Articles Posted in Management Disciplines

In a recent blog post Ron Friedmann responded to a question posed in a legal technology publication:

“‘How do you envision the legal team of the future changing?’ The thesis of my answer: multidisciplinary teams ….

” … The complexity of the modern world makes many problems multifaceted. How many ‘legal problems’ are really business problems with a legal element?  Clients need lawyers to team with other professionals – and treat them as peers – for the best solution.

“A story from early in my legal market career illustrates the point. I had just arrived at a large firm to run practice support. A partner who knew I had a quant background asked me to help on a competition matter. A regional office of a regulator questioned our client’s action. It worried that many consumers would be adversely affected by a mistake it had made. I ran a simple time-series regression on the number of claimants to date. It showed a quickly diminishing curve. That is, a reasonable projection showed few new complaints would be filed. That one graph got the regulator to back off. That was a simple stats answer, not a legal’ answer.”

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This past Monday (July 2) Mark A. Cohen wrote the following in Forbes online:

“Law is staging its own version of ‘every kid gets a trophy’ … Every week, all over the globe, the legal industry throws gala dinners to celebrate its ‘innovators,’ ‘visionaries,’ and ‘pioneers.’  These gatherings afford attendees a chance to dress up, schmooze with peers, feel important, and convince themselves that their industry is performing splendidly. Legal providers are hearing ‘Celebration’ while for buyers it’s ‘I can’t get no satisfaction.'”

I met Mark Cohen a couple of months ago at a global conference on legal innovation sponsored by Northwestern University’s Pritzker Law School’s Center for Practice Engagement and Innovation where he is a Distinguished Fellow.

On one hand, he’s what I’d call “a lawyer’s lawyer”, with:

” … An international reputation as a ‘bet-the-company’ civil trial lawyer with stints as a decorated Assistant United States Attorney; BigLaw Partner; National Litigation Boutique Founder and Managing Partner; Federally-appointed Receiver of an international aviation parts business conducting operations on four continents; and outside general counsel to three insurance companies.”

But this “lawyer’s lawyer” also founded and managed two entrepreneurial companies before advising law firms and law departments on improving their services delivery:

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Some times a character test presents itself in the guise of a legal question.

And when that character test presents itself it’s the duty of general management — not their lawyers — to decide with wisdom and discernment.

Because — except where there is an actual violation of law or of the bar authority’s canons of ethics — lawyers considering moral issues can miss the forest (discernment) for the trees (strict, technical rule compliance).

Consider this sequence relating to Tesla:

1. Two months ago California’s Division of Occupational Safety and Health opened an investigation into Tesla following a report about “underreporting recordable work-related injuries and illnesses”.

2. Two weeks ago Tesla announced that it would lay off nine percent of its work force.

3. Ten days ago (June 18) Bloomberg reported that — as a condition to receiving severance payments — Tesla would require a laid-off employee to sign the following statement of fact:

” [The laid-off employee] had the opportunity to raise any safety concerns, safety complaints, or whistleblower activities against the company, and that if any safety concerns, safety complaints, or whistleblower activities were raised during your employment, they were addressed to your satisfaction.”

Temple University law professor Brishen Rogers:

“I do think the agreement will chill valid employee complaints …. A reasonable worker would just keep their mouth shut, rather than risk losing their severance pay.”

Ya think?

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Lola v. Skadden, Arps arose from a lawsuit in which a plaintiff demanded massive disclosures of documents of a specified description. This meant that the defendant had to review thousands of documents to respond.

David Lola was a licensed lawyer hired on contract by the law firm Skadden Arps to perform those document reviews.

Later, Mr. Lola sued Skadden Arps for overtime pay. Skadden Arps contended that the relevant statute — the Fair Labor Standards Act — precluded overtime pay because the work consisted of “the practice of law”.

The prestigious Federal Court of Appeals for the Second Circuit refused to throw out the suit:

“The gravamen of [the attorney’s] complaint is that he performed document review under such tight constraints that he exercised no legal judgment whatsoever — he alleges that he used criteria developed by others to simply sort documents into different categories ….

“A fair reading of the complaint in the light most favorable to [the attorney] is that he provided services that a machine could have provided ….”

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A few years ago the Washington Post published an article entitled, “There Really are 50 Eskimo Words for ‘Snow'”:  ” … ‘Aqilokoq’ for ‘softly falling snow’ … ‘piegnartoq’ for ‘the snow good for driving sled’ ….”, etc. An Inuit living above the Arctic Circle needs to be precise in describing something so vital to daily survival.

So for a company concerned with its legal health in the cold litigation and regulatory climate of the United States in 2018, it’s too bad that the legal industry has only two words for professional talent:

“Lawyer”, and

“Non-lawyer”.

(And most lawyers aren’t all that excited about substantial delegation to anyone not bearing the title “lawyer” — more about that below.)

It’s too bad because effective delivery of legal services to a client company requires more skill sets than lawyers’ limited, two-word vocabulary can describe:

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Yesterday a prestigious global law firm showcased the baffling combination of brilliant legal expertise and management dysfunction that drives business clients to distraction:  

A “2018 Innovation Hours program, which recognizes up to 50 innovation hours toward billable-hour targets for fee earners”.

This announcement expressly recognized that the attorneys involved in this program — “fee earners” it called them — work for clients under “billable-hour targets” imposed on them by the law firm.

And announced — without irony — its use of “billable-hours targets” in aid of “innovation”.

That it’s common for law firms to impose hourly quotas on lawyers who do the firm’s work — on pain of career jeopardy if they don’t meet that expectation — isn’t news.

Such quotas are Exhibit A for the proposition that when the legal industry values a lawyer’s work by how long that lawyer takes to do his or her job — the legal industry has pitted the attorney’s interests against those of the client.

Did the attorneys working to an hourly quota really think that their client company’s needs required X hours to perform that task — rather than (say) half that time?

Or were individual lawyers motivated by their respective quotas?

Quotas imposed on them by their law firm?

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In Part IV of this series I offer the next of my guiding observations as you consider consultations with legal counsel:

3. Be aware of which legal systems might be used to seek access to information that you want protected. Application of the attorney-client privilege — or its non-U.S. counterparts — can vary in a big way from jurisdiction to jurisdiction.

Consider this hypothetical:

  • A U.S.-headquartered corporation has a subsidiary in the Netherlands — and in-house legal counsel at both places.
  • During an investigation of alleged anti-competitive conduct the EU Competition Commissioner seizes e-mail messages between in-house counsel of the Dutch subsidiary and non-legal, business personnel.
  • The U.S. parent and its Dutch subsidiary assert a “legal privilege” to preclude use of those e-mails against them.

Where you have employed in-house legal counsel who communicates with client company employees on a matter of legal concern, the rules governing the attorney-client privilege (or a foreign law counterpart) might well be different in — for instance — the European Union’s legal system as compared with the U.S.

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In Part III of this series I offer the next of my guiding observations as you consider consultations with legal counsel:

2. Once you’ve got the attorney-client privilege, take care to avoid losing it through “waiver”.

While in Part II I stated that applying this privilege to a specific situation can be extremely complexlosing this privilege can be really easy. It’s called “waiver”.

How waiver works: Client discloses (all or some) contents of a client-lawyer consultation to a party whose participation is not within the scope of lawyer-client communications otherwise protected by the privilege.

Simple example: Client engages attorney for legal advice and lawyer gives legal advice. In other words, lawyer learns facts from client, client seeks legal advice, and lawyer advises client, in “confidence”.

So far so good. Other things being equal (again, this privilege is extremely complex in its terms and application) — the privilege may apply.

Then … there’s communication about all or some of contents of that client-lawyer consultation with someone who happens to be outside the scope of lawyer-client communications protected by the privilege:

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In Part I of this five-part series I wrote that business owners and executives need to take the lead in protecting their companies’ proprietary information — and their own as individuals — from the legal system.

And that opposing litigants, criminal prosecutors, and government agencies are all too ready to access information that may place you in civil, criminal, or regulatory jeopardy.

So you need to be proactive in reaching out to your lawyers on this. And don’t even think about DIY lawyering because application of this privilege to a specific situation can be extremely complex

In Parts II through V I offer guiding observations as you consider consultations with legal counsel:

  1. Make sure that you know who the client is: Is it a business entity that you own or work for? Or are you — as an individual — the client?
  2. Once you’ve got the attorney-client privilege, take care to avoid losing it through “waiver”.
  3. Be aware of which countries’ legal systems might be used to seek access to your proprietary information. Application of the attorney-client privilege — or its non-U.S. counterparts — can vary in a big way.
  4. In some circumstances here in the U.S. you may be better off consulting a lawyer in outside, independent, private practice rather than in-house counsel — because of the way that the courts respond to those two types of attorneys in their application of the attorney-client privilege.

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This five-part series is an extended plea to business owners and executives: Protect your company’s proprietary information — and your own as an individual — from the legal system.  

Two key points:

1. It’s your job to initiate the conversations with the right lawyers that will secure the protections of the attorney-client privilege. Be proactive here. 

2. The only legal “rules” governing this privilege consist of broad generalizations. Their application to a specific situation is up to an individual judge’s “discretion” based on the unique set of facts before the court.

You need skilled legal advice on how a judge might exercise that discretion in your situation. So protecting confidential information is no place for do-it-yourself lawyering.

Let the attorneys do their job. In fact: make the attorneys do their job.  

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