Attorney Journals, San Diego, Volume 219

SAN DIEGO

Volume 219, 2021 $6.95

California Case Summaries

Monty McIntyre Performance Advertising Has a New Marketing Rule

Jaqueline Hummel

Can Using Business Development Give You a Competitive Edge?

Lindsay Griffiths Legal Practice Areas That Are Thriving

Esquire Deposition Solutions How to Build an Inclusive Internal Communications Strategy at Your Firm

Law Firm of the Month

Guldjian|Fasel Serving San Diego

New Office. New Partners. New Opportunities.

Katie Hunt

Reputation Matters.

• Litigation, Arbitration, and Dispute Resolution • Registered Investment Advisors, Broker-Dealers, and Registered Persons • FINRA, Securities & Exchange Commission, and State Regulatory and Enforcement Actions • Corporate and Securities Transactions • Private Equity, Hedge, Real Estate, and Private Investment Funds • Employment and Labor Law

www.SHUFIRM.com

2021 EDITION—NO.219

TABLE OF CONTENTS 6 Legal Practice Areas That Are Thriving During the Pandemic

by Esquire Deposition Solutions

10 Can Using Business Development Effectively Give You a Competitive Edge?

by Lindsay Griffiths

EXECUTIVE PUBLISHER Brian Topor

12 Roll up Your Sleeves: Advisors Using Performance Advertising Have a Heavy Lift Under New Marketing Rule

EDITOR Wendy Price CREATIVE SERVICES Penn Creative

by Jaqueline Hummel

CIRCULATION Angela Watson

LAW FIRM OF THE MONTH

PHOTOGRAPHY Chris Griffiths

16

STAFF WRITERS Dan Baldwin Jennifer Hadley CONTRIBUTING EDITORIALISTS Esquire Deposition Solutions Lindsay Griffiths Jaqueline Hummel Katie Hunt Monty McIntyre ADVERTISING INQUIRIES Info@AttorneyJournals.com SUBMIT AN ARTICLE Editorial@AttorneyJournals.com OFFICE 30213 Avenida De Las Banderas Suite 200 Rancho Santa Margarita, CA 92688 www.AttorneyJournals.com

10

16 Guldjian|Fasel, Serving San Diego New Office. New Partners.

New Opportunities.

by Dan Baldwin

24 California Case Summaries

by Monty McIntyre

28 How to Build and Sustain an Inclusive Internal Communications Strategy at Your Firm

by Katie Hunt

28

ADDRESS CHANGES Address corrections can be made via email or postal mail.

Editorial material appears in Attorney Journals as an informational service for readers. Article contents are the opinions of the authors and not necessarily those of Attorney Journals.

Attorney Journals makes every effort to publish credible, responsible advertisements. Inclusion of product advertisements or announcements does not imply endorsement.

Attorney Journals is a trademark of Sticky Media. Not affiliated with any other trade publication or association. Copyright 2021 by Sticky Media. All rights reserved. Contents may not be reproduced without written permission from Sticky Media.

Printed in the USA

OVER $1 BILLION RECOVERED

NEVADA REFERRAL & CO-COUNSEL RELATIONSHIPS NEVADA’S LARGEST & HIGHEST RATED INJURY LAW FIRM “Rick is one of the best lawyers in the country. I call him every time I have any issue in Nevada and would not hesitate to refer him any type of case of any size.” ~ C. Michael Alder, Esq., Alder Law, Los Angeles, California, CAALA Past President and Former Trial Lawyer of the Year

801 SOUTH 4TH STREET | LAS VEGAS, NV 89101

Legal Practice Areas That Are Thriving During the Pandemic

by Esquire Deposition Solutions

T

he economist John Kenneth Galbraith lumped all forecasters into two groups: those who don’t know what the future will bring, and those who don’t know they don’t know what the future will bring. This observation, while being both self-evident and humbling, hasn’t diminished one bit the business community’s ardor for the forecasting game.

Some predictions actually come true, and those who act upon them are often handsomely rewarded.

Take, for example, early predictions that some legal practice areas would benefit from the Covid-19 pandemic. In 2020, no one really knew what the virus’s impact on the economy would be or how federal and state policymakers across the country would respond. Likewise, no one really knew whether social distancing requirements would check the spread of the virus, or whether personal protective equipment would be effective, or whether a vaccine could be developed.

But we do know this: new legislation and new social and economic arrangements always lead to an increase in litigation and demand for legal services. New laws bring new compliance obligations. Economic stress triggers increased business disputes. And any change in the status quo forces a re-calibration of business risk and triggers a dash to the courthouse to sort out responsibility for unanticipated business and personal losses.

It’s ironic that a profession with a reputation for being resistant to change is, in fact, one of the prime beneficiaries of changing and challenging times. That is proving to be the case again with Covid-19.

Litigators and Labor Lawyers Are Busy Now There was broad consensus in early 2020 that several legal practice areas would see increased demand due to the Covid-19 pandemic. The American Bar Association’s Task Force on Legal Needs Arising Out of the 2020 Pandemic surveyed several hundred lawyers in May 2020 regarding the changes Covid-19 would have on substantive legal areas (PDF). Respondents at the time predicted an increase in demand for lawyers to handle

6

Attorney Journals San Diego | Volume 219, 2021

employment-related issues, insurance coverage disputes, estate planning, bankruptcies, housing issues, and CARES Act assistance.

Business consulting firm McKinsey & Co. predicted a favorable business climate for litigators, pointing out that historically, during economic downturns, litigation practices significantly outpaced transactional law practices.

According to legal industry recruiter Robert Half International, the Covid-19 pandemic will generate increased demand for these practice areas: litigation, contracts, cybersecurity/privacy, and health care.

So how prescient were these forecasters? Very prescient, as it turns out. The following legal practice areas all met predictions for increased Covid-19-related legal services demands.

Insurance Litigation This was an easy one. The insurance industry, which mitigates risk based on consensus assessments of foreseeable events and business conditions, was upended overnight by Covid-19 as everyone—businesses and consumers alike—scanned their insurance policies for relief from Covid-19-related losses.

The most recent report from Thomson Reuters Peer Monitor Index, a widely consulted source of metrics for law firm activity, indicated that litigation practices grew 7.7% from the first quarter of 2020 to first quarter 2021.

For the most part, insurers have been successful in defeating novel coverage claims arising from the pandemic—particularly business interruption claims, which threatened to swamp the industry. However, there are signs that plaintiffs’ litigation strategies—like the virus itself—are evolving in ways that make them less vulnerable to motions to dismiss. Insurance Journal recently reported on a North Carolina case in which the trial judge declined to summarily dismiss a claim for business interruption coverage premised on the argument that Covid-19 caused “damage to the air” breathed by the plaintiff’s employees and patients. Most business interruption claims have foundered on a lack of physical damage to the insured’s premises, a requirement for coverage under business interruption insurance policies.

Labor and Employment One didn’t need much of a crystal ball to anticipate a spike in demand for the services of employment law advisers and litigators to help cope with workplace issues during the pandemic. Covid-19 has upended conventional expectations regarding nearly every aspect of the employeremployee relationship: wage and hour rules, remote working arrangements, illness, disability, productivity, discrimination, and promotion, to name just a few litigationrich facets of work life that have been significantly impacted

by Covid-19.

Every day it seems a novel legal claim sprouts from Covid19’s fertile soil. Last month, in Pennsylvania, a federal trial court ruled that a woman terminated from her employment allegedly because she contracted Covid-19 had stated a viable claim for “regarded as disabled” discrimination under the Americans With Disabilities Act. The legal question in the case was whether Covid-19 is a minor, transitory illness such as cold or flu (in which case it is not a disability), or whether Covid-19 is in fact a disability protected by the ADA. The case is Matias v. Terrapin House, No. 5:21-cv-02288 (E.D. Pa. Sept. 16, 2021).

During the one-year period spanning first quarter 2020 to first quarter 2021, labor and employment law practice groups grew 5.7%, again according to the latest Thomson Reuters Peer Monitor Index.

Trusts and Estates Many legal industry watchers predicted an increased demand for the services of estate planning attorneys during Covid-19, and that has been the case so far. This practice area undoubtedly benefited from the general public’s increased awareness of mortality during the pandemic, the legal profession’s willingness to serve clients outside their physical offices, and also from the enactment of legislation enabling remote notarization and attestation of testamentary documents.

Law practice management software provider Themis Solutions Inc. (Clio) has been surveying attorneys since the pandemic began in early 2020. Clio’s latest Covid-19 Impact Research Briefing, dated Sept. 16, reports a steady increase in “wills and estates” caseloads during the summer of 2021.

Other strong practice area performers identified by Clio were real estate and intellectual property.

Cybersecurity Covid-19 gave additional impetus to the growth of cybersecurity and data privacy practices—fields that were on a growth trajectory prior to the pandemic. As predicted, the

rapid rise of pervasive remote working arrangements, along with the increased use of digital technologies to reach and serve customers, have made cybersecurity and privacy law specialists a hot commodity in 2021.

Earlier this year, legal industry consultancy Firm Prospects LLC told Law360 that the pandemic has caused law firms to beef up headcount in their data privacy, bankruptcy, telecommunications and antitrust practice groups.

Other In-Demand Practice Areas Other legal practice areas currently in-demand due to Covid-19 are white collar crime defense, health care (particularly groups with Food and Drug Administration expertise), mergers and acquisitions, and finally restructuring and bankruptcy practices.

Lateral Link, a legal talent recruiting service, recently reported a very hot job market in Washington, D.C., for bankruptcy litigators, employment lawyers, cybersecurity lawyers, and health care lawyers.

Seizing the Opportunity What can law firms do to respond to an increased demand for these types of legal services? First, law firms can hire lawyers who have Covid-related, in-demand legal skills. Clearly, that is already happening. A second strategy is to “skill up” existing personnel. Investing now in education—whether it’s CLE training from a bar association or work toward a formal degree from a university—will build the expertise needed to serve current and future clients. Investments in technology will also play a role in reaching clients who are newly receptive to digital-only or mostly digital legal service offerings.

Finally, lawyers should strongly consider making changes to their website, directory, and social media listings to inform would-be clients that they have the ability to deliver legal services for Covid-19-related problems. According to Firm Prospects, the number of lawyers mentioning “bankruptcy” in their professional biographies rose by a mere 47 occurrences during a recent survey, while the number of lawyers mentioning “restructuring” leapt by 506 during the same time period.

Small changes like these capitalize on the fact that, while hiring can be a slow-moving, deliberate process, screening decisions are often hastily made—in many cases with the assistance of keyword-scanning software. Even a minor change to a professional biography will capture interest from prospective clients and employers. n This article provided by Esquire Deposition Solutions. Learn more at www.esquiresolutions.com.

Attorney Journals San Diego | Volume 219, 2021

7

REFERRAL FEES PAID

ARIZONA REFERrAL & CO-COUNSeL RELATIONSHIPS ONE OF ARIZONA’S LARGEST INJURY LITIGATION LAW FIRMS

Can Using Business Development Effectively Give You a Competitive Edge?

by Lindsay Griffiths

T

he obvious answer to the title question is of course, yes.

Last night, I had the opportunity to join William McLaughlin, the Business Development Manager for Southeast Asia at ZICO Law, on a webinar for NEXL, a business development platform. We had a robust discussion around this topic which I’ll share when the recording is available, but in the meantime, let’s delve into some of the questions that I’d considered in advance and where lawyers and law firms are today when it comes to business development.

Is Business Development Different from Marketing?

I really hope that everyone reading this already knows that the answer to this question is yes. Historically, law firm professionals (meaning those in your marketing departments) have always understood the difference, but lawyers and law firms have expected them to wear both hats. However, over the last several years, firms have begun to understand the difference and are heeding the professionals’ advice to segment out these two functions within firms. Although some smaller and mid-sized firms still have only one person (or one person per function) in many cases, you’re seeing more finely delineated actions associated with both roles.

This will also be dependent on geography (as we discussed during the session last night).

How Have Clients’ Expectations Changed Over the Last 1-3 Years Regarding Business Development?

Firms don’t do anything unless their clients drive it. And while we still do business based on the adage that clients want to do business with those they know, like and trust, there is an expectation and understanding now, depending on the type of work and clients, that some firms will begin that process or include in that process a business development and, in some cases, operations professional, who is responsible for the “professional” side of the transaction.

That person understands the clients’ business, the industry, the market factors, and will then bring in the relationship partner when the timing is right. As firms become more sophisticated and recognize that they are more profitable and efficient when run as businesses, and their clients demand this more and more, this will and has become more common.

10

Attorney Journals San Diego | Volume 219, 2021

What Are Some Effective, Competitive Business Development Strategies?

Is there anything new when it comes to business development?

Not really—the tried-and-true methods are successful for a reason.

Sally Schmidt, President of Schmidt Marketing, Inc. authored a fantastic piece for Attorney at Work on “Six Business Development Strategies for Lawyers,” which suggests how traditional methods can be adapted for pandemic times (or dare we say “normal” times?). These ideas are ones to lean on and hone to be successful and effective—I’ll delve into a couple, but first and foremost, you need to come into any business development activity with goals and a plan—what is it that you want to achieve and why? Know who you want your clients and potential clients to be, and the techniques and strategies you’ll use to get them will become evident.

• Cross-selling: I know a lot of lawyers hate this term, and so we’ve changed it to become a lot of different things, but let’s all be grown-ups and admit that when we put down our swords and share the table with each other, these tactics actually work. Take an honest look at your existing clients and referral sources (this includes those of you with a membership network like the ILN) and do a gap analysis— Sally discusses this in detail, saying that you want to look at where you’ve represented them in the past, both substantively and geographically. Then, put together a client team that can cover these services and jurisdictions. If your firm doesn’t have that coverage, look at your referral partners for those teams—clients don’t care about the details, they just want you to get the work done effectively and efficiently. If you already work well with your referral sources (again, think membership networks!) why not leverage them in this way?

• Stay visible to clients: People often think of content as “marketing” and it often is, but you can easily translate it to business development. Is there a particular client that you’ve been trying to get more work from or a meeting with? Ask them to co-author an article or be a guest on your podcast.

Look at what their company has been doing lately and write about some of their issues (broadly, of course), and then drop them an email with a link and why it might be useful.

Content isn’t just for marketing.

• Make proactive pitches: Similar to the cross-selling suggestion above, this is another great time to connect with referral colleagues or your colleagues in other offices or practice and industry areas to see where you may be stronger together in pitching for new work.

• Expand institutional relationships: Previously, we’d do a lot of this in person. You can choose to do some of that on a limited basis in person now, depending on your clients’ locations and tolerance, or you can get creative—offer to host a webinar for their in-house team or set up one-on-one calls without video for people who are fed up with video.

Consider too for some that hiring a business development coach may be a great answer. It’s not for everyone, but creating an environment within the firm where groups of lawyers are accountable to each other for their business development activities can be helpful, as can giving people guidance on developing their goals, strategies, and tactics.

What Are the Emerging Trends in Business Development?

There are a few key trends in BD at the moment—why do these matter? If it’s not something that your firm is doing or considering, it may mean that another firm has a competitive advantage over you when it comes to winning business.

• Overall, we’ve seen an increase in investment in business development, with marketing and BD leaders becoming

more of a part of the strategic operations of law firms.

[LexisNexis, January 2021] • Firms are creating more of a defined business development process. [LexisNexis, January 2021] • We’re seeing greater use of tracking, though whether the input of data is effective is still questionable. [Attorney at Work, March 2021] • Firms are being more collaborative—this is a trend that started in past years but has been accelerated because of the pandemic and the accessibility of tools like Teams and Zoom. [Attorney at Work, March 2021] Law firms have gotten increasingly sophisticated in the almost twenty years that I’ve been in the legal industry, which continues to benefit both the clients and the firms themselves. The more we focus on the twin goals of adding client value and increasing law firm efficiency (both of which lead to profitability), the more I believe we’ll see the importance of the law firm business professional rise. n Lindsay Griffiths is a law firm network executive responsible for the oversight and management of dayto-day operations of the International Lawyers Network.

Develops strategies and implementation plans to achieve the ILN’s goals. Responsible for recruitment, member retention, and a high level of service to members. Engages in the legal industry to stay on top of trends, both in law firms and with law firm networks.

FIRM FOCUS ON EMPLOYEE BENEFITS LAW

Corey F. Schechter PARTNER

Butterfield Schechter LLP is San Diego County’s largest firm focusing its law practice primarily on employee benefit legal services. Our experience in employee benefits law and business law provides creative solutions for the most pressing business concerns. We are also dedicated to employee ownership and know all things ESOP (Employee Stock Ownership Plans). Learn more at www.bsllp.com.

Marc S. Schechter FOUNDING PARTNER

Paul D. Woodard

mschechter@bsllp.com

PARTNER

Helping You See ERISA and Employee Benefits Law Clearly Practice areas include: ESOPs - Pension, Profit Sharing, 401(k) Plans - ERISA Litigation - ERISA Compliance - IRS and DOL Audits - Nonqualified Deferred Compensation Plans - Stock Options Plans - Business Transaction & Succession Planning - Qualified Domestic Relations Orders (QDROs)

10021 Willow Creek Road, Suite 200, San Diego, California 92131 Telephone: (858) 444-2300 Facsimile: (858) 444-2345 www.bsllp.com

Attorney Journals San Diego | Volume 219, 2021

11

Roll up Your Sleeves: Advisors Using Performance Advertising Have a Heavy Lift Under New Marketing Rule

by Jaqueline Hummel

A

side from trading errors, a primary source of gray hair for compliance officers is reviewing marketing materials, especially advertisements containing firm performance.

The rules governing performance advertising are complicated and require digging into SEC No-Action letters going back decades.

Moreover, the marketing team’s creativity can pose significant challenges to compliance officers in drafting disclosures for advertising non-standard performance information. The SEC’s new Marketing Rule (Rule 206(4)-1), the “Marketing Rule,” makes the task a little easier by imposing ground rules for investment advisors showing performance data, whether for separately managed accounts or private funds.

Before getting into the details of performance advertising, advisors and their marketing teams must keep in mind that every advertisement must comply with seven general prohibitions, discussed in my prior article, The New Marketing Rule and the Seven Prohibitions: Sneaky, Sloppy, Tricky, Shifty, Iffy, Flimsy, and Dicey. In addition to meeting the requirements for advertising performance data, marketing materials prepared under the new rule must also be fair and balanced, not include any untrue statements or omissions and not be materially misleading. Simply put, the Advisers Act Section 206 fraud standard still applies.

Don’t Be Gross Compliance officers can save their breath by no longer having to explain the very limited situations when a firm is allowed to show gross performance without accompanying net numbers.

The ICI No-Action letter allowed advisors to use gross-of-fees performance in one-on-one presentations to wealthy individuals, pension funds, universities, and other institutions, as long as specific disclosure was included about fees. This practice will no longer be allowed under the new Marketing Rule, which states that an investment advisor may not include in any advertisements “any presentation of gross performance, unless the advertisement also presents net performance” in equal prominence to, and calculated over the same time, as the gross performance. Like the honey badger, the SEC just does not care that institutional investors might prefer gross performance figures.

The Marketing Rule defines “net performance” as the performance results of a portfolio “after the deduction of all fees 12

Attorney Journals San Diego | Volume 219, 2021

and expenses that a client or investor has paid or would have paid in connection with the investment advisor’s investment advisory services to the relevant portfolio.” In the definitions, the rule states that net performance includes asset-based advisory fees, performance-based fees, and carried interest and excludes items such as capital gains taxes or costs the advisor agrees to bear. Custodial fees paid to a third party are not required to be included in the calculation of net performance. However, if a client or investor pays an advisor for custodial services instead of a third party, “then the advisor must deduct the custodial fee in calculating net performance for purposes of the advertisements.”

For example, if custodial fees are included as part of a wrap fee paid to the advisor, then the advisor must deduct the custodian fees when calculating net of fees performance.

The new rule addresses the use of model fees and follows current guidance. Specifically, an advisor cannot use model fees to make its performance look better than it would have if actual fees had been deducted. An advisor can use a model fee equal to the highest fee that would be charged to the advertisement’s intended audience.

Don’t Play Favorites The Marketing Rule requires that all performance data used in advertisements be presented using standardized time periods of one, five, and ten years. Portfolios managed for shorter time periods should include performance information for the life of the portfolio. Advisors can include performance from other time periods if they include the required periods. Do not be tempted to play around with sizing and fonts to highlight better performance—the time periods required by the rule must be shown with “equal prominence.”

Private fund managers, however, do not have to provide performance data for the standardized time periods. They may choose the time periods for presenting performance as long as the presentation is fair and balanced.

It’s All or Nothing Another area where the SEC provides clarity is an advisor’s ability to show related performance in advertisements. The staff took a page out of the Global Investment Performance

Standards’ (GIPS®) book by requiring advisors using “related performance” in advertising to include the performance of all portfolios with substantially similar investment objectives, subject to the following caveats. First, portfolios managed in the same investment style can be excluded if the advertised results are not materially higher than they would have been if the portfolios were included. Second, portfolios can be excluded if doing so would not affect the prescribed time periods for the performance returns. The new rule allows an advisor to show the performance either on a portfolio-by-portfolio basis or as a composite aggregation of all portfolios. For firms that decide to go the portfolio-by-portfolio route, they will need to include the amount of assets in each portfolio and the selection criteria (e.g., accounts managed in the small cap value style).

What about advisors that do not want to show related performance and prefer using a single representative account?

The SEC feels the risk of cherry-picking is just too great. In a footnote, the SEC says: “Under our final rule, advisors may include performance returns of a single portfolio (without also providing the performance of other related portfolios) if the performance is not materially higher than if all related portfolios had been included, and the performance does not violate the rule’s general prohibitions.”

Based on the release, the SEC requires investment advisors that want to advertise their performance to calculate the performance of all accounts managed in the same investment style. Then firms must decide whether to include all portfolios either as a composite of all accounts or on a portfolio-by-portfolio basis. The practical effect is that firms that do not comply with GIPS will need to make some changes to their performance calculation processes.

This includes adopting standards for defining their investment strategies and then creating composites by grouping all portfolios managed in that style for performance calculation purposes. The process must be documented and consistently applied to avoid cherry-picking. The Chartered Financial Institute (CFA)’s Global Investment Performance Standards handbook is an excellent resource for understanding how to create and maintain composites and includes examples of how to present performance data.

Private fund managers must also consider whether they are required to present “related performance” of earlier funds under the Marketing Rule, especially in situations where prior funds have substantially similar investment policies as the new fund being marketed. The SEC gave fund managers an out for situations where “the relevant financial markets or investment advisory personnel have changed over time such that the investment policies, objectives, and strategies of an advisor’s earlier private funds are no longer substantially similar to those of the fund being marketed, the advisor would not be required to include the earlier private funds in its related performance.”

Carve-Outs Permitted The Marketing Rule also sheds light on another murky advertising area: carve-outs, referred to as “extracted performance.” The

rule is very limited, however, and only allows advisors to show the performance of a subset of investments in a single portfolio.

For example, an advisor that manages a fixed income portfolio, but wants to market a new investment style focused on belowinvestment-grade debt, can extract the performance of this asset class from the broader portfolio. The rule requires that an advertisement containing extracted performance must also provide, or offer to provide, the results of the total portfolio from which the performance was extracted.

The big sticking point with this provision is that it only applies to carving out performance of a subset of investments from a single portfolio. The SEC specifically excluded performance carved out from a composite of portfolios from the definition of extracted performance. An advisor that wants to present a composite of extracts would have to comply with the conditions for presenting hypothetical performance (discussed below).

Additionally, the SEC’s anti-fraud standard still applies, meaning that advisors should include disclosure explaining that the data represents a subset of a portfolio’s investments and how the investments were selected.

High Guardrails Around Hypothetical, Model, Back-Tested, and Other Imaginary Performance The Marketing Rule restricts the use of all “non-actual” performance advertising. The SEC dumps model, back-tested and hypothetical performance data into one bucket, including “targeted” or “projected returns” (used in the private fund space), defining them as “performance results that were not actually achieved by any portfolio of the investment advisor.”

Advisors are prohibited from using hypothetical performance in advertisements unless they take these steps: • Adopt policies “reasonably designed” to ensure that the hypothetical performance is relevant to the likely financial situation and investment objectives of the advertisement’s intended audience.

• Include sufficient disclosure so that the intended audience can “understand the criteria used and assumptions made” in calculating the hypothetical performance; and • Provide information “to enable the intended audience to understand the risks and limitations of using such hypothetical performance in making investment decisions to create the performance, its risks, and the limitations of the performance data.”

The SEC strongly emphasizes in the final release that advisors should have a compelling argument for using any kind of hypothetical performance in ads. Moreover, the rule limits the use of hypothetical performance to those investors that have “resources and financial expertise” to assess such performance.

It’s clear that the Staff does not want this type of presentation Attorney Journals San Diego | Volume 219, 2021

13

used with retail investors. And it bears repeating that any materials defined as advertisements are subject to the seven prohibitions—so advisors should include robust disclosure to meet the “fair and balanced” standards.

An advisor’s “reasonably designed” policies and procedures for determining whether hypothetical performance is relevant should include a process for determining whether the intended audience has the “expertise and resources to understand hypothetical performance.” Advisors could include criteria such as previous investments with the firm, minimum net worth, and extensive investing experience. In the final release, the SEC said that advisors could also rely on the fact that investors meet certain “regulatory defined categories” such as qualified purchasers, qualified clients, and qualified institutional buyers.

Advisors that want to use hypothetical performance in marketing materials should understand that this is going to be a heavy lift. In addition to having a clearly defined process for producing the performance data, firms must be able to justify its use, develop robust disclosures explaining the way it was calculated and its limitations, and document a process for identifying an audience with “resources and financial expertise” to understand the performance information.

Notable Exclusions Hypothetical performance can be used with current or prospective investors when provided in response to an unsolicited request from a current or prospective client or private fund investor, or to a potential private fund investor in a one-onone communication. These communications are not considered advertising. When providing this information, the advisor should include a statement indicating that it is being provided in response to the potential investor’s request.

The Marketing Rule also excludes performance generated by investment analysis tools from the definition of hypothetical performance if advisors comply with several conditions. The SEC borrowed the definition of “investment analysis tool” from FINRA Rule 2214, which defines it as “an interactive technological tool that produces simulations and statistical analyses that present the likelihood of various investment outcomes if certain investments are made or certain investment strategies or styles are undertaken, thereby serving as an additional resource to investors in the evaluation of the potential risks and returns of investment choices.”

Unlike FINRA, however, the SEC placed additional conditions on an advisor’s ability to use these tools without having the output considered hypothetical performance. First, the investor must participate either by inputting information into the tool themselves or providing it to the advisor to upload.

Additionally, the SEC requires advisors using these tools to include the following disclosures: • A description of the criteria and methodology used, including the investment analysis tool’s limitations and key assumptions; 14

Attorney Journals San Diego | Volume 219, 2021

• A statement that results may vary with each use and over time; • If applicable, a description of the universe of investments considered in the analysis and an explanation of how the investments are selected, whether the tool favors certain investments and, if so, explains why, and states that other investments not considered may have characteristics similar or superior to those being analyzed; and • A statement that the tool generates outcomes that are hypothetical in nature.

The SEC Does NOT Approve Although it seems obvious to compliance professionals, apparently the practice is prevalent enough that the SEC found it necessary to include a prohibition on advisors from making “any statement, express or implied, that the calculation or presentation of performance results in the advertisement has been approved or reviewed by the Commission.”

The Short List Advisors that want to use their performance data in advertisements will need to beef up their compliance policies and procedures to meet the many conditions imposed under the Marketing Rule.

Here’s a short list of the essential items to be included in marketing and advertising policies and procedures: • Gross and net performance data must be presented in equal prominence.

• Net performance must be calculated using actual fees or model fees that are based on the highest fee that would be charged to the advertisement’s intended audience.

• Performance data must include standardized time periods of one, five, and ten years, or the life of the portfolio (if shorter).

• The firm should create a process for classifying portfolios into groups by investment objective, and each new portfolio should be assigned to a group at the time of funding.

• Performance data should be prepared only after analyzing the performance of all portfolios managed in the same investment style, and a determination made about whether to show performance as a composite or on a portfolio-by-portfolio basis.

• Advertisements cannot include any statements implying that the Securities and Exchange Commission approved or reviewed the calculation or presentation of performance results.

• Extracted Performance can only be used if it shows the performance of a subset of investments in a single portfolio, and an advertisement containing extracted performance must also provide, or offer to provide, the results of the total portfolio from which the performance was extracted.

For firms wanting to use hypothetical performance, here’s the “to do” list: • Adopt policies “reasonably designed” to ensure that the hypothetical performance is relevant to the likely financial situation and investment objectives of the advertisement’s intended audience.

• Include disclosure regarding the criteria used and assumptions made in calculating the hypothetical performance.

• Include disclosure about the risks and limitations of the hypothetical performance in making investment decisions to create the performance, its risks, and the limitations of the performance data.

• Adopt a process for determining whether the intended audience has the expertise and resources to understand hypothetical performance. Use criteria such as previous investments with the firm, minimum net worth, and extensive investing experience. Investors that meet certain “regulatory defined categories” such as qualified purchasers, qualified clients, and qualified institutional buyers may also be included.

Firms that use interactive analytical tools with investors or potential investors should provide clients or prospects with the following disclosures:

• A description of the criteria and methodology used, including the investment analysis tool’s limitations and key assumptions.

• A statement that results may vary with each use and over time.

• If applicable, a description of the universe of investments considered in the analysis and an explanation of how the investments are selected, whether the tool favors certain investments and, if so, explains why, and states that other investments not considered may have characteristics similar or superior to those being analyzed.

• A statement that the tool generates outcomes that are hypothetical in nature.

Compliance with the Marketing Rule is going to take time and significant thought. Despite the guidance provided, there are still many gray areas requiring an analysis of the specific facts and circumstances of the situation. Advisors have until November 4, 2022, to comply, so use the time wisely. n Jaqueline Hummel is a Partner and Managing Director at Hardin Compliance Consulting LLC (HCC). HCC established the hardincompliance.com website to discuss regulatory compliance issues and strategies for compliance officers to be more effective. Learn more at www.hardincompliance.com.

Attorney Journals San Diego | Volume 219, 2021

15

NEW OFFICE. NEW PARTNERS. NEW OPPORTUNITIES. Best Friends Find Best Opportunity for Personal Injury Service in New San Diego Office of Guldjian|Fasel Accident Attorneys

by Dan Baldwin

B

est friends Kaaveh K. Zargar and Chad Irvin planned to open their own law firm since their days at Thomas Jefferson Law School. That opportunity arrived, but in a manner not anticipated, when offered partnerships in the new Guldjian|Fasel office in San Diego. With the expansion, the personal injury firm now has a team of attorneys, supported by a full-sized staff including paralegals, legal assistants, medical billing negotiators, case managers, intake specialists, records, and human resources.

Although they worked separately for a number of years, their plan was always to work together in San Diego. Zargar returned and worked as a personal injury attorney. During that time, he served as co-counsel with Chris Guldjian on a few successful and high-profile cases. “After that, Chris and Frank asked that I come in and join their firm.”

Irvin served as a defense attorney in San Diego for a few years. “The entire time we did that, Kaaveh and I were in constant communication. Our motivation was always to come back home and work together,” he says.

“We offer the best of both worlds when comparing large and small firms. Large firms are appealing because they appear to offer manpower and resources. Small firms are appealing because they offer a more personalized touch. Injury victims that sign up with larger firms may never speak to an attorney and their case becomes one of any number of cases. Injury victims who sign up with smaller firms know their case will get attention but run the risk of it being farmed out to a firm they do not get to choose if the case can’t be settled easily,” Zargar says.

16

Attorney Journals San Diego | Volume 219, 2021

The Guldjian|Fasel Team: Yan Li, Esq., Kaaveh Zargar, Esq., Chris Guldjian, Esq., Frank Fasel, Esq. and Chad E. Irvin, Esq. JOURNALS

LAW FIRM

OF THE MONTH

© Christopher Todd Studios

2021

© Bauman Photographers

Chad E. Irvin, Esq.

Irvin says, “At our firm, either Kaaveh, me, Chris, or Frank will speak to the client at regular intervals throughout our handling of the case. This means that, not only do clients speak to an attorney, but they get to speak to one of the four partners.

Then, if a case cannot be settled easily, the team stays together for the duration of the case—we’re handling it in-house.”

The teaming up of two best friends has earned considerable praise from clients.

They took my case after a motorcycle accident happened to me, being always very communicative, professional, and honest throughout the process. Thanks to Kaaveh, Chad, Rosie and all others that bring professionalism, fairness and good every day to people. Thank you!

A SUCCESSFUL DIVISION OF LABOR The firm specializes in personal injury and lemon law cases.

Zargar manages cases in the prelitigation stage, in which they attempt to resolve the case without putting their client through the stress of litigation. The policy is to try to resolve every case before filing a lawsuit, as long as they can get compensation 18

Attorney Journals San Diego | Volume 219, 2021

that reflects the fair value of their clients’ claims. When the insurance company takes an unreasonable approach to settlement, rather than outsourcing the client’s cases like many other law firms, they simply move the case over to the litigation department.

Litigation is Irvin’s main area of responsibility. Lawsuits are handled inhouse—even if they need to take the case to trial. If there is an overflow in either area the other will jump in and help. Obviously, they collaborate closely when cases move from prelitigation to litigation.

The duo currently has a case involving a complex auto v. pedestrian crash. Their client was minding his business, waiting for an order from a food truck. However, the food truck positioned itself so that customers placing orders and waiting for their orders to be filled had to stand in parking spaces within a parking lot. The owner of the parking lot is a large grocery chain. Although the owners knew that its customers were standing in parking spaces, the food truck never did anything to protect its customers from the automobile traffic or stop them from standing in open spaces. Despite the food truck serving customers in this parking lot for nearly a decade, the grocery chain never did anything to prevent the truck’s customers from standing in its parking lot.

Unsurprisingly, a car driving in the parking lot struck their client and pinned him into the food truck, which caused the client to suffer serious brain and spinal injuries. To date he has spent more than three months in the hospital and has had seven different surgeries. When Zargar attempted to open settlement discussions, none of the parties were willing to consider their own roles in contributing to this horrific incident. So, Zargar and Irvin made the decision to immediately file a lawsuit. Currently, they are in the middle of litigation against the grocery store, the food truck, the driver of the car, and the city.

Such cases hit home. Zargar says, “The reason I became a personal injury attorney—in my final year of law school, I was seriously injured in a roll-over car accident as a result of someone else’s negligence. I have experienced multiple calls daily from insurance company lawyers wanting a fast settlement. I saw firsthand how a financial settlement obtained by my attorney was able to provide for my future medical care and compensate me for my injuries. From that point on, I knew that I wanted to practice personal injury so that I could help others the way my attorney helped me.”

we understand what works and incorporate that in how we practice.”

That approach is certainly one of the primary reasons that the majority of the firm’s cases come from referrals, many from smaller firms that do not oversee personal injury cases that complex or firms outside of personal injury practice areas.

Key to that success is making connections with referral sources. “We find that the reason we get those referrals over other firms comes down to the relationships we build,” Irvin says.

The firm has grown significantly since Zargar and Irvin joined. During the past five years Guldjian|Fasel has more than doubled in size. They have also substantially expanded the number of providers they work with under a multitude of specialties. This is important, because no matter where they get a case, throughout California, they ensure their clients get whatever care they need. “Now that we’ve expanded our focus by returning to San Diego, we can follow the same format and repeat that success here,” Zargar says.

SERVING THE COMMUNITY WITH THE BEST OF ALL WORLDS Irvin says their clients get the best of the entire southern California personal injury lawyer community when coming to Guldjian|Fasel because San Diego lawyers are a different breed. The legal community is very close knit and if you ask a San Diego attorney, regardless of whether they’re a plaintiff or defense attorney, they’re going to say they hate having cases against people in Orange County or LA. When someone talks to LA lawyers, they’re not going to like attorneys from San Diego. “I cut my teeth in San Diego with my first several years of practice, so I know the community and style. Kaaveh has practiced in Orange County and LA and as a result we’re able to take everything we’ve learned, and we developed a style that works in any arena. We’re bringing that style back to San Diego. We’ve had success in San Diego, Orange County and LA and because of that

Kaaveh Zargar, Esq.

© Bauman Photographers

Guldjian|Fasel is often called on to manage lemon law cases. Irvin is working a case in which their client purchased a sports car from a German manufacturer. The client has been having transmission problems since purchasing the vehicle. The client brought the vehicle in for inspection of the problem twelve times. The manufacturer told the client ten times out of twelve that there was nothing wrong with the vehicle. On two occasions they said it was just a software issue. Irvin got the case, discussed it with his partner, and they hired an expert who told them exactly what was wrong with the transmission. Once the problem was identified, the manufacturer had no choice but to acknowledge it. Today the firm and their client are looking at a situation where the manufacturer is actually willing to give their client every penny that could be recovered under the applicable act in an effort to settle before the case goes to trial and attorney’s fees continue to accrue.

Irvin says, “What I like most about the work is the opportunity to make the law work for my clients. Most of my clients don’t understand how the legal system works and because of that they’re often the people who get taken advantage of by the system. I’m finding a way to make it so that the law benefits them.

One of the reasons I love the law is that you can always find a reason or an angle that works to your benefits. It’s my job to find that angle or reason in the law to benefit them.”

© Christopher Todd Studios Chad E. Irvin, Esq. and Kaaveh Zargar, Esq.

COOKING UP SUCCESS Irvin has a fascinating take on the practice of law. As an attorney who enjoys cooking, he says, “I find cooking a lot like the practice of law. You have a bunch of ingredients and a recipe. You can follow the recipe directly and recreate what someone else has already done. But, as you familiarize yourself with cooking, you understand how flavors interact and you learn different techniques. You can take those same ingredients and create a completely different dish; you could also change the recipe slightly to add a bit of your own flair to the recipe. A case is the same. You have the facts of what happened, you get diverse types of evidence, and you’re asked to apply those to the law. A car accident is not novel.

There’s a set recipe that 99 percent of attorneys are going to follow, and they’ll get a decent result. What I try to do is figure out what flavors work best together so that I can improve the recipe.”

Irvin says trial attorneys are the apex species in the legal world. Any civil case, whether it be a wrongful termination case, a contract dispute, or a personal injury case will ultimately go to trial if it cannot be resolved. Accordingly, everything done before that is merely gathering the pieces that will be put together during the trial. The more cases you try, the better you understand how best to put those pieces together. “After I tried my first case, my entire perspective

20

Attorney Journals San Diego | Volume 219, 2021

on handling and arguing cases completely changed. In addition, trying cases requires other skills that many other attorneys need not hone—you must be competitive, quick on your feet, intuitive, creative, and resourceful.”

Personal service remains key to the firm’s success. Zargar says, “I enjoy helping others the way I was helped by attorneys. There’s a certain satisfaction being able to help people who are injured and who are being taken care of by these insurance companies. This is a customer service industry first and foremost. Clients are our number one priority. We make sure we have staff here who follow that philosophy. Whatever the client needs.”

Irvin adds, “One of the best things about working in the new office is that it doesn’t feel like you’re coming to work because you’re collaborating with a friend. It feels like you’re spending time with a buddy.”

And so, the story of two friends comes full circle. The career dreams of two law students find completion in an expanding firm, a new office, and a new opportunity to serve a widening circle of clients. n Contact Guldjian|Fasel 2667 Camino del Rio, Suite 301-18 San Diego, CA 92108 www.gfaccidentattorneys.com

SPECIALIZING IN COMPLEX BUSINESS LITIGATION

BET-THE-COMPANY CASES OVER 65 YEARS OF COMBINED EXPERIENCE REFERRALS/SUBSTITUTIONS ACCEPTED AT ALL STAGES OF LITIGATION, INCLUDING TRIAL • Complete defense jury verdict in real estate dispute and more than $400,000 collected for attorneys’ fees and costs in Batter v. McElhinney, et al. (2019)(Jason Kirby).

• $2.1 million jury verdict for firm client in Doe v. San Diego Unified School District, et al. (2018)(Jason Kirby & Michael Kirby).

• $1.1 million arbitration award for firm clients on cross-complaint after zeroing plaintiff on $6 million damage claim in Step Strategy Advisors v. Solid Gold Health Products for Pets, Inc., et al. (2018)(Jason Kirby lead counsel).

• Michael Kirby received the 2021 Best Lawyers in America® distinction for (1) Bet-the-Company Litigation, (2) Commercial Litigation, (3) Litigation – Real Estate, and (4) Litigation – Securities.

501 West Broadway | Suite 1720 | San Diego, CA 92101 | 619-487-1500 | www.kirbyandkirbylaw.com

California Case Summaries New California Civil Cases

by Monty A. McIntyre, Esq. These recent cases summarized by Monty A. McIntyre are from his publication California Case Summaries™. Monty prepares short summaries (one paragraph), organized by legal topic, of every new published California civil and family law case that California lawyers can subscribe to on either a monthly, quarterly or annual basis. Monty also offers specialized practice area annual summaries in the areas of Employment, Family Law, Real Property and Torts. For more information go to cacasesummaries.com. A California civil trial lawyer since 1980, a member of ABOTA since 1995, a past president of the SDCBA and San Diego ABOTA, and also an expert Zoom user, Monty serves as a mediator, arbitrator and referee with ADR Services, Inc. handling cases throughout California in the areas of business, elder abuse, employment/wage & hour, insurance bad faith, legal malpractice, medical malpractice, personal injury, real property and wrongful death. Web: www.adrservices.com/neutrals/mcintyre-monty/ To schedule a matter, contact Monty’s case manager Haward Cho, (619) 233-1323 or haward@adrservices.com.

CALIFORNIA SUPREME COURT Insurance McHugh v. Protective Life Ins. Co. (2021) _ Cal.5th _ , 2021 WL 3853061: The California Supreme Court reversed the Court of Appeal, which had affirmed a judgment for defendant, following a jury trial, concluding that Insurance Code sections 10113.71 and 10113.72 did not apply retroactively to plaintiff’s term life insurance policy, which had been terminated by defendant to failure to pay the premium. The California Supreme Court held that sections 10113.71 and 10113.72 apply to all life insurance policies in force as of January 1, 2013—regardless of when those policies had originally been issued. The case was remanded for proceedings consistent with the opinion. (August 30, 2021.)

Torts Gonzalez v. Mathis (2021) _ Cal.5th _ , 2021 WL 3671594: The California Supreme Court reversed the decision of the Court of Appeal. Declining to create a third exception to the rule in Privette v. Superior Court (1993) 5 Cal.4th 689, the California Supreme Court ruled that unless a landowner retains control over any part of the contractor’s work and negligently exercises

24

Attorney Journals San Diego | Volume 219, 2021

that retained control in a manner that affirmatively contributes to the injury (Hooker v. Department of Transportation (2002) 27 Cal.4th 198, 202), a landowner will not be liable to an independent contractor or its workers for an injury resulting from a known hazard on the premises. (August 19, 2021.)

Sandoval v. Qualcomm Incorporated (2021) _ Cal.5th _ , 2021 WL 4097782: The California Supreme Court reversed the decision of the Court of Appeal that found that defendant Qualcomm Incorporated (Qualcomm), the hirer of an independent contractor, was liable for the third degree burns that plaintiff (an employee of the independent contractor) suffered to over one-third of the surface area of his body after he triggered an arc flash from a circuit he did not realize was “live” with flowing electricity. The California Supreme Court ruled that defendant Qualcomm owed no tort duty to plaintiff, the parts specialist working for Qualcomm’s contractor, at the time of plaintiff’s injuries. Although Qualcomm performed the partial power-down process that preceded the contractor’s work and resulted in the presence of the live electrical circuit, the Supreme Court concluded that under the facts of this case Qualcomm neither failed to sufficiently disclose the hazard under Kinsman v. Unocal Corp. (2005) 37 Cal.4th 659, 664, nor affirmatively contributed to the injury under Hooker v. Department of Transportation (2002) 27 Cal.4th 198, 202. It also concluded that the

pattern jury instruction used in the case—CACI No. 1009B—did not adequately capture the elements of a Hooker claim. (September 9, 2021.)

CALIFORNIA COURTS OF APPEAL Appeals Reddish v. Westamerica Bank (2021) _ Cal.App.5th _ , 2021 WL 3827308: The Court of Appeal dismissed defendant’s appeal of the trial court’s order requiring that defendant and the plaintiffs should share equally the costs of taking thirty plaintiff depositions in a certified class action alleging Labor Code and wage and hour violations. Defendant appealed the trial court’s order claiming it was appealable under the collateral order doctrine. The Court of Appeal rejected defendant’s argument, ruling that because the outcome remained uncertain, the matter had not been finally determined for purposes of the collateral order doctrine. (C.A. 1st, August 27, 2021.)

Arbitration Banc of Cal., NA v. Superior Court (2021) _ Cal.App.5th _ , 2021 WL 4398583: The Court of Appeal granted defendant’s petition for writ of mandate compelling the trial court to vacate its order granting defendant’s petition to compel arbitration in plaintiff’s action for breach of a loan to facilitate defendant’s purchase of a commercial aircraft. The Court of Appeal held the trial court erred in granting the petition to compel arbitration based upon the Supreme Court’s decision in Henry Schein, Inc. v. Archer and White Sales, Inc. (2019) ___ U.S. ___ [139 S.Ct. 524, 529] (Schein), which held that where an arbitration clause contains a delegation provision, the arbitrator should decide the threshold issue of arbitrability even if the argued basis for arbitration is “wholly groundless.” In Schein, the court considered who should decide whether the parties’ dispute arising from a specific contract with an arbitration clause was arbitrable. In this case, however, the issue in defendant’s petition to compel arbitration was whether the parties agreed to arbitrate their dispute over the loan documents which did not have arbitration clauses, and this was a question for the trial court to decide. (C.A. 2nd, September 27, 2021.)

Herrera v. Doctors Medical Center of Modesto (2021) _ Cal.App.5th _ , 2021 WL 3417591: The Court of Appeal affirmed the trial court’s order denying a petition to compel arbitration in an action by former employees to recover civil penalties under the Private Attorneys General Act of 2004 (PAGA; Lab. Code, § 2698 et al.).

Pursuant to Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348, PAGA representative claims for civil penalties are not subject to arbitration under a predispute arbitration agreement. (Esparza v.

KS Industries, L.P. (2017) 13 Cal.App.5th 1228, 1234.)

The PAGA claims alleged in the former employees’ complaint were owned by the state and were pursued by the former employees as the state’s agent or proxy. (ZB, N.A. v. Superior Court (2019) 8 Cal.5th 175, 185.) The arbitration agreements in question were not enforceable as to the PAGA claims because the state was not a party to, and did not ratify, any of those agreements. Also, after the former employees became representatives of the state, they did not agree to arbitrate the PAGA claims. (C.A. 5th, August 5, 2021.)

Attorney Fees Missakian v. Amusement Industry, Inc. (2021) _ Cal. App.5th _ , 2021 WL 4451940: The Court of Appeal reversed the judgment for plaintiff, following a jury trial, on his breach of oral contract and promissory fraud claims against defendant Amusement Industry, Inc. (Amusement). The jury found for plaintiff on both claims, but it found for Amusement’s founder, Allen Alevy, on the promissory fraud claim, and the trial court later granted a judgment notwithstanding the verdict (JNOV) for plaintiff against Amusement. The jury awarded plaintiff $2.525 million on the breach of oral contract claim and awarded plaintiff $750,000 in compensatory damages and $1,750,000 in punitive damages on the promissory fraud claim. Plaintiff had worked as an inhouse attorney for Amusement. Alevy recruited plaintiff to be the in-house attorney for Amusement. Alevy and plaintiff orally agreed that plaintiff would receive a salary of $325,000, and once ongoing litigation in New York (the Stern Litigation) was resolved plaintiff would receive a bonus of $6,250 for each month he had worked on that litigation (Monthly Bonus), and an additional bonus of ten percent of the recovery in the Stern Litigation, excluding ordinary litigation costs (Stern Litigation Bonus). This agreement was never reduced to writing and signed by both parties. The Court of Appeal reversed the judgment for plaintiff on the breach of oral contract claim because that agreement was a contingency fee

Attorney Journals San Diego | Volume 219, 2021

25

agreement subject to section Business and Professions Code section 6147 and was therefore unenforceable as a matter of law. The Court of Appeal found the jury’s special verdict to be inconsistent because it found Alevy did not make a false promise, but that Amusement (acting only through Alevy) did. Because the trial court could not choose between the jury’s inconsistent responses, the court should have ordered a new trial as to all parties rather than granting a JNOV.(C.A. 2nd., September 29, 2021.)

Attorneys Amjadi v. Brown (2021) _ Cal.App.5th _ , 2021 WL 3855831: The Court of Appeal reversed the trial court’s judgment of dismissal entered after plaintiff’s attorney agreed to a settlement for $150,000 with defendant over plaintiff’s objection, and the trial court’s later order denying plaintiff’s motion to vacate the judgment in her action for personal injuries arising from a car accident.

The settlement was entered by plaintiff’s attorney pursuant to a provision in the attorney’s contingent fee agreement, which allegedly granted the attorney the right to accept settlement offers on the client’s behalf in the attorney’s “sole discretion,” so long as the attorney believed in good faith that the settlement offer was reasonable and in the client’s best interest. The Court of Appeal concluded that such a provision violates the Rules of Professional Conduct and is void to the extent it purports to grant an attorney the right to accept a settlement over the client’s objection. The Court of Appeal held the settlement was void and reversed the judgment. It also referred plaintiff’s former attorneys to the State Bar for potential discipline, as required by law and by Canon 3D(2) of the Code of Judicial Ethics.

(C.A. 4th, August 30, 2021.)

Civil Code Dept. of Fair Employment and Housing v. M&N Financing Corp. (2021) _ Cal.App.5th _ , 2021 WL 4398564: The Court of Appeal affirmed the trial court’s order granting plaintiff’s motion for summary judgment on the first and second causes of action alleging violations of the Unruh Civil Rights Act (Civil Code, section 51) and Civil Code section 51.5, and assessing over $6 million in statutory damages pursuant to Civil Code section 52(a). The Court of Appeal reversed the trial court’s order granting defendant’s motion for judgment on the

26

Attorney Journals San Diego | Volume 219, 2021

pleadings as to the fifth cause of action alleging that the defendant M&N Financing Corporation (M&N) “knowingly compelled and coerced its employees to engage in practices that violated” FEHA and Civil Code sections 51 and 51.5, in violation of Government Code section 12940(i). Plaintiff sued defendants M&N and Mahmood Nasiry for operating a business that purchased retail installment sales contracts (contracts) from used car dealerships that used a formula that considered the gender of the car purchaser. Defendants would pay more for a contract with a male purchaser than for a contract with a female purchaser or female coborrower. The Court of Appeal rejected all of defendant’s arguments (no standing, lack of injury, etc.) against the $6 million judgment. The trial court had granted the motion for judgment on the pleadings on the basis that section 12940(i) did not apply because employee Khayyam Etemadi and other employees of M&N were not “aggrieved” parties under the statute.

The Court of Appeal disagreed, holding that employees who are coerced by their employer to violate Civil Code sections 51 and 51.5 are “aggrieved” within the meaning of section 12965(a) and have standing to sue their employer pursuant to section 12940(i). (C.A. 2nd, September 27, 2021.)

Employwment Becerra v. The McClatchy Co. (2021) _ Cal.App.5th _ , 2021 WL 4472625: The Court of Appeal reversed the judgment for defendants, following a bench trial, in a class action by newspaper home delivery carriers for The Fresno Bee newspaper who alleged that defendants violated the unfair competition law (UCL; Business & Professions Code, 17200 et seq.) by failing to pay the carriers’ mileage expenses as required by Labor Code section 2802. The primary issue at trial was whether the carriers were employees or independent contractors and the trial court concluded they were independent contractors. The Court of Appeal reversed, ruling that the issue of whether the carriers are employees or independent contractors had to be determined under the S. G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341, (Borello) test. The trial court erred in deferring to the Employment Development Department regulations that the Court of Appeal found were inapplicable, and the trial court also failed to properly analyze the factors required by Borello. (C.A. 5th, September 30, 2021.) n

Need a professional writer for your e-newsletter?

Peterson Reporting.

Providing nationwide service since 1986.

From day one of your

Reporting

deposition to the last day

Videography

of your trial, Peterson Reporting

Trial Presentation

is an indispensable member of your trial team. Proven

Unless you have the time, desire and skills, hire people who do!

professionalism and proficiency

Free Conference Rooms Live Streaming Services Video Conferencing Services

for more than 25 years.

Locally owned, globally known.

Global Reach Complex Cases Accurate, Fast

We can write and design everything from e-newsletters to brochures to websites.

530 B Street, Suite 350 San Diego, CA 92101

619 260 1069

Since 1986 petersonreporting.com

215-550-1435 • penn-creative.com

Call to request green delivery of your transcripts and receive a discount.

Peterson AttJrnl HPV.indd 1

7/12/13 27 5:04 PM Attorney Journals San Diego | Volume 219, 2021

How to Build and Sustain an Inclusive Internal Communications Strategy at Your Firm

by Katie Hunt

I

’ve recently had many conversations with colleagues and peers about how to write about diversity, equity, and inclusion (DEI) in a firm’s internal communications. We know that generic values statements no longer do enough—our communities want to hear about the actions our leaders have taken to demonstrate these values.

As a white, mid-career woman (a robustly represented demographic across communications teams), I am always learning when I engage in the ever-shifting discussions around DEI. But having focused a lot of time crafting internal messaging over the tumultuous past year, I have picked up a few valuable strategies.

1. First, listen. When someone comes to me to promote a program or tell a story, I want to help quickly and efficiently. But working on internal DEI content always reminds me to prioritize listening. People often need to share frustrations before they dive into a plan. And those frustrations help me do my job better— they help me know what my audience needs.

... people usually appreciate the chance to share their insights and experience in a brief email exchange or phone call.

At my firm, the comms team is lucky to work with an engaged, fulltime DEI staff, who also help connect us with stakeholders from diverse backgrounds across the firm. These stakeholders help us understand what they need to hear in, say, a message from firm leadership about a particular current event. Of course, I never want to burden people with extra work just because they are part of an impacted group. But I’ve found that people usually appreciate the chance to share their insights and experience in a brief email exchange or phone call.

2. Be Specific. This rule holds true for any good content, but it has special resonance for DEI programs.

... tell them what exact initiatives are in place to foster inclusion and professional development.

Your audience has likely seen statement after statement that amount to, “Yes, we are committed to diversity, equity and inclusion,” whether from your organization or from brands they follow elsewhere. So instead, tell them what exact initiatives are in place to foster inclusion and professional development and what results those initiatives have achieved.

At my firm, despite an internally well-publicized audit of our DEI programs a few years ago, we realized that we had not recently updated the firm community on our initiatives. So, I wrote a comprehensive update for our internal website. This update described, for example, leadership committees that focus on DEI, how they set goals for making the firm more inclusive, and specific progress they’d made toward these goals.

A big part of the writing process turned out to be finding information that already existed—many of the facts I wanted to share, such as demographics of firm employees and new hires, 28

Attorney Journals San Diego | Volume 219, 2021

lived in business development and legal personnel materials. So, I collaborated with other departments to gather that information, then wrote an article that would put it in front of our entire community and link it to their lives. For example, I included a count of how many external professional development opportunities the firm supports— e.g., conferences and bar association events—alongside feedback from our participating lawyers about the programs’ value.

One important caveat: specifics on how diversity factors into work assignments or employee evaluations can’t always be shared for legal and privacy reasons, so check with legal personnel and DEI teams before getting too detailed.

3. Don’t Just Write About Diversity. Internal communications at my firm often include profiles of our lawyers and staff, announcements of awards or professional milestones, and other content that ostensibly has nothing to do with DEI. Except that it does—because by featuring a diverse group of people in all types of content, you’re reemphasizing the firm’s commitment to inclusion and advancement for everyone.

Since older generations of lawyers tend to skew white and male— and by virtue of where they are in their careers, they are often the people helming major matters and winning awards—I’ve found it important to seek out stories that spotlight people from traditionally underrepresented backgrounds. ...by featuring a diverse group of people in all types of content, you’re reemphasizing the firm’s commitment to inclusion and advancement for everyone.

My firm’s pro bono program has provided one source—because pro bono work often gives younger lawyers a chance to manage high-impact matters, it can give communications teams the chance to feature the successes of a younger, more diverse pool of people. Internships and fellowships do the same, and we profile everyone we can who completes one of the firm’s internal professional development programs.

4. Make Sure Your Imagery Tells the Right Story. All your imagery—not just when it accompanies DEI-related content— should feature diverse groups of people.

On my firm’s intranet, lawyer and staff headshots often accompany the stories we post. So, it’s painfully obvious when we’re only writing about the achievements of white, male firm members, even to people who are just skimming the homepage and don’t read a word. Again, seek out opportunities to feature diverse groups of people. You can’t simply rely on the news that shows up in your inbox to provide those stories for you. n Katie Hunt is a content strategist focused on internal and external communications at WilmerHale, where she previously managed content on the firm’s internal website.

She lives in Los Angeles.

Dedicated Exclusively to Divorce & Family Law MAGGIO LAW Orange County Divorce Attorneys is solely focused on representing clients in both contested and uncontested Divorce as well as Family Law matters.

We are also experts in providing Divorce Mediation Services to individuals or both parties who wish to achieve an amicable and cost-effective dissolvement of marriage.

We Provide Aggressive Representation with: • Child Custody • Visitation Rights • Divorce • Legal Separation • Domestic Violence/ Restraining Orders • Prenuptial (Premarital) Agreements • Spousal Support • Property Division • Same Sex Marriages/ Domestic Partnerships • Stepparent Adoptions Gerald A. Maggio

420 Exchange, Suite 270, Irvine, CA 92602 (949) 553-0304 | www.maggiolawfirm.com

Referral Fees Paid

Kathy Minella, Esq., Certified Family Law Specialist

Providing Experience, Integrity and Results

When you hire a family law attorney, you’re investing in a partnership to address your legal matter and achieve your goals pertaining to divorce, child custody or even spousal support. You can be assured that Certified Family Law Specialist Kathy Minella is committed to your goals from beginning to end.

OUR SAN DIEGO FAMILY LAW SERVICES • Divorce • Adoptions • Child Support • Child Custody • Domestic Violence

1450 Frazee Road, Suite 305, San Diego, CA 92108 www.minellalawgroup.com | 619.289.7948

PRSRT STD U.S. POSTAGE

PAID

Santa Ana, CA PERMIT NO. 777

UNRIVALED JURY VERDICTS SETTLEMEN T S PERSONAL SERVICE REFERRAL FEES

PANISH SHEA & BOYLE is happy to discuss how

we may assist you in your case. Please contact

the Honorable Judge Peter Polos (Ret.) for more information at polos@psblaw.com.

WWW.PSBLAW.COM

310.477.1700

1.877.800.1700