The Brief No. 51: Looming Indicators

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August 21, 2019

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Scorched Earth Hiring - How to Avoid Being a Toxic Law Firm Bad hiring practices can have far-reaching consequences. We’ve had front row seats to some very avoidable hiring tragedies and so we’ve put together some suggestions on best practices to avoid becoming that firm that everyone avoids like the plague.

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States Rights? With the Trump administration’s aggressive roll back of environmental protections, a record summer for climate change related disasters, and experts predicting more humanitarian disasters from climate change, many are calling for immediate action. Lawyers are putting on their superhero capes. 22 states, 6 cities, and the District of Columbia filed a lawsuit against the Trump EPA, stating that current policies are failing to adequately address climate change concerns. The case is currently in the US Court of Appeals in D.C., with hopes it will make it to the Supreme Court. On August 13, a group of lawyers and legal professionals under the name, A Call to the Bar, sent a letter to the Democratic National Committee encouraging them to hold a candidate climate change debate; a similar letter will also be sent to the Republican National Committee if there is a contested primary. 

“We” Bring Good Scandals to Light? Forensic accountant Harry Markopolos, famous for exposing Bernie Madoff, tanked General Electric’s stock with accusations of inadequate long term care insurance reserves, failing to book a major write down, and for being a “bigger fraud then Enron”. GE’s CEO purchased $2M of stock and GE denied the accusations, accusing Markopolos of market manipulation to benefit his hedge fund position betting against the stock and the stock partially rebounded as many questions remained about the ailing former business giant. The business world continued head scratching while examining the WeWork companies IPO filing and specifically the office leasing concept’s valuation as a tech company, slim operating profits, massive losses, and complex relationship with CEO Adam Neumann. The unsettling feeling the company evoked spread beyond analysts to its target audience as comments resurfaced from WeWork co-founder and Adam Neumann’s spouse, Rebekah Paltrow Neumann at the company’s 2018 Summer Camp that "A big part of being a woman is to help men [like Adam] manifest their calling in life”.

Looming Indicators: Feeling a strange deja vu of past recessions as complex accounting frauds, underfunded insurers, and financial news (and markets) went into a tizzy about the inverted yield curve? Last week the stock market resembled a summer roller coaster as an inverted bond yield curve emerged. The chaos continued as the Wall Street Journal warned of spooking the economy with “Tariff threats by tweet”, the White House accused the media of trying to crash the economy to hurt POTUS’s chance of re-election, and the White House trade advisor denied that the curve ever inverted. As the markets partially rebounded, many tried to unpack the varying recession indicators to predict if one is imminent. 

Busy Week for the Business of Law: In spite of, or perhaps because many lawyers remember “the new normal” created by the last recession it was a busy week for the business of “New Law”. Litera acquired transactions management platform Doxly which provides management and analytics of transactions while eliminating unbillable tasks and Reynen Court’s “Big Law App Store” officially launched in partnership with Elevate. The emerging area of Litigation funding is under scrutiny after questions were raised about publicly traded Burford Capital’s accounting and case valuation practices causing predictions that related inquiries will seek to further regulate litigation financing.

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The Yield Curve Explained in 15 minutes: The legal industry has not forgotten the impact of the recession of 2008 on the practice and wondering when and how the next recession will hit the industry. If you’re curious about all of the talk of yield curves and looming recession and what this all means, check out this short explanation from Vox: The Yield Curve explained in 15 minutes.

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