For White-Collar Defense Bar, It’s Happening in Vegas

LAS VEGAS â€" In 1986, Raymond Banoun, a Washington lawyer, organized an annual meeting for the white-collar criminal defense bar. He picked a warm-weather locale for the event, reserving conference facilities at the Boca Raton Resort and Club in Florida.

But the resort contacted Mr. Banoun on the eve of the gathering and said it couldn’t hold it because it did not want to be associated with discussions of criminal activity. They quickly moved it to Miami, and 75 lawyers showed up.

What a difference a few decades make. This week more than 1,200 lawyers from across the country convened at the Cosmopolitan Hotel in Las Vegas for the American Bar Association’s three-day White Collar Crime National Institute.

“I’m amazed at what it has become,” said Mr. Banoun, a partner at Cadwalaer Wickersham & Taft. “It really has become an annual reunion of our profession.”

Over the last 20 years, there has seen an explosion in white-collar criminal defense work at the country’s largest law firms. Representing businessmen and political officials in hot water was once considered déclassé, but today every large corporate law firm has a substantial practice focused on the lucrative work.

Government lawyers have also become more involved in the conference over the years. Numerous federal prosecutors and securities regulators attended this year’s event, including Robert S. Khuzami, the outgoing director of enforcement at the Securities and Exchange Commission, who spoke at a session on insider trading.

While the lawyers were ostensibly there to attend panels and discussion groups on hot topics in white-collar litigation, the event is largely a schmooze-fest. In the evenings, the lawyers party hop, attending law firm-sponsored parties held up and down the Vegas strip! . On Wednesday night, a group of Philadelphia-based law firms hosted a bash at the Hyde in the Bellagio hotel, while the law firm Baker Botts served sushi in a private room at the Mandarin Oriental.

There are also privately organized dinners, including events for defense lawyers who worked earlier in their careers as federal prosecutors. On Thursday night, the United States attorney’s offices in Manhattan and Brooklyn are both holding alumni dinners. The Manhattan crew is eating at Rao’s at Caesar’s Palace, while the Brooklyn crowd has a reservation at Comme Ça in the Cosmopolitan. Also invited are current prosecutors in the respective offices.

The cozy relations between government lawyers and the white-collar criminal defense bar has come into focus with the nomination of Mary Jo White, a partner at Debevoise & Plipton who has rotated between government service and private practice throughout her career. With her representations of country’s largest banks, including JPMorgan and the board of Morgan Stanley, consumer advocates and some legislators have expressed concern that she is not the right person to vigorously protect investors’ rights.

Michael Smallberg, an investigator for the Project on Government Oversight, a consumer advocacy group, said in an e-mail that it was “illuminating but not surprising” to see government and defense lawyers mingling in Nevada. “What happens in Vegas is the same thing that happens here in Washington: the blurring of lines between the regulator and the reg! ulated,â€!  Mr. Smallberg said.

Others did not see a problem with prosecutors and regulators attending a conference along with criminal defense lawyers.

“I think casual relationships across the table actually reduces the cost of enforcement and compliance,” said Daniel Richman, a former federal prosecutor and law professor at Columbia Law School. “The fact that you had drinks with someone in Las Vegas won’t lead you to give away the store in negotiations, but you’ll be more likely to rethink what might otherwise be a dumb subpoena.”

Judge Jed S. Rakoff, a federal judge in Manhattan who in recent years has presided over numerous high-profile white-collar crime cases, was the conference’s keynote speaker.

As lawyers picked over “Tuscan stuffed” chicken breasts and strawberry mascarpone parfaits, Judge Rakofflambasted the federal sentencing guidelines.

The judge has long been a leading critic of the guidelines, which he says lead to overly punitive and irrational sentences

“My modest proposal is that they should be scrapped in their entirety and replaced with a non-arithmetic multi-factor test,” Judge Rakoff said.

Among the prominent cases that Judge Rakoff has presided over was last year’s insider trading trial of the former Goldman Sachs board member Rajat K. Gupta, which ended in a conviction. On Thursday morning, Reed Brodsky, one of the federal prosecutors who tried the case, and Gary P. Naftalis, the lawyer for Mr. Gupta, sat on a panel and discussed their trial.

Mr. Naftalis explained that it was difficult representing a corporate executive in the post-financial crisis climate. “There are challenges representi! ng a busi! ness person in this toxic atmosphere,” he said. “You don’t start with a particularly level playing field.”

He also mocked the Federal Bureau of Investigation’s decision to use Michael Douglas - who played the fictional white-collar criminal Gordon Gekko in the movie “Wall Street - to star in a televised public service announcement that was meant to root out insider trading.

“I didn’t know how to counter that,” Mr. Naftalis said. “I thought of calling Kirk Douglas or Catherine Zeta-Jones, but they didn’t take my calls.”