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In
This Issue |
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1. Does Antitrust
Matter? Only if you like
competition.
2. Did You Know?
Stars, rising and otherwise.
3. Techniques for Expediting
Litigation. Slimming down before
trial.
4. 20 Years Already! Well, not
quite.
5. Cheering for Contingent
Fees. The American Enterprise Institute
shows its populist side.
6. Hot Lunch. Truth
and D&O
insurance. |
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Did You Know?
All six partners
in the Dallas office of Susman Godfrey
L.L.P. have won designation as Texas Super
Lawyers or Rising Stars in 2005-2006, according to
Texas Monthly magazine. Two of
our associates also made the Texas
Monthly Rising Stars list.
Congratulations to Terry
Oxford, Ophelia Camina, Bill Carmody, Jonathan Bridges
(new partner), John Turner (new partner), Michael Fritz,
Gretchen Sween, and Your
Editor.
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20 Years
Already!
The magnificent ice sculpture
you see above marked the spot where friends and guests,
who braved an ice storm on December 8 to attend our
Holiday Open House, could feast on ice-cold crab
claws and jumbo shrimp.
In the tradition of the Walt
Disney Company -- which celebrates all of
its anniversaries for two years instead
of just one -- we dedicated the Open House to the
start of our 20th year in
Dallas. That means we just finished our
19th year. And our actual 20th anniversary won't
arrive until December 2006.
2006 Open House theme: Our
Third Decade in
Dallas.
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Hot Lunch.
The
Truth About D&O Insurance reviews the
recent history of liability insurance for corporate
directors and officers and the companies they
serve. The presentation summarizes the types of
D&O coverage (Sides A, B, and C), describes common
conflicts between the insureds and the insurance carrier
(settle early vs. late), notes the surge of cases in
which payments exceeded available insurance proceeds,
identifies frequent causes of action against directors
and officers, and recommends strategic options for
directors, officers, and companies seeking D&O
coverage.
Your
Editor presented a version of The Truth About
D&O Insurance at the Susman Godfrey Forum in
September 2005.
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Does Antitrust Matter?
The editorial and opinion pages of The Wall
Street Journal suggest that antitrust law has
outlived its usefulness as a corrective to
abuses of private economic power. They
-- and a profusion of bloggers -- decry
enforcement of the Sherman Act as punishing
bigness for its own sake and, worse, hindering vigorous
competition.
Has the law that the
Supreme Court once called "a comprehensive charter of
economic liberty" become an instrument of economic
oppression? Northern Pacific Railway Co. v.
United States, 356 U.S. 1, 4 (1958). In a
word, no. The Sherman Act doesn't prohibit
monopolies; it doesn't even discourage them.
But it does ban a company that wields monopoly
power from misusing it to injure rivals,
particularly innovators that offer
superior products and services and lower costs to
consumers. The Act also forbids competitors from
banding together to fix the prices at which they
will sell to consumers, to limit the goods and
services available to buyers, or to allocate
customers and territories among themselves.
Consumers benefit from the rough-and-tumble competition
that the Sherman Act aims to foster.
Antitrust litigation has another virtue -- it
beats the pants off of government regulation, which
often favors the status quo. Can you think of
a more effective way to thwart innovation
than having an agency regulate it?
Lawsuits under the Sherman Act require a huge
investment of time and money, often lasting years and
costing millions of dollars. But they remain the
single most effective way to assure
that businesses large and small have a fighting
chance to become . . . the next Microsoft.
Barry
Barnett, Editor |
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Cheering for Contingent
Fees
Speaking of institutions that question the utility of
litigation, the American Enterprise Institute lately
published a study that raises Two Cheers for
Contingent Fees (AEI Press Sept. 2005). The
authors, economists Alexander Tabarrok and
Eric Helland from George Mason University and
Claremont-McKenna College, respectively, empirically
examined the effects of setting limits on contingent
fees. They found that contingent fees:
- Motivate performance by lawyers.
- Improve access to courts for the less wealthy.
- Spread risk to the lawyer.
- Reduce the number of "junk suits".
- Decrease the amount of time to settlement.
- Do not inflate the size of damages awards.
- Have been common in the U.S. for more than 100
years.
According to the AEI
press release , the authors of Two Cheers for
Contingent Fees conclude that, "while tort
reform is an important goal, limiting the contractual
rights of plaintiffs and their lawyers is an
unattractive and likely ineffective method of achieving
that goal."
The principal findings of Two Cheers
shouldn't come as a surprise. Contingent
fees use economic incentives to align lawyers'
interests with their clients' -- allowing free-market
forces to encourage outcomes that optimize benefits to
both. Economists, even conservative ones, love
that kind of stuff.
Still, this AEI publication gratifyingly
confirms the populist idea that contingent fees provide
the keys to the courthouse for small businesses
and individuals -- and that restricting clients'
right to contract for a contingent fee
arrangement does harm rather
than good.
Courthouse Keys for Marion County, OH
(1833-83). |
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