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IT’S OFFICIAL. OUR INTELLECTUAL PROPERTY GROUP IS PATENTLY BETTER. At Vorys, we’ve been protecting the rights of our clients for decades in virtually every area of intellectual property law, including biotechnology, business methods, polymer chemistry, electrical, pharmaceuticals and nanotechnology. Now, we have expanded and strengthened our IP practice group with the addition of Mark Watkins and Michael Garvin, whose wealth of experience in patent law gives us new leverage in an increasingly complex area.

Higher standards make better lawyers.® For more information, please visit vorys.com/IP.

Vorys, Sater, Seymour and Pease LLP 200 Public Square Suite 1400 Cleveland, Ohio 44114 106 South Main Street Suite 1100 Akron, Ohio 44308

lEgal guiDEBooK

November 17 – 23, 2014 l3

PrEsiDEnT’s lETTEr

Focusing on what works: Redefining your firm’s success around the experience of your clients

BoarD of DirECTors PreSideNt Erin Hawk Porter Wright Morris & Arthur LLP Columbus PreSideNt-eLeCt Jennifer Shankleton Brouse Mcdowell Akron iMMediAte PASt PreSideNt Liz Boehm Benesch, Friedlander, Coplan & Aronoff LLP Cleveland SeCretAry Brittaney Schmidt Vorys, Sater, Seymour and Pease LLP Columbus treASurer Jeff Dennis Kegler Brown Hill & ritter LPA Columbus

mEmBErs aT largE Mark Elliott eastman & Smith Ltd. toledo Karen Eutsler rendigs, Fry, Kiely & dennis Cincinnati Lance Godard Fisher & Phillips LLP Cleveland Julie Gurney Benesch, Friedlander, Coplan & Aronoff LLP Cleveland Rob Phillips Vorys, Sater, Seymour and Pease LLP Columbus Dorenda Swanson Squire, Sanders & dempsey Cleveland Marcie Valerio Porter Wright Morris & Arthur LLP Columbus the Ohio chapter was honored as LMA’s 2014 Outstanding Chapter. Learn more at www.legalmarketing.org/ohio.

By Erin W. Hawk

n Peter Shankman’s recent article in Strategies, the bimonthly magazine of the Legal Marketing Association, he talks about today’s experiential society: “When all else is the same, what will save a company is the experience a customer has with it.” This goes for law firms, too. Helping law firms improve their clients’ experience and become more successful as a result was the focus of the Legal Practice Development Institute, presented by the Legal Marketing Association of Ohio in partnership with the Hawk Cleveland Metropolitan Bar Association. Held in Cleveland on Oct. 21, the Institute featured thought leaders from across the country who offered key strategies for both attorneys and the legal marketing and business development professionals who support them. Below are my top 10 takeaways from this full-day program.

“Do smart things. Don’t do dumb things.” In other words, do what works. While it is stating the obvious, this comment from Joe Morford, managing partner at Tucker Ellis, tells it like it is. Sometimes, we distract ourselves from action by over-thinking and over-analyzing. Prioritize and be smart.

The playing field has completely shifted. This was a consistent theme throughout the day. Since the recent recession, successful firms have had to rethink their approach to the practice of law, and there is no turning back. Developing a clear advantage against their competitors has become increasingly challenging as corporations have tightened their legal spend and the legal market has continued to be saturated. Attorneys and firms who cannot listen to the needs of their clients and offer them a true partnership and clearly defined value will be passed over by their competition.

Creating a client-centered culture is key. Kip Reader, managing partner at Ulmer & Berne, stated that what is best for your clients is best for your firm overall. Clearly,

firms that place the needs of their clients first are positioning themselves as true trusted advisors and partners to their clients. However, saying you are client-centered and proving it are two different things. Every member of your firm, from the receptionist to senior partner, embodies your firm’s brand. What is the experience of a client walking into your office? How can you make every client interaction exceptional?

successful firms are those that can adapt. Tim Corcoran, president of the Legal Marketing Association, outlined the Learning Curve Model, which redefines the formula for law firm profitability. Under this model, firms understand that efficiency matters, experience matters, client satisfaction is critical for profitability and realization is a leading indicator of firm profitability.

Embracing diversity and inclusion can help propel your firm’s success. Lead change from where you are and look for ways to encourage open dialogue and discussion. Focus on creating a culture where diversity and inclusion are valued.

about your kids by name and may bring a special appetizer for you to try that isn’t yet on the menu. Paying attention to the individual preferences of your client contact and understanding what is motivating them personally is key to becoming their trusted advisor. What can you do to help them do their job better? To make them look good? To make their life easier? To reduce their risk? To help their career? To help them save money? It is why they will choose you over your equally qualified peer at the firm down the street.

legal project management is a new lens for law firms that helps them better communicate with clients. Clearly defining the scope of the project and ensuring that you and your client are on the same page with respect to projected outcome, timeline and budget help ensure that you are able to meet or exceed client expectations. On a parallel note, consider all client communication, including the bill and the impact that it has on the relationship with your client. No bill should be a surprise, or

you likely will have issues collecting your full fee.

Client feedback is a gift. If you are not asking your clients about their needs and what you could be doing better, you are jeopardizing your firm’s greatest asset. No client relationship can be taken for granted. These important takeaways, along with countless others, underline the changing dynamics within firms and the importance of keeping clients at the forefront. Whatever your role within your firm or company, it is within your power to have an impact on your client’s experience with your firm. What can you do today to make that experience exceptional?

Erin Hawk is president of the Legal Marketing Association of Ohio and Labor and Employment Practice Development Manager at Porter Wright. She has 19 years of experience in law firm marketing and business development and is committed to driving a culture of client service. Contact her at 614-2271983 or ehawk@porterwright.com.

understanding market realities helps firms target their strategies and focus their areas of strength on expanding opportunities. Successful firms reward innovation and reinvention and are nimble enough to realign themselves based on market demand.

What’s in it for me? Aligning benefits with desired actions creates a successful business development engine. How can you motivate certain behaviors? What will drive action? It is often hard to have significant impact on behavior without considering the metrics of how attorneys are compensated.

on time on budget on point

understanding the personal benefit for a client, not just generic benefit, helps you create loyalty. Think of your favorite restaurant where your waitress greets you by name and asks if you want the usual. Maybe she offers menu suggestions based on what you have ordered in the past. She asks

Rethink Your Outside Counsel CusTom PuBlisHing sTaff Advertising Director Nicole Mastrangelo, nmastrangelo@crain.com Section Editor Cheryl Higley Graphic Designer Staci Buck For more information about custom publishing opportunities, please contact Nicole Mastrangelo.

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LEGAL GUIDEBOOK

L4 November 17 – 23, 2014

By Mike Garvin

he most controversial topic in patent law today is the rise of companies whose business model is filing patent infringement lawsuits. These companies are commonly referred to as “patent trolls.” The impact that patent trolls have had on the economy, and even what companies fall within the definition, is the subject of considerable debate. Regardless, companies across industry sectors have atGarvin tempted to combat the troll business model through the courts and Congress. Both sides have claimed victories. For instance, in the legislative arena, the America Invents Act, passed in 2011, contains some provisions favorable to industry; but industry efforts to have more drastic legislation passed

Recent Supreme Court Patent Decision Could Be Rude Surprise for Tech Firms, Others have so far been stymied by Congress’ infamous gridlock. In June, the U.S. Supreme Court issued a decision in a case named Alice Corp v. CLS Bank that many in the pitched “industry v. trolls” battle consider a resounding defeat for the trolls.

The claimed invention in the patent at issue in CLS covered a computerimplemented method of using a third party, or intermediary, to mitigate settlement risk in international currency trading transactions. In its decision, the Supreme Court

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held that the claimed method was not patentable because it covered nothing more than an “abstract idea.” Long before the decision in CLS, prior decisions of the Supreme Court and other lower federal courts had held that laws of nature, natural phenomena and abstract ideas, standing alone, are not entitled to protection under the federal patent statute, but in certain circumstances if combined with “something more” can be transformed into a patentable invention. The court determined that the concept of intermediated settlement in currency transactions fell within the category of abstract ideas because it is “‘a fundamental economic practice long prevalent in our system of commerce.’” In the portion of its analysis that is sending shock waves through the patent world, the court then found that simply implementing the abstract idea of intermediated financial settlement with a “generic” or “general purpose” computer cannot transform it to a patentable invention. There’s little doubt that CLS represents a victory for the anti-troll forces. Since the CLS decision was issued, lower courts have struck down more than a dozen patents as “patent ineligible,” including the following: n A method of providing secure online sales transactions n A computer-based method for converting airline customers’ loyalty award credits n A method of predicting human performance based upon genetic testing n A method of facilitating employment searches using anonymous communications n A method of “upselling” products using electronic communications devices

It may be hard to mourn the loss of a patent on “upselling” products, but

will CLS strip away a critical tool that e-commerce and other computer-based companies have used to protect their innovations? How would, for example, a patent on a “method of displaying a user interface to verify identity of a participant in a computerized transaction facility” fare in a post-CLS world? That claim appears in an early eBay patent whose stated goal is to enable verification of the identities of participants in on-line trading facilities, thereby “enhancing user trust” in those facilities — the heart of eBay’s entire business model. It’s too early to tell whether CLS will doom all patents covering business models like e-commerce and social networking, but there’s certainly reason to believe that few will survive. Dennis Crouch, a law professor who hosts a well-known patent law blog, recently observed: “What we’re still looking for is a post-Alice court decision that upholds a computer-method patent under [the patent statute].” Regardless what the future may hold, e-commerce, social networking and similar companies, both large and small, will want to reconsider their strategies for protecting their innovations. One step is to analyze whether there’s enough “beef” in their patents to survive CLS. For instance, the Supreme Court emphasized that an abstract idea, such as a business method, cannot be made patentable merely by implementing it with a “generic” or “general purpose” computer. This leaves open the possibility that the use of a customized computer, or the use of a computer in a particularly innovative way, in implementing a process may remain patentable. Companies whose business models rely on computer-implemented processes will want to revisit how they can use other forms of intellectual property, such as copyright and trade secrets, to protect their innovations. They should also seek to maximize the protection of their innovations through contractual terms with customers, suppliers, consultants and the like. The one certainty in the wake of CLS is that the scope of intellectual property protection in the U.S. for computer-based business processes has changed dramatically. What’s yet to be determined is just how much. Mike Garvin is an IP litigation partner in the Vorys, Sater, Seymour and Pease LLP Cleveland and Akron offices. Contact him at mjgarvin@vorys.com.

LEGAL GUIDEBOOK

November 17 – 23, 2014 L5

Legal Pitfalls of Non-Competition and Non-Solicitation Agreements

mployers have used noncompetition and non-solicitation agreements for many decades. With recent changes in the economy, frequent employee turnover and mobility, and corporate mergers and restructuring, these types of agreements continue to be the topic of much discussion and litigation. Sometimes the term “non-compete” is used to describe any type of agreement Pilat that restricts what a former employee can and cannot do after the end of an employment relationship. But there are important differences. A non-competition agreement seeks to prevent a former employee from engaging in any type of business activity that competes with the former employer for a period of time in a geographic area. That is contrasted with a non-solicitation agreement, which allows the former employee to compete but restricts them from soliciting clients or customers (some or all) of the former employer. Ohio courts have long held that any such restrictions must be reasonable, and are only enforceable “if the restraint is no greater than is required for the protection of the employer, does not impose an undue hardship on the employee, and is not injurious to the public.” If the court finds the restrictions to be unreasonable, the court has the power to modify the agreement to conform to what it decides are reasonable restrictions. Generally speaking, the longer the time period of restriction or the broader the geographic area, the more likely a court will find the restriction to be unreasonable. However, every situation is unique and the courts are clear that “each case must be decided on its own facts.” So while a threeyear restriction covering a 30-mile radius was considered by one court to be reasonable, a two-year restriction covering one county was unreasonable to another court. With recent activity in corporate mergers, acquisitions, spin-offs, and restructuring, one question often raised is whether a non-competition/nonsolicitation agreement is still enforceable by a successor to the original employer. The answer is a (qualified) yes according to the Ohio Supreme Court. However, the answer can change depending on the specific language in the employment agreement and the subsequent transaction agreement. Another question involves what is “solicitation” that might be prohibited by a non-solicitation agreement. Again, the specific contract language will have a large impact on what the former employee can and cannot do. For example, one court held that an employee sending an announcement to particular clients for whom she had worked did not improperly solicit those clients, but that a letter to all clients of the company could be considered an

improper solicitation. Non-competition and non-solicitation agreements are still and should continue to be part of many employment relationships. But each situation is different and the courts will closely scrutinize those agreements to ensure

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a reasonable balance of interests between employer and employee. George V. Pilat is a partner with Mazanec, Raskin & Ryder Co., L.P.A. Contact him at 440-424-0007 or gpilat@mrrlaw.com.

If the court finds the restrictions to be unreasonable, the court has the power to modify the agreement to conform to what it decides are reasonable restrictions.

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By: George V. Pilat, Esq.

MY BENESCH MY TEAM

When we all pull together, we all get ahead.

Cleveland Columbus Indianapolis Philadelphia Shanghai White Plain Wilmington www.beneschlaw.com

Benesch salutes the LMA and our fellow law firms who broke new ground to make the Legal Guidebook possible. We are proud to support the Legal Marketing Association’s Ohio Chapter (LMA Ohio) and its goals to provide educational and innovative thought leadership opportunities to the legal community in Northeast Ohio. Congratulations and thank you to Crain’s Cleveland Business and LMA Ohio for spearheading the Legal Guidebook, and to our colleagues who joined us in contributing.

LEGAL GUIDEBOOK

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The risks associated with misclassification include liability for years of unpaid federal, state and local income tax withholdings and social security and Medicare contributions.

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L6 November 17 – 23, 2014

MISclASSIfIcATIoN of EMployEES AS INDEpENDENT coNTRAcToRS By Susan C. Rodgers

isclassification of employees as independent contractors is a major issue for state and federal legislatures and regulators as well as plaintiff class action lawyers. The IRS has a comprehensive employment tax audit program that includes finding businesses that have misclassified workers as independent contractors. States have focused on catching

businesses that are not paying unemployment insurance or workers’ compensation premiums for misclassified employees. Class action lawyers target companies that have misclassified employees in order to seek unpaid employee benefits and overtime compensation. It is important to recognize there is no uniformity in the definition of an employee. The IRS applies its own factors for analyzing employee status, while state agencies may have their

own definition of employee for enforcement purposes and determining who is covered under workers’ compensation or unemployment com- Rodgers pensation. The risks associated with misclassification include liability for years of unpaid federal, state and local income tax withholdings and social security and Medicare contributions.

Mazanec, Raskin & Ryder Mazanec, Raskin & Ryder was started by three former insurance claims professionals who identified the industry’s true needs and were committed to building a firm with exceptional service, focusing on the client and always with a keen eye to serving their needs in the most costeffective manner possible. Now, more than 30 years later, MRR provides outstanding legal representation in virtually all types of litigated matters affecting insurers and their insureds, the business community and public entities of all types. We counsel businesses, individuals and public entities on a wide variety of matters including business formation, commercial transactions, labor and employment matters and legislation, insurance coverage and defense, risk management, planning and zoning and other issues facing local governmental clients.

A company could also be liable for unpaid workers’ compensation and unemployment insurance premiums. As to individual workers or class of workers, there is the potential for liability for unpaid work-related expenses, failure to pay minimum wage and overtime compensation plus liquidated damages. A business cannot make an individual an independent contractor simply by issuing him a 1099 or having a contract that says he is an independent contractor. The real issue is who has control over the individual. Some of the factors looked at by the courts and agencies are: (1) the degree of control over the manner and method of doing the job; (2) the opportunity for profit or loss; (3) the investment in facilities and equipment; (4) lack of permanency (or length) of the relationship; (5) the degree of skill needed for the work, and; (6) how integral the individual’s work is to the business of the principal/employer.

Prior to using independent contractors or restructuring existing employee relationships to independent contractor relationships, it is beneficial to perform an employee/independent contractor audit. This is a process that examines and analyzes whether the position would pass the applicable independent contractor tests under governing state and federal laws. Assuming they are independent contractors under the analysis, the business should enter into well written agreements demonstrating an independent contractor relationship and treat them as independent contractors in practice. Management should be trained that independent contractors should not be treated as employees (i.e. participation in benefits). Susan C. Rodgers, Esq., is a partner at Buckingham, as well as the firm’s General Counsel and the Employment & Labor Practice Group Leader. Contact her at 330-258-6552 or srodgers@bdblaw.com.

On the Move. Frantz Ward is Pleased to Announce the Firm’s Relocation to 200 Public Square in Spring 2015.

100 Franklin’s Row / 34305 Solon Road / Cleveland, OH 44139 / T: 440.248.7906 / F: 440.248.8861 175 South Third Street / Suite 1000 / Columbus, OH 43215 / T: 614.228.5931 / F: 614.228.5934

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www.frantzward.com · 216-515-1660

LEGAL GUIDEBOOK

November 17 – 23, 2014 L7

Managing Pregnancy-Related Workplace Issues By Patricia F. Weisberg

regnancy-related issues in the workplace are becoming more complex to manage. That’s because the increased number of women in the workplace increases the chances of employing a pregnant worker. In addition, employees have become more aware of their rights and protections under various government agencies. Complicating matters is the fact that pregnant workers are protected not only by federal laws, but also differing state and local laws — all of which are constantly changing. In July of this year, the Equal Employment Opportunity Commission (EEOC)

released new enforcement guidance under the Pregnancy Discrimination Act (PDA) addressing pregnancy discrimination in the workplace. Although these are guidelines only, they carry considerable weight since courts often defer to the EEOC’s interpretation of the law when deciding cases. As a result, it’s important that employers be aware of their new “obligations.” Among other things, the EEOC guidelines state that employers must offer light duty to pregnant employees if they make light duty available to non-pregnant employees whose ability or inability to work is similar. That means that if employees who have

been injured on the job have the right to work light duty, then light-duty work must also be offered to pregnant employees who are unable to Weisberg perform their jobs for similar reasons. This issue is expected to be addressed by the U.S. Supreme Court next year but, until then, it may be subject to varying interpretation. The definition of pregnancy-related disability has also been expanded such that almost any condition related to a pregnancy could be considered a disability. Specific examples include:

pelvic inflammation (may substantially limit ability to walk); pregnancy-related carpal tunnel syndrome (may affect ability to lift or perform manual tasks); disorders of the uterus or cervix (may necessitate certain physical restrictions to enable full-term pregnancy); pregnancy-related sciatica (may limit musculoskeletal functions); gestational diabetes (may limit endocrine functions); and preeclampsia (may affect cardiovascular/circulatory functions). The new guidance further extends protection to employees who are still in the planning stages of becoming pregnant, including those who are undergoing fertility treatments or who have announced plans of becoming pregnant.

These are only a few of the many changes that create a greater need to continually review workplace policies to help protect against a pregnancy discrimination claim. Before creating any new policies or enforcing existing policies that relate to a pregnant or wouldbe pregnant employee, employers should consult with competent employment law counsel to determine if they are operating within the confines of existing laws, guidelines and court decisions. Patricia F. Weisberg is a partner in the labor & employment practice group of Cleveland-based Walter | Haverfield LLP. Contact her at 216-928-2928 or pweisburg@walterhav.com

COMPLIANCE: Smaller companies and individuals may face scrutiny By Patrick F. Haggerty and Lindsey Carr Siegler

ecent actions by the SEC may usher in a new wave of enforcement actions involving small companies and individuals. For many years, it appeared the government only prosecuted large companies for corruption; now small and midsized companies, as well as individual compliance officers, are also at risk when they fail to adhere to the Foreign Corrupt Practices Act

(FCPA) and other regulations. There is no de minimus exception to the FCPA — even small bribes can result in large penalties and fines — and smaller companies are not immune. Notably, in August 2014, the SEC fined Smith & Wesson $2 million for authorizing a third-party agent to provide approximately $11,000 in guns and cash payments to Pakistani police officials. As a result of the bribes, Smith & Wesson won a contract with the Pakistani police to sell 548 pistols for a profit of $107,852. LITIGATION

“This is a wakeup call for small and medium-size businesses that want to enter into high-risk markets and expand their international sales,” Kara Haggerty Brockmeyer, chief of the SEC Enforcement Division’s FCPA Unit, said in a statement. “When a company makes the strategic decision to sell its products overseas, it must ensure that the right internal controls are in place and operating.” TRANSACTIONAL

The SEC has also warned that individuals may be personally liable for misconduct. Last month the SEC brought an enforcement action against a Siegler former Wells Fargo compliance officer who allegedly altered a memorandum regarding her review of suspicious trades before providing it to the SEC. According to the SEC, by altering the document, the compliance officer “made it appear that she performed a more thorough

review in 2010 than she actually had.” Without doubt, a robust selfassessment and appropriate compliance program is essential for any company doing business abroad. Patrick F. Haggerty chairs Frantz Ward LLP’s Litigation Practice Group where he and Lindsey Carr Siegler, litigation attorney, advise clients on compliance related issues, including the Foreign Corrupt Practices Act. Contact Haggerty at 216-515-1605 or haggerty@ frantzward.com or Siegler at 216-5151658 or lcarrsiegler@frantzward.com.

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Trial tested and client approved. Sometimes the desired result is our client’s satisfaction with a buttoned-up, iron-clad contract. Sometimes it is our client’s appreciation of our guidance in implementing sound workplace policies. And other times, it is winning a defense verdict that saves our client hundreds of thousands of dollars. In all cases, we are focused on the bottom line, which is achieving our client’s desired outcome in the OQUV GHƒEKGPV YC[ RQUUKDNG

>Business Litigation • eDiscovery • Business Transactions • Employment Law -Andrew Dorman Reminger Co., LPA Commercial Litigation & Professional Liability Chair >Want more straight talk? Visit Reminger.com to learn more. AKRON CINCINNATI CLEVELAND COLUMBUS SANDUSKY TOLEDO YOUNGSTOWN INDIANAPOLIS FT. MITCHELL LEXINGTON LOUISVILLE

Results. Period. 101 W. Prospect Avenue, Suite 1400 Cleveland, OH 44115 216.687.1311 www.Reminger.com

LEGAL GUIDEBOOK

L8 November 17 – 23, 2014

PROTECT YOUR BUSINESS:

Properly manage the E-Discovery Process

epresenting clients in commercial, financial and employment disputes comes with certain challenges. Counsel with litigation experience, as well as substantive knowledge about a client’s dispute, have helped manage those challenges for years. With modernday technology, however, managing electronically stored information (ESI) during a lawsuit presents new challenges for clients and counsel alike. Knowledgeable counsel can help clients navigate the e-discovery process and avoid potential pitfalls and unnecessary expenses. E-discovery — the exchange of ESI during the course of a lawsuit — is now a fact of life in all litigation. Whether it is a wrongful termination lawsuit, shareholder dispute, or securities litigation case, the discovery process will undoubtedly involve some aspect of e-discovery. Preserving ESI Preservation of ESI is the first, and possibly the most important, step in the e-discovery process. The duty to preserve potentially relevant ESI is triggered when the client knows or should know that the evidence is relevant to future litigation. When the duty is triggered, a client must implement what is called a “litigation hold,” a protocol

designed to ensure that all potentially relevant sources of ESI are preserved. Implementing a litigation hold should be collaborative between client and counsel and should involve the identification of relevant client witnesses and their sources of potentially Dorman relevant ESI. Not only should clients and counsel collaborate among themselves, they should speak to the key players within the organization so that counsel and client Nally can meet the court’s rules and expectations to identify, preserve, and search all sources of ESI that may become important. A litigation hold should also cause clients and counsel to analyze a company’s information technology systems, and specifically, any document retention policy that may lead to the automatic purge or destruction of ESI. Companies often have systems in place to automatically purge emails or other data after a certain time period. These systems must be understood and addressed once the duty to preserve is triggered. In a recent court opinion out of the Southern District of Ohio, Judge Kemp reaffirmed the important of proactive litigation hold procedures, stating that “counsel cannot turn a blind

Efficiency in processing documentation

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Knowledgeable counsel can help clients navigate the e-discovery process and avoid potential pitfalls and unnecessary expenses.

eye to a procedure that he or she should realize will adversely impact the search for discovery. Once a ‘litigation hold’ is in place, a party cannot continue a routine procedure that effectively ensures that potentially relevant and readily available information is no longer reasonably accessible.” Failing to implement, monitor and enforce a proper litigation hold can lead to serious consequences. The failure to preserve documents and information may lead to a finding of spoliation —

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By: Andrew J. Dorman and Brian P. Nally

that is, a finding that a party destroyed or altered documents or information that would have been important to the case. A finding of spoliation can lead to many negative consequences. In the most severe situations, a court can dismiss the spoliating party’s claims entirely. Alternatively, a court can prohibit a spoliating party from introducing evidence in support, or defense, of a particular claim or instruct the jury to apply what is called an “adverse inference instruction,” which instructs the jury to assume the documents or information destroyed or altered would have been detrimental to the spoliating party. A court may also enforce traditional monetary sanctions, which often include an order that the spoliating party pay for certain attorney’s fees incurred by the opposing party. In addition to these sanctions, a finding of spoliation often goes hand-in-hand with a claim of punitive damages, which significantly increases the potential exposure of a case.

After the preservation stage, e-discovery then shifts into processing and producing relevant documents and information. Because the quantity of documents and information in an e-discovery project can be shockingly large, it is imperative that clients retain knowledgeable counsel to craft targeted search terms and a sophisticated e-discovery protocol. These procedures can reduce the amount of data within the e-discovery project and, in turn, reduce the amount of attorney review time and associated legal fees. As President Lincoln said, “give me six hours to chop down a tree and I will spend the first four sharpening the axe.” Sharpening the focus of an e-discovery project at the outset will have the net effect of significantly reducing the overall time and expenses of the project. E-discovery can be overwhelming and potentially costly to clients. Knowledgeable counsel can help navigate clients through the e-discovery process, protect clients from potential pitfalls and their associated risk and increased exposure, while at the same time reducing the overall cost of the project. Under current court rules, protecting your business goes beyond just defending the allegations of a lawsuit; it involves the proper management of ESI before and after a lawsuit is filed. Andrew Dorman is a shareholder with Reminger Co., LPA in Cleveland, and serves as the chair of the Commercial Litigation, Professional Liability and Financial Services Professional Liability practice groups. Contact him at 216-430-2169 or adorman@ reminger.com. Brian Nally is an Associate with Reminger Co., LPA in Cleveland, serves as Chair of the E-Discovery practice group. Contact him at 216-430-2106 or bnally@ reminger.com.

LEGAL GUIDEBOOK

November 17 – 23, 2014 L9

The Human Element of Data Security and Privacy Compliance By Aaron Mendelsohn

ver the past two years there has been increased focus in the mainstream media and business world on data security and privacy. With the NSA revelations brought forth by Edward Snowden last year and a string of high-profile data breaches involving consumer personal data such as Target, Home Depot, and most recently, JPMorgan Chase, issues surrounding the protection of data have become a national talking point. But what is often overlooked in the national discourse on data security and privacy is the importance of educating and training employees to better understand proper

data management practices in order to identify risks and better protect their employer’s critical information. Often considered the “weakest link” in the protection of critical information, employees need to be properly trained and educated by employers to understand what to do with the information necessary to perform their job duties, and what rules and policies are in place to protect it. It’s not enough for an organization to simply post an acceptable use policy or privacy policy. Employers should be training their employees regularly to understand how to properly process, transfer, and store the company’s information, and to be able to identify data security risks and popular attack vectors.

Basic employee training should include information about how to securely transfer data, whether to another employee, a vendor, Mendelsohn or to external media such as a USB drive or external hard drive. It must also include information about popular data security attacks and risks such as phishing attacks, social engineering, smash and grabs in parking lots to steal laptops, and the use of unapproved webmail and consumer cloud storage sites. Further, training must also provide information on how to report suspected data breaches

to the appropriate company contacts. Companies should also consider some enhanced training to specific functions like IT and HR that regularly process critical information and personal data, and senior executives that are vulnerable to targeted attacks. Not all companies will need the same level of training, and much of the content will be tailored to an organization’s specific needs. Companies should always contact their legal professionals for advice on how to put into place effective employee training. Employee training for data security and privacy is not a one and done deal either. It’s an ongoing process where new employees are trained upon hiring,

and then the entire organization receives annual refresher training. And employee training must be part of a larger data security and privacy framework that includes proper policies, and organizational and technical controls But it all starts with your employees, and with an educated workforce an enterprise will begin to properly protect itself from the data security and privacy risks facing businesses today. Aaron Mendelsohn is an associate in the 3iP Group where he practices in the areas of technology transactions and data security, privacy and data/document retention. Contact him at 216-363-4635 or amendelsohn@beneschlaw.com.

Information Governance: What Every “D&O” Needs to Know By Brent M. Buckley

core duty of directors and officers (Ds&Os) is to protect corporate assets, and those of company business partners. This includes protecting confidential information, reputation and goodwill. And it requires oversight of management to develop systems that identify, mitigate and manage risks. While Ds&Os are not required to have a detailed understanding of technology, they should have a direct

understanding of the company’s cybersecurity protocols for preventing and responding to a data breach. Ds&Os should allocate sufficient time on board and corporate meeting agendas to review cybersecurity, and evaluate what steps have been, or need to be, taken to manage cyber risks. It is then that Ds&Os should determine if specific cybersecurity insurance is needed and whether it is adequate to cover possible expenses to the company if a data breach occurs.

Cybersecurity insurance typically covers expenses for (i) business interruption, including lost revenues from network disruption; (ii) Buckley “event” management, including notifications, legal, public relations and electronic data loss; (iii) cyber extortion/ransom, including investigation and reimbursement of expenses to assure continuity of

operations; and, (iv) network security and privacy, including the defense of claims, and payment of settlement and damages. In addition to insurance protection, the documentation and audits that insurers require provide an opportunity to implement prevention measures, along with loss-detection and reporting systems. It has been estimated that nearly 90% of “corporate assets” are now maintained on an electronic platform and therefore are susceptible to a tech/

cyber crisis. While it is not easy to prove the legal duties Ds&Os have for protecting electronically stored information, some claims are starting to succeed. And, aside from litigation concerns, even a court victory will not remedy reputation, operational or enterprise damage. Brent M. Buckley is the managing partner of Buckley King. Contact him at 216-685-4801 or buckley@ buckleyking.com.

The Ohio Chapter of the Legal Marketing Association (LMA) is pleased to partner with Crain’s Cleveland Business on its 2014 Legal Guidebook. LMA is an international not-for-profit professional organization and the universal voice of the legal marketing and business development profession. It serves as a forum where CMOs and specialists at all stages of their careers from firms of all sizes can join with consultants, vendors, lawyers, marketers from other professions and marketing students to share their collective knowledge to benefit themselves, their employers and their clients. THE AUTHORITY FOR LEGAL MARKETING

www.legalmarketing.org/ohio

LMA’s Ohio Chapter consists of over 100 members in cities across the state. To learn more about our chapter, upcoming programs and ways to get involved, please contact president ERIN HAWK at ehawk@porterwright.com or 614.227.1983 or president-elect and membership chair JENNIFER SHANKLETON at jshankleton@brouse.com or 330.535.5711.