In House - The FindLaw Corporate Counsel Blog

April 2017 Archives

Legal Ops Taking Aim at Changes in 2017

‘Legal ops’ can conjure up the image of a sniper, clothed with clandestine legitimacy and a laser-focused rifle.

It’s a fair analogy, as legal operations professionals gain more power in corporate legal departments around the world. Ten years ago, not many corporate counsel knew they existed. Today, they are key members of legal teams trained to work fast and cut costs.

With the formation of the Corporate Legal Operations Consortium, there are more than 600 card-carrying members of the organization. This is an account of who they are and what they can do:

GM Leaves Venezuela in Wake of Financial Crisis, Seized Assets

Like a tornado sweeping through town, a government can take out a company in a moment that instantly reminds people they are not in control. If any survive, they are left to pick up the pieces and to try to rebuild their lives.

In Venezuela, General Motors employees are dealing with a financial crisis sweeping the country. The government seized the automaker's factory, leaving thousands jobless and wondering about how to pay for their next meal.

The seizure resulted from a decades-old lawsuit, but came to a head because the country is fighting for its political and economic life. Venezuelans are dying in protests over the conditions, and American businesses are also falling victim to the crisis.

It is a reminder to companies doing business abroad that everything can change in an instant.

Discovery Communications Names New General Counsel

Savalle Sims has been named the new general counsel for Discovery Communications.

Sims, formerly deputy general counsel, will lead the company's global legal teams and manage legal issues worldwide. In the new position, she reports to Bruce Campbell, chief development and legal officer.

"Savalle is a strong leader, with an incredible legal mind and strategic approach that has served Discovery exceptionally well," Campbell said in announcing her promotion.

Theranos Threatens Bankruptcy; Judge Stops Proposed Deal

Theranos played the bankruptcy card in a class-action against the company, but it was a bad play that derailed a proposed deal.

In documents unsealed in Delaware Chancery Court, investors said the company threatened to file for bankruptcy protection if they didn't accept a deal to dismiss their claims. A Theranos lawyer tried to pressure Partner Investments LP and two other funds, which invested more than $96 million in the company, to accept more equity instead.

According to reports, the plaintiffs said Theranos' attorney "sent the unmistakable message" that the company would declare bankruptcy if the investors turned down the deal. The plaintiffs then discovered that Theranos engineered the deal to make it impossible for the funds to obtain "any recovery."

Judge Travis Laster has stopped the proposed deal for now and set a hearing on the matter for June 26.

When Litigation Financing Makes No Cents

Mark Herrmann, a veteran of BigLaw litigation, says that litigation financing makes no sense for rich companies.

They can afford the attorneys fees to litigate, but they borrow the money and lose more even if they win. In a $20 million fee case, for example, they will pay twice that for borrowing. So even if they win $100 million, they will pay $40 million for financing when they could have paid only $20 million out-of-pocket.

Now why would they do that? For once, let's not blame the lawyers. It's the stock analysts.

President Donald Trump signed a 'Buy American and Hire American' executive order yesterday, which could lead to significant changes to the H-1B temporary visa program. H-1B visas allow highly skilled, foreign workers to work in the United States for three years, extendable up to six, with 85,000 such visas issued every year.

Here's what you can expect following the president's "Hire American" EO.

In-house attorneys shouldn't keep the rest of the company at arm's length. That's the message from PayPal's Chief Business Affairs and Legal Officer, Louis Pentland. "As an in-house lawyer," Pentland explains, "the best you can get is when you're integrated with the business team."

That means forgoing the more traditional role of simply identifying and advising the company on risks, while allowing others to make the final decision.

Avoid Gender Bias in Performance Reviews

Lady Justice was not always blindfolded, although she served the same purpose.

"Sight was the desired state," wrote Professors Judith Resnik and Dennis Curtis, "connected to insight, light and the rays of God's sun."

In their treatise Representing Justice, the authors provide a historic look at Lady Justice and the idea that justice is blind. Even with eyes wide open, she has always been fair.

But according to an article in Harvard Business Review, fairness is still evolving in the workplace. Performance reviews have not been fair towards women.

As lawyers, we're not always fans of employee discretion. That's why we like strong policies and clear guidelines, things that can make sure that a worker's poorly made decision doesn't result in a company-wide f--- up.

But too much restraint, and too few opportunities for employees to use their own good judgment, can be counteractive. Indeed, according to Harvard Business School professor John Deighton, it might even lead employees to have your customers dragged off airplanes, bruised, bloody, and primed for internet outrage.

AI Increases Cyber Risks for Companies

Data, the affable android of Star Trek fame, had a lesser-known brother named Lore. In the fictional universe, they were identical on the outside but very different on the inside. They were incalculably intelligent, yet as different as good and evil.

Similarly in the real world, artificial intelligence has great potential to improve the legal condition. But this blog is about AI's dark side.

What Is the Timeline for Getting Your Next In-House Job?

'There is no spoon.'

So said the bald kid in The Matrix explaining that traditional rules do not apply, but so also said attorney Tracey Lesetar-Smith in describing the rules for getting an in-house job.

"The conventional rule is that one must toil away in law firms for eight-plus years before earning the right to jump in-house," she said. But is it really a rule?

Writing for the ABA Young Lawyers Division, Lesetar-Smith said there are no rules when it comes to landing in-house jobs. Everybody has a different story. Here are a few more:

In January, the Department of Labor sued Google, accusing it of withholding information on pay disparities from federal regulators. Then, last Friday, the DOL accused Google of "systemic compensation disparities against women pretty much across the entire workforce."

Now, Google is pushing back, arguing that its internal analyses ensure that "our pay practices remain aligned with our commitment to equal pay."

Corporate Succession Plan Starts at the Top

Like finding an incomplete will, it's really too late for succession planning if you've waited until the company president dies.

Before the funeral is over, people are vying for control. Some distant relation will suddenly appear with a forgotten claim. And who invited the taxman?

Dying is hard enough, but you can make it a little easier by planning ahead for succession in your company. It starts at the top.

Wells Fargo's board of directors released its report into the bank's fraudulent account scandal yesterday, a scandal that saw millions of fake accounts opened customers' names, as employees bent rules to meet demanding sales goals. The report, which marks the near culmination of the bank's internal investigations, laid blame primarily on two executives: ex-CEO John G. Stumpf and former head of community banking Carrie L. Tolstedt.

But the report also gives some insight into how the problem got so bad, and how the bank's internal legal department failed to prevent the scandal, even when they'd warned of risks years before.

What's the cost for overseeing a program where fraud was rampant? About $75 million and counting. That's the amount that Wells Fargo's board announced it would "claw back" from two executives this morning, sending them the bill for the bank's account fraud scandal. The bank agreed to pay $185 million to regulators in September, after it was accused of fraud that saw 2 million fake bank account and credit card lines opened in customers' name.

But the bank isn't just laying blame on the two executives alone. Today's massive report from the bank's board, based on months of internal investigation, says that the structure and culture of the bank made it prime territory for such fraud.

Tips to Overcome Stress at the Office

You have a big corporate job, responsible for millions of dollars and accountable to thousands of shareholders. But it's hard to breathe at the top because the air is thin and the pressure is intense.

Or maybe your job is not so big, still you feel stressed as you put out the fires of even a small business. Life is hard on the street, too.

Well it won't get any easier if you have a headache, get sick or simply burn out. So relax, have a seat, and take your shoes off. Here are some tips to help you de-stress:

Saying your class-action is largely settled is like saying you're a little pregnant.

But that's the status in the proposed settlement of a high-profile invasion of privacy case. Twitter, Yelp, Instagram and others have agreed to pay $5.3 million to people who used their apps only to discover that their contacts had been uploaded through "Find Friends" and similar features.

Only problem is, "Find Friends" is a feature on iPhones as well, and Apple is not settling. The battle began in 2012, but the war may just be getting started.

Avoiding Online Age Discrimination in the Hiring Process

In the facile computer world, people sometimes get lazy with things like spelling and math. Auto-correct covers a host of spelling sins, but math requires a little more work.

For internet job sites like Monster, Indeed, and CareerBuilder, it turned out to be a bigger problem. The Illinois attorney general recently cracked down on them and others for potentially violating age discrimination laws by screening out older workers online.

If you can do basic math, however, your company can avoid online age discrimination. It starts with taking responsibility and continues with ensuring accountability.

SCOTUS to Decide If U.S. Corporations Can Be Liable for Overseas Terrorism

Arab Bank in New York thought it couldn't be held liable for customers overseas -- even those who were known terrorists.

After all, the U.S. Supreme Court had ruled that liability presumptively does not reach corporations in America for human rights violations committed in other countries. Moreover, the U.S. Second Circuit Court of Appeals had thrown out the cases against Arab Bank based on that ruling.

But that was then, and this is now.

"[T]his case presents the issue in as gripping a context as this Court is likely to see: proven corporate financing of terrorism, partly from a perch in the United States that was indispensable to the terrorist scheme," the petitioners said in urging the Supreme Court to hear Jesner v. Arab Bank.

If the legal profession ever becomes more representative of America's demographics, it might be because of in-house lawyers like you. More and more, major corporate legal departments are requiring that their outside counsel invest in diversity.

The most recent corporate client to flex some pro-diversity muscle is Facebook. This weekend, the company institute a new diversity mandate for its outside counsel, the New York Times reports. Under the new policy, teams handling legal matters for Facebook must be at least one-third minority or female.

When law firms hire, they tend to look for signs of skill, intelligence, and dedication. For new associates, this may mean seeking out candidates with degrees from top schools, or involvement in time-consuming activities like law review. For laterals, firms may look for years of experience with a prestigious firm, or a history of grinding out hours.

In-house legal departments look for these things too. But much more so than their law firm counterparts, the corporate world emphasizes "culture fit," that elusive quality that seems to indicate "you'll do well here."