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.

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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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.

Image by Adam Tinworth

The hard-charging, take-no-prisoners corporate culture exhibited by Uber and his brash CEO is now seen as the company’s biggest liability, reports The Los Angeles Times.

Co-founder and Chief Executive Travis Kalanick announced Tuesday that would take an indefinite leave of absence.

Reporter Tracey Lien writes that Kalanick took responsibility “for where we’ve gotten and how we’ve gotten here.”

He wrote the statement in a memo to employees, “acknowledging a humiliating year in which the company was accused of mishandling the medical records of a passenger who was raped by an Uber driver in India, using trade secrets allegedly stolen from a Google-owned self-driving car firm and covering up claims of sexual harassment,” according to Lien.

Read the LA Times article.

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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.

Bloomberg reports that MetLife Inc. General Counsel Ricardo Anzaldua is stepping down after he helped win a court battle that reversed the government’s designation of the insurer as too big to fail.

Anzaldua will be on the job until the end of June, and he’ll continue to advise Chief Executive Officer Steve Kandarian through the end of the year, the CEO said Thursday in a memo to staff.

“Under Anzaldua, MetLife was the only company to go to court to fight the designation by a government panel as a non-bank systemically important financial institution,” reports Katherine Chiglinsky.”General Electric Co. sold assets to shed its finance unit’s SIFI status. And American International Group Inc. said that the label, which can bring increased regulation and tighter capital rules, wasn’t a big deal.”

Read the Bloomberg article.

BloombergBusinessweek reports on the story behind the accountant who might end up the best-paid whistleblower of all time, with a potential paycheck of $600 million, while Caterpillar, the 92-year-old pride of American industry, will experience something unfamiliar: public humiliation.

“In a 2011 deposition, a Caterpillar attorney asked [accountant Daniel] Schlicksup if his actions threatened to hurt shareholders. write Bryan Gruley, David Voreacos and Joe Deaux.

“It is absolutely in the shareholders’ best interests to have the most accurate financial statements they can have,” Schlicksup replied. “I don’t think that the shareholders of Enron would think it would have been such a bad deal if somebody would have caught that before it bankrupted the company and they lost everything they had.”

Read the BloombergBusinessweek article.

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Barnes & Thornburg LLP has added Richard Kaye to its Atlanta office as a partner in the Corporate Department, where he works on domestic and international transactions.

In a news release, the firm said Kaye focuses on commercial and corporate law and represents multinational corporations, governmental entities, and emerging growth companies. He advises clients on domestic and cross-border M&A transactions, real estate, franchising construction, foreign investment, joint venture and partnering agreements, commercial contracts, and commercial and trade transactions, among other complex matters.

“Rich has a strong transactional practice in the U.S. and we can parlay his international experience when working with European and Asian clients with respect to their operations here,” said Stuart Johnson, managing partner of the firm’s Atlanta office. “He will nicely complement our corporate and M&A capabilities in this market and across the country.”

Prior to joining Barnes & Thornburg, Kaye was a member at Sherman & Howard LLC. His arrival comes on the heels of Robert Lockwood, a partner in the Intellectual Property Department, who joined the Atlanta office earlier in the year.

Beyond his law practice, Kaye is a member of the Advisory Board of Metro Atlanta Chamber and a member of the Georgia Economic Developers Association. He is former chair of the American Bar Association’s International Commercial Transactions, Franchising and Distribution Committee.

Kaye earned his J.D. from Emory University School of Law and his B.A. from the State University of New York at Stony Brook and also studied at the University of Paris IV, Sorbonne. He is admitted to practice in the state of Georgia and before the Georgia Supreme Court, the Court of Appeals of Georgia, the U.S. District Court for the Northern and Middle Districts of Georgia and the U.S. Court of Appeals for the Eleventh Circuit.

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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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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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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.

Institutional asset managers carry enormous clout across corporate America. So it’s unfortunate that so many of these managers choose to support the status quo for boards, even when investors are ill served, points out The New York Times.

As an example, writer Gretchen Morgenson, discusses the case of Arconic, the industrial metals company that spun off Alcoa in November. Some of its directors are facing a proxy challenge to be decided at the company’s next annual meeting.

Giant hedge fund Elliott Management is behind the challenge, following years of declining sales, rising losses and a subpar stock performance at Alcoa.

As Morgenson explains, “The structure of Arconic’s board — and Alcoa’s before it — is investor-unfriendly. It is what’s known as a classified board, in which directors’ terms are staggered, protecting them from being voted out en masse.”

Read the NYT article.

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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San Francisco Business Times is reporting that Uber fired two of its lawyers late last year after they sought advice from other law firms, a move Uber reportedly considered a fireable offense.

Reporter Alisha Green follows up on a report from The Information that says the lawyers reached out for input on proposed policy changes at the San Francisco-based ride-hailing giant related to how long internal documents and company data are retained. The firings were “followed by the departure of three other lawyers over the next few months.”

The article continues:

The unrest in Uber’s litigation team was apparently sparked by a proposal from Uber’s general counsel related to “how the company handles corporate documents and other company data,” according to The Information.

“The two lawyers had expressed concerns to some colleagues about the new policy, according to two people briefed about the issue. The specific concerns couldn’t be learned. The lawyers contacted several outside law firms to solicit an opinion about the proposed policy, a move that Uber deemed to be a breach of their responsibilities to the company, these people said.”

Read the SF Business Times article.

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In its new Study of Effective Legal Spend Management, Exterro reveals how more than 50 in-house legal decision makers are leveraging new strategies for reducing legal spend at their organizations.

More than 20 legal spend management techniques are analyzed and compared against one another, giving readers the needed insight for effectively minimizing legal costs within their own legal departments, the company says on its website.

The study provides:

• Insight on how leading legal departments are managing spend and controlling costs
• Survey results on frequently asked legal spend questions
• New strategies for controlling your legal spend at your organization

Download the complimentary report.

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DLA Piper recently announced that Paul Wassgren has joined the firm’s Corporate practice as a partner in Los Angeles.

Wassgren advises a array of clients, from individual entrepreneurs to domestic companies to multinational and publically traded corporations on securities, project and real estate finance, mergers and acquisitions and general corporate matters.

“Paul’s impressive domestic and international experience and familiarity with corporate law across multiple jurisdictions will provide value to our clients,” said John Gilluly, DLA Piper’s US chair of the Corporate practice. “Paul is a great addition to our global platform, and given his work in Los Angeles over the past several years, he’ll also further strengthen our growing West Coast team.”

Prior to joining DLA Piper, Wassgren was a partner at Fox Rothschild LLP in Los Angeles, where he counseled clients doing business around the world, including China, Australia, Mexico, Belize and India, in a range of corporate matters. He also previously worked in business development for a biotechnology research and development company.

“Paul has developed an extensive network of relationships, in the Southern California region, as well as nationally and internationally, that will enable us to better serve clients in a wide range of industries and matters not only in Los Angeles but on our global platform,” said Perrie Weiner, co-managing partner of DLA Piper in Los Angeles. “We believe his background in biotechnology, real estate and securities, among others, not only complements our existing practice groups but will further enhance what is an already strong Corporate group in California.”

Wassgren’s arrival follows the additions of corporate partners Michael Brown (San Diego) and Brandee Fernandez (Silicon Valley) in California in the past several months.

Wassgren received his J.D. and M.B.A. from Oxford University, and his B.A. from Pepperdine University.

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