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04/12/07

Market realities of a law firm's closure


After 47 eventful years, midsize law firm Rider Bennet is closing down on May 31.

"It's like seeing a landmark disappear," commented Daniel Kleinberger, a law professor at William Mitchell College of Law. The news has dismayed the legal community.

At its peak in early 2004, Minneapolis law firm Rider Bennett had 140 attorneys. What caused the firm's closure despite it being profitable?

"Rider Bennet failed to compete in today's increasingly challenging legal marketplace," announced Steve Plunkett, the firm's managing partner in a press release. It was losing its ground to firms with more lawyers, and more resources, he added.

In Kleinberger's opinion, the rise in salaries of entry-level associates along with greater marketing and advertising demands have changed the traditional business model for law firms.

Reportedly, the issue of senior attorneys' compensation made Rider Bennet vulnerable. "And when those attorneys left for other firms, they took their clients with them," acknowledges Plunkett. However, the clients' strong bond with their lawyers rather than the firm as a whole is likely to help Rider Bennet's remaining 91 lawyers, too. The clients most likely won't desert them when they relocate to other firms.

The downfall of the firm is attributed to the market realities. Law firms now need to compete in the marketplace like any other business.

The legal community has nothing but praise for the contributions of the folding firm. "An excellent, high class, operation; a lot of energy, lot of integrity, lot of intelligence, a lot of great people,'' is how Kleinberger portrays the firm.

"The firm was known for its humane culture. It encouraged its partners to be involved in things beyond the law," admires Sheryl Ramstad, a judge on Minnesota's tax court and a former partner of the firm. She praises the firm lavishly for its practice of allowing women to go part-time and offering sabbatical programs to partners.

Ramstad hopes the firm's closure doesn't mean an end to such humane practices.

World Bank appoints law firm to probe internal leak
The World Bank seems to be in trouble again- the second time in a week. Shockingly, it is the Bank's internal matters which have rocked it again.

The root of the bank's trouble can be traced back to a web story released on Fox News website on January 30. The story contained confidential minutes of a board meeting of the Bank. The information displayed a confrontation between the World Bank President Paul Wolfowitz and the Bank's board of member countries.

Perturbed at the disclosure of confidential documents, the Bank is reported to have hired Williams & Connolly, a high profile Washington, DC, litigation firm to probe into the matter leading to the leak.

The Fox story, along with another write up uploaded on its site on March 27, has bewildered the board members.

The leak of internal communications is a second controversy to hit the Bank in a few days.

On Monday, Wolfowitz assured the board to cooperate fully with a probe into a pay increase given to a female staff member, Shaha Riza. According to the Bank staff association, Riza was given a preferential treatment by way of a raise that was twice as large as the Bank rules permit. Reportedly, Wolfowitz is having a personal relationship with Riza. The probe is to expose whether the raise violated staff rules.

BIZARRE NEWS

Whoooops! I removed the wrong testicle!!
A real shocking and painful story. Air Force veteran Benjamin Houghton checked into Veterans Affairs Medical Center hospital in Los Angeles on June 14 to have his left cancerous testicle removed. The problem faced: the surgeons couldn't differentiate between left and right. Yes, you guessed it… they removed the wrong testicle. The 47-year-old was obviously shocked to receive the news, thinking it to be a joke at first. Houghton has now sued the hospital for $200,000 for the "wrong site surgery," after doctors failed to mark the correct testicle before operating. The claim is pending. The hospital's chief of staff has formally apologized to Houghton and his wife. The damage is already done. The part cannot be reattached. But isn't $200,000 too less a price tag for a man's testicles?

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