Ah, the happy-go-lucky lab. My parent's lab exhibited the exact same behaviour, with the added behavior of barking whenever she decided she'd had enough of being in the dog run -- my parents would come running to cater to her, erg.
I came home got chewed on, slobbered on and decided that I'd had enough. I put on a choke and a leash and wham! she hit the ground and wouldn't move. Tried coaxing. No go. Treats. Uh-uh. Took it off -- bounce! bounce! I thought about it for a moment and then locked her up in one of the spare runs and instructed the rest of the family not to even go near her and to ignore all fuss coming out of there.
The programme was simple. If I went in to feed her or pick up any mess, I completely ignored her. The only time she got attention was in the short sessions (I had 4 5-10 minute sessions in the day) and the only thing she got attention for was willing obedience. The first couple of lessons were just learning to accept the collar and leash and to heel at my side (nothing strict). I teased her with a treat to begin with to break down resistance to being on a leash. If she didn't respond, I just cut off the lesson, put her away and came back in a couple of hours. By the last lesson that evening, there was a complete turn around -- when I said heel, she'd plaster herself to my left knee, look up and start licking her chops and would follow through in all pace changes and turns. She took subsequent lessons and corrections very well (so much for a soft dog!) and generalised lessons very quickly.
As for barking, oh she did bark...barked herself clean hoarse before she realised it wouldn't help and stopped. I made it a point never, ever to approach the run when she was barking. If she saw me and started, I just turned around and walked away until she shut up, at which point I'd turn back. She got the hint quickly.
It took 3 days for her to get rid of the habits that so annoyed me to begin with. From then on, it was just a question of working on obedience, proofing it, building on it. Incidentally, my parents made me stop isolating her after 2 days -- they felt so sorry for her. They did have to admit that she quickly became a much easier dog to live with: still very happy and energetic, but much more polite and nicer to have around.
Considering that this puppy is just 5 months old (are you sure? 60 lbs is kinda heavy), isolation may be a bit drastic but crating the dog or defining a 'place' that they're expected to stay at is a good idea. Apart from everything else, it's a good start to interacting with your dog on your terms, not the ones it wishes. Tell your friend to control his dog's environment, find a consistent obedience programme and follow it. It's the best way. I'd recommend a book I've found helpful in this regard, but I don't know how acceptable that is here.