Speaker 1: This is Bloomberg Law with June Brusso from Bloomberg Radio.
Speaker 1: Lawyers have long served on the boards of privately held
Speaker 1: companies and nonprofits, and public companies are increasingly looking for
Speaker 1: lawyers to become corporate directors, bringing their legal expertise to
Speaker 1: the boardroom and prestige to the attorneys who can navigate
Speaker 1: potential conflicts. My guest is, when Den Eolis of Eolis
Speaker 1: International Group, a legal recruiting company, are you seeing more
Speaker 1: lawyers being considered for board seats or getting on boards.
Speaker 2: Absolutely, there's been a sea change in the interest in
Speaker 2: including lawyers in the mix of skills and abilities and
Speaker 2: background with very major corporations and in the companies that
Speaker 2: we deal with. They are not the focal point in
Speaker 2: many cases, but they are part of the mix. And
Speaker 2: that was not the case during the past twenty years
Speaker 2: to nearly the same level before that. For lawyers used
Speaker 2: to be on boards frequently because the CEOs who worked
Speaker 2: with them knew them, were comfortable with them, and wanted
Speaker 2: to bring them in. But there have been a whole
Speaker 2: host of changes in the way in which companies work
Speaker 2: with lawyers and law firms, and there's been a big
Speaker 2: change that's been created by chief legal officers having significant
Speaker 2: responsibility internally and the outside lawyers not necessarily having as
Speaker 2: close a relationship with their clients the CEO as they
Speaker 2: used to because they have a much greater responsibility to
Speaker 2: the chief legal officer.
Speaker 1: Where there is from are the lawyers on boards, generally
Speaker 1: lawyers with business backgrounds or general counsel at businesses.
Speaker 2: There are really a great variety of backgrounds for the
Speaker 2: lawyers who end up on boards these days, because there's
Speaker 2: an openness now to a variety of pieces in terms
Speaker 2: of criteria. At the end of the day, what distinguishes
Speaker 2: who does and who doesn't get on the board are
Speaker 2: those who have the necessary credentials and fill the general
Speaker 2: criteria and most of all look sound and feel as
Speaker 2: if they will play well in the sandbox, and companies
Speaker 2: call that chemistry. So the possibilities for lawyers are more
Speaker 2: about their intellectual assets or they're not as concerned about
Speaker 2: the specifics of the transactions they've worked on. They're more
Speaker 2: concerned about how they approach the business. They're more concerned
Speaker 2: about their ability to make the pivot from being a
Speaker 2: counselor with great business judgment to become a a debater, deliberator,
Speaker 2: and voter who understands and participates in policy making decisions.
Speaker 2: So it doesn't matter what their particular discipline is for
Speaker 2: some boards, for others the industry where the discipline is critical,
Speaker 2: so it's a broad mix.
Speaker 1: Is there a general figure for how much time it
Speaker 1: takes to be on a board?
Speaker 3: Yeah.
Speaker 2: When we are talking with most of our client companies
Speaker 2: because we are doing a search, generally speaking, I find
Speaker 2: they have quarterly meetings. Many of them that have quarterly
Speaker 2: meetings hold those meetings in different places, and so it
Speaker 2: means you've got to travel to get there to the meeting.
Speaker 2: On every board, you have obligations to attend one or
Speaker 2: more committee meetings. Most people are on more than one
Speaker 2: committee when they're a director, and you have to tend
Speaker 2: those committee meetings. But then there are additional responsibilities and
Speaker 2: obligations within those committees that requires projects to be addressed.
Speaker 2: I think it's fair to say that a lawyer who
Speaker 2: is active on boards but does not have a senior
Speaker 2: leadership role on that board in terms of chairmanships of committees,
Speaker 2: probably has to allocate somewhere around thirty days a year.
Speaker 2: Now that might seem like it's not so much time.
Speaker 2: Why couldn't you take three or six?
Speaker 3: Right?
Speaker 2: But the truth of the matter is that there are
Speaker 2: conflicts in terms of when those board meetings will take place.
Speaker 2: There are conflicts in terms of being on one board
Speaker 2: and what other boards can you be on. And there's
Speaker 2: a big logistics issue in terms of the kind of
Speaker 2: work you're doing, the environment in which you're doing it,
Speaker 2: the industry in which you are at active, and how
Speaker 2: that plays against the interests of other boards being able
Speaker 2: to consider you and you being able to consider them
Speaker 2: as you're a lawyer. The thirty days that I suggest
Speaker 2: is truly the minimum. As a practical matter, boards invariably
Speaker 2: get the biggest challenges and the biggest opportunities, and that
Speaker 2: means being available at the time of those challenges and
Speaker 2: opportunities develop, and they don't develop on any individual's timetable.
Speaker 1: Is it easier to get on a board if you've
Speaker 1: been on boards before.
Speaker 2: There is no question in my mind that there is
Speaker 2: absolutely no situation in which you will get on a
Speaker 2: board more easily than if you've already had a board seat.
Speaker 2: You know, they say about actors that you have to
Speaker 2: have an equity card to get a park, but you
Speaker 2: have to have a park to get an equity card.
Speaker 2: It's really like the same problem in order to get
Speaker 2: a board seat. Nothing is better than having had one
Speaker 2: at the same time, Until you've had one, it's hard
Speaker 2: to get the board seat. So the chicken and egg
Speaker 2: problem which exists in the rest of the world is
Speaker 2: applicable when it comes to lawyers on boards as well.
Speaker 1: And how important are connections and getting a board seat.
Speaker 2: Now those connections ten, fifteen, twenty years ago and more
Speaker 2: were frequently a function of personal relationships. Now boards understand
Speaker 2: that they can get a lot of information about lawyers,
Speaker 2: and they will use companies like ours, for example, for
Speaker 2: the purposes of betting, helping them to put lawyers into
Speaker 2: the pipeline and for giving them ideas of where successful
Speaker 2: lawyers are and what seems to be making them successful
Speaker 2: within the boardroom as a whole, But there is no
Speaker 2: substitute for an end, whether it's a lawyer or anyone else.
Speaker 2: Having connections to a non gov chairman, to a CEO,
Speaker 2: to an executive chairman, that is still going to be
Speaker 2: very important in the process, which is why with our clients,
Speaker 2: individual lawyers we work with them in preparing for board
Speaker 2: service on what's called network mapping, which simply means understanding
Speaker 2: their connections and the value of them, and learning how
Speaker 2: to exponentially expand them so that in addition to the
Speaker 2: opportunities that we may have for them, that they will
Speaker 2: also be much more empowered to develop opportunities because of
Speaker 2: the people who could be helpful to them.
Speaker 1: Have you seen that including lawyers adds to the diversity
Speaker 1: on boards?
Speaker 2: We know that boards are talking about diversity, and that
Speaker 2: includes underrepresented minorities and women, and in every area there
Speaker 2: are a great number of boards that are doing an
Speaker 2: extraordinarily good job on focusing on this issue, and it's
Speaker 2: a big issue. I always tell people, if you expand
Speaker 2: your notion of who want to fit into your potential
Speaker 2: talent pool, you can double your potential talent pool and
Speaker 2: get people you might not otherwise ever consider, who have
Speaker 2: incredible breadth and depth in areas you may not typically
Speaker 2: even think about. The diversity issue right now is one
Speaker 2: on which I think it's fair to say boards are
Speaker 2: very very concerned in general, and they are demonstrating that
Speaker 2: concern by increasing, particularly the percentage of women on their boards.
Speaker 2: The number one requirement for a board member for most
Speaker 2: of our clients is wisdom and.
Speaker 3: That comes in many different flavors, many different cultural backgrounds, industries, expertise, credentials,
Speaker 3: and it's a wide open slate.
Speaker 2: We know that the issue of protecting shareholder profit is
Speaker 2: a key piece in the puzzle for every board member,
Speaker 2: but we also know that environmental issues, social responsibility issues,
Speaker 2: governance are critical. We know that dealing with compensation, both
Speaker 2: within the board and internally in the company are issues
Speaker 2: that have become far more complex. So there is no
Speaker 2: shortage of board directorship needs and certainly an increasing and
Speaker 2: expanding opportunity for lawyers because of the nature of risk
Speaker 2: assessment and governance that moves at the speed of light
Speaker 2: in terms of issues of.
Speaker 1: Import Thanks for being on the show, Wendin. That's Wehn
Speaker 1: Deini Jolis of the Eolis International Group. Over the last
Speaker 1: four months, the investigation into whether the nation's oldest federal
Speaker 1: judge is able to perform her duties has become public
Speaker 1: in a way that's unusual for the federal judiciary, and
Speaker 1: now a three judge panel of the Federal Circuit, the
Speaker 1: same appellate court that judge Pauline Newman, has sat on
Speaker 1: for nearly forty years, has voted unanimously to sanction the
Speaker 1: ninety six year old judge over her refusal to cooperate
Speaker 1: with an investigation into her mental fitness. Newman has fought
Speaker 1: back against the investigation by suing her colleagues, accusing them
Speaker 1: of violating the Constitution. She's known for her descents and
Speaker 1: believes that her colleagues are trying to get rid of
Speaker 1: her to avoid that scrutiny.
Speaker 4: I think the nation needs my voice. I think that
Speaker 4: if the judges on this court are willing and more
Speaker 4: than willing to push me out in order to get
Speaker 4: me out of the way so that no one says
Speaker 4: that they've made a mistake, that I need to be
Speaker 4: here to countermand.
Speaker 1: That joining me is ethics. Law expert Arthur Hellman, a
Speaker 1: professor at the University of Pittsburgh Law School. Arthur the
Speaker 1: panel released its one hundred eleven page report along with
Speaker 1: more than two hundred pages of exhibits. How unusual is
Speaker 1: it for the judicial panel to release its report for
Speaker 1: the public to read.
Speaker 5: That's never happened before. As far as I'm aware that
Speaker 5: the Judicial Counsel because I suppose the Judicial Council must
Speaker 5: have been the entity that authorized it would publicly issue
Speaker 5: a special Committee report in advance of the Judicial Council decision.
Speaker 5: That has never happened. In fact, in most instances, the
Speaker 5: special Committee report itself is never published at all. The
Speaker 5: Judicial Council summarizes the conclusions and perhaps quotes from it,
Speaker 5: but ordinarily this would not be a public document. So
Speaker 5: it's unprecedented that it would not be only made public,
Speaker 5: but made public in advance of the Judicial Council decision.
Speaker 5: Judicial Council is the body that has the authority to
Speaker 5: impose sanctions.
Speaker 1: Do you think it was released because of how public
Speaker 1: this has become and how Judge Newman herself has responded
Speaker 1: to this.
Speaker 5: Well, it could be a product of the fact that
Speaker 5: Judge Newman has repeatedly called for release of materials and
Speaker 5: public availability of proceedings that ordinarily are confidential, not only
Speaker 5: while they're happening, but even afterwards. So it could be
Speaker 5: that I find myself wondering though, if committee did not
Speaker 5: make a decision, that they would issue the evidence first,
Speaker 5: and then in a week or two, the Judicial Council
Speaker 5: would issue a decision, and I have no doubt that
Speaker 5: the Council will act in accordance with the recommendations, in
Speaker 5: other words, laying the groundwork for the decision. But it's
Speaker 5: still something that I think was unnecessary and probably undesirable.
Speaker 1: So let's just step back a moment for those who
Speaker 1: don't know what's been happening. It started with other judges
Speaker 1: and court staff raising concerns about Judge Newman's health. She
Speaker 1: was said to have suffered a fainting spell where she
Speaker 1: was unable to walk without assistance after oral arguments in
Speaker 1: May of twenty twenty two. Just tell us what happened
Speaker 1: after that so we can get an idea of the sequence.
Speaker 5: Well, reports came to the Chief Judge, Chief Judge Kimberly Moore,
Speaker 5: primarily interactions with court's staff, but it did include some
Speaker 5: interactions with judges. Those reports were enough to persuade the
Speaker 5: Chief Judge that there was a possible problem with Judge
Speaker 5: Newman's mental capacity, and so she took steps to investigate
Speaker 5: us was quite proper and indeed what she should have
Speaker 5: done under the statute that Congress passed. Judge Moore engaged
Speaker 5: in that preliminary investigation decided that there was enough to
Speaker 5: move forward, and I think she asked Judge Newman to
Speaker 5: voluntarily take senior status, but she told Judge Newman that
Speaker 5: she would be identifying a complaint that initiates a formal proceeding,
Speaker 5: and so that started the proceeding that led to this report.
Speaker 1: Seems to have escalated this dispute is that Judge Newman
Speaker 1: refused to cooperate with the committee in any way and
Speaker 1: refused to submit to medical testing.
Speaker 5: Yeah, that's exactly right, June. And that is one of
Speaker 5: the things that makes this unique, I think, and also
Speaker 5: very troubling because at each stage Judge Moore and the
Speaker 5: Special Committee asked what they ordered Judge Newman to do
Speaker 5: these various things, submit to testing and submit to interviews
Speaker 5: and so forth, and each time Judge Newman said yes,
Speaker 5: but only under certain conditions, the Chief Judge added to
Speaker 5: the charges charges of misconduct based on failure to cooperate.
Speaker 5: So it was indeed an escalate proceeding where we had
Speaker 5: this back and forth and each time new charges were added,
Speaker 5: until finally the Special Committee ended up limiting its initial
Speaker 5: consideration only to the misconduct charges of failing to cooperate,
Speaker 5: and nominally that is what this order is about. It's
Speaker 5: not about the disability. Well, that's obviously what underlies it,
Speaker 5: but the sanction is imposed for the misconduct of failing
Speaker 5: to cooperate. And I think that's a serious problem here
Speaker 5: because there's really a mismatch between the underlying concern, which
Speaker 5: is disability, and the formal charge, which is misconduct by
Speaker 5: reason of failure to cooperate.
Speaker 1: It seems like that failure to cooperate, it's hard for
Speaker 1: Judge Newman to disagree with that because she hasn't cooperated.
Speaker 5: That is certainly true, she hasn't cooperated. But her argument,
Speaker 5: which the committee rejects, is that her failure to cooperate
Speaker 5: was justified because of what she views as procedural failings
Speaker 5: in this proceeding. In other words, it's sort of analogous
Speaker 5: to contempt proceeding as a means of testing an injunctive
Speaker 5: order that, in order to challenge the validity of the proceedings,
Speaker 5: Judge Newman refused to comply with the order.
Speaker 1: The details in this one hundred and eleven page report
Speaker 1: and two hundred plus pages of exhibits were some say troubling,
Speaker 1: others say distressing to read. Can you tell us a
Speaker 1: little bit about what's disclosed.
Speaker 5: Yes, well, there's a lot of stuff there. Most of
Speaker 5: it is about interactions with court employees. But there's one
Speaker 5: email chain, as you say, it's not two hundred pages
Speaker 5: of appendices. There's one email chain towards the end of
Speaker 5: those appendencies that I found very significant because it's all
Speaker 5: they are except for the every action of names and
Speaker 5: other details. But it's over a course of two days
Speaker 5: in July, as I recall and Judge Newman repeatedly requests
Speaker 5: in these emails, she repeatedly requests the return of what
Speaker 5: she calls her chambers computer with my stored information. And
Speaker 5: you have Chief Judge Moore and the director of it
Speaker 5: and the Clerk of Court. They all repeatedly tell her
Speaker 5: that there is no chamber's computer with her stored information
Speaker 5: because everything, all the information is on the network drive.
Speaker 5: And you have Judge Newman just seems unable to comprehend
Speaker 5: what they're telling her, because she makes the same requests
Speaker 5: again and again. And I have to say, I don't
Speaker 5: think anyone can read that chain and not have some
Speaker 5: doubts about Judge Newman's mental capacity. It is sad and troubling,
Speaker 5: but it provides some powerful support for the committee's conclusions
Speaker 5: about Judge Newman's situation.
Speaker 1: One thing that sort of has always puzzled me is
Speaker 1: that she's even refused to acknowledge that she had a
Speaker 1: heart attack, and that seems like something that could easily
Speaker 1: be acknowledged and could easily be either proven or disproven.
Speaker 5: Well, I suppose one can read that as the word
Speaker 5: that comes to mind is denial, and I think that
Speaker 5: is part of what the committee is saying, that Judge
Speaker 5: Newman does not acknowledge in any way that she has
Speaker 5: any kind of problem if you look at what's there,
Speaker 5: of course, but you also look at what is not there.
Speaker 5: And one spiking thing about the way the committee went
Speaker 5: about its proceeding is that it decides, I did it
Speaker 5: affirmatively not to conduct any interviews with the other judges.
Speaker 5: In other words, all of this is based very explicitly
Speaker 5: on reports from court staff, and that just seems very
Speaker 5: odd to me. There may be some reasons for it,
Speaker 5: but you would think that it would be at least
Speaker 5: as important to hear from other judges who have sat
Speaker 5: in conference with her deciding cases. So that's after roll
Speaker 5: of the function we're talking about. Deciding cases, and the
Speaker 5: best information about Newman's capacity to decide cases would be
Speaker 5: the judges who, over the last two or three years
Speaker 5: have sat in private conferences after the arguments and thrashed
Speaker 5: out the issue. Did she understand the issues in these
Speaker 5: conversations except the occasional I bank, there are three judges
Speaker 5: sitting in the room together. Did she understand than what
Speaker 5: was being said? Were her comments coagent? Were they responsive
Speaker 5: to the issues in the case? To my mind, that
Speaker 5: would be for the most important evidence about Judge Newman's
Speaker 5: mental capacity, and the committee deliberately and self consciously decided
Speaker 5: not to pursue that evidence.
Speaker 1: It seems as another thing that can be very easily
Speaker 1: demonstrated that even though her workload was significantly reduced, she
Speaker 1: took four times as long to write half the opinions
Speaker 1: while sitting on half the number of cases as her colleagues.
Speaker 1: So that seems pretty easily demonstrable.
Speaker 5: Yes, the low productivity and the delays, we didn't have
Speaker 5: to wait for this report for that. In fact, I
Speaker 5: think George Moore's initial order identifying it had several examples
Speaker 5: of very very long delays, including some very routine cases,
Speaker 5: and that actually conceivably could be misconduct. Delay in a
Speaker 5: single case is not recognizable under the Act, but a
Speaker 5: repeated pattern of delay could be misconduct, but that would
Speaker 5: not necessarily reflect a disability. There are just some judges
Speaker 5: who are or become low, but that is certainly something
Speaker 5: that could fall within the Act given a pattern that
Speaker 5: is described in both this and the documents.
Speaker 1: Well, one lawyer pointed out that in defense of Judge
Speaker 1: Newman's capabilities, that she issued a dissent in a case
Speaker 1: recently that was well written and shows she does have
Speaker 1: something to contribute.
Speaker 5: Yes, and you know that's evidence that should be considered.
Speaker 5: I suppose what response would be is that, given the
Speaker 5: way a judge works today with considerable assistance from law marks,
Speaker 5: the publication of an opinion, whether it's a court opinion
Speaker 5: or a descent, does not necessarily tell us what we'd
Speaker 5: want to know about the judge. That's why I think
Speaker 5: it is so important and desirable to have the evidence
Speaker 5: of the judges who sat on the panels with Judge Newman,
Speaker 5: because they could tell us whether she knew what she
Speaker 5: was doing and was making arguments of the quality that
Speaker 5: the lawyer you quote found in the descent that would
Speaker 5: tell us whether Judge Newman herself is able to make
Speaker 5: cogent and coherent legal arguments.
Speaker 1: The report included Judge Newman's conduct thwarting the Committee's investigation
Speaker 1: cannot go unpunished and cannot be met with a minor
Speaker 1: sanction that a life tenured judge might ignore. So what
Speaker 1: are they suggesting?
Speaker 5: Well, that goes back to the basic point, which is
Speaker 5: which you mentioned earlier, which is that the Committee and
Speaker 5: Chief Judge Moore, who is of course a member of
Speaker 5: the Committee, have turned a disability investigation into a misconduct proceeding.
Speaker 5: And it is troubling there that very language you quote
Speaker 5: it severe sanctions. The nineteen eighty Acts was designed as
Speaker 5: a forward looking statute and not primarily punitive. And in fact,
Speaker 5: there was a proceeding some years ago involving a judge
Speaker 5: who was abusive toward lawyers and others in his courtroom,
Speaker 5: and the fifth thir Judicial Council ordered a one year
Speaker 5: suspension just as here, and when the Judicial Conference Committee
Speaker 5: reviewed that order, it upheld it, but said only in
Speaker 5: so far as it is remedial rather than punitive, meaning
Speaker 5: that the judge would undergo counseling or treatment or simply
Speaker 5: self reflection and come out of it able to be
Speaker 5: a productive judge again. But this sanction is not being
Speaker 5: imposed in that way. Nobody thinks that a year or
Speaker 5: cases will help cure the problems that the Committee perceives.
Speaker 5: And indeed, as the language you just quoted makes clear,
Speaker 5: the Committee does seem to view this as punitive rather
Speaker 5: than remedial. So that is troubling under the statute.
Speaker 1: Thanks so much for being on the show, Arthur. That's
Speaker 1: Professor Arthur Hellman of the University of Pittsburgh School of Law.
Speaker 1: And that's it for this edition of The Bloomberg Law Show.
Speaker 1: Remember you can always get the latest legal news on
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Speaker 1: Show every weeknight at ten pm Wall Street Time. I'm
Speaker 1: June Grosso and you're listening to Bloomberg