‘The General’ guns for Hogan

There may be no place like home, but for Hogan & Hartson partner Ty Cobb a change of address uncorked a heap of trouble recently.


Client launches anti-Hogan ad campaign

There may be no place like home, but for Hogan & Hartson partner Ty Cobb a change of address uncorked a heap of trouble recently.

The vitriol reached a peak last week when a former Hogan client, Denver-based General Steel, launched an extremely high-profile and ferocious advertising campaign lambasting the firm.

The company put out a public call in newspapers and on the radio claiming it had been short-changed by Hogan in terms of services.

It asked any other Hogan clients that may, in its words, have discovered its lawyers were “less experienced” than expected to call a toll-free number. It is not known whether any have taken advantage of this unique opportunity.

The campaign was an attempt to recoup costs incurred by General Steel when it instructed Hogan on a lawsuit it faced three years ago. During the matter, leading white-collar defence lawyer Cobb relocated from Denver (home of General Steel) to Washington DC, an event the client claimed led to it being represented by a less senior lawyer, namely employment associate Sean Gallagher.

General Steel (known in its own ad campaigns as ‘The General’) settled the lawsuit and agreed to pay $4.5m (£2.57m). It then sued Hogan.

The company’s president Jeff Knight apparently warned Hogan in the settlement negotiations that he would initiate a “shock and awe” advertising campaign in order to influence Hogan to settle.

According to Hogan general counsel George ‘Sandy’ Mayo (who may have been speaking with just a trace of sarcasm), Knight designed the campaign himself “because of his expertise in advertising”.

Mayo says the campaign and its argument was “complete nonsense”.

“Ty Cobb is a very successful trial lawyer who tries cases all over the country,” Mayo adds. “It doesn’t matter where he lives. The notion that where his house is located has any impact upon his abilities is laughable.”

The case is set for arbitration in Denver next April.

General Steel did not return a call for comment.

Reed Smith evolves its practices along industry lines

Reed Smith has appointed the former senior partner of Richards Butler, Paul Johnston, as the head of its new global financial services group.

Johnston starts his new role on 1 January next year along with Los Angeles litigation partner Michael Brown, who will become head of life sciences, another new firmwide group at Reed Smith.

The move is part of an ongoing process by the firm to restructure its practice groups along industry verticals instead of traditional practice skill sets.

The firm began the process on 1 January this year with the launch of its private equity and real estate divisions.

The two latest groups represent Reed Smith’s largest revenue-generating areas. Each group will contain more than 100 lawyers and contribute more than $100m (£48.55m) to firmwide turnover. Reed Smith chairman Greg Jordan said the move was a “natural step” in the evolution of the firm.

“We’re going to be taking another step in the growth of the firm and have all the lawyers who represent certain types of clients and their interests moving into one group, irrespective of their individual specialities,” says Jordan.

Jordan adds that he anticipates the firm’s global turnover would be in excess of $1bn (£485.49m) in 2008.

“Each of these two new groups will contribute around 10 per cent of our 2008 business,” he adds.

Jordan says it would be the responsibility of the group heads to drive them forward strategically, with full responsibility for staffing, marketing and direction.

“More than anything, we’ll be looking for Paul and Michael to be real leaders of these key groups,” he adds. “Myself and the rest of the management of the firm had the responsibility of filling these positions and we’re delighted the two of them agreed to step in.”

Big business turns to lawyers for compliance

Several stories in this column over recent weeks have focused on the aggressive growth strategies of numerous firms in New York. But it’s not just private practice firms that are out in packs hunting for lawyers.

Thanks to the ever-more stringent US regulatory regime, lawyers are increasingly becoming in demand as compliance officers in major corporations.

According to Alisa Levin, one of the principals at Manhattan recruitment consultant Greene Levin Snyder, compliance right now is “white hot”.

“I’ve placed more compliance officers in the last year than in the previous five,” says Levin. “Five years ago we handled the occasional compliance search. Now every fifth in-house position will be a compliance search.”

And as with the rest of the legal market, the salaries are growing to match the visibility.

Levin says senior compliance officers at major corporations or investment banks can command salaries of at least $700,000 (£339,850). One reason for that is the element of personal liability that goes with the territory.

“It’s a very tough job,” adds Levin. “You have a target on your back now because of the increased reporting requirements of US companies and the fact that these positions carry some degree of personal accountability to the compliance officers themselves. It’s scary stuff.”

Cohen Milstein invokes 200-year-old law

Last month saw a US Court of Appeals decision that could have implications not only for a significant number of the world’s leading multinationals, but also for the US itself.

Cravath Swaine & Moore led the charge for the defendants, while litigators from Cohen Milstein Hausfeld & Toll (including Michael Hausfeld) represented the plaintiffs.

At stake is a $400bn (£194.2bn) class action centred on the apartheid regime in South Africa between 1960 and 1993. As one lawyer involved with the case puts it: “The plaintiffs purport to represent all of the non-white citizens living in South Africa during apartheid.”

The suit is predicated on the Alien Torts Claims Act, which grants US courts jurisdiction over certain violations of international law. The law dates back to 1798 and was considered redundant for most of the previous two centuries. But according to another lawyer involved, “ATS [or Alien Tort Statute] claims are exploding – they’re everywhere”.

Sensationally, in the apartheid case, the three groups of plaintiffs – Khulumani, Ntzebesa and Digwamaje – unexpectedly won the right last month to take the matter back to the district court, from which it was originally dismissed in November 2004.

In the meantime lawyers for the defendants have now begun petitioning for a writ of certiorari, or judicial review, in the Supreme Court.

“The issue at stake as to whether a corporate can be held liable for the acts of a repressive government as a result of it doing business in that country are monumentally important,” says a lawyer who prefers not to be named. “Take China: is every company doing business in China responsible for the repressive attributes of that government?”Cohen Milstein partner Agnieszka Fryszman rejects this point, claiming the suit was not aimed at companies doing business in South Africa, only at those that aided and abetted the apartheid regime.

“It’s a qualitatively different matter selling goods in a country from contributing to human rights violations,” adds Fryszman.

To read more of Matt’s ‘Byrne in the USA’ blogs click here.