Government investigations, civil lawsuits and a ton of regulations to get acquainted with – this is the complex brew of elements securities litigators have to skillfully navigate. If you're thinking of becoming a litigator in this subset then take note, as Milbank's lawyers lift the lid on what it's like to balance enforcement and civil work; the questions that need to be asked when developing case strategy; and why their practice is becoming “increasingly global.”
Chambers Associate: What does securities litigation involve?
Grant Mainland, partner: Our securities litigation group handles a wide array of civil and criminal matters that arise under the federal securities laws. With the growth of our white collar practice, we have become particularly adept at handling parallel civil and governmental proceedings – for example, a DOJ or SEC investigation with companion class action lawsuits arising under Section 10(b) or other provisions of the securities laws. These days, the announcement of a regulatory or enforcement matter almost invariably results in class action filings. But government investigations and plaintiffs’ class actions have fundamentally different dynamics.It’s important to approach the enforcement side of the case with an eye to how it will affect the civil side, and vice versa.
In terms of the client base, while Milbank has particularly deep relationships with financial institutions, securities litigation often involves a diverse array of clients in various industries. For example, I’m currently working on a securities case against a South American company and another relating to a pharmaceutical concern.
“These days, the announcement of a regulatory or enforcement matter almost invariably results in class action filings.”
CA: What do associates do?
Alexandra Paslawsky, associate: Every day is different, and associates are involved in every step of the process. Associates will do research, analyze documents, and prepare witnesses for interviews, depositions, and trials. I’ve played different roles on different teams, depending on what kind of case it is.
Anna Dimon, associate: The work day is largely driven by what stage of litigation a case is in; depending on the maturity of a case, more or less time will be devoted to reviewing documents and drafting briefs. Associates also complete as-needed research projects that come from clients on a rolling basis.
CA: What do partners do?
GM: Having just become a partner, I am increasingly focused on the overall strategy of the case. What are the themes we are trying to advance, whether through motion practice or mediation or otherwise? What kind of factual evidence do we need to obtain from the plaintiff or third parties or our own client? What kind of expert opinions or testimony will we need to defend against the claims? How will we handle any developments on the governmental side (if applicable)—say, a settlement or the announcement of an enforcement action?
In thinking through these issues, I work closely with the team of associates in developing our arguments; formulating and advancing our positions on discovery matters; liaising with experts, etc...
Daniel Perry, partner: Many of the class action cases that are brought don’t have a lot of merit. In general, motions to dismiss are filed in these types of cases around 95% of the time, with an average of about 50% of those motions granted. Milbank’s performance is a bit better than the market average. This work involves keeping up with the current law and being in the know, which is where a firm like ours really adds value – you may be in the middle of drafting a motion to dismiss when the Second Circuit hands down a decision. That’s not at all uncommon, and our team excels at keeping up with these developments.
“What are the themes we are trying to advance, whether through motion practice or mediation or otherwise?”
CA: What are the highs and lows of the practice?
AP: These cases are filled with opportunities for young associates to get a lot of experience doing substantive work for major companies. There are a lot of opportunities for face time with partners and client contact.
The lows can be different depending on the case – sometimes you’re working on an extremely tight timeline, so everything is expedited. Sometimes you may have a ton of documents to get through. But these are the things that can also make the case exciting and meaningful.
DP: This is a fun practice area because these are big cases, with big dollar values, and they get a lot of attention from the client. Cases are litigated in federal court, and the law is very well developed and interesting. One high of the practice is dealing with really sophisticated clients on these large, meaningful cases, with an opportunity to appear in federal district courts regularly.
As for the lows, the thing I find most tedious is the discovery that sometimes accompanies these cases. These can be large cases spanning many years, multiple business units, and large, complex companies, so the task of collecting, reviewing, and producing documents is substantial. It’s also unlike other types of litigation, where you have an adversary on the other side that has similar production obligations, creating some balance where both sides are incentivized to cooperate and be reasonable in their demands. This is primarily a plaintiffs’ lawyer-driven practice, so they can be somewhat unrestrained in what they ask for. One of the things we have to deal with is plaintiff firms over-reaching in discovery, purely because that’s a strategy to draw this out and make the process so painful, unpleasant, and expensive that the company is incentivized to resolve the case. We are obviously experienced in dealing with that – but it doesn’t make it any more fun!
“The intersection of civil securities lawsuits and government investigations – by the DOJ, SEC, state AGs, or other enforcement or regulatory bodies – is a critical dynamic.”
CA: Which factors are driving the practice at the moment?
GM: The intersection of civil securities lawsuits and government investigations – by the DOJ, SEC, state AGs, or other enforcement or regulatory bodies – is a critical dynamic. In some cases, we handle both the government investigations and private suits. In others, we handle either the governmental or civil side only and coordinate with counsel handling the other piece of the case. In either event, attention to the broader picture is essential.
With more foreign companies listing shares on US exchanges, thereby subjecting themselves to the federal securities laws, there is an increasingly global aspect to the practice. This is especially so with respect to Foreign Corrupt Practices Act (FCPA) investigations involving corruption and anti-bribery issues.
“These cases are filled with opportunities for young associates to get a lot of experience doing substantive work for major companies.”
CA: How can students keep up-to-date with the market and industry trends?
AP: I’d encourage students to attend talks by lawyers with experience in the industry. These are the people who have lived it, and I’ve found that their advice and insight can be invaluable.
DP: The nice part about this area of the law is that there's a lot of attention to it in the legal press, and you can fairly easily stay up-to-date by looking at journals that cover the securities litigation market. Cornerstone publishes a fantastic annual study on trends in the market. Of course, there’s no substitute for reading the cutting-edge cases in the circuits and on occasion from the Supreme Court.
GM: There are many publications and blogs that closely follow recent developments in securities litigation – The D&O Diary is a very topical blog that comes to mind. Stanford Law School (working with Cornerstone Research, an economic consulting firm) also created the Securities Class Action Clearinghouse, which I find extremely helpful.
CA: Where can new associates expect to be in five years?
DP: Mid to senior-level associates in our group prepare and defend witnesses in deposition, and are often the primary drafters of motions to dismiss, motions opposing class certification, and for summary judgment. They also appear in court to argue discovery motions and the like. There are opportunities for substantive research, writing, drafting, and court appearances.
“This courtroom experience is something that I think really sets us apart – we feel strongly about getting our associates into court.”
CA: What are the opportunities unique to Milbank?
DP: Beginning as summer associates, our aspiring litigators first get experience working on pro bono cases. In their first year, all Litigation associates begin taking part in Advocacy@Milbank, which is a multi-level training program tailored for our practice that spans their first six years at the firm. Part of this program is a partnership with the Office of the Appellate Defender in New York, where first-years team with more senior litigators to handle pro bono appeals, often arguing them in court.
This courtroom experience is something that I think really sets us apart – we feel strongly about getting our associates into court. In securities cases, whenever there are opportunities we try very hard to get our associates that experience. Our sense is that judges and clients are normally quite supportive – as are all of our partners – and what we’ve found is the associates do a really excellent job and rise to the occasion. That’s just part of our culture as a litigation department.
Along with that, we’re also committed to providing best-in-class training to all of our mid and senior-level associates through our Milbank@Harvard program. Each year, beginning in their third-year, classes of our associates from all of our practices around the world meet up for an intensive week of sessions up at Harvard, with Harvard Law and Business School professors. It’s a totally unique program, and we hear from our associates that it really boosts their skills, their confidence, and their understanding of our clients’ businesses.
CA: What advice do you have for students interested in this area?
AP: I’d tell students interested in securities litigation to demonstrate that interest! The best way to learn about the work and understand the practice is to ask people about it.
DP: Take all of the law school classes oriented toward securities and federal litigation, federal courts, evidence, securities regulation – make sure you have the building blocks your law school offers. Then, select a litigation department that regularly practices in this area. Once you’re at the firm, those firms will invest a lot in training and educating and preparing you as a securities litigator.