, but just a few notes.   InsideLegal  is an online legal community and insider’s guide to doing business in legal technology, and a
information resource for anything related to legal technology research, surveys, law firm innovators, vendor executives, industry statistics, etc.   They have been producing ILTA’s vendor education program (click here) since 2004 and have worked closely with industry media on assembling panel discussions and educational programs for vendors.  They produced the program again this year and are presenting the findings of the 2010 ILTA Member Technology Purchasing Survey (click here) which highlights what ILTA law firm members are spending on technology an what applications and services they are implementing and planning to buy.  

The ILTA 2010 theme was “Strategic Unity”,  a concept that resonates the need for law firms and law departments to unite their technology with the practice of law. These disciplines must come together as never before in order to survive and thrive in the future. Conference sessions were developed around this concept,  offering attendees ideas and options in creating unification strategies in their own organizations.

But there seemed to be two other major talking points on the floor of the conference: (a) the consolidation taking place in the e-discovery market: Altegrity acquiring Kroll; Autonomy acquiring CA’s Information Governance division, AccessData acquiring Summation, etc. and (2) the integrated approach to e-discovery so many vendors are striving to accomplish.

And as always at these conferences there is too much to do, too many people to see.   We interviewed a great number of vendors and speakers at the conference and those in-depth interviews (text and audio) will post  after Labor Day when we continue our e-discovery “thought leaders” series (click here).   But just a few highlights:

*  Autonomy, ever onward and upward, unveiled its new end-to-end, meaning-based Risk Management platform for law firms using IDOL (one of its products) to deliver multiple risk management modules from a single intelligent platform.  It combines Autonomy Client Intake, Conflicts Manager, Legal Hold, Records Manager and Supervisor with IDOL and as a result automatically understands the inter-relationships within data, and monitors and apply policies against all communications channels.  As a result, law firms can transform legacy and manual risk management processes and reduce the cost of owning and maintaining multiple point solutions.  Combined, the modules manage compliance with regulations and ethical rules as well as meeting client requirements for data security, and responding to requests from regulators and courts.  Autonomy says this is the first platform that automates the time-consuming risk management process.   We’ll have more next month with an in-depth interview with Deborah Baron, VP Legal and Compliance for Autonomy.

*  CaseCentral introduced its ”Review Service Providers Certified Partner Program” (RSP).  The program was developed in response to the growing demand from lawyers, legal experts and service providers for more efficient solutions to expedite the document review process. The RSP program provides the training and tools needed to offer clients a one-stop shop for initial document review using the RSP’s review services bundled with CaseCentral’s on-demand single matter and multi-matter, multi-party eDiscovery review software. Certified partners can now offer all-inclusive reviewing services based on a pricing model — per hour, per document or per gigabyte.   We’ll have an in-depth interview next month with several folks at  CaseCentral.  

*  eTERA Consulting  is a company that keeps making a larger and larger presence in the data management field.  It was recently named to the Inc. 500 list, an exclusive ranking of the nation’s fastest-growing private companies.  It is a leader in “early information assessment” (EIA) and the company will be making a full presentation on EIA at the Chief Litigation Officer Summit on September 12-14 2010 in Las Vegas.    They did a nice job at this conference via a presentation on the highly-charged topic of electronic discovery economics.  Dan Junk (newly arrived at eTERA and formally a managing attorney at Simpson Thacher and Bartlett where he was responsible for coordinating all national defense counsel in tobacco litigation throughout the U.S.) kept to the ILTA theme of “strategic unity”, the integration of technology with the practice of law.  It is a company where the pieces just seem to be falling into place.  Next month we’ll have an interview with Scott Holec, eTERA’s President.

*  We had a chance to hook up with “social media guru” Rob Robinson who is back at Orange Legal Technologies.  Orange LT just continues to experience phenomenal growth with another bang up quarter.  The company thinks this accelerating growth is a direct indicator of increasing client desire for complete, integrated, and Software-as-a-Service delivered electronic discovery services, something we have commented on numerous times this past year.  Orange LT has ”OneO® Discovery Platform” which has the ability to deliver online analytics (early case assessment), processing, and review from the security of a hosted centralized repository.  Posse List members will remember Orange LT supported the joint defense counsel in one of the largest cases ever filed by the S.E.C. — United States v. Robert Allen Stanford, et al.  And through Rob’s expertise they still have the best slideshare presentations any vendor has produced such as Rob’s ”meet and confer” presentation (click here).

*  And speaking of cloud computing and Software-as-a-Service vis-a-vis e-discovery … there were 8 presentations.  We will provide all of that material next month when The Electronic Discovery Reading Room launches our new web site on the cloud and e-discovery, sponsored by Autonomy, CaseCentral and Microsoft. 

*  Recommind knocked the socks off the conference when they announced huge growth with its Axcelerate On-Demand solution, with revenue during the past year increasing 961 percent and new cases jumping by 425 percent.  They are the leader in predictive information management and we believe they are the e-discovery industry’s only on-demand solution with predictive coding  and  predictive  analytics  technology.  Next month we will have a follow-up to our earler interview with Craig Carpenter (click here)  and discuss their advances in Europe where they have become a major player.

Other coverage of ILTA

There was some excellent coverage of ILTA this year by our colleagues.  The conference wrapped up at 12 noon today (Las Vegas time) so we suspect there will be more wrap-ups, commentary over the weekend.  Here are some links to some of that coverage.  We’ll add to this list over the weekend best we can:

*  InsideLegal coverage can be found by clicking here.

* Christy Burke of Legal IT News has a series of posts audio posts from the conference which you can access by clicking here, clicking here and clicking here.

* Barry Murphy’s eDiscovery Journal  has some excellent coverage and you can access it by clicking here.

*  Bowtie Law’s ReCap of ILTA 2010  which is here.

There were a number of articles on document review and contract attorneys last week.  The discuss the challenges faced by contract atorneys and legal support professionals, how to recruit for and manage document reviews, setting up workflows, etc.   Here are the links: 

1. Challenges for Corporate eDiscovery/Litigation Support Professionals – http://bit.ly/bQR6TP
2. Climbing Back – Socha and Tom Gelbmann Highlight Key Trends Identified in Annual eDiscovery Survey – http://tinyurl.com/29yxwbj
3. Discovery vs. Document Review Is Value vs. Cost – http://tinyurl.com/2fea5l7
4. E-Discovery: Opt For Major Changes Rather Than Tinkering At The Edges Of The Rules – http://tinyurl.com/269e4of
5. Managing Lawyers – Choose Review Attorneys Carefully; Treat Them Well – http://tinyurl.com/275s73m
6. Setting Up Review Workflows for Multi-Language Documents – http://tinyurl.com/2bem3bb

A contract lawyer is suing Labaton Sucharow alleging that the law firm violated federal labor laws by not paying time-and-a-half for overtime.  The contract lawyer, Moshe Koplowitz, said that Labaton Sucharow did not pay him at a higher rate when he worked more than 40 hours in a week.  Koplowitz has been doing contract work for a number of years and is about 10 years out of law school.  A review of the case from the New York Times can be found by clicking here.  There are also some excellent comments to the article.

NYC Posse List members will remember Labaton Sucharow from the large Countrywide class action document review.  Which is kind of interesting since Koplowitz’s suit seeks to become a class action.

We spoke with the lawyer who drafted the complaint, D. Maimon Kirschenbaum, who said that federal law required employees paid by the hour to receive one-and-a-half times their regular pay for every hour over 40 hours worked in a week.  To read the complaint click here.

As we discussed with Kirschenbaum, the cases rests on whether document review constitutes the practice of law.  Under Federal law it hinges on:

§ 541.304 Practice of law or medicine. 

    (a) The term “employee employed in a bona fide professional capacity” in section 13(a)(1) of the Act also shall mean:  (1) Any employee who is the holder of a valid license or certificate permitting the practice of law or medicine or any of their branches and is actually engaged in the practice thereof;

Under state law it hinges on 12 NYCRR § 142-2.14 which reads as follows:

(iii) Professional. Work in a bona fide professional capacity means work by an individual:

(a) whose primary duty consists of the performance of work: requiring knowledge of an advanced type in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction and study, as distinguished from a general academic education and from an apprenticeship, and from training in the performance of routine mental, manual or physical processes; or

original and creative in character in a recognized field of artistic endeavor (as opposed to work which can be produced by a person endowed with general manual or intellectual ability and training), and the result of which depends primarily on the invention, imagination or talent of the employee; and

(b) whose work requires the consistent exercise of discretion and judgment in its performance; or

(c) whose work is predominantly intellectual and varied in character (as opposed to routine mental, manual, mechanical or physical work) and is of such a character that the output produced or the result accomplished cannot be standardized in relation to a given period of time.

Tom the Temp has reported on this story and there is a stream of comments on his site that discuss the various issues that may or may not be involved in the case.  For those comments click here.

This all reminds us of the Preston Gates & Ellis case (now K&L Gates LLP and yes — that’s Bill Gates father) where the firm agreed to settle a lawsuit alleging violations of the wage and hour laws. The suit was filed on behalf of over 300 lawyers who were employed by the firm to review electronic documents that were the subject of discovery requests in lawsuits. The gist of the case was that the law firm treated the lawyers as professionals who were exempt from the overtime laws as a result of their professional status, but the lawyers claimed that their work did not require them to use their professional skills, thereby making them nonexempt hourly workers. The settlement reportedly involved a payout of $700,000. The firm denied violating the law and told the media at the time that it would be easier and more cost-effective to settle the case than to fight it.

The reason that lawsuit was important is that it illustrated that even sophisticated employers can find themselves in a costly dispute over whether employees have been properly classified under federal and state wage and hour laws. The suit also illustrates that it is the actual work performed by employees that matters, not the amount of education or training that the employees have or the label that is placed on the work. The issues in the Preston Gates & Ellis case could arise in any workplace with exempt employees, even if they are not professionals. Misclassifying executive or administrative employees could have the same result.

Note to New York Posse List members:  has anyone seen a citation, case or reference that New York law does not recognize document review as the practice of law?  We know this is an issue for out-of-state lawyers trying to waive into New York.  Let us know your experiences and if you can e email us a cite/reference:  manager@theposselist.com.

According to an article in today’s law.com, the key defendants in the BP oil spill litigation, key defendants have lined up three prominent Florida law firms to defend against spill cases in Florida.  Akerman Senterfitt (Florida’s largest law firm) snagged BP and will handle all its Florida civil litigation. Cameron International (the manufacturer of the failed blowout preventer) snapped up the second-largest firm, Greenberg Traurig. Halliburton Energy Services (which pumped cement at the well) hired Broad and Cassel. 

Akerman Senterfitt and Greenberg Traurig are major users of contract attorneys throughout Florida.  

With potentially billions in lost tourism and fishing industry dollars, and with its longer coastline, some believe Florida rather than Louisiana will be ground zero for oil spill litigation. 

But everybody is eying the multidistrict litigation panel, which will hear arguments in July to decide where the federal lawsuits should be consolidated. Not surprisingly, the oil industry is fighting for Texas, while plaintiff firms are pushing for Louisiana or Florida. 

For the full article from law.com please click here. 

Posse List members in Florida are telling us they are getting calls from various staffing agencies.  Kelly Law Registry is very active in Florida.  For their contact information and the contact information for other staffing agencies active in Florida click here.  We will be expanding that agency list based on emails we have received from various Florida agencies, and we will post more information as it becomes available.

Oil, oil, oil, oil ….

As has been reported in the Wall Street Journal, Lawyer Weekly and various other sources, companies that potentially face civil or criminal liability for the Gulf of Mexico oil spill have hired a large cast of outside legal help, including former high-level government attorneys and a top product-liability lawyer.  BP has tapped former U.S. deputy attorneys general Jamie Gorelick and Mark Filip to represent the oil company before Congress and the Justice Department, respectively.  Transocean Ltd. has retained John Beisner of Skadden, Arps, Slate, Meagher & Flom LLP, who represented Ford Motor Co. in litigation involving Explorer sport-utility vehicles and exploding Firestone tires.  He also helped Merck & Co. in litigation over its prescription pain killer, Vioxx.

Legal bills for BP, Transocean, contractor Halliburton Co. and others are mounting as the companies navigate the preliminary stages of a Justice Department criminal inquiry as well as myriad suits filed by fishermen, shrimpers and others who say their livelihoods have been harmed by the spill. 

Gorelick, who now is at WilmerHale, worked at Justice during the Clinton administration and also is a former general counsel for the Defense Department.  She has represented BP before Congress in recent years and will do so now as the company faces a thicket of regulatory and congressional hearings. 

Filip worked at Justice under Bush II.  He and Richard Godfrey, both partners at Kirkland & Ellis, will represent BP in matters concerning the Justice Department as well as the U.S. Marine Board of Investigations. 

Thomas Milch at Arnold & Porter is representing BP on environmental issues. 

Transocean’s team includes Ned Kohnke and Edwin Preis Jr. of Preis & Roy PLC in New Orleans, Ivan Schlager of Skadden and David Wochner and Rachel Clingman of Sutherland Asbill & Brennan. 

There has also been an oil slick of articles concerning the various e-discovery issues such as this one from LegalWeek.com (click here to download)  which quotes some of the major players in e-discovery:  Jim Wagner (CEO of DiscoverReady), Laura Kibbe (senior vice president of document review services at Epiq Systems), Craig Carpenter (general counsel of Recommind), Wendy Curtis (chair of Orrick Herrington & Sutcliffe’s e-discovery Working Group), Amor Esteban (a partner at Shook Hardy & Bacon with expertise in e-discovery and data management), and Sanjay Bhandari (partner at Ernst & Young in London).  

Plus the talk that BP is a take-over candidate (click here).   

Meanwhile, on Capitol Hill, a private consultant for energy companies told Congress that any effort to rewrite oil spill liability laws retroactively would likely face a legal challenge based on breach-of-contract claims.  If  successful, those breach-of-contract claims could cost the federal government billions of dollars in payments to the oil and gas industry.  The Senate Judiciary Committee is considering legislation to lift limits on damage awards.   For the full story from law.com click here.

Data/document collection has begun in the U.S., and in Europe.  Several sites are tracking all of this litigation and we will keep you posted.  It appears the litigation may be situated in Houston (click here) although a few law firms we spoke with said the doc reviews will be across the U.S.  Given the law firms mentioned in the first paragraph of this post (Skadden, WilmerHale, A&P) we can assume (granted, assumptions are always dangerous in doc review predictions) that D.C. will get a good chunk of the work since these firms use D.C. doc review centers for most of their work. 

And let’s not for get all that subprime/financial crisis litigation 

And on top of The Oil Follies we have all the financial litigation we have previously chronicled: the increase in U.S. government data requests from the DOJ and the SEC, compliance audits and investigations at both the state and federal level, hundreds of private litigations, etc.  Most of this work has been in DC with a chunk in NYC.  In fact the DC agencies have been screaming for bodies with the busiest agencies being  Compliance, Hudson Legal, Kelly Law Registry, Legal Assets, Legal Placements, and Pat Taylor.  You can find their contact email by clicking here.   

Over in Europe we have seen the launch of the first large doc reviews involving European banks and financial institutions (projects in Brussels, Geneva, London, Luxembourg, Munich) with more to come. 

Oh, yes.  There are the EU target investigations of the energy, tech, and drug markets (the EU has stepped up antitrust enforcement in the technology, energy, drug and transportation sectors); the LCD makers cartel investigation, etc. 

And the continuing surge in foreign language document review projects 

As we have indicated in numerous posts over the last year, foreign language document reviews have dominated the U.S. contract attorney market due to the continuing increase in FCPA cases and IP litigation.  It has provided a steady stream of work from firms such as A&P, Baker & McKenzie, Finnegan Henderson, Kirkland & Ellis, WilmerHale, etc. who have strong FCPA practices, and IP practices. 

For some of our new members, FCPA doc review work in a nutshell:

▪  Foreign language document reviews made up 78% of Posse List postings last year, and over 40% of those were FCPA related.   And we use the term FCPA broadly because it isn’t only FCPA violations per se.   These cases include money laundering, wire fraud, antitrust laws, private party civil litigations, etc.   

▪  As we have previously reported, the DOJ brought a record 26 actions in 2009; the SEC brought another 14, its second-most ever. The DOJ cases included prosecutions of 44 individuals—a huge surge from just nine in 2008, 10 in 2007, and six in 2006.  There are 130+ cases on track in 2010. 

▪    In Europe we have seen a surge in multi-jurisdiction prosecutions with co-operations between countries.  And we have seen increased industry and sector-wide investigations which has cross-border implications. 

In the U.S., that flood of requests for CJK (Chinese Japanese Korean) fluent attorneys (especially Japanese) on our various job lists is due not only to the Toyota litigations but also the continuing increase in IP cases and “case specific” investigations such as the one resulting from the FBI raids in various Michigan locations of Japanese suppliers. 

We have 1,800 Posse List members on the CJK lists (attorneys and paralegals) and based our market research and feedback from Posse List members there are 15-20 CJK projects in the major CJK document review markets:  Boston, Chicago, Detroit, DC, LA, NYC, and San Francisco.  

Note: the highest paying agency for Japanese fluent contract attorneys with a continuing demand in DC, NYC and elsewhere: Merrill Brink.  They are paying $63 an hour plus OT.  They also offer a signing bonus and completion bonus.  They also have a need for other languages.  Contact: Vanessa.Vidunas@merrillcorp.com 

And there is boatload (iPad load?) of litigation brewing involving Google, Apple and some other high-tech stalwarts.  We have attended several telecom/media conference in the U.S. and Europe and we’ll post more on that in a later edition.