Executive Compensation: It's Hot and About to Get Hotter
June 28, 2006
With the Enron (Lay/Skilling) trial having concluded and the business community eagerly anticipating more reports recommending SOX ' 404 relief for smaller companies, executive compensation issues seem far removed, except for the occasional (or not so occasional) headline. Don't be lulled, however, into a false sense of security. Executive compensation is about to take center stage as THE latest 'corporate governance' topic.
Is Half a Summer Associate Better Than None?
June 28, 2006
In a February <i>A&FP</i> article titled 'Associate Overcompensation?' I ventured the opinion that competition for the most promising new associates was perhaps needlessly intense, given that law firms aren't very good at identifying which law school graduates actually will turn into excellent lawyers. The following interesting report seems to invite essentially the same question with regard to law student summer associates.
Europe's Reaction Against the SOX Anonymous Whistleblowing Rule
June 28, 2006
Watching the reaction of European data protection authorities to the anonymous whistleblower requirement set forth in ' 304 of the Sarbanes-Oxley Act of 2002 (SOX) has been like watching an ongoing heavyweight prize fight. In one corner, representing the U.S. and its recent history of corporate frauds, stands the SOX champion determined to use all means to prevent future frauds. In the other corner, representing Europe's 20th-century history, which unfortunately includes use of anonymous 'informants' to 'denounce' and silence or kill opponents of repressive regimes in Germany, France and elsewhere, stands the European Union (EU) data protection champion resolved to protect what Europeans view as the fundamental human right of privacy. The SOX and EU champions have exchanged blows, neither has given up much ground, and the match appears to be headed into the late rounds. The audience of multinational corporations required to comply with both SOX and EU data protection laws can only watch, do their best to implement anonymous whistleblower mechanisms in compliance with both SOX and EU privacy law, and wait until the contest is ultimately decided.
Branches, Boutiques And Client Conflicts
June 28, 2006
As analyzed in several <i>A&FP</i> articles, a major strategic goal of many law firms is to attain and maintain dominance for specific practice areas in a legal market. One downside of dominance in a practice area, however, is that a firm may increasingly need to turn away work in other practice areas due to client conflicts.<br>From the following excerpts of recent news analyses from <i>A&FP</i>'s ALM affiliates, it seems reasonable to conjecture that conflict-related attorney movements between firms help maintain a healthy level of competition in legal services that excessive dominance might otherwise undermine.
Clarifying the Force Majeure Clause in a Commercial Lease
June 28, 2006
<i>A&FP</i> articles in March and April discussed how various 'boilerplate' clauses in a commercial lease may one-sidedly favor the landlord or tenant. The present article emphasizes the need to ensure that the force majeure clause in particular protects vital interests in the event of a major catastrophe. Whether your firm is a tenant or landlord, you'll want to take a close look, first at this article and then at your lease.
Taking a Stand on Standards Initiatives
June 28, 2006
Industry analysts often debate implementation details of various standards, but more critical attention should be focused on whether entire standardization programs are well conceived. This article offers some lines of thought that readers may find useful in deciding their overall response to a standardization proposal.
Confidential Client Communications? Maybe Not
June 28, 2006
Former SEC Chairman William H. Donaldson noted in a March 5, 2004 speech that SOX was needed to deal with 'a general erosion of standards of integrity and ethics in the corporate and financial world ... The acquiescence by the gatekeepers, like accountants, who turned their backs or actually condoned such accounting manipulation, combined with stock option incentives to management, fueled the short-term focus.' Ironically, the SEC and the Department of Justice, which enforce SOX's criminal provisions, appear ready to burden the traditional ethical obligations of corporate legal counselors to keep client communications confidential in an effort to police the integrity and ethics of other corporate gatekeepers.
'Misprision of a Felony'
June 28, 2006
Notwithstanding the continuing reliance of federal courts on the Federal Sentencing Guidelines, they recognize that Congress did not intend to weaken the plea bargaining system when it enacted the Sentencing Reform Act. Given the formulaic nature of the guidelines, plea bargaining may be the best way to secure the most advantageous result for a client facing federal criminal charges. One bargaining tool is for defense counsel to suggest that his client plead to an alternative charge, such as misprision of a felony, 18 U.S.C. ' 4.
