The Midterm "Shellacking": 6 implications for the legal indu

1.  Political wannabes lawyer up

The most immediate legal work flowing from the midterms will be for election law specialists. As of this writing, hopeful politicians from Alaska to Colorado are hiring counsel in order to navigate a recount process.

Perkins Coie’s Marc Elias had been approached by Florida Democrats to help lead a challenge by gubernatorial candidate Alex Sink against Republican Rick Ross. Sink has since conceded. Elias represented Minnesota Senator Al Franken in his bitterly contentious 2008 recount victory over Norm Coleman. Sorting out this year’s Minnesota Governor’s race has led to engagements for Bryan Cave (GOP) and Fredrikson & Byron and Winthrop & Weinstine (Democrats).

In Alaska, Patton Boggs partner Benjamin Ginsberg has been drafted to Senator Lisa Murkowski's write-in effort. (Ginsberg was a key player on the winning side of the hanging chad fiasco of 2000.) Murkowski’s opponent, Joe Miller, has blasted her for hiring “high priced election lawyers.”

2.  FinReg under fire

The Republicans’ takeover of the House puts a huge target on the back of the Dodd-Frank Financial Regulatory reform law. As Bloomberg details:

"Republicans’ new power gives them the ability to shape more than 240 rules that may be needed to implement the Dodd-Frank law ... The regulatory oversight and ability to weaken rules may benefit banks including Goldman Sachs, JPMorgan Chase & Co., and Bank of America Corp., all of which lobbied against elements of the Dodd-Frank law, saying they would hurt profits."

Already however, the implications of Dodd-Frank have spurred law firm to bolster their white collar practices in anticipation of a spike in DOJ and SEC investigations. Among the BigLaw players to have recently beefed up their white collar and internal investigation capabilities are White & Case, Jenner & Block, Vinson & Elkins, Lowenstein Sandler, Chadbourne & Parke, and Paul Weiss.

Dodd-Frank contains a whistleblower “bounty provision,” which empowers the SEC to award whistleblowers up to 30% (!!) of fraud recoveries higher than $1 million. Thus incentivized, the dime-droppers will continue to keep the SEC investigators and their BigLaw counterparts plenty busy

3.  Here come the subpoenas

The presumptive new chairmen of the House Committee on Oversight and Government Reform and the House Judiciary Committee are Darrell Issa (R-CA) and Lamar Smith (R-TX) respectively. Both Darrell and Lamar have been among the Obama Administration’s fiercest critics and both will find themselves empowered to issue subpoenas. Their first move? To demand the White House stop shredding any documents.

Talking Points Memo identifies 4 potential initial investigations to keep eye on: 1.) ACORN 2.) Joe Sestak's "job offer" 3.) The Black Panther voter intimidation allegations and 4.) BP.

4.  Health care: "death by a thousand cuts"

Ongoing challenges to health care reform assure lawyers a role in both the political arena and the courtroom. Notwithstanding a new Republican majority in the House, a Democratic Senate and President Obama’s veto power make the chances for outright repeal of health care reform slim. Instead, foes of the new law will likely take a piecemeal approach to its evisceration, attacking specific provisions and eliminating funding; rather than a single fatal wound, “the strategy will more likely resemble death by a thousand cuts.”

According to Sen. Mitch McConnell (R-Ky.), Republicans will focus, “in the House, on denying funds for implementation, and, in the Senate, on votes against its most egregious provisions." Bloomberg notes that “House and Senate Republicans have written at least 30 bills that would roll back provisions of the health-care overhaul Obama signed into law in March.” Thomas Scully, senior counsel at the D.C. office of Alston & Bird LLP, has said that “very little will happen in the next two years, but it will be a big political battle.” Big political battles mean big business for law firms, like A&B, with large legislative and lobbying practices.

Meanwhile, the health care debate continues to occupy litigators as well. Businessweek predicts that “most of the action may be in the courts, where 21 states are challenging the law’s requirement that all Americans buy health insurance. Successful challenges could accomplish what Republican lawmakers can’t, by eliminating an important component of the overhaul.”

5.  Gay rights setbacks

Proponents of gay rights suffered a series of setbacks last week, and not only in the voting booth. On Monday, the U.S. Court of Appeals for the 9th Circuit extended its temporary stay of a lower court’s injunction banning enforcement of the military’s Don’t Ask, Don’t Tell policy as unconstitutional. (On Friday, the plaintiffs, the Log Cabin Republicans, filed an appeal with the U.S. Supreme Court.) The Obama Administration, which favors legislative repeal of Don’t Ask, Don’t Tell over judicial invalidation, has urged the Senate to act during the lame-duck session of Congress. But the likelihood of this happening, The Wall Street Journal reports, ”appears all but lost for the foreseeable future.”

On Tuesday, among the Democratic members of Congress who lost their seats to Republicans was Rep. Patrick Murphy (D-Pa.), the sponsor of legislation repealing DADT. Meanwhile, in a rare move, voters in Iowa ousted three state Supreme Court justices. As the WSJ Law Blog notes, the move was “widely seen as a repudiation” of the court’s 2009 ruling that the state constitution protected the right of gay citizens to marry and was funded in part by conservative groups outside the state. The new Republican governor, Terry Branstad, who will name their successors, opposes same-sex marriage.

6.  Guantánamo Bay: Gitmo lawyers likely to remain busy

Even before last week’s election, it was clear that the closing of the prison at Guantanamo Bay, was no longer a priority for the Obama Administration, despite the president’s earlier promises. The coming Congressional shift in power only increases the chances that the prison will remain open. Rep. Lamar Smith (R-Texas), who is likely to become the new chair of the House Judiciary Committee, has stated that keeping the detention center open is among his top priorities. He favors treating terrorist suspects as enemy combatants and opposes trying them in civilian courts, positions shared by Peter King, the New York congressman in line to chair the homeland security committee.

Despite attacks questioning the loyalty of lawyers who have represented detainees, attorneys at firms both big and small have continued to work pro bono in connection with the treatment, trial and due process rights of detainees.

-posted by brian & vera