May 4, 2010 – Law.com

Scott Rothstein ran what appeared to be a wildly successful law firm but turned out to be a  $1.2 billion Ponzi scheme. Prosecutors asked District Judge James Cohn to execute a vast forfeiture plan last month seeking ill-gotten gains in the form of cash, real estate, and other goods. Meanwhile, the lawyers for Herbert Stettin, the Trustee overseeing the estate of Rosenfeldt Adler (Rothstein’s law firm) feel the Government’s reach is too broad and that something should be left over for their client to administer. “I know the intersection of federal forfeiture law and federal bankruptcy law is a treacherous one,” said Paul Singerman, the Berger Singerman partner heading the trustee’s legal team. He said forfeiture laws were designed to take race cars away from drug dealers, but “this is not that type of case.” Not so long ago, prosecutors put the bad guys away, and bankruptcy attorneys and receivers recovered money for fraud victims. But the Justice Department has expanded its mission in the past decade, and the federal docket is littered with actions such as U.S. v. One Ancient Egyptian Wooden Sarcophagus or U.S. v. $13.9 million from Wachovia.  When asked whether any money will be left, once prosecutors are done with claims from fraud victims, to pay creditors of the firm, Singerman responded, “We absolutely believe there will be.” Right now, however, not a lot of money has been recovered on the bankruptcy end. Singerman told U.S Bankruptcy Judge Raymond B. Ray in April that only about $3 million has been recovered by the trustee. What makes Singerman so optimistic, however, is negotiations with bankruptcy litigation targets, such as Banyon Income Fund, which claims a $775 million investment in Rothstein’s fake settlement financing scheme, and attorneys at the firm who received bonuses or loans. Singerman has told Ray that a settlement with a major player is forthcoming, and Banyon would be a juicy target. Stettin might be looking for any money Banyon received back from the Ponzi scheme, Tew said, but the Fort Lauderdale investment company reportedly lost $300 million and positioned itself as the leading creditor. << Read the Full Story >>

Everybody knows things are bad. Everybody’s out of work or scared of losing their job. Banks are going bust. Nobody knows what to do. So I want you to get up, go to your windows, and yell – ‘I’m as mad as hell and I’m not going to take this anymore!’  – Network

Last month the blawgosphere erupted with discussions about the future of law: what to change, what to preserve, where did we go wrong? One of the most fundamental debates was about closed networks like Westlaw and Lexis (let’s call them “Wexis”) versus nominally open ones such as Avvo or Google. Wexis monopolizes legal research and – thanks to properties like Findlaw and Lawyers.com - legal marketing as well. These are the ultimate closed networks. They draw their strength from contracts, a steep learning curve, talented salespeople, and ubiquity. Avvo, Google, and others offer a more transparent experience with no sales force, few barriers to entry, no commitment, and no direct price tag for the use of their services. Which type of network is most likely to help lawyers meet their obligations in the future? The answer depends on whether lawyers get mad as hell and decide not to take it anymore, or shrug off the question and go back to business as usual.

The New 800-lbs. Gorilla

By putting an army of salespeople in the field and convincing lawyers that they could not function without them, Westlaw and Lexis have survived countless recessions and outlasted every threat. But last year, forces that had been building for decades such as unbundling, outsourcing, information availability, non-lawyer alternatives, and weak attorney-client bonding, created an opportunity for a different network provider to fill the void. And that is exactly what happened. But here’s the real question: if lawyers had not been jobless in record numbers last year, if businesses had been able to spend, if Big Law had not started laying off instead of hiring, and if the economy had not cratered, would Wexis still be doing business as usual? Probably: and that most likely means that lawyers are resigned to living under a 2-vendor cartel with little real competition and almost no incentive to innovate.

So in November 2009 when Google Scholar announced that it would be offering State and Federal cases including Supreme Court opinions back to 1791, it took a while for the news to sink in. Soon however, you could hear Westlaw and Lexis brass drop their collective loads as they realized that Google would not be content to give away for free the information that they had been charging for. Instead, they realized, Google Scholar intended to update its databases in real time and add services to enhance its growing legal library. In short, it looked like Wexis might face serious competition and the suits were scared. 

… too be continued in Part 2

As Dan Frommer of the Silicon Valley Insider points out, The WSJ has reported that Google is building a store for Google Apps – the business version of Gmail, Docs, Spreadsheets, and the Calendar (all of which I use in my practice). The Google Apps Store would allow customers to buy add-ons only if and when needed to extend their basic Google Apps environment without having to buy the whole enchilada. Apparently Microsoft still has not gotten the memo however, as its Office 2010 (which I am now beta-testing) is still bloated, slow, and crash-prone in the proud MS tradition. This as Google tries to disrupt several Microsoft businesses, including its Office and Windows giants, and its Exchange email business. Google could announce the App Store as soon as March, the WSJ’s Jessica Vascellaro says. Like the App Stores flourishing in the mobile industry, Google could collect a cut from sales while passing the majority of revenue along to developers.

According to Clemens Ceipek, vice president of New Lexis, our customers spend their time … in e-mails or in Word creating or reviewing documents. That is exactly what we are doing. As a lawyer you no longer need to go to a separate, dedicated site to get the information.” Ideally this means that a user reviewing a brief in Word can click on the Shepard’s tab and confirm the status of all cases in the document at once. If the user wants to read the cases, clicking on another tab splits the screen and pulls up the cases. This same integration of information could extend to items within a firm’s own network or document management system in addition to items from Lexis databases or the Internet.

via abajournal.com

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