In House - The FindLaw Corporate Counsel Blog

May 2015 Archives

A survey of international General Counsels by TerraLex, a legal referral company, shines some light into what GCs look for when they hire outside counsel -- and how much law firms will have to improve to keep them satisfied.

The survey gathered input from 127 chief legal officers companies based in the United States and abroad. Its results highlight the importance of outside counsel in aiding with regulatory compliance and the frustrations many GCs face from law firms lack of industry expertise and expensive billing practices.

There are plenty of white collar criminals out there: insider traders, embezzlers, nearly all of FIFA. But there are also plenty of people who stumble into corruption, not because they are corrupt, but because there is not a strong enough ethical system in their workplace.

How can in-house counsel insure that otherwise ethical businesspeople don't stray into illegal practices? Preet Bharara, the U.S. Attorney for the Southern District of New York, has some advice -- and if anyone is qualified to talk about white collar crime, it's him. Few lawyers have brought down as many white collar criminals as Bharara.

Shortly after its planned merger with Comcast fell through, Time Warner Cable may soon be purchased by Charter Communications for $55 billion dollars. After a messy break up, that's quite the rebound for the cable and broadband company.

The merger between the two companies is spurred largely by Charter's desire to expand its broadband holdings, according to The New York Times. As consumers move away from traditional cable to online streaming services such as Hulu and Netflix, Internet provision has become one of the most important parts of many cable packages. Though the merged company would be smaller than proposed Comcast-TWC deal, it could raise similar concerns.

Zap! Pow! Bang! In a legal dust up between one of the world's biggest superhero sidekicks and a major pop star, D.C. Comics is opposing Rihanna's attempt to trademark her given name. In an effort to bring more product lines under her umbrella -ella -ella, the singer has filed for trademark protection for her given name, Robyn.

The comic book company claims that the trademarked name could cause confusion with Batman's sidekick, Robin. D.C. Comics holds the trademark for Robin in relation to action figures and comics, according to Inside Counsel.

PayPal, the online payment company owned by Ebay, has agreed to pay $25 million to settle claims stemming from its "Bill Me Later" program. The Consumer Financial Protection Bureau had accused PayPal of refusing to honor the advertised terms of its online credit product, signing customers up for credit without their permission, and failing to properly manage its credit and billing system.

Thankfully, PayPal's failure can be your inspiration, as there's plenty to learn from the company's credit debacle.

Maybe you miss the pay of a high performing firm, or you long to return to litigation. Perhaps you've just realized that the General Counsel isn't going to die and leave you the top spot anytime soon. Whatever the reason, you want to go back to firm life.

The good news is, it can be done! Lawyers are increasingly making moves from in-house departments to firm practice. But it's not always an easy transition. Here's some tips to help ease your way:

When you buy a "designer" bag out of the back of a van, you probably realize it's a knockoff. That might not be the case when you purchase a similar bag online, where counterfeit goods can proliferate without the buyer being able to check every monogram, button and zipper to see if the item is the real deal, or just a rip-off.

For companies involved in online markets and e-commerce, and their legal departments, counterfeit goods can cause major headaches. Take Alibaba for example. The enormous Chinese e-commerce company is currently being sued by Kering SA, the enormous French luxury brand company behind Gucci, Yves Saint Laurent and Balenciaga, which alleges Alibaba knowingly traffics in counterfeit goods.

5 Tips for a Drama-Free Company Picnic

It's quickly approaching summertime, and there's nothing more fun than to throw off the shackles of the office for a day and enjoy the outdoors at the company picnic. (Attendance is mandatory; fun is negotiable.)

Of course, when you bring people into the great outdoors, things will happen. Poison ivy will happen. Injuries will happen. And if there's going to be alcohol at the picnic, well ... look out. Here are some tips for ensuring that your company outing has the least amount of drama possible.

It's a whole new world for the sharing economy, as the Philippines issued new regulations for ride-sharing services such as Uber and Lyft, last week. Though other countries have taken action on ridesharing services -- Uber has been banned everywhere from Eugene, Oregon, to all of Thailand -- the Philippines is the first nation to develop ridesharing specific regulations, according to Reuters.

In an industry that has often operated by bumping up against the margins of the law, the new regulations could help further institutionalize the sharing economy. If successful, they may be a model adopted by other jurisdictions looking to regulate such services.

It's not just telemarketers that are at risk of being sued under the Telephone Consumer Protection Act. Any company that makes customer phone calls, sends texts or faxes faxes could be open to liability under the TCPA. The TCPA prohibits unsolicited advertising by phone, text and fax. It provides $500 to $1,500 for each violation, plus allows for the recovery of lawyer fees and costs.

TCPA lawsuits are a booming business. For a plaintiff's side class action firm, a company's TCPA slip up can be a windfall. There's even apps that help consumers convert unwanted calls straight into lawsuits. Thankfully, a vigilant in-house legal department can help reduce the risks of unexpected TCPA litigation.

While employers have to offer health coverage to full time employees under Obamacare, could it be better to steer them towards Medicaid instead? That's what at least one corporate advisor, writing in Forbes, is arguing.

To be fair, that article's author runs a company which advises employers on how to get public benefits for their workers, so he might not be the most objective. But, he is correct -- certain low-wage workers can qualify for Medicaid in some states, and if they chose it over employer-sponsored health insurance, that could save companies money -- at the public's expense.

A recent survey of directors, board chairs and CEOs sheds new light on the role of general counsel in large corporations. The survey, conducted by the legal recruiting company Barker Gilmore and NYSE Governance Services, reached over 5,000 corporate leaders, though the response rate was not given.

It's filled with valuable insights into the minds of executive teams, who are increasingly looking at general counsel as a valuable part of corporate leadership. Here's some of the lessons in-house counsel can take away:

According to a new study by Baker Hostetler, one of the nation's largest intellectual property focused law firms, most data breaches are caused by human error, not hackers or malware. In a review of over 200 data breach incidents, the firm found employee negligence to be the leading cause of breaches.

That's right -- those Russian hackers are less a threat to your company's security than its own employees, whose negligence or theft was responsible for more than half of all breaches examined.

Your company may not be paying its legal department in bitcoin yet -- and it may never -- but bitcoin technology could soon change the way financial operations work. Nasdaq is currently experimenting with bitcoin's blockchain technology to see if it can speed up trades on its stock market.

Right now, the experiment is limited to a small market for securities in privately held companies. If the project is successful, it could ramp up the speed of securities trades -- potentially transforming the industry. For in house counsel, now's a good time to start taking note of bitcoin.

Companies that use commissions as a significant part of employees' pay may be able to take advantage of the Fair Labor Standards Act's commission-based employees exemption. Under this exemption, employers aren't required to pay overtime to certain commission-based workers. That can mean big savings.

Of course, an in-house lawyer knows that employment regulations are never simple or straight-forward. Rather, they're full of pitfalls that can leave an employer exposed to costly litigation and penalties if they don't do things properly. A good GC needs to know how to take advantage of the exemption while avoiding its hidden traps.

Here are three of the most common ways employers trip up when dealing with commission-based employees:

When it comes to CLE, options for in-house lawyers can be limited. Thankfully, the Association of Corporate Counsel, a bar association for in-house attorneys, has you covered when it comes to meeting your education requirements.

You're especially covered this May, when a slew of CLE trainings are offered. Here's a quick overview.

When the Dodd-Frank Wall Street Reform and Consumer Protection Act was passed in 2010, it included an expanded whistleblower bounty program. As an incentive to report violations of financial regulations, whistleblowers are entitled to 10 to 30 percent of an enforcement action's recovery.

If they can ever get it. According to a review by The Wall Street Journal, 83 percent of the whistleblowers who have applied for their awards have yet to have their claims addressed.

Everyone needs an extra hand now and then. Especially in-house attorneys. Taking on outside counsel can help a legal department balance its existing work with new obligations, and add specialized expertise where needed.

Finding a good match isn't easy, however. About 30 percent of in-house counsel let their outside counsel go every year. You don't have to be one of them though -- if you pick well. Here's three common mistakes GCs make when hiring outside counsel:

Every time employees leave, there's a risk that they take some valuable trade secrets along with them. The case of Sergey Aleynikov serves as a good reminder of this. Aleynikov was a programmer for Goldman Sachs before he left to start up his own trading firm -- using trading algorithms purloined from the Wall Street firm. He was convicted of stealing "secret scientific material" last Friday.

Aleynikov's much publicized case serves as an important reminder that one of the jobs of in-house counsel is to zealously guard the proprietary information of the company. This means acting when theft of trade secrets is expected, as well as taking steps to prevent such theft in the first place.

You don't have to go to Austin or Portland to hear about the importance of "keeping it weird." In many companies, cultivating an office culture of "weirdness" is seen as a way of fostering creativity and increasing employee satisfaction. Apparently having a foosball table and bean bags isn't enough these days.

Of course, like many other office culture issues, there are legal risks that any good GC should address before clearing out everyone in khaki. Here's some thoughts on staying weird while staying on the right side of the law.