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QUESTION FOR ENRON JUDGE: TO SHRED OR NOT TO SHRED? R. Neal Batson says his work is done. And now the court-appointed examiner, whose fourth and final report on the Enron Corp.’s massive bankruptcy was made public two weeks ago, wants to shut the door for good on his investigation into the company’s finances. Last week, U.S. Bankruptcy Judge Arthur Gonzalez granted Batson’s request that he and his associates be free from liability in connection with the reports they submitted during the 18-month, $100 million investigation. But the Manhattan judge postponed until Dec. 18 a hearing on Batson’s more controversial requests: That the Alston & Bird partner be excused from having to answer questions or provide documents to third parties involved in related litigation, and that he be permitted to destroy many of the documents gathered in the investigation. But neither the plaintiffs lawyers in shareholders suits against Enron nor the company nor its debtors nor its creditors want the documents near a shredder. “There is simply no urgent or compelling reason that would justify destroying these documents,” wrote Alan Gamza of New York’s Moses & Singer for an Everett, Wash., public utility. “The documents that the Enron examiner seeks to destroy comprise a unique, vast source of information.” Alston & Bird partner Dennis Connolly, who is representing Batson, declined comment. The recent developments come on the heels of Batson’s last report, which blasted two Houston firms, Vinson & Elkins and Andrews & Kurth. The firms advised the energy company on deals involving its special purpose entities that hid billions of dollars of debt and boosted income. On Dec. 1, Gonzalez ruled that Enron’s creditors committee can sue both firms, as well as former Enron executives, including ex-general counsel James Derrick, on claims including malpractice and negligence. John Villa, a Williams & Connolly partner representing Vinson & Elkins, which is also facing a consolidated class action filed by shareholders in Houston federal court, says the recent ruling doesn’t come as a surprise. “It was a largely ministerial action taken by the Bankruptcy Court,” says Villa. “It’s not independently significant.” However, Gonzalez adjourned until further notice the creditors’ motion regarding Kirkland & Ellis, which also did work for Enron. “The examiner’s report doesn’t criticize Kirkland & Ellis,” says firm partner Laurence Urgenson. “The record is even clearer now that there is no legal or factual basis to include us in the suit.” � Lily Henning DOWNSIZING Morgan, Lewis & Bockius announced last week it will close its seven-lawyer Northern Virginia outpost. D.C. managing partner Michael Kelly took over running the McLean office in mid-October, insisting at the time the firm would strengthen its presence there. Firm management declines comment about the decision, but released an internal memo sent to employees. “We have concluded that maintaining an office in Northern Virginia was not materially increasing our opportunities or capacity to attract and serve clients,” the memo says. The announcement comes less than three weeks after NoVa litigation partner Douglas Lobel jumped ship to Arnold & Porter. Morgan, Lewis opened the office in November 2000 during the dot-com boom, but after the Northern Virginia market softened, firms began pulling out, including Skadden, Arps, Slate, Meagher & Flom and O’Melveny & Myers in 2003. � Marie Beaudette AND BULKING UP Morgan, Lewis & Bockius may be on the retreat in Northern Virginia, but the firm is expanding in Northern California. Last week, the firm acquired seven partners in Palo Alto plus one in the District from New York-based intellectual property boutique Pennie & Edmonds. Morgan, Lewis expects to scoop up another 15 to 20 lawyers from the firm in Silicon Valley, and add eight to 10 more lawyers and patent agents in Washington. The moves come amidst merger talks between 172-lawyer Pennie and Jones Day. Pennie D.C. partner Victor Balancia says those discussions spurred him to consider his options. “I think Morgan, Lewis best fits the type of work that I like to do,” says Balancia, who has a significant pharmaceutical litigation practice. Meanwhile, other attorneys in Pennie’s 22-lawyer D.C. office are “waiting to see if they’re going to get offers from Jones Day,” says one Pennie associate here. “I think the bulk of the firm will stay together and go [there].” � Christine Hines CRUNCH TIME As the nation’s federal courts try to cope with meager funding increases proposed by congressional budgeteers, the previously unthinkable idea of staff layoffs is becoming a reality. The court clerk in the Southern District of Florida, one of the busiest courts, has already told 13 of his 165 employees that they are being dismissed or soon will be. And David Sellers, spokesperson for the Administrative Office of the U.S. Courts, says about 1,000 of the 30,000 nonjudge jobs nationwide are in jeopardy unless Congress comes up with more money. “We need a 7.5 percent increase just to cover our uncontrollable costs,” says Sellers. The courts’ budget for fiscal year 2004 has not yet been approved by Congress, but a continuing resolution would only boost the courts’ funding by 4.7 percent. Thus the layoffs. “The judiciary has never before outright released employees because of budgetary constraints,” Sellers says. “We told courts months ago to make contingency plans based on various budget scenarios.” A few districts resorted to furloughs rather than outright staff cuts. A source at the federal courthouse in the District of Columbia says three appeals-court employees who left have not been replaced because of the budget crunch. � Jonathan Groner and Dan Christensen HEALTHY START In the wake of Congress’ passage of a sweeping Medicare bill last month, D.C. health law practices are deepening their ranks. Getting a jump on the hiring was Hogan & Hartson, which recently nabbed Sheree Kanner, former chief counsel to the administrator of the Centers for Medicare and Medicaid Services in the Department of Health and Human Services. The firm’s health law department head, Ann Vickery, says Hogan is on the lookout for more hires with similar experience. Last week, Colin Roskey, the U.S. Senate Finance Committee’s health policy adviser, joined the D.C. office of Alston & Bird. The firm’s managing partner, Ben Johnson, calls the addition of Roskey “a major coup.” The firm also has its eye on Medicare’s top administrator, Thomas Scully, who is set to step down Dec. 16. Scully has said he is in talks with different firms, including Alston & Bird and Boston-based Ropes & Gray. � Lily Henning ‘TIS THE SEASON Skadden, Arps, Slate, Meagher & Flom has announced a 2004 associate bonus ranging from $2,500 for first-year associates to $20,000 for senior associates, according to a source inside the firm. The bonuses, the first to be announced this year by a New York firm, are the same as last year. Skadden’s associate base salaries tend to be higher than those of other firms, starting at $140,000 for first-years, compared with $125,000 at most firms. So Skadden bonuses are usually smaller than those of comparable firms. Bonuses are down considerably from their height in 2000, when they pushed total first-year compensation to $165,000 at top firms, and senior associates received as much as $100,000 in bonuses. In November 2001, Skadden was also the first firm to announce a bonus, but it supplemented it in January 2002 after most rival firms paid a larger amount. � Anthony Lin, New York Law Journal GOLD MEDAL A team of lawyers from Zuckerman Spaeder scored a big win Dec. 5 when a Utah federal judge dismissed charges against their client Tom Welch, who headed the efforts to bring the Olympics to Salt Lake City. Five years ago, Justice Department prosecutors accused Welch and his deputy Dave Johnson of improperly giving expensive gifts and trips, among other things, to International Olympic Committee officials when Salt Lake City was under consideration for the 2002 Winter Olympics. Welch and Johnson insisted this was common practice, and Olympics officials did not take any action against them. But the pair were charged by federal prosecutors with 15 bribery-related felonies and refused to plea-bargain. Last week, Judge David Sam of U.S. District Court for the District of Utah threw out the charges, saying that the case “offends his sense of justice.” Says Zuckerman partner William Taylor, who led the defense, “We were just ecstatic. It’s been a long, long haul.” � Marie Beaudette NEW DIGS The U.S. Patent and Trademark Office last week officially opened the doors to its new home � an interconnected, five-building campus in Alexandria, Va., complete with heightened security features, an atrium, a child care center, and a museum. By February, 2,600 employees will have moved in, and all 7,100 employees will be in the new work space by mid-2005. The buildings “are designed for optimal performance,” said PTO Director James Rogan at the ribbon-cutting ceremony. But getting them built wasn’t easy � the agency faced multiple suits from its previous landlord as well as opposition in Congress. Despite the roadblocks, “the project is obviously moving towards an extremely successful completion,” says former PTO head Q. Todd Dickinson, now a partner at Howrey Simon Arnold & White. At least one intellectual property law firm, Oblon, Spivak, McClelland, Maier & Neustadt, relocated to Alexandria to be close by the agency. � Christine Hines A LIFE CUT SHORT The brutal slaying of a Baltimore assistant U.S. attorney last week shocked the local legal community. Jonathan Luna, a graduate of University of North Carolina School of Law, started his career in 1993 as an associate at the D.C. office of Arnold & Porter. Luna left the following year for a post in the general counsel’s office of the Federal Trade Commission. He spent two years as a local prosecutor in Brooklyn before joining the Baltimore U.S. Attorney’s Office in 1999. At the time of his murder, Luna, who was 38, was handling a drug conspiracy case, and his family was under police protection. Arnold & Porter managing partner James Sandman says, “We’re stunned. Jonathan was not only a superb young lawyer, but memorably warm and likable.” � Vanessa Blum

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