Law Firm Places Corporate Client Ahead of Divorce Client and Gets Sued

IMG_0277A prominent U.S. law firm, Blank Rome, with twelve offices around the world, is being sued in New York by a divorce client who alleges that the firm was more interested in protecting their corporate client, Morgan Stanley, then looking out for her best interests.

Kristina Armstrong was married to Michael Armstrong, who was head of capital markets and international and domestic private wealth management at Morgan Stanley. Ms. Armstrong’s court action alleges that Blank Rome failed to advise her they were representing Morgan Stanley in a $400 million transaction and took steps to protect her husband in their divorce case. The court document reads:

“Mr. Armstrong sat at the controls of Morgan Stanley, which employed and paid Blank Rome millions of dollars in legal fees, thus allowing Blank Rome to be the ultimate “puppet master” as Blank Rome could control Ms. Armstrong’s divorce litigation in a manner designed to protect Morgan Stanley.”

The lawsuit suggests that during the divorce litigation her lawyers failed to seek possession of Mr. Armstrong’s securities license, the “single most important economic asset at play” in the divorce which she values at $12 to $16 million.

Mr. Armstrong denies knowing of any relationship between his wife’s lawyers and Morgan Stanley and the firm vigorously denies their former client’s allegations.

What is interesting about this case is that it appears as if Mr. Armstrong’s professional credentials, namely his securities license, may be property that is divisible in the event of marriage breakdown. Indeed, New York is one of the few jurisdictions that places a value on a professional degree acquired during the marriage. Its lifetime value is calculated by experts, who charge big fees for their valuation services.

So, if you have credentials as a lawyer, doctor, securities trader, MBA, architect and presumably other professional designations, this qualification will be monetized and a payment will be made to the professional’s spouse. In one case the career of an opera singer was valued and divided between the spouses.

Not surprisingly, this law is widely criticized and no wonder…. in one case a wife’s nursing degree was valued at $$850,000 and after subtracting her student loans the court ordered her to pay 25% of the value to her husband over a period of 396 months. At the appeal level the value was changed to a mere $155,000 but the wife was still required to pay 25% to her ex-husband. The most common reaction to this law is ” I have to pay my spouse money that I have not yet earned?”

Yes, that’s about right, and that is in addition to any spousal support order. Happily for Canadians, while some lawyers have tried to press for a division of career credentials, Canadian courts have resisted the notion that a career can be valued and monetized with a payout to one’s partner.

Lawdiva aka Georgialee Lang


Jailhouse Lawyers: Jerry Rosenberg

Jerry Rosenberg holds the record for the longest incarcerated inmate in the State of New York. He is also the first New York inmate to earn a law degree in prison.

Rosenberg spent 46 years in prison before he died in 2009 of natural causes. After his conviction for the murders of two police officers in New York, he had an appointment with the warden of Attica Prison to die in the electric chair.

He escaped death, however, when he discovered a legal loophole that compelled Governor Nelson Rockefeller to commute his sentence to life in prison. The law in New York State had recently been amended in the first moves towards the abolition of the death penalty.

Within four years of his imprisonment he attained a law degree from Blackstone School of Law, an accredited correspondence law program founded in 1890 in Detroit, Michigan. He was, of course, never admitted to the bar as a practicing lawyer, but that did not get in his way.

During the Attica prison riot of 1971, Rosenberg tried to restore peace and became chief legal advisor to the leaders of the uprising, which took 43 lives, including ten prison guards.

He also worked with famed lawyer civil rights lawyers William Kunstler and his partner Ron Kuby in defence of several Attica inmates charged with murder.

After the riots he was transferred to Sing Sing Prison, thirty miles from New York City, where he assisted thousands of inmates with their post-trial appeals and motions, often focusing on errors made by incompetent or indifferent trial counsel. He frequently succeeded in sentence appeal applications, with reductions from 3 to 10 years.

After the prison upheavals of the 70′s, Rosenberg was able to convince the authorities to establish small law libraries in prisons and thereafter, he operated as a law professor teaching inmates to learn the law for themselves. He encouraged inmates to use their “minds and words” and not bullets.

In 1981 Rosenberg was the first inmate allowed to formally act as counsel in court during a fellow-inmate’s court hearing. He appeared before Judge Albert Rosenblatt, who later became a jurist on the Court of Appeal of New York.

He was not able to free himself though, and was never granted parole, despite his applications every two years.

Jerry Rosenberg stole the lives of two fathers, husbands, and brothers when he committed double murder. Lawyer William Kunstler once remarked: “But for a cruel twist of fate, Jerry might well have become one of the country’s foremost criminal lawyers”.

In my view he did not fall victim to fate, he created the circumstances that suppressed his enormous potential. However, at the end of his life, there was no question that he contributed to the betterment of the lives of inmates across the United States.