Photocopiers – A Recurring Data Security Risk

DrinkerBiddle

In a case that illustrates the data privacy risks associated with modern copiers, the United States Department of Health and Human Resources (HHS) has announced a $1,215,780 settlement with Affinity Health Plan, Inc. (Affinity), arising from an investigation of potential violations of the HIPAA Privacy and Security Rules.

This matter started when Affinity was advised by CBS Evening News that CBS had purchased a photocopier previously leased by Affinity.  CBS explained that the copier’s hard drive contained confidential medical information relating to Affinity patients.  As a result, on August 15, 2010, Affinity self-reported a breach with the HHS’ Office for Civil Rights (OCR).  Affinity estimated that the medical records of approximately 344,000 persons may have been affected by this breach.  Moreover, Affinity apparently had returned multiple photocopiers to office equipment vendors in the past without erasing the data contained upon the internal hard drives of those returned copiers.

After investigating this matter, OCR determined that Affinity had failed to incorporate photocopier hard drives into its definition of electronic protected health information (ePHI) in its risk assessments as required by the Security Rule.  Affinity also failed to implement appropriate policies and procedures to scrub internal hard drives when returning photocopiers to its office equipment vendors.  As a result, OCR determined that Affinity also violated the Privacy Rule.

In discussing this issue, Leon Rodriguez, Director of OCR, stated that, “This settlement illustrates an important reminder about equipment designed to retain electronic information: Make sure that all personal information is wiped from hardware before it is recycled, thrown away or sent back to a leasing agent…HIPAA covered entities are required to undertake a careful risk analysis to understand the threats and vulnerabilities to individuals’ data, and have appropriate safeguards in place to protect this information.”

In addition to the agreed upon settlement payment of $1,215,780, the settlement also requires the implementation of a Corrective Action Plan (CAP).  The CAP requires Affinity to use its best efforts to retrieve all hard drives that were contained on photocopiers previously leased by the plan that remain in the possession of the leasing agent, and take protective measures to safeguard all ePHI going forward.

Points to Consider

Affinity’s case demonstrates the risks presented by the modern copier – they are specialized computers that will store data and retain itindefinitely.  Thus, they pose a security risk for any company that processes and/or possesses personally identifiable information or proprietary information, such as trade secrets, research and development records, marketing plans and financial information.  Clearly, this risk applies to businesses regardless of specific business sector.

Therefore, when acquiring a copier, consider all options available to protect the data processed on that machine, typically through encryption or overwriting.  Encryption will scramble the data that remains stored on the copier’s hard drive.  Overwriting (or wiping) will make reconstructing the data initially on the drive very difficult.

Finally, anticipate the copier’s return to the vendor or other disposition.  Make sure that arrangements are made prior to the copier’s departure to effect the hard drive’s removal and secure disposition so as to make any data on it unusable to third parties.  Often vendors will provide such a service as will IT consultants.

Note that protecting sensitive information is a company’s ongoing responsibility.  Make sure that copiers are considered as part of any comprehensive data security or privacy policy (as are PCs, laptops, smart phones, flash drives and other electronic devices) to avoid an avoidable, but costly and embarrassing, data breach.

For additional information from the FTC on safeguarding sensitive data stored on the hard drives of digital copiers, click here.

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Consumer Financial Services Basics 2013 – September 30 – October 01, 2013

The National Law Review is pleased to bring you information about the upcoming  Consumer Financial Services Basics 2013.

CFSB Sept 30 2013

When

September 30 – October 01, 2013

Where

  • University of Maryland
  • Francis King Carey School of Law
  • 500 W Baltimore St
  • Baltimore, MD 21201-1701
  • United States of America

Facing the most comprehensive revision of federal consumer financial services (CFS) law in 75 years, even experienced consumer finance lawyers might feel it is time to get back in the classroom. This live meeting is designed to expose practitioners to key areas of consumer financial services law, whether you need a primer or a refresher.

It is time to take a step back and think through some of these complex issues with a faculty that combines decades of practical experience with law school analysis. The classroom approach is used to review the background, assess the current policy factors, step into the shoes of regulators, and develop an approach that can be used to interpret and evaluate the scores of laws and regulations that affect your clients.

Health Care on the Hill: Week of September 9, 2013

DrinkerBiddle

This week Congress returns to Washington, DC following their August recess and are jumping right back into legislative matters. Listed below are a few health-related hearings scheduled for this week.

Each Monday Capitol Health Record will be providing health-related highlights for the coming week.

Tuesday, September 10, 2013

10:15 a.m.
“PPACA Pulse Check: Part Two”
House Energy and Commerce Subcommittee on Health Hearing
2322 Rayburn House Office Building

Wednesday, September 11, 2013

2:00 p.m.
“The Threat to Americans’ Personal Information: A Look into the Security and Reliability of the Health Exchange Data Hub”
House Homeland Security Subcommittee on Cybersecurity, Infrastructure Protection, and Security Technologies Hearing
311 Cannon House Office Building

Thursday, September 12, 2013

10:00 a.m.
“Dental Crisis in America: The Need to Address Cost”
Senate Health, Education, Labor, and Pensions Subcommittee on Primary Health and Aging Hearing
430 Dirksen Senate Office Building

Thursday, September 12, 2013 and Friday, September 13, 2013

In addition to the above Congressional hearings, the Medicare Payment Advisory Commission (MedPAC) will be meeting in Washington, DC on Thursday and Friday to discuss recommendations regarding Medicare payment policies. MedPAC will meet at the Ronald Reagan Building and International Trade Center (1300 Pennsylvania Avenue, NW) from 9:30 a.m. to 5:15 p.m. on Thursday and 9:00 a.m. to 12:00 p.m. on Friday (agenda).

Amy Walker contributed to this article.

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LinkedIn (or Left Out) for Lawyers

Until recently, very few lawyers and corporate counsel had even heard of the social media site LinkedIn.  In fact, it surprises many to learn that LinkedIn was launched ten years ago.  How quickly things have changed!

Ninety-five percent of ABA members indicate that they have posted their profiles on LinkedIn. Seventy percent of corporate counsel indicate that they use LinkedIn regularly as a tool to find and vet outside counsel.  These statistics come from a 2012 ABA survey.

linkedin

LinkedIn is now one of the world’s most popular websites.  If you would like to be found by potential clients, your LinkedIn profile has become even more important than your website biography.  If you are looking for networking opportunities, your LinkedIn presence and activity have become just as important as your face-to-face networking.

LinkedIn launched in May 2003.  “From the very start, LinkedIn differentiated itself as a site for business, business development and recruitment rather than a social site,” said Phil Nugent.

“In just ten years, LinkedIn has gained 225 million users around the world, including 80 million users in the United States,” said Nugent.  “More than 173,000 people join LinkedIn each day.  It is a great place for many attorneys, because the demographics of LinkedIn skew older, wealthier and more-educated than any of the other top social media sites.”

Nugent discussed effective use of LinkedIn by lawyers and law firms at the monthly educational meeting of the Rocky Mountain Chapter of the Legal Marketing Association, held July 9 at Sullivan’s Steakhouse in LoDo Denver.  Nugent is a non-practicing attorney and principal at NCG Strategic Marketing.

“Successful use of LinkedIn as a business development tool has three steps,” said Nugent.  “First, you must post a complete and compelling profile.  All too many lawyers and law firms leave it at that, however, and then wonder why LinkedIn is not working as well as they had hoped.

“To achieve success on LinkedIn, you must build a strong network of connections in terms of both quality and quantity,” said Nugent.  “With this accomplished, you can leverage LinkedIn as a business development tool to find others, to get found and to conduct market research.”

Getting Started on LinkedIn

The creation and posting of a good profile is step one of a solid LinkedIn presence.  However, it should not be the same as a lawyer’s website bio.  Instead, it should be designed to satisfy the unique needs of LinkedIn’s search algorithm.

“LinkedIn’s algorithm uses a metric to quantify profile strength, which has a huge effect on search results,” said Nugent.  “Different areas of your LinkedIn profile carry different weights.  You should aim for a profile-strength of “all-star,” or as close to 100 percent as possible.”

Nugent discussed and gave specific recommendations regarding the algorithm’s weights.

Name and title (25 percent) — Do not make the mistake of simply listing a generic job title in this very important space.  It should include carefully selected keywords – the keywords that those searching for someone like you are likely to use.  The title category can be as long as 120 characters, or about 18 words.

Photo (5 percent) – A profile that includes a photo is seven times more likely to be viewed than one without a photo. Be sure that the photo is both professional and recent.

Summary (10 percent) – Use your summary to tell a compelling story about how you help clients solve their legal problems.  This section should include plenty of keywords.  It can include up to 2,000 characters, or about 350 words.  Spell check is always recommended.

Education (15 percent)

Previous two jobs (30 percent)

Three recommendations (15 percent) 

Another smart tactic for promotion of your LinkedIn presence is to customize your profile’s URL.  LinkedIn automatically generates a random URL, but this easily can be changed to a much shorter version featuring your name.  Additionally, you should be sure to add links to your website and blog.

On the “Edit Profile” page you can add content modules that include projects, publications, honors and awards, patents, certifications and languages.

“Throughout your LinkedIn profile, remember that content is king,” said Nugent.  “The copy should be compelling and should include plain-English keywords that are the same words that will be used by your target market or your ideal clients.  These keywords should indicate who you are and what you do.  Avoid ‘legalese’ — unless your clients use it, too.”

Once you have prepared and posted a strong LinkedIn profile, you want to make sure that people can actually gain access to it.  Go to the “privacy controls” section of your profile and choose the settings that allow “everyone” to view your profile photo and visibility.

Creating a LinkedIn Network

To support a strong LinkedIn profile, you need a strong network.  When it comes to building a network, you can pitch as well as catch.  This means that you shouldn’t rely only upon the invitations that you receive; you should proactively send invitations to those with whom you would like to be connected.

A LinkedIn network works like a big circle, with you in the middle.  First-degree connections are direct connections.  These are the people you have accepted and who have accepted you.  Second-degree connections are friends of these friends.  Third-degree connections are friends of second-degree connections.  Your level of visibility into third-degree connections is limited, and a request to connect must be routed through the second-degree connection that controls the relationship.

“The quality of your network is important,” said Nugent.  “If you accept too many random invitations, your network, although large, may not be sufficiently useful.  If you accept (and send) too few invitations, you won’t be able to use the database as it was designed.

“Before accepting any invitation,” said Nugent, “ask yourself if this person is potentially a client or a source for the kind of work you really want to do. Strive for balance between the quantity and the quality of the invitations you accept.”

When vetting an invitation, check out the inviter’s profile.  Is the invitation from a real and (apparently) respectable individual?  Does the inviter have quality contacts that might prove valuable?  Does the inviter have a large number of contacts?  Did the inviter include a personal note with the invitation?  “Rely on these factors to determine if it makes good sense to connect,” said Nugent.

When sending out your own invitations, start with your existing contact list.  Include your firm’s partners, associates and staff; members of professional, business and industry groups that you belong to; and referral sources, clients and friends.

“Never allow your network to stagnate,” said Nugent.  “It should grow continuously.  When you meet a new contact, follow up within 48 hours with an invitation to connect on LinkedIn instead of (or in addition to) an email or a written note.  To facilitate this tactic among those you meet, consider including your LinkedIn address on your business card.”

Using LinkedIn for Research

“A well-crafted LinkedIn network is like a finely tuned sports car,” said Nugent.  “It’s really a waste if you just let it sit in the garage.  You should take it out for a spin as often as possible.  The more you ‘drive’ LinkedIn, the more you’ll discover its usefulness — and the more you’ll realize what a powerful tool it can be on a daily basis.”

Your LinkedIn network is essential when conducting pre-interaction due diligence.  “You can search your network in order to find out useful information about prospects, their companies, clients, competitors, consultants, referral partners, media sources and employees,” said Nugent.  “The quality of your results will be determined by the quality of your contacts and the size of your network.

“LinkedIn can help provide answers to many important questions,” said Nugent.  “These include who is the right person to talk to in a particular organization?  What can I discover about this person prior to our meeting?  Who else is on their team?  Who might be able to provide me with background or an introduction?”

LinkedIn’s “advanced search” capability allows you to refine a search by relationship, location, current company, industry, past company, school and language.  Search can be further narrowed by groups, years of experience, function, seniority level, interests, company size, Fortune ranking and date joined.

Lawyers who want expanded search capabilities and additional functionality can try a premium membership on a monthly basis rather than sticking with the basic free membership.  However, the free membership provides plenty of power for most LinkedIn users.

“In just ten years, LinkedIn has gone from being a novelty embraced by techies to a must-have marketing tool for all professionals who hope to compete in today’s marketplace,” said Nugent.  “By creating a strong profile and a robust network, and by being an active user, any lawyer can vastly enhance his or her online visibility and reputation.”

International Group Structures Are Subject to An Ongoing Review for Optimizing Their Tax Position

GT Law

The recent trends show that offshore jurisdictions are off the corporate agenda in view of the increased scrutiny and decreased levels of acceptance from both fiscal and corporate social responsibility perspectives. Client feedback confirms the following rationale for moving corporate tax planning solutions onshore:

  • Increased scrutiny on tax havens and statutory requirements regarding tax substance, potential issues concerning withholding tax and taxation of foreign profits; and
  • Avoiding overtly complicated tax systems with strict CFC (controlled foreign company) regulations, thin capitalization rules and prohibitive transfer tax applicability.

It is a well-known fact that the Netherlands is not a tax haven but a safe haven and a logical choice as an alternative with an extensive double taxation treaty network. In addition, the Netherlands has an extensive bilateral investment protection treaty network that is regarded to provide premium coverage in view of the broad definition of “investor” and “investment” and providing access to dispute resolution through arbitration against independent states and awards that are enforceable against states, often referred to as “the Dutch Gold Standard.” Dutch structures are increasingly a recurring feature in international corporate structures for the purpose of protecting key corporate and personal assets. In this GT Alert, we briefly set out the options for migrating a corporate structure to the Netherlands to benefit from the all of the features that the Netherlands has to offer.

How to Achieve a Corporate Migration

Migrating a corporate entity within the EU into the Netherlands is a straightforward process from a Dutch law perspective. The following options are available:

Registration of an EU member state entity with the Dutch Trade Registry

The tax residence of an existing holding company can often be changed by moving its place of effective management and control outside of its existing jurisdiction for tax purposes. This may trigger a tax charge on exit.

Cross border merger

EU parent companies can migrate to the Netherlands by effecting a statutory merger with a Dutch entity under the cross-border merger regulations. It is also possible for non-EU parent companies to merge with a Dutch company by initially entering into the EU through a conduit EU jurisdiction that permits cross-border mergers with non-EU entities.

Share swap

It is possible to incorporate a holding company in the Netherlands whereby the existing shareholders exchange their existing shares for shares in the newly created Dutch holding company.

Re-registration as Societas Europaea 

An EU parent company can re-register as a European Company (Societas Europaea) and transfer its statutory seat to the Netherlands followed by a re-registration in the Netherlands as a Dutch parent company.

Why migrate to the Netherlands?

Key drivers for migrating the top holding company of an international group structure to the Netherlands are:

  • Low corporate income tax rate of 25% on trading profits (20% up to EUR 200K first band);
  • The Netherlands has an extensive double taxation treaty network with well over 90 jurisdictions;
  • The Netherlands has entered into a vast number of bilateral investment protection treaties (BITS) that offer comprehensive protection against unfair treatment of investments by sovereign states through access to world class dispute arbitration;
  • International and well-recognized jurisdiction with one-tier corporate governance system similar to that of common law countries;
  • Straightforward, cost-efficient and fast incorporation process for Dutch entities;
  • Public company N.V. entities are widely recognized as listing vehicles;
  • The Netherlands is the premier port of entry to mainland Europe with excellent facilities in terms of corporate and financial services;
  • English language optional for proceedings before the Amsterdam courts; and
  • Limited and straightforward corporate reporting requirements.

Taxation

The Netherlands is a gateway to Europe and the rest of the world. For many years, the Netherlands has been a preferred location for foreign companies to establish a business. The location, the political stability and, especially, the beneficial tax regime have turned the Netherlands into one of the go-to countries in this respect. The following tax points are of particular relevance:

  • The general Dutch corporate income tax rate is 25% (20% up to EUR 200K first band). This rate is more than competitive in the region, as all countries surrounding the Netherlands have higher corporate income tax rates.
  • Traditionally, the Dutch participation exemption has been a major attractor of companies to the Netherlands. This facility allows the receipt of dividends and capital gains from subsidiaries free of tax in the Netherlands. The Dutch facility is still one of the most flexible and easy accessible compared to other jurisdictions, especially, with regard to the following conditions: no holding period is required, an interest of 5% is already sufficient to apply, interest in subsidiaries located in tax havens are allowed to benefit from the facility and certain other specific benefits are available.
  • No withholding tax on royalties and no withholding tax on interest.
  • Dividends are taxed at a statutory rate of 15%. However, this rate may be reduced by virtue of tax treaties to 0-10%. In principle, no dividend withholding tax applies to distributions made by a Dutch cooperative pursuant to the domestic rules.
  • No controlled foreign company/Subpart F rules
  • No thin capitalization rules.
  • There is no stamp duty or capital tax.
  • One of the most extensive international tax treaty networks (the Netherlands has concluded over 90 tax treaties, more than most other countries) and the membership of the EU (and corresponding access to EU treaties) ascertain minimal taxation on payments to any group company.
  • Another traditional benefit of the Netherlands is the open attitude of the Dutch tax authorities. The Netherlands offers the possibility to discuss and reach agreement on tax positions in advance with the Dutch tax authorities that can be formalized in agreements (or advance tax rulings) to offer optimum certainty in advance.
  • Currently, the Dutch government´s main focus is on innovation. In 2007, the government was one of the first countries to introduce a special tax regime aimed at innovation (Innovation box). Based on the Innovation box, income earned out of R&D activities can benefit from an 80% exemption, resulting in an effective tax rate of 5%;
  • The Netherlands has extensive experience in the use of hybrid structures (i.e. hybrid entities and hybrid loans). These structures can be used to further optimize the group tax rate.
  • The Netherlands has traditionally not only been very welcoming to foreign companies, but also to expatriates. In the Dutch Personal Income Tax Act, expatriates (with certain skills) can receive 30% of their income as a tax free allowance under the so-called “30%-ruling.” A benefit that also benefits the employer in negotiating (net) salaries.
  • Customs authorities in the Netherlands have a reputation for being cooperative, innovative and exceptionally efficient; all to facilitate the free flow of goods. Customs duties or import charges are charged at a later date, if the goods are stored in accordance with customs procedures in the Netherlands. This leads to considerable cash-flow advantages to foreign shippers.
  • The Netherlands’ position on Value Added Tax (VAT) is also advantageous. In contrast to other EU member states, the Netherlands has instituted a system that provides for the deferment of VAT at the time of import. Instead of paying VAT when the goods are imported into free circulations within the EU, the payment can be deferred to a periodic VAT return. The Dutch VAT system offers companies significant cash-flow and interest benefits.
  • Even though the Netherlands provides several unparalleled tax facilities, it is not blacklisted as a tax haven, but can be considered as a safe haven.
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Determining Which Social Media Platforms Work Best for Your Law Firm [INFOGRAPHIC]

The Rainmaker Institute mini logo (1)

When you consider the overwhelming number of people who are now using social media, the question you should be asking is not, are my prospects, clients, and referral sources using social media? The question you should be asking is, which network are they using most often?

Don’t make the mistake of thinking you are your client.  Just because you don’t actively participate on Facebook or other social media platforms don’t mean your clients and prospects aren’t.   Very few law firms are aggressively going after these platforms; it’s an opportunity to get ahead of the curve. Plus, search engines now rank social media pages, so it’s very important for SEO.

Depending on the demographic of your clientele, you may have more success with one social media platform compared to another. The infographic below, based on the latest social media usage data from the Pew Research Center, can help you determine which platforms can work better for you, depending on the profile of your ideal target market:

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Working with 3rd Party Providers to Make Dodd Frank Conflict Mineral Compliance Easy

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At your firm or within your company dealing with conflict minerals, you might have recently heard the buzz about the latest Dodd Frank Conflict Mineral Compliance requirements. If these requirements affect the way law firms or companies do business, then working towards compliance initiatives remains a priority.

Regulatory Assessment and Scope Analysis

This involves examining the law firm’s client or company seeking compliance product portfolio and doing an analysis of whether the product are affected by the law and therefore must be in compliance, or “in scope” Vs “out of scope.” It can also include:

  • Examining corporate obligations
  • Determination of key regulatory compliance decision points
  • Creation of a conflict minerals technical document

Creation of a Compliance Plan

This involves creating an end to end compliance plan and associated processes

  • All activities detailed in chronological order
  • Creation of application of due diligence standards
  • Responsibilities assigned to personnel
  • Determination of compliance communication pathways

Software Set Up

Industry standard to date for the majority of companies in scope of this regulation involve using a software platform to manage the large amount of data and suppliers that will be surveyed.Vendor Selection

  • Vendor Selection
  • Decisions to integrate with Enterprise Resource Planning system  (ERP), which is used to design and manage resources within a company, as well as Product Lifecyle Management (PLM), used to design, manufacture and plan the development of products
  • Methodology of supplier communication

Supplier Engagement

This portion of the process involves communication and data collection from the supply chain. Includes:

  • Data collection methodology
  • Reporting and analytics of the data collected
  • Corrective action and addressing problem suppliers

Reporting

Once data has been collected firms enter the reporting phase to complete the process for the first year. This process is then replicated year over year. With the infrastructure in place firms enter the “maintenance” phase of compliance.

Standard practise in the compliance industry has also seen that Law firms or the company seeking Dodd Frank compliance are engaging 3-4 outside service providers.

They are usually:

1.       Law firms: To determine exact requirements and legal requirements.

2.       Software: To provide the platform for data collection, management and analytics.

3.    Accounting: To audit the data collected and ensure strong data backing the program.

4.    Consulting: To develop the processes, work with /train suppliers and help with data collection.

Assisting your clients with Dodd Frank Conflict Mineral Compliance does not have to be complicated. Working through the 5 step process above and working with other 3rd party providers makes compliance at any level easy.

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The Foreign Corrupt Practices Act (FCPA) in the News: Big Scoops, Real Fallout

Sheppard Mullin 2012

In early August, the New York Times reported that the U.S. Securities and Exchange Commission (SEC) is investigating JPMorgan Chase related to alleged violations of the Foreign Corrupt Practices Act (FCPA) in China.  According to the article, the press had not previously reported on the investigation, and the Times knowledge of it was based on a “confidential United States government document.”  The article generated a number of similar news reports.

This is not the first time the media has hopped on the FCPA bandwagon following a juicy story about alleged bribery.  For example, in 2012 and again this year, the New Yorker ran feature articles on alleged corruption in the Macau gambling industry and the Guinean mining industry.  And reports by the Wall Street Journal and other sources, both inside and outside the United States, brought into focus the alleged bribery payments arising from the News Corp phone hacking scandal in the United Kingdom.

The increase in feature reporting on the FCPA makes some sense: stories typically involve racy factual underpinnings, exotic locations, multi-national companies and crooked governments.   Nonetheless, the FCPA may have been underreported in the mainstream press, even as it was being vigorously enforced by the SEC and Department of Justice.

As the press catches up to enforcement, it appears that the stories themselves may in turn have ramifications for the enforcement environment.  One result of more prominent news coverage may be increased pressure on the U.S. government to prosecute alleged FCPA violations.  While it is possible that a news story could trigger a new investigation, coverage of an ongoing investigation would seem to increase scrutiny on it, thereby inciting the government to investigate more thoroughly than might otherwise be the case, or to push harder against potential procedural hurdles like jurisdiction or the statute of limitations.  Given the high cost that has come to be associated with defending against enforcement actions, this type of pressure could lead to major expenditures by companies.  Indeed, some FCPA investigations have reportedly led to $100 million or more in attorneys’ fees.

The FCPA’s heightened visibility in the mainstream press thus brings into relief an issue with which companies need to be particularly aware: bad press.  In fact, the more negative press that accumulates with respect to a particular company and/or allegation, the worse the ramifications for the company.  Investors may start to abandon the company, management changes or other dramatic action may be taken to demonstrate the company’s commitment to addressing perceived problems, and the company may ultimately be more willing to settle the matter on the government’s terms to make the issue go away.

Companies can help protect against violations – and the adverse PR that may come with violations or even allegations of violations – by implementing comprehensive anti-corruption programs.  In addition, companies must foster a “tone from the top” that stresses compliance with anti-corruption laws and open communication about suspected violations.  Potential whistleblowers must feel secure and appreciated for coming forward to report allegations internally, so they are less inclined to report the allegations externally.  In other words, companies that do not want to air their dirty laundry had better keep a clean house.

A Modest Proposal: Mentorship and Associate Development in Law Firms, Part I

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In April 2012, a group of attorneys from the Meritas Leadership Institute (“Meritas”) discussed and identified recurring trends in the legal industry that affect law firms on a global scale. Among the trends was retention, with young attorneys leaving law firms before benefiting the firm by bringing in new clients or earning big wins. This relates to law firms applying considerable amount of time and resources in recruiting new talent who do not ultimately stay with the firm. In addition, a generational gap exists as the novice and seasoned practitioner work side by side, often with different perspectives on worth ethic, profession ambitions, communication styles, personal motivations, notions of professionalism and more. Is there a solution to all of these problems so as to drive efficiency and harmony in law firms? Meritas offers a modest proposal in its white paper entitled the “2012-2013 Model Mentorship and Associate Development Program.”

Trends in the Legal Industry Concerning Mentorship

The white paper takes the stance that the Model Mentorship and Associate Development Program (“Mentorship Program”) is considered key in solving all of the above issues because with proper instruction and individualized attention, new attorneys will “join the team.” In turn, these attorneys add value to their law firms and receive more personal satisfaction.

The white paper is the brainchild of young attorneys who have collaborated in Meritas and worked together to engage in thought leadership activities. Katie Lynch, a member of the cohort, worked with her colleagues for a year to produce the white paper, which develops the purpose, structure and goals of mentoring and associate development. She provides her insights into the project and research in this article.

As part of its methodology, Meritas conducted a survey of senior attorneys with twenty plus years in the legal industry and new attorneys with seven or less years of experiences. Meritas also interviewed attorneys from all over the world in order to obtain a global perspective of the legal industry. Their research showed across the board that firms with formal mentoring programs in place as well as young attorneys with mentors thrived as compared to their counterparts without mentorship programs and mentors, respectively. “The Mentoring Programs helped them get associated and accustomed [to the law firm], ” Ms. Lynch explained.

Indeed, this supports changes in the practice of law, with the advent of technology. With email and off-site remote access, attorneys are increasingly working more independently, resulting in less cultivation of their professional development. The ultimate purpose of this program is to facilitate face-to-face interaction between novice attorneys and seasoned practitioners in order to support the growth of the young associate at an earlier point in their careers.

New Attorneys Engaging in the Business of Law

It is a known fact that new attorneys coming out of law school are not taught the business of law. Yet a law firm is in the service industry. “It’s not just about what to put in a motion and other general practice issues,” Ms. Lynch said. The Mentorship Program places a greater emphasis on building a business of law skill set. Whereas before attorneys were handed cases, now they are expected to build their own book of business earlier in their careers, along with retaining clients, marketing, and other such functions. The Mentorship Program recognizes that new associates need to be educated in this area.

The other important component to the Mentorship Program is that associates start as soon as they join so that they can obtain support from day one. “Young attorneys with tools of success can bring law firms success,” Ms. Lynch said. In integrating into the law firm environment, they will develop their own practice and engage in business development, thereby affecting the bottom line of the law firm. From a general overview of the law firm to the day-to-day specifics, a formal mentoring program can acclimate attorneys and allow them to operate efficiently and blend into the law firm culture.

Part II of this article will discuss specific components of the Mentorship Program and provide advice to law firms on how to adopt the program.

Discovery from Data Storage Providers: Building a Silver Lining into Your Cloud Storage Contract

barnes

Many companies use cloud technology, especially cloud storage providers, to reduce IT management costs and rid themselves of the headache of overseeing the software and hardware needed to perform certain services internally, while gaining the ability to expand quickly. Indeed, it is estimated that by 2014 cloud storage will be a $148.8 billion industry and people will process over 50 percent of computing workloads in the cloud constituting one third of all internet traffic.

See Cindy Pham, “E-Discovery in the Cloud Era: What’s a Litigant to do?” 5 Hastings Sci. & Tech. L.J. 139 (2013); David D. Cross and Emily Kuwahara, “E-Discovery and Cloud Computing: Control of ESI in the Cloud.”

But, handing your data over to a third-party does not come without a price. Savvy litigants are beginning to head straight to these third-party cloud providers to subpoena corporate records during discovery. This can pose serious problems for the data owners including:

  • Vendors can produce your records without reviewing and withholding for privileged, work product protected, trade secret, or otherwise confidential information and designations.
  • Vendors with no vested interest in the litigation will likely respond to all the requests without an eye toward what is relevant or required under the rules resulting in mass overproduction.
  • Vendors may charge you, their customer, a high price for collecting and producing the data they are storing for you.
  • Vendors may not have maintained the metadata for each set of data, exposing you to a claim of spoliation.
  • A vendor’s deletion or backup schedule may have erased responsive data, exposing you to a claim of spoliation.
  • Differences in the productions you and your vendor make in response to the same requests can lead to claims of spoliation or concealment.

See Ashish S. Prasad, “Cloud Computing and Social Media: Electronic Discovery Considerations and Best Practices,” The Metropolitan Corporate Counsel, February 2012 Volume 20, No. 2.

The Silver Lining: The remedy, of course, for most of these potential problems is negotiating your contract with cloud computing providers with an eye toward discovery. First, make sure your contract contains express commitments regarding the storage and retention of your data. You and your provider should be on the same page regarding how long data is to be maintained and what types of associated file data should be preserved so that you avoid any untimely deletion.

Second, make sure your contract requires immediate notice (within 48 hours) to you of any subpoena or document request received by your provider targeting any of your data.

Third, the contract with a cloud services provider should set forth that you, through your attorneys, have the right to review all documents and data prior to production. Your agreement should also give you the right to require the provider to withhold any documents from production that you designate as either subject to a privilege or not-relevant or not responsive.

Fourth, the cost of collecting and assembling data for review and production from a cloud can be high because of the way in which the data is stored. Therefore, you will want to designate who bears the expense of the collection and production of your data so you aren’t surprised by a large bill later.

Finally, I would also caution you to think carefully about whether the cloud is really the cheaper alternative it appears to be. If your business involves frequent litigation or due-diligence necessitating the documents at issue, the cost of accessing and producing these documents from the cloud may override the initial savings. Similarly, think strategically about low-value data you can store cheaply in the cloud versus potentially privileged, trade secret, and confidential information you may want to designate for local, albeit more expensive, storage which is solely in your control.

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