CCBJ January - February 2021

Corporate Counsel Business Journal January  February 2021 VOLUME 29, NUMBER 1

6TH ANNUAL

Buyers' Guide to In-House Tech

FEATURING: Computershare FTI H5 iDS Nuix OpenText

INSIDE Clear Principles Give the Legal Team Freedom to Roam 1844: Black Male Lawyers Tell Their Stories Anticipating the Biden Administration’s Approach to Labor COVID-19 Reveals Inherent Advantages of ADR It’s Time for Corporate Law Departments to Spend More on Tech

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JANUARY • FEBRUARY 2021

In This Issue LAW BUSINESS MEDIA

Kristin Calve

EDITOR & PUBLISHER

Kimberly Fine

MANAGING DIRECTOR PROGRAMMING

Dylan Shepard

EDITORIAL ASSISTANT

AT THE TABLE . . . . . . . . . . . . . . . . . . . 2 Clear Principles Give the Legal Team Freedom to Roam Kristin Calve

FRONT . . . . . . . . . . . . . . . . . . . . . . . . . 7

Rachel Dwyer

GRAPHIC DESIGNER

Neil Signore

SVP & MANAGING DIRECTOR OF EVENTS

Lainie Geary

DIRECTOR OF CLIENT SERVICES

Amy Lemel

DIRECTOR OF CLIENT SERVICES

Jennifer Coniglio VP FOR EVENTS & SPECIAL PROJECTS

Matthew Tortora

SENIOR DATABASE MANAGER

Pat Hanelt

OFFICE ADMINISTRATOR

Rob Williams WRITER

PULSE . . . . . . . . . . . . . . . . . . . . . . . . .15 15 Anticipating the Biden Administration’s Approach to Labor Bob Lian

19 It Starts with Good Governance – Reminders for the “New Normal” Joe Cancilla

22 Committed to IP Excellence Today and Tomorrow John Hayden

25 Healthcare Investors Look to Opportunities and Gauge Risks in 2021 Amber McGraw Walsh, David J. Pivnick and Gretchen Heinze Townshend

Taylor Highbloom SOCIAL MEDIA

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

CORPORATE COUNSEL BUSINESS JOURNAL (ISSN: 1073-3000), January/ February 2021, volume 29, number 1.

Published bimonthly by Law Business Media, 104 Old Kings Hwy N, Darien, CT 06820. Subscription price: $110 a year.

Periodical postage paid at Darien, CT, and additional mailing offices.

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

IDEAS . . . . . . . . . . . . . . . . . . . . . . . . . 29 29 COVID-19 Reveals Inherent Advantages of ADR Jacqueline Silvey

33 Supporting Black Businesses: How One Firm Is Making a Difference Ade Bakare and Esch McCombie

36 European Union Further Refines Its Sustainable Investment Regulations Ezra Zahabi

JANUARY  FEBRUARY 2021 VOLUME 29, NUMBER 1

TECH GUIDE . . . . . . . . . . . . . . . . . . . 43 43 It’s Time for Corporate Law Departments to Spend More on Tech Nathan Cemenska

46 Is Your Early Case Assessment Process Hurting Your Case?

Wendy Cole

50 Evolving Technology Brings New Challenges, and New Solutions Alex Chatzistamatis

55 Directing the Course of an Investigation with Database Discovery Tactics Julian Ackert

60 The General Counsel Report 2021: Rising to Today’s Challenges and Building Resilience for the Future Wendy King

62 Minimizing Compliance Risks Natalie De La Cruz Valdes

67 Looking Beyond Traditional Criteria to Select the Right Service Provider for Your Legal Tech Karen Klein

70 Using the Right Artificial Intelligence Tools to Address Your Business Challenge Kimberly Culpepper

Kristin Calve At the Table

Clear Principles Give the Legal Team Freedom to Roam  Conrad Brooks, general counsel with AXIS Capital, talks about his unconventional career path, his personal leadership style, and what he looks for in new hires.

CCBJ: Please tell us a little bit about what led you to your current position at AXIS. Conrad Brooks: My path to this job was somewhat unconventional. I was an aeronautical engineering major in college, but I ended up switching to geology when the math started becoming a little much. We called it “rocks for jocks”, but of course now I am proud of my degree in the natural sciences. After graduation, I served for 11 years as an officer in the U.S. Navy. Toward the end of that time, I started a part-time, evening M.B.A. program in order to gain more overall business knowledge. After leaving active duty, I headed off to law school and ultimately landed in the securities and mergers-and-acquisitions practice at one of the large law firms in Atlanta.

I really enjoyed my time there, ultimately joining the partnership and staying for a total of 10 years. I learned about an opportunity at AXIS through a friend, and joined the company 14 years ago, initially as securities counsel, and then later as corporate counsel. Now I’m in my fifth year as general counsel and corporate secretary. It’s

exposed to some exceptional leaders and mentors. Through those experiences, I was able to observe and pick up a good deal of practices and principles that I synthesized and expressed in my own way. Having said that, there is no doubt that many of the foundational leadership lessons that I learned came from my military service.

Generally, I like to keep it pretty simple. I aim to set a few

been quite a journey.

clear guiding principles and expectations for the team.

How would you describe your leadership style, and

our main mandate is to protect the ship, so to speak, in

Within the Legal/Compliance department here at AXIS,

who do you believe has influenced it?

our role as legal guardians of the corporation. Within

I’ve been very fortunate during my time in the Navy, and

partners, which goes beyond just serving in an advisory

then at the law firm, and now here at AXIS to have been

capacity. So, I use the word “partners” intentionally.

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JANUARY • FEBRUARY 2021

that framework, we seek to serve as effective business

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

Strategic Partners

There are many cynical lawyers out there, and I generally find that to be unhelpful.

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

Another critical element is knowing your people and looking out for their welfare. At AXIS, we try our best to get the hiring right. The next step is to train and equip our people to handle their responsibilities. And then we empower them by letting them know that we have their backs and trust them to do great work. At that point, it’s important to give them room to roam and operate to

Jones Day McGuireWoods LLP McNees Wallace & Nurick LLC National Association of Corporate Directors (NACD) Nuix

develop their own style and voice as they work with their

Sills Cummis & Gross P.C.

internal clients, while offering mid-course corrections

Weil, Gotshal & Manges LLP

from time to time, as needed. Then we do our best to recognize and celebrate successes. This has proved to be

Advisors

a pretty effective formula, and more often than not you’ll

Exterro FRONTEO FTI Consulting iDiscovery Solutions JAMS LexisNexis CounselLink NAM (National Arbitration and Mediation) OpenText™ Discovery Wolters Kluwer’s ELM Solutions Wolters Kluwer’s Legal & Regulatory Zapproved

be amazed at what your team can produce.

Another observation, for any senior leader, but especially in a general counsel role, is that the eyeballs are on you, so be prepared to act accordingly. How is your work ethic?

How do you treat others at all levels of the organization?

Do you demonstrate professionalism? That all matters because your words and actions have impact.

A final principle I will mention – and I think this has been especially important during the COVID-19 pandemic – is that in a work from home environment, it’s almost impossible to communicate too much. It’s human nature to want to feel part of the group, to be in the know and

Contributors Anderson Kill Ipro Tech Computershare Logikcull Cornerstone Research Morae Global Fish & Richardson

be included. So, even at the risk of over-communicating, we have been intentional about connecting frequently in various ways with our team members.

Please help us improve and expand our services to corporate counsel by sharing your ideas with our publisher, Kristin Calve, at 844-889-8822 or kcalve@ccbjournal.com.

CORPORATE COUNSEL BUSINESS JOURNAL

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What are the qualities you look for when hiring new people for your team?

Let’s stipulate that being bright is a baseline requirement.

Beyond that, I look for highly caffeinated, hard-working

I am willing to sacrifice blue-chip academic credentials for high-energy, curious lawyers.

doers. In fact, I am willing to sacrifice blue-chip academic credentials for energetic, curious lawyers. We also value

environment: Don’t short-circuit your initial training by

a willingness to take on broader work responsibilities

leaving too soon. Law firms can be rich training grounds

and learn new things. We try to screen for people who are

with exposure to a wide variety of complex legal issues

enthused about making the jump from what likely was a

and access to some real powerhouse experts in the

more specialized practice, especially if they are coming

various disciplines. Being in that ecosystem is a great

from the law firm environment.

way to build your conceptual tool kit. Also, especially in those early days, you really need to roll up your sleeves to

We also place a premium on collegiality. We favor positive,

develop some technical expertise because that’s going to

friendly people that you enjoy spending time with. There

be foundational to your brand and what you do thereafter.

are many cynical lawyers out there, and I generally find that mindset to be unhelpful. In fact, personally, I like to

Second, I would advise people to seek broader responsibility

keep in mind the Teddy Roosevelt quote, paraphrased,

at any opportunity, even if it means taking on things

about giving credit to the ones that are in the arena

outside of your comfort zone. I remember being a junior

trying to get something done, not the ones criticizing

securities lawyer and somehow getting pulled into the

from the sidelines.

Hart-Scott-Rodino antitrust regulatory world. Looking back, it was a great opportunity to stretch and grow, and I

And finally, good communication skills. You have to be

still occasionally draw on some of that learning.

able to translate potentially complex legal points to your various audiences or make nuanced business concepts

Third, make sure you own your work and take responsibility

clear to outside advisors. This skill is absolutely critical

for your actions. That is pretty basic advice, but I think

to effective lawyering.

it goes a long way towards establishing your personal credibility both in the workplace and beyond.

What would you say is the best career advice you’ve ever received?

And finally, I would say that it’s really important for all of us to keep in mind that although our careers can be

I have a few things to share. First, and this may be

important elements of an interesting, fulfilling life –

especially relevant for junior law firm attorneys

there is more to life than work. Make sure to dedicate

who might be interested in switching to an in-house

meaningful time for family, hobbies and other interests,

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whether exercise, travel, religion, music, charitable work,

in society, beyond the maximization of profits. I think

whatever gets you refreshed and energized. Find some

that these lessons apply equally to the law profession –

balance as best as you can.

and diversity and inclusion immediately comes to mind.

I feel the profession has made positive strides in gender

It was Groucho Marx who said, “If you’re not having fun,

diversity, but is that reflected at the more senior levels?

you’re doing something wrong.” I think Groucho had it

What about racial, ethnic and other types of diversity? We

right. Life’s way too short to be miserable.

clearly still have a long way to go, and it’s important for organizations to develop a specific work plan to realize

Are you hoping to see any changes moving forward

those outcomes – not just platitudes. I also believe there’s

within your profession?

plenty of room in the profession for better innovation, use of data, project management skills and the like.

I am fortunate to be the sponsor of the corporate

Here, our legal professionals run point for a variety

citizenship initiative at AXIS. That work has given me a

of interdepartmental projects, and it is increasingly

great opportunity to reflect on a corporations broader role

important to be able to bring those tools to bear. 

CORPORATE COUNSEL BUSINESS JOURNAL

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JANUARY • FEBRUARY 2021

Front

LAW FIRMS: NOW IS THE TIME FOR CLIENT-CENTRIC TECH ROADMAPS

Prof. William Henderson’s Legal Evolution blog recently ran a piece by a pair of Thomson Reuters executives, Carlos Gámez, Client & Partner Lead for Legal Technology Innovation, and Carly Toward, Senior Director of Proposition Strategy, analyzing the tension between the short-term thinking of sellers – law firms – and the needs of buyers – corporate legal departments.

Corporate law departments need to mitigate and manage risk, while consistently demonstrating efficiencies in delivering value to the business. As a result, they are focused on costs and transparency.

Law firms are structurally organized to focus on short-term profits, which disincentivizes efficiency improvements, innovation and long-term investments.

Their goal is to make the case that the time is ripe for law firms to develop and implement client-centric tech roadmaps – roadmaps that mirror what clients are already doing for themselves. As in-house teams have grown, so have cost pressures, forcing legal departments to become more sophisticated in their engagement with outside counsel and in their use technology. For law firms seeking to enhance their engagement with in-house counsel, it’s useful to focus on the pain points associated with the areas of accountability described in the chart below.

ADVISE Advise Senior Executive Team & Board Interact with Regulatory Agencies

MANAGE RISK

PRACTICE LAW

Asess Risks Design Policies, Processes & Controls Monitor & Report Compliance

Litigation & Disputes Contracting & Drafting M&A Intellectual Property Management Legal Entity Management

Often role of seperate compliance function, which may be overseen by Head of Legal

RUN THE DEPARTMENT Manage Team & Matters Manage External Legal Relationships

Control Budget Measure Performance & Value

CORPORATE COUNSEL BUSINESS JOURNAL

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Briefly Clifford Chance welcomes regulatory and white collar defense attorney, Tomislav Jokismovic, as counsel in New York.

Former Supreme Court of North Carolina chief justice, Cheri Beasley, joins McGuireWoods’ litigation practice in Raleigh.

Delta Capital Partners hires Peter Cornell as president and promotes Martin Lueck from chief underwriting officer to COO. FTI announces 37 new senior managing director promotions for 2021.

Akin Gump advises Kennedy Lewis Investment Management in $100 million investment in Empire Holdings.

Barnes & Thornburg launches racial and social justice foundation to advocate and effect racial and social justice in local communities.

Wolters Kluwer’s Compliance Solutions enhances their paycheck protection program to expedite small business administration loan applications.

Morrison Foerster represents Tene Capital and Pulse Agri Investments in acquisition of Ahern Agribusiness, Inc. Morae Global Corporation and PERSUIT announce a strategic partnership.

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JANUARY • FEBRUARY 2021

BLACK MALE LAWYERS TELL THEIR STORIES The opening of a report, 176 Years Later: Real Life Stories of Black Male Lawyers in Corporate America, issued in October 2020 by 1844, a group of black male lawyers from leading law firms, in-house law departments and prominent government positions, begins with this: “Amidst the global public outcry in response to Mr. Floyd’s murder, the members of 1844 felt an obligation to share our individual and collective experiences with systemic racism.

REAL LIFE STORIES OF These experiences highlight the fact that, even BLACK MALE LAWYERS IN CORPORATE AMERICA as lawyers at premier law firms, Fortune 500 companies, and top government posts, our members are not exempt from – nor immune to – the prejudices and unfair treatment leveled against black people in this country.”

Bloomberg recently interviewed four members of 1844, which is named for Macon Bolling Allen, the first black man admitted to practice PRESENTED BY 1844 in the U.S. You can find the piece here.

176 YEARS

LATER:

44%

56%

66%

are the only black male attorney in their office

passed over despite requisite experience

assumed beneficiaries of affirmative action

74%

88%

faced harsher scrutiny of work than white peers

ignored/denied service in store/ restaurant

MACON BOLLING ALLEN Macon Bolling Allen (August 4, 1816 – October 15, 1894) is believed to be the first African American to become a lawyer, argue before a jury and hold a judicial position in the United States.

Watch the Gap: ESG & Compliance A recent survey from Bloomberg Law revealed an opportunity for companies to ratchet up the effectiveness of their environmental, social, and governance programs by integrating them with their overall compliance programs. “While most respondents (70%) from corporate in-house legal departments indicated that their organization has integrated ESG considerations into its existing risk management framework,” the report says, “40% of them reported that their ESG programs are not integrated within their organization’s traditional compliance infrastructure. This reveals an opportunity for these companies to increase the level of ESG integration within their compliance programs and to foster a holistic approach to ESG management.”

Integration of Corporate ESG and Compliance Programs

Percentage of In-House Counsel Saying their Programs are Integrated

Thomson Reuters announces an extension of its content revision agreement with RSA company, Archer, strengthening financial institutions’ abilities to address changing regulatory requirements.

George Theocharopoulos is appointed managing director in FTI’s merger integration and carve-outs practice.

Prentiss Donohue is appointed as executive vice president, SMB/C sales of OpenText.

Exterro acquires digital forensic investigation tech provider, AccessData.

Weil advises QuickChek in $645 million sale to Murphy USA

40% Not Integrated 5% Not Sure 55% Integrated Source: Bloomberg Law ESG Survey 2020

2020 Hindsight: A Tipping Point for Service Delivery?

When we look back on the extraordinary year of 2020, will we see a genuine “inflection point for the redesign of the delivery of legal services”? That’s the question at the heart of the 2021 Report on the State of the Legal Market from the Center on Ethics and the Legal Profession at the Georgetown University Law Center and Thomson Reuters Institute, with supporting data from Acritas and Peer Monitor.

While the answer is an inconclusive “remains to be seen” until we get a bit more distance, this remains a report corporate law departments should check out.

Karl Schneider, attorney with McNees, is reappointed to their board of building appeals.

Former FERC commissioner, Bernard McNamee joins McGuireWoods Consulting as a senior advisor and McGuireWoods as a partner.

AlixPartners announces Paul Barry and Faisel Hussein join as managing directors in the power & utilities industry team.

Marina Mattar joins FTI as a senior advisor within their strategic communications segment.

E-discovery innovator, Jennifer Hamilton joins HaystackID as deputy general counsel.

Morae announces a technology partnership with Foundation Software Group.

CORPORATE COUNSEL BUSINESS JOURNAL

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Nuix and advisory firm, KordaMentha, announce a new partnership to offer Nuix Discover®.

Former U.S. attorney, Joshua Minkler, joins Barnes & Thornburg’s white collar and investigations practice in Indianapolis.

Digital transformation expert, Narry Singh, joins AlixPartners’ digital practice.

Hon. Keith Davis (Ret.) is welcomed to JAMS’ panel in California.

Bodhala releases a report presenting actional solutions for companies seeking changes in diversity.

Morae announces the expansion of the company’s operations with the acquisition of information management provider, Trinogym.

Akin Gump advises Emerald Solar Energy in $37 million secured project financing.

David Evenhuis, Sarah Hyser-Staub, Jeffrey Esch McCombie and Kenneth Stark are promoted to membership with McNees.

Washburn University School of Law completes $1 million matching gift challenge for tribute to Sen. Bob Dole.

Finance attorney, Michael Welch, arrives as counsel for Clifford Chance’s U.S. structured Finance Team.

SUBMIT YOUR ANNOUNCEMENTS TO editor@ccbjournal.com

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Looking Ahead There’s always talk of inflection points in year-end stories. This year was especially rich – not surprising given the beyond-the-boiling-point events of 2020. Good thing, then, that Law.com got an early start and launched its Breaking Tradition series in August 2020. “[W]e wanted to start it then because we felt the practice of law was at an inflection point: where traditional law firms still held the upper hand, but the influence of alternative legal service providers (ALSPs) and non-traditional law firms could no longer be ignored as a driving force in the industry.” Looking ahead, they also asked a group of lawyers, technologists and other legal experts what’s in store for 2021. Here are some responses (edited for length and style):

“The narrative will pivot from ‘doing more with less’ to ‘doing more with what you already have’ as people focus more on the adoption of existing tools and return on investment. This will begin to close the perceived innovation gap.”

– Oliver Campbell, head of practice operations, Hogan Lovells

“We do expect ALSPs to continue growing . . . but a much bigger threat to law firms is insourcing: Law firms losing business and talent to their own clients.”

– Nathan Cemenska, director, Wolters Kluwer ELM Solutions

“We expect to see continued growth in the legal operations profession in clients’ in-house legal departments. We are seeing clients consider legal operations roles as one of the first few hires when building out an in-house team.”

– Jon O’Connell, partner, Crowell & Moring

“I predict 2021 will mark a turning point in the adoption of data analytics across the legal industry.”

– Jeff Rovner, managing director, O’Melveny & Myers

“Demand for paralegals will continue to greatly exceed demand for lawyers, as more legal work is industrialized, and the lawyer monopoly is eroded by regulatory innovation. Paralegals are better positioned to leverage technology and operate processes.”

– Adrian Camara, CEO, Athennian

“The baby boomer generation is rapidly retiring – leaving a large void in the leadership of law firms that did not plan ahead. There are literally billions of dollars in legal work at risk.”

– Russ Haskin, senior director, Wilson Allen

“I expect to see a continued focus on legal department transformation as legal departments continue to navigate increased workloads and rebound from forced headcount reduction actions, in some instances looking more intently at alternative legal service providers and the potential value these relationships can bring.”

– Lori Lorenzo, research and insights leader, Deloitte

“We’ll continue to see growth in legal practice course providers and law departments offering initiatives to build innovation skills that future lawyers will be expected to have – like AI, intelligent search, data analytics – to cultivate a system of ‘work-ready’ graduates.”

– Alex Smith, global product management lead, iManage RAVN

“We expect that ALSPs will continue to play an expanded role in the industry, partnering with law firms and corporate legal departments.

Additionally, ALSPs should also aid these entities in reaching their stated goals in the areas of diversity, equity and inclusion.”

– Bryan Parker, CEO, Legal Innovators

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

FEASIBILITY STUDY: Council of Europe’s Ad hoc Committee on AI In December, the Council of Europe’s Ad hoc Committee on Artificial Intelligence published a Feasibility Study exploring a legal framework for the development and deployment of Artificial Intelligence. Concluding that current regulations are insufficient to guide the development of AI, the Council proposed the development of a new legal framework comprised of binding and non-binding Council of Europe instruments, including nine principles deemed essential to the protection of human rights in the context of AI.

SUCCESS STORIES: Legal Tracker Learn here how corporate law departments are proving their value with Thomson Reuters’ matter management, case tracking, e-billing and analytics platform. For example, how did Andeavor’s new GC build a legal operations team rooted in best practices and prove the legal department wasnʼt a cost center, but a profit center.

Read this and other in-house Success Stories here and elevate your legal department’s game.

SUMMARY: Outside Counsel Cyber Assessment Project Connie Brenton, VP of Law, Technology and Operations at NetApp, recently showcased some findings from an ambitious undertaking, NetApp’s Outside Counsel Cyber Assessment Project. This rigorous effort to develop a comprehensive view of how law firms, big, small and in between, handle security of their networks, data and systems is an excellent resource.

Check it out and assess the vulnerabilities in your outside counsel’s cyber programs.

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JANUARY • FEBRUARY 2021

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

Julian Ackert is a managing director with iDiscovery Solutions in Washington, D.C. He has over 15 years of consulting and project management experience in the technology and litigation industries, and has extensive experience with forensic data collection and computer forensic analysis.

Mr. Ackert has worked on several international projects involving complex data privacy, collection, and review challenges. Pg. 55 Ade Bakare is a member with McNees. He practices in their energy and environmental group where he focuses on issues involving water, sewer and stormwater utility services, as well as electricity and natural gas matters. Bakare counsels sewer and stormwater clients on both regulatory and transactional matters. Pg. 33 Joe Cancilla practices in the McNees corporate and tax law and mergers and acquisitions law groups. Mr. Cancilla regularly advises on corporate governance issues, mergers, acquisitions, divestitures, financings, commercial transactions, intellectual property strategy and licensing issues, and various public and private company compliance matters for clients in manufacturing, retail, energy and financial services industries. Pg. 19 Nathan Cemenska is the director of legal operations and industry insights at Wolters Kluwer ELM Solutions. Previously, he worked for UpLevel Ops, a management consultancy focused on helping general counsel improve law department performance. Before that, he worked as a legal operations business analyst for Elevate Services. Pg. 43

Alex Chatzistamatis is a principal enterprise architect with Nuix.

He works closely with corporate clients to solve some of the tough unstructured data challenges.

For the past seven years, Chatzistamatis has consulted on many projects involving investigations, e-discovery, information governance, email archives and cloud technologies. Pg. 50 Wendy Cole is director, product marketing for OpenText Legal Tech solutions. After practicing civil litigation in Toronto for seven years, her focus shifted to legal technology and e-discovery. She has been involved in the development of e-discovery in Canada from both a technology and policy perspective for over a decade. At OpenText, Wendy is responsible for strategic product marketing of e-discovery solutions, including Axcelerate Investigation. Pg. 46 Kimberly Culpepper serves as the senior director of marketing for H5 and leads its marketing department. She is an entrepreneurial marketing leader with experience developing marketing strategies and executing multi-channel campaigns that drive revenue growth for leading companies in the legal industry. Pg. 70 John Hayden is a principal in the Washington, D.C., office of Fish & Richardson P.C., where he serves as practice group leader of the firm’s IP Group. He is also an elected member of Fish’s Management Committee. Pg. 22 Wendy King is a senior managing director in the discovery practice within the technology segment at FTI Consulting. Based in Atlanta, she brings more than fifteen years of experience in e-discovery practice sport. Her focus is on helping law firms understand the costs and resources involved with e-discovery software. Pg. 60

Karen Klein is chief legal officer with Relativity. Since stepping into this role in June, 2020 she oversees all legal and regulatory compliance matters and provides strategic partnership to the rest of the executive team and the board of directors. Prior to joining Relativity, Klein was EVP and general counsel of Ticketmaster. Pg. 67

Gretchen Heinze Townshend is a partner with McGuireWoods. Her practice focuses on corporate health-care transactional work and regulatory matters. Townshend’s experience includes representation of various types of healthcare providers, including hospitals, health systems and specialty medical practices. Pg. 25

Bob Lian is a partner with Akin Gump. Since 2008 Lian has led Akin Gump’s labor and employment practice. He focuses on class and complex labor and employment litigation, workplace investigations, restrictive covenant disputes, executive disputes and strategic advice. Pg. 15

Natalie De La Cruz Valdes is a managing director with Computershare Governance Services, UK. Natalie has an LLB in Law and a post-graduate Legal Diploma in Legal Practice, with 13 years’ experience having led global managed service delivery teams at Eversheds and EY. She has acted as global client account director for a number of Fortune 500 and FTSE350 clients across a multitude of sectors. Pg. 62

Esch McCombie is a member with McNees. He practices in their real estate and pipeline & oil/gas infrastructure practice groups. His focus his is land use matters, including obtaining permits and approvals at the municipal, county and state level. On a national level, McCombie conducts zoning and land use due diligence associated with mergers and acquisitions. Pg. 33 David J. Pivnick is a partner with McGuireWoods. He serves as a co-chair of the firm’s healthcare and life sciences industry team. Pivnick focuses his practice on complex commercial litigation with an emphasis on healthcare litigation. Pg. 25 Jacqueline Silvey, Esq. is general counsel of NAM (National Arbitration and Mediation). She is involved in various management operations including panel development, oversight and implementation of commercial and employment dispute resolution initiatives, the creation and implementation of various rules of procedure, and the general business affairs of the company. Pg. 29

Amber McGraw Walsh is a partner with McGuireWoods. As the chairwoman of the firm’s healthcare department, she chairs one of the largest healthcare practices in the U.S. and is a leader in promoting the advancement of women in the private equity sector. Pg. 25 Ezra Zahabi is a partner with Akin Gump. She advises on relevant developments and considerations regarding changes to the UK and EU financial regulatory framework.

Ms. Zahabi focuses her practice on financial regulatory matters relevant to the investment management and funds industry. Pg. 36

CORPORATE COUNSEL BUSINESS JOURNAL

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Anticipating the Biden Administration’s Approach to Labor to those developments. For instance, when I started

 Bob Lian, partner at Akin Gump and leader of its labor and employment practice group, has been with the firm for nearly three decades. Here, he discusses what the future of employment law may look like under a Biden administration, including potential new COVID-19 regulations, possible restrictions to noncompete agreements, and the important role litigation plays in “regulating” the modern workplace.

practicing, much of the work centered around federal laws and regulations. There was also a decent amount of union-management relations work still. One of the most noteworthy changes over the past several years has been the extent to which states and localities have become involved in regulating the workplace. That includes laws about minimum wage, workplace harassment, leave or other workplace protections.

CCBJ: As the leader of Akin Gump’s labor and employment practice, what insights can you offer to our readers about the current state of workplace laws,

Another significant trend has been how courts, legislatures, and regulatory bodies have been trying to fit workers in the

regulations and litigation?

gig economy and other nontraditional workforce arrange-

Bob Lian: As the economy has evolved, there have been

origins in the 1930s. There has been an explosion in work

ments into legislative schemes that in many cases have their

a number of changes in the regulation of the workplace;

arrangements that do not look like a typical employer-

the pandemic has only accelerated these trends. The forces

employee construct. Yet courts, regulators and legislatures

that are shaping our politics these days are also having an

still largely operate based on old concepts of what a worker

impact on the workforce and how policymakers respond

is and what bodies of law apply. I think we’re going to CORPORATE COUNSEL BUSINESS JOURNAL

15

aggressively enforcing wage and hour laws, and penalizing

Employers today need to be mindful of a broad array of not only federal but also state and even local laws.

noncompliance in these areas. He also has promised to aggressively apply and enforce prevailing wage laws, like the Davis-Bacon Act and the Service Contract Act. Another area worth paying attention to is efforts the Biden

continue to see changes in this area as society grapples with how to address these arrangements, what benefits and protections should be provided, and really how to define these roles in a very fundamental sense. Are the workers in the gig economy employees or independent contractors, or possibly a hybrid? Should there be a new category, perhaps? This has an impact on a broad array of areas, including wage and hour laws, union organizing, and other sorts of workplace protections.

administration may to undertake to limit the enforceability of noncompete agreements. A number of state legislatures have already done this. What we’ve seen over the years is that states are taking increasingly restrictive views about when noncompete agreements can be utilized and with regard to which segments of the workforce they are permissible, as well as what types of procedures need to be followed in order to implement them. The Obama Administration issued a report that laid the groundwork for further challenges to those types of agreements. There

A corresponding trend that we’ve been seeing involves efforts by plaintiffs and regulators to try to hold companies at the apex of a business relationship liable for the working conditions of everyone who supports that business.

President Obama’s former wage and hour administrator, David Weil, referred to the current situation as a “fissured workplace,” where companies use contractors, outsourcing, franchising, and other arrangements that don’t fall into that traditional employer-employee model, to accomplish their mission. I suspect we will continue to see efforts to wrestle with these issues and figure out how to create a liability model that addresses it – most likely in how independent contractor, “joint employment,” “single employer” or “alter ego” statuses are defined.

have been other reports suggesting that they have an adverse

What might you expect to happen in this area as we transition to a Biden administration?

and who have been mentioned as possible candidates for

effect on employees in terms of their ability to maximize their wages and employment opportunities. I suspect that President Biden will press for limits on how and when restrictive covenants in employment can be used.

In terms of timing, it typically takes an administration somewhere between two and three years to really begin implementing its agenda for the workplace, mainly because it takes time to get appointees in place and for those folks to know what levers to pull to get the administration’s agenda moving. But I suspect that the Biden administration and the people he is likely to appoint to the Department of Labor and other workforce agencies will move more quickly. This is principally because who he has involved in his transition high-level appointments in workforce-related jobs have a lot of government experience and are likely to be able to hit

President-elect Biden has staked out a range of fairly aggressive reforms in his campaign materials. They include

the ground running a little bit more quickly than one might

reinvigorating unions, both as a matter of policy and law,

when there is a change in parties.

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JANUARY • FEBRUARY 2021

ordinarily expect with a new administration, particularly

But change in some areas will happen somewhat more

took office, he issued an executive order that said that for

slowly. For example, every Democratic president during

every new rule that is issued, two have to be eliminated.

my lifetime has talked about trying to rebuild the labor

I highly doubt the Biden administration is going to do

movement. There are broad economic and societal forces

anything like that.

at work that make that difficult. Efforts to change the law governing union organizing or union rights will

However, what is going to impact all of this significantly is

run into stiff resistance from Republicans. In addition,

how quickly Biden is able to get his appointees confirmed in

it usually takes a least a couple of years for there to be

the Senate. And, of course, that has a big political aspect to it,

enough turn-over at the National Labor Relations Board to

both with respect to how the Senate race in Georgia turns out,

facilitate a meaningful change in the direction favored

and also in terms of how quickly the leadership in the Senate

by a new administration. But nonetheless, I do think

moves his appointees through committee and for approval.

there is going to be an effort in that regard.

What are your thoughts on occupational safety under In general, it is reasonable to expect a more aggressive

the Biden administration, especially given COVID-19?

enforcement agenda at many of the regulatory agencies, like the Equal Employment Opportunity Commission (EEOC),

One school of thought says that President Biden will be

the Occupational Safety and Health Administration (OSHA),

under a great deal of pressure to issue a formal rulemaking

and the Wage and Hour Division. When President Trump

governing COVID-19, like we’ve seen at the state level in

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17

Democratic majority in the House, I think it’s going to be

There has been an explosion in work arrangements that do not look like typical employer-employee constructs.

difficult for the Biden administration to get any sort of sweeping legislative change through Congress.

For that reason, I suspect we are going to continue to see efforts to effectuate change through notice-and-comment

California, Virginia, and elsewhere. The Trump administra-

rulemaking and through sub-regulatory means, through

tion received frequent criticism for not doing an emergency

enforcement guidance, directives, and interpretations of

rulemaking. On the other hand, there has obviously been

existing law, without having to use formal rulemakings

a lot of positive news recently about the vaccines.

I think we will see some sort of temporary emergency rule around COVID-19. More broadly, I think we will likely see an increase in enforcement of OSHA rules. And we’re probably going to see something of a return to the issuance of aggressive press releases when employers do get cited. That was a tactic that the Obama administration frequently used, but it

or legislation. There is a lot a Biden Administration will be able to do just through how it directs its enforcement efforts of existing law.

I’ll conclude by expanding on that last point a bit: Because of the tight margins in Congress, I think we end up seeing private litigation continue to be the main avenue of

largely ceased during the Trump administration. I suspect

enforcement of workplace

that under a Biden administration, OSHA is likely to resume

laws, as opposed to gov-

the use of press releases as a way of leveraging enforcement

ernment-initiated actions.

resources and trying to shame employers into compliance

Most of the “regulation,”

through the threat of negative publicity.

if you will, that takes place

What won’t change under the new administration?

Getting legislation passed and signed into law has always been hard. With a slim majority in the House, President Biden is likely to face tough sledding in Congress, regardless of the outcome of the election in Georgia, it is going to remain so. What we’ve seen over the past several administrations is that efforts to make changes to workforce

in the workforce today happens through private litigation – private plaintiffs bringing lawsuits, class actions and the like, in the state and federal courts – as opposed to governmentinitiated lawsuits and

laws and regulations have taken place substantially at

enforcement actions. I think

the rulemaking level and sub-regulatory level through

that is going to continue

interpretations and guidance documents. With a slim

to be the case. 

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JANUARY • FEBRUARY 2021

Bob Lian is a partner with Akin Gump.

Since 2008 Lian has led Akin Gump’s labor and employment practice. He focuses on class and complex labor and employment litigation, workplace investigations, restrictive covenant disputes, executive disputes and strategic advice. Reach him at blian@akingump.com.

It Starts with Good Governance – Reminders for the “New Normal”

For example, how much information has been flowing to

Joe Cancilla, of counsel with McNees, addresses

timely reminders of basic corporate governance issues that he recommends keeping top of mind.

those holding fiduciary duties? And through what channel has it been flowing? For larger public companies, scheduling formal Board meetings, providing a sufficient amount of information to support detailed agenda items, taking minutes of the meetings, and providing regular updates on

Hopefully, there are more months behind us rather than ahead of us in dealing with COVID-19. As the world has settled into some version of normalcy while facing this global pandemic, the volume of information pushed to companies from its advisors has diminished from the initial shutdown chaos of March/April 2020. But that does not mean that the potential issues for businesses have reduced, nor does it alter some fundamental management concepts that the persons operating and managing a business must follow. So, some simple reminders of basic corporate governance issues, perhaps with some practical advice, might be in order.

As we know, the business and affairs of a corporation are managed by its directors. With that come the fiduciary duties of directors to act in the shareholders’ best interests, and, in some jurisdictions, perhaps the best interests of other constituencies as well. Most public company executives and directors are well aware of their responsibilities in this area. For many smaller private companies, the limited liability company (LLC) is a popular vehicle used to organize and manage a business. From a governance perspective, similar fiduciary duties, although perhaps a bit more flexible, apply to the persons managing the LLC and should be considered as the business adapts and responds to the current climate. Regardless of the size and structure of the business and whether it is publicly traded or privately held, the same general advice holds in thinking through and being alert to changes, both large and small, in the operation of the business in response to COVID-19.

the business in an ad-hoc manner from the CEO and CFO is commonplace. For most if not all such companies, the number of meetings and volume of information flowing to its directors has likely increased significantly in 2020.

However, this practice may not be second nature to the smaller private companies. It is worth considering how the governance profile of the business would appear to someone on the outside looking in. For example, if your business is looking to refinance existing indebtedness or perhaps obtain new debt or equity financing, the number and quality of potential sources may be impacted by how well the corporate books and records have been maintained in 2020.

So the practical advice is that if your business has not been very structured and formal in this area, it might be worthwhile to direct some resources to shore up this cornerstone of corporate governance. As part of this effort, consider when the corporate organizational documents were last reviewed. Now might be a good time to ensure, for example, that actually holding a Board meeting on Microsoft Teams or Zoom is permitted in your jurisdiction and by your organizational documents (State statute, Charter, Bylaws and/or LLC Operating Agreement).

Similarly, consider how well each individual can at least hear and hopefully see the presentation materials during a meeting. Be sensitive to confidentiality issues, as well.

If there is significant background noise on a call, it might be worthwhile from a governance perspective to dig deeper into where a director is physically sitting and CORPORATE COUNSEL BUSINESS JOURNAL

19

It is never a bad time to check in with your information technology group to ensure important corporate records are being stored, either temporarily or permanently, in secure locations.

perhaps provide a reminder that others may be able to see and hear the meeting that probably should not.

As for a record of what was presented and what actions were taken at the meeting, is everything, including signatures, being stored electronically? Are minutes being reviewed and signed manually, then scanned and uploaded somewhere? Was the pre-COVID-19 practice to include signed minutes and other significant corporate documents in a hard-copy minute book? Is there a plan to continue that practice post-COVID-19? On a good day, records management is a painful topic for many companies and their in-house counsel. But if there is significant remote work taking place that is generating important corporate records, it is worth considering how those records are being generated and maintained, as well as how consistent that process is with past practice. It is never a bad time to check in with your information technology group to ensure important corporate records are being stored, either temporarily or permanently, in secure locations. And to close this loop, a reminder to the Board that if they are now receiving materials and attending Board meetings in a different way than they

More information flowing to the Board is generally a good thing. But from a corporate compliance perspective, consider whether any personal health information is being inadvertently distributed. It seems prudent that information be regularly disseminated to the Board regarding any positive COVID-19 tests, any procedures or new policies being implemented, as well as any impact on production or operations of the business.

However, consider the sensitivity of any personal information that may be contained in the detailed appendices that support high-level summaries or presentation materials.

The board should also be regularly informed regarding overall compliance initiatives, particularly if operating in an industry impacted by new and frequently changing State and Federal COVID-19 regulations (like the hospitality and food and beverage industries, as examples).

Does your business operate internationally, and does it have legal entities formed in foreign jurisdictions? Have the books and records of those entities been maintained adequately, and are regular governance meetings being scheduled and held? If a service company or local law firm has not been engaged to handle those issues, consider whether now might be an appropriate time to get that part of the house in order. And while you are at it, consider for significant operational foreign subsidiaries whether some brief local counsel advice might be money well spent to assess what, if any, fiduciary duties may exist and to whom they run, and whether there are any specific COVID-19 impacts in the jurisdiction, through new regulations or otherwise.

where (on a personal device or in a different cloud-based

For most businesses, the companyʼs financial health and/ or of the industry within which it operates is, in this era of COVID-19, receiving regular and significant attention.

From a governance perspective to the extent insolvency

area) that might be discoverable.

issues may be on the horizon, it is worth remembering

were pre-COVID-19, they should consider whether they have any records now being stored unexpectedly some-

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JANUARY • FEBRUARY 2021

that fiduciary duties do not go away when a business is

and the financial impact to the company that might not

insolvent. However, the creditors of the company likely

surface for a while. Maybe a plant-level controller or

replace the shareholders as the primary beneficiary

an accounts payable manager should be a stop on your

of those duties.

next trip around the office (if your office is open) or for expanding your video meeting skills. Similarly, check in

In addition, consider whether it might be prudent to set

with your friends in the procurement function, as well

up a special committee of the Board to both serve as a

as inventory management and production scheduling.

governance channel for specific actions the company

Issues with suppliers, expanding inventory levels, idle

may need to take, not only in dealing with potential

or excessive production scheduling all may give clues to

insolvency issues but also in response to any specific

concerns that might trigger further internal discussions.

COVID-19 operational issues. A special committee would

Usually, someone or some group in the organization is

also be recommended by most advisors when considering

getting signals in advance of a financial crisis, but if

whether to explore a sale or other restructuring of the

everyone is scattered and working remotely, the issues

business. This area’s general guidance would be to engage

may be more difficult to discover. Being tuned in to

directors independent and disinterested in any possible

“hidden” warning signals should help you prepare

restructuring or other transaction to serve on this special

timely advice for the busi-

committee. And in the smaller private company arena,

ness that might be facing an

consider adding a manager or director if there are insuf-

unexpected significant event

ficient resources to discharge these duties. Also, vetting

sooner rather than later.

all prospective committee members for ties to any controlling equity interest holders would be recommended.

As our friend Ferris

Outside advisors will likely be needed if the concerns are

Bueller said so eloquently

significant. If the finance group is not tuned in to this for

in 1986: “Life moves pretty

budgeting purposes, be sure to check in with them.

fast. If you donʼt stop and look around once in a

On that note, some practical considerations for lawyers or

while, you could miss it.”

compliance personnel working in-house (and for senior

Hopefully, by the time you

managers or owners in smaller private companies) might help

are reading this, COVID-19

provide early warning of potential issues that may need to be

is in the rearview mirror,

addressed. For example, stay in close contact with your finance

but let us be sure to look

and accounting personnel at all levels. Presumably, senior

around the corporate

finance executives in a larger organization have processes

governance side of the

and procedures to monitor potential liquidity concerns.

house and be prepared for whatever might be quickly

But for smaller private companies, perhaps other finance

approaching the top of

or accounting personnel may help provide clues in poten-

your to do list, whether

tial concerns with, for example, slow-paying customers

you realize it or not. 

Joe Cancilla practices in the McNees corporate and tax law and mergers and acquisitions law groups. Mr. Cancilla regularly advises on corporate governance issues, mergers, acquisitions, divestitures, financings, commercial transactions, intellectual property strategy and licensing issues, and various public and private company compliance matters for clients in manufacturing, retail, energy and financial services industries. Reach him at jcancilla@mcneeslaw.com.

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Committed to IP Excellence Today and Tomorrow

 John Hayden, principal at Fish & Richardson, talks about the firm’s prowess in the patent prosecution and counseling space, how COVID-19 has affected business, and what he expects to see going in to next year.

CCBJ: Leading the high-profile patent practice at the largest intellectual property law firm in the country is a big job.

Tell us about your role and your priorities for the new year.

John Hayden: I lead our IP Group, which includes the patent, trademark and copyright, and regulatory and government affairs practices. It is a team of more than 200 attorneys and technology specialists, and hundreds of additional team members who directly support our practice.

I’m tremendously proud of how the entire team transitioned seamlessly from working together in our many offices to working remotely while maintaining excellent client service and producing outstanding work product. I’m also proud that the firm was able to make the transition without furloughs, layoffs or compensation reductions. We’ve actually managed to grow the team this year by more than 20 attorneys and technology specialists (80 percent of whom are diverse), and we’ve also added comparable numbers of paralegals and docketing professionals.

My priority going into the new year will be to continue to focus on the safety and well-being of our team and to ensure that we have outstanding talent in place to support existing and new clients. That effort will involve continuing to strive to maintain the fabric of the team while working remotely, as it looks like the effects of the pandemic will continue for many of us well into 2021. At the same time, we also need to prepare the team to be ready for face-to-face interactions once that becomes an option (including identifying the clients, markets and sectors that will most benefit from such interactions). In the meantime, we are working to find 22

JANUARY • FEBRUARY 2021

new ways to interact with current and potential clients while face-to-face meetings remain a limited option. To ensure that our team has the support they need, we are continuously improving our support infrastructure, as well as making some major revisions to our tools. And, of course, I remain committed to growing our international practice, working with our Shenzhen and Munich offices.

Fish is known for its long-term client relationships on both the litigation and patent side. What is the secret to the patent group’s ability to retain clients over the long haul?

We strive to understand our clients’ technology and business on a very fundamental level. We’re able to do so because of the uniqueness of our team – not only do our attorneys have deep technical expertise, but the size of our team also means that we have that deep expertise across an incredibly broad range of technologies. That’s something you don’t find at other firms. Clients stick with us because we understand their long-range plans for their intellectual property and are able to adapt our approach to meet their needs at any time.

How have clients’ needs changed, and how are you responding to those changes?

It’s not clear to me that their needs have changed. At a high level, clients who come to our patent group are looking to develop a patent portfolio that supports their business needs, to develop strategies for making that patent portfolio as robust and defensible as it needs to be, and to identify the optimal courses for navigating the patent portfolios of their competitors. This is as true today as it was when I started with Fish as an associate in 1992.

What has changed is how we address those needs. For example, when inter partes review and related post-grant proceedings came onto the scene, we assembled an industry-

leading post-grant practice that offers an outstanding solution for protecting clients’ patents that are being challenged as well as for challenging competitor patents that should not have been granted.

We’ve also addressed our clients’ demands for high-quality, high-value legal services through increased reliance on our technology specialist program, paralegals, support systems and technology. Our technology specialist program – which focuses on recruiting scientists and engineers – especially helps us expand our technical breadth and depth without limiting ourselves to the much smaller pool of people with appropriate technical backgrounds who have also gone to law school. And access to that larger pool of accomplished individuals has allowed us to be much more intentional about enhancing the diversity of our team, which is a value embraced by both the firm and our clients.

It also allows us to grow our attorney ranks – many of our associates and principals started at the firm as technology specialists and attended law school under the firm’s tuition reimbursement program.

One of your personal passions has been developing the next generation of patent prosecutors and counselors at Fish. What are you doing, and why is it so critical?

It’s important to me that Fish maintain its position as the industry leader for handling the most complex IP issues for cutting-edge companies, and the best way to do that is to invest in the next generation of attorneys who can carry that torch. We provide our junior attorneys and technology specialists with extensive training and give them plenty of opportunities to practice their craft. For example, our innovative Patent Lab is an intensive twoand-a-half-day training program where new team members practice claim drafting, patent application drafting, inventor interviews and response drafting. It is entirely interactive, with hands-on exercises led by Fish’s senior

principals, who offer plenty of detailed feedback. We also consider the role that our senior attorneys play in mentoring and training others as a significant factor in their evaluations for advancement and compensation.

Fish’s patent work for clients outside the U.S. is one of the firm’s fastest-growing segments of its practice. Can you tell us about this work and its strategic importance to the firm?

Much of the growth in our patent practice in recent years has been the result of significant growth in work originating outside of the U.S. This work has supplemented our robust practice for domestic clients, which is also growing, but at a more modest pace. We are seeing an increasing number of international clients that are interested in developing strong, high-quality U.S. portfolios – which is compatible with our approach – as opposed to getting a large volume CORPORATE COUNSEL BUSINESS JOURNAL

23

We strive to understand our clients’ technology and business on a very fundamental level.

What’s on the horizon that you are planning for now?

What keeps you up at night?

In the short term, we’re looking forward to being able to interact with our clients and teams in person again. The COVID-19 crisis has forced a lot of changes very quickly, and

of patents with less concern about quality and value. That emerging shift in strategy has allowed us to play to our strengths quite well with international clients. We also find that many clients are benefiting from the seamless interaction of our U.S. and Munich offices by using us as a resource to build their portfolios in both the U.S. and Europe.

Fish’s patent practice has been an innovator in developing and using proprietary technology to more effectively and efficiently manage your patent docket.

Explain the technology and how it helps Fish serve

I think we’re going to be learning lessons from this experience for a long time. In the longer term, I’m staying focused on our international practice – expanding our presence in Munich to better serve our clients in Europe and figuring out additional ways to leverage our presence in Shenzhen, including the addition of more U.S. practitioners.

The biggest thing that keeps me up at night is ensuring that our team is sized appropriately for our workload.

As our work has grown, we’ve moved cautiously to expand

clients at the highest levels.

the team to appropriately support the work, while

As a technology law firm, we understand the power of

significant hysteresis in

technology and how to use it effectively to improve our

the system (i.e., while it

processes. Our patent practice has been paperless for nearly

is straightforward to add

a decade, which has streamlined the practice immensely.

We have developed several proprietary tools that have been helpful as well. For example, our Automated Practice Systems tool gives our team access to all of their files and correspondence anywhere – an invaluable asset since our offices have been closed due to COVID-19. We also created a proprietary tool called Power Docket that lets individual team members manage their dockets and, more importantly, provides an efficient and effective communication tool for keeping the team apprised of the status of docket items in real time. And we provide client portals that let clients

recognizing that there is

people as work grows, we don’t want to be in a position of needing to actively shrink the team if work slows down). I’ve been very proud that, during my tenure leading the group, we’ve been able to handle ebbs and flows without losing team

access information about their matters in real time. These

members due to lack of

tools help us collaborate and work together more efficiently,

work, and my intention is

and clients appreciate that.

that this will continue. 

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JANUARY • FEBRUARY 2021

John Hayden is a principal in the Washington, D.C., office of Fish & Richardson P.C., where he serves as practice group leader of the firm’s IP Group. He is also an elected member of Fish’s Management Committee. Reach him at hayden@fr.com.

Healthcare Investors Look to Opportunities and Gauge Risks in 2021

McGuireWoods partners Amber McGraw Walsh, David J.

Pivnick and Gretchen Heinze Townshend discuss policy and litigation trends that healthcare providers and investors will monitor in 2021. Walsh chairs the firm’s healthcare department, Pivnick is co-leader of the healthcare and life sciences industry team, and Townshend is a healthcare regulatory expert advising providers and investors alike.

CCBJ: Setting aside key litigation and risk management concerns for healthcare providers and investors, can you talk briefly about the current landscape of healthcare investing in light of the COVID-19 pandemic?

Amber Walsh: The strong interest in private equity, hospital and strategic buyer investment in healthcare that existed prior to the onset of the pandemic seems to have largely returned after a brief pause in the early months of the pandemic. It is true that we are starting to see more distressed asset investing in healthcare. And deals look different than they did pre-pandemic, and likely will for a while. Buyers and sellers are negotiating several unique deal pricings and other protective metrics to ensure that the seller gets the full credit for the historical business that was built but the buyer is protected from COVID-19 unknowns. And with the presence of Paycheck Protection Program (PPP) loans, PPP lenders presents a new class of stakeholders in 2020 deals that will likely remain for the coming few years, which impacts deal pace and process.

But the healthcare sectors that remained of interest prior to the pandemic remain of interest, and the features of an attractive business to investors prior to the pandemic remain relevant, with the ability to effectively harness technology for patient care and the demonstration of the hardiness to weather the pandemic storm now being

more critical features for a broader array of healthcare providers than prior to the pandemic.

Turning to those litigation and risk management concerns, prior to the COVID-19 pandemic, what were the top issues of concern for healthcare providers and healthcare investors from a litigation standpoint?

Were there certain areas of particular focus for different stakeholders in the industry?

David Pivnick: There are concerns and risks associated with re-opening during and coming out of a pandemic.

These are tough cases due to challenges in establishing causation, but they will be brought, particularly if appropriate safeguards are not in place.

We can expect to see an uptick in fraud and abuse investigations for a variety of reasons. We tend to see more whistleblower complaints in a tough economy, especially when employees are getting laid off. There also will be heightened scrutiny on issues related to funding distributed under the CARES Act and the PPP. In addition, the Justice Department’s focus on the opioid crisis has continued and arguably will be heightened.

Will the Biden administration take a different approach to enforcement of the Stark Law, federal Anti-Kickback Statute and other anti-fraud laws? Should this concern providers and investors?

Walsh: Historically, Democratic administrations have had a more significant focus on healthcare fraud and waste, have been more concerned with perceived risks of private and physician ownership and have generally favored greater government control over all elements of the delivery of care. But I believe that’s an overly simplistic view and does not necessarily reflect what we can see in the next four years for a variety of reasons.

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25

First, the Biden-Harris healthcare platform is not heavily

administration was anti-enforcement and focused on reduc-

focused on these types of regulations. Rather, it is far

ing regulations. But, as a practical matter, the DOJ was fairly

more focused on public safety and welfare in light of the

active during the past four years and there was not a mean-

pandemic, and they are going to have their hands full with the pandemic and its aftermaths (including the resulting many years of investigations and litigation surrounding potential misuse of HHS Relief Funds and other investigations related to COVID-19 David described above). Second, it appears that a divided Congress with a Republican-led Senate will be in place until at least the midterm elections, which will have a chilling effect on the more progressive elements of the administration. And finally, and potentially most importantly, unlike other areas of enforcement (e.g. immigration and environmental), healthcare fraud and abuse had really dramatically increased universally many years ago and has been a major focus for the DOJ through several presidencies with very little shifting

ingful change in enforcement strategies or activity levels.

Gretchen Townshend: I do believe changes in enforcement are likely to occur in the coming years, but this is more due to the impact of the pandemic and certain waivers to the Stark Law and Anti-Kickback Statue implemented for its duration as well as the recently finalized changes to the Stark Law and Anti-Kickback Statue slated to take effect on January 19. In both cases, certain arrangements which would have been potentially problematic prior to the commencement of the pandemic have been/will be permitted. Like providers, the various federal agencies are going to need to navigate these changed rules through

from administration to administration.

their enforcement activities.

Pivnick: I agree on Amber’s last point about enforcement

How has the COVID-19 pandemic in and of itself shifted

in recent years. There was a perception that the Trump

those concerns?

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JANUARY • FEBRUARY 2021

Pivnick: The focus areas also remain in play and have

language of the Stark Law which were intended to reduce

arguably been heightened as a result of the pandemic –

inadvertent non-compliance and resulting provider

the opioid crisis, home health and hospice care and skilled

self-disclosures.

nursing. We may see some bigger picture policy changes, but I would not view it as being highly likely to occur

When assessing financial relationships which implicate

just because of a change in administration.

Stark Law, the new rules provide additional opportunities to cure Stark Law compensation issues, lack of signa-

Simultaneously, the Centers for Medicare & Medicaid

tures/writings, de minimus compensation and the like.

Services recently finalized proposed rule changes to

Similarly, the changes to the Anti-Kickback safe harbors

various federal fraud and abuse law, including some

provide additional compensation options, such as the

intended to give hospitals and physician groups greater

removal of the requirement that independent contractor

flexibility as they move toward value-based care.

aggregate compensation be set in advance so that pro-

Separate and apart from business opportunities, in

ductivity and unit-based compensation methodologies can

what areas will these reforms have the most impact

be protected. The ultimate upshot being that the new

on litigation and risk management concerns?

rules should give compliance officers and risk managers more options to protect additional types of arrangements

Townshend: Following the implementation of the new

and cure inadvertent noncompliance discovered within

rules, various financial relationships with and between

their organizations short of the self-disclosure process. 

providers which have historically been in violation of or risky under Stark Law and the AntiKickback Statue will have additional protection. This is true with providers entering into new contracts related to value-based care (i.e, gainsharing arrangements, bundled payment initiates, capitation arrangements) under the new Anti-Kickback Statute safe harbors and Stark Law exceptions.

But perhaps equally as important are the changes

Amber McGraw Walsh is a partner with McGuireWoods. As the chairwoman of the firm’s healthcare department, she chairs one of the largest healthcare practices in the U.S. and is a leader in promoting the advancement of women in the private equity sector. Reach her at awalsh@mcguirewoods.com.

David J. Pivnick is a partner with McGuireWoods. He serves as a co-chair of the firm’s healthcare and life sciences industry team.

Pivnick focuses his practice on complex commercial litigation with an emphasis on healthcare litigation. Reach him at dpivnick@mcguirewoods.com.

Gretchen Heinze Townshend is a partner with McGuireWoods. Her practice focuses on corporate healthcare transactional work and regulatory matters. Townshend’s experience includes representation of various types of healthcare providers, including hospitals, health systems and specialty medical practices. Reach her at ghtownshend@mcguirewoods.com.

made to the technical CORPORATE COUNSEL BUSINESS JOURNAL

27

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COVID-19 Reveals Inherent Advantages of ADR

CCBJ: You’ve served as the general counsel of NAM for almost 14 years. During your tenure there, how has alternative dispute resolution (ADR) evolved and improved?

Also, the quality of the neutrals that are available in private ADR now is better than ever. You really have the best of the best, both in terms of ADR experience and subject-matter experience. We have former trial and appellate level state and federal court judges in addition to attorneys with deep experience in a wide variety of subject matter areas that serve on our panels throughout the United States and internationally.

The growth and acceptance of ADR has contributed to the finest jurists and legal practitioners transitioning to dispute resolution as their primary occupation.

Jacqueline Silvey: In the time that I’ve been with NAM, ADR has become more of a fixture in the legal landscape. I’ve seen a broader variety of case types moving to mediation and arbitration, and there has been an increase in the size of the cases, the number of parties and the complexity of the matters. You’re not just looking at simple two-party or low-value matters anymore, but rather multiple-parties with varying claims, complex legal issues and significantly higher dollar values at stake. The types of matters that we handle now are so much more diverse than they were 14 years ago.

The overall increase in the sophistication of the cases over the years has also resulted in an increase in the overall sophistication of the process. This includes everything from the different sets of rules and procedures that have been created for specific case types or for industry specific ADR programs, to technological advancements in the use of videoconferencing for mediations and arbitrations, state of the art conference facilities, and knowledgeable and experienced case managers who understand the nuances that come with specialized ADR programs and procedural rules.

 Jacqueline Silvey, general counsel with NAM (National Arbitration and Mediation), discusses the changes she’s seen in alternative dispute resolution over the years, the current state of the industry, and where she sees it going post-pandemic.

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The ADR industry as a whole has evolved to a point that users can rely on refined administrative processes, exceptional neutral talent and a time and cost efficient way in which to resolve their disputes.

The COVID-19 pandemic has transformed the way an ADR company like NAM does business. What specifically has changed, and how has the user experience been enhanced?

When the pandemic hit, as Courts and law firms and companies started to shut down, the need to keep cases moving to resolution was greater than ever. NAM had been offering videoconferencing as an option for its mediations and arbitrations for over 25 years so that made it pretty easy for us to transition our cases from in person to videoconferencing. We offered four videoconferencing platforms to accommodate our clients and created new processes for the remote submission of documents and case related materials. It was incredibly important to us that our clients were able to continue to process and resolve their cases the same as they did pre-pandemic.

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JANUARY • FEBRUARY 2021

The four videoconferencing platforms we offer our clients are: Zoom, Cisco WebEx, BlueJeans by Verizon, and Skype.

Our preferred platform is Zoom, because of its ability to provide multiple breakout rooms, which is needed for many of the mediations we handle. Our platform is HIPAA compliant and we use specific settings that are configured differently than the generally available Zoom commercial accounts. We use a branded URL that’s not available to the public, which is designed to enhance security, in addition to other customized settings.

All of our neutrals are trained to use the various videoconferencing platforms and we have information technology staff available to monitor every conference in case any party needs technological assistance. All of our conference facilities comply with social-distancing guidelines, and they regularly undergo enhanced cleaning and sanitizing for situations when matters do proceed in person.

We also offer our clients hybrid options, meaning some parties can appear in person and some via videoconference.

NAM has been using videoconferencing for almost 25 years.

It’s always been extremely important to NAM that the user experience is exceptional, and that has continued to be a top priority since COVID-19. We do everything we can to accommodate our clients and make them feel comfortable.

The talent pool in the ADR industry has grown more knowledgeable, with a better understanding of how to provide high-quality dispute resolution services.

What skills and other traits should one look for when selecting a mediator?

When counsel is looking to select a mediator, I’m usually asked to provide a list of people that have a certain subjectmatter experience, relative to whatever the underlying case is. But there is another consideration that is also extremely important, perhaps even more so than the mediator’s subject-matter experience – and that is the mediator’s negotiation and settlement skills, as well as their personality.

You want a mediator who has great communication skills, including the ability to listen – a likable and relatable individual with a good reputation. If, for example, you are going to compare the experiences of two parties – one party that had a mediator who had all the right subject-matter experience but lesser interpersonal mediation skills, and another party that had a mediator with a bit less subjectmatter experience but amazing interpersonal skills – I think you’re going to find that the party that selected the second mediator, the one with the better negotiating and mediating skills, will end up having the better experience. Now, of course, I’m not suggesting that you use someone who’s not familiar with the subject matter at all, or that it’s not an

important consideration, because it is – but I am suggesting that you look for someone whose people skills – their negotiation and mediation skills – are really top-notch.

So, in my opinion, the perfect choice is someone who is the whole package… has the subject matter knowledge and is personable as well as a great communicator; and who has a good reputation and is known for their settlement skills and abilities. That’s what we look for at NAM so that we can provide our clients with the highest quality neutrals in the ADR industry.

As a leader in the ADR field, NAM invests significant resources in recruiting experienced neutrals and in maintaining state-of-the-art technology. How else does NAM strive to stand out in the ADR community?

Earlier I mentioned that the size and complexity of the cases that go to mediation and arbitration has grown throughout the years. The increase in the sophistication of the cases goes hand in hand with an increase in the sophistication of NAM itself, as a company. Our administrative staff and case managers are trained to understand the differences in these case types, the various rules and procedures and nuances that are involved in administrating different types of cases. We have highly knowledgeable and experienced case managers assigned to the various departments, as well as to the different programs and initiatives that we administrate, in order to ensure that we provide our clients with top-level customer service when administrating their cases.

NAM also excels at creating and designing ADR programs and initiatives. If it’s an industry-specific program, it’s not uncommon for us to design an entire set of rules and procedures and documents specific to that initiative.

Candidly, we believe that we are unique in this regard.

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disputes continues to increase throughout the United

The perfect choice for a neutral is someone who is likable and is a great communicator; someone with a good reputation who is known for their settlement skills.

States and internationally.

Where do you see ADR heading post-pandemic?

I think that the pandemic has definitely accelerated the growth and adoption of ADR. With the court closures and backlogs, there has been a greater need to resolve disputes

In fact, there are several industries where we have established the rules, procedures, guidelines, and administrative caseflow in its entirety. This is mission critical for industries that are considering the implementation of an ADR process or for a company looking to create an ADR program. The administrative services that NAM provides far exceed just scheduling hearings and creating calendars.

another way, so there has been an increase in the use of ADR. Parties that were new to ADR have now experienced its benefits, including the cost-effectiveness, the high quality of the neutrals, and the state-of-the-art facilities and technology that are available. So, they will likely come back. And existing clients, who were already familiar

We really focus on making sure that the user experience is very positive. From our inception 30 years ago, almost one hundred percent of our clients that start using NAM’s services continue to use our services to this day.

One of the core beliefs at NAM is that if you entrust us with your case, your experience with us should be a positive one. It’s extremely important to us.

with ADR are going to

NAM is one of the largest ADR companies in the United States, and it maintains a global roster, including a nationwide panel of more than 2,600 top-tier neutrals that comprises judges and other legal professionals.

What kinds of matters do you see trending in your organization’s workload?

did before and I believe

We have been fortunate enough to experience growth in many areas over the years, but in the commercial space, especially recently, there seems to be an uptick in contract and business-relationship disputes. Insurance coverage disputes is yet another fast-growing area. And when it

companies resolve

comes to employment matters, the number of employment

afterward too. 

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JANUARY • FEBRUARY 2021

continue to return too, because they’ve always had a positive experience and they know the benefits of ADR. So, post-pandemic, we’re going to have a larger user base than we that parties will continue to use ADR because of its inherent advantages.

The core benefits of ADR were present before the pandemic, they’ve helped disputes during the pandemic, and I’m certain that the use of ADR is just going to continue to grow

Jacqueline Silvey, Esq. is general counsel of NAM (National Arbitration and Mediation). She is involved in various management operations including panel development, oversight and implementation of commercial and employment dispute resolution initiatives, the creation and implementation of various rules of procedure, and the general business affairs of the company. She also oversees neutral recruitment throughout the United States and internationally. Reach her at jsilvey@namadr.com.

Supporting Black Businesses: How One Firm Is Making a Difference

What considerations did you take when launching the

After a tumultuous year that shined a harsh

spotlight on racial injustice, corporations are exploring ways to support black communities. Ade Bakare and Esch McCombie, of McNees Wallace and Nurick, LLC, have some ideas.

Legal Equity Advancement Program (LEAP)?

McCombie: It comes back to, what are the needs of a community? When youʼre putting a program together, itʼs easy to sit in your office with a group of people and go on about the needs of another group of people. We knew we needed

CCBJ: Multiple events and tragedies in 2020 brought heightened attention to the impact of systemic racism on black communities across the country. As a result, industries and corporations stepped up to push for change. What specific approach did McNees take?

Ade Bakare: Iʼm a member of McNees’ diversity committee.

We sat down as a committee and considered all the events we were witnessing in 2020. And like every organization, we werenʼt sure what to do or where to start. Most of us were aware that racism exists in this country, but the events of 2020 – the George Floyd killing and the disparate impact of COVID-19 on African American communities – brought systemic racism to everybodyʼs attention.

We wanted to make an impact and do something that would help uplift African American members of our local community as well as leverage our skills and expertise.

We know there are deep rooted issues affecting a vast spectrum of sectors of our society, and it would be foolhardy to take on more than we could adequately address.

We decided to take a focused approach and direct our

to reach out to the Black community, reach out to Black business owners, entrepreneurs, the African American Chamber of Commerce, and others to hear what they believed the needs of their business community to be.

So, what we did, and I think it turned out to be a great approach, was having some focus groups early on. We spoke with the people creating businesses and those working in the Black community to hear what they felt they needed from a legal services program. And we used that as our foundation.

Bakare: This is our first time administering a pro bono program of this scope and size, and we put a great deal of thought into how to structure our program. Do we try to provide a little bit of assistance to many people? Or do we provide real, substantial assistance to a smaller group of people?

We determined we wanted to provide substantial relief to a smaller group of people, with the idea that it would have a more meaningful, long-term impact. If we invest substantial efforts and resources behind Black entrepre-

energy towards a particular segment of the broader

neurs, the skills they gain will allow them to develop their

problem where we could make a difference.

businesses in a way that benefits the community long after they conclude their participation in this program.

Esch McCombie: I believe we realized that, as attorneys, we can play a specific role. We wanted to tailor the scope

How do you envision the initiative in the long term?

of the program to focus it locally and try to make some real

Are there any plans to expand?

change in the community using the legal skill sets we have.

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33

We wanted to make an impact, to do something that would help uplift African American members of our community.

McCombie: Weʼre just getting to the point where we can start reviewing applications, so itʼs hard for me to say this program is already successful. But the initial steps have certainly been successful, and thatʼs because it started at the top of our firm. Our management committee led the charge and offered their full support from the

Bakare: This program currently is focused on Black-owned businesses, but we view it as a pilot program that can be expanded. There are opportunities within LEAP or other initiatives to expand to other minorities or disadvantaged businesses, and to expand the geography. Hopefully, this program is just a jumping off point and we can reach more people in the years to come.

What is your advice to other entities looking to take similar actions?

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JANUARY • FEBRUARY 2021

beginning. When there were issues where we might be reaching, we didnʼt hear "No." We heard, "Letʼs figure out a way to make this work. Letʼs figure out how to get you the necessary resources." For any program like this, the leadership of the business really needs to buy in and market the program internally and that creates buy-in from the rest of the organization.

Bakare: To echo that point, if you think about how this program originated within our firm, it was one of our associates, Rachel Hadrick, who brought the concept for the program to

my attention. Then, I discussed it with management and

other businesses, inside and outside of the legal industry,

our diversity team. And even though the idea came from

join us in championing these efforts. We can’t go back to

one of our associates, once management supported it, it

passive indifference. It creates a stagnant environment in

just spread throughout the firm. It was all hands on deck from our associates, the paralegals, the partners. Our chief marketing officer developed the marketing efforts.

You need a buy-in from the top down through every facet of your organization to successfully put together a program like this.

Due to 2020 events, there is greater racial divide in the country. What role should or could law firms play

which systemic racism can thrive.

At this point, I think we all realize the problems are there and we canʼt sit around and just talk about it. People need to stand up and create programs and take steps to make a difference. So we have been thrilled that other businesses have come to us from all over; whether itʼs a commercial realtor offering to help our awardees find office space, or

in leveling the playing field?

a business consultant volunteering to help put together

Bakare: When you go to law school and you take the bar

businesses jump on board and we hope that continues

and become a lawyer, itʼs not just a job, itʼs a profession.

business plans. Itʼs been great to see all these other in 2021 and beyond. 

And law firms should be held to the ideals of that profession, which require us to work towards achieving justice in our society. When you look at it from that perspective, law firms should absolutely be involved in combating systemic racism, both internally and externally, in the communities we serve. And itʼs with that energy and perspective that we view the events of 2020 as a call to action. And we hope to sustain that effort and perspective beyond 2020.

Why is it imperative for the legal industry and industry in general to step up this effort?

McCombie: McNees has a long history of working to create diversity within our firm and the legal industry generally. Although 2020 focused our energy on a specific problem – systemic racism – it made us realize that another problem is passive indifference. While McNees has worked for many years trying to create diversity, this last year really helped us to open our eyes, and get a

Esch McCombie is a member with McNees. He practices in their real estate and pipeline & oil/gas infrastructure practice groups.

His focus his is land use matters, including obtaining permits and approvals at the municipal, county and state level. On a national level, McCombie conducts zoning and land use due diligence associated with mergers and acquisitions. Reach him at jmccombie@mcneeslaw.com.

Ade Bakare is a member with McNees. He practices in their energy and environmental group where he focuses on issues involving water, sewer and stormwater utility services, as well as electricity and natural gas matters. Bakare counsels sewer and stormwater clients on both regulatory and transactional matters. Reach him at abakare@mcneeslaw.com.

potentially meaningful program going. And weʼre hopeful CORPORATE COUNSEL BUSINESS JOURNAL

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European Union Further Refines Its Sustainable Investment Regulations

What are the new requirements?

 Ezra Zahabi, partner with Akin Gump’s London office, discusses the state of ESG investing in Europe, including the latest EU regulations, how the new laws will effect the post-Brexit UK, and where she sees ESG investing going in the future.

There are two new European regulations that are specifically focused on ESG investing. These complement and build on other ESG focused requirements, including the 2019 revised Shareholder Rights Directive (SRD), which requires investment managers and certain institutional investors to publicly report on their shareholder engage-

CCBJ: Please share some background about what led up to the new regulations around environmental, social and corporate governance (ESG) investing in the EU

ment and voting behavior. The two new regulations are the Sustainable Finance Disclosure Regulation (SFDR) and the Taxonomy Regulation. The SFDR basically intro-

and when they will come into effect.

duces a new regime of disclosures around ESG issues for

Ezra Zahabi: The background for the new rules in the EU

ticipants.” That includes occupational pension schemes,

comes from the United Nations Framework Convention on Climate Change, which is an international framework for dealing with climate change. More recently the Paris Agreement committed the signatories to using their best efforts to further the objectives of keeping a global temperature rise this century below 2 degrees Celsius (3.6 degrees Fahrenheit) above pre-industrial levels. Those two big international conventions have given rise to more specific initiatives, including the EU’s Sustainable

investment managers and other “financial market parinvestment advisors, and other kinds of institutional investors and asset managers.

Investment managers and other institutional investors will be required to disclose information about how they approach ESG in their investment process. Investment managers will need to publish statements describing their approach to ESG and how they incorporate sustainability risks in their investment process. Flowing from that dis-

Finance Action Plan and the European Green Deal.

closure, other disclosure requirements will provide fur-

These initiatives seek to transition the European economy

of those requirements apply on a “comply or explain”

to a more resource-efficient and sustainable economic model and to build a financial system that is capable of supporting sustainable growth. One of the key elements of these initiatives is finding mechanisms within the financial markets to organically guide capital flows to more sustainable sectors and to change market behavior through drivers like investor pressure. A cornerstone to the successful redirection of capital flows is transparency, so the new ESG disclosure requirements form one of the key steps toward achieving that recalibration.

36

JANUARY • FEBRUARY 2021

ther information on the manager’s ESG approach. Many basis. So the focus of the ESG disclosure requirements is really to get large investors to show how they approach ESG issues and how they integrate sustainability risks into their investment decision-making processes. Once they’ve described that, they then have to decide whether to comply or explain in further disclosures. In contrast to some existing disclosures, these disclosures are likely to be relatively granular, which is necessary for the disclosure to be meaningful, so in practice the disclosure will need to be relevant to the specific asset class and market.

The terminology in the regulation is pretty dense, how-

portfolio and its impact on the ESG issues they have

ever, managers can elect to specify whether or not their

identified as relevant to the manager. So, for instance,

investment processes take into consideration the nega-

let’s say a portfolio is heavily invested in the energy

tive impacts of their investment decisions on the environ-

sector in enterprises focused on extracting and processing

ment, social equality or other areas.

fossil fuels. The manager needs to have data on the basis of which it can assess the portfolio against highly

The ESG disclosures are phrased to require disclosure

prescribed key performance indicators such as carbon

of the impact of investments on “sustainability factors.”

footprint, deforestation etc. in order to express the impact

This is a really broad concept which encompasses envi-

of its investment decisions on sustainability factors.

ronmental matters, social and employee matters, respect for human rights, anticorruption and anti-bribery mat-

The secondary legislation that sets out the granular dis-

ters. So when managers disclose their ESG approach, they

closure requirements has been delayed but when it takes

have to think carefully what they are saying about what

effect, managers will need to disclose against some 50 key

the manager really factors in the investment process and

performance indicators or data fields, more than 30 of

how these various considerations actually manifest.

those being mandatory. The secondary legislation sets out formulae and very detailed definitions of certain concepts.

What that really means is that if managers state they are taking into account the ESG impact of their investments,

The granularity and quantitative nature of the disclosures

they will need to produce and assess data about their

require managers to have adequate due diligence policies

CORPORATE COUNSEL BUSINESS JOURNAL

37

have integrated ESG concerns into their vernacular when

These initiatives seek to transition the European economy to a more resource-efficient and sustainable economic model.

dealing with investors. They demonstrate an understanding of ESG issues, and they’ve indicated that they may have an interest in ESG policy, but really, when it comes down to it, many of those managers are, at heart, value investors. So they may talk about ESG, and may even genuinely take it into consideration, but nevertheless it’s

and data frameworks that take into consideration the negative impacts of investment decisions on sustainability, and allow them to disclose in a way that’s consistent with the EU regulations. There is a great deal of work involved in upgrading internal processes to allow for the same.

The ESG concept under the SFDR is really broad.

However, in practice, this first wave of disclosure is more focused on climate change and environmental issues. The Taxonomy Regulation chiefly focuses on environmental issues but it provides a potential framework also for the social and governance issues. The focus at the moment is very much on the environmental issues and on climate change in particular.

Under the SFDR, the high-level disclosure obligations will

not actually fully integrated into their due diligence or decision-making processes. So another key concern for the European Commission has been to address what they see as “greenwashing” in the financial markets, meaning the promotion of financial products where, if you scratch below the surface and look beyond the marketing talk around ESG, it becomes clear that the strategy is really just value investing.

Some managers will need to consider and comply with additional disclosure requirements for the so-called “light green” or “Article 8” products, which are distinct from the “dark green” products that truly have sustainable investments as the investment objective. I think most managers know whether they’re actually in dark green territory, but some will need to determine whether their products are being sold as “promoting sustainable

take effect on March 10, 2021. In regard to the second-

characteristics” such as to require additional disclosure.

ary legislation, there has been concern in the markets in

The regulatory goal is to standardize disclosure to enable

Europe about the ability of investors and asset manag-

meaningful comparison and require managers to disclose

ers to comply with the new super-prescribed, granular

in their pre-contractual documentation how exactly

disclosure standard. The effective date of the secondary

they’re achieving the ESG objectives they state they are

legislation has been postponed and it won’t take effect

committed to. So if a manager is promoting empower-

until after 2021.

ing women entrepreneurs or green energy or any other sustainability factors, it has to explain what it is actually

Because ESG and climate awareness have been on the

doing in order to achieve the characteristics that it is pro-

political agenda for a long time – especially among

moting. Similarly, if there are reference benchmarks, like

European investment managers who have been subject

certain indices, for example, there will be various tools

to various domestic regulations that require them to take climate change into consideration – many managers 38

JANUARY • FEBRUARY 2021

that institutional investors and investment managers can use to analyze their investment decision-making process

and to pull out the necessary information to assess whether something is sustainable or not. It’s expected that the “light green” and “dark green” disclosure will be standardized in prescribed format.

That’s quite a bit to consider. How will all of this impact financial institutions?

One of the key questions is really about performance.

There’s some concern that a greater push toward sustainable investment might result in poor overall short-term performance, which might be a problem for certain institutional investors.

Another potential effect is that many managers are going to be pushed into a space where they really need to think about how they make their investment decisions at a much more granular level. I think that many managers – even the ones who think that they have ESG within the scope of their investment horizon in some way – are not necessarily prepared for these new regulations. So there’s going to be a need for the senior management at these financial firms to really think about what the firm is actually doing, how far are they willing to go, what they are really going to change if they want to state in their disclosures that they do consider ESG impacts. They will need to engage with investors to understand what their expectations are now and where they think the asset managers and leaders are going in the future. Where are they going to be in terms of practices and disclosures in

going forward, and so there’s going to be a push for increased transparency in these areas.

As a practical matter, in the short term, it may be about how firms can comply in order to make sure they’re not in breach of their legal obligations. But in the longer

five year’s time or in 10 year’s time?

term, I think it’s really about engaging with investors

We expect there is going to be more engagement with

approach ESG and what information they will want to see.

investors on ESG matters and investors’ expectations,

And that part of the process, the longer term, is likely to

which will find its way into the due diligence question-

involve things that are currently talked about more than

naires in an increasingly detailed way. There will likely

done in actual practice – things like potential tax benefits

be periodic reporting requirements on ESG performance

or other sorts of financial incentives around investing in

and understanding how they’re expecting managers to

CORPORATE COUNSEL BUSINESS JOURNAL

39

sustainable sectors, quite possibly combined with some

In the UK, I think the agenda is probably more about

form of potential financial penalties.

ensuring that the companies and the issuers – i.e., the investee companies – produce and disclose adequate

How does Brexit play into this?

information to make sustainable investing a meaningful exercise. Contrary to expectation earlier in the year, the

The United Kingdom stands apart from the EU now, but it

UK will not implement the SFDR on March 10. I think that

also has climate change action high on its political agen-

it was largely thought that the UK would implement the

da. The UK is an active member of the Financial Stability

EU framework, since the UK and EU financial markets are

Board and has already been discussing the role of the fi-

highly interlinked and it will be tremendously onerous to

nancial sector and financial markets in mitigating the ad-

have two separate disclosure regimes, especially if they

verse impacts of climate change. The UK also has its own

are very similar but not identical.

Green Finance Strategy, and it is expected that all large asset owners, as well as all large issuers, are going to be

In any case, the UK is going to have its own regime, which

required to report in line with the Task Force on Climate-

it has stated will be closely aligned with the SFDR. It is

Related Financial Disclosures. This basically means that

unlikely to be identical to the SFDR, and the devil may

financial accounts will have to include climate-related

well be in the detail there. The longer-term hope is that

financial disclosures.

once the political dust of the UK’s withdrawal from the EU

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JANUARY • FEBRUARY 2021

in a systematic and a cohesive way within their internal

When it comes down to it, many investment managers are, at heart, value investors.

decision-making processes.

I think the other big thing to think about is investor engagement, which I think will be a longer-term process and a longer-term dialogue between asset managers and

settles, there will be some kind of an equivalency decision or a substitutive compliance mechanism. I think there is a good chance that some arrangement will be agreed between the EU and the UK by which if compliance with one set of rules satisfies compliance with the other, because trying to produce two sets very similar but not identical disclosures will just double the work.

The UK Financial Conduct Authority is expected to put out a consultation paper on the new disclosure requirements in the first half of 2021, with the final rules available at the end of 2021. The new regime is expected to become effective in 2022, a slightly later timescale than SFDR. Where do you think the ESG space overall is going from here?

There’s going to be significant movement, especially around development of investment research and rating tools that allow investment decisions to be made in a way that’s objectively justifiable, verifiable and consistent.

The development of these tools will also make compliance and integration of ESG considerations in the investment process more affordable and manageable for asset man-

investors, in terms of addressing the standards that are absolutely worthwhile and worthy of committing energy and resources to. Also, there are potentially conversations to be had about concerns that both managers and investors may have around the shorter-term performance of assets.

There are also concerns, of course, that these regulations will limit a manager’s ability to create exposures to investing in companies that are not deemed to be sustainable as defined by the new framework – I mean, that’s the ultimate policy objective of the rules. The goal, really, is that change in the corporate sector, in terms of the commercial practices of companies on the ground, can be driven by the drying up of available capital, unless they change their unsustainable practices.

So, part of the concern is that there is going to be more active shareholder engagement on matters relating to ESG. While issuers may not all wel-

agers. Some firms may have already developed their own

come this unequivocally,

proprietary technology around ESG, but for those that

it is unlikely to come as

haven’t, they will be reliant on prepackaged solutions.

a surprise as they have

They may seek to modify them, but they’ll need some

been grappling with these

external tools to actually implement ESG considerations

issues for some time. 

Ezra Zahabi is a partner with Akin Gump. She advises on relevant developments and considerations regarding changes to the UK and EU financial regulatory framework.

Ms. Zahabi focuses her practice on financial regulatory matters relevant to the investment management and funds industry. Reach her at ezra.zahabi@akingump.com.

CORPORATE COUNSEL BUSINESS JOURNAL

41

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Buyers' Guide to In-House Tech

It’s Time for Corporate Law Departments to Spend More on Tech

 Legal professionals require legal tech solutions

designed to meet their needs.

The C-suite demands CLDs become true leaders rather than experts to consult only when there is a problem.

One of the most valuable, yet largely overlooked, insights from the CLOC 2020 State of the Industry Survey was about technology spend in corporate law departments (CLDs). According to the survey, “large” CLDs (defined as having more than $10 billion in revenue) spend an average of $600k+ on technology per year.

If that sounds like a sizable amount to you, you’re wrong.

In fact, benchmarked against the best publicly available data, it appears woefully inadequate. Large CLDs spend, according to the CLOC survey, about $61.4 million per year on law firms and other vendors, and about $38.3 million on internal expenses (mostly salaries, probably), for a total of around $99.7 million. That means they are spending only about 0.6 percent of total law department spend on tech.

In contrast, the broader corporations’ CLDs are part of spend, on average, according to Deloitte, 3.64 percent of total company revenue and up to 7.88 percent, in the case of banks – on technology. That is significantly greater than the 0.6 percent CLOC says CLDs spend, especially since the CLOC number is calculated as a percentage of spend.

(The CLOC number would be much lower if calculated as

that tech spend statistics might make them appear to be.

Although a valid argument, it doesn’t tell the whole story.

More than 50 percent of technology spend now occurs in individual business units, versus the old model where it went through a centralized purchasing process. That means departments like finance, HR and marketing are spending more and more money on technology out of their own budget, giving them more “say” and increasing the likelihood the tech purchased meets their actual needs rather than the needs somebody else thinks they ought to have.

Legal should be right there with them. But per the numbers, legal isn’t doing that. Legal is behind.

For the most part, it is nobody’s fault, but the result of a complex constellation of inherited reasons that include the following: • Legal is small. The global legal industry recently grew to over $1 trillion in size, and thinks it is big. However, that is

a percentage of revenue.)

only about 1.3 percent of the world economy, compared to

Defenders of corporate law departments might argue that,

and talent prioritize markets that present the greatest

about 10.9 percent for medical. It’s no surprise that money

while the broader organizations spend more, that figure

opportunity, and where solutions can scale massively.

should not be used to suggest law departments are behind

Legal isn’t particularly attractive in this regard.

on technology. After all, the argument goes, what’s important is how much technology the law department is using,

• Legal is viewed as a “one-off” function. Unlike account-

not who pays for it. Often technology, like Microsoft Office,

ing, which operates on a monthly cadence that is highly

is paid for by IT or other departments, but legal is still

routinized, legal is often viewed as a one-off. You only

using it. Therefore, CLDs are not the presumptive luddites

call legal when you have a legal problem. Now that legal

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is getting more attention, it turns out more legal work

the market being relatively small, investment has flowed

can be routinized than originally believed. But that

into legal tech in the last few years, in part because it is

doesn’t change the fact that, historically speaking, legal was viewed as a low ROI area in which to add process and technology. The industry is still suffering from that misapprehension.

• Corporate law departments hire out of law firms

seen as a “blue ocean” where there is less competition per opportunity than in larger areas such as medical. The rise of legal operations is dispelling the myth that legal isn’t susceptible to process and technology, and the C-suite increasingly demands that CLDs become true leaders and

designed to produce good lawyers, not necessarily

managers, rather than subject matter experts you only

good leaders or managers. Many in-house folks come

go to when there is a problem. Legal tech companies have

out of law firms. Law firms bill hourly and therefore

started to recognize that they need to incorporate an

make money every minute their attorneys are advising clients and typing up legal documents; in contrast, they “lose” money every minute spent managing. That men- tality can carry over into the legal department when law firm professionals go in-house. Many of them continue to function as individual contributors, potentially unaware

insider’s perspective to build truly relevant solutions.

The biggest thing CLDs can do is acknowledge the problem. The perception is that law CLDs do not operate like other parts of the business units in most organizations,

of the opportunities (like tech) that larger, systemic

and often times for good

ways of thinking would uncover.

reason – but this is really

• Solutions that don’t meet expectations. The last couple of years have seen a trend of legal technology companies hiring lawyers not to be part of their legal department, but to help with product design. This gives them an insider’s perspective and lets those lawyers talk to clients and potential clients in a way that helps identify and

an opportunity. Be a lawyer for yourself. Gather exhibits like the benchmarking data above and advocate for more resources. Show that technology and pro-

solve client pain points quickly and easily. This is a great

cess can create a win/win

step but is relatively new in the industry. Many legal tech

for everybody, but further

solutions brought to market have missed the mark on

investment is needed to

addressing law department needs, because they were driven by developers that don’t understand the legal market. This has resulted in solutions that don’t meet the department’s needs, have low user adoption, and probably worst of all, reduce confidence in legal tech.

make that happen.

Only then will we see the technology investment percentage in legal rise to

So, what is a corporate law department to do? As men-

rival the tech spend of other

tioned above, solutions are already underway. Despite

business departments. 

Nathan Cemenska is the director of legal operations and industry insights at Wolters Kluwer ELM Solutions.

Previously, he worked for UpLevel Ops, a management consultancy focused on helping general counsel improve law department performance. Before that, he worked as a legal operations business analyst for Elevate Services. Reach him at nathan.cemenska@wolterskluwer.com.

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Is Your Early Case Assessment Process Hurting Your Case?

Early case assessment (ECA) is crucial to developing a winning strategy. Wendy Cole, product marketing director, legal tech with OpenText, explains how Axcelerate Investigation is helping organizations regain control of their ECA process and quickly assess the merits of their case.

CCBJ: ECA is a nebulous term that has been widely used to describe certain early-stage challenges and processes in e-discovery and investigations. Please describe those processes.

Wendy Cole: The term ECA, or early case assessment, refers to the process of collecting and culling data and then taking a quick dive into that data to gain an understanding of the facts and evidence that will inform the case strategy. Ideally, you want to assess the strengths and weaknesses of the case quickly and decide how to proceed, whether the matter is related to a civil proceeding, or assessing potential liability related to a regulatory or other type of investigation.

In any early case assessment project or investigation, time is of the essence. But many projects, due to issues I’ll talk about next, take many weeks if not months to get to the key facts that can inform case strategy or drive resolution.

How have legal teams typically tackled challenges such as traditional approaches to ECA and investigations?

Fundamentally, unlike a litigation document review, where critical facts are known and issues defined, in ECA or an investigation often there is little information to go on or none at all. Corporate legal teams facing massive volumes of electronically stored information and unknown unknowns are tasked with finding the key 46

JANUARY • FEBRUARY 2021

evidence and getting to the truth of a matter under tight deadlines. More often than not, legal teams struggle to execute the right strategy and tools to zero in on key information quickly.

Many legal departments take a patchwork or ad hoc approach. Some use numerous point solutions for distinct parts of the process: one tool for collecting data, one for processing and culling, and a third for analytics. Those using a first-generation ECA platform for basic culling then need to use a separate analytics tool or import the data into an e-discovery review platform for analytics capabilities before they can gain any real insight into the data. There are a lot of steps involved, a lot of hands on the data and a lot handoff points. When multiple solutions and people are involved to “get the job done,” this introduces delays, inefficiencies, risks and additional costs into the equation.

Other teams rely on their information technology (IT) teams to search for and send them personal storage table (PST) files for manual review, only to find they need more emails or data from other custodians. This is a slow and laborious process, and it risks missing potential evidence in other data sources within the organization.

Finally, to “get the job done,” others gather PSTs and simply send them to a third-party vendor for the data to be processed for a full production-style review that is designed solely to separate the potentially responsive from the nonresponsive data. This can be unnecessarily time-consuming and drive up costs.

How is today’s environment driving trends that are pointing to new approaches?

The salient theme of the past year is how to do more with less while optimizing results. Since the pandemic, legal

More often than not, legal teams struggle to execute the right strategy and tools to zero in on key information quickly. teams have been struggling with an increase in workload – especially “unplanned work” like investigations – while having access to fewer resources. At the same time, data volumes are growing, exacerbated by a largely remote workforce relying more heavily on chat, ephemeral messaging and other types of communications to do their work. And there’s the intermingling of work and personal data, challenges related to bring your own device (BYOD) and growing data security concerns. So, you’ve got more data, greater risk, less time, fewer resources, and more work to be done. There are new challenges and there’s a learning curve.

In the midst of this pressure there’s still the tendency for a knee-jerk reaction: “We don’t have the resources to look at this data in-house. We need to get someone outside to find the critical data for us.”

The historic reliance on outside counsel for more mundane tasks such as the mechanics of ECA, investigations and document review, regardless of cost or budget, is shifting. We are seeing many legal departments increase spend on technology, amidst flat budgets, in order to reduce dependency on outside counsel and address capacity problems. This includes a focus on technology that incorporates emerging technologies such as machine learning

such as managed document review and investigation SWOT teams. The key is to build a strategy incorporating technology, people and process that addresses the long-term pain points and inefficiencies to achieve better legal and business outcomes.

What are essential technology capabilities that legal teams should look for regarding ECA and investigations?

to automate highly manual and inefficient processes.

First, general ECA tools usually have collection and broad

Reliance on specialized providers won’t go away, but we’ll

axe; they’re not precise, and that’s exactly what’s needed

see better optimization of external expertise for tasks

in ECA and investigations.

culling capabilities. These are important but are like an

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Buyers' Guide to In-House Tech

Analytics give you the ability to shave substantial time off

Ideally, you want to assess what supports your case, what doesn’t support your case, and what the truth actually is.

Finding the facts to support your case requires tools that operate with precision, like a scalpel. This is where analytics (both textual and conceptual) and machine learning

an ECA project or investigation so you can get to the heart of the matter faster, and make decisions faster. You can do a deep dive into the data, reveal the patterns, surface the key information, surface outliers. Many times you’re not looking for the everyday communications; you’re looking for an outlier. Why is this person only communicating at this time of day? Or, they haven’t communicated with this person in six months and suddenly there’s this barrage of communication between two parties. Why? It’s those tools

are critical to an efficient and effective solution for zeroing

that help you surface the patterns and find the evidence

in on the evidence quickly. When combined in a single tool

quickly. And that’s critical to early case assessment.

with collection, processing and culling, analytics will maximize efficiency and minimize delay and cost.

Using analytics way earlier in the process may even avoid costs, because the organization may settle the matter or

How are analytics being used to improve traditional

decide not to pursue it and avoid a complete review and

approaches, and what are the benefits over traditional

production process, which will save them both money and

ways of conducting ECA and investigations?

time and allow them to go forward with their business.

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Tell us about OpenText’s new product Axcelerate

can install it on premise, or they can use it in the cloud

Investigation, and what makes it unique.

on demand. When deployed on premise, teams can create central data repositories and reuse information

Axcelerate Investigation is a single ECA and investigations

for multiple matters, saving costly and time-consuming

platform that includes the analytics I just described. It

rework. With on-demand cloud deployment, legal teams

incorporates traditional ECA tools – data connectors,

can use the platform on an as-needed basis, without

processing and culling capabilities. But then it adds broad and deep analytics and machine learning capabilities.

Because all functionality is integrated, collecting and culling is more efficient, and the team has substantially earlier access to the evidence. This helps teams shave weeks or even months off the usual time it may take to get to the facts.

Axcelerate Investigation is intuitive and easy to use, and its advanced analytics, machine learning and visualization tools help reveal patterns. So, legal teams can quickly get up to speed and find the key data themselves. Because Axcelerate Investigation’s powerful analytic tools are front-loaded, Axcelerate Investigation is exceptional at ferreting out the unknown unknowns, which is critical in an investigation where facts are not developed or not known.

With automated document summaries, teams can shortcut the fact-finding process by using the summaries to help them determine which documents they need to look at.

Predictive search technology means that when a team finds

infrastructure, operational costs or IT to support them.

Flexible deployment options give teams early access to really advanced analytics in whatever way works for their particular circumstances and priorities. And that’s the key point.

And if the team’s analysis reveals that a full review and production is warranted, or if regulatory authorities are requesting full production of documents, the data and all analysis and work product conducted in Axcelerate Investigation moves seamlessly to the Axcelerate Review and Analysis cloud platform for full review of the data set for relevance and privilege.

It’s a single platform for all ECA and investigation

a really good document, they can use the “find more like

needs and takes users

this” search technology to uncover similar documents

seamlessly to full review,

quickly. Advanced sentiment analysis helps teams by

including advanced tech-

automatically categorizing documents into negative,

nology-assisted review,

neutral and positive sentiments.

and production where required. So, it’s a very

The product also offers teams flexibility. Legal departments

Wendy Cole is director, product marketing for OpenText Legal Tech solutions. After practicing civil litigation in Toronto for seven years, her focus shifted to legal technology and e-discovery.

She has been involved in the development of e-discovery in Canada from both a technology and policy perspective for over a decade. At OpenText, Wendy is responsible for strategic product marketing of e-discovery solutions, including Axcelerate Investigation.

Reach her at wcole@opentext.com.

efficient solution.  CORPORATE COUNSEL BUSINESS JOURNAL

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Buyers' Guide to In-House Tech

Evolving Technology Brings New Challenges, and New Solutions and I can tell you it’s something that every single one of

 Alex Chatzistamatis, senior principal enterprise

architect with Nuix, discusses the ways that technological advancements like machine learning and artificial intelligence are shaping the future of e-discovery and other areas of the legal profession.

them wants to talk about almost nonstop every day.

The second facet of this is ultimately the data sources themselves – specifically, I mean modern cloud-based data sources, many of which don’t even have a legal precedent yet. There are many philosophical debates

CCBJ: What are some of the most pressing challenges facing corporate legal teams at this stage of the COVID-19 crisis?

Alex Chatzistamatis: If you take COVID-19 as a whole, obviously it has thrown a huge monkey wrench into many areas of litigation with an uptick in litigation itself – whether it’s legal disputes, contractual issues, financing, employment, etc. When you get into the weeds about the challenges that ultimately underpin these things, the biggest issue that all corporate legal teams are facing is, remote employment.

I look at this from two facets. One is the remote employees. That’s basically you and me and really everyone who is doing their day-to-day job from home, but there’s also another aspect of that, which is the people who are tasked to collect and preserve electronically stored information (ESI) from the broader workforce. Generally, those are going to be investigators or any discovery practitioner within an organization that’s tasked to do that work.

It’s actually pretty challenging when you think about it, especially with all of the various barriers and roadblocks that have presented themselves because of the whole work-from-home model that we’ve all been restricted to.

Virtual private networks (VPNs) and other cloud-based firewall technologies often stand between the remote employee and the folks that are attempting to gather and collect that data. So that’s a huge component. And in my role with Nuix, I interface with customers and clients of all shapes and sizes from the corporate world on a daily basis, 50

JANUARY • FEBRUARY 2021

about how to deal with some of these modern data sources, which quite frankly, the courts haven’t addressed. So I would say those are really the two biggest challenges right now: remote employment and modern cloud-based data sources.

What are some new sources of threats that corporate legal teams should be concerned about or have on their radar?

This is really an extension of what I was talking about regarding the last question, but again, it’s these modern data sources. We aren’t talking about emails, Word documents and loose files anymore. Now we’re dealing with more collaboration tools. Think about tools like Microsoft Teams, Slack or Zoom, where there are just these constant streams of chats and recordings – live streams, recordings, audio calls, you name it. These are technologies that corporate legal teams really haven’t faced in the past, and it’s challenging to figure out how to obtain this data, how to work with it, how to respond to it, and how to do it at scale.

Another type of data source to have on your radar is backup tools. There’s been a trend in the last few years toward cloud-based backup solutions like Druva, for example.

Some organizations are replacing traditional endpoint collection tools with something like Druva, and it’s actually a pretty smart way to solve that problem. But of course, it also presents some challenges in terms of being able to then obtain that data, making sense of it and using it as part of a litigation.

with the data. In my opinion, that’s probably one of the

Unsupervised machine learning actually achieves better effectiveness than traditional supervised machine learning.

biggest ones, and the fact that folks are finally starting to really embrace it, even though the technology has been around for some time – probably at least a decade or more at this point. But the fact that it’s really starting to gain traction and achieve wide acceptance is huge.

I would also say that this concept of “shadow IT” is another threat that corporate legal teams should be concerned about. And by shadow IT, I simply mean any type of platform that is external to the organization that employees might be working with. So, for example, if you think about apps like Facebook, iMessage, WhatsApp, those are all various types of backdoor channels. They might start out innocently. You might have workplace discussions going on behind the scenes –innocent conversations, at least at first, that ultimately could lead to workplace culture issues, or various other discussions that could potentially

The next important innovation, I would say, is cloud computing. I’ve worked with plenty of organizations that really want to solve their problems, but at the end of the day, acquiring the hardware or other storage platforms is a huge hurdle. But cloud computing has really helped to reduce that barrier to entry, specifically for organizations that are looking to bring e-discovery or other kinds of ESI solutions in-house. And on the flip side, for software vendors, it has allowed them to build some really awesome, scalable solutions that they can easily deploy to their

escalate into something like an insider threat.

What would you say are the most important innovations you’ve observed in e-discovery in recent years?

There have been so many in the last few years, and I don’t know that I could even really pick one, because there’s a great deal of exciting developments these days. So, in no particular order, I would say, the growth in artificial intelligence (AI) and machine learning, specifically technology assisted review (TAR). These days, we call it CAL, continuous active learning. There are lots of studies out there that indicate that unsupervised machine learning actually achieves better efficiencies and effectiveness than traditional supervised machine learning, where you’ve got one or more humans basically sitting there and manually making decisions about a subset of the data. Those study results ultimately prove that there are superior results with less review efforts and less manual human interaction CORPORATE COUNSEL BUSINESS JOURNAL

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Buyers' Guide to In-House Tech

clients worldwide. Our chief data scientist, David Sitsky, is cooking up some really amazing things for Nuix using cloud services. It really is eye-opening when you see how powerful and easy it is to adopt and recognize benefits from cloud technologies.

But the one that’s nearest and dearest to my heart is automation. In the last few years, we’ve seen an uptick in automation across all industries, but it’s only in the last 12 months or so that I’ve really started to see it pick up significantly in our industry. Business process management (BPM) tools, robotic process automation (RPA) tools, like CAL, which I mentioned before, have been around for a while, but they’re really starting to gain traction and enable organizations to automate various steps and activities between different tools – potentially even interfacing with non-traditional e-discovery tools, for example. Imagine the possibilities when interfacing with cloud-computing

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environments, or other enterprise tools, and building a holistic approach to solving e-discovery challenges.

How has the relationship between legal teams, information technology, and other areas within the enterprise evolved in recent years, especially as it relates to handling and using electronically stored information?

Over the last few years, I’ve really seen an increase in the number of organizations that are unifying these areas and bringing these teams together – where technical teams are starting to work with nontechnical teams, laying out all of the business challenges, the technical challenges, the philosophical issues. So instead of continuing with the traditional siloed approach, where everyone has their own tools and is doing their own thing – whether it’s worrying about e-discovery or investigative issues or data privacy or whatever it is – they’re approaching

is used in our industry. So beyond the traditional CAL ap-

These collaboration tools are technology that corporate legal teams really haven’t faced in the past.

proach that we’ve already talked about, I think we will see AI expand and rise into other areas, like privileged review, personal information detection and auto-redaction, and more. The ability to use unsupervised machine learning to dive into these different areas will be huge. And being able

these issues holistically. Because independently, there’s

to do it at scale, very quickly, with little to no human inter-

only a certain amount that you can do, but if you group

action, will truly be a game changer for organizations.

these different business units together, you start noticing, “Oh yeah, we’ve got those pain points. We have those

Then the second aspect of this is what has come to be known

same challenges. We solve these problems with X tool and

as data warehouses or “reusable litigation repositories.”

we do it with Y tool.” The relationships that are formed

When you think about how e-discovery generally works,

between those groups when you bring them together

it’s the same repetitive process. There is a great deal of

leads to a more collaborative, unified approach. And that

time and resources wasted by having to manually go

ultimately leads to an organization being able to reduce

back to the well, so to speak, and basically grab the same

the number of tools that it uses.

data over and over and over again. A data warehouse will allow you to be able to use your pre-existing data sources

When you consolidate all of these groups, you end up lever-

to build a single repository

aging much of the same technology and tools to solve the

that contains the data you

various data challenges, which are actually fundamentally

need for your frequently

similar. Then you can really start introducing automation,

litigated custodians, which

which, ideally, crosses different use cases or disciplines,

you can instantly search

such as e-discovery, cybersecurity investigations, etc. And

for, at any time. Whether

that’s ultimately where, if you do it right, you can create

it’s for discovery, or for an

value and really make the organization shine. You can con-

investigation or a regula-

trol outside costs; you can make faster, more informed de-

tory response, there are

cisions; you can simplify your workflows; you can respond

many ways that you could

more quickly to requests and challenges. And ultimately,

leverage this type of solu-

that leads to improving your data security and protections.

tion. Having that always-on repository will allow you to

What are the highest priority technology consider-

find the answers you need

ations for corporate legal teams in 2021?

faster and really show the full, complete picture to the

We can break this down into two areas. One of them is

teams that need it, instead

the AI and ML. I firmly believe that, across the board, this

of having to reinvent the

technology is still in its infancy, but especially the way it

wheel every single time. 

Alex Chatzistamatis is a principal enterprise architect with Nuix. He works closely with corporate clients to solve some of the tough unstructured data challenges. For the past seven years, Chatzistamatis has consulted on many projects involving investigations, e-discovery, information governance, email archives and cloud technologies. Reach him at alex.chatzistamatis@nuix.com.

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JANUARY • FEBRUARY 2021

Directing the Course of an Investigation With Database Discovery Tactics

Let’s start with the definitions of “structured data” and

Julian Ackert, managing director at iDiscovery

Solutions, discusses the differences between structured and unstructured data and how database discovery can allow a legal team to conserve resources and get the best outcome for their client.

“unstructured data.” Unstructured data is the content of emails or documents or other individual files, as I was just describing, and structured data is what comes out of a transactional system. Generally, when we’re looking at discovery and fact-finding, we look at the unstructured data, because that’s the easiest for us to digest and under-

CCBJ: Databases have been a source of electronically stored information (ESI) for some time, and discovery of structured database content is not new. So, what is database discovery?

Julian Ackert: Traditional discovery looks at and identifies information that resides in individual files – like wordprocessing documents, spreadsheets and PowerPoint presentations – as well as free-form communications such as emails. But database discovery also considers data points that exist in transactional database systems that can identify the behavior of individuals and help with other kinds of analyses.

What that means, for example, is that if a case revolves around where somebody was when they did something, you can look at the content of unstructured data to understand what was written about the question at hand, but you can also look at the context of structured data, which is essentially a record of their data footprints – where they were at a certain date and time, geolocation coordinates, anything related to that type of information. Content, such

stand. Structured data, on the other hand, is millions of rows inside a database, and it’s not an easy exercise to understand what that data represents. One thing to note: all data is structured in some way, shape or form. So the difference between structured and unstructured data is a bit of a misnomer, but unstructured data generally has more free-flowing content that requires the eyes of an individual in order to understand its meaning.

For example, when someone writes an email, they’re using natural language – and the words in that email are unstructured data. The natural language needs to be evaluated by someone to understand what is being said. Whereas if you’re dealing with a product management system that is tracking a product from its source to its destination, each point that is recorded is stored in a structured data system, and the path that the product takes from point A to point B is structured data that’s recorded in a structured database system – also known as a transactional system.

How would you combine both structured data and unstructured data when performing a database discovery?

as what is written in the body of an email, is something

First, let me say that we’ve come a long way in the discovery

that you would typically have a human being review, but

process, and this question highlights that fact. When I

the context can help you go beyond that. Database discovery

initially got involved with discovery, and really electronic

is looking at both content and context together.

discovery (although, from my experience, you can drop the word “electronic,” because it’s all discovery. Data,

What is the difference between structured data and

information and facts just happen to be recorded electroni-

unstructured data?

cally in today’s world). When I started in this world of CORPORATE COUNSEL BUSINESS JOURNAL

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discovery, emails were just becoming a potentially relevant data source. And at that time, emails, which are considered unstructured data, were not very easy to deal with. They were difficult and complex. I remember some case teams saying, “Let’s not even get into emails.” And that was both sides saying, “Emails are not something we should get into.”

That was a long time ago. Emails are a ubiquitous component of discovery today. It’s actually one of the first places you look, which I think is fine. But there may be a better way to investigate facts – if we are able to review the emails and at the same time understand some of the context around them, we get a better, faster view into the facts.

As an example, let’s look at communication frequency to find parties of interest. Emails may have very high levels of communication frequency or a very low level of communication frequency – both of which can provide important context.

For example, in a particular case two parties may be very critical to the facts, but I may have zero or very few emails within a particular timeframe for those parties. If so, that is an indication that emails may not be the preferred form of

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communication between these parties. Or, on the flip side, it may be very interesting context if I have thousands of emails with a particular person in a particular timeframe. We’re taking unstructured data and evaluating it with the context of structure (frequency) to get a better sense of the facts in a matter. we can take this a step further and look even deeper at the structured data. Maybe even flip the scenario and start to look at the context of the structured data first, before we start looking at the content of unstructured emails.

For example, going back to the product life cycle, if I am analyzing a product life cycle through the use of structured data, I see trends and patterns in the product life cycle that tell me, from a fact perspective, that there are some interesting time frames of interest. Based on that analysis of structured data, I can now focus on time frames of key interest for the unstructured data.

Databases often have millions or even billions of records.

So analyzing that amount of unstructured documents seems like it would be a very expensive exercise. Won’t database discovery, then, be cost-prohibitive?

Database discovery is looking at both content and context together.

This ties in nicely with what I was just talking about. The analysis of hundreds of thousands, millions or even billions of transactions does not equate to the review of that same number of documents. Unstructured content in documents is expensive to review because, predominantly, a human being is examining the content to decide whether and how it is relevant to the issues in scope (perhaps assisted with document technology assisted review). The costs are linearly proportionate to the volume - the more unstructured data you add, the more human review time you need. In contrast, analyses of structured data can be designed once and then applied to any number of records without a linear increase in cost.

It’s very widely known that the most expensive part of the discovery process is the reviewing of documents. So spending some time and energy on analyzing structured data first can actually save you significant dollars – relative to the cost of discovery throughout the whole life cycle – because it allows you to hone in on the key points of interest related to the claims and defenses of the case.

I often ask, “What are the questions of fact that we’re trying to answer?” Because if you understand what you’re trying to answer, there are oftentimes very interesting structured data sources that can help you find those answers faster and cheaper than traditional unstructured document review.

Databases are complicated. Is the juice worth the squeeze?

I often get this question, and I’ll tell you that, in my experience, it all comes down to understanding the data sets of key importance. There could be thousands of databases related to a particular workflow or an issue. They may all

help answer the question of facts in a case. But not all data is created equal. Oftentimes, unless there’s a good consultative exercise performed up front to focus on the structured data sets of highest value, the juice may not be worth the squeeze after all. A shotgun approach with respect to the structured databases of interest is not going to be the most effective approach. A consultative approach instead allows the case team to be surgical and analyze the databases that are most interesting. When a consultative approach is applied, in almost every case I’ve worked the juice is absolutely worth the squeeze.

How would a legal team get started with this kind of analysis?

To get started, you need two things. First, you need a good consultant on your team that can understand the facts of the case and guide the team towards the potentially relevant structured data of key interest.

There is not a “one-size-fitsall” solution for structured data analysis like we see with email. Second, you need technology that Julian Ackert is a managing will allow you to analyze director with iDiscovery Solutions in Washington, D.C. He has over structured data content in 15 years of consulting and project an efficient manner such management experience in the that your work product is technology and litigation industries, and has extensive experience forensically sound, your with forensic data collection and process is repeatable, and computer forensic analysis. you leverage prior experiMr. Ackert has worked on several international projects involving ence. One example of that technology is the xIOT® platform that is offered

complex data privacy, collection, and review challenges. Reach him at jackert@idiscoverysolutions.com.

by iDS.  CORPORATE COUNSEL BUSINESS JOURNAL

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iDS provides innovative consultative solutions

At Relativity, we help users organize data,

to law firms and corporations around the world,

discover the truth, and act on it. Our SaaS

serving as a guide through the complex areas of

platform, RelativityOne, is used by 13,000+

digital forensics, eDiscovery/disclosure, structured

organizations to manage large volumes of data

data, cybersecurity, data privacy, and information

and quickly identify key issues during litigation,

governance. We have three offices in the US and

investigations, and compliance operations.

one in the UK. Our proven processes remove factual uncertainty – providing valuable insight into the unknown, the unseen, and the undiscovered.

For more information, visit idsinc.com

More information is available at

or email info@idsinc.com

www.relativity.com

Computershare (ASX: CPU) is a global

H5 empowers corporations to confidently

market leader in transfer agency and share

tackle growing data complexity with defensible

registration, proxy solicitation and stakeholder

and cost-effective fact finding and data

communications. We also specialize in

classification solutions for investigations and

corporate trust, bankruptcy, class action and a

litigation. With a seamless blend of linguistics,

range of other diversified financial

analytics, and AI, H5 partners with leading

and governance services.

corporations to proactively mitigate data risks and gain insights early to drive strategic decisions.

58

More information is available at

More information is available at

www.computershare.com/us

www.h5.com

JANUARY • FEBRUARY 2021

OpenText, The Information Company™, enables

Wolter’s Kluwer’s ELM Solutions is the market-

organizations to gain insight through market leading

leading global provider of enterprise legal spend

information management solutions, on-premises

and matter management, contract lifecycle

or in the cloud. OpenText end-to-end eDiscovery

management and legal analytics solutions. We

and legal technology solutions help corporate legal

provide a comprehensive suite of tools that address

departments and law firms improve efficiency,

the growing needs of corporate legal operation’s

optimize results and lower overall costs.

departments to increase operational efficiency

For more information about OpenText (NASDAQ:

and reduce costs. Corporate legal insurance claims

OTEX, TSX: OTEX) visit opentext.com.

department trust our innovative technology and end-to-end customer experience to drive world-class business outcomes.

More information is available at

More information is available at

www.opentext.com

www.wolterskluwer.com

FTI Technology solves data-related business Nuix creates innovative software that empowers organizations to simply and quickly find the truth from any data in a digital world. Using Nuix software, customers can overcome the challenges of litigation, investigation, governance, risk, and compliance by asking the right questions and getting complete, timely answers. Our collaborative data analytics algorithms and visualizations reveal the key facts and their context from any data—regardless of scale, with incredible speed.

challenges, with expertise in legal and regulatory matters. As data grows in size and complexity, we help organizations better govern, secure, find, analyze and rapidly make sense of information. Innovative technology, expert services and tenacious problem-solving provide our global clients with defensible and repeatable solutions. Organizations rely on us to root out fraud, maintain regulatory compliance, reduce legal and IT costs, protect sensitive materials, quickly find facts and harness organizational data to create business value.

More information is available at

For more information, contact

www.nuix.com

ftitechsales@fticonsulting.com

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The General Counsel Report 2021: Rising to Today’s Challenges and Building Resilience for the Future Advisors to interview general counsel from a range of

 FTI senior managing director, Wendy King, describes

the evolution of the role of general counsel, especially in regards to the challenges met in 2020. In order to help their organizations navigate 2021, there are tasks to consider.

industries in a conversation about their role today. The study examined how corporate legal departments are responding to the pandemic, a shifting digital landscape, diversity, equity and inclusion, the technological competency of lawyers and the road ahead. In addition to

In corporate legal departments, recent years have seen a steady rise in planning and establishing programs to mitigate anticipated risks. Alongside this focus on proactive risk management, the role of the general counsel evolved from the office of “no,” to one of significant strategic influence. Once largely viewed as a cost center, or barrier to corporate progress, the general counsel of today are business drivers in their own right.

This evolution for the general counsel came in the nick of time for the turmoil of 2020. In the 2007 best-seller, The Black Swan: The Impact of the Highly Improbable,

by Nassim Nicholas Taleb, the author discussed the discovery of the first black swan in Australia – when the people of the “Old World” assumed with certainty that all swans were white – as a metaphor for the impact of rare and unpredictable events. Although Taleb has

providing new perspectives on current trends and future directions, this report also offers year-over-year comparisons to the findings of the previous study, The General Counsel Report: Corporate Legal Departments in 2020.

As much as the world is hoping for a quick recovery from the fallout of 2020, many of today’s challenges will persist into 2021 and very likely beyond. The burden of maintaining business resiliency and stability in this environment will continue to fall on the GC’s shoulders. To continue to rise to today’s challenges, corporate legal departments must embrace the lessons learned from Black Swan events, expand their existing responsibilities and take ownership of their newly assigned roles. To help their organizations successfully navigate 2021, GCs are tasked with elevating their role in the following capacities:

questioned whether the Black Swan is a metaphor for

Guardian Over Emerging Risk

the COVID-19 pandemic alone, the idea of Black Swan

Counsel are navigating a minefield of both anticipated

incidents serves as an excellent guide for analyzing the sequence of unpredictable events that have shaped 2020, and changed the world of chief legal officers for 2021 and beyond. The pandemic, changing technology, increased risk, economic uncertainty, a social justice awakening and political unrest have combined to challenge beliefs on the Old World of the general counsel as these

and unforeseen risks. Data protection, security and privacy, emerging data types and intellectual property loss were identified as top concerns that have intensified due to the events of 2020.

Chief Health Officer and Custodian of Employee Safety

leaders build resilience for the future.

More than 80 percent of GCs surveyed said they are

To better understand the current in-house environment,

company policies for bringing employees back to in-person

FTI Technology and Relativity engaged Ari Kaplan

work and ensuring workplace health and safety.

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responsible for or primary decision makers in determining

Mitigator of Skills Gaps and Outsourcing

systems. Some survey participants noted that their plans

Many GCs recognize skills gaps and bandwidth limitations among their in-house teams, which is driving specific needs for outsourcing to external experts, service providers and law firms.

to modernize their legal departments were hampered

Advocate of Technology Proficiency Corporate legal departments are adapting to remote workplace productivity tools and increasing overall technology proficiency. Confidence in technological capabilities increased by more than 15 percent since 2019.

when COVID-19 lockdowns went into effect.

Steward of Inclusion and Diversity With equity issues having reached the forefront of societal attention and debate, GCs today are likewise at the forefront of tackling diversity, equity and inclusion programs within their organizations.

Mentor for the Legal Field

Champion of Technology Adoption

Survey respondents had a wide range of advice for their

One third of in-house legal teams are now using artificial intelligence (AI) as part of their technology stack (a slight increase from 2019) and 70 percent use cloud or SaaS

peers and their outside legal partners. Top takeaways included remembering to exercise empathy, remaining flexible and listening intently to colleagues and clients. 

Wendy King is a senior managing director in the discovery practice within the technology segment at FTI Consulting. Based in Atlanta, she brings more than fifteen years of experience in e-discovery practice sport. Her focus is on helping law firms understand the costs and resources involved with e-discovery software. Reach her at wendy.king@fticonsulting.com.

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Minimizing Compliance Risks

associated reporting requirements from regulators. As a

Natalie De La Cruz Valdes, managing director with

Computershare Governance Services, UK, discusses how corporate governance and regulations may affect risk and the role outsourcing plays in budget management.

result it is no longer an option for multinationals to have inadequate controls and visibility over their subsidiary compliance status. This can result in four main categories of risk: legal, financial, reputational and operational risk.

If we think about legal risk, thatʼs where youʼve got the headache of trying to stay on top of changing regulations,

CCBJ: Todayʼs corporate governance and regulations have become more and more complex. How has this affected an organizationʼs ability to manage its processes and minimize risk?

Natalie De La Cruz Valdes: Thatʼs something we see many of our multinational clients grappling with. Most multinationals are struggling to keep on top of the changing regulatory landscape, where new compliance rules and requirements are introduced at an ever-increasing pace.

It’s particularly challenging to manage underlying processes and minimize risks in terms of clients showing their businesses are fully compliant across multiple countries.

Itʼs not an easy task, but it’s a basic requirement for groups with international subsidiaries. Itʼs almost always more expensive and time consuming to return to good compliance than it is to comply with the obligation in the first place.

And if we look at the actual requirements and take each one in isolation, theyʼre not particularly complicated. But when clients have multiple entities spread across multiple territories, and youʼre looking at each country’s specific obligations, deadlines, and the introduction of new requirements, very quickly it can become overwhelming. The pace is difficult for in-house teams to keep up with, and thatʼs where you see the risk of compliance failures.

from ongoing statutory obligations for subsidiaries to adhoc transactional requirements that crop up in the normal course of business. It also means staying on top of the processes required to implement those changes on the ground. This can be particularly challenging for organizations with a decentralized structure and often results in a lack of visibility and control.

Historically, legal risk has been considered in the context of corporate governance within the realm of the parent company, the boards, additional committee meetings, etc. But as globalization has increased, the corporate governance agenda, challenges and risks have also broadened in scope.

The requirements for sound governance are now a must at the subsidiary level as well as the parent company level.

When we look at financial risk, to give an example, we see directors receiving threats of imprisonment for not filing financial statements on time, and local registries or regulators initiating actions against non-compliant companies.

Historically, these have been theoretical risks, but now regulators and registries have become more aggressive in taking these actions. Penalties and fines can be levied against companies for non-compliance, which creates not only a financial but also a reputational risk. The penalties are typically nominal, however some fines accrue by the day until the company is put back in compliance and can therefore become more substantial. And if fines are

In recent times, subsidiary governance moved up the

happening on an ad-hoc basis, it adds an element of

agenda linked the fair tax debate, tax transparency, and

unpredictability to the budgeting process.

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As previously mentioned, reputational risk is also linked to financial risk, because it can have a significant impact on an organizationʼs bottom line. Itʼs often overlooked when we talk about non-compliance, but reputational risk can affect things like new business opportunities and so it can have a disproportionate effect.

Operational risk is a pretty big one for multinational organizations. Relying on local resources to discharge compliance obligations is fraught with risk. Compliance activities are often deprioritized, which creates an operational risk to the business. There must be a robust Compliance and governance program in place if business disruptions are to be minimized and resources are able to focus on the right tasks. When organizations try to manage day-today subsidiary compliance in-house, it eats up a huge amount of time and distracts in-house resources from concentrating on higher value tasks. Legal functions are under increasing pressure to do more with fewer resources, and thatʼs where competing priorities come

into play and create unsustainable situations. Whether it’s a market lawyer with an appreciation for the importance of compliance, or someone from the local finance function who inherited compliance obligations as part of their job, in both scenarios the compliance burden is placed on busy individuals already wearing multiple hats at a local level. And typically, we see clients using spreadsheets or silo technology systems, which provide very little control around the quality of information, or the accuracy and maintenance of that data.

With tight budgets and limited resources, how can outsourcing play into budget management for compliance initiatives?

Typically, we ask our clients two key questions: Do they understand how much theyʼre spending on subsidiary management today, and do they know what theyʼve spent on subsidiary management in the last 12 to 24 months?

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It's more expensive to return to non-compliance than it is to comply in the first place. is no. Itʼs really difficult for clients to quantify spend, particularly when theyʼre operating in a decentralized model. And the single most effective way to deal with that is through service provider consolidation and fixed fees.

That’s the difference between a reactionary and a proactive model. Reactionary is the scenario where you have in-house teams to manage subsidiary compliance. Itʼs not really their day job, it creates constant fire drill scenarios and it distracts them from what they should be doing.

The proactive model is typically the outsource model, where a trusted provider consolidates everything into a single vendor who can provide knowledge, methodologies and processes. It allows a clear line of sight of upcoming deadlines and obligations and a buffer to mitigate risks when potential issues occur. The proactive model removes the need for internal resources to spend hours triaging unexpected issues. There’s also less reliance on the key individuals and thereby reduces the risk of business disruption if a team members leaves. In our experience, clients who consolidate down to a single service provider model can save upwards of 20 percent on standard compliance costs, as well as freeing up internal resources to focus on more strategic and value add activities.

What advice do you have for a corporation considering global enterprise legal management solutions?

It is critical for multinational organization to have the right technology in place, as we move into an increasingly virtual world. But technology itself is not the solution. For 64

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technology to be effective, it needs to be managed carefully and used thoughtfully with the right underlying processes and controls in place. Whether youʼre using a spreadsheet or a technology platform, knowing whoʼs responsible for entering information into the system, and how the information is maintained is key to building the integrity of data as well as trust and confidence in the system.

Most multinationals struggle to achieve a robust and reliable single source of truth without the help of a trusted partner like Computershare, who have the knowledge and methodologies to help drive discipline into the system setup and ongoing maintenance. This also enables organizations to benefit from best practice recommendations and critically to leverage the system to its full capability.

The deployment of global entity management software is no longer nice to have, but instead it has become a must for businesses where thereʼs an expectation that technology is utilized across functions to mitigate risk, business disruption and create efficiencies. The production of meaningful MI and insights generated by effectively leveraging technology and data is also critical to achieving enhanced governance.

As one might expect, there has been an increase in the uptake of technology as a result of COVID-19. This has accelerated the existing trend to modernize governance and created a need for a platform that enables global governance activities to be dealt with remotely, as the need for transparency of subsidiary operations increases. In this context, the solution is therefore the considered use of the right technology platform, providing the ability to access accurate, real-time corporate data from anywhere at any time. In addition, having access to knowledge, insights and procedural requirements can help save internal teams time and aid faster decision-making. This can be taken one step further by leveraging technology to help turn insights into action, using that to report on and mitigate key risks.

There is also the trust element linked to the effective use

costs of and time spent on compliance. As we know, a

of global entity management solutions. If there is a loss of

general lack of visibility of local requirements, which can

faith in the integrity and accuracy of the data in a system,

often shift, is an ongoing problem for most multinationals.

people will move away from relying on it as a trusted data

Therefore, having the ability to tap into procedural

source. This is often when organizations discover they have

information in a single technology platform has potentially

multiple siloed systems tracking the same information. For

massive benefits for most organizations.

example, finance, tax, legal, all holding their own versions of the truth, rather than utilizing a single accurate data source.

Another area where technology may be better leveraged

Having a single source of truth enables internal teams to

is to provide greater transparency of spend patterns for

work more efficiently and to share information with other

compliance and corporate change activities. This is infor-

functions and stakeholders across the business, safe in the

mation that most organizations simply do not have access

knowledge that the data is accurate. It also reduces overall

to, making budgeting more challenging that it needs to be.

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For technology to be effective, it needs to be managed carefully and used thoughtfully.

In summary, working with a trusted partner to properly implement a global platform such as GEMS, can create many efficiencies, increase overall governance and visibility and provide meaningful data to mitigate risk and drive better decision making.

How you are anticipating the pandemic impacting compliance workflow and other issues with so many people working from home on personal devices?

As the pandemic gathered pace, itʼs been necessary for organizations to contend with the swift adoption of remote working and all its associated challenges and disruption.

For many itʼs probably exposed gaps or vulnerabilities in previous working practices. If we add that to the trend of increasing regulation, and the expectation for legal and secretariat teams to do more with less, it becomes the perfect storm. Now more than ever businesses have to focus on steps they can take to effectively manage their global substitute governance practices. How do they future proof the business to ensure good governance and compliance across those subsidiaries going forward?

Technology is critical. As we shift to working in a virtual environment, some big, credible companies have confirmed that their employees will have the ability to work from home in the long term. So, this is really a seismic shift and something we simply werenʼt used to before. Relying on having information in a filing cabinet by your desk, or being able to turn to a colleague to ask for information – how do you make that shift to working at home in an isolated environment and not have access to those resources?

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Technology has to be the answer to that. Organizations need to look at their plans around technology. Have they got a robust platform in place? Can they consolidate? There are solutions out there and partners like Computershare that help clients and advise them on that. So, itʼs not something they necessarily need to do alone, organizations can bring in relevant expertise to support them.

With the pandemic, the goalposts have shifted. What weʼre seeing is that a blend of human and digital resources is critical to making sure organizations can achieve an effective governance program, and functions are fit not only to meet todayʼs challenges, but future proofing and keeping pace with constant changes happening all around. The best way to do that is through technology and working with external partners that can help supplement internal resources.

So again, it comes down to consolidation outsourcing, and the governance and control piece. Making sure you have the relevant governance and controls in place as people are working remotely. Making sure they have access to the information you need, that you have consistent global processes and methodologies in place, and place less reliance on individual resources. Making Natalie De La Cruz Valdes is a sure you’re thinking about managing director with Computershare potential risks from a busiGovernance Services, UK. Natalie has an LLB in Law and a post-graduate ness disruption perspective.

Legal Diploma in Legal Practice, with It really is critical because 13 years’ experience having led global the world has changed. And managed service delivery teams at businesses and teams that Eversheds and EY. She has acted as global client account director for a are not mindful of that and number of Fortune 500 and FTSE350 donʼt have a plan in place to clients across a multitude of sectors. keep up with that change, Reach her at Natalie.DeLaCruzValdes@ well itʼs going to be very computershare.co.uk. difficult for them. 

Looking Beyond Traditional Criteria To Select the Right Service Provider For Your Legal Tech objectives of your business requires that you look beyond

Ask these questions to cut through the marketing noise and ensure quality and longevity.

traditional criteria and know how to cut through the marketing noise. By leveraging the key questions outlined here, you can go beyond typical business requirements and establish what really sets a legal tech service provider

Modern legal departments are adopting technology at a faster rate than ever before – to improve their ability to draw insights from case data, reduce costs within e-discovery tech stacks and create business growth opportunities.

Decision makers are under immense pressure to select technology for their business that can most efficiently and accurately organize data, discover the truth and act on it.

With so many legal technology solution providers in the market, selecting the one that will cater to the unique needs of your legal department and the long-term

apart from its competition.

What investments is the service provider making to ensure that they offer best-in-class security?

Many legal technology solution providers will say that they have the most secure platform and the most comprehensive security programs, but it’s important to determine if and how the provider is actually investing in the processes and technology that best protect your data. Is it investing in single or multifactor authentication, 24/7 monitoring,

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encryption at rest and in transit, secure coding, penetration testing, vulnerability management, etc.? How well trained are their employees when it comes to security? One accidental click of a link in a phishing email could have major consequences, affecting the company’s product, communications mechanisms, and ultimately its customers. Most important, has the provider invested in a fully integrated security team that works around the clock to anticipate threats, mitigate risks and stay ahead of adversaries?

Does the technology integrate seamlessly with the cloud?

According to Flexera’s “Cloud Computing Trends: 2020 State of the Cloud Report,” by 2025, 51 percent of data will be in data centers and 49 percent will be in the public cloud. In addition, over 80 percent of large corporations will likely move some of their operations to the cloud by 2022, with cloud usage increasing dramatically across organizations. If your service provider isn’t cloud native, you should verify that it has a plan for this transition.

Will the company be prepared for it?

Is this solution flexible enough that it can handle multiple use cases, allowing access to teams across the company that can leverage it for their own functions?

At Relativity, our users include not only legal professionals but also employees from human resources, compliance, information technology and other departments that handle things like internal investigations, legal holds, data subject access requests and more. It’s worth asking if the solution includes integrations that can be tailored to best meet your unique data challenges in e-discovery and beyond.

For example, Relativity’s App Hub has 140 applications that customers can utilize and 104 developer partners building on top of Relativity’s technology to further extend the platform and tackle data challenges. Have a 68

JANUARY • FEBRUARY 2021

conversation with your service provider to ensure that the solution you’re bringing on can be leveraged across your company and customized to meet your needs. This is also important to help you justify the spend.

What is the service provider’s outlook and perspective on artificial intelligence (AI)?

I’m not including AI simply because it has been and continues to be a hot topic. At Relativity, we believe that it’s important for any technology service provider to have meaningfully and strategically thought about how the advent of AI will impact them and the way they do business.

If they haven’t thought about it, be wary of moving forward

with them. It’s a likely indicator that the company lives too much in the present, without looking ahead.

What are the service provider’s core values, and how

What’s the company culture like?

All companies should have a set of established core val-

High employee retention is one indicator of a strong company culture. Investing in a service provider’s solution when the company has high employee turnover means that your account management team may change every few months – causing disruption and forcing your team to continually build new relationships and educate the account management team on your business. Ask what employee retention rates are like and what talent management processes they have in place that reflect the company’s investment in its workforce and their future.

will they carry over into the work they’re doing for you?

ues that serve as the blueprint for where the company stands. At Relativity, our core values are woven into the work we do every day. A service provider’s core values should be an important part of who they are and how they conduct their work. If they’re unable to articulate what they value, you risk partnering with a company that lacks clear direction and a sense of responsibility to its customers and community.

Ultimately, when selecting a legal technology solution provider, it should be about much more than finding a

How does their company culture support inclusion, diversity and belonging?

tool that simply gets the job done. Ask the hard questions

It’s important to ask how the company is working to foster a culture of inclusion, diversity and belonging. What is the company doing to bring in more diverse job candidates?

Do underrepresented groups and allies have a safe space to share experiences, celebrate differences, and connect in a more meaningful, personal way? Are there a diverse group of voices contributing to the decision-making process to ensure different perspectives are driving decisions? Fostering a culture of inclusion is not only the right thing to do – it’s also beneficial for you as a customer to work with a company that embraces talent with diverse backgrounds.

employees, dedicated to

Will you be just another client to them? Or will they view this as a true partnership?

If you pick up the phone and call with an issue late in the night, will there be a person at the other end of the line?

Will you get an email response back within 24 hours? Do they have someone on call 24/7?

to establish whether the company is forward-thinking, invested in its tech and its providing the level of support your company needs to achieve its goals, and infused with a strong company culture. At Relativity, we exemplify all of the above and go beyond the traditional criteria to bring our customers the best user experience possible. When you work with us, you join a thriving, passionate community of users and partners who are just waiting to jump in and help. We hope that

Karen Klein is chief legal officer with Relativity. Since stepping into this role in June, 2020 she oversees all legal and regulatory compliance matters and provides strategic partnership to the rest of the executive team and the board of directors. Prior to joining Relativity, Klein was EVP and general counsel of Ticketmaster. Reach her at karen.klein@relativity.com.

you ask us about it.  CORPORATE COUNSEL BUSINESS JOURNAL

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Using the Right Artificial Intelligence Tools To Address Your Business Challenge intelligence and intervention playing a significant role in

 In addition to having more data to manage, the

expectation that companies will identify and protect sensitive data has also intensified, and the failure of any organization to maintain privacy protections could have devastating consequences.

the outcome. This is especially true when it comes to the inherent nuance of privilege review, which has essentially remained a manual effort. One hopeful sign is the increasing use of AI-based technologies for this function as well, which will accelerate the more laborious aspects of this time-consuming and costly process.

Artificial intelligence (AI) and machine learning technol-

AI Beyond Document Review

ogies have been used for years in support of discovery and litigation. But most in-house legal departments have

It is important to keep in mind that most AI use cases in

other operational needs in addition to discovery and

the legal realm involve the analysis of textual content.

litigation, including general information governance

Legal challenges related to information governance, data

activities, corporate investigations, data privacy and

privacy, compliance, investigations, contract review and

compliance, contract review, and the management of

M&A all have in common the need for analytics tools that

second requests to support mergers and acquisitions

interrogate massive volumes of text. The use of AI in these

(M&A) and divestiture activities. With trends indicating

endeavors – whether machine learning algorithms, data

a growing need for companies to seek more sophisticated

classifiers or otherwise – generally requires both linguistic

and technologically advanced solutions, can AI be applied

and analytics expertise behind the tool for a successful result.

to address use cases in these other areas as well?

And, as opposed to a TAR workflow, which is typically applied to sets of documents that have previously been

First at the AI Bat: Responsive Review

identified and collected, other potential legal use cases need to contend with data in place.

Since 2012, when New York Magistrate Judge Andrew J. Peck approved the use of technology-assisted review (TAR) in

AI technology is already being used regularly to automate

the Da Silva Moore case, the use of AI-based technologies

the review of day-to-day business contracts. With a typical

has become increasingly common in support of electronic

Fortune 1,000 company maintaining 20,000 to 40,000 active

discovery in litigation. Today, lawyers and legal profession-

contracts at any given time, this can result in huge time and

als commonly train supervised machine learning algorithms

cost savings, while also improving accuracy.

to streamline the labor-intensive task of document review in litigation, saving time and expense, while often improving

Below, we consider some of the other trends that corporate le-

the accuracy of review – if the work is done correctly.

gal departments now face and explain why both linguistic and data analytics expertise are necessary parts of the AI skill set.

Although workflows associated with TAR are by now well established, experience has shown that TAR is not

Information Governance: To say that corporate legal

a magic bullet. It still takes considerable time, effort

departments have more data to manage than ever before

and expertise to use TAR tools successfully, with human

would be a significant understatement. According to

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Any response, AI-enabled or otherwise, must be supported by human expertise.

StatInvestor, data volumes in the world have grown from 0.1 zettabytes in 2005 (zettabyte = 1 trillion gigabytes) to 47 zettabytes in 2020 – a growth of 470 times in just 15 years.

Part of the reason for such growth is the expanded variety of data sources that today’s corporations need to address.

In addition to enterprise-wide systems that manage everything from accounting and customer relationships to email and work product generation, corporations need to account for data from mobile devices, social media and other cloud systems, collaboration apps like Slack and Microsoft Teams,

same for California residents. (More resources can be found in the International Privacy Law Library.) Also, corporations are having to implement new workflows to respond to data subject access requests – i.e., requests from individuals about the way companies handle their personal data.

So, in addition to having more data to manage, the expectation that companies will identify and protect sensitive data has also intensified, and the failure of any organization to maintain privacy protections could have devastating consequences. The challenge: How do you identify data that needs to be protected?

Corporate Investigations: Corporate legal is also having to address an increase in corporate investigations. In the 2019 Corporate Investigations Survey (conducted by

and even (eventually) data from internet of things devices.

Aside from the costs associated with maintaining evergrowing data stores, the volume and complexity of this data presents a number of risks. With so much data to manage from so many different sources, much of which could (and likely should) be disposed of, the ability to analyze and assess data content has become a crucial corporate need. The challenge: How do you identify which data you can defensibly delete?

Data Privacy: The growing number of data privacy laws comprise another trend impacting legal operations today.

With many states and countries taking steps to require the protection of personally identifiable information (PII), companies need to know what personal information they have in their possession and where that information is stored. In May 2018, Europe implemented the General Data Protection Regulation to protect the data privacy rights of European individuals, and California implemented the California Consumer Privacy Act in January 2020 to do the CORPORATE COUNSEL BUSINESS JOURNAL

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H5 and Above the Law), nearly two-thirds (63 percent) of respondents involved with corporate investigations expected the number of investigations to increase over the next three years. Since the pandemic, those concerns have only increased. For example, in a September 2020 survey conducted by the Association of Certified Fraud Examiners, 74 percent of surveyed certified fraud examiners indicated that preventing, detecting and investigating fraud in the COVID-19 era has been even more challenging than it was before the pandemic. The challenge: How do you find potential evidence or indicia of criminal activity within massive data stores?

Mergers, Acquisitions and Divestitures: Corporate investment activities such as mergers and acquisitions are keeping corporate legal departments busier than ever. According to Deloitte’s M&A trends 2020 survey, 63 percent of respondents expected M&A transaction activity to increase this year, with divestitures (driven by organizations seeking to cash in on high valuations and those aiming to reposition assets in advance of a downturn) potentially becoming more active. Those transactions may require closer scrutiny by the Federal Trade Commission for antitrust concerns, and corporations may be required to respond to a second request to provide more information about the transaction.

These second requests often entail accelerated time frames.

The challenge: How do you quickly identify responsive information for an impending HSR request?

Addressing the Challenges It should be clear from the trends and challenges identified above that evolving use cases throughout the enterprise cry out for a sophisticated technological response. Notably, because they are primarily driven by the requirement to interrogate text, AI in the form of machine learning algorithms, natural language processing, and data classification methodologies can play a major role.

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Equally notable is that each challenge has a unique set of requirements to address. The application of AI solutions should be an iterative, methodical and scalable exercise.

Any response, AI-enabled or otherwise, must be supported by human expertise – both in the analytical assessment of the requirements and the development of a solution. The maturity of the organization to handle advanced technologies is of no small consequence either, and the care and feeding of such systems is an ongoing requirement.

Looking Forward The consultancy firm McKinsey estimates that 22 percent of a lawyer’s job and 35 percent of a law clerk or paralegal’s job can be automated, enabling a focus on more vital and strategic work. There are plenty of opportunities to leverage AI technology to support that automation effort. The good news is that development of AI tools to use within the enterprise is a rapidly developing field. Without a solid foundation upon which to build AI capabilities, however, ad hoc applications of AI tools may fail to meet expectations. What is required is a strategic response that includes a prioritized assessment of the use cases to be addressed and an expert analysis of the best AI or Kimberly Culpepper serves as the advanced analytics tools senior director of marketing for H5 and leads its marketing department. for each use case. More She is an entrepreneurial marketing good news is that the leader with experience developing expertise to provide both marketing strategies and executing multi-channel campaigns that the assessment and the drive revenue growth for leading potential solution is readcompanies in the legal industry. ily available in the legal Reach her at kculpepper@h5.com. services ecosystem. 

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