Key Provisions in Software Settlement Agreements

By Keli Johnson Swan
Scott & Scott LLP

The end of the year is a busy time for software publishers and entities like the BSA | The Software Alliance (“BSA”) and the Software & Industry Information Association (“SIIA”) to resolve an audit target’s copyright infringement dispute by entering into settlement agreements. While it may be advantageous for a company to reach a quick resolution by the end of the year in order to resolve any outstanding disputes or potential monetary penalties, it is critical not to rush through settlement without carefully considering provisions in a draft settlement agreement.

The following are a few provisions that should be carefully considered before executing an agreement.

Release of Liability.
The release of liability is arguably the most critical provision in a settlement agreement because without it, a company is still exposed for any potential copyright infringement claims. These provisions should be read very carefully because software publishers sometimes limit the provisions to specific circumstances, and make the release of liability contingent on several factors, including post-settlement remediation and other ongoing responsibilities.

Warranty.
Often software settlement agreements contain a provision that the release of liability is contingent on the accuracy of the audit materials that were submitted. This is particularly important because a company should make every effort to ensure that it conducts an accurate self-audit immediately after the audit request is received.

Post-settlement obligations.
The BSA and SIIA have specific terms it requires in settlement agreements, which requires that any software that was discovered to be unlicensed during the course of the audit is uninstalled or replaced with licensed software. Additionally, a software publisher or the BSA or SIIA may seek to include provisions that are more restrictive than the software license agreement requires, such as future on-site inspections. These terms generally can be negotiated so it is important to seek legal counsel before executing a settlement agreement.

Confidentiality.
While some targets of software audits wish to share their experiences to educate others, most companies prefer not to have any negative publicity related to resolving copyright infringement claims. The confidentiality provision should be carefully crafted to prevent the software publishers, BSA, or SIIA from publishing a press release about the settlement agreement.

These are just a few issues to consider when reaching a settlement to resolve alleged copyright infringement claims. If in doubt, contact an attorney experienced in software licensing and copyright infringement matters.

 

 




eBook: A Guide to the Enterprise Legal Management Paradigm Shift

OnitAs most legal departments’ workload increases and resources diminish, it’s no surprise that running an efficient legal department is challenging. Old processes tracked on Excel spreadsheets or rudimentary databases will no longer cut it. Many legal departments find themselves struggling under the weight of legacy technologies that simply do not work or are expensive to upgrade.

Onit has published an eBook (see the form below) that discusses how ELM solutions are positively impacting corporate legal departments like Archer Daniels Midland (ADM), The Home Depot and Under Armour.

The eBook, available for free downloading, covers:

• Why ELM is more than just legal e-billing and spend management and “should” include contract management, legal holds, NDA creation, legal service requests, etc.
• Why “process automation” and collaboration is critical for performance
• Cues from the industry, market trends and Gartner’s predictions
• The new technology curve and future of legal operations technology

Download the eBook:

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Associate Bonus Watch: Cravath Announces Its 2016 Associate Bonuses

pay-salary-income-statisticsBiglaw’s compensation leader, Cravath Swaine & Moore, announced its 2016 year-end bonuses for associates this week, and the list has a familiar look, reports Above the Law.

“But there is, of course, one huge difference: back in June, Cravath raised base salaries for its associates, a move that led dozens of firms around the country to hike associate pay,” writes David Lat.

He added announced bonuses to new salaries and concluded that a first-year associate at Cravath will earn around $180,000 in total compensation.

“At the top of the scale, an eighth-year associate will earn almost $400,000 in total compensation ($280,000 for the first half of the year, $315,000 for the second half of the year, and $100,000 in bonus money), up from $380,000,” he writes.

Read the Above the Law article.

 

 

 




Cross-Atlantic Merger Could Yield 2,300-Lawyer Firm

Handshake -deal-merger - acquisition - M&AAtlanta-based Sutherland Asbill & Brennan is in merger discussions with Eversheds of London, the firms announced on Tuesday, reports Bloomberg Law.

The proposed merger could result in a law firm with more than 2,300 lawyers in 31 offices across 29 countries, the firms said in a joint statement. The merged entity would have revenue of more than $900 million, putting it into the top 40 law firms in the world, by revenue.

Bloomber described the announcement as depicting the discussions as being in an advanced, yet incomplete stage. It said that both firms have presented the proposed combination to their partners, who will likely vote on the deal before year-end.

Read the Bloomberg article.

 

 

 




Texas Law Firm With 80-Year History Is Disbanding

The Fort Worth Star-Telegram is reporting that Shannon Gracey Ratliff & Miller, one of Fort Worth’s storied law firms for more than 80 years, is shutting down at the end of the year, according to court records.

“The partners recently voted to dissolve at the end of 2016, and several of its attorneys are leaving to join other firms or start new ones, according to court records and interviews with those familiar with the situation,” reports .

Some Shannon Gracey lawyers already have formed new firms or joined other Texas firms. The firm’s website lists about 30 lawyers now, with offices in Fort Worth, Dallas, Arlington, Austin, Houston and Rhome.

Read the Star-Telegram article.




Report: Billing Rates Up, Lawyer Productivity Down

Wells Fargo Private Bank’s Specialty Group released a report on how law firms performed in the first nine months of 2016, with the report’s authors finding a decline in demand across all timekeepers, according to an article published by Bloomberg Law.

Lawyers’ rates increased by 3.6 percent, with an expected hike of another 4.4 percent coming the following year.

In an interview, Joe Mendola, senior director of sales at Wells Fargo Legal Specialty Group, drilled down into what the catch was for the industry.

Among the findings:

  • The richest firms are also the busiest, with partners are projected to log an extra 100 hours this year compared to everyone else.
  • There has been a decline in productivity this year.
  • With demand flat or declining, law firms are raising rates to keep growth strong — and to pay for higher associate salaries.

Read the Bloomberg article.

 

 




Bailey Brauer Named Among Nation’s Most Feared Law Firms

Bailey Brauer PLLC of Dallas was named to BTI Consulting Group’s 2017 ranking of U.S. law firms that corporate lawyers never want to face in court.

Founded in 2013 by former big firm lawyers Clayton Bailey and Alex Brauer, the firm has represented major corporations, family-owned businesses and high-net-worth individuals in a variety of business disputes by relying on years of expertise trying and appealing cases and negotiating favorable settlements.

“It’s a point of pride to be on this impressive list,” says Bailey, who is experienced in state and federal trials and appeals. “General counsel call on Bailey Brauer because we provide the experience and quality they expect while keeping a close eye on the bottom line.”

In a release, the firm said:

One of the country’s leading business research firms, BTI Consulting produces its annual review of the U.S. legal market by conducting independent confidential interviews with more than 300 corporate counsel from the world’s largest corporations over a one-year period.

“It’s gratifying to know that in-house lawyers are recognizing the level of work we deliver at Bailey Brauer,” says Mr. Brauer, a trial and appellate lawyer who has helped clients win cases in state and federal courts nationwide. “Our firm is proof that bigger isn’t always better.”

Bailey Brauer’s impressive list of courtroom victories during the past six months includes helping a nationwide food provider defeat a price-fixing claim for more than $500 million; prevailing against a major corporation that sought an injunction against its former employee; and winning a breach of contract claim for a poultry producer after a contractor violated animal welfare standards.

The firm currently is headed to trial in Dallas on behalf of an investment fund in a multimillion-dollar federal fraud case against a group of out-of-state defendants.

 

 




Law Department Operations: Survey Results & Live Webinar

Blickstein GroupThe 2016 report on a comprehensive survey of law department operations, “Trying to Take the Leap from Small Changes to Major Disruptions,” can be downloaded from Blickstein Group at no charge.

Since 2008, Blickstein Group has worked in cooperation with Consilio to survey hundreds of law departments solely on the operations function to provide benchmarks that are useful to all law departments.

In addition to releasing the survey report, Blickstein Group will host a live webinar on Dec. 14 to provide exclusive analysis of survey results by five industry leaders. The complimentary online event will be Wednesday, Dec. 14, at 1 p.m. EST.

Some of the topics covered will be:

  • The role of the LDO
  • Change management
  • Alternative fee arrangements
  • Technology and tools
  • Metrics and reporting

Presenters at the webinar will be:

  • Brad Blickstein – Principal, Blickstein Group and Publisher, Law Department Operations Survey
  • Elizabeth Jaworski – Director, Legal Operations, Motorola Mobility and Member, Law Department Operations Survey Advisory Board
  • Josh Rosenfeld – Vice President, Legal Services, QuisLex
  • Robin Snasdell – Managing Director, Consilio
  • Aaron Van Nice – Director of Legal Operations, Baxter Healthcare and Member, Law Department Operations Survey Advisory Board

Download the report or register for the webinar.

 

 




Trump’s SCOTUS Shortlister Kethledge Doesn’t Mince Words

By SPDuffy527 (Own work) [CC BY-SA 3.0 (http://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commons

By SPDuffy527 (Own work) [CC BY-SA 3.0, via Wikimedia Commons

President-elect Donald Trump and Sixth Circuit Judge Raymond M. Kethledge have something in common — blunt opinions, reports Bloomberg Law.

Some senators considering Kethledge’s 2008 nomination questioned his lack of judicial experience, but now he’s on Trump’s list of potential U.S. Supreme Court nominees to replace Justice Antonin Scalia, who died unexpectedly Feb. 13.

“Kethledge’s notable opinions at the U.S. Court of Appeals for the Sixth Circuit include a ruling in favor of a Tea Party group and against the Internal Revenue Service,” writes reporter Patrick Gregory. “The judge has written that he likes to see candidness and civility in appellate briefs.”

Read the article.

 

 




AG Depositions in Climate Change Probe Called ‘Highly Unusual’

Image by Mike Mozart

Image by Mike Mozart

A federal judge in Dallas has ordered the attorneys general of two Northeastern states to come to Texas next month to be deposed in a lawsuit brought by Exxon Mobil, according to a report posted by Androvett Legal Media & Marketing.

The company has accused Massachusetts AG Maura Healey and New York AG Eric Schneiderman of unlawfully using their powers to investigate whether the oil giant misled investors and the public by downplaying the impact of global warming. The company is seeking an injunction barring the attorneys general from demanding internal documents relating to climate change research and investor communications stretching back decades, according to the Androvett report.

“These investigations could have a potentially catastrophic effect on Exxon, based on the documents and information that have been made public so far,” says attorney Chris Hamilton of Dallas’ Standly Hamilton. “However, allowing a company that is the subject of investigations to take depositions of elected state officials regarding their motivations is highly unusual and problematic. What would happen if a criminal defendant sought the deposition of a district attorney regarding the motivation for prosecuting a case? The precedent for a court to allow this type of tactic is concerning.”

The judge’s order advised the officials to reserve Dec.13 for giving testimony in Dallas.

 

 




Skadden Publishes 2016 Edition of Energy Law Handbook

Skadden Energy Law HandbookSkadden, Arps, Slate, Meagher & Flom’s Energy Regulation and Litigation Group has produced the fourth edition of the Skadden Energy Law Handbook, which includes a summary of recent developments.

On its website, the firm says the handbook contains 16 chapters covering a broad range of issues arising in the context of FERC, CFTC and antitrust regulation of the energy sector (e.g., market manipulation, merger review, electric reliability and open access transmission tariffs, among others).

The updates cover such topics as compliance programs, audits and investigations, criminal and civil penalties, FERC market manipulation enforcement, CFTC regulation, antitrust enforcement, reliability, affiliate rules, natural gas, false statements, and more.

Download the handbook.

 

 




China Contracts: Dispute Resolution Clauses

In his China Law Blog, Dan Harris writes that the dispute resolution provision in China contract may be the most important provision in the contract.

“If you put in a dispute resolution provision that makes sense, your Chinese company counter-party with whom you are contracting will be afraid to breach the contract. Conversely, if you put into the contract a dispute resolution provision that will not work, you are signaling to your Chinese company counter-party that it can breach its contract with you with impunity. Yes, it really is that important,” Harris writes in the blog post.

He explains why a provision calling for resolution in U.S. courts can sometimes be a hindrance, compared to a clause requiring dispute resolution to take place in Chinese courts.

Read the article.

 

 




Incorporation by Reference of an Arbitration Clause Is a Simple Matter … Isn’t It?

ArbitrationDrafting an arbitration clause for an agreement may seem like a straightforward matter most of the time, writes Gilbert A. Samberg for Mintz, Levin, Cohn, Ferris, Glovsky and Popeo. It may even be as simple as incorporating by reference an arbitration provision in another document or agreement. Or is it?

In the article, he discusses a recent federal district court ruling, Cooperativa Agraria Industrial Naranjillo Ltda. v. Transmar Commodity Group, Ltd., that may offer a cautionary lesson  before making such assumptions.

“In Naranjillo, the decisive principle was that an offeree cannot assent to an offer unless the offeree knows of its existence. The Court found that there had been no showing that Naranjillo actually knew of the existence of the arbitration clause terms,” Samberg explains.

Read the article.

 

 




Using Standard Form Contracts May Hurt Your Business

contract-signature-1464917_150When putting together a contract for the first time, many business owners may turn to standard form contracts to make agreements between customers, vendors, and other businesses, writes Corey F. Schechter of Butterfield Schechter LLP.

“Calling these contracts ‘standard’ may make it seem like they will protect your interests and provide for any contingencies that arise,” he explains. “However, many businesses find that a standard form contract ends up hurting their business.”

Because a form contract is designed to cover all bases, it may avoid language that is specific to a particular type of business, according to the article.

“Not only do these vague business contracts fail to address important issues that may arise between the two parties, they may also lead to confusion over what terms will actually govern the agreement,” Schechter writes.

Read the article.

 

 




Judge Squelches New Overtime Regs: Now What?

A Texas judge’s decision to block sweeping new overtime rules hadn’t been out for two hours Monday evening before Philadelphia employment lawyer Gina Ameci started getting phone calls from her employer clients, reports The Philadelphia Inquirer.

Now what? “As of today, there is no law,” she said. “Anything is possible.”

“The judge’s decision came as a relief to industry groups, such as the Retail Industry Leaders Association, one of the 50 business groups that had sued the U.S. Labor Department,” writes reporter Jane M. Von Bergen.

“Ameci said her clients, now faced with a period of uncertainty, would now have to weigh their risks. Should they roll back new policies to save money and then face potential liability if the regulation is ultimately upheld? That risk might be worth it, she said, for nonprofits who often have people doing professional work, but earning in the $35,000 a year range,” the report says.

Read The Inquirer‘s article.

 

 




‘Chapter 22’ Looms Over Some U.S. Oil and Gas Bankruptcy Survivors

Oil wellReuters tells the story of “Chapter 22” companies, oil and gas industry firms that return to bankruptcy court after their first Chapter 11 overhaul failed to fix their problems.

Reporter Jessica DiNapoli describes the scene at Global Geophysical Services LLC, where a few employees are winding down what is left of an oil and gas industry data provider that only three years ago had a staff of more than 1,000 and offices around the world.

“A casualty of high debt and a cash crunch, the company filed for bankruptcy in early 2014 before tumbling oil prices pushed scores of other energy firms over the edge. Last year, it became one of nearly 20 companies that have already exited bankruptcy, but is now one of the first to have filed for creditor protection again,” she explains in the article.

She quotes Edward Altman, a professor emeritus at the Stern School of Business at New York University, as saying that nearly a fifth of all U.S. companies that exit bankruptcy as a going concern seek creditor protection again within about five years.

Read the Reuters story.

 

 




Meet the Top Lawyer of the World Series Champs

Image by Ron Cogswell

Image by Ron Cogswell

As the top lawyer for the Chicago Cubs, Lydia Wahlke spends most of her time protecting and enforcing the team’s brand, but she still gets to be a fan of the new World Series champions, according to an interview published in Bloomberg’s Big Law Business.

She spent four years at Miramax Films as a video editor and field producer before deciding to take the LSAT on a whim. That led to law school and then being hired as a litigation associate at Kirkland & Ellis in her home town of Chicago. Then in 2010 she joined the Cubs organization.

“One of the greatest challenges we have is also one of our greatest assets: our brand,” she told Bloomberg’s . “We have needed to find the right path to protecting and enforcing our brand, while allowing our fans to celebrate being fans and celebrate their love of the team. That can be challenging because we are 146 years old and it’s a really complex brand that has come about in many ways, including organically from fans celebrating the team. You have to find that dividing line between fighting people and protecting your licenses and protecting your brand long-term, but you don’t want to take the fun out of it. That can be deciding whether or not to enforce our mark.”

Read the Bloomberg article.

 

 




Practical and Ethical Issues for Attorneys Practicing Dual Occupations

By Laura Drossman
Drossman Law

Laura Drossman

Laura Drossman

Complying with the California Rules of Professional Conduct can be challenging enough for an attorney, but issues can become even more complicated if you are also practicing a dual profession. Engaging in a second occupation may appeal to some attorneys (especially solo practitioners who may enjoy more flexibility in their practice) as they can draw on their legal experience in performing such service, diversify their revenue stream, or sow long-lost creative oats. But lawyers must always consider the practical and ethical challenges involved with actively practicing dual occupations.

Subject to certain restrictions, California state ethics rules generally permit California attorneys to engage in the practice of law and a second occupation. This issue has been addressed by the state bar’s Standing Committee on Professional Responsibility and Conduct in several opinions.¹ Engaging in dual professions may carry traps for the unwary lawyer, however, as such conduct may conflict with a lawyer’s duties of confidentiality, loyalty, and/or violate the Rules of Professional Conduct, which govern an attorney’s actions at all times.

Providing non-legal services to a client is considered a business transaction, but one that creates actual and potential conflicts of interest. A client for whom a lawyer provides non-legal services is nonetheless considered a legal client with respect to the applicability of the Rules of Professional Conduct. Therefore, prior to entering into any such transaction, the attorney must determine all actual and potential conflicts, and if such conflicts are waivable. If so, the attorney must disclose the conflicts and risks and obtain written client informed consent and waiver. If not, the attorney must forego the deal.

Conflicts present even greater risk where attorneys perform “law-related” occupations, such as real estate brokerage or financial services to non-legal clients. In those situations, the lawyer is bound by the Rules of Professional Conduct as well as the rules and regulations governing the second occupation, and is responsible for reconciling the two. This can be challenging and potentially impossible where, for example, a lawyer providing real estate brokerage services must reconcile his or her duty to keep all information relating to the representation of a client confidential with the robust disclosure obligations imposed on brokers by the Bureau of Real Estate regulations.

An attorney must continue to comply with the Rules, even in promoting their second occupation. Advertising for the provision of non-legal services that imply clients will benefit from the attorney’s legal expertise is governed by the Rules of Professional Conduct and must conform to all rules governing lawyer advertising. Further, lawyers must be careful to not use their side occupation as a way to solicit legal clients in a manner that may violate the rules prohibiting in-person solicitation.

Finally, in structuring partnership or other shared business arrangements for non-legal deals, lawyers must be sure they maintain full control over their legal practice, and avoid any sharing of legal fees.

Footnote
1. California State Bar Formal Opinion Numbers 1982-69, 1995-141 and 1999-154.

Laura Drossman is the principal attorney at Drossman Law, a real estate and business law firm based in San Francisco. She is also a licensed real estate broker.




Pension & Welfare Plan Overpayments: What’s An Employer To Do?

Practical Law will present a free 75-minute webinar in which Mark A. Bodron, Baker Botts LLP, Gia G. Norris, Practical Law, Elizabeth A. Gilman, K&L Gates and Judy Hensley, Roberts & Holland, will provide a practical roadmap for counsel to employers on best practices for advising clients on pension and welfare plan overpayments.

The event will be Tuesday, Dec. 6, at 1 p.m. Eastern time. See the registration page for CLE status.

Participants of this program will:

  • Review common scenarios in which pension and welfare plan overpayments arise.
  • Gain an understanding of the legal framework and correction procedures governing pension plan overpayments, including potentially thorny tax issues that impact your employees.
  • Learn practical strategies to protect your clients from the most recent wave of litigation in the self-funded group health plan context.

A brief Q&A session will follow.

Presenters:

Mark A. Bodron, Partner, Baker Botts LLP
Mark Bodron is a partner in the Houston office of Baker Botts. His practice concentrates on the areas of employee benefits and executive compensation. Bodron advises clients on all aspects of qualified retirement plans, including 401(k) plans, ESOPs and cash balance plans, nonqualified plans, stock-based plans and deferred compensation and other executive compensation arrangements, including issues related to Section 409A deferred compensation rules and Section 162(m) performance-based compensation. Bodron’s practice also includes advising clients on health and welfare plan matters, including compliance and reporting issues related to the Affordable Care Act, COBRA and HIPAA. He frequently advises clients on ERISA fiduciary and prohibited transaction matters and represents clients before the IRS, DOL and PBGC on matters related to employee benefits.

Gia G. Norris, Senior Legal Editor, Practical Law Employee Benefits & Executive Compensation
Norris joined Practical Law from Roberts & Holland LLP, where she was a senior employee benefits and executive compensation associate. Previously she was an employee benefits and executive compensation associate at both White & Case LLP and Proskauer Rose LLP. Norris is the Website & Technology Chair of the Employee Benefits Committee of the America Bar Association’s Section of Taxation. She is also a member of the Employee Benefits Committee of the Tax Section of the New York State Bar Association.

Norris received her Juris Doctorate from the University of Pennsylvania Law School and her Bachelor of Arts from Johns Hopkins University in Political Science and Women’s Studies.

Elizabeth A. Gilman, Associate, K&L Gates LLP
Elizabeth Gilman is a litigation associate in the firm’s Houston office. She focuses her practice on commercial disputes and is uniquely qualified in disputes involving the energy sector, especially oil and gas. Her technical education and experience enhances the value of her representation and counsel. She earned her undergraduate degree from Purdue University, majoring in industrial management with an emphasis in manufacturing. Gilman excels in her ability to work with clients and experts in complex fields. Gilman has experience in all phases of the dispute process which allows her to provide comprehensive representation for her clients. She has experience in early dispute management, litigation and arbitration through the appellate process and collection. She has tried cases both in front of a jury and an arbitrator. On behalf of her clients, she brings a high level of experience in energy litigation, and both on-shore and off-shore construction disputes. Gilman’s experience in contract negotiation and drafting further contributes to the value of her representation to her clients. Her experience spans many forums, including mediation, state and federal court, and domestic and international arbitration.

Judy Hensley, Associate, Roberts & Holland LLP
Judy M. Hensley concentrates on a wide variety of employee benefits and executive compensation matters in both the transactional and compliance contexts. She advises on tax, ERISA and other legal considerations relating to employee benefit plans, programs and arrangements, including design, administration and compliance of tax-qualified plans. She has advised clients on ERISA fiduciary matters for investment funds and plan fiduciaries. Her experience includes the structuring and design of equity compensation arrangements, including stock options, stock appreciation rights, restricted stock, restricted stock units, phantom stock, performance shares and LLC/partnership interests (including profits interests) and nonqualified deferred compensation plans, as well as executive employment, severance and change-in-control agreements. She also has advised clients on compensation and benefits issues unique to bankruptcy and restructuring transactions.

Register for the webinar.

 

 




Facts in Law Firm Discrimination Suit No Bellwether on Gender Pay

The $100 million discrimination lawsuit filed against the New York-based international law firm Chadbourne & Parke over claims that female partners are paid less than their male counterparts is less about gender than employment status, according to Sarah Bradbury, senior counsel at Dallas litigation boutique Estes Thorne & Carr PLLC.

An article published by Androvett Legal Media & Marketing quotes Bradbury:

“While it is becoming increasingly easy to create an employment relationship and characterize an independent contractor as an employee, an equity partner cannot be categorized as an ‘employee,’ making it very difficult to prevail in this case. However, if a similar lawsuit were brought by income level partners, it becomes a very different case.

“Gender pay disparity may be real at this particular firm specifically or within the legal profession generally. However, even if the disparity exists, in this instance, because the attorneys are not employees of the firm, they simply have no employment discrimination route to pursue,” adds Ms. Bradbury, who is Board Certified in Labor & Employment Law by the Texas Board of Legal Specialization.