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Speaker 1: This is Bloomberg Law with June Brusso from Bloomberg Radio.

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Speaker 2: Every day, every day from now until the election, we're

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Speaker 2: giving out a million dollar prize. That is, and all

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Speaker 2: you have to do is sign a petition in support

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Speaker 2: of a constitution. It's very straightforward. You don't even have

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Speaker 2: to vote. You don't have to vote. You just have

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Speaker 2: to sign a petition saying you believe in the Constitution,

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Speaker 2: which if you already believe in the Constitution, you're just

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Speaker 2: signing something you already believe and you can ruin a

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Speaker 2: million dollars.

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Speaker 1: That's awesome, awesome, Maybe straightforward, not really. Elon Musk left

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Speaker 1: out that being registered to vote is a prerequisite to

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Speaker 1: being eligible for that million dollar check. The world's richest

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Speaker 1: man has already committed at least seventy million dollars to

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Speaker 1: help former President Donald Trump in the presidential election. Now,

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Speaker 1: Musk is pledging to give away one million dollars a

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Speaker 1: day to voters for signing his Political Action Committee's petition

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Speaker 1: supporting the First and Second Amendments registered voters in swing states.

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Speaker 1: That is, he's already given out two of those million

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Speaker 1: dollar checks in Pennsylvania and has plans to expand the

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Speaker 1: sweep stakes to registered voters in seven battleground states this week.

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Speaker 1: Pennsylvania Governor Josh Shapiro, a Democrat who previously served as

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Speaker 1: the Swing States Attorney General, said Sunday on NBC's Meet

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Speaker 1: the Press that law enforcement should look into Musk's giveaway.

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Speaker 3: I think there are real questions with how he is

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Speaker 3: spending money in this race, how the dark money is

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Speaker 3: flowing not just into Pennsylvania, but apparently now into the

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Speaker 3: pockets of Pennsylvanians. That is deeply concerning. Look, Musk obviously

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Speaker 3: has a right to be able to express his use.

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Speaker 3: He's made it very very clear that he supports Donald Trump.

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Speaker 3: I don't obviously we have a difference of opinion. I

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Speaker 3: don't deny him that right. But when you start flowing

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Speaker 3: this kind of money into politics, I think it raises

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Speaker 3: serious questions that folks may want to take a look at.

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Speaker 1: Does musks give away violate the law or not? Well,

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Speaker 1: it depends joining me is elections law expert Richard Brofald,

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Speaker 1: a professor at Columbia Law School. Rich tell us about

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Speaker 1: Trump's giveaway.

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Speaker 4: So elon Musk is offering to pay people to get

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Speaker 4: other people who are registered to vote to sign a

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Speaker 4: petition supporting free speech and the right to bear arms.

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Speaker 4: So if you're able to get somebody to do that,

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Speaker 4: you will get forty seven dollars for referring a registered

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Speaker 4: voter to sign the petition. In addition, he's going to

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Speaker 4: put the names in a lottery and one person a

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Speaker 4: day will then get a million dollars if they're a

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Speaker 4: registered voter who signed the petition. So that's the goal

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Speaker 4: is one petition signer and you are to sign the position,

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Speaker 4: you've got to be a registered voter will get a

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Speaker 4: million dollars in Pennsylvania. And then also he's doing the

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Speaker 4: same thing and other.

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Speaker 1: States, and it's just the swing states, just the swing states.

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Speaker 1: Pennsylvania Governor Josh Shapiro said, I think it's something that

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Speaker 1: law enforcement could take a look at. Does this violate,

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Speaker 1: first of all, federal law.

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Speaker 4: Well, there is a federal law that prohibits someone from

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Speaker 4: paying someone else to register to vote, not just to vote,

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Speaker 4: but to register to vote. The trick here is it's

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Speaker 4: not clear whether Musk is paying only new registrants or

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Speaker 4: whether if you register to vote twenty years ago, you're

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Speaker 4: still religible. You still get the money. If you're bringing

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Speaker 4: in people who registered twenty years ago, or you registered

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Speaker 4: twenty years ago, you're still eligible for the money. And

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Speaker 4: it's not clear if the federal law which prohibits people

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Speaker 4: for registering to vote also applies to paying people who

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Speaker 4: registered a long time ago, as opposed to in response

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Speaker 4: to the payment. I think the federal law is probably

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Speaker 4: intended to prohibit paying somebody in order to get them

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Speaker 4: to register to vote, but it's not that clear. It

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Speaker 4: just says pays or offers to pay or accepts payments

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Speaker 4: for registration to vote or voting, but voting isn't coming

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Speaker 4: up in this at all. He's not paying anybody for voting.

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Speaker 4: He's entirely focused on registration. And when it says pays,

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Speaker 4: their offers to pay or accept payment for registration, it's

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Speaker 4: not clear whether that means new registration, you weren't registered

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Speaker 4: before you got paid, and now you're going to register,

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Speaker 4: or if it turns out he's paying everybody in the

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Speaker 4: States who registered it, even if they are registered in

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Speaker 4: nineteen eighty, because they're registered. Although his intention is clear

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Speaker 4: to get new people to register and doing that would

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Speaker 4: clearly violate the law. He's written it in such a

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Speaker 4: way that it would seem to apply to people who

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Speaker 4: are already registered, who registered before this, and therefore are

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Speaker 4: not being incentivized by this to register. It's not clear

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Speaker 4: if the law applies to them, and the way it's written.

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Speaker 4: I think people who registered a year ago or fifty

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Speaker 4: years ago would be eligible to count towards the forty

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Speaker 4: seven dollars for bringing in somebody and to be eligible

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Speaker 4: to sign the petition to get the million.

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Speaker 1: But even if some of the voters were registered already,

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Speaker 1: if some of them weren't registered, and the odds are

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Speaker 1: good that's the case, then he's violated the law.

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Speaker 4: Right If he's paying people to register to vote, that's illegal.

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Speaker 1: Now Musk is saying he's not paying them to register

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Speaker 1: to vote, he's paying them to sign a petition, but

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Speaker 1: he only wants people who are registered.

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Speaker 4: To registered to vote to sign artificial I think that

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Speaker 4: one's easy to get by. He is paying for the

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Speaker 4: joint activity of being registered and signing a petition. If

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Speaker 4: he signed the petition and weren't registered to vote, you

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Speaker 4: get nothing. So clearly being registered to vote is crucial

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Speaker 4: to getting paid and being eligible for the million dollars.

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Speaker 1: So then could he be prosecuted conceivably?

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Speaker 4: I mean it is a crime. I mean, it would

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Speaker 4: obviously be very controversial because he's written it relatively careful,

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Speaker 4: and it's true that many of the people he's paying

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Speaker 4: presumably were registered before. But if it does have the

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Speaker 4: effect of getting some people to register who hadn't been

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Speaker 4: registered before, then I think it does fall within the statute.

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Speaker 4: So the thing is, it's a federal crime. So although

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Speaker 4: Joshapiro is raised as a former Attorney general Pennsylvania, the

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Speaker 4: US Attorney would actually have to decide this. I guess

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Speaker 4: the local US attorneys and the relevant states are possibly

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Speaker 4: the attorney general, And it would be a pretty dramatic

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Speaker 4: thing to do, frankly, and what he's doing is pushing

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Speaker 4: the envelope, is not breaking through the envelope, but it

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Speaker 4: would be a pretty dramatic response.

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Speaker 1: Also, what about state laws? Don't most states have a right?

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Speaker 4: Most states have laws, some simils. I don't know the

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Speaker 4: speciffics of Pennsylvania or Michigan or the other battleground states,

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Speaker 4: but it's possible that there would be It makes sense.

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Speaker 4: I mean, federal law is interesting, and that it applies

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Speaker 4: to paying people to register, not just paying people to vote.

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Speaker 4: And I don't know for a fact that every state

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Speaker 4: has a similer rule, but it wouldn't surprise me.

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Speaker 1: Apparently, after people started talking about this, they reframe the

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Speaker 1: giveaway as a job opportunity, saying winners will be selected

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Speaker 1: to earn one million. As a spokesperson for America Pack,

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Speaker 1: does that get around it?

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Speaker 4: It might. I mean the trickier one is is bringing

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Speaker 4: in the people who registered voters, I mean being rewarded

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Speaker 4: for bringing in registered voters also, But it might. I mean,

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Speaker 4: the whole thing is a gray area. I mean, he's

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Speaker 4: being very careful in terms of what he's paying people for,

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Speaker 4: and as long as he has some deniability that registration

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Speaker 4: is the goal as opposed to something else, he might,

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Speaker 4: you know. I mean, you might decide that you're an

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Speaker 4: employer and you only want to hire registered voters because

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Speaker 4: you think they're more responsible workers. It's not clear to

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Speaker 4: me that would be illegal.

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Speaker 1: So it seems like the line is blurry and a

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Speaker 1: little confusing. So sum it up for us here.

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Speaker 4: Okay, So I think he has walked up to the

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Speaker 4: line of violating the law and might have violated the law,

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Speaker 4: and might have just walked along the line. The law

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Speaker 4: clearly prohibits paying people to registered to vote, But so

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Speaker 4: long as he's able to treat this as registration, which

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Speaker 4: would include pre existing registrations as a qualification for something,

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Speaker 4: he might be able to get away with it. Certainly,

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Speaker 4: the people who might be able to get this reward

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Speaker 4: who were registered in the past. It's hard to see

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Speaker 4: what the violation is, but yes, they sent that people

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Speaker 4: are getting rewarded for registering. Now that would be a

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Speaker 4: violation of the law. Now, I should also point out

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Speaker 4: that registration in Pennsylvania closed yesterday, so at this point

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Speaker 4: we're talking about people who registered in Pennsylvania at least

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Speaker 4: I don't know when it closes in the other states

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Speaker 4: in a fairly narrow window of days, so I think

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Speaker 4: it's basically not much more than a week where this

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Speaker 4: offer was available and it's now closed. I mean, people

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Speaker 4: can continue to get the million dollars. I think they're

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Speaker 4: pulling a name out of the hat or whatever. It's

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Speaker 4: like a lottery until election day. But registration in Pennsylvania

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Speaker 4: has closed. There will be no new registrations in Pennsylvania

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Speaker 4: before election day.

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Speaker 1: The federal law also makes it a crime for the

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Speaker 1: person who's accepting payment for registration to vote.

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Speaker 4: Yes, it does so, then if.

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Speaker 1: The people who get the million dollars weren't registered.

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Speaker 4: Already, they are potentially at risk. I mean the penalties

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Speaker 4: ten thousand dollars fine or five years in prison. It's

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Speaker 4: hard to imagine anybody going to prison for this. It's

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Speaker 4: not out of the question that out of their million dollars,

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Speaker 4: them I have to pay ten thousand. It seems unlikely

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Speaker 4: that the government would ever go after the voters as

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Speaker 4: opposed to a must himself.

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Speaker 1: How often does the government go after anyone under this statute?

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Speaker 1: Is it rare?

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Speaker 4: I'm not aware. I mean there've been in since where

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Speaker 4: things that seem like they're really not well intentioned efforts

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Speaker 4: to get people to vote. I think at some point

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Speaker 4: it was one year a hogindass. Some ice cream company

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Speaker 4: basically was offering ice cream to people, came in with

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Speaker 4: the I Voted sticker and they were basically told they

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Speaker 4: shouldn't do that.

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Speaker 1: Also, can we say that he has funneled almost seventy

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Speaker 1: five million dollars into his America pack witholdout citizens United

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Speaker 1: Would any of these packs be possible?

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Speaker 4: Yeah, if it was his own money as opposed to

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Speaker 4: money from Tesla or his corporation. Individuals are free to

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Speaker 4: spend as much as they want of their own money

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Speaker 4: anytime since Buckby v. Valeo, Citizen and I have only

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Speaker 4: affected the use of corporate dollars. So I don't know

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Speaker 4: if he's using his personal dollars or dollars from one

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Speaker 4: of his companies. If it's one of his companies, yes,

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Speaker 4: then citizeney U I admitted, possible. But if it was

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Speaker 4: his personal funds, then Citisney Night had nothing to do

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Speaker 4: with it.

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Speaker 1: It may not be technically wrong, but it just seems

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Speaker 1: right big.

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Speaker 4: Yeah. No, it's it's paying people to register to vote,

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Speaker 4: and it's designed to get people of a certain political

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Speaker 4: perspective to register to vote. So yeah, but it's you know,

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Speaker 4: right now, the law was written with other shenanigans in mine,

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Speaker 4: and he came up with something different.

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Speaker 1: Not long until election day. Bloomberg has reported there were

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Speaker 1: some one hundred and sixty five cases about election law

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Speaker 1: percolating in the last two years. Can you tell at

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Speaker 1: this point what might be an issue after the election.

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Speaker 4: It's hard to tell because we won't know until actually

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Speaker 4: after it happens. I think what happened in twenty twenty,

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Speaker 4: Nobody who was predicted that, and certainly in two thousand

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Speaker 4: nobody saw the hanging beets is an issue. So I

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Speaker 4: don't think we're gonna know until actually happens.

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Speaker 1: Okay, thanks so much, rich that's Professor Richard Brefalt of

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Speaker 1: Columbia Law School coming up next on the Bloomberg Law Show.

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Speaker 1: If it's Wednesday, a Houston based boutique law firm is

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Speaker 1: placing bets on lawsuits, and so far picking winners has

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Speaker 1: made the firm's partner some of the highest paid in

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Speaker 1: the country. If it's Wednesday and it's noon, one law

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Speaker 1: firm is placing bets on lawsuits in a unique vetting

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Speaker 1: process that leads to up or down votes on cases

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Speaker 1: that have cost American businesses billions of dollars in damages.

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Speaker 1: The Sussman Godfrey firm has a knack for taking on

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Speaker 1: cases that generate a lot of publicity and some stunning results.

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Speaker 1: Think about that seven hundred and eighty seven million dollar

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Speaker 1: defamation settlement with Fox News, and they're the ones suing

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Speaker 1: Open Ai on behalf of The New York Times By

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Speaker 1: investing its own time and money with contingent fee arrangements.

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Speaker 1: The Houston based firm takes the risk that it can

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Speaker 1: pick more winners than losers and in the process make

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Speaker 1: more money than it otherwise would by billing clients by

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Speaker 1: the hour. It seems to be working for the boutique firm,

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Speaker 1: with its back to back record setting years. Successfully picking

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Speaker 1: winners has made the firm's partners some of the highest

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Speaker 1: paid in the country, with profits of nearly seven million

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Speaker 1: dollars per partner last year. Joining me is roy Strom

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Speaker 1: Bloomberg Law senior correspondent who's written about the firm. Roy

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Speaker 1: tell us what happens at Sussman Godfrey every Wednesday at noon.

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Speaker 5: So at noon on Wednesdays at Susman Godfrey, which is

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Speaker 5: the big law firm well known for its point of

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Speaker 5: side litigation work. These lawyers they filter into a conference room.

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Speaker 5: They have offices in Hughes since that's their biggest office.

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Speaker 5: They walk in, there's partners on Zoom and other offices,

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Speaker 5: and they go around and they pitch their colleagues, maybe

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Speaker 5: as many as one hundred and fifty lawyers on the

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Speaker 5: next big lawsuit that the firm should invest its time

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Speaker 5: and its money in. Thus, when godfre He takes these

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Speaker 5: cases on contingency fee, which means they really only get

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Speaker 5: paid if they win. And so they're a big partnership.

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Speaker 5: They need some way to decide what they should be

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Speaker 5: spending their time on, how they should be spending their money.

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Speaker 5: And so they go in front of this group of

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Speaker 5: lawyers and they make their case, and the colleagues poke

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Speaker 5: holes in it. They probe this sort of legal theory.

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Speaker 5: They question the damages, they talk about the judges who

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Speaker 5: might be involved, where the appeals could be heard, and

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Speaker 5: probably anything else that I couldn't even think about a

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Speaker 5: lawyer would question a case about.

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Speaker 1: And then it just takes an up or down vote

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Speaker 1: of the partners or of the too.

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Speaker 5: Yeah, the partners vote and the associates vote. The associates

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Speaker 5: are involved in the meeting as much as the partners are,

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Speaker 5: and they're asked to weigh in.

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Speaker 4: One of the.

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Speaker 5: Partners we spoke with said that he was pushed in

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Speaker 5: one of these meetings by an associate and this associates

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Speaker 5: questioning ultimately sort of swayed the group to vote the

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Speaker 5: case down, and that associates ultimately went on to become

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Speaker 5: a partner. And I think the firm thinks that having

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Speaker 5: these associates involved is a good way to build the

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Speaker 5: culture of the place. You could imagine that these sorts

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Speaker 5: of meetings could be kind of contentious, and if not contentious,

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Speaker 5: at least a level of sort of dispute that I

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Speaker 5: think a lot of firms might not be comfortable with.

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Speaker 5: So having these associates in there and having them having

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Speaker 5: viewed these cases through the lens of their partners for

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Speaker 5: years really prepares them, I think, in the firm's view,

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Speaker 5: to ultimately stand up one day and pitch for the

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Speaker 5: cases that they think the firm should be taking on. So, yeah,

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Speaker 5: it's a wide range of the firm's lawyers who are

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Speaker 5: here in these meetings and debating over these cases.

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Speaker 1: And before the meeting, I mean, what's the prep before

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Speaker 1: the meeting.

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Speaker 5: So the meetings are on Wednesdays, and partners send around

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Speaker 5: on Mondays a sort of outline or written pitch about

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Speaker 5: the case that they're going to bring up in the meeting,

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Speaker 5: and lawyers at the firm will read that Monday pitch

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Speaker 5: and they will respond in writing over email, asking some questions,

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Speaker 5: sort of getting some baseline understanding of what the case

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Speaker 5: is about, and there'll be some back and forth over

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Speaker 5: that email chain, and a lot of times that knocks

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Speaker 5: cases out of the Wednesday meeting. One of the managing

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Speaker 5: partners at the firm told us that there was no

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Speaker 5: real way to get a sense of what the sort

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Speaker 5: of acceptance rate is for the cases that the partners

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Speaker 5: bring up, because many of the cases don't even make

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Speaker 5: it into this Wednesday meeting by the time partners have

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Speaker 5: picked them apart after the Monday emails. The partner who

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Speaker 5: raised it might say, Okay, I have more to think about,

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Speaker 5: I have more questions to answer before I go before

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Speaker 5: the whole firm, or they might say, you know what,

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Speaker 5: on second thought, I think you guys are right. This

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Speaker 5: probably isn't the case for us.

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Speaker 1: And does the lawyer who pitched it. Does that lawyer

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Speaker 1: take point on the case, Do they actually litigate the

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Speaker 1: case or are they just backing some other law firm.

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Speaker 5: The lawyers who pitched these cases will be working these cases,

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Speaker 5: you know, to settlement or to trial. The firm staffs

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Speaker 5: its cases itself, of course, and so they're not a

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Speaker 5: litigation funder who might have a discussion like this about

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Speaker 5: how to allocate their money at different law firms different cases.

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Speaker 5: This is a law firm that's deciding how to spend

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Speaker 5: its own time, and so the partners who are raising

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Speaker 5: a particular case certainly intend to be involved in litigating

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Speaker 5: that case alongside colleagues and.

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Speaker 1: Tell us about some of the high profile cases they've

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Speaker 1: recently taken on.

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Speaker 5: I think probably the best known case Thatsessman Godfrey has

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Speaker 5: taken on recently was the defamation claims brought by Dominion

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Speaker 5: Voting Systems against Fox News over the sort of claims

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Speaker 5: in the wake of the twenty twenty presidential election that

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Speaker 5: these voting systems had somehow been corrupted or were part

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Speaker 5: of a broader effort to steal the twenty twenty election.

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Speaker 5: And of course those claims led to a seven hundred

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Speaker 5: and eighty seven million dollars settlement that Fox News had

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Speaker 5: to pay basically at the doorsteps of a trial, after

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Speaker 5: a lot of discovery had happened and people learned about

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Speaker 5: these sort of inner discussions at Fox News about these claims,

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Speaker 5: some of the reservations that even the Fox News people

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Speaker 5: had about what they were saying on the air, and

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Speaker 5: assessment Godfrey represented Dominion in other cases as well that

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Speaker 5: certainly were big time in the news and resulted in

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Speaker 5: some huge settlements.

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Speaker 1: Tell us about the NFL suit.

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Speaker 5: Yeah, they also were behind this suit that accused the

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Speaker 5: NFL of antitrust violations regarding their long time Sunday ticket package.

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Speaker 5: This offering where you could watch sort of any game

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Speaker 5: that the NFL was airing, no matter what market you

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Speaker 5: were in. And I think this lawsuit alleged that they

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Speaker 5: had artificially inflated the price of that package, and that

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Speaker 5: led to a big verdict against the NFL. It was

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Speaker 5: almost five billion with a b dollar vert A judge

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Speaker 5: overturned that verdict recently, so that's not going to go

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Speaker 5: into Sustan God for win column. But it was certainly

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Speaker 5: a Newsy case and the NFL Commissioner, Roger Goodell, had

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Speaker 5: to give testimony a trial and at least the jury

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Speaker 5: ruled in their favor, but a judge overturned it.

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Speaker 1: Like I said, Roy, do you know how other firms

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Speaker 1: decide whether they're going to take on cases? I mean,

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Speaker 1: do the partners usually vote? Yeah?

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Speaker 5: I mean that's part of the thing that is unique

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Speaker 5: about this firm is that they have grown to such

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Speaker 5: a size. I think last year they brought in nearly

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Speaker 5: seven hundred and fifty million in revenue, which makes them

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Speaker 5: one of the hundredth largest law firms in the country.

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Speaker 5: And it's just rare that a firm with such a

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Speaker 5: big contingency practice grows to that scale, And so the

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Speaker 5: firms that they're competing with are oftentimes these sort of

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Speaker 5: at least on that revenue figure, are these sort of

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Speaker 5: corporate defense firms that have a much less risk tolerant

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Speaker 5: business model. They're billing by the hour, they're defending the

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Speaker 5: types of claims that Lessman Godfrey would bring. But those

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Speaker 5: firms do from time to time take up contingency fee

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Speaker 5: cases the way Sussmen has made its name, and they

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Speaker 5: oftentimes have a much less democratic sort of process for

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Speaker 5: selecting those cases. Some of these firms will have a

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Speaker 5: contingency fee committee that might take the information and then

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Speaker 5: sort of make their own decision. It might just be

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Speaker 5: a sort of litigation department leadership making those types of decisions,

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Speaker 5: but certainly very rare to have a dialogue between one

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Speaker 5: hundred and fifty people over one case.

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Speaker 1: And you mentioned defense oriented firms. Some of the questions

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Speaker 1: that Sussman Godfrey lawyers ask are based on the defendants

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Speaker 1: in the case. Does the lawsuit threat the defendant's fundamental

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Speaker 1: business model that might motivate a defendant to fight you

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Speaker 1: to the death. So they're looking at all aspects of

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Speaker 1: the case.

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Speaker 5: Yeah, that was one of the sort of topics that

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Speaker 5: I thought was really interesting. They think about the posture

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Speaker 5: the defendant sort of mentality going into a case. What

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Speaker 5: might prevent them from settling a case like this If

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Speaker 5: you are threatening this sort of fundamental business model that

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Speaker 5: this business the defendant uses, what does that mean for

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Speaker 5: the likely outcome of the case? Does that mean that

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Speaker 5: they're going to really go to the math? Does that

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Speaker 5: raise the cost of fighting this dispute? And just some

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Speaker 5: of that sort of psychological discussion that they laid out

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Speaker 5: I thought was really interesting.

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Speaker 1: Successfully picking winning cases has made lawyers at the firm

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Speaker 1: of Sussman Godfrey among the highest paid in the country.

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Speaker 1: Last year, it brought in nearly seven hundred and fifty

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Speaker 1: million dollars in revenue, the result of major contingency wins,

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Speaker 1: including the seven hundred and eighty seven million dollar Fox

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Speaker 1: settlement with dominion voting systems. The firm's unique process of

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Speaker 1: vetting cases plays a central role in its skyrocketing revenue.

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Speaker 1: I've been talking to Bloomberg Law senior correspondent Roy Strom. Roy,

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Speaker 1: these Wednesday meetings are nothing new. They date back to

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Speaker 1: the firm's founding some forty five years ago.

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Speaker 5: That's right. The firm got its start in Houston. Founder

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Speaker 5: Steve Sussman was a very big personality, a very well

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Speaker 5: known successful lawyer who sort of crafted this business practice

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Speaker 5: and who was well known for the types of cases

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Speaker 5: assessment still does now. Steve Sussman died in twenty twenty

405
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Speaker 5: unexpectedly after a bicycle accident, But the firm is really

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Speaker 5: molded and shaped by the way he ran things.

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Speaker 1: How do they determined partner compensation?

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Speaker 5: The partner compensation there is sort of interesting because it's

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Speaker 5: a course of partnership, and so the profits of the

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00:23:13,440 --> 00:23:18,280
Speaker 5: firm are divided up every year to the partners. But

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Speaker 5: the partners sort of have their own risk tolerance and

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Speaker 5: they kind of manage their own books of business for

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Speaker 5: lack of a better term. They sort of choose which

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Speaker 5: cases they're going to be working on, and some of

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Speaker 5: the partners are very risk tolerant. They might have sort

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Speaker 5: of all of their cases being all their time being

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Speaker 5: spent on contingency fee cases, and as the managing partners

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Speaker 5: of the firm explained to us, that will impact their

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Speaker 5: personal compensation. They might have some leaner years while they're

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Speaker 5: waiting for those cases to finalize, and then they'll of

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Speaker 5: course be compensated in line with the conclusions of those case.

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Speaker 5: Their firm does do hourly billing cases, it's a smaller

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Speaker 5: portion of their revenue compared to most any other firm,

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Speaker 5: but partners who work on those will be compensated more

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Speaker 5: like your typical big law attorney. So the partners are

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Speaker 5: sort of almost operating. They're making decisions based on their

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Speaker 5: own risk tolerance in terms of what their compensation will

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Speaker 5: look like year to year. But the basic aspects of

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Speaker 5: that compensation model are the revenue the partner generates and

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Speaker 5: the work that partner does for other cases that they

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Speaker 5: didn't bring in. So that's fairly consistent with other firms.

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Speaker 5: It's just the partners kind of pick and choose how

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Speaker 5: much of their work is done on this contingency the basis,

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Speaker 5: which just by its very nature has a much lumpier

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Speaker 5: return model compared to the billable.

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Speaker 1: Hour in a lawsuit. Last year, an agreement between the

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Speaker 1: litigation funder and the law f became public, showing the

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Speaker 1: funder agreed to pay the firm's monthly fees of up

439
00:25:05,640 --> 00:25:10,320
Speaker 1: to six million, nine hundred and fifteen thousand dollars. But

440
00:25:10,480 --> 00:25:13,800
Speaker 1: usually the firm is the one funding the litigation.

441
00:25:14,440 --> 00:25:17,840
Speaker 5: Yeah, you know, of course, litigation funding has grown has

442
00:25:17,840 --> 00:25:22,520
Speaker 5: become a much more prominent piece of contingency fee litigation.

443
00:25:23,520 --> 00:25:28,399
Speaker 5: And there was this episode last year lawsuit where the

444
00:25:28,560 --> 00:25:32,800
Speaker 5: agreement between Sussmen Godfrey and a litigation funder became public

445
00:25:32,840 --> 00:25:35,160
Speaker 5: and the course of the litigation, and it did show

446
00:25:35,200 --> 00:25:39,600
Speaker 5: that Sussman was receiving sort of monthly fees on the case.

447
00:25:40,000 --> 00:25:43,240
Speaker 5: And from what I have heard and from what they said,

448
00:25:43,920 --> 00:25:47,160
Speaker 5: that was more of an outlier for the firm. They

449
00:25:47,240 --> 00:25:51,600
Speaker 5: often prefer to use litigation funders to pay for the

450
00:25:51,640 --> 00:25:55,680
Speaker 5: cost some of the expenses and costs of cases, but

451
00:25:55,800 --> 00:25:59,280
Speaker 5: they're less likely to use it in a way that

452
00:25:59,320 --> 00:26:03,320
Speaker 5: would impact the actual return or the damages such that

453
00:26:03,440 --> 00:26:07,000
Speaker 5: the funder is getting a large portion of the total

454
00:26:07,119 --> 00:26:08,320
Speaker 5: award from a case.

455
00:26:09,000 --> 00:26:11,919
Speaker 1: What I thought was interesting also was the hiring practices

456
00:26:12,440 --> 00:26:17,040
Speaker 1: that they only hire people who have clerk for federal judges,

457
00:26:17,080 --> 00:26:19,560
Speaker 1: and they don't hire lateral partners.

458
00:26:20,240 --> 00:26:23,879
Speaker 5: Yeah. Yeah, So the firm from the beginning, I was

459
00:26:23,920 --> 00:26:26,160
Speaker 5: really looking for a sort of you know, the top

460
00:26:26,200 --> 00:26:29,720
Speaker 5: of the top talent coming out of law schools. Of course,

461
00:26:29,760 --> 00:26:35,879
Speaker 5: they are litigators, and so they do hire people requisite

462
00:26:35,920 --> 00:26:40,240
Speaker 5: to have a federal clerkship before coming to the firm,

463
00:26:40,280 --> 00:26:43,520
Speaker 5: which kind of sets the bar pretty high to begin with.

464
00:26:44,320 --> 00:26:46,880
Speaker 5: And then they really hope unlike a lot of big

465
00:26:46,960 --> 00:26:50,920
Speaker 5: law firms which kind of accept and acknowledge that associates

466
00:26:51,000 --> 00:26:53,000
Speaker 5: might work there some amount of time and then go

467
00:26:53,080 --> 00:26:56,800
Speaker 5: find something else to do, I think this firm really

468
00:26:56,840 --> 00:27:00,280
Speaker 5: does want these associates to stay there for the law hall,

469
00:27:00,320 --> 00:27:03,920
Speaker 5: to understand their business, to grow into it and become partners.

470
00:27:04,359 --> 00:27:08,520
Speaker 5: And they are much more focused on promoting partners from

471
00:27:08,560 --> 00:27:12,280
Speaker 5: their internal ranks as opposed to hiring from other law firms,

472
00:27:12,320 --> 00:27:14,879
Speaker 5: which of course does set them apart from your typical

473
00:27:14,880 --> 00:27:18,439
Speaker 5: big law firm which today very very active and you

474
00:27:18,800 --> 00:27:22,040
Speaker 5: poaching partners from rivals is just something that this firm

475
00:27:22,560 --> 00:27:24,680
Speaker 5: hasn't done much of doesn't intend to do.

476
00:27:25,240 --> 00:27:28,840
Speaker 1: So if it's Wednesday, we know where all the lawyers

477
00:27:29,280 --> 00:27:32,280
Speaker 1: at Susman Godfrey are. Thanks so much for coming on

478
00:27:32,320 --> 00:27:36,160
Speaker 1: the show, Roy, it's a really fascinating story. That's Bloomberg

479
00:27:36,240 --> 00:27:40,399
Speaker 1: Law senior correspondent Roy Strom in other legal news today.

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00:27:40,800 --> 00:27:44,640
Speaker 1: At a legislative committee hearing today in Texas, a death

481
00:27:44,720 --> 00:27:48,160
Speaker 1: row inmate who's proclaimed his innocence for more than two

482
00:27:48,280 --> 00:27:52,640
Speaker 1: decades had some high profile supporters speaking on his behalf.

483
00:27:53,240 --> 00:27:57,880
Speaker 1: Criminal defense attorney turned author John Grisham says the system

484
00:27:58,200 --> 00:28:02,000
Speaker 1: rushed to judge Robert roberts an autistic man who was

485
00:28:02,080 --> 00:28:05,200
Speaker 1: convicted of shaking his two year old daughter to death

486
00:28:05,359 --> 00:28:06,480
Speaker 1: in two thousand and two.

487
00:28:07,000 --> 00:28:09,920
Speaker 6: The science was terrible, the juris selection was awful. From

488
00:28:09,920 --> 00:28:13,560
Speaker 6: the opening bill, the prosecutor was allowed to point a

489
00:28:13,600 --> 00:28:17,040
Speaker 6: finger at Robert and call him a a baby killer

490
00:28:17,160 --> 00:28:19,040
Speaker 6: whatever that persisted throughout the trial.

491
00:28:20,040 --> 00:28:23,639
Speaker 1: Shaking baby syndrome has been discredited as the basis for

492
00:28:23,720 --> 00:28:29,159
Speaker 1: criminal prosecutions, and psychologist Phil McGrath, better known as Doctor Phil,

493
00:28:29,680 --> 00:28:33,359
Speaker 1: told the committee that his review of Robert Robertson's case

494
00:28:33,400 --> 00:28:36,440
Speaker 1: has convinced him that the fifty seven year old did

495
00:28:36,520 --> 00:28:38,600
Speaker 1: not shake his young daughter to death.

496
00:28:39,120 --> 00:28:43,560
Speaker 5: If we start executing people in Texas absent due process,

497
00:28:43,720 --> 00:28:45,240
Speaker 5: absent fair trial.

498
00:28:45,400 --> 00:28:48,280
Speaker 3: We are going down a really dangerous Roade.

499
00:28:49,080 --> 00:28:53,640
Speaker 1: Robertson's absence at the highly anticipated hearing was another twist

500
00:28:53,840 --> 00:28:57,360
Speaker 1: in last ditch efforts to spare his life. He had

501
00:28:57,360 --> 00:29:00,480
Speaker 1: been set last Thursday to become the first person in

502
00:29:00,520 --> 00:29:04,520
Speaker 1: the country executed over a murder conviction connected to a

503
00:29:04,600 --> 00:29:09,000
Speaker 1: diagnosis of shaken baby syndrome. He was actually taken to

504
00:29:09,080 --> 00:29:11,760
Speaker 1: the death chamber and was waiting in a holding cell

505
00:29:12,120 --> 00:29:16,040
Speaker 1: when the Texas Supreme Court abruptly halted plans to give

506
00:29:16,120 --> 00:29:19,280
Speaker 1: him a lethal injection. And that's it for this edition

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00:29:19,320 --> 00:29:22,360
Speaker 1: of the Bloomberg Law Podcast. Remember you can always get

508
00:29:22,360 --> 00:29:25,080
Speaker 1: the latest legal news by subscribing and listening to the

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00:29:25,120 --> 00:29:29,160
Speaker 1: show on Apple Podcasts, Spotify, and at Bloomberg dot com,

510
00:29:29,200 --> 00:29:33,440
Speaker 1: slash podcast slash Law. I'm June Grosso and this is

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00:29:33,480 --> 00:29:34,080
Speaker 1: Bloomberg