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Wake Up Call: Covid Likely to Boost Class Action Costs, GCs Say

July 8, 2020, 12:55 PM

In today’s column, a Big Law firm that got millions of dollars from a federal program aimed at protecting jobs in the Covid-19 crisis is laying off associates; dozens of law firms and a dozen legal education organizations, including law schools, got money from the program; half of U.K. law firm leaders responding to a recent survey said they expect to make staff cuts this year; the grand jury process is set to resume in New York City state courts in a few days; two Big Law firms have no Black equity partners, while several firms have only one; Amazon.com named a former federal prosecutor to lead its counterfeit crimes unit.

  • Leading off, corporate in-house legal departments initially underestimated Covid-19’s impact on class action litigation they will have to defend against, but now over 70% say they expect an increase in such litigation and virtually none expect a decrease, according to Carlton Field’s 2020 class action survey report, its ninth annual edition. The report is based on interviews with general counsel, chief legal officers and direct reports to general counsel, at 415 Fortune 1000 and other large companies across various industries. It says spending on class action defense, increasing for the last five years, rose 7.3% to hit $2.64 billion in 2019 and is likely to increase this year. By the end of May 2020, more than 560 Covid-19 class actions had been filed nationwide, it says. (ClassActionSurvey.com)

  • New York City-based Hughes Hubbard & Reed, which had $288 million in gross revenues last year according to American Lawyer, in April got between $5 million-$10 million from the federal Paycheck Protection Program, aimed at helping companies save jobs during the economic crisis set off by the Covid-19 pandemic. According to reports, the firm is laying off an unspecified number of associates, to which it is offering severance pay and training. A firm statement attributed the cuts to court closures and a slow-down in deal activity. (AbovetheLaw.com)

  • Hughes is among at least nine Big Law firms that got multimillion dollar loans from the PPP but cut salaries or jobs this year anyway, a report says. (American Lawyer) Dozens of Big Law firms, including Boies Schiller Flexner, Stroock; and Sullivan & Worcester got money from the program. (BLAW)

  • Half of U.K. law firm leaders responding to a recent Managing Partners Forum survey said they expect to make staff cuts this year. and half also said they anticipate a steep decline in revenues because of the crisis. (Law.com International)

  • As the pandemic forces law firms forced to adapt their offices to keep lawyers and staff safe during the pandemic, some are rethinking their plans designing new spaces. (American Lawyer)

  • As Covid-19 cases pile up in California, recent law graduates used a Zoom session to urge state officials to make a decision about the state’s bar exam. (BLAW)

  • Grand juries are set to resume in New York City’s state courts on Aug. 10, but it’s not clear how many grand jurors will actually be willing to show up. (New York Law Journal)

  • Management-side worklaw firm Littler and ComplianceHR launched an automated employee screening tool to help companies manage the reopening of their workplaces after Covid-19 shutdowns. ComplianceHR is a joint venture of Littler and artificial intelligence platform Neota Logic Inc. (Littler.com)

Lawyers, Law Firms

  • Cravath Swaine & Moore and Haynes and Boone still have no Black equity partners, while several firms have only one, according to a diversity inventory. (American Lawyer)

  • The general counsel of The Hershey Co., Damien Atkins, says he’s a “Black male in a profession where there’s not many of us. That’s an opportunity for me to shine.” He talked recently about what top lawyers can do to boost diversity in the legal profession. (Corporate Counsel)

  • Marriott Hotels, which was sued last year for allegedly ignoring sex trafficking at three of its Philadelphia hotels, can bring third-party defendants into the litigation, a federal judge ruled. (Legal Intelligencer)

  • Fenwick & West represented pharmacy-management startup ZipDrug on its acquisition by IngenioRx, a wholly owned subsidiary of Anthem, Inc. (Fenwick.com) (MedCityNews.com)

Laterals, Moves

  • McDermott Will & Emery is adding a five-lawyer group from Katten Muchin Rosenman to its restructuring and insolvency practice in Dallas, led by Katten partner Charles “Chuck” Gibbs, who will now head McDermott’s practice. Mark Patterson and Eric Seitz are also making the move, as counsel, along with two associates. (BLAW)

  • Buchalter said it hired former California federal prosecutor Joshua Robbins as chair of its new white collar & investigations practice, working out of its Los Angeles and Orange County offices. According to his LinkedIn, Robbins has been a Washington, D.C.-based Baker & Hostetler counsel and Sidley Austin associate, and he most recently led the white-collar defense practice at boutique firm Greenberg Gross LLP. (Buchalter.com)

  • Akin Gump hired back international trade lawyer Matthew Nicely as a partner in Washington. According to his LinkedIn, Nicely arrives from Hughes Hubbard, was international trade and practice group leader at Thomson Hine, spent time at Vinson & Elkins and Willkie Farr & Gallagher, after working as an associate at Akin Gump early in his career. (AkinGump.com)

  • Duane Morris recruited corporate lawyer Anastasia Kaup as a partner in Chicago. She was previously a banking and finance associate at Mayer Brown. (DuaneMorris.com)

  • K&L Gates’ Washington office hired health care regulatory and compliance lawyer Andrew Ruskin as a partner. He arrives from Morgan, Lewis & Bockius, where he was a partner advising on Medicare and Medicaid reimbursement and compliance. (KLGates.com)

  • Haynes and Boone grabbed veteran patent lawyer Philip Albert as a partner in San Francisco, getting him from Davis Wright Tremaine. Albert previously spent 21 years at Kilpatrick Townsend & Stockton, including 15 as partner. He was an engineer in NASA’s Jet Propulsion Laboratory and founded a company that produced semi-custom software and turnkey computer systems for accounting tasks and bank operations. (HaynesBoone.com)

  • Offshore firm Appleby Global appointed Tim Faries, managing partner of its Bermuda office and head of its insurance practice, to serve as chief executive officer of its year-old fiduciary services unit. (ApplebyGlobal.com)

In-house

  • Amazon.com named associate general counsel and director Cristina Posa, a former federal prosecutor, to head the counterfeit crimes unit it launched in June. (BLAW)

  • Velocity Financial hired former Securities and Exchange Commission lawyer Roland Kelly, a financial industry in-house veteran, as general counsel and corporate secretary. A Morgan, Lewis & Bockius associate early in his career, Kelly arrives most recently from Jefferies Financial Group Inc. where he was managing director, associate GC, and assistant secretary. (Yahoo! Finance)

Legal Education

  • A dozen legal education organizations, including law schools and the maker of the LSAT test, got forgivable emergency loans of $150,000 or more from the Small Business Administration’s Paycheck Protection Program, SBA data show. (Law.com)

  • A proposed New York state bill would create an emergency diploma privilege. (Law.com)

To contact the correspondent on this story: Rick Mitchell in Paris at rMitchell@correspondent.bloomberglaw.com

To contact the editors responsible for this story: Rebekah Mintzer at rmintzer@bloomberglaw.com; Darren Bowman at dbowman@bloomberglaw.com

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