More Sweepstakes Pitfalls (Georgia Class Action)

Overlawyered.com reports that a class action lawsuit has been brought claiming promotions law violations in connection with Deal or No Deal’s “Lucky Case Game.” Sweepstakes violations are easy to trigger, since promotions law varies from state to state and changes rapidly. Traditionally companies have sought to avoid illegal lottery claims by allowing entrants to use an alternative means of entry that does not involve the purchase of a product or the paying of a fee. Typically promotions law claims are brought by a state’s attorney general. If this case in Georgia allows class actions to be brought directly on behalf of losing entrants, the risk profile for these types of promotions could rise significantly.

Read more at Overlawyered.com:

Deal or Raw Deal?:

Howie Mandel’s stunningly successful Deal Or No Deal television game show had an amusing little side-show.
Viewers were invited to play the ‘Lucky Case Game’ by choosing which of six on-screen gold briefcases was the lucky case. Viewers submitted their choice on the Internet for free or through a text message that cost 99 cents. At the end of the program, the winning briefcase was revealed, and the winners were entered into a random drawing. The winner of that drawing received a prize of as much as $10,000.

One enterprising Georgia lawyer claims that this amounts to illegal gambling and has filed a class action lawsuit to obtain refunds of the 99 cent text message fees (plus attorneys fees, of course):

When a Forsyth County couple sent 99-cent text messages trying to win a prize on the NBC game show ‘Deal or No Deal,’ they engaged in illegal gambling and should get their money back, a lawyer told the Georgia Supreme Court on Tuesday.

So should all other Georgians who sent text messages in the show’s ‘Lucky Case Game’ and lost, lawyer Jerry Buchanan said. A judge hearing the case has estimated the bounty could reach tens of millions of dollars.

The case has been report to the state Supreme Court for the answers to two questions:

1. Does Georgia law allow losers of an illegal lottery to recover the money they lost?

2. And, if so, may the losers recover that money from the lottery’s promoter or organizer?

No mention of the third question.

(Atlanta Journal & Constitution, ajc.com, Feb. 27)

Since the suit was filed, the game has stopped.

(Via Overlawyered.)

The SEC May Want To Have A Word With The Latest Venture Capitalist On The Block

Founders at young companies often oversimplify the legal requirements of raising money. This article at TechDirt describes some novel approaches to raising venture capital, but that may not have been fully thought through from a securities law perspective:

The SEC May Want To Have A Word With The Latest Venture Capitalist On The Block: “A few weeks ago, we discussed why the idea of a P2P venture capital firm didn’t make much sense. Having lots of people invest is the same thing as going public — and doing that requires complying with all sorts of SEC regulations. Simply opening up shop and asking lots of people to invest is bound to cause problems. Apparently, that’s not stopping some folks. Wired has an article about how the founder of Powerset (the massively hyped up search engine startup that hasn’t even launched yet) has moved on to try to start a new venture capital firm that would take small investments from many people and use those funds to invest in ‘greentech’ investments. This is a little different than the P2P VC firm that we talked about, and actually seems to resemble something from the dot com bubble: a company called meVC, that allowed the public to invest money, which was then invested in startups. Of course, the folks at meVC at least realized that soliciting funds from the public meant going public itself first, so as not to run afoul of SEC regulations. Even then, things didn’t work out so well. From the sound of things, it’s not clear that the guy behind this new effort even realizes that, as described, the fund itself is probably very much in violation of SEC rules, but I’m sure the SEC will be kind enough to inform him pretty quickly if he moves forward with those plans.

(Via Techdirt.)

District Court Rejects “Making Available” Theory of Copyright Infringement

“A federal judge in Connecticut has rejected the RIAA’s ‘making available’ theory, which is the basis of all of the RIAA’s peer to peer file sharing cases. In Atlantic v. Brennan, in a 9-page opinion [PDF], Judge Janet Bond Arterton held that the RIAA needs to prove ‘actual distribution of copies’, and cannot rely — as it was permitted to do in Capitol v. Thomas — upon the mere fact that there are song files on the defendant’s computer and that they were ‘available’. This is the same issue that has been the subject of extensive briefing in two contested cases in New York, Elektra v. Barker and Warner v. Cassin. Judge Arterton also held that the defendant had other possible defenses, such as the unconstitutionality of the RIAA’s damages theory and possible copyright misuse flowing from the record companies’ anticompetitive behavior.”

Recording Industry vs. The People:

In Atlantic v. Brennan, a Connecticut case, the Court has denied the RIAA’s application for default judgment, rejecting the RIAA’s ‘making available’ theory.

The February 13, 2008, decision of District Judge Janet Bond Arterton holds, among other things, that the complaint is insufficient, both because

‘‘without actual distribution of copies…. there is no violation [of] the distribution right.’ 4 William F. Patry, Patry on Copyright § 13:9 (2007); see also id. N. 10 (collecting cases); Perfect 10, Inc. v. Amazon.com, Inc., 508 F.3d 1146, 1162 (9th Cir. 2007)(affirming the district court’s finding ‘that distribution requires an ‘actual dissemination’ of a copy’)’

and because the balance of the complaint fails to satisfy the pleading standards of Bell Atlantic v. Twombly, – U.S. –, 127 S. Ct. 1955, 167 L. Ed.2d 929 (2007), and would not survive a motion to dismiss the complaint pursuant to Fed. R. Civ. P. 12(b)(6), agreeing with Interscope v. Rodriguez, 2007 WL 2408484 (S. D. Cal. August 17, 2007).”

(Via Recording Industry vs. The People and Slashdot.)

Download the Court’s Opinion Here

Cartoon Courtesy of: max.favilli under a creative commons license.

JD Supra

As a follow up to our post last week regarding the “Public Library of Law” a reader wrote in about a new site called JD Supra that is attempting to become the YouTube of legal filings (or even more precisely, the Scribd of legal filings). The site is free, which makes it an attractive alternative to the overpriced Lexis and Westlaw services. Because the content is user submitted, it is far less comprehensive than the pleading searches on the full service search sites. Searches on the site turn up a wide variety of filings, articles and forms. Nice resource for in-house lawyers without access to Lexis and for those of us transactional attorneys with dusty Westlaw cards.

JD Supra:

“What is JD Supra?

JD Supra is an online repository of useful legal documents – a community-based research tool that offers everyone free access to the law and its practitioners. And, like many of the best online tools and services today, JD Supra is so much more than that. Borrowing from the moniker of ‘Web 2.0,’ JD Supra is:

* A community, in which members of the legal world post their court filings, decisions, and articles to a searchable database that is free for anyone to use.
* A networking tool, in which lawyers, law firms, and other members of the legal community create and maintain in-depth professional profiles that link directly to the documents they’ve posted.
* A consumer resource, in which anyone with the need can 1) find a lawyer with demonstrated expertise and experience in any given issue, and 2) preview a prospective lawyer’s work.
* A real-time news source, in which the media 1) has instant and simultaneous access to important court filings and decisions, and 2) can find legal experts easily.
* A gateway to a vast amount of truly useful information, in which everyone is provided free access to the law.”

(Via JD Supra.)

Obama = $34,000 Paycut

I’m a big Obama fan, but I have to admit this is one part of his platform that is awfully hard on lawyers. Ted Frank has an excellent article on Abovethelaw.com breaking down Barack Obama’s proposed elimination of the cap on social security taxes. Ted estimates that the policy change would hit the average attorney at top tier law firms to the tune of $34,000 a year. The Above The Law article has a link to a spreadsheet you can use to calculate the impact on your take home pay. Based on our current situation, I think a vote for Obama is actually worth it. I just hope for that price there is something left to collect when the time comes.

Abovethelaw.com: “Obama, BigLaw, and Taxes
(Or: Obama = $34,000 Paycut)

Barack Obama Senator Barack Hussein Obama Above the Law blog.jpg[Ed. note: Today we bring you some 'news you can use': a practical look at how political choices might affect your personal finances. This post is by Ted Frank, who blogs at Overlawyered.com and PointofLaw.com, and who has guest edited ATL in the past. Take it away, Ted.]

BigLaw lawyers love Obama. If one searches by law firm various databases on-line for campaign contributions, one sees an overwhelming sea of blue, and most of it to Obama.

But how will Obama affect BigLaw wallets? On Above the Law, we regularly see commenters threaten to abandon law firms for falling $5,000/year short of market. I therefore thought it worthwhile to examine the effects of Obama’s tax and spending plans on take-home pay.”

(Via AboveTheLaw.com.)

The Chewbacca Defense

This wouldn’t be much of a law blog if I forgot to remind readers of the Chewbacca defense. “Ladies and gentlemen of the supposed jury, if Chewbacca is from Endor, you must acquit.”

In-House Opportunity at Facebook

They say Facebook is the next Google in the way Google has become the next Microsoft. If the recession doesn’t knock the tech market completely on its ass, Facebook is about the best place to flee to from Big Law. Facebook is hiring for a position in its transactional group. This is about as good an opportunity as a senior associate has to retire young. If you get the job described in this post, post a comment to this lowly blog from your beach house in 5 years.

Corporate Counsel / Facebook / Palo Alto, CA: “Facebook/Palo Alto, CAFacebook is seeking a talented Corporate Counsel to support its transactional group. The position will report to the Associate General Counsel, Transactions. This is a full-time position and is located in our Downtown Palo Alto, CA office.

Responsibilities

* Contract drafting, negotiation and advisory responsibilities for Facebook’s business development, sales, infrastructure and marketing groups, including vendor agreements and advertising agreements
* Participate in structuring, negotiating and drafting general business transactions (ranging from standard contracts to one-off, complex, high-dollar-value transactions)
* Administration and resolution of legal issues that arise in existing commercial relationships
* Handling pre-litigation legal disputes and inquiries

Requirements

* J.D. degree and membership in at least one state bar (preferably CA)
* Strong transactional background, with 5+ years of legal experience and at least three years top-tier law firm experience
* In-house experience at a technology or internet company a plus
* Candidates must be flexible and willing to work extended hours when necessary to complete projects in a timely fashion
* Compensation based on experience and includes equity compensation

Mention InhouseBlog.com’s Job Board in your cover letter when applying.

Apply To Job“

(Via InhouseBlog’s In-house Counsel Job Board: Technology Transactions.)

Survey of In-House Life — The Results — Bureaucratic but more Balanced

Law.com gives a summary of some of the pitfalls of going in-house, along with some questions and answers from current company lawyers about what they like and dislike about their jobs:

Question 1. When you first went in-house, what were the most important things you found you needed to know?

• Learn as much as possible about the businesspeople, the company culture, roles and key contacts, personalities, business goals, who does what and who to go to when you need something. Get an organizational chart that you can annotate as you learn what people do.

• Learn about the business, how it’s structured, the decision-making process, how the company makes money.

• Build good relationships. If you are the first lawyer

for a business unit, the businesspeople will not be used to working with lawyers. Be sensitive to their reservations. Explain legal terms and concepts for nonlawyers.

Question 2. What was the hardest thing for you to get used to?

• Bureaucracy, internal politics and culture; understanding how business decisions are made based on company culture and politics; unseen dynamics.

• Being expected to give a business recommendation in addition to or instead of a legal one; balancing business objectives with legal risks; moving ahead with agreements that weren’t in perfect legal order because the business benefit outweighed the legal risk. Learning to work with other departments and businesspeople as a part of the team and not an outside lawyer.

• Not having the law firm infrastructure to help — lack of support, resources, paralegals.

• Volume of work, calls and e-mails.

• Vast number of meetings that take place to make a decision; time spent in those meetings and how little gets decided or accomplished.

• Legal department as a cost center: Getting used to the fact that the practice of law is a business. Realizing that someone is actually going to have to pay that $325/hour rate, and that someone is YOU.

• No distance between you and the business client. You are physically there. You are on call to clients without limit. Since they do not pay per hour, they tend to utilize legal service as if it’s a free and unlimited resource. Unreasonable demands, tight timeframes and deadlines. Expectation of immediate turnaround.

• Breaking down the genuine discomfort some businesspeople have around lawyers. … You have to show them that you are invested in learning their business before they will bring you to the table.

• Making outside counsel “take haircuts” on invoices which are warranted by excessive billings.

Question 3. What was the easiest?

• Not having to keep track of billable time and not having to bill a minimum number of hours.

• Predictable work schedule, having weekends and evenings back and more control over schedule.

• The role of business adviser specializing in one client’s business.

• Variety of work.

• Getting to delegate work to outside counsel.

For the full article and more questions and answers read on at Law.com.

(Via Law.com.)

General Counsel Salaries Compared with Big Law Firms

My understanding has always been that lawyers tend to take a pretty big financial hit when moving from firm life to in-house. This recent report published by InsideCounsel.com give some in-depth statistics on General Counsel compensation, which sheds light on salary in-house.With senior associates at big firms making in the mid 200’s, and partners averaging in the millions, it is not surprising that companies are needing to raise pay to compete for talent. One thing to keep in mind, however, is that often public company salary figures for Chief Legal Officers and GCs in surveys skew to the higher side. The reason for this is that public companies are required to publish compensation for their highest paid officers including bonuses in their SEC filings. This means that the General Counsels that make in the millions due to stock option compensation are frequently listed (and easy to count in surveys), while information on lower paid GCs is harder to collect. How do these numbers match up with your experience? Download a copy of the report here and let us know in the comments below.

This post at Above the Law has some great links to salary related information:

Skaddenfreude: Life on the Inside(Or: General counsels and in-house lawyers are doing quite well, thank you very much.): “

We tend to emphasize Biglaw over the in-house world here at ATL. When we do talk about in-house lawyers, it’s often in the context of their complaining about the legal bills they get from large law firms — and how much first- and second-year associates earn these days, despite being short on knowledge and experience.

Law Firm Prospects for 2008

According to this article law firms are in for a rough 2008. I practice in the Technology Transactions space and the market doesn’t seem to have slowed down here in Seattle. Companies are still doing deals, and M&A work continues to flow. The IPO market has slowed, which makes sense considering the recent volatility in the public markets. If you are in a technology company or work in a big firm, let us know in the comments if you are worried about the economy and if you are seeing any changes in your business as a result.

For Law Firms Too, 2008 Shaping up to be Tough: “

After several years of rising revenue and profit and all the accompanying salary wars and ever-higher client rates, the nation’s largest law firms are bracing for a period that might not be so flush.

Such is the opening to Law Blog colleagues Jamie Heller and Nathan Koppel’s story Why Big Law Is Bracing For a Leaner 2008 in tomorrow’s WSJ. The skinny: the lackluster economy is taking its toll on big firms, and not just at those which had beefed up on mortgage-related work. Rather, transactional work (M&A and the like) is down at a wide swath of law firms. And while legal clean-up from the subprime mess is giving firms an injection of new work, such a boost is typically not enough to make up for the fallout elsewhere. Compounding the problem, write Heller and Koppel: counter-cyclical practice areas like litigation and bankruptcy have yet kick into high gear.

Still, 2007 was a record year for a bunch of law firms, many of whom have been releasing their financials over the past few weeks. We thought now was as good a time as any to get you caught up on much of what’s been reported so far, either by the firms or legal pubs like the Recorder and the Lawyer (Click through on the link to get the source of the data for each firm). We’ve tried to be comprehensive, but if we’ve missed any big firm, feel free to send it to lawblog@wsj.com.

In the meantime, back to 2008. Increasingly we hear tale of associates getting bumped from one practice area to another and partners who actually have time to tool around on YouTube. Law Blog readers, are such tales apocryphal or truly reflective of troubled times? Talk to us.

	Gross Revenues 2007	Increase over 2006	Profits-Per-Partner 2007	Increase over 2006
Paul Hastings	$975 million	20%	$1.9 million	20%
Cooley Godward Kronish	$485 million	45%	$1.4 million	42%
Fenwick & West	$183 million	9%	$1.02 million	8%
Gibson Dunn	$907 million	12%	$1.9 million	9%
Heller Ehrman	$491 million	-3%	$1.01 million	-3%
Irell & Manella	$227 million	10%	$1.91 million	14%
Latham & Watkins	$2.01 billion	23%	$2.27 million	22%
Littler Mendelson	$307 million	28%	$420,000	-10%
Loeb & Loeb	$218 million	21%	$1.29 million	10%
Luce Forward	$111 million	6%	$605,000	6%
Manatt Phelps	$242 million	14%	$1.3 million	14%
Morgan Lewis	$1.0 billion	12%	$1.4 million	15%
Morrison & Foerster	$894 million	16%	$1.3 million	12%
Munger Tolles	$205 million	10%	$1.33 million	9%
O’Melveny & Myers	$934 million	8%	$1.64 million	1%
Orrick Herrington	$772 million	16%	$1.67 million	16%
Pillsbury Winthrop	$590 million	2%	$985,000	13%
Quinn Emanuel	$385 million	21%	$3.01 million	24%
Reed Smith	$892 million	39%	$1.01 million	7%
Sheppard Mullin	$333 million	11%	$1.22 million	19%
Townsend & Townsend & Crew	$146 million	-15%	$740,000	-48%
Cleary Gottlieb	$887 million	9%	$2.14 million	2%
Dechert	$836 million	15%	$2.35 million	18%
Paul Weiss	$651 million	10%	$2.60 million	4%
McDermott Will	$978 million	14%	$1.52 million	8%
Dorsey & Whitney	$330 million	11%	$672,000	30%
King & Spalding	$615 million	6%	$1.40 million	6%
Skadden	$2.02 billion	9%	$2.28 million	9%
White & Case	$1.37 billion	16%	$1.67 million	11%
DLA Piper	$2.1 billion	19%	$1.28 million	8%
Cadwalader	$587 million	5.5%	$2.72 million	-6%
WilmerHale	$944 million	5%	$1.06 million	8.6%
Howrey	$475 million	4%	$1.01 million	-18%
Weil Gotshal	$1.18 billion	12%	$2.11 million	11%
Sidley Austin	$1.39 billion	11%	$1.38 million	5.8%
Mayer Brown	$1.18 billion	9%	$1.24 million	9%
Paul Hastings	$976 million	20%	$1.92 million	20%
Baker & McKenzie	$1.83 billion	20%	$1.06 million	22%
Shearman & Sterling	$921 million	9%	$1.85 million	12%
Hogan & Hartson	$880 million	17%	$1.19 million	18%
Willkie Farr & Gallagher	$603 million	20%	$1.12 million	10%

(Via WSJ.com: Law Blog – WSJ.com.)