On June 6, the law firm of Cravath, Swaine & Moore, the crème de la crème of Wall Street law firms, announced that it was increasing the salary for new attorneys just out of law school to $180,000 and for eighth-year associate attorneys to $315,000. (At the end of the eighth year an associate attorney is either chosen to be a partner or asked to leave the firm.) Such employees also may obtain annual bonuses. The average compensation for the firm’s partners, on the other hand, was $3.56 million.
Cravath, according to a profile from Chambers & Partners, has offices in New York City and London with a total of 90 partners and 426 associate attorneys. The firm’s website says it hires “only the top students from the nation’s finest law schools, we train our associates through a rigorous rotation of practices, we elevate partners exclusively from within and we compensate partners in a lockstep system throughout their careers.”
I react to this news from at least three perspectives.
First, as I explained in an earlier post, immediately after law school graduation in 1966 I joined Cravath as an associate attorney with an annual salary of $9,000 ($66,941 in 2016 Dollars). In 1968 the firm jumped the starting salary to $15,000 ($104,657 in 2016 Dollars) with similar boosts to the salaries of more senior associates. I left Cravath and New York City in 1970 even though being a Wall Street lawyer was challenging and exciting as was living in the city with a wife and two young sons. I value those years, but did not want to remain another four years to compete for a chance to become a Cravath partner with all the sacrifices of time, energy and stress that would require and with all the income and prestige that it would entail. Instead I chose to move to Minneapolis to practice law with Faegre & Benson (n/k/a Faegre Baker Daniels), about which I also have written.
Second, the Cravath move to a starting salary of $180,000 is clearly an outlier in the overall U.S. legal job market. While observers speculate that other prominent Wall Street law firms probably will match this increase, law firms in other U.S. cities and business corporations, in my opinion, will not do so, and clearly governments and nonprofit organizations with lawyers will not be able to do so.
Third, this increase in compensation comes after widespread weaknesses in the demand for lawyers in the U.S. Indeed, in recent years the openings for new attorneys have shriveled. Many recent law school graduates, often with large student-debt loads, have been unable to find law-related jobs. Some recent law graduates have sued their law schools with claims they had been scammed. Law school enrollments have been declining. I hope the Cravath increase is a sign that there may be increasing opportunities for new lawyers, but I am not holding my breath.
A prior post reported about the planned meetings in Havana of a delegation of congressional Democrats led by Senator Patrick Leahy. Now we have news of what happened on their three-day trip.
Here is a photo of the delegation in Havana (left to right): Representative Chris Van Hollen, Senator Sheldon Whitehouse, Senator Debbie Stabenow, Representative Peter Welch and Senator Patrick Leahy. (Senator Richard Durbin is the other member of the delegation.)
On Saturday, January 17th, they “met with officials from Cuba’s Culture Ministry in order to discuss possible Cuban participation in the Smithsonian Institution’s Folklife Festival, a summer celebration of traditional art and culture on Washington’s National Mall.
On Sunday, January 18th, they met with more than a dozen dissidents including critics of the 18-month-old secret negotiations that led to last month’s announcement. All but two of them expressed support for the opening.
One of these two, Antonio Rodiles, said it “was a friendly meeting, they heard the different positions, but the senators are very much in favor of Obama’s measures and want to hear that we agree.” Rodiles, however, criticized the Obama administration for failing to win enough guarantees of reform from the Cuban government. “I said the process [of negotiating the U.S.-Cuba accords] took place without transparency or taking the full range of opinions into account.”
Another dissident, Elizardo Sanchez, head of the Cuban Human Rights and National Reconciliation Commission, a Cuban non-governmental organization tracking political detentions, said that the Cubans at the meeting “had delivered a list of 24 long-term prisoners whom they wanted to see released in addition to the 53 on the Obama administration’s list.”
On Monday, January 19th, the U.S. delegation met “for several hours with Foreign Minister Bruno Rodriguez Parrilla, who told the legislators that Cuba welcomed President Obama’s loosening of the U.S. trade embargo, which would permit more travel to Cuba and economic links including exports of telecommunications equipment and wholesale goods for use by the country’s small private sector.” According to Leahy, Rodriguez is “open to every issue from trade to communications. He talked about the travel back and forth, medical issues. Name an issue, he’s involved.” (To the right is a photo of this meeting.)
Also participating in this meeting were Josefina Vidal Ferreiro, the Director General of the North American Division of Cuba’s Foreign Ministry, and Cuba’ chief diplomat at the Cuban Interests Section in Washington, José Ramón Cabañas, the latter of whom visited Minneapolis’ Westminster Presbyterian Church last October.
The U.S. legislators also had hoped to meet with Cuban President Raúl Castro, but that did not happen apparently because the Americans had met with Cuban dissidents on Sunday.
On May 6, 2012, two Palestinian Christian hymns had their world premiers during the Sunday morning worship service at Minneapolis’ Westminster Presbyterian Church. Both were commissioned by two Westminster members to celebrate the church’s partnership with Evangelical Lutheran Christmas Church of Bethlehem, Palestine.
The music for these hymns was written by Palestinian musicians Marwan Abado, Naser Musa and Georges Lammam. They along with three others (Antoine Lammam, Miles Jay and Tim O’Keefe) constitute the Georges Lammam Ensemble who were present and played and sung the hymns and other Middle Eastern music during the service. The lyrics for both were written by Rev. Dr. Mitri Raheb, the Pastor of the Christmas Church.
The first hymn, Ahar (We Are Free), had three verses and refrain that were a Christian response to the realities of the contemporary Middle East. The hymn’s lyrics in Arabic were on the cover of the church bulletin for the service shown at the right. The verses were sung in Arabic by the Ensemble to their own accompaniment on Middle Eastern instruments. The refrain was sung in English by the congregation:
“We’re free, unbound from slavery.
We’re free, in our humanity.
As dark as it may seem, we’ll work toward the dream until we see the beam, the light of liberty.
We’re free. We’re free. We’re free.”
The lyrics for the other hymn, Ghanu Lil Hayat (A Hymn for Life) had a message of resurrection to be sung in the Easter season. Its two verses were sung in Arabic by the Palestinian musicians with their own accompaniment, and the congregation repeated the first verse in Arabic:
Lai sa ho wa ha hou naa ha hou naa
Kuf fu a’n nii bu kaa caa ma naa buu ha y aat
Rev. Raheb delivered the sermon, “A Village Tour,” based on this passage from the Gospel of Mark (1: 35-39):
“In the morning, while it was still very dark, [Jesus] got up and went out to a deserted place, and there he prayed. And Simon and his companions hunted for him. When they found [Jesus], they said to him, ‘Everyone is searching for you.’ He answered, ‘Let us go on to the neighboring towns, so that I may proclaim the message there also; for that is what I came out to do.’ And he went throughout Galilee, proclaiming the message in their synagogues and casting out demons.”
This passage, Raheb said, was a short summary of Jesus’ political program. In the context of His having been born, raised and lived under Roman occupation and having been oppressed day and night, He was faced with the question, how can His people be liberated?
To answer this question, Raheb continued, Jesus chose not to go to Rome, the capitol of the occupying power, to demand that the people be liberated. Nor did He have any desire to be a king or religious leader or the founder of a political party. Jesus had a different concept of liberation. Instead He chose to go on a village tour to preach, teach and heal the people who were marginalized, who were not in control of their lives. Jesus told them that their liberation starts in the mind and in the heart and that they–the outsiders– were being called to be His ambassadors for the Kingdom of God. We are free!
The service was attended by a local Islamic imam and was live-streamed to the Internet and watched by members of Christmas Church in Bethlehem and by Christians in Europe. It is now archived and can be watched by anyone. It was the concluding event in Westminster’s Palestinian Arts Festival.
In my opinion, this worship service was one of the most meaningful in Westminster’s recent history. It fully integrated the mission of our global partnerships with our worship service. It emphasized that God speaks and acts in different ways, in different times and in different places. We in the United States do not have a monopoly on understanding God and Jesus. The Bible was not written in English in 21st century U.S.A. We can gain additional perspectives on God and Jesus from symbolically standing in the shoes of our brothers and sisters in different places and circumstances. Jesus lived and worked in an era of occupation.
As previously noted, I have a strong professional preference for mediation and arbitration as methods for resolving disputes between manufacturers and distributors or dealers. This assumes that the parties have tried and failed to resolve their disputes through direct negotiation, which is the least expensive and least time-consuming method and which enhances the possibility of amiable future relationships.
The reasons for preferring negotiation, mediation and arbitration hold as well for commercial disputes between entities in different countries.
Mediation (or conciliation as it is called in the international arena) where a neutral third-party assists the disputants in trying to settle their disputes is the first option after negotiation. This was my preferred dispute resolution method because it empowered the parties themselves to settle their disputes, because it opened the way for creative solutions that were not possible in court or in arbitration and because it was the least expensive option.
Only if mediation (or conciliation) failed, would such a contractual provision call for submitting the dispute to arbitration under one of several general sets of arbitration rules where the arbitrator resolves the dispute. Arbitration was preferred to court litigation because the former eliminated the expensive pre-trial discovery and other processes of the court and because the parties participated in selecting the arbitrator who was seen as a safer decider than an unknown judge or jury. On the other hand, the costs of international arbitration are significant, especially with three arbitrators from different countries and international travel.
Moreover, there are additional reasons why arbitration is a preferred method for international commercial dispute resolution. First, there is fear of prejudice against the foreigner by a court or jury of another country. But such fear is less with an arbitrator or arbitrators that the sides help to choose. Second, there is a multilateral treaty that makes arbitration awards (the final decision in an arbitration) easier to enforce in other countries. In contrast, it is more difficult to enforce one country’s courts’ final judgments in other countries. This is very important. For example, an arbitration award or a court judgment might hold the defending corporation (the respondent or defendant) liable to the complaining corporation (claimant or plaintiff) for $1 million for breach of contract, and most of the respondent or defendant’s assets might be in a different country than where the arbitration or litigation took place.
At Faegre & Benson, I frequently drafted dispute resolution provisions for international contracts prepared by other lawyers in the firm. In addition, I was counsel for two foreign companies in international arbitration proceedings under the Arbitration Rules of the United Nations Commission on International Trade Law (UNCITRAL). Each of these cases illustrated interesting facets of such proceedings.
Turkish distributor vs. U.S. (Minnesota) manufacturer.
In the first case, I represented the Turkish terminated distributor of medical devices that were manufactured by a Minnesota company. Their written agreement, written by Minnesota lawyers, called for Minnesota law as the governing law and arbitration in Minnesota under the UNCITRAL Arbitration Rules with three arbitrators and with English as the language of the arbitration.
Under Article 5 of the UNCITRAL Rules there are three arbitrators unless the parties agree to have only one arbitrator. When there are three arbitrators, the claimant (here, the Turkish company) selects the first arbitrator; the respondent (here, the Minnesota company) picks the second; and then these two arbitrators select the third and presiding arbitrator. Although the first two arbitrators are selected by the two parties, the arbitrators are to be independent, not representatives or advocates for the parties that selected them.
My Turkish client and I thus had to go first in selecting an arbitrator. My ideal candidate was a Minnesota lawyer from Turkey who was bilingual in English and Turkish and who knew Turkish business customs and circumstances, but not surprisingly I could not find such a person. I then called the Turkish consulate in Chicago and Embassy in Washington, D.C. for recommendations for such an arbitrator. I eventually found a U.S. (and Turkish) lawyer in New York City who was born in Turkey, who was bilingual and who knew its business customs and circumstances, and the Turkish company appointed him as arbitrator. The Minnesota company then appointed a professor from a Minnesota law school as the second arbitrator. The two of them then appointed a retired chief justice of the Minnesota Supreme Court as the third and presiding arbitrator.
The hearings were held in a conference room of the Minneapolis office of the presiding arbitrator in the IDS Tower and lasted several days. The Minnesota company was represented by its in-house lawyer and two lawyers from its outside law firm while I was by myself for the Turkish company. (This was a role reversal for me.) The atmosphere was tense in the conference room. The husband of the couple who owned the Turkish company had been an arbitrator in his own country where things were handled much differently, and yet he enjoyed the battle in the Minneapolis conference room. His wife who was also involved in the business and was a witness, however, was appalled by the hostile questioning of the other side’s lawyer.
Several weeks after the hearing, I received in the mail the two-page award of the arbitrators requiring the manufacturer to pay a sum of money to the Turkish company. Thereafter the money was paid, and the case was over. My client and I were very pleased.
Under Article 32(3) of the UNCITRAL Arbitration Rules, the arbitrators are required to provide a statement of the reasons for their award unless the parties waive this requirement. In this case, the requirement was waived because a relatively small amount money was claimed and because both sides wanted to avoid the expense of paying for the time of the arbitrators to prepare such a statement of reasons.
U.S. (Minnesota) Buyer vs. Asian manufacturer
In the second case, I was counsel for an Asian manufacturer responding to an arbitration claim for over $26 million for breach of contract and other alleged wrongs. The contract at issue had been prepared by a non-lawyer employee of a Minneapolis foreign-trade consulting firm. It had what I regarded as a very inartful arbitration provision. It called for arbitration under the rules of “the United Nations Uniform Commercial Codes,” which do not exist. Nor did it specify where the arbitration should be held or the number of arbitrators or the language of the arbitration.
The Minnesota company first suggested there be only one arbitrator and that a specified retired Minnesota state trial court judge be that sole arbitrator. Although I had experience before that individual when he was a judge and had full confidence in his ability to be a fair arbitrator in this case, my Asian client did not want to have the case decided by one person from Minnesota. Therefore, I told opposing counsel that we did not agree to only one arbitrator.
Nothing more was heard from opposing counsel, and I thought the case had died on the vine. I was greatly surprised, therefore, when I received a letter from the Permanent Court of Arbitration at The Hague, Netherlands. The letter said that under Article 7 (2)(b) of the UNCITRAL Arbitration Rules, it was the designating authority for appointment of arbitrators when a party defaults in so doing and that the Asian company had defaulted in appointing the second arbitrator. In response, I recited the above history and stated that the Minnesota company had never appointed the first arbitrator and that, therefore, the Asian company had not defaulted. An official at the Permanent Court said I should tell that to the person it was designating as the appointing authority, a barrister in Melbourne, Australia. I reiterated my argument to the barrister to no avail when he appointed the head of an Asian international arbitration center and a former attorney general of that country as the second arbitrator.
Thereafter, these two arbitrators appointed a Danish lawyer from Copenhagen with extensive experience in international commercial arbitration as the third and presiding arbitrator.
On behalf of the Asian company, I filed a motion to dismiss the arbitration as it had never agreed to arbitration under the UNCITRAL Arbitration Rules, and the panel set a hearing in Minneapolis on this motion. Several weeks before the hearing, I was startled to receive a letter announcing the resignation of the second arbitrator (the Asian lawyer). My Asian co-counsel and I then immediately appointed a Queen’s Counsel barrister from London as the second arbitrator. (Later I found out that the Asian arbitrator had resigned because his fellow arbitrators refused to authorize him to fly first class (at substantial expense) to Minneapolis for the hearing.)
The hearing on the dismissal motion was held in Minneapolis, and the panel denied the motion. They did so even though their decision recognized that the “United Nations Uniform Commercial Codes” did not exist and under a strict interpretation, the arbitration clause had no effect. Nevertheless, the order concluded that the clause must be understood as referring to the UNCITRAL Arbitration Rules.
At the same time we also had a dispute as to the venue (or “seat”) of the arbitration due to the inartful arbitration clause’s not specifying such; my side argued for Hong Kong; the other side, London; and the arbitrators decided on London. The arbitrators also decided that the language of the arbitration would be English, which was not specified in the clause, but all agreed to English.)
In U.S. trials and arbitrations, witnesses are cross-examined on inconsistencies, real or apparent, between their testimony at the trial or hearing and prior testimony or statements. However, in this arbitration, the panel told the attorneys it was “not necessary during examination or cross-examination of witnesses for them to examine the witnesses on matters already in the written materials.” This was a surprise for me and a problem in preparing good cross-examination questions.
In the Fall of 1997, the hearings on the merits (or the trial) were held in three different cities. Minneapolis was first for the testimony of certain witnesses. I then flew to the Asian city where my client was located for hearings for the testimony of other witnesses. I then returned to Minneapolis for a brief stay, and then it was on to London.
London was the city for closing arguments. They were held in a conference room of an arbitration center in “legal London,” on the Strand near the Law Courts and the Inns of Court. The attorneys for the Minnesota company went first. Then my Asian co-counsel and I made our arguments.
I prepared for the closing arguments in Faegre & Benson’s London office, which is just several blocks from St. Paul’s Cathedral. Working on a Sunday morning, I could hear the pealing of the Cathedral’s bells and wished that I were in the church, rather than in the office.
Approximately four months later I received the 27-page Award that dismissed all of Claimant’s claims and all of my client’s counterclaims. One of the key points was the conclusion that the Claimant’s predecessor-in-interest and assignor had waived all claims for breach of contract and that its conduct did not fall within the wording of a non-waiver clause in the contract.
Thereafter Claimant submitted a motion for correction and interpretation of that key point, which my client resisted. On the basis of the papers the panel decided, 2 to 1, that there was no need for any interpretation or correction of the Award. At last, the case was over.
Not surprisingly this was not an inexpensive arbitration. In addition to the fees and expenses of each side’s attorneys, the bill of the three arbitrators for their fees and expenses was $302,000 to be split equally by the two parties.
 Post: Resolving Disputes between Manufacturers and Distributors/Dealers (Aug. 9, 2011).
 One example of rules for this method of dispute resolution is the UNCITRAL Conciliation Rules, which cover all aspects of the conciliation process, providing a model conciliation clause, defining when conciliation is deemed to have commenced and terminated and addressing procedural aspects relating to the appointment and role of conciliators and the general conduct of proceedings. The Rules also address issues such as confidentiality, admissibility of evidence in other proceedings and limits to the right of parties to undertake judicial or arbitral proceedings while the conciliation is in progress. (UNCITRAL, 1980–UNCITRAL Conciliation Rules, http://www.uncitral.org.)
 Post: Resolving Disputes between Manufacturers and Distributors/Dealers (Aug. 9, 2011).
 The Convention on the Recognition and Enforcement of Foreign Arbitral Awards (also called “the New York Convention” or treaty) now has 146 of the 192 U.N. member states as parties, including China, Korea, Japan, India, Indonesia and other major trading partners of the U.S. The treaty requires courts of contracting States to give effect to an agreement to arbitrate when seized of an action in a matter covered by an arbitration agreement and also to recognize and enforce arbitration awards made in other States, subject to specific limited exceptions. (UNCITRAL, 1958–Convention on the Recognition and Enforcement of Foreign Arbitral Awards, http://www.uncitral.org.)
 The UNCITRAL Arbitration Rules cover all aspects of the arbitral process, providing a model arbitration clause, setting out procedural rules regarding the appointment of arbitrators and the conduct of arbitral proceedings and establishing rules in relation to the form, effect and interpretation of the award. (UNCITRAL, 1976–UNCITRAL Arbitration Rules, http://www.uncitral.org.)