Lawyers and Clients (Wall Street Journal Article)

wsj

 

Programs Fail to Send Majority of Work to Firms Owned by Minorities

Big companies, elite law firms and government agencies all announced programs in recent years to steer more work to minority law firms.  The result so far: some progress, but less than many people had hoped.

Robert Lowe is one lawyer who has come out ahead – but not before having to dispel some stereotypes.  Mr. Lowe, an Asian-American, remembers an interview he had with an employee of the Resolution Trust Corp. in 1990 about working on failed-thrift cases for the federal agency.  “You guys have secretaries and word processors, don’t you?” he recalls the agency representative asking.

As a graduate of the respected University of Texas law school who was already counseling the likes of Nordstrom Inc., and Porsche Cars North America Inc., Mr. Lowe, 43 years old, found the query a little amusing.  “People think you can hardly walk” if you are a minority-owned firm, he says.

The RTC soon learned that Lowe & Associates had both secretaries and computers, and the agency is now a satisfied customer.  Half of the annual income of the six-lawyer firm, based in Alexandria, VA, comes from a score of thrift cases it handles for the agency.  “I am glad I had the opportunity to put my foot in the door,” he says.

But while Lowe & Associates is a major beneficiary of the recent push to increase the profile of minority law firms, some other minority shops are facing a tough time.  One problem is that corporate legal departments and even the RTC, seeing to cut costs, have reduced their reliance on outside counsel.  In addition, not every group that says it wants to steer work to minority firms ends up doing so.

Where the initiatives have worked, they have served the clients’ needs while sparking the formation and growth of minority firms.  Though most minority-owned firms are still quite small, with about 40 lawyers at most, the elevated demand for their work has led to the creation of some significant strategic alliances with bigger, more established firms.

Last fall, for example,  Jones, Day Reavis & Pogue, one of the U.S.’s largest law firms, formed an alliance with six-lawyer White Hill Sims & Wiggins, a black-owned firm in Dallas.  Terms call for Jones Day to get a piece of the work that White Hill may pull in a s a result of government or corporate efforts to use minority law firms.  White Hill, in turn, gets access to Jones Day’s research and support facilities, and a fancy new address via a cut-rate lease on excess space Jones Day had in its office in downtown Dallas.

So far, everyone is optimistic about the arrangement, which Richard Kneipper, a partner with Jones Day in Dallas, views pragmatically.  “I am not interested in doing good, but rather making money for both firms, and if I can do some good in the process, that would be great,” he says.  “I hope they turn out to be just an awesomely successful firm.”

In some other instances, though, such partnerships have proven to be fraught with pitfalls.  Disputes can arise over apportioning billings between the firms and over who bears legal liability in case of alleged malpractice.  Minority firms, being smaller, can also be less stable than their partners.  Graham & James called off a major joint venture with a minority firm three years ago after Graham’s would-be partner ran into financial troubles.  And some people express concern that the arrangements sometimes turn into mechanisms for big firms to attract business targeted for minorities without giving a fair share of work to the minority joint venture partner.

The ventures that focus on getting work form the RTC seem to have been among the most lucrative so far.  Mr. Lowe’s success grew from a joint venture with Morrison & Hecker, of Kansas City, which found its big RTC practice threatened a few years ago when the agency decided to cut off firms unless they had ties to minorities.  Other big firms entering such alliances include the likes of Hughes, Hubbard & Reed, based in New York; Atlanta’s Powell, Goldstein, Frazer & Murphy and Brobeck Phleger & Harrson, San Francisco.

But even this sort of venture doesn’t always work.  Donald Hill, a partner in White Hill, is on his second joint venture with a big firm.  The first, a highly touted, two-year alliance with the Dallas office of Arter & Hadden, a big Cleveland-based firm, didn’t bring much new work his way, he says.  An Arter & Hadden partner, Forrest Smith, disputes the idea that the venture was a flop, and says the firm is still keen on the idea of joint ventures.  “If you want to crack the corporate community, the average minority law firm is not going to be able to get through that door.  That firm is going to need some way to get in there,” he says.

Corporations have been warming to minority firms, although the bottom line has been uneven.  Much of the corporate interest has been channeled through the ABA Minority Counsel Demonstration Program, which set out in 1988 to hook up minority lawyers with corporate legal lawyers from a list of minority lawyers that the ABA maintains, although lately the growth in signatories has slowed.  And fees generated by the program – on the order of $40 million to $50 million a year – have been about flat in the past two years.

Many firms say the program was invaluable in the beginning but question whether economics are prompting some companies to retreat.  Says Renaye Cuyler, of Gorayeb & Cuyler, a minority-owned New York firm and a participant in the ABA program: “The old-boy network is still alive and well.”

The past three years have been trying. Defending the nonsensical suit brought against us has
been an emotional rollercoaster that is impossible to describe to anyone who has not
experienced such a disastrous event. This experience has had far reaching effects on not just
me and my family, but our team of employees and their families as well. From a business
owner who had everything on the line, it has been a great weight to bear.

As you know, I have spent many many hours with many many attorneys through my years in
the General Aviation business. Some good, some bad … always in crisis. I want you to know
that with all my sincerity, and without hesitation, without question, you have been the hardest
working, most thoughtful, most intelligent, most insightful, most caring person AND attorney
that I have ever spent time with. And as importantly … the best partner I could have asked for
to stand beside me through this “dog fight.” In fact, these simple words can’t justify the
exponential thought and effort you put forth for my personal well being and for the Penn Yan
Aero family.

Your exceptional efforts allowed us to walk away from this lawsuit unscathed, with our heads
held high, and as you always said, “on the side of the angels.”

There will always be a bottle of Taylor Port in my cellar with your name on it…ready for that
day.

And as Iceman said in the movie Top Gun … “You can be my wingman any day!”
From all of us at Penn Yan Aero, thank you!

William Middlebrook
President/CEO
Penn Yan Aero
RPM Technik, Inc.

Strategies to Obtain Early Settlement of General Aviation Claims

According to the NTSB, 1,471 general aviation accidents occurred in 2012 alone.  These accidents resulted in 432 deaths.  This follows the general trend for the last 14 years, when more than 1,400 general aviation accidents occur annually.  In 2010, general aviation accounted for 96 percent of all aviation accidents, 97 percent of fatal aviation accidents, and 96 percent of all fatalities for U.S. civil aviation.[i]  These statistics demonstrate the stakes associated with general aviation litigation, as approximately 1 in 3 accidents results in death every year.

Practitioners are familiar with the hallmarks of general aviation cases.  First, the plaintiffs allege serious, if not catastrophic damages: (1) wrongful death; (2) lost wages; (3) emotional damages; and (3) survivors’ damages such as loss of consortium.  Second, practitioners are faced with complex issues of liability. General aviation accidents can result from several competing theories: (1) pilot error such as loss of control or mid-air collision; (2) system or component failure; or (3) third party liability.  These competing theories lead to an exponential cost in experts, involving complex engineering facets, and often complex and expensive computer modeling to reenact the physics of the accident and/or the mechanics of material failure.

Add to these the ongoing costs of the NTSB investigation and reports, and practitioners face enormous expenses to investigate, reconstruct, and defend general aviation claims.  Between the multiple causation experts, damages experts, attorneys, and the geographic dispersion of witnesses, wrongful death claims can often run into the millions before the first demand is ever made; and that demand will be in the millions as well.  As a result, there are significant advantages to early settlement negotiations and resolution.  First, putative defendants avoid the publicity of a trial.  Second, clients salvage their reputations.  Third, clients avoid the disclosure of potentially disastrous facts.  Fourth, clients avoid the forgoing litigation fees and costs.  Finally, clients avoid a potential award of punitive damages.

By contrast, in 2003, approximately 98% of all civil tort actions were settled or dismissed without a trial in federal court.[ii]  Of approximately 98,000 tort cases concluded in the United States District Court from 2002-03, less than 1,700 were decided by bench or jury trials.  Knowing the slim chance any given claim will be decided by the jury, then, and the extraordinary fees and expenses associated with moving a case to trial, the general aviation practitioner should focus a directed effort on early settlement.

Engage Opposing Counsel Early

Counsel for manufacturers, pilots, repair facilities, and other targeted parties should engage claimant’s counsel soon after the accident, assuming a claimant has retained counsel.  During these early conversations, practitioners should focus on the complexities ahead and facing both sides.  Practitioners should take the time to discuss the lengthy delay a judicial resolution would entail, along with the slim chance a jury will actually decide the action.  And, if the claimant were to “hit big,” a lengthy appeal will almost certainly follow.  Given that financial compensation drives modern tort litigation, claimant’s counsel should focus on the time value of money for their clients.  Defense counsel should also include thoughtful early settlement engagement in their action plan for the same reasons.

Discussing the uncertainty of a successful outcome for either side provides opportunity to explore multiple different outcomes. Practitioners can explore the possibility of only of many parties being found liable, such as the pilot who was not paying attention on take-off, or the repair facility that failed to follow its station repair manual.  This provides an opportunity for claimants to analyze their risk/reward in pursuing multiple parties.  If claimants settle with some parties early, they can focus their litigation strategy on the remaining parties.

Lastly, practitioners should remind opposing counsel of the control both sides have in an early, negotiated resolution.  Collectively, the best service lawyers can render to their clients is the one whereby we make affordable settlement decisions easier for opposing counsel. By doing so, we can obtain an early resolution for our client.  After all, settlement only “hurts” for a short time and a verdict, successful or not, lingers.

Choose the time and place for early settlement discussions

Everyone likes the home court feel, and some are flattered that opposing counsel will travel to discuss settlement.  Scholars suggest a positive relationship between legal adversaries “can be more effective for achieving mutually beneficial and equitable outcomes.”[iii]  Making small concessions to increase your “likability” makes it more probable your opponent will ultimately accept a negotiated offer.[iv]

Another tactic practitioners may employ is to promote settlement discussions while at NTSB inspections or other investigative arenas.  The neutrality of the site, while an independent investigation is ongoing, can foster mutuality of purpose with a secondary benefit of setting the stage for later productive discussions.  And by abandoning the “see you in court” stalemate, practitioners can truncate the negotiation process and engage in fruitful discussions.

Avoid discussions of liability

In addition to stalemating discussions, telling opponents they do not have a case will cause them to take similarly extreme positions themselves.  So, practitioners should focus the discussion on damages to the exclusion of the root cause(s).  If you do not already have it, devote your research to developing a detailed knowledge of the elements of damages recoverable in the jurisdiction where the action is (or would be) pending.  Then you can discuss with opponents whether they can recover for a survivorship action depending on whether suffering are presumed or must be proved by independent evidence.  You should know and be able to discuss whether caps on non-economic damages exist.  Unrealistic demands well outside jury awards in conservative jurisdictions, for example, are harbingers for early failed settlement discussions.  Practitioners can manage those expectations with strong, sourced research on damages.

Engage different mechanisms that are educational and economical

If opposing counsel hesitates to negotiate early in the process, practitioners can employ several mechanisms that make negotiation more attractive.  For instance, proposing limited damages discovery may entice opponents to tell more of their story.  Also, discovery such as a limited deposition of the surviving family members allows the injured party the opportunity to “say their peace,” while allowing the client to evaluate the family’s credibility, likeability, as well as to measure the loss resulting from the deceased loved one.

Additionally, practitioners can request the economic damages from the claimants and engage a single expert to evaluate those damages.  After obtaining the raw data, an expert will develop a clear, early picture of the economic damages, damages which are unlikely to change as the action progresses.

Focus on closure for the survivors

Wrongful death litigation characteristically extends the period of mourning and grief for the survivors and family members.  Survivors are constantly required to relive the loss of a loved one while making strategic and tactical litigation decisions, preparing for trial, and testifying (at least twice) about the pain and grief.  Thankfully, practitioners often observe that the end of litigation brings an end to the grief itself, or at least claimants can begin the process of healing by putting the blame behind them.  By focusing on this closure early, opposing counsel can achieve a goal they cannot often achieve through drawn-out litigation: peace.

Conclusion

Given the nature of general aviation claims and accidents, aviation practitioners should take advantage of early negotiating strategies.  Early negotiation should result in savings on many fronts: financial savings, reputational savings, and psychological savings. Remember that a bad settlement is better than a bad trial.

Bruce Wallace practices in Nexsen Pruet’s Charleston office, where he has represented banks, insurers, and corporate clients in a wide range of matters related to business and consumer litigation for almost two decades.

Bruce has been active with DRI for many years and in several capacities.  He is the current Annual Meeting chair, as well as the vice chair of the Lawyer Malpractice SLG of the Professional Liability Committee.  In the past, Bruce served as chair of the D&O and E&O SLG of the Commercial Litigation Committee.

With 190 attorneys in eight locations throughout the Carolinas, Nexsen Pruet provides comprehensive legal services to companies both large and small, handling challenges at the deal table, in court, and in the halls of government.  To contact Bruce, call 843.720.1760 or email bwallace@nexsenpruet.com.

Robert J. Lowe, Jr. practices at Lowe & Associates in Charleston, SC., and is a retired Air Force/Air National Guard fighter pilot.

Bob has represented banks, insurers, corporate clients and government agencies in complex litigation and related matters for over 30 years.  These matters have included aircraft wrongful death litigation in the state and federal courts of Virginia and South Carolina.

He has been a speaker at government, corporate and academic forums on a wide range of issues.  Bob also co-authored “Vanguard,” the strategic vision for the Air National Guard.  To contact Bob, call 843.408.1900 or email rlowe@lowefirm.com.

South Carolina District Names Charleston Attorney Bob Lowe as its President-Elect at Annual Convention, June 1, 2013

The Exchange Clubs of the South Carolina District by unanimous vote of delegates from 17 Exchange Clubs throughout South Carolina have elected Charleston attorney Bob Lowe as its president-elect.  Bob is a member of the Exchange Club of Charleston and the Evening Exchange Club of Charleston. He is a past Man of the Year for the Exchange Club of Charleston and current president of the Evening Exchange Club of Charleston.

Exchange Club President

The Exchange Club of Charleston is the largest of 700 Exchange Clubs in the country and recently donated over $802,000.00 in grants to the local community. The Evening Exchange Club of Charleston was recognized during the convention as the mid-sized club with the highest number of completed programs of service to the community during 2012-2013. Bob is the first lawyer to be named president-elect in the 77-year history of the South Carolina District.

During the Winter 2013 Senior Leadership Conference conducted by the National Exchange Club, Bob was elected by his peers as the Team Leader/Spokesman for the 31 district president-elects throughout the country.  He will retain that position when he becomes South Carolina’s District President later this year.

Exchange is America’s oldest service club with 700 clubs and nearly 20,000 members across the country. Its mission is carried out through its programs of service that include Americanism, Youth Programs, Community Service, and its national project, the Prevention of Child Abuse. Founded in 1911, Exchange celebrated its 102nd Anniversary in March of 2013.

View the Press Release

For information go to www.nationalexchangeclub.org

 

Club Honors Couple, The Post and Courier – Charleston, SC newspaper, August 29, 2009

View the Post and Courier Article

The Charleston Exchange Club’s “Man of the Year”is part of a husband-and-wife team dedicated to community service, and both are looking forward to this year’s Coastal Carolina Fair. Local attorney Bob Lowe was named at the group’s banquet earlier this summer. His wife, Gwen Lowe,was named the Evening Exchange Club of Charleston’s “Exchangite of the Year,” and in state-wide competition of 20 club finalists as the South Carolina Exchangite of the Year. Bob Lowe, who has been with the Exchange Club since 2006, serves on the Board of the Coastal Carolina Fair and also is its general counsel.  For this year’s fair, which starts Oct. 29, one highlight will be an appearance by Julianne Hough of “Dancing With the Stars” fame. “We’re hoping for a great turnout,” he said.
This will be the 53rd version of the fair. More than $550,000 in grants from last year’s fair went to 59 charities in the local area, as well as to scholarships. Lowe, who practices law in Charleston, received his undergraduate and law degrees from the University of Texas. He was an Air Force fighter pilot and flew as a member of the Texas Air National Guard while he was in law school. He later flew fighter jets for the District of Columbia Air National Guard. He also serves on the National Exchange Club Committee on Jurisprudence and Laws.
Gwen Lowe has been involved in numerous assistance groups, including collecting school supplies for the Teachers’ Supply Closet, collecting cell phones for Soldier’s Angels, and discarded eyeglasses for seniors. She also has volunteered for LowCountry Orphan Relief and aided efforts behind the prevention of child abuse, which is the national initiative of all Exchange clubs.

Top Gun Pilot Produces Winning Law Firm, Government Trade Magazine, Summer, 1995

Reaching1 Reaching2

 

Top Gun Pilot Produces Winning Law Firm

A former “top gun” fighter pilot who flew fighter jet missions in Southeast Asia in the early 1970’s for the Air Force, Robert (Bob) Lowe, Jr., is now fighting for the RTC in litigation, professional liability and transactional matters.

Lowe is founder of Lowe & Associates, P.C., and Olde Town Alexandria, Virginia, minority-owned law firm that RTC officials consider to be a prime example of the successful ventures that have participated in the Joint Referrals and Representations Program offered by the RTC’s Division of Legal Services in conduction with the Department of Legal Programs (DLP) of the Division of Minority and Women’s Programs (DMWP).and his firm first began representing the RTC in 1990, having been introduced to the RTC through a joint-counsel arrangement with the Washington, D.C., offices of Morrison & Hecker, a non-minority firm with offices in Kansas City and Washington, D.C. “Our initial assignments involved multi-million dollar adversary proceedings in bankruptcy court and complex litigation involving local area RTC conservatorship assets,” Lowe said.  “But, our work was just beginning.”

Lowe recounts that while his firm was relatively small when it first began to work with the RTC, the firm had already represented a number of Fortune 500 clients.  Today, Lowe & Associates has nearly doubled and will soon expand its existing waterfront offices and add two more attorneys.

“Lowe & Associates is a successful, growing firm because they provide excellent service and counsel to their clients.  It’s that simple,” said Mary A. Terrell, RTC Senior Counsel/Director, DLP.  “They started out with the outstanding reputation of Bob Lowe with his top-gun fighter approach to winning lawsuits and his experience as a trial lawyer with two of Virginia’s oldest law firms.”

Moreover, both Terrell and Lowe agree that the success Lowe & Associates has had in its work with the RTC has been a catalyst for opening other doors to this talented law firm.

“The RTC’s Joint Referrals Program is the most effective such program I have ever seen, whether we’re talking national or local, governmental or non-governmental,” Lowe said.  “A lot of the credit belongs to the RTC staff and Mary Terrell for their aggressive commitment to making this program work.”

In January of 1992, Lowe & Associates and Morrison & Hecker became the first joint-counsel firms to be assigned to the closing and litigation review of an RTC receiver-controlled thrift.  The mass of the work involved required them to maintain a staggered, on-site presence at the thrift for three months.  Terrell said that after that assignment, many senior RTC attorneys who worked with Lowe & Associates noted that this firm required little or no assistance from non-minority firms in handling the complex litigation and due diligence matters that were a major part of RTC work. “When we put this program int oplace, we knew the minority and women-owned firms could handle this work, but because this kind of work had always fallen to non-minority firms in the past, we needed a program that allowed minority  and women-owned firms to showcase their expertise and talent,” Terrell said.  “Lowe & Associates is a textbook example of what we knew was out there.”

Since then, Lowe & Associates has performed work for the RTC independent of, and in partnership with non-minority firms.  Their reputation has continued to build, as well.

“Our work with Lowe & Associates on professional liability matters has been a pleasure; they have top notch attorneys and are incredibly well-organized and responsive,” said Robert (Rob) Steinberg, managing partner of the Washington office of Porter, Wright, Morris & Arthur, one of the RTC’s busiest outside majority firms.  “I have truly enjoyed working with the Lowe firm on RTC matters, and look forward to working with Bob Lowe and his attorneys on our joint-venture matters for private sector clients.”

In recalling the initial contact with RTC, Lowe points out that he has always remembered hearing Mary Terrell say that her only job was getting substantive financial institutions work immediately to minority and women-owned law firms.

“I know that the sophistication of the financial institution work that we have handled for the RTC was undoubtedly the catalyst to Lowe & Associates’ rapidly developing international practice,” Lowe said.

In October 1994, the Lowe firm was competitively selected by Booz, Allen & Hamilton as its subcontractor and the Porter, Wright firm as subcontractor to Lowe, for the provision of capital markets, financial, regulatory and privatization legal services to the newly independent states of the former Soviet Union.  The Lowe and Porter Wright firms began preliminary work in this U.S. AID program in November 1994.  The Morrison firm may also provide support functions in this work.

Late last year, RTC’s Atlanta office again selected the Lowe and Porter Wright firms to perform a professional liability investigation.  Based on preliminary estimates, the firms’ split of substantive legal work will be fifty-fifty.

Today, the Lowe firm continues to handle both governmental and private sector clients, including the FDIC, U.S. AID, Rubbermaid Commercial Products, Inc., Mooring Financial Services and the Welshire Credit Corporation.  Lowe & Associates also represents other corporate clients that in the past relied almost exclusively upon the “large” law firms for complex legal service requirements.