This NY Times article reports on the interesting story of tax shelter lawyer Raymond J. Ruble, a former Manhattan-based partner with Sidley Austin Brown & Wood. Mr. Ruble was well-known at Sidley, Austin for his aggressive work on tax strategies for investors, and was one of the biggest earners for the firm.
However, Mr Ruble is at the center of a government investigation into Sidley, Austin’s promotion of abusive tax shelters. In October, Mr. Ruble was dismissed, a highly unusual move by such a prestigious law firm. Days earlier, government investigators told the firm that millions of dollars from a San Francisco-based seller of tax shelters had gone – apparently unknown to the law firm – into a Delaware trust created by Mr. Ruble.
At least four civil lawsuits name Mr. Ruble and his former employer as defendants. Some of the lawsuits contend that he also worked with Ernst & Young and Deutsche Bank, among others, to promote a variety of abusive tax shelters.
The entire article is interesting reading, and includes the following tidbit on Mr. Ruble’s promotion of tax shelters in a continuing education publication:

In any case, in an article, “The Professional Responsibilities of a Tax Lawyer in the Context of Corporate Tax Shelters,” published by the Practicing Law Institute in its course handbook series for lawyers, Mr. Ruble argued that tax lawyers had a first duty not to the tax system but to their clients.
He began the article by quoting from the Gospel of Matthew: “No man can serve two masters.”

This Wall Street Journal ($) article reports on the annual American Lawyer review of law firm finances, which found that America’s richest law firms got even richer last year.
New York City based Wachtell, Lipton, Rosen & Katz topped the list with average profits per partner of $2.58 million. Other New York firms, helped by the Wall Street recovery, dominated — claiming 13 of the top 15 spots.
Strong revenue growth generated a 9.8% increase in average profit per equity partner to $930,700. Nonequity partners made an average $357,597 per partner.

In this article, the Wall Street Journal ($) does a good job of summarizing the initial reactions to the U.S. Supreme Court’s decision last week in Blakely v. Washington, a decision that could have major implications for the federal sentencing guidelines and, for at least eight states, holds that judges cannot increase a defendant’s sentence based on facts and behavior that were not presented to a jury. Though the decision involved just one state’s sentencing system, legal specialists on guidelines say that the decision could affect the guidelines under the federal system.
The federal sentencing guidelines evolved from the Sentencing Reform Act passed by Congress in 1984. Congress created a commission to set guideline ranges that specify sentences for each class of convicted person. Courts generally select sentences from within the range based on the consideration of acts or behavior of the defendant that often was not the subject of the criminal charges. Legal sentencing guideline specialists say the Supreme Court’s ruling in Blakely could invalidate everything within that range except for the lowest level.
In Blakely, the majority said all facts essential to the sentence must be tried before a jury. Federal and many state sentencing guidelines currently involve finding facts during the non-jury sentencing phase that may increase a convict’s time served. Blakely would appear to hold that all such facts would have to be charged and tried before a jury, or those facts are formally waived for sentencing purposes.
Yesterday’s decision is the second in a week questioning the validity of sentencing laws. Last Friday, U.S. District Judge William Young ruled that federal sentencing laws were unconstitutional because they gave prosecutors too much power.
Moreover, the Journal article speculates that another sentencing appeal that will be closely watched as a result of Blakely is the sad case of Jamie Olis, the midlevel executive of Dynegy Corp. who was recently convicted and sentenced to 24 years based partly on an expert’s estimate of the amount of market value that was lost as a result of the fraud in which Mr. Olis participated. The Journal article states that the government expert’s estimate was not presented to the jury. However, my recollection is that the government expert’s testimony on that subject was presented to the jury, but not rebutted by the defense during trial, and that U.S. District Judge Sim Lake concluded that he could not consider the defense expert’s estimate post-trial if it was not presented during trial.
Look for Professor Ribstein to comment on these developments upon his return from vacation.