CCBJ March-April Issue

Page 1

Corporate Counsel Business Journal March  April 2020 Volume 28, Number 2





Rise of the GC

As Reputational Leader

Shhhhh. Insurers Are Crushing “Silent Cyber”

Data Drives Better Relations With Outside Service Providers

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


In This Issue



Corporate Counsel Business Journal LAW BUSINESS MEDIA

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

Kristin Calve

Taking Control, With a Flexible Grip Kristin Calve


Kimberly Fine


FRONT . . . . . . . . . . . . . . . . . . . . . . . . . 5

Dylan Shepard

PULSE . . . . . . . . . . . . . . . . . . . . . . . . . 11

Chelsea Dewan

11 The Rise of General Counsel as Reputational Leaders Richard Torrenzano



Neil Signore


Lainie Geary

14 McGuireWoods and Bank of America Partner for Progress On Diversity & Inclusion

Amy Lemel

16 Does FAA Prevent States from Barring Mandatory Arbitration?



Matthew Tortora


Pat Hanelt


Rob Williams WRITER

Taylor Highbloom

Triston “Chase” O’Savio

19 Navigating the Gray Zones in Fast-Paced Cannabis Sector

Howard Sklamberg

21 Taking Advantage of an Emergent New Area of Evidence

Daniel Regard

IDEAS . . . . . . . . . . . . . . . . . . . . . . . . . 25 25 Adapting to the Steady Elimination of “Silent Cyber” Coverage Daniel J. Healy



28 Choose Local Counsel with 5-W’s-and-an-H Approach


POSTMASTER: Please send address changes to Corporate Counsel Business Journal, P.O. Box 3248, Northbrook, IL 60062; by emailing; by visiting our online portal at; or by calling 847-559-7559. CORPORATE COUNSEL BUSINESS JOURNAL (ISSN: 1073-3000), March 2020, volume 28, number 2. 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.

Esch McCombie

31 As ADR Continues to Surge, The Experience of the Mediator And Arbitrator is the Key Differentiator

The Honorable John P. DiBlasi

34 Drone Technology Soars to Dizzying Heights Despite the Drag of Regulatory Uncertainty

Jennifer Richter

38 The Business Case for a Diverse Supplier Program

Kelly Atkinson and Debi L. Mitchell

INTELLECTUAL PROPERTY . . . . . . .41 41 Analyzing the Panoply of Issues Swirling Around Life Sciences Patent Litigation

Wanda French-Brown, Irene Hudson and Benjamin Hsing

44 Life Sciences Litigation Heats Up Around Patent Eligibility And Generics

Betsy Flanagan

46 Guiding Chinese Companies in U.S. IP Disputes Requires Counsel with Trust And Experience

Scott D. Stimpson and Trent S. Dickey

OPS . . . . . . . . . . . . . . . . . . . . . . . . . . . .51 51 Using Data to Foster Trusted Partnerships

Aaron Pierce

54 As ELM Platforms Mature, Law Departments Gain Ground On Business Goals

Jonah Paransky

56 It Takes the Whole Ecosystem to Address Law Department Issues

Colin McCarthy

59 Future Seats at the Table Reserved For Business Savvy GCs with Soft Skills

Ari Kaplan

61 The Expanding Remit of the Corporate Legal Department

Bill Piwonka

64 The Limits of Incremental Improvements

Casey Flaherty

Kristin Calve At the Table

Taking Control, With a Flexible Grip  As deputy general counsel at a real estate investment and management company. Amber Murray responds creatively to legal and business issues, but as the director of her career, she plots her own path. CCBJ: What led you to enroll with Jamestown? Amber Murray: I started my practice at King & Spalding in the commercial real estate transactions practice group. I worked for a number of clients who were developers and real estate private equity firms, and did some real estate finance, with limited work for Jamestown. Noah Peeters was also at King & Spalding; he did more work for Jamestown, and in 2012, he came in-house and is now our general counsel. Shortly after he joined Jamestown, the in-house legal team here realized that they needed another mid-level attorney, and he reached out to me. The work fit perfectly with what I was already doing, and I liked the types of properties that Jamestown owns. I knew they did really sophisticated work, and I was interested in learning more about the business side of real estate, not just the transactional side. Andthe move came at a good time in my career, because I was a seventh-year associate, and I’d decided that I wasn’t interested in pursuing partnership. What’s your leadership style like? I allow people the freedom to grow. I give them a fairly large amount of autonomy so that they can develop their own style and come back to me if they need advice, so I’m not micromanaging them. I am on the more introverted end. I tend to do a lot more listening, and I think that helps sometimes with leadership, because I’m often the person who’s not always talking the loudest. I synthesize everyone’s comments and come to a compromise position that addresses all of their concerns.

time was the Executive Assistant to the Chancellor of North Carolina Central University in Durham, NC. She is a lawyer by training, a family friend and was one of my mentors. She was always very organized and poised under pressure — people throughout the university had a large amount of respect for her intellect and expertise. As I was considering going to law school, she helped me think about the best schools to attend and what kind of practice I might be interested in pursuing.

Who’s influenced you in your career?

What qualities do you look for when hiring for your team?

The year after I graduated from college I worked as the administrative assistant to Rosalind Fuse-Hall who at the

We look for people who are highly intelligent, who are hard workers, but also who are willing to be flexible and creative.



NETWORK Even though we are a real estate company, much of what we do demands a high level of creativity. We own retail, office and multifamily properties across the United States, and we aim to create places where people want to be. We’re a vertically integrated company, so we have our own creative and marketing teams planning events to draw people to the properties. With that comes a lot of contractual work. We need attorneys who are willing to be nimble and creative. When one of our creative and marketing team members comes to us and says, “Hey, we’re going to have a holiday event, and Santa is going to zip-line off the roof of a building,” we can’t be the kind of people who say, “No, absolutely not. Can’t do that.” So we really do look for people who are flexible and like to have fun; people who want to enjoy their job and be continuously learning every day. We’re presented with new issues as technology continues to emerge and privacy laws rapidly evolve. We have to be quick on our feet. What’s the best career advice you ever received? Years ago, one of the partners in my practice group told me to take control of my own career. At the time, I thought that was very difficult, since I was only about a second-year associate. But it has proven to be some of the best career advice I’ve ever gotten. For me, it means always thinking about what I want out of a role or out of a workplace situation and that I have to go find it. Particularly now that I’m in an in-house setting, if there’s a business line that I want to learn more about or an area of the business that I don’t quite understand, if I’m taking control of my career, that means I need to go find the people in that group and build relationships with them so that I can ask them questions and learn more about that area. If there’s something that I don’t understand inthe legal world, it’s incumbent upon me to go and learn more about it and find some resources. This is my journey. It doesn’t have to look the same as my coworkers or other lawyers or other in-house lawyers even. I can do it however I want, but I have to drive the car. What are some changes you’re hoping to see within the profession? I hope to see more people with diverse backgrounds working at higher levels in the legal profession. Recent studies show that most large law firms still have relatively low percent­ages of female partners and even fewer partners who identify as racial and ethnic minorities. Over the next few years, I’m hopeful that law firms and corporations with in-house legal departments will continue to have serious and transparent discussions about how to recruit, retain and promote diverse attorneys and how to encourage inclusion in the workplace. 

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 Akin Gump Strauss Hauer & Feld LLP Barnes & Thornburg Clifford Chance Jones Day McGuireWoods LLP McNees Wallace & Nurick LLC National Association of Corporate Directors (NACD) Sills Cummis & Gross P.C. Weil, Gotshal & Manges LLP

Advisors American Arbitration Association Exterro FRONTEO FTI Consulting iDiscovery Solutions JAMS

LexisNexis CounselLink

OpenText™ Discovery Wolters Kluwer’s ELM Solutions Zapproved

Contributors AlixPartners LLP


Anderson Kill

Fish & Richardson

AST Brainspace Burns & Levinson

Legal Suite Septeo Group QDiscovery Stradling Yocca Carlson & Rauth

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




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Corporate Ops at the Crossroads

There is no denying the explosive growth of the corporate legal ops function. CLOC, as always, is Exhibit A, but the 12th Annual Law Department Operations Survey also tells the tale. Coming out of the Great Recession, inhouse teams slowly but surely started adding ops professionals. From a steady 3% of companies adding their first ops pro in 2009, 2010 and 2011, 30% added ops pros over the next five years. Then came the surge as more than 30% added ops staff from 2017-19. It’s an incredible story, but what happens when the next recession hits? Survey respondents are concerned about an impending resource pinch. “While it is true that adding legal ops professionals results in cost savings,” says Brad Blickstein, publisher of the survey, “I don’t expect that growth to continue through the next recession. It’s counterintuitive, but corporations can simply not politically support the addition of headcount in the law department in the face of hiring freezes or layoffs elsewhere.” David Cambria, a corporate legal ops veteran who now serves as chief services officer at Baker McKenzie, has been clamoring since the first survey for ops professionals to up their impact. “Perhaps our own ways of defining ourselves are part of the problem,” he writes. “The legal operations profession isn’t really a role, as much as it is a series of interconnected disciplines.” Cambria, now writing from his law firm perch, is skeptical of the ability of ops professionals at law firms and corporate law departments to align interests. “Despite all we have in common,” he writes, “legal operations professionals at law firms and legal departments often remain at odds, and unfortunately, in some cases, those differences are only becoming more entrenched. (See charts below.) This is not productive and can be harmful to our clients, their businesses and our own profession.”


33.3% AGREE 66.7% DISAGREE







87.7% AGREE




Briefly ABA Business Law Section to present program on ethics and privilege issues confronting inside and outside corporate counsel. Akin Gump advises MBU Capital on acquisition of Union Bank UK. Former federal prosecutor Michelle Bradford joins Barnes & Thornburg in D.C. office as partner. Burns & Levinson sponsors WIN Lab for third consecutive year.

The Expanding Universe of the CLO The 2020 ACC Chief Legal Officers Survey is compiled from the responses of more than 1,000 CLOs and GCs across 20 industries worldwide. Always worthwhile, the latest version is especially rewarding – insightful and useful, as ever, but also outstanding for its use of graphics to display and explicate complex data. On this page and the next, you'll find charts illustrating top takeaways from the survey's four main areas:  Continued expansion of the role and reach of the CLO (Chart A)  How legal increases value to the business (Chart B)  Meeting the challenge of growing industry-specific regulation (Chart C)  Deploying new technologies to drive greater efficiency (Chart D)

CHART A: Percent of CLOs reporting to CEO or top executive

Clifford Chance announces that Peter J. Mucchetti has joined as a partner in its Americas Litigation & Dispute Resolution practice. Angela Crawford and Lila Acharya launch new corporate compliance and investigations legal boutique, Crawford & Acharya pllc. DRI announces its 15th annual diversity law student scholarship competition. Novartis launches new preferred firm program for legal services. EisnerAmper promotes Michael Breit, Christopher Loiacono and Jay Weinstein to Vice Chair. Federal Judges Survey from Exterro weighs in on new data privacy laws and evolving e-discovery practices. Akin Gump advises CenterPoint Energy in $400 Million sale of natural gas retail business. John Adkisson is announced as the new President and CEO of Fish & Richardson.









CHART B: CLOs rate issues from important (10) to unimportant(1) REGULATION | COMPLIANCE




6.69 TAX


Clifford Chance advises Eletrobras in a $1.2 billion notes offering.

CHART C: New issues your board has been asking about

Fish & Richardson wins jury verdict for Wasica and BlueArc in long-running patent dispute. George Serafin joins FTI Consulting’s Health Solutions Practice. Ipro announces strategic partnership with NetGovern. QuisLex achieves HITRUST CSF® certification to manage risk, improve security posture and more. James Healy-Pratt, Esq., joins JAMS in New York.

CHART D: Trajectory for select trends/technologies BLOCKCHAIN IN LEGAL TECHNOLOGY APPLICATIONS











12.7% 11.3%

McGuireWoods selects Wanda French-Brown as representative for the Leadership Council on Legal Diversity 2020 Fellows Program.








Leidos announces $1B acquisition of L3Harris Security Detection. Matthew Kerzner, director of EisnerAmper’s Center for Family Business Excellence, earns PH.D.



JPMorgan Chase will announcea number of policies to increase restrictions on global coal funding and to end direct project funding of Arctic oil and gas projects.

17.6% 17.1%

Crystal Clark, attorney with McNees, to serve as general counsel to P.A. senate republican caucus. Weil advises Front Yard Residential Corporation in its $2.3 billion sale to Amherst Residential. Carol Verish Houck joins McNees’ Real Estate Practice Group. NACD and ISA release new guide for cyber-risk oversight.

15.9% Will accelerate

Too difficult to tell



EisnerAmper participates in NYC's inaugural career discovery week. Orrick advises on $100 million green revenue bond offering for Oscars® museum. Ipro announces Ipro Tech show to take place at Arizona State University College of Lawin 2020. Joseph P. Scorese joins Sills Cummis & Gross in Tax, Trusts and Estates Practice. Thomson Reuters introduces Legislative Insights providing actionable data relating to proposed federal legislation. Jim Hawkins and Jessica L. Roberts, professors at University of Houston Law Center, call for stronger consumer safeguards to protect the privacy of personal information. Robert F. Young returns to McNees in their Energy & Environmental Law Practice Group. Weil secures grant of disability benefits claim for 27-year-old U.S. army veteran. Kevin Wood, Corinne Smith, Marshall Meringola and Michael Smith join Winstead PC’s Healthcare Industry Group in the firm’s Austin office. Wolters Kluwer’s ELM Solutions introduces LegalVIEW® BillAnalyzer Data Service. Women in eDiscovery announces 2020 annual sponsors, launching new chapters globally. Aaron Marienthal, McGuireWoods associate, to Join PayActiv. Submit your announcements to



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.

WEBSITE: SALI Alliance It’s taken almost two years, but the SALI Alliance is starting to bear fruit. SALI (Standards Advancement for the Legal Industry) is an independent organization of law firms, companies, solution providers, industry organizations and academics working to develop “open, practical standards” for the legal industry. The organization recently released its Legal Matter Specification Standard (LMSS 1.0), which provides a common, party-neutral language for describing legal matters that will serve as a starting point for the exchange of information as organizations apply analytics to their legal data. According to Toby Brown, SALI board member and chief practice management officer at Perkins Coie, this is a milestone achievement. “It is rewarding to see the standard available for wide use for the pursuit of legal industry innovation,” he says. For more, go to

REPORT: Legal Tracker LDO Index The Thomson Reuters Legal Tracker LDO Index draws benchmarking data comprised of more than $90 billion in legal spending from 1,400 legal departments and 62,000 law firms, along with responses to a July 2019 survey from 210 legal departments. As such, it is a rich source of information Percentage of work handled in-house and insight. That’s especially true of 7% Decreasing the fourth edition, which follows on reports in Spring 2017, Fall 2017, 2018 40% Flat - no change and now 2019. “As has been shown in each edition of the Index thus far,” Increasing 53% says the Executive Summary, “legal department staff have been increasingly relied upon to do more. Indeed, 68% of legal departments surveyed are facing Outside counsel spending increasing legal work demands – a 31% Decreasing high-water mark hit last year as well.” Interestingly, as illustrated in the charts 22% Flat - no change to the right, as the percentage of work 47% Increasing handled in-house continues to increase, so does spending on outside counsel, though the percentage of in-house departments increasing their outside counsel spending fell to 47% -- the lowest since Fall 2017.

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. Kelly Atkinson is an office administrator with Barnes & Thornburg. She works with the firm’s diversity, development and inclusion director and the diversity and inclusion committee to develop and execute new programs, events, and initiatives to promote the platform of talent sponsorship, integration with the business, and culture. P. 38 The Honorable John P. DiBlasi has an illustrious career that includes10 years spent as Justice of the Supreme Court, Commercial Division where he resolved hundreds of matters. As a full-time neutral with NAM, his ADR practice encompasses a wide and varied range of cases P.31 Trent S. Dickey is a Member of Sills Cummis & Gross. He has more than 35 years of experience representing major domestic and foreign corporations in all aspects of intellectual property and complex commercial litigation. P.46 Casey Flaherty, Director of Legal Project Management at Baker McKenzie, is a former Biglaw associate and corporate counsel who moved into legal operations consulting for law departments and law firms before taking on his current challeng. P.64 Betsy Flanagan is a principal at Fish & Richardson, where she focuses her practice on complex, high-stakes life sciences litigation. P.44 Wanda French-Brown is a partner at McGuireWoods. She represents clients in a range of technologies, including biotechnology, medical devices, healthcare diagnostics, and pharmaceuticals with a concentration in Hatch-Waxman litigation. P.41

Daniel J. Healy is a partner in the Washington, D.C., office of Anderson Kill, LLP. He is the deputy co-chair of the Cyber Insurance Coverage practice group and a member of the firm’s Insurance Recovery practice group. He previously served as a trial attorney at the U.S. Department of Justice, where he received numerous awards. P.25 Benjamin Hsing is a partner at McGuireWoods. He has nearly 30 years of experience litigating patents in a range of technologies, including pharmaceutical compounds and formulations, treatment methods, medical devices and imaging devices. He has tried numerous high-profile cases on behalf of major pharmaceutical and technology companies. P.41 Irene Hudson is a partner at McGuireWoods and focuses her practice on Hatch-Waxman and medical device litigation. She represents domestic and international biologics and pharmaceutical and medical device companies, including coordinating multijurisdictional litigation and managing discovery. P.41 Ari Kaplan, founder Ari Kaplan Advisors, is a leading industry analyst and the principal researcher for a variety of widely distributed benchmarking reports. He often speaks with students and professionals on how they can leverage technology and distinguish themselves in the downturn. P.59 Colin McCarthy is the CEO and co-founder of Legal Operators. With legal and accounting backgrounds and experience in the tech industry, he has managed systems including SharePoint, Apttus and Contractlogix. P.56

Esch McCombie practices in the McNees Real Estate and Pipeline & Oil/Gas Infrastructure practice groups. He focuses his practice on land use matters, including obtaining permits and approvals at the municipal, county and state levels. P.28 Debi L. Mitchell is the director of office operations at Barnes & Thornburg, overseeing the firm’s facilities and support services needs. She helps implement firm-wide polices concerning operational matters, including document management and disaster recovery, approving firm-wide operational contracts and agreements. P.38 Triston “Chase” O’Savio is an attorney at McNees Wallace & Nurick’s Labor and Employment Group. He provides counseling to employers on a range of labor and employment matters, including compliance assistance with laws such as the FMLA, ADA, Title VII, and wage and hour laws. P.16 Jonah Paransky is executive vice president and general manager of ELM Solutions. In this role, he is responsible for leading the overall performance and growth strategy of the business unit globally. P.54 Aaron Pierce is the vice president and general manager of the CounselLink business. With over 20 years of technology leadership experience, and over 10 years in the legal software space, Aaron is passionate about helping legal professionals achieve greater outcomes through data-driven decisions. P.51

Daniel Regard is the president and CEO of iDiscovery Solutions. A programmer and an attorney by training, Mr. Regard has conducted system investigations, created data collections, and managed discovery on over a thousand matters. Prior to founding iDS, he was the national director of e-Discovery for LECG. P.21 Jennifer Richter is a partner with Akin Gump. Richter has represented technology and communications companies and investors for nearly three decades. P.34 Howard Sklamberg is a partner with Akin Gump, specializing in advising clients on matters related to U.S. FDA regulation and policy. Sklamberg also focuses his practice on a wide range of compliance and enforcement issues. P.19 Scott D. Stimpson is chair of the Sills Cummis & Gross Intellectual Property Practice Group. He has practiced intellectual property litigation and counseling for 30 years, involving a wide range of IP issues including patents, trademarks, copyrights and trade secrets. P.46 Richard Torrenzano is chief executive of The Torrenzano Group. For almost a decade he was a member of the New York Stock Exchange's Management and Executive committees. P.11

Bill Piwonka oversees all marketing functions for Exterro. His background is rooted in business-to-business marketing operations. During the past 20 years‚ he has led marketing teams and initiatives spanning strategy‚ product marketing‚ product management demand generation and more. P.61



Pulse The Rise of General Counsel as Reputational Leaders RICHARD TORRENZANO THE TORRENZANO GROUP cal advertising, which may well turn out to be a smart

Richard Torrenzano speaks on the evolution of the role of general counsel, especially as it pertains to the upkeep and oversight of a company’s reputation navigating a modern day environment.


as any company in living memory faced as many high-profile controversies and setbacks as Facebook? The company confronted hot-button issues – from the Cambridge

Analytica scandal, to data breaches, to antitrust actions – with a tone deafness unique among major corporations.

And yet, there are signs that Facebook is beginning

to get smart.

Rather than remain in the crossfire of a deeply po-

larized country, CEO Mark Zuckerberg is positioning Facebook to serve as the neutral curator of the national dialogue. He is leading an intense, internal discussion

strategy of enduring short-term heat for long-term insulation.

The company is also beginning to learn to set the

agenda. When Zuckerberg and his wife, Priscilla Chan, recently appeared on the CBS Morning News, they talked casually with anchor Gayle King across a kitchen counter, presenting an appealing, sympathetic image.

No doubt, smart image consultants are behind this

turnaround. But I would not be surprised if part of Facebook’s new approach in style and substance is the handiwork of someone who came on board in April – general counsel Jennifer Newstead.

If so, this would be in keeping with a growing trend

in corporate America – the rise of the general counsel in reputational leadership. A general counsel is arguably the best positioned member of the C-Suite to coordinate actions across disciplines for crisis response.

While not every company can call on the former

and debate among company leaders to seek a safe path

top counsel at the State Department, companies are

between competing demands of two parties on politi-

turning to general counsel to help manage complex CORPORATE COUNSEL BUSINESS JOURNAL


General Counsel have always had a special superpower: privilege. interplay between public perception – stimulated by coverage and commentary – and the law. General counsel have always had a special “superpower” – as members of the bar, they can try to shield communications about a legal issue as privileged. However, protection of privilege for in-house counsel has become complicated and been steadily eroding. They have long had a duty to educate employees and outside advisors on how and when to claim privilege. They also have added fiduciary duties as members of the bar. Being on the frontline with authorities and regulators, they know how to avoid traps that could jeopardize the company as well as their own licenses. For years, it was a given that general counsel were siloed in this legal space. If the role of communications advisors was to counsel outspo12


kenness, the role of the general counsel was to urge CEOs to play every card close to the vest. Newstead is part of a new generation of leaders that understands that a company can fight negative coverage and public sentiment in a way that reduces, rather than increases liability. As these leaders have emerged, the offices of general counsel have become integral to crisis response. That deep interaction between media, social sentiment online and actions of politicians and regulators call for counsel with a full range of political and communication tools. A general counsel today must be able to read and understand the Code of Federal Regulations, as well as policymakers, media and the ultimate jury, the public – which are not only customers – but in some cases shareholders.

Another reason general counsel is playing a more central role in corporate leadership is because that office has more flexible resources to respond to crises than do peers in marketing and communications. Budgeting for communications and marketing is minutely planned, and any deviation will require sacrificing something already on the books. A budget of a general counsel is built with leeway for the unexpected. General counsel clout has long been interdepartmental and companywide. General counsel can issue mandates across departments with a gravitas that a chief technology, marketing, sales or communications officer cannot. And, a general counsel is positioned to manage day-today details of a crisis in a way CEOs should not. This independence also leaves general counsel better positioned to balance competing objectives. Like the CEO and CFO, general counsel

Richard Torrenzano is chief executive of The Torrenzano Group. For almost a decade he was a member of the New York Stock Exchange’s Management and Executive committees. He has counseled chief executives and boards of corporations in the United States, Europe, Asia and Latin America, as well as several heads of state.

excel at the difficult task of weighing a company’s needs. In these instances, the general counsel can serve as excellent mediator to ensure the entire company is pulling together. Many also appreciate that the best time to prepare for a crisis is before one happens. The general counsel often takes the lead by putting together an interdisciplinary team capable of understanding and responding to a wide array of potential threats to the company.

Counsel are often called on to make sure everyone, from the designated spokesperson to customer-facing personnel, understand tradeoffs between reputation and legal jeopardy so the team can move swiftly but carefully. To be most effective, general counsel must learn how to prepare for a crisis with a brutally honest evaluation of a company’s reputational profile. In such an evaluation, it is vital to be able to call upon outside consultants for social and

traditional media expertise to analyze and discern sentiment of various publics about a company or its products. Such advisors bring related aspects of effective communications, knowing when to abandon legalese in favor of “human-speak.” It took an embarrassed United Airlines more than several tries when it addressed the forced removal of a passenger in 2017 to use empathetic language most people could understand and relate to. The United de-

bacle should be a searing lesson to all business leaders to speak and write in plain English, not in corporate acronyms or legalese.

The rise of the general

counsel within the leadership of a company reflects growing complexity and interplay between reputation and legal action. As this complexity increases, we can expect to see the general counsel play a more important leadership role in corporate strategy, risk, as well as reputational protection and response. 



McGuireWoods and Bank of America Partner for Progress On Diversity & Inclusion


cGuireWoods and Bank of America

joined forces in an aweinspiring setting Feb. 25 to elevate the discussion of diversity and inclusion in the legal profession. The event, “Partnering for Progress in Diversity & Inclusion,” drew more than 200 attorneys from firms, corporations and government to the Smithsonian Institution National Museum of African American History & Culture in Washington, D.C.

McGuireWoods Chairman Jonathan Harmon led a discussion of the challenges and opportunities facing companies and law firms and their shared need to make meaningful progress building and nurturing diverse and inclusive teams. Joining Harmon were panelists Amy B. Littman, Bank of America’s deputy general counsel and managing director; Mark W. Johnson, executive vice president and chief legal and governance officer of Kimball

When I look at this wonderful panel and the many leaders in this space who are in the room tonight, it gives me great optimism. — JONATHAN HARMON



International; Robert J.

added: “When I look at

Grey Jr., president of the

this wonderful panel and

Leadership Council on

the many leaders in this

Legal Diversity; and Wade

space who are in the room

J. Henderson, former

tonight, it gives me great

president and CEO of the


Leadership Conference on

Civil and Human Rights.

of America conducts

extensive analysis to

Harmon acknowledged

Littman said Bank

D&I progress “has been

ensure its outside law

stubbornly slow,” but

firms assign diverse legal

teams to its matters, with women and lawyers of color playing substantive roles. When the bank evaluates law firms, “we want to know what you achieved that year, what you plan to achieve and, most importantly, we ask what we can do to work with you and help the effort.”

Johnson, a former McGuireWoods litigator, encouraged creativity: “We have the power to shape trajectories, to look into what’s coming up in the pipeline and to work with law firms to make sure the right programs are in place. I love the fact that companies are taking different approaches to this issue because that’s

what we should be doing. There’s no one-size-fitsall solution.” Grey called on law firms and corporations “to be intentionally bold about the next step we take. This is the type of conversation and the type of engagement we have to have.” Henderson said McGuireWoods’

collaboration with Bank of America for the “Partnering for Progress” event was groundbreaking. “I really want to commend both Bank of America and McGuireWoods for coming together to sponsor this event. I hope other banks and law firms can be encouraged to try to do what we’re doing tonight.” 



Does FAA Prevent States from Barring Mandatory Arbitration? TRISTON "CHASE" O'SAVIO MCNEES WALLACE & MURICK

 Recently enacted state laws that prevent employers from requiring mandatory arbitration for claims of sexual harassment by employees have been challenged as unconstitutional.


n response to the #MeToo movement, several states have enacted laws that prohibit employers from requiring prospective employees to arbitrate sexual harassment claims, asserting that mandatory arbitration effectively forces employees to give up their right to a jury trial. California, Maryland, New Jersey, New York, Vermont and Washington are among the states that have banned mandatory arbitration clauses in employment contracts for sexual harassment claims, despite the U.S. Supreme Court’s confirmation of the enforceability of arbitration agreements under federal law. Critics of mandatory arbitration agreements



argue that they discourage employees from pursuing claims of sexual harassment and conceal alleged employer misconduct from the public. Supporters of mandatory arbitration agreements, on the other hand, assert that they protect parties from wasting time, money and resources in class actions. Proponents of mandatory arbitration agreements have successfully argued that the Federal Arbitration Act (FAA) preempts states from enacting laws that ban arbitration agreements. Courts continue to grapple with this conflict. The following is a compilation of relevant case law and an overview of the pertinent arguments regarding mandatory arbitration prohibitions throughout the country. Conflict Between Mandatory Arbitration Prohibitions and the FAA The Supreme Court recently affirmed the enforceability of arbitration

agreements under federal law – and in its decisions, the Court acknowledged the value of using arbitration agreements as a deterrent to class action litigation.1 The Court has concluded that the FAA preempts state laws that “stand as an obstacle to the accomplishment of the FAA’s objectives,” while acknowledging that the FAA preserves traditional state law defenses to arbitration such as duress, unconscionability or fraud.2 Despite the Supreme Court’s position on this issue, many states have enacted statutes that preclude employers from requiring current employees and applicants to agree to arbitrate future claims of sexual harassment. New York’s Attempt to Ban Arbitration In Latif v. Morgan Stanley & Co. LLC, the Southern District of New York had to decide whether Article 75 of New York’s Civil Practice Law and Rules (CPLR 7515) conflicted with the goals and objec-

tives of the FAA, in violation of the Supremacy Clause of the United States Constitution.3 New York enacted this statute in an attempt to address sexual harassment in the workplace by prohibiting employers from requiring employees to arbitrate sexual harassment claims and by affording accusers the option of a public trial. Shortly after CPLR 7515 took effect, a former employee filed suit in federal court alleging claims of sexual harassment against his former employer. The employer moved to compel arbitration. The former employee argued that CPLR 7515 prevented the defendant from compelling arbitration.4 The court ultimately granted the employer’s motion to compel. In its decision, the court focused on the plain language of the FAA, which states that a written arbitration provision “shall be valid, irrevocable, and enforceable, save upon such grounds as exist

at law or in equity for the revocation of any contract.”5 In other words, an arbitration agreement is enforceable unless the plaintiff can prove a defense based on fraud, duress or unconscionability.6 Conversely, CPLR 7515 created an outright prohibition against the formation or enforcement of arbitration agreements in cases involving sexual harassment, without the need to show fraud, duress or unconscionability.7 As a result, the court held that CPLR 7515’s prohibition against arbitration agreements was preempted by the FAA and granted the employer’s motion to compel arbitration.

Triston “Chase” O’Savio is an associate with McNees Wallace & Nurick in the firm’s Labor and Employment practice group. He previously served as a federal judicial law clerk to the Honorable Judge James M. Munley in the Middle District of Pennsylvania, and he received his J.D. from Penn State Dickinson Law.

California’s Attempt to Ban Arbitration California also recently enacted a similar statute, AB 51, which precludes employers from requiring any applicant or employee “to waive any right, forum, or procedure” for a violation of the Fair

The Supreme Court affirmed the enforceability of arbitration agreements under federal law – and acknowledged the value of using arbitration as a deterrent to class action litigation. Employment and Housing Act or the Labor Code as a condition of their employment, continued employment, or the receipt of any employment-related benefit.8 Employers who violate AB 51 could be subject to misdemeanor criminal liability.9 On December 6, 2019, the U.S. Chamber of Commerce challenged AB 51 in the U.S. District Court for the Eastern District of California.10 The challenge stems from the theory that AB 51 unconstitutionally violates the Supremacy Clause of the United States Constitution because it conflicts with the FAA. The suit seeks not only a declaration that the FAA preempts AB 51 but also a declaration that the FAA’s express language protects both the formation and enforcement of

arbitration agreements, an argument that is consistent with prior case law.11 On January 31, 2020, the Eastern District of California issued a preliminary injunction against the state of California, enjoining the state from enforcing AB 51.12 The state of California is able to file an immediate appeal of the order granting the preliminary injunction.13 However, the injunction will likely remain in place until the court makes a permanent ruling on the preemption issue.

These two decisions

illustrate the uncertainty in this area of law. Although employers in New York and California may currently be able to require employees to sign arbitration agreements as a condition of employ-



ment, the U.S. Court of Appeals for the Second and Ninth Circuits could decide otherwise. Ultimately, the Supreme Court may have to make a ruling on the validity of these laws, which could have widespread implications on the status of arbitration throughout the nation.

Employers in

Maryland, New Jersey, Vermont and Washington should also keep a watchful eye on the following laws, which are not currently being challenged in the federal courts, but could be challenged under similar theories as the above-referenced cases. Maryland H.B. 159614 Maryland’s anti-arbitration law renders null and void all agreements or provisions in employment contracts requiring arbitration of prospective sexual harassment claims and claims of retaliation arising therefrom. Employers are prohibited from taking “adverse 18


action” against employees who fail or refuse to enter into agreements prohibited by the law. An “adverse action” includes discharge, suspension, demotion or discrimination in the terms, conditions or privileges of employment, or any retaliatory acts that result in a change to the terms and conditions of employment that would dissuade employees from asserting their rights under the law, or discourage others from testifying in an action involving violations of the law. New Jersey S12115 Employers are prohibited from entering provisions in employment contracts that waive an employee’s substantive and procedural rights or remedies relating to a claim of discrimination, retaliation or harassment. The amendment further provides that “no person shall take any retaliatory action, including but not limited to failure to hire, discharge, suspension,

Ultimately, the Supreme Court may have to make a ruling on the validity of these laws, which could have widespread implications on the status of arbitration throughout the nation. demotion, discrimination in the terms, conditions or privileges of employment, or other adverse action, against a person, on grounds that the person does not enter into an agreement or contract that contains a provision deemed against public policy.” Vermont H.70716 Prohibits employers from requiring any employee or prospective employee, as a condition of employment, to sign an agreement that waives “a substantive or procedural right or remedy available to the employee with respect to a claim of sexual harassment.” Employers are required to adopt a policy against sexual harassment that includes a statement that it is unlawful to retaliate against an employee

for bringing a complaint of sexual harassment or for cooperating in an investigation of sexual harassment. Washington S.B. 599617 An employer may not require an employee, as a condition of employment, to sign a nondisclosure agreement, waiver or other document that prevents the employee from disclosing sexual harassment or sexual assault occurring in the workplace, at work-related events coordinated by or through the employer, or between employees, or between an employer and an employee, off the employment premises.  To view these footnotes, please visit


 Legal advice surrounding the regulatory status of cannabis- and hempbased products is a moving target, but FDA expert Howard Sklamberg keeps his clients apace. CCBJ: Tell us a little bit about your background. What’s the primary focus of your practice? Howard Sklamberg: I worked at the Food and Drug Administration from 2010 through 2017. I was deputy commissioner for global regulatory operations and policy from 2014 to early 2017. In that role, I was chair of the FDA’s marijuana working group, which oversaw the FDA’s policy development related to cannabis drug development, CBD [cannabidiol], recreational marijuana in the states, and coordination with other parts of the government. The field of cannabis has gotten a lot more active since the farm bill was passed in 2018, which removed hemp and cer-

tain types of hemp-based cannabidiol from the list of controlled substances. I’ve been working with firms, principally in the policy area, to help them understand the changing legal landscape and to help them work with the FDA and others to develop regulations that protect consumers and provide them with a choice. The policy area is particularly fertile right now, and it’s very much a moving target. Also, my firm has a lot of clients on the investment side. We advise them principally on the legal status of companies or products that they’re thinking of investing in, so they know what the law is and can comply. How is the FDA responding to the growing cannabis industry? First of all, the FDA has been in the field of cannabis for many years in its role overseeing the development of botanical drugs, such as drugs derived from cannabis.

The policy development really accelerated starting around 2014, when a lot of the recreational marijuana laws went into effect, then it accelerated again at the end of 2018. The FDA has been engaged in a pretty detailed process of evaluating data on the safety of hemp and cannabis products, has been issuing warning letters for products that make fraudulent health claims, and also working with the industry to come up with a workable and clear framework for regulation. One of the challenges is that the space has grown so quickly. There are so many companies and a huge variation in the quality of the products and the types of players. There’s some evidence of companies selling products that claim to be CBD that do not contain CBD or contain too much CBD. The FDA has actually posted lab analysis on its website. There’s broad consensus that the best way to protect consumers and

offer them choice is to have a clear, workable framework for regulating these products. That will address any safety concerns and hold companies to the standards for manufacturing and suppliers that we expect for products that the American public consumes. What are the FDA’s regulatory priorities and what type of enforcement or investigative actions are you seeing? The FDA’s enforcement priorities have been concentrated on products that make fraudulent claims. The FDA has issued a slew of warning letters over the past few years that address products that make outlandish claims to cure cancer or Alzheimer’s. It has a well-developed health fraud program that targets fraudulent products, both trying to take them off the market and educating consumers. That’s been its priority. It has also provided information to the public



about CBD. There is some disagreement between some in the industry and the FDA about safety issues, particularly what concentration levels trigger safety concerns. A lot of those details will be fleshed out with more data and the FDA’s continuing evaluation of existing data. How are you advising clients to stay on the right side of enforcement activity? The best advice is to follow the law. Some products are clearly illegal, some products are clearly legal, and then some are in a gray zone. Marijuana is still a federal controlled substance. The distribution of marijuana might be legal under state law in some states, but it still violates federal law. Some hemp products are legal. The FDA itself has not claimed that CBDcontaining cosmetics are illegal. We advise our clients on what the law is and to follow the law. For inves20


tor clients who are looking at making an investment, particularly more of a passive investment, they often have less information about the legal status of the products. We provide assistance in telling these companies what we think is legal, what we think is not. How are you advising investors in this area? For investors, there are many questions. The first question involves whether the product is legal. The second is if

Howard Sklamberg is a partner with Akin Gump, specializing in advising clients on matters related to U.S. FDA regulation and policy. Sklamberg also focuses his practice on a wide range of compliance and enforcement issues. Reach him at

they are indirectly doing business with a company that is violating federal law. If they’re providing, for example, a general service to companies violating federal law, there could be implications. Somebody might own real estate, and in one of those buildings there’s an office in the marijuana business, for example. Also, what types of regulatory requirements there are for banking and securities is a concern. Clients ask about investments in Canada, where cannabis is legal but regulated. They might ask what precautions, if any, are needed.

to Congress – all want

Do you have any predictions for the coming year and beyond?

legislation may be part of

Predictions about regulations are generally difficult. It’s even more difficult when you have presidential and congressional elections happening, but pretty much everybody – from the leaders in the industry to the FDA itself

that to happen. There is a strong interest in Congress to provide much more certainty on the regulatory status of hemp-based products that may contain CBD. Some bills before Congress are trying to prompt the FDA to be more timely in regulation and develop a more clear regulatory framework in the near future. I think we’re going to see Congress continue to have that interest. We’re also seeing the FDA talk about the need to have more certain regulation. It has indicated that the solution as well.

I personally hope

that there is activity in the next couple of years because having clear regulation in this area, regulation that sets standards that protect consumers, is imperative for consumer safety, for offering choice, and for the industry. 

Taking Advantage of an Emergent New Area of Evidence

Dan Regard, president and CEO of iDiscovery Solutions, discusses recent trends and innovations in the world of digital forensics and e-discovery, including the revolutionary role of contextual data in today’s legal strategies.

CCBJ: What are some forensic and technological trends or areas of focus that you expect to see in 2020, based on iDS’s recent business and the matters you’ve been working on? Dan Regard: One of the big issues in the industry right now is trying to understand how best to apply the tools that we already have – really bringing the know-how of technology-assisted review (TAR) to bear. There’s still a lot to be improved on, in terms of data preparation, gathering and orientation, as well as maximizing the value that can be taken out of the various forms communication that exist

today. We’re still learning new ways of extracting information. But the challenges are not with the technology – the challenges are actually with the sources. We’re seeing data now in an increasingly splintered sequence of channels, whether it’s Twitter or Pinterest or TikTok or whatever comes next. All of these different forms of communications can be relevant under the right set of circumstances, which causes more source challenges and platform challenges. How are clients responding to that, in terms of their data retention and management? For example, we had a conversation recently with a large company that is trying to move all of their corporate clients into Teams, using their own version of Slack for all their internal communications. That way, they can monitor

for harassment or compliance problems more efficiently, as opposed to with email. It makes discovery easier. Do you see people moving in that direction? It’s hard to say, because we tend to be on the reactionary side of downstream developments. Clients and their employees adopt the technologies that they want, right, and we usually end up dealing with the ramifications at least six to 12 months later, because that’s when litigation arises, not when the technology is first adopted. The challenges I was referring to a moment ago are not so much with enterprise-level technologies, like the one you just mentioned. It’s with the technologies that are independently adopted by employees – the viral new communications platform du jour that employees start using before the employer is even aware it exists. These platforms pop up in a very organic

fashion and can spread very quickly – like TikTok has, for instance. At the end of the day, what we find is that employees often don’t really know or care that a particular platform is supposed to be only for personal use or only for business use, so it ends up getting used for both. That can be unintentional. But we also have cases where the use of nonofficial channels is more deliberate – whether it’s collusion or antitrust violations, for example, many times that tends to happen outside of the official corporate channels, for obvious reasons. Where do you see your company going this year and in the next several years? We made a decision a long time ago to develop a deep bench of computer, forensic, e-discovery, TAR and overall cyber expertise, and we’re going to continue to grow that capability. We’re going



to bring in even more experts. We’ve rolled out a new methodology for enhanced project execution that actually focuses on the beginning of a project. It’s not an additional expense to our clients, but it acknowledges that there are certain things that need to be done at the beginning of a project to preserve the opportunity to testify, opportunities that you may lose if you don’t take them early in the case. We’re engaging with clients about that necessity. Sometimes, when it comes to testifying, we at iDS are more aware of that reality – that these things need to be done early – than our client law firms and law departments are. So we’re actually helping them craft strategies for how to best prepare for the eventuality that expert testimony may be necessary. We’re also expecting the company to grow geographically. We’re opening up an office in London later this year. 22


In fact, I’ll be there soon myself to lay some of the groundwork for it. Let’s talk about what iDS is doing in terms of innovation, technologically or otherwise. We just rolled out a new platform that’s specifically designed to manage structured data in litigation. There’s no other tool out there that does that. We developed it for our own expert testimony purposes, and now we’ve commercialized it for others as well. By structured data, I mean all of the metadata that is generated by technology as we go about daily our lives. Cell phones, GPS, the metadata that exists because you texted with somebody – when you did it, how many times you did it, that kind of thing. And these sources of metadata are increasing. Now it’s also the output of your Ring doorbell. The history of your Waze account. Your financial history – credit card records, ATM withdrawals.

All of these different data streams can be analyzed and combined to tell a more cohesive, complete picture of the history of events in a particular case. We call this contextual data. This is a form of innovation, this data integration. These tools didn’t exist until we created them. We’ve spent six years developing them so far, and we’ve just released the latest version. Innovation can also involve looking closely at existing technologies and finding new ways to apply them to the problems of law. We think, for example, TAR is fantastic, but by itself it’s a very complex tool. So, we combine that existing technology with process and expertise. We have a methodology for consistent high-quality results using TAR, but we also know that the goals of TAR are not always the same. It depends on what your intended outcome is. Are you investigating a collection of documents? Are you reviewing documents for production?

Are you reviewing them for privilege? Those are three very different actions, with three very different outcomes. Therefore, we take three very different approaches. That’s a form of innovation. We deal with a lot of legal operations professionals, who are always trying to optimize how they insource or outsource legal work. Do you have any advice for them about evaluating subject matter experts that they might bring in? What should they be looking for? It’s enticing to look at a subject matter expert and ask a single question: “Do they understand the subject matter?” That’s appropriate, of course, but you also need to ask a few other questions. Who’s going to make sure that they can testify in a way that’s reliable in the American court system? Who’s going to make sure that they can

communicate well to a jury or to the trier of fact? Who’s going to make sure that they handle depositions well, or that they can contribute when you’re taking a deposition from whoever’s on the other side? All of these issues are an important part of the landscape that determines whether that expert testimony is going to be successful. It’s not just their subject matter expertise. As a result, when we work with our clients, one of the things we talk about is how we can make sure that we surround that expert with a successful team. We are experts in e-discovery and computer science, but sometimes we’re hired to help other subject matter experts, whether it’s involving trade secrets, patent litigation, whatever the case may be, because we bring that expertise. I’ve spent 20-plus years supporting forensic accountants and economists. We’re the ones who retrieved the data and cleaned it

up. We’re the ones who housed the data. We even did the preliminary analysis. But no one can match forensic accountants when it comes to the interpretation of the data, or for direction on what needs to be done. And in a world where the footprint of evidence is larger than ever, you often need a team. Pick those other skill sets wisely, so that they complement that expert and help them be more successful. What do legal ops people need to know about what’s changing on the technological front? How should they be preparing themselves professionally for when adverse things happen? As the gulf between those who know law and those who know technology becomes wider, finding the way to bridge that gap is crucial, and it becomes more of a challenge. We have great tools out there, great technologies, and as they become more

sophisticated, the need to integrate them into the legal practice becomes stronger. I would encourage them to look for translators, look for connectors, look for people who can bring together a versatile team to handle a variety of issues. Also, there is that emergent new body of evidence, contextual data, that I mentioned before, and it affects the tactics, strategies and outcomes of litigation. It impacts all three legs of the litigation stool – damages, merits and

Daniel Regard is the president and CEO of iDiscovery Solutions. A programmer and an attorney by training, Mr. Regard has conducted system investigations, created data collections, and managed discovery on over a thousand matters. Prior to founding iDS, he was the national director of e-Discovery for LECG. Reach him at

credibility. It’s a real powerhouse. So those are my two pieces of advice: Find someone who can help you connect to the right technological solutions. And number two, pay attention to this emergent area of evidence, contextual data, because it really is causing transformative outcomes. You’re working on a book. What can you tell us about it, especially in terms of what it offers the legal community? The book is about the impact of big data on litigation – that emergent technology around contextual data that I’ve been talking about. It’s called “The Last Jury Trial: Litigation in a World of Perfect Information.” Sci-fi television shows like Black Mirror aside, I wanted to think about this question: “Do we already live in a world where we are recording everything that we do,



everywhere that we go,

tells us that it will

something totally new –

questions – about how we

everything we purchase,

become more

we didn’t need them in

everybody we spend time

accessible in the future.

the past, now we need

deal with it as a practice,

with?” The answer is yes,

In fact, our data has

them. You don’t write

we do. Right now, today.

already become so

laws about something you

Perhaps it’s difficult

accessible that, as a

can’t do, you write laws

to acquire some of that

society, we felt the need

about something you

data, but it does exist.

to write laws to stop

Therefore, it went from

people from accessing it

shouldn’t do. In the end, this

nonexistent to existent.

when we don’t want them

whole emerging area

But our experience with

to. These privacy laws

of contextual evidence

documentation. All of

all previous technologies

speak to the existence of

raises a lot of new

this is in the book. 



what the implications are for how we litigate, what the sequence of civil procedures should be, how this evidence is different than oral testimony and other

Ideas Adapting to the Steady Elimination of “Silent Cyber” Coverage DANIEL J. HEALY ANDERSON KILL These policies and contracts transfer certain types of

 As insurance companies continue to look for ways to absolve themselves of liability for cyber-related losses, it is imperative that in-house counsel be well informed about all possible avenues of indemnity for their company.


ata breaches have made headlines for years. The marquee victims – or culprits, depending on your point of view – have been large retail-facing companies that have had millions of their customers’ personal and financial data records exposed by hackers. Banks and other financial institutions are also at a high risk of major losses from cyberbreaches because they inherently collect and store personal identification and financial information about thousands of people and businesses. In-house counsel have had to educate themselves about both the available cyberinsurance coverage and the indemnity obligations in the involved contracts.

risks. A company’s insurance policies can pay for its own losses as well as its liabilities to others. Where robust indemnity agreements are in place, they can transfer the obligations to pay for such losses and liabilities to, or away from, the company itself. Siphoning cyber coverage into specialty policies Cyber policies have proliferated over the past 15 years and now come in many varieties, providing different types of coverage. Some are stand-alone cyber policies with typical coverage for breaches, notification costs, data restoration, ransomware and other situations. Other policies are derivations of errors and omissions (E&O) policies that focus on the act or cause of a loss and extend coverage for data loss and liability to others.

For years, other policies, such as general liability,

property insurance, and directors and officers (D&O) CORPORATE COUNSEL BUSINESS JOURNAL


liability, have provided coverage for certain types of losses that stem from a data breach or other cyber loss.

as physical property damaged by a breach. D&O poli-

Even if the indemnity provision that in-house counsel needs to rely upon is not ideal, there may still be ways to leverage it to mitigate the costs of a loss.

cies could be expected to cover the lawsuits that follow

importance. But companies may also need to focus on

For example, a general liability policy might cover liability for property damage to another party’s physical property, including computer hardware. A property policy might cover the replacement of bank debit cards,

many data breach scenarios, when shareholders or regulators look to blame the victimized company.

Insurance companies are now moving ahead with

plans to eliminate the coverage found in these non-cyber policies. The insurance companies call such coverage “silent cyber.” This cynical misnomer casts the coverage that has always been found in those non-cyber policies, which is inherent in a plain-language reading of the policies, as if it were an unintended windfall for policyholders. On the contrary, that coverage has always been there, but now insurance companies are looking for ways to eliminate it. Indemnity agreements into the breach If insurance companies get their way and are successful in eliminating coverage that might apply to data breaches and other cyber Daniel J. Healy is a partner in the Washington, D.C., office of Anderson Kill, LLP. He is the deputy co-chair of the Cyber Insurance Coverage practice group and a member of the firm’s Insurance Recovery practice group. He previously served as a trial attorney at the U.S. Department of Justice, where he received numerous awards.



losses from all non-cyber policies, then policyholders will have to look elsewhere to fully cover their

indemnity agreements.

Indemnity agreements can be found in a wide variety

of contracts. In the realm of cyber losses, the companies most often involved are service providers that are instrumental in providing the services needed to gather, store, use or secure computer systems that hold data. Sometimes such agreements also involve the systems that are used to process transactions, as more and more transactions are being conducted fully electronically.

For example, an agreement with a cloud service pro-

vider will likely include an indemnity agreement relating to all claims, causes of action, losses, damages and so forth. But what will the agreement actually do in the event of a cyber loss that emanates from its system but causes the theft or compromise of a client company’s data (which, in turn, is actually that client company’s customers’ or business partners’ data)? If the indemnity provision reads like the following, it is possible, depending on the facts, that the service provider will raise arguments that it does not need to provide the client company with indemnification.

Service Provider shall defend, indemnify and hold

harmless Client … from and against any and all

claims, demands, suits, judgments, losses, liabilities,

cyber needs. Obviously,

damages, costs or expenses of any nature whatsoever

the coverage under a

… caused solely by any: (i) negligent act or omission

policyholder’s stand-alone

of Service Provider, its officers, directors, agents or

cyber policy will be of key

employees; (ii) failure of Service Provider to perform

the Services in accordance with generally accepted professional standards; or (iii) breach of Service Provider’s representations and warranties, agreements, duties or obligations as set forth in this Agreement.

Such a provision does require the service provider to indemnify the client. But depending on the facts, the question is when. It could be argued that the indemnity obligation would only arise once it has been established what was caused “solely by” the service provider’s negligence, breach of contract, or breach of warranty. If, for example, the breach of the service provider’s system led to a loss despite the service provider having strong security measures in place, that service provider might argue that the loss was not the result of its sole negligence. A slightly broader approach might be to have an indemnity agreement that requires the service provider to indemnify the client company:

from any and all liability, arising out of Service Provider’s negligence, whether it be sole or in concert with others, in connection with performance of the services described.

This language enables the client company to seek its indemnity rights whether or not it has been established that the service provider was the sole negligent party. In-house counsel should remember, while sifting through these obligations, that in the scenario described, the customers of the company looking to enforce the indemnity provisions against a service provider might be bringing lawsuits. Partner companies could also be threatening to pursue recovery against the company. Instead of fighting a war on multiple fronts, pursuing indemnity for claims it has to defend, the company

In-house counsel should look at the insurance requirements that counterparties must have, as well as, potentially, additional insured requirements. should know how it intends to hold a counterparty liable for the expected indemnity. Ideally, the indemnity will be a predictable and efficient way to assign risk. Even if the indemnity provision that in-house counsel needs to rely upon in a given situation is not ideal, there may still be ways to leverage the indemnity obligation and accomplish some transfer of the costs of a loss. For example, if indemnity is tied to particular “work,” “services” or “products” for which one party is clearly meant to be responsible, then parties may not need to spend the time and expense of waiting to litigate who caused what. Instead, they can resolve the indemnity issues quickly, because at least some liability is clear. Also, in-house counsel should look at the insurance requirements that counterparties must have, as well as, potentially, additional insured requirements. Often these insurance provisions go hand in hand with indemnity provisions and permit the company to pursue another’s insurance policies. In an environment where insurance companies are reducing liability for cyber-related losses by eliminating so-called “silent cyber” coverage, it is important to know how to use insurance provisions to access another party’s cyber policy. The sheer cost of data breaches has been studied extensively, and it is immense. It is not unrealistic that a breach could lead to losses that exceed the limits of a company’s cyber coverage. For that reason alone, as part of their company’s response plan, prepared in-house counsel need to have thought through potential avenues of indemnity and ways of tapping other companies’ cyberinsurance policies.  CORPORATE COUNSEL BUSINESS JOURNAL


Choose Local Counsel with 5-W's-and-an-H Approach ESCH MCCOMBIE MCNEES WALLACE & MURICK

When it comes to hiring local professionals – legal representatives or otherwise – asking six key questions will help make sure you get the best possible outcome.


hoosing local professionals to represent your company is part of entering a new market. When analyzing the situation, leadership might ask: “Why should we enter a new market?” or “Where should we go next?” Once answered, follow-up questions could include: “Who should lead our team?” “What will our business model look like?” “When should we enter?” And, of course, “How should we do it?” Those are all very important questions, but deliberately asking them together was probably not a technique taught to you in business school or law school. I think I am correct that famous Chinese military strategist and philosopher Sun Tzu did not specifically instruct leaders to ask “who, what, where, when, why and how” when planning an attack (or a merger). Stephen Covey gave us seven habits of highly effective people but did not encourage those six questions specifically. Motivational speaker Simon Sinek told us to ask “why” first, but even he did not discuss the importance of the other five familiar questions. In my case, it was my third-grade teacher, Mrs. Curry, who taught me the importance of the 5 W’s and an H (5W1H). I’m not here to one-up Sun Tzu, Mr. Covey or Mr. Sinek. Rather, I am merely encouraging you to take the same approach when engaging local professionals that you would when choosing a new market. For example: Why do you need local counsel for a certain project? What is the project? Where should local counsel be located? When should they be engaged? Who is the right choice to use as local counsel? How do you find the right firm? I am a land use attorney in Pennsylvania. My practice focuses on entitlements, approvals, and permits from



state agencies and local government. We are frequently engaged as local counsel to navigate the tangled web of authority in the Commonwealth. In Pennsylvania, local government includes 67 counties and 2,561 municipalities. Each municipality has its own land use regulations. Indeed, developing property in Philadelphia or Harrisburg is quite different than in rural townships. As a result, my practice provides a great foundation for exploring how the 5W1H technique we learned in elementary school can be applied to choosing local professionals for a new project. The example questions answered below focus on finding an appropriate local land use attorney. However, each could be applied to any local need. Unlike Mrs. Curry, who would have us start with “who,” or Mr. Sinek, who would have us start with “why,” our approach must start with “what.” What Is the Project? You must understand the scope of your project. For example, obtaining approval for a professional office probably has fewer hurdles than obtaining similar approvals for a warehouse or a high-traffic drive-thru restaurant. In the first case, you might start by engaging a local civil engineer to put together a land development plan. Once completed, you might determine that the approval process is straightforward and unlikely to meet opposition, such that local counsel is not needed at all. Conversely, you may know that some residents are likely to oppose your pipeline, shopping center or casino. Perhaps they may even actively protest against it. In that case, you will undoubtedly want local land use counsel to represent you. Why Is Local Counsel Needed? Why do you need local land use counsel for this project? As mentioned above, if the project is likely to be opposed, you will need local counsel to control the

process. Local counsel can help ensure that your application is compliant with local rules and regulations. Local counsel also can keep the municipality and the opposition in check should they attempt to work outside of legally required processes. Sometimes, local counsel is helpful simply because of their contacts. Land use attorneys spend a significant amount of time educating and engaging with elected officials and municipal staff. By building these relationships, we get to know the individuals in local government, who come to trust us and consider us experts. Those relationships take time to build, but they make the approval and permitting process much smoother when we submit a challenging project. Alternatively, your engineer might inform you that you need zoning relief from the local zoning hearing board or the governing body. As with any hearing or legal procedure, you will want competent counsel to represent you. Where Should Local Counsel be Located? Put simply: close to the project. Although “close” is a relative term, it is an important one for three reasons. First, most small, rural municipalities are uncomfortable, if not threatened, by “big-city attorneys.” (Although, there may be times where that is exactly what you want.) Conversely, even the best rural land use attorneys know better than to work inside the limits of major cities, because city politics and processes are just different. Therefore, finding local land use counsel near the project – or from a similar locale – is important. Relatedly, counsel located near the project are more likely to already have a good rapport with the municipality’s governing body and staff. The concept is similar to how a litigator who has been before a certain judge on multiple occasions comes to learn the judge’s thought process. Local counsel understand the hot-button or target issues in the municipalities where they work. In addition, you gain instant credibility by

association and can avoid pitfalls that might not be so obvious to an “outsider.” Who Should You Engage, and How? You need local counsel who can provide you with the benefits listed above at a cost that fits your budget or cost structure. Therefore, when interviewing a firm, ask how many projects they have worked on in the municipality and the outcome of those projects. Also ask about the firm’s land use bench. Land use is a niche practice and, at least in Pennsylvania, it requires attorCORPORATE COUNSEL BUSINESS JOURNAL


neys to attend evening meetings. You want to be sure that the firm you choose has the depth and contacts to get your approval. You also want to be comfortable that you will have legal representation if one of their attorneys has two or more conflicting meetings on the same night. Accordingly, finding a firm with a deep land use bench is vitally important. But how do you find that firm? Google only gets you so far. I suggest reaching out to contacts in the project’s region to ask if they know which is the “go-to” firm. Another good option is contacting associations to find out who the best land use attorneys in the area are. For example, if your project is in a township in Pennsylvania, you could reach out to the Pennsylvania State Association of Township Supervisors for a referral. Alternatively, if your usual outside counsel is a member of ALFA International (a lawyer referral group), they probably can get you in touch with a local firm of the same general size and caliber that you are used to working with. Finally, it might be appropriate to contact the municipality to ask who the staff recommends. It is often the relationship between municipal staff and the land use attorney (or other land use professionals) that makes or breaks a Esch McCombie practices in the McNees Real Estate and Pipeline difficult project. & Oil/Gas Infrastructure practice groups. He focuses his practice on land use matters, including obtaining permits and approvals at the municipal, county and state levels. Using his experience and relationships, he reaches favorable outcomes for clients in matters involving zoning, subdivision, land development, stormwater, noise and traffic, among others.



When Should You Engage Local Counsel? Depending on your project, this question could be as important as “who.” I am biased, but I recommend bringing in local land use

Next time you have an issue in an unfamiliar market, pause and work through the what, why, where, who, how and when. counsel early in the process. It should be no surprise that the legal cost to file, litigate and win a land use appeal is much higher than the cost associated with the preceding application process. Moreover, the potential negative publicity often is worse with litigation. Win early, for less. Local land use counsel should be consulted the moment you perceive a problem. If you know your project will face opposition, you should engage local counsel before your engineer or architect puts pencil to paper. By working with the other professionals on your team to put together a plan, local counsel can help to significantly reduce required zoning relief and limit potential reasons for denying your plan. Additionally, and if necessary, local counsel can recommend the best local government relations, grassroots and public relations groups, so that you do not find yourself behind the eight ball if social media explodes. Conversely, if your project is innocuous, you might delay bringing in local counsel until your engineer completes a first draft of the plan. Conclusion The 5W1H of choosing local professionals is important. The next time you have an issue in an unknown market, I encourage you to pause and take some time to work through the “what, why, where, who, how and when” questions discussed above. While Sun Tzu, Mr. Covey and Mr. Sinek didn’t specifically implement a 5W1H approach, I’m certain that they and (your) Mrs. Curry would agree that a deliberate approach to choosing local professionals is a best practice. 

As ADR Continues to Surge, the Experience Of the Mediator and Arbitrator is the Key Differentiator Hon. John DiBlasi is a highly sought-after mediator and arbitrator who has been with NAM (National Arbitration and Mediation) for more than a decade. Here, he discusses his extensive career experience and what it’s like to work for one of the true pioneers in the field of alternative dispute resolution.

CCBJ: NAM is a pioneer in ADR. Over the last several years, the company has grown tremendously. What are the biggest changes you’ve seen during your time with NAM? John DiBlasi: The first thing I should point out is that when I started in the legal profession 40 years ago, mediation was nonexistent. And 28 years ago, when Roy Israel started NAM, he had incredible vision. Roy was able to see that there needed to be some viable alternative for resolution that was more efficient than the justice system. The theory was that if you could bring the parties together to discuss a settlement with a neutral third party assisting in the negotiation process, it would result in the savings of time, money and the ability to control risk. His foresight was incredible, as very few people were utilizing mediation or arbitration at that time. His efforts resulted in NAM becoming a major player in the field of ADR. Eleven years ago, I decided to devote my practice to ADR, as an arbitrator and a mediator. I met with Roy at NAM and discussed what was then the serious decision to give up my private practice. It was a leap of faith, but it was the best career decision I’ve ever made. I’m incredibly proud of my affiliation with NAM because of what it stands for as a company and as a preeminent provider of ADR services. To give you an idea of what it was like a decade ago, when I started with NAM, we would have attorneys

come in who had never mediated a case before. I would hear the same refrain: “I don’t understand the benefit of this process, Judge, what’s the point of it? I’m a trial lawyer. I try cases. I’m not interested in settling them. I just don’t see how this process could possibly work.” I heard that in the early years many times. Attorneys simply didn’t understand what ADR is, or its utility. Over time, through word of mouth and outreach, through continuing legal education, the process gained what is now widespread acceptance. The savings of time and money is probably the most significant factor in ADR becoming as popular as it is now. Litigation is incredibly expensive. The prospect of being able to avoid a lengthy trial with a jury that can be very unpredictable became appealing. Save time and expense, while reducing risk. Another factor that started to turn more corporations toward mediation and arbitration, but particularly mediation, was the financial crisis. Businesses started taking a harder look at litigation costs and realized that ADR was a way of substantially reducing them. Caseloads in court systems everywhere, no matter where you happen to be practicing, have increased dramatically. Judges are overworked, court staff are overworked, and there is a reticence on the part The Honorable John P. DiBlasi has an illustrious career that includes of the government – be it 10 years spent as Justice of federal, state or local – to the Supreme Court, Commercial Division where he resolved continue to pour resourchundreds of matters. As a full-time es into the judiciary. So neutral with NAM, his ADR practice encompasses a wide and varied what’s happening is that range of cases. Reach him at over time, because of its cost-effectiveness, plus CORPORATE COUNSEL BUSINESS JOURNAL


process and the selection of the arbitrators or the mediator is going to be difficult. When it comes to specifying that ADR provider, you should make sure to select a first-rate company like NAM to administer the process. NAM’s experienced team of schedulers, account executives and paralegals will save you a lot of time, money and headaches by handling all of the details involved in coordinating a mediation or arbitration. The process is going to go more smoothly. If you’re using a provider like NAM, it’s going to be done efficiently. the savings in time, and the fact that people just do not want to take a risk in court, mediation and ADR in general have exploded, and now more and more people are inclined to take a shot at it. Let’s talk a bit more about how ADR has expanded and evolved. What are some things that our readers may not know about ADR that they should know, especially as applies to NAM? In terms of the process itself, NAM is unique as an administrator of the ADR process, whether it’s mediation or arbitration. Parties have a choice when they enter into a contract. They can have it written into the agreement that ADR is a requirement before the parties can enter litigation. They can also specify in the contract that they will use an ADR provider, and even agree that they will use a certain panel. It’s being built into contracts more and more. As a general comment, as a neutral, one thing that I would say right off the bat is that if you’re signing a contract, and mediation or arbitration are mandatory before you litigate, it would be foolish not to designate a specific ADR provider in the agreement. The reason for that might be obvious: Once you are already in conflict, attempting to reach an agreement with respect to the administration of the 32


What are some of the things you like most about NAM and the way it conducts its business? Well, you need an ADR provider that understands your needs, number one, and also has the facilities, technology and staff to make your life easy. The other thing about NAM that is unique is the corporate culture, in that there is very little turnover in terms of the people who work for the company. There is a great deal of institutional knowledge among the employees. And the evolution of NAM is really the evolution of the ADR process itself. As a company, NAM understands the needs of its clients, it understands the needs of its mediators and arbitrators, and there is incredible attention to detail in terms of coordination. The entire organization is committed to ensuring that everything is done in an efficient and cost-effective way, which is critical to the ADR process. You were a justice for the New York State Supreme Court Commercial Division and Civil Division for 10 years. How does that experience help you when you’re mediating or arbitrating a case? Well, one thing I always say is that as a former judge, to be the best possible mediator, you must forget

that you were a judge. A lot of people laugh when I say that, but I’ll give you an example. When you’re a judge, you have numerous tools at your disposal to compel a settlement or to strongly encourage it. You can accelerate discovery, you can accelerate motion practice, you can accelerate the trial date. As a mediator, while the skill set is very similar to a judge’s in many ways, it’s a different process. My personal style is to very carefully evaluate the case, which involves a lot of preparation, and come in with a game plan in terms of how I’m going to try to move the parties toward a settlement. While I always remain flexible in advance, I try to have various alternative resolutions in mind. But I also listen carefully during the mediation and want to make sure that everybody gets heard. You cannot rush the mediation process. For the parties to accept a compromise, there must be enough time for them to back off from their original positions. They must be given room to accept the fact that they’re not going to get exactly what they want, while also feeling like they’ve had the opportunity to do as well as they possibly can. You must understand that time is a critical element. People who are accepting a compromise often feel like they’re losing face. They need the time to change their position without feeling like they have lost respect. I always tell parties, “I’m not here to tell you to accept or reject a settlement or to give you legal advice.” Strong-arming people never works. Pushing people hard, the way a judge might, never works. This is a process of facilitation, evaluation and diplomatic persuasion. How do you see technology playing a role in the future of ADR? It’s fascinating to me the way the technology has evolved over the years. At NAM we have tech people who are there to support the process in advance and on

I’m incredibly proud of my affiliation with NAM because of what it stands for as a company and as an ADR provider. a moment’s notice if need be. I was involved in a long, complex arbitration where I had to go from New York to Los Angeles for extended periods. Through the use of technology, we were able to conduct preliminary hearings, hear motion arguments, and take testimony by videoconference – dramatically reducing the amount of time that had to be spent in L.A. In much the same way, you may have a mediation that’s taking place in New York, and you have interested parties who are in other parts of the world. The technology that NAM has enables us to videoconference people in so that they can all participate without traveling. It may sound like a relatively simple thing, but it’s an enormous savings in terms of time and money. I think the use of that kind of technology is just going to continue to grow. What trends do you see for ADR in 2020 and in the upcoming decade? The biggest trend I foresee is continued growth in the use of both mediation and arbitration. You’re going to see more and more companies include ADR provisions in their contractual agreements – and selecting a top ADR provider, such as NAM, from the outset. I also believe that the use of technology in ADR, both to reduce costs and to include parties who otherwise could not be present, will help to dramatically increase the use of ADR overall. Ultimately, what you hope to do in business is preserve your relationships, but in the event that you cannot, you want to control litigation costs and reduce risk – and ADR is the way to do that.  CORPORATE COUNSEL BUSINESS JOURNAL


Drone Technology Soars to Dizzying Heights Despite the Drag of Regulatory Uncertainty  Jennifer Richter is a partner at Akin Gump with an extensive background working in technology, media and telecommunications. Here, she discusses the innovative world of unmanned aerial vehicles, including the nascent regulatory landscape around this technology and the cooperative effort that will be needed to move it forward.

CCBJ: Please tell us a bit about your background and the focus of your practice? Jennifer Richter: I love technology. Most of my legal career has been spent solving regulatory and legal puzzles presented by new innovations. When I started my law career almost 30 years ago, I wanted to work with companies that deliver communications services to the public. I caught the media bug during my first broadcast regulation course. When I finished my law degree, I was lucky enough to land a job at a small communications boutique in Washington, D.C. I was hired into their weird new “wireless” practice. This was 1991. The wireless industry didn’t really exist then. Wireless licenses had just been lotteried by the FCC, and there were no wireless networks or cell phones, apart from huge car phones. From that moment on, I’ve worked with companies that have built our nation’s wireless networks, and companies that are inventing new technologies that rely on, or interact with, the wireless networks. This is where unmanned aircraft systems (UAS) comes into the picture. Years ago, when Amazon first indicated they would deliver packages using drones, a group of us met with them to discuss representing them in Washington and working on new drone policies to enable their goals. We discussed many issues, of course, but the issues I focused on related to communications, navigation and surveillance capabilities for UAS. 34


Questions like: How would remote pilots connect with drones and how often do they need to be connected? How would drones identify themselves while in flight? How would drones connect with each other and avoid colliding? How would drones connect with a low-altitude traffic management system? Their idea from the start was that UAS would rely on today’s commercial wireless networks to support their communications functions, and this made a lot of sense. Wireless networks provide coverage and service to high-rise buildings more than 400 feet above ground level, and this is the airspace in which many small drones will operate. Use of the wireless networks was theoretical then, but today it is widely acknowledged. Even if there are details to work through, ultimately wireless networks will support UAS communications for many different types of drones and many different functions. Those functions include command/control links for drones, remote identification and tracking capabilities, collision avoidance, and real-time transmission of sensor data, videos and photography. All of these functions require spectrum. Regulators and the aviation industry increasingly recognize that traditional aviation air traffic solutions will not be able to satisfy all of the communications needs of UAS. Leveraging existing wireless networks, we are working on new solutions and options for command and control, detect and avoid, and connections to a UAS traffic management system. A lot of testing and standards-setting work is underway to validate this, while some rulemakings at the FAA and FCC are starting to touch on the issue. Various groups are hard at work on standards and policies that will enable commercial wireless networks to support UAS, including the International Telecommunication Union (ITU), Drone Advisory Committee, CTIA, 3GPP, RTCA, ASTM, and ANSI, among others. Apart from the communications issues, our Advanced Aviation Practice at Akin Gump is hard

at work with the major drone innovators, railroads, utilities, insurance companies, entertainment companies, wireless carriers, semiconductor companies, and major aircraft manufacturers on their use of UAS and urban air mobility or advanced air mobility (UAM or AAM) technology for their business plans. UAM/AAM refers to automated air taxis, essentially drones with passengers. What is the current state of the regulatory landscape related to the UAS industry? Specifically, what are some of the privacy and safety issues we are facing? First, let me clarify some of the acronyms used to describe this brand-new set of aviation innovations, as it can get confusing. A drone, an unmanned aircraft, and a UAV are the same thing – they are remotely piloted aircraft, highly-automated autonomous devices or vehicles in the sky. The UAS or Unmanned Aircraft System is more than just the drone. It is the drone, the remote pilot, ground station and the communication links and other components that control the drone. My work for the UAS industry largely involves the communications links to and from the drone, and the systems that support it. But the most exciting innovation of all, for the future, will be UAM/AAM – passenger air travel on unmanned vehicles. UAM/AAM will enable a third dimension of passenger air travel that doesn’t exist today, alleviating congestion on roads and enabling better access to desired locations where people want to live and work. Where are we on drone regulations today? There are big gaps that needs to be addressed. Aviation regulation continues to lag behind the capabilities of UAS technology, and more needs to be done on that front – and faster – without compromising safety. Our government knows that and is working on it but the process is slow. The trouble is that entirely new regu-

lations are needed for many different components of the UAS ecosystem. For example, we need regulations to enable a remote identification system for UAS. We need regulations to govern collaborative UAS traffic management services that will largely be run by private industry. We need regulations for type certifying the various types of unmanned aircraft. We need regulations for routinely approving advanced UAS operations, such as flight beyond visual line of sight (“BVLOS”), flight over people, and package deliveries by drone. We need regulations for counter-UAS authorities and technologies. We need regulations to protect critical infrastructure from drones. Some think we need privacy regulations related to the capture of information by UAS. We also need the involvement of local cities and communities to develop “smart city” infrastructure, so that there is a robust communications system deployed on the ground that can support all these innovations in the air. Resolving these myriad issues will enable UAS innovations, real and anticipated, across numerous industries, including oil and gas, agriculture, entertainment, real estate, and insurance, including multi-modal transportation, to name just a few. But new regulations take time to develop through the collaboration of all stakeholders, Jennifer Richter, a partner with including industry, pubAkin Gump, has represented lic interest groups and technology and communications companies and investors for nearly communities, aviation three decades. Previously, she regulators and the security was vice president and general counsel of a wireless community. Many federal communications company. Reach regulators are involved her at including the Department CORPORATE COUNSEL BUSINESS JOURNAL


of Transportation, FAA, FCC, the Department of Homeland Security, the Department of Justice, the Department of Defense and others. It is not a small task to bring forward a framework that will enable safe and secure deployment, use and integration of UAS in the airspace. In the absence of a complete and finalized regulatory system for various types of UAS, the FAA and industry are trying to accommodate requests for UAS operating approval, and for type certification of UAS, with existing aviation regulations that are largely inapplicable. For example, Google’s Project Wing requested more than 100 exemptions to FAA regulations in order to get their Part 135 application for drone package delivery approved. This laborious approach is obviously not sustainable for an entire industry, or the FAA, over the long term. At Akin Gump, we have developed an interactive database that studies requests for advanced operation authorizations and how the FAA has previously addressed those requests, including requests for Part 135 authorization for package delivery, and requests for authority to fly BVLOS or over people. We are using this tool to help clients successfully navigate a path through the FAA until new policies and procedures are in place. For its part, the FAA recently released a new rulemaking to issue type certificates for individual unmanned aircraft designs heavier than 55 pounds that will be used for package delivery. Comments in response to that rulemaking are due in early March. This is good progress in the right direction.

Urban Air Mobility, which some are now calling Advanced Air Mobility, will enable a third dimension of passenger air travel that doesn’t exist today, alleviating congestion on roads and enabling faster access to desired locations, where people want to work and live. FAA; the public comment period closed after receiving over 50,000 comments. Apart from enacting Part 107 regulations in 2016, that enabled commercial, visual line of sight use of small UAS, the Remote ID rulemaking is the most critical one for the UAS industry. Our security agencies have held the FAA back from adopting advanced regulations for UAS that will enable BVLOS flight and flight over people, until there is a workable system for Remote ID. Estimates suggest that it may be a few years before we have a working Remote ID system in the field.

The FCC and FAA also are engaged in rulemakings

that will allow them to make recommendations to Congress under Section 374 of the FAA Reauthorization Act about viable spectrum solutions for command and control of UAS. That report is past due, but is likely to be made in coming months. The FCC also may initiate a rulemaking to establish service and technical rules for the 5030-5091 MHz band, to make it available for command and control of UAS. The FCC also is considering

All that said, what changes do you anticipate in terms of government regulations?

rules for the 5.9 GHz band, the intelligent transporta-

There are many, many changes, recommendations, rulemakings and new regulations coming for UAS, in 2020 and 2021. Right now, we are in the middle of the Remote Identification rulemaking for UAS with the

aircraft. This band may be opened for unlicensed/Wi-Fi



tion spectrum, which can be used for vehicle-to-vehicle (“V2V”) communications for cars on the ground, and use, in part, and the aviation industry plans to weigh in with the FCC to ensure the final plan for the band continues to support aircraft use for V2V. This use case has

already been studied by NASA as part of its progressive testing of a UAS traffic management system.

In addition to the current rulemaking for type certif-

icates for package delivery drones that are heavier than 55 pounds, the FAA has tentatively scheduled rulemakings this year that will enable UAS flight over people, and flight beyond the visual line of sight. A rulemaking to protect critical infrastructure from drones under Section 2209 of the FAA Reauthorization Act also is scheduled to commence. It would be very encouraging if all of these rulemakings were issued in 2020. However, it’s possible that a number of them will be postponed to 2021. What kinds of law enforcement activity are you seeing? How are you advising clients to stay on the right side of enforcement activity? Probably the most asked question by our clients is “What can I do about the drone that is flying over my confidential business operations?” Industry is concerned about unauthorized drones surveilling their operations. The answer, unfortunately, is not much. It is a federal crime to take an aircraft out of the air, and drones are classified as aircraft. A number of agencies now have counter-UAS authority under Title 18 of the U.S. Code, including the Department of Justice, Department of Defense, Department of Homeland Security and Department of Energy. But unless and until Title 18 authority is expanded to include local law enforcement and certified members of private industry, such as representatives of critical infrastructure, which requires legislative action, it will be extremely difficult to protect private property and facilities from the presence of unwanted drones. Similarly, jamming technologies cannot be used by civilians to disrupt the communications links of a drone in order to disable it.

Only the government has the authority to employ jamming technologies. In order to protect private operations, a company could post signage to try to create a “no drone zone,” employ acoustic detect-and-avoid technologies to determine when an aircraft is heading toward their property, and use “attack dog” drones to try to back unwanted drones away from the property. Beyond these, lawful methods of protecting one’s property from drones are limited today. There are a number of bills pending in Congress that seek to address UAS issues, including security threats posed by drones. One of those bills is the DHS Countering Unmanned Aircraft Systems Coordinator Act, which is pending in both the Senate and the House. Congress also has recognized the need to protect some critical infrastructure from drones, but it has yet to implement those protections. In 2016, Congress included Section 2209 in the FAA Extension, Safety, and Security Act of 2016. As written, Section 2209 requires the FAA to establish a procedure for “operators or proprietors of fixed site facilities” to apply for a designation that would “prohibit or restrict the operation of unmanned aircraft in close proximity” to fixed sites identified in their application. That provision required FAA action by January 15, 2017, but there has been no public progress toward implementation. In our view, implementing Section 2209 in a manner that leverages the specialized knowledge of the owners and operators of critical infrastructure is essential to ensuring safe UAS operations around those facilities. We believe the FAA is presently working on a proposed rulemaking to implement Section 2209. These are exciting and challenging times for technology and aviation. The advances that are being made will change how all of us live and work, hopefully for the better. Finding the right regulatory balance that will safely enable these innovations for all stakeholders will preoccupy our work for many years.  CORPORATE COUNSEL BUSINESS JOURNAL


The Business Case for a Diverse Supplier Program

 Debi Mitchell and Kelly Atkinson of Barnes & Thornburg discuss the wide-reaching benefits of deploying diversity and inclusion outreach throughout a company’s full supply chain. CCBJ: What is supplier diversity, and why is it important? Kelly Atkinson: Supplier diversity means having diversity among the people, vendors and business partners that provide the various supplies and services your company procures. If your organization is committed to diversity and inclusion, that commitment should include supplier diversity.

At Barnes & Thornburg, our long-standing com-

mitment to diversity and inclusion is one of our core values. We want to make sure that, as part of our strategic platform and operations, we are living those core values, and that includes the choices we make about our suppliers. Debi Mitchell: It’s always helpful to have a diverse supplier pool, and we encourage the companies we work with to support that goal as we go forward. How can organizations work to extend diversity and inclusion efforts beyond simply recruiting and retaining diverse talent? Atkinson: At Barnes & Thornburg, diversity and inclusion permeate every aspect of our operations. We include supplier engagement as part of that. It says a lot when you put your money where your mouth is. When others can see that it’s genuinely a big part of your culture, including the way you work with your vendors and suppliers, it has a real impact. 38


Mitchell: As members of the business community, organizations can keep a lookout for diverse suppliers and vendors to help expand their business’s vendor pool. What are the keys to success when building and launching a program? Mitchell: First, identify and put together your goals. Identify your existing pool of suppliers and vendors to see how diverse the group is. Then explore opportunities to identify diverse suppliers and vendors through networking, educational opportunities and client engagements. As you put your program together, make sure that you account for the scope and breadth of your company. Because we have 18 offices, our program needed to work across the U.S., so we included various geographic business areas and products and services tailored to departments throughout our firm. In addition, you need to have top-down buy-in from leadership. We were fortunate that our management committee supported us throughout the development of the program. Atkinson: With any project, you want to make sure that you’re working with all of the relevant departments and within your organization’s internal controls. You need to incorporate every piece of that structure and draft communications ahead of time, so that things don’t

Debi L. Mitchell is the director of office operations at Barnes & Thornburg, overseeing the firm’s facilities and support services needs. She helps implement firmwide polices concerning operational matters, including document management and disaster recovery, approving firm-wide operational contracts and agreements. Reach her at

It truly makes us more thoughtful in our buying decisions and how we engage our business partners, and that ultimately helps us best serve our clients. — KELLY ATKINSON slip through the cracks. In our case, it was eye-opening

them as you develop the program and engage different

how many pieces of our business were affected by this

users throughout the firm.

program, because its implementation was both internal and external.

What is the business case for implementing a diverse

supplier program?

You want to be clear about your vendor expectations

from the outset as well.

One final point: Test and test, and test again, so that

you can knock out all of the kinks. You will find lots of

Atkinson: Unfortunately, just saying “It’s the right thing to do” doesn’t always cut it – you do need to make CORPORATE COUNSEL BUSINESS JOURNAL


a business case at a lot of companies. At our firm, it truly makes us more thoughtful in our buying decisions and how we engage with our business partners, and that ultimately helps us best serve our clients. One of the big goals of our program is to help us do better to

As you put your program together, make sure that you account for the scope and breadth of your company.

benefit our clients; our diverse supplier program helps us do that.


How can external and internal legal teams work together to engage in diverse procurement? Atkinson: We can hold each other accountable. For example, we can create reports to show who does the legal work for our clients, which is especially important if they’ve requested diverse teams from the start. Outside counsel can even hold us accountable by asking questions on requests for proposals about our diverse supplier program, which we’re happy to report on because we’re proud of what we’re doing. Mitchell: As external and internal legal teams look for expertise to help them in their endeavors, Kelly Atkinson is an office administrator with Barnes & Thornburg. She works with the firm’s diversity, development and inclusion director and the diversity and inclusion committee to develop and execute new programs, events, and initiatives to promote the platform of talent sponsorship, integration with the business, and culture. Reach her at



you will want to regularly remind the teams

takes one person in a group to help the team engage in diverse procurement.

Another opportunity would be to provide educa-

tional forums for disadvantaged business enterprises. Small businesses that are owned and managed by women or minorities would benefit from the networking that’s provided, while taking advantage of the educational opportunities. What aspect of the program might be a surprise to our readers? Atkinson: A big part of the diversity program that we thought was important – on top of tracking where we spend money and how we make buying decisions – is that we want to ultimately create opportunities to help diverse business enterprises, either by aiding in the certification process, or by creating educational opportunities to help them win more business on their own.

of diverse resources that

We want to use the resources we have within the firm

have been made available.

to help businesses succeed, beyond just our spend.

As groups find more and more diverse suppliers, it

Mitchell: Although creating the program takes quite a

will be important for the

bit of time, it really brings attention to how important

new suppliers be added to

it is to do the legwork and continue to communicate in

the pool of vendors. It only

order to have a successful program. 

Intellectal Property Analyzing the Panoply of Issues Swirling Around Life Sciences Patent Litigation often have both a branded and generic or quasi-generic

 McGuireWoods partners Ben Hsing, Wanda French-Brown and Irene Hudson, a former patent examiner and two former pharmacists respectively, discuss recent trends driving increased ANDA and other patent litigation activity for life sciences companies. CCBJ: Your team has significant experience with abbreviated new drug application (ANDA) litigation arising from the Hatch-Waxman Act, a law designed to expedite the approval process for generic drugs in the United States. According to a recent analysis from Lex Machina, the ANDA docket is growing, with an average of 269 cases filed annually between 2009 and 2013, and 451 cases filed annually in 2014 and 2015. What’s driving the increase? Ben Hsing: We have seen an increase in both the number and size of companies filing ANDAs, including those by specialty pharmaceutical companies that

component, which has resulted in an increase in the number of companies challenging the patents of any particular drug product listed in the Orange Book under the Hatch-Waxman regime. However, the rise in the number of cases filed during the past few years specifically is a function of when regulatory and/or patent exclusivity for a particular drug in the Orange Book expires. The timing of when an ANDA can be accepted, which then necessarily leads to litigation, is regulated by the Hatch-Waxman Act. Most drugs these days are challenged when that exclusivity period is up, and those challenges are usually brought by multiple (if not a dozen or more) companies, thus leading to the increased number of ANDA litigations. The same report shows that most ANDA cases are filed in the federal courts in Delaware and New Jersey. Are there differences in how the judges in CORPORATE COUNSEL BUSINESS JOURNAL


those venues handle the cases? Do decisions tilt toward branded or generic drugs in any noteworthy fashion?

issue (compound versus formulation versus method of

Wanda French-Brown: The reason that the federal

Given some recent federal circuit decisions, the

courts in Delaware and New Jersey have such a large

case law on eligibility for a diagnostic patent is

portion of these cases, historically and today, is large-

challenging for patent holders, while the case law

ly because of jurisdiction. Most of the branded and

on patent eligibility for treatment methods is now

generic pharmaceutical companies are incorporated in

stronger. Can you explain the dynamic at work here

Delaware. Also, New Jersey was and to some extent still

and what it means for your clients?

treatment) and market issues (first in class, multidrug competition) are more informative.

is the principal place of business for these companies. The Hatch-Waxman patent bar also tends to favor filing

Irene Hudson: The case law on patent eligibility

in Delaware and/or New Jersey (and a few other juris-

has developed quite a bit in the eight years since the

dictions) because of the courts’ familiarity with the

Supreme Court’s 2012 decision in Mayo v. Prometheus,

unique issues presented by these cases. Since these cas-

which called into question the patent-eligible subject

es are tried to the bench, having a judge who is familiar

matter in the fields of diagnostics, personalized

with the regulatory schematic and legislative history

medicine and biotechnology. For some time, method of

behind Hatch-Waxman is quite helpful. In addition,

treatment patents that intersected with laws of nature,

some jurisdictions, such as New Jersey, have local rules

natural phenomena or abstract ideas were under

directed specifically to Hatch-Waxman cases concern-

attack, but the Federal Circuit has hashed out those

ing issues like the order and timing of the production of

cases and deemed patents

Wanda French-Brown is a partner at McGuireWoods. She represents clients in a range of technologies, including biotechnology, medical devices, healthcare diagnostics’ and pharmaceuticals with a concentration in HatchWaxman litigation. Reach her at



certain documents. These

eligible that include

rules help to facilitate

treatments with specific

the efficient preparation

drugs, dosages and/or

of the case for trial. In

regimens. The law in the

terms of tilting in favor of

diagnostic field is not so

a particular party, statis-

straightforward because

tics seem to suggest that

the “improvements”

Delaware and New Jersey

sought to be patented

are somewhat tilted to-

are not necessarily tied

ward branded companies;

to improvements to the

however, those statistics

techniques for detecting

need to be drilled down

the natural phenomena, for

into much further to truly

example. As we watch the

understand whether the

law on Section 101 develop,

court or a particular judge

we continue to work with

has a tendency to tilt one

our clients to seek out the

way or the other. Factors

specifics of the invention

such as type of patent at

to support eligibility.

Irene Hudson is a partner at McGuireWoods and focuses her practice on Hatch-Waxman and medical device litigation. She represents domestic and international biologics and pharmaceutical and medical device companies, including coordinating multijurisdictional litigation and managing discovery. Reach her at

There has been a steady rise in invalidity challenges

ecution process and context behind the file histories of

to Orange Book patents in concurrent U.S. Patent

patents – and I fully utilize that in-depth understand-

and Trademark Office (USPTO) proceedings. Is this

ing to counsel our clients.

a significant trend? What impact is it having on the patent strategies of clients? Hsing: The availability of inter partes review (IPR) proceedings before the USPTO has allowed generic drug companies another forum to challenge Orange Book– listed patents, and generic drug companies have taken advantage of it. As a result, brand companies must be prepared to face IPR challenges to their Orange Book– listed patents. To do so, many brand companies have conducted early case assessments of their patents before facing any generic challenges. IPRs proceed expeditiously, and it is never too early for brand companies to develop arguments supporting validity. While less frequent, the USPTO is also a forum for brand versus brand challenges where there is a blocking patent, such as a patent to a genus of compounds. Your team includes former registered pharmacists and a former patent examiner. How does that inform the counsel you provide to clients? French-Brown: As pharmacists, Irene and I understand firsthand how drugs are administered to patients by doctors, physician assistants, nurses, etc. We are also familiar with the research and development processes that lead to the products that come under litigation, such as how a compound gets synthesized, formulated, etc., all the way through clinical trials and the regulatory background leading to approval.

There is a split in the courts over interpretation of the “act of infringement” needed to support venue in ANDA cases. This seems to be rooted in the unique nature of Hatch-Waxman litigation, which concerns disputes over generic drugs that will be sold in the future as opposed to drugs currently being sold. Explain the significance of the issue and where you see it going. Hudson: Courts in the districts of Delaware and New Jersey have held that in the context of Hatch-Waxman litigation, the “act of infringement” an ANDA filer “has committed” includes all of the acts that would constitute ordinary patent infringement if, upon Food and Drug Administration (FDA) approval, the generic drug product is launched into the market. Under this approach, patent owners have more latitude as to where to bring suit, as most generic drugs are marketed nationwide upon FDA approval. Other courts (in Texas and also New Jersey) have disagreed with this holding and ruled that an “act of infringement” arises out of the preparation and submission of the ANDA. Under this approach,

Having both practiced as pharmacists, we are also

the options for available

very familiar with formularies and other commercial/

forums where suit may

market factors.

be brought are severely limited. The Federal

Hsing: As a former patent examiner, I am well versed in

Circuit has not yet ruled on

USPTO proceedings, and I understand the patent pros-

this issue. 

Benjamin Hsing is a partner at McGuireWoods. He has nearly 30 years of experience litigating patents in a range of technologies, including pharmaceutical compounds and formulations, treatment methods, medical devices and imaging devices. He has tried numerous high-profile cases on behalf of major pharmaceutical and technology companies. Reach him at



Life Sciences Litigation Heats Up Around Patent Eligibility And Generics Fish & Richardson patent litigator Betsy Flanagan talks about the latest trends in high-stakes patent litigation for pharmaceutical companies and the importance of fostering more teams led by women. CCBJ: You won an important Federal Circuit case for Mayo Collaborative Services against Athena Diagnostics that the US Supreme Court declined to review in January. Why is this case so significant? Betsy Flanagan: Patent eligibility has been a hot-button issue in the IP field ever since the Supreme Court ruled in Mayo’s favor in 2012 in Mayo v. Prometheus. Under that precedent, the courts have held that several patents covering methods of medical diagnosis are ineligible for patenting. Each successive decision sowed more discord; while some support the outcome, many believe Mayo goes too far. Our case was no exception, and we had to walk a fine line over five years, including through the written advocacy I led, to achieve this result for Mayo. The claims and facts in our case bore many similarities to the prior cases finding ineligibility. We argued on solid ground that Athena’s patent on a method of diagnosis using admittedly standard techniques was ineligible, too. Naturally, we wanted to get the case dismissed at the outset to save our client’s resources, but we faced the uphill battle of convincing the district court to do so on the pleadings. It took multiple rounds of briefing and argument, and nearly two years, but we prevailed, in large part because the patent contained statements detrimental to the eligibility inquiry. Despite our win, additional hurdles presented at each stage of the appeal. Many amici weighed in for Athena. There was a dissent from the panel’s opinion in our favor. By the time Athena moved for rehearing, there was a lot of activity in Congress about changing the law on subject matter eligibility. We again believed that the case law favored us, and the en banc Federal 44


Circuit agreed 7-5. But the court issued a highly unusual, precedential opinion denying rehearing that included eight opinions either concurring or dissenting from the denial, with a very strong message: Diagnostic methods should be patentable.

When we got to the Supreme Court last fall, there were

two other cases implicating eligibility issues already pending, for which the Court had asked the solicitor general to provide views on months before. After we submitted our opposition brief, the solicitor general urged the Court to take up our case but not the other two. Ultimately, the Court passed on them all. Although that decision was met with dissatisfaction by many in the industry, our client was thrilled, and we were pleased to help them prevail in a high-profile case. Life sciences cases with novel legal issues have been a defining part of your practice. What case stands out as the most unusual? Are you tackling any interesting legal issues in your current caseload? Our win for our client Gilead Sciences in a case over their blockbuster hepatitis C drugs Sovaldi and Harvoni turned on proving a rarely used unclean hands defense that wiped out a $200 million adverse jury verdict. Viable equitable defenses like unclean hands are few and far between. To prevail, you need to be in command of the facts, plan your discovery strategy to best position the defense, tell a persuasive story with equities in mind, and think outside the box to analogize your case to the few others that are out there.

Betsy Flanagan is a principal at Fish & Richardson, where she focuses her practice on complex, highstakes life sciences litigation. Reach her at

We are currently awaiting a ruling from the

Federal Circuit on whether a district court improperly overturned a jury verdict in favor of our client GlaxoSmithKline on induced infringement of a pharmaceutical method-of-treatment patent. It’s an interesting case because the drug label not only played a central role in proving infringement, which is typical in HatchWaxman cases, but external evidence beyond the label also came into play. It will be the first case in which the Federal Circuit weighs in on a contested induced infringement issue after a generic drug launch and jury verdict. You handle Hatch-Waxman litigation for a number of well-known branded pharmaceutical companies. What trends are driving Hatch-Waxman litigation, and how has the practice evolved over the years? I’ve noticed in my own practice and from the case law that the prosecution history of the asserted patents and family members are playing a central role in the litigation strategy. For example, generic companies are undertaking more creative design arounds, leaving the doctrine of equivalents as the lead infringement theory.

Woman-dominant trial teams are still a rarity, yet you’ve won cases with hundreds of millions of dollars on the line with such teams. What do you think it will take for more woman-dominant trial teams to lead high-profile patent litigation cases? That’s an issue that I believe involves many stakeholders. Women litigators must show interest, seek out training, ask for opportunities, and keep pushing even when the opportunities don’t immediately materialize. Mentors and firm leadership need to engage on the issue by offering training, providing opportunities, and advocating within the firm and with clients for women to get more stand-up work. And perhaps most importantly, clients will need to play an active role. That may mean putting faith in someone with less experience and asking more experienced litigators to divide time more equally between the war room – strategizing and preparing others for stand-up roles – and the podium. This type of support will likely have a meaningful impact on women’s job satisfaction and retention. It certainly has for me. Before going to law school, you were a scientist working on vaccine research. What drew you into IP litigation and your role at Fish & Richardson?

This has led to more court decisions on the issue of prosecution history estoppel, and thus more guidance for future cases about when it will or will not apply. Lack of patent eligibility was also a popular defense for certain method-of-treatment claims for a while, but some recent decisions will likely cut down on that defense.

It’s also of note that the number of generics pursu-

ing a given branded product appears to have increased. This makes cases quite large, requiring an even more organized approach and complex litigation strategy, since different theories could be advanced across the multiple defendants.

I was a chemistry major in college but made sure to take a broad spectrum of classes. In that spirit, I spent a semester at my school’s Washington, DC, satellite campus, where I did an internship in the area of science and policy. In my coursework, I learned about the aubert and Kumho Tire standards. It opened my eyes to the idea of applying my scientific background and curiosity in another way. But I wasn’t immediately convinced, so I moved forward with my research job at Merck and even deferred my law school admission for a year to be certain the law, in particular IP law, would be a good fit. I’m glad I chose the law and am fortunate Fish hired me many years ago as a summer associate.  CORPORATE COUNSEL BUSINESS JOURNAL


Guiding Chinese Companies in U.S. IP Disputes Requires Counsel with Trust And Experience  Scott Stimpson and Trent Dickey, members at Sills Cummis & Gross, have years of experience working with Chinese companies and their lawyers on various patent and IP matters in the United States. CCBJ: Can you each describe how you first became involved with representing Chinese companies? Trent Dickey: For me, it was in the mid ’80s. I became outside litigation counsel for a New Jersey–based company called Russ Berrie, which was a gift and novelty company, probably best known for its teddy bears and troll dolls. It sourced almost 2,000 products annually from Asia, primarily from China – before most companies did. Back in those days, it was all about copyright infringement – there was a lot of copyright infringement work. Scott Stimpson: About 15 years ago when I was with a global law firm, I made my first trip to China, made some presentations, attended a couple of seminars, and was introduced to a handful of companies. One of the first was a company that did manufacturing and inventing in the flash drive space, which became one of my first Chinese litigation clients in the United States. In 2006 we brought a patent litigation suit in Texas, which at the time was, I believe, reported to be one of the first patent litigations brought by a Chinese company on an American patent. That was a very exciting time. And since then, I’ve been to China at least twice a year, meeting people, representing clients, and presenting at seminars. Why are companies in China calling on Sills Cummis to help with their legal needs? Stimpson: From my perspective, on the patent litigation front, one of the reasons clients turn to Sills 46


Cummis is our intellectual property group has Big Law experience, with the economic benefits of a New Jersey-based headquarters. I actually began my career at one of the largest IP boutiques in the U.S. and I did an awful lot of patent litigation while I was there, learning from some of the best. When that firm closed its doors, I moved to a global firm in New York City where I litigated patent cases for a number of years before joining Sills Cummis & Gross. Other attorneys in our group have had the same sort of Big Law experience too, bringing efficiency and value to our clients. So I think that’s attractive to Chinese companies, as well as to other companies. Another reason that we’ve been successful with Chinese litigation work in the IP field is that we have successfully represented other Chinese entities in the past. Trent and I have both been in China doing litigation work with Chinese companies for many years now, and so we’ve developed a track record we can show these companies. I think China is the same as many other countries in that they like to see that you’ve successfully represented other companies from their country in U.S. litigation. Dickey: I’d also add that an underestimated but essential ingredient for successfully representing Chinese companies is trust. Chinese companies put a tremendous amount of value in being able to trust their counsel, and having had so many years representing Chinese companies, Scott and I have

Scott D. Stimpson is chair of the Sills Cummis & Gross Intellectual Property Practice Group. He has practiced intellectual property litigation and counseling for 30 years, involving a wide range of IP issues including patents, trademarks, copyrights and trade secrets. Reach him at

been able to establish that trust. Also, having worked

more likely it is that you’re going to eventually encoun-

with many Chinese lawyers who these companies look

ter some sort of IP issue, whether it’s copyright, patent

to for advice or recommendations, we get support from

or other issues. So for companies selling products in the

those Chinese lawyers too. And of course, it’s a big plus

U.S., especially those selling a considerable number of

to have the success we’ve had. We’ve had a really amaz-

products, a couple words of advice: First, if you do find

ing string of successes for our clients.

yourself in a patent litigation or copyright litigation, it is important to understand and accept the differences

What legal advice do you have for the Chinese companies selling products here?

between the legal systems and the way they work in China versus the United States.

For companies that are new to American litigation,

Stimpson: As far as Chinese companies selling prod-

things like discovery are going to be a shock, to put

ucts in the U.S., I’d say that success will breed, in many

it mildly. China and the United States are on opposite

cases, IP issues. The more successful you become, the

ends of the spectrum with regard to how much disCORPORATE COUNSEL BUSINESS JOURNAL


covery is allowed. There is obviously a great deal of discovery allowed in the United States, and it can be very expensive. So it is important to understand and accept that. Trust your lawyers and rely on their advice because it’s very easy to get into trouble for discovery problems otherwise. Another piece of advice for Chinese companies – but really any company – is that if you have good patents, you shouldn’t be too hesitant to assert them. I’ve worked with some very innovative Chinese companies that have very good patents but are also too reluctant to assert them when necessary. Obviously, you can assert them and try to get your market share in the United States. You can try to get licensing revenue. But also, if you’re selling in the United States and you get sued for patent infringement, that’s a great time to dig into your pile of patents and see what’s there. A good countersuit can go a long way and maybe even lead to finding an amicable resolution to the litigation, or at least give you an upside. So there’s a lot to be gained by asserting patents at the right time.

Trent S. Dickey is a Member of Sills Cummis & Gross. He has more than 35 years of experience representing major domestic and foreign corporations in all aspects of intellectual property and complex commercial litigation. Reach out to him at



Dickey: I would like to amplify what Scott mentioned about discovery. It is such a different concept not just for the Chinese but also for any foreign companies that haven’t experienced litigation in the United States. For instance, a patent dispute in China usually takes four months to resolve. In the United Kingdom, it takes about 18 months. In the United States, it takes more than

Chinese companies are perhaps a little too reluctant to assert their patents here in the U.S. — SCOTT STIMPSON two years. They just don’t have anything close to what our system is like in China or Asia. In fact, educating foreign clients about e-discovery is one of the biggest challenges we have, and it’s essential. Scott and I have co-written articles that we’ve published in China, educating Chinese lawyers on intellectual property law, both trademark and copyrights, to help them to understand the U.S. system. I think it has helped. Scott and I both lecture in China as well, about twice a year, on these topics, to educate Chinese companies and others about how the U.S. legal system works and how to avoid these problems in the first place. Do you see China’s interactions with the U.S. legal system expanding? Stimpson: Yes. I think that for the last 10 years or so, it’s pretty obvious that it has been expanding. It’s inevitable really – the more products you sell in the United States, the more likely it is that you’re going to run into legal disputes here. So it’s been on the upswing for quite a few years now, and I expect it to continue to increase. If you look at new litigations or even patent litigations filed in the United States, there are very frequently Chinese defendants or retailers selling Chinese products that are named. It’s just a result, I think, of the fact that Chinese companies have been very successful in selling products in the United States. I talked earlier about how Chinese companies are perhaps a little too reluctant to assert their patents here. But in

our discussions with Chinese companies during the last couple of years, we’re seeing a bit of an uptick in their willingness to consider that approach. So maybe we’ll see some expansion on that front too. Time will tell. Dickey: You used to see many Chinese companies defaulting on litigation in the United States, and there are

Educating foreign clients about e-discovery is one of the biggest challenges we face – and it’s essential. — TRENT DICKEY

still a number of smaller companies that, when there is

given that 120 countries have signed a BRI

an infringement claim, whether it be a patent, trade-

memorandum of understanding with China. But my topic was closer to home and within my realm of experience. I talked about early procedural motions and defenses for Chinese companies in U.S. litigation. There was a very large audience, so it was a real treat to be invited and to participate.

mark or product liability claim, they just don’t defend. But we tend to represent larger companies that have a substantial amount of business in the United States. Most of the time with our big-box retail clients, there’s an indemnity agreement, and if the Chinese company wants to continue to sell into the U.S., they have to defend. They’re getting more involved in U.S. litigation, either directly or via our representation, which often includes their supply chain. There’s a lot more defense by Chinese companies now than in the past. Trent, I heard that you were at the Global Lawyers Forum in Guangzhou in December. Can you tell us a bit about that? Dickey: It was a real honor to be invited by the All China Lawyers Association, which is the biggest bar association in China. They invited me not just to attend but also to be on a panel and speak. The heads of international legal communities and bar associations from 57 countries were in attendance, and the People’s Republic of China’s Minister of Justice Fu Zhenghua and his vice minister were our keynote speakers. The theme was international rule of law and cooperation, and the obvious focus was on President Xi Jinping’s Belt and Road Initiative (BRI). Chinese law firms, although large, are still primarily domestic practices. So there was a focus on how they can reconcile disputes involving the BRI,

Scott, you and Trent also gave a seminar in Shenzhen recently. Can you tell us a bit about that one? Stimpson: We gave a presentation in Shenzhen on U.S. patent law and litigation and defending Chinese companies in American litigation. It was well attended, with Chinese business representatives and in-house lawyers there. After the presentation, Trent and I both fielded a lot of questions from the audience. I was even interviewed by a state-run television station in Shenzhen. They wanted to talk about many of the same topics that you’ve been asking me about, particularly strategies for Chinese companies selling products in the United States. It was a great event, and it went very well. I was pleased to be a part of it. Dickey: Me too. China is just fascinating. It’s exploding in so many areas. We know that there have been some setbacks, obviously, but the trade talks are focusing on IP issues that Scott and I are heavily enmeshed in. It’s one of those situations that’s just constantly evolving, and it presents wonderful opportunities for U.S. lawyers to assist Chinese companies.  CORPORATE COUNSEL BUSINESS JOURNAL


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OPS Using Data to Foster Trusted Partnerships

 Aaron Pierce of LexisNexis talks about the many benefits of legal management solutions like CounselLink, from tracking legal spend to improving communication with outside vendors and creating stronger relationships. CCBJ: Let’s talk about CounselLink’s role in supporting law departments. Aaron Pierce: CounselLink is a cloud-based enterprise legal management solution for corporate legal departments. I like to think of it, basically, as a platform that enables insights and efficiencies within the legal department. It provides work management capabilities for handling the legal work that in-house counsel does. It also handles legal spend management capabilities for all of the various law firm and vendor invoices that flow through the legal department. And most recently, we’ve also been growing its set of vendor management capabilities, which allow for legal operations to better track and understand all of the work that their outside vendors are providing for them.

Vendor and legal service provider management is a

widely discussed pain point for law department executives and legal operations professionals, and the question they want answered is, “How can law departments gain insights that help them better evaluate their existing vendors and legal service providers?”

The key to improving any system is, first, being able

to measure it. If you’re not collecting data, both objective data points and subjective data, you can’t even begin to properly rate or compare or identify trends. It doesn’t have to be a huge program. It doesn’t have to be a big corporate initiative. You can start with just one or two data points, then collect more data based on your needs as you go along. Maybe you just want to look at how well firms are complying with your guidelines, or maybe you want to see how often you’re engaging in detailed hourly billing arrangements versus alternative billing arrangements.

In CounselLink, for example, we have a vendor

scorecard tool that you can use to track some of those data points directly. Once you plot your vendors and put them on a chart, you can start to watch the trends CORPORATE COUNSEL BUSINESS JOURNAL


over time – and you can also use that ability as a tool for

based on your data and criteria. But if you’re taking

helping to manage those relationships.

that approach of trying to find the right firm for the

Matching up legal service providers like law firms, consultants, e-discovery providers and others on a matter-by-matter basis is often seen as a challenge. How can law departments and legal operations executives ensure that they are selecting the best solution for a particular matter?

right matter, as you said, you’re going to need to have a collection of the critical data points from those kinds of matters that will help point to the right firm or service provider. For instance: How big is the matter? What’s my anticipated exposure? Is this a critical betthe-firm matter, or is it more of a transactional, lowerimportance piece of work?

It all comes back to the data. If you’re dealing with a

single firm for all matters of a certain type, you can

you to the right place to go. I recommended starting

track the firm’s performance. You can keep an eye on

with one or two data points, and as you start to mature

their work over time and make sure that it is improving

and expand the data you’re collecting, you can begin



You want to collect those data points to help point

on, as well as a place to collaborate on those matters.

The key to improving any system is, first, being able to measure it.

You can’t always be in the same room, you can’t always

to drill down and use the different criteria to come up with the best firm for a given set of end points. You should be able to generate some simple and repeatable reports that pull this data and help you drive that process of selection, based upon the different inputs to those matters.

that you are looking at the same data, and that you’re

How can law departments better communicate and collaborate with their legal service providers and vendors? Using a tool like CounselLink to help facilitate that communication means you’re going to have all of your information in one place. You won’t lose information to the email box of a particular attorney who doesn’t happen to share that he got an email from an outside counsel, for instance. Instead, you’ll be able to see the ongoing collaboration and data all in one place, alongside all of the other details about the matter that your organization is collecting.

In CounselLink in par-

ticular, vendors and clients Aaron Pierce is the vice president and general manager of the CounselLink business. With over 20 years of technology leadership experience, and over 10 years in the legal software space, Aaron is passionate about helping legal professionals achieve greater outcomes through data-driven decisions.

share a common user interface. They log into the

be face to face, you won’t always be looking at the data at the same time. But with the right tools you’ll know making decisions based on having access to the same information, both as an in-house legal professional or as an outside law firm or vendor that’s supporting those legal departments. What else should our readers know about optimizing their relationships with their vendors and legal service providers to stay on budget and secure the best outcomes? It’s all about ongoing communication and feedback. The more open and transparent you can be about your goals and needs, and the more open and transparent your firms or partners can be about their goals and needs, the more likely it is that you’re going to be able to drive successful outcomes. Having that open and transparent communication about performance, just like you would as part of your regular employee engagement, is tremendously beneficial. It means sharing the data you’re collecting with your partners, with your outside counsel and your vendors, but also sharing how you’re interpreting the data and how you’re using it to drive your decisions.

Trusted partners that you can rely on to be an exten-

sion of your in-house operations, and that you let in to

same tool. They’re not just

understand your goals and motivations, will provide

submitting bills to a black

higher value. The more that they understand not just

box, they’re being given

the data or the details but also the motivations and

a place to communicate

strategy behind them, and the better you are able to

and view data about the

share that information, the more likely you are to have

matters they’re working



As ELM Platforms Mature, Law Departments Gain Ground On Business Goals  Jonah Paransky, executive vice president of Wolters Kluwer ELM Solutions, discusses the ways that the role of general counsel has evolved in recent years to accommodate the growing emphasis on legal ops, and how new technology can help legal departments maximize their impact while minimizing costs. CCBJ: What are some of the important high-level changes you’ve seen in legal departments over the last several years? Jonah Paransky: General counsel, under pressure from their organizations to maximize value and minimize spend, have shifted to a much stronger focus on business strategy. They are still expected to deliver the best legal advice to the companies they serve, but that now comes alongside an expectation of expertise in running the legal department efficiently and with business goals in mind.

In recent years, it has become more common for

general counsel to have a legal operations director reporting directly to them. Legal ops is an area where general counsel have placed much of the emphasis for their drive to improve performance and value. The 2019 Altman Weil Chief Legal Officer Survey found that adding personnel to the law department operations function is seen by general counsel as the best way to improve the efficiency of legal services delivery.

Given the impact of the legal ops function, it’s not

surprising that legal ops is now a much more accepted part of the typical corporate legal department. Back in 2008, the Blickstein Annual Law Department Operations Survey found that 37 percent of legal ops directors viewed “gaining attorney respect” as their primary challenge at work. Ten years later, zero percent of respondents cited that as a challenge. It’s safe to say, legal ops is well established and here to stay. 54


How are law departments responding to the current corporate legal landscape and expectations? They’re utilizing an increasing number of solutions targeted at helping them meet their strategic and business goals. The foundation of these solutions are the enterprise legal management (ELM) platforms that lay the groundwork for better operations by streamlining workflows and capturing data about legal matters and spend. We’ve moved into a more mature era of ELM, in which technology is quite advanced and is being leveraged for more of the tasks that law departments need to accomplish. Artificial intelligence (AI) is a great example of technological improvement. More than 57 percent of respondents to the 2019 Blickstein Law Department Operations Survey said that they expect most law departments to use AI for legal work in the next three years. We’ve seen e-discovery solutions, for example, introduce AI-driven technology-assisted review to improve efficiency and results in identifying relevant information. Lawyers are also using AI in their research, increasing their efficiency by letting machine intelligence find the specific citations they need in a fraction of the time it would take an attorney. Our company, Wolters Kluwer ELM Solutions, leverages AI to help inhouse legal staff with a number of workflows: LegalVIEW® BillAnalyzer is an AI-enabled bill review service that helps companies save up to 10 percent on legal spend and Jonah Paransky is executive vice president and general manager of increase billing guideline ELM Solutions. In this role, he is compliance up to 20 perresponsible for leading the overall performance and growth strategy cent. LegalVIEW Predictive of the business unit globally. Insights helps improve Reach him at Jonah.Paransky@ outside counsel selections and support important de-

cisions about matters with predictive budget and cycle time information. Ten years ago, solutions like these would have sounded like science fiction to most corporate lawyers, but today general counsel and legal ops professionals understand the value of AI. At ELM Solutions, we are also expanding into new areas like contract lifecycle management, which has been a major pain point for many corporate law departments. In May of 2019, we acquired CLM Matrix so that our portfolio could support this growing legal function need. We knew it was the right choice for us because Forrester ranked CLM Matrix the No. 2 contract lifecycle management offering in the market, and it already had customer satisfaction scores that were through the roof. It’s an excellent fit for our strategy of integrating products seamlessly so that busy legal professionals don’t need to log into separate systems to get their work done. What advice would you give to a corporate law department, regardless of industry or company size, to help them improve the business value they bring to their organization? Use all of the data you have available. That means your own internal data, as well as data from external sources to benchmark your performance against. Data is an incredibly valuable tool, and law departments that don’t leverage it to control spend and improve their decision-making are leaving money on the table. This is becoming clear to legal leaders who are more and more often seeking solutions that can provide them with clear, relevant analytics. EY’s 2019 Reimagining the Legal Function Report found that 87 percent of law departments experienced a large or moderate increase in demand for analytics in the last five years. This is an area where vendors like ELM Solutions not only have the technology but also the experience and expertise to help law departments build an effective metrics program. Because data is such an important part of value capture for legal teams, it is a major focus for ELM

Solutions. Our LegalVIEW database is the largest repository of legal spend data in the world, with more than $130 billion in detailed legal invoice data. Well over a decade ago, we created our data contributor program, which allows our clients to securely share their data for benchmarking research and product development purposes, and by now the program has grown to include more than 100 clients. That data is anonymized, cleaned, enhanced with information from outside sources, standardized, categorized, and used to generate insights, including those contained in the Real Rate Report, which has become the gold standard for hourly rate benchmarking.

What are you and the ELM Solutions team doing to help law departments improve their strategic value? We have a keen focus on the customer experience, and we constantly work with law departments to understand exactly how we can help them meet their goals. Our Total Spend Management approach emerged out of those relationships. We have innovated around e-billing and brought it to the next level with advanced technology and experts that generate savings and improve visibility into legal spend and the management of it. We are careful to not only offer solutions to client challenges but also to implement them in ways that make it easy for clients to take full advantage of them. For example, when we introduced a rate benchmarking feature that allows users to compare proposed rates to market rates, we placed it directly in the workflow where users view law firm rate proposals. Similarly, our Predictive Insights Module presents law firm rankings directly on the screen where users make decisions about outside counsel assignments. Making the data available isn’t enough – we make sure to deliver it right where users actually need it. These principles inform all of the new features and solutions we conceive of, now and in the future, and we’re excited to share our next round of innovations with law departments.  CORPORATE COUNSEL BUSINESS JOURNAL


It Takes the Whole Ecosystem to Address Law Department Issues Colin McCarthy, founder of Legal Operators, talks about recent developments in the world of legal operations, how to think big to solve current legal ops problems, and what to expect in the future of this exciting field. CCBJ: How did you arrive at your current role in legal operations? Colin McCarthy: I took a nontraditional path. When I graduated from law school, I didn’t know what I wanted to do, so I took the first job I could find. I was working in Kansas City, as a document review attorney for a law firm called Shook, Hardy & Bacon. Although the experience was good, I knew it wasn’t for me. I moved to California, where I worked for several small law firms over a short period of time, which each gave me a different perspective. I also worked at the district attorney’s office as an attorney intern and got great experience there. However, I still hadn’t found my calling. Eventually, I got a job at Sonos, a home audio company in Santa Barbara, working with a small legal team. The company was undergoing hyper growth at the time, which gave me the chance to experience many different opportunities. I learned from the general counsel there to always ask “Where can I add value?” – this was his mantra every day, and it has become mine. At Sonos, I got to learn about contract management systems. We had one that was not working for the company, so I learned to unwind it and map out and build another system. I was the first beta tester for a company called SecureDocs – who later, after building our system at Sonos, launched a new company called ContractWorks. I’m still a big fan, and I champion their success whenever I can. After Sonos, I made a move to the Bay Area to work for a semiconductor company called GlobalFoundries. 56


There, once again, I did a little of everything – intellectual property work, mergers and acquisitions, contracts, etc. I had a big focus on two particular systems – a contract lifecycle management system and an e-billing tool – and was spearheading both projects, from a legal standpoint, for a global team of 20,000-plus people. I credit a lot of my growth to these opportunities. With that experience, I moved to Rubrik, an amazing startup in Palo Alto. I had free rein to lay down new systems. The company was, and still is, in a hyper growth stage, so I had an opportunity to make a huge impact in a small timeframe. From there, I was hired by Twitter as their sole legal operations person. There was a huge amount of alignment at Twitter with what I’d already learned and accomplished, which allowed me to make an effective impact there as well. Most recently, I launched an organization/movement called Legal Operators. I have brought 600 thought leaders in our community together on a Slack channel to solve gaps in the legal ecosystem. We do this by identifying the issues, talking out loud about them, and putting brainpower together to figure solutions out. The focus of this group is to provide the best content, collaboration, community and culture to move the needle forward. We solve legal operations problems by looking at them through four lenses: process improvement, legal technology, legal spend management, and industry metrics and data analytics. It takes the whole ecosystem to solve these issues. What are some of the most significant developments you’ve seen in the industry in the last year? There was massive movement in legal tech in 2019. Contract management companies have never been

so hot. Companies like, Akorda, IronClad, Parley Pro, Malbek and Concord are all out-innovating themselves. These are exciting times for selecting tools that are not enterprise, like Apttus, Conga, SpringCm and Icertis. If I’m considering any of these tools, I know I will have to reevaluate soon, as the technology is improving year after year, with an emphasis on customer success and easy user interface. There is an apparent skills gap in legal operations. The industry to this point has reacted by putting finance people, legal people, senior people, junior people and project managers into these rolls. This has absolutely bridged the gap, but it takes a whole ecosystem to solve the issues presented to companies – such as change management, project management, tool extractions, tool implementations, tool selections, etc. It was a year of progress and moving forward. What’s your forecast for 2020?

Colin McCarthy is the CEO and co-founder of Legal Operators. With legal and accounting backgrounds and experience in the tech industry, he has managed systems including SharePoint, Apttus and Contractlogix. Reach him at

Expectations are growing across the board. There’s a big transformation happening. You’re going to have a lot more work, but there’s only so much bandwidth and budget in a law department. Add in all these new privacy implications across the whole company, and there’s a lot more strain on legal. We’re going to see much more of Axiom and/ or hiring to solve the privacy problem and the shortage of talent in the market. More remote

General counsel should be receptive to bigger ops teams to support the growth of the legal department over the next year or two. work too. And legal operations has to grow. Technology can bridge the gap between manual processes and automation, but general counsel will have a lot of new challenges, and they should be receptive to bigger ops teams to support the growth of the department over the next year or two. Tell us about Legal Operators and what you hope to achieve with this organization. I co-founded Legal Operators last May. I’d been going the Corporate Legal Operations Consortium for a couple of years, and I’d seen the amazing things they were doing for the industry. However, I felt that they had some blind spots and were missing out on some things that, frankly, seemed obvious to me. I felt that given my connections and abilities, and my understanding of the industry, I was the person to put a plan into action to fill the gaps in the market. Hence, Legal Operators was born!

We started with sponsored happy hours with a UK

law firm called Penningtons Manches Cooper, with as core sponsors and champions of our group. Our mission is to bring people together from the legal operations community, but I also wanted to include the rest of the legal ecosystem, because everybody lends a different voice. We want to bring the collective power of the legal community together and connect these collaborators, inventors and disrupters who are defining the future of the profession. That’s our mission statement. It’s bold. We started with the happy hour in San CORPORATE COUNSEL BUSINESS JOURNAL


teams, because you’re working with them collectively.

We solve legal operations problems by looking at them through four lenses: process, technology, spend and analytics. Francisco and then did the same thing in Los Angeles. Each happy hour is infused with education, with two to three 15-minute TED-style talks.

Our Chicago chapter launched in February, and

more than 80 people attended. The audience was fully

There should be knowledge transfers across the whole department.

Then look at it through a legal technology lens. Make

a technology road map of your whole company first, and then do the legal department. Identify what systems your company is using. What systems can you leverage that other departments may be using? Can you get different licenses and bring them in? That’s one way to save money, be efficient, and get the best technology

engaged, with a great lineup of speakers. Once the

without paying for it. As you make the technology road

sessions were done, we brought the participants back to

map, ask, “Is this working for the team?” Interview

the Slack channel for further discussion. The New York

everybody and get as much information flow as you can.

launch is on March 19 at the Bloomberg Law headquar-

ters, and it is quickly filling up.

Other areas where we will launch domestically soon

are Atlanta, Austin, D.C., Seattle, Philly – and maybe in your neighborhood, if there is demand. Internationally, London, Toronto, Sydney and Melbourne. We have teams on the ground in these areas that are just as en-

The third lens to look through is spending. You’ve got

to know your spend inside and out. You’ve got to have that relationship with finance, that relationship with the general counsel or manager, and you’ve got to own that process. You have to know what your law firms are expecting. You’ve got to understand the relationships.

thused about Legal Operators as I am.

You’re building processes for that as well, and under-

What’s your advice to people looking to advance their

careers in legal operations?

not measuring what you’re doing, you’re missing the

standing that spend. Finally, there’s analytics. This is a big trend. If you’re

boat, because you need to quantify where the company Join the community. Try to learn. To quote Sheryl Sandberg: “Lean in.” If you want to advance your career, you’ve got to tackle the hard things, and you’ve got to get the right knowledge from people. Don’t be frightened by that.

You’ve got to look at it through a process lens. What

are the existing processes? Learn them – and how to put new processes down. You’ve got to figure out, from a process standpoint, where the frustrations are, where

is and where the company is going.

To summarize, look at it through the lenses of pro-

cess, technology, spend and analytics. I’m sure there are more layers to it, but if you want to advance your career and build a legal operations function, this is a great place to start. Expect the best from your team, and give them an opportunity to grow. And never stop asking yourself, “How can I add value now?”

the blips are, how can you get information to and from

people, how to share information with the various

seriously. It should be fun! 



Keep a positive attitude, and don’t take yourself too

FUTURE SEATS AT THE TABLE RESERVED FOR BUSINESS SAVVY GCS WITH SOFT SKILLS  An inside look at FTI Technology and Ari Kaplan Advisors’ recent survey of chief legal officers about the future of the legal industry.


he legal industry is at a crossroads in 2020. Advanced analytics and machine learning are growing more commonplace within legal work. New privacy regulations are causing organizations to rethink their approach to enterprise data and customer relationships. Certain legal functions are growing more commoditized. And law school admissions, while up slightly in 2019, remain historically low. Against this backdrop, FTI Technology and Relativity partnered with Ari Kaplan Advisors to survey chief legal officers about the future of the legal industry and the skills and expertise needed for the next generation of lawyers. To understand their perspectives, Ari Kaplan personally interviewed 32 general counsel from corporations of all sizes. The results indicate an industry in transition across four key areas: the evolving role of in-house counsel, risk factors and how the modern legal department is addressing them, technology and innovation in law, and advice that general counsel have for law firms and future lawyers. 1. The Evolving Role of In-House Counsel From the inherent dangers of a bring-your-own-device mobile workforce to the frequent headlines about data breaches, risk is ubiquitous in today’s business environment. According to 97 percent of respondents, the role of today’s general counsel is to help companies navigate these daily calculations about risk and business strategy – a dramatic shift and expansion of their responsibilities. As the general counsel’s role has evolved, law departments have become much less binary, with respondents

emphasizing that they are less likely to summarily reject a request or idea than they used to be. No longer is legal “The Department of No.” The expectation now is that legal is an innovative unit that helps the company creatively solve problems and achieve objectives. 2. Risk Factors and How the Modern Legal Department Is Addressing Them As risk has grown, compliance has become increasingly important, and this is a key area where legal can show quantifiable business value. Regulatory penalties are costly, and reputational damage can have dire long-term consequences. Fortunately, demonstrating compliance – especially around data privacy – can earn customer loyalty. More than half of respondents reported that data privacy regulations and compliance pose the greatest enterprise risks today, and two-thirds reported changing their data privacy policies to comply with the General Data Protection Regulation. For many, their organizations had an “important wakeup call” in the form of an internal or external breach, leading to formal, substantive plans and additional investments in privacy compliance. 3. Technology and Innovation in Law Like other business departments, legal is embracing cloud-based apps, with 75 percent of respondents reporting the use of service-as-

Ari Kaplan, founder Ari Kaplan Advisors, is a leading industry analyst and the principal researcher for a variety of widely distributed benchmarking reports. He often speaks with students and professionals on how they can leverage technology and distinguish themselves in the downturn.



legal work. From contracts and e-discovery to case management, general counsel view best-of-breed applications as a cost-effective means of remaining agile.

Growing data volumes impact many legal functions

beyond e-discovery, which may be why 44 percent of respondents reported that they are using or planning to leverage artificial intelligence for other functions as well, such as reviewing and managing contracts. 4. Advice From General Counsel to Law Firms and Future Lawyers From technical skills to thoughts on the value that working at a large law firm can provide, respondents shared a lot of practical advice for current law students. For some, the legal profession is “a calling,” albeit a highly competitive one at which some do not succeed. Most advised law students to gain a broad set of technical and soft skills, develop an appreciation for how businesses work, and research all of the career options available to them after law school, from large and small law firms to corporate and government work. 60


When it comes to working with outside law firms, general counsel report that their legal departments want practical advice, better communication and lower fees – but most of all, they want these law firms to know what they and their companies value most, and to focus on delivering exactly that. What Lies Ahead This is a period of transition for the legal industry and especially for the role of general counsel. As the position grows in stature, so do expectations, which includes broadening responsibilities to encompass more of a business-strategist role, adopting emerging technology and innovation to combat growing external threats, and running a legal team with a service-oriented approach. Successful general counsel of the future will need a wide array of practical business experience and soft skills in order to keep a seat at the table and help companies navigate an increasingly complex global environment. Read the entire General Counsel Report 

The Expanding Remit of the Corporate Legal Department

 Bill Piwonka, chief marketing officer at Exterro, discusses key ways that legal departments have evolved in the last decade, including operational and process changes, technological advancements, and the new role of the general counsel. CCBJ: The role of the general counsel has changed dramatically in the last 10 years. What’s been the driving force behind these changes? Bill Piwonka: The general counsel or chief legal officer used to simply be responsible for providing legal advice and managing litigation and other legal operationsfor the organization. In the last 10 to 15 years, the role has evolved and grown so that different parts of the organization are now actually reporting up to the GC or CLO – I use those terms interchangeably. These days, you’ll see privacy reporting to that person; you’ll see compliance and ethics reporting to that person. Over the last six or seven years, we’ve seen legal operations taking on a much broader and more important role. I think it’s in response to the C-suite focusing more on legal and saying, OK, how do we continue to provide the best legal representation and legal advice to the organization, while controlling costs at the same time? And consequently you’re seeing a lot more functions that previously had been outsourced being brought in-house. We’re seeing more projectmanagement-certified individuals come in and really treat legal as a business process. So you’re seeing a much broader scope for the GC or CLO – and I’d say that what’s driving it has a lot to do with what’s happening in society itself. Privacy has become a very big focus, really coming into play with the implementation of the General Data Protection Regulation (GDPR) in Europe, and then this year in the U.S. with the California Consumer Privacy Act. There are 13 or 14 other states

that have privacy legislation winding through their legislatures as well. Clearly consumers and governments are focused on privacy. So organizations need to make sure that they’re compliant with all these various privacy regulations. Cyberattacks and hacking are a constant threat. You’ve got to focus on compliance in terms of regulatory mandates. If you think about a company that’s in pharmaceuticals, or finance, or utilities, for instance, these industries are heavily regulated, and you absolutely have to make sure that you’re compliant. So having somebody who understands the various implications from a legal perspective overseeing different groups or departments makes a tremendous amount of sense. What are some of the changes in organizational structure that you’ve observed? Previously, you might have had some of these different groups and departments within a company being more independent. Now they are reporting up to the GC or CLO. So there’s more of a need for collaboration and communication than ever before. I’ll give you a couple of examples. The GDPR and CCPA give individual consumers the right to ask companies what data they have stored on them, what they’re doing with that data, and which third parties have access to that data. They can request to see the data, and in some cases, they can request to have that data deleted. At the surface level, you might look at that and think, OK, that’s the responsibility of the privacy group, right? These are privacy regulations, so privacy should handle that. But if you think about the process, you realize that a consumer comes in via the Web or an online portal, or even over the phone, and requests this information, right, that’s going to kick off some workflow that makes sure the request goes to the right person. If it’s an employee CORPORATE COUNSEL BUSINESS JOURNAL


making the request, you probably want to send it to somebody in human resources to get the information, as opposed to somebody in the privacy group or IT – which may be very different than if it was a consumer making the request. After somebody is tasked with finding the information, you have to collect it, and you have to review it. Often you’ll have to redact certain information, because it may not pertain to that specific requester, and then you have to produce it back. When you think of it that way, it’s e-discovery, right? So a lot of these companies have e-discovery technologies in their legal group, but the privacy people may not even be aware of it. Soif you’re trying to operationalize and become more efficient, you want to have privacy and the legal ops or e-discovery professionals working together on these data subject access requests. And it gets even more complicated if the request is to delete the information. Because on the surface you say, OK, the law says we have to delete it if we’re requested to do so – but before you do that, you have to have an understanding of whether that data is under a legal hold or is subject to retention regulations from some other piece of legislation. So now you start thinking, well, the compliance group needs to be able to say, OK, we have to be comBill Piwonka oversees all marketing functions for Exterro. His pliant with this regulatory background is rooted in businessobligation. Legal has to be to-business marketing operations. During the past 20 years, he has involved to say we can’t led marketing teams and initiatives delete something that’s spanning strategy, product marketing, product management part of a legal hold. So now demand generation and more. Reach you’re seeing how multiple him at departments, which are all 62


reporting up to the GC or CLO, need to work together and harmonize their efforts to ensure that everything is being done appropriately. From an organizational perspective, what we’re seeing is a blurring of the lines between these formerly distinct departments, which used to be more siloed in their day-to-day activities. Could you talk a bit about legal governance, risk and compliance (GRC) and why it’s important? First, it’s important to point out that GRC is a term that’s been around for a while, right? And it has different focus areas. There’s information technology GRC, there’s finance GRC, there’s human resources GRC. But in terms of legal GRC, say you’re the person responsible for legal compliance, and you also have strong ties to privacy and security from the perspective of what your legal obligations are in a breach response. If an unfortunate cyber event happens, if you get hacked, there are legal requirements about when and how and to whom you have to communicate the breach information. If you’re the person at the top of the organization, you need to have a way to consolidate these different activities and tasks and leverage the information and technology you have in your organization. So ideally you’ll want one platform that has commonalities that can be used across all of these different departments to help people do their jobs. I would argue that you need to start with a robust, modern enterprise-class data inventory system, where you know where your data is and who owns it, the data-retention regulations that govern that data, of course, as well as what third parties have access to it. That will allow you to effectively analyze the data and respond to various requests for it. But on top of that, you also need to have the ability to connect to those data sources, so that you can verify what’s in your data inventory, go find the information you’re looking for,

and find information that’s potentially stored inappro-

ing technology and process management and process

priately or in the wrong place. Legal GRC is an approach

optimization has been applied to all kinds of things:

– from a technological perspective – to becoming more

how we close out our financial books every month, how

efficient and productive and operationalizing all of

wemanage our supply chains, how we develop applica-

those different tasks and activities across the various

tions, how we run our manufacturinglines. Over the

departments that report to the GC.

last 30 years, organizations have used strategies like Six Sigma and other process methodologies to become

How are general counsel, legal ops professionals

more productive and effective, to do things at alower

and others in the industry increasing their technical

cost but with higher quality. And over the last five to


seven years, we’re finally seeing legal get process optimization and process management applied to it. As the

Partially, it’s just a natural demographic evolution. As

C-suite is taking a sharper eye to the cost of the legal

the workforce changes and gets younger, there’s a grow-

organization, they’re saying OK, we can do things more

ing percentage of digital natives who are already very

effectively. We can utilize technology to better manage

comfortable with technology. As the part of the work-

our internal operations from a legal perspective. So I

force that is less comfortable with technology reaches

don’t think it’s necessarily that the industry is going

the end of their careers, they’re gradually being re-

out and taking computer classes or something like that

placed by that younger generation. But also, purely from

to increase its technical competency. It’s just a natu-

a process standpoint, if you go back to what I was saying

ral evolution of understanding that technology can be

about legal operations business-process optimization or

appliedto the legal department’s day-to-day activities,

business-process reengineering, those ideas have been

to make everyone’s jobs easier while reducing costs and

around for 30 years already. The discipline of apply-



The Limits of Incremental Improvements


t the recent, excellent Law 2030, Vijay Govindarajan observed, “There is only so much Six Sigma you can do.” Despite my affinities, I concur. Low baselines can have an outsized impact on the efficacy of interventions— but then baselines stop being low. Consider buying a car with an eye towards better gas mileage. Which technological leap saves more gas? Improving a car’s miles per gallon (i) from 10 mpg to 20 mpg or (ii) from 20 mpg to 100 mpg? Put another way, from the perspective of gallons saved, what is the ‘bigger improvement’ (i) +10 mpg/2x or (ii) +80 mpg/5x? Since I’m asking the question, you already surmised the answer is counter intuitive: Miles per Gallon




Leap 1

10 mpg

20 mpg

10 mpg

Leap 2

20 mpg

100 mpg

80 mpg


10,000 miles

Fuel Consumption

Fuel Savings



1000 gal

500 gal

500 gal

500 gal

100 gal

400 gal

One simple takeaway is that once you cut something in half, there is nothing you can do, save eliminating it entirely that will ever again deliver the same raw level of improvement. In the legal context, for example, we have good reason to accelerate contract review. Start with a standard review that averages 20 minutes and reduce it by 60% through basic interventions (harmonized templates, checklists, playbooks, deviation matrices, etc.). You save 12 minutes per contract. Next, throw on some razzle dazzle AI that reduces average review time by another 60%. You save less than 5 additional minutes. That’s not nothing, especially with large volumes. But it comes at a cost, including the opportunity cost of addressing other chokepoints, constraints, and rate-limiting factors. With that framing, the point seems obvious. Then again, everything is obvious oncve you know the answer. Diminishing returns are not usually so obvious. What “feels” obvious is: if some is good, more is better. Thus, we regularly encounter organizations doubling down on what already worked and being disappointed when their returns don’t double accordingly. I love low-hanging fruit. I’m such a fan of incremental improvement we’ve not only segregated LPM team 64


members to specialize in upgrading our delivery infrastructure, we’ve also rolled out a competency framework that formally requires every LPM to measurably contribute to improvement initiatives. Pick the low hanging fruit. But then move on to other low hanging fruit (there’s plenty if you can avoid a fixation on past successes). Ultimately, however, you will need to pursue nonlinear innovation (recall “eliminating it entirely”). There are many small steps on the way to true transformation. But eventually you need to take some big steps, too. OK, one more silly math problem. I had the good fortune of sitting in on a presentation from Dr. Larry Richards—he of “lawyer brain” fame. If you are unfamiliar with Dr. Richards’ research, I commend it to you. In this presentation, Dr. Richards focused on strength-based teaching. Specifically, he cited a seminal study in which 6,000 Nebraska school children were taught to speed read. Where “normal” students improved their reading speed from 90 to 150 words per minute (+60 wpm, +67%), “gifted” students improved their reading speed from 350 to 2900 words per minute (+2550 wpm, +729%). The moral of the story is leaders should leverage their team’s strengths — i.e., identify and foster the diverse talents of individual contributors. The literature on team performance and work satisfaction supports this conclusion. But what if we looked at it another way? What if, instead, the problem we were trying to solve was saving time on a finite task? What if we wanted the school children to get through their prescribed reading so they had time for other activities (music, sports, reading for fun)? Which group is actually saving more time? Let’s assume they need to read 10,000 words per night (i.e., ~20 pages). Speed

Normal Readers Gifted Readers





150 wpm

60 wpm

2,900 wpm

2,550 wpm

350 wpm




Time Savings



111.1 min

66.7 min

44.4 min

28.6 min

3.4 min

25.1 min

The obvious answer is not always the right one, especially when the question changes.  Casey Flaherty is Director of Legal Project Management at Baker McKenzie.


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