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Wake Up Call: Wells Fargo Docks GC’s Bonus Amid Scandal

March 2, 2017, 1:20 PM

• Wells Fargo & Co. said it will withhold 2016 cash bonuses from eight senior executives and claw back compensation received in 2014 as the board holds managers accountable for the bogus-account scandal that hit the company last year. Among the affected is its general counsel, James Strother. ( Bloomberg ) The bank also warned investors it may find more victims of the scam. Separately, it said U.S. authorities are examining whether other firms abused its technology to violate international sanctions. ( Bloomberg )

• Herbert Smith Freehills won its lawsuit in Australia against eight partners who defected to White & Case. The ruling blocks the eight from joining White & Case as partners for six months. ( The Lawyer )

• Yahoo! Inc. General Counsel Ron Bell has left the company after an investigation of security breaches in recent months found that the legal team had enough information to warrant further inquiry but didn’t sufficiently pursue it. ( Bloomberg via BLB )

• Gibson Dunn partner Miguel Estrada on Wednesday shot down rumors that he was in consideration to be the next U.S. solicitor general. ( National Law Journal )

Law Firm Business

• Two pair of firms from Chicago and New York announced they are combining Wednesday, in separate deals. Freeborn & Peters, a 140-lawyer firm based in Chicago, said it is getting its first New York office by adding five-lawyer firm Hargraves, McConnell & Costigan. And Kaufman Dolowich & Voluck, a New York-based firm with 129 lawyers nationwide, acquired 15-lawyer boutique Baugh Dalton in Chicago. ( New York Law Journal )

• Bryan Cave’s gross revenue slipped 1.5 percent, to $608 million, in 2016, its third-straight year of decline. But profits per partner rose 7.5 percent, to $865,000, while revenue per lawyer increased 2.9 percent, to $700,000. both new highs for the St. Louis-based firm. ( Am Law Daily )

• Dallas-based Jackson Walker saw gross reveenue rise 11.3 percent in 2016, to $246.5 million, while profit per partner shot up 20.4 percent to $1.09 million, as a strong performance in litigation, corporate and real estate fueled 2016. ( Texas Lawyer )

• An online conversation between Mary O’Carroll, head of legal operations at Google, and Zach Abramowitz, CEO and co-founder of ReplyAll.me. ( BLB )

Legal Market

• The U.S. Court of Appeals for the Federal Circuit Wednesday ruled that three patents on mobile payments owned by Smartflash are not eligible for protection under Section 101 of the Patent Act. The decision, which gets Apple Inc. off the hook for $533 million, is another win for Gibson Dunn partner Mark Perry. ( The Recorder )

• Nearly a year after they participated in a successful challenge to Staples Inc.’s proposed $6.3 billion takeover of Office Depot, Pennsylvania and District of Columbia attorneys general came up empty-handed in their bid to get a federal judge in Washington to award them $175,000 in legal fees. ( National Law Journal )

• Alere Inc., the beleaguered medical-test maker, said this week that it’s still working through the material weaknesses in its internal accounting controls that spawned government investigations and delayed its regulatory filings last year, and also reviewing “inappropriate conduct” at its Korean subsidiary and revenue-recognition practices at its Japan locations. That news comes as it tries to force Abbott Laboratories to follow through on an $8.4 billion takeover offer. ( Bloomberg Gadfly )

• Some unwitting customers of an unusual Reno, Nevada-based company, Wags Lending, have filed complaints in which they say they found out they were leasing a puppy, when they thought they were buying one. ( Bloomberg )

• Former Columbia Law grad and Big Law attorney Leigh Sprague spent two years in a California federal prison for stealing $10 million from a Russian oligarch. Now, he wants to preach the error of his ways to future lawyers. ( Am Law Daily )

• Cory Stigile, a lawyer at Hochman, Salkin, Rettig, Toscher & Perez, discusses why the IRS is focusing on America’s wealthy this tax season. ( Bloomberg )

President Trump’s First 100 Days

• The U.S. isn’t bound by decisions made at the World Trade Organization, Trump’s administration said in outlining a new trade agenda that promises to root out unfair practices by foreign countries. Trump’s pick to lead the USTR, lawyer Robert Lighthizer, hasn’t yet been confirmed. ( Bloomberg )

• Trump’s defense-heavy budget could completely eliminate funding for the Legal Services Corp., which funds free legal services across the country. ( Litigation Daily )

Happening in SCOTUS and Other Courts

• The U.S. Supreme Court told a lower court Wednesday to reconsider whether Virginia’s Republican lawmakers unconstitutionally drew state legislative districts along racial lines, giving a partial victory to black voters who challenged the voting map. ( Bloomberg )

• A former close political ally of New Jersey Governor Chris Christie urged a judge to spare him prison for pleading guilty to pressuring United Airlines to fly a money-losing route convenient to his family’s weekend home. ( Bloomberg )

• The Nevada Supreme Court published a censure order barring from the state bench a former judge who faced a complaint for having a public defender handcuffed. The former judge, Conrad Hefen, agreed not to contest the Nevada Commission on Judicial Discipline’s punishment recommendation in the case. ( Above The Law )

• U.K. courts are struggling to recruit to fill vacancies on the bench, as law firms partners’ “attitudes” are dissuading attorneys from applying, and the problem is likely to get worse, according to a report. ( Law Society Gazette )

Laterals and Moves

• Rio Tinto picked up Freshfields Bruckhaus Deringer partner Philip Richards to head its legal team on a temporary basis while it looks for a permanent GC. ( The Lawyer )

• Reed Smith raided Winston & Strawn for an eight-lawyer tax team in Paris. ( The Lawyer )

• McDermott Will & Emery on Wednesday named two new heads of its litigation group following the departure of Lazar P. Raynal, who decamped for Quinn Emanuel Urquhart & Sullivan. It said David Rosenbloom and Steven Scholes will take over leadership of McDermott’s approximately 250-lawyer strong litigation group. ( BLB )

• Gibson, Dunn & Crutcher raided Latham & Watkins to pick up Michael Darden, chair of the oil and gas transactions group and co-chair of the oil and gas industry team, for its new office in Houston. Former Latham lawyer Justin Stolte is also going to Gibson Dunn. ( Texas Lawyer )

• Perkins Coie announced it has hired healthcare transactions lawyer William E. Swart as a partner for the firm’s Dallas office in the corporate & securities practice. Swart comes from Polsinelli, where he was a co-founder of that firm’s Dallas office. ( Perkins Coie )

Technology

• The newly Trump-controlled FCC Wednesday gave internet service providers a green light to sell users’ personal information without getting their permission. ( Wired )

• When making a decision such as whether to hire, insure or lend to someone, is more data better? A recent Harvard Business Review experiment, which involved sending 316 fake applications to the largest U.S. law firms, suggests that, when it comes to fairness, the opposite is often true. ( Bloomberg View via BLB )

• Economists may be underestimating the impact on labor markets of increasing automation and the rise of artificial intelligence, according to a post published on the Bank of England’s staff blog on Wednesday. ( Bloomberg )

• Microsoft said Windows updates will soon be more reliable, and easier to apply. ( Ars Technica )

Miscellaneous

• It can be useful and efficient when one state recognizes a license or certification issued by another, as lawyers and bear hunters can attest. When it comes to permits to carry concealed weapons, however, this rationale doesn’t apply. ( Bloomberg View )

Compiled by Rick Mitchell and edited by Casey Sullivan.

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