Legal Project Management Moves In-House | Legal Intelligencer
The message to general counsel and chief legal officers from their CEOs and CFOs could hardly be clearer: “Get the costs of your legal department under control or face the consequences. In the last decade, general corporate operating expenses have gone up about 20 percent, but overall legal costs have gone up 75 percent, far outpacing inflation. Our business got beaten up big time by the recession; time for you to share the pain and share the accountability.”
Henceforth, the memo goes, you must manage the legal function as proactively and efficiently as the company manages every other business unit — perhaps even more so, since the legal department is, after all, a cost center and not a profit generator for the company. Yes, you have more on your plate these days with increasing legal and regulatory demands, but it’s time to do more with less.
Skip the excuses and rationalizations; it’s time for lean-and-mean budgets, aggressive cost management and clear standards for demonstrating the value you provide the company. Yes, quality legal service matters, but tightening the screws on legal costs matters more. Your bonus — and perhaps even your job — depends on your ability to reduce your total legal spend.
The issue of increasing costs certainly is not a new one for general counsel. In surveys for the last five years, GCs have consistently identified the need to control costs as one of their top concerns and most important priorities. Until 2008, though, that concern rarely translated into significant changes in many legal departments. Then, when the economy tanked, they had to at least appear to tighten their belts.
For many senior in-house counsel, this was a rude awakening. Like beleaguered law firms, they took some painful emergency short-term action steps that often translated into cutting some staff lawyers, fewer employees (or FTEs) and fewer trips to conferences. The result, however, was not doing more with less. It really was doing the “same with less,” and even that heavily stressed the legal department.
Long term, they prayed for a return to the status quo ante. Many still hope to continue to enjoy “black box budgets.” (“Just give us what you gave us last year, plus 20 percent.”) Many claim that cost predictability is impossible in an “uncertain legal environment.” Others believe that no solid metrics exist for measuring the value of lawyers’ experience and expertise.
Wiser heads embrace Stephen Covey’s famous quote: “If we keep doing what we’re doing, we’re going to keep getting what we’re getting.” Savvy CLOs realize that the upside of the pressure to control costs put on them by their own management is the increased leverage it gives them in their relationships with outside counsel. They no longer can afford to buckle under to steep annual hikes in law firm billing rates; they no longer can allow law firms to pass all expenses and inefficiencies through to the client. They must learn to wield the whip hand, a skill alien or uncomfortable for many of them.
This shift in the law firm-client balance of power has left some general counsel a little bewildered. “I feel like the dog that, after years of chasing the fire engine, finally caught it,” said one. “Now I have to figure out what to do with it.”
Through convergence programs, RFPs and value-based alternative fee arrangements (AFAs), many general counsel are significantly altering the balance of power between client and law firm. Among law firms that understand the implications of this sea change, there has been a rush to embrace legal project management (LPM) as a discipline to manage legal tasks efficiently, consistently and predictably –and deliver on the promises they are making to clients in their AFAs.
Microsoft Wins Best Legal Department of 2010 | Corporate Counsel
It was a holiday gift ten years and billions of dollars in the making.
On Dec. 16, 2009, Microsoft Corporation’s legal department settled the company’s longest and most expensive antitrust legal battle. In a major concession to European regulators, the software giant agreed to open its Windows operating system to rival Web browsers.
Microsoft’s general counsel, Brad Smith, and his legal team spent months last year hammering out the details of the 61-page settlement with the European Commission, the European Union’s executive body. By fall, Microsoft’s legal department had held 24 videoconferences and 34 conference calls with E.C. lawyers. “We wanted to be seen as a company that would work with regulators,” said deputy general counsel David Heiner, who heads the antitrust group and led much of the negotiations.
Some have called the settlement one of Smith’s crowning achievements. He and his legal team ended more than a decade of close scrutiny by European regulators. The software colossus can keep doing business across the Atlantic, and the stage is now set for better relations with Brussels. “There could have been an endless succession of slug-it-out battles to the death, and instead Microsoft elected to make some perhaps unwelcome but nonetheless significant concessions,” said Ian Forrester, a partner at White & Case who represented Microsoft in Brussels. The case, he said, is “a really extraordinary piece of legal history.”
The settlement was also symbolic for the company’ s legal team, which has set out to prove that it can resolve disputes amicably, despite Microsoft’s reputation for aggressively fighting legal disputes to their bitter, final end. And much of that effort has focused on building relationships and listening to what the other side wants, and fears. “We have tried to make that a defined part of how we train people to negotiate — in any context,” Smith said. “That is not always successful, but has been widely successful for us.”
Since Smith took the helm of Microsoft’s in-house legal department in 2002, he’s led a campaign to recast his company’s pugnacious image and come to terms with both regulators and Redmond’s fiercest competitors. Last year, for example, along with resolving the Brussels imbroglio, the department helped put together a friendly partnership deal with Yahoo! Inc. after months of acrimonious takeover discussions. The E.C. agreement was the culmination of Smith’s diplomatic offensive.
That’s not to imply that Microsoft has gone all touchy-feely. It remains a formidable legal opponent, especially when it comes to protecting the company’s most valuable asset — its intellectual property. Last year the legal department won two precedent-setting patent defense victories on appeal. Meanwhile, it stopped several consumer lawsuits from getting class certification.
Those litigation successes are among the many reasons we have awarded Microsoft’s lawyers the accolade of Best Legal Department of 2010. It's the fifth time we’ve given out the award, and, as usual, the competition was extremely tight. Corporate Counsel’s writers and editors spent days debating, arguing, and exchanging sometimes heated e-mails. After sending reporters to interview the finalists, we confirmed our ultimate choice.
New gadget extracts evidence from cell phones – The New Britain Herald News : New Britain, Conn., and surrounding areas (newbritainherald.com)
With the help of an upgraded piece of equipment, city police Detective Michael Grossi was able to discern in less than a minute Monday that his superior officer had 93 text messages and 512 e-mails listed on his Blackberry.
He could also individually read each one. If any had been deleted, Grossi could have accessed the contents.
“With these tools we can interpret the data and get it off the phone,” said Lt. James Wardwell, who turned over his BlackBerry for the demonstration. “Right now he’s connected and sucking the data off. It took him about a minute to retrieve the data and hand me back my phone.”
If any of the information had contained child pornography, the quick analysis time could prevent a child from being molested again. That’s what Heather Steele. president and CEO of the Innocent Justice Foundation, was hoping for when she arranged for the city police department to receive two $2,500 grants from the Michael Bolton Charities, Inc. and the J. Walton Bissell Foundation earlier this year.
The police “are the vanguard of people who understand what these crimes are,” Steele said. “With the Internet it has exploded, but a lot of chief and command officers didn’t understand and chose to put their resources in things like burglary or homicides.”
Steele’s California-based non-profit organization connects law enforcement agencies in need of tools and training to investigate crimes against children with charities who are willing to fill the funding gap.
She was on hand Monday along with Jacqueline Smaga from Michael Bolton Charities and Dan Anthony from the West-Hartford based J. Walton Bissell Foundation to accept recognition from the city for their contribution and tour the department’s Digital Forensics lab to view the investigative techniques that their money helped buy.
“Our unit is probably the best in the state,” Mayor Timothy Stewart told the visitors minutes before he awarded them with plaques for their participation. “We started several years ago, way before most other departments. They’ve solved some pretty interesting cases, not just for our department, but for others as well.”
The department used the money to purchase upgrades to two pieces of equipment used to analyze mobile digital devices including BlackBerries, iPhones and other cell phones. Detectives must either obtain consent from the owner or a search warrant before they can search the digital devices, police said.
Wardwell created the digital unit in the 1990s as computer technology was increasingly becoming a factor in crimes and criminal investigations.
Top cop: SEC may not delay civil cases | Reuters
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The head of the Department of Justice‘s Criminal Division said the U.S. Securities and Exchange Commission might not have to delay civil enforcement actions so prosecutors can pursue related criminal cases.
Lanny Breuer, assistant attorney general for the criminal division, expects the Justice Department to develop a closer working relationship with SEC enforcement staff, saying the Obama administration “cares very deeply about comprehensive approaches” toward enforcement.
“Just because there’s a civil action … and a parallel criminal action, the days are gone where the civil action will necessarily be stayed until the criminal action is over,” Breuer said after a speech at the Council of Foreign Relations in New York. He did not discuss specific cases.
A Justice Department spokeswoman said Breuer was referring to recent instances in which courts have elected not to put SEC civil cases on hold while criminal investigations are ongoing.
The timing of parallel enforcement activity has surfaced recently in the sprawling hedge fund insider trading case centered on the Galleon Group hedge fund.
It may also become an issue for the SEC’s civil fraud lawsuit against Goldman Sachs Group Inc, which was filed two weeks before news surfaced of a Justice Department criminal investigation.
Prosecutors face a higher burden of proof and tougher rules on discovery than investigators pursuing civil cases.
The existence of a criminal probe could also cause individuals to assert their Fifth Amendment right against self-incrimination were the SEC to seek testimony.
via Top cop: SEC may not delay civil cases | Reuters.
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Foreign Corrupt Practices Act Update | Sheppard Mullin Richter & Hampton LLP – JDSupra
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The Department of Justice (“DOJ” or “Department”) and the Securities and Exchange Commission (“SEC”) have dramatically stepped up their enforcement of the Foreign Corrupt Practices Act (“FCPA”). Perhaps the most noteworthy development this year was the first ever FCPA sting in which Federal Bureau of Investigations (“FBI”) agents posed as agents representing foreign government officials and solicited bribes from executives in the defense and law enforcement products industry. However, less sensational enforcement efforts—including investigations arising out of industry-wide probes and self-reporting—continue to be a focus for the DOJ and reports of more investigations surface seemingly every week. Most recently it has come to light that Australian natural resources firm, BHP Billiton, is under investigation by the SEC for possible violations of the FCPA, as well as by officials from the United Kingdom for possible corruption stemming from their operations in Cambodia and elsewhere.
via Foreign Corrupt Practices Act Update | Sheppard Mullin Richter & Hampton LLP – JDSupra.
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GE, Sony, Nvidia said to be part of Justice Dept. probe – The China Post
The U.S. Justice Department has questioned General Electric Co., Sony Corp. and Nvidia Corp. as part of a probe into the technology industry’s recruiting and hiring practices, according to a person familiar with the matter.
Authorities are examining whether companies secretly agreed to not recruit or hire each other’s employees, an antitrust violation that could deprive workers of higher salaries, said the person, who requested anonymity.
The disclosure that officials at the three companies have been questioned indicates a wider investigation than was previously known publicly. The Wall Street Journal has reported that the investigation also involves Intel Corp., International Business Machines Corp., Google Inc., Apple Inc. and IAC/InteractiveCorp.
Collusion of this sort “would hurt the workers” and give consumers “fewer choices,” said Robert Lande, a law professor at the University of Baltimore. Besides depressing wages, such an agreement may stifle innovation, he said.
The Justice Department hasn’t determined whether any company violated the law, said the person familiar with the matter. Investigators are still following up on leads from their discussions with the firms and examining several time periods, the person said.
via GE, Sony, Nvidia said to be part of Justice Dept. probe – The China Post.
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World Intellectual Property Day | The White House
In recognition of World Intellectual Property Day, the US government is engaging in activities all over the world to highlight the importance of intellectual property and our commitment to protecting it.
Our law enforcement agencies, the Department of Justice and the Department of Homeland Security, announced today the formation of a national network of law enforcement personnel.
The Department of Justice announced that the FBI is increasing its manpower that focuses of IP significantly, by creating regional IP squads in major cities around the nation and adding an additional 20 new agents to those squads.
In addition, the DOJ announced that it will be adding 15 new prosecutors throughout the country to add to its current force of 200 prosecutors specially trained to handle IP enforcement.
In collaboration, the Department of Homeland Security announced that its multi-agency IPR Center is creating partnerships with 70 federal, state and local law enforcement in 22 cities to collaborate on IP enforcement actions.
And ICE announced the efforts of a major sweep – Operation Spring cleaning – that resulted so far in 45 arrests, the seizure of 701,384 counterfeit items valued at $44 million.
Many other agencies that also work on IP enforcement are joining this united effort. Secretary Clinton and Secretary Locke and Ambassador Ron Kirk are issuing statements highlighting the importance of intellectual property. There are also a numbers of events taking place today where senior government officials are speaking on intellectual property, including Ambassador Miriam Sapiro of USTR at the National Press Club, Under Secretary of State Robert Hormats at the US Chamber of Commerce. I will be speaking at an event with the Chairman of the House Judiciary Committee John Conyers, the head of USTR, Ambassador Ron Kirk, the head of our US Patent and Trademark Office David Kappos and other senior Commerce officials, including Under Secretary Francisco Sanchez. And embassies throughout the world are reaffirming those same sentiments in statements issued by their ambassadors and in a number of educational programs they are holding.
The President has made clear that strong enforcement of America’s intellectual property is a critical part of our plan to promote exports and create jobs. I look forward to continuing our dialogue and utilizing the expertise out there to harness and protect what has always been one of America’s greatest strengths – the diversity of great ideas.
U.S. Steps Up Probe of Tech Hiring – WSJ.com
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The Justice Department is stepping up its investigation into hiring practices at some of America’s biggest companies, including Google Inc., Intel Corp., International Business Machines Corp., Apple Inc. and IAC/InterActiveCorp., people familiar with the matter said.
The inquiry is focused on whether companies, particularly in the technology sector, have agreed not to recruit each others’ employees in ways that violate antitrust law. Specifically, the probe is looking into whether the companies’ hiring practices are costing skilled computer engineers and other workers opportunities to change jobs for higher pay or better benefits.
After a probe that began more than a year ago, Justice Department investigators have concluded that such agreements do raise significant competitive concerns, according to the people familiar with the matter.
But the leadership of the antitrust division hasn’t yet decided whether—or how—to challenge the hiring practices, these people said. About a dozen companies are meeting with top antitrust officials at the Justice Department this week and next, some to defend their practices, others to provide information.
Antitrust experts say the Justice Department could argue that an agreement between competitors that holds down labor costs is as much a violation of antitrust laws as an agreement to fix prices.
Such agreements are “very close to the line,” said Melissa Maxman, an antitrust lawyer at the law firm Cozen O’Connor. “They’re not agreeing on price, but they’re kind of agreeing on costs.” Skilled computer scientists with some management responsibilities, for instance, often make base salaries of $180,000 to $210,000. Compensation for the most sought-after workers typically soars far above that and includes bundles of stock options and bonuses.
via U.S. Steps Up Probe of Tech Hiring – WSJ.com.
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Civil Rights Era Cold Case Investigations Continue « USDOJ: Justice Blog
The Justice Department has conducted extensive outreach to investigate and resolve these unsolved cold cases. Our cold case initiative has yielded major accomplishments.
Earlier this month, a federal appeals Court upheld the 2007 conviction of James Ford Seale, a reputed Klu Klux Klansman, in the kidnapping and killing of Charles Eddie Moore and Henry Hezekiah Dee in 1964. The Court upheld Seale’s conviction by a jury in a trial prosecuted by Justice Department officials 43 years after the murders. Read the Court’s opinion, here.
Because of legal limitations, it is unlikely that there will be federal jurisdiction over most of these cases. Two critical statutes used to prosecute racially motivated homicides, interference with federally protected activities and interference with housing rights, were not enacted until 1968. Under the Ex Post Facto Clause of the Constitution, these laws cannot be applied retroactively to conduct that preceded their enactment. The five-year statute of limitations on most federal criminal charges is another challenge for prosecutors.
Department officials have also engaged the community, including civil rights groups like the NAACP, Southern Poverty Law Center, and the Cold Case Truth and Justice Project to enlist help in identifying potential cases and uncovering information. The Department is committed to bringing these cases when possible.
Our review of these cases will be exhaustive and thorough. If we are able to bring a sense of closure to these cases, to bring justice in any form to the families of the victims of these horrific crimes in memory of Emmett Till, it will be worth the effort.
via Civil Rights Era Cold Case Investigations Continue « USDOJ: Justice Blog.
Prosecutors, Defense Snipe Over Speedy Trial Clock in FCPA Case – The BLT: The Blog of Legal Times
Justice Department prosecutors are fighting back against the demands of some criminal defense lawyers that the government not be allowed to control the pace of the department’s most ambitious Foreign Corrupt Practices Act case, unfolding in federal district court in Washington.
Twenty-two executives and employees in the arms dealing business have been charged in the U.S. District Court for the District of Columbia with attempting to bribe a fictitious foreign official in order to secure a cut of a $15 million contract. The case is the largest-ever prosecution of individuals for FCPA crimes and marks the first large-scale use of an undercover sting in the department’s fight against foreign corruption.
Defense lawyers for 18 of the 22 defendants are challenging the prosecution’s request to stop the speedy trial clock, saying that the government has had ample time to investigate and prepare the case for trial. Charges were announced in January, capping an investigation that lasted for more than two years. Most of the defendants were arrested that month at a trade show in Las Vegas. Some of the defense lawyers have said they are prepared to go to trial this summer.
Prosecutors want to stop the speedy trial clock, saying that the cases are complex and likely involve novel legal issues. To support the “complex” designation of the case, the prosecution argues that the cases include “voluminous” discovery and a “wide-ranging” alleged conspiracy. The prosecution has not announced whether it plans to group certain defendants together for trial or go at defendants one by one.
via Prosecutors, Defense Snipe Over Speedy Trial Clock in FCPA Case – The BLT: The Blog of Legal Times.
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