The Future of Law Firm Marketing with Deloitte CMO Diana O’Brien [PODCAST]

In this podcast interview, John McDougall of McDougall Interactive and legalmarketingreview.com and Nicole Minnis of The National Law Review speak with LMA keynote speaker Diana O’Brien about her role as CMO of Deloitte, the future of law firm marketing, marketing technology, and the challenges that law firms face with traditional and digital marketing.

John McDougall: Hi, I’m John McDougall, CEO of McDougall Interactive, and I’m here today with Nicole Minnis, Lead Publications Manager at the National Law Review. And our guest is Diana O’Brien, the Chief Marketing Officer of Deloitte. Diana will be the Keynote Speaker at the upcoming Legal Marketing Association annual conference on April 11th – 13th, in Austin, Texas. Welcome, Nicole and Diana.

Nicole Minnis: Thanks John, hi, and hello to you, Diana, as well.

Diana O’Brien: Thanks John and Nicole, it’s great to be here today.

John: Absolutely, and Diana, thanks for taking the time. You are a fairly new CMO, and I know that you came to this role from a non-marketing background — given that, what inspired you to take this new role as CMO of Deloitte?

Diana: Well “inspired” is the right word. First, my passion was really clients. I’ve spent 30 years in client service. That’s really where I learned to listen to clients, and respond, and react to what it is that they needed, and that was really the impetus to me appreciating and becoming, I think, a champion for clients within our firm. So today being the Deloitte CMO, I’m really the champion for all of our clients, and I’m responsible for helping out stake-holders within the firm whether they be our newest associates to our partners, be responsible for listening and understanding the collective needs of all of our clients and creating an environment where our clients get every day, in every interaction, a world-class experience in every touchpoint. So the client experience is something that I’m just deeply passionate about.

The second thing I sort of married up with that is I had the chance, after having that career, to take on a responsibility of being the Managing Director of Deloitte University – which is our learning center in Texas – and that’s where I came to appreciate and recognize that the world has changed. What worked yesterday doesn’t work tomorrow. We need to create environments where people can thrive, and grow, and continue to evolve, and I had the chance to do that for all of the learning. But, really, the same is so true for marketing today. We’re moving from this world where you could just push out this sort of one-way message where you were communicating what you wanted to communicate and push it out there and hope people heard it, to this more interactive, 24/7, broader business connection, and creating an environment where your clients thrive and you’re part of that active engagement. So it’s not really a back office anymore, it’s right front and center with the clients, and it’s a new capability that you need in order to do that.

So when you marry those two things up, it was a perfect choice for me and I was excited to take it on.

John: Yes, it sounds like empathy and inspiration.

Diana: Yes.

John: And what’s your mandate as CMO?

Diana: It’s really simple. It’s really to drive growth for the firm; it really couldn’t be any more simple than that. What I would say that maybe would resonate, I think, for a lot of marketers is that it does still start with the Deloitte purpose, and I do think that you don’t grow unless you’re grounded in your purpose. So, a good CMO is always going to know what that is and be able to inspire all their professionals to link back to that. So, the Deloitte purpose is to make an impact that matters with our clients, our people, our communities. So, when I think about what my job is and I think about the 70,000 professionals that work at Deloitte, I need all of them every day to go out and strengthen our brand to grow the firm by showing up to our clients in a consistent but personalized way that creates strong relationships, that builds powerful experiences, delivers unique insights that helps our professionals and our clients establish the kind of connection that is sustainable over time so we can really help as problems and issues go over time.

Changes to the Marketing Organization at Deloitte

John: And what changes have you made to the marketing organization in order to execute on that mandate?

Diana: Gosh, I’ve been busy with that.

John:  Quite a few.

Diana: We’ve streamlined a lot. We have really focused on optimizing the resources but we’ve been driving towards a new model. What’s interesting about Deloitte in this regard – and I don’t know that everyone’s appraised this quite yet but – we encompass, obviously, the most traditional elements, which is the communications and marketing capabilities, but all of the go-to market assets, if you will, sit under me as well. So, our go-to market channels [including our managing partners in key markets, our client leaders and our industry practice leaders] and thought leadership, public policy, corporate citizenship, they have been put under me as well and so that’s unique and actually I’m hearing some of that. I’ve met with a few other CMOs that are doing some of the same things and have had some of the same responsibilities, and so what I like about it is that it’s really this combined essence of, really, how does the market — How do you drive growth? How do you really develop a marketplace?

The other thing we think is really important is digital. Obviously we have a strong digital practice and that serves our clients, but it also serves our in-house marketing team and that’s key to us being able to deliver our brand every day and create those kinds of experiences that we were talking about and deliver those insights. So I work very closely with the consultative arm of our Deloitte digital practice.

John: That’s a lot of stuff going on. That’s fantastic. Go ahead, Nicole.

The Future of Law Firm Marketing

Nicole: Shifting gears slightly and thinking about our legal marketing listeners more specifically, what do you see on the horizon in terms of transformation or potential paradigm shifts for law firm marketing?

Diana: It’s so interesting, Nicole, I think in many ways. Professional services, accounting, and consultancies like our firm and law firms, have some real similarities in this regard. I think digital marketing is going to continue to grow and that’s really for all of us, it’s not just legal markers. But we need to face it in a way that maybe some others don’t have the same issues, partly because we come from professionals where we’re highly skeptical. That’s just our profession, so we have to maybe be a bit more willing to get into the data around the success of digital and how that may in fact change us and work to be a better adopter of it. With some of the increased competition that’s there, I think if we don’t do that, the professional services environment has some challenges to stay ahead of the game, and that’s particularly going to be the case, I think, with talent. That’s going to be one of the big challenges if we don’t address that.

Certainly social media, obviously law firms are doing things in social media, but I think it will continue to be a big focus. It certainly has been for us. We have worked to become more engaged and use more outside platforms – and my own micro-site is an example – to sort of meet people where they are. We use LinkedIn more than we’ve ever used before to help us connect into the marketplace.  We’ve all got to figure out how to have our sites optimized for mobile so content can be more easily consumed. And again, when you come from a place where maybe adaptability is a little lower and skepticism is a bit higher, the mindset of professional services firms where we do have some of that, we have to work harder I think to embrace some of those things.

Marketing Technology

Nicole: It sounds to me like Deloitte is way ahead of the curve in terms of digital technology so I commend you and your firm on those efforts. What marketing technology do you see is getting the most buzz right now besides some of the things that you’re already working on?

Diana: It’s a good question. I have two things I want to say on this, one social listening is obviously incredibly important in content management systems or continuing to evolve publishing platforms, and it’s important that we stay thoughtful of that, but the number of channels that you now have to participate in is exhaustive, and it’s just growing, and I think it’s important that we not become sort of overwhelmed with the technology, but really solve specific business problems. One of the things I think that law firms can do is I think it’s important that they continue to differentiate themselves with eminence, and thought leadership, and specific things that you can differentiate yourself on. And one of the things I think that are particularly useful are – maybe not as technology-buzzing, if you will – but blogs and podcasts. I think they’re low-cost communication tools that really are a more direct engagement, and can connect more easily sometimes with the targeted audience that you want with the specialized information that you have.

Sometimes I think we can become sort of enamored with the technology. When I first took on I felt like, maybe the first four months, I was a bit enamored with the technology, but I kept coming back to, “Well, what problem am I really trying to solve for that’s going to drive my business?” While I think there are some interesting things out there that we all need to be aware of, I think it’s important to keep coming back to, “What problem am I solving?”

Marketing and Thought Leadership

John: As a follow-up to that, I love hearing you talk about thought leadership. I own a site, authoritymarketing.com, and we do a lot of work around the idea that your experts and your thought leaders, especially in professional services, will help propel your blogging, and podcasting, and marketing, and SEO, and social media. Would you say that those blogs and podcasts can also then be used by your sales people in business development, and is it kind of streamlining your efforts or killing two birds with one stone by doing both of those things at once? Not just doing the blogs and podcasts for their own right for their search in social benefits and all of that, but to also potentially use for biz dev?

Diana: Yes, there’s no question, and actually we did something interesting this last year. We actually did an active online course on a couple key topics that we felt we were expert in, and what I feel happened as a result of that is the level of engagement that we were able to achieve. It’s actually really a form of marketing in today’s world which is more interactive. It isn’t this push of a message. It’s this engagement where, let’s say you put a blog out there, someone comments back. In [this case], people are commenting on the course. People are exchanging ideas over the content. So you’re evolving it and working it together. That’s the new world. That’s the new model. It isn’t something that is just, “Here’s my ideas and here they are.” It’s a dialogue and exchange that ultimately is more productive for everyone.

The Biggest Challenges for Law Firm Marketers

John: Absolutely, and what about specifically for law firms, what are the biggest challenges for law firm marketers?

Diana: I think, similarly, something similar that we have is how do you keep differentiating yourself in a saturated market? How do you promote your brand? How do you continually evolve, and innovate, and show that you’re uniquely qualified over someone else? Obviously eminence is one way to do that. Engaging is certainly a way. Thinking beyond law firms and professional services firms like Deloitte have, in the past, always charged – for example – by the hour, and that’s just been a mindset that’s gone in. Starting to think more about, “What’s the real value we’re bringing in?” Thinking of ways in which you can differentiate yourself. I think the marketer has a role now to play in helping to shape the thinking around that.

It isn’t just the message. It’s really the mindset of the organization. It’s the type of strategies and tactics that you will use, such as what we were just talking about in thought leadership. It’s how you create the client experience end-to-end, how you think about all the customer decision-making, how the customer feels at all those points that the marketer plays a role in. I think they have a really unique place to influence the many stake-holders, the many lawyers that are in the organization and how they show up at their clients.

But I think even more importantly than that is the future of where their talent is going to come from. I mentioned it before, but we did a study that was a digital study, we did it with MIT Sloan Management, and what we found was across all these age groups that, primarily, talent is really looking for organizations that are technically capable and receptive to employees being able to be digitally sophisticated. And we found that in many cases companies are not nearly as mature as the upcoming workforce and current workforce wants to be, and so that’s a challenge so we have to deal with that.

Conveying the Value of Marketing to Management

John: Yes, absolutely, especially younger people, and not just very young people, certainly into the 30s, and 40s, and above, but a lot of people are just so attuned to social media these days and searching on their mobile phones so if your organization is lagging in that it doesn’t inspire them. I often hear legal marketers complain how hard it is to convey the value of what they do to the management of their firms; do you have any advice for them?

Diana: I think this is something relatively new for CMOs, personally. I don’t, in my consultative time with clients, I think CMOs often didn’t really find their way into the C-suite, and I think that has changed. This is now a real opportunity to affect the C-suite.

I think the CMO had a chance to connect with the CFO about the metrics that drive sales. I think they are instrumental with working with the Chief Talent Officer about how to empower their employees to be better brand ambassadors, to reflect the culture in their business. I think they need to work with the CIO on any new technologies that might be touching the customer or extracting customer insight within the organization. So now they are really up here and I don’t think that was the case before. So they have a chance to change the perception of marketing and that’s new and it’s really a great kind to build new relationships and I think the advice I would have is not to underestimate the power that you have right now to influence and build key relationships with their peers, to have a sit at the table, to take your seat at the table and translate the customer experience, and bringing the customer championship into business results.

John: Yeah and as you said that earlier, really tying that up into your core mandate, your core value proposition and mission statement and making sure that marketing especially things like in the past, SEO or certain things were easy to kind of push a button and they would happen over on the side. Now they need to be much more integrated, right?

Diana: Yes and I think people consider those tactics. They thought, “Oh, well, just go do that.” Now it is an embedded part of the strategy and you can’t really have an organizational strategy without understanding how the marketing message is linking to that and how you are making them come to life in every element of the customer experience.

Content Marketing

John: Do you think content marketing has really driven a lot of that because if you could do digital marketing in the past, it was a little bit of a fairy dust, you know. You could kind of just sprinkle it on. Now you can’t just do that. You have to really develop content that has to reflect the brand or fail, right?

Diana: Yes. I said one time in a talk, and I thought I’d share it even at the conference, but I used to think of marketing as sort of a little m where it was about this message that you pushed out. And now it’s so much more. It’s really about the big M. It’s about the meaning.

John: Right.

Diana: And you are exactly right. That comes from the content that’s really there and it has to be rich.

John: Yes. And the CEO, the CFO, they should take an interest, and I think they are, more so than ever.

Diana: I do too. I do too.

John: What are you up to these days and how can listeners connect with you online?

Diana: Well, I have been pretty busy with the new role but what I have done most recently, I just left Deloitte University, which is a home to me every time I am there but we just had about a thousand of our folks there that sit in our market development organization that had spent two days thinking about, with a number of guest speakers, thinking about how are we going to continue to create the right connections and gain the right knowledge and to think about the right technologies to keep moving our organization forward.

We don’t have, you know — we’re big and it’s hard always to get people together and I’m glad we made that investment. It’s not always easy to do but it’s important when we do to make the most of it, and I think we did. So I was thrilled to be able to have our people together and I encourage, even when you know, with all the options to do things socially and online and virtually, sometimes being in person is the best way to really further that bond. So I was glad to do that.

So connecting with me, obviously please check out our website, first cmo.deloitte.com where you will get lots of relevant content that’s perfectly relevant to the CMO and I hope everybody goes there. My twitter handle is @DianaMOBrien and I welcome anyone and I’d like to have an exchange with anybody, and then certainly deloitte.com. We welcome anybody to visit us there for our eminence.

John: Absolutely, well thanks for talking to us today and thanks for listening everyone to the National Law Review podcast. Visit the National Law Review website at natlawreview.com and for more information about the Legal Marketing Association’s annual conference, visit legalmarketing.org/annual_conference. I’m John McDougall and thanks for listening.

Article By John McDougall & Nicole Cudiamat Minnis
© 2016 The National Law Review

Seven Strategies to Succeed at Law Firm Leadership

The title “managing partner” falls short of the mark in describing the work of a law firm leader. “Chief executive officer,” in my opinion, is more accurate. Terminology evolves so that some titles no longer reflect their original meaning.

Managing partner has become such a term. When a managing partner is named, is the law firm really appointing a manager in the corporate sense? A manager, after all, is a caretaker responsible for oversight of a unit or department.

A recent survey on the topic of law firm management and leadership asked those polled to distinguish between a “manager” and a “leader.” Insights that the survey respondents offered included, “Management is mechanical, while leadership is inspirational,” and “The leader sets the direction and the plan, while the manager implements the plan.”

Another survey respondent was more pointed: “Managers implement what leaders want them to do. Most law firm managers want to be loved and not to lead.” Saying that managers want most to be loved may overstate the case. But it does sum up the problem. If a law firm needs vision, inspiration, motivation, cohesion, consensus, direction-setting and the establishing of firmwide goals, it needs strong leadership committed to that work.

Leading Lawyers 

The hard realities of law firm leadership are apparent. Among them:

  • The authority of lawyer management (or leadership) is derived from the willingness of the firm’s partners to be managed (or led).
  • Partners perceive themselves as being owners of the firm, having certain prerogatives and independence, not as employees to be managed.
  • Each firm has its own personality and culture, and the management techniques effective in one firm may or may not be successful in another.

In the face of these hard realities, many managing partners retreat into the noncontroversial confines of day-to-day management, putting aside attempts to exercise true leadership. What is needed instead is a well-thought-out plan to lead your firm forward into the 21st century.

SEVEN STEPS TO SUCCESSFUL LEADERSHIP

1. Create Job Descriptions for Yourself, Your Successor and Other Firm Leaders.

Remember, you’re drafting a job description for a CEO, not a manager. Think of your job description as a contract with your partners. At a minimum, it should delineate the amount of time you will devote to management responsibilities. A CEO’s primary responsibilities should include strategic planning, setting the future direction of the firm, cultivating relationships with major clients, and identifying and grooming future firm leaders. To compensate for time lost from your personal practice, the job description should define your pay structure.

2. Redefine the Role of Practice Group Chair.

Practice group chairs are too often treated as lions among their prides. Often they are appointed because they are the senior member of the group or the most effective rainmaker. This does not mean they are the most effective manager, the best mentor or the most committed to the success of the firm. Practice group chairs should be elevated to the level of senior management. They should be given the full authority to manage their groups. Practice group leaders need to be chosen based on the ability and the commitment to lead.

3. Get to Know the Firm’s Client Base Personally.

No partner should “own” a key institutional client. Managing partners should reach out to client contacts and underscore the message that the firm—not only the client’s chosen counsel—is pleased to be of service. Ask the client for feedback, learn the client’s business and the industry, and strategize to help the client reach its goals. Do more for the firm’s clients than simply putting out fires.

4. Identify and Hire a Strong Chief Operating Officer.

If you are going to be an effective leader or CEO, you have to get the minutiae off your desk. Delegate day-to-day administrative responsibility to a strong, competent executive director or COO. This person should head up a team of business professionals and serve as your trusted “second hand” on the leadership team.

5. Offer Reforms to “Time and Money” Matters.

You will be asking senior management to take on a more extensive and defined role in the operations of the firm. Adjust the time demands on the executive committee and the practice group leaders to allow for sufficient nonbillable time for them to fulfill their management responsibilities. Likewise, adjust the compensation criteria for senior managers to acknowledge the time they must devote to management matters and for the firm-benefitting results that they achieve.

6. Start (or Reenergize) the Strategic Planning Process.

A strategic plan is a living document that requires modification and fine-tuning from the first day it is implemented. If you have been selected as the firm’s managing partner, presumably you have a vision of what you want the firm to become, what you want it to achieve. Sell this vision and muster a supporting coalition among the equity partners. You don’t need to win them all over, but you will need an effective critical mass and working majority. With this group at your back, start small and keep the initial goals simple. Suggest three or four one-year priority items with sufficient low-hanging fruit to show short-term wins. Consolidate your gains and move forward.

7. Maintain Your Firm’s Investment in Its Future.

The challenges of launching new initiatives, creating consensus and moving your firm forward can sometimes cause a firm leader to forget about the little things that, in the end, may prove to be just as important as greater goals. Don’t forget to implement a first-rate training and associate development program. Here lies the future of your firm. Don’t forget about marketing and business development initiatives. These provide the growth that will finance your firm’s future. Don’t forget about technology upgrades. These are the essential tools that keep your firm on the cutting edge and ahead of the pack. And don’t ignore your successor. Heirs apparent need the opportunity to learn the principles of law firm management.

The old Chinese proverb says that a journey of 1,000 miles begins with a single step. Becoming a leader of a law firm is similar. A CEO must, step by step, patiently bring along the uninterested, the doubters and the curmudgeons to join the advocates and the reformers. Bold vision and small steps are the stuff of leadership.

Article By John Remsen, Jr of The Remsen Group
Copyright 2016 The Remsen Group

Fiduciary Risk in Data Privacy and Cybersecurity? You Bet!

Health plan administrators are (or certainly should be) well-versed in their obligations under the Health Insurance Portability and Accountability Act (HIPAA), as amended by the Health Information Technology for Economic and Clinical Health Act (HITECH). Failure to secure protected health information (PHI) from disclosure can result in civil monetary penalties of up to $1.5 million and potential criminal penalties of up to 10 years’ imprisonment. Penalties of this size have the tendency to get people’s attention. But, if you are a retirement plan fiduciary or administrator (which likely includes officers and other senior-level executives at a company), are you aware of your obligations to protect sensitive data and other personal information in your control and the control of your vendors?

Retirement plans store extensive personal data on each participant and beneficiary. This data ranges from Social Security numbers and addresses to dates of birth, bank account and financial information, and other records and is stored physically and in electronic forms for years, if not decades. The term often used for this type of information is “personal identifiable information” (PII). While stored, numerous human resources and benefits department personnel, participants, beneficiaries, recordkeepers, trustees, consultants, and other vendors have access to some or all of this highly sensitive information. The extensive trove of PII presents an attractive, and often undersecured and easily exploitable, opportunity for criminals intent on stealing identities or on the outright theft of plan assets and benefit payments.

Federal laws similar to HIPAA but applicable to retirement plans have not (yet) been enacted. However, this does not mean that retirement plan fiduciaries and administrators are off the hook. Under the Employee Retirement Income Security Act of 1974 (ERISA), as amended, a fiduciary is required to discharge his or her duties solely in the interests of plan participants and beneficiaries, and, in doing so, must adhere to a standard of care frequently described as the “prudent expert” standard. Under this standard, it is not difficult to conclude that a retirement plan fiduciary who does not take certain precautions with regard to the protection of PII may be in breach of his or her fiduciary duty. And, although a breach of an ERISA fiduciary duty does not trigger clear statutory penalties like those applicable under HIPAA and HITECH, under ERISA, fiduciaries are personally liable for their fiduciary breaches.

So, what precautions should retirement plan fiduciaries take to help ensure that they have fulfilled their fiduciary duties with respect to data privacy and cybersecurity? What should a fiduciary do in the event of a data privacy or cybersecurity breach? Presently, 47 states, the District of Columbia, Guam, Puerto Rico, and the Virgin Islands have enacted some form of breach notification law, and it is unsettled whether these breach notification laws are preempted by ERISA.

Article By Matthew H. Hawes & Patrick Rehfield of Morgan, Lewis & Bockius LLP
Copyright © 2016 by Morgan, Lewis & Bockius LLP. All Rights Reserved.

Lawsuit Challenges FDA Approval of Genetically Engineered Salmon

BullmonLast November, we posted that the Food and Drug Administration (FDA) had approved a genetically engineered (GE) salmon: AquaBounty Techonologies’ AquAdvantage Salmon. This approval marked the first time that the FDA authorized selling a genetically engineered animal for human consumption.

Immediate backlash followed the FDA’s November 19, 2015 announcement from environmental and consumer advocacy groups. On March 31, 2016, environmental and food safety groups, as well as fisherman trade associations, sued the FDA and related agencies in federal court in California. The suit seeks to reverse the FDA’s approval of the fish for human consumption.

The complaint alleges that the FDA failed in its statutory duty to take a “hard look” at how GE salmon will impact the environment. The plaintiffs warn that the FDA did not appreciate the risk that the farmed salmon would inevitably escape, “interbreed with wild endangered salmon, compete with them for food and space, or pass on infectious disease . . . .”

The plaintiffs also take aim at the FDA’s authority to regulate GE animals under the Federal Food, Drug, and Cosmetic Act (FFDCA), arguing that, back in 1938, Congress did not expect the FDA to regulate genetically engineered animals for human consumption: “GE animals present enormously different risks and impacts than drugs, requiring different expertise, analyses, and regulation than were contemplated when Congress enacted the FFDCA.”

Whether additional lawsuits will follow this one remains to be seen. In our November post, we predicted that consumers could sue to challenge the labeling of the GE fish. Although the FDA initially determined that AquaBounty would not need to label its salmon as GE, a provision in December’s 2016 Omnibus Appropriations Bill required the FDA to ban GE salmon imports until it published labeling guidelines for the fish. In February, the FDA issued that ban and announced its plans to establish labeling guidelines.

Even if AquaBounty puts FDA-approved labeling on its product, consumers still may sue under failure to warn and related legal theories. The food industry has had some success defending state law food labeling claims based on federal preemption. But the federal Nutrition Labeling and Education Act exempts claims based on the adequacy of safety warnings unless the FDA has actually considered a risk and determined that no warning is necessary. So, the key question in any consumer personal injury suit involving GE salmon likely will be whether the FDA considered the risk of the alleged harm in implementing its new labeling guidelines.

Article By Amy M. Rubenstein & Katia Asche of Schiff Hardin LLP

© 2016 Schiff Hardin LLP

U.S. Air Force Testing BioBased Vehicle Oil Created From Canola Seed, Soybean, And Synthetic Petroleum

OilOn March 22, 2016, a team visited Malmstrom Air Force Base to test a new biobased synthetic oil in the base’s vehicles. The testing is sponsored by the Defense Logistics Agency (DLA) and the Office of the Secretary of Defense, with four bases chosen to use the plant based synthetic oil in vehicles. The Department of Homeland Security’s Law Enforcement Training Center has also begun testing the oil and will be monitoring the impacts on vehicle performance and engine quality over the next 12-18 months. George Handy, the project manager, stated that the use of biobased oil is not expected to result in “any change in the performance of any of the vehicles because they are already running on synthetic fuels.” If the testing goes well, the biobased oil will be available to purchase through normal channels, improving national security through the use of a domestically produced sustainable product.

Article By Kathleen M. Roberts of Bergeson & Campbell, P.C.

©2016 Bergeson & Campbell, P.C.

DOJ Issues New FCPA Guidance and Launches Self-Reporting Pilot Program

The US Department of Justice has announced the creation of a one-year pilot program intended to encourage companies to self-report bribery violations and provide extensive cooperation in exchange for reduced penalties, ranging from reductions in fines to declinations.

On April 5, the Fraud Section of the US Department of Justice (DOJ) issued its “Foreign Corrupt Practices Act Enforcement Plan and Guidance” (Guidance) outlining the following “three steps in [its] enhanced FCPA enforcement strategy”:

  1. The intensification of its investigative and prosecutorial efforts by substantially increasing its FCPA law enforcement resources.

  2. The strengthening of its coordination with foreign law enforcement.

  3. Its implementation of an “FCPA enforcement pilot program” to encourage voluntary disclosure, cooperation, and remediation.[1]

While the first two steps have been championed in prior DOJ press releases and speeches, the third step—the creation of the FCPA enforcement pilot program—is an important development that has the potential to change the voluntarily disclosure calculus in connection with FCPA matters.

The Guidance applies “to organizations that voluntarily self-disclose or cooperate in FCPA matters during the pilot period, even if the pilot thereafter expires.”[2]

Intensification of DOJ’s Investigative and Prosecutorial Efforts

The Fraud Section plans to more than double the size of its FCPA Unit by “adding 10 more prosecutors to its ranks”[3]—a staffing goal that was previously announced by Assistant Attorney General for the Criminal Division Leslie Caldwell at an FCPA conference in November 2015.[4] The Guidance also cites the FBI’s establishment of “three new squads of special agents devoted to FCPA investigations and prosecutions,” a hiring initiative that was announced approximately a year ago.

Strengthening of DOJ’s Coordination with Foreign Law Enforcement

The second part of the Guidance builds on previous statements by senior DOJ leaders that they “are greatly aided by our foreign partners”[5] and “it is safe to say [in 2013] that we are cooperating with foreign law enforcement on foreign bribery cases more closely today than at any time in history.”[6]

FCPA Enforcement Pilot Program—Eligibility and Potential Benefits

The most important part of the Guidance is the Fraud Section’s announcement of a one-year “FCPA enforcement pilot program,” which provides for “mitigation credit” that takes into consideration three essential factors: (1) voluntary disclosure, (2) full cooperation, and (3) remediation. In cases in which the above three factors are met but a criminal resolution is nonetheless warranted, “mitigation credit” can include “up to a 50% reduction off the bottom end of the Sentencing Guidelines fine range, if a fine is sought” and the avoidance of a third-party compliance monitor.”[7] Moreover, the Guidance states that, in appropriate cases, where the above factors are fully satisfied, DOJ “will consider a declination of prosecution.”[8]

Voluntary Self-Disclosure

A company must voluntarily disclose an FCPA violation to the Fraud Section in order to be eligible for the full mitigation credit. As a preliminary matter, the disclosure must be truly voluntary—a disclosure that the “company is required to make, by law, agreement, or contract” would not constitute voluntary self-disclosure for purposes of this pilot.[9] Second, the disclosure must occur “prior to an imminent threat of disclosure or government investigation” and be “within a reasonably prompt time after becoming aware of the offense,” with the burden on the discloser to demonstrate timeliness.[10] Finally, the disclosure must include “all relevant facts known to [the company], including all relevant facts about the individuals involved in any FCPA violation.”[11]

DOJ’s voluntary disclosure requirement follows a recent announcement by the US Securities and Exchange Commission (SEC) that companies subject to FCPA enforcement actions are required to self-report their potential misconduct to be eligible for deferred prosecution agreements and non-prosecution agreements. Full Cooperation

The Guidance sets forth nearly a dozen requirements for companies seeking cooperation credit under the pilot program.[12] Those requirements can be distilled into the following four categories:

  • Disclosure of Relevant Facts: Companies are expected to disclose “all facts relevant to the wrongdoing at issue” on a timely basis, including “all facts related to involvement in the criminal activity by the corporation’s officers, employees, or agents” and “all facts relevant to potential criminal conduct by all third-part[ies].” Disclosure is expected to be “proactive” rather than “reactive,” and facts relevant to the investigation should be voluntarily provided “even when [companies are] not specifically asked to do so.” In addition, disclosures are expected to include “all relevant facts gathered during a company’s independent investigation.”

  • Preservation and Disclosure of Documents: All relevant documents—as well as “information related to their provenance”—are expected to be collected, preserved, and disclosed. This expectation extends to “overseas documents” and important details about those records such as their location and the individuals who discovered them. In some cases, prosecutors may insist that companies provide translations of foreign-language documents. Finally, it is expected that companies will assist with the “third-party production of documents . . . from foreign jurisdictions.”

  • Making Individuals Available for Interviews: Upon request, companies are expected to “mak[e] available for [DOJ] interviews those company officers and employees who possess relevant information,” including—where appropriate and possible—individuals located overseas, as well as those who no longer work for the company.

  • Conducting Transparent and Coordinated Internal Investigations: Companies are expected to provide timely updates about their internal investigations and, where requested, ensure that such investigations do not conflict with those being conducted by the government.

The Guidance notes that “cooperation comes in many forms,” and that the Fraud Section “does not expect a small company to conduct as expansive an investigation in as short a period of time as a Fortune 100 company.”[13]

Remediation

The final requirement is that of “timely and appropriate remediation,” and the following items generally will be required in order for companies to receive remediation credit:

  • Implementation of an Effective Compliance Program: While the criteria depend on the size and resources of the organization, the following factors are normally considered:

    • Whether the company has established a “culture of compliance”

    • Whether the company has sufficient compliance resources

    • The quality and experience of the compliance personnel

    • The independence of the compliance function

    • Whether the company’s compliance program has performed an effective risk assessment and tailored the compliance program based on that assessment

    • How a company’s compliance personnel are compensated and promoted

    • Auditing of the program to assure its effectiveness

    • The reporting structure of compliance personnel within the company

  • Discipline of Culpable Employees: It is expected not only that companies discipline culpable employees, but that they have systems that provide for the possibility of disciplining others with oversight of the responsible individuals.

  • Acceptance of Responsibility and Implementation of Reforms: Companies are expected to recognize the seriousness of the misconduct, accept responsibility for it, and implement reforms to identify and reduce the risk of similar violations.[14]

Credit

Where the above conditions are met but a criminal resolution is warranted, the Fraud Section’s FCPA Unit (1) may accord up to a 50% reduction off the “bottom end” of the Sentencing Guidelines fine range, if a fine is sought; and (2) generally should not require appointment of a monitor if a company has, at the time of resolution, implemented an effective compliance program.

Furthermore, where the same conditions are met, the Fraud Section’s FCPA Unit will consider a declination of prosecution. In doing so, prosecutors must balance the importance of encouraging disclosure against the seriousness of the offense. In assessing the seriousness of the offense, prosecutors are to consider the involvement by executive management in the FCPA misconduct, the size of the ill-gotten gains in relation to the overall revenue of the company, a history of noncompliance by the company, and any prior resolutions by the company with DOJ within the past five years.

Finally, if the company cooperates and remediates, but has not voluntarily disclosed, the Fraud Section’s FCPA Unit may provide partial mitigation credit, but will agree to no more than a 25% reduction off the bottom of the Sentencing Guidelines fine range.[15]

Implications

This Guidance comes after what has been a growing perception that voluntary disclosures have slowed significantly due to a lack of transparency, consistency, and clarity as to what the benefits are, if any, to self-disclosing. Whether the pilot program succeeds in encouraging self-disclosures will likely depend on the perception of companies and defense counsel of the fairness and openness of the application of the criteria in the Guidance.

[1] US Dep’t of Justice, Memorandum from Andrew Weissmann titled “The Fraud Section’s Foreign Corrupt Practices Act Enforcement Plan and Guidance” (Apr. 5, 2016) (Guidance)

[2] Guidance at 3.

[3] Id. at 1.

[4] Stephen Dockery, “US Justice Dept. Boosting Foreign Corruption Staff,” Wall Street Journal (Nov. 17, 2015)

[5] US Dep’t of Justice, “Assistant Attorney General Leslie R. Caldwell Speaks at American Conference Institute’s 31st International Conference on the Foreign Corrupt Practices Act” (Nov. 19, 2014)

[6] See id.; see also US Dep’t of Justice, “Acting Assistant Attorney General Mythili Raman Delivers Keynote Address at the Global Anti-Corruption Congress” (June 17, 2013)

[7] Guidance at 8.

[8] Id. at 9.

[9] Id. at 4.

[10] Id.

[11] Id.

[12] Id. at 5-6.

[13] Id. at 6.

[14] Id. at 7-8.

[15] Id. at 8-9.

Trade Secrets Bill with Controversial Civil Seizure Provision Passes Senate

Recently, Congress and the courts in the United States have been active in reining in what many have seen as patent system that has run amuck. In the process, they have placed a number of limits on patent holders’ ability to effectively and successfully enforce patents. But as opportunities to enforce intellectual property through patent suits have been narrowed, another IP door appears to be opening.

For several years, Congress has been working on legislation that would, in effect, federalize what until now has been a state-by-state system of trade secret law. The current version, the Defend Trade Secrets Act of 2016 (S. 1890) (“DTSA”), was approved by the Senate on April 4, 2016 with bipartisan support.

The DTSA would operate to expand the existing Economic Espionage Act by, among other things, adopting much of the framework of the Uniform Trade Secrets Act (“UTSA”) and permitting private parties to bring civil trade secret misappropriation actions. UTSA-derived provisions are already in effect in 48 of the 50 states. Thus, while there are some differences between the DTSA and the UTSA, it is unclear whether the DTSA would represent a meaningful departure from existing trade secrets law, at least substantively. There are differing views.

The DTSA’s Civil Seizure Provision

What would almost certainly represent a significant new development is the DTSA’s civil seizure procedure, which is not contemplated under the UTSA. Under the proposed law, upon application by a party asserting theft of trade secrets, a federal court would have the authority to order law enforcement officials to enter land and seize property “necessary to prevent the propagation or dissemination of the trade secret that is the subject of the action.” Most strikingly, the bill envisions an ex parteprocess under which seizures would be authorized and executed without any notice to the relevant property owner(s), including third parties—a process that naturally raises due process and Fourth Amendment concerns.

Supporters of the bill point to analogous ex parte seizure provisions contained in the Lanham Act1 (authorizing ex parteseizures of counterfeit goods) and the Copyright Act2 (authorizing ex parte impoundments of documents and things related to copyright infringement)—provisions that have survived constitutional scrutiny.

Moreover, Rule 64 of the Federal Rules of Civil Procedure authorizes prejudgment seizures of property under applicable state law (e.g., writs of replevin or sequestration remedies), and ex parte seizures under such state law provisions have likewise been upheld under many circumstances. Courts have also justified ex parte seizures under the All Writs Act.3 Thus, there is precedent for these types of procedures.

It is also worth noting that ex parte seizure procedures are used in intellectual property cases in numerous jurisdictions outside of the United States. For example, in the United Kingdom, so-called “Anton Piller” orders have been utilized for many years to secure documents and things on an ex parte basis, in exceptional circumstances.

Significant Controversy

Nevertheless, the prospect of ex parte seizures in the trade secrets context has generated significant controversy in the United States. One major source of concern is the fact-intensive nature and overall complexity of trade secrets disputes. What exactly is the information at issue and does it qualify as a trade secret? How, if at all, has it been maintained in secrecy? Does the target of the seizure really have the information in his or her possession, and if so, how was the information obtained? Was reverse engineering involved? And so on.

Even on a preliminary basis, the complex factual issues involved in trade secret disputes may not lend themselves to fair resolution through expedited and non-adversarial ex parte procedures. Indeed, it does not take much imagination to conceive how, in the wrong hands, one-sided ex parte seizure proceedings might be used for improper purposes.

For example, in one Lanham Act counterfeit goods case, the plaintiff’s attorney “ran roughshod over the applicable statutes and rules,” submitting an inaccurate and misleading affidavit and convincing the lower court to authorize a private investigator to conduct the seizure and hand the seized property to the attorney.4 In another, the district court described a scheme in which the plaintiffs obtained seizure orders in a succession of counterfeiting cases, only to dismiss each case approximately one year after seizing the goods, without having ever established that the goods were, in fact, counterfeit.5

Rigorous Procedural Safeguards

In an effort to eliminate potential mischief, and to ensure that the new DTSA scheme passes constitutional muster, the bill’s sponsors have included a number of key procedural safeguards:

  • Ex parte seizures would be reserved for “extraordinary circumstances” only;

  • A seizure order would only issue upon the plaintiff’s filing of an affidavit or verified complaint that sets forth “specific facts” establishing, among other things: (1) immediate and irreparable injury if seizure is not ordered; (2) a likelihood of success on the merits of the trade secret claim; (3) the balance of harms favors the applicant; (4) the identity and location of the material to be seized, with reasonable particularity; and (5) more ordinary procedures (such as a TRO motion under Rule 65) would be ineffective because the seizure target would evade the order or destroy the evidence;

  • The applicant would be required to post a bond sufficient to cover damages should the seizure turn out to be wrongful or excessive;

  • Any seizure order would “provide for the narrowest seizure of property necessary” and would be executed by law enforcement officials;

  • The court would be required to provide specific guidance to the officials executing the seizure that “clearly delineates” the scope of their authority and details how the seizure must be conducted;

  • The court would also be required to schedule an adversarial hearing for the earliest possible time after the seizure was executed, at which hearing the applicant would bear the burden of proof of establishing that the seizure order was proper; and

  • The bill provides for a civil action for damages based on a wrongful or excessive seizure.

Taken together, these safeguards are significant and may reduce the likelihood of erroneous seizure orders and/or abuse of the system. In fact, it is possible that the obstacles to securing a seizure order would be so significant that, as a practical matter, they would eliminate the seizure remedy as an alternative in all but the most egregious scenarios. That appears to be an intended result.

In any event, having navigated the Senate, the DTSA will now pass to the House of Representatives for further consideration. A companion bill to S. 1890, H.R. 3326, was introduced in July 2015 and has enjoyed broad bipartisan support. In an era of partisan rancor, the DTSA may yet be one instance—the ex parte seizure provision notwithstanding—in which legislators find ways to work together across the aisle to achieve results.

1See 15 U.S.C. § 1116(d).
2See 17 U.S.C. § 503(a).
328 U.S.C. § 1651.
4Warner Brothers v. Dae Rim Trading, Inc., 877 F.2d 1120 (2d Cir. 1989).
5NASCAR v. Doe, 584 F. Supp. 2d 824 (W.D.N.C. 2008).

Announcement of “Privacy Shield” Gives Hope for U.S. Companies Who Previously Relied on Safe Harbor

We have previously discussed the EU Court of Justice’s invalidation of the long-standing Safe Harbor program, previously relied on by many organizations as a means of authorizing transfers of EU citizens’ private data to the United States. U.S. companies eagerly awaited news of a replacement for Safe Harbor and kept a close watch as the January 31, 2016, grace period on enforcement announced by the EU Article 29 Working Party expired. News of a new framework  broke in early February and the European Commission released extensive documentation revealing the details of Safe Harbor’s proposed replacement – the EU-U.S. Privacy Shield program (Privacy Shield) – on February 29, 2016.

Privacy Shield encompasses seven principles for assuring adequate protection when transferring and processing personal data originating in the European Union. Similar to Safe Harbor, organizations can self-certify their compliance with these principles, provided they (1) commit to the U.S. Department of Commerce that they will adhere to the Privacy Shield Principles, (2) publicly declare their commitment to the Privacy Shield Principles, and (3) actually implement the Principles. Once compliance is certified, organizations may seek inclusion on the Department of Commerce’s list of certified organizations, effectively authorizing them to transfer the personal data of EU residents to the United States.

Privacy Shield Principles

  1. Notice. Privacy Shield requires organizations to provide notice regarding the type of data collected, the purposes for which it is collected, any third parties to which the data may be transferred, individuals’ right to access their data, and how individuals can limit use and disclosure of personal data. The organization also must provide notice of its participation in Privacy Shield, acknowledge applicable enforcement authorities and describe recourse mechanisms available.

  2. Choice. Organizations must provide clear, conspicuous and readily available mechanisms allowing individuals to opt out of any disclosure of their personal data to third parties, or use of their personal data other than the purpose(s) for which it was initially collected or subsequently authorized by the individual. Certain sensitive information will require individuals to opt in affirmatively.

  3. Security. As under Safe Harbor, participating organizations must take “reasonable and appropriate measures,” based on the risks involved and the nature of the personal data, to protect the data “from loss, misuse and unauthorized access, disclosure, alteration and destruction.”

  4. Access. Privacy Shield–certified organizations must provide individuals with access to and the opportunity to correct, amend or delete inaccurate or improperly processed personal data. Individuals also must be allowed to confirm that their personal data is being processed. An organization may restrict access to data “in exceptional circumstances.”

  5. Data Integrity and Purpose Limitation. Privacy Shield requires not only that any data collected be “relevant for the purposes of processing” but also that organizations limit collection to relevant data only. Participating organizations also must “take reasonable steps to ensure that personal data is reliable for its intended use, accurate, complete, and current.”

  6. Accountability for Onward Transfer. Certified organizations’ contracts with third parties receiving personal data must require that such data “may only be processed for limited and specified purposes” consistent with the level of consent given by the data subject. Third-party transferees also must agree to “provide the same level of protection as the [Principles].” Certified organizations also must “take reasonable and appropriate steps” to ensure third-party agents adhere to the Principles, and are required to stop and remediate any unauthorized processing by third parties, if necessary. Importantly, with limited exceptions, certified organizations remain liable to data subjects for any vendor’s violation of the Principles.

  7. Recourse, Enforcement and Liability. Perhaps Privacy Shield’s most significant new features are its recourse and dispute resolution provisions. Complaint-handling processes must be implemented to obtain Privacy Shield certification. To ensure effective enforcement, Privacy Shield requires (1) procedures for verifying representations made about privacy practices, (2) recourse for data subjects and (3) remedies for failures to comply with the Principles. These newly required “independent recourse mechanisms” are empowered to provide remedies separate from regulators’ enforcement authority.

Legal Safeguards

Because the extent of U.S. government surveillance of personal data was a primary reason why the Safe Harbor program was invalidated, in support of Privacy Shield the U.S. Office of the Director of National Intelligence and the U.S. Department of Justice have furnished letters outlining the legal safeguards that will limit U.S. government access to personal data transferred pursuant to Privacy Shield. In addition, the U.S. Secretary of State is set to appoint a Privacy Shield Ombudsperson, who will be responsible for handling European complaints regarding whether personal data transferred under Privacy Shield has been accessed by U.S. intelligence activities.

In addition, the Judicial Redress Act of 2015, signed into law on February 24, 2016, allows EU citizens to bring civil actions against U.S. government agencies under the Privacy Act of 1974 to access, amend or correct records about them or seek redress for the unlawful disclosure of those records.

Certification and Compliance

Privacy Shield is expected to be approved by the European Commission later this year and published in the Federal Register shortly thereafter. Organizations that self-certify within the first two months following publication will be given nine months to bring all third-party relationships into compliance. Two months after the effective date, the Principles become binding on an organization immediately upon certification. Privacy Shield will thereafter undergo annual joint reviews by EU and U.S. authorities.

All organizations that intend to become Privacy Shield certified are strongly encouraged to immediately begin updating their policies to meet Privacy Shield’s heightened obligations, including reviewing their third-party agreements to ensure compliance.

Article By Gregory Bautista & James F. Monagle of Wilson Elser Moskowitz Edelman & Dicker LLP
© 2016 Wilson Elser

Announcement of "Privacy Shield" Gives Hope for U.S. Companies Who Previously Relied on Safe Harbor

We have previously discussed the EU Court of Justice’s invalidation of the long-standing Safe Harbor program, previously relied on by many organizations as a means of authorizing transfers of EU citizens’ private data to the United States. U.S. companies eagerly awaited news of a replacement for Safe Harbor and kept a close watch as the January 31, 2016, grace period on enforcement announced by the EU Article 29 Working Party expired. News of a new framework  broke in early February and the European Commission released extensive documentation revealing the details of Safe Harbor’s proposed replacement – the EU-U.S. Privacy Shield program (Privacy Shield) – on February 29, 2016.

Privacy Shield encompasses seven principles for assuring adequate protection when transferring and processing personal data originating in the European Union. Similar to Safe Harbor, organizations can self-certify their compliance with these principles, provided they (1) commit to the U.S. Department of Commerce that they will adhere to the Privacy Shield Principles, (2) publicly declare their commitment to the Privacy Shield Principles, and (3) actually implement the Principles. Once compliance is certified, organizations may seek inclusion on the Department of Commerce’s list of certified organizations, effectively authorizing them to transfer the personal data of EU residents to the United States.

Privacy Shield Principles

  1. Notice. Privacy Shield requires organizations to provide notice regarding the type of data collected, the purposes for which it is collected, any third parties to which the data may be transferred, individuals’ right to access their data, and how individuals can limit use and disclosure of personal data. The organization also must provide notice of its participation in Privacy Shield, acknowledge applicable enforcement authorities and describe recourse mechanisms available.

  2. Choice. Organizations must provide clear, conspicuous and readily available mechanisms allowing individuals to opt out of any disclosure of their personal data to third parties, or use of their personal data other than the purpose(s) for which it was initially collected or subsequently authorized by the individual. Certain sensitive information will require individuals to opt in affirmatively.

  3. Security. As under Safe Harbor, participating organizations must take “reasonable and appropriate measures,” based on the risks involved and the nature of the personal data, to protect the data “from loss, misuse and unauthorized access, disclosure, alteration and destruction.”

  4. Access. Privacy Shield–certified organizations must provide individuals with access to and the opportunity to correct, amend or delete inaccurate or improperly processed personal data. Individuals also must be allowed to confirm that their personal data is being processed. An organization may restrict access to data “in exceptional circumstances.”

  5. Data Integrity and Purpose Limitation. Privacy Shield requires not only that any data collected be “relevant for the purposes of processing” but also that organizations limit collection to relevant data only. Participating organizations also must “take reasonable steps to ensure that personal data is reliable for its intended use, accurate, complete, and current.”

  6. Accountability for Onward Transfer. Certified organizations’ contracts with third parties receiving personal data must require that such data “may only be processed for limited and specified purposes” consistent with the level of consent given by the data subject. Third-party transferees also must agree to “provide the same level of protection as the [Principles].” Certified organizations also must “take reasonable and appropriate steps” to ensure third-party agents adhere to the Principles, and are required to stop and remediate any unauthorized processing by third parties, if necessary. Importantly, with limited exceptions, certified organizations remain liable to data subjects for any vendor’s violation of the Principles.

  7. Recourse, Enforcement and Liability. Perhaps Privacy Shield’s most significant new features are its recourse and dispute resolution provisions. Complaint-handling processes must be implemented to obtain Privacy Shield certification. To ensure effective enforcement, Privacy Shield requires (1) procedures for verifying representations made about privacy practices, (2) recourse for data subjects and (3) remedies for failures to comply with the Principles. These newly required “independent recourse mechanisms” are empowered to provide remedies separate from regulators’ enforcement authority.

Legal Safeguards

Because the extent of U.S. government surveillance of personal data was a primary reason why the Safe Harbor program was invalidated, in support of Privacy Shield the U.S. Office of the Director of National Intelligence and the U.S. Department of Justice have furnished letters outlining the legal safeguards that will limit U.S. government access to personal data transferred pursuant to Privacy Shield. In addition, the U.S. Secretary of State is set to appoint a Privacy Shield Ombudsperson, who will be responsible for handling European complaints regarding whether personal data transferred under Privacy Shield has been accessed by U.S. intelligence activities.

In addition, the Judicial Redress Act of 2015, signed into law on February 24, 2016, allows EU citizens to bring civil actions against U.S. government agencies under the Privacy Act of 1974 to access, amend or correct records about them or seek redress for the unlawful disclosure of those records.

Certification and Compliance

Privacy Shield is expected to be approved by the European Commission later this year and published in the Federal Register shortly thereafter. Organizations that self-certify within the first two months following publication will be given nine months to bring all third-party relationships into compliance. Two months after the effective date, the Principles become binding on an organization immediately upon certification. Privacy Shield will thereafter undergo annual joint reviews by EU and U.S. authorities.

All organizations that intend to become Privacy Shield certified are strongly encouraged to immediately begin updating their policies to meet Privacy Shield’s heightened obligations, including reviewing their third-party agreements to ensure compliance.

Article By Gregory Bautista & James F. Monagle of Wilson Elser Moskowitz Edelman & Dicker LLP
© 2016 Wilson Elser

Managing Client Needs with Cross-Generational Leadership

Everyone knows the generational stereotypes: Baby boomers are loyal and hardworking, people who believe in putting your nose to the grindstone and getting work done but who may have a difficult time working the latest mobile technology. Gen Xers are independent and skeptical, while millennials are tech-savvy, Instagram EVERYTHING, and are aggressively interested in collaboration and work-life balance.

In law firms across America, these groups are comingling and working together to manage client matters and relationships. The panel The Ties that Bind: Building Cross-Generational Leadership at the 23rd Annual Marketing Partner Forum discussed the business imperative of building a diverse, multi-generational client team to fortify legal services. NLR took the opportunity to speak with the moderator Amanda K. Brady, Global Practice Leader at Major, Lindsey & Africa, and Melissa R. Margulies, Client Service Counsel at Ballard Spahr, about generational issues facing law firms.

The first thing to keep in mind is what a general counsel wants from his or her outside counsel. GCs want a team that will work together and get the job done, and the law firm team should represent the business needs and goals of the client. General counsels want attorneys who make their jobs easier, and law firms are expected to meet the needs of the client. Amanda Brady says, “The client doesn’t need to meet everyone working on the matter, but my sense from the GC is that they really appreciate getting to know key attorneys working on their projects so they are more comfortable conducting follow-up communications.”

Every situation is different, and factors must be considered to appropriately handle each client. Open lines of communication that allow clients to communicate their needs to the firm are imperative. Melissa Margulies points out, “We ask the client for feedback about both partners and associates and how the team has helped the client. Additionally, we continually evaluate whether the relationship partner and team members are the right fit, based upon the changing business needs of the client.”

Margulies continues, “What I see and what I encourage are different tiers of client contact and multiple points of contact.” She points out that each generation brings its own strengths, and it’s important to set up a team that can do the work and further relationships. Margulies says, “It’s important that younger lawyers are given opportunities to interact with the younger business people at the client so that those two groups grow up together.”

Traditionally, the senior attorney has the relationship and brings the client to the firm. Junior attorneys do the work, while the partner manages the relationship, allowing the junior attorneys opportunities to interact and meet with the client along the way. Brady says, “The obvious challenge is for the junior attorney. They don’t bring as much experience to the table, so they have to tout the experience of the more senior attorneys and work as a team.” Collaboration is essential, and making sure junior attorneys are brought to the table is an important part of keeping the relationship viable as the years go by.

The question becomes how often and when do you introduce the junior attorneys to the client. Of course, the answer is, “It depends.” What’s important is keeping the client relationship current and making sure you are managing the client’s current needs—as well as any needs that come up in the future. Margulies says, “There is no rule of thumb for how long it takes to develop a relationship.” She points out that if there is a long-standing relationship between the client and the firm, it might not take long to introduce a junior lawyer.  If it’s a brand new client, it could take a little longer. She says, “The longer the relationship, the firm develops an institutional memory of the client and it doesn’t take as long for lawyers to learn and understand the client’s business.”

There are a few strategies that work well in trying to get junior attorneys integrated with clients and to help understand the clients and add value to the relationship. One strategy is allowing junior attorneys opportunities to write, hold webinars, or give presentations on areas of interest to the client. Brady says, anecdotally, “Lawyers [in firms] are more specialists, more current than in-house counsel. They deal with the issues on a regular basis; in-house legal departments don’t necessarily have the education budget, so outside counsel can fill the gap. It’s a way to become dialogue partners as you sort through the information.”

Margulies suggests one way for junior attorneys to gain experience is to work off-site with a client. She says, “If we have chance for a secondment of a lawyer to a client, we will do that, as it presents an amazing opportunity for the young lawyer to go work at a client for a period of time, see what it’s like on the inside, and develop relationships that he/she might not have the opportunity otherwise to do.” Along with the benefits for the attorney and the connections that can be made, it shows a commitment by the firm to the client’s interests and the relationship.

Additionally, pro bono work is a fascinating way to get people together in an unusual context. With the good will inherent in helping others and the out-of-office environment where roles and expectations are shaken up a bit, conversation flows and relationships can advance. Margulies points out, “You can really forge relationships that way—sitting together in a different situation, doing something you might not normally  do—but you’re also working together, solving problems, and building relationships.”

These are great strategies for involving junior attorneys, but at some point, the senior partner moves on and the torch must be passed. Brady says, “Continuity for the client is important for the firm’s well-being, and there is always someone wanting to build a relationship with in-house counsel.” Making sure there are no gaps in the relationship with the client is crucial; however, this transition can be difficult. There are a few important things to remember as the changes are considered. Margulies says, “It’s important to understand that, generally, lawyers are perfectionists; transitioning  a long relationship, for whatever reason, is difficult. It’s very hard to relinquish control.”

That said, how does the change happen? Many of the strategies mentioned earlier can help ease the transition, Margulies says, pointing out that, “It is easier when lawyers are encouraged to involve younger lawyers early on so it becomes a natural progression. It’s a way to build trust and comfort, and letting go is easier when younger attorneys are involved earlier and the more senior attorneys are comfortable with their knowledge and abilities.”

Baby Boomers, Gen Xers, and Millennials are sharing the work at law firms and taking care of clients’ needs. There are difficulties and no real easy solutions, and the answer to just about every question is “It depends.” But as Brady points out, “Change is going to happen, and everyone is trying to figure out how to make it work.”

Article By Eilene Spear of The National Law Review / The National Law Forum LLC

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