There’s scores of people out there busy preparing for tomorrow’s Cinco de Mayo celebrations, totally unaware that Law Day was just celebrated in the US on May 1st, for the fifty-seventh consecutive year. While it doesn’t involve sipping margaritas or wearing a festive sombrero, Law Day has its own unique importance.
President Eisenhower established this national holiday to honor the notion that the United States was founded on the rule of law as a “safe, free and just society” (Strong, 2015). This celebration of the roots of our nation is traced back to the Margna Carta of 1215, which celebrates its eight hundredth anniversary in 2015. The ABA has a webpage dedicated to the importance of the Magna Carta, which boats that the influence of its “story of modern constitutional government and its associated rule-of-law values” is still continuing and relevant today (ABA, 2015).
The blog written by Frank Strong reminds us that the Magna Carta’s key principles utilized in the founding of our nation’s democracy include:
No taxation without representation
Right to a fair trial
No one is above the law – not even a king
So it’s very fitting that on Law Day, this past May 1st, those of us in the legal profession celebrated not only the rule of law in our government’s founding, but also the Magna Carta’s eight hundred year long history.
“Foreign bribery is not an acceptable way of doing business, and we won’t tolerate it.” (Maye Brown LLP). This statement by Lanny Breur in 2010, the Assistant Attorney General for the United States, strikes at the heart of the FCPA, or the Foreign Corrupt Practices Act. Competing internationally for business, it is commonplace for companies to issue bribes in order to beat out their competitors, and in some areas of the world, it’s often expected. However, this practice is illegal for US companies, and it is the responsibility of a corporate legal department to educate executive management as well as employees on the dangers and consequences of such illegal activities.
This slide share put together by Michael Volkov of Mayer Brown LLP discusses the many important point of the FCPA legislation, and what corporate counsel must consider in ensuring its company complies with the Act.
It’s important to take away from this that enforcement of the FCPA by the Department of Justice (DOJ) and FBI are on the rise, and companies must be vigilant in their compliance in order to avoid substantial fines and even jail time. It is the job of corporate counsel to ensure that:
employees understand the breadth of the FCPA rules in order to comply
accounting and finance departments are keeping accurate books and records, adequate internal controls
wholly-owned international subsidiaries also comply with the FCPA
report any violations through voluntary disclosures
Major violations and resulting fines have crippled large companies. Corporate counsel must help steer the company clear of such pitfalls.
Trade secrets have always been a valuable piece of a company’s competitive edge. Defined as information that derives independent economic value from not being generally known and a reasonable effort is undertaken to maintain its secrecy, it is often the responsibility of corporate general counsel to take measure to ensure trade secrets remain secret (Cornell University Law School). The following slide slide introduces this concept, identifies who often keeps trade secrets, and how corporate counsel can mitigate the risk of trade secret exposure.
Using non-disclosure agreements, non-solicitation agreement, non-compete agreement and the inevitable disclosure doctrine, corporate counsel can use its best efforts to ensure that company secrets remain within the company, and the company’s competitive edge is intact and viable. It’s essential a company’s legal department acts as the front line of protection and defense against disclosure of company secrets.
Staying honest isn’t always easy in business, and even the most careful general counsel can find itself caught up in an ethical debate. One of the major functions of an in-house corporate counsel is to provide the moral compass for its company, and to ensure the company’s business dealings remain on the right side of the law. It is often a chief objective when reviewing and negotiating contract language to avoid litigation opportunities. However, there are plenty of gray areas when ethical concerns may come into play. Here’s an introduction to just a few of the hot issues of corporate counsel ethics:
First – it’s imperative to understand who the actual client of in-house counsel really is. Is it the company as a whole? Its officers or directors? Employees? Subsidiaries? In-house counsel only has one client – the company. Circumstances may develop where corporate counsel needs to make it clear to an employee or officer that it represents the best interests of the company, not individuals employed by the company. Becoming embroiled an ethical conflict concerning a conflict of interest between the company and an individual officer or employee could lead to a violation of state bar rules (Stagg, 2013).
Second – there is an obligation to protect the confidential information of the company. This duty of confidentiality extends to all information related to the representation of the company. For instance, in a state like California, general counsel may report a legal violation to executive management, but if the company continues to violate the law, general counsel may still not disclose its knowledge outside the company (Santon, 2010).
Third – E-discovery and litigation holds, which occur when litigation is either foreseeable or actually commences, can be extremely controversial within a company. Issuing and monitoring litigation holds are part of corporate counsel’s duty to provide competent representation under ABA rules (Stagg, 2013). General counsel must not only issue the hold, but ensure the company is identifying and preserving all discoverable information. This may lead to the preservation of incriminating evidence against the company, but doing otherwise would violate the law (Santon, 2010).
This brief clip discusses litigation hold and the duties of corporate counsel in more depth:
Are legal operation professionals on the rise? Historically, in-house corporate legal departments, or corporate counsel, are compromised of attorneys, paralegals, or other support staff administrators, who duties and responsibilities revolve around drafting, reviewing, negotiating and executing the commercial or government contracts that dictate the company’s business. Their role in minimizing a company’s risks and liabilities, identifying added costs, and protecting the company’s interests is what makes an effective in-house legal team so invaluable. However, scrutiny on best-business-practices for corporate legal departments has long been ignored.
This video overview, sponsored by TaTa Consultancy Services, pulls content from a conference introducing the impact of legal operations:
Connie Brenton, in her article last year, highlights that “progressive systems for creating compelling visions and goals, hiring, training and retaining talent, building powerful cultures, operating efficiently and measuring performance” has historically been lost on in-house corporate counsel (Brenton, 2014). In the last few years, the legal industry has seen a dramatic increase in the employ of legal operations professionals in larger corporate counsel departments, in order to create the effect of running more like a business. Brenton goes on to identify the catalysts for this trend as pressure to minimize overhead costs, the arrival of tools and resources such as reporting software, and the development of service businesses that supply people and processes in support of legal operations.
The Association of Corporate Counsel (ACC), a major influence driver in the world of corporate legal teams, created a new membership chapter in March 2015, for Legal Operations. Its vision is to encourage the intensifying growth of legal operations by offering resources, conferences and forums on this innovative functions within law departments, and how this role impact the management of in-house corporate counsel (ACC.org). This new initiative by ACC only drives home the growing significance of legal operations within larger corporate counsel departments, and makes it clear that this is not a passing fad. ACC’s President and CEO Veta Richardson stated that “In today’s corporate environment, driving value is a top priority, and legal operations professionals are at the forefront of leading these initiatives to run the law department more efficiently and effectively,” (Calve, 2015).
The hype surrounding the value-added role of legal operations seems to be evidence that corporate legal teams are being swept up into the sophistication of streamlining business, creating more value, and minimizing overhead costs. It could be time to consider whether your corporate legal team warrants best-business-practice improvement and could benefit from a legal operations professional.
Many people think of a contract with a grimace or shudder…Page after page of high-level, often confusing terms and conditions that may as well be written in hieroglyphics. More often than not, an individual not well-versed in contractual prose will just sign the document rather than go through the torture of reading all those fine-print clauses. However, for the staff of a corporate legal team, the job starts and ends with contractual terms & conditions, with the goal of signing a mutually beneficial agreement that protects the interests of the company. To achieve that end result, there is an art to negotiation, to ensure the company ends up with a deal they can live with.
Here’s some of the “do not’s” of negotiating a contract:
Don’t involve feelings, only facts: It’s imperative when negotiating to leave emotions out of it. Occasionally, the other party to negotiations may be aggressive, brusque or unwilling to compromise – but it is essential to remain professional and poised (Brodow, 2015).
Don’t make demands: If the other party takes a hard-line on an issue in contention, it may prove more successful to ask why they are taking that particular stance, which can lead to a more productive discussion. Demands are often met with demands, and builds frustration while hampering the negotiation process (Stim, 2015).
Don’t sweat the small stuff: You may have a arm’s length wish list of changes and modifications to an agreement, but most often, risk and revenue are the two single-most important concerns when negotiating. Be prepared to let go of less impactful issues in order to stay focused on winning changes for more material concerns (Stim, 2015).
Never bluff: Contract clauses can be extremely complex, but never pretend otherwise if a legal or practical nuance is not fully understood. Ask someone more senior in your legal department to read it over, or ask the other party to clarify their intentions in drafting the specific language. Otherwise it’s likely the other party will know that you’re missing the point, and while you lose credibility, you also hurt the negotiation process.
Avoid compromising with vagueness: At times, the easy way out on a point of disagreement is to craft an intentionally ambiguous clause in which both parties can rely their own interpretation of the language. This doesn’t solve the issue, and can create larger problems during contract performance. It’s better to get it right the first time.
While these tips are vital to effective contract negotiation, there are scores of negotiation styles and tactics. It’s important to remember you will often be building long-term business relationships with most of your counterparts, so mutual respect and professionalism, as well as achieving your contract objectives to set precedent, are paramount.
This online webinar from ICF International below delves into the nuts and bolts of contract negotiation. Tune in if you are interested in a more detailed overview!
Women’s History Month celebrates all women, allowing a special time to focus on the women of the past, present and future that have had an impact on humanity in some way. Equal pay for women has become a revisited and trending topic recently, and a reminder for men and women alike that a gap to be bridged remains for equality in the workplace. The legal profession was long dominated by men, and scores of women over the past hundred years or so have trail blazed to change that. Let’s take the time to remember and celebrate a few of those important women this month! (Courtesy of: http://www.twwlawfirm.com/wp/wp-content/uploads/2014/03/Belle_Mansfield-300×300.jpg)
• Arabella Mansfield:(Seen in the picture above) In 1869, she became the first female lawyer in the United States, after passing the Iowa bar. This event actually drove Iowa to be the first state to change its legislation to allow woman into its bar (Britannica.com).
• Belva Lockwood: Earning her law degree in 1873, Lockwood became the first woman to argue a case before the Supreme Court through special legislation. She also successfully lobbied to pass a law giving female federal employees the same pay as males (Biography.com). (Courtesy of: http://cdn.theatlanticwire.com/img/upload/2012/02/13/womenscotus.jpg)
• Ellen Mussey & Emma Gillett:(Seen together in the above picture) These women were pioneers in the field of women’s rights to legal education. Together Mussey and Emma established the first co-educational law school specifically open to women. In April 1898 the Washington College of Law (now part of American University) was incorporated as the first law school in the world founded by women. Mussey and Gillett also founded the Women’s Bar Association of the District of Columbia in 1917, one of the first organizations for female lawyers in the US (American University, 1996).
• Sandra Day O’Connor:(Seen in the picture above) O’Connor became the first female justice on the US Supreme Court in 1981 and served twenty-five years before her retirement in 2006 (Biography.com).
• Janet Reno: In 1993, Reno became the first US Attorney General, with President Clinton’s nomination (WIC.org).
• Elena Kagan: Kagan became the first woman to officially serve as US Solicitor General in 2009, and notably was also the first woman appointed as Dean of the Harvard Law School (Biography.com).
• Julia Hanft: My boss! Currently acting as corporate General Counsel and Senior Vice President of Legal/Contracts for a global telecommunications company (and the only female SVP of the company). She is one of the many female lawyers today who are mentoring and advocating for young women in the legal profession. Small differences made by many can have an incredible impact!
Beware patent trolls: House Judiciary Committee Chairman Bob Goodlatte (R., Va.) reintroduced a controversial intellectual property bill last week that was pulled last year before going to the Senate floor. If the bill passes this time around, it could significantly discourage what is widely perceived as abuse of patent-litigation.
There are several elements of the legislation that litigation much more challenging for plaintiffs. The bill would require the courts to determine early on whether a patent is invalid, and it would delay the expensive discovery process until the courts have interpreted the patent as well (Kamdar, 2015). Going further, the legislation would compel plaintiffs to disclose the owners of a patent before their lawsuit is filed, as well as account for their rationale for suing a specific defendant in their court pleadings. It also requires the courts to stay patent litigation against customers when there is parallel litigation already ongoing against the manufacturer (Crouch, 2015).
The real piece of controversy – the bill obligates the party bringing a lawsuit that is “not reasonably justified in law and fact” to reimburse their opponents’ legal fees (Crouch, 2015). This is seen as a significant discouragement to those dragging out patent lawsuits just for the sake of forcing a settlement, which many companies go as far as to call this longstanding trend extortion.
While there is a slew of supporters amongst the IT, software and computer industries for legislation this far-reaching, there are vocal dissenters who believe the Innovation Bill goes farther than necessary to deter unnecessary litigation in the patent world. Where you are for or against it, there’s no arguing – this legislation will have quite the impact if enacted.
To learn more about the impact of “patent trolls”, check out this interesting TedTalk by Drew Curtis:
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