The Legal Intelligencer Blog

The Young Lawyer’s Competitive Advantage: Social Media

By John D. Barber
Special to the Legal

Big law firms can be slow to react to changing technological landscapes. There are many reasons for this and every firm has its favorites: security, time, aging support staffs, time, fear of change and time, just to name a few. And, more times than not, as a young lawyer, your only real option is keep your head down and soldier on. This is not the case with social media. A small effort on your part to build and maintain your presence now could help set you apart from your peers in 10 years.

As I'm sure you know perfectly well, for the rest of your legal career, time literally equals money. Every unaccounted-for six minutes equals some specific dollar amount that you are losing your firm. But remember that becoming a successful partner will require more than just meeting your deadlines with acceptable work product and billing hours. As a partner you will also have to demonstrate the ability to manage relationships and develop business.

In this, today's young lawyers have an advantage that generations of associates before them have not. Social media networks allow you to make and maintain ties to contacts of all sorts in a time-effective manner and should not be neglected because you need to get your monthly required hours in. In fact, using this technology effectively and responsibly may be the difference in forging a successful career.

At this point in your life, you have probably logged thousands of hours using social media and it is most likely already second nature to you, even if you don't realize it. Use that! Those countless hours have allowed you to develop skills and a comfort level that your more senior counterparts will likely never have.

You never know where a weak tie today will lead to tomorrow. Think of those Facebook friends you've had since your freshman year at college. Maybe you don't speak to them now, but they are definitely more likely to take your call in 10 years than someone with whom you have no connection. And what about those entry-level folks working for your boss’ big client that you met at that networking function? Will they stay entry level for the rest of their lives? These are relationships you can easily maintain thanks to social media.

There is one simple step you can take to strengthen the ties with those connections that you may not regularly contact. Through well-timed sharing of quality, interesting content, relevant to your practice, you can accomplish two goals with social media: keeping your name present in the minds of those you are connected to and building a reputation for being at the forefront regarding developments in your practice area.

This isn't to say you should expect every connection or relationship you make to turn into business someday. You shouldn't be insincere in the relationships you cultivate and social media shouldn't be your only business development activity. But it is an extremely useful tool. If you treat every relationship like it could one day turn into business, then when the possibility is there, you will be prepared and positioned well for success.

Ratio Analysis – How to Find the Fraud Needle in the Company Haystack

By B.J. Hoffman
Special to the Legal

It is not uncommon to hear executives air concerns about possible exposure to internal fraud. In such cases, company owners are typically unable to put their finger on exactly what might be wrong other than having an uneasy feeling about a particular employee, or group of employees, a controller, a CFO, or another individual with access to company assets. Though there may be red flags of untoward behavior by employees – unexplained spending, working odd hours, sloppy record-keeping – company owners are generally at a loss as to how to explore potential fraud further.

The most effective first step in determining whether further investigation is warranted is ratio analysis applied to historical company financial results. Ratio analysis serves to highlight financial anomalies and trends, identifying areas of financial risk for additional testing. In its simplest form, ratio analysis is merely the evaluation of company historical results over several years.

I typically want to have five years of company data (internal financial statements or tax returns) available when performing ratio analysis, laid out by year in an electronic spreadsheet. Horizontal and vertical ratio analysis is the usual starting point in any investigation.

Horizontal Ratio Analysis

Horizontal analysis is the evaluation of a particular line item’s trend over a multi-year period. For instance, if the company reported that advertising expenses have increased by 100 percent from 2008 to 2013, is that reasonable or have fictitious expenses been coded in the advertising category?

Vertical Ratio Analysis

Vertical ratio analysis compares one line item with another in a given year. For instance: advertising expenses versus sales revenue. If the company advertising expenses approximate 2 percent of annual sales from 2008 through 2011, but jump to 8 percent of sales in 2012 and 2013, perhaps the underlying details of 2012 and 2013 advertising expenses should be explored. Maybe the jump in expenses is the result of a new 2012 advertising campaign or, alternatively, perhaps the advertising expense increase coincides with the hiring of the company’s new controller.

Exploring Ratio Analysis Further

Ratio analysis can be much more detailed than horizontal and vertical evaluations. Certain ratio analysis tests are designed to examine the speed of a company’s collection of its accounts receivable over time, its gross margin on inventory sales, or the rates of customer refunds issued by a particular retail cashier.

If accounts receivable collections are slowing over time, is someone in the accounts receivable department stealing customer payments? If gross margins on product sales are declining, is a warehouse employee misappropriating inventory? If one cashier’s rate of refunds issued is greater than all others, is that cashier fabricating refunds and pocketing cash?

Ratio analysis is a flexible tool and can be tailored to the individual department under scrutiny. It can assist in overseeing operations from 30,000 feet, or it can be designed to drill down at an excruciatingly detailed level, such as in analyzing stadium beverage sales by vendor location, for a given ticketed attendance, under set weather conditions, etc.

The beauty of ratio analysis as an investigative tool is that it cuts to the chase, identifying likely areas for more intensive testing. When fraud is a concern but management has little else to go on, open the ratio analysis toolbox to find the needle in the haystack.

B.J. Hoffman is a certified public accountant and certified fraud examiner for Citrin Cooperman, an accounting, tax and business consulting firm. He is a partner in the Philadelphia office. Hoffman provides clients with a mix of audit, tax and litigation support services. He often works with closely held entities in a variety of industries, including professional service firms and real estate enterprises. He can be reached at [email protected] or 215-545-4800.

 

Witnesses Called Adversely: A Conundrum for Both Sides of a Case

By Melissa M. Gomez
Special to the Legal

In a medical negligence trial, a defendant nephrologist was accused of failing to appropriately monitor the raising of a patient’s blood sodium levels, which had been depleted to a life-threatening extent by excessive alcohol consumption. The claim was that, as a result of the doctor raising sodium levels too quickly, instead of having a massive hangover, the plaintiff was left with permanent and severe neurological deficits.

The dilemma for the plaintiff was whether to call the defendant doctor as an adverse witness in the case. The decision to call the doctor would give the plaintiff a chance to present the defendant in an adversarial context, hitting the target issues hard and quickly and letting the jurors form a less than optimal first impression for the doctor. This is a reasonable and wise decision.

The decision not to call the doctor would provide the jury the chance to hear the case facts void of the doctor’s input, especially if he was generally likable, which could make the adverse examination backfire. This also is a reasonable and wise decision.

In this case, the plaintiff did decide to call the doctor adversely. Now the defendant had a dilemma. In this trial venue, defense counsel could perform the entire direct examination during the plaintiff’s case after adverse, or it could do some quick rehabilitation on key issues and then call the doctor again for full direct in the defense case. If the defense performs the full direct examination with the witness during the opposing case, it can stop the plaintiff’s momentum and interject defense themes, while immediately presenting a better image of the defendant early in the case instead of asking jurors to wait until after the plaintiff’s case to hear them. The full direct examination after adverse also denies the plaintiff a second bite at cross-examination during the defense case. This is a reasonable and wise decision.

If the defense decides to wait and call the defendant for direct examination during the defense’s presentation of evidence, the defense will reap the benefit of hearing all of the plaintiff witnesses, enabling it to fully address the opposing testimony in examination strategy. It also gives more air time to a likable defendant. This is a reasonable and wise decision.

So, what is the advice? The issue that I have seen is that attorneys get comfortable with choosing their strategy based on what has worked in the past and what they are most familiar with, often doing it the same way every time. This is a mistake. Instead, the important thing to do is evaluate the strategy of each case separately, because, while both decisions can be completely reasonable and wise, both strategies can backfire given the wrong case.

So, let’s go back to our nephrology case. The defendant doctor was the kind of person who was very intelligent and literal in his work. On the other hand, he was a terrible communicator as a result of a mixture of both his personality and cultural makeup and so was prone to say unhelpful things during his testimony.

As stated, the plaintiff called him adversely to give the jurors a negative first impression of him, which he was sure to provide as a result of his communicative shortcomings. The defense decided to rip the band-aid off, stopping the plaintiff’s momentum short by examining him fully after adverse, during the plaintiff’s case. Defense themes were introduced, the defense was immediately able to rehabilitate the doctor’s image and the doctor was not presented again during the duration of a several-week trial. I think both sides made the right decision based on this particular case and this particular defendant.

In a different case, though, with a defendant who communicates well, whether a doctor or a manager or a delivery truck driver, the plaintiff may be doing its own case a disservice by calling a defendant adversely that may be likable or sympathetic to a jury. In this instance, it is the plaintiff who is giving the defense two bites at the apple of presenting a witness who will be well received twice during the trial: both in the plaintiff’s case and the defense case as well. On the other hand, in a lengthy trial, calling an unlikable defendant adversely may also mean that the jurors will have lots of time to forget how much they dislike him or her.

For the defense, with such a witness, presenting the entirety of the testimony during the plaintiff’s case presents the defendant’s testimony early in the trial. As a result, memories of likability can diminish with time and the inundation of other information, especially considering that the witness will be sandwiched within adverse testimony.

Getting too comfortable with a mode of how to handle these situations can be dangerous. First, if you go to trial frequently, opposing counsel knows what to expect. Second, while your strategy may work in a case today, it can be detrimental in the one you have next month. There are factors too important to consider for it to be wise to do it the same way every time. Most importantly, the length of trial and tendency for jurors’ memories to fade as well as the likability or potential for a witness to be sympathetic are factors. In cases where a defense witness is important enough to potentially be called adversely, he or she is important enough to make that decision with care.

Melissa M. Gomez is a jury consultant and owner of MMG Jury Consulting LLC. She holds a Ph.D. in psychology from the University of Pennsylvania. Her experience includes work on hundreds of jury trials in Philadelphia and across the country, with a focus on the psychology of juror learning, behavior and decision-making. She has more than a decade of expertise in research design and methodology, as well as in behavioral and communication skills training.

This posting is for general informational purposes only and should not be construed or interpreted as advice specific to any matter. Each case is different and no strategy applies uniformly to all. If you have any questions regarding jury psychology that you would like to see addressed in this blog, contact Gomez at [email protected] or call 215-292-7956.

PUC Must Still Refrain From Act 13 Ordinance Reviews

By Zack Needles
Of the Legal Staff

The state Supreme Court has denied the Public Utility Commission’s appeal of a Commonwealth Court order requiring the agency to cease and desist from reviewing municipal ordinances to determine whether they comply with the Pennsylvania Municipalities Planning Code and the state Oil and Gas Act.

The court issued a one-page order Thursday quashing the appeal. The order noted that Justice Thomas G. Saylor dissented, saying he would have noted probable jurisdiction and called for expedited appeal proceedings.

The agency was charged with the task under Section 3305, Chapter 33 of the recent Act 13 amendments to the Oil and Gas Act, but Senior Judge Keith B. Quigley said in an order issued in October that the PUC should have ceased performing the reviews following the Commonwealth Court's July 26, 2012, en banc ruling in Robinson Township v. Commonwealth, invalidating as unconstitutional those amendments that require municipalities to adopt uniform zoning ordinances that would allow drilling in all zoning districts.

The constitutionality question in Robinson is currently awaiting a ruling by the Supreme Court.

Zack Needles can be contacted at 215-557-2493 or [email protected]. Follow him on Twitter @ZNeedlesTLI.

Aichele Officially Out as Chief of Staff, Gromis-Baker In

By Zack Needles
Of the Legal Staff

Governor Tom Corbett announced late Wednesday that Stephen S. Aichele has officially stepped down as chief of staff and will be replaced by Republican strategist Leslie Gromis-Baker.

Gromis-Baker is Corbett’s liaison with the federal government in Harrisburg and Washington D.C., as well as the head of Harrisburg-based lobbying firm LG Strategies.

Gromis-Baker previously worked at Pittsburgh-based Buchanan Ingersoll & Rooney as a professional in its state government relations practice.

In 2010, Corbett selected Gromis-Baker to be one of the co-directors of his transition team.

A press release by Corbett’s office said Aichele plans to return to private practice, but the release did not specify what his new job will be.

One possibility is that he will return to Saul Ewing, where he had spent his entire 35-year career until Corbett tapped him to serve as the state's general counsel in January 2011.

Corbett elevated Aichele to chief of staff in May 2012.

Aichele served in various leadership roles, including managing partner, during his time at Saul Ewing.

He took over as the firm's chairman in 2006, a role in which he served as the firm's "public ambassador" through participation in community affairs and in the business, civic and political organizations in which the firm participates.

In 2010, Aichele had been asked by the firm to head its project and resource development department.

A spokesperson for Saul Ewing told The Legal on Wednesday that the firm had "no comment about Aichele returning at this time."

State Senator Farnese Joins Zarwin Baum

By Zack Needles
Of the Legal Staff

State Senator Lawrence Farnese, D-Philadelphia, has left Haddonfield, N.J.-based Archer & Greiner, where he was of counsel, to join Philadelphia-based Zarwin Baum DeVito Kaplan Schaer Toddy as of counsel.

Farnese focuses his practice on commercial litigation.

“We are delighted Senator Farnese has joined our Firm” said Gary A. DeVito, chairman of Zarwin Baum’s commercial department. “Senator Farnese is such a strong and positive influence in our community and he uses his unremitting energy to promote programs and legislation beneficial to the citizens of Philadelphia and the commonwealth of Pennsylvania. In doing so, Senator Farnese continues to establish himself as a leader not just locally, but statewide.”

Preliminary Hearing Set for Ex-PSU Administrators

By Ben Present
Of the Legal Staff

Three former Penn State administrators will finally appear in court as prosecutors look to advance charges that they covered up accusations against convicted serial child molester Jerry Sandusky more than a decade ago.

Magisterial District Judge William C. Wenner signed orders Tuesday setting a joint preliminary hearing for the ex-officials on July 29 in Harrisburg. Prosecutors will aim to hold for trial the cases of former Penn State President Graham Spanier, former athletic director Tim Curley and former vice president for business and finance Gary Schultz.

The hearing would mark Spanier’s first court appearance since he was charged last November.

The court hearing, though, comes more than a year-and-a-half after Schultz and Curley were first charged. The three men face several charges, including felonies, that they failed to report to authorities an eyewitness account that Sandusky molested a boy in a Penn State shower and then lied to a grand jury about it.

That eyewitness account mentioned in the charging documents came from former Penn State graduate assistant and assistant football coach Mike McQueary.

McQueary testified in December 2011 that, in 2001, he told Schultz, Curley and former head coach Joe Paterno that he saw something sexual in nature going on between Sandusky and a boy who looked like a 10-year-old. The testimony came at Schultz and Curley’s first preliminary hearing, before Spanier was charged in the scandal and before additional charges were brought against Schultz and Curley.

A date for the hearing against all three men had faced long delays as the former officials argued that the presentments against them should be thrown because they thought former Penn State General Counsel Cynthia Baldwin represented them when they went before a grand jury.

Ben Present can be contacted at 215-557-2315 or [email protected]. Follow him on Twitter @BPresentTLI.

U.S. Lawmakers Back Out of Cozen Same-Sex Marriage Case

By Gina Passarella
Of the Legal Staff

Paul D. Clement and his firm have withdrawn their client from an Eastern District of Pennsylvania case that raised questions of the constitutionality of the Defense of Marriage Act.

In light of the U.S. Supreme Court’s ruling finding unconstitutional DOMA’s limitation of marriage to between one man and one woman, the Bipartisan Legal Advisory Group of the U.S. House of Representatives has requested to withdraw as intervenor in Cozen O’Connor v. Tobits.

The House, represented by former U.S. Solicitor General Clement and other attorneys at Bancroft PLLC, had intervened in suits across the country to argue in support of DOMA given the Department of Justice had declined to defend the law.

“The Supreme Court recently resolved the issue of DOMA Section 3’s constitutionality,” Clement said in the filing on behalf of BLAG, referring to the high court’s June 26 ruling in U.S. v. Windsor. “Accordingly, the House no longer has a role to play in this litigation and now seeks to withdraw as a party defendant.”

The Tobits case was placed on the suspense docket by U.S. District Judge C. Darnell Jones II of the Eastern District of Pennsylvania in September 2012 while the court awaited the outcome of other relevant decisions. When the Supreme Court ruled on the DOMA case last month, the parties in Tobits said they hoped that would jumpstart their case toward a resolution. Other than BLAG’s filing Monday seeking to withdraw as intervenor, there has been no movement on the docket since the high court’s ruling.

Cozen O’Connor filed the interpleader action in January 2011, asking the court to decide whether the parents or wife of a deceased female partner are entitled to the partner’s profit-sharing plan benefits. While both the parents and the partner’s wife, Jennifer Tobits, have argued the court doesn’t need to reach the issue of the constitutionality of DOMA, the parents argued their daughter’s marriage is not recognized under any applicable law in the case.

Read here to see how attorneys expect the Supreme Court’s decisions to impact the Tobits case.

Gina Passarella is the senior reporter for The Legal. She can be contacted by email at [email protected] or phone at 215-557-2494. Follow her on Twitter at @GPassarellaTLI.

Emancipation's Impact on Child Support

By James W. Cushing
Special to the Legal 

Pennsylvania Rule of Civil Procedure 1910.17(a) establishes that a child support order will be modified as of the date the request for the modification is filed. This rule is consistent with the terms of 23 Pa.C.S.A. §4352 regarding retroactive modification of arrearages. Now, generally speaking, the modification of a child support order is requested because of a change in employment, a fluctuation of income, a change in the custodial arrangement of the children and the like. For the most part, the obligation to pay child support for a child terminates when the child reaches the age of 18, but is this termination automatic and, if not, can arrearages accrue after a child reaches the age of 18 if a petition to modify is not filed?

On its face, it would appear that if an obligor does not file to modify the child support – for the purpose of this article in order to terminate it because of emancipation – the order continues and arrearages can accrue after the age of 18.

Very few cases have been reported on the issues described above, and it would seem the Pennsylvania Superior Court case of Holcomb v. Holcomb, 448 Pa.Super.154 (1995), is the leading case on the matter. In Holcomb, the child-at-issue graduated high school in June 1993, thereby becoming emancipated under the law. The father of the child did not file to modify the support order for the child, in order to terminate the order, until June 1994. The relevant question, for the purpose of this article, is whether the child support order should have continued to accrue between June 1993 and June 1994 despite the fact that the child for whom the support was ordered was emancipated the entire time.

The hearing officer’s reasoning was to give the father a retroactive accounting of his support back to June 1993, as if he filed his petition to modify in June 1993, effectively deciding that emancipation automatically takes effect regardless of filing to modify.

The court ruled that, first, it has no power or authority to require the obligee, the mother in this case, to repay any money received after the child-at-issue emancipates. It logically follows, then, that if it cannot order repayment, its power regarding reducing or eliminating arrearages is similarly absent.

Next, the court specifically ruled that it simply has no statutory or procedural warrant or authority to modify support arrearages before the date the father filed a petition to modify regardless of whether the child-at-issue for whom the support has been ordered is emancipated in the interim. Indeed, the court admonished the father, saying “nothing prevented [him] from filing a petition for modification on the date his daughter became emancipated … [therefore] like all successful petitioners who seek modification of a support order, the modification is granted effective as of the date the petition was filed.”

So, for obligors and practitioners alike, it is vitally important to be vigilant in filing petitions to modify support as soon as a child is emancipated; otherwise, a child support order, along with its arrearages, will potentially continue to accrue unabated until some action is taken to stop it.

James W. Cushing is an associate at the Law Office of Faye Riva Cohen P.C., research attorney for Legal Research Inc. and sits on the board of directors of the Christian Legal Clinics of Philadelphia.

Griesing Law Hires Former HUD Counsel

By Gina Passarella
Of the Legal Staff

Barbara A. Potts has joined Griesing Law as senior counsel after three years with the U.S. Department of Housing and Urban Development.

Potts spent 10 years as a financial services partner with Blank Rome in Philadelphia before being appointed to HUD in 2010. While at HUD, Potts first served as deputy regional counsel for Region III, which includes all of Pennsylvania, Delaware, Washington, D.C., Maryland, Virginia and West Virginia. In early 2013, Potts accepted a detail to HUD’s headquarters in Washington to provide specialized legal counsel on a variety of issues related to the administration of Federal Housing Administration health care loan insurance programs.

At Griesing Law, Potts will focus on real estate and transactional matters. Her representations while in private practice have included real estate development and finance matters; advising clients with respect to procurement and contracts matters, construction and insurance issues; and structuring and negotiating public-private partnerships and equal opportunity plans for private and public sector development projects.

While at Blank Rome, Potts served as the outside general counsel for a municipal waste hauling company, Griesing Law said. Before joining Blank Rome in 2000, Potts served for eight years in the City of Philadelphia Law Department. She began in that department as a deputy city solicitor and ended as a first deputy city solicitor. In addition, she served as the Law Department’s representative on the City of Philadelphia’s Board of Pensions and Retirement.

Potts’ governmental experience also includes serving as real estate section chief for the Federal Deposit Insurance Corporation in Atlanta from 1991 to 1993. In addition, she was pro bono counsel to the African American Museum in Philadelphia for more than 17 years.

“We are proud and delighted to have such an impressive lawyer as Barbara Potts join our firm,” Griesing Law founder Francine Griesing said in a statement. “Barbara brings a wealth of experience that expands our growing transactional capabilities.”

Gina Passarella is the senior reporter for The Legal. She can be contacted by email at [email protected] or phone at 215-557-2494. Follow her on Twitter at @GPassarellaTLI.