In House - The FindLaw Corporate Counsel Blog

July 2009 Archives

Microsoft Bings Yahoo

After over a year of negotiations, Microsoft and Yahoo are officially hitched--sort of.

The ten-year partnership deal links the two mega-sites in web search.  Yahoo's interface will remain the same but its search will be powered by Microsoft's recently-ramped up search engine, Bing.  Though Google is the search engine of choice for over 70% of all internet searches, the deal unifies the #2 and #3 in the search line.

The deal guarantees Yahoo an 88% profit for all searches conducted on Yahoo/Bing over the next five years.  This may allow the website to stay afloat, retool, and refocus as it shifts its attention from power search to building out its other portal features.  Yahoo expects the partnership to add about $275 million to annual operating cash flow.

SEC Sets the Dress Code: No Naked Shorting

The Securities and Exchange Commission (SEC) turned its temporary rule banning abusive "naked" short selling of securities permanent earlier this week, just days before it was due to expire on July 31st.  But not everyone is breaking out the champagne. 

Naked shorting, as the invidious practice is called, is selling stocks short without borrowing them first.  Sellers then look to cover positions after the sale.  The temporary rule was put in place as a stopgap measure last year at the time Lehman Brothers and Bear Stearns were stumbling to demise.  It requires that the broker-dealer, rather than the seller, be responsible for ensuring for delivery within three days after the trade.

Small Stent, Big Settlement

Medtronic Will Pay Abbott Laboratories $400 Million in Heart Stent Settlement

After ten years of debate and legal jousting for patent rights on heart stents, medical device maker, Medtronic, will pay its rival Abbott Labs $400 million to settle all existing claims as well as to block off any future claims---at least for the next decade.  The bare metal and drug-eluting stents were created to prevent cardiac arrest by scaffolding arteries to keep them open for blood flow.

Abbott inherited the patents and their respective litigation when it acquired Guidant in 2006.  Medtronic and Abbot have since been chasing each other across the globe in the name of vascular stenting--with claims filed in California, the Netherlands, France, Germany, and Japan.  The long-awaited settlement comes just one week before trial was set to begin in San Francisco federal district court in a case brought by Medtronic against Abbott.

The Yin and Yang of Corporate Counsel Convergence

Legal departments look to un-divide divisions of labor with outside firms.

Economic indicators may be looking up these days, but that doesn't make the idea of corporate counsel convergence any more appetizing to law firms.  Convergence is the consolidation of the number of outside firms an in-house legal department utilizes.  Instead of approaching various different firms specializing in different practice areas to meet a company's multi-faceted legal needs, the economic slowdown has led to the corporate legal department trend of retaining a few firms to handle it all. 

Contract Flexibility in the Time of Swine Flu

Countries May Have No Legal Recourse in Enforcing Vaccine Contracts with International Pharmaceutical Companies

The swine flu pandemic has already had a forceful impact across the globe, but with fall flu season just months away and pharmaceutical companies racing to fill vaccine orders, it may also prove to be a major game-changer in international contract law. 

Many countries have contracted to receive enough of the vaccine to satisfy their nation's needs; however, the are not subject to binding international law.  And in the light of the pandemic nature of swine flu, aka an "extraordinary circumstance", legal experts are cautioning countries scheduled to have vaccines imported, to have a back-up plan.  Many of the vaccine order contracts contain clauses that allow breaking of the contracts under extraordinary circumstances opening the door for governments of countries with pharmaceutical plants to lock down vaccine stores to serve their country's needs first before exporting the vaccine abroad.

Bringing Pro Bono to Center Stage

The 2009 ABA Pro Bono Publico Awards Recognize Excellence in Volunteer Legal Services

At a time when legal departments are tightening their purse-strings it is uplifting, and arguably necessary, to hear stories of practitioners beating the odds--and a sour economy--to serve the underserved.  On August 3, 2009 the American Bar Association will honor recipients of this year's ABA Pro Bono Awards.  The awards are open to individuals, law firms, law schools, government offices, in-house counsels, and other institutions. 
The AmLaw Daily has an interview with Weldon Latham, head of Jackson Lewis' corporate diversity counseling group, in which Latham cautions companies to be especially cautious in their human resources decisions in these times of economic woe.

According to the piece, the U.S. Equal Employment Opportunity Commission reported a 15 percent rise in workplace discrimination cases in 2008.  Latham suggests that a little proactive thinking could help companies avoid those kinds of lawsuits before they arise.

Latham says that he and his firm encourage "companies to set up a business-based-need plan, laying off the people who they need less," rather than engaging in a simpler, yet more dangerous, first-hired-first-fired system.

Legal departments should spread the word that HR departments need to come up with plans like these in order to minimize the risk of lawsuit, as well as maximize the business efficacy of the company's workforce.

Just make sure that your position is one the company needs before you do!

Help Your Company Get IT When It Comes to eDiscovery

By now everyone knows how important ediscovery is.  Most information is now stored mainly in electronic form, so ediscovery is an essential part of any lawsuit or arbitration. 

Legal departments know this.  IT departments know this.  So why is there still tension and acrimony between the departments when it comes to ediscovery issues? 

Part of the problem is the lack of a shared language and background.  Different cultures, in other words.  IT departments concern themselves with performance, uptime and disaster recovery since their primary responsibility is to provide computer services to employees whenever they need them.  Legal departments, on the other hand, focus on building cases, making arguments and gathering evidence.

There Will Be Blood

Government regulators in the US and Europe have oil market speculators in the crosshairs, and are looking to take them down by imposing sweeping restrictions on how they can trade. 

Apparently, governments on both sides of the pond fear that oil speculation can lead to wildly volatile oil prices, which could derail the nascent economic recovery.  In the US, the Commodity Futures Trading Commission announced that it is interested in lessening the influence of speculative traders, such as hedge funds and investment banks, by putting caps on how much money any one trader can put down on a commodity at any one time.

The moves come as the price of a barrel of oil creeps back up from a 2009 low of nearly $34 to a recent high of around $73 a barrel.  In 2008, the price of oil shot up to $145 a barrel, placing a major burden on the finances of companies and individual consumers alike.

Old GM, Meet the New GM

It's been a while since I posted anything on the GM bankruptcy, and the hiatus has been completely deliberate.  With so much news and speculation swirling around the proceedings, it would be easy to let the affair completely take the blog over.

But yesterday's opinion from the bankruptcy court judge definitely deserves a post, especially since one of the key points in the opinion deals with the disposition of injury lawsuits against the company.

Corporate Counsel Don't Buy All This Talk of a New Legal Model

Corporate counsel are mad, and they're not taking it anymore.  And that includes all this discussion of a new legal model, according to a report in the ABA Journal.

About 75 percent of CLOs gave law firms low marks when asked how serious law firms are about changing their legal service model to deliver greater value to clients, according to a survey by legal consulting firm Altman Weil. At the same time, in-house lawyers are taking steps to tighten their own belts by laying off lawyers and cutting back on outside legal work, the survey showed.

The CLOs were asked to give firms a score ranging from a low of 0 to a high of 10 to indicate how serious they think they are about changing their legal models, according to an Altman Weil press release summarizing the June survey findings. Only 5 percent gave firms a score between 8 and 10, indicating the CLOs believe the firms are serious about change. Twenty percent gave firms middle scores of 5, 6 or 7. Another 75 percent gave law firms a rating between zero and 4, indicating the CLOs believe the firms have little or no interest in change.
So, while corporate counsel are generally unhappy with the way law firms are running things, they're also cynical about the chances for change.    Maybe the recent changes in the lockstep associate compensation model will give them a little faith.

Either way, it's shaping up to be an interesting year for the business of law.

Seminar - Archiving and the Enterprise: Cut Costs Now!

This seminar is presented by Mimosa Systems:

Tues., July 21, 2009
9:00am - 1:00pm
1065 La Avenida
Mountain View, CA 94043

The costs of backup and eDiscovery requirements are soaring along with the likelihood of your team needing ready access to your corporate communications and content.

  • Storage requirements will grow from almost 18 MB per user/day in 2007, to over 28 MB per user/day in 2011*
  • 80% of electronic discovery events involve email and attachments**
  • One of 2 organizations worldwide is using or planning to use SharePoint***
Is your organization prepared?