By Natalie Lynch
Lynch Law Firm PLLC

Today, many people prefer texting over many other forms of communication such as calling or emailing the recipient. This is an efficient form of communication because individuals can send a quick message about something important to them within a few seconds rather than being busy on a call for several minutes. Despite its expedience, texting in the workplace can carry certain risks for employers and may pose some problems.

Potential Problems

One of the most serious concerns that employers have about texting in the workplace is its association with productivity. Employers do not want to see their staff distracted and busy concentrating on personal matters instead of the job at hand.

Another concern is that texting in the workplace can cause dangerous distractions. For example, employees may drive forklifts in industrial settings and may drive to complete sales calls or work errands. Texting while driving continues to be a major source of concern with distracted driving being the primary cause of accidents today.

Texting in the workplace also poses risks concerning privacy issues. Work videos sometimes go viral and often in a negative way for employers. Employees may send a video message to a friend, family member or rival that does not paint the employer in the best light. These messages can damage the company’s reputation. Also, confidential information or trade secrets may be stolen when employees take pictures of this information and send it to someone else.

Creating a Policy

Due to the many risks that texting in the workplace can cause, many employers may decide to institute cellphone policies that discuss the use of cellphones, texting and calling in the workplace. These policies set out the rules and expectations of the business. For example, there may be a complete prohibition on texting while driving for work purposes. Additionally, they may state that employees are not permitted to text while they are meeting with a customer or client in person. A common and important policy many employers implement is that no video or audio recording is permitted at work. The policy may outline certain disciplinary measures that the employer may have the discretion to take if the employee does not follow the rules. These actions may be progressive in nature, such as starting with a verbal warning and then moving up to a written warning. The employer should carefully consider a number of factors before implementing a cellphone policy in the workplace.

Considerations

While the simplest solution to avoid the problems texting in the workplace poses may be to ban all use of cellphones, this action will likely negatively impact employee morale. Many individuals depend on their cellphones to keep them in touch in important ways and employees may fear what to do in case of an emergency. A complete ban on cellphone use or texting may be considered antiquated and isolating to employees. When developing a policy for the business, it is important to consider the size of the business and the realistic ability to monitor employees’ observation of the cellphone policy. Additionally, the culture and type of business is important to consider.

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Consilio is conducting an online survey is designed to provide law department leaders insight into comprehensive benchmarking data, legal operations and discovery best practices, and trend reporting.

Survey results provide a foundational resource for assessing law department performance, and justifying spend and staffing levels or initiative investments through peer comparison.

“Corporate law department performance is widely discussed yet infrequently measured with accuracy across industries. Legal spending, department organization, staff workload, outside counsel and vendor management, leadership priorities, client service delivery and technology are several of the areas of performance that we aim to measure, benchmark and use to identify best practices in our 2017 Law Department Benchmarking Survey,” Consilio says on its website.

Participants who complete the survey by July 15, 2017, will receive a $25 coffee gift card.

Participants will receive the survey results report including benchmarking data at the industry and revenue segment level, Consilio reports.

Complete the survey.

Zapproved has published a guide that discusses five ways to save costs and build efficiencies by bringing e-discovery processing and review in-house. The guide can be downloaded at no charge.

On its website, the company says keeping in-house e-discovery costs in check is a constant balancing act. Complex litigation and regulatory matters — along with pressure to streamline operational spending — create an often expensive e-discovery reality.

According to a study from FTI Consulting, the majority of Fortune 1000 corporations now spend $5-10 million annually on e-discovery with 70% of the costs tied directly to document review.

The guide shows how to take charge of e-discovery by leveraging easy-to-use and secure in-house tools that minimize business risk — and maximize budgets.

• Unlock detailed tips in this guide from Zapproved to get started. It outlines six ways to slash spending and boost efficiencies. Find out how to:
• Use modern, cloud-based e-discovery software tools to bring routine e-discovery processes in-house.
• Modernize legacy systems to limit dependence on IT.
• Empower legal teams to slash expenses, improve data security and speed time to resolution.

The guide also offers step-by-step recommendations and best practices to help:

• Get insights faster by plugging in data processing tools
• Save money by reviewing routine, high-velocity matters in-house
• Improve response to internal investigations and FOIA information requests

Download the guide.

General counsel support is crucial for corporate legal departments that are trying to decrease the number of law firms they work with, 3M Co.’s managing counsel said, writes Yin Wilczek for Bloomberg BNA.

Joseph Otterstetter, who leads his company’s ongoing convergence efforts, told Wilczek that the most important step is making sure the in-house team is “aligned, starting with the general counsel. There will be resistance, I promise, and so if the general counsel isn’t supportive, it’s best not to even start, frankly.”

3M launched its effort convergence in 2013, when it cut the about 300 of its U.S. outside firms to about 35 to 36 firms, said Otterstetter, who also is associate general counsel of 3M. And more recently the company re-assessed the major portfolios into which it divides its legal work, he said.

Read the Bloomberg article.

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The Association of Corporate Counsel released its latest in-house trends report, which revealed that a higher percentage of women’s salaries were on the lower end of the salary scale than those of their male counterparts, reports Above the Law.

“The survey, based on responses from 1,800 in-house counsel in 53 countries, further stated that while a higher proportion of men existed in six of seven salary bands above and beyond $199,000, only 8 percent of male respondents actually believed that the in-house gender wage gap existed,” according to reporter Staci Zaretsky.

The ACC report also found that more than one-third of female respondents have had trouble finding satisfactory after an absence of six months or less. And longer absences hurt even more.

Read the Above the Law article.

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Above the Law reports on a BarkerGilmore in-house counsel compensation report that shows in-house lawyers received average pay increases of 4.3 percent last year.

“That sounds perfectly middling, until you realize every rung of the prevailing Biglaw associate scale bests that — some years by a lot,” writes Joe Patrice.

The tech industry led the way with higher salaries, bumping up 4.9 percent, while financial and manufacturing industries tied for the small hikes, just 3.7 percent. But the BarkerGilmore survey found that more respondents felt they were undercompensated compared to their peers.

Read the Above the Law article.

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By Norm Finkel
Schoenberg, Finkel, Newman and Rosenberg, LLC

The list of reasons why small law firms offer big advantages is well known—this is especially true for businesses that are mid-sized or emerging. But here’s a quick review. With a smaller law firm, seasoned attorneys are the norm, rather than the associates who typically handle day-to-day business for the big law firms. A smaller firm is a bit like the classic Avis commercial; they work harder. The attention given to the client is second to none. So, relationships between law firm and general inside counsel tend to be closer. Then, of course, there is the matter of fees; they tend to be a lot more reasonable.

With all these advantages, why would a client opt for big law?
Let’s say a small law firm has established its credibility with a long track record of great work. The relationship between inside counsel and the partners is solid. But one day, the client says, “Sorry, we have to go with the big guys on this one.” What does that mean? Is it a rejection of all the hard work and success? Does it erase all the great progress you’ve shared over the past few years? Not really. There are a number of reasons why a client might go big. For instance, there is the matter of self-protection when a major audit is in order. If something goes wrong, no one can say it was due to the fact that a small law firm was chosen for this arduous task. Or, perhaps a case may be the subject of intense national scrutiny. For public relations alone, the choice of a larger law firm to handle it may be most prudent, especially when internal counsel has a board of directors that must support the rationale. When such contingent factors come into play, it is no reflection on the smaller firm or general counsel and, for the most part, no threat to the established relationship. In fact, small firms have a vital role to play in cases such as a large merger or an audit, because they can bring the big law firm up to speed on day-to-day information that the larger won’t have access to.

When it’s best to bet on David rather than Goliath.
There are cases where trust in the relationship outweighs all other factors. Here is an example. I represented a former chairman of a bank. The bank sued my client for losses it suffered on SBA loans after the 2008 meltdown. The bank had a board and an SBA loan committee—both of which approved the loans. The bank, rather than looking at its own culpability, sued the former chairman and president. Two of Chicago’s large law firms were recruited to represent the bank and its board members and loan committee members. Our attorneys walked into the courtroom every day and faced an army of lawyers from multiple firms; even the judge commented on the cost of all those lawyers.

My firm litigated the case in state court and won, but we were denied legal fees. The bank appealed its loss, while we appealed the denial of fees. My client ran out of money long before the case went to trial, but we did not quit. He died tragically at the age of 65, shortly after the trial court’s judgment but before the appellate court rendered its decision. We were owed seven figures by that time.

The appellate court affirmed the exoneration of my client and reversed the decision denying our legal fees and sent the case back to the trial court for a determination of our entitlement to, and amount of, legal fees. After the court determined we were entitled to fees, the bank agreed to settle the matter. This occurred shortly before the court determined the amount of legal fees to be awarded. The family and widow were gratified by the outcome. Although we went up against two large law firms who had a client with immense resources, after a 5½-year ordeal, we won.

The future is starting to favor the Davids, but don’t write off the Goliaths just yet.
Trends are emerging that seem to favor the mid to smaller law firms. The 2009 “Bloody Thursday” that kicked off major layoffs at some of the biggest law firms brought with it a demand for lower fees. Of course, this opened a white space opportunity for smaller, entrepreneurial firms who could deliver more for less. Not only that, but because of technology some of the advantages that once favored bigger firms have evaporated. The giants once owned the biggest libraries and best information. But now, thanks to the digital revolution, small and big alike have access to the same data. Keep in mind, smaller firms tend to be more invested in their clients. The partners are responsible for the success or failure of their business; this goes further than just filling out a time sheet for hours. A concern with cost efficiency is part of their DNA. But as for the Goliaths, as Basha Rubin put it in an article for Forbes, “I’m not arguing that all big law firms will disappear entirely. Why should they? Many provide unparalleled service; they will continue to make sense for the biggest deals. The next time I merge my multibillion dollar corporation with another multinational multibillion dollar corporation, I certainly intend to hire one.” < https://www.forbes.com/sites/basharubin/2014/07/07/big-law-big-problems-2/#210f8e75db42>The general counsel of a Fortune 500, national health club chain that I’ve represented for over 35 years has repeatedly told me how much he appreciates my attention to his business and that the results he has experienced from using a smaller firm are “second to none.”

What are the takeaways for inside counsel?
I started my career in a firm of 15 to 20 lawyers. Six months into the job, I tried my first case and won. I would never have gotten that experience at a large law firm. Recently I hired an attorney from such a firm who was working 100 hours a week and couldn’t get any traction on his career. For what it’s worth, my advice to internal counsel is this:

· Keep the outstanding small firm that has worked so hard to win your business
· Remind them when an audit comes up or a case with national media buzz, that leaning on the big firm is simply a matter of self protection – not a dismissal but a fact of life in business
· Promote the great work of your smaller partner law firms to your board so that they can see the value
· Remember that business, technology and culture are in a state of evolution and the best partners are the ones who keep pace

Norm Finkel, senior partner and head of the the litigation practice at Chicago based Schoenberg, Finkel, Newman and Rosenberg, LLC.

By Natalie Lynch
Lynch Law Firm

Businesses may hire independent contractors and employees, and it is important that they understand the differences between these two classifications. Independent contractors do not get the same legal protections as employees do, such as being eligible for unemployment benefits or being protected by labor laws. Independent contractors often do not receive benefits of any type. Due to these distinctions, it is important for businesses to clearly classify independent contractors. Without proper classification, an independent contractor may be able to make claims reserved for employees if a court or governmental agency decides that it was actually an employee instead of an independent contractor. The business may even be held responsible for paying payroll taxes on behalf of the newly-classified employee and face significant monetary penalties.

Right of Control Test
The Internal Revenue Service and other government agencies use the right of control test to determine whether an individual is an independent contractor or employee. If the employer has the right to control how the work is performed then the worker is considered an employee. However, if the business can only accept or reject the final product, then the person is considered an independent contractor. The IRS uses about 20 factors to evaluate who controls the work performed. The more control a company exercises over the work that is performed, the more likely that the worker will be classified as an employee. A worker does not have to meet all of the factors in order to be considered an employee or independent contractor. No one specific factor is dispositive. The IRS also gives different weight to different factors depending on the individual circumstances. Every state has additional tests. For example, Texas has an excellent chart to help make the evaluation more clear.

Factors
Some of the factors that are considered include:

Level of Instruction
An employee relationship is more likely to be determined when a worker is directed as to how to perform his or her work, when to perform it and where to perform it. Independent contractors generally have more freedom in these regards.

Training
Company-provided training suggests an employee relationship because the business is directing the methods by which the work should be performed.

On-Site Services
An employment relationship is suggested when the employer requires the worker to be at the company site even when the work can be performed somewhere else because this gives the employer more control over the worker.

Sequence of Work
When the employer determines the sequence of work such as which work should be performed first and last, this suggests greater control and an employment relationship.

Schedule
When a worker is required to work full-time hours, this is indicative of an employment relationship because the company has greater control over a majority of the client’s time. Contractors have more flexible schedules while employees have more set hours.

Payment
An important difference between employees and independent contractors is how they are paid. Employment relationships may be based on hourly, weekly or monthly pay schedules. However, contractors are often paid based on project completion or by commission. Additionally, an employer may pay for business or travel expenses while an independent contractor is usually expected to pay these costs on its own. Likewise, an employer may provide tools and other materials necessary to complete a job for employees while an independent contractor must usually supply his or her own tools and materials.

Business Integration
Workers who perform tasks that are integrated into the business are more likely to be found to be employees rather than independent contractors.

Assignment
Employees are usually expected to perform the work themselves. However, independent contractors are often able to delegate work to another person. Likewise, contractors may be able to hire, pay and supervise people who assist him or her. If the business controls assistants, there is more likely to be an employee relationship than a contractual one.

Termination
Employees can often be terminated for any reason or no reason in at-will states. However, contractors often have a contract that must be followed in order to avoid liability for early termination. The contract terms usually govern termination. Likewise, employees can usually quit their jobs for any reason while independent contractors usually cannot terminate the working relationship without ramification.

Carefully evaluating these factors can help businesses avoid possible liability associated with misclassifying employees.

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Within the next few years, we will find ourselves on the cusp of a revolution in the practice of law led by the adoption of artificial intelligence — in particular, by in-house lawyers, according to a post at Above the Law.

“Much like email changed the way we do business every day, AI will become ubiquitous — an indispensable assistant to practically every lawyer,” writes Sterling Miller for Thomson Reuters. “Those who do not adopt and embrace the change will get left behind. Those who do will ultimately find themselves freed up to do the two things there always seems to be too little time for: thinking and advising.”

He predicts that, as CEOs and CFOs get familiar with AI, they will expect the general counsel and legal department to keep up. “In-house lawyers who embrace AI will become more valuable to the next generation of CEOs and CFOs,” Miller writes.

Read the Above the Law article.

The National Association of Corporate Directors’ new article, “Seeing Opportunity in Reputation Risk,” explores how effective board oversight of corporate responsibility (CR) and environmental, social, and governance (ESG) strategies, practices, risk management, and crisis preparedness can not only help manage strategic risk, but also result in enhanced reputation.

The article can be downloaded from the NACD site at no charge.

The following is an excerpt from this article by Jeff Hoffman and Andrea Bonime-Blanc, which appears in the March/April issue of NACD Directorship magazine:

“ESG and CR are frequently not on boards’ radar. When they are, there is rarely sufficient time allocated to their discussion. There are reputation risks and value creation opportunities that can be found beyond what is normally discussed at board meetings. Unfortunately, many ESG and CR risks are unknown to the board until an incident happens and it goes public—and possibly viral. The risks around ESG and CR are generally easy to identify, mitigate, and plan around. While being prepared for the worst-case scenario may take time and effort, it will be far less painful than the alternative: negative headlines and conversations on social media.”

Download the article.

Optimus BT will present a free webinar featuring a comprehensive demonstration of eContracts, an Enterprise Legal Contract Management product for SharePoint, featured in Gartner Market Guide 2017 for legal teams.

Automating Contract Management with SharePoint will be Wednesday, June 21, 2017, at 2 p.m. EDT.

The presentation also will cover why it is important to go beyond your legal contract repositories and invest in a Legal Contract Lifecycle Management solution.

Key topics covered will include:

• Building blocks for automating contract management and legal function within your organization.
• Possibilities presented by Microsoft Azure and SharePoint for Contracts management in the Cloud for processing large volume of documents, Advanced Search & Workflow.
• Demonstrate how Optimus BT’s eContracts can help kick start this journey and address the major pain points due to lack of automation of contract lifecycle.
• Capabilities to look for while automating contract management processes.
• An example of how an IT and legal teams have benefited from automating their contract lifecycle.

Register for the webinar.

Zapproved has published a free guide called “Get In-House Processing and Review Howtos” that can be downloaded from the company’s website.

The guide’s subtitle is “5 Ways to Slash Spending with Cloud E-Discovery,”

“Keeping in-house e-discovery costs in check is a constant balancing act,” the company says on its website. “Complex litigation and regulatory matters — along with pressure to streamline operational spending — create an often expensive e-discovery reality.”

The guide discusses:

• Use modern, cloud-based e-discovery software tools to bring routine e-discovery processes in-house.
• Modernize legacy systems to limit dependence on IT.
• Empower legal teams to slash expenses, improve data security and speed time to resolution.

• Get insights faster by plugging in data processing tools
• Save money by reviewing routine, high-velocity matters in-house
• Improve response to internal investigations and FOIA information requests

Download the guide.

Workplace investigations may be initiated after the employer is accused of wrongful conduct, such as permitting unlawful harassment or discrimination. While an employer may want to reach out to various employees including the alleged victim, doing so can negatively impact the ongoing workplace investigations, warns Natalie Lynch of Lynch Service Company.

Understanding the importance of objectivity while workplace investigations are underway may help the employer shield against potential liability, she advises.

In a post on the company’s website, she discusses the need for clear policies to be in place before any workplace investigation begins, how to respond to alleged misconduct, and the unique concerns that arise with text messages in the context of an investigation.

Read the article.

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Uber has picked an interesting time to shuffle the top ranks of its legal team. points out  Johana Bhuiyan at recode.net.

A company email indicates that CEO Travis Kalanick said he plans to search for an external hire to fill the role. The general counsel search started after Uber moved its  longtime general counsel, Salle Yoo, to chief legal officer.

Uber is facing a federal Department of Justice probe as well as a major lawsuit from Alphabet.

“Given Uber’s myriad of thorny legal issues, along with an ongoing investigation into allegations of pervasive sexism and sexual harassment, that search should be an interesting one for the company to conduct,” writes Bhuyan.

Read the recode.net article.

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LawGeex, a provider of an AI contract review platform for businesses, has launched The In-House Counsel’s LegalTech Buyer’s Guide – a free, downloadable guide that showcases more than 100 must-know technology solutions which solve the daily challenges faced by in-house lawyers.

The book includes practical advice based on dozens of interviews, real life experiences and personal recommendations from in-house lawyers and legal experts who have used technology to cut costs and reduce legal inefficiency. Lawyers came from companies including Pearson, AIG, TabTale, Travelocity, Vodafone, NetApp, Del Monte, Axalta Coating Systems, Tongal and Novartis.

The book includes:

• 60+ page practical and jargon-free reference guide
• 100+ top technology solutions for legal departments
• Personal recommendations and stories from dozens of in-house lawyers and legal experts
• Explanations of an in-house legaltech buying journey, including barriers to adoption, establishing and monitoring KPIs, and more

Download the guide.

Bloomberg Law reports on a survey of nearly 400 managing partners and chairs, finding that the leaders of Big Law firms in the U.S. don’t seem to be very happy with recent changes — or lack thereof — in their firms.

“In response to survey questions posed by legal management consulting firm Altman Weil, 88 percent of respondents said they have chronically underperforming lawyers, 61 percent said overcapacity is diluting their profitability, and 65 percent said their partners resist most efforts to change how to they do business,” writes Stephanie Russell-Kraft. “This comes at a time when most (72 percent) law firm leaders said the pace of change in the legal industry will only continue to increase in the coming years.”

One of the findings is that business is moving in-house, and managing partners recognize that: 67.9 percent of respondents said they are already losing business to in-house legal departments.

Read the Bloomberg article.

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Big Law Business and Catalyst will present a complimentary event in San Francisco, Successful Legal Department Management: Innovation to Control Litigation Costs and Ensure Compliance to discover how today’s top law firms are pairing innovation with technology to move litigation control in-house and on-budget.

The event will be Wednesday, June 28, 2017, 3:30-5:30 p.m. at the Bloomberg LP office at 3 Pier #101 in San Francisco 94111.

Leading in-house and outside counsel will discuss where they believe legal departments face the most pressure and how to successfully transform the management of litigation.

In addition, this event will explore:

• The necessity of developing new and innovative approaches for managing departments to keep litigation costs low
• How to prepare teams, departments and businesses to identify the benefits of technology
• How to effectively prepare for litigation, from initial investigations to trial

Register for the event.

Bloomberg BNA and World Services Group are partnering to deliver business intelligence, drawn from market-leading news and data analysis, tailored for the advisers of international business.

The forum will be at Bloomberg LP’s office at 120 Park Ave., New York 10017, on Tuesday, June 20, 2017. A pre-forum briefing will be 1-3 p.m., and the forum will be 3-5 p.m.

The Cross-Border Deals Forum will explore strategies for handling business and regulatory challenges impacting the industry, including:

• Tax reform, trade agreements, and policy shifts;

• Cross-border risk assessment;

• Expanding privacy and data security requirements; and

• Market and industry opportunities to watch.

Connecting deal-makers with a global group of peers and actionable insights, the Cross-Border Deals Forum covers the market shifts, opportunities and long-term trends executives are watching, and the political and regulatory changes affecting cross-border success.

Request an invitation.

Matt Kelly of Radical Compliance writes about a new report from the Society of Corporate Compliance & Ethics finds that most chief compliance officers don’t review incentive-based compensation for possible misconduct risk.

He calls this an alarming conclusion, since incentive pay is often what causes misconduct in the first place.

“According to the report, which surveyed more than 400 compliance professionals, only 23 percent have opportunity to review management incentive plans before senior executives approve those plans; another 8 percent could review the plans after approval,” he writes. “A whopping 52 percent said they never review management incentive plans at all.”

Read the article.

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