Crain's Cleveland Business

VOL. 38, NO. 30

JULY 24 - 30, 2017

Akron

Source Lunch John Habat, Greater Cleveland Habitat for Humanity Page 31

Panyard Inc. is making a big noise in the steel pan drums industry. Page 28

CLEVELAND BUSINESS

HEALTH CARE

SPORTS BUSINESS

Uber could improve access for recovery

By KEVIN KLEPS

By LYDIA COUTRÉ lcoutre@crain.com @LydiaCoutre

Transportation is the largest barrier for people seeking and receiving addiction treatment.

A walk to the bus stop might be dotted with temptations. Harsh winter temperatures could dissuade someone from making the trek. A chaotic trip back could take away from time to reflect on what they’ve learned in treatment.

“Using a bus pass when you’re in early sobriety and you’ve got a brain that’s on fire … just wound up being more difficult than a person without addiction, living at home in their own house, with a supportive family could imagine,” said Dr. Ted Parran, co-medical director of Rosary Hall.

But an Uber arriving outside their door, ready to deliver them straight to treatment, brings convenience, speed, dignity and respect to that journey.

And, according to preliminary results from a pilot program at St. Vincent Charity Medical Center in Cleveland, offering free Uber transportation for addiction patients could help improve attendance rates for assessment and treatment appointments at Rosary Hall’s Intensive Outpatient Treatment (IOP) program.

St. Vincent’s pilot, launched in midJune, provides transportation in partnership with Circulation, a Boston-based company that has developed a proprietary, HIPAA-compliant digital platform to connect Uber with patients and health care providers.

Thirty days into the 90-day pilot, the 11 patients enrolled in the program have received a total of 156 Uber rides to and from treatment and have not missed a single IOP or individual counseling session, which is “amazing,” said Orlando S. Howard, outpatient manager at Rosary Hall.

The List Northeast Ohio’s largest law firms Page 26

New uniforms will lift Cavs’ merch biz kkleps@crain.com @KevinKleps

Thanks to two players — LeBron James and Kyrie Irving — who sell more signature shoes than anyone else in the league, the Cavs are more closely aligned with Nike than any NBA team.

Or, at the very least, any team aside from maybe Michael Jordan’s Charlotte Bobcats.

And it’s the Cavs — one of the few organizations that are dramatically changing their look for the 2017-18

SEE UBER, PAGE 27

Entire contents © 2017 by Crain Communications Inc.

season — that might have the most to gain from the NBA’s switch to Nike as the league’s exclusive oncourt apparel provider.

Matt Balvanz, a senior vice president of analytics at Navigate Research, told Crain’s he wouldn’t be surprised if the NBA’s merchandise sales jump 30% in the first year of the deal with Nike.

The increase could be higher for the Cavs, Balvanz said, because of the combination of their fans preferring

ON CRAINSCLEVELAND.COM All-star Game at risk: The NBA has threatened to pull a future All-Star Game from Cleveland unless Q renovations start soon.

The Cavs’ 2017-2018 primary logo has new colors, typography.

Nike over Adidas (the league’s previous apparel provider) and the team’s significant design changes, which the Cavs told Crain’s they likely will unveil in early to mid-August.

Chicago-based Navigate Research pulled numbers from YouGov’s data-

base that show Cavs fans prefer Nike over Adidas by a 1.5-to-1 margin and are 2.6 times more likely to be current Nike customers than that of Adidas.

The biggest margin — and the most significant for a team that’s set to unveil new uniforms — is between Cavs fans who, according to YouGov’s surveys, intend to purchase Nike apparel (35%) and those who say they’ll buy Adidas products (1%).

SEE UNIFORMS, PAGE 27

SPECIAL SECTION | LEGAL AFFAIRS, PAGES 13-22

Sorting out whether it’s worth going solo

I

n the wake of the Great Recession, entrepreneurial lawyers are increasingly turning to opening their own shops rather than cutting their teeth at large or midsize firms.

In fact, according to a 2016 survey, 23% of lawyers said they would start their own firm if they had the capital. That’s up from just 5% in 2005. There is a bevy of individual motivations for doing so, but one thing is clear: Being your own boss is more appealing than ever. Page 13

INSIDE

Employers confront hazy marijuana policy. Page 14 Evolving education law calls for counsel. Page 15 Telemedicine is laden with legal concerns. Page 16 Local law firm hiring remains flat. Page 18

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CRAIN’S CLEVELAND BUSINESS

Coating company prefers its new reality

By RACHEL ABBEY McCAFFERTY rmccafferty@crain.com @ramccafferty

When North American Coating Laboratories got its start in 1974, the company focused solely on coating eyeglasses and sunglasses. Today, eyewear makes up less than 20% of its business, whereas the rest includes a huge range of industrial products — from rifle scopes to watch crystals to security cameras.

“I mean, the list kind of goes on and on,” said president and CEO Brian Wilson.

And in recent years, the company has added a new area of expertise: virtual reality.

North American Coating Labora-

“They have to be the first one with their product out the door in order to capture the market. So that’s why they’re willing to pay big money to get things in here and turned around in a day or two, and back to them, and then going to the next version.”

— North American Coating Laboratories president and CEO Brian Wilson

tories offers vacuum-applied coatings for both plastic and glass components and dip-applied hard coatings, which add capabilities like scratch resistance for plastics. Its ability to coat both materials makes it

stand out, Wilson said.

Its plant at 9450 Pineneedle Drive in Mentor employs about 30, an increase of about five in the past year and a half. The company was much larger when it was mass producing

sunglasses, but that ended in the early ’90s, said Dan Fiore, director of business development.

Fiore said the company has grown in other ways, too, investing about $1 million in the past two years in upgrades like a revamped office kitchen and in equipment like a new cleaning line. Wilson said the company doesn’t share annual sales, but that it has seen significant increases in profitability in recent years.

Business grew organically over time, said Wilson, who is the son of the company’s founder. Companies knew they could get anti-reflective coatings on their sunglasses and sought out how to apply those coatings to new products, a shift that started in the mid- to late ’80s.

And as North American Coating

Laboratories grew to serve more industries, it also expanded the type of coatings it offered to include products like indium tin oxide for touchscreens, which Wilson described as a clear tint that conducts electricity. Wilson said military and automotive are the largest industries the company serves, but that the virtual and augmented reality industries are next in line.

There’s a lot of opportunity in that space, as there are so many companies working on virtual and augmented reality products, Wilson said, whether it’s for entertainment purposes or industrial applications. So far, the company has worked on a variety of prototypes in this space, such as Google Glass and Microsoft HoloLens, Fiore said.

Wilson said it likes to get in the “ground level” with these companies, so it can make the best use of employees’ decades of expertise. Fiore said the next step for the company will likely be in autonomous cars.

But while North American Coating Laboratories is working on the most cutting edge of technology, the company really values the basics.

North American Coating Laboratories prides itself on its responsiveness and the speed with which it gets back to customers, Wilson said. The company often responds to requests for quotes within an hour, he said, and employees will respond during off-hours. That makes it a good fit for these high-tech industries.

“They have to be the first one with their product out the door in order to capture the market,” he said. “So that’s why they’re willing to pay big money to get things in here and turned around in a day or two, and back to them, and then going to the next version.”

And virtual and augmented reality is a good industry for North American Coating Laboratories to serve, because these customers have venture capital to spend, Wilson said.

The company runs three shifts, which means it can finish projects quickly.

Employees are cross-trained and expected to pitch in where needed. Overall, the company prides itself on service and turnaround time, Wilson said.

Ned Nestorovic, president of Seattle Photonics Associates in Washington, uses North American Coating Laboratories for the majority of the plastics coating work his optical engineering, design and prototype company needs.

Nestorovic said Seattle Photonics makes prototypes for a wide variety of optical products, from camera lenses to laser-based systems to microscopes, and he appreciates how quick North American Coating is to respond, because products can never get made quick enough in tech. He also likes that the company is flexible and works with him if the plans for a coating aren’t going to work. That “interactivity” is critical, he said.

Scott Payette, vice president of optical components at Wilcox Industries Corp. in New Hampshire, said he likes the company’s quality, and on the occasion that there is a problem, North American Coating Laboratories is very upfront about getting it resolved.

He’s been at Wilcox for less than two years, but has worked with North American Coating at a previous job. In his more than 20 years in the industry, he said he hasn’t come across anyone better for coatings.

Relationships are another traditional value that’s been key to North American Coating Laboratories’ growth. People tend to move around in the optics industry, Wilson said, and they often take North American Coating with them.

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CRAIN’S CLEVELAND BUSINESS

Chad Kertesz stands outside his 11-suite apartment project on Columbus Road in Tremont. (Tim Harrison for Crain’s)

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As Chad Kertesz sat on a picnic table outside Rising Star Coffee in Ohio City’s Hingetown area chatting with other patrons, you would not suspect the 30-year-old red-haired man is putting together investments approaching $30 million in the neighboring area.

Or that some of his projects are nearby. A few hundred feet southwest from the perch at the onetime Ohio City Firehouse at 1455 W. 29th St., Kertesz, through his My Place Homes, plans to start building this month nine townhouses costing upward of $475,000 on part of Vine Court west of West 29th Street.

Meantime, about 60 feet west of the firehouse is the parking lot behind the former home of screw machine products maker Testo Manufacturing Inc., at 2925 Detroit Ave., which he bought last month.

Dating from 1900, the building has 7,000 square feet of space. He is in negotiations with three restaurants and a boutique for portions of the building.

Kertesz took an indirect route to joining the cadre of developers that are capitalizing on the revitalization of Ohio City and Tremont.

He said he fell in love with the look and feel and atmosphere of the neighborhoods and began looking for opportunities there due to a change in his primary business.

In 2008, Kertesz left the family real estate business, Woodmere Village-based Kertes Homes, a custom home building firm that also owns a substantial apartment portfolio.

Kertesz had worked in the family business for five years to gain a short course in real estate, from building to leasing, rather than finishing college. “I learn by doing,� Kertesz said, and he preferred that to a more conventional course.

As the housing crisis began producing single-family homes for sale at ridiculously low prices, he began building a portfolio of them as rentals. He went on his own in 2008 because the single-family rental focus did not fit the family business started by his grandfather, even though he felt it represented a great opportunity.

However, the resurgence in home-buying the past three years has

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The townhouses that Chad Kertesz plans to start building soon on Vine Court in Ohio City will cost upward of $475,000. (Contributed rendering)

“This gives me a mission to get out of bed in the morning.

I’ve seen how improving just a few houses can make an impact on a street in a neighborhood.� — Chad Kertesz

made it harder to find homes at prices he wants to update and rent out. He won’t say the size of his portfolio, but it includes houses in Beachwood, Cleveland Heights and three other eastern suburbs, as well as Ohio City.

As a result of the new-found home-buying competition, he said he began looking at commercial and apartment opportunities. He had also, in this process, found he loved working with old properties and in 2013 sensed the growing pulse of interest in Ohio City and Tremont.

The largest project is opening this month, a joint venture with developer Fred Geis and his son Ethan Geis, the 70-suite Clinton West Apartments at 3007 W. Clinton Ave. Kertesz is a 50% partner with the Fred Geis family in the apartments.

Kertesz said he had bought the industrial building on the site known by the name Five Star Meats, and was introduced through a contact of his father, Ronnie Kertesz, to Fred Geis. The modernistic Vine Townhomes will go in on the south side of the West Clin-

ton apartments, a project My Place Homes is undertaking on its own.

Meanwhile, contractors are also finishing up an industrial building conversion to apartments at 2097 Columbus Road in Tremont with a working title of Columbus Lofts. “I noticed the building when I was at the Velvet Tango Room and thought it would be cool as apartments,� Kertesz said. The building will house 11 suites. In the future, he plans to build a half-dozen for-sale townhouses on the lot next door at Columbus and Freeman Avenue.

Kertesz has another five projects in the works, among them projects ranging from updating and repositioning three existing small apartment buildings such as Franklin Manor, 5215 Franklin Ave., to 3800 Woodbine Ave., where he plans to install apartments in boarded-up first-floor retail space as he updates existing upstairs rentals in a 10-suite project. “This gives me a mission to get out of bed in the morning,� Kertesz said. “I’ve seen how improving just a few houses can make an impact on a street in a neighborhood.�

Kertesz said his wife, Svetlana, helps him with his projects. He said he also has partners and investors in individual projects but declined to name them.

The one-time Testo Manufacturing building that Kertesz recently acquired is on the stretch of Detroit near Hingetown that is being repopulated by residents of two new apartment buildings, and more rentals are on the way.

SEE KERTESZ, PAGE 25

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CRAIN’S CLEVELAND BUSINESS

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dependent, but that was on track to drop to 33% by last year, according to a 2015 independent physicians survey — the most recent available — from Accenture, a company that offers services in strategy, consulting, digital, technology and operations.

A challenging market for doctors to practice independently is a big factor in that drop, Paras said. The new Premier will offer choice to those doctors as well as to patients who may be intimidated by or otherwise uninterested in larger institutions, he said.

The model allows doctors to practice “without the burden of bureaucracy,� said Ray Marvar, general counsel at Premier.

Lin and Paras both stress that the independent model brings quality, lowers cost and allows for a more personal patient-doctor relationship.

The merger will help to broaden the geographical footprint for Premier, which has largely operated on Cleveland’s West Side. Today, the combined entities provide services — a large primary care base and a range of medical specialties — from Sandusky to Painesville.

Paras said Premier will continue its close relationships with systems in the region.

Entrepreneurship is in this country’s DNA, and in health care, it is especially vital, Lin said. “When the pendulum has swung so far, we just feel like time is ripe to almost do the opposite, meaning to invest in our independence.�

NEO goods-producing sector takes biggest jobs hit in June

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Exceptional Quality

As the regulatory environment, technology requirements and overhead costs force independent docs to consider selling or joining larger systems, two independent physician groups in Northeast Ohio are looking to push back against that trend.

Premier Physicians Centers and Jubilee Healthcare, which does business as NorthShore Healthcare, are joining together in a merger they say aims to improve clinical quality, patient care and access to providers. “More and more independent practices just can’t hold on anymore, and they end up selling,� said John Lin, president of NorthShore and the new CEO of Premier. “So that’s the general trend in most cities in America. I think we didn’t really get that memo, because we’re investing and going the other way.�

Premier and NorthShore will spend the next several months working through the transition to functioning under one entity, holding the Premier name. They are not disclosing financial terms of the move. Lin notes that the partnership is about growth and said he does not expect staffing cuts.

Having an independent physician network is valuable both to the market in general, as well as to the patients, who long for a close bond with

their health care provider, just as doctors do, Lin said. The highly personalized care that the organizations aim for “is harder when you are small and don’t have scale,� he said.

Lacking the IT and management infrastructure it needed, Premier had been looking for a partner for the past couple of years, said Dr. Tony Paras, president of Premier. The 23-year-old company has grown from a handful of doctors to about 100 providers, 70 of whom are physicians. NorthShore, which began last year, is the single biggest addition in Premier’s history, and will bring its total to 111 health care providers and 492 employees.

NorthShore was the perfect complement with Lin’s business acumen, IT expertise and management and financial resources, Paras said. Combining the two creates a space for physicians who want to practice independently, but are intimidated by or unable to fund the administrative and overhead costs of running a business. “There’s a lot of pent-up demand of physicians who have dreams of something different and something unique and something entrepreneurial, but (they’re) not sure because of all the risks involved,� Lin said. Bringing on NorthShore puts Premier in a good position to provide that option, to offer physicians the resources, infrastructure and support needed to let them focus on the medicine and care, he said.

In 2000, 57% of physicians were in-

The regional employment roller coaster continued in June with Northeast Ohio losing 5,518 jobs from the May total, as total private sector employment dropped to a projected 1,167,386 — a 0.47% loss.

Looking year-to-year, past the monthly fluctuations, the job loss in the seven-county metropolitan area since June 2016 is 0.02%, or 290 jobs, according to the Ahola Crain’s Employment, or ACE, Report.

The June job loss was heaviest in the goods-producing section, which includes manufacturing and construction — 3,380 jobs lost between May and June versus 2,138 jobs lost in the larger service sector, which accounts for 82% of the private sector jobs tracked in the ACE survey.

Year over year, the goods sector lost 4,912 jobs versus a gain of 4,621 jobs in services.

Jack Kleinhenz, the Cleveland Heights economist who created the ACE Report model, said the losses are not a serious concern. “Too much should not be made out of June’s decline,� he said. “It does not point to any major concerns for regional growth. The national and regional economies continue to wander forward at a moderate pace.�

Kleinhenz attributed part of the decline to the auto industry, a large employer in the region, and the summer shutdowns of auto plants.

The July 12 Beige Book, the Federal Reserve Bank’s report on the economy,

AHOLA. CRAIN’S. EMPLOYMENT

Crain’s Cleveland Business has partnered with The Ahola Corp., a payroll and human capital management firm in Brecksville, and local economist Jack Kleinhenz to provide monthly data — and clarity — about a key factor in business decisionmaking: the size of Northeast Ohio’s workforce.

Seasonally adjusted employment numbers, Northeast Ohio JANUARY: 1,175,104 FEBRUARY: 1,177,120 MARCH: 1,175,534 APRIL: 1,176,482 MAY: 1,172,905 JUNE: 1,167,386 1,155,000

1,160,000

1,165,000

noted that payrolls in the Fourth District, which includes all of Ohio, western Pennsylvania, eastern Kentucky, and the northern panhandle of West Virginia, continued to expand since the last Beige Book report released May 31, although at a slightly slower pace.

Longer term and nationally, Kleinhenz noted that the Institute for Supply Management (ISM) reported the manufacturing sector nationally grew in June and the overall economy grew for the 97th consecutive month. The ISM manufacturing employment index showed a 3.7% increase over May. “The labor market remains very healthy and continues to show the confidence in workers willing to leave one job for another,� Kleinhenz said.

Closer to home, the recent Ohio

1,170,000

1,175,000

Department of Jobs and Family Services, in its “2024 Job Outlook,� is projecting that employment in the region will grow by 74,700 jobs to 1,475,300 by 2024. That’s a 5.3% increase over the 1,400,600 employed in the 2014 base year. The projected growth will come despite a loss of 7,200 manufacturing jobs.

The growth sectors include health care (27,400 jobs), food preparation and serving (7,100) and transportation and material handling (5,000).

Many of the jobs that are expected to grow the fastest were in low-paying occupations such as home health aide and restaurant cooks. The report also projected significant demand for registered nurses and computer systems analysts.

CRAIN’S CLEVELAND BUSINESS

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PA G E 7

Institute of Music isn’t falling flat after tough time

By RACHEL ABBEY McCAFFERTY rmccafferty@crain.com @ramccafferty

While the Cleveland Institute of Music’s collaborative, family-like culture remains, there are efforts underway to infuse a new business sense into the way the institute in University Circle is run and the way its students are taught.

There are a few factors at play here.

One is the influence of a new president with a less-than-traditional background — he hails from the Detroit Symphony Orchestra’s business operations rather than academia.

“The building block of a school of music like ours are the people who teach the private lessons.”

— Paul Hogle, CIM president

The other is a recently completed effort to assuage the concerns of one of the institute’s accrediting bodies, which institute officials say has made the institution stronger.

In June 2015, the Higher Learning Commission had placed the Cleveland Institute of Music “on notice” — meaning it was falling short on some criteria.

President Paul Hogle said the work to resolve the commission’s concerns had already been done by the faculty, staff and trustees by the time he arrived about one year ago. All he had to do was highlight that work to the commission. The notice was lifted effective June 29, and the institute had remained accredited throughout the process.

The hiring of Hogle was the first in a series of administrative changes at the school. The institute recently brought on an associate dean of admissions & enrollment management, an expanded role from the past. The institute created a new program focused on business skills and named a leader for that, as well as adding the role of chief academic officer for the first time.

The process of adding a chief academic officer was in motion before Hogle arrived but was one he fully supported. The Higher Learning Commission’s report had indicated the way the institute approached educational processes wasn’t as “sophisticated” as at larger schools, Hogle said.

“I think we have to admit that was

true,” he said. “The level of training here and our educational partnership with Case: spectacular. But making sure that the enterprise of higher education was being run in a contemporary higher education way, the proper learning outcomes, the proper curriculum, the proper faculty involvement, ownership of that — that had not been something, as the commission pointed out, that we did as well at.”

The right notes Having someone like Judy Iwata Bundra with a strong academic background — she comes from the DePaul University School of Music in Chicago — as chief academic officer and dean of its conservatory was important, as Hogle is a less than traditional leader for the Cleveland Institute of Music. He’s not primarily an academic, though he has served as a faculty member in the past, or a performing musician. His most recent role was at the Detroit Symphony Orchestra as executive vice president. He has also held leadership roles, mainly in fundraising, at orchestras in Atlanta, Baltimore, Chicago and Indianapolis.

The hiring of Hogle is indicative in the institute’s shift toward more of a business focus, Robert Mueller said Shawn Riley, president at McDonald Hopkins and an institute board member who was part of the presidential search committee that hired Hogle. Hogle took over for Gary Hanson, the former Cleveland Orchestra executive director who had been serving on an interim basis at the institute since the retirement of Joel Smirnoff at the end of 2015.

“We picked up something we didn’t have in the past,” Riley said.

Riley said the hope was that Hogle would push the institute to be run in new ways. Already he’s been revamping the development office, looking to strategically shrink enrollment and growing the board. His ideas have been “extremely refreshing,” Riley said.

Gary Poth, executive managing director for Key Family Wealth and an institute board member, described Hogle as a great fundraiser and a strategic thinker. The institute’s mission remained consistent, but the approach to deliver it has become more focused and business-like, actively measuring how the institute measures up against its competition, Poth said.

And knowing that is important, as there are only seven independent conservatories in the country among which Hogle counts the institute.

One big differentiator is what Hogle calls the “Cleveland difference.”

Hogle said he knows his classical music competitors also have great faculty and great buildings and most are on or near the coasts. But, on top of a low cost of living, Cleveland

Michael Sachs, principal trumpet of the Cleveland Orchestra (center), coaches a CIM student. (Roger Mastroianni)

boasts a high level of quality in a variety of areas, from the Cleveland Orchestra to the city’s museums to its hospitals. It has Case Western Reserve University, where the institute’s students take general education classes and with which the institute partners on a joint music program.

He wants to ensure the city and the institute are benefiting one another, an area that he doesn’t think has always been at the forefront of the con-

servatory. But the school’s strength is in the first word of its name.

“Our best advantage is all things that are Cleveland,” said Hogle, a Northeast Ohio native. “And I have waited my entire career to return home to be able to sell that.”

The great differentiator Other differentiators for the institute could be cost and more practi-

cal, business-focused education. The Cleveland Institute of Music held tuition flat for the 2017-2018 academic year — the cost for just tuition is $47,200 for the year — and Hogle said that will become more of a pattern going forward. He also said he expects the institute to become smaller in the coming years, as a focus is placed on making sure graduates are prepared for jobs.

SEE CIM, PAGE 8

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CRAIN’S CLEVELAND BUSINESS

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CIM

CONTINUED FROM PAGE 7

Dale Hedding, managing director of external affairs and patron engagement, said the goal will be improved student experience. The facilities were designed for a much smaller population, Hedding said, and that means there’s currently competition for practice and performance opportunities.

Current conservatory enrollment is just above 400. That figure doesn’t include people enrolled in preparatory or continuing education lessons.

A new program at the college, the Center for Innovative Musicianship, also known as CIM², will help to fill

that need for students. The goal of the program is to help students learn the business skills they need to be successful musicians in a freelance or gig economy, Joyce Griggs told Crain’s when it was announced in April. Griggs, who had served as the institute’s interim chief academic officer and dean of the conservatory, now serves as the center’s vice president and director.

The idea is that, while students have always had the skills to leave and start their own chamber ensembles — and many have, Hogle said — they may not have known how to read a balance sheet or how to work with a board. The skills that could be shared may range from nonprofit

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management to labor law principles to marketing to fundraising. CIM² will couple these kinds of lessons with the more traditional studio work done by the students. “CIM has always produced students who were prepared for the workforce,â€? Hogle said. “We always allowed that training to happen on an individual basis with individual studio teachers. The building block of a school of music like ours are the people who teach the private lessons. ... What this program does is it allows that to happen and formalizes it so that at the end of four years, every student gets a toolbox that we collectively think they’re going to need to be successful.â€?

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PA G E 9

At the Table

For better dining-out treatment: Don’t be ‘that guy’ So let’s imagine you’re a server in a restaurant.

Work with me here. Such a scenario might be unimaginable to you, but tens of thousands of Americans — make that 14.7 million, according to the National Restaurant Association — work in restaurants. They supplement or entirely earn their living waiting on or clearing tables, running food or drinks, and generally aiming to make your dining experience as seamless and enjoyable as you’d like it to be.

And you’d think successfully interacting with servers would be second nature by now. After all, the National Restaurant Association claims that roughly half of all U.S. food dollars are spent in restaurants — nearly twice the amount dropped while dining out in 1955.

At some point in our careers, nearly half of Americans have worked in a hospitality industry-related job. The U.S. Bureau of Labor Statistics shows that 1 out of 12 private sector jobs in America is related to the hospitality industry.

And many of those restaurant workers — specifically, the ones eligible for tips — may be paid little more than a couple of bucks per hour, according to an Aspen Institute report. The work is often part-time, sporadic and without paid benefits.

More than two-thirds of the workers are women, and roughly half of them support children under the age of 18.

No, treating workers well and tipping generously may not be a personal, legal responsibility. Understanding a few hard facts, however, may clarify some of the not-so-subtle factors that enter into the dynamics behind the service you sometimes experience while dining out.

Believe it or not, there’s a lot you can do to make things go more smoothly.

If you want to save time, quit reading after you internalize these five words of surprisingly effective advice: Just don’t be a jerk.

If you’re essentially a self-absorbed kind of character — the type with that sort of weird hierarchical sense that lets you believe that anyone who lacks a prestigious education, great job title and a plushedout ride consigns them to the punchline level of society — then you may not recognize your poor manners. You know, the jerk behavior that pits you against the same workers who are just trying to make your evening enjoyable.

So … back to pretending you’re a server. What are the things you’d hope a customer would do to help the dining experience go swimmingly?

I’ve worked in or have been privy to the guest-waiter transaction for literally half a century. Granted, I’m touching only the tip of the iceberg here, but allow me to offer a few more words of advice.

JJDo a little advance scouting.

Sure, eating out ought to be fun and spontaneous. Yet with all the available resources out there — professional reviews, Yelp, online menus and restaurant websites — it’s easy to learn a little about where you’re going.

Here’s where a bit of initial groundwork can come in handy. If you’re going to want a certain kind of table, hate drafty areas, require certain accommodations, call ahead of time.

Showing up to a jammed restaurant at 8 p.m. on a Saturday and demanding customized treatment rarely wins

Joe Crea

“Give the server and the kitchen time to get it right.

And remember, they’re juggling multiple orders.

Cooking is an art, and artistry takes a bit of time.”

your case. An advance call is also the right time to ask for special dietary accommodations. Not every restaurant stocks gluten-free pasta or offers vegan fare. Inquire ahead of time. And it doesn’t hurt to check back when you arrive that evening to confirm those needs and desires. (By the way: I always urge customers to get the name of the person with whom they’ve spoken. It sends the signal that you’re serious about your requests. At the very least, you’ll have someone to blame if your requests haven’t been met.)

JJWhen

you make your reservations, gently inquire roughly how long you can comfortably occupy your table. Some places allow one or two hours. At other places, the table is basically yours for the evening. It helps knowing whether other guests have dibs on your table for a later seating. the moment you walk in, be polite. You’d be surprised how quickly your demeanor signals to the restaurant staff what kind of customer they’re dealing with. And how fast that word spreads. Besides, politeness isn’t that hard. You don’t have to fall in love with the waitstaff; just imagine yourself in their shoes.

and kitchen. But you’ve got more of a fighting chance if you’re upfront about what you really want.

J Keep in mind that most of your meal will probably be cooked to order. Give the server and the kitchen time to get it right.

And remember, they’re juggling multiple orders. Cooking is an art, and artistry takes a bit of time.

J Meanwhile, pipe down. Use your indoor voice. It’s not that the server’s delicate eardrums may be offended, but the person’s at the next table might. And your server has to help make them happy, too. And, yeah, conversations can grow rowdy and ripe with F-bombs. It’s an evening out, right? All in good fun. But hilarious as we can be (or at least

think we are), loud and off-color rarely passes for wit. Unless you’re the headliner for a paying crowd.

J Early on, express how you want the bill to be divided. Now, this may seem like a no-brainer. And if you have an easy-going group who’ll toss in their credit cards and say “just divide this six ways,” that almost always goes smoothly. But if you know one member of your party is going to suck down four cocktails or quarrel over who got the extra parsley, do everyone a favor and request separate checks.

J Let the server do their job — right down to letting them clear the table his or her way. You may want the table cleared more quickly, but stacking dishes is both gauche and unhelpful.

J Let the server know your timing needs — and be sensitive to theirs. There’s a fine line between feeling rushed and wondering why the server has chosen to disappear when you’re trying to catch a 9 p.m. showtime. Politely make it clear that you’ll need to be hurrying along or have all the time

in the world. But then recognize that workers need to get home, too.

There’s lingering, and then there’s selfishly barricading yourself at a table when you’re well past closing.

J Last but far from least: Tip. You’re certainly within your rights to express your concerns or disappointments to management. Stiffing the server (unless he or she is directly and verifiably at fault) is not the right way to do so. More about the endless finesses to tipping, and effective ways to lodge a complaint, some other time. For the moment, a not-so-gentle reminder that in this world — at least in the U.S. — fronthouse restaurant workers expect and, yes, live off tips. A minimum 15% gratuity is standard. To stiff someone who has busted butt all evening with a fiver — now THAT’S the picture-book definition of “jerk.”

Freelancer Joe Crea has been covering the Cleveland dining scene for nearly 20 years. Share your dining experiences, concerns, recommendations and tips by emailing him at clbfreelancer@crain. com. (Put “At the Table Dining Tips” in the subject line.) He’ll address reader topics in future columns.

UPCOMING CUSTOM SUPPLEMENT

JJFrom

JJHave

realistic expectations.

Consider this a temp gig, a shortterm relationship. Almost anyone can be patient and understanding for an hour or two, no?

All that said, here’s where things can get dicey. A thousand and one factors can come into play, from inexperienced servers to problems in the kitchen. It’s impossible to know just what the hold-up may be, and ultimately the reason should not be your problem.

Except it often IS your problem. And it’s been my experience that while throwing a red-faced tantrum may feel satisfying, it rarely gets you far.

Crain Content Studio-Cleveland, in partnership with the Ahola Corporation, takes a look at some of the top issues, challenges and opportunities facing Northeast Ohio’s family businesses.

Issue date: 9/18 • Ad close: 8/11

JJBe clear. Use your words. And LISTEN. Sure, you know what “medium rare” means in your book. But when a server explains that in THIS place, medium-rare means X, Y or Z … well, hear the explanation and take it to heart.

JJBe realistic. Let’s say you can’t tolerate salty foods. Fair enough.

When you express that request, bear in mind that rare is the restaurant that prepares every last element the moment an order hits the kitchen.

Sauces are often made in advance and seasoned to the chef’s specifications. If you’re asking for a salt-free preparation for a house specialty, it may be a challenge or require a wait.

JJBe as clear and complete with your order as possible.

Preferences, seasonings, health issues: be specific. And be patient as you express them. Rarely does a server double as a stenographer. Often, they’re just the messenger, an intermediary between dining room

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CRAIN’S CLEVELAND BUSINESS

Opinion From the Editor

Landerhaven misses Connor

Editorial

A way forward It’s no secret the United Way of Greater Cleveland needed a good kick in the backside. The 100-plus-year-old organization was hardly a philanthropic dead weight, but over the years, it failed to evolve as the corporate community on which it counted for the bulk of its fundraising dollars continued to shift.

There had been hints the organization was willing to shift gears beyond its traditional workplace call-to-arms where, typically, a heavy-handed CEO would urge his or her employees to pony up for the annual campaign. The United Way’s previous strategic plan developed under its since-departed CEO Bill Kitson had some of the right ideas — namely, making people feel more connected to the organization beyond the annual workplace pitch — though it lacked the teeth needed to realize any meaningful change.

Enter August Napoli Jr., the veteran Northeast Ohio fundraiser known for the Cleveland Museum of Art’s remarkable fundraising push, who took over United Way a little more than a year ago. And just recently, Napoli and his board unveiled a strategic plan that has the potential to turn the venerable organization into a modern fundraising juggernaut.

On its face, it has all the elements of a successful business plan: built-in metrics, regular reporting, a clear strategic vision and a pot of cash set aside to make it a reality. And if at least half of the plan’s goals come to fruition, the organization and ultimately Cleveland will be better off for it.

For one, no longer is the organization depending solely on the workplace campaign, though it remains a critical piece of the group’s work. In particular, the organization has focused — and the makeup of its advancement teams reflects as much — in on 600 individuals in the community as prospects for principal gifts.

Ignoring principal giving, as the organization had in the past, relegated the United Way’s work to “account management” rather than true fundraising, Napoli told a recent gathering of Crain’s editors and reporters. Groundbreaking? Not really. Necessary? Absolutely.

“That’s not instead of their annual gift — it’s in addition to their annual gift,” Napoli said. “Everyone understands the operating needs of the organization. That’s what the annual campaign’s about. But where we’ve been silent is the variety of needs that we have that require a different kind of funding source. That requires cultivation of people that have high net worth and have the desire to invest ... to try to effect change.”

And while it’s not necessarily a headline-grabbing development, the United Way is at last devoting significant resources to shoring up its donor databases, which had fallen into disarray and should allow the organization to pinpoint potential donors beyond their workplaces.

Also, United Way plans to put out requests for qualifications, calling for all agencies — not just those who have been funded — to demonstrate why they’re qualified to work together with other organizations to address a community need. That model should serve as an important check that the United Way is funding the most critical work in our community.

It’s easy to cast doubt on this effort as just another strategic plan for an organization many recognize but still have a vague understanding of its actual work. But given that Napoli grew up outside of the broader United Way system and the organization’s newfound willingness to devise its own Cleveland-centric program, we’re optimistic this could be the dawning of a new era for one of Cleveland’s most important nonprofits. Napoli described the local United Way as the “greatest organization with unmet potential out there.”

The United Way is hardly just a pass-through organization that waters down contributions to deserving agencies throughout the city, though in the past it might have deservedly earned that characterization.

With Napoli at the helm, donors — both those cutting a $10 check during a workplace campaign or the big guns considering a $1 million gift — should be confident this venerable organization is headed in the right direction.

Publisher and Editor: Elizabeth McIntyre (emcintyre@crain.com)

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The old saying goes that a dog is a man’s best friend. Harlan Diamond certainly agrees, but he’ll also tell you that dogs are a business person’s best ambassador.

He should know. The lifelong dog lover recently had to say goodbye to Connor, his loyal companion at Executive Caterers at Landerhaven in Mayfield Heights, the conference center and catering service Diamond founded and has run for more than half a century.

Connor, an 8-year-old Irish Wolfhound, died this past May after battling cancer since last fall. If you’ve been to Landerhaven, there’s a good chance you knew him.

No one knew him like Diamond.

Connor’s absence has left an enormous hole not only in Diamond’s home, but at the business, where Connor was easily the Elizabeth most popular employee.

McIntyre “My life has changed without him,” the lifelong dog owner said.

Connor weighed over 200 pounds and was 44 inches tall, by far the biggest of the four Irish Wolfhounds Diamond has owned over the years.

“My other three wolfhounds could all fit in my Corvette,” he said.

“But not Connor. I had to drive him around in an old limousine.”

He was great at customer relations.

“He was sweet and gentle. He loved people,” Diamond said.

But it was his size that made him stand out. Connor was a sweet and gentle giant.

“If people were having a cocktail hour at Landerhaven, they’d say, ‘Where is the dog?’ All I’d have to do is clap,” Diamond said with a laugh. “It was like Moses parting the Red Sea. The crowd would part and Connor would come to me from the office.”

Diamond isn’t the only business owner who welcomes pets in the workplace. A survey by the Society of Human Resource Management shows that 7% of employers now allow pets to come to work with their owners, an increase from 5% five years ago. Businesses such as Google, Amazon and Etsy have joined the trend of pet-friendly workplaces.

The benefits of having pets at work are well-documented and include lowering stress levels, boosting productivity and improving morale. There are some real down sides, though, that can’t be ignored: accidents, liability, allergies and distractions.

Plus — and this one is hard for animal lovers to comprehend — some people just don’t like pets.

But even folks who were afraid of dogs liked Connor, Diamond said. And though he never once flashed aggression, he knew what kids tasted like, he said: “Once he discovered kids taste good, he’d give them a good licking.”

I asked Diamond if he, as a business owner, was ever concerned that Connor’s presence might be off-putting for some of his guests.

“Once in a while, we’d get a bride or someone deathly afraid of animals, and we’d just keep him in the office,” he said. “It was never an issue. By the fifth or sixth year I had him, people would come looking for him. They expected him to be around.”

And now, he won’t be.

That’s going to take some getting used to for regular customers, and especially for Diamond, who said Connor would likely be his last companion. He needs some time to grieve Connor, and because of his age and living arrangements, another dog isn’t likely.

But he’ll remember those times with Connor. The happy times, like when Connor was “married” to his cousin’s dog in New York. “Boy, did he stray!” Diamond said.

He’ll remember the tough times, when the cancer took its toll and it was time to say goodbye. “No pet deserves to suffer,” he said.

And he will remember the benefits of having a best friend in the office every day.

“People who don’t have pets,” Diamond said, “don’t understand what they’re missing.”

Write us: Crain’s welcomes responses from readers. Letters should be as brief as possible and may be edited. Send letters to Crain’s Cleveland Business, 700 West St. Clair Ave., Suite 310, Cleveland, OH 44113, or by emailing letters@crain.com. Please include your complete name and city from which you are writing, and a telephone number for fact-checking purposes.

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Web Talk Re: Tales of two cities The (Politico) article itself was pretty clear that of that $693 million, “About $500 million, or more than 70 percent, represented either Medicaid underpayments — the gap between the (Cleveland) Clinic’s official rate, which is usually higher than the rate insurers pay, and what Medicaid pays — or Clinic staffers’ own medical education.”

They can proclaim all the generosity they want, but the fact is that CCF cleared $2.7 billion in profits in the past four years, paid no taxes, and their proudest achievement is a $500K community health center. CCF makes a profit of $500K in one afternoon.

What is needed is an attitude adjustment: Instead of being a world-class health care and real estate acquisition corporation that happens to be in Cleveland, they need to see themselves as being part of the community, making long-term, meaningful investments in security, education and workforce development in and with the community, not just within the campus(es) they create, not just throwing a few dollars and a few volunteers over to the other side from time to time.

One quote from the (Politico) article says it all: “You can come from the Mideast and get a heart, but you can’t run down there for an emergency ... there’s something fundamentally wrong with that.”

Even if it is not directly their fault, that CCF’s own backyard has one of the worst health outcomes in the nation, terrible security and an awful quality of life is an embarrassment that CCF seems to be willing to live with for the past 30 or so years, but those who support and are proud of the Clinic and Cleveland should not be. — ClevelandDave

Why is the Clinic responsible? Because they are a ... wait for it ... (without laughing) ... a nonprofit organization. I have a great idea. Let’s take a multi-billion-dollar business and give them 365 acres right next door to you. And have them pay no taxes. Ensuring there will be no taxes paid on dozens of city blocks. And then let’s have everyone who works there leave your neighborhood. On a $331 million taxpayer-funded freeway. And let’s watch your existing community thrive. There is an “R” word that applies for what is happening here to the people in the neighborhood. And the word isn’t “responsible.”

— Win Stanley

Alumni from the first NEOhio StartupBus here: It’s 100% not about the competition. That’s really an afterthought compared to how it is couched in the explanation above.

For me, StartupBus was an incredibly condensed version of starting a company (on wheels). I met a team of people who I am still connected with today. We decided on an idea, executed a working MVP, built a deck and messaging, got feedback or even customers, and launched. All within days. All done while battling bad internet, eating questionable road food, packing into mediocre hotel rooms, and getting way too little sleep. (You know, the normal startup experience.)

The culminating product, pitches and competition really don’t equate to much compared to the relationships and learnings that I built over that week. — Ed Buchholz

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Focus LEGAL AFFAIRS

Risks and rewards of going solo In the recession’s wake, attorneys increasingly find success on their own

By JEREMY NOBILE jnobile@crain.com @JeremyNobile

S

herri Dahl spent 13 years building her career in big law firms before hanging her shingle.

She’s now two years into her business with Dahl Law LLC, where she works out of her home in the Cleveland suburb of Bratenahl.

Dahl may enjoy the comforts of working at a home office and being her own boss, but the work is arguably more difficult — or, at least, generally more intensive — for someone who once focused solely on cases in the large-firm realm.

With no support staff, she devotes much of her time to managing her business, marketing and paying bills and taxes in addition to the typical efforts of building a client network and, of course, practicing law. Dahl charges

Time spent practicing law When it comes to practicing law, large firms have an advantage over small firms (11-29 attorneys) and solo practitioners, according to a recent survey by the Thompson Reuters Solo and Small Law Firm group. Figures are from 2016.

Large firms: 69% Small firms: 61% Solo practices: 55% 10%

20%

30%

40%

50%

60%

70%

a fair deal less than she did working at any of her former firms, like Squire Patton Boggs, where she spent nearly a decade and was never offered the sort of partner track she desired and says she strove to earn (one of a couple reasons she didn’t stay with the firm).

Yet, Dahl is loaded with work right now as a solo practitioner. She’s even diversifying in the kind of cases she takes on — a personal goal of hers and one amounting to a degree of flexibility she didn’t get working in a largefirm environment.

And she’s never been happier.

“I wanted the freedom to do what I want,” Dahl said, whose career has centered primarily on corporate bankruptcy. “I want to do marijuana law, and I’d like to do municipal insolvency. When I see a new area of business law I think could be big, I’d like to get in on the ground floor. But when you’re at a big law firm, that’s virtually impossible.”

SEE SOLO, PAGE 22

Illustration by erhui1979 via iStock

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CRAIN’S CLEVELAND BUSINESS

LEGAL AFFAIRS

Ohio employers confront marijuana use

By JEREMY NOBILE jnobile@crain.com @JeremyNobile

Ohio may be growing more open to marijuana use, but its businesses aren’t.

But they don’t really have much of a choice.

Tones could change if overarching state and federal laws related to use of medical cannabis do. But until then, laws are making it quite difficult for any employer to proactively write rules permitting staff to use it as a doctor might recommend once Ohio’s medical marijuana program goes into effect in September 2018.

On one hand, federal laws still classify marijuana in the same category as heroin and LSD, and there are no federal laws requiring businesses to accommodate marijuana use. On the other, states across the country are increasingly passing laws permitting some kind of medical or recreational use. The laws simply don’t jibe.

And those conflicting laws leave businesses in a conundrum when it comes to allowing use by employees as they’re caught between old rules, like zero-tolerance policies, and changing laws and perspectives on medical marijuana.

As Ohio ramps up to its medical marijuana program, companies here are looking to legal counsel for guidance on tightening rules to make it clear that staff could still be drug tested and fired for having marijuana in their systems — regardless of state laws that might allow patients to use.

“What employers are doing right now, if they’re being advised properly, is creating some type of workplace policy specific to medical marijuana

usage,” said Thomas Haren an attorney with Seeley, Savidge, Ebert & Gourash focused on Ohio’s budding medical marijuana industry. “Broadly speaking, medical marijuana doesn’t change Ohio employment law all that much. We are still an at-will employment state. You can still refuse to hire, suspend, terminate or take adverse employee action if they use medical marijuana in violation of policy.”

If there’s no clearly written policy and someone is tested and fired for marijuana use, they’re potentially liable for unemployment claims, regardless of any doctor recommendation saying the drug would benefit the person (doctors, in fact, only recommend medical marijuana to patients, but don’t prescribe it, because of federal laws. This is why a patient doesn’t get their marijuana from a pharmacy.).

“But what about employers who don’t want to necessarily say no? I have seen that,” said Stephanie Trudeau, a labor and employment litigator with Ulmer & Berne LLP. “They are torn over their desire to find a way to make the legalization of it blend together in a safe workplace in harmony. I’ve talked to some who are struggling over the idea of making employees choose between keeping their job or keeping a treatment the employee says is medicine that improves their quality of life.”

A budding reality As would be expected, states that have legalized marijuana in some form are, indeed, seeing sharp increases in failed drug screens. That means marijuana in the workplace will be a growing reality.

According to research company Quest Diagnostics’ annual drug test-

those in manufacturing, service, retail, hospitality, health care, life sciences and technology.

“However, the majority of our clients are very opposed to the idea that employees might come to work under the influence of any substance,” Zashin said. “This gets complicated with respect to marijuana, which can show up in the user’s system long after the effects wear off. Employers are all over the board on this and not one approach fits “We have some clients that are all.”

He added leaning toward a marijuana that businesses in “safety sensi‘friendly’ approach — they are not tive” industries, concerned about employees using like manufacmedical marijuana outside of work.” turers, are naturally the most likely to take the — Stephen Zashin, Zashin & Rich most hard line marked both states’ steepest year- on use — and there’s quite a density of over-year change since they passed those in Northeast Ohio. their recreational laws. The national growth rate in that period is 4%.

Fighting the stigma Yet, there are a handful of companies who want to be proactive in And regardless of laws, there’s still a terms of their own policies on mari- stigma with marijuana use among juana, but their hands are tied. some people. While companies talk A driving issue is that technology behind closed doors about being proin testing isn’t at a point yet that can active and accommodating, despite distinguish whether a person is actu- overall attitudes toward cannabis ally high at work versus having taking changing, all are still leery of how that their recommended cannabis medi- might be perceived in the public. No cation on their own time versus sub- one seems to want to embrace the stances like alcohol. As Trudeau tongue-in-cheek title of being the notes, “The science here is failing us.” “stoner company.”

“We have some clients that are All states allowing some kind of leaning toward a marijuana ‘friendly’ cannabis use are wrestling these isapproach — they are not concerned sues. about employees using medical marOhio is just the next line. ijuana outside of work,” said Stephen Zashin pointed to a recent ruling Zashin, a labor and employment law- by the Massachusetts Supreme yer with Zashin & Rich. Companies Court in Barbuto v. Advantage Sales he’s currently working with include & Marketing LLC. In that case, the ing index released in May, marijuana positivity in the U.S. workforce has increased 75% in three years — from 5.1% in 2013 to 8.9% in 2016.

In Colorado and Washington, the first states to approve recreational marijuana use, the increase in urine screens showing marijuana outpaced the annual national average, according to the study. Colorado saw an 11% increase between 2015-2016, while Washington increased 9%. That

plaintiff, who suffers from Crohn’s disease and takes medical marijuana for her symptoms, argued she was a “qualified handicapped person” and she should be absolved from the company’s policy of not retaining an employee who tests positive for marijuana. Massachusetts justices sided with her, ruling patients who use marijuana for medical purposes can file discrimination claims if they’re fired for testing positive, and that allowing her to use it would constitute reasonable accommodation of a disability.

Meanwhile, in 2015, the Colorado Supreme Court ruled that a business can fire an employee for using medical marijuana even if the employee is off-duty and following state laws. That ruling was tied to a case involving a quadriplegic who was fired by Dish Network for using marijuana — as doctors recommended — outside of work.

So as states wrestle with marijuana use in the workforce, each is simultaneously and separately shaping their own approaches.

Haren suggests that states like Ohio could be more proactive themselves in helping support development of new technologies to test levels of impairment. Having the proper testing tools and technology could solve a lot of issues.

“It’s easier to measure the impact of alcohol. But we’re not there yet with cannabis,” Haren said. “For us to get a better understanding of the ways cannabis impairs people, and how we actively measure that level of impairment, that would be a good thing.”

But until then, expect companies to maintain hard lines of medical marijuana use, leaving some employees to undoubtedly face the difficult decision of choosing jobs over medicine.

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Evolving educational law calls for counsel Walter | Haverfield carves out a niche helping districts navigate the bureaucratic thicket

By DOUGLAS J. GUTH clbfreelancer@crain.com

Tim Raia, a 15-year-old with Down syndrome entering Nordonia High School this fall, is anticipating the next level of his academic career with the mixed enthusiasm and anxiety you’d expect from a typical American teenager.

He’s excited to meet new friends, play trumpet for the school band and take general education courses modified to suit his needs and abilities. He is also a bit worried about getting lost in a bigger school, but his mother, Sheila Raia, said any concerns are outshined by the tantalizing promise of what’s to come.

“I want him to have the same high school experience that I did,” Raia said. “It’s wonderful to see how excited he is about the future.”

Providing Tim Raia and other non-traditional students with a meaningful learning environment is a challenge for budget-conscious schools nationwide, particularly as the number of pupils in special education ticks upward alongside cuts in federal funding. Considering the costs and evolving legal complexities of properly serving special needs students, local school districts are turning to professional counsel to navigate them through the bureaucratic thicket.

Cleveland-based Walter | Haverfield is one of the few law firms in Ohio with a designated education law practice group. Education chair Christina Peer’s team assists 60 districts in Northeast Ohio regarding

the evaluation, identification and curriculum planning of individual special needs learners. In the event of a dispute, the firm guides clients through resolution strategies that help them avoid costly litigation.

“We work hard to get to a solution that everyone can live with,” Peer said. “My philosophy is, everyone involved in a dispute is trying to do the right thing for the child and reach a place of compromise.”

Expectation vs. obligation Following years of decline, the number of school-age students covered under the Individuals with Disabilities Education Act (IDEA) grew from 5.67 million in 2011 to 5.83 million by fall 2014, according to the most recent data published by the U.S. Department of Education. The rapid development of disability categories such as autism served as a major driver of the upswing.

Roughly 13% of Orange Schools’ 2,000 learners fall into the category of special needs, said Kershini Naidu, director of student support services for the East Side district.

Orange’s “continuum of services” is built around a team approach where regular and special education teachers instruct a small group of students with learning, behavioral and intellectual disabilities. Pupils who require more support have access to social workers as well as speech language specialists and occupational therapists. Orange also provides psychologists at each of its schools for children identified as having special needs.

“We work hard to get to a solution that everyone can live with. My philosophy is, everyone involved in a dispute is trying to do the right thing for the child and reach a place of compromise.”

— Christina Peer, education chair, Walter | Haverfield

In accordance with national special education law, Orange’s disabled population receives an Individual Education Plan (IEP), which defines the classes or services needed to meet short-term academic requirements. Typically, parents will confer with an Intervention Assistance Team (IAT) to discuss these objectives, and it’s at this stage where disagreements about a child’s academic future may necessitate legal involvement.

“It becomes prominent when a family expects more than what our obligations are,” Naidu said. “A big part of the work is problem solving.”

Implementation of a student’s mandated education plan is often a point of conflict, with parents alleging that a school is not providing the proper services for their child under federal and state regulations. Parents can file a due process hearing — a court procedure where a hearing officer decides how to deal with the disputed issue — but mediation from Walter | Haverfield has allowed Orange to avoid formal complaints.

Ideally, the firm will offer clarity to worried parents who may be expecting more from a school than the

law requires. In one instance, a couple new to Orange wanted their son placed in the same residential program he enjoyed at his out-of-state school. Walter | Haverfield mediated a solution with the parents’ attorney where the student was transitioned into a day treatment facility instead.

“They had that (residential) program in the past, but it wasn’t an appropriate expectation on their part,” Naidu said. “We have to navigate through tricky expectations in a respectful manner while educating people about the district’s obligations.”

Lending a helping hand With an increase in students diagnosed with disabilities, districts are spending more to provide services such as occupational therapy and speech language pathology. Less money means fewer resources to administer programming that meets precise IDEA standards. However, lack of resources is never a reason to deny services to a child with disabilities, said Carrie Hutchinson, director of pupil services at Nordonia School District.

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Nordonia sets aside 83% of its $1.6 million annual student services budget to address special education.

The district has a smaller percentage of disabled learners as compared to the state average, but there remains a balance to be struck when allocating limited dollars for expensive special needs programming, Hutchison said.

Nordonia reaches out to Walter | Haverfield regarding education plan issues or guardianship scenarios where the firm will translate custody papers and other complicated legal documents.

“They put us in a situation where we feel comfortable in the decisions we make when working with families,” said Hutchison. “When there’s a question about a student, you want to make sure you’re dotting your I’s and crossing your T’s. It helps our staff to know they have someone to back them, legally speaking.”

Walter | Haverfield is proactive in the face of a constantly changing academic landscape, noted Peer, the firm’s education department chair.

The firm launched a series of podcasts on topics including Endrew F. v. Douglas County School District, a recent Supreme Court ruling that could create a new standard for special education. Firm-hosted workshops and presentations, meanwhile, cover hypothetical parent-district scenarios a school may encounter.

“Districts are open to getting the training they need,” Peer said. “We want to see people doing things the right way for their specialized populations.”

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Q&A: Jeffrey D. Smith Partner, Fisher Phillips

Technology has made so many facets of our lives easier, and medicine is no exception. Over the last several years, the popularity of telemedicine has surged as employers increasingly look to curb rising health care costs and patients seek the most convenient way to receive care. Some health care experts believe telemedicine could be the link that ultimately bands together the fragmented health care system. According to a report last fall from Georgia-based Jackson Healthcare, a health care staffing and IT firm, the global telemedicine market is anticipated to grow at a compound annual rate of 14.3% between 2014 and 2020. Also, by this year, about 70% of employers planned to offer telemedicine services as an employee benefit. Of course, the rise of telemedicine presents a number of legal issues employers must recognize. To help sort through the confusion, we’ve turned to Jeffrey D. Smith, a partner at Cleveland-based law firm Fisher Phillips and a member of the firm’s employee benefits practice group. — Timothy Magaw What exactly is telemedicine?

Telemedicine generally refers to the provision of medical services by health care professionals through technology, rather than in person. It can be provided via either real-time communications — think phone calls or video conference — or ‘store and forward’ technology, such as sending medical images or biosignals.

Common services offered through telemedicine range from patient consultations and primary care diagnoses, to prescription drug refills and behavioral health counseling.

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Why is it becoming an increasingly popular concept for employers?

The appeal for an employer is that telemedicine services generally reduce benefit costs and increase convenience and access to care for group health plan participants. Plan costs are reduced because medical services offered through telemedicine are often less expensive than an office visit. They may also be especially attractive to employers with operations in rural settings where some advanced or specialty

health care options are inaccessible or inconvenient, and to employers whose employees have irregular schedules or travel frequently because a physician consultation can be accessed at home or on the road.

What sort of legal risks should employers be made aware of when considering such programs?

Providing telemedicine services to employees can raise a number of legal issues — the most common being compliance with federal laws such as ERISA, COBRA and HIPAA, as well as state laws concerning medical licensure and practice and informed consent. Employers offering access to a telemedicine program for all employees — regardless of group health plan enrollment status — could inadvertently create a separate ERISA group health plan. If the program provides primary care or prescription drug services, it would qualify as a separate group health plan under ERISA, COBRA, HIPAA, and other federal laws, and the program would have to meet the requirements under each of these laws. Further, all

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require ‘informed consent’ from patients before a provider is permitted to give telemedicine services. The consent must explain to the patient what telemedicine is, laying out the expected benefits and possible risks associated with using telemedicine services.

“The best way to minimize the risk of creating a separate group health plan — and thus triggering additional compliance obligations under various federal laws — is by permitting only employees who are enrolled in a group health plan to use the telemedicine benefits.�

telemedicine programs are subject HIPAA’s privacy, security and breach notification requirements.

I imagine differing state laws could cause a problem, too.

Each state has medical licensing laws that may preclude or restrict a provider licensed in one state from delivering telemedicine services to individuals in another state. For example, a physician assistant (PA) licensed in Georgia can write a prescription for controlled substances, but a PA licensed in Kentucky cannot. A patient in Kentucky would have difficulty filling that prescription, even though the Georgia practitioner was licensed to write it. Some states may also have laws restricting the scope of benefits that providers can deliver over the telephone or internet.

Additionally, some local rules may

What sort of issues can arise when a telemedicine program is adopted alongside a highdeductible health plan?

Employers must also be careful to not disqualify employees from using their health savings accounts (HSA).

Employers who adopt a telemedicine program alongside a high-deductible health plan (HDP) need to be sure they don’t inadvertently disqualify their covered employees from HSA eligibility. An HSA allows individuals covered under a high-deductible to defer compensation on a pre-tax basis for the purpose of paying eligible medical expenses. In addition, the HSA participant must not be covered under any disqualifying coverage, which generally includes any health coverage that provides a benefit prior to meeting the HDHP deductible (unless one of the IRS’s limited exceptions apply). Thus, a telemedicine benefit could count as disqualifying coverage, for example, if the employer pays a portion of the telemedicine consultation, or if the participant pays less than fair market value for the consultation before meeting the HDHP deductible. A telemedicine program requiring a separate charge for each ‘visit’ would avoid this HSA issue.

What are some best practices employers should follow?

Employers considering the adoption

of a telemedicine program should take compliance requirements into consideration when designing and implementing the program. The best way to minimize the risk of creating a separate group health plan — and thus triggering additional compliance obligations under various federal laws — is by permitting only employees who are enrolled in a group health plan to use the telemedicine benefits. In this way, the telemedicine program can be integrated with the group health plan to meet federal requirements.

As such, it must be available to qualified beneficiaries through COBRA as well. Further, given the sensitive medical information being transferred by electronic means, employers should review security issues and risks with their IT professionals, including whether employees should be permitted to store their health information on employer-owned devices. Employers should look for service providers that can demonstrate compliance with information security rules.

If there’s a data breach and sensitive medical information is compromised, does the employer bear any of the responsibility?

As the plan sponsor, the employer could potentially bear full responsibility for compromised medical information. If the employer uses a telemedicine services provider, the business associate agreement (BAA) between the employer and the provider will generally establish who is responsible for what. The employer should ensure the BAA has an indemnification clause that allows the employer to pass any liability costs along to the service provider if

the breach is the service provider’s fault. However, employers should beware of BAAs that limit liability to the amount paid for the services provided. This has become an increasingly common practice by service providers that may leave the employer holding the bill for damages caused by a data breach.

Do you see any of these risks complicating the future for telemedicine? Or is it here to stay?

Despite the legal risks associated with telemedicine, it is likely here to stay. However, as more plans adopt telemedicine programs and the volume of sensitive medical information communicated over technology increases, data breach concerns will certainly grow.

Assuming employers work with vendors, what sort of questions should they ask when vetting potential partners?

Because plan sponsors are still ultimately responsible if there’s a data security breach, employers should thoroughly vet potential vendors to ensure they will appropriately safeguard protected health information. They should ask to see vendors’ HIPAA procedures and ensure they comply with HIPAA’s privacy and security requirements.

For example, has the vendor performed a security risk analysis and adopted a risk management plan? Where and how will sensitive medical information be stored? Will it be encrypted? Do the vendor’s employees undergo HIPAA training?

Does the vendor have cyber insurance that protects the group health plan in the event of a data loss or breach?

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Opioid crisis hits Reminger close to home As such, the Cleveland-based firm is backing organizations helping those fighting addiction

By BETH THOMAS HERTZ

men, including some in the Transitional Program for those who have achieved sobriety after the three months. Its third location, the Jean Marie House on Engle Road in Brook Park, houses up to 35 women.  The Lantern Center for Recovery, a center on Triskett Road that helps chemically dependent men achieve sobriety through long-term residential care that includes discussion groups and 12-step meetings. Once a resident completes a 90-day Phase 1 program, he can transition into one of three off-site Phase 2 sober living or transitional housing options and receive continued support.  The KISS Foundation, based on Denison Avenue, which offers several levels of residential care for men overcoming addiction. It can house up to 55 men across three buildings, and encourages participants to seek help for their physical and mental health challenges as part of a commitment to treat the whole person.

Steve Walters, president and managing partner of the 130-attorney Reminger firm as well as being presi-

clbfreelancer@crain.com

The Cleveland-based Reminger law firm started a foundation funded by donations from the staff and others about 10 years ago to help worthy causes that were meaningful to the firm’s employees. It has made many small donations over the years, but recently decided to take a bigger aim at a problem that is both in the news and in their hearts: the opioid epidemic, and donated $15,000 to three area nonprofit organizations that work to help people overcome addiction.

The facilities chosen by the Reminger Foundation to each receive $5,000 are:  The Ed Keating Center, which operates three residential facilities for men and women. Its facility at West 117th St. and Berea Road has administrative offices and housing for up to 85 men in a three-month Sober Living Program. Its Jones Road location, in Slavic Village, houses up to 85

“I want to spread the word that addiction does not discriminate, it affects everyone in every socioeconomic status. If I can help just one family avoid the heartbreak and devastation of losing a child, his death would bring something positive. …. I won’t let (my son) be just another statistic.”

— Jessica Plavic, Reminger employee, in a letter to her colleagues

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dent of the Reminger Foundation, said these three organizations were chosen because they are doing important work with lean staff and tight budgets, and are ineligible for federal funding due to having a spiritual component to their mission.

“They provide an invaluable service to the community and are operated by incredible people who are on the front lines, each with their own unique approaches to providing that care,” he said. “We wanted to help and give back to our community as this problem continues to grow.”

Walters explained that the opioid epidemic is close to home for the firm, as one employee had a son who passed away from an overdose on June 5, right about the time the foundation was making a decision to target opioid addiction, and another has a child who has been in and out of rehab for about 15 years.

The employee whose son died, Jessica Plavic, who works in medical indexing at the firm, has gone with other representatives of the firm to make the donations to the facilities. She expressed in a letter to her colleagues that she hopes the death of her 23-year-old son, Robert “Bobby” J. Carlson III, can mean something.

“I want to spread the word that addiction does not discriminate, it affects everyone in every socioeconomic status. If I can help just one

family avoid the heartbreak and devastation of losing a child, his death would bring something positive. …. I won’t let (my son) be just another statistic. I do not know of one person who does not know of someone who is either a family member dealing with this or an addict themselves,” Plavic wrote.

Walters agreed that this issue is underappreciated.

“Some people think addicts don’t deserve help or that the government should pay for it,” he said. “To see the pain a parent goes through with their child who is struggling with this, and to see so many other people impacted by this, it is amazing and we wanted to help.”

He noted that the firm, which has 14 offices in Ohio, Indiana and Kentucky, does a lot of work in the medical community, making it particularly aware of the ravages of addiction.

Walters said he expects the Reminger Foundation will continue to look for ways to funnel resources into helping with addiction issues and encourages others to do so as well.

“We live in a great business community and everyone has their own causes they support but certainly this is something we all need to focus on as well because there are a lot of people doing great work to help,” he said.

“If we can save even one person, it’s a great thing.”

List: Employment at Northeast Ohio law firms remains flat

By CHUCK SODER

Northeast Ohio’s largest law firms: Find the list on page 26.

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17-1548

The biggest law firms in Northeast Ohio aren’t getting any bigger — at least not in terms of local employment.

The number of local attorneys employed by the region’s 40 largest firms has remained almost completely flat since 2013, according to data collected annually for the Crain’s Law Firms list.

The top 40 firms on the 2017 list employed 2,462 local attorneys as of May 1. Add 12 to that figure and you get the number of local attorneys those same firms employed back in 2013. And the number didn’t fluctuate much in the years between.

Go back a few more years, and the story changes: The 40 largest firms that have reported numbers since 2008 (which includes 38 of the top 40 firms on this year’s list) have lost 170 local attorneys since 2008 — a 6.5% decrease (the number remained flat in 2009 and then dropped for four straight years).

That same group of firms cut even more positions that don’t require a law degree: Total local staff (which includes attorneys) fell by 493 over that same time period, hitting 5,526 in 2017 — an 8.2% decrease. Granted, about 140 of those lost positions were at Weltman, Weinberg & Reis Co., a collections firm that ramped up staffing during the recession before

ramping back down. It employs 27 local attorneys, putting it at No. 35 on the full digital version of the list, but it had the 2nd largest total staff with 402 employees.

As per usual, Jones Day ranked No. 1 in terms of local attorneys (followed

by BakerHostetler), local staff and worldwide attorneys (followed by Square Patton Boggs). All three of those firms employ fewer local attorneys today than in 2008.

We don’t collect revenue and profit figures for this list, so the employment figures don’t say whether business is up or down each year, but several attorneys who spoke to Crain’s this spring said the industry never really recovered from the Great Recession. An April 21 story titled “Lawyers rethink the business” cited attorneys and reports stating that demand is down, though some firms have increased profits by cutting costs (which often means people).

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LEGAL AFFAIRS Adviser: Suzanne Bretz Blum

Computer-aided design does not make you a copyright cad Architects, designers and developers in the age of computer-aided design (CAD) are understandably uncertain about copyright protection for architectural plans, criteria drawings, layouts and other instruments of service.

A recent decision out of the U.S. District Court for the Northern District of Ohio found that copyright infringement did not arise from layering another architect’s prototype plans into a CAD file and using them as part of a “tool kit” to create new architectural plans because the new plans were not shown to be substantially similar to the prototype plans.

The court also found that the owner of the prototype plans could not prove its claim that use of the plans in a CAD program amounted to removing the owner’s copyright identification in violation of the Digital Millennium Copyright Act. The DMCA is an amendment to federal copyright law intended to adapt copyright protection to circumstances that arise with the use of digital technology. The Court’s findings, particularly those on the DMCA’s application to standard practices using CAD, break new ground in providing copyright guidance to professionals in the fields of development, design and construction.

In Robert L. Stark Enterprises, Inc., et al. v. Neptune Design Group, LLC, 2017 LEXIS 55951, Neptune Design Group claimed that architectural plans it had created for certain Menchie’s frozen yogurt franchises were used without its permission.

Neptune was the approved design firm of the franchisor. A franchisee used Neptune for the first four stores it developed, but then got permission from the franchisor to use a new architectural firm for additional stores it intended to open.

Evidence presented to the court showed that the franchisor had emailed PDF copies of prototype plans drawn by Neptune to the franchisee, who forwarded the plans to its new architect. The new architect then forwarded the plans to a third party with instructions to input the plans into a CAD program using the new architect’s layering instructions.

The new architect used those plans as part of a “tool kit” to create its architectural drawings for multiple new locations. The court reviewed the new plans and Neptune’s claims of how the new plans were “strikingly similar” to Neptune’s plans, but concluded that the evidence did not support a finding that the new plans were similar enough to be considered infringing copies.

In addition to its copyright claims, Neptune also asserted a claim that the new architect’s use of Neptune’s plans in the CAD program amounted to a violation of the DMCA’s provisions on removal of copyright management information. Neptune’s prototype plans were imprinted with Neptune’s title block, consisting of the design firm’s name and address.

This type of copyright ownership information is called copyright management information, or CMI. The DMCA allows the recovery of statuto-

Suzanne Bretz Blum is a founding shareholder of Thacker Robinson Zinz and represents businesses in disputes, particularly those involving business competition issues. She represented the developer and franchisee in the summary judgment decision described in this column.

ry damages where a copyright owner can prove that someone intentionally falsified or removed the owner’s CMI. There was no evidence that Neptune’s CMI was physically or electronically removed in the process of entering the plans into the CAD. Rather, Neptune claimed that the plans generated from that CAD file for the additional Menchie’s stores should have included Neptune’s CMI, and that its absence on the new plans amounted to intentional and unauthorized removal of CMI. Neptune’s argument was that the architect’s new plans were derivatives of Neptune’s plans and thus had to retain Neptune’s CMI. The court rejected that argument and granted summary judgment dismissing Neptune’s DMCA claim. The court found that the CAD program was not making a “copy” of the Neptune plans, and that the new architectural plans were not shown to be “copies” of Neptune’s plans. Accordingly, absent evidence that the franchisee and architect removed CMI from Neptune’s original work or distributed a copy of Neptune’s work knowing that CMI had been removed, there was no violation of Section 1202 of the DMCA. Though this is an area of law with little precedent, the court’s decision was consistent with one other case known to involve similar facts and issues. In Frost-Tsuji Architects v.

Highway Inn, Inc., 2014 U.S. Dist.

LEXIS 157560 (D. Hawaii), that court found that “basing a design on the [previous architect’s] work [is] not the same as removing copyright management information from an original copyrighted work.”

The Neptune Design Group case sheds welcome light on the propriety of standard design practices. However, architects and developers should take precautionary measures as well.

You can avoid having to prove your work is not infringing by verifying that you have permission to use prototype plans and other work that goes into your CAD tool kits. Don’t just assume you have permission to use any drawing given to you, even when the person giving it to you seems to have the authority to do so. Making sure you have written confirmation of such permission by the party whose identifying information appears on the plans may save you from the cost and aggravation of defending against copyright infringement and DMCA claims at some later date.

Ulmer acquires well-known Cleveland immigration practice

By JEREMY NOBILE jnobile@crain.com @JeremyNobile

Ulmer & Berne LLP has acquired the practice of renowned Cleveland attorney David Wolfe Leopold & Associates to place additional depth in their immigration practice.

The move adds Leopold — who has practiced in Cleveland for nearly 24 years and has provided regular commentary on immigration issues for major media outlets including The New York Times, The Washington Post, CNN, MSNBC and Fox News, among others — a staff of three and some additional paralegals. Leopold’s work focuses on counseling both U.S. and foreign businesses, health care institutions, law firms, religious institutions, nonprofits and other entities on an array of issues related to U.S. immigration, visa and citizenship law.

Leopold is director of the immigration curriculum at the Case Western Reserve University School of Law and an adjunct professor of immigration law at Cleveland State University.

“Our practice philosophy has always been excellent client service, and Ulmer’s similar reputation as a firm that places a high value on service makes this an ideal fit.”

— David Leopold

He is now a partner in Ulmer’s Cleveland office and chair of the firm’s immigration practice group.

“The ever-changing regulations regarding corporate and family immigration are currently as fluid as they have ever been, and my established practice, combined with Ulmer’s broader platform offers enhanced opportunities for growth,” said Lepold regarding his interest in joining the Cleveland law firm. “Along with that, our practice philosophy has always been excellent client service, and Ulmer’s similar reputation as a firm that places a high value on service makes this an ideal fit.”

“There is perhaps a no more dynamic voice on immigration than David’s,” said Ulmer’s Cleveland partnerin-charge, Patricia Shlonsky. “His immigration law experience and insight is second to none, and at a time when the conversation around immigration in this country is as heated and uncertain as ever, David is a tremendous asset to our clients and their employees who must navigate the complex U.S. immigration processes.”

Ulmer is ranked as the eighth largest law firm in Northeast Ohio, according to Crain's research, with 79 local attorneys.

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Untangling Trump’s immigration policy in the business world The Trump administration has implemented several measures that affect companies with multinational workforces. Here are a few of those and what employers can do to protect themselves and their workforces:

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Travel ban First off, while the ultimate fate of the administration’s travel ban unveiled in March remains uncertain, the U.S. Supreme Court recently reinstated it in part, with the court’s decision specifically addressing the ban’s impact on foreign national employees of U.S. companies.

On June 26, the court narrowed the scope of lower courts’ injunctions on the travel ban, ruling that it cannot be enforced against “foreign nationals who have a credible claim of a bona fide relationship with a person or entity in the United States.” The court further stated that a foreign national worker who has accepted a U.S. company’s employment offer will not be subject to the ban if the employment is formal, documented and formed in the ordinary course and not for purposes of evading the travel ban.

Until the Supreme Court conducts its full review in October, citizens of the six countries named in the travel ban who hold U.S. work visas should not be refused admission because of the ban. That said, the court’s decision allows for discretion in determining whether the employment relationship is valid, suggesting that foreign workers from the six countries will need to show additional documentation when seeking a visa.

Increased screening, delays for visa applicants

Stephen E. Walters Managing Partner Reminger Co., LPA

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Simultaneously with the March 6 travel ban, President Trump issued a memorandum to the secretary of state, attorney general and secretary of homeland security calling for additional vetting of visa applicants and limiting the number of daily visa interviews to allow time for the increased vetting.

Then on June 21, Trump signed an executive order that deleted a provision in a 2012 executive order requiring that 80% of temporary visa applicants be interviewed within three weeks of receiving their applications. These measures have exacerbated wait times for visa interviews at consulates and extended the time required for the consulate to return the passport with the visa in it. Temporary work visa applicants now wait three months or longer for an appointment at some U.S. consulates in Canada, for example, and more visa applicants are being selected for administrative processing (an additional background check), which can add up to 12 weeks to the visa process.

Employers should be aware of these delays because they can extend the lead time needed to get

Sarah C. Flannery is a partner and leader of Thompson Hine’s immigration practice in Cleveland

new foreign national workers to the United States, delay business travel abroad because a visa needed to return cannot be secured before the trip and result in employees being stranded abroad without a passport while they await the consulate’s processing of the visa application.

Work visa verifications On April 3, U.S. Citizenship and Immigration Services (USCIS) announced an increase in unannounced site visits to verify information in work-sponsored visa applications. USCIS will prioritize employers whose information cannot easily be verified, those who place workers at client sites and those who are “dependent” on an H-1B workforce (highly skilled professionals in specialty fields), with IT consulting firms being a prime example.

But the site visits will not be limited to the employers and will include the businesses at which some of these H-1B visa holders work. For instance, a company using IT contractors with H-1B visas should prepare for a site visit. In this case, the host company should work closely with its IT consulting firm to ensure it has the appropriate information to respond to a site visit or documentation request.

Site visits also apply to the L-1 visa program, used by global organizations to transfer managers, executives and specialized knowledge employees to the United States.

Large companies (1,000+ employees in the United States or over $25 million in U.S. sales) and those with more than 10 transfers in the past year are eligible for blanket petitions, a type of pre-approval that makes the L-1 process more efficient. Employers with the blanket approval may anticipate they are exempted from the increased scrutiny; however, USCIS recently conducted a site visit for an L-1 manager who recently renewed his L-1 visa and successfully completed the first step of the green card process with USCIS. H-1B and L-1 employers should prepare for site visits by reviewing petitions to ensure they are accurate and filing amendments where necessary, and by designating who is responsible for interacting with USCIS officers. Managers and staff should be informed about the examination process, and the H-1B and L-1 workers and their supervisors should review petitions and prepare for the types of questions they will be asked.

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Diebold to appeal ruling in patent dispute

By JEREMY NOBILE jnobile@crain.com @JeremyNobile

For North Canton-based Diebold Nixdorf, it’s fair to say you win some, and you lose some.

Diebold has been battling Nautilus Hyosung Inc. — a Korean company with a U.S. subsidiary, Nautilus Hyosung America, based in Irving, Texas — in court over patent lawsuits for many months. At the center of the disputes are technology used in their respective automated teller machines.

In the latest patent infringement suit, the International Trade Commis-

sion sided with Diebold in three of four claims but found what Diebold described in a news release as a “technical violation” of a Hyosung U.S. patent involving legacy Wincor technology.

Diebold said in its release that it will appeal the July 14 decision, emphasizing that the ruling “has no bearing on existing products in the market, and Diebold Nixdorf has developed a new and improved version of the product that is not affected by this patent which will be used in future sales.”

Where Diebold sees victory in defeating some patent claims, and argues it’s unaffected by the one it lost, Hyosung sees a win of its own.

“Today is yet another great day for Hy-

“Although we did not start this patent dispute with Diebold Nixdorf, we have every intention of ensuring this ruling is properly enforced and their ATMs and components are kept out of the U.S.” —Sungmahn Kim, executive vice president and chief operating officer of Nautilus Hyosung America

osung as the ITC has affirmed the (administrative law judge’s) ruling that Diebold is wrongfully infringing Hyosung’s patented technology,” said Sungmahn Kim, executive vice president and chief operating officer of Nautilus Hyosung America, in a news release. “Although we did not start this patent dispute with Diebold Nixdorf, we have every intention of ensuring this ruling is properly enforced and their ATMs and components are kept out of the U.S.” Hyosung’s release adds that the ITC issued orders that bar “Diebold Nixdorf from importing and/or selling in the U.S. any ATMs containing Hyosung-patented technology.” But as Diebold has indicated, it seems to

have found a workaround with their development of a different product.

Diebold called this recent suit retaliatory for prior patent claims Diebold filed against Hyosung.

Notably, this month’s ruling follows a May ruling where the ITC found that Hyosung had infringed on two of six Diebold patents. Each firm played up the victory of claims they won, as Crain’s noted at the time.

After Diebold appeals, the company said in a statement, “these intellectual property disputes will move to federal district court, where each company will have a U.S. jury decide whether infringement occurred and what damages are owed.”

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SOLO

CONTINUED FROM PAGE 13

Market influence

U P U PCO BL MI ISH NG IN CU G S ST EC OM TIO N

Dahl is one of a swath of lawyers in the field increasingly drawn to work at small or solo practices in the years trailing the Great Recession.

There are a bevy of industry factors and individual motivations for that movement.

One prevailing reason, though, is the economic downturn, which has forever changed the legal business. It was that period that forced companies to rethink legal costs, which generally led to a beefing up of in-house counsels to handle work instead of paying for expensive legal teams at massive firms.

Clients who do ship out work demand more transparency, along with lower and more predictable costs.

And this has all put a strain on revenues at big corporate law firms that unquestionably relished the pre-recession days where firms typically ran the meter as long as possible and left clients with hefty bills that were rarely scrutinized.

The actual movement and motivations of each and every lawyer in the business can be hard to track, particularly at the small and solo practice

Immigration attorney Melissa Gawelek speaks with a client at Cleveland-Marshall’s solo practice incubator. (Contributed photo)

level. And surveys that do examine those trends tend to have small sample groups.

However, one survey from 2016 from legal staffing and consulting group Robert Half Legal interviewed lawyers across North America in firms with 20 to 1,000 employees.

Of all respondents, 23% said, if they had the capital, they’d start their own firm. That marks a significant increase from the 5% who said they’d do the same in 2005.

Anecdotally, actively practicing

lawyers and those working at universities and bar associations relay that lawyers are, in fact, increasingly ditching the traditional large or midsize firm to start their own business.

“In the post 2008 economy, it’s pretty clear that the legal profession needed to right size, so we’ve seen smaller law school classes and less aggressive hiring in many bigger firms,” said Rebecca Rupert McMahon, executive director of the Cleveland Metropolitan Bar Association.

There was arguably a glut of law-

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ways — political beyers in the field beliefs and things like fore the recession that,” she said. “I hit. Some firms saw think (millennials) layoffs as business feel more empowdried up. Many cut ered and in control back on new hires of their destiny than out of law school or the previous generstopped them comation felt. I think we pletely. And that, in live in a society turn, has led to “I wanted the where building a smaller law school freedom to do business is more atclass sizes. tainable for people, According to the what I want. When and people generalNational Law Journal, enrollment in I see a new area of ly aren’t as concerned with failure.” law schools was flat business law I As far as why the in 2016 after sinking every year since think could be big, incubator — there 2010. Overall en- I’d like to get in on are others in the country, but Cleverollment is still land-Marshall's, the about 30% less than the ground floor. brainchild of former pre-recession highs. But when you’re law school dean And while the reCraig Boise, was cercession is in the at a big law firm, tainly a trailblazer economy’s collec- that’s virtually — has attracted attive rearview mirror, tention by Clevethere’s still a hang- impossible.” landers, Jones thinks over very much init could be tied to fluencing how firms — Sherri Dahl, Dahl Law LLC the “blue-collar” atoperate today.

Firms may be hiring, but new hires titude in Northeast Ohio. and total staffs still pale overall when compared to levels seen a decade A growing trend ago.

“Many of the traditional go-to poIn terms of accessibility, going into sitions that once existed in law in the small or solo world is also easier great numbers constricted. So the to do today because of technology, need to find alternatives to those po- Dahl said. It's what making all her sitions became critical,” McMahon work from home possible. That said. “So the solo and small-firm wasn't the case 15 years ago. movement was a natural next step.”

So it’s a confluence of events leading the movement.

The stigma of running a small or The industry reacts solo shop instead of getting into a traGroups and academies supporting ditional firm has definitely changed lawyers are evolving as a result of this over the years, though, said Ian Friedman, who runs a small practice trend.

Bars like the CMBA, often facing in Cleveland at Friedman & Nemecek flat member growth, have increas- LLC. And motivations can be unique ingly offered more programs for to each person — like Dahl, who small and solo practitioners because wanted more flexibility in her work.

Friedman went into solo practice that’s where growing demand is. In one telling stat: Of the CMBA’s rough- in 1997 in criminal defense right out ly 5,200 members today, McMahon of law school, which was a rarity at said about 40% of those belong to the time. He took a group of four to a large law firm in 2015, but stayed a firms with one to 14 attorneys.

McMahon said this shows an evo- matter of months before heading lution for the group in some ways as back into the small firm realm he’s in many bars have traditionally been today. He called his stint with a larger considered solely as places for law- firm a “learning experience.”

“Today, it is far more acceptable, yers at large and midsize firms to network and earn their continuing legal and even encouraged, to go solo as education — not a place for the small much as going to a firm is,” Friedman firm and solo attorney to better learn said, noting people often told him he how to run a business, which simply was “nuts” and he’d fail when he isn’t required learning in the typical hung his shingle in the 1990s. The skepticism often came from friends law school.

Meanwhile, the Cleveland-Mar- and colleagues who were eying the shall College of Law launched a solo big salaries they really wanted at a big practice incubator in February 2014. firm.

“Now, students and young lawyers The program, which offers 10 spaces for law students starting their own aren’t made to feel like they’re an businesses, has grown in popularity outcast if they go into private pracand is just one tenant shy of full ca- tice,” he said. pacity today, said Ashley Jones, coorEven though he dabbled in the dinator of the incubator and founder large law firm world, he says that enof her own solo practice, Ashley vironment just wasn’t for him.

Jones Law. As far as the movement itself, most Jones launched her business out of experts see that continuing to graduschool in late 2011. She was largely ally grow regardless of how the legal motivated by being her own boss and market continues to evolve. promotes the benefits of a solo prac“I think we’ll continue to see an intice to students she supports. Solo crease in small and solo firms bework is certainly no easy task, but cause of what the economy did in some lawyers, particularly the entre- 2008 and beyond,” McMahon said. preneurially minded, she said, will “Sometimes life in big law firms disoften be happier practicing inde- connects you from what’s happening pendently of the traditional firm en- on the everyday street. Being in small vironment. or solo practice puts you more in Part of that could be attributed to contact with your neighbor next characteristics often ascribed to a door. We’re seeing people excited to younger demographic, in addition to run their own businesses, and they’re a change in stigmas. delivering legal services in a more di“I think there is a certain segment rect way. The fact we have such a rich of people who are 25-35 who really and robust number of small and solo feel empowered in a lot of different practices is a great thing.”

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CRAIN’S EVENTS

CONTINUED FROM PAGE 4

“I think additional retail there is a no-brainer. We have several letters of intent out on Testo,” Kertesz said.

“Frankly, I envision this area becoming as popular as Chagrin Boulevard.”

Ted Theophylactos, president of the Ted & Co. team at Howard Hanna’s Ohio City office, has worked closely with Kertesz.

“He discovered the West Side and fell in love with it,” Theophylactos said. “That’s not usually how it works.

You usually don’t see a young person like him buying buildings.”

Kertesz is one of many young people, several bearing familiar names of established developers, transforming parts of the near West Side.

Theophylactos represented Kertesz in the purchase of the Testo building and said he approached it like a shrewd negotiator.

“He knew he’d have to pay a good amount for it but didn’t show that,” Theophylactos said. “There is so much going on in the neighborhood it’s hard to see the potential of it.

Chad does because he’s here and he’s in the middle of it.”

Land records don’t disclose a sale price on the property.

Although Kertesz joint ventured with Geis on West Clinton Apartments, Tom McNair, executive director of the Ohio City Inc. neighborhood development group, said it’s “honestly not clear how Kertesz will fit in the neighborhood.”

McNair added, “They’ve bought some things and they have resources, but we don’t know yet. We’re ready to work with them for the benefit of the neighborhood.”

Ironically, Kertesz has no such hedge about the local development corporation. He views working with it as one of the advantages to working in Ohio City and credits it with much of the area progress.

Moreover, he and his wife enjoy Ohio City’s “mix of old and new” and proximity to downtown, and plan to make an even greater commitment to it than cash and time. He said they plan to move with their two children to the neighborhood, likely on Vine, from the East Side.

Each year, Crain’s Cleveland Business honors a group of women who have demonstrated exceptional commitment to Northeast Ohio. (McKinley Wiley for Crain’s)

Honoring 2017’s Women of Note

Lauren Rich Fine, managing director of Gries Financial, was one of the 15 Women of Note.

Anne Noonan, president and CEO of Omnova Solutions, shares her personal story with attendees.

More than 600 people turned out for the sold-out 2017 Women of Note awards luncheon on Tuesday, July 18, at FirstEnergy Stadium. The event, hosted by Crain’s Cleveland Business, honored the 15 Women of Note, as well as Beth Mooney, chairman and CEO of KeyCorp, who was presented with the Cleveland Foundation Women of Note Legacy Award. The luncheon and program were presented by the Cleveland Foundation and co-presented by Thompson Hine and CBIZ.

Kristen Baird Adams, chief operating Constance Hill-Johnson, owner and CEO of Visiting Angels, Cleveland, officer at PNC and a 2014 Woman of stressed the importance of caregiving in her remarks.

Note, applauds the 2017 honorees.

CRAIN'S CLEVELAND BUSINESS μ JULY 24, 2017 μ PAGE 25

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PA G E 2 6

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J U LY 2 4 - 3 0 , 2 017 |

CRAIN’S CLEVELAND BUSINESS

THE LIST

Largest Law Firms

Ranked by Number of Local Attorneys LOCAL PARTNERS LOCAL LOCAL WORLDWIDE ATTORNEYS/ FEMALE/ MINORITY STAFF ATTORNEYS PARTNERS

SALARY: ASSOCIATE FROM LAW SCHOOL PRIMARY PRACTICE AREAS

1

Jones Day 901 Lakeside Ave., Cleveland (216) 586-3939/www.jonesday.com

198 67

12 1

627

2,500

$160,000

Full range of litigation and corporate practice areas

Heather Lennox Cleveland partner-in-charge

2

Baker & Hostetler 127 Public Square, Suite 2000, Cleveland (216) 621-0200/www.bakerlaw.com

156 93

20 2

397

907

$145,000

Corporate, litigation, employment, tax, private equity, health care, class actions

Hewitt Shaw, Cleveland office managing partner; R. Steven Kestner, firmwide chairman

3

Tucker Ellis 950 Main Ave., Suite 1100, Cleveland (216) 592-5000/tuckerellis.com

135 65

13 5

275

215

NA

Benefits, business litigation, class actions, governance, employment, environmental, estate planning, finance, financial institutions, IP, insurance, M&A, pharma, real estate, taxation, mass tort, white collar

Joe Morford managing partner

Thompson Hine 127 Public Square, Suite 3900, Cleveland (216) 566-5500/www.thompsonhine.com

131 68

13 3

313

382

$125,000

NA

Deborah Read, managing partner; Robyn Smyers, Cleveland office partner-incharge

5

Benesch 200 Public Square, Suite 2300, Cleveland (216) 363-4500/www.beneschlaw.com

131 68

12 1

251

198

$120,000

Commercial finance, corporate & securities, executive compensation, insolvency & creditors' rights, IP, employment, litigation, public finance, public law, private equity, real estate & environmental, tax

Gregg Eisenberg managing partner

6

Calfee, Halter & Griswold 1405 E. 6th St., Cleveland (216) 622-8200/www.calfee.com

129 69

12 2

253

157

NA

Corporate, M&A, securities, litigation, IP, government relations, labor & employment, employee benefits, real estate, tax, estate & succession planning

Brent Ballard, managing partner; Thomas McKee, chairman

Squire Patton Boggs 127 Public Square, Suite 4900, Cleveland (216) 479-8500/www.squirepb.com

107 48

12 2

294

1,565

NA

Communications, corporate, energy, environmental, financial services, government enforcement, health care, hospitality, trade, litigation, labor, IP, life sciences, public finance, real estate, restructuring, transportation

Frederick Nance, global managing partner; Michele Connell, managing partner, Cleveland

8

Ulmer & Berne 1660 W. 2nd St., Suite 1100, Cleveland (216) 583-7000/www.ulmer.com

86 48

11 1

174

163

NA

Business law and litigation, construction, restructuring/creditors' rights, data privacy, employee benefits/ERISA, employment, financial services litigation, health care, IP/technology, product liability, real estate, tax

Patricia Shlonsky partner-in-charge, Cleveland office

9

Roetzel & Andress 1375 E. 9th St., 10th Floor, Cleveland (216) 623-0150/www.ralaw.com

79 47

10 1

170

157

NA

Banking/finance, employment, energy/environmental, estates, health care, transportation, franchise, government, education, real estate, construction and IP

Douglas Spiker partner-in-charge, Cleveland

Brouse McDowell

77 51

15 1

128

128

NA

Corporate & securities, business restructuring & commercial, environmental, estate planning, health care, insurance recovery, labor & employment, litigation, oil & gas, real estate & construction, tax

Marc Merklin, managing partner; Christopher Carney, partner-in-charge, Cleveland

THIS YEAR

FIRM (1)

4

7

388 S. Main St., Suite 500, Akron 10 (330) 535-5711/www.brouse.com THE LIST

Largest Law Firms

TOP LOCAL EXECUTIVE

RESEARCHED BY CHUCK SODER & CRAIG MACKEY

Insight on the challenges of today Foresight for the road ahead

Want the full version of listAttorneys Ñ and every other Crain's list? Become a Data Member: CrainsCleveland.com/data Ranked

by Number ofthis Local Information is supplied by the companies. Crain's does not independently verify the information and there is no guarantee these listings are complete or accurate. Send additions, corrections and clarifications to Chuck Soder: csoder@crain.com

(1) Firms with equal numbers of local attorneys are then ranked by worldwide attorneys.

SALARY:

LOCAL

THIS YEAR

mcdonaldhopkins.com FIRM (1)

ASSOCIATE PARTNERS LOCAL Business Counseling | Business Restructuring | Intellectual Property | Litigation | Tax and Benefits LOCAL WORLDWIDE FROM LAW ATTORNEYS/ FEMALE/ PARTNERS

MINORITY

STAFF ATTORNEYS

SCHOOL

PRIMARY PRACTICE AREAS

TOP LOCAL EXECUTIVE

11

Walter | Haverfield 1301 E. 9th St., Suite 3500, Cleveland (216) 781-1212/www.walterhav.com

77 39

9 0

131

77

NA

Corporate transactions; education; employment & labor; health care; IP; litigation; public law; real estate; tax & wealth management

Ralph Cascarilla managing partner

12

McDonald Hopkins 600 Superior Ave., E., Suite 2100, Cleveland (216) 348-5400/www.mcdonaldhopkins.com

74 45

3 0

168

252

NA

Corporate, litigation, IP, restructuring, estate planning, real estate, M&A, white collar, health, banking

Shawn Riley president

13

Reminger Co. 101 Prospect Ave. W., Suite 1400, Cleveland (216) 687-1311/www.reminger.com

65 55

9 3

177

133

NA

Medical malpractice, workers comp., estate planning, D&O and employment practices, professional liability, oil, natural gas and utilities, products liability, trucking and commercial transportation

Stephen Walters CEO, president

14

Buckingham, Doolittle & Burroughs 1375 E. 9th St., Suite 1700, Cleveland (216) 621-5300/www.bdblaw.com

65 49

8 2

134

65

NA

Business, litigation, employment & labor, real estate & construction, health & medicine, trusts & estates

John Slagter managing partner

15

Hahn Loeser & Parks 200 Public Square, Suite 2800, Cleveland (216) 621-0150/www.hahnlaw.com

58 41

6 4

132

107

NA

Commercial litigation, business, IP, estate planning, labor and employment and creditors' rights, reorganization and bankruptcy

Stanley Gorom III partner in charge, Cleveland office

16

Taft Stettinius & Hollister 200 Public Square, Suite 3500, Cleveland (216) 241-2838/www.taftlaw.com

55 31

6 3

97

415

$120,000

Business & finance, bankruptcy, environmental, health care, IP, labor & employment, litigation, domestic relations, real estate, tax

Kevin Barnes partner-in-charge, Cleveland

17

Vorys, Sater, Seymour and Pease 200 Public Square, Suite 1400, Cleveland (216) 479-6100/www.vorys.com

54 22

2 1

79

349

$120,000

Corporate, litigation, labor & employment, bankruptcy, health care, real estate, financial institutions

Anthony O'Malley managing partner, Cleveland

Frantz Ward 200 Public Square, Suite 3000, Cleveland (216) 515-1660/www.frantzward.com

53 34

5 1

92

53

$115,000

Bankruptcy/creditors' rights, construction, corporate, education, estate planning, health care, insurance coverage, labor & employment, litigation, real estate

Christopher Keim, managing partner; Michael Frantz, Joel Hlavaty, management committee members

19

Krugliak, Wilkins, Griffiths & Dougherty 4775 Munson St. N.W., Canton (330) 497-0700/www.kwgd.com

52 37

6 0

100

52

NA

Corporate/business, real estate and construction, labor and employment, employee benefits, workers' comp., taxation, health care, environmental, OSHA, oil & gas, trusts and estates, litigation

Terry Moore managing director

20

Gallagher Sharp 1501 Euclid Ave., 6th floor, Cleveland (216) 241-5310/www.gallaghersharp.com

44 31

7 1

88

52

NA

Litigation, insurance, legal malpractice, professional liability, railroad, trucking, aviation, maritime, product/employer liability, mass/toxic torts, environmental, construction, municipal, corporate, appellate

Timothy Brick managing partner

21

McCarthy, Lebit, Crystal & Liffman Co. 101 W. Prospect Ave., Suite 1800, Cleveland (216) 696-1422/www.mccarthylebit.com

41 22

4 0

73

41

NA

Transactional, estate planning and tax, litigation, health care, IP, domestic relations, banking, real estate, municipal and zoning, personal injury, employment law, alternative dispute resolution

Kenneth Liffman managing principal

22

Weston Hurd 1301 E. 9th St., Suite 1900, Cleveland (216) 241-6602/www.westonhurd.com

40 31

6 0

69

49

NA

Auto/transportation; bankruptcy, business, construction, employment, estate/trust/probate, family law, insurance, litigation, malpractice defense, real estate, tax, white collar defense, workers' comp.

Carolyn Cappel managing partner

23

Day Ketterer Ltd. 200 Market Ave. N., Suite 300, Canton (330) 455-0173/www.dayketterer.com

38 24

3 0

63

39

NA

Banking, bankruptcy & restructuring, business, education, environmental, estate/trusts/probate, family law, labor & employment, litigation, real estate, taxation, workers' comp.

Robert Roland managing partner

18

RESEARCHED BY CHUCK SODER & CRAIG MACKEY

Want the full version of this list Ñ and every other Crain's list? Become a Data Member: CrainsCleveland.com/data

Information is supplied by the companies. Crain's does not independently verify the information and there is no guarantee these listings are complete or accurate. Send additions, corrections and clarifications to Chuck Soder: csoder@crain.com (1) Firms with equal numbers of local attorneys are then ranked by worldwide attorneys.

CRAIN’S CLEVELAND BUSINESS

James and Irving ranked second and fifth, respectively, in NBA jersey sales

UBER

CONTINUED FROM PAGE 1

In the 30-day period prior to the pilot, Rosary Hall saw 76% client participation in IOP and 62% participation in individual counseling sessions.

“We only see it getting better,” Howard said.

In the past, Rosary Hall was able to offer some grant-funded bus passes to those in treatment, and single-ride cab vouchers, usually to transport a patient from detox to their next level of care.

But there weren’t transportation support options for those not already in the program reaching out for an initial assessment. In the first several months of this year, roughly 20% of patients didn’t show up for these assessments. No-shows are huge setbacks for the patients, who, upon not making their appointments, may lose the courage they had finally gathered to ask for help, Parran said. They feel guilty and worry that they won’t get another appointment if they call back.

“Missing an assessment is a disaster for a patient, and it’s also a disaster for the program, because the program has scheduled a counselor’s hour and a half to two hours to do that assessment, and pushed other people who are calling for assessments down the road,” he said.

For those who do enter treatment, there’s months of regular travel. After a three- to five-day inpatient detox, patients are required to attend four three-hour IOP sessions per week for the first five weeks, as well as individual counseling sessions. And then for another eight to 12 weeks, they participate in weekly 1.5-hour sessions in the non-intensive program.

Bus passes weren’t always convenient or the best option for someone in addiction treatment, and cab vouchers didn’t apply to this backand-forth. Plus, with the Cleveland Yellow Cab Co. ending operations last month, the vouchers were no longer an option.

An average of 62% of patients suc-

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PA G E 2 7

NBA fans strongly prefer Nike over Adidas, according to surveys compiled by YouGov, and the gap between the apparel providers is even stronger when it comes to Cavs fans. A look at the findings:

CONTINUED FROM PAGE 1

Swoosh is ‘a draw’

J U LY 2 4 - 3 0 , 2 017

Cavs fans are swoosh backers

UNIFORMS Those numbers are obviously influenced by James — who has a lifetime deal with Nike that business partner Maverick Carter has said is worth more than $1 billion — and Irving. The latter’s Nike signature shoes are the second-best sellers among NBA players, topping the likes of Golden State Warriors stars Steph Curry and Kevin Durant.

“I think they’re so good at marketing and branding, and telling a story,” Dan Mannix, the president and CEO of New York-based LeadDog Marketing Group, said of Nike, which reportedly will pay the NBA $1 billion over eight years for the official apparel rights.

Still, the potential sales lift for the Cavs’ new Nike uniforms will depend on how well they’re received. On May 31, the team unveiled a new collection of logos, and introduced black to its permanent color palette.

Soon, fans will get to see how the team and Nike incorporate the logos into its uniform collection.

“From an innovation standpoint, it really ties to what’s the fans’ response?”

Mannix said. “Is it something that resonates with people? That’s something you’ll know pretty quickly just by tracking social (media) and listening to what people’s reactions are.”

|

Among adults who claim that the NBA is one of their top interests …

57% would consider buying Nike shoes and apparel vs. 38% for Adidas.

36% intend to purchase Nike shoes/apparel vs. 12% for Adidas.

33% are current Nike customers vs. 21% for Adidas.

Among adults who say they support the Cavs …

56% would consider buying Nike shoes and apparel vs. 38% for Adidas.

35% intend to purchase Nike shoes/apparel vs. 1% for Adidas.

39% are current Nike customers vs. 15% for Adidas.

Nike’s 2017-18 NBA uniforms will include such editions as the Association and the Icon. (Contributed photo)

Source: Navigate Research, YouGov

during the 2016-17 season, and the Cavs finished second to the Warriors in the team merchandise rankings.

But even with the lift that has been provided by James’ return, three consecutive trips to the NBA Finals and the long-awaited 2016 championship, merchandise revenue, according to a team source, is eight to 10 times smaller than the money generated by the club’s robust ticket sales.

Of the Cavs’ team-controlled revenues, merchandise sales account for a percentage that’s in the low to mid-single digits, the source said.

And once the franchise’s total revenues, which include the team’s cut of the monstrous national TV deals with ESPN and Turner Sports, are factored in, the merchandise percentage drops into the low single digits, the source said.

Part of the reason for that is any Cavs merchandise that is sold nationally or internationally goes into

the league’s revenue pool, which is divided evenly among the NBA’s 30 teams and is classified as basketball-related income (giving the players a sizable chunk, too).

The areas in which the Cavs can significantly benefit from the new uniforms and the switch to Nike, though, are their team-controlled shops — online and at Quicken Loans Arena. A portion of those sales still go to the players, but the revenue isn’t split with the rest of the league.

It should also be noted that the 2017-18 season won’t be the first in which Cavs fans can purchase a jersey with Nike’s iconic swoosh logo.

The apparel giant has been an NBA marketing partner for 25 years, and Nike-branded “Swingman” jerseys (higher-caliber replicas that the Cavs sold for $80 to $90 in their team shop last season) have been sold for years.

Yet any fan who wants the Cavs’ most up-to-date look might be com-

pelled to purchase authentic (Adidas jerseys that went for about $300 last season) or replica jerseys produced

by Nike.

There will also be plenty of options from which to choose, as Nike last week said it will be unveiling at least four uniform editions for each team.

In 2017-18, the Cavs’ jerseys will feature the swoosh logo on the upper right, and Goodyear’s Wingfoot logo on the top left. The latter — which stems from a lucrative long-term jersey patch partnership that was announced in May — will only be available at the Cavs’ online and in-arena team shops.

“I definitely think it’s a draw,” Mannix, LeadDog Marketing’s founder, said of the swoosh. “It depends on your age, where you live and what players you support.”

With an average age of 42, according to a recent Magna Global survey for the SportsBusiness Journal, the

NBA’s fans are significantly younger than those of Major League Baseball (57), the NFL (50) and NHL (49). And Cavs backers, according to Navigate Research, strongly prefer Nike — the apparel provider of choice for all of the team’s top players.

That’s an ideal combination for a franchise that is on track to pay $220 million or more in combined salaries and luxury taxes this season.

However, even a merchandise surge of 30% or more isn’t going to provide the type of revenue lift many fans might expect.

A Cavs source expects a “decent” merchandise bump, which is to be expected any time a team releases a new design. The club is also hopeful that fans will go to their shops because they will be the only places in which the Wingfoot logo will be available.

But it’s another logo — the swoosh — and the presence of Nike that probably is the most significant.

cessfully complete the five-month IOP program at Rosary Hall. The most frequently cited reason for those who drop out of the program is a lack of access to affordable, reliable, convenient transportation.

Thom Olmstead, director of university partner collaborations at St. Vincent, was tasked with finding a way to address the transportation challenge. Using a van proved to have “almost insurmountable” logistics and would require patients riding for hours around town as everyone was picked up. He looked at other ride-sharing services, before finding and settling on Circulation.

Right now, Rosary Hall is collaborating with a few sober living houses for the pilot. Olmstead found that many were eager to participate — more than they wanted for the pilot. But, if the pilot continues to prove successful, the goal is to expand to more of those homes and potentially beyond.

Within the first year of the program, St. Vincent’s objective is to provide transportation for 228 clients to access addiction treatment, which Rosary Hall already has capacity for.

low Cab services for transporting ambulatory patients who don’t need an ambulance or wheelchair van service, but have no other means of transportation. UH’s medical transportation providers are now managing the process for transporting ambulatory patients using Lyft and Uber, according to a memo to care leaders from UH Chief Nursing Officer Jean Blake.

At St. Vincent and Rosary Hall, Howard said they’d like to continue to provide the service because, for one, patients who stay in treatment longer do better — so long as they can get there. And second, free Uber rides align with the hospital’s mission to treat people with dignity and respect.

With the stigma of addiction, many patients haven’t been treated with

the dignity and respect that they deserve in years, he said. But something as simple as an Uber ride begins to build that, all while hopefully getting more people to treatment.

“It’s going to make a huge difference,” Howard said. “As long as I’ve been in the treatment field for over 25 years, I’ve never seen anything as exciting as this.”

BR EA DTH OF EX PERTISE PER FOR M A NCE DR I V EN A FIR M YOU K NOW

Dignity and respect After that, Olmstead said, they’ll consider adding additional resources for more treatment capacity.

Currently, the hospital is internally funding the program, but the team is working to finalize a significant grant and are seeking additional funding sources for its estimated $184,000 pricetag for year one — $51,000 for administrative/staffing costs to manage the program, $18,000 in technology costs for Circulation and about $115,000 in Uber costs for the transportation itself.

Already, other areas of the hospital are looking at ways they could use the Circulation program to increase access for patients, Howard said. The pilot starting as Cleveland Yellow Cab closed was pure coincidence, but came at the right time.

University Hospitals had used Yel-

Institutional A sset Management Family Wealth Retirement Plans WWW.ANCORA.NET

PA G E 2 8

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J U LY 2 4 - 3 0 , 2 017 |

CRAIN’S CLEVELAND BUSINESS

AKRON

Kenmore firm a hit in steel drum industry

By JUDY STRINGER clbfreelancer@crain.com

A visit to Panyard Inc., one of the Kenmore neighborhood’s burgeoning music businesses, is as much a lesson in the history of steel pan drums as a look inside the Akron company.

Owner Ron Kerns is a musician and — when it comes to steel pans — a historian eager to share his excitement about the birth and evolution of the instrument with the hope of keeping the Caribbean art form alive.

“I fell in love the minute I saw my first pan,” Kerns said. “I was auditioning for Ohio colleges. When I came to the University of Akron, (Larry) Snider said, ‘If I accept you and you come here, you will play a steel drum.’ I said, ‘What the hell is that?’ He showed me and I never turned back.”

Kerns opened Panyard in 1990 with former business partner Shelly Irvine after the two percussionists graduated from the University of Akron. The original mission was to document and publish Caribbean steel pan melodies. Today, Kerns makes and sells between 8,000 to 10,000 pans a year from his California Avenue factory.

About 150 of those are handcrafted 22.5- or 26-inch drums, but most are a smaller version — called the “Jumbie Jam” — mass produced off site by stamping sheets of steal into miniature 16-inch beginner bowls. It takes 8 seconds to stamp a Jumbie, Kerns said, and another 30 minutes to hand tune it. That’s a fraction of the 10 hours it takes to make the same pan by hand.

The beginner pans are sold by 800 retailers in eight countries for just under $200 a pop. Sales for the 14-person company topped $1 million last year.

Ask Kerns how he went from UA Steel Drum Band member to a global

Panyard owner Ron Kerns’ love for the steel drums was born while he was a student at the University of Akron. (Shane Wynn for Crain’s)

Some of Panyard’s steel pans are mass produced, while others are handcrafted at its California Avenue factory.

leader in the fabrication of pans, and the Kettering native is quick to credit ingenuity.

“When I came up with the technology to produce a die and start stamping some of our pans instead of handcrafting them, that blew every-

thing wide open” he said.

But, Kerns added, innovation has deep roots when it comes to steel drumming — roots that date back before the first hammer hit steel. This is where the historian kicks in.

In the 1800s, Kerns said, the British

government made it illegal to play musical instruments in colonial Trinidad as a way to control African slaves, whom they had brought over to work sugar cane fields and whom they believed were communicating through drumming. Without their drums, the slaves began using bamboo tubes to tamp out beats for parade masqueraders during the annual Carnival festival.

As parades grew larger, bamboo tubes were not loud or durable enough for the processions. Drummers beat on garbage can lids and large biscuit tin lids. As the story goes, in 1938 a young Winston “Spree” Simon, fearing his biscuit tin drum was ruined after the flat surface was beaten inward, turned the drum over and tried to bang it back into shape with a rock. When he flipped it again, Spree noticed he had created five distinct pitches on the playing surface.

Steel pan pioneers later migrated to 55-gallon barrels, which were large enough to fit the full chromatic scale, according to Kerns, who entered the pan innovation scene himself shortly after starting Panyard.

Kerns and Irvine had visited Trinidad during their UA Steel Drum Band tenure and were mesmerized by the island musicians’ intricate steel drum arrangements, sometimes 10 minutes long, all composed and passed down by ear. The duo made more than a dozen trips to Trinidad in the late 1980s and early ’90s to transcribe and preserve various arrangements.

Not long after Panyard began publishing the Caribbean tunes, however, pan enthusiasts were asking for more than sheet music. They wanted mallets and stands — accouterments Kerns and Irvine had made for their own use. Then, composers, directors and musicians wanted the pans themselves.

“You would hear the pan sitting next to a grand piano. And the pan was cool, but it really couldn’t hang with this high-quality instrument,” Kerns said. “I started studying the metal, figuring out what kind of steel, how much carbon, how much manganese, and the exact thickness and hardness (needed) so we could have a straightforward departure point when we were handcrafting.”

Panyard’s first pans were handcrafted from 55-gallon drums, which have 22.5-inch diameters. Kern later developed a 26-inch solid hoop pan, which enlarged the playing surface for “proper note sizes,” he said. In the early days, the company made maybe 100 pans a year; the larger ones taking as much as 100 hours to shape and tune.

In 2007, Kerns took Panyard to the next level when he introduced the world’s first steel pan die, used for casting the Jumbie Jams. The drums are big sellers, especially around Christmas, he said, noting that Panyard sold about 1,000 each month in October and November last year.

The company also has built specialized tips for pneumatic hammers and drafted reusable templates, both of which allow it to speed up the production of the larger bowls and bring more consistency to the final product. Kerns said the plan is to fabricate a die for the 26-inch pans so the company can meet the heavy demand for those drums. Today, it takes the company three to six months to fulfill an order due to a backlog.

“The big step was how could we mechanize so that we can get more pans out to more people and expose the culture and expose the art form on a much, much higher level?”

Kerns said. “Now that we have proven that works, we are almost done on our research to start making the dies to stamp the other size pans.”

Bridgestone Invitational ups its local tie-ins

By DAN SHINGLER dshingler@crain.com @DanShingler

There are a lot of eyes on the Akron area every summer when the professional golf world descends upon Firestone Country Club for the World Golf Championships-Bridgestone Invitational.

But this year, in addition to seeing the golf, fans watching from the rough or on TV will see a lot more attractions tied to the Rubber City and Northeast Ohio.

“Absolutely — a lot more,” said tournament director Don Padgett, who practically grew up on the course, thanks to his father’s 24-year stint running the facility, first as head pro and then as general manager.

“We’re looking to appeal to the masses a little bit more, and we think we’ve got a little something for everybody this year,” Padgett said.

That begins, even in the world of golf, with food, of course, and the tournament, which runs Aug. 2-6, is bringing in more local food businesses this year. In addition to Swensons Food Truck, which will be serving up Akron’s most famous burgers again this year, the 2017 lineup includes B Spot burgers from Michael Symon, Barrio Tacos from Cleveland, Lobster

Louies from Canton and Hatfield’s Goode Grub, a popular Cleveland food truck.

After food, Padgett’s going for what he said is likely the other thing most Padgett Northeast Ohio residents have in common: a love of local sports. Bridgestone is hoping to leverage fans’ attachment to both pro and college teams with tie-ins and events this year.

The biggest is the tournament’s joint effort with the Pro Football Hall of Fame to market the area because the Hall’s induction weekend coincides with the golf tournament.

“Most of their big events are in the evening, and the golf is during the day, so it’s a good fit,” Padgett said.

Thursday will be College Day. “Whether you’re Buckeye or a Zip or a Viking or a Golden Flash, we’re encouraging everybody to wear their college colors,” Padgett said.

The tournament is also working with the Browns and has asked fans to wear Browns colors on Friday, which Bridgestone is dubbing NFL Day. Padgett said he suspects he’ll also see some blue-and-silver in the crowd, though, because the Cowboys

are playing in this year’s Hall of Fame game down I-77 in Canton. Josh Cribbs and Kevin Mack are likely to be sporting brown and orange during their scheduled appearances at Firestone, though.

Saturday will be Indians Day, with an appearance by Mike Hargrove.

And when the golf tournament wraps up on Sunday, Bridgestone will hold Cavs Day, featuring former Cavs star Ron Harper.

For that, Padgett is hoping Columbus resident Jason Day will wear Nike Cavs-themed shoes. Padgett said he’s seen Day, a known Cavs fan, wear them previously on the course.

Cavs fans might remember Day’s wife, Ellie, sustaining injuries in a December 2015 Cavs game in Cleveland, after LeBron James accidentally plowed into her while chasing a loose ball. It was a moment that might make some rethink their lust for courtside seats.

Not that Firestone or the Bridgestone tournament are forgetting golf.

This year’s tournament will pay homage to the legends who have won at Firestone over the 64 years that the course has hosted a big annual tournament. Those winners include 18 World Golf Hall of Famers and 33 players who have won major championships.

This year’s tournament will recog-

nize three-time Firestone winner Arnold Palmer, who passed away in September 2016. Though he only won at Firestone three times, Palmer was a longtime local fan favorite who has a special connection to the course’s history.

“Arnold actually gave the nickname to the 16th hole — ‘The Monster,’ ” Padgett said. “It was during the 1960 PGA (Championship), when he actually made an eight there on Saturday.

He called the hole ‘The Monster’ in the press tent. Of course, that was the newspaper headline the next day, and we’ve been calling it that ever since.”

So, this year, Arnie’s Army Foundation, Palmer’s philanthropic organization, will hold an Arnie’s March at Firestone, where fans can tour the course for $25, with the money raised going to Akron Children’s and Rainbow Babies and Children's hospitals.

Firestone will dedicate and name the bridge on the 16th hole the Arnold Palmer Memorial Bridge, which even Padgett is already calling simply Arnie’s Bridge.

Last year’s attendance was about 75,000, down from the crowds of about 85,000 the tournament had been drawing in recent years. That was likely because the date of the tournament was moved to July 4 weekend to accommodate the Republican National Convention, Cavs

playoffs and other big events in Northeast Ohio, Padgett said.

The tournament director also said that the acquisition of Firestone’s parent, ClubCorp, is not expected to have an impact on the Bridgestone Invitational.

The event has long held meaning in the Rubber City.

It’s always an important event for Akron, said mayor Dan Horrigan.

“For one week every summer, the eyes of the world are on Akron, Ohio.

It is truly an honor for our community to welcome some of the world’s greatest athletes and 30,000 visitors,” Horrigan said in email correspondence about this year’s tournament.

In addition to the hundreds of jobs the tournament and course provide each summer, the Bridgestone Invitational has generated tens of millions of dollars in economic activity for local restaurants, hotels and other businesses, while raising more than a million dollars for local charities, Horrigan said.

“However, this event is about more than its financial impact — hosting the Bridgestone Invitational is a point of pride for our community.

Watching the world’s best golfers compete in this championship on our home turf is a personal privilege for me, both as mayor and a lifelong fan of the game,” Horrigan said.

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PA G E 31

John Habat

President and CEO, Greater Cleveland Habitat for Humanity When John Habat gets up in the morning, he meditates for about 20 minutes to clear his mind before exercising and heading to work. The practice served him well through the clashes that went with multiple roles in public service over the last 40 years. He started out working as an executive assistant to the late George Voinovich when he was mayor of Cleveland, moved on to work as a lobbyist for the former Greater Cleveland Growth Association, and to stints in education administration with Youngstown State University and Cuyahoga Community College. From a policy wonk, he became a lawyer and manager, mostly behind the scenes. He’s now in a visible role as the leader of the Greater Cleveland affiliate of the organization that puts low-income families to work building their own homes with the aid of armies of volunteers. — Stan Bullard

Five things Favorite place in Cleveland Euclid Creek Reservation of Cleveland Metroparks. “It’s a great urban park. It’s near where I grew up as a kid (in Collinwood), and it’s accessible today from Beachwood, where I live now,” Habat said.

Favorite vacation location His last vacation was to Alaska, but his favorite place is the Southwest.

“It’s beautiful there and I like the heat,” he said.

A voracious reader Habat just finished Thomas Friedman’s “Thank You For Being Late,” but his favorite author is Carlos Castaneda. “You can read him casually or he can take you into a deep inner landscape,” he said.

Hobbies He just finished his fifth marathon, and he loves gardening — with flowers.

Drive-time listening National Public Radio or classic rock

Lunch spot Stone Mad Restaurant & Bocce 1306 W. 65th Street, Cleveland

The meal One had the Stone Mad burger with no bun. The other had the salmon BLT. Both drank Diet Cokes.

The vibe Nestled behind a storefront in a residential section of West 65th, it features fine woodwork, a colorful frieze on the ceiling and an indoor bocce ball court. The outside patio, decorated with stone, accounts for the name. Fun and friendly says it best.

The bill $ 33.43 with tip

Why did you join Habitat for Humanity?

Running a nonprofit had been my goal for a long time. When people first suggested Habitat, I said, “Habat at Habitat for Humanity? It’s too hokey.” However, the organization was at a critical point in 2011.

The staff was down to six, and it was doing a couple of houses a year. I realized I could use all my skills as a lawyer, a chief administrative/ financial officer and a lobbyist. And Habitat’s mission really resonated with me. As a Cleveland inner-city kid, we moved so much I went to 12 different schools. I know how housing instability can harm a family and its children’s future prospects.

Why did Habitat in Cleveland stop building new homes — what the organization is most known for — and focus on rehabbing houses in focus areas?

The circumstances said loudly in 2013 not to build new. Reclaim what is there and abandoned. The cost of rehabbing three houses is similar to building one new — that’s three times the number of families that can be served. We started the block approach in Slavic Village and lower Kinsman and decided to help existing residents with small repairs along with gut rehabs for new homeowners. We did 28 houses in 2016 and helped 74 existing residents.

We’ll do 32 full rehabs in 2017 and help over 100 existing residents in the focus neighborhoods. In 2018, we’ll explore building new houses again to fill in some of the many lots left vacant by so much needed demolition.

Do volunteers do all the work?

They account for 80% of the project, and that’s what keep our costs so low.

We use contractors for some parts of the house such as roofing for safety reasons. We also rely on in-kind donations such as roofing shingles Owens-Corning donated for 80 homes.

What is the most critical part of Habitat for Humanity? Is it volunteers or the ReStores where you sell reclaimed building materials and other items? Or getting the site for a low price?

Volunteers are the reason we can do what we do at a lower price than anyone else. The average payment for new Habitat homeowners in 2016 was $365 a month, including taxes, insurance and the mortgage. It’s far less than the rent on a substandard apartment in Cleveland (from $600 to $900 a month). If you are a family

with five or six kids, good luck.

Virtually everyone pays less than they paid in rent. Some want to leave CMHA for home ownership. Our families make 30%-80% of the area median income based on family size.

For a family of four, that’s $20,000 to $50,000 annually. We hold the mortgage with a 0% interest rate.

That’s the Habitat way.

Tell us about the ReStores. It was surprising how many people were at the store on West 110th Street in Cleveland one recent Saturday.

Restore East is in North Randall at Northfield and Emery.

We sell things no one else does, such as used toilets, sinks, cabinets.

Reclaimed and donated building materials and tools and furniture are also for sale. The only thing we don’t handle is clothes. Once we received as a donation a helicopter propeller. And we sold it. The donations and stores generate a lot of money for our affordable homeownership program.

How are the ReStores faring as retail suffers?

We’ve had a study done and believe we can support four or five ReStores in Cuyahoga County. We’re actually looking now for another location.

Maybe in North Royalton or Strongsville or in Cleveland near Waterloo or East 185th Street. There is a lot of remodeling going on in Collinwood.

Do you have a mentor?

I’ve had a lot of key people in my life.

While I was working for Bill Batchelder in the Ohio House in the 1970s, I met George Voinovich when he was lieutenant governor. I said I’d like to work on his campaign for mayor. He asked me to do one paper, then another. I worked on his campaign and joined the staff when he became mayor, lobbying the state of Ohio.

Remember, we were in default then, and it took state approval to get out of default. And we did a lot — George really cared about urban issues. Carole Hoover (Habat’s boss at the Greater Cleveland Growth Association) is one of the most generous people I know.

What was the biggest break that you got in your life?

Although I was Catholic, in 11th grade I was able to attend Mt. Vernon Academy, a residential Seventh Day Adventist school in Mt. Vernon, Ohio. For the first time, I had stability in my life. I flourished. The message for me from that was, “There is more for you to do in life.”

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