The National Law Forum

Revenue Growth Strategy with Goulston & Storrs P.C.[PODCAST]

Your clients are here, are you listening? Rachel meets with Beth Cuzzone of Goulston & Storrs P.C. to discuss how to, “pitch less and listen more,” when it comes to law firm growth.

We’ve included a transcript of our conversation below, transcribed by artificial intelligence. The transcript has been lightly edited for style, clarity and readability.

INTRO 00:02

Hello and welcome to Legal News Reach, the official podcast for The National Law Review. Stay tuned for more discussion on the latest trends in legal marketing, SEO, law firm best practices and more.

Rachel 00:15

I’m Rachel, the Editorial Manager at the National Law Review. In this episode we’re excited to talk to Beth Cuzzone, Chief Strategic Growth Officer for Goulston & Storrs. Beth’s role at Goulston & Storrs revolves around relationships. Relationships internally and externally. Relationships with prospects, clients and business partners. With decades of experience in the industry, Beth has been inducted into the College of Law Practice Management and the Legal Marketing Hall Of Fame, published by the ABA, Thomson Reuters and several industry publications, and awarded several honors throughout her career. Beth is also a co-founder of Legal Sales and Service Organization. Thank you, Beth, for joining us today.

Beth Cuzzone 00:53

Thank you so much for having me, Rachel. And I’m so excited to see that you’ve launched this podcast series.

Rachel 00:59

We’re very excited to have launched it and really excited that we got to have you on. So one of the main topics we want to dive in today was bringing the voice of the client into legal marketing. So I was wondering if we could just get your thoughts on that? Why is it so important to bring the voice of the client into firms?

Beth Cuzzone

That’s a great place to start, Rachel, that’s a great place to start. And I do think bringing the voice of the client into what we are doing every day in the in law firms is really important, let me give you a couple of statistics. 80% of revenue will come from 20% of existing clients and law firms. So your future revenue depends on 20% of your existing clients, I’m going to say that, again, 80% of revenue comes from 20% of your existing clients, then you’ve got five times as many resources to attract a new client than it does to keep an existing one, you take those and you marry that with market demand. So spoiler alert, for anybody who’s listening to this podcast, what we want you to be thinking about is bringing the voice of the client and listening more to client needs to basically help you be more competitive, generate more revenue, be more profitable, and increase your client service.

Rachel 02:16

It definitely seems like an important part, especially that statistic of keeping those 20% of clients to make sure you hang on to that revenue. That’s super important. How has COVID-19 affected firms relationship with their clients? Because it’s sort of, you know, buried its way into basically every single facet of our lives. So I’m curious to get your thoughts on that.

Beth Cuzzone 02:37

No, it’s true. I mean, if we start on the very premise that clients are the most important variable, and growing revenue and profit for law firms, and that the only thing that’s constant is change, right? Clients’ needs change, decision makers at client companies change, laws and regulations change. And so if we aren’t having those open dialogue conversations and getting feedback and conversations with our clients, then how do we stay ahead of change? And then you bring in COVID, you know, with great disruption, it brings great opportunity. And so I would say now is the time for lawyers and law firms to be implementing, bringing the voice of the client into their firm, no matter what they’re doing to bring it in even stronger. I think having client feedback programs and listening to clients was once a nice to have now it’s a need to have. So if you are still doing the exact same legal services in the exact same way that you were pre pandemic, not to sound harsh, I would consider this your warning light for b2b law firms. There aren’t new issues, new ways of doing business, new technologies. And so I think the pandemic has catapulted the need for firms to be doing this with much more vigor, and process and framework. So I also think that the pandemic has affected firms’ relationships with their clients in a lot of good ways. We are bringing clients or clients are bringing their lawyers into their home. I don’t know about you, but over the last year and a half, I’ve met pets, children, delivery people, family members, from our clients, and my colleagues and my friends in the industry that I probably never would have if not for the pandemic and the reality of Zoom. So I do think that we’re starting to get to know clients in a different way. That’s not a bad thing. But again, I also think that the business issues that have come with COVID has created opportunity, and it also has created the foundation for “let’s do things differently”

Rachel 05:00

That’s some really good insight there. I want to get your thoughts on what firms can do, why it’s important for firms to bring in their clients into their conversations in legal marketing, what firms can do right now to improve those relationships.

Beth Cuzzone 05:13

Beyond the feedback, I do think just in general, overarching, how you improve your relationship with clients, is about asking yourself and taking a little bit of a litmus test. Take your top 10 clients, your top 15, your top three, your top 20, it depends on the size of your firm your practice that sort of thing. And say, “Do I know every one of my clients strategic priorities, strategic directions, measurable goals in the next year or two?” I don’t think we’re going to find many people that can actually rehearse them for their top five, top 10, top 20, top 30 clients. The other thing I would say is, you know, really being able to impact your relationship is asking the people that you have relationships with at client companies – how are they evaluated? How are they deemed successful? What are they trying to accomplish, but sometimes their goals may be different than the company goals. If there is a software technology company, and they have an in house legal department, the technology company’s mission might be changing the way science is done or impact on a disease. So that’s kind of their mission and their strategic direction. And goals might be about how many new customers they can acquire and that sort of thing. That’s all very important information to know. But if you’re the General Counsel, you know, maybe what you’re trying to accomplish is budget certainty. So if you don’t know those answers to those questions, then it’s hard to be able to provide service that has value. And you know, basically, what I mean by that is, how are you spending time off the clock with your clients? What value are you providing? Because when you’re on the clock, they’re paying you to be strategic, substantive, proactive, responsive, accessible, all of those things they’re paying you for. But when you’re off the clock, how are you helping their business? What kind of information are you giving them? Are you making introductions to them? Are you saving them money? And so I think it’s a little bit like throwing something at the wall to see if it sticks if you don’t know the answer to those questions.

Rachel 07:28

We spoke a little bit about spending time with clients off the clock and, you know, engaging with them in that way. Is that part of that process? Or, you know, is that one of the ways that people can see that feedback out?

Beth Cuzzone 07:42

Absolutely. Bringing the voice of your client into the firm can be done in many different ways. And feedback is one of them. But that is a way that you can add value to the client, because you will hear when you’re asking for feedback about ways that you’ll be able to improve your service. And then you’ll be able to go back and implement change and in turn, increase client service and really impact your client relationship. It all ties together. And it is one facet of client service.

Rachel 08:19

So you recently wrote a book about client feedback for the ABA. Can you tell us a little bit about that?

Beth Cuzzone 08:26

Well, I think timing played a big role. We were just talking about this. I think this now is the time for law firms to really double down in this area. We’ve all been reading books and articles about obtaining feedback from clients. And it’s important. And they’ll focus on the business case, some of the statistics that you and I were just talking about, or they’ll focus on a phase of the feedback loop. The book that we wanted to create was an instruction that would lay out the entire process, step by step of how our industry can move along the maturation line of client feedback, bringing the voice of the client, making improvements, and keeping that loop moving.

Rachel 09:22

Seems like an exciting topic and a great opportunity. So what are some ways you’re seeing firms getting this feedback?

Beth Cuzzone 09:29

There’s a couple of things that are happening. First, there’s a huge technology push in business right now. And so I’m seeing some terrific uses of technology and lawyers and law firms or marketing. The marketing function in law firms can do after action reviews, which is at the end of a deal, or a case, being able to sit down with a client for a few minutes and say, how did we do? What did you think of our team? And what did you like best about us? Did we surprise you? Are there other things that other law firms do that you’d like that you’d like us to do in the future. There’s also online surveys, I’ve seen law firms put a couple of survey questions on their bills, every two years, we’re going to sit down and have an annual strategy session. And we’re going to take two or three hours off the clock. And we’re going to talk about how we’ve been doing. And we’re going to talk about the people on our team, we’re going to talk about the changes in your company, we’re going to talk about what the pipeline of issues look like, and how we can be preventative and try to bring down, you know, the legal spend that sort of thing. And that’s where you either hire a consultant, or in house, you do it, where it doesn’t have to be on a schedule. But you reach out to those top clients. And again, that could be 10% or 30% of your clients depending on your law firm size, and asking them how you’re doing. And then bringing it back.

Rachel 11:18

How can law firms really use this feedback to differentiate themselves from the competition and really take that feedback to heart and actually make some changes?

Beth Cuzzone 11:26

So these are all really great questions. So you will find this staggering, I think, Rachel, I have been conducting client interviews for more than 20 years. I was at a consulting firm. Before I went in house to law firms where we did some client interviews, I’ve been at a law firm that I’ve been doing client interviews at for a couple of decades. I can probably count less than a dozen times that I’ve encountered a client feedback interview when the client hasn’t commented “this is the first time my law firm has ever asked me these questions.” This is the first time I’ve ever been invited to a client feedback session. That’s the first time that I’ve been, you know, invited to give some client service input. So think about that 25 plus years of client interviews, and I think less than 12 have actually had something like this happen to them before. My point is that the very nature of doing it is a differentiator, right. And what it will allow you to do is when you’re asking these questions, and getting the feedback about what they want to see, you can be that trusted advisor. That starts to bring all sorts of value, added value around your substantive legal service advice. And you can actually start to play a real business leader role with your clients so that you’re not seeing it as legal advice, or the necessary evil, but really start to see that you’re additive. And that you can be accretive to the company and their mission. And I think again, the way you do that is by taking the very information that you hear and turning it into value add.

Rachel 13:40

Moving into our next section here speaking a little bit about differentiating law from service from the competition, we’ve spoken about ways that law firms can interact with their clients and asking for that feedback allows them to, you know, show that they can be a really good added value. What are some ways that firms can really highlight the service they offer to clients and make that connection with them?

Beth Cuzzone 14:03

We’ve always had a hard time differentiating our services from our competition. I think we look alike. We sound alike. And I think where we’re going to find differentiation is – do we act alike? And so I think that some of the ways that we as law firms will be able to highlight the services that we offer to clients is instead of telling clients what we do, too, responding to clients about what they need and how we can solve, I think just sometimes we’ve gotten into a little bit of an automated notion of, we have a newsletter. And so we’re going to now send it out to every one of our clients that talks about a new law and something that we do. And that’s not differentiating, that’s not really highlighted. or services. Instead, I would say if law firms can start doing what I call Account Based Marketing, and looking at it client by client, and really understanding what’s important to the client, and the content and conversation that you put in front of those clients will be the way that you differentiate yourself. So move from content marketing, which was so popular a couple of years ago, I say, take the very tenets of content marketing, and bring them down to a client and have it, again, be client based. That’s where I think law firms will be able to differentiate those micro sites that are just for the client. And the information in that hub is just for that client. You know, if that client is a middle market, private company, they don’t care about what’s happening in the eye, you know, with no, by the way, with no interest in becoming a public company, you know, they don’t want to get 17 newsletters about a new law that’s impacting public companies. But you certainly can be looking at trends that are in the middle market space, and kind of what’s market deal points and be putting that into a hub. So that’s where I think I’d like to see law firms and lawyers and marketing departments really start to focus.

Rachel 16:32

I guess this is sort of like a two pronged question. How have you seen the legal industry pivot in the post COVID world in terms of how they interact with clients? And a larger question would be what changes have you seen with that sort of client interaction since COVID has taken place?

Beth Cuzzone 16:50

Well, I think that the playing field has leveled, I think that there used to be some type of hierarchy before you could have access to a client, when you were at a law firm. If you were the relationship partner, you were the bridge between the client and everybody else at your firm. And I have seen that collapse, that hierarchy collapse. And I think that these relationship partners have brought along, you know, some younger folks, or maybe one of their colleagues who’s an industry expert in something the client needs. But what I’ve also seen, which is so exciting for me, is the opportunity for people in marketing departments to have FaceTime with clients. And that’s always been a little bit of an obstacle for marketing departments and law firms. And I’ve heard so many of my executives, who are amazing brand ambassadors for their law firms say, I’m not sure how I can find a way to be client facing. And it’s been a goal of mine. And I think COVID has really changed that. And I think that now, there are lots of opportunities for the marketing departments, or the business development departments, the client, service departments, whatever they’re called, to really have that forward facing role. And I think feedback is one way, but using your CRM system, to really find some proactive opportunities, and bringing them to the relationship partner and saying, let’s talk with the client about this.

Rachel 18:49

So what are some things that Goulston & Storrs has done the past year to really adapt to challenges brought on by COVID-19? We’ve spoken to a number of law firms so far, and in making this podcast and it seems like all of them sort of have a different answer. So I think it’s interesting to get that perspective.

Beth Cuzzone 19:07

The first thing that we did, I think, as a firm was we took off the law firm or lawyer or legal services hat at the beginning of COVID. I think the place where we probably had a shining moment with our clients, we were worried about our clients, their families, their businesses, and we put down the webinars and the newsletters and the outreach, and just tried to reach out to them on a very personal individual level to be sure people were doing okay and were healthy, and that that’s the first thing we did. But then it came back to business as usual. And I’m looking at so many statistics Rachel that are showing me that law firms are having the best year they’ve had since the last downturn this year. And so we’ve done a number of things differently. First of all, the way we are packaging, pricing and delivering, our legal services looks a little bit different. We brought in a chief value officer a couple of years ago, and it’s a real growth spot for us a real bright light for us. Because we are spending a lot of time with clients trying to figure out how to price you know, our services that fall in line with where they may be, economically. And it’s a marathon, right, it’s not a sprint. And so they’re just, some years clients need a different approach than others, in terms of billing and payment terms, and that sort of thing. So we’ve really been trying to align with our client needs there. And, and just the way we’re talking to them is different, right, we’ve created more on demand video, versus hosting seminars in our offices.. So anything the same that you were doing pre COVID, probably time to look at that process. And I think that runs across all the business operations. think we’ve all had to manage to change and adapt.

Rachel 21:48

Right. And I think the only constant in life is change. I think one of the things that we have heard from a lot of law firms is just having just a pivot and make all these changes. And now a lot of law firms are looking at adopting law these things long term. So hopefully, we’ll see some, you know, improvements and some changes going long term.

Beth Cuzzone 22:15

I’m wondering, Rachel, you and your team spend so much time out in the marketplace, so I’m interested to see what trends are you seeing in the marketplace around client service and client growth.

Rachel 22:32

We’ve spoken with quite a few law firms in creating this podcast. And I think one of the big trends that we’ve seen from the guests that we’ve interviewed is, and you mentioned this earlier, sort of pivoting more to bring in the client into what these law firms are doing in terms of their marketing efforts, and finding new ways to connect with them. I think one of the one of the big things that we’ve seen as like a company as like, working with clients on publishing their thought leadership and publishing, you know, their events and things like that, I think one of the big things we did see are more firms doing these virtual events. And, you know, putting their expertise out there when they couldn’t meet in person, and they can’t, you know, have a conversation with their clients or go to a conference, or things like that. So I think just finding new ways to connect with the people that they work with, outside of the office, when we can’t actually be with each other in person.

Beth Cuzzone 23:39

Or so you’re starting to see content marketing, turn into content selling in a way and content relationship building. And you’re part of that process.

Rachel 23:49

Right. And we do. One of our publishing clients, specifically writes a lot about ways that attorneys and law firms can really set themselves apart or improve their processes. And that’s been a shift in focus from what we saw before the pandemic.

Beth Cuzzone 24:07

I love that. Are there are initiatives that you’re seeing that firms are deploying that actually improve relationships with their clients? Are you seeing some of what we touched on earlier in other firms or in the marketplace?

Rachel 24:20

Right, I think it sort of goes along with what I said earlier, and really positioning themselves as you know, a value improvement and then also highlighting what they do well, as a firm. Specifically, one of the topics that’s come up in other interviews is really highlighting what the firm is doing more broadly in terms of their growth, some speaking more about, like diversity and inclusion initiatives, keeping themselves accountable for making sure those things happen and really taking on more of these changes that we’ve seen as COVID has progressed. I mean, it’s just Typically, I’m talking about, you know, remote work arrangements, you know, really listening to what their attorneys want and need. So I think that’s been a big thing that we’ve seen on technology.

Beth Cuzzone 25:11

Are you seeing any technology that’s hot around growing relationships?

Rachel 25:21

The main thing is, as I spoke earlier, really taking advantage of virtual events. And I’m not specifically talking about just webinars, one of the other firms that we had on spoke about how they interacted with clients. And this is maybe more than relationship building is sort of empowering attorneys to have like a coffee meeting with their clients like a virtual coffee meeting. So they would, they would give out these Starbucks gift cards. So they could sit down with their clients and have a cup of coffee virtually, and really hear about the things that they’re experiencing, their pain points, things like that. And one other thing that they were talking about was, before the pandemic, they maybe had never even heard of doing a virtual happy hour. And maybe a lot of people would have scoffed at that idea of having like, either like a drink or a cup of coffee over a Zoom call. But he said that, you know, he’s been on countless, or at least I think at least he said, at least three virtual happy hour since the pandemic began. I don’t really think a lot of people used Zoom a lot before the pandemic. So it’s been sort of a big way that people have connected with their clients. But I’d be interested in hearing what you have to say about that topic. You know, are there any technologies that you’re seeing that are helping firms grow their relationships with their clients?

Beth Cuzzone 26:47

I think there’s a couple of things that we’re seeing Goulston & Storrs. We are looking for technology that brings efficiency, and AI to some of the services that we provide. And so you know, you’re on a constant hunt nf figuring out how artificial intelligence and that sort of thing helps. But also, one of the things that we’ve done is we have adopted a technology in all of our business units that talk to each other. Finance, pricing, experience, relationship, management, enterprise, all of those products are talking to each other. So you are more informed. And we’ve been able to create some predictability around some of our client needs. Because there’s so many things talking to each other, as opposed to having these silos. I feel like you and I are experiencing and seeing a lot of the same trends, I think our highlights for today is great disruption brings great opportunity, service will be a differentiator, your client is another law firm’s prospect. Getting closer and digging further down into that relationship has never been more important. And client feedback is not only a way for that to happen, but I think it’s also a way for the marketing business operations functions to find client facing roles.

Rachel 28:23

Right. And I think specifically, your focus for this podcast about bringing the client into the conversation, I think, isn’t one that we’ve had so far. I think one thing that’s been really great about this podcast is just being able to learn so much from each of the people that we talked to. So yeah, thank you for joining us today. And thank you for those great questions.

Beth Cuzzone 28:45

I just want to again, thank you for bringing this podcast to us. And the series because I think we’re going to learn a lot from each other. I think there’s a real brain trust among a legal marketing and business development community. And I’m thrilled that you’re bringing it together and making it accessible for all of us.

Rachel 29:05

We had a great conversation about client feedback, revenue, and go-to-market strategies in the legal industry. Special thanks to Beth Cuzzone from Goulston & Storrs for joining us today.

Beth Cuzzone 29:15

Thank you so much, Rachel.

Article By Rachel Popa and Jessica Scheck of The National Law Review / The National Law Forum LLC

For more articles on the legal industry, visit the NLR Law Office Management section.

Biden Administration Issues New Government-Wide Anti-Corruption Strategy

On Dec. 7, 2021, the White House published a government-wide policy document entitled “United States Strategy on Countering Corruption” (“Strategy”). The Strategy implements President Biden’s National Security Memorandum from earlier in 2021, which declared international corruption a threat to U.S. national security.

The Strategy is notable for several reasons:

First, the Strategy focuses not just on the “supply side” of foreign bribery and corruption—that is, companies acting in violation of the Foreign Corrupt Practices Act (FCPA)—but also on the “demand side” of the equation, namely corrupt foreign officials and those who assist them. It promises to pair vigorous enforcement of the FCPA with efforts to hold corrupt leaders themselves accountable, via U.S. money laundering laws, economic sanctions, and visa restrictions.

Second, the Strategy specifically calls out the role of illicit finance in facilitating and perpetuating foreign corruption, promising “aggressive enforcement” against those who facilitate the laundering of corrupt proceeds through the U.S. economy. Professional gatekeepers such as lawyers, accountants, and trust and company service providers are specifically identified as targets of future scrutiny. The Strategy also promises to institute legislative and regulatory changes to address anti-money laundering (AML) vulnerabilities in the U.S. financial system. These promised changes include:

Finalizing beneficial ownership regulations, and building a national database of beneficial owners, as mandated by the Anti-Money Laundering Act of 2020.
Promulgating regulations designed to reveal when real estate is used to hide ill-gotten gains. Contemporaneously with the White House’s issuance of the Strategy, the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) issued an Advance Notice of Proposed Rulemaking (ANPRM), inviting public comment on its plan to apply additional scrutiny to all-cash real estate transactions.
Prescribing minimum reporting standards for investment advisors and other types of equity funds, which are currently not subject to same AML program requirements as other financial institutions.

Third, the Strategy calls for a coordinated, government-wide response to corruption, and it contemplates a role not only for law enforcement and regulatory agencies but also for agencies such as the Department of State and Department of Commerce, which is to establish its own new anti-corruption task force. It remains to be seen if the increased scope of anti-corruption efforts called for by the Strategy will result in new or additional penalties for persons and entities perceived as corrupt or as facilitating corruption, but the Strategy may place an additional premium on corporate anti-corruption compliance.

Individuals and entities operating in sectors traditionally associated with corruption and/or AML risk should consider taking the following steps in response to the Strategy. These considerations apply not only to U.S. persons and businesses but also to anyone who may fall within the broad purview of the FCPA, U.S. money laundering statutes, and other laws with extraterritorial reach:

Increase due diligence for any pending or future transactions in jurisdictions where potentially corrupt actors or their designees play a role in awarding government contracts. Ensure any payments are the result of arms-length transactions based on legitimate financial arrangements.
Professional gatekeepers should become familiar with the particular risks associated with the industries in which they operate. While AMLA made it clear that lawyers, accountants, and real estate professionals will come under increased scrutiny based on the risk profile of their clients, the Strategy increases the likelihood that law enforcement will devote additional resources in this sometimes-overlooked area.
Given the increased role the State Department will continue to play in the anticorruption space based on the National Defense Authorization Act and the Strategy, companies doing business in or with countries vital to U.S. foreign policy goals should remember that in addition to the individual leaders of these countries, government institutions and lower-level officials could create risk and will be closely watched. Though the U.S. government often talks about specific government officials, the Strategy appears to take a broader approach.
Businesses should continue to examine and reexamine third-party risk with an emphasis on preventing potential problems before they occur. Additional resources and increased cooperation between and among government agencies may lead to additional investigations and enforcement actions, so compliance programs should be updated where necessary.

Article By Kyle R. Freeny and Benjamin G. Greenberg of Greenberg Traurig, LLP

For more white collar crime and consumer rights legal news, click here to visit the National Law Review.

9th Cir. Upholds Antitrust Jury Verdict Against Chinese Telescope Company [PODCAST]

Court affirms evidentiary rulings on market definition and overcharges. Agrees evidence supported verdict for collusion and attempted monopolization.

The Ninth Circuit Court of Appeals this month upheld judgment in favor of Optronic Technologies, Inc., finding there was sufficient evidence that Chinese telescope manufacturer, Ningbo Sunny Electronic (“Sunny”), conspired with a competitor in the U.S. consumer telescope market to allocate customers, fix prices, and monopolize the telescope market in violation of federal antitrust laws (Optronic Technologies, Inc., v. Ningbo Sunny Electronic Co., Ltd., No. 20-15837, 9th Cir. 2021). Ninth Circuit Judge Ronald M. Gould wrote the opinion.

California-based Optronic, known commercially as Orion Telescopes & Binoculars, sued Sunny in November 2014. Orion alleged Sunny violated Sherman Act Sections 1 and 2 by conspiring to allocate customers in the telescope market and conspiring to fix prices or credit terms for Optronics in collusion with Suzhou Synta Optical Technology. Orion further alleged Sunny’s 2014 acquisition of independent manufacturer, Meade, violated Section 7 of the Clayton Act. Orion alleged that Sunny engaged in these anticompetitive acts to force Orion out and further monopolize the telescope market.

A California jury found in favor of Orion on all counts and awarded the company $16.8 million in damages, which the district court trebled to $50.4 million. The district court also ordered injunctive relief, directing Sunny to supply Orion and Synta’s Meade on non-discriminatory terms for five years, and not to communicate with Synta about competitively sensitive information.

Rulings on key elements of plaintiff’s economic evidence affirmed.

Sunny appealed on several grounds, including two that challenged key elements of the plaintiff’s expert economic evidence. The jury had found Sunny liable for attempted monopolization and conspiracy to monopolize in violation of Section 2, which makes it unlawful for any person to monopolize or attempt or conspire to monopolize any relevant market. Sunny argued on appeal that the evidence could not support a Section 2 verdict because Orion’s economist failed to define a relevant market. In particular, Sunny claimed the expert did not examine the cross-elasticity between substitute products in the market or perform a SSNIP test, the standard analysis used to delineate the outer boundaries of a relevant market.

The appeals court found these contentions lacked merit. The plaintiff’s economist had testified that the relevant product market was the market for telescope manufacturing services. The purpose of the SSNIP test is to determine whether the relevant market is drawn too narrowly and should be expanded to include potential substitutes. But because no other manufacturing capacity can substitute for telescope manufacturing services, wholesale purchasers of telescopes cannot turn to other manufacturers to fulfill orders. Without substitutable manufacturers, a SSNIP test boils down to whether new manufacturers would enter the market fast enough to make an increase in price unprofitable for a hypothetical monopolist, which they could not. As a result, the court held that the economist reasonably could forgo performing a SSNIP analysis.

Sunny also challenged the economist’s estimate of anticompetitive overcharges that could not directly be observed. Neither the “benchmark” nor “before-and-after” estimation methods were available. Therefore, to develop a measure of damages, the plaintiff’s expert presented two different methods of estimating the overcharges. In the first method, the expert collected data on cartel overcharges from the economic literature on markets with structures and conditions similar to telescope manufacturing. The average of those overcharges was then used as an estimate of the overcharge resulting from defendants’ collusion. As a check on this estimate, the economist also submitted a theoretical Cournot equilibrium model of market prices based on assumptions drawn from the record in the case. The two methods yielded similar and consistent results. Affirming the admissibility of the expert’s damages estimates, the appellate court found the expert’s report and testimony “were sufficiently tied to the facts of this case such that the district court properly admitted this evidence.”

In rebuttal, the defendant’s economist testified to the high sensitivity of the assumptions used in the plaintiff’s theoretical model. Interestingly, defendants were not permitted to submit their own estimate of damages for the first time on rebuttal, so the defendants’ expert had to limit her testimony to the sensitivity of the model without the ability to show the jury any resulting alternative estimate of the anticompetitive overcharge. The appeals court affirmed the trial court’s limitation on the defendants’ rebuttal expert.

Price fixing and a larger scheme.

Sunny also argued that Orion failed to present sufficient evidence to support Orion’s Section 1 claims. Section 1 prohibits unreasonable restraints of trade. Horizontal price fixing and market allocation are per se unreasonable and support Section 1 liability without regard to any purported justification or defense. The Ninth Circuit noted that Orion offered evidence that Synta executives encouraged Sunny’s purchase of Meade, an acquisition that was part of a larger scheme by Sunny and Synta to jointly control the telescope manufacturing market, even though federal regulators had already prohibited such a combination. The court also declined to upset the jury’s finding that Sunny conspired with a Synta subsidiary to fix prices and credit terms to Orion, a per se violation of Section 1.

“If you break it, you buy it.”

Finally, it is notable that the appellate court affirmed the award of damages accruing after September 2016, when the defendant and Synta took their last steps to eliminate Meade, and Synta entered a Settlement and Supply Agreement with Orion. The court held that, even if the conspiratorial acts of Sunny and Synta ended in 2016, Orion could still recover post-2016 damages “because it continued to suffer economic harm from the harm to competition caused by the illegal concerted activity.” Thus, where collusion causes a durable change in market structure or sets the pattern of a continuing collusive practice, it is no defense that the conspirators may have ceased engaging in concerted action.

The rule adopted by the Ninth Circuit in Optronics is clear: “[W]here an antitrust plaintiff suffers continuing antitrust injuries from anticompetitive changes to market structure that arose from a proven antitrust violation, we hold that the violation may be a material cause of that injury, and so recovery of damages is permitted, even after the last proven date of the violative conduct. This rule accords with the common-sense principle that ‘if you break it, you buy it.’”

Welcomed clarity.

The Ninth Circuit’s opinion brings welcomed clarity on several points. It demonstrated that plaintiffs need not perform a SSNIP test where market-specific circumstances define a market’s outer boundary. For claimants facing the need to estimate unobservable anticompetitive overcharges, it affirms an ingenious method for arriving at a reasonable and reliable estimate. And, for past conspiracies with continuing anticompetitive effects, the decision announces the common-sense principle that a defendant “remains liable for the continuing injuries suffered by plaintiffs from the structural harm to competition that its unlawful scheme brought about.” Put simply, this is a well-articulated decision by a capable panel that adds precision and certainty to antitrust.

Edited by Tom Hagy for MoginRubin LLP

Article By Timothy LaComb and Jonathan Rubin with MoginRubin.

For more articles on 9th Circuit decisions, visit the NLR Litigation section.

Stopping Harassment Before it Starts Includes Dealing with Bullying

Toxic workplaces have been making plenty of headlines lately. Recent stories about toxic workplaces – and some of the fallout – have spanned all sorts of industries, from the government to video gaming to professional sports.

What makes a workplace toxic? There’s probably an academic definition (or two), but what’s intended for the purposes of this article is behavior that is intimidating, demeaning or belittling, and is either severe, ongoing or both. It typically involves someone taking advantage of a power difference, real or perceived. The power difference may come from the official position or title, it may come from a long tenure with the organization, it may come from namedropping or sense of connections to power within the organization, and it may come from being a rainmaker, superstar, or someone identified as high potential. The person or group on the receiving end lacks such power and often receives a message, not always in so many words, that any complaint will not be believed or taken seriously. Critically, there are usually instances of demonstrating poor behavior in front of others, without intervention or acknowledgment, signaling the behavior is accepted.

A toxic workplace can be especially difficult to deal with because rude (or worse) behavior, unless tied to a protected characteristic, is not necessarily harassment or discrimination under the law. Even the Supreme Court says companies are not required to be manners police, and most certainly do not want to be tasked with managing the manners of our coworkers. After all, we are all capable of an off day when we are not as kind or considerate as we aspire to be. We hesitate to call out the poor behavior in someone else, either to avoid embarrassment or confrontation, because it’s not a good time and then it’s too late, or because it could be us the next time. Unfortunately, this tolerance likely contributes to a bigger problem, allowing the poor behavior to grow into illegal harassment.

The problem is not new. In 2016, the EEOC reported that training to stop or prevent harassment was largely missing the mark. Among other things, the EEOC suggested training focus more on preventing poor behavior(s) that tends to escalate into harassment, namely bullying.

With that suggestion in mind, what should be done to improve processes? What can you do?

Make sure your training programs address behaviors that are common precursors to harassment or discrimination (either as part of EEOC training or something separate).
Consider whether your complaint process would allow or even encourage complaints that do not fit the typical paradigm of unlawful discrimination or harassment. If not, consider broadening your process or developing something different that can help address concerns before they become formal complaints. (And be prepared to hear and listen more.)
Consider how to ensure appropriate confidentiality but also have a way to recognize a pattern of poor behavior attributed to an individual or group.
Don’t communicate tolerance as a bystander. If you recognize someone is uncomfortable, intervene. Intervention does not have to be an admonition or correction, it can simply be a diversion.
Foster dialogue about how to improve, starting with yourself and those comfortable with you. Are you quick to apologize if you were short with someone? If you made a remark or told a joke that someone that was too stereotypical or otherwise offensive, would someone tell you they had been uncomfortable? To be clear, you probably are not the problem. But more dialogue means more opportunity for everyone to improve and recognize what or who might be a real problem.

These are just a few suggestions and none of them are very easy to accomplish. But, they do not cost much and may save a lot of money. No one wants to deal with the publicity or litigation that often comes with making the headlines for having a toxic workplace. But, the more common costs are low productivity and high turnover. It’s worth another look.

Article By Dabney D. Ware with Foley & Lardner LLP.

For more articles about employee rights in the workplace, visit the NLR Labor & Employment section.

Ohio Votes to Legalize Sports Betting

Ohio lawmakers have reached an agreement that will legalize sports betting for those 21 and older. House Bill 29, which was passed by the Ohio House of Representatives and Senate on December 8 and is expected to be signed into law by Governor DeWine in the coming days, will allow licensed gaming operations to begin accepting wagers as soon as April 1, 2022.

Since the Supreme Court of the United States struck down federal law prohibiting state-sponsored sports betting in 2018, 33 states and Washington D.C. have passed legislation establishing regulated markets for wagering on sports. Ohio now becomes the 34th as it hopes to curb the flow of its residents’ entertainment and tourism dollars into neighboring Michigan, Pennsylvania, Indiana and West Virginia, all of whom have already legalized sports betting.

Oversight. The Ohio Casino Control Commission (“OCCC”) will be responsible for regulating and monitoring all sports gambling activity in the state. Once the bill is signed into law, the OCCC is required to establish a licensing process, consumer protections, advertising guidelines, and financial requirements for licensees. As an enforcement agency, it will also be given the authority to create other administrative rules it deems necessary to carry out its oversight duties.

Licenses. The OCCC will being accepting license applications on January 1, 2022 and can begin issuing a limited number of licenses on April 1, 2022. The law provides guidance as to how the OCCC will evaluate applicants, and establishes three classes of licenses: (1) Type A licenses for casinos, racinos and sportsbooks operating online and via mobile app; (2) Type B licenses for brick-and-mortar sportsbooks, which will be distributed throughout the state based on county population; and (3) Type C licenses for betting terminals to be placed in restaurants, bars and the like that possess D-1, D-2, or D-5 liquor permits.

Taxes. A 10% tax will be placed on the new industry’s revenues. Combined with the fees and fines collected by the OCCC, most of this money will be earmarked for distribution by the Ohio General Assembly to public and nonpublic K-12 education programs and a state-sponsored Problem Sports Gaming and Addiction Fund. The bill also creates certain tax incentives for licensed operators beginning in 2027.

Be Ready. Businesses affected by legalization, whether pursuing a license, contracting with a license-holder or being indirectly impacted, need to stay vigilant as Ohio’s sports betting regulatory framework develops. From financial reporting to employment practices, failure to understand and implement processes to comply with the forthcoming regulations could result in significant fines or even criminal penalties.

FDA Completes Peanut Allergy Health Claim Review

On August 10, 2021, Prollergy Corporation (Prollergy) submitted a notification to FDA regarding health claims related to the introduction of allergenic foods to infants and the reduction in the risk of developing food allergies. Under the Federal Food, Drug and Cosmetic Act, as amended by the FDA Modernization Act (FDAMA), a manufacturer may submit to FDA a notification for a health claim based on an authoritative statement from a scientific body of the US Government or the National Academy of Sciences; in this case, the authoritative statement Dietary Guidelines for Americans 2020-2025 and 2020 Dietary Guidelines Advisory Committee.
On December 8, 2021, FDA announced that it had completed reviewing Prollergy’s notification, concluding that manufacturers may use the following claims on the label of any food product that qualifies for the claims:
- “If a baby has severe eczema, egg allergy or both, introducing age-appropriate, peanut-containing foods as early as 4 months may reduce the risk of developing a peanut allergy. Caregivers should check with the baby’s healthcare provider before feeding the baby peanut-containing foods.”
- “For babies with an increased risk of peanut allergy (babies with severe eczema, egg allergy or both), introducing age-appropriate, peanut-containing foods as early as 4 months may reduce the risk of developing a peanut allergy. Caregivers should check with the baby’s healthcare provider before feeding the baby peanut-containing foods.”
Companies are permitted to start using the approved claims as of December 8, 2021. These claims are in addition to a qualified health claim that FDA acknowledged in 2017, which was also related to the link between early peanut introduction and the reduced risk of developing peanut allergies.

Article By Food and Drug Law at Keller and Heckman

For more articles on food regulation, visit the NLR Biotech, Food, Drug section.

Freddie Mac Addresses Cryptocurrency in Mortgage Lending Criteria

On December 1, 2021, Freddie Mac published Bulletin 2021-36 for Freddie Mac sellers to provide updated guidance on eligibility criteria for qualifying mortgages. Freddie Mac publishes such bulletins on a regular basis for loan originators who wish to resell mortgages to Freddie Mac, and Bulletin 2021-36 covers a number of routine topics such as 2022 conforming loan limits, certain credit underwriting criteria and document custody. The bulletin is notable, however, because it specifically addresses requirements related to cryptocurrency’s use in the mortgage qualification process.

The bulletin announces that, due to a “high level of uncertainty associated with cryptocurrency,” Freddie Mac has updated its credit underwriting criteria for qualifying mortgages as follows:

Income paid to a borrower in cryptocurrency may not be used to qualify for a mortgage;
For income types that require evidence of sufficient remaining assets to establish likely continuance (e.g., retirement account distributions, trust income and dividend and interest income), those assets may not be in the form of cryptocurrency;
Cryptocurrency may not be included in the calculation of assets as a basis for repayment of obligations;
Monthly payments on debts secured by cryptocurrency must be included in a borrower’s debt payment-to-income ratio and are not subject to other criteria regarding installment debts secured by financial assets; and
Cryptocurrency must be exchanged for US dollars if it will be needed for the mortgage transaction (i.e., any funds required to be paid by a borrower and any borrower reserves).

The bulletin also notes that Freddie Mac will continue to monitor cryptocurrency developments and may update its requirements as appropriate in the future. The new cryptocurrency criteria are effective immediately.

Article By Scott H. Kimpel of Hunton Andrews Kurth

For more articles on crypto, visit the NLR Financial Institutions & Banking section.

9 Tips for Better Email Management for Lawyers

Email management for lawyers and professionals across most industries is a constant uphill battle. In fact, the average professional spends 28 percent of the workday reading and answering emails, according to McKinsey. A lawyer has to pay special attention to their inbox because they often receive lucrative client and business information. However, they’re also overloaded with industry updates, bar association newsletters, and civic engagement emails.

For a professional who bills by the hour, sifting through hundreds of emails is not only time-consuming but unprofitable. Email can also be a distraction and inhibit effective time management.

Here are some practical tips for email management for lawyers.

Take Advantage of Email Management Features and Shortcuts
Use Filters to Keep Inboxes Organized
Schedule Email Correspondence
Priotize Emails
Switch Internal Communication to Other Platforms
Clear the Clutter
Unsubscribe to Miscellaneous Emails
Disable Social Media Notifications
Embrace Legal Technology Solutions

1. Take Advantage of Email Management Features and Shortcuts

Email platforms have tons of features and shortcuts to make work more efficient and improve email management for lawyers. Unfortunately, most people don’t take the time to learn about them and use them to their fullest.

For example, Gmail has a feature that allows you to mute conversations in groups and keep them from popping up at the top of the inbox each time someone contributes. Gmail also offers task management and reporting tools to maximize efficiency.

2. Use Filters to Keep Inboxes Organized

Lawyers’ inboxes become cluttered from questions and correspondence from non-clients. For example, law firms may have an inefficient onboarding process that leads new team members to direct questions to anyone available, including lawyers.

The best way to address this is for law firms to put rules in place to ensure that emails go to the appropriate recipients – in the onboarding example, that would be the onboarding team. Inboxes can also be sorted using separate folders and filters, such as clients, bar association, and so on, to make it easy to identify high-priority emails.

3. Schedule Email Correspondence

Email provides a tempting distraction for lawyers. While waiting for an important email reply for a case, a lawyer may compulsively check email to see if it came through. That leaves them open to other distractions, such as the industry newsletter with a provocative subject line. Before they know it, hours have passed and most of it was spent scrolling the inbox.

Lawyers should designate a few times throughout the day that are for checking the inbox and responding to emails. These times can be first thing in the morning, before or after lunch, or before leaving for the day. The timing doesn’t matter as much as keeping the schedule consistent and sticking to the rule of only checking email during those scheduled periods.

4. Prioritize Emails

Email prioritization is a simple way to manage an overflowing inbox. Lawyers should divide emails into sections for emails that require follow-up, emails that can wait, and emails to archive.

Follow-up emails are emails that need responses in a timely fashion, such as client emails. These are the most important emails in an inbox and should have priority. Emails that can wait may include emails that need further work or research before a response, such as internal emails from management teams. Email archives should only have emails that are finished and require no further communication but may need to be referenced later.

5. Switch Internal Communication to Other Platforms

Inboxes can become cluttered from internal communications, which isn’t ideal for anyone at the firm. If possible, law firms should switch internal communications from email to other communication tools, such as chat tools or document review software.

This not only keeps email inboxes focused on crucial client or business correspondence, but ensures that the law firm has streamlined communication to keep everyone on the same page.

6. Clear the Clutter

Most people, not just lawyers, have a fear of hitting the “delete” button. Everyone convinces themselves that they’ll need that email in the future and it should be saved, but that just leads to an overloaded inbox that mixes important emails with internet junk mail.

Like anyone else, lawyers have emails that have been lying unattended in the inbox for months or even years. In all likelihood, the sender has forgotten about the email, yet the recipient holds onto it “just in case.”

The practical choice is for lawyers to sort through the inbox and delete any email that’s been sitting for ages, all with the intent of responding or following up someday. Any emails that are undecided can go in the archives, so they’re around if needed, but don’t take up space in the inbox.

7. Unsubscribe to Miscellaneous Emails

Lawyers get spam emails, too. If left unchecked, spam email can overtake an inbox with irrelevant promotions. Lawyers may subscribe to an email list deliberately, then no longer need the information, or accidentally while searching for information in a rush.

Ideally, lawyers will only subscribe to email lists they want to receive information from. It doesn’t always go that way, however, so lawyers should set aside time each month or every few months to identify emails that go unopened and hit the “unsubscribe” button.

8. Disable Social Media Email Notifications

Social media is a distraction in and of itself, especially with email notifications. Inboxes can become overloaded with social media notifications for every like, comment, or share, leading lawyers to not only check their inboxes but sign on to social media accounts.

None of these notifications is important to a lawyer’s workday. Many law firms have social media teams, but if they don’t, it’s more efficient to schedule time in the day or week for social media engagement and leave the rest of the time focused on priority emails.

Lawyers should log in to each social media account and deactivate email notifications, as well as any other platform that has email app notifications. This could rid an inbox of thousands of emails each month.

9. Embrace Legal Technology Solutions

Law may be a traditional industry, but legal technology options have incredible benefits for streamlining efficiency and maximizing productivity at law firms – including email.

Several tools are available to sync with email and assist with inbox management, such as solutions that integrate with Microsoft Outlook, Gmail, and MailChimp to sync emails, view contact information, and create tasks.

Make Email Management for Lawyers Simple

Email can be a significant distraction and time waste for lawyers and law firms, but many technology tools are available to help. PracticePanther helps lawyers stay on track with automation tools and relevant app integrations to prioritize client emails, create new contacts, and manage tasks to keep your practice organized.

Article By PracticePanther

For more articles on legal technology, visit the NLRLaw Office Management section.

Disclaiming Patent Claims Leads PTAB to Grant a Request for Adverse Judgment

In Arsus, LLC v. Unified Patents, LLC, (Fed. Cir. Nov. 16, 2021), the Federal Circuit affirmed, through a Rule 36 judgment, the PTAB’s ruling granting a Request for Adverse Judgment After Institution of Trial.

Arsus initially sued Tesla Motors, Inc. for patent infringement in the Northern District of California asserting U.S. Patent No. 10,259,494. The ’494 patent is directed to a “rollover prevention apparatus.” The patent describes an “adaptive steering range limiting device,” which “prevents the steering wheel of the vehicle from being turned beyond the threshold of vehicle rollover, but otherwise does not restrict the rotational range of motion of the steering wheel of the vehicle.”

Unified Patents filed for inter partes review, challenging Arsus’ claims as being unpatentable under 35 U.S.C. § 103. Arsus then filed for statutory disclaimer of all challenged claims with the USPTO under 37 C.F.R. 1.321(a), and subsequently filed a Motion to Dismiss with the Board. In doing so, Arsus argued that because all of the claims at issue were disclaimed, there was no longer any case or controversy, and thus the Board had no jurisdiction to do anything other than to dismiss the IPR. However, the Board construed Arsus’s disclaimer as a Request for Adverse Judgment under 37 C.F.R. § 42.73(b), and terminated the IPR in favor of Unified Patents.

Arsus responded by filing a Motion to Vacate Judgment and, relying on Federal Circuit precedent from Sanofi-Aventis U.S. v. Dr. Reddy’s Laboratories, Inc., 933 F.3d 1367, 1373-75 (Fed. Cir. 2019), argued that the Board did not have jurisdiction to enter the Judgment because the disclaimer mooted the IPR petition and “deprived the Board of subject matter jurisdiction.” Unified Patents, LLC v. Arsus, LLC, IPR2020-00948, Paper 19, 3 (PTAB Jan. 29, 2021). The Board, however, pointed out that Sanofi-Aventis concerned a district court’s jurisdiction under Article III of the Constitution, and determined that Arsus failed to show that the same requirements applied to administrative proceedings.

Arsus subsequently appealed to the Federal Circuit, which affirmed without opinion by issuing a Rule 36 judgment.

Article By Andrew N. Schneider, Shannon M. Patrick and Amanda K. Murphy, Ph.D. of Finnegan

For more articles on the PTAB, visit the NLR Intellectual Property section.

Quentin Tarantino’s Secret NFTs

Quentin Tarantino recently announced plans to auction off seven scenes from the 1994 motion picture Pulp Fiction as non-fungible tokens or NFTs. These “Tarantino NFTs” will include a collection of high-resolution digital scans of the original handwritten Pulp Fiction screenplay. The NFTs each contain scans of the uncut screenplay pages themselves that form a single scene from the movie. They will be auctioned on the NFT marketplace OpenSea and are built on the blockchain platform Secret Network, which launched in February 2020.

Secret Network, developed by SCRT Labs, has additional data privacy & encryption features compared to other blockchain platforms that implement NFTs. These additional features are used to keep information associated with an NFT secret. For example, the buyer of an NFT is better able to hide their identity. Further, content associated with an NFT can be kept private to the buyer if they so choose.

Miramax was quick to oppose this new venture, filing suit on the heels of Tarantino’s announcement. Miramax asserts that because Tarantino assigned to Miramax in 1993 nearly all of his rights to Pulp Fiction, Tarantino’s remaining rights under the operative agreements are too narrow for him to produce, market, and sell NFTs. Tarantino’s reserved rights include “print publication” and “screenplay publication”, but Miramax contends that that is insufficient for Tarantino to produce NFTs. Miramax’s reasoning is that since each NFT is by definition unique and therefore a “one-time transaction,” distributing an NFT is not “print publication.” Miramax may find some support for that argument in the Copyright Act, which defines “publication” as “distribution of copies,” using the plural form and not the singular. Further, Miramax claims that Tarantino’s rights do not include a “future media” clause, supporting its contention that NFTs were not contemplated by the operative agreements, while Miramax’s rights specifically do. As Miramax states, “Tarantino’s conduct may mislead other creators into believing they have rights to exploit Miramax films through NFTs and other emerging technologies, when in fact Miramax holds those rights for its films.”

Ultimately, the dispute centers on these two questions:

Is Miramax correct that an NFT is not a “printed publication” because it is a “one-time transaction?”
Does the Copyright Act’s definition of “publication” as “distribution of copies” in the plural favor Miramax’s argument, since each NFT is unique by definition?

Tarantino’s announcement has generated intense interest in the cachet and bragging rights associated with owning a portion of his work. Like previous new technologies, however, NFTs may not fit neatly into existing legal structures. And since it has yet to be determined whether Tarantino has the rights to produce NFTs of the Pulp Fiction screenplay, interested buyers would do well to exercise a healthy degree of caveat emptor until the legal landscape is more certain.

This article was written by Michael R. Graif, Frank L. Gerratana and Allen Loayza of Mintz Levin law firm. For more articles about NFTs, please click here.