Ten Things: Minimizing Risk in Commercial Contracts

After “will I go to jail for that?” the most common question asked of in-house counsel typically involves commercial contracts and whether “it’s okay for us to sign this?”  There are multiple parts to this seemingly simple ask, but the core of the question has to do with risk.  More specifically, if we sign this contract are we taking on an unacceptable level of risk?  Risk too is subject to multiple meanings.  Are we talking about commercial risk, legal risk, financial risk, reputational risk, or what?  Regarding the many facets of the question, it’s typically the in-house lawyer’s job to come up with the answer.  Unfair or not, because lawyers are trained issue-spotters, the analysis of risk in commercial agreements and the process of minimizing that risk usually falls in the lap of the in-house legal department.  Unfortunately, the process of spotting and analyzing risk is rarely black and white.  It’s generally highly subjective and it’s not always right.  Over the course of many years, I have learned about – or come up with – a number of ways to minimize risk in commercial agreements.  This edition of “Ten Things” will walk you through some of the best ways to do so:

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Ten Things: Legal Procurement – The Next Big Thing for In-House Lawyers

I know that artificial intelligence is the hot topic of the moment for in-house legal departments.  And it should be.  It promises tremendous cost savings and productivity enhancements for in-house lawyers.  While everyone is very excited about the new kid in town, there is something brewing out there that is equally exciting but which rests on some pretty mundane financial principles: procurement.  Or, more specifically, legal procurement.  Now, before you go running into the hallway screaming that it will be a very, very cold day in hell before you let anyone from procurement get involved with your law firms, hear me out.  There’s something here that’s worth exploring.  This edition of “Ten Things” will provide a primer on the legal procurement process:

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Ten Things: “Cool Tech” 2018 Edition

I am a little bit late with my “Cool Tech” post for 2018.  Not surprisingly, I have found it much harder to write my blog on a regular basis once I became general counsel again.  I’m not complaining though – I think being an in-house lawyer is the best legal job on the planet (other than Federal appeals court judge).  If you’re attending the Annual ACC meeting in Austin, Texas in October be sure to check out my panel on contract risks on Monday, October 22 at 2:30 pm.  Stop by for the session and afterward come up and say “hello!”  Also, I just heard from the American Bar Association and they want to publish the second volume of my “Ten Things” book.  That will come out sometime in 2019.  And, when I publish this blog, I should have over 3,000 followers (which just blows my mind).  Okay, enough digression, let’s get on with this edition of “Ten Things.”  Long-time readers know that every summer I write about some of the “cool tech” I have come across and that I think in-house lawyers might find interesting too.  You can catch up on the prior years here: 20152016, and 2017.  Everything I mentioned in these past posts is still worth reading.  But, there is always more good stuff out there to talk about!  And, as always, I receive nothing to mention the products in my blog.  I just think in-house lawyers will find this tech interesting.  Finally, I tend to skip big, expensive tech purchases as “Cool Tech” and look to discuss technology that is immediate, affordable, and useful.  Here we go:

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Ten Things: Sexual Harassment Claims in the #MeToo Era

While in-house lawyers are always concerned about sexual harassment claims, the last year or so has provided a loud wake-up call regarding the highly negative impact of such claims on employees and on the company involved.  While women can certainly engage in sexual harassment, the headlines over the last year – and recently with CBS CEO Les Moonves – are littered with deplorable accounts of men using their power to take advantage of female employees.  These headlines follow a sea-change event where sexually-abused and harassed woman are refusing to suffer in silence.  Instead, beginning with the downfall of movie producer Harvey Weinstein in late 2017, they are coming forward in waves with their stories, bringing with them a glaring hot spotlight on the darkest corners of corporate offices all over the world.  This is the #MeToo era.

While the news headlines tend to focus on the misdeeds of the rich and famous, for in-house lawyers the concern is local – but just as important.  The #MeToo movement provides added urgency for in-house lawyers to make sure their company is doing the things necessary to prevent disaster and ensure a safe workplace for women and men.  As usual, dealing with sexual harassment claims in the #MeToo era comes down to getting the basics right.  For many companies, it is easy to trace the devastating impact of a particularly damaging sexual harassment claim to two problems: failure to properly investigate and failure to take appropriate action.  This edition of “Ten Things” discusses the key things you should be doing to both prevent sexual harassment from occurring and, if it does, properly investigating and resolving such claims:

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Ten Things: Presenting Legal Issues to Senior Executives

I remember my first legal presentation to the full senior executive team very well.  I had just started in and was using my hands to gesture on some point when I caught the coffee cup of the chief operating officer with my right hand and blew a geyser of coffee across her papers and across much of the table.  Oh, God!  I sat there paralyzed and wondered if I had a box handy to gather my personal effects for the walk to the parking garage that was certainly in store for me.  The CEO looked at me, and then at the COO, and just started laughing.  Then he said that it was “probably the best debut before the executive team” that he had ever seen.  We got the table cleaned up and I somehow managed to get back on track and give my presentation, but I realized (and the General Counsel reinforced) that I was pretty lucky to have a forgiving CEO with a sense of humor.  Not everyone is so lucky.

One of the most difficult things for in-house lawyers to do is present legal issues to senior management.  The first problem is usually the lack of experience in presenting to the C-Suite or the Board of Directors.  These opportunities are often rare.  Second, flying coffee aside, it can be very intimidating. Executives have little time to spare and legal issues are generally not high on their list of favorite topics.  You can feel their impatience.  Third, it can be challenging to simplify complex legal issues or the decisions that need to be made.   While it isn’t easy, every in-house lawyer needs to know how to effectively present before the senior executives of the company (including the Board of Directors).  This edition of “Ten Things” sets out the lessons I have learned over a couple of decades of presenting legal issues to the C-Suite:

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Ten Things: What In-House Lawyers Need to Know About Joint Ventures

You’re sitting at your desk, slurping down a big mug of coffee, when the CEO stops by your door.  “Guess what,” she says. “We’re going to do a joint venture with Mega Corp! I need you and your team to get right on it.”  You say, “You’re [messing] with me, right?  Joint ventures are where good business ideas go to die.”  Well, you don’t say it, but you sure are thinking it because you know that most joint ventures never perform as expected, many severely underperform, and most terminate early because the parties cannot agree on some issue.  Regardless, joint ventures are not going away – CEO’s just seem to love them.   And when the business wants to move forward with a perfectly legal idea, in-house counsel fall in line and do their utmost to make the deal happen (and draft documents that help minimize problems down the road).   While it is impossible to consider every possible problem that might arise over the course of the joint venture, you can set up a process that will allow the parties to minimize potential issues.  How?  By spending a lot of time upfront thinking about the key considerations of putting the venture together.  This edition of “Ten Things” walks you through the basics of setting up a joint venture:

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Ten Things: Creating a Good Contract Playbook

Contracts are the grease on the skids of most businesses, i.e., it is how they make money.  Consequently, unless you work in a very unusual legal department, one of the most important tasks you deal with as an in-house lawyer is the drafting and negotiation of contracts.  Most of us sat through a contracts class the first semester of our first year of law school, where concepts like “consideration,” “statute of frauds,” “offer and acceptance,” and “direct vs. consequential damages” were drilled into our heads.  And I am glad this was the case because the bit of law school I use the most day-to-day as an in-house lawyer is contract drafting (followed closely by “meeting avoidance”).  Most legal departments use contract templates for their important contracts, as it speeds up the process.  Yet, less than 25% of in-house legal departments use contract playbooks as part of the process.  This is surprising because everyone in the legal department, executive team, and the sales organization should understand which contracts are acceptable to the company and which contracts the company will walk away from.  Contract playbooks do just that.  Given their importance and the lack of adoption, this edition of “Ten Things” will walk through the process of creating a contract playbook:

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Ten Things: So You Want to Hold a Contest (and Not Go to Jail)?

I do love the folks in Marketing.  They are always very engaging and fun, and they have cool giveaways they will share with you.  But, I love them a lot less when they show up at my office door wanting to launch a contest. Tomorrow. Ugh. If you’ve been in-house long enough and your company has a marketing department, you will at some point probably need to figure out how to deal with contests and sweepstakes.  These games can be great promotional devices, generating excitement and interest in your company’s products and services. For many companies, these are their most effective forms of advertising.  As consumers, I know that many of us have entered such games – filling out a form, dropping a business card in a fishbowl, submitting a photo, clicking on a link on Facebook, getting a “Monopoly” game piece at the supermarket, or just buying a “Lotto” ticket at the gas station.  As consumers, however, most of us pay little attention to what goes on behind the scenes of a contest or sweepstakes.  As lawyers, we know that creating a successful one takes a lot of work by the business and the legal department, all of which will go to waste if the contest rules are not clear or if the sweepstakes runs afoul of state or federal laws. Unfortunately, sometimes your marketing team doesn’t understand all the work and complexity of pulling off a successful contest or sweepstakes.  It most certainly is not as easy as showing up at your door and announcing that the company wants to launch a one tomorrow or even next week.  As we say in Texas, that dog won’t hunt.  Yet, with some forethought and planning you can work with your marketing team to set up a reasonable process to create and approve contests that meet everyone’s needs. This edition of “Ten Things” discusses the basics of creating legal contests and sweepstakes in the United States:[1]

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Ten Things: Buying and Implementing Legal Tech

Last week the good folks at LawGeex released their free 2018 Legal Tech Buyer’s Guide.  Jammed full of valuable information, it’s essential to any in-house department looking to purchase legal tech.  If you haven’t downloaded it yet, do it now.  On June 11, 2018, I’ll be speaking at the ACC Legal Operations Conference in Chicago about practical uses of Artificial Intelligence in legal departments.  And, as you readers know, I am a sucker for a good gadget (watch for my 2018 “Cool Tech” blog later this summer and check out my interview with legal tech blogger Colin Levy).  All of this got me thinking about the fact that I have been around for – and helped buy and implement – a lot of legal tech over the years.  I was there when fax machines were cutting edge and when e-mail was new.  I helped build a home-grown document management system and now I am looking at uses of artificial intelligence for my team.  From typewriters to AI, yellow pads to iPads, is a pretty healthy span of technological change for any lawyer. The one thing that hasn’t changed is the process you go through when buying or implementing any type of technology.  If you go about it the wrong way, you can end up with a very expensive lesson and a piece of software that no one wants or uses.  Trust me, I know.  So, it’s important to get it right.  This edition of “Ten Things” walks through some of the lessons I have learned about buying and implementing legal tech:

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Ten Things: Sherman Act Section 2 – The Monopoly Man Cometh

When I went to law school way back when there were two topics I swore I had no interest in Tax law and Anti-Trust law.  I avoided those classes like a high school third-period ballroom dancing.  Ironically, as General Counsel, the two biggest pieces of litigation I have worked on were, of course, multiple tax law class actions and a mind-numbing, soul-sucking antitrust dispute.  Which meant, despite my previous oaths, I got a first-class education in both.  Of the two, by far the worst was the anti-trust dispute which involved multiple plaintiffs, the DOJ, and the hyper-focused attention of the CEO, President, and Board of Directors as this was truly a “bet the company” problem.  Not to mention that I did not have a day off (including holidays) for almost two years.

So, why do I bring up all this pain?  Because I wanted to share the most challenging part of the entire dispute – dealing with Section 2 of the Sherman Act.  I’ll get into the details below but will just note here that Section 2 is vast minefield of traps for the unwary and you can easily find your company mired in a litigation quagmire where every contract, every clause, every meeting or action, and every email or PowerPoint comes under scrutiny for alleged uncompetitive behavior all because your company is highly competitive and highly successful.  Sound like a nightmare?  It is.  Meaning, all in-house counsel should have a basic understanding of Section 2 (or the local law equivalent, e.g., EU Article 102 on abuse of a dominant position) so they can keep a sharp lookout for whether, under the right set of circumstances, company actions or plans could risk drawing anti-trust scrutiny or, far worse, an anti-trust lawsuit.  This edition of “Ten Things” sets out the basics of Section 2 and what you need to watch out for:

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