Cairo Association of Teachers - Newsletter

CAT Tracks for January 30, 2009 CSD #1...TAKE NOTE

Two articles from today's New York Times that should be required reading for officials of Cairo School District Number One!

First of all...

CSD #1 stands accused of violating the rights of James Gibson...by refusing to honor a legally binding contract (as later confirmed by an impartial arbitrator) and subsequently RIFing James Gibson when he had the audacity to challenge the District's improper/illegal action. It is also charged that officials of the District went so far to persecute James Gibson by calling potential employers to discourage his hiring...costing him thousands of dollars of compensation.

In fact, James Gibson is suing CSD #1 for violating his civil rights.

And, according to the article below, the heretofore not-so-friendly court system is showing an inclination to side with said claims...

Editorial
Workers Who Speak Out

The Supreme Court issued a strong ruling this week in favor of employees who are retaliated against for complaining about being harassed. The justices unanimously sided with a woman who was fired after answering questions in her company’s investigation of a sexual harassment claim. The ruling should give more employees the courage to speak up when they see civil rights laws being broken in their workplaces.

Vicky Crawford, who worked for the Nashville school system, was questioned by her employer as part of an internal investigation of the system’s employee relations director. Ms. Crawford told an investigator of several instances of sexually harassing conduct.

At the end of the inquiry, the employee relations director kept his job. Ms. Crawford was fired for embezzlement, although the charges against her were not pursued. She sued, charging that her firing was retaliatory.

The school system argued that Ms. Crawford was not covered by the anti-retaliation provision of Title VII of the Civil Rights Act of 1964 because she did not file the complaint against the employee relations director. She simply answered questions that were put to her. Ms. Crawford insisted that her participation in the internal investigation was enough to win her protection.

The Supreme Court has taken a hard line on retaliation against workers who complain of civil rights violations. In 2006, it ruled 9-to-0 in favor of a woman who was transferred to less desirable duties after complaining of sexual harassment. The justices overturned a standard many courts had used that made it almost impossible for workers to win a retaliation case unless they were fired.

This week, the court went further, ruling that even employees who merely answer questions as part of an internal investigation are protected against retaliation. Justice David Souter, in an opinion joined by six of his colleagues, noted that Title VII protects workers who have “opposed any practice” that the act makes illegal. By answering her employer’s questions as she did, Justice Souter said, Ms. Crawford had opposed sexual harassment, and was therefore covered by the law.

If workers had to worry about retaliation, civil rights laws would lose much of their force. The Supreme Court, in its second major ruling on retaliation in three years, has made clear that if employers are going to punish anyone, it must be the employees who break the law — not the ones who speak out against them.

Again, if only...

Link to Original Story

Economy Pinches the Billable Hour at Law Firms

By JONATHAN D. GLATER

Lawyers are having trouble defending the most basic yardstick of the legal business — the billable hour.

Clients have complained for years that the practice of billing for each hour worked can encourage law firms to prolong a client’s problem rather than solve it. But the rough economic climate is making clients more demanding, leading many law firms to rethink their business model.

“This is the time to get rid of the billable hour,” said Evan R. Chesler, presiding partner at Cravath, Swain & Moore in New York, one of a number of large firms whose most senior lawyers bill more than $800 an hour.

“Clients are concerned about the budgets, more so than perhaps a year or two ago,” he added, with a lawyer’s gift for understatement.

Big law firms are worried about their budgets, too. Deals are drying up, and only the bankruptcy business is thriving. Two top firms, Heller Ehrman and Thelen, have collapsed in recent months. Others have laid off lawyers and staff. So cost-conscious clients may now be able to sway long reluctant partners to accept alternatives.

The evidence of a shift away from billable hours is, for now, anecdotal, as few surveys exist. But partners at a half-dozen other big bellwether firms and lawyers at corporations, who sometimes engage outside counsel, say they are more often seeing different pay arrangements.

Mr. Chesler, who is an advocate of the new billing practices, said that instead of paying for hours worked, more clients are paying Cravath flat fees for handling transactions and success fees for positive outcomes, as well as payments for meeting other benchmarks. He said that such arrangements were still a relatively small part of his firm’s total business, but declined to discuss billable rates and prices in detail.

The system of billing by the hour has been firmly in place since the 1960s; keeping track of time spent provided a rationale for the amount charged. In earlier, perhaps more trusting times, firms stated a price “for services rendered,” without explanation.

But one has only to eavesdrop on a table of law associates comparing their workloads to get a sense of how entrenched the billable hour is, creating a pecking order among lawyers, identifying the best as the busiest and the most costly.

With a sigh that is simultaneously proud and pained, lawyers will talk about charging clients for 3,000 or more hours in a year — a figure that means a lawyer spent about 12 hours a day of every weekday drafting motions or contracts and reviewing other lawyers’ motions and contracts.

“Does this make any sense?” said David B. Wilkins, professor of legal ethics and director of the program on the legal profession at Harvard. “It makes as much sense as any other kind of effort to measure your value by some kind of objective, extrinsic measure. Which is not much.”

To be sure, lawyers may be talking a good game but secretly hoping that the economy will bounce back and everything will return to normal, said Frederick J. Krebs, president of the Association of Corporate Counsel, whose members work in the legal departments of corporations and other organizations. He said that lawyers cheerfully lamented the bad incentives created by billable time for years, even as they grew rich from the practice.

“I like to paraphrase Churchill,” Mr. Krebs said. “In all these conversations, never has so little been accomplished by so many for so long. It just hasn’t happened.”

But the crashing economy may achieve what client complaints could not, Mr. Krebs added. “We may well be at a tipping point here.”

Greed may also encourage lawyers to change their payment plans. Law firms are running out of hours that they can bill in a year, said Scott F. Turow, best-selling author of legal thrillers and a partner at Sonnenschein Nath & Rosenthal in Chicago.

“Firms are approaching the limit of how hard they can ask lawyers to work,” he wrote, in an e-mail response to a reporter’s query. “Without alternative billing schemes, lawyers will not be able to maintain the rapid escalation in incomes that big firms have seen.”

A recent study released last year by the Association of Corporate Counsel showed a rise in the number of companies paying by the hour — but that covered the spring and summer, before the worst of the downturn.

Many smaller firms and solo practitioners have long offered to perform services, like mortgage closings, for flat fees. Plaintiff lawyers also often work on a contingency basis, receiving a percentage of any awards.

“What we do in our business litigation is charge clients some kind of monthly retainer, which gets credited against an eventual recovery,” said John G. Balestriere, a partner at Balestriere Lanza, a Manhattan firm with five lawyers. “It’s a lot easier for us to tell a client, ‘We want to do this, we want to push for summary judgment,’ ” he said, and so avoid a lengthy, costly trial.

When not paid by the hour, lawyers’ approach to their work changes, said Carl A. Leonard, a former chairman of Morrison & Foerster who is now a senior consultant at Hildebrandt International, which advises professional services firms.

In one case, he said, Morrison & Foerster negotiated a fixed fee for defending a company in court, covering work up to the point of a motion for summary judgment.

On top of the fee, if the case settled for less than what the company feared having to pay if it lost in court, the law firm got a percentage of the amount saved. The arrangement made sense when the goal was to resolve the dispute quickly, Mr. Leonard said.

Lawyers on the case negotiated a settlement for much less than the client’s worst-case number, Mr. Leonard said. “The effective hourly rate was something like 150 percent of our hourly rates,” he added. “We made money, the client was happy.”

In litigation, firms that charge by the hour can suffer if they are too successful and end a lawsuit — and the stream of payments from continuing work — too quickly. One law firm that recently collapsed, Heller Ehrman, was hurt in part because a number of cases had settled.

That collapse highlights the risk to law firms experimenting with other payment arrangements: If lawyers set too low a price, they lose money. Many lawyers may not be good enough businessmen to pick the right price, said Mr. Krebs, of the Association of Corporate Counsel.

“The difficulty is, we don’t really know what it costs us to do something,” he said. But the biggest stumbling block to alternative fee structures may be the managing partners at law firms, who will have to overhaul compensation structures to reward partners and associates for something other than taking a long time to do something.

“I don’t think law firms have completely come to grips with that issue,” said J. Stephen Poor, managing partner at Seyfarth Shaw in Chicago. “But they need to start coming to grips with it very quickly.”