37 Comments
author

Posting on behalf of a former federal prosecutor who asked to be identified as “Queen Pizza”:

“When Elon Musk does something that seems illogical, I usually look for a deeper logic. I see something insidious at work here. I think Musk is trying to create the reputation among AmLaw100 firms, prosecutors and enforcement attorneys that if you ever cross him, he will move his work elsewhere.

Most young government attorneys take the job hoping both to do good and to set themselves up for a strong career. They expect to be on the job market at some point. They will include their high profile matters on their resumes. A Musk investigation/prosecution certainly would be a capstone.

If Musk creates the reputation that he will never hire (or stay with) a firm that employs an attorney who investigated him while in government service, law firms may shy away from hiring government attorneys who have a Musk matter on their resumes. Just about every AmLaw100 that does not have a Tesla conflict would love to get that work. It is easy to pass over a resume.

If AmLaw100 firms shy away from hiring government attorneys who have investigated or prosecuted Musk, then many talented government attorneys will hesitate to join such an investigation.

That would be a result that Musk might wish to see. Of course, he might just being acting childishly.”

Expand full comment
author

Posting on behalf of a reader who has worked at multiple Biglaw firms over the years:

"While Cooley couldn’t fire the associate, they made the mistake beforehand. You run the conflict check and don’t hire the associate who will piss off the big client to begin with. It’s Musk’s money, and he has every right to say he doesn’t want his millions to go to a firm that hired an enemy of his.

Meanwhile, the associate is still in a bad way. How can he possibly have a long term future at Cooley when so many partners will resent him? He may not have been made aware of the controversy, but if he was, his best career move was to volunteer to resign in exchange for severance and help landing at an equally good job elsewhere."

Expand full comment

I commend the firm for standing by the associate. As a practicing attorney, I would like to think that my firm would stand by me in a similar situation.

Expand full comment

Firm did the right thing. Musk had the right to take his business elsewhere, but that doesn't mean he exercised good judgment when he did. At some point he will need someone else's trust, whether a lawyer, business partner, or potential adversary. The more he acts arbitrarily, the more he invites distrust.

Expand full comment
Jan 20, 2022Liked by David Lat

Musk had the right to do make this ask--nobody is saying it was illegal or anything--but just because you CAN do something doesn't mean you SHOULD do something. What he tried to do was wrong, and good on Cooley for telling him no.

Expand full comment
Jan 20, 2022Liked by David Lat

As a postscript to my comment quoted in AmLaw, I ordered a Tesla Model X 13 months ago, and I’m still awaiting delivery. Perhaps Mr. Musk should pay more attention to his own business and less to Cooley’s.

Expand full comment
author

Posting on behalf of "Burhan":

"Thank you for sharing several viewpoints, but as your article implies, we can’t really have an informed opinion about Musk's request without knowing how the associate interacted with Tesla or Musk and without knowing Musk's rationale. At the risk of illustrating an obvious point, consider if the associate was an offensive a**hole and, at the same time, the son of a billionaire who allocated billions to short Tesla and lied on TV, the heir of BMW or a coal empire?"

Expand full comment
author

Posting on behalf of another reader (who messaged me privately but didn’t want to comment under their own name):

“What would Cooley have done if Musk had objected *before* it hired the associate? If, as I think, the answer is obvious, that shows that Cooley is more interested in being *perceived* as standing for principle than in actually doing so.”

Expand full comment
Jan 20, 2022Liked by David Lat

Clients have the right to ask that an associate not work on their matters, but FIRE them from the firm without wrongdoing for petty vengeance? Mess with another human being's right to support themselves and their family? What's next, "off with their head." Musk went too far. I also agree with the other comments about Cooley motivations. This is just sad. Besides everyone knows the best lawyers see an issue from both sides - prosecutor and defendant. Why deny yourself from that experience. Isn't that why you go to BigLaw in the first place?

Expand full comment

Of course Musk was within his rights to fire, hire or direct his attorneys to do anything, unless there is some oddball paragraph in the letter of retention that says otherwise. That does not mean that the firm has to do it. Indeed, it seems clear that the firm has an equal obligation of independent judgment that required it to act as it did and refuse an unreasonable demand by the client to NOT exercise independent judgment. This is not a hard case. Both parties were within their rights to act as they did. It really is just that easy.

Expand full comment
founding
Jan 20, 2022Liked by David Lat

I am glad Cooley stood by its associate, but let's be clear - they were looking out for their own skin, not (just) making a principled stand.

In the talent cycle that we are currently in, it would be crazy for Cooley to have done anything else. Many BigLaw firms have more work than they can handle and live in fear of associate attrition. Cooley firing that associate would have been tantamount to declaring open season to every recruiter and rival in the market, and they would have lost a LOT more business than just Tesla because they wouldn't be able to staff the work.

All of the flattering "standing in principle" press, on the other hand, makes Cooley look bright and shiny in the talent market, and I'm sure it's not an accident that this story ended up in the legal press. Well played, Cooley. Well played.

Expand full comment
Jan 20, 2022Liked by David Lat

Entirely reasonable for a client to ask that a firm not use a given lawyer *on its matters*. And it’s up to the client to explain why it so desires if it chooses (or not if it doesn’t). I’ve certainly seen situations where this has happened — sometimes for good reasons, sometimes for no apparent reason. And if the client had a good reason (work quality, attitude, etc.), it may well cause the firm to fire or counsel out that lawyer. I’ve also known of situations where there was no apparent reason, but the associate had and developed no other work streams, and thus it eventually led to them being let go. But I do not think a client has cause to tell a firm to fire a lawyer (regardless whether s/he is working on that client’s matters, but even more so if s/he isn’t working on its matters). How is that employment decision the client’s business?

I say that and it seems right. But clients choose not to work with firms based on other work the firm does; and that again is the client’s choice (albeit one I find a little silly). I’m not quite sure why the fire-this-associate situation seems different, but it does. Maybe it’s just that this seems so asinine on Musk’s part?

Expand full comment
Jan 20, 2022·edited Jan 20, 2022Liked by David Lat

Good for Cooley for standing by its associate. Maybe I am not as cynical as other people but Cooley should stand up for its associates on principle in times like this especially when Musk really had no reason to demand the associate be fired. Like Musk, Cooley also has business decisions to make. They need good associates to help with "prestigious" clients. Good associates can go elsewhere if they see a firm that will bend to every single client demand, no matter how ridiculous it is. Sorry to be boring, David, as I wholeheartedly agree with you.

Expand full comment

I think someone mentioned this before: how did this news come out? If Cooley leaked this confidential discussion with a client, I would be troubled by that.

Expand full comment
Jan 21, 2022Liked by David Lat

I agree that Cooley was right (if not absolutely required) to stand by their associate. Giving in would reflect very poorly on the firm's integrity.

Musk, I assume, has the legal right to take his business wherever he wants, with or without a reason - there really isn't an alternative that would be workable. However, his behavior is petty and vindictive, and reflects very poorly on him. If I were otherwise inclined to invest in Elon Musk's businesses (which I'm not, and never have been), I'd be less inclined after this.

Expand full comment
Jan 20, 2022·edited Jan 20, 2022Liked by David Lat

"Musk pays the bills. For the vast amount he and his companies spend, he has the right to demand high levels of loyalty from his law firms." Well, well, well. He's describing nothing more than a "hired gun" not a professional.

The professional services guru David Maister told me back in 2006, "Your final point could not be more important nor profound, Francine. Please forgive me if I repeat YOUR point. "When a firm slips into the 'Poor me, I have to prostitute myself to make money' it opens the floodgates to many other forms of unprincipled, “self-justifying” behavior." Exactly!

There are CONSEQUENCES when leaders create an atmosphere that says “we can’t afford to have standards.” Ethical breaches start happening in BOTH directions – firms feel that they can’t say “No!” to clients (and we end up with scandals) and, as you say, Francine, firms feel they have permission to cross the line in their own behavior."

https://davidmaister.com/guns-for-hire/#comments

So, I'd love to know which company this reader works for because it would likely be a good one for me to investigate as a journalist and maybe for an activist to short.

Expand full comment