The National Law Forum

Are You Waiting to Make Valuable Investments for Your Law Firm?

At the end of each year, most law firms balance their books and assess the dollars they have spent on advertising and marketing. Every year, many law firms are surprised to see that their returns from carefully planned marketing campaigns have only broken even or produced a minimal return on their investment.

Many lawyers are still pushing hundreds of thousands of dollars into obsolete advertising channels. For example, most law firms have realized that YellowPages advertising is no longer effective. Yet many lawyers continue to advertise in YellowPages directories. With the exception of some rural market areas, most of those yellow page advertising lawyers are continually disappointed that their office phones remain silent. A majority of our clients have virtually stopped all paid yellow page directory advertising.

Similarly, many lawyers have expressed dissatisfaction with their television advertising. The way consumers watch television has changed, especially in the past several years. This trend has been hastened by the advent of new technologies. Netflix and Hulu allow viewers to watch their favorite shows without tuning into a television station. DVR allows television viewers to fast-forward through commercials. According to Motorola’s recent Media Engagement study, more than one-third of weekly TV viewing by Americans is pre-recorded. Roughly three-quarters pre-record their shows to skip advertisements.

With these trends and technologies in place, many of your prospective clients will not see your law firm’s commercial spots. Additionally, most of our Consultwebs clients find that the cost per case for TV is typically four to six times higher than for SEO/organic marketing and fifty to one hundred percent higher than pay per click (PPC) or AdWords advertising.

Are you waiting to make valuable investments for your firm?

Armed with data to guide your decisions, you do not have to wait to invest in Web marketing. Web marketing has a proven track record of strong ROI. To effectively manage your marketing dollars, your firm must know the return on investment (ROI) from each marketing effort you employ. By consulting the data, you will be poised to make the best decisions for your law firm’s marketing efforts.

Article By:

Dale Tincher

Consultwebs.com, Inc.

Is Obesity A Disease? The American Medical Association Says “Yes”; The Americans with Disabilities Act Says . . .

In June 2013, the American Medical Association (AMA) declared obesity a disease. The president of the AMA gave several reasons for this declaration^[1] “[R]ecognizing obesity as a disease will help change the way the medical community tackles this complex health issue.” The AMA president emphasized that classifying obesity as a disease could encourage people to pay attention to the seriousness of obesity, increase the dialogue between patients and physicians, and result in greater investments in research.

The Americans with Disabilities Act (ADA) was amended, effective January 1, 2009, to greatly expand the coverage of the act. Employers and individuals continue to observe how the Equal Employment Opportunity Commission (EEOC) and courts interpret and implement the amendments. Obesity is one condition that continues to be affected by the amendments.

In the original regulations implementing the ADA, the EEOC stated that “except in rare circumstances, obesity is not considered a disabling impairment.” 29 C.F.R. § 1630.16 App. (§ 1630.2(j)). Similarly, in its pre-amendment Compliance Manual, the EEOC stated that normal deviations in height, weight or strength are not impairments. However, “severe obesity,” which the Compliance Manual defined as “100% over the norm,” is “clearly an impairment,” although whether obesity rises to the level of “disability” is, like all impairments, determined by the substantial limitations test. The EEOC also noted that persons who are severely obese may have underlying or related disorders such as hypertension or thyroid disorder which do qualify as impairments.

The EEOC’s March 2011 regulations, which reflect changes made by the ADA Amendments, retain the statement that “[t]he definition of the term ‘impairment’ does not include physical characteristics such as . . . height, weight, or muscle tone that are within ‘normal’ range and are not the result of a physiological disorder.” This statement, however, does not prevent obesity from being considered a disability under the amended ADA. The ADA requires an individual assessment of the individual to determine whether he or she is disabled.

There are two principal ways in which the amendments increase the likelihood that obesity will be considered a disability under the ADA: (i) broader standards under the “substantial limitations” test and (ii) individuals no longer need to show that they are actually disabled to prevail under the “regarded as” disabled prong.

The substantial limitation test and major life activities

To qualify for protection under the ADA, an individual must show that he or she is disabled—substantially limited in a major life activity. The amendments were, in large part, a legislative response to courts’ narrow interpretation of what constituted a substantial limitation.^[2] Significantly, “‘[s]ubstantially limits’ is not meant to be a demanding standard.”^[3]

In combination with an expanded interpretation of major life activities, which include walking, standing, sitting, reaching, lifting, bending, breathing and working as well as major bodily functions including digestive, respiratory, circulatory functions, it is likely that many individuals whose weight restricts them from performing these activities or is a result of the dysfunction of a bodily system will be disabled within the meaning of the amendments.^[4]

“Regarded as” disabled

An individual may be illegally discriminated against under the ADA if he or she suffers an adverse employment action because his employer considers him to be disabled. Under the ADA amendments, the individual does not need to show that she is actually disabled, or that she is substantially limited in a major life activity—simply that her employer thought that she was and took adverse action based on that perception.

For example, in 2010 a Mississippi district court allowed Ms. Lowe, an obese receptionist, to proceed with her ADA “regarded as” claim because her former employer harassed her based on her use of disabled parking.^[5] The court stated that under the amendments “an individual is now not required to demonstrate that the disability she is regarded as having is an actual qualified disability under the ADA or that it substantially limits a major life activity.” Instead, the plaintiff was only required to show that “she has been subjected to an action prohibited under [the ADA] because of an actual or perceived physical or mental impairment whether or not the impairment limits or is perceived to limit a major life activity.”

Significantly, “a plaintiff now might be considered disabled due to obesity under the ADA if her employer perceived her weight as an impairment.” Therefore, employers should take care not to assume that employees are unable to complete tasks simply because of their weight. The ADA also prohibits discrimination in hiring, so employers should not decline to hire an individual simply because he or she is obese.

The ADA does not apply to individuals who cannot perform the essential functions of their job because of a medical condition, including obesity. As with all medical conditions, employers must identify the job responsibilities that employees are not able to complete and engage in a dialogue with the employee about accommodations that will allow the employee to perform these functions. If employees cannot perform their essential job functions with accommodation, employers may take adverse employment actions based on the performance failures.

_{[1] Ardis D. Hoven, Obesity As a Disease?, Huffington Post, June 28, 2013, www.huffingtonpost.com/ardis-}_{d-hoven-md/obesity-as-a-}_{disease_b_3518956.html.}

_{[2] See Regulations to Implement the Equal Employment Provisions of the American With Disabilities Act, as Amended, 76 Fed. Reg. 16981 (March 25, 2011) (stating that, in the ADA Amendments Act Congress “simply indicates that ‘substantially limits’ is a lower threshold than ‘prevents’ or ‘severely or significantly restricts,’ as prior Supreme Court decisions and the EEOC regulations had defined the term”.}

_{[3] 29 C.F.R. § 1630.2(j)(1)(i).}

_{[4] Although some courts impose a requirement that the individual be “severely obese” or have a weight “outside the normal range” to be disabled, the amendments likely supersede any such requirement for individuals who can show that their weight substantially limits a major life activity or is the result of the dysfunction of a major bodily function. Compare BNSF Ry. Co. v Feit, 2013 WL 1855832 (D. Mont. May 1, 2013) (relying on the repealed EEOC compliance manual for the definition of “severely obese”); with EEOC, Section 902 Definition of the Term Disability, available at: http://www.eeoc.gov/policy/}_{docs/902cm.html (stating that the definition has been removed from the website because “the analysis in it has been superseded by the ADA Amendments Act.”).}

_{[5] Lowe v. American Eurocopter LLC, No. 1:10CV24-A-D, 2010 U.S. Dist. LEXIS 133343 (N.D. Miss. Dec. 16, 2010).}

Article By:

James H. Kizziar Jr.

Amber K. Dodds

Bracewell & Giuliani LLP

Could Your Business Qualify for a 179D Green Building Tax Break?

If your company has built a new facility or upgraded an existing one anytime in the past six years, you might find that you qualify — at least partially — for a tax break of up to $1.80 per square foot under federal tax code section 179D, or the energy efficient commercial buildings deduction. This could be the case even if you had no concrete intention to focus on green building standards at the time.

A couple of great features of this deduction are, first, that you might be able to substantially mitigate your tax burden as far back as six years and, second, it’s very likely that you will qualify if your facility exceeds 50,000 square feet and it meets current state building codes, according to a business tax writer for Forbes, who spent eight years as the U.S. Senate Finance Committee’s tax counsel.

The 179D tax deduction gives the business an immediate deduction in the current year plus a basis reduction for the value of the facility, which can be anything from a warehouses or parking garage to an office park or a multi-family housing unit. For private-sector projects, the building owner, assuming it paid for the construction or improvements, generally gets the deduction. In public projects, the architect, engineer or contractor can obtain it by seeking a certification letter from the government unit. Nonprofits and native American tribes are not eligible.

The green building deduction was created in recognition of the fact that around 70 percent of all electricity used in the U.S. is consumed by commercial buildings. The deduction, which is up for renewal — and possible expansion — this year, has already proven that efforts to mitigate the tax burden of businesses in a technology-neutral way is an effective way to encourage energy efficiency, according to the Forbes writer.

What improvements must be made to qualify for the green building credit? Currently, the new or renovated building merely needs to exceed the 2001 energy efficiency standards developed by the American Society of Heating, Refrigerating and Air Conditioning Engineers, or ASHRAE — and most state building codes already require this. That means the vast majority of new and improved buildings already meet this requirement.

It’s also possible to partially qualify for the deduction by meeting the standards only for the building envelope itself, which includes HVAC, the hot water system, and the interior lighting system. A building could qualify based upon only one of these systems, or all three.

Source: Forbes, “179D Tax Break for Energy Efficient Buildings — Update,” Dean Zerbe, Aug. 19, 2013

Article By:

Business and Corporate Law Practice Group

McBrayer, McGinnis, Leslie and Kirkland, PLLC

Complying with the Affordable Care Act’s Exchange Notice Requirement

The Patient Protection and Affordable Care Act (the “Act”) amends the Fair Labor Standards Act (“FLSA”) to require employers of all sizes to provide their employees a notice of the availability of coverage through public health insurance exchanges by March 1, 2013.¹ In January of this year, the U.S. Department of Labor, the agency charged with administering the FLSA, announced a delay in the effective date of the notice to the “late summer or fall of 2013.”² In Technical Release No. 2013-02 (entitled, “Guidance on the Notice to Employees of Coverage Options under Fair Labor Standards Act §18B and Updated Model Election Notice under the Consolidated Omnibus Budget Reconciliation Act of 1985”),³ the Labor Department provided details about the FLSA exchange notice requirement. The effective date of the requirement is now October 1, 2013 for current employees or within 14 days of an employee’s start date for employees hired after that date.

Background

The FLSA exchange notice must include a description of the existence of, and services provided by, public exchanges. That Act further requires that the notice:

Explain how the employee may be eligible for a premium tax credit or a cost-sharing reduction if the employer’s plan does not meet certain requirements;
Inform employees that if they purchase a qualified health plan through the exchange, then they may lose any employer contribution toward the cost of employer-provided coverage, and that all or a portion of the employer contribution to employer-provided coverage may be excludable for federal income tax purposes;
Include contact information for customer service resources within the exchange, and an explanation of appeal rights;
Meet certain accessibility and readability requirements; and
Be in writing.

The Department has provided two model notices — one for employers who offer a health plan⁴ to some or all employees and another for employers who do not.⁵ The model notice for employers who offer a health plan includes two parts. Part A (entitled “General Information”) tracks the requirement of the statute. Part B (entitled, “Information About Health Coverage Offered by Your Employer”) solicits information about the employer’s group health plan coverage that is intended to assist employees who apply for subsidized coverage under a group health plan product offered through the exchange. Part B includes an optional section that asks the employer to disclose whether the health care coverage offered meets the minimum value standard and whether the cost of coverage is intended to be affordable. While not required, employers may decide to complete this part of the notice in order to avoid having to respond to inquiries from exchanges seeking to process an individual’s application.

The notice requirement applies to all employers who are subject to the FLSA. In general, the FLSA applies to employers that employ one or more employees who are engaged in, or produce goods for, interstate commerce. For most firms, a test of not less than $500,000 in annual dollar volume of business applies. The FLSA also specifically covers the following entities, regardless of dollar volume of business: hospitals; institutions primarily engaged in the care of the sick, the aged, mentally ill, or disabled who reside on the premises; schools for children who are mentally or physically disabled or gifted; preschools, elementary and secondary schools, and institutions of higher education; and federal, state and local government agencies. (For an explanation of the reach of the FLSA, please see http://www.dol.gov/compliance/guide/minwage.htm.)

Timing and Delivery of Notice

Under the heading “Timing and Delivery of Notice,” Technical Release No. 2013-02 provides as follows:

Employers are required to provide the notice to each new employee at the time of hiring beginning October 1, 2013. For 2014, the Department will consider a notice to be provided at the time of hiring if the notice is provided within 14 days of an employee’s start date. With respect to employees who are current employees before October 1, 2013, employers are required to provide the notice not later than October 1, 2013. The notice is required to be provided automatically, free of charge.

The notice must be provided in writing in a manner calculated to be understood by the average employee. It may be provided by first-class mail. Alternatively, it may be provided electronically if the requirements of the Department of Labor’s electronic disclosure safe harbor at 29 CFR 2520.104b-1(c) are met.

(Emphasis added).

The reference to “employees” means all employees, full-time and part-time, but there is no need to provide notices to dependents. Nor does the notice have to be provided to former employees or other individuals who are not employees but may be eligible for coverage (e.g., under COBRA).

The question of who, exactly, is an employee is an important one. The Act’s exchange notice requirement amends the FLSA. Thus, while the Internal Revenue Code and ERISA look to the “common law” standard, applicable court precedent interpreting the FLSA’s use of the term “employee” relies on the broader, “economic realities” test. Accordingly, an individual is an “employee” for FLSA purposes if he or she is economically dependent on the business for which he or she performs personal services. Thus, individuals properly classified as independent contractors for tax purposes may nevertheless be employees (to whom notice must be provided) for FLSA purposes.

Delivery can be in hand or by first class mail. Delivery may also be made electronically under the Department of Labor’s “electronic disclosure safe harbor at 29 CFR 2520.104b-1(c).” The regulations at 29 CFR 2520.104b-1 provide a safe harbor under which electronic delivery is permitted to employees who have the ability to effectively access documents furnished in electronic form at any location where the employee is reasonably expected to perform duties as an employee and with respect to whom access to the employer’s or plan sponsor’s electronic information system is an integral part of those duties. Under the safe harbor, other individuals may also opt into electronic delivery.

Enforcement

The Act does not appear to impose any separate penalty for ignoring the exchange notice requirement. The FLSA authorizes administrative actions, civil suits and criminal prosecutions for violations of pre-existing FLSA sections, but not, it seems, for this requirement. This does not mean, of course, that noncompliance is a good idea or even a viable option. The lack of penalties does not translate into a lack of consequences. Plan sponsors still have a fiduciary obligation to be forthcoming with plan participants and beneficiaries. (This situation is similar to the rules governing the distribution of summary plan descriptions — while not technically required, there are many good reasons to comply.)

Article By:

Alden J. Bianchi

James M. Nicholas

Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

U.S. Department of Labor (DOL) Clarifies Family and Medical Leave Act (FMLA) Leave Entitlement for Same-Sex Spouses

**In the wake of the Supreme Court’s Windsor decision, employers should review and, if necessary, revise their FMLA policies and procedures to ensure compliance.**

The U.S. Department of Labor (DOL) recently clarified that same-sex spouses are now covered by the Family and Medical Leave Act (FMLA) to the extent that an employee’s marriage is recognized in the state in which the employee resides. This clarification, which follows the U.S. Supreme Court’s decision in United States v. Windsor,[1] is consistent with the existing FMLA regulatory language defining a “spouse” for purposes of FMLA coverage.

The DOL did not issue any new formal, stand-alone guidance but instead revised several existing FMLA guidance documents to remove references to the Defense of Marriage Act (DOMA). It also affirmatively stated in a newly released Field Operations Handbook section on the FMLA that “[s]pouse means a husband or wife as defined or recognized under state law for purposes of marriage in the State where the employee resides, including common law marriage and same sex marriage.”

Moving forward, FMLA spousal leave will only be available to employees who reside in a state that recognizes same-sex marriage, given that the existing FMLA regulatory language tied spousal coverage to the place of residence prior to the Windsor decision. However, the U.S. Office of Personnel Management (OPM), which has jurisdiction over FMLA rights for federal employees, recently issued post-Windsor guidance that extends FMLA leave rights to the spouses of federal employees without regard to states of residence.[2] OPM’s approach could eventually be followed by DOL for private sector employees and those employees otherwise covered by DOL rules but likely would require regulatory changes that would involve a notice and comment period.

It is worth noting that, while DOL’s clarification reflects a general increase in federal FMLA leave rights available to same-sex couples, in some circumstances, the availability of FMLA leave rights could mean a decrease in a given employee’s overall leave entitlement. For example, same-sex spouses residing in states recognizing same-sex marriage will now be subject to the FMLA’s restrictions on the combined amount of leave that spouses working for the same employer can use in certain circumstances. Similarly, an employee might have been entitled pre-Windsor to leave pursuant to state (but not federal) law to care for a same-sex spouse, which meant that the employee’s state and federal leave entitlements could not be exhausted concurrently.

Conclusion

In light of DOL’s updated guidance, employers should make sure that their FMLA policies allow spousal leave for employees in a same-sex marriage that is lawful in the state in which the employee resides. Employers, however, will need to think carefully about how they will administer such policies to avoid both employee relations issues and sexual orientation discrimination claims. For example, if an employer does not request documentation from an employee in an opposite-sex marriage as to whether the employee’s marriage is recognized in the state in which he or she resides, issues may arise if this information was requested of an employee in a same-sex marriage. While some employers may choose simply to grant FMLA leave to all employees regardless of domicile, employers need to be aware that such time may not be recognized as statutory FMLA leave. Employers should also pay close attention to future developments in this area as more states consider recognizing same-sex marriages.

_{[1]. United States v. Windsor, 133 S. Ct. 2675 (2013).}

_{[2]. See U.S. Office of Personnel Admin., Benefits Administration Letter No. 13-203, Coverage of Same-Sex Spouses (July 17, 2013).}

Article By:

Ellen M. Bandel

Michelle Seldin Silverman

Corrie Fischel Conway

Morgan, Lewis & Bockius LLP

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.

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 Insurance Portability and Accountability Act/Health Information Technology for Economic and Clinical Health (HIPAA/HITECH) Compliance Strategies for Medical Device Manufacturers

As computing power continues to become cheaper and more powerful, medical devices are increasingly capable of handling larger and larger sets of data. This provides the ability to log ever expanding amounts of information about medical device use and patient health. Whereas once the data that could be obtained from a therapeutic or diagnostic device would be limited to time and error codes, medical devices now have the potential to store personal patient health information. Interoperability between medical devices and electronic health record systems only increases the potential for medical devices to store personal information.

The concern has become so significant that the U.S. Food and Drug Administration recently issued a draft guidance and letter to industry noting concerns associated with theft or loss of medical information by cybersecurity vulnerable devices. For a more detailed discussion of this issue, see last month’s blog post.

This raises another important issue for medical device manufacturers and health care providers: medical device compliance with the Health Insurance Portability and Accountability Act (HIPAA) and the Health Information Technology for Economic and Clinical Health (HITECH) Act. Compliance with HIPAA and HITECH has become a major concern for hospitals and health care providers, and will increasingly be an issue that medical device manufacturers will need to deal with.

A medical device manufacturer needs to answer three questions in order to determine whether the collection of patient information by a medical device is subject to HIPAA and HITECH:

Does the information qualify as Protected Health Information?
Is a Covered Entity involved?
Does a Business Associate relationship exist with a Covered Entity?

Protected Health Information

Protected Health Information (PHI) is individually identifiable health information transmitted or maintained in any form or medium.^[1]Special treatment is given to electronic PHI, which is subject to both the HIPAA Privacy Rule, and the Security Rule (which only applies to electronic PHI). To be “individually identifiable,” the PHI must either identify the individual outright, or there must be a reasonable basis to believe that the information can be used to identify the individual.^[2]

“Health information” is any information (including genetic information) that is oral or recorded in any form or medium, and meets two conditions.^[3] First, the information must be created or received by a health care provider, health plan, public health authority, employer, life insurer, school or university, or health care clearinghouse.^[4] Second, the information must relate to the past, present, or future physical or mental health or condition of an individual, or the provision or payment of health care to an individual.^[5]

If data collected by a medical device does not meet the definition of “individually identifiable,” or “health information,” it is not covered under HIPAA and HITECH. For example, a medical device that logs detailed medical diagnostic information about a patient, but includes no means by which that information may be traced to the patient, the data would likely fall outside of HIPAA and HITECH. Alternatively, a medical device, such as a mobile medical app, may request that a user provide detailed medical information about himself or herself. Provided that information is requested outside of the context of a health care provider, health plan, public health authority, employer, life insurer, school or university, HIPAA and HITECH similarly would likely not apply.

Covered Entities and Business Associates

There are two types of persons regulated by HIPAA and HITECH: “Covered Entities” and “Business Associates.” A Covered Entity is a health plan, a health care clearinghouse, or a health care provider who transmits any health information in electronic form in connection with a covered transaction.^[6] A Business Associate is a person who either creates, receives, maintains, or transmits PHI for a regulated activity on behalf of a covered entity, or provides legal, actuarial, accounting, consulting, data aggregation, management, administrative, accreditation, or financial services to a covered entity, where the service involves the disclosure of PHI.^[7]

Therefore, at a minimum, in order to be subject to HIPAA and HITECH a Covered Entity needs to be involved. For example, medical devices sold directly to consumers for personal use would generally not be subject to HIPAA and HITECH.

Conversely, just because a medical device manufacturer is not a “Covered Entity,” HIPAA and HITECH may apply through a Business Associate relationship. Business Associates include Health Information Organizations, E-prescribing Gateways, and others that provide data transmission services with respect to PHI to a covered entity, and that require access on a routine basis to PHI.^[8] Business Associates also include persons that offer PHI to others on the behalf of a covered entity, or that subcontract with a Business Associate to create, receive, maintain, or transmit PHI.^[9]

_{[1] 45 C.F.R. § 160.103 “Protected health information”.}

_{[2] 45 C.F.R. § 160.103 “Individually identifiable health information” (2)(i) and (ii).}

_{[3] 45 C.F.R. § 160.103 “Health information”.}

_{[4] 45 C.F.R. § 160.103 “Health information” (1).}

_{[5] 45 C.F.R. § 160.103 “Health information” (2).}

_{[6] 45 C.F.R. § 160.103 “Covered entity”.}

_{[7] 45 C.F.R. § 160.103 “Business associate” (1).}

_{[8] 45 C.F.R. § 160.103 “Business associate” (3)(i).}

_{[9] 45 C.F.R. § 160.103 “Business associate” (3)(ii) and (iii).}

Article By:

Seth A. Mailhot

Sheppard, Mullin, Richter & Hampton LLP

White House Previews List of Incentives to Support Adoption of its Cybersecurity Framework

As its latest step in a broader effort to prioritize cybersecurity, the White House released last week a list of possible incentives that may be offered to companies that own or operate critical infrastructure systems and assets to encourage adoption of a national Cybersecurity Framework, scheduled for release in February 2014. The list of possible incentives—which the Departments of Homeland Security, Commerce, and Treasury identified in response to a February 12, 2013 Executive Order—includes grants, liability limitation, public recognition, and cybersecurity investment rate recovery, among others. Some of the identified incentives could be created from existing federal agency authorities, while others would require legislative action from Congress. Over the next few months, agencies will seek input from critical infrastructure stakeholders in examining their preliminary lists and determining which to implement and how.

In the same February 12, 2013 Executive Order, the President directed the National Institute of Standards and Technology (NIST), an agency of the Department of Commerce, to lead the development of a national Cybersecurity Framework to reduce cyber risks to critical infrastructure. The President called for the Framework to include a set of standards, methodologies, procedures, and processes that align policy, business, and technological approaches to address cyber risks, and directed NIST to incorporate voluntary consensus standards and industry best practices to the fullest extent possible. NIST released a draft outline of the Framework on July 1, 2013, and a full draft of the Framework is scheduled for release in October.

Exactly how the Cybersecurity Framework will interact with or complement the North American Reliability Corporation (NERC) Critical Infrastructure Protection (CIP) standards is unclear. The Cybersecurity Framework is intended to provide cross-sector security standards, while the NERC CIP standards were developed by, and for the use of, the electricity sub-sector. The Administration intends for NIST to consult its peers, as the President directed the Secretary of Homeland Security to “engage and consider the advice” of sector-specific and other relevant agencies. The Secretary must also identify areas for improvement that should be addressed through future collaboration with particular sectors and standards-developing organizations, which would presumably include NERC. Whether NERC has been consulted and how their input thus far has been considered is unclear.

In its draft outline of the Cybersecurity Framework, NIST indicates that the voluntary program is intended to complement rather than to conflict with current regulatory authorities, and the draft compendium, attached to the outline, includes reference to the NERC CIP Standards. In fact, NERC submitted comments in response to NIST’s February 26, 2013 Request for Information seeking input to help shape the draft Framework. However, the content of the Framework is still unknown, and until the draft is released in October, the exact relationship between the two sets of standards remains uncertain. In the meantime, as NERC stated in its comments to NIST, NERC feels strongly that a second set of potentially conflicting or redundant standards could create undue hardship on the electricity sub-sector. NERC also stated that, “while a framework of cybersecurity standards that is applicable to all sectors is possible, the framework may need flexibility to have certain common elements to be valuable or effective. Some sectors, such as the electricity sub-sector, are far more advanced in their cybersecurity efforts; other sectors may need time to meet minimum (voluntary) standards. The framework must build on existing standards and programs to develop a comprehensive approach to cybersecurity.”

As national-level cybersecurity efforts have progressed this year, so have NERC’s efforts to improve the CIP standards. NERC Reliability Standards are generally written as performance standards; that is, they prescribe a measurable end-state or goal, and attempt to remain technology- and method-neutral. However, utilities widely criticized earlier versions of the standards as being focused primarily on compliance documentation as opposed to security principles. With input from stakeholders, NERC significantly revised its CIP standards in Version 5, which were filed with FERC on January 31, 2013. Much of industry considers the revised CIP program to be an improved framework for critical asset cybersecurity protection, with a renewed risk-based focus on security. NERC stated that it stands ready to share its industry-driven approach with NIST as it endeavors to develop the Cybersecurity Framework.

Article By:

S. Becca Smith

Bracewell & Giuliani LLP

Commodity Futures Trading Commission (CFTC) Proposes Rules for Systemically Important Derivatives Clearing Organizations (SIDCO) to Conform to International Standards

The Commodity Futures Trading Commission has proposed additional standards for systemically important derivatives clearing organizations (SIDCOs) that are consistent with the Principles for Financial Market Infrastructures published by the Committee on Payment and Settlement Systems of the Bank for International Settlements (BIS) and the Board of the International Organization of Securities Commissions. The proposed rules include new or revised standards for governance, financial resources, system safeguards, default rules and procedures for uncovered losses or shortfalls, risk management, disclosure, efficiency, and recovery and wind-down procedures.

The proposed rules are designed to assure that SIDCOs will be deemed to be qualifying central counterparties (QCCPs) for purposes of international bank capital standards set by the BIS’ Basel Committee for Banking Supervision. The proposed rules would also allow a derivatives clearing organization (DCO) that is not a SIDCO to elect to opt in to the SIDCO regulatory requirements, thereby allowing the DCO to be deemed a QCCP.

The CFTC’s proposing release is available here.

Article By:

Kevin M. Foley

James M. Brady

Katten Muchin Rosenman LLP

How to Identify Hidden Referral Sources

Too often, attorneys sign a new client without having a true understanding of how that client came to them.

How can you repeat your successes if you don’t know what you’re doing right?

If you start examining the ways that new clients come to you, you will begin to reveal referral sources you didn’t even know you had.

Here are some tips for discovery:

Whenever someone calls to inquire about your services, have whoever handles the call ask how they found your firm. If they say on the Internet, ask what search terms they used. If they say they saw an ad, ask where. If they say they were referred, ask by whom (and be sure you follow up with that referral source to thank them promptly!).

Create a spreadsheet so you can track how prospects find you. The idea is for you to be able to tell at a glance what law firm marketing method is bringing you the most leads.

Track how many times you “touch” each lead before they become a client, and what methods you used to keep in touch.

Examine the data for which activities you are currently doing that result in the best quality leads, and which ones are bringing in prospects that are not a good fit for you.

Track costs and how much time you are spending for each of your law firm marketing activities so you can determine your ROI for each activity.

Have your clients provide feedback on your services – likes, dislikes and be sure to ask if they feel good about referring you to friends and family.

Once you are able to tell what you’re doing right, you can then put your resources to work in areas that bring you the best quality leads.

Article By:

Stephen Fairley

The Rainmaker Institute

The National Law Forum

Are You Waiting to Make Valuable Investments for Your Law Firm?

Like this:

Is Obesity A Disease? The American Medical Association Says “Yes”; The Americans with Disabilities Act Says . . .