In House - The FindLaw Corporate Counsel Blog

December 2016 Archives

The Department of Justice announced earlier this week that it was charging three Chinese citizens with insider trading, after they traded on info obtained by hacking into the emails of M&A lawyers. The trio was able to purloin insider information after using the credentials of firm employees to gain access law firm servers. The news was another in a long series of revelations that hackers were targeting law firms -- and often succeeding in gaining access.

Consider it a reminder that, when it comes to keeping information secure, you can't always count on outside counsel.

Celebrities and Supreme Court justices weren't the only ones to die this year. 2016 saw the most broken M&A deals in recent history, according to the New York Times. In terms of transactions withdrawn after being publicly announced, this year was the biggest since the financial crisis of 2008, Michael J. de la Merced reports.

In total, busted deals represented nearly $800 billion, or almost a quarter of the $3.55 trillion in transactions announced during 2016.

As 2016 comes to a close, what does the new year hold for in-house counsel?

Our crystal ball is on the fritz, but we have a few solid predictions nonetheless. Attorneys in corporate legal departments can expect some current in-house trends to continue strong in to 2017, as companies, for example, continue to place more responsibility on in-house counsel. But big changes could be ahead, too, largely due to the incoming presidential administration which has promised to turn long-standing regulations (and practices) on their head.

Checklist for Reorganization After a Merger

In a way, a merger is like a marriage. It's a union of separate beings contributing to a common goal. After the honeymoon, they will face new challenges but the successful ones will continue for many years.

So why are some mergers more like bad marriages? Maybe they forgot that successful unions take some time and definitely take more work. Below is a checklist to ensure successful reorganization after a merger.

6 Tips for Delegating Legal Work

There is no class on delegation in law school.

The closest thing is a lecture on the non-delegation doctrine, which teaches that Congress cannot delegate certain duties to administrative agencies. So what is an attorney to do when it comes to knowing how to delegate legal tasks?

Because developing delegation skills is not part of legal education, corporate counsel need to learn from other disciplines and mentors in the workplace. Charles A. Volkert, writing for Minority Corporate Counsel Association, says delegating offers distinct advantages for both managing counsel and the people they lead.

"By communicating a more holistic view of company goals and enhancing project- and team-management abilities, counsel can help their departments meet the complex challenges they face today," he says.

Here are some tips:

On the eve of the one of the busiest travel periods of the year, two major airline carriers announced that they'll soon become one. The Alaska Air Group said last week that it had finally wrapped up its acquisition of Virgin America, a deal that had been delayed for months, in part due to anti-trust review by the Department of Justice.

The merger has a total value of $4 billion, according to a statement by Virgin America. Their merger will create the fifth largest airline in the nation. To celebrate, the companies launched a new aircraft with combined branding from San Francisco International airport last week.

Holiday Etiquette for the Office Party

Should I wear a Santa hat or a Christmas sweater to the office party? Is it alright to drink at the office before New Year's Eve? Does this fruit cake make me look fat?

Decisions about holiday etiquette; they're almost as hard as deciding what gifts to buy. So here are some general principles, suited particularly for lawyers and their clients at those office parties.

The blockchain might be the number one tech buzzword of 2016, followed quickly by smart contracts. The blockchain works by creating decentralized, digital ledgers that encrypt, register, and verify transactions. Smart contracts rely on computer programming to create, verify, or execute deals.

Smart contracts have been heralded as the future of contracting, received praise in the legal and tech press, and spawned startups that have earned millions of dollars in venture capital. But, they may not be the panacea some are expecting. Indeed, smart contracts come with some serious limitations.

How Employment Visas Could Change Under Trump Administration

Immigration attorneys will have more work to do than usual, and not only the sole practitioners fighting for those foreigners yearning to breathe free. Corporate counsel are gearing up for changes that will affect American employers.

During his campaign, Trump said he would crack down on employers who abuse immigration laws to undercut American workers. He cited "outrageous practices" at companies like Disney in Florida "when Americans were forced to train their foreign replacements."

"I will end forever the use of the H-1B as a cheap labor program, and institute an absolute requirement to hire American workers first for every visa and immigration program," Trump said last March. "No exceptions."

The election of Donald Trump in November means that government regulatory programs could undergo a massive shift in the near future, as industries are deregulated, government enforcement priorities are shifted, and federal rules are rolled back.

But don't expect things to change instantly come Inauguration Day. When it comes to your compliance regime, the best strategy is to stay the course, according to experts.

Facebook Shareholder Suit Alleges Zuckerberg Conflict of Interest

It reads like a scene from an old movie, a la Sweet Smell of Success in 1957:

"I love this dirty town," says J.J. Hunsacker, a syndicated columinist played by Burt Lancaster. He wants to break up a romance between his younger sister and a jazz musician. Sid Falco, an unprincipled press agent portrayed by Tony Curtis, is the man to do it.

"The cat's in the bag and the bag's in the river," Falco promises.

Funny, that's the same line Marc Andreessen texted to Mark Zuckerberg during one of the biggest deals for the future of Facebook. Zuckerberg, who was trying to retain his majority voting rights while unloading billions worth of his stock, replied dubiously. He probably didn't know what Andreessen was saying.

"Does that mean the cat's dead?" he asked.

With the holidays fast approaching, now is a good time to make sure your company has an office gift policy -- and to stick a copy of it in everyone's stocking.

While it's the season of giving, companies still need to set and enforce gift-giving guidelines, as overenthusiastic gift exchange has the possibility of resulting in compliance and tax violations.

Anti-Hacking Laws Get a Tighter Grip on the Workplace

The Defend Trade Secrets Act (DTSA) became federal law recently, which gives employers more legal power to protect their trade secrets. This is good news and bad news for the workplace: The good news is that employers have more remedies when hackers get into their computer systems. The bad news is that employees are the usual suspects.

In addition to setting federal standards that have previously been left to the states, DTSA provides for money damages, injunctive relief, seizure of property to protect trade secrets from disclosure, punitive damages, and attorney fees.

Corporate purse tightening continues to impact how in-house legal departments work, a new study shows. Companies increased their total legal spend by just a single percentage point, according HRB Consulting's 2016 Law Department Survey.

But how that cash is being spent is changing. Corporate legal departments are reducing their spending on outside counsel, the survey found, while upping their investments in legal technology. Meanwhile, in-house salaries have shown only the most modest gains.

What Is 'RegTech?'

You've probably heard of FinTech, the application of emerging technologies like artificial intelligence and data analytics to the financial services industry. We're sure you're familiar with #legaltech too, the infusion (albeit a slow one) of cutting edge technology into the legal industry.

But do you know about RegTech? This new, tech-heavy approach to regulatory compliance is increasingly showing up on some in-house counsels' radar.

We're almost starting to feel bad for Theranos. Once a Silicon Valley wunderkind, Theranos rose to fame on the back of its founder Elizabeth Holmes' Steve Jobs-turtle necks and claims that the company could reshape the blood testing industry. Theranos rode that hype to a $9 billion valuation, only to be brought down by skepticism from the medical community, federal investigations, and an eventual ban on Holmes operating a medical laboratory. Once considered the richest self-made woman in the world by Forbes, the magazine recalculated her wealth this summer, declaring her net worth to be, essentially, zero.

A company doesn't crash and burn so spectacularly without attracting lawsuits, of course, and Theranos has had its share. It's been hit with consumer class actions and its former partner, Walgreens, recently filed a $140 million breach of contract suit against the company. Those things are expected. But the company is now facing a much more unusual suit: a rare lawsuit alleging pre-IPO securities fraud.

Facebook Sued by Two Employees for Race Discrimination

According to a complaint filed against Facebook, a manager called employees "n****r" and "monkey." He also referred to one African-American as a "lazy n****r who wanted everything handed to him," the suit alleges. Robert Baron Duffy and Robert Louis Gary responded by filing racial discrimination claims against the company.

Duffy, a former operations manager at the company's North Carolina facility, and Gary, a night shift manager there, also claim they were paid less than their Caucasian colleagues. They allege the company failed to adequately address their discrimination and retaliation claims after they made internal complaints.