Taking the First Step to Digitally Transform Your Legal Department

With more than two-thirds of CEOs expecting their business models to change in the next three years, it’s no surprise that digital transformation continues to be a strategic priority for organizations of all industries and sizes, says Contract Logix in a release.

“What is surprising, however, is that a recent study by Gartner revealed an astonishing 81% of legal departments are not prepared to support their company’s digitization process. That’s a worrisome figure given that legal departments and the contracts they execute define our business relationships and are the backbone of any organization,” the company says.

The Contract Logix release continues:

The good news for legal is that digitization, at least when it comes to contract management, has never been easier. By embracing software that’s built specifically to support contract lifecycle management, legal teams can shift from laggard to leader in the execution of their organizations’ digital transformation.

The question then becomes, where and how should a legal organization begin the process? Let’s look at the first and most critical step to take when setting the foundation for contract – and legal — digitization.

Digitize and Centralize All Your Contracts in Secure Repository
It’s not uncommon for legal departments to store contracts in shared folders across multiple locations and formats. However, centralizing your agreements into an electronic contract repository is the all-important first step towards the digital transformation of your contract management processes.

Think about how often you or your team need to reference or find an agreement. Whether you’re locating a specific detail or reviewing the entire contract before a renewal or termination, there are many reasons why an online, centralized repository is a foundational element to your legal digitization.

Not only will it keep your agreements organized, it greatly reduces the risk of contracts being lost, overlooked, and accessed by the wrong individuals. It will also allow you to access any document at anytime from anywhere on any device, and that ubiquity is a key component and driver for any organization’s digital transformation.

Another reason to digitize your contracts is so you can easily make use of the valuable data contained in them. Having the ability to capture, analyze, and report on data such as expiration dates, contract amounts, types of clauses used, and contacts will allow you to make much more informed business decisions. After all, digital transformation is all about improving your business processes and developing new business models.

As you begin the process of digitizing and centralizing your contracts – whether they are paper or already in electronic form – it’s’ important that your contract management system employs optical character recognition (OCR) technology. OCR automatically scans the content of your documents as you add them to the system regardless of their format. This ensures that all your contract data is easily found in the results of any search you perform, reports you run, or dashboards you create.

Centralizing all your contracts into a secure, electronic repository is the best and most logical starting point to achieving legal digitization. It may seem like a daunting task, but with help of contract management software, it’s not.

Cloud-based contract management software can be very easy and cost-effective to implement. You can start with a solution that meets the needs of your organization today. Then, as your requirements grow, you can add additional capabilities and user licenses.

Once you’ve built this foundation you can begin to embrace all the other wonderful features of contract management software that allow you to further execute your digital transformation strategy and put smiles on the faces of both your CIO and CEO.



Another Reason Not to Use Fixed Price Buy-Sell Agreements

A recent post on the  Farrell Fritz website describes the uses and possible pitfalls of using fixed price buy-sell agreements.

Author Peter Mahler explains:

“A fixed price buy-sell agreement is one in which co-owners of a business select a specific dollar amount, expressed either as enterprise or per-share value, for calculation of the future buyout price to be paid an exiting owner or his or her estate upon the happening of specified trigger events such as death, disability, retirement, or termination of employment.”

Fixed price buy-sell agreements in theory offer two main advantages over pricing mechanisms that utilize formulas or appraisals at the time of the trigger event: certainty and the avoidance of transactional costs.

Read the article.



Negotiating a Labor Contract: Finding the Style that Suits You

A post on Foley & Lardner’s Labor & Employment Law Perspectives blog discusses negotiation styles for employers when the time comes for a new labor contract.

“There isn’t a one-size-fits-all answer as to what works best,” writes Thomas C. Pence. “Some people yell a lot and are very effective with it. Others try yelling and come off sounding cartoonish (never a good thing in negotiations). The best advice is to be true to yourself.”

Pence advises contract negotiators to be self-assured and determined in arguing their positions.

Read the article.



Webinar: Focusing on the Business Processes of Contract Management

Contract - agreement - handshake - dealAbove the Law  and Concord will present a complimentary webinar titled “The Process of Negotiating: Focusing on the Business Processes of Contract Management for Successful Negotiation.”

The event will be Wednesday, Jan. 31, 2019, at 1 p.m. Eastern time.

The webinar will be moderated by Brad Blickstein, consultant, speaker and writer on law department operations. He will be joined by Travis Bickham, VP of sales and marketing at Concord, and Jeff Barlow, co-founder at Nimble Services.

The webinar will explore how to reimagine the negotiation process as a business process:

  • How to rethink contract processes to increase efficiency and effectiveness
  • Negotiation processes, best practices, and how to avoid an adversarial tone
  • Tools and technology that will help create repeatable, scalable processes

Register for the webinar.



Register for ACC Xchange 2019 Mid-Year Meeting for Legal Executives

ACCThe Association of Corporate Counsel is accepting registrations for Xchange 2019, The Mid-Year Meeting for Advancing Legal Executives.

General Counsel News readers who register by Jan. 30 will receive a $100 discount when using the code GCNEWS19.

The event is scheduled for April 28-30, 2019, at the Hotel Minneapolis in Minneapolis, MN.

ACC has arranged for four curricula addresses in the areas of contracts, leadership, legal operations, and litigation.

More information may be found here:

Register for the event.




Supreme Court Hands Rare Win for Workers in Arbitration Case

Neil Gorsuch

Justice Neil Gorsuch

The U.S. Supreme Court on Tuesday sided with a long-haul truck driver who sued his employer for failing to pay him a minimum wage, handing down a decision that could have broad ramifications on the transportation sector and the economy as a whole, reports CNBC.

CNBC reporter Tucker Higgins explains:

“In an opinion delivered for a unanimous court, Justice Neil Gorsuch held that courts must decide whether an exception in the Federal Arbitration Act, or FAA, for transportation workers applies before requiring arbitration. And, he wrote, that exception applies not just to traditional employees but also to independent contractors.”

The U.S. Chamber of Commerce had urged the court to rule in favor of the employer.

Read the CNBC article.



Arbitration Agreements: Tips for Enforceability

Steven P. Gallagher of Akerman LLP offers some tips on what to do — and not do — when considering arbitration agreements for new hires.

He discusses some of the advantages and potential disadvantages to having arbitration agreements in place for employees.

“Because arbitrations are private, the proceedings, claims, and ultimate outcomes are ordinarily confidential. Most interesting to employers is that arbitrators tend to award lower damages than juries,” Gallagher writes.

But sometimes arbitration is “neither quicker nor less expensive than litigation, and arbitrators are sometimes inclined to ‘split the baby,’ even if the law is clearly on your side.”

Read the article.




A Quick ‘Yes’ Can Create a Binding Contract, Even If There Has Not Been Agreement on All Terms

Email marketingEven an informal email can constitute acceptance of a contractual offer, warns The In-House Advisor.

“Moreover, just a few months ago, Judge Timothy Hillman took this principle one step further by ruling, in Witt v. American Airlines, that an exchange of emails can form a binding settlement agreement, even if the parties have not agreed to all of the terms of that settlement,” explains author Shepard Davidson, a Burns Levinson partner.

The judge found that both sides had agreed to a settlement in an email exchange. When the plaintiff later tried to reopen discussions, American Airlines filed a motion to enforce settlement agreement. The court allowed the motion.

Read the article.



Texas Case Offers Three Lessons for Contract Drafters

The Texas Supreme Court recently heard oral argument in Barrow-Shaver Res. Co v. Carrizo Oil & Gas, Inc., on the interpretation of a farmout agreement providing that an assignment could not be made “without the express written consent,” according to a post on the website of Porter Hedges.

“The issue—whether the provision means consent can be withheld arbitrarily or only reasonably,” the post states. “Regardless how the Texas Supreme Court rules, there are three lessons in Barrow-Shaver for contract drafters: (1) be precise in contractual language; (2) address the use of non-final drafts in interpretation disputes; and (3) consider other provisions that may be impacted by the implied reasonableness issue.”

The post offers some pointers on each of those three points.

Read the article.



Kavanaugh’s First Opinion Rejects Vague Exception Limiting Enforcement of Arbitration Agreements

Many of the recent U.S. Supreme Court rulings on arbitration agreements cases have been decided by narrow 5-4 majorities, which has raised the possibility that the replacement of Justice Anthony Kennedy by Brett Kavanaugh might lead to some softening of the court’s position in those cases.

But as Ronald Mann, writing in the SCOTUSblog points out, the latest such ruling will shed no light on that broader question, because even the justices more skeptical about arbitration saw no merit in the arguments against arbitration here.

Kavanaugh wrote the opinion for the unanimous court. In this case anyway, none of the justices saw any merit in a process calling for collateral litigation over the gateway question of arbitrability.

“At bottom, the question is whether a court or an arbitrator decides whether an arbitration agreement governs a particular dispute,” writes Mann.

Read the article.



Can You Be Forced to Sign This Contract Modification?

A new U.S. Postal Service change to the standard terms and conditions that apply to its newly awarded Highway Contract Route (HCR) and Contract Delivery Service (CDS) contracts could be unenforceable, according to David P. Hendel, writing in the Husch Blackwell Contractor’s Perspective blog.

The changes apply to existing CDS contracts as well as newly awarded ones. In an email, the Postal Service asked contractors to sign, without any “alterations or additions,” a contract modification that incorporated the new terms. If the contractor did not so, the Postal Service’s email threatened contract termination, Hendel writes.

He cited problems with the way the changes are presented, including lack of consideration, violation of the implied covenant of good faith and fair dealing, and the legal theory of coercion and duress.

Read the article.




General Counsel Named in Corruption Probe Subpoenas Resigns

Cleveland.com reports that Emily McNeeley, general counsel for Cuyahoga County’s troubled IT Department and one of several people named in subpoenas related to an ongoing corruption investigation, has resigned from her $95,000-a-year job,

The county reported the resignation Tuesday, according to Cleveland.com’s Courtney Astolfi.

McNeeley was placed on unpaid leave in April after corruption investigators repeatedly named her, and her boss, IT Director Scot Rourke, in subpoenas served on the county. The cases refer to potential conflicts of interest, the report says.

Read the Cleveland.com article.



Syngenta MDL Judge Tears Up Lawyers’ Contingency Contracts in $500 Million Fee Ruling

Reuters reports that U.S. District Judge John Lungstrum of Kansas City has set aside individual contingency fee contracts that some plaintiffs’ lawyers had in place for clients in a multidistrict litigation.

The ruling rejected the claims of Watts Guerra, a Texas firm that had signed up tens of thousands of farmers to bring individual cases in state court, accusing the agricultural giant Syngenta of peddling genetically modified seeds that produced corn China refused to import. The case led to a $1.5 billion global settlement for the U.S. farmers, according to Reuters’ Alison Frankel.

“This court has the authority and duty to determine the amount of reasonable fees paid to attorneys from the settlement fund, and because any further contingent fee payments would necessarily come from proceeds from the settlement fund, the court can and does prohibit any such additional payments,” Lungstrum wrote in the opinion.

Read the Reuters article.



When a Promise Isn’t Enough – Crafting Proper Employee Patent Assignments

Employees are the engine that drives a manufacturer’s innovations, but employees’ potentially patentable innovations only become the employer’s intellectual property if the proper patent assignment language is used, warns Foley & Lardner in its Manufacturing Industry Advisor blog.

Authors Christopher King and Richard Dancy explain:

“All employees that may develop potentially patentable innovations during the course of their employment should be required to sign contracts transferring ownership of all intellectual property rights to their employer. This may even include factory employees who submit ideas for product improvements through an employee suggestion program. However, if employee patent assignments are not carefully crafted, manufacturers may end up in a nightmare situation – believing they own a valuable patent invented by an employee when, in reality, it belongs to the employee.”

Read the article.



Enforcing a Non-Compete Agreement? One Size Does Not Fit All

Non-compete agreements are subject to state law, and states vary in their treatment of them. There is no one-size-fits-all non-compete agreement, and the enforceability of a non-compete agreement turns upon the state law under which it is construed, points out a blog post from Knobbe Martens.

A case in point involves two high-end, off-price fashion brands are duking it out over an employee jumping ship, write authors Alexander D. Zeng and Mark Kachner.

“Generally, states that are more willing to enforce non-compete provisions do so for countervailing policy reasons: to prevent trade secret misuse, reduce the cost of trade secret litigation, protect employers’ investments in employees, and favor freedom of contract. The outcome of this lawsuit will be heavily impacted by the state law governing Arcuri’s non-compete agreement.”

 Read the article.



A Guide to Outsourcing Contractual Relations

Kilpatrick Townsend & Stockton has published a structured guide to outsourcing in the USA.

The guide covers contract forms, due diligence, duration and renewal, supplier selection, service specifications, charging methods, warranties and indemnities, and ending the agreement.

Authors of the guide, which is published at Lexology.com, are James Steinberg, Joshua M. Benson, Farah F. Cook, Joshua S. Ganz, Julie C. Grundman, Maha Khalaj, Lance McCord, Michelle Tyde, Amanda M. Witt and Vita Zeltser.

Read the article.



Parties Must Proceed to Arbitration Despite Unavailability of Arbitration Forum Specifically Named in the Contract

An Ohio appellate court has addressed an issue that arose when an arbitrator specified in a contract is no longer available.

Pepper Hamilton’s Constructlaw blog covers the case in which a homeowner sued a contractor, alleging unjust enrichment and fraud. The contractor moved to compel arbitration under the agreement arbitration provision. But the specified arbitrator, the Ohio Arbitration and Mediation Center, appeared to be defunct.

“Because it was still possible to arbitrate the issues, the Court determined the agreement was not unenforceable due to impossibility,” writes Ryan R. Deroo. “The Court explained that this conclusion was consistent with the intent of the parties as they agreed to arbitrate disputes, and a change in forum should not override the fundamental purpose of the arbitration provision.”

The appellate court directed the trial court to appoint another arbitrator.

Read the article.




Jordan, Lynch & Cancienne Wins Take-Nothing Decisions in Texas, Louisiana

Trial lawyers with Jordan, Lynch & Cancienne PLLC scored big defense wins recently for two separate clients, securing a quick summary judgment for The Dow Chemical Company in Texas and prevailing in a jury trial for Union Carbide Corporation in New Orleans.

In the Texas case, MMR Constructors Inc. tried to claim an additional $17 million from Dow after it had already paid MMR for work on its plant in Freeport, Texas. That case ended with a summary judgment for the defense.

And in the New Orleans case, jurors heard three weeks of testimony related to the death of an oil field worker who died of mesothelioma. The jury found Union Carbide and Montello were not responsible.

Read details of the cases.



Fifth Circuit Reminds Buyers to Beware of Buying ‘Deemed Rejected’ Contracts

Squire Patton Boggs warns that a recent decision by the Fifth Circuit Court of Appeals in In re Provider Meds, L.L.C. is a stark reminder to chapter 7 trustees that they have an affirmative obligation to examine a debtor’s assets.

A trustee’s failure to conduct a sufficient and timely examination may deprive the estate of significant value, writes Mark Salzberg.

“The issue before the Court in Provider Meds was whether the assumption and assignment of an intellectual property license agreement . . . conveyed any intellectual property rights since the Agreement had not been timely assumed by the trustee,” Salzberg explains.

Read the article.



Court Rules Law Firm’s Arbitration Provision Unconscionable

A California appellate panel determined that a law firm’s arbitration agreement with a partner was unconscionable, reversing a trial court’s grant of a motion to compel arbitration in an employment dispute, according to a post on the website of Manatt, Phelps & Phillips.

In the case, a litigator who had been employed at Winston & Strawn sued the firm, asserting claims of discrimination, retaliation and wrongful termination. A trial court granted the firm’s motion to compel arbitration.

“The arbitration provision in the employment agreement signed by [the plaintiff] failed to meet the standard of Armendariz v. Foundation Health Psychcare Services, Inc., the court said, and was unconscionable. Further, the taint of illegality could not be removed by severing the unlawful provisions without altering the nature of the parties’ agreement, leading the panel to void the entire agreement and send the case back to Superior Court.”

Read the article.