Stealth Layoffs And Sam Alito On Tilt

0:11Hello, welcome to another edition of Thinking Like a Lawyer. I'm Joe Patrice from Above the Law. I'm joined by my colleagues, Catherine Ravino and Chris Williams. And we are here to discuss the big stories from the week that was in legal. We will, however, begin with a little bit of small talk, which we shouldn't. I guess we're recording this a little early, so we can't toast, but we should toast with our Kash Patel bourbon. Is that any bourbon? No, he has. It is Woodford Reserve, which is the answer to a trivia question on Above the Law this past week. But also it is a bottle of Woodford Reserve that has been especially engraved with the logo of the FBI, the stylized version of Kash Patel's name, meaning that there's a dollar sign in lieu of an S in Kash.

1:05And number nine, because he's the ninth FBI director, because this is the world we live in. Yeah. Well, I will say I do I do think it is cool when people get like commemorated things like one of the coolest things I remember about Obama besides the bombing children thing was like the bomber jacket that he had that had the nice little 44 on the wrist of it. Yeah. So, you know, I respect the nine aspect of it. If you're going to get a personalized thing, have the have the number of the thing that you are on it. I do think the dollar sounds a little tacky. Yeah. And I think that and certainly this was based on reporting out of the Atlantic.

1:42And one of the sort of the thing that makes it awkward, of course, is that this is somebody who's been reported is spends a lot of time, you know, inebriated, according to other folks is reporting. And there's also, you know, a code of conduct at the FBI saying that, you know, there should never be an appearance of, you know, inebriation, et cetera, et cetera. And here he is giving out full bottles of bourbon. And one of the lines in the original Atlantic was, oh, does anybody ever recall another FBI director having personalized bottles of bourbon? And the response from like a career FBI agent was laughter.

2:23Yeah. I mean, it is objective, like, like, you know, like Chris said, it's objectively cool to have little commemorative things. That said, I don't think you should be using the logo of a government agency that taxpayers pay for that you're in charge of on your little commemorative thing. And it definitely shouldn't be a bottle of bourbon when you're, you know, running the FBI. Yeah, I would say Woodward Reserve. This is a great opportunity to get Jagger Boozer. You need to get Pete Hexet and then have a series where you just have it called The Liquor Cabinet. Yeah. Listen, I think that this is a great retirement gift for somebody.

3:01Right. Right. Who is on their way out and is not currently in charge of, you know, criminal law enforcement in this country. When you're not worried about whether or not they're having a drink in midday, you know, because they're retiring. I think it's a great option for something like that. This also reminds me of the cold opening this past week on Saturday Night Live, which it featured prominently the bottle of bourbon and also my new drink order. Yes. Which is the six, three decision, six Bud Lights and three shots of bourbon. Of J-Mo. Of J-Mo. You're right. There you go. But yes, no, look, I don't, the bottle situation, like I said, it's not so much that that's a problem, but it speaks to a broader judgment issue, right?

3:45If you don't understand why this would be a problem, then that suggests that you might not have the temperament to do this job. Let's just put it that way. One last small talk thing. Are you a renowned hot dog eating champion yet, Joe? You know, I haven't checked whether or not that's taken off yet. But no, that's a reference to a story that I – a joke I made in a story or a reference, I guess, made in a story about AI, which is there was somebody who recently, to prove how bad those AI summaries that Google gives you are, just put out some fake stories that he was a hot dog eating champion and then found relatively quickly that they got worked into those official summaries, even though it was completely untrue.

4:36But yeah, no, so I threw that out there as a gag. I didn't put as much effort into it as he did, though. So my guess is it doesn't. It hasn't registered my success yet. Oh, well. All right. Well, we have... Time for some big talk. Yeah, no, it is time for some big talk. In particular, our big talk is that we are unfortunately talking about layoffs again. Yeah, recession indicator, big loss style. Playoffs? What are you talking about? Playoffs? Are you kidding me? Playoffs? Yeah, well, that's our playoff soundtrack, which we play for layoffs. I do enjoy that. But yes, there are two big stories that actually came out.

5:23We broke the same day, first of which is Paul Weiss, which, you know, we've spent a fair amount of airtime talking about the travails at Paul Weiss over the last couple of years. But these are where we characterize as stealth layoffs, meaning, of course, that there's no official layoff that the firm is engaged in. And instead, they couch it in terms of performance review. Mind you, the associates, there's a shocking number if they're just performance related, right? Because you don't generally get rid of five to 10 people in the same department that are similar years all at one go if they're performance related or strictly performance related.

6:05But it's also, you know, folks that have had great reviews up until all of a sudden the economic conditions change. And then all of a sudden they have kind of an intense problem that, you know, that small mistake that you made in some brief is enough to start that hill rolling down and you find yourself out of a job where, you know, if the economic conditions were different, you would be joyfully promoted with the rest of your class. And we've talked about stealth layoffs a lot at Above the Law, and I think that they are one of the most awful, insidious things that happen at Big Law. It's bad, and it's a little, you know, a little gutless.

6:46It's a lot gutless. A lot gutless, yeah. It's a lot. So we have – Paul Weiss obviously is the one that we're talking about the most. They're the ones who are very upfront that – well, not upfront, the opposite. it. They're the ones who are out there saying these really were performance, even though it seems from the chatter that there are a lot of people involved. And it's it's weird when, you know, there's their litigation, too, which is the real right to me, the sticking point. We've covered extensively the amount of litigation talent in the partnership and senior level that has exited the firm in the wake of its deals with the Trump administration.

7:26And, you know, in the wake of the Scott Barche administration of the firm that, you know, they're focusing more on the corporate side as opposed to litigation. There's a ton of talent on the partnership level that's gone. And all of a sudden, all those associates in litigation that were hired, assuming a lot more work was coming in the door in that department, all of a sudden now there's performance issues. It's questionable. It's also such a weird move to make because it's just like a cell phone that you've done a really bad job of hiring. If it were true, you're like, oh, you know, the issue is we just we did some hiring and it turns out we were just 25 percent wrong on everybody we hired.

8:06Like, that's ridiculous. All third to fourth year is weird. Yeah. It makes no sense. So, yeah, it's bad. But this wasn't our only layoff story. Yeah. McDermott, Will and Schulte were very upfront about their layoffs in comparison. And, you know, they had recently, you know, it used to be Schulte Roth and McDermott McWill and Emmer and they came together. They're a new firm. And there are redundancies that happen when there are these sorts of mergers. And while, you know, staff is usually bears the brunt of those kind of redundancies. They also happened on the in the associate ranks. They were very upfront about what happened, that they, you know, grateful to the associates.

8:47Their work was great. It's not their fault. But, you know, bigger firm means we don't need quite as many people doing the same job. Yeah, that has historically been a side effect of these sorts of mergers that nobody wants to talk about. Everyone gets really excited about how you put two things together and now you're in the AMLA 50 or higher, but nobody really talks about the, especially in big markets. The most successful mergers on a lot of levels are where you are taking a couple of regional firms from different places and there's not a lot of overlap. When, though, you take big firms that have, you know, both have big New York offices, somebody, something's going to give.

9:34Yeah. The thing I don't get, like Catherine was saying earlier, it's not that hard to triangulate when layoffs are happening, especially when you have things like Fishbowl where people are talking to each other, even if there is some sort of veil of anonymity, you notice So after a while, the trends and sites like us where we encourage people to send in tips are encouraged to write about it. Why not just be honest like McDermott was? What's the incentive of lying about doing layoffs when you've clearly done them? Well, I do think that they're hoping that mainstream media doesn't pick it up. And the story, I think particularly for a firm that is already dealing with some PR hits, is that they don't have the law school students talking about it.

10:11Right. And they kind of avoid that bubble. I think that's part of it. And I think that it very much depends on the notion of shame that these are – listen, people who are in big law, people who have excelled academically throughout their entirety of their lives, and all of a sudden to say, you, you're terrible at your job, you need to be gone, is a big ego hit for folks who aren't used to that, right? So they are depending on that kind of shame and failure to keep – for people to keep quiet. Yeah. No, and it used to be a lot easier for them. Sure. I think the existence of things like Fishbowl and all have nurtured a generation that's more willing to be open about these things happening to them.

10:52But I think during, for instance, the big recession, you know, at this point, however many years ago that was. 2009, yeah. 17, right? Yeah, right, yeah. But back then, it was very true that nobody wanted to talk about these things because you felt like it was you, not the conditions. And I think that there's also an amount of self-delusion, too, at the firms, because I imagine at, I don't know, I don't know that it's exactly how this happens at Paul Weiss, but at a firm X, they're saying, well, it is performance-based because it's not like we're cutting 10 % across the board where we need to cut 10%, so we're cutting the worst 10%.

11:30Right. So there's some sort of arbitrary justification that is performance-based in some way. But to be very clear, if they didn't have those same economic pressures, everyone would have been promoted and gotten their full bonuses. Right. Yeah. No, it's bad. It probably will get worse. Do you think that other firms will do it get worse or more at these firms? Other firms. I think that there are unique conditions in both of these situations that make litigation for what's all going on at Paul Weiss and the merger here. That said, we are looking at, in particular across litigation everywhere, we've got a federal government that is not bringing prosecutions that is really bad for the white-collar side of the work.

12:15We have antitrust being basically non-existent. And the government is doing a lot to make litigation hard, and that will have an impact at some point. We have the AI issue on the side, too. I think these are kind of early bellwether canaries, sort of. I also think the other big one that will be impacted is the size of their incoming classes. True. I think that's another sort of indicator to look for in the future. All right. Well, let's take a break and come back and talk about how some lawyers can make some money on the side.

13:14to develop your litigation skills and build your practice. I hope you'll check out Litigation Radio and join the ABA litigation section for access to all of the resources, relationships, and referrals you need to thrive as a litigator.

13:30All right, so if you think that your job in legal may be jeopardized, there is a way to make money on the side, insider trading. Okay, don't do that. That is terrible advice. Wait, is this a Kalashi ad? No, there was a major story last week that spanned the world of finance and big law. Some 30 individuals, corporate attorneys and various finance professionals that were erected in connection to an insider trading scheme. At least two folks have been identified and they are both attorneys. He is Niccolo Notra, Notra, notra, Fitch Chan. I'm not sure how to say his name, but Yale Law School graduate who was a serial big law jumper, went from firm to firm to firm and reportedly used information that he found at firms in order to make some trades that were wildly successful.

14:28And he and his partner, another attorney who was in, I think, a small law firm, they recruited a network of other people that they went to law school with, that they went to undergrad with, that they knew from various deals in order to get this information and kind of farmed it out into larger groups of folks in order to avoid being caught. We also have information that a Wilkie Farr counsel, now former, appears to be cooperating with the government. There was another document that was also unsealed at the same time that the bigger indictment came down that identified this individual. And it was since been pulled from the docket after news outlets realized that this person was named.

15:15So makes it pretty clear what's going on here. I believe that he went to law school with some of the other folks. And that's how it kind of got appears to be how he got pulled into the scheme. Look, I mean, this is one of the first like I was on the litigation side. But one of the first things that we were told when we showed up at a big law firm was not to do exactly this. Well, this is exactly what you're not supposed to do. Yeah. And and even though I was on the side where, you know, on the litigation side, by that point, the deals have pretty much gone south. So it's all kind of public. But, you know, you have access to document management systems and stuff like that.

15:55You can learn things. And so you were told, definitely don't do this. We were all told not to have individual stocks at all to do all of our investing with mutual funds for that reason. And it's very clear, again, because he appears to be cooperating with the government, but Gershowitz, that's the person who appears to have turned the amount of money. It's because they have this kind of larger network. And he really told them a lot of details about how they tried to evade detection for as long as they did. But it would be like he found something out about a deal at his firm. And then it went to like two layers of extended networks of folks who then purchased between two to three million dollars of stock in that in that particular deal.

16:39And he wound up with a, you know, thirty thousand dollar kickback as a result. Yeah. Now, I mean, I will say 20 years ago, The New York Stock Exchange claimed that they had sufficiently well-developed tech to catch people even if they were using intermediaries and this sort of thing. It would seem to me as though that was perhaps a little overstated if this was able to go on for as long as it was years after the fact. Because all of this is exactly the behavior that they said we are very well equipped to catch. It definitely is going on for a number of years. One of the other specific examples that is involved in the indictment specifically is the iRobot deal, which happened back in or didn't happen, but was announced back in 2022.

17:30So you're talking about a number of years that this all happened and went down. And I'm sure there's stuff that even dates further back when we start of piecing it together from the information that's in the indictment. I will say this is a good time to get caught as part of like a major insider trading scheme because whatever you're doing fails into comparison with whatever happening with the administration. So you aren't a big name. Look, you know, buying$900 million in oil shorts right before trying to claim that the strait is closed again or whatever is going on. There is obviously not going to be any prosecution of that.

18:09It almost feels as though this is the sort of thing that they're going to bring charges on to, you know. To show, oh, see, we're not being stopped on time. Right, right. Yeah. Now, if I were advising any of these people, which I am not, I think this would be a good time for all of them to write letters to the editor of their local newspapers explaining how Donald Trump is great. And they have always loved him. Get on that pardon train as quickly as you can. And Yale Law grad, not Harvard, so not woke, and there's potential there. One of them was a Columbia Law School grad. New York. Gotta play those associations while you can.

18:49And they can definitely afford the pardon. Yeah. So, all right, well, let's take a break here, and we'll be back in a minute. All right, the other big event of last week that spanned several stories before it was all over is the Supreme Court basically struck down functionally the Voting Rights Act, of course. So they, you know, they didn't really strike down Section 2, but they functionally struck down Section 2. Yeah. And in doing so, allowing Louisiana to get rid of its majority minority districts, because as they pointed out, racism's over. The result of that was every state in the South immediately moving to get rid of their black majority districts, which somewhat suggests that that might not have been factually true when they said that racism was over in the South.

19:42I tried explaining what this outcome meant to, I was at a derby party and they were like, well, why don't we just have it so that we have a, everyone gets an equal vote. And I was like, well, one, that's called actual democracy rather than representative democracy. And the reason we don't have that is because of white supremacy. So I had to explain to him why there was a racial animus behind this. Yeah, I mean, the purpose of the Voting Rights Act and this whole line of cases is that even if you give the universal suffrage, if you organize it in such a way that that vote is consistently placed such that it always will be uncounted or overwhelmed by other votes, it raised the question of whether or not this defeats the right itself.

20:29And that is why we have all these laws, which we no longer appear to be applying. But to the point about whether or not this was, you know, this was true or not, the results of the last week suggest that clearly, clearly racism wasn't over. And it was it was pretty clear, you know, when you look at the opinion and find that Sam Alito, who wrote the opinion, included some studies to back this up. The Guardian did some research and discovered that those studies were fake and thrown in the opinion. That's a bad look. They were based on real numbers, but the studies themselves fudged a bunch of stuff to get the results that they certainly wanted.

21:14The stuff comes from the DOJ's brief on the matter. Unsurprisingly, the DOJ inserted itself, even though theoretically the DOJ's role would be to insert itself in this case to defend the law that's on the books. They chose to do the opposite and to attack the law and included these fake studies. Leto then dutifully copied them because they helped his reverse engineering of the opinion and they got caught. This is, you know, not the first time this sort of thing has happened. You know, the we had the case, the wedding designer case a few years ago to strike down discrimination laws. It turned out that that was all fake.

21:58The whole factual conditions behind it was like the whole scenario was made up. This should be a bigger deal. Like, I mean, I know you write about it. We write about it. You wrote this particular story. But I know that we talk about it. But people should be outraged by this. Yeah. And then the chief justice has the absolute positive audacity to get annoyed that people think that the court is a political actor. Well, and that's true. And I will add, so this kicked off what we usually get after a decision like this, which is the PR tour. So we had Roberts go out and say that he's very disappointed in everybody for saying that the Supreme Court is political as they just rewrite the election laws in the middle of an ongoing election in Louisiana.

22:48Then you have Barrett made similar remarks about how the court isn't particularly political. Well, Gorsuch won't go that far, but is hawking a children's book and talked about how, you know, made some vague we're all in this together kinds of illusions. This is what happens after an opinion like this. There is a drive by the people behind it to try to shore up the idea that they are not actively political, despite, you know, what we're all seeing. Unfortunately, you think they pull the names out of hats? because people get assigned to do it yeah because the thing that comes to my mind is always katherine's write-up of uh amy corney barrett political hacks saying we're not political hacks and i was like we played this game before we play it every we play it every year around this time uh this this particular issue obviously has kicked off all of these attempts to redistrict tennessee just voted to get rid of their stuff uh it seems like they may have they may run afoul of a problem because there's apparently a state law in Tennessee that bans that kind of redistricting that they originally said, well, we will strike down that law first and then redraw the maps.

24:03And they apparently forgot to strike that law down. So that one may still that one may still have a couple more hurdles to go. But yeah, there this this is what's going to happen. It is all based on a premise that was not true, and then they had fake cases over it. The only other angle on this story that I thought was interesting was there was a back and forth between Justice Jackson and Alito a few days later about a different procedural issue that I thought was fascinating because it really speaks to – we've talked on this show before about Jackson's idiosyncratic approach to things. Which gets her all kinds of criticism where people are like, she's talking about all this stuff that doesn't matter.

24:50She's so dumb, which in reality, what she does when you read the context is she's a big fan of throwing people off by going after something that seems to be irrelevant. Then slowly getting extracting the concessions she needs to draw it back to where it was. And this seemed like another example of that just between the justices. There was a there is a rule that the Supreme Court has that their decisions don't become final for, you know, another month or so. The court decided to unceremoniously and without any real prompting waive that rule in this instance. And she said, I don't understand why you're waiving a rule.

25:31And Alito lost his mind screaming and ranting in this opinion about how this is so ridiculous. Why should we not – why should we be bound by this? It's such a small procedural rule. But as he does this, he kind of plays into it. As he explains how no one should be concerned about this, all he manages to do is really draw out the arbitrariness of how this particular rule they're going to ignore just because it happens to be valuable to their political goal. Wait, what about the shadow docket? Well, I mean this is not a shadow docket issue. you but yeah but yeah procedure to do things that was I was joking oh yeah yeah no I mean it plays into all those tools yeah no definitely the but yeah I really thought this was another episode of her unique style just like I'm just gonna kind of sit on this thing that seems like it makes no sense and just watch you flounder is that her colleagues are still falling for it right yeah No, Roberts didn't.

26:34Well, sure. Roberts was like, whoa, whoa, whoa, I see what's going on here. Fair. Some of her colleagues are still falling for it. It seems odd to me that they haven't gotten the memo. So is Alito joined by Gorsuch and Thomas? And I mean, I'll go ahead and say that if you were to guess the guys on the court who have the biggest egos. I mean, you know, like, and that's a lot of what this was just like you could have just as easily let this dissent sit there and say, well, too bad. But they they couldn't let her have the last word really, basically. And that's and that was the trap. My thing is, I really don't understand why the justices play the cutesy game of, you know, we all really get along.

27:25I'm not sure what interest that narrative serves. and I think this is one of those examples where like just a small thing of a justice saying hey we're taking a break from convention here becomes an argument it's like y 'all aren't as cool as y 'all pretend to be well and and I do know the narrative that it serves so that's the that's the one that allows the current majority to take unprecedented political action and then write it off as oh no but we all get along uh I but you're right I don't don't understand I would I agree, but I feel like the time I heard it most recently was from Sotomayor, wasn't it?

28:01Yeah. So it's not just this thing that's coming from the majority. Well, right. And that's what I was going to say is that what I don't understand is why the liberal justices play along with it. And it seems as though Jackson has this kind of unique way of not playing along without being overt about it because of the kind of roundabout way that she goes about to handle things. But Sotomayor called out the Kavanaugh situation and then ended up apologizing for it, for something that was entirely reasonable and factual. So there was nothing to apologize for. But there we are. The veracity of it required apology.

28:43Like you're not supposed to speak the truth. Come on. Yeah. We're judges. But no, I do. I have wondered for a while when we're going to see justices be a little bit more straightforward about how things are broken. Yeah. And when you're in this position, there really isn't an advantage institutionally to staying silent about what's going on. And, you know, I think I have long accused Justice Kagan, who I think is very good at what she does, but I've accused her long term of taking. Of finding instances in which she finds common ground with the majority, and then it almost as though she's setting it up to be like, well, I kind of agreed on these grounds here and, you know, you're going to you're going to return the favor later.

29:33and uh they don't uh because that is not that is not the kind of collegial game that they are playing uh and i just i feel like she she has to be too smart to continually fall for the charlie brown kick the football setup yeah like the decorum is not going to be reciprocated there's not going to be any point where a kavanaugh apologize if you're saying hey racial discrimination is cool actually like it's not but you have to apologize for saying that hey that's what he said and uh i don't i don't get why we why they they're too smart to play the game i don't know why they still do it yeah all right well i think that brings us to the end here thanks everybody for listening you should subscribe to the show to get new episodes as they come out leave reviews stars all that sort of stuff uh you should be listening to the jabot catherine's other podcast i'm a panelists on the Legal Tech Journalists Roundtable.