The Future of Big Law

The Future of Big Law  |  With business still tepid in the aftermath of the financial crisis, and with the industry reeling from the failure of Dewey & LeBoeuf, DealBook looks at the future of lawyering in a special section, “Big Law Steps Into Uncertain Times.” That future may involve an entirely new business model, one without any partners, writes Andrew Ross Sorkin in his column.

A trio of white shoe law firms - Cravath, Swaine & Moore, Debevoise & Plimpton and Cleary Gottlieb Steen & Hamilton - have found success by keeping things old school, paying partners according to a strict lock-step system, writes DealBook's Peter Lattman. At Cravath, a former Obama administration lawyer, Christine A. Varney, had to meet all 83 partners before she could join the firm - and she received no signing bonus or special deal when she was voted into t he partnership.

Cravath has long been a place where money seemed less important than love of the work, writes James B. Stewart, who joined the firm out of law school 36 years ago. The realization that Cravath partners were emotionally invested in what they did is what finally moved him to leave the legal profession for a career in journalism, Mr. Stewart says:

“This came as a profound revelation. Of course they worked long hours, because it didn't feel like work to them. They took great satisfaction in the services they rendered their clients. You couldn't fake this. The partners seemed to have some sixth sense. I enjoyed my work. But I had to admit I didn't love it the way they did.”

So where can a lawyer find work these days? For the white collar bar, a string of Wall Street scandals has provided steady business, reports Azam Ahmed. For instance, the Libor scandal, which touches 16 banks and spans more than 10 government authorities, “is looking lik e a full employment act for the corporate bar,” said Samuel W. Buell, a professor at Duke Law School. Still, white collar work can pose ethical quandaries. Companies being scrutinized for misconduct often hire a law firm to conduct an investigation, but that practice “raises significant questions about conflicts of interest,” writes Peter J. Henning, the White Collar Watch columnist.

Lawyers for Wall Street have found a friendly reception at an appeals court in Washington, which has a philosophy of keeping government watchdogs on a short leash, reports Ben Protess.

A London-based law firm, Freshfields Bruckhaus Deringer, has responded to the global economic slump by emphasizing its international reach - a strategy that has put it on top of the league tables for the first half of 2012, with $162 billion of announced deals, reports Mark Scott. And another firm, the Global IP Law Group, has carved out a niche in patent legal and advisory work, as companies inc reasingly see patents as an asset class, reports Steve Lohr.

For aspiring lawyers, law school, with sky-high tuition and job prospects that remain uncertain, can seem like a losing proposition. Steven M. Davidoff, DealBook's Deal Professor, writes:

“The problem of law school is one that is ubiquitous to higher education - the current model is inherently expensive but even today, lower-priced alternatives don't seem to meet the standards or be desired by many students. It is here where revolutionary technologies like online learning may come into play.”

Sheila Bair Strikes Again  |  The former chairwoman of the Federal Deposit Insurance Corporation has some choice words for bankers and fellow regulators, including Treasury Secretary Timothy F. Geithner, in her new book. DealBook reports that Ms. Bair portrays Mr. Geithner in the book as an apologist for Wall Stree t, and she suggests that his effort to bail out nine big banks may have masked a rescue intended just for Citigroup (a theory that other government officials have rejected).

“Participating in these programs was the most distasteful thing I have ever done in public life,” writes Ms. Bair in the book, “Bull By the Horns: Fighting to Save Main Street from Wall Street and Wall Street from Itself,” set to be released on Tuesday.

On the Agenda  |  Banco Santander is expected to take its Mexican unit public today after the market closes. The I.P.O. will amount to a test both of investors' appetite for Latin American banks and their willingness to invest in an institution closely tied to Europe's crisis. With the results of stress tests of Spanish banks coming on Friday, The Wall Street Journal writes that German banks have a particularly high amount of exposure to their Spanis h rivals.

The media mogul Barry Diller, chairman of IAC/InterActiveCorp, is on CNBC from 8 to 9 a.m. James S. Chanos, the founder of the hedge fund Kynikos Associates, is appearing on Bloomberg TV at 8 a.m. The former prime minister of Greece, George A. Papandreou, is on Bloomberg TV at 9:35 a.m.

With the housing market showing signs of a recovery, the S&P/Case-Shiller home price index, coming at 9 a.m., will offer a portrait of the market in July. Another crucial gauge, the Conference Board's index of consumer confidence, is coming out at 10.

Tim Pawlenty's About-Face  |  Mr. Pawlenty is an odd choice to lead the Financial Services Roundtable, one of Wall Street's most influential lobbying shops, considering that the former Republican governor of Minnesota opposed the financial industry on a range of issues while running for president, Andrew Ross Sor kin says in the DealBook column. “His appointment is the clearest sign yet of the flexible ethic that makes the revolving door in Washington spin faster,” Mr. Sorkin writes.

Jeffrey Gundlach Wants His Art Back  |  The bond investor, of DoubleLine Capital, is offering a reward of as much as $1.7 million for information leading to the recovery of the artwork, including pieces by Piet Mondrian, Jasper Johns and Joseph Cornell, that was stolen from his home in Santa Monica, Calif. Mr. Gundlach's “emotions are pretty raw right now,” reports New York magazine's Kevin Roose, citing an unidentified person close to the investor.

Mergers & Acquisitions '

Diageo in Talks to Buy Stake in United Spirits  |  The world's largest spirits compan y is in discussions to buy a stake in United Spirits, which has around a 40 percent market share in India.
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Guggenheim Said to Team With Billionaire in Bid for Anschutz  |  Fresh off of leading a group to buy the Los Angeles Dodgers, Guggenheim Partners is joining forces with Patrick Soon-Shiong, the Los Angeles billionaire, to bid for the Anschutz Entertainment Group, Reuters reports, citing three unidentified people with knowledge of the deal.
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Sony Said to Be Poised to Invest in Olympus  |  Reuters, citing three unidentified people familiar with the deal, reports that Sony is likely to approve an investment of roughly $642 million in Olympus this week.
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Glencore Scales Back Investment in Zinc Producer  |  Glencore is revising down the stake it plans to acquire in Kazzinc to just under 70 percent, a move that could reassure credit rating agencies as the trading firm looks to take over Xstrata, Reuters reports.
REUTERS

Groupon Moves Into Restaurant Reservations With Savored Deal  |  As Groupon continues its quest to become a big platform for merchants, it appears that the online coupon purveyor is moving into restaurant reservations - and a little into OpenTable's domain.
DealBook '

Indian Oil Firms Bid $5 Billion for Conoco Assets in Canada  | 
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Times Completes About.com Sale  | 
NEW YORK TIMES MEDIA DECODER

INVESTMENT BANKING '

At R.B.S., Managers Said to Condone Rate Manipulation  |  Traders and their managers at the Royal Bank of Scotland “routinely sought to influence the firm's Libor submissions between 2007 and 2010 to profit from derivatives bets, according to employees, regulators and lawyers,” Bloomberg News reports.
BLOOMBERG NEWS

R.B.S. to Cut 300 More Investment Banking Jobs  | 
BLOOMBERG NEWS

Barc lays to Tie Compensation to Societal Goals  |  The chief executive of the British bank said that employees would be paid based on a new metric that will take into account their contribution to society at large, Reuters reports.
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Goldman Sachs Expected to Name Fewer Partners  | 
FINANCIAL TIMES

Chase Customers Found to Be Satisfied  |  A new survey found that only 15 percent of the retail customers of JPMorgan Chase had heard or read about the bank's multibillion-dollar trading loss in London, The Wall Street Journal reports.
WALL STREET JOURNAL

Bank of America Hires Morgan Stanley Off icial  |  Michael Maghini, formerly a director of distribution for the annuity and insurance business of Morgan Stanley Smith Barney, is joining Bank of America Merrill Lynch to run its insurance and annuities division, Reuters reports.
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Investors Treat Nordic Banks as a Safe Haven  | 
WALL STREET JOURNAL

PRIVATE EQUITY '

Mediq Agrees to $1 Billion Buyout  |  The Dutch pharmacy and medical supply company Mediq is being sold to the private equity firm Advent International for 775 million euros, or about $1 billion, The Financial Times reports.
FINANCIAL TIMES

Providence Equity Partners Said to Sell Stake in Fund Manager  |  The private equity firm sold a stake of under 10 percent in the company that manages its funds, Reuters reports, citing an unidentified person with direct knowledge of the matter.
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Bidders Circle Unit of Telecom Italia  |  Clessidra, an Italian private equity firm, said it was among bidders for the media unit of Telecom Italia, The Financial Times reports.
FINANCIAL TIMES

HEDGE FUNDS '

Asian Hedge Funds Lag Rivals Overseas  |  According to the Eurekahedge Asian index, 395 hedge funds in Asia had a return of 1.6 percent this through August, compared with a 3.2 percent gain globally, Bloomberg News reports.
BLOOMBERG NEWS

Seattle Signs Off on Arena Backed by Hedge Fund Manager  |  The Seattle City Council voted to approve a plan to build a $490 million arena after the hedge fund manager Chris Hansen said he would guarantee the debt, The Associated Press reports.
ASSOCIATED PRESS

Man Group Releases Details of Restructuring  | 
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I.P.O./OFFERINGS '

Facebook Shares Tumble 9%  |  Investors digested the Barron's cover story that estimated Facebook's stock was worth $15.
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Guide to Fairway's I.P.O.  |  Want to own a piece of the company that controls the New York grocery store Fairway? According to the risk disclosures, you will have another overbearing landlord in your life.
WALL STREET JOURNAL

Dave & Buster's Sets Range for I.P.O.  |  Dave & Buster's Entertainment, the restaurant and arcade chain, is seeking to sell 7.7 million shares in its I.P.O. at $12 to $14 a share. At the midpoint of that range, the private equity-backed company is set to raise $100 million.
DealBook '

Quintiles Transnational Said to Consider I.P.O.  |  The c ompany, which provides drug-trial services to pharmaceutical companies, was bought in 2008 by private equity firms including TPG and Bain Capital.
BLOOMBERG NEWS

VENTURE CAPITAL '

Twitter Said to Eye Media Moguls for Board  |  AllThingsD reports: “Twitter is now interviewing a series of well-known media players for its board, as the San Francisco online social communications service seeks to increase its ties to the entertainment industry, according to sources close to the situation. And one of the top director candidates is well-regarded Hollywood exec Peter Chernin, said several sources.”
ALLTHINGSD

Former Principal Accuses Pantheon Ventures of Discrimination  |  Carol Foster, a former principal at Pantheon Ventures, sued the venture capital firm, charging that she missed financial benefits and lost sales territory to younger male colleagues, Reuters reports.
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Venture Capitalists Take a Shine to Life Sciences  | 
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Lightstone Ventures Raising New Fund  |  The venture capital firm is raising a fund of at least $200 million to invest in early-stage therapeutics companies, Reuters reports, citing an unidentified person.
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LEGAL/REGULATORY '

A Crucial Witness in Rajaratnam Trial Receives Probation  |  Rajiv Goel, a former Intel executive who leaked secret information about his employer, was sentenced to two years' probation.
DealBook '

Gensler Calls for Overhaul of Libor  |  Gary Gensler, chairman of the Commodity Futures Trading Commission, suggested that authorities should retool or replace the London interbank offered rate.
DealBook '

Discover Financial Agrees to Refund $200 Million to Customers  |  Discover Financial Services struck a settlement with regulators after being investigated over deceptive telemarketing and sales practices, The New York Times reports.
NEW YORK TIMES

Morgan Stanley O rdered to Pay Fidelity in Dispute  |  An arbitration panel told Morgan Stanley Smith Barney to compensate a unit of Fidelity Investments in a fight over a broker who tried to solicit former Fidelity clients, Reuters reports.
REUTERS

Lawyers for Peregrine Founder Oppose Motion to Keep Him in Jail  | 
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