Trade Secret Implications of Facebook’s Frances Haugen’s Testimony: Do NDAs Protect Trade Secrets Against Whistleblowers?

This month, Facebook whistleblower Frances Haugen publicly revealed her identity on CBS’ 60 Minutes and testified before a Congressional subcommittee on the matter. Ms. Haugen was formerly a member of Facebook’s civic misinformation team, and in a series of reports to the Securities and Exchange Commission, she detailed Facebook’s ongoing illegal and unethical business practices. These include prioritizing profit over the safety of users, repeatedly lying to investors and amplifying the January 6th Capitol Hill attack on their platform. As a result, lawmakers have discussed potential solutions to rein Facebook in, including Section 230 reform and a new national data privacy law.

Previously, we discussed the legal implications of Ms. Haugen’s testimony for whistleblowers and employers, as well as implications for data privacy. In part three of our series, we will discuss the trade secret and intellectual property related implications of the Facebook testimony.

What are the Trade Secret Implications of Frances Haugen’s Testimony?

According to reporting from the Wall Street Journal, the confidentiality agreement Ms. Haugen signed with Facebook allowed her to disclose information to regulators, but not to share proprietary information. The company said it will not retaliate against Ms. Haugen for testifying to Congress, but has not said if it will respond to her disclosing information to the press and federal regulators. Trade Secrets as their name implies are the ‘secret sauce’ that is the result of a company’s investment in research and development and what makes them better and different.

However, in an interview with the Associated Press, Facebook’s Head of Global Policy Management Monika Bickert said Ms. Haugen “stole” documents from the company, which sheds light on how Facebook may view Ms. Haugen’s actions and may react differently down the road..

Furthermore, confidential information is not the same thing as trade secrets, with confidential information having its own protections, Davis Kuelthau Senior Attorney Michael J. Bendel explained to the National Law Review.

“From what I have seen, I don’t know if her testimony, or the documents she released, rise to the level of being trade secrets under the relevant law,” he said. “The information is likely confidential information, and that can create its own grounds for protection and breach, such as a breach of a fiduciary duty she may owe to Facebook, but to be a trade secret takes more than simply being confidential information.”

Do Non-Disclosure Agreements (NDAs) Protect Companies’ Trade Secrets?

Mr. Bendel said two laws in particular could be significant in determining if the information would be considered a trade secret and the implications of the sharing the information, including the California Uniform Trade Secret Act (CUTSA) and the Federal Defend Trade Secrets Act (DTSA). Both laws could be used by Facebook against Ms. Haugen, since Facebook is headquartered in California.

Definition of a Trade Secret and How Does it Interact with the CUSTA and DTSA

“Even after the Frances Haugen situation, I predict all the usual trade secret protections will still be available. The basic definition of a trade secret is: information not generally known to the public that gives economic benefit to its owner and reasonable efforts are made by the owner to maintain its secrecy,” he said. “We would have to look at the particular CUTSA and DTSA requirements to determine how a particular business goes about creating a trade secret in its location, and then what happens to cause an improper disclosure of that trade secret where it occurs, and then what remedies are available to such a company to prevent that or seek damages and try to be made whole from such an improper disclosure.”

NDAs do protect companies’ trade secrets, but laws like the DTSA include whistleblower immunity as a safe harbor to encourage employees to disclose information that may be a trade secret and evidence of a violation of law by the company, Mr. Bendel said.

“An employee takes a risk that the trade secret information is in fact such evidence of a violation (or likely to lead to such evidence) to qualify for the immunity.  Differently, the CUTSA does not provide such whistleblower immunity,” he said. “As another example, the DTSA expressly allows an aggrieved company to seek, without any notice to the defendant, a court order to seize property to help prevent further damage to the trade secret. Differently, the CUTSA does not have the same such remedy.”

However, for companies to take advantage of its remedies under the DTSA when a case like Ms. Haugen’s arises, they need to include safe harbor language in employee contracts specifically mentioning that the company promises not to hold individuals liable under federal or state trade secret laws for the disclosure of trade secrets to an attorney, or a federal, state or local government official, directly or indirectly, for the purpose of reporting or investigating a suspected violation of law. Additionally, the law does not allow employees to disclose trade secrets to private entities like newspapers and social media networks.

“So, in the Frances Haugen case where she shared information with The Wall Street Journal, that appears to create a clear issue for her under available trade secret law, if trade secrets were taken from Facebook, as we know that information has been disclosed without Facebook consent,” Mr. Bendel said.

Conclusion:  Is Your Company’s NDA Protecting Your Trade Secrets?

How effective a company’s NDA is in protecting trade secrets depends on how the agreement is drafted. Despite Facebook saying it won’t retaliate against Frances Haugen for testifying to Congress, it’s possible they may decide to press charges against her for talking to the press about their internal documents.

Even if Facebook decides to go down that route, whistleblower attorneys told the National Law Review that Ms. Haugen’s testimony may open the door for more whistleblowers to come forward with similar allegations against other tech companies. Additionally, even if a company can take action against an employee for disclosing trade secrets, they should not use NDAs to cover up evidence of wrongdoing.

“This position has some extensive basis in the law of public policy that prevents private actors from using their private business activities, and even such a thing as a trade secret, from being used to violate the law,” Mr. Bendel said. “This is similar rationale as the ‘safe harbor’ approach, but grounded in the fact that we do not want to enable people to hide behind certain tools like non disclosure agreements and trade secret protection, if the people/company is using these tools to hide activities that break the law.”

Read the first part in our series on Frances Haugen’s Facebook whistleblower testimony here.

Read more on the privacy implications of Frances Haugen’s Facebook whistleblower testimony here.

Copyright ©2021 National Law Forum, LLC

Article By Rachel Popa and Chandler Ford of The National Law Review / The National Law Forum LLC

For more articles on Facebook, visit the NLR Communications, Media & Internet section.

New Report Highlights Need for Coordinated and Consistent U.S. Policy to Address Possible Impacts to Financial Stability Due to Climate Change

“Climate change is an emerging threat to the financial stability of the United States.” So begins a recently issued Financial Stability Oversight Council (FSOC) Report, identifying climate change as a financial risk and threat to U.S. financial stability and highlighting a need for coordinated, stable, and clearly communicated policy objectives and actions in order to avoid a disorderly transition to a net-zero economy.

The FSOC’s members are the top regulators of the financial system in the United States, including the heads of the Federal Reserve, the Securities and Exchange Commission (SEC), and the Consumer Financial Protection Bureau. Their charge is to identify risks facing the country’s financial system and respond to them. This new Report supports steps being taken by various financial regulators in the U.S.

The Report suggests four steps necessary to facilitate an orderly transition to a net-zero economy.

  1. Regulators must develop and use better tools to help policymakers. “Council members recognize that the need for better data and tools cannot justify inaction, as climate-related financial risks will become more acute if not addressed promptly.” The FSOC Report highlights the tool of scenario analysis, “a forward-looking projection of risk outcomes that provides a structured approach for considering potential future risks associated with climate change.” The FSOC recommends the use of sector- and economy-wide scenario analysis as particularly important because of the interrelated and unpredictable development of climate impacts and technologies necessary to address them. Each of these technologies may have an unexpected impact on a part of the economy.
  2. Climate-related financial risk data and methodologies for filling gaps must be addressed.  The FSOC Report noted that its members lacked the ability to effectively access and use data that may be present in the financial system. The FSOC Report also noted potential risks to lenders, insurers, infrastructure, and fund managers caused by physical and transitional risks of climate change and the need to develop tools to better understand those risks.
  3. As has been highlighted by the environmental, social, and governance (ESG) movement, disclosure by companies of their climate-related risks is a key piece of data not only for investors but also for regulators and policymakers. Disclosure regimes that promote comparable, consistent, or decision-useful data and impacts of climate change are necessary, according to the Report, and also regimes that cover both public and private entities. The Report highlights various ongoing discussions on this topic, including possible regulations by the SEC.
  4. To assess and mitigate climate-related risks on the financial system, methods of analyzing the interrelated aspects of climate change are necessary. The Report details the developing thoughts around scenario analysis as a tool to help predict the many aspects of climate change on the financial system but notes that clearly defined objectives and planning are essential for decision-useful analysis.

Eliminating Use of PFAS at Airports May Be Harder Than Congress Thought

Per- and polyfluoroalkyl substances (PFAS) are emerging contaminants that are subject to increasing environmental regulation and legislation, including legislation to outright ban their use in certain products. Congress directed the Federal Aviation Administration (FAA) to stop requiring PFAS in the foams used to fight certain fires at commercial airports, and to do so by Oct. 4, 2021. In complying with this order, FAA shows the difficult tightrope it has to walk to meet the “intent” of Congress’ directive, while not really meeting the goal Congress had hoped for.

The FAA issued Certification Alert (CertAlert) 21-05, “Part 139 Extinguishing Agent Requirements,” addressing the continued use of aqueous film-forming foam (AFFF) in order to meet the Oct. 4 deadline. In Section 332 of the FAA Reauthorization Act of 2018, Congress directed that after this date, FAA “…shall not require the use of fluorinated chemicals to meet the performance standards referenced in chapter 6 of AC No: 150/5210–6D and acceptable under 139.319(l) of title 14, Code of Federal Regulations.”

The CertAlert directs airports to continue using AFFF with PFAS unless they can demonstrate another means of compliance with the performance standards stablished by the Department of Defense (DoD) for extinguishing fires at commercial airports. The FAA alert also reminds airports about the need to test their firefighting equipment. Airports can perform the required testing by using a device that has been available since 2019 which does not require the discharge of any foam. Finally, the FAA also reminded airports to comply with state and local requirements for management of foam after it has been discharged.

The FAA reported in its communication that it began constructing a research facility in 2014 that was completed in 2019 and that it has been collaborating with DoD in the search for fluorine-free alternatives for AFFF. The FAA reported that it has tested 15 fluorine-free foams and found that none of them meet the strict DoD performance specifications that also are imposed on commercial airports. More specifically, FAA said the tested alternative foams had the following failings:

  • Increased time to extinguish fires
  • Not as effective at preventing a fire from reigniting
  • Not compatible with the existing firefighting equipment at airports

AFFF was developed to fight fuel fires on aircraft carriers where the ability to suppress fires as rapidly as possible and keep them suppressed is vital to the health and safety of pilots, crews, firefighters and the ship. The military specification (commonly known as MilSpec) for effective firefighting foams for fuel fires is in place for both military and civilian airports.  For many years, the consequences of the use of AFFF to fight aircraft fuel fires – most specifically, the adverse impact on groundwater and surface water – was not fully appreciated. Only recently has this threat been understood and only even more recently has the management of firefighting debris been directly addressed.

Congress may have thought it was eliminating a threat with the legislation directing the FAA to no longer require airports to use AFFF. But FAA’s latest messaging on AFFF highlights just how difficult it is to find suitable replacements, especially when they also have to meet the DoD’s stringent performance standards. The FAA did invite any airport, if they identify a replacement foam that meets the performance standards, to share that discovery with the FAA. However, it is unclear what that would accomplish when it is the DoD and not the FAA that certifies a particular foam’s performance.

In essence, FAA could not solve the challenge that Congress gave it (approve a fluorine-free foam) and instead used the CertAlert to approve airports to use such foams if they can find them on their own. The bottom line is that inadequate progress has been made to fulfill congressional intent to stop using AFFF at commercial airports, and airports are left with no choice but to use PFAS containing foams.

There is legislative activity in many states to ban products with PFAS and at the federal level there have been legislative actions targeting the same – like removing them from MREs. The FAA’s removal of its mandate to use AFFF without offering a PFAS-free alternative is a particularly visible example of the challenge in transitioning away from reliance on PFAS chemicals.

© 2021 BARNES & THORNBURG LLP
For more on travel and transportation, visit the NLR Public Services, Infrastructure, Transportation section.

Knock Your Socks Off: A Conversation with EEOC Leaders

Mandatory vaccinations, harassment and retaliation charges, and guidance and enforcement priorities are just some of the important issues U.S. Equal Employment Opportunity Commission (EEOC) officials addressed at Ward and Smith’s Fall Employment Law Update.

I moderated the discussion that was led by Tom Colclough, Deputy District Director of the EEOC Charlotte District Office, and Glory Gervacio Suare, Director of the EEOC Raleigh Area Office.

Over his 25 years with the EEOC, Colclough has investigated charges and complaints of discrimination, led high-performing teams, and served in various leadership positions. Currently, he plays a key role in fulfilling the agency’s mission through strategic enforcement, management, and planning.

Gervacio’s background includes serving as the director of the EEOC’s Honolulu office. Her career with the Commission began as an enforcement investigator in 2001, and she continually provides outreach and educational assistance to various committees in her jurisdiction.

The conversation began with an analysis of how many charges the EEOC handles in an average year, and of those charges, how many go through mediation, conciliation, or litigation. “We normally receive between 65,000 and 100,000 charges per year,” said Colclough. “This year, it was around 65,000. In our district, we received about 5,500 charges this year.”

Of that amount, Colclough explained that the EEOC:

  • Resolved 17.8% of cases through the negotiated settlement process;
  • Completed approximately 500 successful mediations;
  • Issued a ‘no cause’ determination for 65% of cases; and
  • Dismissed around 29% for untimely filing or because a summary review of the Charge allowed the investigator to determine that a violation did not occur.

The leading types of charges last year included retaliation, followed by disability and race. “This is interesting because, in the previous year, race was the second type of charge that was filed,” commented Gervacio. “So I think we’re seeing a trend because of COVID, and with reasonable accommodation requests and vaccination mandates, we’re probably going to see more disability charges in the near future.”

Enforcement Priorities

The local EEOC district office focuses their efforts in part on supporting six national strategic enforcement priorities, says Colclough. These enforcement priorities include:

  • Eliminating barriers in recruitment and hiring;
  • Protecting immigrants, migrants, and other vulnerable workers;
  • Addressing emerging and developing issues;
  • Enforcing equal pay laws;
  • Preserving access to the legal system; and
  • Preventing harassment through systemic enforcement and targeted outreach.

Colclough indicated his district has developed a complement plan to address issues that are important to the local community: “For the most part, we’re looking at vulnerable workers, also emerging issues dealing with the ADA. As you know, COVID is an emerging issue that continues to develop every single day. And retaliation is the number one priority.”

Retaliation goes beyond someone receiving an adverse result after objecting to a form of harassment or discrimination. “There’s more to retaliation than just the mirror opposition or exercising a right to complain,” noted Gervacio. “Disability is on the rise, and there’s a component of retaliation when somebody requests a reasonable accommodation due to their disability.”

COVID Vaccinations

The subject of mask mandates and vaccination requirements is still on employers’ minds and continually evolving. Generally, officials at the EEOC expect to see a substantial increase in COVID-related charges and inquiries pertaining to reasonable accommodations.

For those who watch the news every day, it’s clear that vaccination mandates remain a hot button issue, explained Colclough. “One thing I’d like to folks to know is that, on our website, we clearly state that federal laws do not prevent an employer from requiring all employees physically entering the workplace to be vaccinated for COVID-19.”

Gervacio illuminated the subject with an analysis of a recent case involving United Airlines, in which a court order placed a temporary stay on the company’s vaccination mandate. Basically, the judge ordered that placing employees on unpaid leave for requesting an exception to the airline’s vaccination mandate due to a disability or religious exemption is not a reasonable accommodation.

“We are still waiting on guidance from our headquarters on how to address that,” said Gervacio, “so it is unfolding as we speak.”

In light of this development, employers should understand that it is doubtful that placing an individual who requests an exemption to a vaccine mandate on unpaid leave is a reasonable accommodation. Until the EEOC provides updated technical guidance, a potential best practice for employers is to go through an interactive process for all disability and religious-related exemption requests.

Is Long COVID a Disability?

Recently, the EEOC stated that it would be adopting the Department of Health and Human Services position on “long COVID” is to classify it as an ADA disability. The determination ultimately turns on whether or not it substantially limits one or more daily activities.

Employers should educate themselves on what “long COVID” is and its symptoms and understand that since it could potentially be classified as an ADA disability, they should be prepared to engage in an interactive discussion with the employee.

Working from Home

At the pandemic’s start, many employers suddenly had to transition the majority of their workforce to a remote or a virtual environment. With that in mind, the question of which positions are appropriate for telework remains relevant.

Given a choice, many employees would choose to work from home, but that may not be in the employer’s best interest. “Telework as a reasonable accommodation “might be the gold Cadillac standard of what an individual wants,” explained Colclough, “but that’s not necessarily what the employer has to provide.” Employers only need to consider whether an accommodation allows the individual to perform the essential job functions.

“Telework is just one of many tools of accommodation an employer has in their toolkit,” adds Colclough. Employers may sometimes feel that the employee is driving the interactive process and that they have to comply with the employee’s preferred accommodation.

Ultimately, however, it is up to the employer to decide what accommodations are reasonable based on the needs of the business and what will allow the employee to perform the essential job functions. Employers have various options for those who are averse to getting the vaccine, whether their request for an exception is ADA-related or due to a religious exemption. As far as reasonable accommodations, the following are listed on the EEOC’s website as technical guidance on potential reasonable accommodations to vaccine mandates:

  • Social distancing, e., placing an individual in their own office;
  • Modifying shifts to limit interactions with other employees and customers;
  • Periodic testing; and
  • Reassignment.

Gervacio pointed out that “[t]here are many examples of reasonable accommodation listed on the Job Accommodation Network. This service provided by the U.S. Department of Labor’s Office of Disability Employment Policy offers technical guidance on various types of accommodations for certain disabilities, including specific COVID-related issues from telework.”

An unexpected outcome the EEOC has seen after the rise of telework is an increased number of sexual harassment complaints over the past 18 months. These complaints have originated from Zoom meetings, Facebook, and other forms of social media.

Employers should consider developing standards for how employees are expected to behave in a virtual environment, advised Colclough. “We’ve got to convince people to get back to being as professional as they were in person,” he said. “And perhaps that will help some harassment complaints go down.”

Gervacio recommended that employers train their managers and supervisors. “A lot of the charges we get, it seems the manager or supervisor is not aware of their roles and responsibilities, and whether or not they need to take action,” commented Gervacio. “This training should be tailored to the workforce because you want them to be engaged.”

Another update the EEOC leaders mentioned included a change to the notice of right to sue. When the EEOC decides to close an investigation, it issues what is commonly referred to as a notice of right to sue, which allows the charging party to file a federal lawsuit if they want to pursue the claim further.

Finally, the EEOC leaders shared that recently, the regulations were amended to make digital service an acceptable form of communication for this notice. “Doing it digitally is much, much faster,” added Colclough, “and we get an almost instantaneous notice when parties take a look at it. This helps us ensure the right to sue got into the right hands.”

© 2021 Ward and Smith, P.A.. All Rights Reserved.

Article By Hayley R. Wells of Ward and Smith, P.A.

For more articles on the EEOC, visit the NLR Labor & Employment section.

How COVID-19 is Impacting Global Supply Chains & How Companies Can Cope

Despite the positive impacts of ongoing safety measures and the development of effective vaccines, global supply chains are continuing to face unprecedented logistical challenges because of the COVID-19 pandemic. Since the emergence of the coronavirus in early 2020, supply chains across the world drastically slowed down for a variety of reasons, including but not limited to disrupted shipping lanes, labor and material shortages and fluctuating demand. Every sector of the economy is affected to some degree, most notably the automotive, tech and medical supply industries.

Global markets face many unknowns as the supply chain returns to normal. The impacts of COVID-19 are far reaching, and it is difficult to determine precisely how long the disruptions will last. Further, late deliveries or no supplies of materials or labor presents a number of legal implications, and many companies affected by the disruptions are looking for guidance on how to proceed.

How Has COVID-19 Impacted the Global Supply Chain? 

According to the Bureau of Labor Statistics (BLS), 4.3 million U.S. workers left their jobs as of August 2021. This 3 percent decrease in the U.S. work force is especially impacting the supply of truckers and warehouse workers which particularly impacts the supply chain. As variants of COVID-19 continue to spread throughout the globe, vaccine mandates and required coronavirus testing leaves employers scrambling to stay compliant amidst being short staffed. These actions are also occurring after a year-long closure of major manufacturers all over the world.

Even with President Biden’s Executive Order 14005, which aims to strengthen domestic supply chains, issues with cybersecurity and labor resignations continue to cause bottlenecks at U.S. ports. Without the necessary workforce to transport goods across the U.S., some ports are facing an 80 percent increase in congestion. As the global supply chain grows more chaotic, President Biden met with officials last Wednesday to discuss the nationwide supply chain bottlenecks, announcing that the Port of Los Angeles will begin operating 24 hours a day, seven days a week to help deal with the bottlenecks. Additionally, major retailers such as Walmart and Target committed to increasing shipping operations during off-hours, with logistics companies FedEx & UPS making a similar pledge.

“In my 40 years of living and working in Southern California, I have never seen container ships off the coast of Malibu, and yet there they are, because there is no more room for them in the parking lots that are the ports of LA and Long Beach,” said Brad Hughes, Member of the Transportation & Logistics Practice at Clark Hill PLC.

How Long Will COVID-19 Supply Chain Disruptions Last? 

It remains to be seen precisely how long the effects of COVID-19 will be felt on supply chains. In many cases, the answer is industry-specific since different industries rely on the global supply chain in different ways. However, in general, it does appear that the problem is unlikely to be resolved before the end of 2021.

“Unfortunately, the supply chain problem is not likely to be resolved before Christmas,” said Mark Andrews, Senior Counsel and member of the Transportation & Logistics Practice at Clark Hill PLC. “There are many grinches involved, from port bottlenecks, driver and truck shortages, to high freight costs and tariffs. These are compounding problems that need simultaneous attention but will take different times to resolve.”

Industries reliant on highly specific, specialized goods, such as semiconductors or rare earth metals, face a particularly long return to normal. Over 60 percent of businesses in the manufacturing industry reported domestic supplier shortages, followed closely by construction companies at just under 60 percent.

“While many project with cautious optimism a mid-2022 chip supply recovery, we do anticipate other supply chain woes well into late-2022,” said Scott Hill, Executive Partner and member of the Corporate Practice Team at Varnum LLP. “Supplies of raw materials such as resin, aluminum, and steel have become unreliable in this volatile market. Long lead times and increased prices for raw materials, especially in the auto space, are projected which will cause significant disruption when a full restart is demanded. Those who have the ability to order materials now will be better positioned to sell to the market.”

How Can Companies Handle COVID-19 Supply Chain Disruptions? 

The supply chain disruptions brought on by the COVID-19 pandemic have wide reaching legal implications, specifically the web of state and federal laws surrounding transportation.

“I would identify uniformity of federal and state transportation law as a badly needed element of ‘legal infrastructure’ to reduce transportation costs and delays,” Mr. Andrews said. “Examples include driver hours, worker classification and up-supply-chain liability for ‘negligent selection’ of motor carriers involved in traffic accidents.”

With there being no signs of the supply chain disruptions ending anytime soon, companies can take steps to manage their supply chain operations. Potential solutions include moving from a sole-source supply chain to a multi-source supply chain, according to Varnum’s Mr. Hill.

“Since the onset of the pandemic, we have worked closely with our clients to optimize their supply chain, whether they were operating under sole-source or multi-sourcing strategies. As you may imagine, multi-sourcing and on-shoring to the extent possible has been particularly important with bottlenecks in the chain across the globe,” he said.

Another consideration for companies experiencing supply chain disruptions is handling claims of delayed delivery, specifically for those in the automotive supplier industry. Mr. Hill said his clients are working daily to remedy automotive industry supply chain issues to ensure expectations are met.

“Many of our clients are in the automotive supplier space and the semiconductor shortage continues to warrant attention and necessitates daily if not hourly conversations up and down the chain to reflect good faith efforts to deliver under the terms of supply agreements,” he said.

Currently, federal agencies and the Biden Administration are responding to supply chain issues, specifically through President Biden’s executive order. The order addresses many of the issues facing supply chains right now, including directing heads of federal agencies to conduct a one-year review on supply chain vulnerabilities.

Conclusion

Even though many of the challenges presented by the supply chain disruptions are ongoing, the announcement from the Biden Administration that ports and retailers are committing to increasing operations to deal with supply chain issues may help ease some of the strain. Additionally, companies can expect more regulatory actions to come later in the year from other agencies.

“Federal agencies are actively undertaking a range of actions in response to recent executive orders and other presidential direction on the nation’s supply chain issues,” said Anthony Campau, Counsel and Director of Government Regulation for Clark Hill.

“Some of those measures are already public, but more detail will likely become visible this fall when the Office of Information and Regulatory Affairs (OIRA) releases the Fall 2021 Unified Agenda of Federal Regulatory and Deregulatory Actions, which will list all regulatory actions currently under development at federal agencies. That publication should offer a helpful window into planned regulatory responses to the nation’s supply chain woes,” he said.

Copyright ©2021 National Law Forum, LLC

For more articles on supply chain, visit the NLR Antitrust & Trade Regulation section.

Why Legal Teams Need Digital Contracting for Modern Business

Legal teams have always had the arduous task of analyzing legal documents, which is not only time-consuming but also requires close attention to detail and years of education and training. On top of that, because this is traditionally done manually, the critical data buried within contracts has remained lost.

While manually analyzing contracts might have worked in the past, it simply won’t cut it in the fast-paced reality of today. It’s time for legal teams to join the digital transformation. Over the last decade and a half, every other facet of business has undergone digitization…except contracts. And with digital transformation investments projected to hit a total of $7.8 trillion from 2020 to 2024, it’s legal’s turn to get on board.

Businesses rely on contracts to survive. Think sales contracts, employment and partnership agreements, NDAs, licensing agreements and more. But as they exist today, contracts are a workflow impediment and the data they hold isn’t being used to its full potential.

Data is currently trapped in contracts

There is all kinds of information-rich, operational data hidden in contracts critical to a company’s success. As much as 90% of company spend and investments are determined by contract terms. At the same time, suboptimal terms and inefficient contract management can result in a whopping 9% loss of annual revenue. While the specific information businesses choose to focus on will vary, some common points hidden in contracts include:

  • Total contract value – the total value of the contract once it’s active, its recurring revenue and charges.
  • Auto-renewal opt-out notification period – the amount of time auto-renewal can be opted out of.
  • Personally identifiable information (PII) exchange – data identifying an individual.
  • Counterparty address region – the party on the other end of the contract.
  • Ability to terminate for convenience – the power to terminate a contract if it becomes unsatisfactory.
  • Exclusivity – a type of agreement where one party agrees to work exclusively with the other.

This critical data isn’t readily available and there’s no good way of tracking it unless we adopt a new way of doing things. Once unearthed, contracts will help businesses become efficient, effective and more accurate.

Contract data allows legal teams to operationalize and reduce risk

Legal teams need to be able to keep up in a world that runs on increasingly larger numbers and more complex scenarios. To do so, they need to be equipped with resources enabling them to be data-driven. For example, today, legal teams may lack the answers to simple questions about the contract pipeline simply because these insights aren’t stored, compiled and updated in real time. Without this, legal teams are unable to operationalize their processes, making it impossible to put the systems in place that allow for more efficient work. After all, inefficient contracts can cause losses ranging from five to 40% of deal value. It also exposes the company to danger because, without tracking, contracts are ripe with risk.

Contracts hold the operational and substantive information legal teams need to operationalize, set goals, mitigate risk and prove their value to the company. Operational data includes the number of workflows launched and completed as well as turnaround and response times. Substantive data, such as governing tax law, contract amount, data protection and implementation obligations, exposes risk and obligation.

With the right tools and a centralized system, legal teams can have access to all the details they need to prove their team’s value, work more efficiently and protect their companies.

A new standard: digital contracting

A new standard for companies and legal teams to keep up with a fast-paced, data-driven world: digital contracting, a standardized system for business contracting to connect people to systems and data. Once digitized, contracts will become living, collaborative documents to easily find and track the once-hidden goldmine of data within. The result is resilient teams.

Legal tech is leading the way in developing the software needed to support digital contracting. Next-generation contract management software makes metadata searchable and readily accessible. This will enable entire businesses to have the information they need to make well-informed decisions at their fingertips.

Soon, the days of in-house lawyers having to paper chase will be long gone. Instead, lawyers will be able to create agreements instantly, collaborate and get approval with ease, while having access to version history and the metadata needed to operationalize and reduce risk.

It’s time for legal teams to get the tools they need to thrive in today’s fast-paced work environment by getting on board with a better, faster, more sustainable way of work through digital contracting.

© 2021 Ironclad, Inc. All rights reserved.

Article By Chris Young of Ironclad

For more articles on the legal industry, visit the NLR Law Office Management section.

How to Be More Inclusive with Your Legal Marketing

If your law firm isn’t focusing on inclusivity and diversity in its marketing, you may be missing out on opportunities to grow your business and provide legal help to those who need it.

Being inclusive with your law firm marketing might be difficult when you have no idea where to start. But you will need to figure out how to show people from all different types of backgrounds that you’re the law firm for them with your advertising and marketing efforts.

Audit Your Law Firm’s Current Marketing Strategies

In order to be more inclusive, you first need to get really honest with yourself about where your law firm is currently at in terms of diversity and inclusion, and which systems you might have in place that have prevented your firm from becoming more inclusive in your marketing approach.

Start off by auditing the content your law firm has already released. You should be looking for any unintentional messages about who your law firm is, what matters to you, and who you will or will not work with. For example, does the content on your website use terminology such as “his or her”, or “he or she”? To be more inclusive, your content should always address your target client as “they” to be most inclusive.

Comb through your social media profiles, your attorney bio, and every piece of media you’ve created and analyze them.  Are there ways that you could have been more inclusive to ensure that people from more diverse backgrounds recognize that you’re the law firm that can help them?

What Photos Does Your Law Firm Use?

One of the first things you should go through when you’re reviewing your law firm’s marketing materials are the photos you have used. Any images on physical materials, and more importantly, online, should be carefully considered. Do all of your photos and images have people of the same nationality, gender, or race? What about individuals who have disabilities? There are a few different ways you can go about being more inclusive when it comes to your photos.

First, you should start hiring with inclusivity and diversity in mind. This means hiring people from varying backgrounds to work with you and your law firm. It is the most natural and authentic way to be more inclusive with your marketing, because your law firm is living it.

Another way to be more inclusive in your marketing photos is by engaging with and participating in your community. Volunteer with organizations that care about inclusivity and diversity. Host fundraising events where possible. These are just a couple of options, but ultimately you want to immerse your law firm in the community that you want to be representing.

Have You Thought About Accessibility?

Another way to be more inclusive in your marketing is to take accessibility into consideration. Is your current website accessible for those with visual, neurological, cognitive, or auditory impairments?

Are there ways that you could make it easier for clients to find you and interact with the current materials your firm has already created? Some easy upgrades to make your website more accessible could include adding keyboard navigation capabilities, adding ALT Text to your images, and descriptive URLs.

Consider Language Barriers

When you live in a particularly diverse area, and when you want to take steps to be more inclusive, you should take into consideration the fact that not all of your prospective clients are going to speak English as their first language. Some clients may not speak English at all. By having lawyers in your team who can speak multiple languages, you may be able to uniquely bridge a language barrier gap that your competitors may not be taking into consideration.

Make sure you let your future clients know that a language barrier won’t be a problem with your law firm, because you have people on staff who speak their native language. This is not only a great marketing benefit, but provides your client with an overall better experience with your law firm.

Establish a Solid and Ongoing Review Process

Most attorneys know that getting a bad review online can have a significant impact on your law firm. One of the best ways you can be more inclusive and diverse in your marketing is by establishing an ongoing review-getting process.

If successful, you could be seen as a law firm with a solid reputation. If your reviewers leave open and honest feedback on their experience with your firm, those searching for an attorney could resonate with your client’s experience and view you as the best option for their legal representation.

You should also be sure to respond to any negative feedback or reviews you might receive. And be sure to utilize constructive criticism that may be holding your law firm back from achieving optimal inclusivity.

This article was written by Meranda M. Vieyra of Denver Legal Marketing. For more articles about Legal Marketing, please visit here.

The Attorney-Client Relationship Post-Pandemic with Baker Donelson [PODCAST]

Rachel and Jessica discuss law firm management and attorney-client relationship-building in the third episode of the Legal News Reach podcast with Jennifer Keller and Adam Severson with Baker, Donelson, Bearman, Caldwell & Berkowitz, PC.

Read on below for a transcript of our discussion, transcribed by artifical intelligence:

Rachel

Hello, and welcome to Legal News Reach, the official podcast for the National Law Review. Stay tuned for discussion on the latest trends in legal marketing, SEO law firm best practices and more.

Rachel
I’m Rachel

Jess

And I’m Jess. We’re the hosts for legal news reach and web content specialists here at the National Law Review.

Rachel

In this episode, we’re excited to talk to Jennifer Keller and Adam Severson with Baker Donelson. So Jennifer and Adam, would you like to introduce yourself to our listeners?

Jennifer 
Sure, sure. And thanks so much for having us. Again, I’m Jennifer Keller, the president and chief operating officer of Baker Donelson. In that role  I manage the provision of legal services through our departments and practice groups. I also manage our firm’s professional development, recruiting and marketing and business development functions. And I’ve been with the firm and since I got out of law school.

Adam Severson

And I’m Adam Severson, I’m the firm’s chief marketing and business development officer. I’m in Nashville, Tennessee, and I’ve been with the firm  10 years coming up in January and prior to that held similar leadership roles at a couple other Amlaw 100 firms

Rachel 
We’re excited to have you both on today, I’ll just jump into a topic that’s been weighing pretty heavily on everyone’s minds for the past year, has your office found any silver linings of the pandemic? How has your office adjusted to that?

Jennifer
Well, I’ll start we have 21 offices and about 650 lawyers. So certainly the pandemic has been a very interesting time for us. And I think all law firms, no matter what their size, or location, I think there have actually been a few silver linings coming out of the pandemic, I would say probably the one you would hear from most law firm leaders as the predominant one is that it has expedited the acceptance of change in a lot of areas, you know, the use of technology, remote work, or alternative work arrangements, collaboration in new and different ways, both with each other inside of firm and with our clients. So I just think in those circumstances, we were forced to pivot and didn’t really have a choice. And so that acceptance of change was sped up a good bit.

Adam 
Just to build on that acceptance of change. You know,  I think we found ourselves, you know, in the marketing and business development team forced to think more creatively about how we position the firm, and how we collaborate and sort of a superspeed way, with our attorneys, we were one of the first firms to launch a Coronavirus Resource Center. And so to sort of launch that, and then be in a place where we did more client alerts in 45 days than we did in the prior 12 months. So the way that we had to rise to the occasion was a silver lining really, because it forced us to think creatively, but also sort of led to this kind of element of teamwork and collaboration that was really inspiring, I think, in some respects, and also exhausting.

Rachel

To sort of build off of that exhausting feeling, we sort of faced that. A lot of our clients started producing way more content than they had just recently. So we had to do a lot of work just to keep up with everything. Can you like talk a little bit more about the challenges that the firm faced and you know, creating that Coronavirus, Resource Center, getting everyone to do all those client alerts? You know, what was that process like?

Adam 
Well, I think fortunately, it was helpful to demonstrate the strong infrastructure that we had in place in the firm. And so from the Resource Center perspective, you know, our web platform technology is really strong and allowed us to adapt almost real time. Some elements of the page were I don’t want to say self sufficient, but like, the content was fast and furious, because the marketplace demanded so many new elements of content and changes, you know, happening pretty rapidly, people that were evaluating whether or not they should close their offices, they were, you know, trying to determine, you know, is we have a large healthcare practice. And so looking at all the considerations that they were having around their hospital systems in the life, and so our healthcare attorneys were getting asked all these questions and being peppered and so we need to then sort of share that horizon scanning in those issues, you know, with a broader client base. And so it was, you know, in many ways out of necessity to meet client demand that we were, you know, putting ourselves in that position.

Jennifer
Some of our most busy groups during that time that people whose practices really were dramatically influenced by the pandemic, Labor and Employment health care tax. Once the relief money started flowing, you know, we’re meeting in many instances that eight or nine at night on Team calls pretty perpetually throughout, and some still are meeting really regularly now. And they were just doing a lot of things on those calls and producing a lot of content without even really knowing that it’s content. And so part of what you really are training people to do during that interesting time is to to sort of capture the work they’re already doing as content and getting that out on the platform.

Rachel
So one of the things that we’re wondering now that we’ve sort of gone through a year of this pandemic, and law firms have made all these changes, how do you think law firm management law firm marketing, will change moving forward? Like, will these changes stick? Will they continue to change? Or how do you see that going?

Adam
Well, there’s a lot to unpack first and foremost, you know, there’s one constant, and that is change. And so I think that we are, you know, well aware that change will continue to occur. And I think trying to figure out and try to be a step or two ahead of some of those changes, is something that we aim to do, the way in which those take place, you know, for our clients, I think is, you know, we’re a little bit derivative of those changes. So whatever change happens in the marketplace, we’re then selected, hopefully, as counsel in some form or fashion after a bank decides to buy another bank, or, you know, any rollout of a new piece of legislation then leads to potentially like Health Corps, right, but the healthcare regulatory issues that our clients might be facing. And so, you know, we’re trying to, you know, figure out ways to be ahead of, you know, whatever those changes are, you know, in fact, just this morning, I was talking with one of my colleagues about some of the value added programs that exist for hospital systems. And you know, that we’ve seen a significant uptick in how we’re being called upon to look at that from a variety of different angles. And so we’re now trying to proactively reach out to our clients to talk about those issues. And so we do that, in a number of ways, whether it’s a virtual cup of coffee to sort of check in with somebody could be a more robust CLE program for, you know, a hospital system with a host of hospitals, where we’re sort of presenting as the subject matter expert doing almost a client specific webinar. And then we’re also doing, you know, programs more broadly, you know, for anybody who either happens upon Baker Donelson.com or gets an invite from, you know, our invite list for for one of those programs.

Jennifer 
And I think from the law firm management perspective, there’s a lot of interesting work going on right now, in analyzing the changes in law firm management that the last 18 months have brought us.  I think that we definitely know that focuses on things like inclusion and mental health, and different work arrangements, different use of real estate kind of collaboration, remotely, just handling that pace of change, that’s all gonna stick, you know, that’s going to be with us for days to come, we’re just going to have to continue to figure out how to take steps ahead in those areas. And so I think what you’re gonna see looking 5 to 10 years ahead is younger, more diverse teams of leadership in firms a lot more input from what we have come to see right now is kind of non traditional leadership in firms. And they’re calling it holistic law firm leadership. And so it’s looking at law firm leadership is instead of just focused in on, let me look at this practice group, or this department or this silo of ours looking at how do we bring someone in, nurture them through their entire career, retain them all along the way, having that client focus in mind, certainly, as well as the firm focus in mind. And really, we know that we’ve got to get a lot of different viewpoints, and you know, making sure that we’re able to do that. So I think we’re gonna see a lot of change in law firm leadership in the days to come. And we are definitely going to need to keep the focus on the things that became really important during the pandemic.

Jess
What transitions besides the CLE offer, or your guys’ webinars have you experienced in your journey to become more digital as far as like day to day tasks that you guys have?

Jennifer
You know, I would say, you know, one of the things that was so interesting, and now that I look back on it, I mean, it seems like it was a blur, but we were in one of the first areas to be really hit by the pandemic, going back into March of 2020. And we took our entire law firm from being largely office space with very few people who were working remotely more than about 20 percent of their time to working solely remotely and about 24 hours. Amazing to think about, I think it was just a miracle actually, at this point in time, but a lot of preparation and work went into being able to do that. But I would say that, you know, it was a huge transition to get really a couple of things. One is our folks to rely on a paperless system of document retention and file keeping, some of them had dipped their toes into it, and we’re using it less than we would like. But we went to a scenario where they had to largely rely much more on those kinds of things. And knowing that they might not be able to get back in the office for an extended period of time, took away that safety net, that they had the big file full of 25 boxes. And so you know, we also experienced, I think, another huge change, which is our legal assistant, working remotely, and tapping into that data in the same way, and then figuring out besides just the file itself, what are all the tools that we have at our disposal to make things operate remotely. And it’s not just a document retention system, it’s the signature systems, it’s the filing systems, it’s the research systems, it’s all of those things that have to come together, we have right now four to five generations of lawyers working together, one or two generations of which are extremely nimble with the technology and the rest of us had a lot to learn. And we continue to learn. So I think we are still in that transition, and are still working toward that transition. And now we’re in this awkward spot where, you know, we’re we we have returned to the offices, but we have a lot of remote work still going on. And so kind of figuring out the happy place where we’re all going to be both from a technology and just presence standpoint, I think is a really interesting thing. But lots of transitions still to come.

Adam
You can see I’m working from my home. I find myself in the office in person, Tuesday, Wednesday, Thursday, if you would have asked us a couple years ago, like oh, are we going to be working remotely a couple days a week? I think we all would have scoffed at the notion.

Jess
I know they started the virtual hearings, you were just talking earlier about a WebEx, these different softwares for your remote workers, probably scanning all your paperwork. And if you had paper files before, would you say that this technology has benefited the notoriously paper, book heavy law firm industry?

Jennifer

Oh, sure. I mean, you know, I think sometimes I think this has allowed us to see the benefits that can be wrought with it. You know, I shudder to think what would have happened had we had a pandemic 1015 years ago, without the luxury of the technology that we have now, without the ability to scan and DocuSign and have the the variety of platforms for the video technology that we have that allow us to do the hearings and the breakout rooms and all those things. I mean, what in the world would we have done without that. But I think also, you know, surprisingly, there’s been benefit to growing the trust and interface relationships with your clients, you know, them feeling like they, they can be sure that you’re going to be there no matter what the circumstance and that you’re going to be able to pivot to service them, that gives them a real sense of comfort and peace about the relationship.

Adam
You know, and one thing too Jessica, that I think is important to think about – I’m always encouraging our lawyers to stay in front of their clients. And, you know, the the days of old, I mean, I remember a couple September’s ago, like I flew to Chicago for a lunch meeting. And I coordinated schedules with three of my colleagues and we all flew to Chicago. And you know, we all got in a cab together and we went down to the loop and we had our meeting and we and we came back to the airport and back to our offices and in some ways kind of  killed the day to go have a lunch meeting and they’re benefits, certainly, you know, to that approach. But but to think now that with in some instances, like 20 minutes notice, I’m able to pull colleagues from four different offices together and be at a platform like we are right now to address whatever issues might be facing a client and brainstorm with them on how we might be able to hopefully meet and exceed you know, their expectations and help solve the problem that they’re facing. Instead of the the sort of, I wouldn’t say colossal waste of time, but a lot of dead time to just scheduling that lunch meeting. You know in and of itself and then coordinating travel calendar. You know, and everything else and to know that, you know, we can we can help you and service you in some ways more easily. And I don’t think there’s a replacement for, you know, in person contact and relationship development, but, but I think we’re certainly much more mindful of, kind of everybody’s like their personal time and their personal space, but also like the ability to kind of bring teams of people together, maybe more quickly than we would have thought, you know, we would have thought initially in the sort of the older way of doing things.

Jess
I’m so glad you mentioned all those points, because I know attorneys, law office staff, they’re expected to be ready for clients pretty much 24 seven, I think attorneys actually work 24 seven, it’s good that, you know, we can use technology to better serve clients needs, whether it’s a law firm, or you know, a site like ours publishing legal news, I can see a lot of benefits as well.

Rachel

So we’ve talked a lot about the attorney client relationship in regards to how that has changed post COVID. And how important that is to law firm success. And I was wondering if you could just speak a little bit about what new tactics have had the biggest impact on your client relationships since the pandemic broke out?

Adam
In some respects, the tactics are exactly the same, you know, we want to be in front of our clients, you know, we created a deliverable in the marketing and business development team called the virtual client development playbook. So that playbook looked at a lot of the content that we had created for some of our clients development workshops, and try to figure out like, how can we do that better in an environment that we’re in because many clients, as much as we might want to go see them for lunch, they don’t want to see us to make sure that we think about that relationship one being empathetic to where our clients at, right? And so are you comfortable having lunch or coffee, and if you’re not, you know, having a meeting like this is exactly something that that we want to use that playbook is really, if you didn’t have lunch, then you would never see your client as sort of a ridiculous way to think about the world. And so I think we’ve thought differently, about, you know, how we do that and trying to be, you know, mindful, you know, we distributed Starbucks cards to a number of our attorneys to then share with their clients as a means to sort of trigger a virtual cup of coffee to talk about what they’re seeing on their desk, and the way in which, you know, they’re working on projects. We’ve, had a number of client happy hours, nobody would, you know, bat an eye for a second to sort of take a client out to happy hour to talk about what’s going on with them. But it almost seemed a little awkward, you know, to have a virtual happy hour where you’d raise a glass with, you know, a client contact or a friend.

And now I think I’ve probably been on more than a dozen virtual happy hours, and, you know, to have conversations to see what people are are dealing with, and one of the things I think that I’ve really encouraged people to think about so much of client development is about in relationship development is about finding commonality. And so whether you like to read books, or you like to travel, or you like sports, or a particular sports, and if it’s football, or whatever that is, and in this pandemic, has really given us, you know, one thing that we’ve all experienced, and we’ve experienced it in different ways, and sort of how it’s impacted us, it’s certainly been different, but that’s an element of commonality. It’s like a easy conversation starter to, you know, sort of break the ice, like, oh, are, you know, are you guys back to the office? Or not? Are you working remotely a couple days a week? Or are you there the entire time, are you guys enforcing masks at your office right now or not. All that is asy sort of coffee fodder for you to sort of see like how you’re dealing with that. For good or bad, like, people got a lot of opinions about that. And so you can then hear what those opinions are and kind of build off of that and have a conversation to sort of develop some report and then sort of lead into some of the challenges that they’re facing in the workplace. And hopefully, Baker Donelson can help them solve some of the challenges that they’re facing.

Jennifer
I think one really interesting thing that we’ve seen is that there’s a whole group of folks who are more comfortable in this environment, to go to  Chicago on a whim sort of thing and there’s a whole group of folks who love this and are making their way through this. We’ve also seen that there’s there’s a lot of folks who find that this environment is easier or more convenient. Introducing their colleagues. And so instead of having a colleague feel like they’re taking a day to get to Chicago to see someone, why don’t you get on quickly with me, I’ll introduce you to Adam will talk through his practice and kind of how I’m thinking he might be able to help you. And that’s a very seamless thing for folks to do. And so not so much a fancy tactic as it is just we found new things that people find as their way of doing things.

Rachel
Yeah, I think the thing that I find really interesting, just listening to your guys’s experience is just things have changed a lot. But some things haven’t changed. Like, I think one of the big sort of things people were worried about being in the pandemic was Are we going to be able to do like make remote work actually work. And I think you know that giving out Starbucks cards and still being able to get the interaction like with the, with the virtual happy hours and the coffee, you can still do all those things, but we’ll do it in a more efficient way. You know, you might not fly halfway across the country to do it. So I think, yeah, that’s gonna be a pretty big positive change moving forward, that we can actually make remote work actually happen. We are wondering if you could speak a little bit about how your firm has typically used D&I efforts to engage with clients. And you know what exactly D&I efforts are and how you’ve made that work.

Jennifer
That was actually you know, a little bit of fortuitous timing, I suppose on our part, we have a new CEO who has been in place for a couple of years now. And one of his main initiatives was to take our prior D&I efforts which were which were very solid in the industry, but she ramp those up with some very significant commitments on our firm’s part. So we rolled out a D&I compact, which sort of projects our firm’s goals through 2025 with respect to D&I and we set out some really very clear numerical expectations for ourselves to have at least 20% diverse attorney’s in our firm, 10% diverse shareholders, 8% diverse equity shareholders and 10% diverse management team. And we have been methodically working toward incremental parts of those goals, we actually have a very significant document that we have shared both on our website and with many of our clients proactively, to show them what we’re doing. We have a lot of clients who have a lot of diversity commitments of their own, and we want to be able to help them meet those, you know, some of the things that make diverse attorneys successful, certainly includes good work.

Adam
Jennifer alluded to some of the goals that we have, but it’s difficult to hit those goals if you don’t know where you are. And so part of what we’ve done, you know, in that is a client specific dashboard that we can roll out and then that we share with our clients. D&I is one of those areas that I think we all recognize that we can all be better in that space. And so to have some of those metrics, as well as some of the more specific and concrete things that we can do, you know, to do that, coupled with data, I think, is been something that our clients have been appreciative of, because it is an area that I think has been important for everybody. I mean, who’s gonna say diversity isn’t important, but without sort of a clear roadmap and some specificity to it, I think, you know, we’re not going to get to where we need to be as a firm and candidly, as an industry.

Rachel
So we also have sort of a  Q&A section here. So if you guys have any questions for us, we’d be happy to dive into those as well.

Adam
Well, you know, you mentioned before that the, you know, attorney client relationship is sort of paramount in any law firm success. And given that y’all are talking to other law firms and other industries, you know, maybe give us an example of how you’ve heard firms wowing their clients.

Jess
Giving them valuable content, valuable information. That’s always number one. I have prior experience working in a law firm, I think there’s this general distrust for attorney offices. And when you give them that invaluable information that can help them I mean, that just creates an instant bond, so to speak, that they’re more comfortable working with attorneys, and the fact that you guys take that extra initiative to do like the coffees or you know, the quick virtual meeting that can help them right away. I mean, that is gonna completely solidify that client with your firm moving forward. You know, they’ll refer anybody to your office, once you show them that you’re there to help them and help them understand things that are pretty complex to understand. Another tactic we’ve seen Law Offices use are the webinars –  we have a legal events calendar on the site. I feel like we’ve been cranking out tons of events on there so that people can learn something new in a specific area of interest and get that information from the professionals that really know their way around that topic. I think those are the two biggest ways that clients will definitely always keep coming back because they’re wowed by that effort.

Jennifer 
So what are you hearing from in House Counsel about changes in their buying patterns?

Rachel
Recently, we did an article on some of the takeaways from the Thomson Reuters marketing partner forum, a lot of information was shared just on, you know, legal spend after COVID, or during COVID, or how it’s going to change moving forward. And some of the big takeaways from some of the attendees included just like pivoting and adopting new technologies. So as we discussed, the shift from in person events to virtual ones, basically gave law firms the opportunity to sort of try these new strategies without making much of a financial investment. And then also one of the things that sort of came out of it was the chance for legal marketers and law firms really show their value to clients and sort of plan for more sustainable growth moving forward. So that basically includes, you know, like an increased focus on analytics, sharing readership data with people. We have a pretty robust analytics system here on our website that our clients can use to really show what articles are doing well, like, what are the trends? Where are people reading these articles? How are they accessing them? Are they sharing them on social media? And from what we heard at the event was attournies are really looking for more of that data of how you know we’re doing all these articles. We’re doing these webinars, but what is the payoff of this stuff? So that’s really the two big takeaways that we’ve seen in terms of that.

Adam

How do you think firms can really set themselves apart from other firms in the marketplace to differentiate themselves?

Jess
So that’s certainly a good question. When you have either very large law firms where you’re spread out across the country, you really get in that competitive market of how do I look different, you know, how do I come up on a search may be better, a lot of that is SEO tactics. I think it’s also the way the content is shared with the clients, usually you can tailor your marketing and your social media presence to what your identity is, as a law firm, sometimes having a more personal edge to it can be helpful. Especially with COVID, or work life balance, working from home or partial flexibility in a law office environment. You know, if you share working from home, it’s nice to be in touch with clients at any time, you know, that shows that you’re more willing, you’re right there to support them, when you’re more personable in that attorney client relationship that also builds that trust that we kind of went over earlier, just because they’re not talking to a robot attorney, they’re talking to somebody who understands where they’re coming from, and sharing a lot of that on social media with a professional spin can really draw them in and then keep following you makes that client come back over and over and looks at the content that you’re taking the time to put out there, identifying your business values and creating a brand identity, it’s going to be the best way to stand out compared to other law firms who maybe are doing a more generic post here and there. And also just continuing that attorney client relationship, you know, a follow up after a webinar, something that’s recurring, that people can keep seeing, and they feel like they’re still in touch with you no matter what, it’s not a once and done Oh, the attorney, you know, worked with me on this and that’s it, you know, they want to keep coming back. And that also benefits the law firm to have these clients return as well.

Jennifer
You know, I think one of the biggest challenges for firms at this point is the transitory nature of the industry. And it’s it’s attempting to you to get and retain the best talent. And so what are some some things that you’re hearing that firms are doing to attract and retain top talent?

Rachel 
Yeah, that’s a great question. And I think it’s one that we’re also paying attention to here at the NLR.  Jess and I and one of our other colleagues, we recently did an article on changes law firms are adopting amid the covid 19 pandemic. And that includes trends and remote work and litigation. And I think one of the big things that I just keep hearing is that remote work is definitely here to stay. I think, even if attorneys are only coming in the office a couple days a week. I think a lot of attorneys want to keep at least some part of that remote setup. Because I think what the pandemic has showed us that remote work can actually work and that that’s something that attorneys like and not even just attorneys, a lot of other people in other industries want to keep working remotely. And one of the things that we’ve seen is that some attorneys will consider either leaving their firm or finding a new job that will allow them to have that flexability.

Jess
I know we’ve talked to a law firm before and that was one of the managing partners big changes that she had to implement was the flexibility. Some law firms may not be comfortable working completely from home, but having some type of flexible work schedule. It’s very attractive to most people at this point. Remote work was probably pretty close to being unheard of unless you had a very particular type of job. I feel like that’s completely flipped on its head now because the pandemic.

Rachel
Jennifer and Adam, thank you again for joining us.

 Adam

Absolutely.

Jennifer
We’re very appreciative for your having us and sharing your information and ideas with us.

Rachel 
Thank you for listening to the National Law Review Legal News Reach podcast. Be sure to follow us on Apple podcasts, Spotify, or wherever you get your podcasts for more episodes. For the latest legal news, or if you’re interested in publishing and advertising with us visit www.natlawreview.com. We’ll be back soon with our next episode.

Copyright ©2021 National Law Forum, LLC

Article By Rachel Popa and Jessica Scheck of
The National Law Review / The National Law Forum LLC

For more on legal marketing, visit the NLR Law Office Management section.

SEC Awards $40M to Two Whistleblowers: Lessons for Prospective SEC Whistleblowers

On October 14, 2021, the SEC announced that it awarded $40M to two whistleblowers.  According to the order, both whistleblowers provided original information to the SEC that led to a successful enforcement action and provided extensive assistance during the SEC’s investigation.  The first whistleblower received an ward of approximately $32 million and the second received an award of approximately $8 million.  Why did one whistleblower receive an award that is four times greater than the award provided to the second whistleblower? And what can prospective whistleblowers learn from this award determination?

Although the SEC’s order is appropriately sparse (to protect the confidentiality of whistleblowers), it offers some important reasons for the disparity in the two awards:

  • The first whistleblower reported promptly and provided a tip that caused the SEC to open an investigation.
  • The second whistleblower provided important new information during the course of the investigation and was a valuable first-hand witness, but waited several years to report to the SEC. Due to the unreasonable delay in reporting the violations, the SEC reduced the second whistleblowers’ award percentage.
  • Both whistleblowers provided extensive, ongoing cooperation that helped the SEC to stop the wrongdoing, but the first whistleblower provided the information that enabled the SEC to devise an investigative plan and craft its initial document requests. The first whistleblower also “made persistent efforts to remedy the issues, while suffering hardships.”

Lessons for Prospective SEC Whistleblowers

Early Bird Gets the Worm

To be eligible for an award, a whistleblower must first submit “original information.” Original information can be derived from independent knowledge (facts known to the whistleblower that are not derived from publicly available sources) or independent analysis (evaluation of information that may be publicly available but which reveals information that is not generally known).  A prospective whistleblower who delays reporting a violation risks becoming ineligible for an award (another whistleblower may come forward first).

And an unreasonable delay in reporting a violation may cause the SEC to reduce an award.  In making this determination, the SEC considers:

  • whether the whistleblower failed to take reasonable steps to report the violation or prevent it from occurring or continuing;
  • whether the whistleblower was aware of the violation but reported to the SEC only after learning of an investigation into the misconduct;
  • whether the violations identified by the whistleblower were continuing during the period of delay;
  • whether investors were being harmed during that time; and
  • whether the whistleblower might profit from the delay by ultimately obtaining a larger award because the failure to report permitted the misconduct to continue, resulting in larger monetary sanctions.

According to OWB Guidance for Whistleblower Award Determinations, one or more of these circumstances, in the absence of significant mitigating factors, would likely cause the SEC to recommend a substantially lower award amount.

Common reasons that weigh against determining that a delay was unreasonable include:

  • the whistleblower engaging for a reasonable period of time in an internal reporting process;
  • the delay being reasonably attributable to an illness or other personal or family circumstance; and
  • the whistleblower spending a reasonable amount of time attempting to ascertain relevant facts or obtain an attorney in order to remain anonymous.

The significant disparity between the two awards announced on October 14th underscores why whistleblowers should report promptly.

A Whistleblower Can Qualify for an Award for Assisting with an Open investigation

Even though the second whistleblower delayed a few years reporting the violation to the SEC and came forward when the SEC already commenced an investigation, the whistleblower received an award for providing information and documents, participating in staff interviews, and providing the staff a more complete picture of how events from an earlier period impacted the company’s practices.  That result underscores how the SEC’s whistleblower rules permit the SEC to pay awards to whistleblowers that provide information in an existing investigation.  In other words, the fact that the SEC has already commenced an investigation should not cause a prospective whistleblower to forego providing a tip to the SEC.

A whistleblower can qualify for an award if their tip “significantly contributes” to the success of an SEC enforcement action, including where the information causes staff to (i) commence an examination, (ii) open or reopen an investigation, or (iii) inquire into different conduct as part of a current SEC examination or investigation, and the SEC brings a successful judicial or administrative action based in whole or in part on conduct that was the subject of the individual’s original information.

In determining whether an individual’s information significantly contributed to an enforcement action, the SEC considers factors such as whether the information allowed the SEC to bring the action in significantly less time or with significantly fewer resources, additional successful claims, or successful claims against additional individuals or entities.

Whistleblowers are Welcome at the SEC

The SEC issued this $40M award shortly after announcing that it reached a milestone of paying $1B in awards to whistleblowers under the Dodd-Frank SEC whistleblower program.  As of October 14, 2021, the SEC has awarded approximately $1.1B to 218 individuals.

Since assuming the position of SEC Chair earlier this year, Gary Gensler has made several public statements and taken specific actions that suggest that he is a strong proponent of the SEC whistleblower program and is determined to utilize the program to detect, investigate, and prosecute violations of the securities laws.  When the SEC announced that it paid $1B in awards, Chair Gensler stated, “The assistance that whistleblowers provide is crucial to the SEC’s ability to enforce the rules of the road for our capital markets.”

And in remarks for the National Whistleblower Day Celebration, Chair Gensler stated:

The tips, complaints, and referrals that whistleblowers provide are crucial to the Securities and Exchange Commission as we enforce the rules of the road for our capital markets . . . the whistleblower program helps us to be better cops on the beat, execute our mission, and protect investors from misconduct . . . Investors in our capital markets have benefited from the critical information provided by whistleblowers. . . . We must ensure that whistleblowers are empowered to come forward when they see misbehavior; that they are appropriately compensated according to the framework established by Congress; and that those who report wrongdoing are protected from retaliation.

Chair Gensler has also taken action to carry out his commitment to encouraging whistleblowers to come forward.  On August 2, 2021, Chair Gensler suspended the implementation of two recent amendments to the SEC whistleblower rules because these amendments could discourage whistleblowers from coming forward. He directed the staff to prepare for the Commission’s consideration potential revisions to these two rules.

© 2021 Zuckerman Law
For more on SEC and whistleblowing, visit the NLR financial Securities & Banking section.

United States to Open Borders with Canada and Mexico for Vaccinated Nationals Beginning November

The United States will open its northern and southern land borders to fully vaccinated foreign nationals sometime in November 2021. When this happens, it will be the first time since March 2020 that these individuals will be able to enter the United States from Canada and Mexico for “non-essential” purposes, such as tourism, shopping, and family gatherings.

The reopening is expected to occur in two phases. During the first phase, fully vaccinated foreign nationals will be able to enter for non-essential purposes. Unvaccinated individuals will still be able to enter for essential purposes, including for work. During the second phase, scheduled to go into effect in early January 2022, all foreign nationals, whether entering for essential purposes or not, will have to be fully vaccinated. The expectation is that there will be limited exceptions, for example for children.

The “essential travel” restrictions applied only to land and sea borders. Foreign nationals have been able to fly into the United States from Canada or Mexico if they met the COVID-19 testing requirements. In November, however, new COVID-19 vaccination and testing requirements will be in place for all air travel. All foreign nationals seeking to enter the United States from anywhere, with limited exceptions, will have to be fully vaccinated, as well as show proof of a negative COVID-19 test taken within three days of departure. Unvaccinated U.S. citizens and legal permanent residents will need to provide evidence of a negative COVID-19 test taken within 24 hours of boarding a flight to the United States and undergo testing upon arrival.

The United States is a little late to the border game. Canada reopened its border to fully vaccinated Americans on August 9, 2021, and to other fully vaccinated foreign nationals on September 7, 2021. It is still not clear exactly when the new U.S. rules will become effective. The United States already announced that the 14-day travel restrictions on China, Iran, the UK and Ireland, the 26 Schengen Zone countries, Brazil, South Africa, and India are scheduled to be lifted sometime in “early” November. The northern and southern border restrictions will be lifted at the same time. We are still awaiting official guidance on documentation requirements and the implementation date.

Jackson Lewis P.C. © 2021

Article By Sheila T. Minihane of Jackson Lewis P.C.

For more articles on travel, visit the NLR Utilities & Transport section.