Today's General Counsel, June 2022

JUNE 202 2 VOLUME 1 9 / NUMBER 4 TODAYSGENER ALCOUNSEL.COM

ST U S R E T L I B ANT STUM W NE EGY GATE T A STR F THE O OUT

• Getting attorneys to adopt technology • Survey shows CLO concern over ESG and DIB • French restructuring rules include labor buy-in $199 SUBSCRIPTION RATE PER YEAR ISSN: 2326-5000 ISSUU.COM/TODAYSGC

• Zoom meetings and attorney/ client privilege

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contents 4 EDITOR’S DESK COMPLIANCE

8 HEALTH AND SAFETY ARE KEY TO RESTRUCTURING IN FRANCE Labor Authority approval required.

By Julien Haure and Marine Hamon

JUNE 2022 Volume 19 / Number 4

COLUMN/PRIVILEGE PLACE

12 THE MORE THINGS CHANGE Remote work complicates privilege protection.

By Todd Presnell

LABOR & EMPLOYMENT

10 NOT GUILTY Judge says non-solicitation pacts are not per-se illegal.

By Ann O’Brien and Lindsey Collins FEATURES

14 TECHNOLOGICAL MATURITY IN LEGAL DEPARTMENTS What to do when in-house lawyers are technoaverse.

By Barry Ader 16 IN-HOUSE LEGAL LEADERSHIP — SURVEY HIGHLIGHTS Candid results on challenges facing legal departments.

By Wendy King and David Horrigan

JUNE 202 2 TODAYSGENERALCOUNSEL.COM

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EDITOR’S DESK

T

he DOJ’s Antitrust Division is using novel interpretations of the Sherman Act to address what it sees as two knotty problems: the stranglehold that social media giants have

on public discourse in the U.S., and the pacts between companies that limit their employees’ mobility. Neither initiative is making much headway. In this issue of Today’s General Counsel, Ann O'Brien and Lindsey Collins discuss U.S. v. DaVita, in which a Denver judge ruled that an agreement between companies not to solicit or hire each other’s employees is not per se illegal under antitrust law. There are several other cases pending over no-poach agreements, and so far the DOJ shows no signs of backing down.

French law, by contrast, continues to tilt toward labor. Julien Haure and Marine Hamon outline the hoops that a theoretical multinational company, hamstrung by pandemic setbacks, would have to jump through in order to downsize. Wendy King and David Horrigan discuss a recent survey in which CLOs spoke candidly about the challenges they face with regard to technological maturity in legal departments, and Barry Ader has some advice about getting attorneys to buy into technological change. Todd Presnell, in his column on privilege, discusses attorney/client issues that one widely-used technology raises.

Bob Nienhouse, Editor-In-Chief bnienhouse@TodaysGC.com

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COMPLIANCE

Health and Safety Are Key to Restructuring in France

By JULIEN HAURE AND MARINE HAMON

N

otwithstanding the extensive financial support of the government, the pandemic has put a great strain on many companies in France, leaving them no choice but to restructure and downsize their workforce. In companies required to implement a social plan (i.e., companies with 50 employees or more planning to terminate the employment of at least 10 employees over a 30-day period), the project — whether

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TODAYSGENERALCOUNSEL.COM JUNE 202 2

collectively agreed-upon with unions or unilaterally set by the employer — must be signed off by the labor authorities. Without this validation, any subsequent dismissal could be held null and void and entitle employees wrongly terminated to reinstatement or payment of damages.

Traditionally, international corporations had a tendency to focus solely on the financial measures and redeployment opportunities they could provide in the plan.

These were the main conditions to ensure a positive decision from the labor authorities.

While this remains mostly true, the focus has recently shifted a little with increasing attention given by labor inspectors to the protection of health and safety when considering the validity of the social plan. This is not surprising. All employers are subject to a legal and strong duty to protect the health and safety of their workforce, and it has BACK TO CONTENTS

been highlighted because of the pandemic.

A restructuring can be stressful in France for all stakeholders.

From the announcement of the project to the notification of redundancies, everyone is under pressure: employees who do not know if or when they will lose their job; human Resources, which must handle, inter alia, discussions and negotiations with employees’ representatives and are pushed by the company to bring the process to an end; and the employees’ representatives, the Social and Economic Committee (CSE), which has replaced the works council, and unions.

Neglecting the protection of health and safety can not only lead to delay in completion due

A restructuring process can be stressful in France for all stakeholders. to the refusal of the labor authorities but it can also aggravate the psycho-sociological risks inherent to this type of project among employees who would have to handle the consequences of their dismissal on their family, career and so forth.

To deal with these frequent pitfalls, the following checklist should guide employers in preparing the health and safety component of their restructuring project: Before the announcement: • List, per category of employees composing the workforce, all health and safety risks that will likely be triggered by the operation and analyze them: BACK TO CONTENTS

Are these risks temporary or long-term? Does the company have processes in place to mitigate them? If so, would they be considered sufficient?

• List the durable and less durable modifications of skills, qualifications and tools that the project will entail, along with the consequences on the employees’ workload (notably for remaining employees).

• Update the mandatory unique occupational risks assessment document (DUERP) within the company, in light of the risks identified in the context of the restructuring project.

When announcing the project: • Envision measures that could mitigate the impact of the announcement on the various categories of employees, for instance, those at risk of being more isolated due to full-time remote work.

• Control communication to avoid leaks before the consultation phase with the CSE has begun, as rumors are likely to increase anxiety and stress.

to mitigate such risks. The CSE’s opinion on this specific aspect of the project should be communicated to the labor authorities, who will closely analyze it for the redeployment and financial measures components of the social plan.

Julian Haure is a partner in Mayer Brown’s Employment & Benefits practice group of the Paris office.

Marine Hamon is an associate in Mayer Brown’s Employment & Benefits practice group of the Paris office.

During the information/consultation process with the CSE and the negotiation phase with unions: • Propose accompanying measures straight away after the project announcement: psychological support, internal workshops on stress management, designation of a psychological risk referral, implementation of an alert procedure.

• Schedule a distinct information/consultation on health and safety with the CSE and provide them with detailed information on the risk analysis conducted and the measures identified JUNE 202 2 TODAYSGENERALCOUNSEL.COM

9

L ABOR & EMPLOYMENT

Not Guilty

Juries Acquit in First Criminal Antitrust No-Poaching and Wage-Fixing Trials

By ANN O’BRIEN AND LINDSEY COLLINS

T

he Antitrust Division’s quest to bring criminal antitrust cases involving the labor market has resulted in two recent losses. These were the first criminal antitrust no-poaching of employees and wage-fixing trials. On April 15, a jury in Denver acquitted DaVita Inc., a dialysis

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TODAYSGENERALCOUNSEL.COM JUNE 202 2

company, and DaVita’s former CEO of charges that they had violated Section 1 of the Sherman Antitrust Act by agreeing with other companies and executives not to solicit or hire each other’s employees. Just the day before, on April 14, a jury in Texas acquitted a former owner and director of a

physical therapy staffing company of wage fixing.

These defeats come after a years-long effort by the Division to treat labor market antitrust cases as per se criminal conduct, akin to wage fixing — a first in the 132-year history of the Sherman Act. In these two verdicts, the BACK TO CONTENTS

juries have spoken, rejecting the government’s new approach.

Decades of criminal enforcement and judicial case law have recognized certain categories of anti-competitive conduct — price fixing, bid rigging and market allocation — as so inherently harmful to competition that they are per se illegal without justification or proof of harm. The Antitrust Division, since its 2016 Antitrust Guidance for human resource professionals, has tried to equate wage-fixing agreements with price-fixing, and no-poaching agreements with market allocation agreements.

The presiding judge in the DaVita trial made clear in his order denying defendants’ motion to dismiss, and in his jury instructions and evidentiary rulings, that non-solicitation agreements are not per se illegal under the Sherman Act. Instead, such agreements can become per se illegal if their purpose was to allocate the market for employees.

These cases reflect the Antitrust

the defense introduced copious evidence about the strategic business reasons behind them, the lack of harm they cause and the actual movement of employees, all of which seemed significant to the attentive jury.

Legal non-compete and nonsolicitation agreements have been around for a long time, and there are powerful strategic business reasons for them to exist. By insisting on bringing these cases criminally, the Antitrust Division has used a blunt tool to introduce significant confusion about what is and is not permissible in the labor market and what constitutes per se criminal conduct under the Sherman Act. As the DaVita jury made clear, simply calling non-solicitation or non-compete agreements “market allocation” does not make them so.

Despite these losses, we do not see the Antitrust Division backing down on its aggressive prosecution of no-poach and wage-fixing cases. On the same day the jury acquitted the Texas defendants, Assistant Attorney General Jonathan Kanter of the Antitrust Division appeared personally (by court order) at a hearing in another Antitrust Division case in Colorado, where the jury had just hung for the second time.

Even after facing the judge’s clear and forceful skepticism about the decision to try the case for a third time, and in the face of jury losses in Denver and Texas, AAG Kanter declared that the Antitrust Division “won’t back down.”

Whether these verdicts ultimately have any impact on the Division’s approach is yet to be

seen. There are several other criminal antitrust cases pending over no-poach agreements that we will be watching closely.

Ann O’Brien is a partner with BakerHostetler and leader of the firm’s Cartel and Government Antitrust Investigations Task Force, which advises clients facing criminal or civil government antitrust investigations or litigation. During a nearly 20-year tenure with the Department of Justice, O’Brien assumed numerous senior leadership and management positions in the Antitrust Division, notably as the Assistant Chief of two sections and as the Acting Director of Criminal Enforcement. amobrien@bakerlaw.com Lindsey Collins is a litigation associate and a member of BakerHostetler’s Antitrust and Competition practice as well as the firm’s Cartel and Government Antitrust Investigation Task Force. locollins@bakerlaw.com

These cases reflect the Antitrust Division’s first attempts to push the bounds of the Sherman Act by trying no-poaching conduct as a per se criminal offense.

Division’s first attempts to push the bounds of the Sherman Act by trying no-poach conduct as a per se criminal offense. In response, the DaVita defense team lodged an effective “rule of reason” defense, something typically not permitted in a per se case. While acknowledging the existence of the non-solicitation agreements, BACK TO CONTENTS

JUNE 202 2 TODAYSGENERALCOUNSEL.COM

11

COLUMN/PRIVILEGE PL ACE

The More Things Change

By TODD PRESNELL

T

he pandemic ushered in a panoply of behavioral changes in the workplace, ranging from virtual conferences to repetitive use of now tiresome phrases such as “these uncertain times” and “the new normal.”

These changes continue to evolve as organizations grapple with permanent work from home, all-office or hybrid office solutions. In the area of corporate communications, a rising concern is whether these behavioral transformations altered lawyers’ ethical duties of confidentiality and protection measures for the corporate attorney/client privilege. The answer evokes another aphorism — the more things change, the more they stay the same.

In-house lawyers with heigh-

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tened privilege and confidentiality concerns are right to express their uneasiness with communicating in a non-office, remote setting. Fewer in-person meetings necessarily increases written communications through email, texts and other messaging platforms.

This inevitably includes more employees copying in-house lawyers to “make it privileged.”

When considering the company’s responses to future discovery requests, the company and its lawyers have more communications to review and produce, and more communications to wrangle with over privilege objections.

The ability to schedule a virtual meeting allows — and encourages — the organizer to invite more employees. For example,

the traveling sales representatives who could not attend in-person meetings that involve in-house counsel can now join by video from a laptop computer from a hotel room or airport lounge. The increased number of attendees at gatherings where lawyers discuss legal issues raises confidentiality and privilege waiver concerns, especially when some join from unknown public places and through unprotected WiFi systems.

In contrast to these evolving technologies, the ethical confidentiality elements of the attorney/ client privilege have remained static. Rules of professional conduct require all lawyers to maintain the confidentiality of their client’s information, which includes, but is broader than, client communications protected by the privilege.

The rule imposes obligations on lawyers to take reasonable precautions to prevent the unauthorized or inadvertent disclosure of privileged or confidential client information. An in-house lawyer can reasonably ask whether proper precautions exist in an atmosphere of increased electronic communications and amplified video conferences with invitees joining from wherever, sitting beside whomever.

The corporate attorney/ client privilege has not changed because of workplace advancements either. It remains narrow, BACK TO CONTENTS

protecting confidential communications made for legal advice purposes. In-house lawyers must still ensure that they have the proper attorney/client relationship with the entity that employs the employees with whom they communicate about legal issues.

They should take precautions to avoid losing confidentiality by putting too many persons on an email chain, or having employees join virtual video conferences from insecure places. Lawyers should improve training so employees understand that their actions can have privilege-waiver consequences. The legal advice component requires greater attentiveness because the line between an in-house attorney’s business and legal dealings within the corporate structure is likely blurrier in a world of increased written communications and virtual meetings.

If the ethical rules and the foundational elements of the attorney/client privilege have not changed, then why the heightened concern when working remotely?

The concern arises because the new work environments allow greater opportunity to breach our obligations and waive privilege protections. So, while in-house lawyers should heighten their awareness of day-to-day privilege-protection protocols, they should specifically consider, or reconsider, the following five practice pointers: • Avoid Public WiFi Networks.

Connecting to the company’s email server through unsecure public WiFi networks increases the chances of a third party gaining access to privileged communications. Ensure that lawyers and employees communicate through a secure BACK TO CONTENTS

network such as a virtual private network or VPN. • Don’t Over-Invite. In-house lawyers should avoid, and train employees to avoid, the temptation to invite more personnel to a virtual meeting than is necessary. Increasing the number of attendees at a meeting that involves legal issues comes with the concomitant increase of confidentiality and privilege loss. Limit invitations to those who have a need to know the meeting’s content to assist the lawyers in providing legal advice or implementing that advice.

• Consistent Privilege Language.

With written electronic communications increasing, the need for lawyers to double their efforts to establish privilege becomes more important.

Although it takes time and discipline, lawyers should label truly privileged communications with a “privileged and confidential” designation and include language instructing recipients not to disseminate the communication to others without authorization, and that it is for legal advice purposes.

• Improve Calendar Invitations.

Consider this situation. An employee discloses during a deposition that he participated in virtual meeting that included the company’s in-house lawyer.

The questioning lawyer asks the employee to disclose the meeting’s discussions, and the company’s lawyer objects on privilege grounds. The questioning lawyer challenges whether the employee and in-house lawyer held the meeting for business or legal purposes and looks at the calendar invitation for evidence.

Does the subject matter of the

invitation help or hurt the company’s privilege claim? Let’s make it help by including that the meeting will be confidential and is scheduled for legal advice purposes.

• Privileged Email Attachments.

The upsurge in emails also means an increase in attachments. Remember that many courts perform a separate privilege analysis on attachments. They do not assume that attachments to privileged emails are privileged as well.

Ensure that attachments to emails contain appropriate privilege and confidential designations, and other wording that helps establish confidentiality and legal advice purposes.

In sum, in-house lawyers should have legitimate concerns about privilege protection as varied forms of remote work evolve.

But rules are rules, and privilege is privilege. The workplace changes have simply exacerbated lawyers’ and employees’ opportunity to run afoul of those mandates. In other words, the more things change, the more they stay the same. We just have to be more vigilant in protecting the privilege.

Todd Presnell is a trial lawyer in Bradley’s Nashville office. He is the creator and author of the legal blog Presnell on Privileges, presnellonprivileges. com, and provides internal investigation and privilege consulting services to in-house legal departments. tpresnell@bradley.com

JUNE 202 2 TODAYSGENERALCOUNSEL.COM

13

FEATURE

Technological Maturity in Legal Departments

By BARRY ADER

T

echnology is useful only insofar as corporate legal departments can persuade lawyers and support staff to use it. Many departments are rapidly onboarding tech solutions that can either improve efficiency through AI-powered workflows or facilitate data-driven insights for smarter decision making — a big win for any organization. But technological maturity is about more than just throwing the right tools into place. Legal departments that approach the change

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management process strategically are better positioned to maximize return on powerful technology solutions.

It’s easy to see why in-house teams would be interested in upgrading their tech. Much of the time-consuming work that in-house attorneys or paralegals do, for instance, can be modernized by adopting technologies that automate critical, laborious functions. Tasks like bill review and management of contracts can be greatly simplified through

automated workflows, which can reduce costs and free up those resources for more value-added work. These types of tasks are present in every area of every company.

The level at which businesses embrace and invest in technology is frequently referred to as “technological maturity.” It is a scale that more and more organizations seem interested in achieving — the quicker, the better. For example, Wolters Kluwer’s 2021 Future Ready Lawyer Survey found that BACK TO CONTENTS

57 percent of legal department respondents said that they planned to increase their investment in technology, up from 51 percent in 2020.

Although there are many compelling reasons for general counsel to take an interest in technology, the ongoing business challenges presented by the pandemic are likely high on the list. The circumstances underlying the public

Ready Lawyer Survey, 60 percent of corporate legal respondents identified both the “difficulty of change management and leadership resistance to change” and the “cost of change” as barriers.

For starters, most corporate lawyers would rather spend their time practicing law and other value-added work versus researching and learning how to use new legal technologies.

transformation plan at the outset.

Corporate leadership wants to know that the technologies their organizations are investing in are going to drive value. Legal departments illustrate value using estimated hard and soft savings, such as dollars saved or gains in productivity. Turning managers into evangelists for change often encourages other employees to overcome their own resistance to new tech-based solutions.

It’s a simple, deliberate strategy, but one that works. With effective change management processes, projects are more likely to stay on budget and are six times more likely to meet objectives than those developed using poor change management. Doing it right takes thought and consideration, but success can deliver value straight to the business.

People and cost remain two of the biggest impediments to technological maturity. health crisis have continued to highlight the importance of strategic cost management, productivity, risk mitigation and business continuity inside corporate legal departments. It’s not surprising that many in-house leadership groups quickly identified legal technology as the best way to meet these objectives.

Nevertheless, as quickly as companies are procuring new technologies, employee adoption remains the cornerstone of a successful implementation. People and cost remain two of the biggest impediments to technological maturity. According to the Future

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But all is not lost. One way to increase attorney buy-in is through offering them a seat at the table early in the development of your technology roadmap — an organization’s long-term strategy for technological innovation. Solicit their feedback on the types of tools they use. What works? What could be improved?

Investing the time required to solicit user input up front can provide attorneys with a sense of ownership over an innovation project.

It is equally important that senior executives buy into any type of innovation or digital

Barry Ader is the Vice President of Product Management and Marketing at Wolters Kluwer ELM Solutions. He has led the launch of several ELM Solutions technologies supporting the modernization and digitization of legal operations in the global corporate legal market. barry.ader@wolterskluwer.com

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15

FEATURE

In-House Legal Leadership: Survey Highlights

By WENDY KING AND DAVID HORRIGAN

D

uring the second year of the pandemic, chief legal officers (CLOs) and their legal departments faced fast-changing challenges in risk, culture and technology. These included ongoing pandemic-related issues; new concerns over environmental, social and governance risk; more active involvement in diversity, inclusion and belonging (DIB) efforts; and a bigger role in technology planning and procurement.

Now, as legal teams face another difficult year, they will need to draw upon the endurance

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and experience they developed to lead their organizations successfully into a post-pandemic era.

According to confidential interviews conducted by Ari Kaplan Advisors for the third annual edition of The General Counsel Report, 60 percent of general counsel indicated worry over mounting risks. During in-depth discussions, Chief Legal Officers spoke candidly about the challenges facing their legal departments and their organizations across several key areas.

Mitigating corporate risk is a traditional role for general

counsel, so it’s not surprising that risk management was a primary focus area in the discussions.

However, helping develop the culture of an organization and taking an active role in technology planning are relatively new responsibilities for corporate lawyers — and most likely activities they didn’t anticipate when they started law school.

Regulatory challenges were identified as a significant area of focus this year. More than onethird of respondents highlighted compliance and regulations as substantial risks. These were not identified as notable factors last year.

In other significant developments, intellectual property loss was not a stated concern for 2022; technology modernization was a concern; and ESG issues, not mentioned in previous years, were listed as a primary concern by multiple participants.

DIVERSITY, INCLUSION AND BELONGING CLOs are also finding culture development and team management, including DIB, to be a growing part of their job descriptions. One hundred percent of the general counsel interviewed said they played some role in DIB, up from 71 percent in the previous year’s study. When discussing DIB as a corporate culture issue, BACK TO CONTENTS

one general counsel made an important distinction — organizations shouldn’t think of diversity and inclusion as risks, he said, “because if it is a legal risk mitigation issue, it misses the point.

Diversity is about value added rather than risk mitigated.”

Greater CLO involvement in team management is another by-product of the pandemic.

Among the increased responsibilities are managing issues related

proficiency in the opinion of the CLOs surveyed. Interviews indicate that they believe attorney technical competence has declined. Last year, 55 percent of CLOs believed attorneys had adequate technical competence — an impressive jump from 39 percent in 2020. However, in 2022, this figure plummeted, with only 33 percent believing lawyers currently have adequate skills.

Some CLOs believed the pan-

The pace of technological change is moving too fast for most lawyers to confidently stay ahead of it. to returning to offices and pandemic-related employee health concerns. General counsel who reported legal team involvement in the return to the office increased slightly from last year’s 84 percent to 87 percent. Such high levels of involvement are a sign of the times. General counsel are now taking a role in employee wellness, with 40 percent saying that investing in employee well-being has become a critical priority.

THE ERA OF THE TECHNOLAWYER With respect to corporate counsel’s use, knowledge and involvement in technology, perhaps the biggest takeaway is that 87 percent of the CLOs interviewed said they were involved in technology planning and purchasing beyond merely approving budgets. They also said that the pandemic has influenced a renewed focus on legal department technology modernization, with 43 percent indicating technology transformation efforts have sped up.

Unfortunately, this new focus on technology transformation has not meant improved technical BACK TO CONTENTS

demic caused the jump in earlier perceived competence, under the theory that it was sink or swim as lawyers moved to home offices without the benefit of tech-savvy IT staffs. The decline could be attributed to several factors. For one, it is part of the larger trend of burnout everyone has been experiencing for the last two years. It is difficult to stay up on tech advancements, training and adoption when day-to-day work is at extraordinary levels for a prolonged period. Moreover, the impact and scope of emerging data sources in e-discovery, investigations and compliance are advancing rapidly. The pace of change is moving too fast for most lawyers to confidently stay ahead of it.

Although attorney technical competence perceptions may be disappointing, some of the report’s commentary indicates we are still in the era of the technolawyer. That is because — although technical competence isn’t stellar — there is recognition of its importance. One respondent said, “Technological competence

is becoming more important for many types of lawyers, as there are very technical implications of lots of the legal work that modern lawyers perform. You need to understand the systems associated with different projects.”

CLOs are now carrying a greater burden than ever before.

They have become corporate legal leaders who are stewards of the entire enterprise. With that comes a demand for endurance, but also a learning curve.

By understanding how others are handling this new landscape, and benchmarking against their peers’ successes and challenges, corporate legal teams will find the resilience they need to continue adapting to new demands and expanding the reach of their department’s influence.

Wendy King is a Senior Managing Director in the E-Discovery Consulting & Services practice within the Technology segment at FTI Consulting. She has worked with leading law firms, government agencies and corporate clients to respond to complex litigation, regulatory investigations and a range of large evidence management and litigation support projects. wendy.king@fticonsulting.com David Horrigan is Relativity’s discovery counsel and legal education director.

An attorney and an award-winning journalist, he is the author of the annual Data Discovery Legal Year in Review and serves on the Global Advisory Board of the Association of Certified E-Discovery Specialists. david.horrigan@relativity.com

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