Weil Get You And... Then Maybe You'll Go To Cravath

0:11Hello, welcome to another edition of Thinking Like a Lawyer. I'm Joe Patrice from Above the Law. I'm joined by Kathryn Rubino. And we are here to talk about the big stories from the week that was in the legal market. But first, we're going to a little bit of Small talk. Yeah, how are you doing?

0:30Joe Patrice:I'm doing all right. How about you? I mean, I had heart surgery last week and I'm okay. Well, listen, you've already talked about the heart surgery. What else do you want from LA? Yeah, but now I'm on the other, you know. Are you recovered? Is that what you're trying to tell me? I'm more or less recovered. You're not going to use it as an excuse or a crutch over the next week or so? I will certainly use it as a crutch for as long as possible. But yeah, no. So, but yeah, no. Last week I was still very much sore from the process. But now, you know, it's going away. Heart surgery is allowed to hurt.

1:00Joe Patrice:Yeah. I don't think you have to downplay that. Yeah. No, I mean, all good on that front. I didn't really have anything to do this weekend. So I watched sports. And that was a lovely, lovely distraction to get through things. We'll actually talk a little bit about that in this show. Because one of our topics will touch on sports. I missed some sporting games this weekend, but that's all right. It was my birthday. Oh, happy birthday. Thank you. Yeah, I did a drag brunch that reenacts the Errors Tour, which was ridiculously fun. It was just a joyful, wonderful experience. Nice. If it comes to a town near you, I highly recommend seeing the Errors Tour drag version.

1:54Joe Patrice:It was... Our listeners in Texas will not be seeing it, I'm sure. Well, they do travel everywhere. No, but didn't they? But that was the whole thing. They banned that in the state. They banned drag shows, yeah. Yeah, they put a... I believe my showing was the 162nd edition of the show, and they're scheduled to go through December. Okay. And they travel kind of everywhere. I think before that they were like in Ohio or something like that. Till December 13th or whatever. That is till his birthday. You're correct. Yeah. See, you know things. I know a lot of things. Words of Tyrion Lannister. That's what I do.

2:34That's what I do. I drink and I know things.

2:35Joe Patrice:Yeah. It was just, it was absolutely joyful and delightful in every conceivable way. And I would highly recommend the show. And it was just, it was really fun. It was like five hours and I just had a good time. Didn't help my sore throat though, because I did scream sing a lot of lyrics. Okay. Well, good to have you back then. And good that your throat is working well enough to do the show. Like sometimes. I mean, I definitely have a tickle, but you know, I'll get there. It'll be okay. All right. Well. Out of my control. That's the end of small talk. You hit the button. It is solely in your control.

3:14You can't prove that.

3:15Joe Patrice:I mean, I saw you physically hit the button. I was doing something else. I can't express how little that's true. So let's talk about while. I mean, we've talked about this, you know, a lot over the last week. We've had a few stories. Indeed. There's more happening. There's so much more happening. Yeah. So let's get into what's going on with Wild Gotchal. Yeah. We talked about it last week. But as a quick reminder, while Gotchal lost its biggest rainmaker to the lateral market, the white hot lateral partner market, Mike Aiello took his book of business and I believe five attorneys partners to Cravath.

3:56Joe Patrice:Cravath has had a number of pretty prominent departures as well. So in a lot of ways, this is a restock for them. I think that people sometimes forget that the sheer number of Cravath partners that have departed since 2021 or so is not tremendously large. It's about 28 or so. But they only have like 106 partners, right? Right, right, right. So it's a much bigger deal when they lose partners. So I think that that is definitely part of it. And the reason why I highlight that 2021 date is because that's when that's the year that they got rid of pure lockstep compensation. It's still a version of it, but they created sort of an extra bonus pool that they could play with in order to give their big rainmakers a bigger payday to prevent them from leaving on the lateral market.

4:52Joe Patrice:And yet, despite that change in 2021, they still have lost a bunch of people. Yeah. So whatever change they made, apparently it's not been enough in order to stem those departures. So that is very real. And they lost a number of very prominent partners, particularly in the corporate space, which I think is part of the reason why Mike Aiello was an attractive candidate for them. Yeah, it kind of seems like this is a situation where both firms seem happy with what happened. While seems to be kind of relieved that, you know, for personal reasons, and Cravath seems happy to have the business. Aiello was a very polarizing figure at the firm.

5:29Joe Patrice:He was against a lot of the growth opportunities that Wiles seems to be pursuing. He called a fellow partner disloyal for wanting to open up a West Coast office. Instead, that person went to, I believe, Wilson Sonsini. And so there was a lot of, I think, personality discomfort around Aiello. At least that's what all the insiders seem to be talking about. But it's also interesting that ILO went to Cravath besides just sort of the pure, well, he has a big book of business aspect to it. Because one thing that the firm's statement really called attention to when they were promoting the new hire was that ILO shares the values that have long defined Cravath.

6:19Money. Oh, no. Apparently.

6:21Joe Patrice:Well, apparently, because Aiello was very much implicated in the 2018 Me Too scandal that shook up CBS News. Right, right. CBS News. He wasn't implicated in a Me Too scandal. The Me Too scandal at CBS News, he was deeply involved in. Correct. Yeah, that's clarifying. Yes, that's a much more fair way to put it. Aiello, despite being an M &A attorney, was asked on behalf of CBS to investigate the allegations or potential allegations against Les Moonves, which consisted of a single 20-minute phone call. Moonves disclosed that a woman had filed a police complaint accusing him of sexual assault and described an additional encounter with an actress where the actress ran out of the room.

7:08Joe Patrice:ILO reportedly didn't ask for names or more details and told the board that there'd been some rebuffed advances, but that CBS had nothing to worry about. They, in fact, had stuff to worry about. And there was several lawsuits about all of this. And so this has been out there since 2018. More to the point is that there's a book, Unscripted, that was written about it, one of the co-authors of which, Stewart, is a Kravath alum. so certainly something cravath was aware of and yet calling attention to his values yeah that was uh that was probably a comms uh a comms fail um yeah yeah neither way oh yeah so not great uh but obviously who knows when people move uh sometimes uh it comes with you know greater restraints uh i don't know uh but you know it's interesting and i think Like, Cravath, you know, I think they desperately want to get more of this particular slice of business.

8:07And Weil is moving on. Now, that said, there's more reports now of what's going on with Weil.

8:15Joe Patrice:Yeah, there'll be another story about this before you are able to listen to this podcast. But according to reporting at Bloomberg Law, Weil's in the market for a merger. Their statement, Wilde's statement about it is that they are not in any particular talks with any particular firm or anything like that. But as always, we're keeping our options open. We're always looking for advancements to expand, blah, blah, blah, blah, blah. Maybe they want some West Coast business. Maybe that's exactly what they're looking for. Whenever I hear these sorts of things, there's a bit of a musical chairs. Yes.

8:48Merry-go-round, musical chairs kind of. And the music having stopped because I said, you know, we talked about the past run of mergers, like the Catwallader run. I was very like, it's not going to be an American firm. There were some flirtations with American firms, but just ultimately the international firms are the logical pair here. And, you know, a lot of them have already paired up. And so now where do you go with this? Is it for a while? Is it some sort of a West Coast centric large firm? Maybe that is part of this. But yeah, I don't know. It's a it's a weird time to want to be in the market to merge at that level.

9:33I think if you're lower in the AMLA 100, there's peer firms that can become an addition of strength. But when you're already a global law firm, it gets a lot harder to figure out who the natural and logical merger partner is. Yeah.

9:51Joe Patrice:And there's a number of other departures at Wild too, also in the M &A space. Their UK M &A lead also left the firm recently, which obviously was likely in the works well before the Aiello move was announced, obviously. But, you know, there's just a lot of movement that's happening. And I think that the death of lockstep across the industry is largely responsible for that. People who leave lockstep or even less only slightly modified lockstep firm are getting significantly higher paydays at their sort of competitor firms. They're getting two, three times what they had been making. So, yeah, of course, of course, they kind of have to do that.

10:33Joe Patrice:as sort of like logical actors in this scenario. Well, and this is going to become, I think this is going to become more aggressive as if the AI industry survives, which we'll talk more about, but assuming it continues to grow and displace some of the key junior tasks, the real differentiator among firms is going to start to become very senior leadership and book of business and relationships based. And when it becomes that, you're going to be in a position to pay whatever you can to bring those people in, especially if the leverage model isn't where the money is getting made anymore. It becomes much more shifted toward that top.

11:17And yeah, so I think we could be in for a real Wild West for a while until things shake out.

11:24Joe Patrice:Yeah, I think we are dead in the middle of this Wild West moment. And I think that the wild cravath back and forth is only one story. I mean, Wachtell lost a bunch of people. Yeah, and we talked about that. And only one of them to making out with an associate. But the others left for lateral reasons. Yeah, it's a wild time. Wild time to be a partner in big law. All right, well, let's take a break, and we will be right back and talk football-ish. Every legal professional wants to put their clients first. but billing, payments, and case management get in the way. 8AM is the professional business platform that helps law firms get paid faster, manage cases more easily, and grow with confidence.

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13:07Joe Patrice:i have a question for you yes are you ready for some football yeah no yes so this is our football content but it's that it's not quite football content because uh i wrote an article last week that I like to believe I have been describing internally as my magnum opus. It is an article about people using chat GPT for legal advice, but also you love to write that. Exactly. Yeah. But also along the way, it's about college football, open weights, bottles, the AI hyper doom scenario that's going around the protect college sports act, Ted Cruz and ESPN. And all of these are involved in this article. I managed to, I think, string them all together.

13:52And so it's one of my favorites. And this was about the.

13:55Joe Patrice:OK, so why are we talking about college football in a legal publication? All right. So this last weekend, LSU played Ole Miss. There was a lot of drama. They lost to LSU. Let's say this correctly. LSU lost to Ole Miss. But going into this, there was a lot of drama around this because Ole Miss historically Berkeley has not been as successful as some of the other teams in its conference. It had risen to the level of being a real challenger under the coaching of Lane Kiffin. Lane Kiffin then right before they went into the playoffs last year, decided to quit on the team and move to LSU. What a shitty move.

14:30It was, it was, it did not go over well. I mean,

14:33Joe Patrice:also like just, just a little pause for people who aren't into the cultural minutia, which both of us are fans of, but let's just say this very clearly. Lane Kiffin is a fail son of the sport that has somehow managed to become important. He is the epitome of white privilege in that every time he fails, he gets a better job. That has historically been true. I will give him credit. I think that his time at Ole Miss actually was the first time he was not failing upward. And the second he actually did great at his job, he bailed, proving that he's just shitty as a person. And it's not just his work that is problematic.

15:12So, okay, so Catherine channeling her inner Daniel Tosh here, the comedian who very much goes after this particular coach. But so anyway, Lane moves to LSU. Fast forward, there was some controversy recently where because—

15:29Joe Patrice:They just kicked LSU out of the SEC! Slow down. There was some controversy recently over what players you can sign. There was some conflicting court opinions about whether or not people have continuing eligibility. he took this to mean and he suggested that he could sign NFL players who are still a few years away you know have an have an extra year had they not gone to the NFL but then they did go to the NFL and he thought he could bring them back so that created some controversy yeah for a lot of reasons anyway uh that fight which ultimately uh did not get the school kicked out of its conference but it almost did because there was a court battle over that.

16:10And the reason this comes up, so that we can finally get to the actual legal conversation, the reason this comes up is that -

16:16Joe Patrice:This was not a legal conversation. It's about federalism. It's about state courts, federal courts. It's interesting. There was a conflict between a state court opinion and a federal court opinion, absolutely. Was it legal tech, though? Let's talk about the legal tech of it all. Yeah, yeah, I'm trying. Anyway, so the way this comes up is that the bizarre and seemingly flawed legal strategy that nearly got them kicked out before they gave in may well according to espn had been driven by the fact that lane kiffin was using chat gpt for his legal advice uh and some and somehow somehow the school the louisiana attorney general's office all of these people were just kind of going along with it uh this comes out of an espn article where a lawyer who is friends, but who did not represent LSU, but is friends with Kiffin said that he was pointing out, hey, these legal stances are going to get you in trouble.

17:07And Kiffin was sending him back screenshots of him asking ChatGPT whether he was right. And ChatGPT going, of course, because that's what they do. They say, of course.

17:17Joe Patrice:Yeah. All right. So one, this is a huge problem. And I think a problem that we've on the practice side talked about. There's a lot of hope that What will happen with AI is it leads to a boom in access to justice where people who otherwise wouldn't afford to be able to have lawyers are able to get legal help, in particular for those situations that are not necessarily the life and limb problems where everybody goes out and tries to get a lawyer or maybe even has a right to one. But the more mundane but nonetheless incredibly important and essential legal problems that are out there, they could potentially get help.

17:53The problem is, and one of the things that a lot of us have cautioned about when we're talking about access to justice and AI, is that it's really good at telling you if you need to go talk to a lawyer. It is not particularly good at replacing that lawyer, and that is where this became a near huge problem for them. I pivot from this conversation, though, to say that while this is going on, we also had last week the beginning of a weird AI doomerism coming from the people who have been flogging AI for years. So there are some people who are critics of AI, and they've been critics consistently. Last week, all of a sudden, all the people who said AI is great started saying that the critics have not been critical enough and that only they have ever understood that AI is going to kill everybody.

18:41They are calling for slowdowns and government action. I am one of those people who is somewhat critical. I am very kind of in the middle here. I believe AI has a lot of potential risks that need to be controlled. I also don't think that there are risks that we can't just solve with all the existing laws that we have. That said, I see the claim that we need to slow down and get the government involved as a sign to build regulatory capture, an effort to get the government to build a legal regime that will explicitly shield the frontier AI labs from the legal liability that they should be facing.

19:21under like the computer fraud act and stuff like that, but also to build a competitive moat. If AI can kill us all and we're the only ones who can are safe enough to comply, that way all these open weights models go away. We also saw just the other day, open weights models, which are the mostly from China models that are smaller and more tweakable and way, way, way, way, way cheaper. they for the first time overtook the open ai gemini clawed models that you've all heard about for the last few years those open weight models generated more pings than the the closed ones that's a real problem if you've burned piles and piles of money on the idea that you're going to take over the world and now all these cheap models are doing are getting more attention because everybody realizes, hey, they're cheap.

20:16So what would happen if you had regulatory capture here? Well, you would be able to say everything's not safe. We've got to ban everything that's open weight, and we're the only ones who get to practice in this space. That might shore up the IPOs that these people are now completely depending on because they burned like a trillion and a half dollars building this stuff, and they can't reliably get more than a few million dollars a year as actual revenue, or a few billion dollars a year as actual revenue. which that's a disconnect that is a real problem if they don't cash in at an IPO and leave somebody else holding the bag.

20:51Of who would be holding the bag, by the way, there's another report coming out from one of the banks, I think Morgan Stanley, that says that there's potentially a risk that the bag is already fully distributed and that this ever goes public, everybody goes down because everybody's pension funds are now deeply embroiled in this. it's a problem and it's a problem that this attempt to get kind of a backdoor bailout by creating a competitive moat is designed to fix that's that part of it and that's part of this article which transitions me to Ted Cruz who appeared on SportsCenter on game day got booed mercilessly because the fans at Texas are good fans