The second quarter of this year saw the pace of law firm mergers rise sharply in the U.S., according to a new report from legal consultancy Altman Weil Inc.

There were 26 new law firm mergers and acquisitions reported in April, May and June, compared to 18 during the first quarter of the year, according to Newtown Square, Pa.-based Altman Weil.

The largest of the latest law firm combinations was between K&L Gates, a 1,500-attorney firm, and Kennedy Convington Lobdell & Hickman, a 175-lawyer firm.

In Memphis there were no significant mergers reported for the quarter. However, in the previous quarter St. Louis-based Husch & Eppenberger LLC and Kansas City, Mo.,-based Blackwell Sanders LLP finalized their merger, which was first announced last September. Of the two, only Husch & Eppenberger had an office in Memphis.

In July 2007, Memphis-based Baker, Donelson, Bearman, Caldwell & Berkowitz PC merged Atlanta-based Gambrell & Stolz LLP into the firm, adding 36 attorneys.

"Even in a deteriorating economy, law firms continue to pursue a growth strategy via merger and acquisition," said Altman Weil principal Tom Clay in a statement. "And based on our conversations with law firm leaders, we think the pace is unlikely to slow."

The US Department of Justice announced Friday that it has settled a lawsuit brought by former US Army germ-warfare researcher Dr. Steven Hatfill, a development that may moot a landmark contempt case against former USA Today reporter Toni Locy now awaiting a ruling by the US Court of Appeals for the DC Circuit. Under the settlement, Hatfill would drop all damages claims against the government in return for a lump sum payment of $2.825 million and a 20-year annuity of $150,000 amounting to $3 million. Hatfill had initially sued the Department alleging that it violated the US Privacy Act by providing personal information and information about him to journalists - including Locy - during its investigation of the 2001 anthrax attacks in which he was at one point named a "person of interest". Locy had refused to disclose her sources in discovery, arguing that the information Hatfill was seeking was not central to his lawsuit. In a letter to the Court of Appeals Friday informing it of the settlement, Hatfill lawyer Christopher Wright said that Locy's evidence was no longer needed by his client.

In March, US District Judge Reggie Walton found Locy in contempt of court for not disclosing her sources and ordered her to pay a fine of $500 a day, increasing to $1000 a day after one week and then up to $5000 a day after two weeks, the costs of which could not be covered by her former employer. Locy obtained an emergency stay of that order from the Court of Appeals and oral arguments on the merits of the sanctions were heard last month. The appeals court has yet to make a formal ruling on the status of the contempt case in light of the Hatfill settlement, but Locy said late Friday that she and her lawyers are hopeful that the deal would end the matter. Locy will be a professor at Washington & Lee University's journalism school this fall.

New York’s highest court has set the bar prohibitively high for proving certain civil cases against predatory clergy by ruling that a woman cannot sue a rabbi who had an affair with her because she was not “uniquely vulnerable and incapable of self-protection."

Some state and federal courts have upheld breach of fiduciary duty claims arising from sexual misconduct by clergy with adult parishioners whom they are counseling. A fiduciary duty exists, those courts said, if the clergy member “held himself out as possessing the education and experience” of a professional counselor.

Only last month, an intermediate New York appeals court recognized a fiduciary duty claim for the first time in the case of a woman who sued a Catholic priest for damages arising out of her adulterous relationship with him. Doe v. Roman Catholic Diocese.

But the New York Court of Appeals pretty much slammed the door on such cases in finding last week that Adina Marmelstein had “insufficiently demonstrate[d] that she developed a fiduciary relationship” with Rabbi Mordecai Tendler.

“Allegations that give rise to only a general clergy-congregant relationship that includes aspects of counseling do not generally impose a fiduciary obligation upon a cleric,” the opinion said.

“To establish that a course of formal counseling resulted in a cleric assuming 'de facto control and dominance' over the congregant,” it continued, “a congregant must set forth facts and circumstances in the complaint demonstrating that the congregant became uniquely vulnerable and incapable of self-protection regarding the matter at issue.”

Tendler, who officiated at an Orthodox Jewish synagogue in New Hempstead, N.Y., counseled Marmelstein for emotional problems. They allegedly began their affair after he told her that “a course of sexual therapy” would make her more attractive to men and help her find a husband.

Marmelstein's allegations were insufficient, Judge Victoria A. Graffeo wrote for the appeals court, because she “has shown only that she was deceived by Tendler, not that she was so vulnerable as to surrender her will and capacity to determine her own best interests.”

In a footnote, Graffeo said she was not suggesting that “a cleric who is also a licensed professional, such as a psychiatrist, psychologist or attorney, could not assume fiduciary obligations under existing laws and the secular standards that govern the practice of those professions.”

But her decision means clerics who are not licensed professionals cannot be sued for sexual misconduct unless the plaintiff somehow meets a “vulnerability” standard which completely disregards the inherent “control and dominance” that clergy assume over congregants.

As a more enlightened New York appellate judge put it, “The hallmark of fiduciary duty -- an imbalance of power between the parties -- is especially manifest in the relationship between a priest and parishioner.” Langford v. Roman Catholic Diocese, 271 A.D.2d 494 (2000).