Category: Wisdom

Wisdom

Why Mediation?

By Lawrence A. Huerta

One of the most difficult jobs of an advocate is making a strong opening offer that generates a reasonable counter-offer.  There are no standard formulas, so how is a strong and realistic opening offer calculated?  In the context of litigation, when should an opening offer be conveyed?  Conventional wisdom is to open with an extreme offer to test the other party and to explore their flexibility.  Unfortunately, if the opening offer is perceived as extreme, it can lead to an early breakdown in negotiations.  Another piece of conventional wisdom is to make a “throwaway” offer without any reasonable expectation of launching a productive negotiation and for the primary purpose of probing the other party’s willingness to negotiate in a certain range.  In 26 years of mediating litigated cases, throwaway offers have been the source of many early stalemates or, at the very least, extensive time devoted to bringing the opening offer into a reasonable range.  In the worst cases, throwaway offers can poison an entire negotiation by negatively influencing all remaining counter-offers, including final offers.  Read More

Wisdom

Modes of Contract Review

By William Marshall
Transactional attorneys refer simply to “reviewing” a contract. However, I have identified different modes of review and found that thinking about them can be helpful in improving my review practices. The following are nine modes of review that I, to varying degrees, am adopting as I review an agreement. Some of them overlap and, of course, I very often perform multiple or even all of these modes in a single reading of an agreement. However if time permits, separate readings focused on one or two of these modes at a time can result in a better, more comprehensive assessment and markup of a document. Read More

Law Practice Management / Wisdom

Following Up on Your First Year

By Marti Worms

Now that Fall has arrived, many of you who graduated from law school last year are approaching one-year of practice or maybe more, depending on whether you had a post-bar position lined up after graduation. This milestone provides an often-neglected opportunity for you, as a new lawyer, to perform some self-assessment and career planning that will help you continue to move forward in your career and prepare for your year-end review.  Whether you are a brand new attorney or a young lawyer with two or three years in practice, consider delving into the following four areas for a do-it-yourself career assessment.

Evaluate Your Work Direction Read More

Wisdom

Client Management in Disclosure Schedules

By Aaron Sokoloff 

The preparation of disclosure schedules is typically one of the most time-intensive aspects of a financing or M&A transaction. In larger firms, this process is often in the hands of a junior associate, since the junior associate is usually the closest to the diligence materials that are the source of much of the information in the schedules. However, this practice gives the misleading impression that disclosure schedules are a straightforward exercise. In fact, the preparation of disclosure schedules often involves some tricky client management issues that can challenge even senior lawyers.

  • Process Management. The division of labor between the company and its counsel in disclosure schedules is not obvious, and the right approach may vary from deal to deal. This is different from many other transaction documents, which are simply drafted by the attorneys subject to the client’s review. Sometimes it may make sense for the attorneys to take the first cut at drafting the disclosures, particularly if the attorneys have significant institutional knowledge of the company. Sometimes it may be appropriate for the company to do the first draft, with the lawyers then taking the role of wordsmithing what the client has prepared. Sometimes the best approach will be for the lawyers to draft some of the disclosures first (e.g. those involving corporate organization, litigation that the firm has handled, etc.), with the company taking the lead on others (e.g. those involving commercial contracts or other operational matters that the outside lawyers are not close to). While the ideal approach varies from deal to deal, it’s crucial that the division of labor is decided early on so that the responsible parties can start making progress on the disclosures. If the company is not familiar with the disclosure schedule process, they may well underestimate the amount of time and effort that a disclosure schedule entails, especially for a mature company. Even if the company offers to take the lead on some or all of the disclosures, the attorney should stay close to the process, to avoid the scenario where the company volunteers to handle the disclosure schedules in an effort to reduce legal fees and then, at the last minute, gets overwhelmed with the process and pushes this project back to the lawyers; this puts the lawyers in the undesirable position of having to complete a disclosure schedule on short notice when they likely haven’t done the necessary underlying review, and may already be fully occupied with negotiating and finalizing other deal documents.
  • Full Disclosure. There is often a tug-of-war between the attorney and the company on the amount of disclosure to provide. The attorney is typically pushing for maximum disclosure, since this gives the client maximum protection by putting the buyer on notice of any issues. The company may desire to limit disclosure, so as to avoid airing out “dirty laundry” for a buyer or investor that they are trying to impress. Attorneys helping their clients with disclosure schedules need to be able to go beyond simply gathering and organizing information, and advise the client on why failure to disclose could lead to the client having to deal with indemnification or even fraud claims.
  • Monday Morning Quarterbacking. One aspect of the “full disclosure” argument that can be a particular flashpoint between attorneys and their clients are disclosures regarding corporate-level matters – e.g. ambiguities or gaps in capitalization documents, non-observance of corporate formalities, etc. Often, the attorneys representing the company on a major transaction have not been closely involved with the company throughout its history, and in the course of their deal work may notice errors or omissions on corporate matters that they believe need to be disclosed. Clients can sometimes take these kinds of disclosures personally, and see them as gratuitous faultfinding by the lawyer who is supposed to be on their side. This kind of issue therefore requires the attorney to exercise some diplomacy in explaining to clients why these disclosures are important, without the client viewing them as a Monday morning quarterback, which can have a negative effect on the attorney-client relationship as a whole.
  • Understanding What a Data Room Does and Doesn’t Do. Clients sometimes have the impression that, if a document is included in the data room (or whatever method by which diligence materials are provided to the buyer/investor), that is as good as disclosing the document in the schedules. This is almost never the case. While posting a document in a data room (or whatever is the manner of providing diligence materials in a particular deal) may be helpful in showing that the company wasn’t trying to defraud the buyer or investor by affirmatively hiding something, the company and its attorney still need to go through the (sometimes arduous) process of preparing a disclosure schedule that is complete and correct in order for it to provide the desired level of legal protection.

Aaron Sokoloff  is an attorney at Procopio, Cory, Hargreaves & Savitch LLP.

This article is for information purposes only and does not contain or convey legal advice.  The information herein should not be relied upon in regard to any particular facts or circumstances without first consulting an attorney. Any views expressed are those of the author only and not of the SDCBA or its Business & Corporate Law Section.

This article originally appeared as part of the 

SDCBA Business & Corporate Law Section’s column series Read More

Law Practice Management / Wisdom

Tips from the Bench: Judge Joel R. Wohlfeil

By Phillip Simpler

Since 2007, the Honorable Joel R. Wohlfeil has been a San Diego Superior Court judge. He presides over Department 73 and handles mostly civil cases. It was an honor to sit down with Judge Wohlfeil for our “Tips from the Bench” series.

1. What was your path to the bench?

I practiced as a plaintiff’s attorney for more than 20 years and tried cases all over the country. I was accepted as a member of the American Board of Trial Attorneys and with the support of my peers, I submitted an application to be considered for appointment to the bench. In 2007, I was appointed by Governor Schwarzenegger.

2. Do you have any tips for newer attorneys in San Diego?

Everyone makes mistakes. Don’t beat yourself up about it, and don’t take an adverse ruling personally. How you respond to adversity will impact how you are perceived by the bench. Judges talk about lawyers just as much, if not more than lawyers talk about judges. Your conduct in one courtroom can impact your reputation throughout the community.

A lawyer’s familiarity and comfort in the courtroom is important. However, it is difficult to get significant civil trial experience, particularly early in your career. Newer attorneys should make an effort to interact and learn from experienced attorneys. Joining an Inn of Court is an excellent option, and it is always beneficial to observe hearings and trials in other cases. Reading books authored by trial attorneys, such as Irving Younger, can also help to bridge that gap.

3. Do you have any pet peeves that attorneys should avoid when appearing in your courtroom?

In an effort to ensure that motions are heard in a timely manner, I do not limit the number of motions that can be heard on a given day. As a result, there is not always going to be a lot of time for oral argument. It is vital to be concise and to lead with your best argument. I appreciate when attorneys are cognizant of my time.

Phillip Simpler is an Associate at Paul, Plevin, Sullivan & Connaughton LLP.

This article was originally published in the August 2018 issue of 

For the Record Read More