ACC Annual Meeting: Oct. 27-30 in Phoenix

The annual meeting of the Association of Corporate Counsel in Phoenix in October will feature more than 140 sessions that will allow participants to earn up to a year’s worth of CLE/CPD credit in less than three days.

The event will be Oct. 27-30.

Topics at those sessions will include such subjects as contract drafting, data security, corporate sustainability, records management, and business education for in-house counsel.

Register or get more information.

 

 




When Icahn Comes Knocking: Best Practices and Recent Developments in Shareholder Activism

WebinarThe University of California at Berkeley School of Law will present a Berkeley Boosts webinar, “When Icahn Comes Knocking,” to explore best practices and recent developments in shareholder activism.

The free one-hour webinar will be May 29, 2019, 10 a.m. Pacific time.

Speakers will be Kenton King and Thomas Ivey of Skadden, Arps, Slate, Meagher & Flom LLP.

Register for the webinar.

 

 




Download: 5 Ways to Manage Expanding Board and Committee Agendas

The National Association of Corporate Directors has published a briefing that explains how audit and nominating and governance committee chairs can improve their risk-oversight strategy.

The briefing can be downloaded from the NACD website at no charge.

The report discusses such questions as: How can boards and committees continue to scale up their capacity for overseeing the major risks on their agendas? How should they address the concerns risk oversight raises among investors and regulators?

Some of the strategies discussed are:

  • Use ad hoc committees to cope with expanding oversight requirements.
  • Leverage evaluations and carefully review charters to ensure that committees are focusing on clearly-defined priorities and responsibilities.
  • Ensure directors’ skills are keeping pace with rapidly-evolving and future issues.
  • Increase meeting efficiency with prereads, consent agendas, and other tactics.
  • Communicate risk-oversight priorities and processes to investors and regulators.

Download the briefing.

 

 

 




Webinar: Former DOJ Compliance Expert on Decoding Regulations

NAVEX Global will present a complimentary webinar, “Decoding Regulations: An Insider’s Guide,” on Wednesday, May 15, 2019, at 10 a.m. Pacific/ 1 p.m. Eastern time.

Speakers will be Hui Chen, former DOJ compliance counsel expert, and Carrie Penman, Chief Compliance Officer of NAVEX Global. Chen wrote the DOJ’s “Evaluation of Corporate Compliance” guidelines and can provide an insider’s view of what to include in a program and how to define effectiveness.

“Law enforcement guidelines for evaluating your compliance program are subjective, not prescriptive,” NAVEX says on its website. “Even the Department of Justice (DOJ) expresses that their guidance is not a ‘checklist nor a formula’ for compliance.”

Register for the webinar.

 

 




Freelance Attorneys or Firms – What’s the Difference?

By Greg Hoover

What value does an in-house legal department bring to the company? We are the lawyers that know our clients best. We understand the business at a fundamental level and understand how the legal environment affects operations. Often, we also serve as the buyer of outside legal services, ensuring that the company receives value for money. To outside counsel, we are something of a professional client; one that makes our living hiring other lawyers, managing the attorneys so selected, and expressing the wishes of the company. The tools and resources we use to get our jobs done are, for the most part, invisible to our clients so long as we remain the primary gatekeeper.

Just as technology has introduced a number of new tools to make us more efficient, new models like online freelance attorney marketplaces have opened up a world of opportunity, which in some cases can give the tried and true firm model a run for its money.

When to Stick with Status Quo Firm Relationships

Most in-house legal departments do not rely on a single attorney or firm to provide all of their outside services. After all, it is highly unlikely that the best attorneys in each jurisdiction and practice area needed by the company work for the same firm. Instead, we assemble a team of lawyers from our contacts. This generally yields better results for our client in terms of cost, effectiveness, and conflicts management. After all, the best employment discrimination litigator in the city is probably not the best patent attorney.

In some cases, sticking with this status quo model of retaining outside help is the prudent route to take. Those instances include:

1. If you, as the in-house lawyer, are unable to manage the freelance attorney. Some in-house lawyers are skilled managers of attorneys and support staff; some are not. Managing outside counsel, whether a firm or a freelancer, is a skill that some in-house lawyers never pick up. If you would rather not review the pleadings and just trust the relationship partner to get it right, then maybe hiring a freelancer isn’t for you. On the other hand, if you will be reviewing the work before anything is set in stone, and you track deadlines and know how to set expectations, then managing a freelancer will come naturally to you.

2. When defining the scope of a complex engagement presents a challenge, breaking out the Rolodex of known firm attorneys makes sense. In these cases, an issue comes up and the initial goal of the general counsel is simply to mitigate damage. The in-house department may not know enough about the issue to even frame the issue and define a successful outcome for the company. However, most of us are capable of doing a little research and at least getting a general idea of the type of attorney to hire and making a first pass at issue-spotting a fact pattern. If you can do that much, you can probably frame the issue sufficiently to at least get a memo from a freelance attorney outlining next steps. Then you can make the decision to parse out another piece of the case to a freelancer, expand the scope of your original freelancer, or, when necessary, hire a firm for a more full-scope representation.

When and How to Use Online Freelance Attorneys

Before we get into the when and how of using freelance attorneys, let’s pause and consider whether this new contract attorney model is really different than the tried-and-true firm model. Aren’t freelance attorneys signed to projects for specific matters really just outside counsel in all but the name? What separates the senior associate at Dewey, Cheetam, and Howe, LLP from the contract attorney available for hire on a freelance network? Or, perhaps the more pertinent question is: what separates the contract attorney Dewey, Cheetam, and Howe would have hired from the one available on one of these online marketplaces? The pool of attorneys interested in working as contract attorneys used to vary significantly by location and practice area. There are large pools of SEC attorneys in New York City; not so many in Minneapolis. With the advent of the internet and some relatively recent ethics opinions, most attorneys can now work as contract attorneys in most locations. The pool of contract attorneys available to the big firm in another city is now available to the in-house lawyer via the internet.

For smaller in-house legal teams, hiring and managing contract attorneys through online freelance marketplaces provides speed, control and affordability that cannot be achieved hiring outside counsel at a law firm. For example, many law firm malpractice policies require that a partner be assigned to a case, even if all of the work will be done by an associate who is perfectly competent to do the work. This not only adds time for the partner to review the work, but also the overhead to pay for the partner’s time. Suddenly, a 2-hour task becomes a 4-billable-hour exercise, when the in-house counsel would have probably been satisfied with the first draft! To compound matters, without a preexisting relationship, in-house counsel usually do not get to select the associate or associates assigned to their matter. This means that they will get whomever is available, even if another associate could have done the task for less money. If the firm is especially busy or the work is in a niche area of the law, the law firm is likely to hire contract attorneys anyway, and add their markup. All of this adds up to a bigger bill and less control for the client.

However, unlike the execution of a project with a contract attorney, which depends less on the direct involvement of the hiring in-house counsel, the freelance attorney model requires involvement and supervision from in-house counsel. Online platforms help by automating communication flows, and more sophisticated ones like LAWCLERK have the ability to create “Teams” of subject matter experts like a virtual Rolodex. Another benefit is the flexibility to scale up and down as projects ebb and flow.

Getting started is easy. Although each online freelance marketplace will vary slightly, I’m most familiar with LAWCLERK so this process is based on my own experience.

1. Scope the Project: To begin, define the project and deliverable that you want from a contract attorney. Remember, the contract attorney doesn’t know more about the case than you tell them. For example, let’s say you represent a Nevada corporation that does business nationwide. You learn that a company in Georgia is soliciting your customers with the assistance of one of your former employees. The employee signed a nondisclosure agreement when he began working for you, but it is not clear if it is enforceable across the country or even applicable in this situation. You want a memo on the causes of action that may be available to you in Nevada or Georgia.

2. Set a Price and Post It: Now that you know what you want to receive, it is time to decide a price. Understand that freelance attorneys are running their own firms and have overhead expenses and downtime like every firm. They aren’t paralegals receiving a salary whether they’re working or not or receiving benefits from a benevolent third party. The freelancer might not have hard office expenses or staff, but there are things like office equipment, insurance, and bar memberships to pay for. Those are real costs and must be compensated for. An under-priced research memo might be the most expensive advice you ever get. Price the work in line with what you know the project will take to complete. Once you develop a relationship with a few contract attorneys, you can poll them in advance regarding pricing.

When posting a project, the posting attorney sets a fixed price for the delivery of the project and a due date. Contract attorneys hired through the platform agree to perform the work described for a fixed fee only, so there are no surprise bills for the hiring attorney. Then, the money is deposited with the online platform provider and the project is posted. Attorneys with expertise in the relevant area of the law receive an alert informing them that a project matching their interests is available. They are then directed to the platform to submit their name and a short message expressing their interest. After the application period expires, the posting attorney selects the contract attorney they think will best accomplish the task and ask them to clear conflicts. After reviewing the relevant rules of professional conduct and the parties, the contract attorney accepts the case and receives access to the case documents uploaded to the platform.

3. Completion of the Project and Payment: Once the project is accepted, the attorneys can message each other through a portal within the platform. When the project is completed, the contract attorney will send the deliverable to the hiring attorney through the portal. The hiring attorney will then have 96 hours to approve or reject the deliverable and can be unilaterally extended for another 96 hours if needed. If the hiring attorney does nothing, the project is automatically approved at the expiration of the review period. A day or two after the deliverable is approved, the contract attorney is paid. No invoices to review, no check requests to write, no W-9 to chase. Under current law, the corporation does not need to issue a 1099-MISC to the contract attorney, as they are paid through a third-party payment platform. If the contract attorney exceeds the threshold to require tax documents (presently $20,000 per year), then the payment platform is responsible for that filing.

4. Managing Disputes: By now, you’re probably wondering what happens when you aren’t satisfied with the contract attorney’s work. With LAWCLERK, the platform will hold the funds pending resolution and serve as the arbitrator of the issue. This provides a degree of expediency and detached judgment often not available in disputes with outside firms.

5. Rinse and Repeat: Once you have received the deliverable and the contract attorney is paid, you can create another post for the next steps, be it a demand letter, pleading, or more research. You can direct a project to particular contract attorney before posting it to the community writ large. Another convenient feature of the platform is the ability to form teams with which you can build a rapport and direct work when you need someone who understands your preferences in a way that is only learned through repeat work.

I am not here to advocate replacing your entire outside counsel network with freelance attorneys. I am suggesting that it is a good substitute for matters which are well-defined and which might be handled more cost effectively outside the traditional law firm model. After all, the job of a general counsel is to ensure the legal needs of the corporation are met, and it is incumbent upon each of us to be good stewards of the shareholders’ money.

About the Author: Greg Hoover is the in-house counsel to a small division of a Fortune 100 company. His work focuses on general business law, government contracts, international sales of goods, and export controls.

 

 




Download: A Blueprint for an Automated Compliance Program

GAN Integrity has published the second edition of A Blueprint for an Automated Compliance Program, an ebook that can be downloaded from the GAN website at no charge.

The ebook is a detailed guide to risk management, due diligence, training, policy management, reporting, and more.

The book is designed to help readers:

  • Understand what to ask when designing your processes
  • Comprehend the building blocks of an automated compliance program
  • Grasp how automation streamlines previously time-consuming processes
  • See how automation heightens the strategic value of compliance

Download the ebook.

 

 




Pat Cornelius Joins Barnes & Thornburg’s Corporate and Healthcare Departments

Barnes & Thornburg has added Pat Cornelius as a partner in the firm’s Corporate and Healthcare Departments in Columbus.

Cornelius focuses his practice on advising clients, who span the healthcare, financial services, life sciences and biotechnology, insurance, energy, and aviation industries, on mergers and acquisitions, as well as matters concerning joint venture and affiliation, capital raising and investments, contracting and licensing, technology development and commercialization, compliance and corporate governance.

In a release, the firm said Cornelius provides counsel on health system mergers and acquisitions, health system-insurer joint ventures, shared savings agreements and payor-provider contracting, hospital-physician alignment strategies, and capital raising and investment transactions. He also advises on in-bound and out-bound licensing software and intellectual property for research, development and commercialization.

Cornelius joins from Squire Patton Boggs, where he was a member of the firm’s Corporate Practice Group. He also previously served as assistant general counsel for America Online, Inc. and as primary counsel for CompuServe and MapQuest.

Cornelius earned his J.D. from the University of Virginia, where he was a member of the Virginia Tax Review, and his B.A. from the University of Notre Dame.

 

 




Former Hertz General Counsel Rebuffs Demand for Clawback

Hertz Global Holdings has filed a lawsuit against its former general counsel and some other former managers after they refused to pay back at least $70 million in incentive compensation for their roles in an accounting scandal five years ago, reports The Global Legal Post.

The company accused the former executives of pressuring employees to use fraudulent accounting techniques to inflate income and earnings, according to a March 25 lawsuit.

Former general counsel Jeffrey Zimmerman has refused to return incentive compensation tied to the erroneous accounting results.

Read the Global Legal Post article.

 

 

 




Join Sally Yates at NACD’s 2019 General Counsel Event

National Association of Corporate DirectorsThe National Association of Corporate Directors will present the 2019 Strategic-Asset GC event, taking place Tuesday, June 11, at the Metropolitan Club in New York City.

The event will feature an expert panel that will include former U.S. deputy attorney general Sally Yates. Participants will learn about revisions being made to the Yates Memo and how those revisions will apply to board members specifically. The discussion will also include information about legal blind spots that general counsel and directors need to be aware of, as well as a poignant discussion around the bigger picture of corporate responsibility and culture.

Learn more and register.

 

 




Halliburton’s Top Lawyer Helps Fend Off Billions in Lawsuits

During his five years as Halliburton’s top lawyer, Robb Voyles has won two cases at the U.S. Supreme Court, successfully concluded a nine-figure tax dispute with its former KBR subsidiary and convinced the U.S. Securities and Exchange Commission to end its investigation of the company without a fraud finding.

Mark Curriden of the Texas Lawbook, writing for the Houston Chronicle, profiles the chief legal officer, one of the most senior and respected executives at Halliburton and widely recognized as a leader of the legal profession.

Just three weeks ago, Voyles won what may have been his sweetest victory yet — and it involves the first case that brought Voyles to the attention of Halliburton executives, Curriden writes. Chief U.S. District Judge Barbara Lynn of Dallas officially dismissed the final remnants of a nearly two-decade-old securities class-action lawsuit.

Read the Houston Chronicle article.

 

 




Webinar: The Role of In-House and External Counsel in Managing Open Source

WebinarFlexera will present a complimentary webinar discussing the role of in-house and external counsel in managing open source software in the business environment.

The event will be Thursday, April 18, 2019, at 9 a.m. PT / 11 a.m. CT / 12 noon ET.

“Having some best practice guidelines that more clearly define your role and help you guide companies through license compliance and risk management only reinforces and bolsters one of your most important responsibilities as a legal advisor,” the company says in its invitation.

Speakers will be Amy Chun, partner in Knobbe Martens, and Marty Mellican, vice president and associate general counsel of Flexera.

Register for the webinar.

 

 




‘Man, That is a Lot of Money’: Why PG&E Spent at Least $84 Million on Lawyers

BankruptcyPacific Gas and Electric Co. paid at least $84 million to four outside law firms in the year leading up to its January bankruptcy filing, court papers show, demonstrating how the embattled utility’s legal bills piled up as its challenges also mounted, reports the San Francisco Chronicle.

“The vast majority of the total legal payments — $75.7 million — went to Cravath, Swaine & Moore, a New York firm that is PG&E’s lead coordinating counsel in wildfire-related matters,” writes the Chronicle‘s J.D. Morris.

The company paid Weil, Gotshal & Manges $4.7 million in the 90 days leading up to the company’s bankruptcy filing. The other firms receiving revenue from the case are Jenner & Block and Keller & Benvenutti.

“Given the importance of these issues to the board, they wanted to hire the best. And the best are very expensive,” said Jared Ellias, a UC Hastings associate law professor. “… But man, that is a lot of money.”

Read the Chronicle article.

 

 

 




After Years of Apologies for Customer Abuses, Wells Fargo CEO Suddenly Quits; GC Takes Over

Wells Fargo general counsel C. Allen Parker will take over as interim president and chief executive of the company after the abrupt departure of chief executive Tim Sloan on Thursday.

Sloan had spent more than two years trying without success to convince lawmakers and regulators that the embattled bank is no longer a threat to its customers, according to Renae Merle of The Washington Post.

“Sloan spent more than two years on an countrywide apology tour after Wells Fargo acknowledged a pattern of consumer abuses — from opening millions of fraudulent accounts on behalf of its customers without their consent to mistakenly foreclosing on hundreds of clients and repossessing the cars of thousands of others. Sloan’s pleas often failed to win over frustrated lawmakers,” Merle writes.

Read the Post article.

 

 




Biglaw Firm Sued for Role in $1.36B Grocery Chain Buyout

Cravath, Swaine & Moore is being sued by a former public shareholder of a grocery chain in a class action that alleges the firm breached its fiduciary duty by providing tainted advice that directed the grocer toward a buyer, private equity group Apollo Global Management, reports Bloomberg Law.

In the complaint, the former shareholder claims Cravath crafted a “false and misleading” U.S. Securities and Exchange Commission filing relating to the 2016 $1.36 billion leveraged buyout of The Fresh Market by Apollo.

The complaint alleges Cravath drafted the SEC filing “to procure stockholder approval and cover up prior wrongdoing,” and in doing so, pocketed $5.5 million in fees in what amounted to “a sham sale process.”

Read the Bloomberg article.

 

 




Webinar: Is Your Whistleblower Program Effective?

NAVEX Global will present a complimentary webinar title “Employee Hotlines: What Is Your Data Telling You?” on Thursday, April 4, at 10 a.m. Pacific time/1 p.m. Eastern time.

Studies show that effective internal whistleblower programs contribute to business success, including lower levels of litigation. Yet, external reports to the SEC are on the rise, with many employees failing to use internal reporting systems due to fear of retaliation.

The webinar will allow participants to compare how their hotline programs measures up against benchmarks from more than one million anonymized reports from industry leader NAVEX Global.

Register for the webinar.

 

 




Michael Best Adds Transactional Attorney Drew Whiting in Chicago

Drew Whiting has joined Michael Best’s Corporate Practice Group as senior counsel in Chicago. Whiting was previously a member of Stahl Cowen Crowley Addis LLC.

in a release, the firm said Whiting will focus his practice advising growth stage companies, venture capital firms, angel investors, investment syndicates, private equity funds and closely-held private and family businesses in matters related to financing, employment, advisory and licensing transactions. He also counsels on the negotiation of investment deal terms, vendor and customer agreements, joint venture agreements, business succession planning, management buyouts, asset sales, business unit divestitures and acquisitions.

“Additions like Drew are instrumental in continuing to service the Chicago business community,” said Kerryann Haase Minton, managing partner of Michael Best’s Chicago Office. “We are fortunate that Drew brings him a wealth of subject matter knowledge and experience in the venture capital and private equity sectors to the firm as we continue to manage bigger and significantly more complex investment deals in the near future.”

Whiting earned his J.D. from Loyola University Chicago School of Law and his B.B.A. from the University of Notre Dame.

 

 




Foley Adds Transactions Partner Clyde Tinnen in Milwaukee

Foley & Lardner LLP announced that Clyde Tinnen has joined the firm’s Business Law Department and Transactions Practice Group as a partner in the Milwaukee office.

In a release, the firm said Tinnen advises a range of public and private corporations across a variety of industries on transactional matters, particularly those related to financing and deal-making. He has structured and negotiated domestic and cross-border financing transactions, including public and private offerings, joint ventures, secured and unsecured credit facilities, acquisition financings, capital leases, leveraged buyouts, and private equity funds. Tinnen also advises clients on issues related to corporate governance and securities law disclosure matters. His clients range from startups to Fortune 100 companies in the energy, retail, telecommunications and hospitality sectors, among others.

“Clyde brings more than a decade of experience which, coupled with his robust public and private transactional knowledge, further strengthens our already deep bench of corporate transactional attorneys,” said Jessica S. Lochmann, vice chair of Foley’s Transactions Practice Group. “Clyde’s proven ability to effectuate success for clients across a variety of industries enhances our practice’s commitment and ability to serve as trusted counsel to every client with corporate finance, securities, M&A, or other transactional legal and business needs.”

Tinnen joined Foley from Withers Bergman LLP, where he was a partner on the corporate team. Before beginning his legal career, Tinnen was a senior financial analyst at two public corporations. He is a member of numerous professional organizations, including the Wisconsin African-American Lawyers Association, the Chicago Black Partners Alliance, and the Jackie Robinson Foundation. Tinnen also volunteers with the Waukesha Teen Court Program.

“We are thrilled to welcome Clyde to our growing Milwaukee office,” said Linda E. Benfield, managing partner of Foley’s Milwaukee office. “He is a tremendous lawyer, and he will be a great fit for our entrepreneurial culture and commitment to client service. We are looking forward to introducing him to our clients locally, and nationally.”

Tinnen was named one of Savoy Magazine’s Most Influential Black Lawyers in 2015 and 2018. He was also a 2015 Fellow for the Leadership Council on Legal Diversity.

 

 




Economic Value Added: The Good, the Bad, and the Complex

National Association of Corporate DirectorsThe National Association of Corporate Directors will present a complimentary webinar on economic value added on Thursday, March 21, 2019, at 2 p.m. Eastern time.

While EVA (or Economic Value Added) is not new, it has been one of the more obscure financial performance metrics for incentive compensation, the NACD says on its website. However, thanks to ISS, it is now center stage. Beginning this year, EVA will be included for “informational purposes” in some ISS research reports. Further, ISS has indicated that they may include EVA in the Financial Performance Assessment (FPA) screens in the future.

What do you need to know about this enigmatic performance metric and how does it apply to compensation plans with a pay-for-performance orientation? This webinar will provide a starting point for understanding EVA and how to evaluate its relevance to your industry, company, and incentive programs.

Register for the webinar.

 

 




Tesla’s General Counsel Lasts Only Two Months

CNN reports that Tesla’s general counsel is leaving the company after just two months on the job — the latest in a series of executive departures at Elon Musk’s electric car company.

The company quickly announced a replacement for Dane Butswinkas, who joined Tesla in December. He will return to his legal practice at Williams & Connolly in Washington. His replacement is Jonathan Chang, who previously served as Tesla’s vice president of legal. Chang has worked at Tesla for almost eight years.

Bloomberg is reporting that Butswinkas was hired in the wake of Musk’s run-in with U.S. securities regulators. Hours before announcement of the GC’s departure, the chief executive officer was sending tweets reminiscent of those that put him and the company in legal jeopardy last year, according to the Bloomberg report.

Read the CNN article.

 

 




Download: Top 10 Compliance Trends eBook

NAVEX Global has published a new eBook titled “Top 10 Ethics & Compliance Trends for 2019.” The book is available for download at no charge from the company’s website.

“Transparency and trust define our industry’s challenges and opportunities for 2019,” the company says on its website. “With each expert opinion found in this year’s annual trends report, you’ll see how shifts in the workplace and regulatory environment bring to light the importance of authenticity and ethical practices.”

Some of the topics covered are:

  • Protected Activity & Corporate Governance
  • Third-Party Risk Beyond FCPA
  • Artificial Intelligence
  • New Global Business Practices
  • GDPR Enforcement Updates

Download the eBook.