CCBJ November-December 2020

Corporate Counsel Business Journal November  December 2020 VOLUME 28, NUMBER 6

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Corporate Counsel Business Journal November  December 2020 VOLUME 28, NUMBER 6

WOMEN IN BUSINESS & LAW

STAYING CONNECTED AND COMMITTED TO SUCCESS Cynthia Mabry, partner at Akin Gump, discusses her career path and influences INSIDE

Urgency, Proportionality and a Sense of Our Shared Humanity

The Shifting Cannabis Landscape

Insurance for Liability Stemming from Biometric Privacy Laws

Despite COVID, LIBOR Rates Still Set to Expire

How Tech Is Changing the Consumer Experience

AT THE HEART OF BUSINESS® Uncommon value for clients who shape our everyday lives.

ATLANTA CALIFORNIA CHICAGO DELAWARE INDIANA MICHIGAN MINNEAPOLIS NEW YORK OHIO RALEIGH SALT LAKE CITY TEXAS WASHINGTON, D.C. BTLAW.COM

In This Issue LAW BUSINESS MEDIA

Kristin Calve

EDITOR & PUBLISHER

Kimberly Fine

MANAGING DIRECTOR PROGRAMMING

Dylan Shepard

EDITORIAL ASSISTANT

Neil Signore

SVP & MANAGING DIRECTOR OF EVENTS

Lainie Geary

DIRECTOR OF CLIENT SERVICES

Amy Lemel

DIRECTOR OF CLIENT SERVICES

Jennifer Coniglio VP FOR EVENTS & SPECIAL PROJECTS

Matthew Tortora

SENIOR DATABASE MANAGER

WOMEN IN BUSINESS & LAW . . . . 38

Urgency, Proportionality and a Sense of Our Shared Humanity

38 Creating a Culture of Success

Kristin Calve

FRONT . . . . . . . . . . . . . . . . . . . . . . . . . 7 PULSE . . . . . . . . . . . . . . . . . . . . . . . . .13 13 Insurance for Liability Stemming

From Biometric Privacy Laws

Cort T. Malone and Vivian C. Michael 16 Federal Data Privacy Legislation: Will It Help the U.S. Remain Competitive in the Global Marketplace?

Cristin Traylor and Alice O’Donovan 18 In an Uncertain Market, Opportunities (and Risks) Abound

Adam Hilkemann

Pat Hanelt

OFFICE ADMINISTRATOR

Rob Williams

IDEAS . . . . . . . . . . . . . . . . . . . . . . . . . 23

Taylor Highbloom

23 Tracking Workplace COVID-19

Litigation Trends, From Discrimination

to Class Action Lawsuits

WRITER

SOCIAL MEDIA

POSTMASTER: Please send address changes to Corporate Counsel Business Journal, 104 Old Kings Hwy N., Darien, CT 06820; by emailing info@ccbjournal.com; or by calling 844-889-8822.

CORPORATE COUNSEL BUSINESS JOURNAL (ISSN: 1073-3000), November/December 2020, volume 28, number 6. Published bimonthly by Law Business Media, 104 Old Kings Hwy N, Darien, CT 06820. Subscription price: $110 a year. Periodical postage paid at Darien, CT, and additional mailing offices.

The material in this publication contains general information, is not intended to provide legal advice and should not be relied on to govern action in particular circumstances. The sources of material contained in this publication are responsible for such material, and any views or opinions expressed are solely those of the source.

VOLUME 28, NUMBER 6

AT THE TABLE . . . . . . . . . . . . . . . . . . . 2

Rachel Dwyer

GRAPHIC DESIGNER

NOVEMBER  DECEMBER 2020

Peter J. Wozniak and Mark W. Wallin

25 Despite COVID, LIBOR Rates Still Set to Expire

Stephanie J. Sprenkle

28 What We Can Expect From the Ongoing

Metamorphosis of the Legal Ecosystem

Shahzad Bashir

32 With Court Cases Backlogged

and Potential Delays Inevitable

Post-COVID, ADR Stands Ready

Hon. David B. Saxe (Ret.)

Kim Keenan

42 Dig Deep, Work Hard, Be Flexible

Cynthia Mabry

46 Continuous Professional

and Personal Development

Rewards All Involved

Tara Jones

OPS . . . . . . . . . . . . . . . . . . . . . . . . . . . 49 49 Taking a Holistic View of In-House

Counsel’s Role in the Business

Ken Crutchfield 54 How Technology Is Changing

the Consumer Experience

Donna Hoffman

Kristin Calve At the Table

Urgency, Proportionality and a Sense of Our Shared Humanity  Rena Reiss, executive vice president and general counsel with Marriott International, discusses her leadership style, what she looks for in new hires, and how her career has come full circle with a second stint at Marriott.

CCBJ: What led you to your current position at Marriott International?

Rena Reiss: This is my second tour of duty at Marriott. I’d been a hotel development lawyer, working for a small real estate firm in D.C., when I initially joined Marriott back in June of 2000. I spent 10 years in the law department at Marriott, then I got a call about becoming the general counsel at Hyatt in Chicago. Honestly, I spent lot of sleepless nights trying to figure out if it was something I wanted to do. My husband and I had been in Washington for a long time. It was our home. We’d raised our family there. But it was actually a good time for me to make a change, because of where I was in my career, and because the kids were grown and out of the house. So I made the leap. I didn’t know anyone in Chicago, and I’d really only been there for my college roommate’s wedding, years ago.

So it was really a fresh start. My husband ended up staying in D.C. for 18 months because of his job situation, which was a bit overwhelming, but it also gave me the chance

talk. I’d known the general counsel who was retiring, of course, because he had been the one who initially hired me at Marriott. So it was like coming full circle. But also, by then Marriott was quite a different company than the one I’d left. It had gone through several acquisitions, including

of be completely immersed in my new job. I already had

the Starwood acquisition, so it was much bigger than

a pretty broad lens on the world, and then I felt like with

when I’d left. But I still knew a lot of the people there,

that general counsel role, the aperture of that lens widened

though of course they had moved into different roles in

even more. As a general counsel, you practice less law than

the intervening seven years. It was almost as if we had all

you might have before. You’re much more of a business

grown up during that time.

advisor. You’re much more involved with strategy. I loved it.

It was also a personal decision, because as much as we loved Throughout all this, I kept in touch with a lot of people at

Chicago, D.C. was home for us. We had a lot of family there,

Marriott, because they were good friends of mine. So when

whole communities of friends there. We knew that one of

they called and asked if I might be interested in coming

my kids, my daughter, would likely move back there. And my

back as general counsel for Marriott, I was happy to

husband and I both have aging parents who were in the area,

2

NOVEMBER • DECEMBER 2020

NETWORK The participants in the CCBJ Network demonstrate, through their many contributions, their unwavering commitment to the advancement and success of corporate law departments. The engagement and support of these “partners of corporate counsel” assure we continue to develop and distribute the news and information this unique and sophisticated audience relies on to meet the evolving legal and business needs of their organizations.

Strategic Partners

The ability to collaborate across disciplines, across lines, is really important, and also the ability to collaborate with people up and down in the company.

American Arbitration Association Akin Gump Strauss Hauer & Feld LLP Barnes & Thornburg Clifford Chance H5 Jones Day

and other close family and extended family as well. It was

McGuireWoods LLP

the right time to come back – and to take on a new role.

McNees Wallace & Nurick LLC

Tell us about your leadership style and who has

National Association of Corporate Directors (NACD)

influenced it.

I learned really quickly that I don’t know it all. There’s no way that you can know it all or do it all. So one of the things I learned quickly is to be humble. There is no shame in saying, “I don’t know the answer to that, but I can find out for you.”

Or “I know who to call for that.” There are internal and external resources that you develop over the course of your years of practice that you can rely on. So that’s important.

I love to have a strong team as part of my leadership circle – people that I have fun working with, and that I respect.

Honesty and transparency are hugely important. I believe in sharing as much information as I can, which makes for better decision-making around the table.

I also really believe that people in my department – especially the people that report directly to me – should call me out if they see me heading down the wrong path. You know, challenge my thinking. I’ll give you an example of something that happened several years ago: We were about to make a decision about something, and I was talking to a small team of my direct reports, and I could see them sort of nodding.

But later that evening, the more I thought about it, I decided I was making the wrong decision. And the next day, we reconvened, and I said, “You know, I’ve thought about this again, and I actually think we need to change course.” And

Sills Cummis & Gross P.C. Weil, Gotshal & Manges LLP

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CORPORATE COUNSEL BUSINESS JOURNAL

3

their reaction was, “Oh, we’re so glad.” So I said, “Well, you guys, why didn’t you say anything?” You know, that’s part of their responsibility. As part of the leadership team, you’re not

I’m a big advocate of kindness.

there just to nod your head. You’re there to challenge – to do it respectfully, of course – but make sure that we’re thinking about all sides of the question. Varying points of

is really important, and also the ability to collaborate with

view are good. By the same token, I’ve also learned to take

people up and down in the company. Don’t just behave well

responsibility. As the general counsel, you have to make

with somebody whose title is higher than yours. Sometimes

the final call. People look to you for that. You can’t delegate

the person who can be the most helpful and knows the most

that. And you’re not always right. But that’s OK. You can

is somebody who might be junior to you, both in years of

pivot, but you’ve got to be willing to make decisions, and

practice or in terms of their job title. None of that should

sometimes they won’t be uniformly popular.

matter. It’s about the ability to understand who you are and who can help you achieve what you need to achieve and help

I also think you have to maintain your sense of humor and

the company achieve what it needs to achieve.

perspective. What we do is very serious, and we all put a lot of thought and consideration into it. But there’s no harm in

You also have to be able to combine a sense of urgency and a

realizing that there’s a bigger world out there. I think that’s

sense of proportionality. Lawyers tend to be fairly intolerant

important too, in terms of a sense of perspective.

of risk. And one of the things that we have all learned this

I think that’s been especially important during the past

year – and especially in the hospitality business – is that

eight months in dealing with COVID.

if you want to eliminate risk, you’d better close the doors to every one of your hotels and go home. That’s the only

What are the qualities you look for when hiring new

way to eliminate risk. What you need to do is mitigate

people for your team?

risks. So you need to really understand the business. One of the real challenges is to say, “OK, I’ve come up with these

First of all, we look for excellence. As a company and as a

20 issues. I need to think through all of them. With 17 of them,

law department, we have high standards and we stick to

I’m going to decide, you know what, it’s fine. Two of them,

them. There’s really no substitute for people being good at

here are some suggestions.” A lot of that has to do with

what they do, being committed and working hard. So that

talking to your clients about how to accomplish what they

means smart in the conventional sense. A huge piece of it

want to accomplish. But then there’s that last question – the

is what I would call the ability to play well in the sandbox.

last one standing – and that is the one that may really derail

We deal with a lot of constituents through our daily

the company from doing what it wants to do. So in that

practice – clients, people in other disciplines, people in our

case, it’s about knowing how to thoughtfully collaborate on

own department who we collaborate with. And the people

alternatives, collaborate on ways to get to the desired result.

who do the best have a mindset that it’s not all about them.

And knowing, again, when you really do have to raise your hand and say, “You know what? We cannot do that.” There

The ability to collaborate across disciplines, across lines, 4

NOVEMBER • DECEMBER 2020

are situations where you’re violating a law – those are the

easy ones. We don’t get a lot of those. But there are a lot of

and retaining diverse teams. We’ve got to create

gray areas. So when you’re hiring, you want people who are

opportunities. We’ve got to create good jobs. We’ve got to

able to make those distinctions.

expand people’s networks. And we need to talk honestly about what we are confronting within our companies.

What would you say is the best career advice you’ve

I’ve had conversations with folks on my team that have

ever received?

been really eye-opening, to share what their community

Remember that your job is not your life. It’s an important part of your life, certainly, and those of us who throw ourselves into our jobs understand that. But at the end of the day, don’t lose sight of what’s important to you.

Sometimes we learn that lesson the hard way. You hear stories about tragedies that happen to people, the loss of a spouse or the loss of a child, and you think, “God, why does it take something so horrific to make us really sit up and help people?” So it’s important to remind ourselves, and to remind the people that we work with, to keep things in perspective. All of us sacrifice something, because you

is feeling, what the Black community is feeling, and what we can do about it. It doesn’t take millions of dollars, necessarily, or huge initiatives. These are journeys that start with just a few steps. It’s like a pebble in a pond that then ripples out and can have a huge influence. We’re fortunate to be at a company that really values the diversity of the people who work here, and who travel and stay with us.

But I think in the legal profession, it’s still a challenge – and we should not shy away from it. I know people say, “Wow, it’s hard to find certain people.” OK, that might be true, but we still have to do it.

can’t do everything. You can’t be all things to all people.

The final thing I’ll say is that I’m a big advocate of

You can’t be in all places at once. But if you lose sight

kindness. I have a big sign outside of my office that says,

of your North Star and you don’t keep your priorities

“Be kind.” That doesn’t mean being a pushover. It means

straight, it actually diminishes you as a professional as

being a human being. It means being kind to people that

well. Because what makes you human includes being a

you are working with, including the counterparties on

good listener and an empathetic person and being able

the other side of the table. And it means being kind to

to fit all those pieces of the puzzle together.

yourself. I do think that recognizing our shared humanity

Are you hoping to see any changes within the profession?

Absolutely. I think COVID has probably sharpened our focus on some of the things that we should have already been looking at. Not only COVID, by the way – I would call this a summer of racial reckoning in the U.S., which has been a huge wake-up call for us individually, as a company, and really as a country. So let’s start with that. I think we need to continue to focus on attracting

and cutting people a little slack would be great for our profession. We are somewhat challenged by being in a profession where we often have to drop everything and respond quickly, but we also have to understand when that’s not the case and we can go do other things, either for our communities or for our families. This idea of being always on, always available, not acknowledging that we have other parts of our lives – I don’t think that’s healthy for us. And at the end of the day, it doesn’t make us as terrific as we could be otherwise, personally or professionally. 

CORPORATE COUNSEL BUSINESS JOURNAL

5

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NOVEMBER • DECEMBER 2020

Front GC Compensation Survey Best-Paid Sectors: Media, Money & Tech Media edged out financials as the highest-paid sector for GCs when it comes to cash compensation in 2019. But when it comes to serious money – stock and options – technology and tech-heavy businesses are where the action is. Alan Braverman, GC of The Walt Disney Co., took the top slot with just over $8 million ($1.7M in salary and 6.3M in non-equity incentive comp).

Eric Grossman, CLO of Morgan Stanley, fell to #2 after a few years in the top slot. But don’t weep too hard. Grossman still pulled down almost $7 million in cash comp ($1M salary plus a $6 million bonus). Flip to a different metric used by ALM Intelligence to compile the 2020 General Counsel Compensation Report, with stock and stock options woven in, and a different picture emerges. When cash isn’t king, tech muscles everyone else aside. The crown goes to Google’s CLO David Drummond with $133.5 million. (Drummond left Google in December.) The gender pay gap narrowed last year, which is good news, and when it comes to all-in comp, including stock awards, women did especially well: 5 of the top 10 slots, including 3 of the top 4, went to women: Susan Helfrick of Chewy ($30.3 million), Kate Adams of Apple ($25.2 million) and Jennifer Newstead of Facebook ($19.1 million).

Top-Paid by Industry

Top-Paid Women Alan Braverman, Disney, $8,000,061 Top 5 Average: $5.2M

Laureen Seeger, American Express

$4.5M

Eric Grossman, Morgan Stanley, $6,938,750 Top 5 Average: $4.9M

Karen Seymour, Goldman Sachs

$4.5M

TECHNOLOGY

Bradford Smith, Microsoft, $4,216,148 Top 5 Average: $3.8M

Wanjiku Walcott, Discover

$3.8M

HEALTHCARE

Thomas Moriarty, CVS, $5,671,833 Top 5 Average: $3.3M

Laura Schumacher, AbbVie

$3.6M

BUSINESS SERVICES

Michael O’Brien, Omnicom Group, $4,100,000 Top 5 Average: $2.7M

Kate Adams, Apple

$3.6M

ENERGY

Paula Johnson, Phillips 66, $2,224,100 Top 5 Average: $1.9M

Leigh Harlan, Tiffany

$3.4M

FOOD, BEVERAGES & TOBACCO

Marc Firestone, Phillip Morris, $2,985,188 Top 5 Average: $1.9M

Anne Madden, Honeywell

$2.7M

RETAIL

Leigh Harlan, Tiffany, $3,382,005 Top 5 Average: $1.7M

Jennifer Newstead, Facebook

$2.6M

ENGINEERING & CONSTRUCTION

Maxine Mauricio, EMCOR, 2,032,500 Top 5 Average: $1.7M

Sandra Leung, Bristol-Myers

$2.6M

CHEMICALS

L. Benjamin Ederington, $1,766,574 Top 5 Average: $1.6M

Kathleen Waters, DaVita

$2.4M

MEDIA FINANCIALS

$

CORPORATE COUNSEL BUSINESS JOURNAL

7

Briefly

ARE YOU READY FOR

JAMS announces the addition of Lisbeth M. Bulmash, Esq., to its panel in Dallas.

FTI appoints senior managing director, Myron Marlin, as the head of crisis and litigation communications for the Americas in the strategic communications segment.

Barnes & Thornburg adds Marcantonio W. Barnes as a partner in Washington, D.C. to lead corporate practice group.

McGuireWoods advises private investment firm, Summit Park, and its portfolio company, C.A.R.S. Protection Plus, in the sale of C.A.R.S. to Spectrum Automotive Elizabeth Stephenson joins AlixPartners as a managing director in Los Angeles.

Onna announces the appointment of Michelle Wideman as its first chief customer officer.

Former FINRA senior officer Elizabeth Hogan joins McGuireWoods’ securities enforcement & litigation team in Washington D.C. JAMS announces the addition of Hon. Alan G. Perkins (Ret.) to its panel in Sacramento.

FisherBroyles announces Lisa A. Marcy has joined the firm in New York and Salt Lake City as a partner.

Anderson Kill announces that Hailey Lennon, former regulatory counsel at Coinbase joined their technology, media and distributed systems group as a shareholder.

8

NOVEMBER • DECEMBER 2020

The AI debates have been raging for years, and Elon Musk, founder of Tesla and SpaceX, among others, is in the middle of them. While recognizing the benefits of AI, Musk openly worries about whether superintelligence is the beginning of the end for humanity. The concerns about AI have not been lost on general counsel and corporate law departments, who must walk the tightrope between advancing their companies business missions and managing what could be a quantum leap in risk. That’s where Lex Mundi comes in. The worldwide network of leading law firms jumped in in late 2018, working with Cambrian Futures on an AI workshop in Amsterdam for GCs, who clearly were interested. A webinar followed, which led to a working group that developed a checklist designed to serve as a starting point for GCs seeking to get out in front of issues related to the proposed use of AI by companies. Check out the “AI Readiness Checklist for Corporate Legal Functions” at lexmundi.com.

ESG Lands in the Laps of Corporate Boards According to a recent Board Primer issue by NACD (National Association of Corporate Directors), environmental, social, and governance (ESG) performance has emerged as a board-level issue. While the topic of socially responsible capital markets has been in the air for years – the 2004 “Who Cares Wins” initiative pushed ESG concerns as a component of routine investment choices – NACD’s 2019-20 public company governance survey showed that boards were waking up to the importance of ESG. This led NACD to develop Strategic Oversight of ESG: A Board Primer. “Although ESG is as broad as it is amorphous in scope,” NACD says, “it is not an insurmountable topic for the board agenda.” The primer is a good start. It breaks the topic down into manageable chunks, provides guidance on key terms, and adds some context with a timeline tracing the evolution of ESG from SRI (Socially Responsible Investing) to SVC (Sustainable Value Creation). Check out the Board Primer at nacdonline.org.

ENVIRONMENTAL Climate Change Energy Management Environmental Impact of Product Portfolio Environmental Management Water Use and Sourcing Natural Resources Biodiversity, Emissions

SOCIAL Health and Safety Human Rights Human Capital Management Data Privacy Employee Rights

GOVERNANCE Business Ethics Compliance Board Structure Board Compensation Compensation Shareholder Rights Executive Compensation Anti-Corruption, Bribery

GCs Take Note: DOJ Muscles Out Purdue In announcing the global resolution of its criminal and civil investigations of opioid manufacturer Purdue Pharma and individual Purdue shareholders, the DOJ went as far as it’s gone in many years to drive a stake through the heart of a U.S. business. (The entire package is subject to the approval of U.S. Bankruptcy Court.) It’s worth reading what the DOJ had to say about this incredible settlement: “The abuse and diversion of prescription opioids has contributed to a national tragedy of addiction and deaths, in addition to those caused by illicit street opioids,” said Deputy Attorney General Jeffrey A. Rosen. “With criminal guilty pleas, a federal settlement of more than $8 billion, and the dissolution of a company and repurposing its assets entirely for the public’s benefit, the resolution in today’s announcement re-affirms that the Department of Justice will not relent in its multi-pronged efforts to combat the opioids crisis.” You can check out the release and the plea and settlement documents here. In a good piece on the settlement, Law360 asks whether the $8 billion deal means GCs and their companies are at greater risk. John Kelly, a former federal prosecutor and managing partner of Bass Berry & Sims Washington, D.C., office, says he does not think so. "This really is an extraordinary settlement in so many ways, from the total value of the penalties to the dissolution of the company," Kelly told Law360. "I do not think this resolution creates a new normal or increased level of risk for general counsel to manage."

The Shifting Cannabis Landscape In the recent elections that swept President Trump out of the White House and President-elect Biden to its doorstep, another major shift took place – an acceleration of the legalization of marijuana in the United States. As you can see below, the legalization map is complicated, which raises many issues for employers and GCs who must advise their HR teams. No wonder recent studies project an increase in spending on both inside and outside counsel. The work of corporate legal departments never gets easier.

JAMS announces the addition of Lisbeth M. Bulmash, Esq., to its panel in Dallas.

FTI appoints senior managing director, Myron Marlin, as the head of crisis and litigation communications for the Americas in the strategic communications segment.

Barnes & Thornburg adds Marcantonio W. Barnes as a partner in Washington, D.C. to lead corporate practice group.

McGuireWoods advises private investment firm, Summit Park, and its portfolio company, C.A.R.S. Protection Plus, in the sale of C.A.R.S. to Spectrum Automotive Elizabeth Stephenson joins AlixPartners as a managing director in Los Angeles.

Onna announces the appointment of Michelle Wideman as its first chief customer officer.

Recreational & Medical Medical Only Low-THC Products No Cannabis Law

Former FINRA senior officer Elizabeth Hogan joins McGuireWoods’ securities enforcement & litigation team in Washington D.C. JAMS announces the addition of Hon. Alan G. Perkins (Ret.) to its panel in Sacramento.

CORPORATE COUNSEL BUSINESS JOURNAL

9

Lorie Lazarus and Peter Balance join Stroock as partners in Los Angeles.

Required Reading Too busy to read it all? Try these books, blogs, webcasts, websites and other info resources curated by CCBJ especially for corporate counsel and legal ops professionals.

Lex Machina, a LexisNexis company, expands on the company’s New York state court analytics.

Akin Gump advises Meritage Group in its acquisition of tire retailer Les Schwab.

OpenText™ announces Enfuse On Air, a digital conference format for investigative reports.

Clifford Chance advises Watford Holdings Ltd. On pending US$700 million acquisition by Arch Group Capital Group Ltd. Samantha Fugagli joins McNees as an associate in their Harrisburg office.

Wolters Kluwer ELM Solutions receives patent for AI-powered legal bill review technology, LegalVIEW® BillAnalyzer.

Deanna Oppenheimer and Simon Paris to join the Thomson Reuters board of directors, effective November 11, 2020.

Kimberly Y. Chainey is named to the position of executive vice president, global general counsel with Aptar.

Nuix and H5 announce a partnership to streamline the classification of corporate data.

SUBMIT YOUR ANNOUNCEMENTS TO editor@ccbjournal.com

10

NOVEMBER • DECEMBER 2020

WHITE PAPER: U.S. Government This 22-page white paper, which sports an almost impenetrable title, “Information on U.S. Privacy Safeguards Relevant to SCCs and Other EU Legal Bases for EU-U.S. Data Transfer after Schrems II,” prepared by the Department of Commerce, Department of Justice, and the Office of the Director of National Intelligence, provides a roadmap to the trove of public information about privacy protections related to government access to data for national security purposes. The focus is on issues of concern to the EU Court of Justice (ECJ) in Schrems II (Data Protection Commissioner v. Facebook Ireland and Maximillian Schrems), which upheld Standard Contractual Clauses (SCC) as a basis in EU law for transferring personal data to non-EU countries. The ECJ put the onus on companies transferring data to analyze U.S. law related to intelligence agencies access to data, which is what makes this white paper so valuable.

PODCAST: In House Warrior Okay, so this is not technically reading, but this daily podcast, moderated by Washington communications guru Richard Levick in partnership with CCBJ, provides keen insight for GCs on topical issues. Recent editions include: “The Burford View of Litigation Finance,” with David Perla, Co-COO of litigation finance powerhouse Burford Capital, talking about the rise of litigation funding and its significantly increased use by corporations and defense law firms as a tool for growth and expansion, and “The New Detectives – The Emerging Power of eDiscovery,” with Hunter McMahon, COO of IDS, talking about the growing power of eDiscovery and how its focus on “just the facts” and its ability to find needles in haystacks makes a dramatic difference in resolving legal disputes. You can find these and other In House Warrior podcasts at levick.com/podcasts.

Contributors Thanks to the law firms, technology companies, alternative legal service providers, management consultants and other supporters of corporate law departments who share their insights and expertise through the CCBJ network. Your parti­cipation is appreciated.

Shahzad Bashir is the president and CEO of Morae Global Corporation. As CEO, he is responsible for the vision and strategy of Morae, as well as providing leadership in hopes of transforming the legal industry for the sake of Morae's clients. Bashir has three decades of experience in legal and financial consulting services. This experience includes the development of business strategies, law department structuring and more. Pg. 28

Ken Crutchfield is the president and general manager of Wolters Kluwer Legal & Regulatory U.S. He leads the Legal Markets group and is responsible for setting the vision and strategic approach with a focus on developing leading digital products.

His group aims to provide legal professionals across a wide range of markets with expert content and analysis and leading workflow solutions. Pg. 49

Adam Hilkemann is a partner with Akin Gump. He has great experience with private equity funds, hedge funds and hybrid funds pursuing a variety of investment strategies. Hilkemann also represents both established and emerging fund sponsors in fund structuring and investor negotiations. Pg. 18

Donna Hoffman is the Louis Rosenfeld Distinguished Scholar and professor of marketing and the co-director of the Center for the Connected Consumer at the George Washington School of Business in Washington, D.C. Her current research is focused on using conceptual, empirical and computational approaches to understand consumer experiences with AI. Pg. 54

Tara Jones is a legal services manager with Verizon Media.

Verizon Media serves as a division of Verizon Communications for its media and online businesses. Jones has a strong focus in e-discovery. Pg. 46

Kim Keenan is a neutral with JAMS. She has had a long career as a nationally known trial lawyer, mediator and in-house counsel. She has also been recognized for her leadership with multiple multicultural social justice organizations. Keenan has served as a mediator in the United States District Court for D.C. as well as for D.C. Superior Court’s Multi-Door Dispute Resolution Program. Pg. 38

Cynthia Mabry is a partner with Akin Gump. Her practice observes capital markets, securities, mergers and acquisitions, and general corporate matters.

Mabry represents public and private entities, investors and underwriters in capital markets and during financial transactions, including offerings of equity and debt securities. Pg. 42

Cort T. Malone is a shareholder in the New York and Stamford offices of Anderson Kill and practices in the insurance recovery and the corporate and commercial litigation departments. He is an experienced litigator, focusing on insurance coverage litigation and dispute resolution. Pg. 13

Vivian C. Michael is an attorney in Anderson Kill’s New York office where she concentrates her practice in insurance recovery. Vivian has helped to recover millions of dollars in insurance assets under liability and property insurance policies sold to banks, government entities, not-for-profits, Fortune 500s, medical practices and small businesses. Pg. 13

Alice O’Donovan is an associate with McGuireWoods in their business and securities litigation department. She works on a diverse range of disputes ranging from the high court to the court of appeal. Pg. 16

Hon. David B. Saxe (Ret.) is a neutral with NAM (National Arbitration and Mediation). Prior to joining NAM, he served as an associate justice, New York State Appellate Division, First Department, for almost 20 years, and he is a highly honored and respected member of New York’s legal community. Pg. 32

Stephanie J. Sprenkle, of counsel in the McNees real estate practice group, where she assists purchasers and sellers in the acquisition and disposition of real property and the development of real estate. She represents tenants and landlords with respect to commercial leasing and financial institutions and borrowers regarding real estate. Pg. 25

Cristin Traylor serves as discovery counsel for McGuireWoods.

She oversees a team of discovery lawyers, litigation project managers and legal assistants who provide experienced assistance and strategic advice to clients. Traylor also manages the Richmond Document Review Center. Pg. 16

Mark Wallin, of counsel with Barnes & Thornburg in Chicago, focuses his practice on defending employers in complex workplace class and collective actions in state and federal court. Wallin also defends employers in class action, multi-plaintiff and single plaintiff discrimination litigation by the EEOC and private plaintiffs. Pg. 23

Peter Wozniak is a partner with Barnes & Thornburg in their Chicago office. He represents clients across numerous industries, including transportation and logistics, restaurants, retail, manufacturing and temporary staffing. Pg. 23

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Pulse Insurance for Liability Stemming From Biometric Privacy Laws CORT T. MALONE AND VIVIAN C. MICHAEL ANDERSON KILL Requirements and Rationale of BIPA

 Identifying insurance coverage for alleged violations of the Illinois Biometric Information Privacy Act can be tricky – but it’s increasingly necessary.

In 2008, Illinois passed one of the first biometric privacy laws in the United States. The Biometric Information Privacy Act (BIPA), 740 ILCS 14/1 et seq., did more than usher in a new wave of biometric information privacy protections. It has also ushered in a wave of class action lawsuits, with plaintiffs seeking to recover damages pursuant to BIPA’s hefty statutory penalties. Companies that collect, store, use, or disseminate biometric identifiers or information in Illinois should take stock of their insurance coverage and be aware of potential pitfalls and pressure points in their policies.

The use of biometric technology in day-to-day operations is on the rise. Whether it’s a fingerprint scan to clock in and out of work or a retinal scan to confirm access to a restricted area, companies in virtually every industry are using and storing individuals’ biometric information.

Consequently, more and more companies will face potential exposure under BIPA and similar legislation in other states, including New York, California, Texas and Washington.

BIPA defines “biometric information” as “any information, regardless of how it is captured, converted, stored, or shared, based on an individual’s biometric identifier used to identify an individual.” Biometric identifier “means a retina or iris scan, fingerprint, voiceprint, or scan of hand or face geometry.” BIPA imposes a number of requirements CORPORATE COUNSEL BUSINESS JOURNAL

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on private entities possessing biometric identifiers or biometric information, including: • Inform individuals in writing of the specific purpose and length of time for which biometric identifiers or information are being collected, stored and used.

• Provide a publicly available retention schedule and guidelines for permanently destroying individuals’ biometric identifiers or information.

• Obtain a written release from individuals to collect, store, disseminate or otherwise use their biometric identifiers or information.

In enacting BIPA, the Illinois legislature recognized that: (1) Biometrics are unique and, when compromised, place individuals at an increased risk of identity theft; (2) biometric technology is new, and “[t]he full ramifications of biometric technology are not fully known”; (3) the public is wary of using biometrics in connection with personal information; and (4) regulating the collection, use, and storage of biometric identifiers and information serves the public interest.

740 ILCS 14/5(c)-(g). The Illinois legislature passed BIPA to codify that any private entity in possession of biometric information cannot “disclose, redisclose, or otherwise disseminate a person’s ... biometric identifier or biometric information” unless the person consents to the disclosure or redisclosure. 740 ILCS 14/15(d).

The Rapid Rise of BIPA Class Actions Following Rosenbach BIPA imposes penalties of up to $5,000 per violation.

Unlike most of the biometric privacy acts in effect today, BIPA creates a private right of action for any person “aggrieved” by a BIPA violation. Any person “aggrieved” by a violation of BIPA may recover for each violation: (1) $1,000 “against a private entity that negligently violates BIPA”; or (2) $5,000 “against a private entity that intentionally or recklessly violates [BIPA].” 740 ILCS 14/20.

In its much-discussed decision in Rosenbach v. Six Flags Entertainment Corp., the Illinois Supreme Court held that any person alleging a failure to comply with any aspect of 14

NOVEMBER • DECEMBER 2020

BIPA – even in the absence of injury or harm resulting from the violation – is an “aggrieved person” under BIPA. “The violation, in itself, is sufficient to support the individual’s or customer’s statutory cause of action.” The Illinois Supreme Court’s decision that any person alleging a violation of BIPA qualifies as an “aggrieved person” with a private right of action was met with a spate of putative class action filings.

More than 150 putative BIPA class actions have been filed since Rosenbach, which was only decided in January 2019.

The relative ease of asserting a BIPA claim since Rosenbach, and the prospect of headline-grabbing settlements (like Facebook’s reported $550 million settlement), suggest that BIPA class action claims will continue to proliferate.

Insurance Coverage Considerations for BIPA Claims Companies facing BIPA claims should consider a range of options for insurance coverage of defense costs, settlements, judgments and verdicts. BIPA claims allege a negligent or intentional invasion of privacy, often by an employer, involving sensitive personal information and systems utilizing that sensitive information. The nature of BIPA liability makes three types of policies natural contenders for coverage: commercial general liability (CGL) policies, employment practices liability (EPL) policies, and cyberinsurance policies.

In most cases, a CGL policy is the first place to look for coverage of a class action. The broad duty to defend under a CGL policy requires insurance companies to provide a full and complete defense if any allegation in the complaint that conceivably could be covered. Many CGL policies promise to pay “all sums” that the policyholder is legally obligated to pay because of “personal and advertising injury,” which is often defined to include “publication of material that violates a person’s right of privacy.” In the case of West Bend Mut. Ins. Co. v. Krishna Schaumburg, an Illinois appellate court held that this “publication” clause encompassed a BIPA plaintiff’s allegation that fingerprint data was improperly provided to a third party and ruled that the insurance company had a duty to defend its policyholder.

Though West Bend is good news for policyholders, they still should expect insurance companies to raise a number of challenges to coverage under CGL policies. Insurance companies have brought declaratory judgment actions citing exclusions for “Access or Disclosure of Confidential or Personal Information and Data-Related Liability,” “knowing” violations of rights, and “Recording and Distribution of Material” in violation of the law. These exclusions must be carefully analyzed in order to determine their impact on coverage.

EPL insurance policies also are a valuable source of protection for companies facing BIPA liability based on biometric data practices in the workplace. EPL insurance provides coverage to employers for claims made by employees regarding defined sets of wrongful acts. Many BIPA claims are brought by employees alleging that their biometric identifiers and information improperly were collected, used or stored by the employer without the employees’ written consent.

Because this is not the typical fact pattern that EPL insurance companies expect to encounter, and EPL policies are less standardized than CGL policies, policyholders can expect some resistance to their BIPA-related claims, such as arguments regarding whether plaintiffs meet the EPL policy’s definitions of “employee” or “independent contractor.” Many EPL policies include “invasion of privacy” in the policy’s definition of “wrongful act,” which ought to give policyholders a strong argument for coverage of potential BIPA liabilities.

Cyberinsurance also may be an avenue for coverage of BIPA claims, depending on the specific terms of the policy. While biometric data should fall squarely within a cyber policy’s definition of confidential information or data, cyberinsurance policies are not yet standardized and need to be scrutinized carefully. The scope of coverage under a cyber policy may depend on several policy provisions, but policyholders with potential BIPA liabilities should be especially wary of exclusions for claims “alleging, based upon, arising out of or attributable to the unlawful collection” of confidential information.

Third parties also may have a duty to provide insurance for any losses arising from a BIPA claim. Some policyholders hire third-party data companies to maintain their biometric scanning systems. Under the terms of the contract between the policyholder and the third-party data company, policyholders with exposure to BIPA claims may have the benefit of being an additional insured on the data company’s insurance policies. Policyholders should request and maintain complete copies of the policies on which they are listed as an additional insured, and confirm that there is adequate insurance for potential future BIPA claims.

Whether a company already is facing BIPA claims, or may face such claims in the future because it collects, uses or stores biometric information, it is critical to understand the possible insurance types that may respond and provide valuable coverage. Companies should work with their brokers and experienced insurance recovery counsel to ensure the best protection from this expanding universe of potentially damaging claims. 

Cort T. Malone is a shareholder in the New York and Stamford offices of Anderson Kill and practices in the insurance recovery and the corporate and commercial litigation departments. He is an experienced litigator, focusing on insurance coverage litigation and dispute resolution. Reach him at cmalone@andersonkill.com.

Vivian C. Michael is an attorney in Anderson Kill's New York office, where she concentrates her practice in insurance recovery. She has helped to recover millions of dollars in insurance assets under liability and property insurance policies sold to banks, government entities, notfor-profits, Fortune 500s, medical practices and small businesses. Reach her at vmichael@andersonkill.com.

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FEDERAL DATA PRIVACY LEGISLATION: Will It Help the U.S. Remain Competitive in the Global Marketplace?

CRISTIN TRAYLOR AND ALICE O’DONOVAN McGUIREWOODS the global market. She posited that an American privacy law

Cristin Traylor and Alice O'Donovan, with McGuireWoods, discuss the outlook for national privacy legislation in the U.S.

could work in conjunction with the European Union's General Data Protection Regulation (GDPR) and other global privacy laws, thus evidencing for other countries that the U.S. is protective of data privacy. According to Brill, a comprehensive law would also address consent and collection issues related

On September 17, 2020, four Republican senators (Roger Wicker – Mississippi, Chairman; John Thune – South Dakota; Deb Fischer – Nebraska; and Marsha Blackburn –

to COVID-19 health data, while at the same time promoting racial equality and prohibiting data discrimination.

Tennessee) introduced sweeping federal privacy legislation

Brill’s comments are particularly pertinent at present.

entitled the Setting an American Framework to Ensure

The GDPR contains stringent restrictions with regard to

Data Access, Transparency, and Accountability Act, or the

transferring personal data outside the European Union –

SAFE DATA Act. This proposed comprehensive national

such transfers are prohibited unless certain “safeguards”

privacy law has three main components:

are implemented. Up until July of this year, one of the safe-

•

• •

Provides consumers with more choice and control over their data.

Directs businesses to be more transparent and accountable.

Strengthens the enforcement power of the Federal Trade Commission (FTC).

On September 23, 2020, a hearing titled “Revisiting the Need for Federal Data Privacy Legislation,” was held to analyze the current state of consumer data privacy laws and various legislative efforts to address data protections.

According to Sen. Wicker, the SAFE DATA Act “would establish a nationwide standard so that businesses know how to comply no matter where their customers live, and so that consumers know their data is safe wherever the company that holds their data is located.”

Julie Brill, former Commissioner of the FTC and Microsoft’s Corporate Vice President, Chief Privacy Officer, and Deputy General Counsel for Global Privacy and Regulatory Affairs, submitted written testimony in favor of the SAFE DATA Act, describing it as critical for providing a national framework for U.S. businesses to allow them to better compete in 16

NOVEMBER • DECEMBER 2020

guards available to businesses needing to transfer personal data from the European Union to the U.S. was the EU-U.S. Privacy Shield Framework. This was designed by the U.S.

Department of Commerce and the European Commission

the legislation be “technology- and industry-neutral,”

with the aim of supporting transatlantic commerce by

and that it should be even more comprehensive

providing companies in the EU and the U.S. with a mecha-

than the California Consumer Privacy Act (CCPA).

nism to comply with data protection requirements when

Unsurprisingly, Xavier Becerra, California Attorney

transferring personal data from the EU to the U.S. On July

General, advocated for a federal privacy law that does

16, 2020, however, the European Court of Justice (ECJ)

not preempt state laws such as the CCPA. Leibowitz and

invalidated the Privacy Shield Framework, citing con-

Ohlhausen prefer to exclude private rights of action, and

cerns about “limitations on the protection of personal

instead provide both the FTC and the state attorneys general

data arising from the domestic law of the United States

with the enforcement power of the national privacy law.

on the access and use by U.S. public authorities” in respect of personal data transferred from the European Union to the

Other national privacy acts have been introduced over the

United States, on the basis that these limitations mean that

past six months, such as the COVID-19 Consumer Data

personal data transferred to the U.S. from the EU does not

Protection Act of 2020, the Public Health Emergency

have the requisite protection required under EU law.

Privacy Act, and the Data Accountability and Transparency Act of 2020, showing an increased interest in compre-

More than 5,000 businesses in the U.S. were accredited

hensive regulation of consumers’ personal data. We are

under the Framework (in many cases, at some considerable

keeping an eye on this proposed legislation, which would

expense). The ECJ ruling does not prevent companies

have vast implications for all industries. 

from transferring data between the EU and the U.S. using other safeguards, such as “standard contractual clauses.”

However, these alternatives may be more cumbersome and less practical – and there is in any case a question mark over whether they can protect data adequately in countries such as the U.S. that do not have statutory privacy protections as robust as those in the EU. This creates significant difficulties for thousands of U.S. and European companies, and makes U.S. businesses less competitive in the global marketplace. The European Commission and the U.S. Department of Justice have released a statement saying that they are working to find a solution to the Privacy Shield problem, but it is difficult to see how any permanent resolution can be found without a significant shift in the U.S. data privacy landscape.

Jon Leibowitz, former Commissioner and Chair of the FTC, and Maureen Ohlhausen, Former Acting Chair of the

Cristin Traylor serves as discovery counsel for McGuireWoods. She oversees a team of discovery lawyers, litigation project managers and legal assistants who provide experienced assistance and strategic advice to clients. Traylor also manages the Richmond Document Review Center. Reach her at ctraylor@mcguirewoods.com.

Alice O’Donovan is an associate with McGuireWoods in their business and securities litigation department. She works on a diverse range of disputes, ranging from the high court to the court of appeals. Reach her at aodonovan@mcguirewoods.com.

FTC, both backed the federal privacy law, advocating that CORPORATE COUNSEL BUSINESS JOURNAL

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In an Uncertain Market, Opportunities (and Risks) Abound

 Adam Hilkemann, partner with Akin Gump, discusses trends in investment management – including hedge funds, hybrid and customized funds, and real estate – and how investors and fund managers are dealing with the ongoing pandemic.

CCBJ: Tell us about your background and how your practice has developed.

Adam Hilkemann: I’m a lifetime Akin Gumper. I summered at Akin Gump, and I’ve been here my entire career. I recently made partner in our investment management practice in Dallas. Our office has a long history in hedge funds, particularly in Texas, but also in private equity and all things funds-related. Myself in particular, I’ve spent a lot of time working on real estate and real estate–related funds, including real estate co-investments and programmatic real estate joint ventures for fund sponsors. Primarily, I’ve worked on the sponsor side, but sometimes on the limited partner side as well. I’ve also worked frequently with hedge fund and hybrid-style clients, again, particularly on the sponsor side. Many times it’s been for clients with more of a niche or specialized investment strategy – things like litigation finance, technology, multi-manager, cryptocurrency, digital asset funds, but also plain vanilla hedge funds and associated compliance work. I’ve also been spending more and more of my time doing investor-side representation for large institutional clients that are investing in other funds, which I think has probably been a trend across many firms.

What investment and asset management trends have you been seeing over the course of the pandemic, and how are investors and fund managers pivoting and prioritizing?

The simplest way to address that question is to split the answer into whether or not we’re talking about liquid products, like hedge funds, or more illiquid investments 18

NOVEMBER • DECEMBER 2020

and products. On the liquid side, certainly the first quarter and early second quarter of 2020 saw a significant performance downturn. Maybe not the biggest in the industry’s history, but overall, for hedge fund managers as a whole, for months like March, it was probably worse than the global financial crisis, and it really erased all of the gains that had been made in 2019, when people were starting to talk about a hedge fund resurgence. A lot of that was wiped out. That being said, hedge funds did mostly outperform market as a whole, which was down maybe twice as much as a lot of these hedge funds – even if the hedge funds themselves had double-digit losses.

Right after that, in the second quarter, along with a lot of the rest of the market, there was a pretty historic upswing for hedge funds, which essentially erased a lot of the first-quarter downswing. And again, hedge funds generally outperformed the market, which is obviously what they are supposed to do. Now we are seeing new funds being launched, especially by the more established managers.

There is a trend in the industry toward more established so-called “mega managers.” As far as liquidity and inflows and outflows, the outflows in the first quarter were pretty significant, and there was certainly a lot of ink spilled about how this could turn into another 2008 liquidity crunch – that we were going to hit a liquidity wall again, like we did in the global financial crisis. But we never saw it.

I think a variety of things account for that. Managers are more sophisticated now; terms are more sophisticated.

Maybe investors are a bit more patient and sophisticated too, and you’re starting to see investors and managers working together, trying to come up with compromise terms, getting less liquidity, perhaps in exchange for fee breaks, or even renegotiating existing deals, negotiating withdrawals or cancelations of withdrawals. It’s hard to say if it’s an overall trend, but I think it does point at an acceleration toward more customized hedge fund products and terms that really match investor needs with what managers would like to see,

There’s an art to dealing with the government before you’re in a courtroom, and it’s a very tricky form of advocacy.

– Micheal Asaro

in particular as investors continue to seek out alternative investments in a low-interest-rate environment.

Since we’re still in the middle of the pandemic, it’s difficult to say where this is all going to lead. As managers continue to negotiate various alternative liquidity structures, there’s also a trend toward potential conflicts and operational difficulty as those play out over time, especially if there is another crunch or large market downturn. It’s going to be important to have increased compliance awareness as we move forward.

On the illiquid side, you’ve got historic amounts of dry powder, as is being reported semi-constantly in industry and industry-adjacent publications. Even from investors with a lot of dry powder, funds of funds, institutions, you saw some tentativeness in the first quarter, since people weren’t sure what was going to happen. When they saw that the markets did not break, and in fact the stock market picked back up and a liquidity crunch did not occur, fundraising and deployment picked back up. And on the

fundraising side, definitely in terms of the large and very large mega managers, you’re still seeing institutional investors oversubscribing big closings – as well as co-investments and other sorts of specialized funds that play to the manager’s strengths and crown jewel–type assets.

That being said, you’re still seeing some hesitancy from sponsors to really push investors for more manager-friendly terms, despite being oversubscribed. As with the liquid market, you’re seeing increasing sponsor focus on specialized funds. Maybe even half of the sponsors are considering or have implemented customized funds or funds of funds.

In other words, a different or narrower strategy than their main fund. Maybe a different investment timeline, harvest horizon, maybe more information or veto rights. A lot of times those investments will be more or less in parallel with their other products, though they are not true “parallel” funds that are investing in everything that the main fund is doing. And we have seen a heightened focus on potential conflicts relating to that. A lot of focus on allocation policies. There’s an Office of Compliance Inspections and CORPORATE COUNSEL BUSINESS JOURNAL

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Examinations (OCIE) alert that went out recently that’s certainly getting attention. And on the expense side, we’re starting to see more focus on allocations as we start to see more industry adoption of the pass-through of internal expenses, like internal legal and accounting expenses.

The Institutional Limited Partners Association (ILPA) has seemingly adopted an approach that permits that sort of pass-through. Although the current trend is to see broad carve-outs for the general partner to allocate investments and expenses flexibly, as long as it’s fair and equitable.

You have a considerable representation within the real estate community. And many organizations are reconsidering real estate investments, leases and more. How are your real estate investment clients reacting to these events?

Certainly there’s some concern in this space generally – especially real estate related to hospitality, shopping malls, downtown offices, other similar kinds of commercial uses.

And there’s still a big question mark out there, since this pandemic still hasn’t played out fully yet, right? We had the COVID-relief stimulus bill. We’ve had some tenant relief at different levels of government. But we’re not seeing a lot of flexibility from the special servicers in the agency and bond markets that are essentially responsible for this debt.

We did see some extensions early on, limited extensions for people back in March, April, May and maybe June, when people were hoping for an early end to the pandemic and were giving borrowers some relief.

But now we’re seeing a lot of those forbearance periods expiring, and I think we’ll start to see more foreclosures and more collateral renegotiation with borrowers. Once again, it’s difficult to say how it will play out, how much cash borrowers are going to be willing or able to put up. Estimates about foreclosures are all over the place. There haven’t been too many yet, but certainly some estimates are that this could be even worse than 2008.

20

NOVEMBER • DECEMBER 2020

Acceleration and customization are the main themes.

That’s the bad news. The good news is that there are a lot of sectors that are still active. Medical properties, infrastructure, food, energy, communications, data centers and related investments. So even if there’s been some discomfort in existing investments in sectors that have been hit hard, sponsors may have the ability to ride it out. And if they’ve got a lot of cash, they may be able to make opportunistic investments in other sectors that are down or slightly down – like multi/single family residential or education – which has generated a bit of a boom in opportunistic real estate credit and net lease–type strategies.

I think there will be continued pressure for managers to support valuations where they’re holding investments at cost, both from an investor and regulatory perspective, particularly if those valuations impact their fees or performance. If they have net asset value-based fees or performance affected by write-downs and write-offs, we’ll probably start to see more conflict renegotiation here as investments that involve more than one fund start to go bust.

What role are hybrid funds and other customized vehicles playing in risk-management strategies?

As we discussed earlier, you’re starting to see increasing customization of products, particularly in the credit space – credit funds of all types, from the traditional to the more unconventional. These are for funds that are not illiquid per se but are not as liquid as a conventional hedge fund either.

There’s been some investor concern about what’s the right liquidity framework for these vehicles – but they’re not quite ready to do a traditional private equity model either.

So there are some trade-offs. Sometimes people aren’t paying fees on commitments, so they’re not paying on unde-

ployed capital, which is good for investors, but now maybe they’re paying fees based on that asset’s value or even net asset value with leverage. So they may end up paying more fees overall. Maybe people have to do an early exit, or slow pay liabilities in exchange for a manager getting a longer overall turn or ability to raise series after series of capital.

We’re seeing that lead to the return of “evergreen permanent capital structures” of various types. You raise pocket after pocket of capital and then deploy constantly. These types of structures can give managers a more predictable source of capital, although they need to be careful about actually being able to call or utilize that capital for follow-on investments or delayed draw credit agreements. These evergreen funds also have to be cautious about the potential for style “drift.” Sometimes they’re also limited by what the administrators can accomplish, and the complexity can be a burden as well. And, with the more specialized hybrid funds, things like trigger funds, where investors want to take advantage of specific market triggers or events, investors may not quite be ready to have their capital tied up. So once again, you’re seeing customization and hybridization that attempts to meet investor and manager goals.

How are you advising fund managers about their near and long-term risk management and compliance strategies in the current environment?

I’ll break this answer down into liquid and illiquid as well.

On the liquid side, in the short term, there’s reviewing your fund terms, checking your gates, checking your ability to create side pockets, reviewing side letters for restrictions, and then also getting in front of investors and addressing potential issues in advance – before quarterly or semiannual withdrawal deadlines, or as requests start to stack up.

A lot of that’s already been done through renegotiations, maybe in-kind redemptions, liquidating vehicles, or sometimes by investors that were a little nervous canceling those requests and staying in the fund.

Investors are increasingly sophisticated and willing to participate in more specialized structures or terms.

Long-term, you’re starting to see managers think about new and creative share classes, and they’re trading off less liquidity for less or more creative fees. You’re also starting to see, especially on the liquid side, the hedge fund side, people revisiting their expense allocation policies – people that maybe were used to having just one fund or maybe a couple of funds with different strategies. Now they’ve got this proliferation of vehicles – funds of funds, managed accounts, sidecars, and so on – and the hedge fund expense allocation policies are now in Private Placement Memorandum (PPM) disclosures that are starting to look a lot more like private equity. It’s also important to encourage hedge fund managers to review their conflict disclosures related to offering investors different liquidity or offering them side letters, getting them to think about their compliance manual and the recent OCIE alert I mentioned earlier. For some of our really large or international managers, we’re also making sure that they’re looking at the United Kingdom and the rest of Europe in terms of what they’re going to do there, because there’s a higher concern over there about whether there’s a liquidity mismatch between funds, investments and their investment terms.

On the illiquid side, short term, some of the same things.

Looking at event investment and expense allocation policies, looking at side letters, revisiting their strategy and make sure there’s not style drift just because of the current market conditions making certain sectors more attractive. Revisiting their valuations and their reporting methodology, and to the extent they can, running issues by their limited partner advisory committees and taking their temperature, particularly on the private equity side.

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Long-term, we want people to think about new fund

in specialized sectors, or with specialized strategies. And

terms, broadening investment strategies, or creating

also, on the manager side, partner with investors to drive

buckets for things that are going to be outside of their

assets under management and overall performance, focus-

main strategy as private investors start to look for more nontraditional private equity–type investments. Also, especially in the credit space, think about potential shadow banking “regulation,” as this may be a sector that is ripe for more regulation, similar to the existing banking regulation structure. Other things we’re doing include encouraging people to review their private placement memorandum, conflict and risk disclosures, and on the investor side, utilizing co-investments and other types of similar structures to draw in investors who might be on the fence with lower average fees, without reducing the headline fees they’re offering.

What opportunities should investors and asset managers be considering during all this?

Acceleration and customization are still the main themes.

On the investor side, beyond just the traditional total relationship fee breaks, where you get a fee break from the manager based on your overall commitments to all of the manager’s funds, it’s smart to approach advisors like partners, in areas that play to the manager’s strength, as part of putting together a complete investment strategy.

Maybe even on a mix-and-match basis rather than a takeit-or-leave-it basis – which we see managers increasingly willing to do for large investors. Also, for investors, caution them to continue monitoring disclosure and conflict issues. The private placement memorandums are no longer simply boilerplate – to the extent that they ever were – and there’s more and more that’s being disclosed to investors. Investors should be aware of what’s in there.

On the manager side, there are a lot of opportunities to deploy capital opportunistically in a wild market, especially 22

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ing on investor reporting and education. We’re starting to see more and more managers adopt the ILPA reporting.

It’s a greater reporting burden for them, but the flip side is that internal expenses that weren’t traditionally passed through, like accounting and legal, including costs associated with that reporting, have now seemingly been blessed by ILPA. I think investors are increasingly sophisticated and willing to participate in more specialized structures or on specialized terms. They’re familiar with hybrid structures, they’re familiar with impact funds and other customized funds and the related issues. And, advisors may soon have the ability to start marketing under the new advertising rules that would give them more flexibility, especially with institutional investors.

Lastly, there’s also a greater potential for tax optimization in the current workfrom-home environment.

It’s not a large trend yet, but we’ve started to see a number of firms considering either changing their tax domicile or at least the domicile of the principals, although that could be very complicated. It’s definitely something to pay attention to though. 

Adam Hilkemann is a partner with Akin Gump. He has great experience with private equity funds, hedge funds and hybrid funds pursuing a variety of investment strategies.

Hilkemann also represents both established and emerging fund sponsors in fund structuring and investor negotiations. Reach him at ahilkemann@akingump.com.

Ideas Tracking Workplace COVID-19 Litigation Trends, From Discrimination to Class Action Lawsuits PETER J. WOZNIAK AND MARK W. WALLIN BARNES & THORNBURG LLP

The COVID-19 pandemic has done a considerable amount for workplace litigation. Peter Wozniak, partner with Barnes & Thornburg, and Mark Wallin, of counsel with Barnes & Thornburg, discuss trends they’re seeing in litigation tracking.

Since March 2020, the Barnes & Thornburg LLP Wage and Hour Practice Group has been tracking COVID-19 related workplace litigation. The goal of this tracker is to allow employers to watch the trends as they develop, and (hopefully) avoid some of the pitfalls.

As the pandemic progressed, several notable trends have developed in the allegations. Far and away the largest number of complaints have come from the “Wrongful Termination, Retaliation and Bias” category. Some of these complaints allege that the plaintiff was terminated under

the pretext of COVID-19, but that the true reason for the termination is one or more protected characteristics possessed by the plaintiff. Age and disability discrimination are among the most prevalent allegations. For example, in Pizzirulli v. Storer Transportation Service, et al., a 64-year-old charter bus driver in Stanislaus County, California, alleged that his temporary layoff was converted to a permanent layoff because of the COVID-19 pandemic. The plaintiff alleges that only three other employees were permanently laid off, and that these other employees were all about the same age as him.

Another emerging trend is claims arising out of federal leave laws such as the FMLA and the FFCRA. These complaints tend to allege that plaintiffs were terminated while on protected leave or that their jobs were not available when they attempted to return from leave. A prototypical example comes from Summit County, Ohio, in Leppo v. Environmental Design Group, LLC. In this CORPORATE COUNSEL BUSINESS JOURNAL

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Time will tell whether these complaints have merit, and the next step will be to analyze whether the claims survive motion practice. The pandemic clearly has created a trap for the unwary. Mindful employers would do well to review their policies and practices to ensure compliance with state, local, and federal laws and regulations, and to consider seeking counsel. Moreover, caution should be exercised before acting, especially when it comes to actions that could affect large portions of your employee population, in order to avoid class claims (to the extent possible). Follow the Barnes & Thornburg COVID-19 Related Workplace Litigation Tracker for continued updates and analysis.  This article should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own lawyer about any specific legal questions you may have concerning your situation.

complaint, the plaintiff alleges that she was terminated while on leave to provide childcare, and that six of seven employees taking FFCRA leave were terminated around the same time, “due to the economic impacts of COVID-19.”

A significant number of class and collective action complaints with a COVID-19 component have also been filed.

In some of these claims, COVID-19 is merely background, unrelated to the class claims. In others, COVID-19 is material to the class claims, as in Jauregui, et al. v. Cytec Engineered Materials, Inc., et al. out of Orange County, California. This class action filed under the California Labor Code seeks unpaid wages for time employees allegedly spent waiting for temperature checks as part of a COVID-19 screen.

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Peter Wozniak is a partner with Barnes & Thornburg in their Chicago office. He represents clients across numerous industries, including transportation and logistics, restaurants, retail, manufacturing and temporary staffing. Reach him at peter.wozniak@btlaw.com.

Mark Wallin, of counsel with Barnes & Thornburg in Chicago, focuses his practice on defending employers in complex workplace class and collective actions in state and federal court. Wallin also defends employers in class action, multi-plaintiff and single plaintiff discrimination litigation by the EEOC and private plaintiffs.

Reach him at mark.wallin@btlaw.com.

Despite COVID, LIBOR Rates Still Set to Expire STEPHANIE J. SPRENKLE McNEES WALLACE & NURICK important, borrowers must focus their attention on what

During the unprecedented events of 2020, some may have forgotten about the upcoming phaseout of LIBOR at the end of 2021 – but now is a good time for borrowers to refamiliarize themselves with the potential ramifications of the change.

happens when LIBOR ceases to exist and what the impact will be on any borrower’s outstanding indebtedness.

The first step for a borrower to undertake is simple. If you did not start reviewing your outstanding loan documents in 2017, start reviewing them now. Determine whether

Do you remember those halcyon days of yore, such as in 2017 when the Financial Conduct Authority (FCA) of the United Kingdom announced that it would no longer support London Interbank Offer Rate (LIBOR) quotes and that

your outstanding financing is using LIBOR as the interest rate. If not, breathe a sigh of relief and go back to worrying about the effects of COVID-19. However, if LIBOR is the interest rate for the loan, carefully review the documents

LIBOR would phase out at the end of 2021?

to determine whether they address what happens if LIBOR

It was a disruption in the financial marketplace, and financial

this issue, but it is then important to review what the

ceases to exist. It could be the documents do address

institutions were left to determine what alternative reference rates would replace LIBOR. Fast forward to 2020, with the new disruptive force of COVID-19 dominating the headlines and affecting businesses, many borrowers may have forgotten about the phaseout of LIBOR, and to some extent, they may have hoped that it would be delayed until the effects of the pandemic lessened. This hope was only increased by the fact that several financial institutions have continued to underwrite loans with maturity dates after 2021 using LIBOR as the applicable interest rate.

However, in March of 2020, the FCA issued a statement that LIBOR’s termination after 2021 is still planned. In addition, the Alternative Reference Rates Committee (ARRC), which was established by the Board of Governors of the Federal Reserve System and the Federal Reserve Bank of New York to identify alternative reference rates to replace LIBOR, published on its website that it will continue on the path of eliminating LIBOR at the end of 2021. Following these announcements, financial institutions need to continue to review their loan portfolios to assess the impact that the phaseout of LIBOR will have on the portfolios, and just as CORPORATE COUNSEL BUSINESS JOURNAL

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consequences are. Some financial institutions used

reasonable index that it is also using for similarly situated

standard language that if LIBOR was unavailable, loans

borrowers, there is some comfort in knowing that the lender

would convert to the prime rate as quoted by the Wall

will be treating your loans the same as others. However,

Street Journal. As of the week of September 14, 2020, the

without naming the specific replacement index, some

prime rate was 3.25 percent (for the same week in 2019,

borrowers will be concerned as to what the financial

it was 5.25 percent). As shown on the ICE Benchmark

institution intends to do.

Administration website, the 30-day LIBOR rate for September 11, 2020, was 1.52 percent. This is a great differ-

ARRC has so far stated that it is supporting using the

ence in interest rates, and a change from LIBOR to a prime

Secured Overnight Financing Rate (SOFR) as a replace-

rate could seriously impact a company’s cash flow, par-

ment index for LIBOR. Unlike LIBOR, which is an average

ticularly if numerous loans are structured in this manner.

of what financial institutions say they would have to pay to borrow from another financial institution and which

Some lenders did think about what would happen if LIBOR

borrowings are unsecured, SOFR is based on the cost of

ceased to exist, and language could be in loan documents

overnight cash borrowings secured by U.S. Treasury secu-

that states that if LIBOR ceases to exist, then a replacement

rities. One of the prime advantages of SOFR, as opposed

index will be used. Depending on how the language is draft-

to LIBOR, according to ARRC, is that the SOFR rates are

ed, a lender may have a great deal of leeway to determine

based on actual transactions, and SOFR is produced in a

the replacement index. For example, if the replacement rate

more direct and transparent manner, whereas LIBOR was

language provides that the lender will use a commercially

based on estimates of rates for future transactions. This

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collective focus and caused many institutions to deal with

Carefully review your loan documents to determine whether they address what happens if LIBOR ceases to exist.

new problems that are occurring in realtime, as opposed to those that are going to occur in the future.

However, it is up to you as the borrower or borrower’s counsel to help shift the focus back onto your financial transactions. Starting the review of your loan documents

distinction should alleviate concerns that SOFR will be subject to the same fraud and manipulation that previously occurred in determining LIBOR.

now will help you better understand to what extent the replacement of LIBOR will impact your outstanding indebtedness, which will impact the cash flow of your business. Also, if the loan documents do not specifically

If your loan documents do not identify a replacement index (or provide parameters for determining the replacement index), it might be up to the borrower and financial institution to mutually agree to a replacement rate. This could very well lead to neither party agreeing to a replacement interest rate, which could lead to a default of the loan when it is time to reset the interest rate, or at the very least, force the borrower to search for replacement financing.

This is a position that some borrowers may not want to face right now. With the economic impacts of COVID-19 affecting businesses and causing financial institutions to tighten their underwriting conditions, especially in industries hardest hit by the pandemic, seeking replacement financing may not in the best interest of a borrower.

So, if you are unsure what replacement index will be used after reviewing your loan documents, or if you are concerned that you might need to seek replacement financing, the next critical step is to contact the financial institution.

Reach out to the lender and start the conversation as to what the loan will look like after 2021. Although many lenders have been focused on the new lending programs that have come into the market because of the pandemic, it is not too early to have the lender shift his or her focus on what is going to occur next year. While major financial institutions have been following ARRC’s proposed timeline to terminate LIBOR, the pandemic has shifted the world’s

state what happens when LIBOR ceases to exist, or if you are in a situation where it appears the replacement index may not be SOFR and you think it may be in your company’s best interest to discuss alternative replacement indexes, it is best to start the conversation with your lender now.

If you would need to enter amendments to the loan documents, it is better to start those negotiations now than at the end of 2021.

Although there may potentially be some delay to the complete phaseout of LIBOR, due in part to the pandemic’s unpredictable nature, the FCA and the ARRC are committed to the expiration of LIBOR; it will happen sooner rather than later. Therefore, take the time now to start planning for the new financial

Stephanie J. Sprenkle, of counsel in the McNees real estate practice group, assists purchasers and sellers in the acquisition and disposition of real property and the development of real estate. She represents tenants and landlords with respect to commercial leasing and financial institutions and borrowers regarding real estate. Reach her at ssprenkle@mcneeslaw.com.

world order. 

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What We Can Expect From the Ongoing Metamorphosis of the Legal Ecosystem

Shahzad Bashir, president and CEO of Morae Global Corporation, has seen the legal profession evolve during his three decades in the industry, but the events of 2020 have spurred an unprecedented transformation. Here, he discusses the specific nature of those changes – and which ones are here to stay.

CCBJ: Your company, Morae Global Corporation, is known for enabling digital and legal business transformation for law firms, law departments, and compliance. Morae recently partnered with CCBJ to co-host the Legal Transformation Forum, an interactive virtual event that facilitated discussions about tough issues facing today’s legal professionals. What were you hoping to achieve with this collaboration?

Shahzad Bashir: If we were in my office, you’d see a framed poster with the caption, “Success is a journey, not a destination.” I’ve had that in my office for almost my entire career – beginning at Arthur Andersen, then at Huron Legal, which I co-founded, and now at Morae, which I founded. Part of my mental model is, “How do we make a meaningful impact, not only for our clients but also for our people?” One of my core guiding principles is to tap the power of collaboration.

Morae is a huge believer in collaborating with business partners, technology partners, and thought leaders like CCBJ. A top issue in our industry is that people tend to operate in silos. These silos can be quite pronounced in the legal ecosystem. Our goal is to do as much collaboration as possible to break down silo walls. As a result, Morae has been able to develop strong core legal and compliance competencies. At CCBJ, you have established a leading platform for thought leadership. Our goal was to bring together our respective strengths to help inform the market. And I think we have very successfully begun that 28

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journey with the Legal Transformation Forum. The networking, the thought leadership, the edification that we achieved – It was a great start, and if we build upon that, just imagine what else we can do together!

What were the key takeaways that you and your team identified as a result of co-hosting this highly interactive global event?

We can look at it strategically and tactically.

Strategically, one of my personal takeaways from the forum, and something which I have long believed in, was the validation that the legal community is global. It doesn’t matter whether you’re representing a bank in the United States, the United Kingdom or Australia – it is a global community. There are common business challenges and common philosophies around the world, which can and do foster substantive discussion and great opportunities for industry collaboration.

I also observed what I will describe as a greater sense of “change readiness” among both corporate counsel and outside counsel. People often look at our industry and say it is slow-moving or resistant to change. But these days, we can see the industry rapidly changing in front of our very eyes.

A great example discussed during the event is the increased adoption of technology and the acceptance of best practices.

Tactically, I found the turnout and level of engagement at the event were wonderful. It was a very nice cross section of the legal industry: law departments, law firms and technology providers. The feedback from speakers and attendees was also excellent. We really enjoyed hosting the forum because of the value it provided for everyone in attendance.

In your opening remarks, you asserted your belief that many of the changes that we’ve seen over the course of 2020 are here to stay. Which changes specifically do you anticipate staying with us, and why?

From what I’ve learned over my years in this business, you’ve

there before 8 a.m. and whose cars were still there after

always got to look back at what have been the causes of any

6:30 p.m. This approach is no longer valid. What we call

change. As is no surprise, most of the changes in 2020 have

“work from home” really is remote working from anywhere,

been due to COVID-19. The old saying, “Necessity is the moth-

at any time. The transition to this model was swift and fluid.

er of invention,” really seems to hold true here. The pandemic provided that extra nudge that some organizations needed

Another example is the widespread use of information

in order to commit to meaningful change. Some of these

collaboration. Outside counsel, enabled by digital trans-

changes were already percolating before COVID-19. But

formation, are collaborating more than ever amongst

in March, the industry was forced to make hard choices,

themselves. Similarly, corporate counsel are collaborating

starting in Europe and the Asia-Pacific region and then in the

more with their internal clients. And we can see outside

Americas. What else was the industry going do as economies

counsel and corporate counsel also working more closely

went into lockdown? The response – with all the changes

with each other. At Morae, we have leaned on technology

now underway – has dispelled the old myth that the legal

and business processes to facilitate greater levels of

industry resists change. Let me give you some examples.

collaboration with our clients too.

One of my friends is a general counsel at a top 10 global

It should come as no surprise then that there has recently

company. For a long time, he used to talk about “butts in

been an accelerated trend in cloud adoption as an important

seats.” This was his way of looking at his workforce. He

enabler for digital transformation.

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Here to stay as well are certain business practices which have

Driving these changes is largely the adoption and acceptance

changed during the COVID-19 period. Specifically, I don’t see

of currently available technology. If you look at Zoom, for

business travel ever going back to the way it was. We have all

instance, that didn’t suddenly get invented on March 12.

found that we can work as efficiently and effectively through

It’s been around. What has changed is us. We’ve all started

the use of technology, rather than jumping on a plane. Don’t

using it. If you look at document sharing, that’s also been

get me wrong – I’m not saying that business travel will

around. The cloud has been available to all of us for years. The

be gone completely. I’m just saying that its role in how

capability to source globally has been around for a long time,

we collaborate will emerge as something different. Travel

as indeed have the alternatives to travel and wet signatures.

isn’t as necessary as people used to think it was. We can

These things will stay, and become further ingrained, as

do a lot virtually instead of physically. Contracts are a

economic activities settle into where they need to be.

good example. Technology is changing the whole process of contracting. Consider wet signatures. For the vast majority of commercial transactions, we’ve moved away from wet signatures to electronic ones.

I believe global sourcing is here to stay too. The location of a service provider and a service recipient do not need to be the same. I see the process of global right-sourcing now significantly accelerating from where it was before COVID-19.

In a broader sense, there’s no “normal,” and I really cannot predict when we will truly be in a “new normal.” Industries, markets and geographies are all responding to what they believe is the emerging normal. When we finally do move into whatever the new normal turns out to be, I believe we’ll find the areas I have described are key parts of it. And it will be a combination of the old and new ways of doing things.

But it’s not like there will be one fine morning with a headline in The Wall Street Journal announcing, “The new normal is here.” There are different economic and social indicators – whether it’s the consumer price index, or stocks, or interest rates, or employment numbers. At some point, these will all move in a direction that will allow us to conclude that our economic activities are where they need to be. And to me, that’s what we’ll call the new normal.

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What advice do you have for people or organizations that are looking to innovate within the legal industry?

My view is that innovation for the sake of innovation doesn’t really stand the test of time. When I consider how we describe Morae’s value proposition to our clients, I often ask my

We are at the cusp of a fundamental transformation in how legal services are created, consumed and even reused by legal and business professionals. colleagues to really think about and define innovation. For me, innovation should include: (1) Defining the outcome, (2) removing the silos, and (3) integrating technology. Those are the three pieces of advice that I can give with all humility. And if those three are done right– either in combination or singly – they will allow the right kinds of innovation to happen.

What are your hopes for the future of the legal industry?

Let me start by saying that I really must applaud my colleagues in a very broad sense for how they have embraced change. Not just my Morae colleagues, but those throughout the legal industry, including my peers and clients.

Oftentimes, as I said earlier, I hear the assertion that the legal industry is too slow to change. That it is resistant to change. Yes, that may have been true a couple of decades ago, and maybe even just a decade ago. But now we’re seeing a wave of changes and transformation unfolding, with more on the way. I really believe that we are at the cusp of a fundamental transformation in how legal services are created, consumed and even reused by legal and

I see fundamental right-sourcing happening – meaning that work is being sent to the right organization, to the right geography, to the right caliber of people, where the resources are fit for purpose.

Technology is another one – we’re seeing increased use of the right technology in the right manner.

And finally, the breaking down of old perceptions of legal services as a homogeneous bucket that can be scooped out and delivered. I believe the future will have many different flavors of what I would call process-oriented services versus judgment-based services.

For example, the drafting, negotiating and signing of a nondisclosure agreement is very much process driven.

Contrast that with negotiating a major transaction or conducting a deposition for a litigation – which require considerable use of judgment calls.

I believe that together, structured collaboration, legal service providers, right-sourcing and technology will all allow service providers and service receivers to differentiate process-driven services from judgment-driven services.

business professionals. This will happen, and here’s why.

First, I am seeing structured collaboration – meaning that there are standardized processes around these engagements.

I see that what used to be called “alternative legal service providers” are now dropping the “alternative.” Now we are simply legal service providers. That’s an acceptance of the role and value companies like Morae can provide.

This represents a fundamental transformation of the industry, for the better.  Bashir's Legal Transformation Summit keynote can be viewed here.

Shahzad Bashir is the president and CEO of Morae Global Corporation.

As CEO, he is responsible for the vision and strategy of Morae, as well as providing leadership in hopes of transforming the legal industry for the sake of Morae's clients. Bashir has three decades of experience in legal and financial consulting services. This experience includes the development of business strategies, law department structuring and more. Reach him at shahzad.bashir@moraeglobal.com.

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With Court Cases Backlogged and Potential Delays Inevitable Post-COVID, ADR Stands Ready

When is the right time to seek out ADR?

The Honorable David B. Saxe (Ret.), neutral with NAM (National Arbitration and Mediation), discusses the ways that his experience as a judge and a lawyer inform his ability as a neutral; the advantages of alternative dispute resolution versus litigation; and the role of mediation and arbitration during the pandemic and beyond.

Both parties and their counsel really have to be ready, both in a practical and psychological sense, to want to talk to each other on a meaningful level. In other words, if they’re ready to tear each other’s throats apart, that’s not the proper time to put them in a room to try to resolve certain disputes. There has to be a cooling-off period first, where they understand that there are risks inherent in going to

CCBJ: After an illustrious legal career as a litigator, trial judge and then one of the justices of the Appellate Division, First Judicial Department for the Supreme Court of the State of New York, you’ve been involved in all manner of disputes and legal proceedings. How has your background and experience prepared you for a career in alternative dispute resolution (ADR)?

Hon. David B. Saxe (Ret.): As a judge, my career on the bench spanned 36 and a half years, and I saw pretty much every kind of case imaginable, probably more than once. So, I look to that experience first. From agriculture cases to zoning cases – A to Z – I’ve ruled on cases, litigated cases and negotiated cases and settlements. So, I understand where most controversies will end up in court.

That informs my ability as a neutral because I can guide the parties and advise them based on my experience about how I think a court decision would go. The parties always want to know, “How is a judge going to look at this case?”

And I know how a judge is going to look at a case, because I’ve probably sat on a case and decided a case just like that in the past. All of that experience helps me be a better neutral.

Additionally, I bring to bear the experiences I had as a lawyer. Prior to my time on the bench, I was a partner in a boutique real estate litigation firm, I was involved in consumer protection cases and I worked for a Fortune 500 commercial lending institution. So, I know the practice of law, and I know the kinds of disputes that come out of doing business.

And I’ve experienced them, both as a lawyer and a judge.

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trial, and that it’s worth the elimination or at least reduction of risk to resolve or settle their case through ADR. They have to reach that level. Sometimes it happens early; sometimes it only happens on the eve of a trial. It’s really determined on a case by case basis, but you have to have that willingness to talk – and listen.

NAM administers arbitrations and mediations, throughout the United States and internationally, that originate from a pre-dispute contractual clause. With that in mind, what is the benefit of including a pre-dispute arbitration clause in corporate agreements and/or employment agreements and programs?

It’s very important. The short answer is that when parties enter into a contract – let’s say it’s any commercial contract, like a contract for the delivery of goods, or for services, whatever it is – if there’s no clause regarding arbitration or mediation, no ADR clause, well, what happens when there’s a dispute? Maybe the parties try to negotiate the problem themselves. Maybe they’re successful. But oftentimes they’re not successful. When they’re not successful, litigation starts, and that’s very hard. At the beginning of a litigation, there’s a great deal of tension between both sides, annoyance, maybe even anger. It’s very difficult at that stage to get the parties together to say, “Well, you know something? Let’s mediate this case.”

It’s far better to have that clause in your contract of sale or services, whatever the case may be, beforehand, so that if a dispute comes about, both parties know that they’re going to be involved with an ADR administrator like NAM, in mediating that dispute, or maybe even arbitrating that dispute.

It’s a tremendous savings of time and money as well.

NAM has been utilizing videoconferencing for more than 25 years, and now, during the pandemic, they’ve been able to convert many of the in-person arbitration hearings and mediation conferences to the virtual platform. As the courts continue to deal with effects of COVID-19, how can virtual arbitration and mediation be of value to practicing attorneys?

Videoconferencing is a game changer. There’s no question about it. And COVID-19 has certainly accelerated that change. NAM has been involved in videoconferencing for over two decades, and they are very technologically

proficient in that regard. The reason why it’s important, and will remain important, is pretty simple: it saves time and money. I don’t think lawyers are going to go back to the old way of arbitrating or mediating a case, because clients are going to push them and say, “Why go back, when we have developed a proven way of videoconferencing ADR?” Before I was affiliated with NAM, I was the mediator for various disputes where the parties were coming from different parts of the country to see me in my law office in New York. They had to be put up in hotels in Manhattan, and a client was paying for a team’s meals, travel, hotel arrangements. Now, they can remain in their law offices, the clients can stay in their headquarters, and we can conduct the mediation through videoconferencing. And it’s fine and it works. So, I think videoconferencing is here to stay and going to become the norm. Attorneys are going to like it, and clients are going to like it.

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Is there any one type of case or claim that we may see more of as we recover from the pandemic?

I think you’re going to see an uptick in the number of complicated marital dissolution cases throughout the country, especially in major urban areas. And those cases will involve issues of financial distribution, or equitable distribution. Complex matters that really require a judge – someone who is not only sensitive to the issues that are going on in the marriage, but is also really knowledgeable about partnership issues, tax issues and things of that nature. The reason I say that is, I think COVID-19 has caused people and families to be placed into a closer relationship than they might otherwise be. So, people are kind of hunkered down in their homes, and husbands and wives and families are spending a lot more time together than they might have otherwise, and I think that is exacerbating some of the tensions. I think that tension is going to burst when the pandemic starts to subside.

And when the pandemic finally does abate, once we have a decent vaccine and people start getting back into the 34

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world, I think you’re going to see a great influx of cases.

I’m not only talking about complex matrimonial cases, but also complex commercial litigation and real estate litigation. Generally, lawyers and their clients have been adopting a bit of a wait and see attitude occasioned by the pandemic, and when people feel more comfortable, I think there will be a rush to resolve disputes. And I don’t think the court system is prepared to handle it. I think these cases are going to swamp the court systems, not only in my bailiwick, New York City, but throughout the country. And that’s why I think the concept of med-arb presents an interesting possibility. It provides a neutral an opportunity to try their hand at mediating a case, while also saying to the parties, “You know what? If there are things you can’t agree on, the way to finish this off is to arbitrate it.”

Is ADR ready to handle the influx of cases that I suspect, there will be? Well, I think NAM is prepared. We have a tremendous roster of neutrals, including neutrals who were former judges in the state court system, like myself.

You’re considered one of the most prolific and frequently cited judges in the nation. Based on your many years of experience on the appellate level, what place would you say an appeals process has in private ADR? This is a subject I have a great interest in, and it’s one I have written about for the New York Law Journal – an article proposing an appellate platform in arbitration.

As a matter of fact, that article was an award winner in a national publication contest, so it was nice to know that members of the bar thought highly about the topic and the article. But getting to the actual substance, I’ve sometimes been surprised by the value of the arbitration award. And while there has to be a winner and a loser, the award is not always just or fair – especially to the losing party – and unfortunately, the affected party really can’t do anything about it. And that’s because of the finality of arbitration.

There are limited grounds, yes, available under statutes for challenging an arbitration award, but they’re very limited. Very, very limited. If I had to put it in a nutshell, you basically have to show that the arbitrator was virtually unethical. It’s an almost impossible standard. So, it seems to me that if you could build in, and this would be in the precontractual agreement, a limited and focused appellate arbitration procedure, it would satisfy a lot of people. I think that it would encourage more litigants to consider arbitration, because they know that if they’re faced with a questionable award, they’ll at least have the opportunity for a do-over. I think that would be very important. I think it would increase the number of arbitrations because the finality of arbitration can sometimes be a deterrent.

I know how a judge is going to look at a case, because I’ve probably decided one like that in the past.

I’ve encountered many lawyers over the years and quite frankly, some are just not good listeners. When others are talking, they’re thinking about something else – usually they’re thinking about a response. And that segues into another characteristic I’ve noticed about attorneys, which is that many don’t have a lot of patience. So, I would try to encourage the lawyer who is representing a party at mediation to be very diligent and aware of their listening quotient. To participate in active listening, where you’re just not letting the words go in and out, but you’re really attempting to listen and maybe even reformulate what’s been said. It shows the party that’s speaking, that you remember what was presented and are reflecting on what was just said.

This is a very important quality, and it ties into the lack of patience that many lawyers have. They want to jump to a solution, and they get upset when the parties at a mediation begin to meander a bit. You’ve got to give people a chance to consider their options, and then bring them back slowly, while listening to their concerns. In doing so, attorneys should not only listen carefully to what their client has to say but also pay close attention to the mediator’s advice. Keeping the dialogue fluid between parties

NAM has specific appellate rules that parties can agree to and incorporate into a contract between the parties who sign on to arbitration.

is often the key to a successful resolution. If the attorney

If you had to give one piece of advice to a lawyer getting

to listen is the one of the most important ingredients to

ready to mediate or arbitrate before you, what would it be?

a successful mediation.

fails to do so, their client could become disenchanted with the process and possibly abandon the mediation altogether. Again, I can’t stress enough that the ability

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If I had to put a name to it, it’s emotional intelligence. The

approach has been sufficiently developed in the ADR field,

qualities of active listening and having the patience to let

but I think NAM is prepared and has been prepared to offer

people tell their story, that’s a sign of emotional intelligence.

med-arb. But it ought to be suggested more often, because

It encourages a closer relationship between the parties

it will eliminate cases. The parties have to be encouraged

to the mediation, and with the mediator. It’s likely to

to trust the process and know that the neutral will be

help produce a resolution. If it’s not there, it’s going to be much more difficult to bring both parties together.

With 2020 almost behind us, what trends do you foresee nationally for ADR, and in particular, for complex commercial matters in 2021 and beyond?

The first thing that comes to mind, because it takes me back to a prior question, and ties into this one, is videoconferencing. As I mentioned earlier, virtual ADR is a game changer. And with the influx of complex commercial litigation coming into the court system, I don’t think that the courts are ready to handle the overflow of cases. The only solution will be to jump to ADR. Or they may actually go directly to ADR – after the lawyers and the parties begin to see that it’s impossible for the court system to handle the increased caseload.

The way ADR can handle it, and the way NAM can handle it, in particular, is to provide a technologically proficient alternative for the parties. I think videoconferencing is going to be very appealing to more and more lawyers and clients. And as it becomes even more sophisticated and mainstream, I think attorneys are going to come to see it essentially as the default position. In-person will become the secondary way. That’s the change I foresee happening, because it’s economical.

Another concept I foresee and encourage is the med-arb alternative. Mediation is terrific, but arbitration locks the door, so to speak. So, combining mediation with arbitration is a terrific way to reduce the areas of conflict that exist between parties. I personally don’t think that this 36

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thoroughly prepared and try to settle the case on consensual terms. But if it can’t be settled, then the parties will go before the experienced mediator, who’s now wearing the arbitrator’s hat, to finally resolve the case.

What I also would like to see in the future is an appeal process within ADR. I mentioned it earlier, but what I had in mind was that after an arbitration award is given, the loser – that is the unhappy side – has a very limited number of options they can do to challenge the award.

So, there is a process called confirmation. The winner jumps into court and seeks to confirm the award so that they can enter a judgment. The loser might go to court to seek an order to disaffirm the award, but as I previously mentioned, the grounds for challenging an award are very limited. So, I’ve been encouraging the creation of an appellate process in arbitration that is a limited and focused arbitration procedure, but is a simple and economical way. I think an appellate process would bring into the world of ADR, and especially into the world of arbitration, a great many more cases than you have now. 

Hon. David B. Saxe (Ret.) is a neutral with NAM (National Arbitration and Mediation). Prior to joining NAM, he served as an associate justice, New York State Appellate Division, First Department, for almost 20 years, and he is a highly honored and respected member of New York’s legal community. Reach him at dsaxe@morrisoncohen.com.

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Success

 Kim Keenan, mediator and arbitrator with JAMS, discusses what it takes to succeed as a lawyer, why she thinks diversity and inclusion efforts have been slow to show results in the profession, and how people can come together collaboratively to achieve better results.

CCBJ: You’ve had an extraordinary career working for organizations like the National Association for the Advancement of Colored People (NAACP), several media companies, and as an adjunct professor. Who and what has influenced you along the way?

Kim Keenan: When you see the best, it makes you want to emulate the best. I’ve gotten to see some of the really great lawyers of our time. I saw Mayor Marion Barry’s lawyer Ken Mundy in court. I saw Johnnie Cochran in court. I’ve seen really great trial lawyers do what they do, both in civil 38

NOVEMBER • DECEMBER 2020

and criminal cases. And early in my career, I had some great mentors and met a lot of really helpful people. When I was in law school, I was fortunate enough to meet Suzanne Richards, who was the first female president of the Bar Association of the District of Columbia. She was a close friend of my mentor at the time, a woman named Mabel Haden, who was a solo practitioner in Washington and was doing things that women didn’t usually do at the time. She owned her own thriving practice, and she was always dropping these pearls of wisdom on me and inviting me to functions. At one of these events, a bar dinner, I met Suzanne Richards. Like a typical law student, I asked her, you know, “What do you do?” And she said, “I only do what I want to do. I only represent people I want to represent. I only work on projects I want to work on.” I remember thinking, “Now that’s the job that I want.” I really internalized that message, and repeated it to myself all the time: “The goal should be to do things that you love – things that you want to do.”

That was a great influence – as was my whole relationship

I can promote diversity better on a budget committee than I can on a diversity committee. with Mabel Haden, my mentor. She was one of the first lawyers I met during law school, and every step of my career, from the very beginning, she would help me plot out where I wanted to go. She would talk with me and offer her insights and observations.

I feel really blessed to have had the experiences I’ve had, and now I try to do that for other people. Not just for women, but for all kinds of people I meet along the way. I’m a senior adjunct professor at George Washington University Law School, where I teach trial advocacy and pretrial advocacy. I occasionally teach a mediation section in the pretrial advocacy course, to give students the experience of really trying to resolve a case in real time with real facts.

So the students learn that litigation isn’t just arguing in a courtroom before a jury, or arguing before a judge – sometimes it’s also about getting together with the other side and a neutral to find a solution that resolves the whole matter. I’ve been teaching for more than 20 years, and I’ve found that lately more and more students are coming to the class with the notion that they will mediate someday.

There has been a great deal of discussion about diversity and inclusion in the legal profession, but there continues to be a struggle to move the needle significantly. Why do you think that is?

I have another mentor who always says, “If you keep doing what you been doing, you’re going to keep getting what you’ve got.” So if you keep creating all of these committees, and it’s not working, maybe you need to rethink the committees. Somebody once offered me the diversity committee, and I said I’d rather be on the budget committee.

Kim Keenan is a neutral with JAMS. She has had a long career as a nationally known trial lawyer, mediator and in-house counsel. She has also been recognized for her leadership with multiple multicultural social justice organizations. Keenan has served as a mediator in the United States District Court for D.C. as well as for D.C. Superior Court’s Multi-Door Dispute Resolution Program. Reach her at kkeenan@jamsadr.com.

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I can promote diversity better on a budget committee than I can on a diversity committee. A lot of times the diversity committee is the place where you send all of the women and the people of color to, what, decide amongst themselves that there’s not diversity?

It’s counterintuitive, but I think that unless the diversity committee is itself very diverse – and I mean diverse in that it has participation from people with all different kinds of perspective – then it’s like you’ve sent all of the people who can help with the problem to a separate room to resolve it. And I don’t understand why you would do that and not see fairly quickly that it just leaves you with the status quo. We don’t have to do it all by committee.

We could just decide that every time we’re going to hire somebody new, we’re going to try to hire in a way that reflects what we want to be as a company.

I just read this article in which someone at Wells Fargo, who apologized later, said he didn’t know where to find Black talent. Well, as a talented Black person I’m always surprised by that because I’m like, “Well, I know some talented Black people.” But if you’re not asking people who would have access to those people, you’re going to think that there are no people like that, simply because they are not in the room with you.

So when I hear that people are doing it the same way they’ve always done it, I tend to think to myself, “Well, then they don’t actually want a different result.” They’re not actively trying to create a diverse mix at their company. Yes, it’s frustrating, because it can’t be done overnight. But it should be something that can be accomplished over a period of time. Every business, law firm, corporation, etc., has targets about what they want to accomplish every year. So if this is a goal that’s worthy and truly desired by the company, it’s a doable goal.

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I think what you find is that people have frustration and fatigue because they’ve been saying these things in these little rooms off to the side, or because they know that the needle is not being moved forward – but ultimately, it’s going to take everybody. This can’t just be the goal of the women at the company or the firm, or the goal of the women of color or the people of color. It has to be the goal of the whole entity. And you know that it’s the goal of the entity when the full faith and credit and weight of the firm is behind it.

In many of my discussions with women, there is frustration with the same old advice – to take more risks, speak up in meetings, etc. What advice do you have for women who are looking to rise in the ranks at their organization?

And how can men and women work together to advance diversity and inclusion in the legal profession?

I worked for the NAACP, so almost by definition I’m talking about Black people, but I’m going to tell you what they are fixated on: “Can you create at outcome?” I don’t remember anybody at the NAACP ever asking me what law school I attended. Ever. Because all they wanted to know was whether I could actually do what lawyers do. I had to prove that to them. Maybe they weren’t used to seeing a woman in my role, but it certainly didn’t change their focus from “Can you get this done?” If you could prove to them that you could get it done, you didn’t have to have conversations like, “What law school did you go to 20 or 30 years ago?”

The goal is to create a culture where the people in charge want to hire and promote people who can get the job done, regardless of what they look like. But to answer the second part of your question, that culture is created by men and women working together – by men and women in the workplace really focusing on connecting and networking.

I can think of a lot of men who gave me opportunities. I remember one time there was a senior associate at a big

WOMEN IN BUSINESS & LAW

firm I worked for, and his secretary couldn’t work late one night. I was an associate who worked late, and I was the only other person around, and he looked over at me and said, “I’ve got this document due, and it needs to be copied and stapled.” I looked at him like, “Are you kidding me? Are you really saying this to me?” Then he actually said, “My secretary isn’t here to do it.” And I was like, “And that’s the reason you’re giving me this?” I went and made the copies and I brought them to him, but I closed the door to his office and said, “I’m on this team, and I’ll do whatever it takes, but I’m not even working on this project and you just said to me, ‘My secretary isn’t here, so you can do her job for me?’ I don’t think that’s appropriate, and it doesn’t value me as a contributor to this team.” I hadn’t worked with him up until that moment, but after that night he asked me to work on everything. And not only did he let me work on important matters but he also really took the time to help me become a great writer. He was a mathematician with words. He could parse the right words and create the right tone. It was sharp, it was succinct, and he really, really invested time in showing me how to write like that.

Now, if you think about it, the beginning of that story, it could have gone very badly. But for whatever reason, I’m the kind of person who will say, “Nope. Let me go in here and look him in the eye and say, ‘You all paid a lot of money for me to be here, and I’m here because I work late and I work hard. But I’m not the copy girl.’” I think he just thought, “Well, look at all this spunk.” And he gave me so many opportunities, and I credit a lot of my writing style to him. He wanted to work with me because I was literally learning his style, and I was able to emulate it.

Those kinds of opportunities to learn are what ultimately give you the confidence and competence to be good in any situation. So I think that it takes men and women working together. I think that there are some men who get a bad rap but actually are open to making a change in how they do things.

If you want to be someone who is successful in your organization, you need to look at the people who have achieved success.

You said that in many of your discussions with women there’s frustration with the advice to simply take risks and speak up more. This is what I would say: In every organization, it is obvious who is successful, whether it’s a man or a woman. The successful people have habits of success. And it isn’t just that they’re comfortable or confident speaking up in a meeting.

That is one of the things though, and it’s important that you have that confidence and competence to know when to speak up and when to listen. Sometimes people don’t realize the importance of knowing when to listen and not say anything.

But at the end of the day, you want to observe the people who are successful and just see what they do. What do their days look like? Are they sitting in the library all day? Of course not.

They go to dinners. They are speaking at events. They are out and about with people who can potentially give them business. They aren’t sitting in their office with the door closed, reading a book. If you’re sitting in the office with a book and they’re out at all of these events, regardless of whether you spoke up in the meeting, it isn’t going to matter.

If you want to be someone who is successful in your organization, you need to look at the people who have success. And you have to want to be like that person. You have to want to be out and about so many hours a week. You have to want to travel. You have to want to work a 12-hour day or a 14-hour day. And if you find that that’s not who you are, maybe your success lies in a different place. But that’s a decision that only you can make. You shouldn’t let other people tell you that you don’t belong in a certain place. You get to decide.  CORPORATE COUNSEL BUSINESS JOURNAL

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Flexible

Dig Deep, Work Hard, Be

Council. Please share how you came to these roles and

 Akin Gump partner, Cynthia Mabry, on committing to success.

what your goals are as part of these organizations.

I am a devoted alumna of Louisiana State University (Geaux Tigers!), and I attended the Honors College while

CCBJ: Please tell us about your career path and what led you to your current role with Akin Gump.

Cynthia Mabry: As a dear friend and colleague of mine says, “I didn’t start at Akin Gump, but I got here as fast as I could.”

I had always wanted to be a lawyer, but I actually started my professional career as an accountant at PricewaterhouseCoopers in Houston. I left PwC in 2007, not knowing that the Great Recession was around the corner.

I graduated law school in 2010 and started work at another international law firm in Houston. As you can imagine, 2010 was not the ideal time to start a law career. Right before I joined, the firm did its first attorney layoffs in its history.

As a new lawyer, I worked on anything and everything – from company formations to title opinions to litigation support. My first real deal was a secured notes offering – and I was hooked. Capital markets was fast-paced and exciting, and my accounting background proved very

I was there. When I graduated and moved to Houston, I became involved with the local LSU alumni chapter. What started as planning football game watches and crawfish boils turned into serving as president of the Houston alumni chapter when I was just 25 years old.

I continued to stay involved with LSU following law school, and was asked to join the Advisory Council to the Ogden Honors College at LSU several years ago. The Advisory Council advises the dean on everything from recruitment and retention of Honors College students to fundraising and scholastic goals for the college. It has been eye-opening to see the challenges that state-funded higher education faces in America in the years ahead, and I am honored to serve and help the dean face these challenges.

As women, we need to take action and find ways to make the legal industry and corporate life better.

helpful on transactions and related compliance work.

So when a longtime client started working with Akin Gump, I was encouraged by the client and others to make

UHLC is a similar story: In law school, I served as president

the jump to Akin Gump. I was promoted to partner this

of the Student Bar Association and also chaired the 3L

January, less than three years after joining the firm.

Gift Committee, which raised more than $35,000 from our graduating law school class for the Immigration Law

You serve as a board member for the University of

Clinic at the Law Center.

Houston Law Center (UHLC) Alumni Association.

In addition, you are a member of the Louisiana State

Following graduation, I was asked to help coordinate

University (LSU) Ogden Honors College Advisory

small-scale fundraising efforts for the Law Center, and

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WOMEN IN BUSINESS & LAW

then I was one of three recent alumni asked to join the UHLC Alumni Board in an effort to energize recent graduates. While serving on the Alumni Board, I co-chaired the newly formed Young Alumni Committee, which provides networking and career-development events for recent Law Center alumni, and I also developed a “junior” Dean’s Society for recent graduates.

I recently finished my two-year tenure as president of the UHLC Alumni Association, and I’m now focused on organizing local UHLC alumni chapters in places like Washington, D.C., the Rio Grande Valley and Dallas.

Who and what has influenced you over the course of your career?

Starting “over” professionally in the middle of the recession was really humbling – but I think I am better for it.

I learned to dig deeper, work smarter, and be ready to be flexible in a changing market.

First, my family has been very influential in my career. My husband is my tireless advocate and partner. We got married right before law school, so he has been with me from my first law school exam throughout the years leading up to me becoming partner. He has been incredibly supportive at each step of my professional journey. My parents have also been influential. They have always encouraged me to think big and push harder – with everything I do. And – of course – my kids. Working and parenting is definitely a challenge, no matter what your profession. I don’t like to use the word “balance” – you have to learn what works for you and your family, and be flexible.

Cynthia Mabry is a partner with Akin Gump. Her practice observes capital markets, securities, mergers and acquisitions, and general corporate matters. Mabry represents public and private entities, investors and underwriters in capital markets and during financial transactions, including offerings of equity and debt securities.

Reach her at cmabry@akingump.com.

Professionally, there have been so many people who have influenced me. I think that you find something you like about each person you work with – whether it is their work ethic, their presence in a room, or how they manage CORPORATE COUNSEL BUSINESS JOURNAL

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Stay positive. For all women who are seeking leadership

As a new lawyer, I worked on anything and everything.

roles, it is up to the leaders to take the high road, to help other women and support other women – personally and professionally. And encouraging others to do the same – that is really key. Leaders must to lead by example.

their work/life – and you find a way to make it your own.

At Akin Gump, Chris LaFollette, John Goodgame and

If you are a professional woman, where there aren’t many

Steve Davis invested in me and helped me transition from

women in leadership, it can feel like you are on an island.

associate to partner. They are each leaders in their field

And there are challenges that men just won’t face in their

who understand their clients’ business and objectives.

career, which can be hard for others to understand.

They have each shown me what it means to be a true partner with your clients, as well as challenged me to

While I do think affinity groups are helpful in some ways,

be a leader within the firm and the community.

having a women’s group in your place of work is not enough. As women, we need to take action and find ways

What is your advice to other women looking for a

to make the legal industry and corporate life better for

path to a leadership role?

the women that come after us. 

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NOVEMBER • DECEMBER 2020

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Personal

Continuous Professional and Development Rewards All Involved  Tara Jones, legal services manager for Verizon Media, began her career as a billing consultant and successfully transitioned to become the manager of the company’s entire e-discovery process. Here, she discusses the attributes and advice that helped her advance in her career, as well as what others can do to chart a similar path.

CCBJ: Can you share a bit about who and what has influenced you over the course of your career?

Tara Jones: I’ve been really fortunate to have had a lot of great influences throughout my career, both professionally and personally. The first person who pops into my mind was a manager I had early in my career, when I was working in legal at AOL, which is now part of Verizon Media. Our group handled complaints that were submitted through the attorneys general and consumer advocacy agencies like the Better Business Bureau. My manager’s name was Heidi Jongquist. She had high expectations and held the entire team responsible for everything that went out, for any decisions that was made. Learning from her was a great opportunity. In the beginning, it was definitely difficult, because I hadn’t had a manager in the past who was as concerned about everything that we did. But throughout the years, she fought for me, and she fought for the whole team. She went to bat for us multiple times, trying to get promotions, trying to get raises. She worked to ensure that we were taken care of. And I worked with her for many, many years. She retired a few years ago, and I’ve been lucky enough to stay in touch with her, and to pose questions to her and ask for advice from her. She’s been a huge influence in my life, both professionally and personally.

What are some key shifts that you’ve seen within the organization during your tenure in legal?

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I started at AOL in 1998, so I’ve been here for quite some time, and there have been many changes. In 2010, I started working in legal holds, which is just a small piece of the e-discovery business process, but several years later I ended up taking over the e-discovery business process altogether. The most notable change in terms of e-discovery is that when I began working in e-discovery with just legal holds, it was a completely manual process. That’s a sign of the times back then. There wasn’t a ton of money to spend on nice tools. Most of my peers at other companies were doing the same thing. We were managing the entire process based off of spreadsheets and manual inputs from human resources data. We were trying to keep track of legal hold notices, and Word documents and share drives. It was quite a big mess, but at the time we didn’t realize it was mess. In the years since, we’ve been able to develop a really mature e-discovery business process with the tools that we’ve been able to purchase. We have now become completely auditable, completely defensible.

The main goal is to save the company money and still remain defensible with your e-discovery production.

We’ve been able to save tons of money by being able to manage our entire e-discovery docket mostly by ourselves.

We definitely still have larger review projects that have to go out to firms or contractors, but for the most part, we’re able to manage all of our e-discovery in-house now.

That’s a huge cost savings. So I feel quite a bit of pride about the things that we’ve been able to do. I think that’s the biggest shift: seeing more executives being willing to

WOMEN IN BUSINESS & LAW

Understanding that there’s no threshold to what you can learn is really important. buy in and throw money at a tool that will help us automate processes and ultimately make us more lean.

What is your advice to other professionals looking to make improvements in their organization?

It is critical to be organized with your thoughts, with your requests, and with whom you’re requesting them from.

Go to the table with all of the necessary information. Be as confident as you can be about your request. If someone goes to their manager and says, “Hey, we need this tool because it would make our lives easier,” that’s not good enough. You need to go to the table with documentation. You need to have itemized lists about what it costs to run your function right now – things like FTEs (full-time equivalents), services that you have to pay for, firms that you have to hire, hours that you have to spend doing the day-to-day processes.

After you’ve had a chance to interview vendors and see different tools and the capabilities of these other tools, you can plug in the numbers for what it would cost to pay for the tool and to document what it would cost to use different firms or companies. Once you can present that information to either your boss or the executive, and prove the need for the tools, that’s when you’re starting to win.

The goal is to make the process as easy as possible, but the main goal is to save the company money and still remain defensible with your e-discovery production. You just have to be completely prepared, do your research, learn how to write a strong business plan, and learn how to defend a business plan. It sounds intimidating in the beginning, but it’s the only way I know of to really make changes and improvements happen within your organization.

Tara Jones is a legal services manager with Verizon Media. Verizon Media serves as a division of Verizon Communications for its media and online businesses. Jones has a strong focus in e-discovery. Reach her at tara.jones@verizonmedia.com.

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Is there any advice that you can give to other women specifically who are looking for a path to a leadership role?

with standing up for yourself and advocating for yourself, it helps to create the path into the leadership role that you want to have.

I think it’s particularly important for women to advocate for themselves within the organization. I sometimes find it challenging to do that myself. Some women tend to shy away from boasting about their accomplishments, about the things they’ve done within the company that have helped save money or helped with whatever their particular role is. Whatever it is they’ve done to make a name for themselves in the business, I think that sometimes women are willing to allow someone else to take credit for that.

Maybe in some situations that’s fine, but in others you have to take credit where it’s due.

What are your hopes for the future of the legal profession?

In my case, I’ve really had to do a lot of research. I’ve spent a lot of time reading case law. I’ve spent a lot of time joining webinars. I have spoken on dozens of webinars. And I do all that not so much because I think that what I have to say is super important, but because each time I have to prepare for a webinar, I learn something new. And I think understanding that there’s no threshold to what you can learn is really important. That applies to everyone, not just to women. But when you combine all of that knowledge

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I really hope that there are more professionals, who may not have juris doctor degrees, who will work to find niches within the legal profession that they can lay claim to. When I started working in e-discovery, it was still a relatively new concept in terms of the longevity of the legal process.

Discovery has always been there, of course, but there wasn’t a ton of information that I could learn about e-discovery.

Obviously, I could read the Federal Rules of Civil Procedure, and I could understand what was expected. But understanding how to run a business process is completely different than understanding what the outcome is supposed to be.

There were a million pieces that went into the process that I had to understand, because I had to understand that if something failed, where I should go to fix it. I think the same can be said for other pieces of projects that happen within the legal profession. There’s a place for the nonlawyer legal professionals to feel and be equally as valuable to the company or the firm that they’re with. 

Ops Taking a Holistic View of In-House Counsel’s Role in the Business the area that I’m looking at as the pressure relief valve, if

Ken Crutchfield, vice president and general manager, LRUS Legal Markets, Wolters Kluwer Legal and Regulatory, U.S., discusses ways that corporate legal departments can optimize their operations, from budgeting and spend to the efficiency and success of business outcomes.

you will. There are a couple of actions that can be taken that tie into that idea. As in-house counsel, consider your stakeholders and customers – are there actions that you can take to offload work and empower them to be more self-service oriented, for example? Another important action is to consider key performance indicators (KPIs). If your organization does not have KPIs, perhaps it should.

CCBJ: The pressure to manage the balance between cost and outcome continues to increase. What trends

If you are using KPIs, consider whether they really are

do you see in how corporate legal departments are

measuring outcomes or if they’re just measuring activity.

budgeting and forecasting?

Measuring outcomes is much more important and impactful, and they may not necessarily be measured in legal

Ken Crutchfield: I believe the key is to think of budgeting

terms. For a simple example, are there ways that you can

in terms of productivity and leverage. The ability to identify

enable more nondisclosure agreements to be completed

tools and technology that make staff more effective and

with less involvement from the in-house counsel, making

help them get the right outcomes is crucial. That’s really

stakeholders more self-sufficient? Or, if you’re looking CORPORATE COUNSEL BUSINESS JOURNAL

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at sales contracts, for example, can you turn contracts around faster to increase the close cycle of your sales team and increase sales productivity? Can you reduce the contract revision cycles? Increasing sales productivity or sales results are more meaningful KPIs than the total number of contracts negotiated, for example.

Despite the pandemic, every indication I see is that legal professionals are busy, both in-house and at outside firms. broader business? Would aligning with broader initiative

How can corporate legal departments work more closely with individual business units to achieve business goals?

provide access to other budgets or create synergies that

It’s very important to set aside specific time to meet with business stakeholders and understand who your most important stakeholders are and build relationships with them. Make sure you understand their goals and objectives and needs – and consider what is strategic for the business.

But also pay attention to the softer issues. What helps your stakeholders from a personal perspective or from a constructive political perspective? At the end of the day, business is still done between people, and having a good relationship in which both parties trust and understand each other helps to provide a more holistic and collaborative context, which I believe is very important.

mon ground and leverage. I would also view budgeting as a

For example, if a business stakeholder is going to make a bold move like integrating two business units that have been separate for a long time, and it hasn’t been done for a number of years because there was some risk or a particular issue, and now your stakeholder is looking to resolve that longstanding issue, consider how you can help make that move smooth and successful.

How can corporate legal departments work with other areas, business units, information technology, etc., to advocate for new systems and software processes?

Make sure you understand the business’s goals and needs. For example, with the pandemic, are there digital initiatives that are logical to align with in support of the 50

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could be leveraged to benefit the broader business and the legal department? That’s a great opportunity to find comprocess, not an event, even though 2021 budgets are already upon us. The wise corporate counsel department is thinking longer term and about the 2022 budget and the 2023 budget right now. Understanding what seeds should be planted, what outcomes are desired, and being able to communicate steps to achieve those outcomes even if you’re not making a formal request right now is important.

I would also emphasize the value of developing relationships here once more. As I said, business gets done between people. The more you understand stakeholders and their needs, the more you will be able to find that win-win. It takes time, and it takes an investment at a personal level, to be able to understand how to manage and operate within your broader corporate ecosystem, but it’s very much worth it.

How can research solutions and applications help in-house counsel better optimize their spending?

I’d really encourage counsel to step back and look holistically at their budget and activity. Are there tools that could help you spend your money more effectively? And then also, as part of that thought process, consider what the high-value activities that the department engages in, versus the low-value ones. Just because something’s been done in the past doesn’t mean that it has value or that

it’s even relevant anymore. Thinking about how to stop

spend when you need to go to outside counsel and achieve

low-value activity or at least reengineer it is an important

better results. Maximizing budget and leveraging tools

point to consider. And within that same frame of thought,

can help your team step back and look more holistically,

there is also the question of the bigger buckets of people,

which can drive greater productivity and better outcomes

of tools and of outside counsel. Consider if shifting a little

with limited resources.

bit of the budget from outside counsel, you could invest in some tools that would make your department more effective, whether it’s by implementing software such as a contract management system or some other initiative.

What trends do you anticipate over the next 18 months?

We conducted the 2020 Wolters Kluwer Future Ready Lawyer Survey earlier this year and uncovered a number of

For example, Wolters Kluwer recently launched the Cheetah

dynamics, including how technology is changing relation-

for Corporate Counsel solution. It includes a series of

ships between in-house counsel and their outside counsel

multistate surveys that can provide answers or better direct

firms, the demands of productivity and the need to get

outside counsel spend on policy-related issues. Leveraging a

more done with less, and all the pressure that entails. So I

collection of multi-state surveys or other practical content

believe we’re going to see work continue to move in-house

may allow your department to more effectively direct the

or be reevaluated. People are busy. That’s a trend that

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we shouldn’t forget, that there’s more work than ever for lawyers to do. And despite the pandemic, every indication I see is that attorneys are going to stay busy, both in-house and at outside firms.

It may feel like a time to switch into survival mode, but the savvy corporate legal departments will see these times as an opportunity. Should there be greater development of analytics for better decision-making? I believe you’ll see more emphasis on analytics and data driven decision making. I mentioned self-service earlier. Any place where work can be automated enables resource to be deployed elsewhere.

In the end, if your department can understand the broader business goals and align to those initiatives, you can ensure better results. That requires an investment in relationships.

An understanding those goals give you the power to maximize the resources entrusted to your team by thinking across budgets categories and by applying productivity tools ensure impact for legal and business results.

We all feel pressure to do more with less. Legal professionals are busier than ever and are all feeling the pressure to deliver. We are also trying to balance work and family.

By applying these principles, I’m hopeful that you can find balance in life and your work team can successfully navigate and thrive in these challenging times!

What other considerations should legal teams be thinking of as they continue to adapt to the current environment?

COVID-19 has significantly changed the way employees do business, and many of these changes – working remotely, communicating on mobile devices, not being connected to a company network, sharing documents and messaging through cloud-based software – impede a company’s ability to readily track and access data in a systematic way. Moreover, these newer apps are seeing significant increases in use and 52

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their systems have not necessarily been tested, from a security perspective, in this way. I’m thinking of Zoom in particular, which has become the video conferencing software of choice for many organizations now conducting business virtually. That app has just exploded since the shelter in place orders started. This security concern is one of the best arguments, aside from e-discovery needs, for having an information governance policy in place: There is just so much personal data out there, personally identifiable data, personal health information, credit card information, Social Security numbers and the like. If a company is not proactive about protecting that information, it’s potentially out there for the taking. And when I say protect, I’m anticipating that companies have done some level of work to protect their data, but as the location of this data changes, companies need to adapt to the new risks and put security additional measures in place.

In short, this major transformation in the workplace can create a number of headaches for in-house legal down the road, from lengthy and complicated document collections to data security breaches.

But with foresight and the right expertise, they can identify the issues now and avoid costly and time-consuming problems later. 

To read the Wolters Kluwer 2020 ACC Legal Operations Maturity Benchmarking Report, click here, and for their Future Ready Lawyer Survey, click here.

Ken Crutchfield is the president and general manager of Wolters Kluwer Legal & Regulatory U.S. He leads the Legal Markets group and is responsible for setting the vision and strategic approach with a focus on developing leading digital products. His group aims to provide legal professionals across a wide range of markets with expert content and analysis and leading workflow solutions. Reach him at Ken.Crutchfield@wolterskluwer.com.

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How Technology Is Changing the Consumer Experience VILDAN ALTUGLU CORNERSTONE RESEARCH DONNA HOFFMAN GEORGE WASHINGTON UNIVERSITY Vildan Altuglu, vice president of Cornerstone Research, interviews Donna Hoffman, professor of marketing and Louis Rosenfeld Distinguished Scholar of the GW School of Business at George Washington University, to gain her insights into the revolutionary impact of technology on consumer behavior, as well as potential issues related to data collection and privacy practices.

Vildan Altuglu: You’ve been studying online consumer behavior for nearly 30 years. Most recently, you have researched how the internet of things, machine learning and artificial intelligence influence consumer behavior.

Can you explain how the online consumer purchase decision-making process differs from what happens in traditional brick-and-mortar stores?

Donna Hoffman: The consumer decision-making process has been described as a purchase funnel, a concept that originated from the study of consumers’ brick-and-mortar experiences. In its simplest terms, the purchase funnel is a series of increasingly narrow stages through which consumers pass when they are looking to buy products or services. At the wide end of the funnel, consumers identify a need for a product and then seek to fill that need. In the middle, they gather information about potential products and evaluate. Finally, at the end of the process, they make a choice and buy a particular product.

Inside a store, consumers might have some idea of what brands they are interested in, examine the alternatives on the shelf, consider their options, and then choose one. This, of course, is a highly simplified view of what can be a relatively complex process. Regardless, according to the purchase funnel concept, the process is considered to be relatively inflexible and very linear.

In recent years, we have come to recognize that the traditional purchase funnel way of thinking has evolved 54

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dramatically, as consumers have incorporated the digital landscape into the physical experience of shopping. We now recognize that the consumer decision-making process is much more complex than a linear funnel; indeed, it is now most often described as a cyclical “decision journey.”

With online purchasing, consumers can get on and off at different points in the journey, expand or contract their choice set based on other consumers’ reviews, compare prices across different vendors, and eventually make a purchase decision. They can even skip some steps entirely.

The internet and personal digital devices have made the online consumer experience more convenient, accessible and seamless. And, more than ever before, this experience is much more in the control of consumers than marketers.

At the same time, consumers continue to value the social and experiential elements of shopping in a physical store.

Online shopping does not completely replace its in-person counterpart; they can coexist and enhance each other.

Altuglu: What are some of the key takeaways from academic research into the online consumer purchase decision-making process?

Hoffman: Today’s digital consumer is engaged, empowered and mobile. With the explosion of smartphone and tablet use, critical interactions can occur anywhere, anytime.

The majority of consumer interactions now happen over multiple visits, across a number of channels.

One of the most critical recognitions that has emerged is that marketers have less control over the purchasing decision-making process, and consumers have more.

Social media, in particular, has played a significant role in that shift. In my research, I have examined how social media influences consumers’ attitudes toward brands, advertising and related market-response measures.

In the past, marketing messages were largely driven by

Hoffman: Yes, consumers do have different reactions to

One of the biggest issues that researchers still need to understand is the value consumers may attach to the privacy of their information.

traditional versus digital marketing. First, it is important to understand what these terms mean. Traditional marketing refers to broadcast platforms such as print media, TV commercials and radio. Digital marketing includes electronic media delivered over the internet (mobile, desktop, tablets) and through specific platforms like

marketers to consumers. Literally, marketers broadcast their uniform messages to the consumer mass market, and consumers were passive receptacles for marketing content. In the world of social media, both consumers and marketers generate these messages, and consumers can be very highly segmented or even microtargeted.

Consumers now rely heavily on other consumers, through online reviews, electronic word of mouth, and online searches. Before making a purchase, they may adjust their decisions based on the attitudes and situational factors of others. This puts the consumer in the driver’s seat and takes much of the power away from marketers.

social media, apps and email.

Altuglu: Do consumers react differently to traditional marketing versus online marketing and through social media? If so, how?

marketing, the advertising message can be targeted

When presented with traditional marketing such as television commercials or magazine ads, consumers interested in the marketed products respond with increased awareness of and potential demand for these products. The consumers may gain familiarity with the marketed products, but they are still many steps away from purchasing.

Traditional marketing is best at stimulating awareness and interest in a product; we refer to this consumer reaction as demand generation.

When consumers are exposed to online and social media specifically to them, based on information they provide when using computers and mobile or smart devices.

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Because of this targeting, consumers are exposed to products that they may already be familiar with or have a need for, and they may react by making a purchase.

Consequently, digital marketing tools can more directly convert needs and wants into sales. This consumer response is referred to as demand fulfillment.

Altuglu: How do you define the internet of things (IoT) and artificial intelligence (AI)? How do you think consumers’ interactions with these technologies will affect their buying habits and experiences?

Hoffman: This question reminds me of one I used to get when the internet was beginning to take off. People would ask me: “What is the internet? How different is it to market on the internet than any other channel?” The assumption was that it was just another channel – one more way to communicate with and market products to customers. It turns out that the internet is not just another channel but instead a revolutionary medium. It permanently changed how we communicate and live our lives.

The same can be said about AI and IoT. Together, AI and IoT bring intelligence to physical products. Because of IoT, physical objects can be connected to the internet, and by extension, to other physical objects. Most of the time, these objects have varying degrees of AI embedded within them, which enables them to “learn” in a way that seeks to augment human decision-making.

For example, common household objects, such as exercise bikes or vacuum cleaners, can become active partners, interacting with us to enhance our lives. Over time, consumers are likely to develop deep relationships with these physical objects, which have some level of autonomy, authority and agency to act on their users’ behalf. In turn, these relationships will transform how we consume, whom we trust, how we trust, what kinds of data are collected about us, and the purposes for which that data is used.

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Altuglu: What is the biggest issue you foresee related to AI and IoT technology?

Hoffman: Smart devices are inherently more involved in our lives, and as a result, they will have access to a wider variety of information about who we are and how we live our lives. In my view, one of the biggest issues that researchers still need to understand is the value consumers may attach to the privacy of their information, how this varies across consumers, and the extent to which context matters. Consumers will need to weigh the benefits of sharing their data via smart devices (including personalization and convenience) with any privacy concerns. So, while we have already seen substantial litigation related to data privacy, I think we can expect future litigation to more closely examine the potential benefits and costs that consumers face when they use these emerging technologies.  Cornerstone Research's webcast, hosted by CCBJ, can be viewed here.

To learn more about the effects of online advertising and purchasing on litigation trends, see Cornerstone Research’s article series on Online Marketing.

The views expressed in this article are solely those of the authors, who are responsible for the content, and do not necessarily represent the views of Cornerstone Research.

Donna Hoffman is the Louis Rosenfeld Distinguished Scholar and professor of marketing and the co-director of the Center for the Connected Consumer at the George Washington School of Business in Washington, D.C. Her current research is focused on using conceptual, empirical and computational approaches to understand consumer experiences with AI. Reach her at dlhoffman@gwu.edu.

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