Kevin LaCroix, writing in The D&O Diary, discusses a recent scholarly article that takes a detailed look at director and officer claims arising out of allegations of sexual misconduct.

The University of Chicago Law School article examines the potential bases of liability, and considers the relative social utility of this kind of litigation, as well as the practical implications for corporate boards and their organizations.

LaCroix writes: “The authors conclude that ‘in some instances, corporate fiduciaries will indeed be liable to shareholders when workplace-sexual misconduct occurs at companies.’ In light of this conclusion, it would be prudent for companies and their executives to take steps to reduce their potential exposure to these kinds of suits.”

Read the article.

Kim Technologies will present a complimentary webinar, “Automating with a Legal Ops Platform vs Siloed Product Solutions,” on May 3, 2018, beginning at 1 p.m. EDT.

“The benefits of a unified software platform over multiple siloed products are clear,” the company says on its website. “Who wouldn’t want to keep all their data in one place; search and report on anything at the click of a button; provide a seamless user experience across the entire department or organization? Traditionally, this ‘holy grail’ has taken huge amounts of time and money to implement and maintain, and has rarely been an option for Legal. Instead, most law departments and law firms have organically grown a hodge-podge of software siloes that create an obstacle to innovation, efficiency and transparency.”

This webinar will cover:

• Global AI market update
• Preparing for the Age of Data
• Platform vs Product and why it matters
• To code or not to code, that is the question
• Automating workflows, documents and dashboards in hours, with no IT support!
• Q&A session

Register for the webinar.

When Michigan State University head lawyer Robert Noto — under fire for his leadership in the Larry Nassar sexual assaults scandal — retired in February, he did so with a generous payout worth more than $430,000, reports the Detroit Free Press. That’s more than a year’s salary for Noto.

Noto, who had been with the university since 1995, resigned about a month after MSU Trustee Brian Mosallam called for his immediate resignation.

Reporter David Jesse writes that Noto received:

• Six months of his $403,100 annual salary. That’s $201,550.
• Payment for 151 unused vacation days. That’s $234,110.
• The use of an university-owned car through Sept. 5. He also gets computer support from the university for the same time period.

Read the Free Press article.

An article published by Zapproved breaks down the results and explains the benefits of replacing an existing system — or lack thereof — with automated, cloud-based legal hold software.

The article can be downloaded at no charge.

Research results demonstrate a real rate of return on investment generated by automated cloud-based legal hold software, the company says on its website.

“E-discovery is expensive, but the risks of not handling it are even more costly,” Zapproved says on its website. “Many legal teams tend to focus their cost-reduction efforts on later phases of discovery, such as processing and review, overlooking the benefits of optimizing the preservation process. Yet putting in the effort to preserve and collect the right data has a trickle-down effect, saving money and time in every step that follows while minimizing potential spoliation. The question is, just how much can you save with effective preservation?”

Download the article.

The Association of Corporate Counsel is conducting the new 2018 Global Compensation Survey — the largest self-reported compensation survey within the in-house counsel profession in the world.

This groundbreaking global study of salaries and total compensation will provide in-house counsel and legal operations professionals with the data they need to benchmark pay and benefits.

Participants who complete the survey will receive 25 percent off the report when published.

Take the survey

Anyone ruminating over the elevated role of in-house lawyers might consider the case of Facebook, points out Elizabeth Olson in a Bloomberg Big Law Business report.

She writes that the company’s top two lawyers, Colin Stretch and Paul Grewal, have played both lawyer and spokesperson as the social media giant confronts a dizzying number of legal issues, which are besieging the Wild West of data privacy at tech companies.

“As tales of data misuse spilled into the open, Grewal, a former federal magistrate, took to social media to staunchly defend his employer. His blog posts filled the void created by the initial silence from CEO and founder Mark Zuckerberg and other top company brass. No doubt everyone in the company will be working overtime to stem billions in losses in recent days,” predicts Olson.

Read the Bloomberg article.

A magistrate judge in the U.S. Western District of Texas has disqualified a former counsel to Rolls-Royce from representing a client in litigation against his former employer, reports Bloomberg Law.

“Donald Little represented Rolls-Royce as in-house counsel from 1997-2008 and as outside counsel in a 2010 case where Rolls-Royce was alleged to have made false statements about ‘suspect’ airplane parts,” explains reporter Mindy L. Rattan. “Rolls-Royce hired George Gage as an expert in that case.”

Then, when Gage sued Rolls-Royce North America Inc. in a qui tam case that involved the explosion of a U.S. Air Force plane, Little represented him.

The magistrate judge who heard the defendant’s motion to disqualify Little said it was “stunning” that Little took that position.

Read the Bloomberg article.

Image by Elliott Brown

Before the top corporate lawyer at Uber Technologies departed last year, she sought a $100 million exit package, reports Business Insider.

Salle Yoo joined Uber as its first general counsel in 2012 and was later promoted to be its chief legal officer, leading the company’s 290-person legal department during a tumultuous time. She resigned in September 2017.

Reporter Julie Bort explains: “Yoo thought [the exit package request] only fair because she had seen male executives ask for and get huge exit packages, and she had spent her career at Uber encouraging women to lean in. So she took her own advice, opened her negotiations with [former CEO Travis] Kalanick by shooting high, and held her breath.”

She and Kalanick negotiated a compromise: less than two-thirds her original demand, but with a kicker: If Uber gave a better severance deal to another employee, it had to match the difference for Yoo.

Read the Business Insider article.

Zapproved has published “Audit Trail Checklist: Set Yourself Up for Success,” a guide that presents five steps to a defensible legal hold audit process.

The guide can be downloaded from Zapproved’s website at no charge.

“Litigation is inevitable — and all too often, so are accusations of lost, destroyed or withheld evidence,” the company says on its website. “Yet many companies aren’t prepared. They may not have a clear record of when a legal hold was issued or who received it — meaning they have to scramble to put notices together when litigation arises. Out-of-date legacy systems of complicated spreadsheets or confusing email read receipts are expensive, time-consuming and risky.”

Zapproved’s audit trail checklist provides five simple steps to create a customized litigation response plan. It includes an outline of where to start, which is where discovery obligations begin, with the Federal Rules of Civil Procedure. It goes on to discuss tips on assessing your current approach and selecting automated, cloud-based tools based on today’s best technologies. The guide also includes suggestions on how to get a team on board.

Download the guide.

Affirming a jury verdict, the U.S. Court of Appeals for the Sixth Circuit found that ten weeks of telecommuting was a reasonable accommodation for a pregnant lawyer put on bed rest, reports Manatt Phelps & Phillips LLP.

The Manatt article explains:

Due to complications from pregnancy, in-house counsel Andrea Mosby-Meachem was put on bed rest. Pursuant to the Americans with Disabilities Act (ADA), she requested to work from home during that period. Memphis Light, Gas & Water denied the request, taking the position that in-person attendance was an essential function of her job. Mosby-Meachem sued, and a jury awarded her $92,000 in compensatory damages on her claim of disability discrimination. The employer appealed, but the federal appellate panel upheld the verdict. The plaintiff presented sufficient evidence for a reasonable jury to conclude that in-person attendance was not an essential function of her job for the ten-week period she requested to work from home, the court said.

Read the article.

Exterro has published a  comprehensive guide to the e-discovery software purchasing process, which can be downloaded from the company’s website at no charge.

In the guide, three in-house e-discovery experts share their experiences leading e-discovery procurement and implementation projects. Using a series of critical questions that a software purchaser must ask and answer, they explore the steps that should be taken when facing a similar challenge.

The guide includes:

• 6 simplified steps for starting your e-discovery software buying process
• Key insight from 3 in-house legal professionals who have already gone through and refined their buying process
• A product agnostic, purely educational guide for successfully navigating the e-discovery software buying process

Download the guide.

The National Association of Corporate Directors has published an article titled “The Innovation Era’s Implications for Boards,” which available for downloading free of charge.

The article, from NACD Directorship magazine, suggests five steps for boards and executives to become better versed in cutting-edge technologies—including combinations of new technologies—to create totally new business categories. These five steps are summarized below.

1. Create a technology learning plan.
2. Assess advanced technologies and their potential impact on your business.
3. Elevate board skills and competencies.
4. Reconsider which companies might be future competitors.
5. Identify internal and external experts.

Download the article.

Image by WhisperToMe

Regal Entertainment’s ex-CEO took home a $14.6 million payout when she and the Knoxville-based theater chain’s other top executives resigned this week, reports Know News, a part of the USA Today network.

Reporter Matt Lakin writes that a report filed with the U.S. Securities and Exchange Commission lists the severance packages awarded to Amy Miles, Regal’s CEO since 2009, and three others.

One of those, general counsel Peter Brandow will receive a $1.04 million payment and an $1.1 million bonus, for an ultimate total payout of $4.7 million. He’d been general counsel since 1999.

“The four bowed out under the terms of Regal’s merger with UK-based Cineworld Group PLC, which became final Wednesday,” writes Lakin.

Read the Knox News article.

The Association of Corporate Counsel has set the agenda for the 2018 ACC Mid-Year Meeting, which will be in Denver April 22-24.

The ACC is promoting two special sessions: “Advanced Ethical Issues in Negotiating and Drafting Contracts” with Clara Ohr, general counsel for East Coast Power & Gas, LLC, and a presentation by Gary Kennedy, former CLO of American Airlines and author of “Twelve Years of Turbulence: The Inside Story of American Airlines’ Battle for Survival.”

Three major components of the meeting will focus on:

• Contracts: Learn advanced drafting and negotiation techniques and tools that drive contract performance, mitigate risk, and meet rapidly changing needs of your organization.
• Mergers and acquisitions: Knowing business—and your company’s business, specifically—will make you an immensely more valuable business partner as your company navigates complex corporate transactions.
• Business training: Business management is the #1 non-legal skill desired by CLOs for their lawyers. Boost your business acumen through academic-taught live and on-demand sessions on key finance, accounting, and emotional intelligence concepts.

Get more information.

The National Association of Corporate Directors has published its 2018 Governance Outlook and made it available for downloading at no charge.

The report provides perspective on the trends, issues, and risks that will command the board’s attention this year.

“Perhaps the biggest challenge for directors right now is deciding where to focus their attention,” the NACD says on its website. “Both risks and opportunities are proliferating at a bewildering pace. How can boards and directors make the most of their limited time?”

The report includes:

• a summary of directors’ priorities from the 2017–2018 NACD Public Company Governance Survey;
• an assessment of the future of risk management from Grant Thornton LLP;
• a look at the forces driving change in board composition and succession;
• an alert to an often-overlooked liability risk: failing to reveal pertinent information;
• new trends in D&O exposures; and
• insight into workforce disruption, cyber-risk reduction, and other risks.

Download the report.

A Texas jury found State Senator Carlos Uresti guilty on 11 felony charges — including fraud and money laundering — for his role as general counsel for a now-bankrupt oilfield services company that perpetrated a Ponzi scheme against its investors.

The Texas Tribune reports that Uresti could face a long prison sentence and fines amounting to millions of dollars.

“Uresti was charged last year in connection with FourWinds Logistics, a now-bankrupt oilfield services company that perpetrated a Ponzi scheme against its investors,” reports Emma Platoff. “Uresti served as general counsel for FourWinds and owned 1 percent of the company. He also earned commission for recruiting investors, according to court documents.”

Read the Tribune article.

FTI Consulting, Inc. announced findings from its Technology segment’s 12th Advice from Counsel study of e-discovery, information governance (IG), privacy and security trends. The study explores how issues of data security and privacy impact in-house legal teams at Fortune 1000 corporations and reveals the top concerns and emerging best practices across three key and intersecting topics: the General Data Protection Regulation (GDPR), IG and data security and remediation.

“A clear and recurring theme is that in-house legal teams are under greater pressure to meet ever-changing and increasing data-related challenges,” said Chris Zohlen, a managing director in the Technology segment at FTI Consulting and co-author of the study. “This year’s Advice from Counsel study shares their practical advice on a range of topics, from securing executive buy-in to benchmarking against peers or auditing the security practices of service providers.”

Data privacy, security challenges and threats were top priorities for virtually every large organization around the globe. Respondents had dozens of suggestions for proactive ways to address IG and data protection, including addressing the human element and creating a culture of awareness in achieving strong security. While billions of dollars have been spent on technology to strengthen security, several participants said that they do not believe their organizations are safer than they were five years ago, because the human element has not been adequately addressed. Other organizations reported working with outside experts to focus equally on implementing technology solutions and creating a culture of awareness to address continually evolving data privacy and security challenges.

Additional key findings and takeaways in the study include:

• The investment required to ensure GDPR compliance was a top concern among the 80 percent of organizations that confirmed they will be impacted by the regulation. However, they were divided on whether they should wait to see how the regulation will be enforced before acting, vs. working to get ahead of penalties proactively.
• For those evaluating an IG strategy to better protect data, respondents agreed on the importance of seeking outside experts. They repeatedly made clear that data security is an area that is evolving quickly and teams need to work with technical experts to stay apace and handle it effectively.
• The growth of cloud storage and machine learning is making it easier for organizations to identify trends and realize monetary benefits from enterprise data. Finding the right balance between Big Data and over-preserving is a common challenge. Organizations know they are creating and saving too much data, and more than half of respondents reported successfully conducting data remediation projects. Others were hampered by limited resources, lack of engagement from cross-department teams or failure to obtain C-level buy-in to move projects forward.

“In today’s business climate, all organizations are challenged to better protect enterprise data, which is a complicated effort that requires dedicated resources across multiple departments,” said Jake Frazier, Head of the Information Governance, Privacy & Security practice and a senior managing director in the Technology segment at FTI Consulting. “Overcoming the initial barriers of securing buy-in and approval from top company leadership can be overwhelming but will make all the difference in setting projects up for success from the outset. Our clients and the respondents in the Advice from Counsel study have found that working with internal and external partners to conduct data protection assessments, identify priorities and execute a plan custom-built for the company’s risk profile are the most effective steps to address budget issues and the broader landscape of challenges.”

About the study
For the past nine years, FTI Technology has partnered with Ari Kaplan Advisors to publish the annual Advice from Counsel study, a quantitative and qualitative view into e-discovery best practices for corporate counsel. The study was conducted through phone interviews with 30 in-house lawyers at Fortune 1000 corporations with responsibilities that included some aspects of e-discovery and information governance. Of this year’s participants, 79 percent develop and implement e-discovery processes while 89 percent develop and implement information governance processes. Eighty percent of participating organizations had total annual revenues greater than $5 billion and 67 percent had over 10,000 employees. In terms of litigation events over the past 12 months, 33 percent reported managing 100 to 500 litigation events, and 33 percent reported managing more than 500 litigation events.

A general counsel who failed to complete his continuing education requirements, leading to his suspension from law practice in Ohio, has received a two-year stayed suspension because of his legal work for his Florida corporation, according to the ABA Journal.

Brian Allan Maciak is general counsel for TBC Corp., the parent company for Midas and National Tire & Battery Auto Centers.

Reporter Debra Cassens Weiss explains: “A hearing panel of the Ohio Board of Professional Conduct determined that Maciak engaged in the unauthorized practice of law in Florida beginning in 2009, when he first started work in the legal department of a TBC company. He was promoted to senior vice president, general counsel and secretary of TBC Corp. in 2012. Florida requires a general counsel to be a member of the Florida Bar or to be certified as an ‘authorized house counsel,’ but Maciak didn’t obtain certification until 2015.”

Read the ABA Journal article.

The Association of Corporate Counsel has released the new ACC Chief Legal Officers 2018 Survey, a study of the issues and environment in which chief legal officers (CLOs) operate, based upon feedback from nearly 1,300 CLOs in 48 countries.

The report can be downloaded for a fee, and a free executive summary is available.

Notable findings include what keeps CLOs up at night, reporting structures, how CLOs view the future of departmental budgets and staffing, litigation and contract workload, and where data breaches and regulatory issues have the greatest impact.

The 2018 report includes an executive summary, key findings, global and industry benchmarking metrics, and an in-depth question-by-question analysis. Key metrics include:

• Legal department spend by company revenue
• Internal, external, and total spend as a percentage of revenue
• Legal department staffing numbers (including lawyers, paralegals, legal operations and administrative professionals)
• Matters handled by the legal department (litigation, compliance investigations, contracts)
• Data breaches, regulatory investigations and patent trolls

Download the report.

Image by US Dept. of Justice

Rachel Brand, the U.S. Justice Department’s No 3 official, is leaving for the top legal job at Walmart, reports the Associated Press.

“Brand attracted interest because of her potential to assume a key role in the Trump-Russia investigation,” according to the AP. “The official overseeing the special counsel Robert Mueller’s investigation, the deputy attorney general Rod Rosenstein, has been repeatedly criticized by Trump. If Rosenstein had been fired or quit, oversight would have fallen to Brand. That job would now fall to the solicitor general, Noel Francisco.”

Walmart sought Brand to be head of global corporate governance at the retail giant.

Read the AP article.