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Katherine Cárdenas is a partner with Lucas & Cárdenas in Chicago. This program was originally presented on Nov. 30, 2016.
There comes a time in the practice of every plaintiff’s trial lawyer when a client arrives with a million-dollar case. Even though the damages are high and the liability is clear, a lot can go wrong between the selection of a jury and the closing argument.
Your client may be deserving — but not be a sympathetic claimant to the jury.
Jurors may have hidden prejudices that you are reluctant to inquire into.
The defense may have a bogus case, but it may be persuasive to the jury.
When a case is worth millions, smart attorneys invest in presenting their case to a focus group. Frequently used to test out a new product, a political campaign or a television series, a focus group is a demographically diverse group of people assembled to participate in a guided discussion about a particular product before it is launched, or to provide ongoing feedback on a pending lawsuit.
This was the situation that faced Katherine Cárdenas, a partner with Lucas & Cárdenas in Chicago. She has more than 20 years of experience representing adults and minors in every area of personal injury.
After she tested her personal injury case before several panels of ordinary people, she discovered unspoken toxic prejudices in the jury, how the jury viewed her client, and how effective her expert witnesses were.
She adapted her case, changed her opening argument and obtained a significant settlement eight days into the trial, before her client even took the stand.
The elements of a focus group.
The presentation of the case.
What she learned about being an advocate.
Why you should conduct a focus group on your big cases.
Ms. Cárdenas has more than 20 years of experience representing adults and minors who have suffered debilitating injuries in every area of personal injury. She prides herself on tenaciously representing her clients from day one to the very end.
She is a member of the highly esteemed Multi-Million Dollar Advocates Forum due to her repeated success in winning multi-million dollar settlements for her clients. In 2012 was recognized by The National Trial Lawyers as one of the Top 100 Trial Lawyers.
She is an Indiana University graduate and obtained her law degree from Loyola University School of Law Chicago. Ms. Cárdenas has tried numerous cases in Cook County, Will County, and Lake County, Illinois. She has represented clients in Federal Court and has argued before the Supreme Court of Illinois. Ms. Cárdenas is a member of the Illinois State Bar Association, the American Association for Justice and the Illinois Trial Lawyers Association.
Ms. Cárdenas has tried numerous cases in Cook County, Will County, and Lake County, Illinois. She has represented clients in Federal Court and has argued before the Supreme Court of Illinois. Ms. Cárdenas is a member of the Illinois State Bar Association, the American Association for Justice and the Illinois Trial Lawyers Association.
Although the U.S. Chamber of Commerce regularly denounces the “costly” American legal system and the number of lawsuits filed, the Chamber itself is a prodigious litigator, a new report (PDF) from Public Citizen’s U.S. Chamber Watch shows.
To block a federal effort to reduce greenhouse gases that cause climate change.
The Chamber is well-known as the nation’s largest lobbyist and as one of the largest dark money outside spenders on elections. Today [Oct. 26], the Chamber’s Institute for Legal Reform will gather hundreds of members at its annual Legal Reform Summit, featuring former Massachusetts Gov. Mitt Romney as the keynote speaker, to explore what it considers to be the perils of over-litigation.
A Georgia Teen faces felony charge after an alleged Snapchat ‘speed filter’ crash that severely injured the other driver. This material is reproduced from the CEBblog™, Snapchat as Evidence, copyright 2016 by the Regents of the University of California.Reproduced with permission of Continuing Education of the Bar -California. (For information about CEB publications, telephone toll free 1-800-CEB-3444 or visit our Web site, CEB.com).
Several years ago we told you to consider Facebook postings as evidence in legal cases. This is still true, but now there are many more social media platforms to consider. Snapchat in particular has become a fertile source of evidence not to be overlooked.
Snapchat is a photo- and video-messaging app that’s different from other apps in that all photo and video messages on Snapchat (referred to as “snaps”) last for only a short amount of time and then disappear.
Indeed, two people were convicted of a sexual assault after they recorded the attack on Snapchat. Jurors were shown screenshots from the Snapchat video during the trial.
high speed car crashSnapchat’s speed filter, which lets users show how fast they’re going while taking a photo, was used as evidence in a case involving a high speed car crash. Plaintiffs sued both the driver and Snapchat, arguing that the speed filter encourages reckless drivingand can cause crashes. Snapchat’s speed filter also may have played a role a car crash that killed three young women.
And in an extremely macabre instance, a teen posted a Snapchap selfie with a murder victim and it became key evidence against him in his murder trial.
And the ephemeral nature of pictures on Snapchat isn’t necessarily a problem. Sullivanexplains that some Snapchat evidence is retained when users take screenshots of snaps and “Snapchat itself keeps logs of previous snaps.” But even deleted snaps don’t necessarily disappear; digital forensics experts can still pull them from the phone.
Now that you know to look at Snapchat for evidence, would you be able to get it admitted at trial? To learn how to get social media evidence admitted, including the key hurdle of authentication, turn to CEB’s Effective Introduction of Evidence in California, chap 54.
A good sense of humor has been the lucky charm for Attorney Mike Burg in a career that started from the hardscrabble neighborhoods of Chicago, to the red carpet galas of Hollywood, through courtrooms across the country, and into the Trial Lawyer Hall of Fame this year.
Burg highlights the effectiveness of humor — combined with a fierce determination to champion every case he takes on — in his new autobiography, Trial By Fire, One Man’s Battle of End Corporate Greed and Save Lives. Based in Denver, he has won numerous verdicts for his clients with more than 20 in excess of $1 million.
The book recounts a case involving a 2004 gas explosion in a building across the street from the courthouse in Steamboat Springs. So many people were involved that the trial was moved to a makeshift facility in a vacant airport.
“How many of you are nervous?” he asked the potential jurors. They all raised their hands.
“I’m really nervous too. This is my first trial…” he said, as the jurors’ eyes widened. He waited two beats and said, “…in an airport.” He was immediately able to build rapport.
Burg honed his skills early in his career, even working nights in standup comedy where he saw Roseanne Barr get her start.
In the book, readers can applaud him as he recovers $6.4 million in the explosion case. You can root for him as he fights for eight years against UBS for knowingly selling risky mortgages to investors. Readers can cheer him on as he leads hundreds of plaintiffs against companies shilling dangerous drugs like Fen-Phen, Yaz, Zyprexa and Pradaxa.
Lawyers will delight as Burg skewers a corrupt executive from Ortho Evra in a deposition. A doctor with a gold-plated resume, he was a director of the birth control patch company who launched his career by faking drug research. For the story, read the book excerpt The Unmasking of Dr. Andrew Friedman.
In the book, Burg describes how he got involved in mass torts early, when he connected in 1999 with lawyers from Wyoming, which turned out to be a hotbed of Fen-Phen cases. Many women there had taken the diet drug that caused severe heart valve problems and death. By the following year he had settled more than 450 cases.
Mike Burg is the founding shareholder of Burg Simpson in Denver.
Low testosterone replacement. “Unfortunately, this treatment has become a mass tort case. The manufacturers tried to sell testosterone to anyone over 40, when in reality it doesn’t help with sexuality. As your body gets older, your body produces less testosterone naturally. Later in life, testosterone increases risk of heart attack and stroke. It’s a crazy deal,” he says.
Depakote. Abbott Laboratories sold the drug to treat seizures and migraines, but some women who took it while pregnant had babies born with severe birth defects. The company paid $1.6 billion to settle federal charges that it promoted off-label uses of the drug and for paying kickbacks to prescribers to drive sales. Plaintiffs have filed 800 cases in the U.S. District Court for the Southern District of Illinois.
Talcum powder. Jurors in St. Louis hit Johnson & Johnson with $55 million and $72 million verdicts in two trials charging that the company knew that its talc-based Baby Powder and Shower to Shower Powder causes ovarian cancer. “We are gathering an inventory of these cases,” he said.
“That’s why this election is so important. We have to get rid of Citizens United and immunity for generic drugs,” he said. “We’re looking forward to Hillary Clinton winning, and having judges that set an even playing field. We’re seeing a lot of mass torts being stripped away by judges, Dauberting out the experts and then throwing the cases out because there are no experts.
In the book, Burg regales readers with representing everyone from the Little Rascals to Ralph Tamm in the first NFL steroid case. Along the way he’s gone golfing with Michael Jordan, attended George W. Bush’s inauguration with the President’s father, and went to a Hollywood party where Nicole Kidman flirted with him.
Trial by Fire: One Man’s Battle to End Corporate Greed and Save Lives by attorney Mike Burg is available on Amazon.com.
Excerpt from Trial By Fire by Mike Burg.
Ortho-McNeil made and sold a birth control patch from 2002 to 2015. It failed to work and caused massive strokes. Attorney Mike Burg led the plaintiffs’ attorneys in the mass tort litigation against the company, and was conducting the deposition of Dr. Andrew Friedman, a top executive at the company.
Andrew Friedman had worked for a while as a researcher at Harvard as well as at Brigham and Women’s Hospital in Boston. After graduating from Amherst College, he was hired by a pharmaceutical company to do studies on Lupron, a medication to treat endometriosis and severe PMS. He had three studies on the drug published in peer-reviewed magazines.
One day, Friedman’s assistant went to Friedman’s boss and said that he had never seen the data on the published studies. When confronted by his boss, Friedman made excuses and distributed the blame. To cover himself, Friedman put fake medical notes in his patients’ records at Harvard and at Brigham and Women’s, saying that the women participated in a study that they had not taken part in. He then turned the fake notes over to his boss.
But Friedman wasn’t quite as smart as he thought he was. His boss looked the notes over and told him that he had a problem. He had printed the fake results on a printer that showed it came from a copy machine that did not exist at the time the study had supposedly been done. He gave himself away with a sloppy error. Caught, he admitted that he had faked the data, as well as the entire study. He was fired from Harvard and Brigham and Women’s Hospital and had his medical license suspended for two years.
Sixty days later, the jobless Friedman received a call from Johnson & Johnson offering him a job as a consultant for the Ortho Evra patch. He accepted. Did he pause to inform his new employers that his medical license had just been revoked due to negligence and laziness on studies on a medication of equal importance and with equal impact on women’s health? Of course not. He did not have to disclose that information, because they knew all about it when they hired him. He was the man Johnson & Johnson wanted for the job.
Friedman became the medical face of the Ortho Evra patch. Within eight months, he was named director of women’s health at Ortho-McNeil, Johnson & Johnson’s subsidiary that produced Ortho Evra. He earned a massive amount of money in a position he should not have been in-one he held at the cost of the health and even the lives of thousands of women.
Being the lead in Ortho Evra, I assigned myself to take his deposition. It is probably one of my favorite depositions, right up there with the Little Rascals case, but for a much different reason. There were three cameras in the room where the deposition was held, one on me, one on the defense lawyer, and one on Friedman. Shortly after I started, Friedman began sweating. Soon, he was perspiring like Albert Brooks’ character trying to anchor the news in Broadcast News.
“They’re both bad,” he said.
“Yes, but which was worse?” I pressed.
He shifted nervously in his chair. My suspicion was that if one, two, or three of the studies had been faked, then it ‘was likely that others had been, too. I was calling into question his entire career.
Friedman regrouped. As an excuse for faking the data, he cited chronic knee pain. He launched into a story about playing tennis at Amherst that had caused the knee pain, which was supposedly the reason he didn’t have enough time to complete the studies and faked his data. For added drama, he also claimed that his son had been diagnosed with. attention deficit disorder at the time, and that, too, had taken him away from the lab.
There was no way I was going to let this guy off the hook. “You played tennis at Amherst?” I asked.
“Yes, I did,” he said confidently.
He couldn’t respond. He had nothing to say. There was a telling photograph taken during the deposition that must have been snapped right at that point. In it, I am wearing a big, excited smile. Friedman is stormy-faced and sweating. In the background, the defense lawyer’s hand is raised in an obvious objection.
My team and I dug up a wealth of information while researching Friedman. His trouble had started at an early age, when he was on vacation in Europe for a summer between years of college. We located correspondence between him and the dean of Amherst, in which Friedman requested to know the dimensions of his dorm room so he could buy the appropriately sized Persian rug.
We knew a tidbit like that probably wouldn’t make it into the trial, but it was still a funny fact. I wanted to know if Johnson & Johnson knew what Friedman had done in the past. Their representative said they knew. They knew! And they still made him director.
“Everybody deserves a second chance,” they told me.
To me, that makes them just as corrupt and dirty as he was. They ignored the facts and the 60 percent correction on estrogen levels in their information, and they hid behind him to protect themselves. It was absurd, because this is Johnson & Johnson, the baby company, the nurse company. They actually hired an already corrupt guy to back a dangerous product.
In my mind, Friedman remains the poster boy for pharmaceutical companies that get themselves in trouble. We need good pharmaceutical companies, honest ones, and we need them working on products that are going to help people. Friedman was eventually repositioned, though he remains at Johnson & Johnson. His professional profile boasts that he is the Head of the Global Labeling Center of Excellence at Janssen, a subsidiary of Johnson & Johnson pharmaceuticals. I guess I would rather have him handling labels than women’s health.
By Joseph R. Neal, Jr., Neal Law. He is a member of The National Trial Lawyers Top 100 Attorneys.
On October 10, 2013, at Chapel Hill High School in Douglas County, Georgia, an ill-advised science experiment went awry in the hallway outside of the chemistry lab during an after-hours “AP Open House.” An 18-year old high school senior, Olivia Johnson, was seriously burned and security surveillance cameras captured the incident on video. This school fire made the local CBS television news.
The chemistry teacher who was the “brainchild” behind this experiment was running late to the open house, and hurriedly retrieved a 4-liter jug of methanol out of the chemical storage room and was attempting to do the “rainbow flame” color experiment with the methanol, an open flame and a couple of other chemicals in a petri dish at a table in the hallway. This experiment was intended to be a demonstration for prospective AP students interested in attending Chapel Hill high school.
Our client, Olivia, an AP chemistry student, volunteered to assist. She was instructed to stand behind the table and light the methanol after the teacher poured it into the dish. The teacher, having turned her back to the experiment, was engaged in an animated conversation with another adult and child when she abruptly turned around with the 4- liter jug of methanol and carelessly poured it into the dish, causing it to gush out of the container.
A flash fire explosion erupted and Olivia was terribly burned in her upper torso, including her arms, breasts, chest, and neck. Olivia was airlifted to and treated by Shriners Hospital in Ohio after being initially admitted at Grady Hospital in Atlanta. She spent three weeks in the hospital, her recovery continues today, and she has endured numerous surgeries over the last several years. Her past medicals at the time of settlement were $280,000. Olivia is a brave and special young woman, and her perseverance and positive attitude is an inspiration to everyone who knows her.
Joshua Schiffer of Schiffer Chanco & Olson originated the case. He and his partners David Olson and Douglas Chanco immediately sent spoliation letters and open records requests to the school and attempted to discuss a pre-suit settlement with the school board’s attorneys, a firm that represents 100 school districts across Georgia.
As could be expected, defense counsel refused to pay anything other than nominal defense costs. Josh and David were bluntly informed by Phil Hartley, Esq., that “Official Immunity” was impossible to overcome and there was simply no case. No matter how terrible the injures or negligent the actions of the teacher, they were told, you simply could not sue a school or its employees for injuring a student. A review of case law in school injury cases seemed to largely back up defense counsel’s assertion.
Many able lawyers in the legal community consulted by Josh and David called the case a “loser” because the case law is indeed quite draconian in school tort cases. The vast majority, if not all, school tort case law on the books focuses on the “failure to supervise” students, which routinely is categorized by the trial and appellate courts as involving only “discretionary duties” and automatically results in immunity being granted, even in the most egregious damages cases.
Josh, Doug and David associated me to enter the case as lead counsel after learning of myvsuccessful litigation in fire and burn cases, including a governmental immunity fire case against the City of Augusta that went all the way to the Georgia Supreme Court after a four-year battle, Vann v. Finley, 313 Ga. App. 153 (2011), cert. denied 2012 Ga Lexis 387. I knew from experience when I entered this case I was in it for the long haul due to the nature of the case law.
When we drafted the suit, despite David’s pre-suit open records request seeking same, we had not been provided the actual video footage of the fire, nor had we inspected the lab, nor seen any pictures of the chemical containers used in the experiment. With this limited information, our original complaint, which was filed in October 2015, alleged only violations of the rules of the actual experiment and the material safety data sheet for methanol. Once we obtained the actual video footage of the fire in discovery, however, we sensed there was more to this case than we were being led to believe and began to dig dipper into what went wrong.
The case is Olivia Johnson v. Ashley Matheison and Sean Kelly, Superior Court of Douglas County, Civil Action File No. 15-CV-02240.
I filed a Notice to Inspect the chemistry lab and David, Josh and I went to the school and examined and took pictures of the chemical storage room, the lab, and the hallway where the fire occurred. We also discovered, in plain view, a row of three ring binders in the storage room containing Material Safety Data Sheets of every single chemical stored in the lab. This discovery was a “gotcha” moment, and I quickly pulled down the MSDS for Methanol and took pictures of it because the defense had previously denied in discovery that they possessed any MSDS’s for Methanol and failed to produce them.
The defense attorney was visibly caught off guard and quickly explained that he did not know about those books. The inspection also revealed a giant red and yellow warning sticker on the cabinet where the Methanol was stored that referred to NFPA 30 (a fire code for flammable liquids) and the phrase “FLAMMABLE – KEEP FIRE AWAY.” Like the discovery of the video footage, the lab inspection was one of several turning points in the case that helped us win.
Around the same time, David did some internet research and found that this “rainbow flame experiment” had resulted in fires in several different schools across the country. David found one of the Plaintiff’s lawyers and I gave him a call. His case involved a private school so he did not face the immunity issue that we were facing, but I decided to ask for the name of his fire experts and see whether they could give us any ideas.
The first expert I called was retired and although he felt very bad for Olivia, his wife did not want him to get involved. Undeterred, I called the second expert and he was a godsend. He specialized in school lab fire cases and had actually started a non-profit called the Laboratory Safety Institute and helped me brainstorm the unusual immunity issue in our case (which he was not really familiar with as most cases he handled were at private schools) and told me that NFPA 45 applied to school labs. I got him to send me a copy of it and then recalled seeing the NFPA 30 sticker on the flammable liquids cabinet at the lab inspection.
At this point, a light bulb went off in my head and I remembered I had been down this road before, that of the fire codes, in the Vann v. Finley case, supra. I then spent many hours researching NFPA 30 and 45, the International Fire Code, the Douglas County Code of Ordinances, the Georgia State Fire Code Regulations and the Title 25 and Title 8 enabling statutes. Through intense and detailed study of this “arsenal of law,” we came up with perhaps a dozen or so fire code violations that we believed the teacher and principal committed.
At this point, we were ready to depose the School Board Safety Coordinator, who admitted the fire codes applied to the school and employees and that they were mandatory. I noticed him to produce all of his fire codes and policies at his deposition and while he did not produce fire codes, he did produce a fire prevention policy that the defendants failed to produce in discovery.
After this deposition, we decided to file a motion to compel, as the defendants had consistently failed to produce germane evidence that we were finding on our own through the lab inspection and a deposition of their employee. We moved for sanctions for the destruction of the jug of methanol and brought up their failure to produce the MSDS for Methanol which we found in the lab and I told the judge about the deposition admissions of the Safety Coordinator.
I also informed the judge at the outset of the sanctions hearing that this case was different from all other school cases in the law books because this case involved a failure to follow mandatory, ministerial fire codes which were law as they had been adopted by both the State of Georgia and Douglas County. Judge William McClain, a former prosecutor, was very familiar with the fire codes from prosecuting arson cases and stated he was “leaning the Plaintiff’s way.” At that point, I offered to drop our motion if the defense would agree to substitute an exemplar jug of Methanol of the same type size, quantity, and manufacturer as the other chemicals in the storage room. This was agreed to very quickly by the defense to avoid the Judge ruling on our Motion to Compel.
When we arrived at the next set of depositions, we saw sitting on the conference table a 4-liter jug of Methanol that had a very visible warning label and fire symbol. The exemplar jug we were able to get as evidence through our Motion to Compel was another turning point in the case. We then subpoenaed the Douglas County Fire Marshall, the fire code official, for a deposition and noticed him to produce all fire codes in his office. When we arrived, we were pleasantly greeted by a rolling cart full of books, including all the fire codes we needed to prove our case.
I have taken hundreds of depositions in my career, but this deposition was, without a doubt, the best and most satisfying deposition I have ever taken. With David’s assistance, I got the Fire Marshall to admit the teacher and principal violated at least ten to a dozen different sections of the fire code and to testify they were mandatory laws that they had no discretion to ignore. After this deposition was over, David and I told the defense attorney as we walked outside to our cars to leave “yall need to settle this case.” He agreed to talk to his partner and clients.
After the Fire Marshall’s deposition, I drafted a tightly worded, detailed and comprehensive amended complaint alleging numerous code violations with citations to authorities, all of which were already proven by the testimony of the Douglas County Fire Marshall and Safety Coordinator. Then we took the video depositions of the Defendants, who, as could be expected, were remorseless, well coached, and admitted no wrongdoing.
The principal said “I don’t know” 212 times in 124 pages of deposition. The teacher repeatedly stated she was not subject to the fire codes and other fire policies because she “had not seen them,” because “nobody told me about them,” and because she “had the judgment to decide” what rules to follow. These depositions meant that when we survived summary judgment, which I was confident we would, the defendants would be terrible witnesses at trial on cross-examination because I had them on video acting like callous, incompetent, and indifferent government employees.
Shortly after the video depositions of the Defendants, it became clear this case needed to settle and the School’s insurer, the Georgia School Board Risk Management Fund, which had totally ignored our pre-suit demands, agreed to mediate the case, prior to any dispositive motions being filed.
On Monday, April 25th, 2016 we conducted a day long mediation with Tommy Greer of Carrollton, Georgia. An interesting thing happened at the mediation that Tommy Greer said he had never seen happen in 30 years of doing mediations. Negotiations began to bog down a few hours into the mediation after the defense cited a case that stood for the proposition that alleged violations of statutes does not necessarily equate to violations of ministerial duties.
Within 30 minutes of being handed this case I was checking my email and saw a case that recently came out of the Court of Appeals, Boatright v. Copeland, A15A2043, (Ga. App., 2016), that stated the exact opposite and we quickly printed it out and sent it to defense counsel, who, as luck would have it, was on the losing end in that case and knew all about the opinion but had withheld it while citing the contrary case. At that point, the gig was up, and negotiations resumed.
Tommy Greer helped us facilitate a settlement all claims for $1,500,000, which exceeded the Georgia school board risk management’s policy limits. The balance of the sum was paid by two other insurance companies which insured the professional associations for the teacher and the principal, but only after a declaratory judgment action in federal court was filed and we convinced the insurance companies to stop fighting among themselves virtually the day before the mediation by showing their attorneys the photographs of Olivia’s burns, the amended complaint, and the depositions of the fire marshal and the safety coordinator for the county.
From our research, our case appears to be the largest settlement (or verdict) ever paid in the history of Georgia in a case against a teacher or principal with an immunity defense. Only three other cases have prevailed against a teacher or principal on the defense of immunity, Boatright, (2016) supra, McDowell v. Smith, 285 Ga. 592 (2009), and Cotton v. Smith, 310 Ga.App. 428 (2011) and from talking with Plaintiff’s counsel in two of those cases (Boatright is apparently still pending), we believe our case concluded with the highest amount ever paid in a school immunity case.
This was truly a team effort. David, Josh, Doug and I are all very grateful that we could achieve justice for Olivia in a case many said could not be won because of the case law. We also want to thank our local counsel, Cade Parian, Esq., who is a Douglas County native and was familiar with our judge and mediator and who attended the sanctions hearing in front of Judge McClain. We hope our case inspires other lawyers to try to find creative ways to make liability become a reality instead of a fantasy in school tort cases.
As authors of books on wealth protection since the 1990s, we have been asked hundreds of times about protecting assets in a divorce. This shouldn’t come as a surprise, as over 50 percent of all marriages in this country end in divorce—and that percentage grows to almost 75 percent for second marriages. Attorneys are not immune from this trend. In fact, the numbers for attorneys may be even worse.
Thousands of attorneys each year are frustrated with the financial consequences of their marital dissolution. They may not receive what they believe they deserve or lose personal assets intended for children, or family assets intended to remain within the family, such as family businesses. While the loss of assets to a soon-to-be-ex can never be avoided, some of the financial pain of a split can be minimized with proper advance planning.
1. A couple marries, each for the second time, and each with adult children from a previous family. Without any pre- or post-marital agreement, they title many of the wife’s previously separate income-producing properties (such as her rental apartment units) into the name of the new husband to save income taxes. Within two years of the marriage, they divorce. The husband gets half the rental units (in addition to alimony and other property), even though both spouses understood that the wife intended them to go to her children. The court simply ignored their understanding, giving half the properties to each spouse.
2. A couple marries, each for the first time. Over the next 20 years, the husband acquires more ownership in his family’s bakery business. His father, the founder, gradually transferred shares to him. At 42, he is the majority owner. Unfortunately, he and his wife then undergo a bitter divorce with the ex-wife granted half the husband’s bakery business as community property. She then forces (1) high dividends and (2) a sale of the company to a competitor.
3. An internal medicine resident gets married. She and her husband discuss her medical education and agree that she should not have to later compensate him for his greater financial contribution in their early years. However, they file for divorce eight years later. The husband considers the wife’s professional degree as marital property, so he claims a share in her earning potential. The court agrees, even though the couple verbally agreed to the contrary.
A premarital agreement (or, prenuptial agreement, premarital contract, ante-nuptial agreement, etc.) is the foundation of any protection in a divorce. The premarital agreement is a written contract between the intended spouses. It specifies the division of property and income upon divorce, including disposition of specific personal property, such as family heirlooms. It also states the responsibilities of each party and their children after divorce. Finally, these agreements lay out responsibilities during marriage, such as what each spouse can expect in financial support or which religion will be used to raise future children. The agreement cannot limit child support.
1. The agreement must be in writing and signed.
Every state requires that a premarital agreement be written and signed. Many also require that it be notarized or witnessed.
TIP: Notarize your agreement, even if your state does not require it. This adds protection against claims of duress or forgery.
2. There must be a reasonable disclosure.
There must be a fair, accurate and reasonable disclosure of each party’s financial condition.
TIP: Attach financial statements to the agreement and have the spouse affirm knowledge of the other’s financial condition.
3. Each party must be advised by a separate attorney.
Many states either require separate legal advice explicitly or use it as a factor in determining whether or not the agreement was fair.
TIP: Hire separate lawyers and give enough time between the agreement and the wedding to avoid any appearance of duress. Courts frown on last-second premarital agreements.
4. The agreement must be unconscionable.
Courts will not enforce a one-sided agreement. Also, the contract must not be structured to encourage divorce. For example, by stating that one spouse has no rights to property except upon divorce.
TIP: Avoid extremely one-sided agreements. It need not be a 50/50 split, but should provide a fair balance.
5. The couple must follow the agreement during the marriage.
Courts disregard premarital agreements when the spouses blatantly disregarded it during their marriage, such as when property designated as the husband’s separate property is re-titled to the wife.
TIP: Treat designated separate property as separate. If loans are made from one spouse’s separate property to the marital unit, then those funds should not be commingled when repaid.
Many clients have contacted us about protecting assets when they foresee their marriage ending. Generally, there is not much one can do to shield assets if they are not already protected through a pre-nuptial agreement as above. However, all is not lost.
When implemented in a transaction with real economic substance (such as benefit, tax or estate planning), certain planning techniques may have a secondary benefit of lowering the value of an asset for marital dissolution purposes. This valuation benefit can end up being significant when the court eventually splits assets. We have seen this work quite successfully for attorneys when investing in certain types of benefit plans through the practice, non-traded REITs and other temporarily-illiquid investments, specific types of cash value life insurance and annuities.
Stan is an attorney who was in a rocky marriage. Stan implemented a non-qualified benefit plan at his practice and funded it over a number of years. While enjoying the income tax and asset protection benefits of the plan, he also chose an investment option that kept the plan value low for five years, after which it would quickly accelerate in value. When Stan ended up getting divorced three years later, this plan was valued in the divorce much less than it would have been if he had not used the plan design. Stan kept about $200,000 of value outside of the divorce decree because of this one tactic.
Whether you are considering planning before you get married, after marriage, or even for a family member, no one tactic or approach works well for all clients. It is crucial that you consult with advisors who are not only well-versed in family law, but also in asset protection – a combination that is much more difficult to find.
SPECIAL OFFERS: To receive a free hardcopy of Fortune Building for Business Owners and Entrepreneurs, please call 877-656-4362. Visit www.ojmbookstore.com and enter promotional code NTL28 for a free ebook download of Fortune Building for your Kindle or iPad.
David B. Mandell, JD, MBA, is an attorney, consultant, and author of more than ten books, including Fortune Building for Business Owners and Entrepreneurs. He is a principal of the financial consulting firm OJM Group www.ojmgroup.com along with Jason M. O’Dell, MS, CWM, who is also a principal and author. They can be reached at 877-656-4362 or mandell@ojmgroup.com.
Sometimes all it takes is one mishap evidenced in a tagged Facebook post to send your custody case into a tailspin.
Evidence obtained through social networking websites can be highly relevant in all types of family law cases, especially divorce, custody, and spousal support. These are some things you should review with your clients about posting comments and photos on Facebook, Twitter, Instagram and other social networking sites.
There are more than one billion users on Facebook. That means there are lots of people who have the potential to read what you post. Posting with caution is necessary for anyone going through a divorce. Especially in highly litigated custody disputes, clients need to either be very careful in postings made on social networking sites or to simply delete their accounts altogether.
For example, clients may think if you limit the settings, their soon-to-be ex won’t see what they wrote. But far too often their ex’s friends or cousins saw the post and potentially even saved or printed it. Even after your clients come to their senses and delete it, your opposition may already have a copy. Clients should also stay aware of what other people are posting to their pages and feeds.
Sometimes all it takes is one mishap evidenced in a tagged Facebook post to send your custody case into a tailspin. When it comes to posting on social media sites, it is important to advise your clients to think before posting. Perception is reality and if their posts can be taken out of context, advise them not to post them.
If your client has been posting negatively about someone or something, even after deletion, there is still risk of the content surfacing. Any good researcher can find something online if they know what they are looking for. Be sure to ask your client up front if they have been slandering the other party online. Ensure your client knows that it is always better that you as you lawyer is aware of what is out there first, no matter how embarrassing it may be.
Many times the other side will troll social media photos searching for non-ideal behaviors. In custody cases, an attorney can argue the other parent is unfit to be the primary caretaker of young children, based on photos found on social media sites.
Further, in financial matters or spousal support, opposing attorneys can use social media posts to prove the standard of living is not being accurately documented and other issues.
As people share more and more on social media, it is becoming increasingly important to consider the ramifications of posts in your divorce case and advise your clients to exercise restraint in their social media posting during their divorce.
John Griffith is a partner at Griffith, Young & Lass Family Law, offering assistance and representation that guides their clients through the legal process and helps protect them and their families. Learn more at www.gylfamilylawfirm.com.
After years of arguing pretrial motions, the District Attorney of Bexar, County, Texas, dismissed the three count indictment against Corpus Christi attorney Keith Gould.
When asked for comment on the order, Duarte stated “I know Keith Gould to be a good and honest man. He is a good and ethical lawyer who has had a dark cloud following him since he was arrested over two years ago. Today, there is not a cloud in the sky. Keith and his family are going to appreciate, enjoy and savor life after learning a real life lesson. Even good people can find themselves accused wrongfully. Having personally faced the lion in its own den, Keith will continue helping his clients zealously as he always has.
Prosecutors cited insufficient evidence to prosecute Keith Gould, 54, who had been indicted in 2014 on three counts of barratry.
Barratry, or illegally soliciting clients, is commonly known as ambulance chasing.
“The state is unable to prove all the elements of the offense of barratry beyond a reasonable doubt,” prosecutors wrote in the dismissal form filed in 186 District Judge Jefferson Moore’s court.
The case stemmed from circumstances surrounding a 2011 lawsuit filed by a former employee who claimed the Gould Law Firm in Corpus Christi and the Andrews and Gould Law Firm in San Antonio paid employees to solicit cases.
Gould was not immediately available for comment Monday. In 2011, Gould said the lawsuit was the result of a disgruntled employee who was fired for misconduct and insubordination.
By Kelly Anthony, Esq., Deputy General Counsel, Counsel Financial.
Acquiring clients is the single-most significant challenge faced by contingent-fee firms, right? Wrong.
It is maintaining steady cash flow. For a contingent fee practice, funds are not received until the successful resolution of a case. Until that time (which, in many instances, could take years), plaintiffs’ attorneys are tasked with advancing all the costs and expenses associated with a litigation. Depending on the complexity of the case, such costs and expenses may exceed well over $100,000.
If your firm is doing well—having a number of cases pending at any given time—the unsteady cash flow inherent to a contingent fee practice can leave your organization in peril. Why? Because having the ability to meet immediate short-term obligations, such as payroll, office rent and taxes, is critical and, “[c]ompanies, after all, go bankrupt because they cannot pay their bills, not because they are unprofitable,” according to Richard Loth, Analyze Cash Flow the Easy Way, Forbes, Nov. 28, 2012. Thus, while a chief component of any legal practice is to generate leads, not having a steady stream of cash coming into your firm might lead to your failure.
So how do you ensure that your firm has the resources to act in the clients’ best interests and operate efficiently?
Staying at cheaper hotels when traveling.
Re-negotiating lease and vendor terms and finding less-costly office space.
For a longer-term solution to saving cash, analyze all aspects of your firm’s overhead. You may be able to eliminate certain marketing and advertising tactics that are not giving you a return on your investment, or eliminate expenses that your firm no longer needs. Be wary though when reducing costs. If done incorrectly or haphazardly it may stunt the growth of your practice.
If you have a case that has resolved, but is not yet funded (and you know you will not receive the funds for some time), you can leverage your future fees to obtain immediate capital. Many companies currently offer post-settlement financing solutions, often in the form of a loan or asset-purchase. Both types of agreements are similar in that your law firm will receive a lump-sum payment at the time of closing and must pay a premium to the company once the fees are received. Post-settlement financing is best utilized for firm’s that have short-term, one-off cash flow needs as they can get pricey if used on a regular basis.
A business line of credit is a useful tool for lasting financial management because it gives law firms years of available working capital at the exact moment they need it. By making a simple draw request to a lender, you can use loan proceeds to fund all of your firm’s litigation expenses and operations. Further, a line of credit provides you the financial freedom to continue to develop and expand your practice while your case inventory remains unresolved—leading to increased profits.
But, when choosing a lender keep in mind that traditional lenders, like banks, often do not understand the unique nature of a contingent-fee practice. Typically, when firms try to get a line of credit from a bank, they are unable to receive the full amount of money they actually need to run their business since banks do not value future fees as collateral for the loan. Therefore, many firms instead elect to get a line of credit from a specialty lender with experience working with law firms. Litigation finance lenders can offer larger amounts of financing, plus have loan terms that are advantageous to law firms.
Whether you decide to do nothing, cut costs, leverage a settled case fee or obtain a line of credit, one thing is certain—managing cash flow is vital to the health of your practice and thus, should not be ignored.
For more tips and strategies on how to effectively manage your cash flow and develop your contingent fee practice, download our exclusive whitepaper here.

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