Seven Ways a Niche Helps Your Business Development

nicheAny marketing expert will tell you that having a clear niche is good for the bottom line; yet, many attorneys continue to be generalists within their practice areas. Some may think that they have a niche, simply by virtue of being an environmental lawyer, an IP lawyer, an insurance lawyer, etc.  Imagine having a real estate agent who specializes in Southern California. Sure, she has the basic skill set that you need, but there is no reason to think she has any special knowledge or insight related to your particular neighborhood. It works the same way with the law. Just because you can cover a wide range of legal issues doesn’t mean that it is wise or profitable. I understand that putting yourself out there as a specialist in a particular niche can seem scary or difficult.  So, here is a list of reasons why niching is worth the effort.

  1. Clients want experts – If you had a brain tumor, you wouldn’t want a generalist to operate; you would want the best brain surgeon you could find. The same principal applies for business problems. If the issue is important enough, the client will want an expert, someone who has handled many similar situations in the past, who has a grasp of the subtleties and can nip problems in the bud. Even though a generalist may be perfectly capable of doing a great job, clients simply feel more relaxed and confident knowing that they chose an expert.

  2. Clients are Willing to Pay More for Experts – Maybe clients want to work with you.  However, wanting something and being willing to pay for it are different. The critical question is if they are willing to pay your rates.  If they see you as a commodity, they are more likely to quibble over your rates and your bills.  Whereas, if you are seen as one of the preeminent people with the skill and knowledge they need, they are a lot less likely to push for discounts.

  3. Higher Quality Referrals from Other Attorneys – In some circles, referrals get a bad rap because some lawyers only refer out the undesirable, low quality cases that they don’t want. The first reason attorneys may avoid giving referrals is that they don’t trust the other attorney to do a good job. Having a clear niche addresses this concern because it makes your expertise clear to the world, and thereby reassures other attorneys that referrals would indeed benefit their clients, and thus reflect well on them. The second reason other attorneys may not give referrals is if they feel they can profitably do the work themselves. This is where choosing your niche wisely comes into the picture. As long as your area of law is complex enough that it is not worth it for other attorneys so invest the time and energy getting up to speed, you naturally attract high quality referrals.

  4. Higher Quality Referrals from Your Social Network – Our social networks can be a great source of business, and yet most attorney’s friends and family are not terribly clear on what they do for a living. How many of you have been asked about DUIs or divorce issues by people who just don’t understand that you actually do M&A? If someone at a party asks what you do and you list seven areas, people are left with the impression that you do everything and you end up with lousy, low quality referrals.  The more clear and precise you are about your niche, the more easily your social network can send you business or aid you in making relevant connections.

  5. Narrows the Competition – Instead of competing against all white-collar criminal defense attorneys or all civil litigators in your geographical area, you are competing against only a handful. Of course, it also narrows the field of clients but it’s a lot easier to distinguish yourself for your amazing customer service, your personable demeanor or your brilliant team when you are competing with 10 people rather than 300 or 3000.

  6. It helps You to Stay Focused Deciding where to put your time and energy is a constant struggle for any attorney, and the more recognition and opportunities you have coming your way, the more difficult the choices become.  One of the great things about having a clear niche is that it becomes easier to choose where to network, who to reach out to for meetings, and which invitations to accept.

  7. It Leverages Name Recognition – The reason this is important is the same reason that TV and radio adds play over and over again. It is the repeated exposure that makes people remember you and associate you with certain types of clients or cases.  For example, maybe someone first meets you at a networking event.  A couple months later, they see you speak. A couple weeks later, they notice that you are on the board of directors for the organization in which you met.  Six months later, they read an article that you authored. This repeated exposure in the same niche makes you both more memorable and more credible.  Similar activities but spread over several different subject areas or geographical areas will likely have less impact since you lose the leverage created by repeated exposure.

Lawyers often worry that narrowing their niche will lead to fewer clients. However, it almost invariably has the opposite effect. Imagine what your life would be like if you could double the number of cases or matters that you really enjoyed? What if you could charge 50% more for your services? What would it be like if the right kind of associates and staff were applying to work with you? The benefits of having a clear niche are significant and well worth getting out of your comfort zone and trying something new.

© 2008-2016 Anna Rappaport. All Rights Reserved

Whistleblower

SEC Whistleblower Awards: Can You Hear Whistles Blow? Valued At More Than $100 Million, You Bet You Can!

Some very loud whistles have been blowing across corporate America since 2011 – whistles valued at $107 million, in fact. The United States Securities and Exchange Commission announced on August 30, 2016, that since its whistleblower program began in 2011, they have awarded more than $107 million total to 33 individuals who voluntarily provided the SEC with original and useful information that led to a successful enforcement action. Whistleblower awards can range from 10 percent to 30 percent of the money collected when the SEC’s monetary sanctions in a matter exceed $1 million.

The SEC encourages employees to report suspected wrongdoing, because they, according to Acting Chief Jane Norberg, “are in unique positions behind-the-scenes to unravel complex or deeply buried wrongdoing.” And, last year alone, employees responded by providing nearly 4,000 tips to the agency. With this kind of incentive from the SEC and other government agencies, as well as a growing number of successes in whistleblower lawsuits, it is more important than ever for companies to get advice on a regular basis. Moreover, companies must be strategic and proactive in their approach to implementing an effective whistleblower protection and anti-retaliation system.

Key elements of an effective whistleblower protection and anti-retaliation system include:

  1. Clear and visible leadership commitment and accountability. This is truly the most important piece of the puzzle. Without sincere support from the top, no internal whistleblower program can succeed.

  2. The creation of a true “speak-up” organizational culture focused on prevention, including encouraging employees to raise all suspicions and issues quickly and insuring the fair resolution of such issues.

  3. Independent, protected resolution systems for employees and third-parties who believe they are experiencing retaliation as a result of raising concerns.

  4. Specific training to educate all employees about their rights and available protections (including both internal and external programs).

  5. Specific training for managers who may receive complaints or information from employees, requiring the manager to be considerate of the employee making the report, to be diligent, and, most importantly, to act on the information with no corporate tolerance of the “just telling me as a friend, not as a manager” excuse.

  6. Internal monitoring and measurement of corporate compliance efforts and the effectiveness of the speak-up and non-retaliation culture, without contributing to the suppression of employee reporting.

  7. Independent auditing to determine if the whistleblower protection and anti-retaliation system is actually working.

Post written by Denise K. Drake of Polsinelli LLP.

2016 Update to Top 25 Law Firm Website Clichés to Avoid

As a group, lawyers are quite literal, often too literal for good marketing.

As a result, more than half of law firms simply illustrate their website home pages with the obvious icons that represent the general concept of “Law,” like columns, jury boxes, striped books, rowing, and “Smiling Lawyers.”

The four most-prevalent explanations seem to be:

(1) “Our website developer recommended this.”

(You apparently hired the wrong developer.)

(2) “We didn’t know what else to do.”

(Then find someone who does.)

(3) “Well, if everyone else is doing it this way, it must be right.”

(Does your business card say “Lawyer” or “Lemming?” Stand out! Excel!)

(4) “No one hires us because of our website. It doesn’t matter what it looks like.”

(It’s a bit circular to create bad marketing, then say, “See, marketing doesn’t work.”)

Your marketing should set you apart. 

Good marketing can help you stand above the crowd.  It can show how you are different, or add more value than your lookalike competitors. But doing exactly what all the other firms do simply buries you in the anonymous middle.  Sure it’s “safe,” but safe doesn’t create market leadership.

Here’s a random accounting firm’s website, illustrated by tax forms, a calculator, eyeglasses, a pen, and paper with columns of numbers. Do you feel assured that their CPAs will find the innovative solution to your challenging financial issues?  Are you compelled to read the “About Us” section or click to learn about their Services?

(Really, think about it — how do you feel about their skills and creativity?)

Website, Design, law firm website

That is, if your website’s home page shows a skyline or column, aren’t you telling visitors that (1) your firm is average, and (2) there’s nothing worth reading inside?  If you want to claim to be an A-tier firm, then you must look like it — and a photo of a handshake, building, or chessboard won’t cut it.

There are no exceptions — unless you’re a Wachtell or Cravath. 

With their hard-earned reputations, they have nothing to prove. Bad marketing doesn’t hurt them as much as it does most other firms.  But keep reading if your firm doesn’t yet possess a Wachtellian level of credibility.

So here they are, the 25 most typical and tedious photos law firms use — followed by what I think these icons actually convey to the average website visitor.

The Top 25 Visual Clichés:

[The Image:]  1.  Globe/Map (Always featuring North America)

Globe, World

[What it means:]  “We did a deal in Toronto once.”

2.  Firm handshake (Usually diverse in some way. Rarely two white men.)

“We’re your partner.”

3.  Building (My favorite is when it isn’t even the firm’s own building.)

“I did it, Maw! I work in a building!” 

4.  Smiling lawyers (See “The Smiling Lawyers Website Trap” blog post here)

“We must be smart, because obviously we’re not photogenic.”

(The worst are the group shots. Play the “Find the most-uncomfortable lawyer” game.)

5.  Skyline (or alternating skylines, for firms with multiple offices)

“We work in a city!” 

(Is that a dispositive hiring issue? Has any prospect ever thought, “If I could just find a law firm that worked in a city — that’s the firm I’d hire!”)

Generic, City Skyline

6.  Gavel (often resting on a striped book)

“We’re small-firm lawyers with a cheap template website.” 

7.  Columns/Courthouse

“We’re a law firm — here’s our column.”

(Yeah, we get it. <yawn>.  This category also includes empty courtrooms and jury boxes.)

Court House, Columns

8.  Light bulbs (formerly incandescent, now they’re swirly energy-efficient fluorescents)

“We have good ideas.” 

(One such “good idea” might have been hiring a better branding firm. Just sayin’.)

9.  Chess pieces (the king is often laying on its side)

“We’re strategic.”

(Why is the king sitting in the middle of the board so early in the game here?)

Chess, Board

10.  Diverse conference room (Everyone is perky and gorgeous. There’s “one of each.”)

“We know how much clients value Diversity.  So we spent $25 on a stock photo.”

(Other “Diversity” options include flags, crayons, colored pencils, and a circle of hands.)

[That’s Part 1. We’ll detail clichés #11-25 next week in Part 2.]

Led Zeppelin Prevails in Copyright Infringement Case: Now on Appeal in Ninth Circuit

Led Zeppelin Copyright InfringementIn May 2014, the Trust acting on behalf of the estate of Randy Wolfe (a/k/a Randy California) of the rock group Spirit filed a copyright infringement suit against Led Zeppelin related to the first chords in the band’s most famous song, “Stairway to Heaven.” See Skidmore v. Led Zeppelin, 15-cv-03462, U.S. District Court, Central District of California(Los Angeles). The Trust brought the case against Led Zeppelin after a 2014 Supreme Court decision opened the door for a broader interpretation of the time frame to seek damages for copyright infringement under the U.S. Copyright Act. See Petrella v. Metro-Goldwyn-Mayer, Inc., 134 S.Ct. 1962 (2014). The Petrella decision limited the application of the defense of laches and permitted lawsuits to be brought involving older copyrighted works with more recent acts of infringement that fall within the statute of limitations pursuant to 17 U.S.C. § 507(b). Hence, in the Skidmore case, despite the decades-old circulation of “Stairway to Heaven,” the plaintiffs decided to bring suit against Led Zeppelin within three years after the release of a re-mastered version of the famous song.

In Skidmore, the crux of the plaintiffs’ case was that Led Zeppelin (with Jimmy Page and Robert Plant as co-authors) allegedly stole the opening passage of “Stairway to Heaven” from “Taurus,” an instrumental by Randy Wolfe that can be found on Spirit’s 1968 debut album. The dispute largely concerned a brief musical passage 45 seconds into “Taurus.” It was alleged that the iconic opening guitar sequence of “Stairway to Heaven” (which was released in 1971, three years after “Taurus”) was copied from “Taurus.”

The Trust also sought an injunction against the release of any additional albums containing the song “Stairway to Heaven” in an attempt to obtain a writing credit for Wolfe, who died in 1997. This case was not the first time Led Zeppelin had been accused of copying another artist’s work. The Trust’s lawsuit listed other songs for which Led Zeppelin had paid settlements over songwriting credits, including “The Lemon Song,” “Babe I’m Gonna Leave You,” Whole Lotta Love,” and “Dazed and Confused.

On April 11, 2016, Los Angeles District Judge Gary Klausner ruled that there were enough similarities between “Taurus” and “Stairway to Heaven” for a jury to decide the claim. On June 23, 2016, following a trial, an eight-member panel jury unanimously found that the similarities between the songs did not amount to copyright infringement. The decision came one year after a jury (in a lawsuit filed in the Central District of California before Judge John A. Kronstadt) ruled that Robin Thicke’s “Blurred Lines” (produced by Pharrell Williams) infringed Marvin Gaye’s “Got to Give It Up.” In the Blurred Lines case, Thicke and Williams were ordered to pay $7.4 million (reduced to $5.3 million) and ongoing royalties to Gaye’s family. The Blurred Lines decision is currently on appeal in the Ninth Circuit.

The Trial

Jurors in the Led Zeppelin case had to decide two issues: First, was it plausible that members of Led Zeppelin had sufficient opportunity (i.e., access) to hear “Taurus” before they wrote “Stairway to Heaven”? Second, if so, were the opening chords of “Stairway to Heaven”  “substantially similar” to “Taurus”?

Issue 1: Access

Led Zeppelin’s guitarist, Jimmy Page, singer, Robert Plant, and bassist, John Paul Jones, all took the stand to testify about their recollections of Spirit and whether they attended Spirit performances, listened to Spirit music or recalled playing the same shows. The Led Zeppelin band members also were questioned by the plaintiffs’ counsel on how “Stairway to Heaven” was created 45 years ago. The jurors sided with the plaintiffs on the issue of access, finding that Page and Plant would have been familiar with “Taurus.” Specifically, the jury relied on the evidence presented in court that (1) Page had the Spirit record in his collection of more than 10,000 records and CDs, (2) Spirit had appeared as an opening act for Led Zeppelin and (3) other members of Spirit testified to encounters with Led Zeppelin members.

Issue 2: Substantial Similarity

The jury next had to determine whether the famous opening to “Stairway to Heaven” was substantially similar to the instrumental opening portion in “Taurus.” Both sides presented expert musicologists, who offered divergent opinions on the musical composition of “Taurus.” Defense experts testified that the two songs shared little in common other than a chord sequence that dates back 300 years. Plaintiffs’ experts said there were significant other likenesses, including the use of arpeggios, similar note combinations, pitch and note durations.

However, the jury never heard the original recording of “Taurus,” notwithstanding its conclusion that Led Zeppelin had access to the recording. The original recording of “Taurus” was made prior to 1972, when sound recordings were not subject to federal copyright protection. The Sound Recording Act of 1971 (effective February 15, 1972) changed federal copyright law to include protection for sound recordings. Instead, jurors had to hear and rely on expert renditions of the sheet music (i.e., the underlying musical notes) for “Taurus” to assess and decide the issue of “substantial similarity” to “Stairway to Heaven.”

Notably, the Trust’s expert played the sheet music on guitar, the instrument used in recorded versions for both “Taurus” and “Stairway to Heaven,” whereas Led Zeppelin’s expert decided to play the sheet music on piano. Irrespective of similarities in the sound recordings, theSkidmore case was decided based on the only protectable aspect – the musical composition of “Taurus” and not the sound recording. During deliberations, the jurors asked to see clips of each expert rendition more than once. Ultimately, the jury returned a unanimous verdict in favor of Led Zeppelin.

Comparisons and Impact: Blurred Lines and Led Zeppelin Cases

The “Stairway to Heaven” infringement decision came one year after a jury ruled Robin Thicke’s “Blurred Lines” infringed Marvin Gaye’s “Got to Give It Up.” In the Blurred Lines case, the eight-member jury also returned a unanimous decision based on the musical composition of “Got to Give It Up” and not the actual recorded version of Gaye’s song. However, the outcome for Led Zeppelinwas decidedly different from the Blurred Lines ruling.

The Blurred Lines decision, and its large award of damages, has been followed by a noticeable uptick in copyright infringement claims surrounding popular songs and recordings. Well-known artists such as Sam Smith, Ed Sheeran, Robin Thicke and Justin Beiber are making news for copyright infringement claims being brought against them. However, the recent verdict in favor of Led Zeppelin suggests that limitations inherent in protected music can limit a determination of infringement. Even though the jury sided with the plaintiffs regarding Led Zeppelin’s access to Spirit’s “Taurus,” the jury concluded that the protected elements of “Taurus” − the musical composition in the sheet music and not the sound recording − were not “substantially similar” to “Stairway to Heaven.” It is too soon to say whether the Blurred Lines outcome or the Led Zeppelinresult will be the norm.

Notwithstanding the appeal, the Led Zeppelin case reinforces the notion that different aspects of an entire song, specifically the musical composition, the instrumentation and the final recording, each are subject to analysis in a potential copyright infringement claim, and the analysis can dictate different outcomes in claims of infringement.

As for the appeal, the Trust’s attorneys are challenging the jury verdict in the Ninth Circuit. The notice of appeal reads:

Please take notice that Plaintiff Michael Skidmore, Trustee for the Randy Craig Wolfe Trust, hereby appeals to the United States Court of Appeals for the Ninth Circuit from the final judgment entered on June 23, 2016, as well as any and all interlocutory rulings, decisions, and orders that gave rise to the judgment and are merged therein.

The filing does not provide legal arguments for why the case should be reconsidered, making it difficult to anticipate the basis for appeal. Furthermore, Led Zeppelin’s publishing company is seeking more than half a million dollars from the Trust in legal fees already incurred for the defense, triggered by a 2016 U.S. Supreme Court decision that allows prevailing parties in copyright cases to seek legal fees. See Kirtsaeng v. John Wiley & Sons, Inc., 136 S.Ct. 1979 (2016). Given the appeal, these fees will only increase. This case and the Blurred Linescase are ones to watch as their outcomes could impact the music industry and copyright law in general.

ARTICLE BY Lamis G. Eli of Wilson Elser Moskowitz Edelman & Dicker LLP
© 2016 Wilson Elser

Form I-924 Regional Center Practice Pointer: USCIS Now Wants All Fields Completed

USCIS Form I-924One of the purposes of Form I-924 is to file an exemplar for a specific EB-5 investment project. In so doing, a Regional Center seeks a preliminary determination of EB-5 compliance for a project prior to the commencement of I-526 filings by individual investors so as to have greater assurance that investors will not encounter issues with the project documents during their individual adjudications.

Part 3 of Form I-924 (excerpted below) solicits information about the Regional Center, its location, its management and administration team, its ownership and management structure, and its corporate history, among other things. In submitting an I-924 for purposes of updating a previously approved exemplar petition, practitioners were able to input “N/A” or “No change from original filing” in these fields when there were no changes to report on that particular point and USCIS accepted such practice for years. However, in recent weeks, USCIS has emailedRequests for Clarification when these fields are not explicitly responded to—irrespective of whether there are no changes to report. This recent change in adjudicatory practice was further confirmed in the USCIS EB-5 Stakeholder teleconference held on Aug. 29, 2016.

Eb-5 form Part 3

Additionally, USCIS is now commonly issuing a Request for Clarification in which it requests the full names and dates of birth for the “management companies/agencies, regional center principals, agents, individuals, or entities who are or will be involved in the management, oversight, and administration of the regional center as requested in Part 3 section D of the Form I-924,” despite the fact that this information had not changed since the prior filing. USCIS has also  issued Requests for Clarification seeking this and similar information in connection with new commercial enterprises as well—not just with respect to the Regional Center principals and management teams.

To that end, Regional Centers may receive such a Request for Clarification from USCIS and must respond to USCIS with the information in ten (10) business days or it is likely a Request for Evidence will be sent on the Form I-924 Application. Regional Centers should answer all fields on Form I-924 in order to avoid receiving a Request for Clarification which may delay the overall processing time of their exemplar amendments. This should be done even if there are no changes since the prior filing with USCIS.

©2016 Greenberg Traurig, LLP. All rights reserved.

September 2016 – gTLD Sunrise Periods Now Open

gTLD Sunrise PeriodsAs first reported in December 2013, the first new generic top-level domains (gTLDs, the group of letters after the “dot” in a domain name) have launched their “Sunrise” registration periods. As of August 31, 2016 ICANN lists gTLD Sunrise periods open for the following new gTLDs:

gTLDs
.shopping
.games
.kerryhotels
.able
.quest
.xn-w4r85el8fhu5dnra
.doctor
.blog

ICANN maintains an up-to-date list of all open Sunrise periods here. This list also provides the closing date of the Sunrise period.  We will endeavor to provide information regarding new gTLD launches via this monthly newsletter, but please refer to the list on ICANN’s website for the most up-to-date information – as the list of approved/launched domains can change daily.

Because new gTLD options will be coming on the market over the next year, brand owners should review the list of new gTLDs (a full list can be found here) to identify those that are of interest.

Employee’s Disparaging and Misleading Tweets May Be Protected Under NLRA: Holy Guacamole!

Guacamole, Food, disparaging social mediaRetail employers dismayed by employees publicly airing workplace grievances in disparaging social media posts must think twice before taking disciplinary action.  On August 18, 2016, the National Labor Relations Board (“NLRB”) confirmed the finding by Administrative Law Judge Susan A. Flynn that Chipotle’s social media policy forbidding employees from posting “incomplete” or “inaccurate” information, or from making “disparaging, false, or misleading statements” on Twitter, Facebook and other social media sites violates Section 8(a)(1) of the National Relations Labor Act (“the Act”).

Chipotle discovered that an employee responded to a customer’s tweet thanking Chipotle for a free food offer, by tweeting back: “@ChipotleTweets, nothing is free, only cheap #labor. Crew members make only $8.50hr how much is that steak bowl really?”  Then, attaching a news article describing how hourly workers at Chipotle were required to work on snow days while certain high-level employees were not, the employee tweeted his displeasure, specifically referencing Chipotle’s Communications Director: “Snow day for ‘top performers’ Chris Arnold?”  Informed by his manager that Chipotle considered his tweets to be in violation of Chipotle’s social media policy, the employee removed them at Chipotle’s request.  Then, several weeks later, Chipotle fired the employee after he circulated a petition about employees not receiving required breaks.

Finding the provision in Chipotle’s policy prohibiting employees from spreading “incomplete” or “inaccurate” information to be unlawful, Judge Flynn opined that: “An employer may not prohibit employee postings that are merely false or misleading. Rather, in order to lose the [NLRA]’s protection, more than a false or misleading statement by the employee is required; it must be shown that the employee had a malicious motive.” Judge Flynn also found the policy provision prohibiting “disparaging” statements to be unlawful, explaining that it “could easily encompass statements protected by Section 7 [of the NLRA]” including “the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.”   Although Chipotle’s social media policy contained a disclaimer that the policy “does not restrict any activity that is protected by the National Relations Labor Act, whistleblower laws, or any other privacy rights,” Judge Flynn concluded that this “sentence does not serve to cure the unlawfulness of the foregoing provisions.”

The NLRB adopted Judge Flynn’s decision that Chipotle was wrong, not only for firing the employee, but for attempting to limit his commentary on social media by its unlawfully termed social media policy.  While agreeing with Judge Flynn’s reasons for finding the social media policy unlawful, the NLRB disagreed with Judge Flynn’s finding that Chipotle violated the NLRA by asking the employee to delete the tweets.  In particular, while Judge Flynn opined that the employee engaged in “concerted activity” even though he did not consult with other employees before posting his tweets because “concerted activities include individual activity where individual employees seek to initiate or to induce … group action,”  the NLRB disagreed, asserting, with no true explanation, that it did not find the employee’s conduct to be concerted.  Agreeing that Chipotle violated the NLRA by terminating the employee after he engaged in protected concerted activity by circulating a petition regarding the Company’s break policy, the NLRB required Chipotle to, among other things, post signs acknowledging that its social media policy was illegal, and to re-instate the employee with back pay.

The message from the NLRB to retail employers is that, barring malicious misstatements, speech concerning terms and conditions of employment is often protected activity, even for employees who want to criticize their employers on Twitter and other social media websites.  To avoid Chipotle’s fate, ensure that your social media policies are up to date and provide for the increasing protections afforded to employee social media activity by the NLRB.

©2016 Epstein Becker & Green, P.C. All rights reserved.

Attend NAMWOLF’s 2016 Annual Meeting, September 14-16 in Houston, Texas

Join NAMWOLF at the 2016 Annual Meeting & Expo in Houston, Texas. The Annual Meeting is a great opportunity to increase your participation and relationships with NAMWOLF Law Firm Members. All attendees further benefit by attending CLE sessions specific to Law Firm Member practice areas, which provides greater insight into each Law Firm Member’s experience and capability to handle complex legal matters.

NAMWOLF Annual Meeting

The NAMWOLF Annual Meeting & Law Firm Expo is a three-day conference providing unique opportunities to connect corporate counsel from Fortune 1000 companies and minority and women owned law firms. The conference features NAMWOLF’s signature event, the Law Firm Expo, which provides an opportunity for In-House Counsel to meet with the Nation’s top minority and women owned law firms in a relaxed networking environment. We provide top notch continuing legal education and networking.

FOR MORE INFORMATION

Visit www.namwolfmeetings.org  for the conference schedule, room block information, and registration information.

IRS Provides Benefit Plan Relief to Louisiana Flood Victims

IRS Louisiana FloodOn August 14, 2016, President Obama declared a major disaster in the State of Louisiana due to the severe storms and flooding that took place in several State parishes (“Louisiana Storms”). Following the declaration, the Internal Revenue Service (IRS) issued guidance postponing certain tax filings and payment deadlines for taxpayers who reside or work in the disaster area. The relief also provides qualifying individuals with expanded access to their retirement plan assets to alleviate hardships caused by the Louisiana Storms. Below is a summary of the filing extension for the Form 5500 series and administrative changes that employers can make to expedite plan loans and hardship distributions to Louisiana Storm victims.

Extension of Filing Deadlines 

Plan sponsors in the affected parishes listed below now have until January 17, 2017, to file Form 5500 series returns, provided the return had an original or extended due date falling on or after August 11, 2016, and before January 17, 2017.

Relaxation of Hardship Distribution and Plan Loan Requirements

IRS Announcement 2016-30 (“Announcement”), issued on August 30, 2016, modifies certain verification procedures that may be required under retirement plans with respect to loans and hardship distributions. This relief allows qualifying individuals to quickly access assets in their “qualified employer plan” to alleviate hardships caused by the Louisiana Storms. Qualifying individuals include employees and former employees who have a principal residence or place of employment on August 11, 2016, located in one of the parishes identified below or who have a son, daughter, parent, grandparent, or other dependent with a principal residence or place of employment in one of the listed parishes on that date (“Qualifying Individuals”).

  • Acadia

  • Ascension

  • Avoyelles

  • East Baton Rouge

  • East Feliciana

  • Evangeline

  • Iberia

  • Iberville

  • Jefferson Davis

  • Lafayette

  • Livingston

  • Pointe Coupee

  • St. Helena

  • St. Landry

  • St. Martin

  • St. Tammany

  • Tangipahoa

  • Washington

  • West Feliciana

  • Vermilion

Other parishes may be added based on damage assessment by Federal Emergency Management Agency (FEMA).

The amount available for a hardship distribution is limited to the maximum amount permitted under the retirement plan and the IRS rules. However, Qualifying Individuals are permitted to use hardship proceeds for any hardship arising from the Louisiana Storms, for example, to repair or replace a home and to acquire food and shelter. Also, a Qualifying Individual may continue to make elective deferrals into the plan (the usual requirement to suspend deferrals for six months does not apply). Plan administrators may rely on the Qualifying Individual’s representations as to the need for and amount of the hardship distribution, unless the plan administrator has actual knowledge to the contrary. As soon as practicable the plan administrator can obtain any required documentation from the participant. Hardship distributions are includible in gross income and subject to the 10 percent excise tax that normally applies to a payment made before age 59-1/2 (unless Congress provides relief).

The IRS is also relaxing procedural and administrative rules that may apply to plan loans for a need arising from the Louisiana Storms. For example, if spousal consent is required for a plan loan or distribution and the employee claims his or her spouse is deceased, the plan may make the loan in the absence of a death certificate if it is reasonable to believe, under the circumstances, that the spouse is deceased, and the plan administrator makes reasonable efforts to obtain a copy of the death certificate as soon as practicable.

For purposes of the Announcement, a “qualified employer plan” includes a plan that meets the requirements of Code sections 401(a), 403(a), and 403(b), or a plan described in Code Section 457(b). Defined benefit plans and money purchase pension plans qualify, but only with respect to in-service hardship distributions from separate accounts, such as employee contributions or rollover amounts.

To qualify for relief, the plan loan or hardship distribution must be made no earlier than August 11, 2016, and no later than January 17, 2017.

If your retirement plan does not provide for loans or hardship distributions but you would like to allow storm victims to obtain loans or hardships, or if you would like to add flexibility to existing plan provisions, the plan must be amended no later than the end of the first plan year beginning after December 31, 2016 (December 31, 2017, for calendar year plans).

ARTICLE BY Timothy BrechtelSusan Chambers & Ricardo X. Carlo of Jones Walker LLP

Espionage and Export Controls: iPhone Hack Highlights New World of Warfare

iPhone HackLast week, researchers at Citizen Lab uncovered sophisticated new spyware that allowed hackers to take complete control of anyone’s iPhone, turning the phone into a pocket-spy to intercept communications, track movements and harvest personal data. The malicious software, codenamed “Pegasus,” is believed to have been developed by the NSO Group, an Israeli company (whose majority shareholder is a San Francisco based private equity firm) that describes itself as a “leader in cyber warfare” and sells its software — with a price tag of $1 million – primarily to foreign governments. The software apparently took advantage of three previously unknown security flaws in Apple’s iOS software, and was described by experts as “the most sophisticated” ever seen on the market. Apple quickly released a patch of its software, iOS 9.3.5, and urged users to download it immediately.

Citizen Lab learned about Pegasus from Ahmed Mansoor, a UAE human rights activist, who received text messages baiting him to click on a link to discover “new secrets about the torture” of Emirati prisoners. Mr. Mansoor had been prey to hackers before, so he contacted Citizen Lab. When researchers tested the link, they discovered software had been remotely implanted onto the phone, and brought in Lookout, a mobile security firm, to reverse-engineer the spyware. Citizen Lab later identified the same software as having been used to track a Mexican journalist whose writings have criticized Mexico’s President. Citizen Lab and Lookout also determined that Pegasus could have been used across Turkey, Israel, Thailand, Qatar, Kenya, Uzbekistan, Mozambique, Morocco, Yemen, Hungary, Saudi Arabia, Nigeria, and Bahrain, based on domains registered by NSO.

NSO Group, the architect of Pegasus, claims to  provide “authorized governments with technology that helps them combat terror and crime,” insisting that its products are only used in lawful ways., NSO spokesperson Zamir Dahbash told reporters that the company “fully complies with strict export control laws and regulations.” The Citizen Lab researcher who disassembled the malicious program, however, compared it to “defusing a bomb.” All of which raises the question – what laws or regulations govern the export of cyber-weapons by an Israeli firm (likely controlled by U.S. investors) to foreign governments around the world?

Cyber weapons are becoming increasingly interchangeable with traditional weapons. Governments (or terrorists) no longer need bombs or missiles to inflict large-scale destruction, such as taking down a power grid, since such attacks can now be conducted from anywhere there is a computer. Do export controls – which have long been used as foreign policy and national security tools, and which would regulate the transfer of traditional weapons – play any real role in regulating the transfer of weapons of cyber-surveillance or destruction? In fact, the legal framework underlying current export controls has not caught up (and maybe never will) to the capabilities of technological tools used in cyberwarfare. Proposals to regulate malware have been met with resistance from the technology industry because malware technology is often dual-use and the practical implications of requiring licenses would impede technological innovation and business activities in drastic ways.

The Wassenaar Arrangement

The Wassenaar Arrangement (WA) was established in 1996 as a multilateral nonproliferation regime to promote regional security and stability through greater transparency and responsibility in the transfer of arms and sensitive technologies. The United States is a member. Israel is not, but has aligned its export controls with Wassennaar lists.

In December 2013, the list of export controlled technologies under WA was amended to include commercial surveillance software, largely to curb human rights abuses by repressive governments’ use of spyware on citizens. Earlier this year, the Department of Commerce issued recommendations that the definition of “intrusion software” in the WA be modified to encompass the concept of “authorization” so that malware such as Pegasus, in which the user does not truly understand the nature of the consequences, would be controlled. Those proposals have not been implemented.

U.S. Export Controls of Malware

In 2015, following data breaches at the Officer of Personnel Management and several private companies, the Department of Commerce published proposed rules to harmonize concepts embedded in the WA into the U.S. regulatory framework for export controls. One critical proposal was a definition of “intrusion software” to require a license for the export and use of malware tools. But the definition covered much more than malware. Cybersecurity experts were alarmed by the rule’s over-inclusive and vague language. The rules would have impeded critical business activities, stifled international research and cross-border exchanges of technology, and hindered response to cyber threats.

NSO Group has been described by researchers as “incredibly committed to stealth, and  reportedly has close partnerships with other Israeli surveillance firms that seek to sell spyware, suggesting an inevitable increase in cyber mayhem. As malware becomes more sophisticated, widespread, and threatening, the need for strictly tailored export controls is not going to go away.

Regulating software is challenging at least in part, because there is no workable legal definition of what constitutes a cyber weapon. Because malware is largely dual-use, the only way to determine whether particular software constitutes a cyber weapon is retroactively. If software has been used as a weapon, it is considered a cyber weapon. But that definition arrives far too late to control the dissemination of the code. Moreover, controlling  components of that software would likely be over-inclusive, since the same code that can exploit flaws to break in to devices can also have benign uses, such as detecting vulnerabilities to help manufacturers like Apple learn what needs patching. Another challenge is that requiring  export licenses can take months, which, in the fast-moving tech world is as good as denial.

The revelation of the Pegasus iPhone spyware highlights questions that have perplexed national security and export control experts in recent years. As the use and sophistication of malware continue their explosive growth, not only must individuals and governments face the  chilling realities of cyber warfare, but regulators must quickly understand the technological issues, address the risks, and work with the cyber security and technological communities to find a path forward.