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McKool Smith, Kilpatrick, Manatt Phelps: Business of Law

Demand for legal services in the U.S. was tepid in the first half of the year while law firm expenses grew, according to a study by Citi Private Bank’s Law Firm Group.

Demand, defined by Citi as the total billable hours logged, declined 1.3 percent compared to the first six months of 2012 while law firm revenue increased slightly by 0.5 percent.

Expenses, including compensation and capital improvements, were up 2.4 percent in the first half of the year.

Compensation accounts for most of the uptick in costs. Compared to the first six months of 2012, compensation expenses increased 2.8 percent so far this year, while headcount grew only 0.4 percent, said Gretta Rusanow, a senior client adviser at Citi.

“We know the industry hasn’t been increasing salaries at specific experience levels,” Rusanow said. “Instead, there’s a shifting demographic. When associates become more senior, say moving from second year to third year associates, their salaries have gone up.”

The quarterly study is based on the results of 172 firms of varying sizes. It doesn’t disclose actual revenue or expense amounts, Rusanow said, because those numbers wouldn’t be “meaningful” because of the range of firms surveyed.

Rusanow said that she expects that unlike last year, when revenue grew by 3.6 percent, this “will turn out to be a flat year for the industry.”


Obama Said to Consider Caldwell for U.S. Criminal Division Chief

Leslie Caldwell, the former head of the Justice Department’s Enron Task Force, has emerged as the lead candidate to become the department’s criminal chief, two people with knowledge of the matter said.

Caldwell, a partner at Morgan, Lewis & Bockius LLP, is in the final stages of the nomination vetting process, said the people, who asked not to be named because the selection process is confidential. They said Caldwell will likely be offered the job after the process is finished, which could be as soon as next month.

In January 2002, a month after Enron’s plunge into bankruptcy shocked the markets and raised questions about the reliability of public companies’ financial statements, Caldwell was tapped to head up a special task force dedicated to identifying and prosecuting criminal activity at the Houston-based energy company.

Over the next four years, the task force brought charges against 36 defendants, including former chief executive officers Jeffrey Skilling and Kenneth Lay and 25 other former Enron executives.

The task force also charged Enron’s auditing firm, Arthur Andersen, with obstruction following the widespread shredding of Enron-related documents in the weeks leading up to the company’s collapse.

The criminal charge effectively put Andersen out of business. Three years after a jury convicted the auditing firm in June 2002, the Supreme Court overturned the verdict. Caldwell left the task force to join Morgan Lewis in 2004.

Caldwell, if selected and confirmed, would step into the position vacated in March by Lanny Breuer. She would oversee a portfolio of prosecutions that include financial and health care fraud, organized crime and wrongdoing by public officials.

The vetting process marks a step in the Obama administration’s efforts to fill out Attorney General Eric Holder’s second-term team, which at one point this year lacked permanent appointees in at least six top positions.

Brian Fallon, a Justice Department spokesman, and Matthew Lehrich, a White House spokesman, declined to comment on the selection. Caldwell didn’t respond to a voice-mail message seeking comment.

Law Firm News

McKool Smith Adds Former Prosecutor in New York

Daniel W. Levy, a former Assistant U.S. Attorney in the Southern District of New York, is joining McKool Smith as a principal in New York.

Levy joined the U.S. Attorney’s office in 2002, and has, according to a firm statement, conducted more than a dozen jury trials and argued more than 15 times before the U.S. Court of Appeals for the Second Circuit. He has led investigations and served as senior trial counsel for prosecutions involving fraud, including money laundering, securities and bank fraud and theft of trade secrets.

“Our white collar practice launched in 2009, and has since really found its footing representing clients in complex investigations and government enforcement actions,” Mike McKool, the firm’s co-founder and chairman, said in a statement. “Dan is an important addition to the practice and the New York office.”

McKool Smkth has more than 175 lawyers in offices in Dallas, Houston, Austin and Marshall, Texas, Los Angeles, New York, Silicon Valley and Washington.

Kilpatrick Townsend Expands Labor and Employment Group

Kilpatrick Townsend & Stockton LLP added a partner and three associates to the firm’s labor and employment group in Atlanta.

Russell Jones is joining the firm as a partner, along with associates Kathryn McConnell, Sara Partin and Camille Ward. They previously worked at Dow Lohnes LLP.

Randy Avram, chairman of the firm’s labor and employment team said in a statement that Jones “brings more than a decade of expertise that covers the entire gamut of employment issues affecting management today.”

Jones represents management in all aspects of the employment relationship, according to the statement.

Manatt Phelps Adds Litigators in Los Angeles Office

John W. McGuinness joined the Los Angeles office of Manatt, Phelps & Phillips, LLP as a partner in its litigation practice. He comes from BuckleySandler LLP and joins Donna L. Wilson, who also joined Manatt from BuckleySandler in late July.

According to a statement from the firm, Wilson and McGuinness represent corporate and individual clients in litigation, focusing on consumer class and individual actions, including mortgage/financial services and data security/privacy matters, complex commercial litigation, and litigation against state and federal governments.

“These three litigators bring significant trial experience and an impressive track record of success,” said Matthew Kanny, chairman of Manatt’s litigation practice.

Over the last year, the team, led by Wilson, has secured favorable results for an international vehicle manufacturer in an eight-figure dispute with the state of California in a midtrial settlement, and litigated on behalf of a telecommunications provider facing claims arising from the Malibu Canyon fire in a multiparty California state court action.

In the Courts

Barclays Investor Lawsuit Partially Revived by Appeals Court

A previously dismissed investor lawsuit claiming Barclays Plc failed to disclose its full credit-market risk in offerings for $5.45 billion in American depositary shares was partly revived by an appeals court.

The federal appeals court in Manhattan said yesterday that the investors may go forward with claims over a $2.5 billion share offering in April 2008, reversing a 2011 lower-court ruling that they couldn’t sue over Barclays’s asset valuation and writedown decisions. The panel agreed with the lower court that claims based on three earlier offerings were filed too late.

A group of investors filed the suit in 2009 seeking to represent buyers of 218 million Barclays shares at $25 each. The investors claimed Barclays should have disclosed losses on mortgage-backed securities as mortgage delinquencies and defaults triggered an August 2008 writedown.

Brandon Ashcraft, a spokesman for London-based Barclays, declined to comment on the ruling.

The case is Freidus v. Barclays Bank Plc, 11-2665, U.S. Court of Appeals for the Second Circuit (Manhattan).

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