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January 2016 Archives

Contract Attorney's Quest for Overtime Pay Fails

On December 30, 2015, a federal court in New York dismissed Plaintiff William Henig's claim against the law firm of Quinn Emanuel Urquhart & Sullivan LLP and the legal staffing firm Providus, for overtime wages brought under the Fair Labor Standards Act (FLSA). The court roundly rejected Plaintiff's claims that he was entitled to overtime wages for the routine review of documents, to determine if the documents fell within a privilege or were relevant, noting that an attorney's review of documents constitutes the practice of law. The judge was not persuaded by Plaintiff's argument that the review of documents required no legal analysis. In reaching her decision, Judge Abrams noted that new attorneys often perform repetitive tasks that are "modest in intellectual scope" and "banal." Nevertheless, the court held this still constitutes the practice of law.

Can Your Lawyer Inherit Your Assets?

Is it acceptable practice for a lawyer to prepare estate planning documents that leave a client's assets to him or her? A very interesting case pending before the Michigan Supreme Court should answer this question. The Michigan Code of Professional Conduct, that governs lawyers licensed by the State Bar, states very clearly that a lawyer shall not prepare an instrument giving the lawyer (or a close relative) a substantial gift, including by will, from a client MRPC 1.8(c). Yet, this is exactly what happened in the case of Papazian v Goldberg, where lawyer Mark Papazian prepared the will for his long-time friend and client, Robert D. Mardigian, that left Papazian an estate of about $20,000,000 to the exclusion of Mardigian's longtime girlfriend, nieces and nephews.

Conduit Loans Are Back...proceed With Caution

Attention Michigan owners of commercial real estate; conduit lending has made a dramatic comeback from the crash of 2008. It took some time but conduit loans have been readily available for qualified projects, not just trophy properties, even in Michigan. Conduit mortgage loans provide better rates in exchange for pre-approved "standardized" documents and underwriting that allows for a minimum of negotiation with respect to loans in excess of $1,000,000. These loans also generally require individual guaranties for certain carve-out "bad" acts such as distributing income before taxes are paid or failing to file tax returns. Once closed the "standardized loan" is then pooled with other similar loans and sold on the secondary market to investors. 

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