LJN Newsletters

Training large document-review teams to consistently apply specified review criteria to millions of pages of often mind-numbingly dull documents has long been a challenge for counsel. The time- and cost-savings offered by online review tools, along with the enhanced automated quality control features of such tools, have made electronic review an increasingly compelling option for large-scale, time-pressured document reviews. While electronic-document review projects have become more common in the last few years, setting up the project and training attorneys in preparation for review remains challenging.

Imagine a very successful equipment leasing company that showed little or no profit for the last 4 years, and so, paid little or no federal taxes. This year, that same company could show a $5 million profit and face a federal tax bill that could easily total $2 million.

Highlights of the latest equipment leasing news from around the country.

The Securities and Exchange Commission announced the release of a staff report on June 15th prepared by the Office of the Chief Accountant, the Office of Economic Analysis and the Division of Corporation Finance on off-balance sheet arrangements, special purpose entities and related issues. The report was prepared pursuant to Section 401(c) of the Sarbanes-Oxley Act of 2002. As required by that Act, the report has been submitted to the president, the Committee on Banking, Housing and Urban Affairs of the Senate, and the Committee on Financial Services of the House of Representatives. The staff report includes an analysis of the filings of issuers as well as an analysis of pertinent U.S. generally accepted accounting principles and Commission disclosure rules. The report describes the staff's study, details its findings, and provides recommendations. Notably, the report prominently identifies leasing as a key focus and a high priority for an FASB project.

Spurred by increasing customer demands, new competitive pressures and regulatory changes, the North America equipment leasing industry is undergoing dynamic change. It will affect how lessors conduct business for years to come, with companies feverishly developing new products, income streams and distribution channels, while still seeking further operational efficiencies.

In a standard lease syndication transaction, the lease syndicator (ie, the seller of the lease) wants to ensure that it is not responsible for the accuracy or completeness of the underlying lessee's financial data. The seller thus typically requires its buyer to affirmatively acknowledge that the buyer itself has made a complete and independent investigation of the lessee's financial condition and is fully satisfied with the lessor's credit standing. The buyer will also be expected to acknowledge that, in acquiring the syndicated lease, it is in no way relying on the seller's business judgment or financial expertise, and has not relied on any information provided by the seller as to the lessee's financial condition.

The legal industry faces powerful and rapid changes. Mergers and acquisitions have increased the number of national and international mega law firms ' and this trend is expected to increase. Competition in local markets is fierce as large law firms open satellite offices or buy mid-sized or small firms in cities across the nation. Accounting firms are big competitors. They employ hundreds of attorneys to serve their many existing clients and to hunt for new prospects. The shrinking number of companies created by mergers and acquisitions in the business sector makes getting new clients more competitive. With a limited client base, everyone is targeting everyone else's clients and clients are demanding better service at lower prices. But most leaders are beginning to really understand this is where the profession stands. Staying at the top in such a competitive and challenging market, however, may be something that is new to many of today's law firm leaders.

What does a firm do when differences in philosophy and management style threaten its very existence? How do you begin to deal with the issues that have accelerated to the crisis stage? Following is the experience of one firm that had to face some difficult decisions about its future. We were requested to step in and sort out the problems with a view towards proposing solutions and providing a basis for reconciliation. This scenario presents the case of a fictional law firm, Mason & Logan, and is a composite of the types of problems encountered by a firm in transition.