LJN Newsletters

Over the years, it has become clear to me that being successful in the lateral market has as much to do with a firm's recruiting process as with the firm's AmLaw ranking. Those who understand the game, regardless of their size, regularly outperform those who just don't "get it." Below is an examination of some factors that separates the players from the also-rans.

There is a tsunami wave coming to law firms caused by an earthquake out there called value billing. Every law firm, small to large, will be affected. The wave will wipe out and suck out to sea the old guild culture, organizational structure, the products and services, and the compensation systems. Although the idea has been around since the publication of books in 1989 and 1992, titled Beyond the Billable Hour and Win-Win Billing Strategies, respectively, there has been little progress throughout the legal profession. Lawyers still expect to bill by the hour based upon the false assumption that effort equals value. Clients are changing their views of value added. We are entering a new era where law firms must change the way they must serve clients and value partner contributions.

The legal profession is experiencing a renewed interest in professional development at many levels, as we predicted would occur when the situation changed from a buyers' to a sellers' market in the pursuit of talent. Not only are firms and their clients seeing an increase in work with a better economy, but also the change in the demographic picture as the large cohort of baby boomer senior lawyers start to transition out is significantly influencing the demand and requirements for professional development. More is happening on the training front; however, important gaps between what is being offered and what lawyers need in terms of skill and fulfilling of client needs are still evident.

When analyzing a product liability case involving a failure to adequately warn, keep in mind that an element of that claim is causation. Restatement (2d) of Torts 402A, comment J provides that a manufacturer may assume that users will read and heed an adequate warning; however, that presupposes the plaintiff can read. Suppose the plaintiff cannot read because he or she is an infant, illiterate, a foreign speaking laborer or a factory worker who never had access to any printed warnings?

Merck & Co., founded in 1891, has a slogan — what it calls its "guiding philosophy." That philosophy is, "patients first." In the first of many Vioxx trials expected to be litigated in state and federal courts across the country, the jury wasn't buying it. On Aug. 19, after a month-long trial, ten out of 12 jurors — the number needed to return a verdict of guilty — found Merck liable to the plaintiffs, survivors of a man who took Vioxx for pain relief. The damages award was staggering: $24.5 million in economic losses and compensation for mental anguish and $229 million in punitive damages.

On Feb. 18, 2005, President Bush signed into law the Class Action Fairness Act of 2005 ("CAFA"). The primary purpose of this legislation was to reduce forum shopping in class action-friendly state courts by granting federal courts greater jurisdiction over class action lawsuits. It is this primary purpose that received most of the attention in the mainstream media and in legal analyses of this legislation.

We were there at the beginning. Members of Shook, Hardy & Bacon's Public Policy Group were seated at the table with others in the business community when plans were first discussed to create a law that would change the jurisdiction of the federal courts so that cases that were truly interstate in nature were resolved in those courts, and not in what has been referred to as state "Judicial Hellholes". (A full explanation and description of Judicial Hellholes is located at www.atra.org.)

The Supreme Court's recent unanimous decision in Grable & Sons Metal Products, Inc. v. Darue Engineering & Manufacturing, 125 S. Ct. 2363 (2005), put to rest almost 20 years of uncertainty regarding the scope of federal question jurisdiction. Responding to a split within the Courts of Appeals, the Supreme Court at long last addressed its holding in Merrell Dow Pharmaceuticals Inc. v. Thompson, 478 U.S. 804 (1986), that continued to baffle lower federal courts and legal scholars ' namely, whether Merrell Dow required a federal cause of action as a condition for exercising federal question jurisdiction. Grable & Sons not only responded with a resounding "no," concluding that federal question jurisdiction does not require a federal private right of action, but it also reaffirmed the Court's longstanding commitment to the broader and more flexible Smith v. Kansas City Title & Trust Co., 255 U.S. 180 (1921), approach to federal question jurisdiction.