Today's General Counsel, September 2022 by Today's General Counsel

ISSUU.COM/TODAYSGC $199 SUBSCRIPTION RATE PER YEAR ISSN: 2326-5000 SEPTEMBER 2022 VOLUME 19/NUMBER 6 TODAYSGENERALCOUNSEL.COM • Don’t get ambushed by the SEC’s climate disclosure rules • Commercial insurance and biometric data risk • The GC/CLO partnership • How big is your water footprint? • The benefits of contract data modeling • A new e-discovery workflow • Interviews with key service providers Practicing Law in the Metaverse

Isolate the substantive topics the contracts cover.

New context, same old issues.

Informed, transparent and defensible.

7 Interview With Joan Fox of Legal Suite

By Steve Shropshire

Seminal cases and notable departures.

24 Contract Data Models: A Modern Framework for Digitization

Build expertise internally or else hire experts.

By Matthew C. Welnicki and Michael P. Dickman

Both online working and online hiring face legal challenges.

10 Interview With Ken Crutchfield of Wolters Kluwer

4 Editor’s Desk

COLUMN/CLIMBING THE LEGAL DEPARTMENT LADDER

By Michael Wright

COMPLIANCE

By Phillip R. Voluck and Jennifer L. Prior

FEATURES

3SEPTEMBER 2022 TODAYSGENERALCOUNSEL.COM contents SEPTEMBER 2022 Volume 19/Number 6

26 Managing Corporate Water Footprints

CYBERSECURITY

INTERVIEWS

By Peter A. Halprin and Tae Andrews

By Chase D’Agostino and Ryan Finn

28 Attorney-Client Relationships in the Metaverse

20 Legal Pitfalls of the Virtual Workspace

By Andrea Bricca

By Michael Littenberg and Marc Rotter

HUMAN RESOURCES

22 General Counsel Benefit By Partnering With Legal Ops

Staying ahead of the regulation curve by buying offsets.

Take advantage of vital information.

14 Preparing For the SEC’s Climate Disclosure Rules

E-DISCOVERY

New technology to facilitate GC leadership.

18 Are Biometric Privacy Liability Risks Covered By Insurance?

All-in-one solutions can be implemented in phases.

16 Modernizing the eDiscovery Workflow for Emerging Data Sources

4 TODAYSGENERALCOUNSEL.COM SEPTEMBER 2022 BACK TO CONTENTS

EDITOR’S DESK

n this issue of Today’s General Counsel, Matthew C. Welnicki and Michael P. Dickman discuss some issues that can arise in the context of virtual legal relationships. For example, a greater likelihood that expectations and understandings will differ. The authors suggest having occasional real world meetings to clarify the terms of engagement. There is also the question of secure communications, because the metaverse is just as leaky and prone to hacks as the other-verse. Worst case, the attorneyclient privilege can be jeopardized.

We are heartened by the significant growth of Today's General Counsel in recent years. We have more readers than ever and greater audience engagement with our newsletters, emails, and webinars. Our growth has pushed us to create more publishing vehicles to keep up with demand: Today's Risk Manager; Today's Legal Ops; and soon Today's Managing Partner and Today's Association Executive. These will share the same editorial focus of exposing to a best-in-class audience of highly engaged readers the best practices in the field they serve. They also will share a parent publishing entity called Today's Business Leader. Under this umbrella, we hope to continue to provide the kind of counsel professionals rely on to improve the organizations they serve. Thank you for being fellow passengers on this journey.

In her column, Andrea Bricca advises in-house attorneys looking to move up to GC or CEO to forge a solid relationship with the legal operations function at their company, and in a must-read for many law departments, Michael Littenberg and Marc Rotter’s discuss what they say is arguably “the most significant expansion of the SEC’s disclosure and compliance regime for reporting companies in decades.” Peter Halprin and Tae Andrews provide an overview of disputes about whether general liability insurance covers penalties imposed because of biometric privacy violations, and Steve Shropshire suggests getting ahead of inevitable rulemaking about corporate water footprints. This issue also includes several articles that deal with a subject of increasing interest to in-house legal departments: managing contracts and how to mine the data they contain.

Bob Nienhouse, bnienhouse@TodaysGC.comEditor-In-Chief

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Interview With Joan Fox of Legal Suite

oan Elizabeth Fox is the Manager of U.S. Sales and Operations for Legal Suite, a member of the Septeo Group. She has spent 20 years working with cor porate legal departments to improve and develop process methodologies, applying best practices to implement technology that automates and supports these processes.

an approval flow. It bogs down the entire orga nization, and I think where we stand today with technology solutions, it should certainly be much easier to manage than it is.

Let’s take this challenge a step further and talk about collaboration applications and how their usage has risen immensely in the last two years. Can these collaboration apps provide a positive personal impact in a legal department, and can this personal impact help keep an organization’s valuable assets and employees engaged and excited about their jobs? That’s a really good point, and the answer is “yes.” Because today people who bring profitability to an organization, your hardworking employees, have a lot of choices. And frankly, if I were a job seeker today, I would ask a lot about the technology available to support me. For a legal department, technology needs to be really easy to use while enabling the sharing of documents and initiating a chat in the same space.

Absolutely. Attorneys are getting further away from their primary function, which is practicing law. Now they have to manage email to accurately understand where something is in a workflow or

If you think in terms of, I have projects 1, 2, 3 and 4, and I’m working with four different people

ThanksJoan.fox@legal-suite.comforjoiningus.Let’s

SEPTEMBER 2022 TODAYSGENERALCOUNSEL.COMBACK TO CONTENTS 7

start by talking about some of the biggest challenges in-house legal departments face with managing internal communications and how they’ve changed over the past two years. We’re all familiar with the challenges of email. It’s never ending, at work through Outlook or on your phone everywhere else, and trying to organize it and maintain visibility is truly challenging. For the legal department, these challenges become even more amplified because of organizational risk. Now that people are working at home outside of the organization, managing internal clients, projects and contract negotiations without visibility or con trol over their workstations becomes a cascade of problems and risks, creating a loss of efficiency.

So it seems like the work from home movement adds a layer of project management for the legal department.

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All of these technologies we’ve been talking about, email and chat, they’re a loop that never closes, which at its foundation, is stressful. Can a system designed to work the way that legal minds engage help reduce burnout?

Visibility is a good way to describe that, which enables the attorneys to develop strategies around these insights.

I think that would be really interesting. Ideally, you’d want a system designed by a lawyer for lawyers. You should be asking, what in this system is helping me immediately provide legal advice to my internal client? Can internal clients communicate without legal being aware? Is there a system tracking activity history, not only for legal department users but for internal clients as well? If documents are downloaded or documents are sent out, there’s a little more visibility over that activity.

Traditionally, legal departments usually aren’t profit centers, and they’re looking for ways to prove their worth to the larger organization. How can a technology solution help the legal department reach goals like lowering costs, while at the same time benefiting legal staff?

SEPTEMBER 2022 TODAYSGENERALCOUNSEL.COMBACK TO CONTENTS 9

That’s where you need an architected platform, a solu tion built and designed to help a legal department reach its goals, so you’re not spending money to fit a square peg into a round hole. You want lawyers to spend more time being lawyers, creating contracts and clauses that actu ally benefit the organization, then run easy reports from data holistically collected by the technology, and com pare the performance on a contract life cycle a year ago versus today, showing the percentage of time reduced.

on these projects, I need a way to very easily see the last time I talked to them, what their response was to me, if there are documents attached, and to view those documents without opening another application. All of those things take extra time.

That’s excellent. Being able to check things off your list is a good thing indeed.

The in-house legal department mantra over the last few years has been “Do more with less,” and this type of solution seems to enable that by lowering costs through efficiencies gained by allowing attorneys to be attorneys rather than administrators. Can this type of technology also provide greater protection under the work product doctrine if the design and configuration are done by the legal department using the tool?

Absolutely. There are many different studies about email and the stress that it causes. Being able to help the people working for your department, your internal clients and lawyers, so they can actually take something from the beginning through to conclusion and close it without having to say, “You need to send another email,” is vital to avoiding burnout. Instead, you can run a report and see you have 75 cases pending, and each one of those cases would have a different status in progress or waiting for judges’ order or whatever stage it might be and with that visibility, you would be able to close that loop and have the satisfaction of saying, “I checked this off my ‘to do’ list today. It’s completed.”

I think that as far as risk management goes, it’s a game changer. Legal doesn’t have to wait for IT. They are not spending time figuring out how an internal client set up their Outlook. Where are their folders? How did they name it? We all have a different way of working. They can just type in a series of search words and find it.

Not to be clichéd, but it sounds like in-house counsel are “Jacks and Jills of all trades, and masters of none.” Absolutely. GC stands for general counsel with an emphasis on general, so you’re dealing with different issues the com pany encounters throughout the day, week and year, and that’s part of the allure for some people to move in-house.

Something you said earlier leads to our second ques tion. Corporations expect all departments, including legal, to contribute to the company vision as well as the bottom line. What processes are critical for in-house counsel to accomplish these goals? It’s important as a GC to understand what the company is trying to accomplish, and what the strategy and goals are to inform what’s important for GCs to work on.

If you’re working within a law firm, the focus tends to be on billable hours. You have multiple clients, and you’re operating within a partnership of individuals who are sharing profits. So moving in-house can be a significant change. Oftentimes, one is looking for a client that is interesting, fun to work with and has a good culture, but on the other hand, you only have one client with one business. As in-house counsel, you have to focus more on the business needs of that organization and relate the legal issues to business outcomes more directly.

In this interview, we focused on the differences between in-house counsel and working at a law firm and how technology can support the in-house legal department.

For example, if your business is focused on managing its reputation, maybe staying out of the news is a crucial part of the conversation. If you’re in a fast-growing industry and

Interview with Ken Crutchfield of Wolters Kluwer

oday’s General Counsel spoke to Ken Crutchfield, Vice President and General Manager of Wolters Kluwer Legal and Regulatory U.S. The Legal Markets Group within Wolters Kluwer Legal & Regulatory U.S. provides legal professionals across a wide range of markets with expert content and analysis and leading workflow solutions. Ken is responsible for setting the vision and strategic approach with a focus on developing leading digital products. He brings three decades of experience to his role. Prior to joining Wolters Kluwer, he was the Senior Vice President & General Manager for the Bloomberg Tax Technology division of Bloomberg BNA. He also served in executive-level positions at organizations including Thomson Reuters and LexisNexis. Throughout his career, he has successfully led the growth of multiple businesses in varying industries, including tax & accounting and legal.

How is working as an in-house counsel for a com pany different from practicing at a firm?

In-house work may be a little bit more repeatable at times (think about reviewing customer contracts), but it’s also dynamic: You may be working on intellectual prop erty in the morning, negotiating a sales contract in the afternoon, and dealing with an employment issue to close out the day. The other thing in-house counsel needs to be aware of is when to engage outside counsel. Certainly, when an issue is trending towards litigation, outside counsel should be engaged. But there are more subtle decisions. Recognizing bespoke issues where a specialist at a firm could perform the work more efficiently is a great

10 TODAYSGENERALCOUNSEL.COM SEPTEMBER 2022 BACK TO CONTENTS

example. There may also be situations where staff aug mentation is needed due to a lack of internal resources. And of course, there are important transactions or issues where outside expertise is required.

It seems that having legal ops focus on these other important aspects within the legal department lets the GC concentrate on practicing law. Indeed. That’s one of the many reasons the legal ops role has become so important in corporate legal departments.

When it comes to the technology a legal department can implement, this depends on the size and resources of the organization. For many law departments, a single allin-one product might be very effective (and all that can

The legal operations role has been emerging over the last few years. Why is this role more important than ever?

There is a tension between understanding and oper ating the “big picture” and managing the day-to-day. Going back to your first question, going in-house means you’re working for a company and managing a depart ment. There are business practices like managing your budget, planning, and other tasks overlaid on top of your legal work. For many new GCs, this learning can distract from the goal of having a seat at the C-Suite table.

SEPTEMBER 2022 TODAYSGENERALCOUNSEL.COMBACK TO CONTENTS 11

Are these things possible to achieve with a single technology, or does it take a combination of tools to do this effectively?

The legal operations role is increasingly focused on measurement, and the application of KPIs that help sup port business goals and effective management of the law department help with that measurement. There can be concrete measures, for example, reducing cycle time on contract negotiations, but also supporting new issues that are important to the company. For instance, ESG is a big area that is affecting not only publicly traded companies through mandated filings and the demands of investors but also private companies as well. Also, there are less obvious areas where KPIs can help: Acquiring and retaining talent remains a challenge.

You mentioned earlier that when working in-house, because there’s a single client, there can be a lot of repetitive work. How does technology play a key role for legal departments?

In the end, you want to be a part of the C-Suite and have input in the business. The GC should be perceived as a strategist and the law department, an enabler. Too many law departments are perceived as the “department of no.”

be afforded.) But if you’re in a larger organization that can leverage the IT department, you may take a best-ofbreed approach by integrating a number of solutions. In mid-sized companies and also law departments that are still running on, say, Sharepoint and Excel, I think the opportunity for an all-in-one legal technology product is a great way to support business priorities.

top-level growth is the goal, you might have a very different set of goals and objectives from a procedural perspective in your organization. Similarly, a slow-growth business may be looking at margin and cost. If you are in a heavily regulated industry, like banking or energy or telecom or the manufacture of chemicals, then understanding what your operation does, where it’s done, and what changes are happening in the business and in the law will be critical to the regulatory compliance aspect of the job.

It is also important to note that a law department can adopt a technology strategy by defining a multiyear plan and roadmap. There are all-in-one technologies including CLM, legal ticketing, entity management, the ability to manage intellectual property, real estate holding and legal compliance in general. All-in-one solu tions can be implemented in phases.

There was an ACC study from a couple of years ago sug gesting that of any action a law department could take, adding legal operations staff would have the greatest impact on maturing the law department. I think, as the legal ops role is still evolving, you don’t have to be trail blazing right now. You can learn from the experiences of peers and apply that learning to your situation with greater confidence you’re going to get results.

Technology is very important. Having a legal solution that helps ensure there’s a full view of the requests coming in will help you manage the law department. Having a single source of truth for information, and then being able to leverage technologies like AI to extract information and analytics are beneficial.

Also as I mentioned earlier, regulatory compliance can be a very challenging process. Having a system to keep track of the legal entity structure and all the changes in the operation and the laws regulating them is critical.

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prescriptive disclosure requirements that apply solely to climate-related issues. In drafting the proposed rules, the SEC drew heavily from vol untary reporting frameworks such as the Task Force on Climate-related Financial Disclosures (TCFD) and the Greenhouse Gas (GHG) Protocol.

The proposed rules would require a new financial statement footnote with disclosure of climate-related impacts (above a de minimis threshold) on each individual line item; Scope 1 and

closure of climate-related risks. In lieu of specific line items that require climate disclosure, guid ance has been issued (first in the form of a concept release in 2010, and more recently in the form of a sample comment letter) highlighting areas where the disclosure require ments that apply to all aspects of a registrant’s business may require discussion of climate-related issues.

In contrast, the proposed rules would create a series of new, highly

COMPLIANCE Preparing for the SEC’s Climate Disclosure Rules

Currently, the SEC’s rules take a principles-based approach to dis-

n March 2022, the Securities and Exchange Commission (SEC) proposed new rules aimed at requiring SEC-reporting companies to provide extensive and comparable disclosure of climate-related risks. The proposed rules are arguably the most significant expansion of the SEC’s disclosure and compliance regime for reporting companies in decades.

SEPTEMBER 2022 TODAYSGENERALCOUNSEL.COMBACK TO CONTENTS 13

If the proposed rules are adopted, companies would need to develop new procedures and internal controls over financial reporting, and develop methods for disclosing greenhouse gas emissions.

If the proposed rules are adopted, companies would need to develop new disclosure controls and new internal controls over financial reporting, adopt new accounting policies, and develop methods for

financial statement requirements, greenhouse gas emissions disclo sure and assurance requirements, and phase-in periods for various aspects of the proposed rules.

Second, because the SEC’s rules will draw heavily from the TCFD and GHG Protocol frameworks, com panies should continue efforts to comply with or evaluate readiness to comply with those frameworks.

Michael Littenberg is a partner and Global Head of the ESG, CSR, and business and human &practicerightsatRopesGray.

and making efforts to educate and/ or recruit appropriate personnel.

Finally, companies should keep an eye on comments submitted on the proposed rules by significant industry groups, other market par ticipants and academics, as well as

14 TODAYSGENERALCOUNSEL.COM SEPTEMBER 2022 BACK TO CONTENTS

Michael.Littenberg@ropesgray.comMarcRotter is counsel in the capital markets group at Ropes & Gray. ropesgray.commarc.rotter@

disclosing greenhouse gas emissions. Many will also need to undertake new or enhanced education efforts, and are likely to strongly consider adding new personnel with relevant expertise.There were extensive public comments on the proposed rule, which the SEC is required to review and consider before adopting final rules. The comment period ended in June 2022. Areas likely to be subject to revisions include the proposed

emerging international disclosure requirements (such as the recently published draft International Sustainability Standards Board standards), as these will inform the directions the SEC is likely to con sider when finalizing the proposed rules.

Scope 2 greenhouse gas emissions data, with third-party assurance over that data and, in many cases, Scope 3 emissions; a discussion of climaterelated risks and impacts over the short, medium and long-term, including granular disclosure regarding any use of scenario anal ysis and internal carbon pricing; details regarding the company’s pro cesses for identifying and managing climate-related risks; disclosure regarding oversight of climate risk, including identifying board mem bers who have climate expertise; and a discussion of climate-related goals and targets set by the company. As proposed, all of that information would be included in annual reports and registration statements filed by reporting companies.

First, companies should consider whether to build climate-related expertise internally or hire additional personnel. Financial reporting, and legal and internal audit functions, are likely to require expertise, as will boards and senior management. The learning curve for climate-related issues is steep. Competition for qual ified persons with climate-related expertise is likely to become increas ingly fierce, so it is worthwhile for companies to begin identifying gaps,

After the final rules are adopted, they will likely face legal challenges, so we believe it is premature to devote extensive resources to com plying until that process is complete. There are, however, steps that companies should take to position themselves so they are prepared when any final rules come into place.

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Despite their permissibility as evi dence, new data forms are diverse and can be challenging to handle. With the wide variety of new data sources used at both the personal and enter prise levels, it is commonplace to encounter new data types regularly. There’s always a “gotcha.” Whether converting data from JSON for Slack, dealing with changes to various mes saging platforms as they include new ways for users to interact, or trying to pull key evidence from a new social media app, each data type can be a new puzzle for vendors, and certainly forWithlawyers.the steady rise of e-discovery motion practice finding sympathy with judges and even arbitrators, any innocent mistake can quickly be recruited into an argument against yourThisclient.iswhy a new e-discovery workflow is needed to meet these challenges. Litigation support ven dors typically work with an email discovery-specific workflow to support attorneys. To deal with the present challenges, law firms should look for vendors that can do more. Vendors need to be able to work with a multitude of data sources, and advise on and perform their collection where needed. A modern workflow must spot potential issues as early as possible, have ready solu tions to anticipate those problems

VECA has been designed to enable and evidence a process that is as informed and transparent as it is defensible. For matters that entail troves of data, where leaves cannot be left unturned, VECA allows you to see into even the dark and impene trable corners of old servers, large device collections and cumbersome client file types, most of which are utterly irrelevant but must be intel ligently excluded. Finally, VECA

E-DISCOVERY Modernizing the eDiscovery Workflow for Emerging Data Sources

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he world is changing, and so are the ways we com municate. In wake of the pandemic and the rise of remote work, there has been a prolifera tion of new ways of meeting. At the same time, people are more aware of cybersecurity and privacy, and they’re more wary of communicating in emails.These days, emails are less frequently used internally. If an orga nization uses Microsoft Office365, they’re likely communicating more intimately in Teams, meeting in Teams and sharing files in Teams. Others may use a combination of tools like Google, Slack, Zoom or WhatsApp. So, it is unsurprising that when litigation arises, the key docu ment is often found outside of email communications.

For law firms engaged in litigation — and increasingly, electronic dis covery — this makes the challenge of finding key evidence in a large data set even more difficult. While it may be true that crucial documen tary evidence today is often found in text and chat, in part because people have become aware of the discov erability of emails and speak more freely in these alternative commu nication channels, under the Federal Rules of Civil Procedure these newer data sources are just as discoverable as email.

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L. Prior is an associate at Kaufman Dolowich & Voluck. She focuses her practice in the area of defense.practicesemploymentliability jprior@kdvlaw.com

of the goods and services offered on the website. According to a report from Accessibility.com, in 2021, 2,352 web access suits were filed against U.S. businesses, representing a 14 percent increase from 2020.

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business’s status as a public accommodation or employer, the best practice to comply with the ADA remains to consult with competent legal counsel and web developers to mitigate the risk of costly litigation. Developers can help businesses audit their digital platforms to ensure accessibility and assist with training employees on how to respond to inquiries, issues or complaints from either the public or prospective employees. In addi tion, businesses facing filed claims may wish to consult their insurance broker or insurer about whether they have any insurance coverage for the claim, including under an employ ment practices liability policy.

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By ANDREA BRICCA

CLOC started with around 15 to 25 legal operations professionals in 2010, incorporated as a nonprofit with 40 members in 2016, and has grown to host an annual event attended by over 4,000

services.” Regular readers of this column understand the importance of integrating the legal department into the operations of the business. All other aspects of any company are driven by data and metrics. The legal department needs to do the same. No longer can an in-house lawyer claim the “business of law” is not part of being a lawyer, or that it is “not what I went to law school for.”

General Counsel Benefit by Partnering With Legal Ops

The area of legal operations most in-house lawyers start with is con tract management. As the operation of the department matures, e-billing and e-discovery are often folded into the mix. The added technology and the data it provides help with vendor selection and oversight, and lead to more effective financial discipline

For the uninitiated, according to CLOC, “Legal operations (or legal ops) describes a set of business processes, activities and the profes sionals who enable legal departments to serve their clients more effectively by applying business and technical practices to the delivery of legal

professionals. It started in the mecca of data, Silicon Valley, and now departments worldwide are seeing the benefits of using technology, data and integration as a backbone of an effective corporate legal depart ment. By using data, metrics and technology, legal departments and their general counsel are better able to demonstrate value, retain talent and operate more effectively and efficiently.

AFRICA&LINDSEYMAJOR,BYGRAPHICS

orward-looking general counsel, along with those lawyers on the road to gen eral counsel, are adopting legal operations as a key component of their strategic plan. The growth of this facet of legal departments was showcased at the 2022 Corporate Legal Operations Consortium (CLOC) Global Summit. In order to be a general counsel in the future, understanding how legal operations can improve the delivery of in-house legal services will be required.

22 TODAYSGENERALCOUNSEL.COM SEPTEMBER 2022 BACK TO CONTENTS COLUMN/CLIMBING THE LEGAL DEPARTMENT LADDER

Andrea Bricca is a Partner with global legal search firm Major, Lindsey & Africa. She matches employers and lawyers to organizationaladvanceand

SEPTEMBER 2022 TODAYSGENERALCOUNSEL.COMBACK TO CONTENTS 23

and legal spend management. Legal ops systems can help general counsel manage outside counsel spend and risk — things that are important to the business overall.

career goals. abricca@mlaglobal.com

Where Companies With Legal Operations Departments Are Concentrated

Our firm’s most recent data shows that 28 percent of the Fortune 1000 have a legal operations function, and the number continues to grow. Additionally, a chief legal operations survey indicates that of those com panies with a legal ops function led either by an administrator or legal operations professional, 73 percent said it was the biggest factor in opti mizing the efficiency of their legal department.Toaddvalue to any business and be proactive rather than reactive, you need good knowledge manage ment and use of data. Lawyers are often seen as reactive, the opposite of what is needed in an in-house

setting. The right systems and people can help the legal depart ment be a leader in institutional knowledge, which in turn helps the general counsel and his or her team provide strategic legal advice to the business — a crucial element of being an effective general counsel leading an effective legal team.

Statistics based on profiles and information available on LinkedIn. Data pulled from CLOC’s 2021 State of the Industry Report and ACC’s 2021 Law Department Management Benchmarking Report.

According to a COO who spoke at CLOC, for anyone with a goal of moving from general counsel to CEO in career progression, the

How a legal operations function is deployed in your organization must be congruent with how the busi ness operates and its legal demands. There is no one-size-fits-all way to implement a program. Start by eval uating your biggest legal challenges and spend to determine what tech nology and systems could make an immediate or significant impact.

information available to the gen eral counsel from an effective legal operations program could be key. A lawyer aiming to be a general counsel should understand how legal oper ations helps the department. The institutional knowledge gained can help general counsel be better busi ness partners. That will better equip general counsel to advise CEOs and boards, and potentially rise to CEO.

Implementing CLM may give you a place to store digital versions of your contract, but it doesn’t change the fact that your contract is still an

you can act on across your enter prise, far exceeding common basic use cases such as contract name, effective date and term.

• Feed data to your entire enterprise.

A data model is a map or a blueprint that provides a greater understanding of what it depicts. For example, there may be countless ways to draft a limitation of liability provision that caps damages at two times fees paid in the last year. From a data model perspective, they can all be mapped back to the same value (e.g., “Limitation of Liability = 2x Fees (Annual)”).Datamodels turn contracts into usable data you can store in your CLM and across your enterprise information technology platforms to filter and search. Data models deliver all sorts of new structured data that

It should be no surprise that implementing a CLM won’t automati cally improve contracting results. Nor will it reveal key insights or actionable data by itself. Contracts are riddled with legalese, repetition, redundancy and confusion, such that deciphering contracts is virtually impossible by anyone other than a highly expe rienced lawyer. How do you think artificial intelligence will fare?

To improve contracting processes and unlock improved data insights, we need to view contracts from a different perspective. We can’t treat contract data as complex words in a dense document. Instead, we must think of contracts as a collection of data points. These data points can be organized within the framework of data models.

CONTRACTS AS DATA MODELS

24 TODAYSGENERALCOUNSEL.COM SEPTEMBER 2022 BACK TO CONTENTS FEATURE Contract Data Models: A Modern Framework for Digitization

• Adopt AI to help with first-pass reviews of third-party paper or turn final agreements into struc tured data.

ontracts possess vital data that can supercharge the business by improving rev enue, reducing risk and increasing efficiency. Law departments are turning to technology, often adopting contract lifecycle management (CLM) systems, to unlock this value. Unfortunately, even the most inno vative companies struggle. World Commerce and Contracting, the leading association dedicated to raising capabilities in contracting practices, found that roughly 60 percent of CLM deployments met original expectations and fully deploy as intended. A survey by Onit’s con tract works group found that 77 percent had “experienced a failed technology implementation.”

unstructured PDF sitting in a repos itory that is not widely accessible. As a result, contracts don’t quickly or easily translate to meaningful data that is easily disseminated across the business. Instead, organizations struggle to use the information to drive value for their company.

Organizing contract data in this way opens up a new world of infor mation to drive the business and increase the legal department’s value. Here are some easy wins:

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• Track fallback usage and approvals to drive continuous improvement initiatives.

Digitizing your contract data also affords law departments opportu nities to improve their relationships with counter-parties and across the industry. Imagine streamlined and easy exchanges between companies’ lawyers and systems so the business teams can focus on the business terms that really matter.

• Complete risk assessments across your contract portfolio and manage your rights and obligations.

The fact is, your contracting is not ready for your CLM.

• Automate drafting of contracts and create clause libraries to sup port self-service.

Seeing contract data in the light of a data model is a paradigm shift for contract management. It opens up

Services Force Majeure Definition

Draft contract language for each position.

You can accomplish this by classifying each position for each sub-concept with one of the following: most desired, fallback or stepdown, last resort or not acceptable.

The following is an abbreviated five-step process to transform your contracts into data models. A deeper dive into this process is spelled out in the white paper, Transforming Contracts Management.

Services Force Majeure Definition Not required Legal Last Resort

A METHODOLOGY TO TURN CONTACTS INTO DATA MODELS

The last step in creating your data model is a one-to-one mapping between each position that you have

EXAMPLE PREFERENCES FOR POSITIONS UNDER FORCE MAJEURE

No liability with reasonable mitigation Legal Most Desired

At the concept level, you can assign ownership to the stakeholder that will take responsibility for the stra tegic approach to how that concept will be managed by the company.

SEPTEMBER 2022 TODAYSGENERALCOUNSEL.COMBACK TO CONTENTS 25

TemplateAgreement

Services Force Majeure Definition No liability with prompt notice Legal Stepdown

You first need to deconstruct your contracts into their component parts, mainly by isolating the sub stantive topics that the contracts cover. If your agreement templates are already organized with head ings to articles and sections, this will make it easy to start to identify concepts and sub-concepts. For example, one concept you may find in some of your contracts is “force majeure,” and one sub-concept would include a definition for force majeure.

Ryan Finn is a Director technology-focusedofdesignfocusesatContractsofSolutionsUnitedLex.Heontheanddeliverydata-drivenand contracting process transformations. His previous experience includes a mix of in-house counsel, advisory and strategic operational roles in IT procure ment at Boeing, Globalization Partners, Agreemint and JP Morgan.

Above is an example of what the ultimate result could look like for a few sub-concepts under force majeure. Now think of this repli cated across all the concepts in your contracts.

from his experiences as part of the leadership team at multiple legal services providers, an in-house com mercial contracts lawyer at ColgatePalmolive and an M&A associate at Simpson Thacher & Bartlett.

One-way in favor of Company Legal Last Resort

Concept Sub-concept Position

Define agreement concepts and sub-concepts.

Services Force Majeure Definition

Assign internal owners for those positions.

4 Choose your preferences for each position.

a wellspring of opportunity for legal to drive value to the business and to improve legal operations. Taking the time to ready your data to reap the full potential of your CLM is well worth the investment.

Chase D’Agostino is the VP & Contract Solution Lead at UnitedLex. He designs and builds modern clients.processescontractingforhisHedraws

OwnerSubject-Matter Preferences

Services Force Majeure Definition

Mutual, due to event beyond reasonable control

Services Force Majeure Definition No mitigation requirement Legal Stepdown

Legal Most Desired

Think of “positions” as different con tracting stances that can be taken for a sub-concept. The exercise of defining positions requires distilling language into very basic and objec tive results, regardless of the dense or relatively complex language in the contract.

defined and well-drafted language.

List objective contracting posi tions for each sub-concept.

Services Force Majeure Definition No liability with reasonable notice Legal Most Desired

Services Force Majeure Definition Mutual, substantially similar conditions Legal Stepdown

26 TODAYSGENERALCOUNSEL.COM SEPTEMBER 2022 BACK TO CONTENTS FEATURE

Managing Corporate Water Footprints

From Hoekstra came a new

its beverages, and touches people’s lives.”Yet

By STEVE SHROPSHIRE

corporate water usage continues to draw scrutiny. Last summer, the environmental nonprofit CDP launched what it called a “first-of-its-kind tool,” ranking more than 200 industrial activities by their potential impact on water resources. More recently, an article about Intel’s new computer chip-making plant in New Albany, Ohio, noted that just

he topic of climate change is putting pressure on com panies to operate in an environmentally sustainable manner. This includes managing their “water footprint,” a phrase that was popu larized by the late Dutch scientist Arjen Hoekstra in the early 2000s, which means the measure of direct and indirect fresh water used in the production of goods and services.

scientific discipline dedicated to water and sustainability, and a more intense spotlight on corporate water users. Some have risen to the chal lenge. Coca-Cola vowed in 2007 to return every drop of water used in its beverages, and last March announced a strategy to achieve “water security” by 2030 “for its business, communities, and nature everywhere the company operates, sources agricultural ingredients for

Some firms are buying envi ronmental restoration property or investing in new technology and education. Coca-Cola teaches sus tainable agriculture techniques to sugarcane farmers in India, and has invested in transforming and routing wastewater from production to irri gation for crops in China.

sustainability projects throughout the West — reportedly restoring 1.3 billion gallons (or about 4,000 acrefeet) in 2020 alone.

The best current option is offsets — giving back in some way to make up for water consumption.

With concerns about the water footprint rising — and nearly threefourths of companies considering water risks as part of their busi ness planning – the time has never been better to consider business strategies and programs to address sustainable water use.

River’s flow has declined 20 percent in the last century, and scientists predict another 20 percent drop over the next three decades — and climate change discussions about altered precipitation patterns.

one of Intel’s factories needs more water than a small city.

hard way in India, where it came under attack for allegedly depleting a local water supply. It served as a wake-up call for the company.

What are the risks of doing nothing? Although there is little regulatory oversight when it comes to the water footprint, the threat is looming, as is the threat of negative publicity for companies that take no action. Coca-Cola learned this the

Others are working directly with conservation organizations on ecosystem restoration projects to offset water-related environmental impacts. One example of this is Idaho Power Company’s investment with The Freshwater Trust to develop the Snake River Stewardship Program. That program is conceived as a 50-year effort to undertake water shed restoration projects in the Snake River basin to improve water quality.Acompany might not be able to provide a mitigation offset at the location of a plant, but they could consider an offset at an upstream tributary. Intel and Amazon have both done this. These offsets could even be made in neighboring states, so that a California company could seek offset opportunities in the Pacific Northwest.

What can corporate water users do to address the increased atten tion on water use? The best current option is offsets — giving back in some way to make up for water consumption. This can be done in a variety of ways.

Some companies are making significant donations to nonprofit organizations focused on fresh water ecosystem restoration. One example is the Bonneville Environmental Foundation, which has made purchasing water off sets easy; companies can purchase water restoration certificates for $4 apiece online, with the funds going to a diverse portfolio of flow resto ration projects. The foundation says 75 water restoration certificates are enough to offset water usage by a 5,000-square-foot office. Intel, in its own quest to achieve net positive water use by 2030, has funded water

Much of the recent criticism regarding water footprints has been borne out of the sentiment that companies most often build facto ries in disadvantaged areas where residents disproportionately suffer consequences of water overuse and misuse. The discussion also is being driven by the recent drought cycle in the Western United States, wildfires, falling water levels — the Colorado

law. He has served as counsel on several cases involving water rights issues of first impression before Oregon, Colorado and federal courts. steve.shropshire@jordanramis.com

Today, Coca-Cola enjoys a better environmental reputation in India and other places where it makes bev erages. A recent report by Feeding Ourselves Thirsty placed Coca-Cola first among beverage, packaged food, meat and agricultural products com panies for water management, giving the company a score of 90.

Steven Shropshire is a shareholder at Jordan Ramis PC, a Pacific mentallawHeregionalNorthwestlawfirm.focusesonwaterandenvironregulatory

SEPTEMBER 2022 TODAYSGENERALCOUNSEL.COMBACK TO CONTENTS 27

28 TODAYSGENERALCOUNSEL.COM SEPTEMBER 2022 BACK TO CONTENTS FEATURE

s commerce extends in the metaverse, the legal profes sion will need to keep pace. Lawyers and firms have already established a presence in these vir tual worlds. Time will tell whether this proves to be a viable platform for legal engagements or simply a marketing tool. But companies that choose to test the waters and engage counsel in the metaverse should be mindful of certain issues. Lawyers and law firms must be mindful as well.

Regarding the formation of the attorney-client relationship, the focus remains whether both sides agree to the relationship. But there are important details to consider, such as the scope of the represen tation, rates and dispute resolution provisions. It is possible for a smart contract to memorialize a relation ship; the retainer and fees might be paid in value-fluctuating cryptocur rency. Blockchain technology might be used. Companies and their legal departments must become familiar

with such technology, and ensure that attorneys they hire virtually are equally well versed. What might be an effective tool to connect law yers and clients might not be the best vehicle for formalizing the relationship.Companies must also be mindful about communications. Virtual and electronic communications can take many forms. Not all are secure. Questions might arise whether DMs, chats and other informal methods of communication will be protected.

Attorney-Client Relationships in the Metaverse

By MATTHEW C. WELNICKI AND MICHAEL P. DICKMAN

SEPT 29 12 PM CDT

Learn why Retention of Knowledge and Increasing ProfitabilityEssentialSatisfactionEmployeeistoFuture

might want to consider supple menting their metaverse interactions with face-to-face meetings and tra ditional forms of communications. The terms of the relationship should be clear and well documented. Even if the attorney and client meet in the metaverse, it might be best to then move to the real world to establish the relationship and its parameters. The metaverse would still be there as another tool. Most importantly, both sides must understand and appre ciate the technology they are using. That technology has limitations and is consistently evolving.

WebinarUpcoming

Matthew C. Welnicki is a partner at Kenney & Sams, P.C. He is a member of its business litigation team and represents clients before and during litigation, on appeal and through sensitive investigations. mcwelnicki@KSlegal.comMichael

Even without a “Metaverse Rules of Professional Conduct,” there are places to look for guidance if a vir tual legal relationship breaks down. The American Bar Association Model Rules, for example, address multijurisdictional practices, formation and scope of the relationship, and confidentiality (Rules 5.5, 1.2 and 1.6.)

Learn how to develop a strategy to retain knowl edge and share knowledge internally, and create a better work/life balance for your employees.

The medium’s security and the par ties’ reasonable privacy expectations must be considered. It is not just the protection of the attorney-client privilege at issue but also the pres ervation of communications and information that clients and attor neysPeople’sshare.expectations and under standing can be different when they are navigating a virtual world. Therefore, businesses (and attorneys)

SEPTEMBER 2022 TODAYSGENERALCOUNSEL.COMBACK TO CONTENTS 29

P. Dickman is a litigator and counselor at Kenney & Sams, P.C. He focuses his practice on constructionbusiness, and insurance disputes. mpdickman@KSlegal.com

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There are also broad catch-all provisions to ensure that the intent is not lost due to a lack of specificity (e.g., Rule 8.4). Legislatures have shown their willingness to promote the execution of contracts through electronic means, and courts are not unfamiliar with disputes about whether electronic communications are privileged. The biggest challenge might be determining the best juris diction and forum in which to seek help.The metaverse is an intriguing environment in which business can engage in commerce and interact with outside counsel. At the same time, businesses and their counsel should not jump into these virtual worlds without considering all the traditional issues in this new con text. Remember, social media was once a new concept too.

Even without a “Metaverse Rules of Professional Conduct,” there are places to look for guidance if a virtual legal relationship breaks down.

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Today's General Counsel, September 2022

Articles inside

Attorney-Client Relationships in the Metaverse

Managing Corporate Water Footprints

Contract Data Models: A Modern Framework for Digitization

General Counsel Benefit by Partnering With Legal Ops

Legal Pitfalls of the Virtual Workspace

Are Biometric Privacy Liability Risks Covered by Insurance?

Modernizing the eDiscovery Workflow for Emerging Data Sources

Preparing for the SEC’s Climate Disclosure Rules

Interview with Ken Crutchfield of Wolters Kluwer

Interview With Joan Fox of Legal Suite

Editor's Desk