« July 2018 | Main | September 2018 »

8 posts from August 2018

August 27, 2018

Clients Don't Give a Damn What You Pay Associates

I love it when the legal profession whips itself into a frenzy. All that emoting. The shock. The awe. The outrage.

And it doesn't take a seismic event to get the profession all hot and bothered. This year, it was spurred by Milbank Tweed Hadley & McCloy, which bumped its first year salary to $190,000 from $180,000. Immediately, there was breathless speculation: What would other firms do? Will Milbank end up as the lone wolf? 

As if any of this was a mystery. Was there any doubt that most "major"—or those with the pretense of being so—firms would fall in line like docile sheep?

But once firms bumped salaries, the rite of indignation started. And it was the client who was supposedly miffed. 

"The tone deafness is astounding," blared the headline on Law.com, in a post that got a ton of attention. (The quote was from a livid client who was worried about the effect of the salary increase on legal fees.) Another post on Law.com wonders whether the raises will result in a client backlash.

The subtext was unmistakable: What the hell are you arrogant law firms doing by paying know-nothing associates so much? Did you forget about consulting us—your clients—who pay the bills? 

Some might see all this as a wake-up call of sorts for law firms—a rebuke to the foolish ways Big Law takes action without listening to their clients.

But I think the fuss is much-ado-about-nothing. It's a big nothing burger if you ask me. The reality is that clients could care less about what firms pay associates. And why should they?

"As a gadfly, I'd like to be consulted," says John Kuo, general counsel of Varian Medical Systems, about the pay bumps, noting that $50,000 was considered "an obscene amount" when he got out of law school. "But as a consumer, I'll let you decide."

Clients are agnostic about these matters because they have the leverage. "I can tell you for sure that no in-house attorney will agree to pay higher rates because the firms decided to pay their associates more salary," says Linda Lu, a senior vice president at Nationwide Insurance Co. "I’m not worried, because we will pay what we pay anyways—the firms’ profit margins just shrink." 

Indeed, who pays retail for legal services these days—particularly for inexperienced help? "Nearly all firms are experiencing pricing pressure," says law firm consultant Peter Zeughauser. "To address it, nearly everyone discounts at least some work." William Henderson, law professor at University of Indiana Maurer School of Law, echoes that point: "About 40 percent of the work is done with a 30 percent discount."

And despite that catchy "tone-deaf" complaint, clients are hardly waiting for firms to structure the billing arrangements. They'll pick the occasions when they might deign to pay full price—and that's just for superstar partners on limited engagements. "I might call up a very expensive partner just to get their thinking on antitrust for two to three hours," says Kuo. But for long term project, "I'm not paying $1,000 an hour," adding, "There are ways to contain my cost, such as alternative billing arrangements." 

That means it's the law firm—at least the ones with thinner profit margins—that's in a bind. "If everybody pays associates the same, profits are squeezed all the more," says Zeughauser, noting the "continuing segmentation of the market" in which the most profitable firms get to charge more. "The rich get richer, and it becomes harder and harder for everyone else to hold onto their top talent."

Which brings us back to the law firms as sheep analogy. Because firms lack originality or are terribly afraid of being left out of the big boy club, they will shell out the hefty bucks–whether they can afford it or need to do so to attract decent talent. 

So why are we talking about client angst in the context of salary increases? Well, it gave firms the illusion that billable rates still mean something. It's nostalgia for simpler times. And it's fake news.


Twitter: @lawcareerist


August 22, 2018

My Man, Don McGahn: The Smartest Lawyer in Trumpland

HqdefaultI know you're still trying to digest all that news about Michael Cohen and Paul Manafort, but let's not forget the recent fuss about White House counsel Don McGahn.

Believe it or not, McGahn is beginning to grow on me. Sure, I've accused him of being an ethics disaster, a ruthless careerist and a dreadful, awful White House counsel. But I now realize that he's so much more. For starters, he's emerging as one of the smarter—if not the smartest—lawyer in Trump's orbit. I mean, he's definitely more lawyerly and normal than Rudy Giuliani, Michael Cohen or Marc Kasowitz.

But before we get into the McGahn mystique, let's pause to consider some of the revelations in that New York Times article that detailed how McGahn "cooperated extensively" with special prosecutor Robert Mueller's investigation into the Russian probe. I won't go into all the gory details, so permit me to tell you what jumped out at me from the Times' piece:

- First, isn't it adorable that McGahn calls Trump "King Kong" behind his back? The Times says he gave Trump the moniker "to connote his volcanic anger." I bet Trump has his own nickname for McGahn, and it's far more vivid.

- Second, wasn't it generous of Trump to give McGahn the top White House legal job even though McGahn went to a no-name law school?  "His lack of a degree from a top law school bothered Mr. Trump," reports The Times. (McGahn got his law degree from Widener University's Commonwealth Law School, which is ranked #143 in U.S. World News & Reports. I know that's scraping the bottom of the pickle barrel, but, hey, at least it's ranked!)

 - Third, how refreshing that Trump's original lawyers (John Dowd and Ty Cobb) for the Mueller probe were so uncynical. They decided to cooperate fully with Mueller, allowing him to interview McGahn, because they thought it would bring a speedy end to the investigation. Apparently, "they took Mr. Trump at his word that he did nothing wrong and sold him on an open-book strategy," according to The Times. 

Wow. Imagine having such faith in a savvy opponent and a client who's known to be a congenital liar! They sure don't make lawyers like that anymore.

We can analyze the wisdom of Dowd and Cobb's tactics until the cows come home, but let's get back to McGahn. You'll have to read the entire Times article to understand how McGahn and his lawyer William Burck decided to cooperate with Mueller, but the bottom line is this: They feared that Trump would throw McGahn under the proverbial bus. Reports the Times: 

They began telling associates that they had concluded that the president had decided to let Mr. McGahn take the fall for decisions that could be construed as obstruction of justice, like the Comey firing, by telling the special counsel that he was only following shoddy legal advice from Mr. McGahn.

Despite what Rudy says, no one knows for sure what McGahn told Mueller. The only thing that's coming out loud and clear is that neither Trump nor McGahn trusts/likes/respects each other.

Which leads to this overwhelming question: Why is McGahn still at the helm of the White House counsel's office? 

I think McGahn is hanging on for two reasons. First, he's trying to make himself over as the un-Trump so that he can be more palatable to the outside world. Even without Trump throwing him under the bus, McGahn's finger prints can be spotted on some unsavory episodes—like his decision to ignore Sally Yates' warning about Michael Flynn and his role in the Comey firing, plus the countless ethics violations of the administration.

Second, I think McGahn loves the job—namely, the way he gets to play God. Like Jeff Sessions, the other thorn in Trump's side who won't quit, McGahn is wielding powers beyond his wildest dreams. By all accounts, he's the decider on Supreme Court nominees, and he's credited with the smooth confirmation process for Neil Gorsuch. And, now, of course, he's overseeing Brett Kavanaugh's nomination to the High Court.

Despite his controversial role in the Trump administration, I doubt McGahn is sweating that clients will run away from him. He had a lot of super conservative clients (among them was the National Rifle Assiciation), and they're probably fine with him. My bet is that he can probably go back to his former firm Jones Day anytime. (Elie Mystal of Above the Law has some keen insights on this.) Everyone knows that Trump is a handful, so who's going to hold his minions accountable?

So, it's the power that must be intoxicating to McGahn. After all, how often does a graduate of Widener Law School get to sit in judgement of top graduates of Harvard or Yale law schools for the highest position of the judiciary and decide the fate of a nation?


Twittter: @lawcarerist

August 20, 2018

Sued for Gender Bias, Yet Named to "Best Law Firms for Women" List

Talk about awkward timing! Guess which firm is on the 2018 Working Mother and ABA Journal's "Best Law Firms for Women" list? Ogletree, Deakins, Nash, Smoak & Stewart, the labor and employment firm that's now facing a $300 million gender bias suit.  

I have no idea how the case will shake out, but I'm willing to bet that some of Ogletree's female lawyers—current and former—are balking (or barfing) at the "best" label. The complaint, filed earlier this year, alleges that the firm "pays its male shareholders approximately $110,000 more than its female shareholders, in target compensation and bonus alone." Plus, there's been a steady exodus of female partners out of Ogletree (10 have left since January, when the case was filed, according to ALM Intelligence).

And just a few days ago, the firm took the unusual step of singling out one of the plaintiffs, Tracy Warren, a former partner who's now at Buchalter, for criticism. "Ms. Warren was terminated from the firm following a client complaint of unprofessional and unethical conduct. Following an investigation by both the firm and outside counsel, Ms. Warren was expelled on a vote of the equity shareholders," said the firm in a statement to Law.com. (The firm did not name the client nor the outside counsel for the investigation.)

"Unprofessional." "Unethical." "Expelled." Ouch. Not exactly a sign that all's well with the women folks at the farm. 

So how does a firm with these troubled relations with women get on that "Best Law Firms for Women" list? Well, it starts with a self-selective process in which the firm nominates itself. (This is true for many "best" list.) According to Meredith Bodgas, editor-in-chief of Working Mother, firms that make the cut "are remarkable for their long-term commitment to retaining and promoting women lawyers," adding that all these firms "provide flexible work arrangements and 57 percent of them offer sponsorship programs for high-potential women lawyers." 

While all 60 firms on that list might provide awesome flexible work arrangements, I'm not so clear how that "long-term commitment to retaining and promoting women lawyers" is measured. Several firms on that list show female equity rates that are well-below the current 19 percent national average, including Kirkland & Ellis (15 percent), Vinson & Elkins (14 percent), Dechert (14 percent) and Lowenstein Sandler (14 percent)—to name a handful. Are these stellar examples of long-term commitments to retaining/promoting women? Or are they more indicative of long-term problems?

But let's get back to Ogeltree. When I asked for comment, a firm spokesperson directed me to its press release, which touts the firm's women's initiative and how it supports female lawyers in three key areas: " 'Power' (identification and attainment of leadership positions), 'Access' (access to meaningful internal and external development opportunities), and 'Results' (maximizing professional success and fulfillment)." 

David Sanford, who's representing the female plaintiffs in the suit against Ogeltree, isn't impressed. He emailed me: “Ogletree can attempt to hide behind vacuous lists and ineffectual task forces, but the lawsuit will shine a spotlight on the gender differences in pay.”

Nor is Sanford impressed with the Working Mother list: “Working Mother also put a major pharmaceutical company on their top list of companies for working women in 2010," alluding to a big case his firm tried that year against Novartis for gender discrimination that resulted in a $253 million verdict against the company. 

As for Working Mother, a spokesman had this to say about Ogeltree's inclusion: "We would remove a firm if there was a certified class action or if there was a settlement indicating discrimination. This has not been certified yet as a class action."

Not exactly a ringing endorsement. I can practically visualize the folks at Working Mother tiptoeing away from this honoree.

My hunch: Ogeltree won't be on next year's list. 


Twitter: @lawcareerist 

August 17, 2018

Women and Men Don't Agree on Harassment (Or Anything Else)


I keep hearing that men are enlightened these days, that the revelations about Harvey Weinstein shook them up and that they've taken the #MeToo movement to heart. 

But after reading the latest survey about harassment by Working Mother magazine and the America Bar Association in the ABA Journal, I wonder if we're giving men way too much credit. (The survey polled almost 3,000 people who work in businesses and law firms.)

In a nutshell, it finds that while men agree that harassment exists in the workplace, but they don't fully appreciate the magnitude of the problem. What's more, men believe that there are adequate measures in place to fix the problem.

Here's how men and women look at power and harassment:

Sexual harassment: 68 percent of women said they've experienced it, while only 19 percent of men did.

Power: 61 percent of women thought men held a disproportionate share of the power in their organization, while only 37 percent of men thought so.

Institutional tolerance for sexual harassment: 47 percent of women said their organization tolerated bad behavior, while only 30 percent of men thought so.

Confidence (or lack of ) in senior leadership to address the issue: 45 percent of women said they had no confidence in the leadership, but only 24 percent of the men thought the same.

Accountability: Only 38 percent of women thought employees are held accountable for upholding policies against harassment, while 56 percent of men did.

The upshot is that men and women are not on the same page about power and the dynamics of sexual harassment. "When we asked, who holds the power, men say it's not them!" says Barbara Frankel, executive editor of the Working Mother Research Institute at Working Mother Media.

Women don't trust the system (52 percent of women said they report being harassed), while men mostly think that that their institutions and leaders are adequately tackling the problems. Not surprisingly, women didn't express much confidence in men being on their sides. Also not surprising is that men thought they were being terrifically supportive: "[W]hen asked if men and women are allies in reaching gender equality, 54 percent of the men said yes; 31 percent of women said the same," reports the ABA.

What a sad state of affairs. Is there any reason for optimism that men and women will see eye to eye and work as a cohesive unit? "This is new territory for everyone," says Frankel. "We're seeing more people talk about this. It's good that there are more open discussions."

So we're back to that old default: being open and honest about our differences. 


August 16, 2018

News and Gossip in the Trumpian World


I swore that I would avoid news associated with our Dear Leader for the rest of the summer. Alas, that was not to be. Here's a quick look at things Trumpian:

Former Foley Lardner associate is the latest darling of the far right. Who says Big Law spawns only unrepenting liberals? Behold Corey Stewart (on left), the Republican Senate nominee from Virginia, who's garnered the enthusiastic support of President Trump.

The New York Times describes Stewart as someone who "has styled himself as a champion of the Confederacy and its statues, and, as he puts it, “taking back our heritage." Though he hails from Minnesota—like his Democratic opponent Tim Kaine (remember him?)—Stewart has become quite the apologist for the alt-right movement. 

Not only has Stewart embraced Trump’s statement that there were "very fine people on both sides" at the Charlottesville protest last year, but he also "contended that that the term 'white supremacist' was a concoction of the left." 

While at Foley (he was senior counsel there from 2005 - 2009; before that, he was an associate at Gardner Carton & Douglas) in Washington, D.C, Stewart was elected chairman of the Prince William County Board in 2006 and started to take an anti-immigration stance. Under his tenure, "Prince William County began questioning arrestees about their immigration status, then turning them over to federal agents," reports The Times. 

So how did the firm react to his extracurricular activities? Not well. "Some of the partners at the firm didn’t like that very much," Stewart told The Times about his anti-immigration measures, adding, "it became uncomfortable." So uncomfortable, it seems, that he he left the firm in 2009 and practiced international trade law solo. 

I could be wrong, but I'm guessing that Foley Lardner is not pouring money into his senate run.

White House employees are like mistresses. As every middle schooler knows by now, NDAs (non-disclosure agreements, for those of you blissfully out of the loop) are the must-haves for rich men who want to keep their paramours quiet after the lust has faded. But why limit NDAs to mistresses?

President Trump has expanded the practice to cover White House staff members as well! According to Kellyanne Conway, reports Politico, everyone who works in the West Wing signs NDAs. 

Pressed about former White House communications director Omarosa Manigault Newman's claim that she was offered $15,000 a month to keep silent about her tenure, Conway said on ABC's "This Week" that it's "typical, and you know it, to sign an NDA … in any place of work." She added: "I’d be shocked if you didn’t have one at ABC." She also noted that Newman had sign an NDA on "The Apprentice," implying that it's just standard procedure. "We’ve all signed them in the West Wing. And why wouldn’t we?"

Hey, if it's good enough for mistresses and reality TV stars, why not government employees? My only question: Where was that $15,000 a month payment coming from? It's hard to imagine that Trump would dip into his own pockets to pay anyone off. Oh, dear, does that mean it's part of the White House budget?

And speaking about your tax dollars: Ex-Big Law partners spearhead DOJ's "Religious Liberty Task Force." You might not realize this, but Attorney General Jeff Sessions says there's a "dangerous movement" afoot to erode religious freedom. To counter that, reports Law.com, he's appointed former Foley & Lardner partner Jesse Panuccio, the acting associate attorney general, and former Kirkland & Ellis partner Beth Williams, head of the DOJ’s legal policy office, to oversee faith-focused measures.

According to Sessions, the danger to religious liberty has “gotten to the point where courts have held that morality cannot be a basis for law; where ministers are fearful to affirm, as they understand it, holy writ from the pulpit; and where one group can actively target religious groups by labeling them a 'hate group' on the basis of their sincerely held religious beliefs."

Indeed, there's a brutal war against Christmas, and we must protect our right to say Merry Christmas at all cost.

Must read. Very powerful piece in Politico: "Stephen Miller Is an Immigration Hypocrite. I Know Because I'm His Uncle." Yes, he's as endearing as he looks.



August 13, 2018

Is that Lateral Partner a Sexual Harasser?

What does Big Law have in common with the Catholic Church and elite prep schools? Apparently, they all recycle sexual harassers and predators to other institutions.

The good (is that the right adjective?) news is that law firms aren’t dumping their bad apples on innocent children. They’re just passing them onto other law firms.

“Rainmakers accused of bad behavior often receive second and third chances,” report Sara Randazzo and Nicole Hong of The Wall Street Journal. And in a time when firms are dependent on business developers, it’s likely that even those with unsavory histories will find a home—at least for a while.

The article cites three partners who allegedly behaved inappropriately at their firms, then moved on to other firms where, in some cases, they were accused of similar conduct.  (All three deny the charges.)

One is capital markets expert James Tanenbaum, who landed at Mayer Brown this year after being forced out from Morrison & Foerster for sexual harassment allegations, and, before MoFo, he was ousted from his longtime firm Strook & Strook & Lavan (where he paid a settlement to a female associate, the Journal reports). “He created an uncomfortable work environment by giving them impromptu shoulder massages, kissing them on the forehead and … asking them to ‘spin around’ for him while commenting on their bodies and clothing,” reports the Journal. He is no longer at Mayer Brown.

The second lawyer is Jeffrey Reeves who left his partnership at Gibson, Dunn & Crutcher, where he worked for 26 years, in December after an investigation into an allegation that he forced a female associate to perform oral sex in his office in August 2017. Reeves joined litigation boutique Umberg Zipser in January, and then jumped the next month to boutique Theodora Oringher, where he still works.

The third is former Fox Rothschild partner N. Ari Weisbrot, people familiar with the matter told the Journal, which reported that he resigned last year after the firm investigated him about allegations of inappropriate behavior. (It’s not clear what the allegations are, though the Journal reports that he tried to force a kiss on a female lawyer who was interviewing for a job.) In May 2017, he moved to Bryan Cave Leighton Paisner, which learned about the allegation when it was contacted by the Journal. Weisbrot is no longer at Bryan Cave.

Weisbrot declined to comment. Reeves and Tanenbaum have not yet responded to requests for comment.

Is your head spinning? Mine was. My first reaction was that I can’t believe this kind of heavy-handed, “Mad Men”-style harassment still happens in Big Law. Granted, these allegations seem to predate #MeToo—but not by that much. Forcing a female associate to perform oral sex in your office or trying to kiss a job candidate is madness. (For whatever it’s worth, Tanenbaum, who’s 70, comes off as the most harmless of the trio—more like an odd, old goat.) That’s not white, male privilege. That’s mega-male stupidity.

So what can firms do to protect themselves from the Harveys of the legal profession? Not much.

Gibson Dunn apparently tried to curb Reeves’ naughty-boy tendencies in 2015 “when co-workers saw him making out with a junior associate at a Las Vegas nightclub during an office retreat,” reports the Journal. The firm instituted mandatory sexual-harassment training and took alcohol off the lunch menu at partner meetings; plus, it demoted Reeves from his role as head of the Orange County’s office.

Asked for comment, the firm’s spokeswoman Pearl Piatt issued this statement:

Gibson Dunn has a strong policy prohibiting sexual harassment, with robust training and vigorous enforcement. We are absolutely committed to a positive workplace culture free of harassment. And in this case, we promptly investigated allegations when they were brought to our attention and acted swiftly and firmly in response. As a result, Mr. Reeves is no longer with the firm.

The “robust training” didn’t seem to do much good with Reeves. The only effective response seems to be booting him out of the firm.

Which means that unsuspecting firms will likely inherit these jerks. (Though firms might ask lawyers about prior complaints against them, firms don’t look that closely, reports the Journal.)

“There’s no lie detector tests for these things,” says Keith Wetmore, a managing director of recruiting firm Major, Lindsey & Africa. “Firms will do background and credit checks, but no firm will call a current employer because that can jeopardize someone’s career.” (Wetmore was the chairman at MoFo at the time Tanenbaum was at the firm, though he declined to comment about that specific matter.) At most, says Wetmore, firms can press harder as to the exact reason someone is leaving: “Jon Lindsey [one of the founders of MLA] always use to ask, ‘Is there anything I should know?’ But sometimes a guy just tells you his name and serial number and keeps you in the dark.”

But what happens to rainmakers with known checkered past? Will no firm touch them? My hunch is that they will find a home somewhere so long as they can retain their clients.

Indeed, Reeves’ new firm seems intent on keeping him. Todd Theodora, the head of Reeves’ latest firm, told the Journal that Reeves has been forthright and understands the boundaries: “Jeff has been living up to his strict and solemn promises to us.”

Good luck with that.

Contact Vivia Chen at vchen@alm.com. On Twitter: @lawcareerist


August 2, 2018

About Those Firms that "Nurture" Women

I have to admit that I squirmed when I read Law.com's headline, "The NLJ 500: Career-Nurturing Firms Win High Rankings on Women-in-Law Scorecard."

It's not that I don't want to celebrate law firms with good track records on female partners. What makes me uncomfortable is the word "nurturing." It makes women seem super-needy, like orphaned baby birds that require special care and feeding for survival. 

And I'm not sure it helps women's image that a senior partner at the No. 1-ranked firm on that list (Fragomen, Del Rey, Bernsen & Loewy) suggested to Law.com that other firms adopt "a gentler and kinder approach to running their operations," if they want to attract and promote women. 
I'm all for a "gentler and kinder" approach in law firms, but do we want to imply that women need to be handled with special delicacy? From my experience, female lawyers are tough cookies.
But putting aside my quibble with this "nurturing" stuff, the list of firms that are supposedly super-welcoming to women didn't make me want to break into a happy dance either. (The largest 350 firms of NLJ's 500 were eligible for the list, of which 264 reported data about their female lawyers.)

The reason? Well, the list is super-predictable. Once again, the top 25 or so firms for women are dominated by labor/employment, immigration and other speciality firms or regional/smaller firms. 

Indeed, you have to read through a lot of unfamiliar firm names until you hit a Big Law firm. (Hogan Lovells—28th ranked—is the only major firm to make the top 30 list.) 

Before I get accused of elitism, let me say I'm not putting down practices like labor/employment or regional law firms. There are talented lawyers everywhere in all types of practices. But the reality is that most of the practice areas where women succeed (education, family law, health care, immigration and labor and employment) are much-lower paying and far less prestigious. To use a term that's gotten me in hot trouble, they are pink ghettos

What's more, the NLJ list probably presents a cheerier picture at some firms than what the reality holds, because it doesn't make a distinction between equity and nonequity partners. So firms can play games (unthinkable, right?) and show a respectable percentage of female partners, even though most women at their shops are contract partners with little clout. (Also, why are all the female partners at Jones Day listed as “equity” when we all know it’s a two-tiered system?)

Anyway you look at it, the situation is not that rosy for women in the legal profession. But I'm not at all convinced that making firms more "nurturing" will do the trick either.

Besides, who believes that law firms are in the business of "nurturing"?

Email me: vchen@alm.com

Twitter: @lawcareerist


August 1, 2018

Money, Money: Michael Cohen v. Brett Kavanaugh


Maybe it's the voyeur in me, but I'm fascinated by the mysterious ways lawyers in Trump's orbit spend and lose money. For the life of me, I can't figure out what's going on with these two: 

He just can't get enough: Oh, I know you associate Michael Cohen with tidying up Donald Tump's sexual liaisons with adult actresses like Stormy Daniels or Playboy Playmates like Karen MacDougal. While his former boss might like indulging in pleasures of the flesh, Cohen seems to have a weakness for a different sort of porn: real estate.

Believe it or not, Cohen recently bought himself a a sexy apartment for $6.7 million apartment in Manhattan's trendy Tribeca, according to the Wall Street Journal.  (The closing took place in April but it only got out now.)

So how seductive is Cohen's new digs?

Well, let's get to the porny part! Located on the 19th floor with vistas of Manhattan, it measures nearly 2,700 square feet, and comes with four bedrooms and 4½ bathrooms. Now, for the sensory delights: The building includes a Turkish bath, a 75-foot lap pool and a private dining room. And did we mention that the concierge service books private aircrafts for tenants?

How does a guy like Cohen with all his mounting legal troubles (and bills) manage to pay for this little abode in the sky? It looks like he got a little help from friends—not his, but those of our dear leader. Cohen apparently got a $3.5 million short-term mortgage from the developers, who happen to be buddies of Trump, reports The Journal. 

Getting a $3.5 million loan is nice, but Cohen still had to cough up the difference, $3.2 million, which most of us don't have stashed away in our cookie jars. Plus, that loan is supposedly "short-term," which means Cohen better find another source of financing—fast.

But what bank will extend Cohen a line of credit? Besides his legal problems connected with Trump, Cohen has independent business troubles: According to Bloomberg, he had to put up his family’s Park Avenue apartment (in a Trump building, of course) as collateral for the millions he borrowed for his tanking taxi business.

And wasn't Cohen just in the middle of renovating his Park Avenue place—which is why he's been staying at the Regency Hotel, where the FBI raided his room? (Query: Who stays at a five-star hotel in New York during an apartment renovation?) 

For a guy who seems to be drowning in debt (he said his legal bills were "bankrupting" him), Cohen is still living large. So where is all this money popping out from? Must be a Russian connection somewhere.

Why is Kavanaugh so bad with money? While Cohen seems to be swimming in dough for unknown reasons, Trump's pick for the Supreme Court, Brett Kavanaugh, is mysteriously bereft of funds. 

"Public disclosure forms for 2017 show that the federal judge would come to the nation's highest court with only two investments, including a bank account, together worth a maximum of $65,000, along with the balance on a loan of $15,000 or less," reports The New York Times

In the best scenario, Kavanaugh only has about $40,000 at his disposal. See how fast that money goes when you're paying private school tuition (his daughters go to a private Catholic school), credit cards and a mortgage. (Note to lenders of Michael Cohen's new pad: Kavanaugh could use some dough.)

Not to panic—totally—Kavanaugh does have some other assets: His retirement account balance is between $400,000 to $500,000, and his wife has a 401(k) retirement account of less than $15,000. Plus, he's owns a $1.2 million house in a nice suburb, though that comes with a mortgage of $865,000. 

Kavanaugh might have decent retirement funds and a roof over his head, but he is still likely the poorest of recent Supreme Court justices. "Justice Clarence Thomas has assets listed between $695,000 and $1.7 million, which is the least among the justices, not counting departing Justice Anthony M. Kennedy, but still at least 10 times that of Kavanaugh," reports New York Magazine.

So why is Kavanaugh so poor? The party line, according to Raj Shah, White House deputy press line, is this: "He’s dedicated his life to public service. Obviously, that comes with sacrifice."

I don't buy that public service stuff. Kavanaugh is a 53-year old man who's been gainfully employed his entire adult life (the salary for circuit judges is about $220,600). Besides, he's no Big Law virgin. He was a partner at Kirkland & Ellis from 1997-1998, then 1999-2000. Granted, those weren't long stints, but did he not save anything at that time?

I have a feeling he's lousy with money. Remember, the guy ran up a debt of $200,000 on his credit cards, largely for baseball tickets. I understand getting into debt because of a bad business venture or gambling habit or sex, but baseball tickets? Really? Why engage in risky behavior when there's no upside?

Anyway, I'm worried about Kavanugh for his own sake. He's got two daughters to put through private school and college (his wife works, but only makes $60,000 or so), plus that big mortgage to pay off. He'll get a raise as a Supreme Court associate justice to $255,300, but I'm afraid he won't handle it wisely.

Everyone, especially the women who've worked for him, says he's a swell guy who listens well. May I suggest that some of you strap him down and make him listen to a little financial advice?


Twitter: @lawcareerist

About The Careerist

The Careerist takes an inside look at how lawyers shape their careers and manage their lives. The blog aims to dissect developments in the profession, provide useful information and advice, and give lawyers a platform to voice their views. The goal is to provide a fresh, provocative take on the state of lawyering.

About Vivia Chen

Vivia Chen

Vivia Chen, The Careerist's chief blogger, has been covering the business and culture of law firms for a decade. A former corporate lawyer, Chen is fascinated by those who thrive (as well as those who don't) in the legal profession. Her take: Success in the law (and life) doesn't always travel a linear path. If you have topics you'd like to discuss or information to share, contact her: VChen@alm.com

My Other Accounts

Google Plus
Blog powered by TypePad
Member since 03/2010