Keep your finger on the legal world's pulse

Arcadia Finance, a new litigation funding firm, has been launched by three former employees of Validity Capital. The firm has access to at least $100m in capital and will focus on investing in U.S.-based commercial and IP litigation, as well as international arbitration. Arcadia will offer customized solutions for a wide range of litigation financing needs and will explore funding matters for as low as $500,000. The founders aim to commit capital in 12 to 18 months and deploy those commitments over a period of 36 months. The launch of Arcadia comes after Validity Capital went into harvest mode last year. The new firm aims to learn from the lessons of Validity and has built a platform with multiple investment partners and flexible capital. Arcadia has raised capital over the course of about one year and its investors are U.S.-based financial services companies with significant litigation finance industry experience. The litigation finance industry has seen a decline in investor commitments, leading to layoffs at Validity and other funders. However, many capital providers remain interested and are waiting to see how their current investments mature.

 

Above the Law

Bloomberg Law

CDR

Natalie Shkolnik and Michael Van Riper of Wilk Auslander highlight the legal system’s cautious approach to regulating generative artificial intelligence (AI) in litigation. Last summer, an incident involving two New York attorneys who unwittingly used fictitious cases generated by AI in their arguments led to sanctions and underscored the technology’s potential pitfalls. Despite such challenges, courts have been slow to adopt comprehensive regulations, primarily focusing on disclosure requirements for AI-assisted research and writing. Recent discussions by the Advisory Committee on Evidence Rules reflect this hesitancy, with members expressing skepticism about proposals for new rules to authenticate AI-generated evidence and manage deepfakes. This cautious stance mirrors the broader legal community’s debate on balancing AI’s benefits against its risks and imperfections. Given the legal sector’s slow adaptation to new technologies and its preference for experience over pure logic, any regulatory changes regarding AI in litigation are likely to be gradual and considered. 

 

Legaltech News

At a recent talk, lawyer and tech expert Robert Ambrogi addressed a group of trial lawyers about generative artificial intelligence (AI)'s role in litigation. Despite his audience's deep courtroom experience, few were familiar with or using AI in their practice. Ambrogi noted a significant disparity in AI adoption between larger and smaller law firms, attributing this to the resources available to larger firms. He suggests that bar associations and vendors could help bridge this gap by providing training and resources to help smaller firms leverage AI effectively, potentially transforming their practices. Ambrogi emphasized that generative AI is reshaping legal processes, and adapting to it could be crucial for the competitiveness and efficiency of smaller law firms.

 

LawSites

Legal Tech Monitor

The FTC has referred TikTok's parent company to the Department of Justice (DOJ) for potential violations of children's privacy rights, uncovering concerns during a compliance review of Musical.ly, which merged into TikTok. The review follows a 2019 settlement where Musical.ly was fined $5.7m for violating the Children’s Online Privacy Protection Act (COPPA). The FTC's move could lead to litigation by the DOJ if it chooses to pursue the case. This action comes as TikTok faces broader scrutiny, including a potential forced sale of its U.S. operations due to national security concerns, intensified by Congressional pressures and ongoing legal challenges against restrictive legislation.

 

Corporate Counsel

Amidst controversy over Randy Mastro's potential nomination as New York City's corporation counsel, a group of prominent lawyers and legal professionals have come forward to support the King & Spalding partner. Mastro, known for his significant legal career and previous role as deputy mayor under Rudy Giuliani, has drawn criticism from some New York City Council members concerned about his past clients and Republican associations. However, supporters including Mary Jo White, Jonathan Lippman, and Jeh Johnson have praised Mastro’s integrity and professionalism. Former judges, Big Law partners, and government officials have voiced their endorsement, aiming to mitigate concerns about Mastro's suitability for the role of the city’s top lawyer. Despite not being officially nominated by Mayor Eric Adams, discussions are underway, with city officials meeting privately with council members to discuss his nomination. Mastro's backers argue that his extensive legal expertise and commitment to justice make him a prime candidate for the position, notwithstanding his contentious legal history representing figures like Chris Christie and corporate clients such as Chevron.

 

Law

California's civil rights agency has announced that Snapchat will pay $15m to settle a lawsuit that claimed the company discriminated against female employees, failed to prevent workplace sexual harassment, and retaliated against women who complained. The settlement covers women who worked for Snapchat in California between 2014 and 2024. The agreement resolves a more than three-year investigation into claims of pay and promotion discrimination. The majority of the settlement money will go to employees who faced discrimination. Snapchat disagrees with the claims but decided to settle to avoid costly litigation. The company will be required to hire an independent consultant to evaluate its compensation and promotion policies and train its staff on preventing discrimination and harassment.

 

ABC News

Los Angeles Times

A deal has been struck between business and labor groups in California to reform the state's law that allows workers to sue employers for wage theft and workplace abuses. The compromise, reached after negotiations, resolves problems with the law known as the Private Attorneys General Act (PAGA). The deal involves changes to the penalty structure, making it more difficult for lawyers to demand payouts from companies. It also imposes a time limit on lawsuits and gives courts the power to order employers to correct violations. The reform legislation will be considered by the Legislature this week. If approved, a coalition of businesses backing a ballot initiative to repeal PAGA will remove its measure. The deal has been praised by labor groups for protecting workers' rights and ensuring bad behavior by employers is halted. The reform aims to encourage compliance with labor laws and protect smaller companies. The allocated share of penalty money for workers will increase from 25% to 35%.

 

Los Angeles Times

The California labor commissioner's office has fined Amazon nearly $6m for violating a safety law that has been in effect since 2022. The Warehouse Quotas Law allows employees to request explanations of productivity quotas and any discipline they may face in failing to meet the quotas. The law also prohibits quotas that interfere with breaks and health and safety laws. The state regulator said Amazon violated the law more than 59,000 times at two Southern California warehouses between October and March. Amazon denies using fixed quotas and is appealing the penalties, which are among the largest issued under the law. The investigation was assisted by the Warehouse Worker Resource Center. Amazon workers have raised concerns about pressure to meet quotas, and other labor advocacy groups have highlighted higher injury rates at Amazon compared to other employers.

 

New York Times

Sullivan & Cromwell has asked law school student groups to confirm their support against harassment or risk losing funding from the firm. The firm's recruiting department contacted around 50 student groups at various schools, including a women of color affinity group at Yale Law School and a New York University Law school LGBTQ student group. The groups were asked to confirm their support for a letter from Sullivan & Cromwell and several other law firms, which raised concerns about anti-Semitic harassment on campuses. The firm stated that it would sponsor the groups based on their understanding that the organizations share views consistent with those expressed in the letter. Sullivan & Cromwell has been vocal against anti-Semitism and harassment in the legal industry. Bill Ackman, a client of the firm, praised their efforts.

 

Bloomberg Law

Bloomberg Tax

Akin Gump Strauss Hauer & Feld, a Texas-based firm with a large lobbying practice in Washington, is appointing new co-leaders to compete with top law firms. Abid Qureshi and Daniel Walsh will take over as co-leaders next year, replacing Kim Koopersmith. The firm is focusing on bankruptcy and corporate transactions to keep up with its competitors. Akin's shift in leadership to New York and London suggests a prioritization of growth beyond Washington. The firm has recently added lateral partners in New York but has also lost corporate lawyers in key areas. The appointment of Qureshi and Walsh reflects a trend among law firms to have multiple leaders. Qureshi is a financial restructuring litigator and Walsh is a U.S.-trained lawyer with extensive deal experience. They will continue to maintain their practices while leading the firm.

 

Bloomberg Tax

Avi Schick has joined Faegre Drinker as a partner and co-leader of the firm's national state attorneys general practice in New York City. Schick, a former deputy AG with the New York State Attorney General's Office, brings experience in representing clients in criminal and civil investigations and enforcement actions before state and federal regulators, prosecutors, and enforcement agencies. He has represented public companies, entrepreneurs, real estate developers, owners and financiers, and government officials in investigations and civil litigation. According to the firm, Schick's addition strengthens their capabilities in handling legal matters related to attorneys general.

 

Bloomberg Law

Boston Scientific Corp. has acquired medical device company Silk Road Medical Inc. for $1.16bn, with legal guidance from Latham & Watkins and Wilson Sonsini Goodrich & Rosati. The deal reflects the increasing activity of law firms in Boston, particularly in the healthcare and clean energy sectors. Julie Scallen, the corporate department chair at Latham's Boston office, led the firm's work on the deal. This acquisition adds to Boston Scientific's previous acquisitions, including Apama Medical Inc. and Symetis SA. BofA Securities, advised by Fried Frank, served as the financial adviser to Silk Road.

 

Bloomberg Law

Several top-tier law firms, including Clifford Chance, Latham & Watkins, A&O Shearman, Freshfields Bruckhaus Deringer, and Kirkland & Ellis, have been enlisted for significant private equity transactions involving prominent U.K. assets. These deals include the investment in London's Heathrow Airport and the private equity takeover of Hargreaves Lansdown. The Heathrow transaction sees Ferrovial selling part of its stake to the Saudi Public Investment Fund and Ardian for £3.26bn ($4.1bn), retaining a smaller portion than initially planned. Simultaneously, Hargreaves Lansdown is poised for a £5.4bn ($6.9bn) acquisition by a CVC-led consortium, following a series of rebuffed offers. These high-stakes transactions underscore the dynamic activity in the U.K.'s financial and legal sectors.

 

Law.com