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.

By David Carns
Chief Strategy Officer of Casepoint

The story of legal technology over the past 30 years is by and large a story of tremendous progress. During that period there have been near-continual improvements, enabling significant gains in speed and efficiency, and lowering the headcount in many legal departments. But until recently the impact of these improvements has been felt primarily in the legal department itself. For the most part, legal continued to be perceived as just another department within the corporate structure, and rarely a strategic driver in the organization.

But recent advances in legal technology – in particular artificial intelligence technologies like analytics, predictive modeling and machine learning – are giving legal more prominence within the corporation and are helping make the department’s strategic value more tangible to the C-suite and the board. Let’s explore how these advanced analytic technologies are currently helping corporate legal departments elevate their standing and demonstrate they are at least as valuable as other corporate business units in managing profit and loss and informing strategic business decisions.

Yesterday’s technology creates new efficiencies, but is that enough?

Legal technology made significant improvements from the 1990s through 2010s by leveraging innovations like word processing, hard copy document scanning, electronic time capture, e-billing, and a broad range of e-discovery technologies, including web-based review and technology assisted review (TAR). The result of incorporating these and other innovations has been a much higher level of efficiency in legal departments.

In light of the paper-based alternatives of the 90s and earlier, the new efficiencies were dramatic. Word processing alone meant that fewer people were required to create memos, briefs, complaints, contracts and the like, and the addition of scanning and electronic time capture made possible huge gains in productivity for attorneys and legal staff. Even as technology opened the doors to exponential increases in data volume, e-discovery applications, web-based review and eventually TAR enabled case teams to pore through millions of digital pages with greater speed than it took to read thousands of physical pages just a few years earlier.

These were significant improvements, but for the most part they did not – and still fail to – resonate in the corporate boardroom. Why? Because legal departments remained predominantly reactionary rather than proactive. While these powerful new technologies allowed legal to manage current challenges with greater ease and with fewer employees, they did little to allow GCs to get ahead of future challenges. But that’s begun to change.

Today’s technologies provide unprecedented insight into current, and future, matters

More recent developments in legal technology – incorporating broader innovations like SaaS and cloud-computing, as well as machine learning, predictive modeling, data analysis and data visualization – are finally allowing legal departments to demonstrate proactive and strategic value to the board. The recent embrace of these innovations by general counsels and legal executives are part of a large trend in which the legal department is exerting much tighter control over eDiscovery technology. That’s happening because GCs understand it’s one of their best avenues to controlling costs. More importantly, the trend is providing the GC and other executives with the metrics they need to understand the precise relationships between cost and performance – not just in eDiscovery, but across the litigation lifecycle.

The power of analytics across multiple matters

These new technologies are realizing their fullest potential in multi-matter analytics and data reuse, in which information about data gleaned from one legal matter is leveraged and applied to the data in subsequent matters, and where analytic processes are tightly integrated across the entire litigation workflow. When advanced analytical technology is integrated across multiple legal matters, the legal department can identify key metrics to understand important trends outside the silo of individual matters. This is precisely where legal begins to transcend its traditional status and function in the organization and become a proactive participant in business strategy.

Machine learning, a key component of analytics, is all about continuous improvement. Machine learning algorithms are built to quickly detect patterns in large bodies of data. By repeatedly and iteratively generalizing from very specific examples, these algorithms steadily refine our understanding of the data and, as they are progressively exposed to even larger volumes of comparable data, are able to make increasingly accurate predictions about the kind of information a new body of data is likely to contain.

For instance, legal now has access to tools that can help them make accurate projections about important factors in eDiscovery like data volume, the number of individual documents, the document types, the number of custodians and the number of reviewers a particular matter is likely to involve. The same tools enable us to quickly make facts-based determinations on questions like these: Which outside counsel is making the most efficient and cost-effective use of technology? Which is likely to perform best on a particular kind of matter? Which reviewers were most effective and productive in Matter A? Which reviewers are likely to do the best job at the lowest cost on Matters B and C?

Analytic technology applied to a single matter – say, predictive coding to speed the review process – can be achieve big cost savings even in that comparatively narrow context, but the technology is especially powerful when you use it to leverage information from one litigated matter and apply that knowledge to additional matters.

For example, privileged documents from Matter A are highly likely to be privileged documents in Matter B. Finding those documents the first time around can be expensive and time-consuming – especially if you are relying on keyword searching – but machine learning can make that process many times faster and more accurate when you are leveraging a larger body of information from previous matters.

Similarly, “hot” documents in one matter are often likely to be informative across multiple matters. The sooner we identify such documents in the litigation lifecycle, the earlier we are able to make important decisions about whether to negotiate or proceed to trial, or about legal strategy – and, of course, this has the potential to save lots of money. The same dynamic applies to information about internal investigations: Analytics can help us quickly identify internal code words or project names tagged in previous investigations and predict their relevance to subsequent investigations. We can even use these metrics and processes to inform multiple matters simultaneously in real time. Suggested tagging from one matter can be applied to speed review in another matter being litigated at the same time.

Data-based portfolio management reduces costs across the board

When you consider the application of analytics across multiple matters, the result is something GCs haven’t had before: true portfolio management with a comprehensive view of costs, efficiencies and trends across all matters. You even have the components of high-level SWOT analysis right at your fingertips. As I’ve already suggested, this is the kind of information that earns legal a seat in the boardroom. Advanced analytics enables comprehensive, effective multi-matter management that will lead to reduced legal costs associated with litigation and reduced risk by improving legal outcomes.

Litigation cost forecasting based on multi-matter analytics is now possible and, properly applied, is much more accurate than less sophisticated forecasting methodologies. And the benefits can extend to other functions in the organization. For example, when the legal department successfully deploys analytics to overhaul its portfolio management processes, that deployment can serve as a model for corporate IT deployment in other departments and inform the organization at large about optimal technology strategies.

Does this kind of potential excite you? It should. Even if your organization chooses not to bring an advanced eDiscovery platform in-house, you should be demanding metrics from outside counsel and/or third-party vendors that can help you determine which outside counsel makes the most effective use of technology and which review teams are most cost-effective and achieve the best outcomes. Does your outside counsel take advantage of analytic tools like document classifiers, predictive coding, TAR 2.0 and advanced data modeling? If you don’t know, you should ask, and you should ask to see the data.

Analytics technology is no longer speculative in the legal domain. It is being used to great advantage in forward-looking law departments and firms right now. Technology platforms are being designed and developed specifically to accommodate a more rigorously proactive mindset in the legal department. These platforms not only incorporate advance technologies, but are also built for maximum extensibility and flexibility so they can be easily and rapidly customized and readily integrate new applications. There is little doubt they can efficiently automate the full spectrum of eDiscovery phases, but they are also giving legal departments a more holistic and data-driven view of the entire litigation process and providing the basis for strategic decision-making. That’s certainly good for legal, but it’s also good for the entire organization.

ABOUT THE AUTHOR

David Carns is the Chief Strategy Officer of Casepoint LLC. He joined Casepoint as a Director of Client Services in 2010, rose the ranks to Executive Vice President until his most recent promotion in 2017. In addition to being a recovering attorney, Carns possesses a lifelong passion for technology and its advancements. His career has always found him at the intersection of technology and the legal field given his intimate knowledge of both.

Prior to joining Casepoint, Carns’ positions included Director of Practice Technology at a premier global law firm, Technology Consultant, and Director of Technology. Carns holds a Juris Doctorate from The John Marshall Law School and a Bachelor’s degree in Philosophy from DePauw University.

Image by Montgomery County Planning Commission

Reuters is reporting that a federal judge on Thursday raised the prospect of not approving CVS Health Corp’s deal to buy insurer Aetna Inc, which closed earlier this week, during a routine portion of the legal process.

“I was reviewing your motion, which, of course is not opposed. And I kind of got this uneasy feeling that I was being kept in the dark, kind of like a mushroom,” Judge Richard Leon of the U.S. District Court for the District of Columbia told lawyers for the Justice Department and the two companies, noting that the American Medical Association, among others, had objected to the deal.

“I’m very concerned, very concerned that you all are proceeding on a rubber-stamp approach to this,” he told them, according to a transcript of the hearing.

Read the Reuters article.

Any attorney who regularly drafts stock purchase agreements, voting agreements, or other contracts that use the term “voting power” would do well to take note of a recent ruling, suggest Benjamin F. Jackson and Stephen P. Younger of Patterson Belknap Webb & Tyler LLP.

They write that the New York case Special Situations Fund III QP, LP. v. Overland Storage, Inc. raises several questions: What does the contractual term “voting power” mean? Does it refer only to the power to elect corporate directors, or does it refer to the power to vote on any fundamental matter of corporate governance? Is voting power an attribute of stock, or is it something that shareholders possess?

Leaving this term undefined in a contract could be risky business, they warn.

Read the article.

The Corporate Legal Operations Consortium will hold its 2nd Annual CLOC Institute on May 9-11, 2017 at Bellagio Resort in Las Vegas.

Known as the largest gathering of legal operations professionals in the world, this year’s conference will feature more than 70 sessions and 120 speakers. More information can be found in a press release here.

To see a list of all the sessions, click here.

Some session highlights and speakers include:

• “Was It Something I Said?: Advanced Workshop on the Role of Personality in a Successful Law Department,” featuring Larry Richard of LawyerBrain (pre-session on May 8);
• “The Future is Closer Than You Think: A Conversation with Richard Susskind,” featuring Richard Susskind, author of “Tomorrow’s Lawyers”;
• “Legal Operations Maturity Model: How Do You Rate?”;
• “Beyond the Hype about AI: Practical Applications of Artificial Intelligence in Today’s Law Department”;
• “Knowledge Management: What, Why and How”; and
• “Big Thinker Panel: CLOC’s Magna Carta for the Corporate Legal Services Industry,” (two-part session).

Register for the event.

Bloomberg Big Law Business will host its 3rd annual Summit in Manhattan.

The event will be Wednesday, May 24, 2017, at Bloomberg LP, 731 Lexington Ave., New York, NY 10022, from noon until 6 p.m. A networking lunch and cocktail reception will be included.

Attendance is by invitation only. Anyone interested in an invitation may submit a request.

The agenda is available online.

Some of the speakers will include:

• Peter Beshar, Executive Vice President and General Counsel, Marsh & McLennan Companies
• Matthew Cooper, Executive Vice President, Head of Legal, Capital One Financial
• Stephen Cutler, Vice Chairman, JPMorgan Chase
• Eric Grossman, Chief Legal Officer and Managing Director, Morgan Stanley
• Deborah Kaback, Chief Legal Officer, Oppenheimer Asset Management
• Aristedes Mahairas, FBI Special Agent in Charge, Special Operations/Cyber Division, New York Office
• Manisha Sheth, Executive Deputy Attorney General for Economic Justice Division, Office of the New York State Attorney General
• Patrick Speice, Assistant General Counsel, Regulatory and Compliance, United States Steel Corporation
• Mary Jo White, Senior Chair, Debevoise & Plimpton

Request an invitation here.

Zapproved has published “The New Law Department Professional,” which discusses the savings corporate legal departments can realize by bringing e-discovery in-house.

“Although their primary duty has always been to protect the organization, in-house legal professionals commonly wear two hats,” the company says in a release. “In addition to their core responsibilities, they often are tasked with handling the administrative operations of the legal department. In the past, marrying these dual roles meant that this less substantive, ministerial work became less of a priority and was pushed down to lower levels or that this work was compartmentalized, leading to independent—and inefficient—silos. Today, however, things have changed.

“These days, legal professionals are expected to lead the charge in implementing corporate initiatives aimed at reducing costs, mitigating risk, introducing new technologies, and changing corporate culture. No longer are the administrative priorities secondary to the substantive work—they are an integral part of it. At the 2016 Conference on Preservation Excellence, panelists discussed ways the new breed of law department professionals are helping to transform their department so it runs like a business, from e-discovery to information governance and more.”

The discussion features:

Moderator:

• Mike Quartararo, Director of Litigation Support Services, Stroock & Stroock & Lavan LLP

Panelists:

• David Castro, Associate General Counsel and Chief Litigation Counsel, Hess Corporation
• Dawn Radcliffe, Legal Operations Manager, TransCanada Pipelines, Ltd.
• Charisma Starr, Legal IT Manager, Exelon

Download The New Law Department Professional

Bloomberg Law will present a half-day program and networking event called the Big Law Business Summit – West, designed as a unique forum for legal industry professionals to uncover new opportunities and solve for challenges to their businesses.

The event will be in Los Angeles on Oct. 27, 2016.

The Big Law Business Summit – West will feature keynote interviews, presentations and conclude with a networking event, the company says. The summit will explore trends, opportunities and challenges, and new developments that are impacting the business of big law – how services are delivered, how value is created for clients, and how firms and legal departments are evolving.

Register for the event.

Archer Norris published its second annual California Business Litigation Report, revealing that corporate lawyers continue to view many aspects of California’s business environment as perplexing, downright exasperating, and in many ways more challenging than other states.

In a release, the firm said employment laws and labor issues were found to be by far the most significant legal concern of companies doing business in California, reported by 62% of respondents. When it comes to areas in which litigating in California is more challenging than in other states, employment law and labor issues again landed in the top spot (69%), followed by environmental law and regulation (57%). The survey showed that the most-cited legal stumbling blocks also include commercial litigation, product liability, intellectual property, land use, and health care. Among out-of-state counsel specifically, regulatory compliance was repeatedly cited as a chief challenge across a wide spectrum of legal concerns.

Conducted in partnership with ALM Marketing Services, Archer Norris’s survey polled general and corporate counsel with business interests in California on their opinions of the California legal climate, how they evaluate litigation matters, and how they choose outside counsel for handling these matters.

This year, Archer Norris also examined current attitudes toward hot issues such as cybersecurity, finding that anxiety about exposure to cyber risks indeed runs deep among in-house counsel, with nearly two-thirds reporting they are “very concerned.” They are most worried about information loss and associated costs resulting from data leakage or systems attacks, damage to critical IT infrastructure, and risk arising from malware and computer viruses.

“The results of our 2016 survey make it clear the legal terrain in California continues to prove daunting not only to companies new to litigating in the state, but also to those who have been handling matters here for some time,” said Gene Blackard, Managing Partner of Archer Norris. “In order to overcome these challenges, it’s more critical than ever for companies doing business in California to have highly responsive and knowledgeable outside counsel. Archer Norris has guided hundreds of businesses through the complex litigation and transactional landscape here, with the goal of seeing our clients succeed in California long-term. With more than 100 attorneys practicing in five offices across the state, we’re exactly where our clients need us to be to best handle their diverse needs.”

The survey also yielded insights about how in-house counsel evaluate which outside California counsel is the right partner. While 55% of respondents noted the importance of a firm offering competitive rates and fees, a number of other factors were deemed more important than cost. Respondents first and foremost look for dependability and consistency (74%), followed by responsiveness, depth of experience, knowledge of the business and industry, and whether the law firm is one known for thoroughly exploring options for resolution other than going to trial.

Respondents reported spending about one-quarter of their overall legal budgets on outside counsel, and most said their budgets will stay the same or increase this year (37% and 29% respectively) compared to last. Many admit they would consider paying “premium” fees (up to 30% above the norm) to defend “bet the company” issues (23%) or legal matters where the client risks losing $1 million or more (32%).

The previous Business Litigation Playbook white paper, which also reveals corporate counsels’ greatest legal concerns within a variety of practice areas, can be downloaded.

Live Summit:
Thursday, June 9,
New York, NY

Registration is being accepted for Bloomberg Law’s premier legal event, the annual Big Law Business Summit in New York City, scheduled for Thursday, June 9.

The event will be at the Apella, Event Space at Alexandria Center, 450 E 29th Street in New York, NY 10016, beginning with breakfast and registration at 8:15 a.m. EDT and ending with a closing keynote and then a party at 5:50 p.m.

General Counsel News readers may attend at no charge. (Registration form)

Two of the speakers will be :

• Magistrate Judge James Orenstein, U.S. District Court (E.D.N.Y.), who recently entered the debate around the government’s ability to compel unlocking of cell phones. Bloomberg News reports, “Orenstein is the first judge to thoroughly explore what the government can and cannot access.”
• Manhattan District Attorney Cyrus R. Vance Jr., who will speak on collaborating across borders and sectors to detect and prevent cybercrimes. He recently testified before the House Judiciary Committee on default device encryption and the need for a federal legislative solution.

Register for the summit.

A Delaware judge has dismissed a lawsuit by Wal-Mart Stores Inc. shareholders who accused the board of the world’s largest retailer of trying to cover up bribes paid by company executives in Mexico, according to a report by Reuters.

The Delaware judge ruled that an earlier dismissal by an Arkansas judge of a nearly identical lawsuit by another group of shareholders precluded the Delaware case from going forward.

“He said that while the Arkansas plaintiffs may have chosen to rush their case rather than fully investigate alleged wrongdoing, their haste did not disqualify them from representing Wal-Mart shareholders,” Reuters reported.

In 2012, The New York Times reported that found Wal-Mart had engaged in a multi-year bribery campaign to build its Wal-Mart de Mexico business.

Read the article.

Legal operations leaders are driving an unprecedented level of focus on discovery processes, data security, and the efficiency of outside litigation teams.

Ari Kaplan Advisors presents the benchmark 2015 Corporate Legal Operations Survey (sponsored by Recommind), providing both quantitative and qualitative insight into:

• cloud readiness
• eDiscovery key performance metrics
• investigations activity
• data security and consolidation strategies
• critical process pain points

Learn what key corporate legal operations leaders are doing (and not yet doing) to optimize visibility, security, and efficiency.

Download the white paper.

The effort to measure and manage legal risk pays dividends in the reduction of real losses from legal issues. It also pays dividends through improved collaboration between the legal team, operations, and senior management, writes Mark Little, compliance and risk management technology executive at Berkman Solutions.

In an article published on Medium.com, he presents the proper answer for a member of a corporate legal department who faces the requirement: describe how you will review all outstanding issues, set priorities that almost never change, improve interdepartmental trust, and make customers happy within an acceptable timeframe.

The answer, he writes, involves implementing a qualitative risk model to measure and manage legal risk.

Read the article.

By Stephen Pinson
Scott & Scott LLP

The limited liability company “LLC” is a popular way to structure a new business venture in Texas. The primary reason for forming an LLC is to obtain protection from personal liability for the owners of the business.

Owners who are planning to form new business entities in the future may want to consider a Texas Series LLC. A Series LLC is helpful for investors who would like to pool their assets into several classes of investment interests, such as those used in corporate restructurings and buyouts, with an added extra layer of protection from liability. The unique aspect of the Series LLC is that it allows the individuals forming it to create several distinct entities and receive all of the benefits of multiple Limited Liability Companies, with only one filing. In essence, the LLC acts as an umbrella where several series of LLCs are insulated from liability and tax protection from the others.

However, the hurdle in enforcing this added layer of liability protection is found at creation of the entity. Pursuant to the Texas Business Organizations Code, to form such an entity, there must be a “notice of limitation” in two documents: (1) the certificate of formation, and (2) the company agreement. But what exactly, needs to be included in the “notice of limitation” for this added layer of liability protection within each series of the LLC to manifest itself?

The Texas Business Organizations Code Section § 101.602 describes the language of the “notice of limitation” in detail, and it requires that the following language be included verbatim: (1) the debts, liabilities, obligations, and expenses incurred, contract for, or otherwise existing with respect to a particular series shall be enforceable against the assets of that series only, and shall not be enforceable against the assets of the limited liability company generally or any other series; and (2) none of the debts, liabilities, obligations, and expenses incurred, contracted for, or otherwise existing with respect to the limited liability company generally or any other series shall be enforceable against the assets of a particular series.

One benefit of the Texas Series LLC is increased privacy and separation from public disclosures. Pursuant to the Texas Business Organizations Code the only document that requires modification in creating a new series is the company agreement. No public documents are filed with the Secretary of State when a new series is created or dissolved. This increases client privacy and allows for the creation of what is essentially a new quasi-separate business entity for each series, which allows for separation of ownership interests, investments, and possible voting and no-voting interests similar to a corporation but with the advantage that these can change with fluidity.

Consequently, if the Texas Series LLC is not formed correctly, or is not delineated in the operating agreement in compliance with Texas Business Organization Code, there are risks that the extra layer of liability protection between the series will not be enforceable. It’s always best to consult an experienced attorney in order to understand the risks involved.