RSS FeedMitch Kowalski, Man to Watch in Tough Legal Times
Last week I met with Mitch Kowalski of the Legal Post. He mentioned our conversation earlier today on the site, which is the kick in the butt I needed to do my own write-up on it during our break from school.
Mitch is an alumn from my school, Western Law, but has chosen a career path unique from most. After practicing for many years on Bay St. he decided to open a writing center, first at Yorkville, and then moving to a more central location on Bloor West.
And just like those television infomercials, Mitch not only runs the place, but he’s a client too.
Mitch’s column on the Legal Post (RSS) has become a popular one among many lawyers and law students wary of these tough economic times.
Mitch forecasts that current graduates (2009) will probably have it the worst because nobody really knows what to expect. Canadian law school grads might just be fighting for shifts at Tim Horton’s for a few years. They should probably be looking at other careers such as NGOs or trying their hands at magic. In any case, it’s probably still better than doing porn.
Major law firms continue to be in denial in a scenario scarier than Halloween. Most of these firms have come into existence well after the Great Depression, and their size has never been tested by a serious and prolonged recession.
The problem is that lawyers don’t have a lot of work during a recession.
Some of the potential growth areas such as labour and employment, IP, and even bankruptcy and insolvency, won’t make up for shortages in major corporate work that employs massive numbers of lawyers within the major firms.
With every economic threat there are also opportunities, and Mitch thinks this is an opportunity to transform the legal profession. The very nature of law firms may change, with some even incorporating other professionals like accountants into their partnership structure, and others even going public.
Cost-saving may force firms to look overseas, instead of using inexpensive articling students (who get paid just over twice minimum wage in some firms when salary/hours is calculated).
The days of sending armies of students to the law library to photocopy into the wee hours of the morning may be ending, because these students still cost too much resources for their office space, workstations and training. Overhead from downtown rent continues to be one of the major costs after salaries in most large law firms. Associate turnover due to burnout and mismanagement is completely ignored and accepted as the price of doing business.
The billable hour also attracts considerable wrath from Mitch’s scrutiny.
Naysayers might shun worrying over the ’sky is falling’ rhetoric. New grads might feel like they’ve been slipped a mickey by the legal industry. But those who want it raw and are entering the brave new economic world willing to turn to the blogs for advice, Mitch’s column is a good place to start for a translation of things to come.
The Legal Post is also up for an ABA Award, and you can vote for them here to help make Canadian blogs a prominent landmark in the legal blogosphere.
Cross-posted to Slaw
Obama Win Might be a Boon for Law Firms
Carolyn Elefant thinks that some law firms are going to see a major increase in business as a result of this week’s election.
Obama is expected to increase regulation in a number of areas, including health and banking, and might provide incentives for green technologies.
Larry Bodine and Zack Needles identify several of growth:
- regulatory law and enforcement work
- litigation
- “green” law
- real estate
- labour law
- bankruptcy
- government contracts
Lawyers with expertise in these areas can expect an increase in work.
Credit-Related Derivatives are “Financial WMD’s”
American investor and philanthropist Warren Buffet calls credit-related derivatives a financial weapon of mass destruction, and he claims they just went off.
Prof. Jesse Fried of Boalt Hall School of Law, University of California, Berkeley, posted an article today on the Harvard Law Corporate Governance Blog. Fried points out,
Over the last two years, Wall Street financiers took home more than $60 billion in bonuses, much of it in cash. Lehman Bros. alone shelled out almost $6 billion in bonuses in 2007; it recently filed for bankruptcy.
Analysts have pointed to the Lehman Brothers and AIG bailout as the reason for the massive economic slowdown in the U.S.
A Scotiabank Group report indicated yesterday that this may affect Canada as well,
We are now forecasting recessions in both countries.
Fried recommends a claw back of Wall Street bonuses to share the cost of economic troubles, and avert future risks. He points to the Bankruptcy Code as the basis for recovering pre-bankruptcy bonus payments.
If companies do not become insolvent, the New York “fraudulent conveyance” statute allows insider payment recovery if:
- fair consideration for payment was not received
- an unreasonable small capital for business operations existed
Fried explains,
Some courts have held that managerial services do not constitute fair consideration for purposes of this type of statute. The statute may thus permit the government, to the extent it is considered an unpaid creditor of a bailed-out firm, to recover a bonus payment to one of that firm’s executives.
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