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Will We See A Wave Of White-Collar Litigation?

…And what implications might that have for lateral hiring in the white-collar world?

When we talk about practice areas that might actually benefit from the coronavirus pandemic and its economic fallout, bankruptcy tops the list. And this makes sense, given the big-name bankruptcies that have been filed in recent weeks, including J. Crew and Neiman Marcus.

Here’s another practice that might benefit from current events: white-collar work, both criminal and civil. The space has been a little sleepy in the past few years, as the more robust enforcement agenda of the Obama Administration gave way to a more pro-business, less aggressive approach by the Trump Administration. Just last year, Jack Newsham wrote in the New York Law Journal about a “white-collar slowdown,” fueled by a dip in white-collar criminal prosecutions to their lowest level in 33 years.

(Note: although pundits love to blame President Trump for what they view as an overly lax pursuit of white-collar criminals, it should be noted that the downward trend in white-collar prosecutions began under the Obama Administration. Federal white-collar cases peaked in 2011 under President Obama, and they’ve been declining ever since.)

In the wake of the pandemic, is white-collar work poised for a boom, or at least an increase? From a piece by Tom McParland for the New York Law Journal:

New York lawyers are bracing for a surge of white-collar criminal and civil cases stemming from market volatility caused by the COVID-19 pandemic, former prosecutors told the New York Law Journal this week….

David Miller, a partner at Greenberg Traurig and former assistant U.S. attorney in the Southern District of New York, said investigations of pandemic-related misconduct were likely already underway, but additional cases also would arise from prior acts that are just now being brought to light.

“I think you’re going to see a combination of both criminal and civil law-enforcement actions,” Miller said. “Either way, I think you’re going to see an uptick in civil and criminal enforcement work later this year.”

Growth areas could include prosecutions of False Claims Act and fraud cases related to government aid programs launched in response to the pandemic, insider trading stemming from bigger swings in the stock market, hoarding and price-gouging of personal protective equipment (PPE) under the Defense Production Act (DPA), and Foreign Corrupt Practices Act (FCPA) cases resulting from attempts to procure PPE in foreign markets.

We are already seeing increased activity on these fronts. As reported by Law 360:

U.S. Attorney General William Barr in March directed the creation of a task force to focus on COVID-19-related market manipulation, hoarding and price-gouging, to be staffed by an experienced attorney from each U.S. attorney’s office.

New York federal prosecutors made waves in recent weeks with a number of criminal cases brought against individuals as part of the nationwide crackdown, including the first-ever charges under the DPA since President Donald Trump signed an executive order invoking the law in response to the pandemic.

And it won’t be exclusively federal. State prosecutors play a significant role in pursuing white-collar crime, and defense lawyers told Law360 that they expect to see increased state prosecutions as well.

(A caveat, though: the pace of these new cases could be a bit slow. Prosecutors are working from home, agents aren’t making as many arrests as usual, and although grand juries are still meeting in some jurisdictions (like the Southern District of New York), jury trials and sentencings are generally on hold.)

What could a pickup in prosecutions mean for the market for white-collar lawyers, both firm-to-firm laterals and lawyers coming out of government, such as U.S. Attorney’s Offices and Main Justice? Once firms return to recruiting as usual, the market should be better than it has been. That might not be saying much — in 2019, the market was so challenging that even assistant U.S. attorneys from the legendary S.D.N.Y. had a tough time of it — but any improvement would be welcome.

But white-collar lawyers should keep their expectations modest, and not pop open the champagne just yet. To borrow a term from the real estate market, there’s a lot of “shadow inventory” in white-collar — lawyers who aren’t on the market right now, largely because it hasn’t been a great market, but who will put themselves on the market once it improves. I predict it will still be a buyer’s market, at least for a while.

Which white-collar litigators will be best positioned to get hired? For partners looking to switch firms, the two top factors will be book of business and actual trial experience. For prosecutors looking to enter private practice, trial experience is also critical; it’s a big part of why firms hire former prosecutors, who tend to get far more trial experience than Biglaw attorneys.

Other important factors include a supervisory title and experience, since this helps in garnering clients and press coverage; expertise in the right areas, such as securities, FCA, or FCPA work (more valuable than, say, drug or gang experience); and diversity, which firms are, to their credit, focusing more on in hiring. Having worked on a famous case also helps a lot. See, e.g., the lawyers who worked on Robert Mueller’s Russia investigation, who landed at such firms as Gibson Dunn (Zainab Ahmad), Paul Weiss (Jeannie Rhee), Cooley (Andrew Goldstein and Elizabeth Prelogar), Jenner & Block (Andrew Weissmann), and WilmerHale (Bob Mueller, James Quarles, and Aaron Zebley).

If you’re a white-collar lawyer at a firm who’s thinking of a move or a government lawyer thinking of entering (or returning to) private practice, please feel free to drop me a line. I’m happy to chat with you about the market in general and what you can do to position yourself best for a move once hiring returns to normal and the white-collar market (hopefully) picks up.

Lawyers See Coming Surge in White Collar Criminal, Civil Cases Stemming From Pandemic [New York Law Journal]
COVID Crimes: White Collar Cases To Expect From The Crisis [Law360]

Ed. note: This is the latest installment in a series of posts from Lateral Link’s team of expert contributors. David Lat is a managing director in the New York office, where he focuses on placing top associates, partners and partner groups into preeminent law firms around the country.

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GC or Bust: Moving Up in the In-house World

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GC or Bust: Moving Up in the In-house World

By Diana Rubin – May 15, 2012 | The National Law Journal

As a legal recruiter specializing in finding lawyers for corporate legal departments, I have found that one qualification top management often insists on in hiring a general counsel is prior general counsel experience — preferably in a company of comparable size in their industry.

This requirement makes sense. Hiring a GC from the same industry means the candidate is accustomed to handling problems similar to those he will soon face in the new company. It reduces the GC’s learning curve and minimizes the risk of a failed hire.

Of course, there are many other qualities management typically seeks in their next general counsel — including business judgment, presence, ability to manage the inside and outside legal team, communication skills and corporate expertise, among others.

But given the desire to hire a person with general counsel experience, where does that leave the deputy GC hoping to ascend to the top spot or the GC of a subsidiary seeking a promotion to lead the parent company? Here are some tips for aspiring GCs:

Learn the Business One of the best things an in-house lawyer can do to get promoted is to learn as much as possible about the business. To become the “business-minded lawyer” that all companies seek, an attorney must be an expert in the company’s technology, processes and products. A lawyer should read his company’s sales brochures. Attend a sales meeting, sales training or sales conference to see how the company’s goods or services are sold. Doing so will provide a deeper understanding of the problems the sales force faces and how they overcome them.

We see the value of deep, hands-on business knowledge every day in the recruiting process as well as in the daily lives of the GCs with whom we interact.

One way to gain in-depth understanding of the business is to see it in operation regularly. Jim Villa, vice president, general counsel and assistant corporate secretary at Washington-based Colonial Parking Inc., spends a full day annually with the parking attendants at one of his garages to keep his hand on the pulse of the business. Eileen Kett, senior vice president and general counsel for Club Med Management Services Inc., is a familiar face at the company’s far-flung properties and knows what goes on on the ground there. This type of immersion will bring any in-house attorney much closer to the business, the people who run it and the problems they confront daily. It will also help forge relationships that assist in-house counsel in understanding the businesspeople’s problems from more than just a legal perspective.

Get Up Close and Personal With the Board Top management also prefer GC experience because GCs have dealt with boards of directors. So in-house counsel seeking advancement should try to be present at board meetings. One way is to serve in a corporate-secretary capacity; another is to present substantively on issues of importance in their areas of expertise. By doing so, in-house counsel will enhance their understanding of the business and become comfortable in the boardroom. The board will also become comfortable with them, an invaluable asset when seeking to move up.

Sandra Leung, GC of Bristol-Myers Squibb Co., said that one way she advanced within the company was by becoming the corporate secretary, despite having no idea what the position entailed and only a litigation background. Ashley Post, “GC Sandra Leung forms connections within the Bristol-Myers Squibb legal department,” InsideCounsel.com, Dec. 1, 2011. If lawyers cannot become the corporate secretary or participate in board proceedings, they should look for ways to accumulate board service outside their company, by serving on nonprofit boards or for-profit boards.

Take Risks One factor general counsel often cite as key to their success is a willingness to take risks. Teri Plummer McClure, general counsel of United Parcel Service Inc., joined the company as a labor and employment attorney and became the head of that group. Her boss advised her that, to advance, she needed hands-on experience. He offered her a district manager of operations position which required moving her family to Florida; leaving her legal job with no guarantee of return; and directing 4,000 employees in pickup and delivery operations, for which she had no training. She took the position. The operational experience from that role probably made her one of the most business-minded lawyers in the legal department. She observed, “The skills I learned in central Florida, in terms of learning the business from the ground up and understanding how decisions are made on the front lines, are absolutely invaluable to me now.…Had I not taken on that role, I would not even have been considered for general counsel.” Michele Coleman Mayes and Kara Sophia Baysinger, “Courageous Counsel: Conversations with Women General Counsel in the Fortune 500,” Diversity in the Bar, July/August 2011.