Ed. note: This is a weekly column by Elie Mystal, Managing Editor of Above the Law Redline, wrapping up the week that was in law and finance. Elie is not a practicing attorney, and anything he says that you listen to can and will be used against you.
So we’re all having fun today with J.P. Morgan, lawyers at Mayer Brown and Simpson Thacher, and their collective $1.5 billion error. The Second Circuit ruled that creditors to the old General Motors may be entitled to $1.5 billion based on a legal mistake in old JPM loan documents.
It might seem weird to use this story as an example in favor of gigantic legal fees, but as you look at how this error happened, you’ll see my point.
JPM loaned GM money as part of a $300 million synthetic loan. Unrelated to that, JPM also financed part of $1.5 billion loan to GM. When GM paid off the first loan, it needed to release JPM’s interest in GM property used to secure the $300 million.
I’m bored already. Evidently, so were lawyers at Mayer Brown. A senior partner delegated part of the task to an associate, who delegated some of the research to a paralegal. The paralegal was unfamiliar with the transaction, probably because he was a paralegal and people spend more time housebreaking their dogs than they spend explaining to a paralegal why they are being asked to do any particular task. The paralegal put in the wrong term because, whatever, he made a mistake researching something no lawyer knows off the top of his head.
From there, the associate copied the mistake into the documents sent to the senior partner without checking the paralegal’s research. The partner send the docs to JPM’s outside counsel without checking the associate’s research. Outside counsel Simpston Thacher didn’t double check or catch the error. Nobody at Mayer Brown, Simpson Thacher, or in-house at GM or JPM caught the mistake. Richard Gere shoved a gerbil up his ass. I know because I read it somewhere. Read more »
Total cash compensation for general counsels at most hedge fund managers tends to range between $500,000 and $2 million. The average total cash package for a general counsel is close to $1.1 million. There are outliers at the top end of the range, however, and I know of several GC’s earning well north of $3 million.
This is welcome news for in-house counsel at the larger, more complex and better performing hedge fund managers. Read more »
When you think tax inversions, think charming bed and breakfasts, vineyard picnics, freshly churned butter, photo ops in front of sheep pastures, and exchanges of e-mail addresses and promises to stay in touch among fast friends. Read more »
Martin Lipton isn’t exactly inviting Nelson Peltz and Barry Rosenstein to dinner. But he’ll take them over Carl Icahn, Dan Loeb or Bill Ackman, opponents of clients who he dislikes as much as the former two do the latter, and vice versa. Read more »
Much like being a first, second, or third year analyst on Wall Street, a lot of being a non-partner employee at a law firm is being shit on. Not respected. Treated like an idiot. That many of these attorneys have six-figure debt and are, in some cases, decades out of their early twenties makes the day to day treatment by their superiors all the more harsh. They can’t ease the pain with a visit to the Murray Hill Brother Jimmy’s; all the can do is go home and wonder “What kind of a life is this? Why do I put up with this,” cry, or some combination thereof. Some quit; others resign themselves to the way of life; a select few go out and get drunk on pinot grigio and decide, “I’m not some paper pusher. I’m an an esquire. I’m important. I know stuff. I’m gonna show them. I’m gonna show ALL of them [knocks over glass].” Read more »
Have you been indicted for insider trading? Forced to work your protected weekend? Been fired for being too good looking? Don’t waste your time with some fancy white shoe law firm representation. Instead, do yourself a favor and give this guy a call. Read more »
A tendency in financial journalism, and journalism in general, really, is to write about the big names. The Lloyd Blankfeins. The Ben Bernankes. The Dick Fulds. The Steve Cohens. For readers, that means never learning about the true heroes. The men and women toiling behind the scenes. The ones doing the real and, quite often, extraordinary work. SAC Capital outside counsel Martin B. Klotz is one of those unsung heroes.
Although we previously flagged Klotz as one to watch based on his tremendousperformance during a deposition of Cohen, in which the opposing counsel addressed the hedge fund manager as “Stevie,” and Klotz proceeded to go absolutely apeshit on the guy, today he cemented himself to us and the world as a god damn genius and a man worth every one of the many pennies he’s being paid. Read more »