Practical Compliance

Classic Protectionism

2012-01-24T10:45:00.002-06:00

In what appears to be a blatant attempt to protect lawyers from having to change with the times, a small group of vocal advocates is using stalling tactics to derail efforts by the Texas Supreme Court to help those who cannot afford a lawyer in a few simple matters.

Richard Zorza's blog post has a good assessment of the situation from a national perspective. There are better solutions than the "delay, study and table" approach advocated by the misguided detractors. And plenty of lawyers are making plenty of money in other states using simpler services.

There is a tsunami of self-represented parties (an "SRL tsunami," I have called it elsewhere) that clogs the halls of our courthouses and costs all clients more in fees paid to their lawyers who have to sit through unnecessarily protracted dockets as self-represented parties bumble and stumble. The Texas Supreme Court is right to look for ways such as standardized forms in simple matters (forms that ALL lawyers and parties can use, by the way, not just nonlawyers).

It makes sense. It is timely. It will work. It needs to happen.

Drafting Good Policies for Social Media Use at Work – Part Two

2011-03-17T02:56:00.000-05:00

In my first post on this topic, I covered some of the risks inherent when employees participate in social media systems (“SM”) whether officially on behalf of the employer or unofficially. This post outlines guidance for crafting an atmosphere at work that embraces SM while educating and guiding employees to prevent problems and protect the employer, other employees and the public.

Basic Policy

Your organization may already have rules and regulations that apply to your industry or operations. You may even have agreements in place with each employee at hiring that cover confidentiality, protection of intellectual property and duties of non-disclosure. It may be that you already have all the official policy language you need to address the risks listed in the earlier posts should an employee cross any of those lines. Why have yet another one?

SM gives people power of a magnitude they have not had before. Destructive, impulsive and malicious actions have never been as easy to permanently and broadly publicize as they are now that we have linked to each other through the Internet and mobile phone networks. Do not assume everyone will connect the dots. Even if you already have all the official and legal protections in place, pull it all together in a reminder that puts each obligation into the SM context. If you do not have everything covered, fill in the gaps. Make sure everyone clearly understands their obligations.

“Friending-Friendly" Rules

Once your policies, confidentiality and non-disclosure agreements adequately cover the prohibitions and restrictions that apply to each employee, turn the opposite direction and put guidelines in place that help the well-intentioned. Rather than a list of “Do Not” items, for example, lay out the reasons for concern and points to keep in mind when communicating with others in any way that may involve or reflect on the employer or other employees. Phrase them in "Do" terminology.

There are a number of resources rich with references and examples of how other organizations have approached this challenge. Several are listed in the footnote. Among them all, there are four main ingredients for an effective, comprehensive SM policy:

1. Concern. Acknowledge the existence of SM. Some companies and organizations prefer an “ostrich approach” and essentially pretend SM is not pervasive, not used widely among their staff and poses no threats. What you don’t say CAN increase the risks to your organization, the public and your employees. Step forward and embrace reality. Make it a point to show you know and understand the power, potential and pitfalls of SM usage and that you are establishing consistent guidance that makes sense within the organization’s particular needs.

2. Community. Stress the importance of being transparent and clearly distinguishing whether you are or are not representing the organization. Leave no doubt. This is an issue of honesty to their "friends" and integrity in their online community. Give examples of how to scrub online profiles of all links to the organization, for example, and disclaimer language that you believe is sufficient and appropriate for most contexts. Explain how others may be confused by a person's role or position with the organization so they clearly see the risk. Employees of a legal department could be misunderstood as giving legal opinions, for example; those who work for a publicly-traded company might be misinterpreted as divulging hints that influence others to buy or sell stock in that company; behaving as if you have "secret" information could look like someone revealing previously non-public facts about the company; etc.

Be detailed and specific. Explain how links, logos, email addresses, lingo and job titles may divulge or mislead as to their relationship to the employer even if the employer’s name is not shown. There should also be a consistent method of “branding” officially-sanctioned SM activities so the public can easily identify those and distinguish them from others.

3. Conduct. Remind staff of the public nature of “private” postings and how online activities may be traced. Share some examples of embarrassing consequences others have endured that make an inadvertent “reply all” mistake look miniscule by comparison. Respect runs both ways and the “Golden Rule” and “Granny’s Rule”* are useful guidelines that help make your point. It is always wise to assume that your staff will NOT make the same assumptions you do. Employees are diverse in many ways other than skin color, so spell out the workplace rules that govern appropriate uses of SM during working hours, on the employer’s equipment, etc. Just because activities are permitted or even encouraged in the organization’s Wiki, for example, does not transfer to personal blogs or other non-work-related SM activities.

4. Confidentiality. What one person thinks is “confidential” or covered by your confidentiality policy may be quite different from what another thinks. Remember that people in different jobs have different perspectives and may have been taught different obligations based on their roles. This is a good place to roll it all into one statement that summarizes and refers to the restrictions and duties regarding confidentiality, professional responsibility, non-disclosure, privacy, public/non-public information, trade secrets and communication with people outside the workgroup. You might be amazed at how some never connect themselves to the bigger picture.

Someone in the IT department may not think twice about posting a question in a peer support Wiki that can expose security weaknesses or divulge trade secrets if they are not made aware of how easy it is to do. A support staff member may not be aware of how rules of professional responsibility that govern the supervisors apply to his work. Those who do not often work with the public or in a PR function may overlook the issues with commenting about a particularly problematic day at work or potentially disastrous issue they are working to contain. Trust them to do the right thing the vast majority of the time, but equip them to understand where the boundary lines are so they do not accidentally cross them.

Conclusion

Your policy documents will have more detail under each of these general areas that fit your organization’s unique needs. If you don’t already have the fundamental policies and employee agreements in place, you may need to consult legal counsel about what to do. If your employees are located in more than one jurisdiction, you definitely need to know what difference that may make on any such policy and whether you can consolidate them all into one document or need different versions.

Social media has been here long enough that no one seriously expects it to go away anytime soon. Rather than obstruct or block SM use, proactively educate your staff and address the risks, responsibilities and rewards of appropriate social media usage and you will more likely benefit from risk containment as well as employee confidence in your leadership.

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* The "Granny Rule:" If you wouldn't want Granny to see it online, don't post it.

Who Owns the Copyright in Work Created While Employed? (cont'd)

2011-03-14T04:21:00.000-05:00

Employers and employees can prevent a lot of problems by clarifying their rights to intellectual property in writing at the beginning. In the first post on this subject, I listed several things to keep in mind when creating an agreement that covers copyrights (and most other intellectual property rights) between employer and employee or when hiring contract services.

1. Who owns what?
2. How will the employer “pay” for the creator’s rights?
3. What is covered by the agreement?
4. What duties does each party owe to the other?
5. What about work product the employer sells to others?
6. How will each address exceptions?
7. When does the IP rights agreement start and end?
8. How will disputes be handled?
9. What happens if the parties can’t resolve a dispute themselves?

In that post, I covered the first four. Now, I will address the rest.

What about work product the employer sells to others?
When one person sells the work of another who is the author of some or all of the work, the author is generally still entitled to compensation unless the author has given up that right. Not so for “works made for hire.” Because the copyright is automatically given to the employer, the author can not revoke or claim an interest in the rights without an express conveyance from the employer or a written agreement with the employer at the time the work was created (17 USC 203(a)).

A clearly-worded written agreement at the outset can allocate any rights that will not be exclusive to the employer (exceptions) and any rights reserved by the employee.

How will each address exceptions?
Some agreements attempt to cover everything the author creates during the employment term, whether or not related to the employer’s business. Those are likely not enforceable beyond what is reasonably tied to the employer’s business or created using the employer’s tools, equipment or proprietary processes, without special "consideration" to pay for works created outside the scope of employment. Others are less clear about work authored at home after work hours, for example, or in concert with others who are not employees of the same employer.

Better to be clear. Describe the works that are deemed included and then list the exceptions. Are some rights world-wide, for example, while others only have a limited geographical license? Are they exclusive rights, meaning no one else can have them at the same time? Are there rights reserved to the author for certain limited uses?

It is difficult to anticipate every possible future event, so provide a mechanism for each party to notify the other that a particular work is included in or excluded from the agreement’s scope.

When does the IP rights agreement start and end?
Unless the work is "prepared by an employee within the scope of his or her employment; or
". . . “the parties expressly agree in a written instrument signed by them that the work shall be considered a work made for hire” (17 USC 101) (1)), or the author transfers the copyright with “an instrument of conveyance, or a note or memorandum of the transfer, is in writing and signed by the owner of the rights conveyed or such owner's duly authorized agent,” (17 USC 204(a)) (2)), the author retains full rights. Parties can agree to buy or sell their respective rights in intellectual property at any time, whether the works already exist at the time of the agreement or are created in the future. Designate the specific starting date and describe when it terminates.
Address the rights that will survive termination of the agreement and those that expire with it so that both sides know their obligations even after they part ways. For any that continue after they separate, be clear on the term, geographical scope and relative priority of the rights.

How will disputes be handled?
If one party disagrees with the other’s interpretation or application of some part of the agreement, what is the preferred method of documenting the concern and the resolution? Are specific people or documents required? Will the procedures produce a result for future reference if needed?

Most agreements address litigation restrictions, but many fail to outline informal dispute resolution procedures or emphasize that they are preferred or even required before either party may begin legal action. You don’t have to go as far as a binding arbitration clause, but you can still guide disputes through a pre-litigation attempt to resolve them.

What happens if the parties can’t resolve a dispute themselves?
As with pre-nuptial agreements, where the pre-wedding couple dislikes thinking about divorce at the beginning of their marriage, employers and new employees dislike thinking about litigation when they are about to enter their “honeymoon phase.” Even so, it is important to nail down the laws that will apply to the agreement, the place where any legal action must be filed and any other variables that may change the terms of the agreement down the road as circumstances change. You need predictability and confidence that a provision in the agreement will not be turned on its head should one party relocate to another jurisdiction with different laws and legal procedures.

Here is where you can insert the arbitration clause, if desired. Also address venue, applicable rules of procedure and law and how costs of litigation will be divided if one party prevails over the other in the litigation.

Other Issues
This post does not address the issues that come up when an author conditionally grants a license to another who then breaches the license terms or fails to warn a subsequent purchaser of the original license terms. I discussed some of these risks in an earlier post, but there are many more to cover at another time.

Conclusion
With a well-written agreement that both parties understand, many disputes can be prevented and those that do arise can be managed. Think through the situation from both sides, use plain language whenever you can, and get solid legal advice before you sign. With those and some luck, you should be able to avoid problems down the road.

For The Children

2011-03-09T23:37:00.001-06:00

It’s not their fault their landlord refuses to do something about the mold in their building, even though more than half the kids living in that building have respiratory infections and other signs of continuous allergic reactions to mold and mildew. It’s not their fault the food stamp office lost their paperwork and cancelled their food assistance about the time they ran low on food. It’s not their fault a man hurt their mother repeatedly and frightened her so much she took them away one night with very few clothes or toys to a strange place with others like them. It’s not their fault the man who said he would fix the family’s only car is now saying he will sell it in 5 days unless they pay three times what he estimated (which is twice the money they have). They did nothing wrong. They did nothing to cause the problems. There is nothing they can do on their own to fix them. Yet the consequences will affect them at least as much as their parents. “They” are children in low-income families in the United States. Some of them have always done without. Some of them are not used to this new life style. All of them live with more than their share of stress and anxiety in their lives. People charged with serious crimes can get a lawyer appointed to defend them. The state government will try to get child support orders in place if their parent has been on public assistance. Who will help these children and their parents fight the slumlord, straighten out their benefits paperwork, obtain an order for protection against an abuser or prevent the loss of their car through fraud? The answer is: the lawyers and other legal staff at legal services, legal aid and similar non-profit organizations who work to right the wrongs that should not happen. A Bipartisan Success George Washington, in a letter to Attorney General Edmund Randolph in 1789, wrote that he believed “the due administration of justice is the firmest pillar of good Government.” (1) Congress created the Legal Services Corporation because it found in 1974 that:

(1) there is a need to provide equal access to the system of justice in our Nation for individuals who seek redress of grievances; (2) there is a need to provide high quality legal assistance to those who would be otherwise unable to afford adequate legal counsel and to continue the present vital legal services program; (3) providing legal assistance to those who face an economic barrier to adequate counsel will serve best the ends of justice and assist in improving opportunities for low-income persons consistent with the purposes of this Act. (4) for many of our citizens, the availability of legal services has reaffirmed faith in our government and laws; (5) to preserve its strength, the legal services program must be kept free from the influence of or use by it of political pressures; and (6) attorneys providing legal assistance must have full freedom to protect the best interests of their clients in keeping with the Code of Professional Responsibility, the Canons of Ethics, and the high standards of the legal profession. (2)

The bill passed with bi-partisan support in the House of Representatives (276 to 95) and the Senate (75 to 18) and was signed by President Nixon on July 18, 1974. (3) It has enjoyed strong bi-partisan support for over 30 years.(4) LSC Works Aided by a legion of volunteer lawyers who donate some of their time to and through pro bono programs, these paid staff know that “injustice anywhere is a threat to justice everywhere.” (5) They work full-time to help as many people as they can in civil legal matters that high-income families will likely never have but would have the resources to address timely and completely. LSC is the single largest provider of civil legal aid for the poor in the nation. Designed on a “conservative” agency model, LSC distributes 95% of its funding to 136 non-profit law firms who hire the staff and work on the unmet legal needs in their communities. (More here…) Today, in the race to hastily slash the federal budget, Congress is considering huge cuts and potential elimination of the Legal Services Corporation. Hopefully, those scenes will not occur here our representatives will reconsider and see the savings LSC’s grant recipients deliver in exchange for their funding.

Keep LSC Working If you work in the legal profession, you can help by contacting your U.S. Representative and showing your support for this program. Make your local legal aid program your "charity of choice." Tell your friends and family why you believe in "equal justice under law" or recite the Pledge of Allegiance that ends with "...and justice for all" and ask them to write or call.

Better yet: ask them to do it for the children. They can't fight this themselves.

NOTES

1. George Washington to Edmund Randolph, September 28, 1789

2. Legal Services Corporation Act, 42 U.S.C. 2996

3. Library of Congress Legislative Histories.

4. Remarks to New Mexico Bar Association reception in Albuquerque, Oct. 20, 2008.

5. From “Letter from a Birmingham Jail,” April 16, 1963 (4th paragraph).

Who Owns the Copyright in Work Created While Employed?

2011-03-03T17:37:00.004-06:00

Overview
The Copyright Act of 1976 (17 USC Section 101-810) (1) gives ownership rights of music, text, artwork, computer code and other such "original works of authorship" (17 USC Section 102(a)) to their authors by default with a few exceptions. (2) No registration by the original author is necessary. One of the exceptions is the so-called “works for hire” exception (more accurately called “works made for hire”) defined in 17 USC Section 101), that gives at least co-ownership of the authored work to the author and the one who paid to have it created.

You can see how someone who hires a sculptor, for example, to create a specific work of art would expect to have some ownership in the creation he paid for. In the technology sector, this issue comes up most often with respect to software code written by employees (3), contract employees and others who perform work that is accumulated into the final software product. Copyright protection extends to copyrightable expression within a computer program, but not to ideas, program logic, algorithms, systems, methods, concepts or layouts (17 USC Section 102(b)) which typically fall under the U.S. patent law (see 35 USC Sections 100 and 101 , e.g.).

Ownership of a copyright can generally be transferred only with "an instrument of conveyance, or a note or memorandum of the transfer, is in writing and signed by the owner of the rights conveyed or such owner's duly authorized agent" or by operation of law. (17 USC Section 204(a)). While many employers have new hires sign an agreement at the start that clearly states the employer will own everything the employee creates while working there, some still do not take this simple, pro-active step. And non-traditional workers pose special challenges.

On top of those, add the challenges that come when the employer sells the work product of the author. Government procurement regulations often require vendors to release some or all of their rights to any intellectual property (“IP”) included in the deliverables. (See standard Federal Acquisition Regulation clauses 52.227-14 through 52-227-20, for example or Policy Notification 49 in Canada, which many state, provincial and local governments pattern their own rules after.) Commercial purchase agreements generally have similar provisions.

And finally, there is more often these days than in the past a challenge that comes when the employee modifies or incorporates work authored by others who may not be employed by the same employer. The ease with which a programmer can find and incorporate “open source” software components exposes the employer to potential claims of people the employer never intended to involve in a project. The employee is also potentially at risk.

Preventing Disputes
Employers and employees can prevent a lot of problems by clarifying their rights in writing at the beginning. Here are some things to keep in mind when creating an agreement that covers copyrights (and most other intellectual property rights) between employer and employee or to define contract services.

1. Who owns what?
2. How will the employer “pay” for the author’s rights?
3. What is covered by the agreement?
4. What duties does each party owe to the other?
5. What about work product the employer sells to others?
6. How will each address exceptions?
7. When does the IP rights agreement start and end?
8. How will disputes be handled?
9. What happens if the parties can’t resolve a dispute themselves?

In this post, I will cover the first four. The rest will be in a later post.

1. Who Owns What?
Most of the time, the parties come together with rights in work product created before they associate. Employers need to know what the employee already owns and the employee needs to list in detail the pre-existing work before work begins so there is no question about the date of creation or the applicability of the employment agreement’s terms. It is important that the employee list any liens or other claims against any of her work and to show that those claims will not apply to work created for the employer.

Describe the parties, indicating who is employer and who is employee, and that the future works subject to the agreement will be made within the scope of the employee's duties. Be sure to address the potential claims of third parties to any of the pre-existing work, especially if any of them work or have worked for the hiring employer or if the new employee may have potential claims by a previous employer to any work she claims. Then describe what rights the employee will surrender to the employer and the exact date and time, including time zone, the employer’s rights will begin. Be specific. Each of these can be a source of disagreement later.

2. How will the employer “pay” for the author’s rights?
An essential element of a valid contract is the “consideration.” One party must give something of value to the other for the second party’s deliverable. Consideration does not have to be in cash, however. Depending on the circumstances, consideration may be the extension of a job offer, or giving up a valuable right or an obligation to do or refrain from doing something in the near future, for example. State clearly what the consideration is and that the parties agree it is sufficient consideration for the future IP rights surrendered by the employee as well as the employer's right to re-sell the work authored by the employee without further compensation.

3. What is covered by the agreement?
This seems intuitive until you dig into the possible scenarios. What about work done after hours though on the employer’s equipment? Or at home after hours on the employee’s own equipment? Can the employee perform the same type of work for others? Can she add to pre-existing works that do not relate to the employer’s business? Address as many scenarios as you can but also include guidelines for the parties to raise and address unforeseen situations in a pro-active manner. It may be wise to include a provision where everything is deemed surrendered unless excepted by separate written agreement prior to creation.

4. What duties does each party owe to the other?
Initially, there are duties of disclosure. Is the employee bound by any nondisclosure or non-competion agreement? Does the employee know of any potential claims by others to his work? Does the employee hold rights in IP used or also owned by potential competitors?

Next, there are duties during the employment or contract term. Has the employee used the work of others in his work? If so, there should be an itemized list of the source, all applicable license terms, where you can get a copy of the license and how the license was acquired. The employee should be required to get permission before incorporating any works of others and should be on notice of potential consequences for violating that clause.

In the second post on this topic, I will cover the remaining five points.
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1 Though this discussion focuses on the Copyright Act of 1976 in the United States, as amended through 2009, the guidelines are generally applicable to other intellectual property issues such as patents, trademarks, and service marks. Those types of IP rights have other concerns, however, that are not addressed here.

2 It is important to note that this post discusses ONLY the United States Copyright Act and works created solely within the United States. Other laws may apply to works from other countries and the U.S. has signed treaties and international commitments related to the protection of intellectual property rights around the world.

3 The question of when a person is an “employee” for the purposes of the “works for hire” exception will be the subject of a later post, since it is complicated and deserves discussion.

Reply to Deaf Ears? Why Won't Herring Permit Dissent?

2011-02-15T13:38:00.005-06:00

Here is a "guest post" by Professor Robert Schuwerk to the latest of a barrage of one-way messages orchestrated by Chuck Herring, Amon Burton, Jim McCormack and a few others whose primary mission appears to be to block all changes at all costs (allegedly because Herring wasn't on either drafting committee). Because Herring, et al., do not permit opposing viewpoints to go out via their spam system, I post these rebuttals. However, unlike the Herring posse, I DO permit comments and disagreement on this blog.

___________________________________________________

This is a dissent from the views expressed below concerning the pending referendum. Like many pieces that have appeared slamming the proposed new rules, it is full of florid criticisms of the rules and of the Bar itself that simply are not valid.

Before responding to particular objections, it is important to keep a couple of things in mind. The first is that there are over fifty rules involved in this referendum. All of the criticisms that I have seen—and I have seen most of them—focus on about five or six of those rules, or about 10%. NOTHING bad is said about the others. Thus a no vote represents a rejection of the lion’s share of this massive project even though no one objects to it.

The second is that critics of the present rule—whose views are behind most of those expressed by other lawyers below—fail to explain how (a) the overwhelming number of Texas lawyers who were actually involved in this project—practicing lawyers just like you—managed to be talked into voting for rules as flawed as those objectors say these rules are, (b) how the board of directors of the Bar, who had all of the opponents’ criticisms before them, managed to be convinced to vote for them unanimously, and (c) how the Supreme Court of Texas, who also had all of those criticisms before them, decided to approve the rules in the form they appear in the referendum, also unanimously. Perhaps all of those lawyers are just stupid or misguided, and only the three lawyers who have spearheaded the campaign against these rules have seen the truth of the matter. On the other hand, perhaps it is the other way around.

Now to some of the specific objections made below. A concession to the shortness of life prevents a response to each one individually.

The old rules were working fine, why change them? This argument is misleading, because it implies that rules were overturned wholesale. That is not so. Many of the current Texas rules are carried forward verbatim into the proposed new ones. No one has objected to those rules as far as I can determine. However, where changes were made, they were done because problems with the existing rule were called to the attention of the two drafting bodies by practicing lawyers and the amendments made to the rules were undertaken in order to remedy those specific problems. All of this is detailed in reports submitted to the Supreme Court of Texas by the TDRPC Committee of the Bar. Nothing was changed just to have something to do.

If these rules were meant to bring us closer to the ABA, they didn’t do a very good job. Not so. There are literally dozens of changes to the proposed rules to bring them in closer alignment to the ABA. For every single rule, its ABA counterpart, if there was one, was carefully studied and, if it appeared to be the better choice, it was adopted. On the other hand, Texas has traditionally had a different view than the ABA as to what the best policy is in certain areas, and in some instances it was decided to adhere to the Texas policy. For example, Texas has always been more reluctant to discipline lawyers for charging excessive fees than the ABA (although each follows the same standard in tort), and it was decided to retain that approach, although under a somewhat different standard than used now. Similarly, Texas has always been more willing to allow lawyers to fund litigation without obliging the client to repay such advances than has the ABA, and once again it was decided to keep that difference in place this time around. The point is that decisions to depart from the ABA were not the result of careless oversights but rather reasoned policy judgments that the Texas approach was, and remained, preferable to that taken by the ABA.

The rules are complicated to the point of being unintelligible. Part of the complication of the new rules (which, bear in mind, is in actuality only a handful of all of such rules) is that they are new. In all honesty, however, another part of the “complication” of the new rules is that their critics have misstated their intended meaning and effect, leading many to say in substance, “Gee, I didn’t get that out of reading them.” Sadly, all too often, that is because the “that” isn’t really there. The proposed new rules are in many instances far clearer than their predecessors, and where they are not, they are more complicated by necessity—that is, because they need to be in order to address a specific problem with the present rules called to the attention of the drafters—and in such cases the comments go out of their way to explain to lawyers how to navigate those complexities. Which brings me to the next commonly hear criticism …

Lawyers have been disenfranchised by not being allowed to vote on the comments. This argument has no basis in terms of how referenda have been conducted in Texas over the last twenty plus years, where the practice has always been that disciplinary rules get voted on, but comments to them do not. This was true in the 1989 referendum on the current rules, it was true in the 1994 referendum on amendments to the advertising rules, it was true in the 2004 referendum on the forwarding fee rule and other amendments to the advertising rules, and it is true today. The reasons for this are two-fold: (a) lawyers can’t be disciplined for violating a comment (or the preamble for that matter, which also isn’t a part of the referendum), and (b) if there is anything wrong with a comment, it can be fixed by the Board of Directors of the Bar without the approval of anyone. Anyone unhappy with a comment should write the TDRPC Committee and ask to have it changed. That is part of what they do.

These amendments are a direct attack on lawyers charging flat fees or nonrefundable retainers. These rules do not alter current disciplinary law in these areas. They do not absolutely prohibit flat fees. They do not absolutely prohibit nonrefundable retainers. What appears to have stirred up anxiety here is that the comments point out that such fees can be problematic in certain circumstances according to case law, a warning not contained in current comments. However, this is not an effort to expand the rule, as some have taken it to be, so as to prohibit such fees, but rather a caution to lawyers that they cannot rely on contractual language in all circumstances so as to keep a fee paid in advance. That’s what case law says. To vote against this rule for making lawyers aware of that in a comment would be a classic case of “shooting the messenger.”

What is the Bar doing advocating for these rules anyway? This is a strange argument. What is wrong with the Bar’s employees taking positions on the pending rules, when those rules have been unanimously endorsed by the Bar’s board of directors? What is wrong with chief disciplinary counsel for the Bar responding to an (unfounded) claim that the new rules would cripple disciplinary enforcement? Who better to respond? Is free speech only for opponents of the referendum, while others must be muzzled? The only possible issue here is an argument that bar dues fund the Bar, so it shouldn’t be playing an active role in the referendum (a so-called Keller issue). How-ever, that is a complete red herring. While there are restrictions on a mandatory bar like ours using membership dues to fund general political or policy positions, those restrictions do not apply to matters of bar discipline, which are specifically approved of as appropriate expenditures under Keller. This of course makes perfect sense. It would be rather bizarre if the Bar could not take a position concerning what constitutes appropriate self-regulation of its members.

In my opinion, as one of the drafters of both the current rules and the proposed new ones, it is not even a close question as to whether the new version is superior. Beyond any reasonable doubt, it is. I urge a YES vote.

Robert Schuwerk

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Thanks to Prof. Schuwerk for his efforts to discredit the deceptive comments out there that serve only to confuse, rather than further honest debate. How about it, Herring, et al.? Why not send out Schwerk's reply on your list?

Here are my prior posts on this referendum:

Part One
Part Two
Part Three
Post-script
Post-Post-Script

Why I Voted YES in the Texas Rules Referendum (Post-post script)

2011-02-07T15:22:00.004-06:00

Another email blast came out today that explained why the author voted against the entire referendum. It includes one point that I keep seeing that is puzzling (it would be amusing, but this is a serious discussion and I hope that the point is not raised facetiously).

Here it is: Rule 1.07 is objectionable because it expressly requires compliance with Rule 1.06, and vice versa. And an express reference from each to the other somehow is a problem.

That's the gist of it. Rule 1.07 has been spun out of our present Rule 1.06 to make 1.06 less confusing, and the opponents don't like that.

It's as if this is a unique situation and each rule is supposed to stand all alone, out of context of the others.

A reference like that is intended to help: it reminds the lawyer who may not be familiar with the area that there are other important provisions to keep in mind. Besides, unless a rule expressly exempts compliance with one or more other rules, they all impliedly cross-reference each other.

If the opponents of the changes to Rules 1.06 and 1.07 were specifically unhappy with any particular provision, or preferred different language, they should have raised such a substantive complaint during the comment period or thereafter prior to finalization of the referendum documents. But there is no "replacement" on their agenda: they appear to only want to block change.

Here are the prior posts in this series:

Part One
Part Two
Part Three
Post-script

Why I Voted YES in the Texas Rules Referendum (Post-script)

2011-02-04T13:30:00.006-06:00

I was not going to post on this topic again, but I received an email that listed 5 reasons the author voted "no" and realized there was an opportunity to rebut the arguments and deceptive remarks.

I will take each point one-by-one.

Opponent's Point 1: "Several of the proposed disciplinary rules are worse and more confusing than the current rules—they seem likely to cause problems for both lawyers and clients."

First of all, there are no specifics here. This sounds like the same "they aren't all perfect, so reject them all" argument. The logic there escapes me. My grandmother used to say, "don't throw the baby out with the bathwater" to such arguments. Take the converse: if several of the present rules are confusing and cause problems today, is that alone enough to discard them all and replace them?

Opponent's Point 2: "The proponents of these new rules and the State Bar have ignored the cost of these proposed rules. The new rules clearly would cost time and money for lawyers and clients—that would be true of any new rules—but these proposals do not create obvious improvements to outweigh those costs. And yet, the one topic that the folks pushing these rules always avoid is "what will these rules cost?" Why?"

Again, no specifics; only general, unsubstantiated statements that appear to be designed to evoke fear, not reasoning. One could just as easily argue that the present rules cost time and money for lawyers, given that (a) we have to learn them initially, (b) we have to frequently review them to look up particular issues, (c) we have ethics CLE requirements intended to help us understand them and (d) if any of us are charged with a violation, we have to spend time and even money on defense counsel to fight them. Where is the meat to this point?

In addition to unspecified "costs" that may or may not exceed the costs of the present rules, there is the unsupported cost-benefit analysis that benefits of the proposed rules do not outweigh those "costs." By what measure? Which benefits are not enough to merit the inconvenience of change? Removing the strict-liability trap on lawyers in the current Safekeeping rule seems like a good benefit to me. Adding a clear prohibition against sex with clients seems like it will benefit the public and the legal profession's image. What costs outweigh those benefits? The opponents can't tell you because the argument is specious.

Opponent's Point 3: "The proposed rules would change many important parts of our law practices—what clients we can accept, how we analyze conflicts of interest, when we can be disqualified from representation, what fees we can charge, how we disburse settlement funds, what client information is "confidential," etc. Each of those changes creates risks for lawyer and clients—and I don't see the corresponding benefits."

This one is chock-full of misleading statements. If the change to "what clients we can accept" refers to people with whom we want to have sex, then that is correct. So? The "disqualified from representation" shows that the author does not know the difference between disciplinary rules and disqualification law. The refrain "what fees we can charge" is bogus: there are no changes to the "flat fee" rules and the difference between "illegal fee or unconsionable fee" and "clearly excessive" is meaningless when you read the respective definitions and factors determining either.

If I were asserting that "how we disburse settlement funds" was changing for the worse, I should be embarrassed. The change actually helps the lawyer and the client in situations where some third party may have a theoretically-possible but unreasonable claim to funds in the lawyer's possession. The lawyer can ignore the specious claims and give funds to the client faster. The author is unaware of the intended benefits, however.

Opponent's Point 4: "Our current rules have worked fine for 20 years. Have you ever heard anyone say "Oh, our current rules are a real problem and we absolutely must change them"? Moreover, we have court decisions and ethics opinions explaining how to use and interpret our current rules. If we adopt flawed rules, how long will it take before the Bar and the courts fix those? Another 20 years? Can we afford to vote for proposals as poorly drafted as these? Wouldn't it be better to start over?"

Isn't this a reprise of the "why change? I am comfortable with what we already have?" attitude? Just because some of our fellow bar members know the present rules is not a valid reason to leave them alone forever (which is not, if you read carefully, what the author is advocating). What other area of law stays the same despite dramatic changes in society, membership and the regulatory environment? The reason these rules have taken so long to revise is NOT because they have worked fine for 20 years: it is because the last referendum failed due to insufficient votes cast and the Supreme Court sent the process back to the drawing board in light of the major changes in the ABA's Model Rules and our profession.

In the same point, the author both advocates keeping our rules because they are "just fine" and "starting all over" with a revamping effort. Which is it? I see a thinly-veiled attempt to defeat the entire referendum for any possible reason. What does the author gain from that? Does it outweigh what our profession and the public will gain from these changes?

Opponent's Point 5: "The Bar has used our bar dues and its staff in a one-sided sales effort, refusing to allow referendum opponents to participate in Bar CLE events or in the Bar-paid-for road shows. Shouldn't the Bar be an honest broker in presenting the Pros and Cons, and then let us decide? If these proposals were worth all of this trouble, wouldn't they sell themselves?"

It is interesting that, with all the input, comments, public meeting feedback and contributions from every section of our diverse bar, the author casts these changes as "one-sided." The Task Force, Bar Committee, Board of Directors and Supreme Court have weighed and considered pros and cons for seven years! The bar membership has submitted comments that produced a number of changes. Is that purely because the author failed to take advantage of the public comment period? Or is it because the author (or the original source of this point) wasn't personally appointed to one of the drafting groups?

As for the last rhetorical question, shouldn't these proposals "sell themselves?", there are two problems. First, there is no "selling" going on; everyone I know of who has spoken in favor of the changes has explained their level of involvement in the process, the reasoning behind the pariticular revisions and where conflicting interests were accommodated as much as possible during the drafting process. The Supreme Court ultimately hammered the proposals into final form. When anyone I know has actually read the proposed changes and considered hypothetical or real disciplinary scenarios, they have concluded that these changes, while not perfect in every aspect, are definite improvements as a whole over what we have.

Conclusion: Once again, the attacks on the rules are non-specific, fear-mongering and dripping with "not made here" attitudes that attempt to cover the belief that, if this referendum fails, then perhaps the opponents will get more of what they want in the next round.

There won't be another 20 years of status quo whether or not these ballot measures pass. The SBOT Committee on the Disciplinary Rules of Professional Conduct is a standing committee that already has a list of additional changes the Court has asked it to work on. The revision process is open and on-going.

If you like some but not all of these changes, don't throw the baby out. Submit your suggestions on how to improve them. Participate, rather than simply oppose everything. It is your bar and your profession. Therefore, your responsibility to help in the self-governance process.

I urge you to vote "yes" and then keep on participating in the on-going improvement of our disciplinary rules.

YES

Feel free to post any specific questions or concerns that you have not seen explained or opposition points you have not seen refuted. I will promptly respond.

Here are the prior posts in this series:

Part One
Part Two
Part Three

Why I Voted YES in the Texas Rules Referendum (Part 3)

2011-02-03T01:23:00.002-06:00

The Drafting and Referendum Processes

Believe it or not, there are people out there loudly urging everyone to vote against everything in the referendum. Some would have you believe their claims that “the referendum is illegal,” “these are the work of some nonpracticing lawyers who are clueless about the real world,” or “this is another example of big government reaching too far into the little guy’s life and pockets.”

The State Bar Act authorizes the Supreme Court to hold this referendum (actually mandates it for such rule changes). The Supreme Court is the body who would decide how to apply the State Bar Act. The Supreme Court approved the State Bar’s proposed ballot after reviewing the State Bar Act. So, (a) what is left that is “illegal?” and (b) who thinks the Supremes will rule their own actions as “illegal?” It is a weak complaint.

These rules are the combined work product of dozens and dozens of my fellow members of the State Bar of Texas and the result of extensive discussion, debate and input from lawyers representing every corner of our diverse bar. Solo practitioners, general practitioners, big firm partners, government lawyers, corporate counsel, criminal prosecutors and defenders, law professors, disciplinary counsel, disciplinary defense lawyers and public interest lawyers have all been on either the Task Force, the Committee or both over the seven year process.

As well, there have been numerous opportunities for feedback from the bar as well as the public (and a number of revisions came from the last feedback period). The proposed rules have been vetted by the Task Force, the Committee, the Supreme Court and the State Bar Board of Directors. It was an open process that involved numerous perspectives, many of which were conflicting.

No one special interest group got everything they wanted. Yet it seems that these groups have aligned themselves against the various rules until it appears that all of them oppose everything. It is easy to be against something; it is much more demanding to be for something or to propose specific alternatives. Too many of these detractors seem to be opposed simply because they were not directly in one of the groups.

Comments about the ballot itself

The 2011 State Bar Referendum ballot has six items. (See a sample ballot here.) All the changes are sorted into groups of rules.

A. Rules 1.00-1.05, 1.15 and 1.16. These are all of the rules in part 1 of the TDRPC with substantive changes EXCEPT the "Conflicts Rules."

B. Rule 1.07. This is a modified version of part of present Rule 1.06 that replaces the present Rule 1.07. This rule drew the most comments, so the Court set it apart.

C. Rules 1.06 and 1.08-1.12. The rest of the "Conflicts Rules."

D. Rules 1.13, 1.14 and 1.17. The two new rules ("no sex with clients" and "prospective client" rules) plus a substantive change to Rule 1.14 (Impaired client rule).

E. Rules 3.01-3.10, 5.01-5.07, 6.01-6.03 and 8.01-8.05. The rest of the rules with substantive changes.

F. Rules 2.01, 2.02, 4.01-4.04, 7.01-7.07 and 9.01. The rules with no substantive changes; only updates to cross-references or to the new definitions and terminology. (And yes, there are people out there actually campaigning to get you to vote against even these!)

Final Thoughts

I have seen, heard, and rebutted many charges against the referendum. Some were quite puzzling, like those who actually WANT the State Bar Act to fail sunset review next year (what do they think will take its place???). Others were misguided, like the lawyers who thought that rule 1.15 was raising the standards they must follow (and therefore showed everyone that they didn’t understand the current rule). Then there are a few who object to the time, effort and expense spent by the bar and its officers in drafting, proposing and explaining the changes (who else is supposed to do those things?).

I think there are plenty others who are simply oppositional. They are opposed to change or being told what they can and cannot do. Or they don’t want to actually read all the changes, but would prefer a couple of rules each year instead of a sweeping revision. Or worst of all: they have a “not made here” bias—if they didn’t personally write the language, then it must be bad.

The largest group by far, however, are those who have not really paid attention and probably do not plan to vote. Your bar association has worked a long time (remember the last referendum in 2000?) and your fellow bar association members have contributed hundreds of hours to the process with your interests in mind. I know; I saw those discussions first hand over the past year.

No one is urging you to vote for the changes simply because a lot of work went into them. But that work should be reassuring to you that these are not arbitrary changes by a detached bunch of bored bureaucrats. They are not perfect, but you can keep writing and emailing the Supreme Court to suggest changes and give examples of problems that come up as a result of the new rules or in spite of them.

Let’s move forward by first catching Texas up with the rest of the country. Then let’s continue to move ahead. Other issues such as multi-state and multi-national law practice loom ahead of us. How will Texas grapple with those if we cannot even bar sex with clients other than those we are related to or already involved with?

Texas lawyers are smart enough to see through the weak arguments and bold enough to take the steps needed to modernize our disciplinary rules. Vote FOR all the six items and help your profession continue to effectively regulate itself. By voting YES, you will make a difference. If you don't vote at all, you won't.

Why I Voted YES in the Texas Rules Referendum (Part 2)

2011-02-02T13:14:00.000-06:00

Rules 1.13 and 1.17

Proposed rules 1.13 and 1.17 are alone almost worth all the other changes combined. All other self-regulating professions in this state already prohibit sex with clients. Why have the lawyers taken so long to do so? We know it is wrong. We know why it is wrong. Yet we have never had a specific rule. Texas needs rule 1.13.

When a lawyer is under investigation for inappropriate relations with his or her client, disciplinary counsel will tell you, the first defense raised is the pitiful, “well, it isn’t in the rules that you can’t do that.”

Make a statement. Make it clear. This rule is important because we have the public’s best interests in mind and we want to make sure every new member of our bar association understands where the lines are.

Proposed rule 1.17 works as much to protect lawyers from actions in bad faith by people who want to cause conflicts of interests as clients who only want to find out if a lawyer will represent them. The so-called “pasta conflicts” caused when someone unilaterally dumps confidential information in the lap of a lawyer and then claims that the “pasta” stuck to that lawyer, forever tainting him and his entire firm, need to be addressed.

With proposed rule 1.17, lawyers can caution “prospective clients” to only tell enough information to let the lawyer determine whether she can or wants to accept the case. If the lawyer truly wants to keep her options open to represent another party in the same matter, she has to tell the prospective client before any discussion begins. That way, everyone is clear about what is going on at the very beginning of the discussion.

Rule 1.05

The changes to Rule 1.05 are a vast improvement over the present version. The new rule cuts out the concepts founded on the rules of evidence and by doing so, makes a very crooked path much straighter.

One objection to this and other rules is that present rule 1.05 isn’t considered “broken,” so it shouldn’t need to be “fixed.” Take out the present version and place it next to the proposed rule. You can immediately see the improvement. Don’t vote against these changes, as one objector urged, because you want to keep everything the same forever. The Supreme Court agrees that rule 1.05 needs help; let’s get it done this time.

Better Rules For All

The new rule language removes several traps and provides clearer guidance to lawyers who are trying to abide by them. You may have seen the protests about how there are “65,000 words” in the rules and comments. What kind of complaint is that?

We are lawyers. It is our chosen profession. We work with words for a living! We apply law to facts to achieve our clients’ goals. Are they saying that they are afraid of so many words?

The “65,000 words,” by the way, are not being ADDED to the present rules and comments. They are replacements for the most part. I wonder how many words are already in there? Were there too many for these objectors?

These changes were all made with consistent rules of draftsmanship, including:
(a) the rule language must clearly identify the action that is prohibited or permitted as an exception to another prohibition
(b) there should be no traps for the unwary and no strict liability (like present rule 1.15 has)
(c) lawyers who are trying to abide by the rules should be able to see where the lines fall so they do not unintentionally cross them
(d) lawyers who seek to intentionally harm others should be prevented from doing so by disciplinary action

Read the proposed changes side-by-side with the present rules (the redlined version is just not enough). Look at the new language and decide for yourself: will our profession be better off—and perceived by the public to be more responsible—with these changes as a whole or without any of them.

Most of the anti-everything objectors are hoping you won’t do that.

Why I Voted YES in the Texas Rules Referendum (Part 1)

2011-02-02T00:58:00.003-06:00

(Full up-front disclosure: For just over a year, I have been on the Texas Bar’s standing Committee on Texas Disciplinary Rules of Professional Conduct. That year was the 7th in the current effort to update the TDRPC, so my work was limited generally to tweaks and revisions that were requested by the Texas Supreme Court after public comments and bar member feedback.)

Texas is currently holding a referendum for the members of the Texas Bar Association to vote for or against a number of proposed changes to the Texas Disciplinary Rules of Professional Conduct. These amendments will revise rules that have been in effect for 20 years. (More information, including a link to the electronic ballot are here.)

I voted for all of the referendum ballot items because:

1. Texas needs the new rules 1.13 and 1.17.

2. The changes to rule 1.05 are a vast improvement over the present version.

3. The new rule language removes several traps and provides clearer guidance to lawyers who are trying to abide by them.

4. These rules are the combined work product of dozens and dozens of my fellow members of the State Bar of Texas and the result of extensive discussion, debate and input from lawyers representing every corner of our diverse bar.

In this and subsequent posts, I will expand on those reasons. I will also take on some of the objections raised by a few people who are very loudly campaigning against the changes.

A bit of history

The current rules, with a few exceptions, were adopted in 1990. There were updates to the “advertising rules” in 2005 to adapt them to the new age of internet information and communication. Otherwise, the changes to society and the legal profession in the past 20 years have occurred with essentially no change to the rules that determine how a lawyer in Texas may avoid disciplinary action*.

On top of that, the problems with the rules that were adopted in 1990 have not been corrected. Some of those rules turned out to be mistakes, but efforts to fix them about 10 years ago failed due to an insufficient number of lawyers voting**.

Yes, there have been changes all around the legal profession. The American Bar Association, recognizing both that there was significant room for improvement in their Model Rules and that society and our standards had changed a lot, commissioned the “Ethics 2000” project to propose changes. Including the Ethics 2000 revisions, the Model Rules—the foundation for many of Texas’ TDRPC—have been amended 30 times since 1990.

How has our legal profession changed in Texas? Just a few of the significant changes were Tort Reform legislation, the rise of mass tort cases, a sharp increase in multi-district litigation, major mergers of law firms across the country, a growing diversity in our bar members, and the impact of technology on both lawyers and their clients as evidence by both electronically-stored information and breaches of confidentiality by unauthorized release of data that was not intended for disclosure.

_______________________________________
* Though the TDRPC rules are sometimes confused with other areas of law, such as professional malpractice, fiduciary duty, and disqualification of counsel, those areas of law are distinctly different. Breach of any of them does not necessarily subject a lawyer to a disciplinary action, and vice versa.
** A majority of those who voted were in favor of the changes; there is no reliable measurement of whether the abstainers were against the changes or simply apathetic.

A New Pledge - To Strengthen Pro Bono Legal Assistance (Part 4 of 4)

2010-10-25T21:45:00.009-05:00

(October 24-30, 2010, is “Celebrate Pro Bono Week” in the United States and Canada and November 8-12, 2010, is “National Pro Bono Week” in the United Kingdom. This is the first of a 4-part series illustrating the need, the challenges and the priceless rewards for volunteer legal professionals. For more information about these events, go to this site for the U.S. and this one for the U.K.)

In the first three parts of this series of posts commemorating Pro Bono Week 2010, I described the extent of the unmet civil legal needs (Part 1) of low-income families in the U.S., the need for a stronger public+private partnership (Part 2) to address that need, and ways that you and your peers can help (Part 3).

This final post lays out a type of wish list of actions that can help private lawyers help more often and includes a new video (at the end). But first, let me tell you about one case I will never forget.

A Client Story

Some years ago, I took the application for legal aid from a couple of elderly women. They were the pastor and a decon of a small, poor, inner-city church located in a very low-income part of town and they had a bunch of documents with them. As I looked through their documents, I saw right away that the church had been sued by a carpet business to collect on its unpaid invoice and establish a lien on the church's only asset: its building and a half-acre of land.

The women looked at me and choked back tears. "We never ordered or received any carpet!" they said. It struck my inner-most sense of justice and I accepted their case on the spot.

When I contacted the business owner, his response made me even more determined. "So what?" he replied when I pointed out that no carpet was delivered or installed. "I got a contract and they owe me for the whole amount."

Well, he didn't have a contract; he had a quote that the minister never accepted. In a nutshell, a carefully drafted answer with counterclaims drove him into bankruptcy court and a quick and easy Adversary Proceeding not only declared his claims for a lien and debt invalid, but also that the church's fraud claims would not be discharged by his bankruptcy. And with that, it was over.

I thought that the result was deeply satisfying. In this case, I helped prevent a gross injustice and hopefully convinced this businessman to never try that again. I wrote a nice letter to the minister to explain the result and that they had nothing to worry about.

A few days later, the front desk called to tell me that the two women were in the lobby asking to see their lawyer. I was worried that they had another problem or didn't understand the outcome of their case. But when I got to the lobby, all I got were hugs, tears and thanks. "You saved our church!" they said. "You were the answer to our prayers." Those hugs and words were more valuable than any fee I had ever collected.

What We Need Now

Growing the ranks of volunteers and increasing donations to help fund pro bono programs will go a long way. We also need changes in our ethics rules and pro bono programs.

Rules.
The American Bar Association added Rule 6.5, “Nonprofit and Court-Annexed Limited Legal Services Programs” to its Model Rules of Professional Conduct in 2002. That rule attempted for the first time to carve out a limited exception to some of the conflict of interest rules. The exception only applies when a lawyer:
>>>>>a. participates in a qualified “limited assistance” event,
>>>>>b. with no expectation of continuing representation in the matter presented,
>>>>>c. does not personally know of a conflict of interest with the person helped at the event, and
>>>>>d. does not personally know that another lawyer in his or her firm would have a conflict of interest with the person helped at the event.

In the wake of recent major hurricanes in the U.S., scores of prospective volunteer lawyers have shied away from providing legal assistance to disaster victims in large part because they were concerned about inadvertently violating applicable ethics rules or causing an imputed conflict of interest that hurt their firms. Another cause for hesitation to prospective pro bono volunteers, especially in areas near a state border, is the worry about inadvertently violating another state’s “unauthorized practice of law” restrictions.

Well-meaning lawyers need protection from these worries. Some pro bono programs have set up “anonymous” call centers and other systems for assisting people without the lawyer and client knowing the other’s names or the names of the parties involved, but some would argue that even that is not safe, as enough facts can often be inferred from the conversation to trigger a potential conflict of interest or disqualification.

The rules should clearly exempt from discipline any lawyer who:
 Provides:
>>>>>i. free, short-term legal assistance
>>>>>ii. in a setting where complete conflict of interest checking is not feasible,
>>>>>iii. has no plan to ever receive compensation for the work,
>>>>>iv. does not allow confidential information from the assistance to be accessed by anyone at his or her firm, and
>>>>>v. has no personal knowledge that he or anyone else in his firm would have a conflict of interest with the client being helped at the event.
 Provides only general assessment and guidance in urgent situations regarding matters involving state laws where he is not licensed, with appropriate admonitions that the client seek other guidance from a lawyer duly licensed in the other state.
 Provides limited, “unbundled” assistance to self-represented litigants, such as coaching before a hearing, reviewing proposed orders, or explaining court rules.
 Provides free limited answers to general legal questions in online forums (as long as he includes appropriate disclaimers).

Rules regulating the legal profession in each state should also clarify what information court personnel and other nonlawyers can provide, such as general procedural guidance, preprinted legal information and how to obtain legal assistance or report lawyer misfeasance to the governing body.

The ABA Ethics 20/20 commission is now reviewing the 2002 Model Rules and issues unaddressed in them. Hopefully, they will come up with more protections and the states will adopt them quickly.

Pro Bono Programs.
Lawyers today are more culturally diverse in many ways than ever before. And “culture” means a lot of things in addition to race, religion, national origin, gender and sexual orientation:

Urban, suburban or rural
Large, medium, small or solo firm
Specialist or generalist
High, medium, low or non-existent technological skills
Heavy, light or zero bar association involvement

These differences make our profession richer and stronger, but give Pro bono program directors challenges:
-> As more lawyers are concentrated in urban areas, fewer are available to provide significant pro bono assistance in rural areas.
-> Some lawyers only communicate by mobile phone and text messages, while others prefer email, faxes or messages left with their secretaries.
-> Younger lawyers tend to work easily with web-based systems, while more-experienced lawyers prefer to deliver aid in person.
-> Lawyers move from firm to firm more frequently, often forgetting to let their pro bono coordinators know of the change.
-> Clients with pre-paid mobile phones can change phone numbers faster than their addresses, yet busy volunteers do not have a lot of time to chase after them to complete a matter.

These and other challenges require program updates in many places to keep attracting new volunteers while retaining valued long-timers. Some pro bono program directors will need to use more online and electronic tools to help busy lawyers volunteer, deliver legal assistance, obtain mentoring support, and report on their results, even as some long-time volunteers still require a phone call to sell them on a new pro bono case. Even more, these tools can be used to connect rural clients with urban lawyers in many types of cases.

Others will have to expand “assisted pro se” projects in ways that require fewer volunteers or incorporate nonlawyers who can deliver legal information and pre-printed guidance. [1]

"Do It Anyway"

But do not let these gaps dissuade you from getting involved. Pro bono programs have existed successfully for many decades and their dedicated staff can accommodate almost every volunteer’s needs who regularly takes cases for them.

It is Celebrate Pro Bono Week. Take an extra case as part of the festivities!

NOTES:

[1] The Texas Office of Courts Administration recently produced informative guidelines [pdf here] for court personnel so they can know where the line is between "legal information" and "legal advice." It is a useful model and has apparently been well received by court personnel across the state.

A New Pledge - To Strengthen Pro Bono Legal Assistance (Part 3 of 4)

2010-10-18T04:48:00.005-05:00

(October 24-30, 2010, is “Celebrate Pro Bono Week” in the United States and Canada and November 8-12, 2010, is “National Pro Bono Week” in the United Kingdom. This is the first of a 4-part series illustrating the need, the challenges and the priceless rewards for volunteer legal professionals. For more information about these events, go to this site for the U.S. and this one for the U.K.)

In my earlier posts, I described the extent of the unmet civil legal needs of low-income families in the U.S. and the need for a stronger public+private partnership to address that need. This one focuses on action.

If you are a lawyer, paralegal, law student, court reporter, court clerk or legal secretary, ask yourself and your peers: is our firm/office/department doing all it can to help relieve the distress our neighbors feel when they cannot afford needed legal help? Some of you are. Thank you. For the rest, take the time to connect with your local pro bono program or look at their statewide website for opportunities to make a real difference. Use your special skills in new ways to help those unable to adequately help themselves through often simple legal problems.

Many paths; one mountain peak

Of course, depending on your present occupation, your volunteer opportunities may seem limited.

 Lawyers in private firms are a rich resource for pro bono programs. Whether sending younger associates to volunteer and build practical legal skills faster or actually co-counseling with staff legal services lawyers to bolster and mentor, firms traditionally have carried their pro bono service banners proudly. Lawyers in small and solo practice tend to have difficulty giving their time away with no one else to keep the revenue stream flowing, but still have traditionally supported pro bono projects either financially or through limited volunteer services. With more cases to place with volunteers than they have on their rosters, Pro bono coordinators sometimes provide CLE courses in partial compensation and always show their thanks openly.

 Corporate and government legal department lawyers have more restrictions on how they can participate, yet they continue to find new ways to help those in need and support legal aid as their “charity of choice.” Some volunteer in “advice-only” events, on speakers’ panels, with fundraising and to recruit other volunteers.

 Paralegals and unlicensed lawyers can be important and valuable volunteers, as well. Many para-professionals have the skills, experience and special knowledge of areas of the law that affect pro bono clients. These “subject matter experts” offer support to lawyers who may be venturing into a new area of the law or taking on several cases at once.

 Court reporters, too, are needed in pro bono programs and staff legal services. Discovery is expensive, but often unavoidable for the responding party. While some large law firms may donate the costs of discovery incurred in their cases, many small firms and solo practitioners cannot. Donated court reporter time helps keep the legal playing field level and the volunteer lawyer in the game.

 Other volunteers are key to successful pro bono programs in the areas of fundraising, communications, office management, volunteer recruiting and recognition, technology, and more. Whether earning community service hours for school or exploring the legal profession as a potential vocation, high school, college and law school students can easily find ways to help keep the program moving smoothly along.

Rest assured, there are plenty of opportunities for everyone. Lawyers and other legal professionals in private practice tend to provide more pro bono services than their counterparts in corporate and government legal departments. Government lawyers can provide pro bono services, despite some misconceptions on that. Corporate counsel can find opportunities tailored to their circumstances and skills at web sites such as this one by the ACC and this one at the Alliance for Justice,

Many ways to join the effort

Here are some ideas on how to make a difference that are specific to the legal profession:

 Helping People. As any experienced volunteer lawyer will tell you, there is nothing in the for-profit side of our profession that comes close to the satisfaction we get from knowing we have helped someone resolve a personal legal matter. Very few pro bono cases are merely financial disputes, because legal aid is designed to address cases that are not lucrative for the private bar. These are compelling situations often filled with emotions such as fear, anger and depression. Even when you do not win 100% of the client’s goals, they are normally appreciative of the fact that someone helped them speak up, fight back or stand tall. (The smiles and hugs are hard to beat, too!)

 Helping Groups. While some will debate whether or not free legal assistance to their local $10+ million symphony should qualify as “pro bono” work, the truth is that nonprofits need legal assistance, too. There are thousands of small nonprofit organizations in the U.S. Many of them were created by or primarily serve families eligible for free civil legal services, so their budgets are very thin. Helping them continue to help others without spending scarce funds on legal fees is one way to help many people in each legal matter. You may not meet all of your “clients,” but those you do work with are sure to let you know how grateful they are for your service.

 Helping Pro Bono Programs. As with most nonprofit organizations, pro bono programs are under-funded, under-staffed and over-whelmed by demand for their assistance. Financial support is always needed, but so is emotional support and public recognition for volunteers and pro bono program staff. Those “in transition” can learn new skills, network with peers and keep their sanity by getting involved while they have the extra time to contribute. Anyone can send cookies, drop off supplies, commend staff in a blog or simply stop by to ask the program coordinator what is needed.

A New Pledge

So let’s make a new pledge together:

“I pledge my support, as a legal professional,
to my fellow citizens and less-fortunate neighbors.
And true to the people, for whom I now stand,
I’ll provide, and support, pro bono assistance
To help achieve Equal Access to Justice for All!”

(rest assured, no one will be jailed for NOT reciting it!)

A New Pledge – To Strengthen Pro Bono Legal Assistance (Part 2 of 4)

2010-10-11T05:00:00.004-05:00

(October 24-30, 2010, is “Celebrate Pro Bono Week” in the United States and Canada and November 8-12, 2010 is “National Pro Bono Week” in the United Kingdom. This is the first of a 4-part series illustrating the need, the challenges and the priceless rewards for volunteer legal professionals. For more information about these events, go to this site for the U.S. and this one for the U.K.)

In my earlier post, I described the size of the problem in the U.S., where, for every person who receives federally-subsidized free legal assistance, at least one more eligible applicant is turned away. (See “Documenting the Justice Gap in America” 2009 update, page 12 (PDF).) Other countries have similar unmet needs based on their levels of funding for civil legal assistance. Government funded programs and non-governmental organizations cannot solve the problem alone. They need your help.

Poverty is An Equal Opportunity Status

The unmet need for civil legal assistance to low-income families in our communities is growing. John G. Levi, Chairman of the Legal Services Corporation’s Board of Directors, estimated that nearly 57 million Americans now qualify for free civil legal assistance based on their very-low-income status. And that is just based on 2009 Census data. When the official 2010 results are in, those ranks will no doubt grow significantly.

The numbers are worse than that: although civil legal aid programs report assistance to many people each funding cycle, many of those clients did not receive all of the help they needed due to the lack of staff and volunteers. Go to any civil legal aid office and ask about the applications they have to turn down due to insufficient staff. Without exception, each will have its stories of eligible applicants with compelling needs that they sent away with either no help or insufficient help to resolve the matter.

The issue is nonpartisan, nondenominational and gender and race neutral:

• Federal funding for free civil legal services began as part of the “Office of Economic Opportunity,” an agency created by the Economic Opportunity Act of 1964. The LSC has a bi-partisan Board of Directors (no more than 6 of its 11 Directors can be from the same political party) and bi-partisan support in Congress.
• Most major religions encourage help to the poor. (See these commentaries: Christian, Jewish, Muslim, and Hindu.) Religious organizations have voiced their support for legal aid to the poor around the globe. (See, for example, this story from Jakarta.)
• The loss of over 8 million jobs in the past few years means that many families are now living at or near the poverty line who used to be well above it. Many more are very close.

At a time when most politicians are calling for budget cuts and many states face their own financial challenges, there is little hope that federal and state funding for civil legal assistance will ever rise to the point where all eligible families and senior citizens will receive help with wills, child custody, home repair fraud, family violence protection, or appealing wrongful denials of public assistance benefits.

The Founding Fathers wrote the current U.S. Constitution “to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity.” They understood that each of these was essential to the new nation’s long-term success. They also understood what can happen when the citizens stop believing that their government’s institutions deliver justice fairly.

Toward a Better Public+Private Solution

Government funded programs cannot meet the need at present funding levels and more funding is unlikely in the current economic and political climate. While poverty and access to justice are issues for all Americans, those of us in the legal profession have the skills, interests and knowledge necessary to provide immediate help to our most vulnerable citizens.

We need more private individuals, firms and organizations to join the effort. Wherever you find pro bono programs, there are more eligible applicants than there are willing volunteers. Pro bono program directors have very limited staff and funds, but seemingly unlimited pleas for legal assistance. Applicants in rural areas face additional challenges because most lawyers are located in urban areas that can be hours away and those in urban areas overwhelm the service providers every month.

Legal professionals are in a unique position to help fill the gap. Justice Oliver Wendell Holmes once said that “of all secular professions, [the law] has the highest standards.” [1] Roscoe Pound, Dean of Harvard Law School from 1916-1936, observed that professionalism in the law “refers to a group…pursuing a learned art as a common calling in the spirit of public service—no less a public service because it may incidentally be a means of livelihood. Pursuit of the learned art in the spirit of public service is the primary purpose.” [2] More recently, Justice Sandra Day O’Connor, after quoting Dean Pound, went on to say that “lawyers have in their possession the keys to justice under the rule of law—the keys that open the courtroom door. Those keys…are held in trust for all those who would seek justice, rich and poor alike.” [3]

The challenge is still there today. How will you rise to meet it?

There are efforts underway to address the needs. The American Bar Association’s Young Lawyers Division and the Young Lawyers Associations in California, Florida, New York, Maryland and other states focus on unmet legal needs in their communities. The Texas Young Lawyers Association specifically has focused on connecting corporate counsel to pro bono opportunities with its new "Partnering for Pro Bono" program. Some states have established web sites to match volunteers to opportunities of interest without them ever leaving their keyboards: Texas, Colorado, New York, and Minnesota are a few examples.

What will you do to support your local pro bono program or legal aid organization? Are you already active in your local program? If not, you can start with these links to some of the legal aid and pro bono organizations:
United States:
American Bar Association’s Center for Pro
Bono
ProBono.net
Legal Services Corporation’s Map
of LSC-funded Programs
Texas "C-BAR" (assistance to qualified nonprofits)

Canada:
Canadian Bar Association
List of links to Legal
Aid Programs in Canada

United Kingdom:
ProBonoUK.net
LawWorks

Others:
National Pro
Bono Resource Centre (Australia)
InternationalProBono.com
(to be continued...)

NOTES:
[1] Suffolk Bar Assn. Dinner, Feb. 5, 1885, Speeches (1913), reprinted in Lerner, Max, The Mind and Faith of Justice Holmes 29 (1954).

[2] Pound, Roscoe, The Lawyer from Antiquity to Modern Times, 5 (1954).

[3] Remarks at the dedication of Anheuser-Busch Hall, Washington University School of Law, St. Louis, Missouri, on Sept. 26, 1997, as printed in 76 Wash. U. L.Q. 5, 12 (1998).

A New Pledge – To Strengthen Pro Bono Legal Assistance (Part 1 of 4)

2010-10-03T05:30:00.002-05:00

(October 24-30, 2010, is “Celebrate Pro Bono Week” in the United States and Canada and November 8-12, 2010 is “National Pro Bono Week” in the United Kingdom. This is the first of a 4-part series illustrating the need, the challenges and the priceless rewards for volunteer legal professionals. For more information about these events, go to this site for the U.S. and this one for the U.K.)

“…with Liberty and Justice For All.”

School children recite the Pledge of Allegiance in the United States nearly every school day:

“I pledge allegiance, to the Flag,
of the United States of America.
And to the Republic, for which it stands.
One nation, under God, indivisible,
with liberty and justice for all.”

To help celebrate National Pro Bono weeks in various countries, I have written a brief series of posts proposing a similar kind of pledge for legal professionals.

Pro bono legal assistance has a long, rich history in nearly all “common law” legal systems. Lawyers have likely been providing free legal assistance to those who cannot afford to hire them since the legal profession began. The concept of providing free civil legal assistance to the poor in an organized fashion dates to the 1800s in the U.S. when legal aid societies were formed to meet the needs of their communities. Perhaps the best known type of pro bono legal assistance is court-appointed counsel for indigent defendants in criminal cases. Think of the American novel, To Kill A Mockingbird, for example.

In the U.S., there is a constitutional right to counsel for federal and most state criminal defendants when imprisonment is a potential punishment. (Most U.S. states also provide the right to representation when the State seeks to terminate their parental rights.) In the U.K. and Canada, people who are arrested may request an “Independent Solicitor” at the police station if they cannot afford their own representation.

But indigent defendants in civil cases have no such right to court-appointed representation. Even though depriving a person of a home, job, or marital property or suffering fraud by an unscrupulous business can be as traumatic and injurious as jail for most families, we have not elevated those problems to the same level as deprivation of liberty or life.

--When a relative wants to adopt an abused child who has been rescued by child protective services and placed in their care, the state will not pay for their legal assistance to complete the adoption.

--When an entire family is about to be homeless because a landlord with poor rent records or a sinister motive is evicting them on short notice, the eviction court will not appoint an attorney to represent them.

--When a judge intentionally or unintentionally refuses to correctly apply the law in a battered spouse’s divorce case, there is no right to counsel to avoid having our legal system used as yet one more weapon of abuse.

--When a working family needs to restructure their debts in bankruptcy to get back on their feet after a major illness or income disruption, the bankruptcy process is generally too complicated for them without legal guidance and legal fees can make the process cost more than they can pay.

--When an elderly widow needs title to her home cleared so she can obtain disaster relief funds or qualify for property tax reductions, no one at the tax office or property records office can represent her.

--When a legally-blind home owner who lives entirely on his Social Security retirement check is tricked into signing papers that give his home to a contractor he thought was trying to help him rebuild after a storm, the litigation required to nullify that contract is typically too complicated to handle alone.

--When a small neighborhood church for low-income families is sued by a carpet company for payment even though no carpet was ever delivered, no one can speak for the nonprofit group unless they can find a lawyer to defend them.

The Public Part of the Solution

Most western nations attempt to address this gap with legal aid in one form or another. There are a number of organizations who provide free civil legal help using full time staff. The Legal Services Corporation distributed over $400 million USD in 2009 to help fund over 136 programs across the U.S. and its territories, for example. Canadian governments contributed approximately $300 million CAD (48% of the total funding to civil and criminal legal aid programs). Standing government agencies and NGOs help millions of low-income people every year in many countries.

Yet the need is still there. The Legal Services Corporation in the United States calculated that, in 2009, almost one million eligible applicants were turned away due to insufficient funding. (See “Documenting the Justice Gap in America” 2009 update, page 9 (PDF).) According to the LSC, in the U.S., “for every client served by an LSC-funded program, at least one eligible person seeking help will be turned down.” (Id., at p. 12.)

This is not a small gap in our quest for “equal justice under the law” (Caldwell v. Texas, 137 U.S. 692, 697 (1891).) that only occurs in isolated cases. This is not merely a problem that plagues poorer states, counties and towns. The holes in America’s pledge to “justice for all” are everywhere. This is a national issue of grave importance in every nation. It is time for a new pledge: A Pledge To Strengthen Pro Bono Legal Assistance.

(to be continued...) Go to Part 2

Mandatory Breaktime for Nursing Mothers at Work

2010-09-30T05:08:00.003-05:00

As provisions of “Health Care Reform” take effect, employers and employees should pay attention. The legislation has far-reaching impact and can catch some by surprise who think it only regulates health insurers. There were two separate bills passed that comprise the “Health Care Reform” package: the Patient Protection and Affordable Care Act (PPACA) (full text) and the Health Care and Education Reform Act of 2010 (HCERA) (full text). (See a very comprehensive discussion of both on Wikipedia and a convenient collection of links to Congressional Record items related to both published by the GPO.)

This post focuses on one of the important but often overlooked changes that affect the workplace: mandatory break time for nursing mothers. The Department of Labor recently published Fact Sheet #73 to provide general information on this new requirement. In a nutshell, the new law provides that:

1. It is secondary to state laws if those laws are more generous in this area

2. It applies to “non-exempt” lactating employees only

3. “Reasonable break time” must be allowed for up to 1 year from child’s birth “each time” the employee needs to express breast milk

4. Employers must provide a place, “other than a bathroom, that is shielded from view and free from intrusion from coworkers and the public” and functionally suitable

5. The breaks can be uncompensated, except to the extent the covered employee uses otherwise compensated break time, but only if the employee is completely relieved of duty during the break

The provision went into effect immediately and applies to all employers. However, employers with less than 50 total employees, counting all locations together, who can show that compliance would impose an undue hardship, may be exempt. There are no detailed regulations or guidance on how to show undue hardship, but the statute’s definition of “undue hardship” is “significant difficulty or expense when considered in relation to the size, financial resources, nature, or structure of the employer's business.” (29 U.S.C. 207(r)(3); PL 111-148, March 23, 2010) There also are no guidelines yet as to whether an employer must apply for confirmation of exemption in advance or rely on its own evidence in defense of an enforcement action.

The DOL expects to issue further guidance sometime in the future and hopefully will produce compliance assistance on this statute, per Fact Sheet 73. Employers and employees will benefit from more clarification. For example, is the PPACA’s requirement of an uncompensated break whenever the nursing mother needs it “more generous” than a state’s requirement that the time run concurrently with a compensated break “if possible?”

In the meantime, employers can look to resources and guidance from states that have had similar provisions for nursing mothers who return to work. The National Conference of State Legislatures has an updated survey of national and state Breastfeeding Laws. Susan Heathfield wrote a blog post, “Lactation Accommodation Policy,” that appears to pre-date the PPACA but provides guidance to employers drafting policies.

California already had a lactation accommodation law and is a rich resource for those looking for tested strategies and ways to avoid potential issues. The University of California-San Diego’s Lactation Accommodation policy is available online, for example.

Employers want their employees back at work happy, healthy and productive following maternity leave. Returning mothers who breastfeed need accommodation to be able to focus on work between pumping breaks. When these goals align, both win.

What You Should Know When Selecting Software for Your Organization - Part Four

2010-07-03T07:32:00.005-05:00

After reading Susan Cramm's book, 8 Things We Hate About IT, available through Harvard Business Press, I saw the need to supplement this series.*

(* For prior posts in this series, click to go to Part One (preliminary phase), Part Two (product search phase), or Part Three (final selection phase).)

Cramm, who is also author of the Harvard Business Review blog, "Have IT Your Way," clearly boils down her extensive experience into a simple handbook for the "IT-Challenged" manager. Here are a few points that are applicable to those in my series on purchasing software:

1. Before running headlong into a purchase, (a) evaluate the idea from the perspective of your boss's boss, (b) check to see whether the capability already exists, (d) ensure that you are ready to devote the necessary resources and (e) verify that the idea is as good as you think. (Cramm, p. 81)

2. Dramatically increase the odds of success for your initiative by (a) defining a clear purpose, (b) engage the "head, heart and hands" of those involved in your project, (c) integrate and streamline business processes, (d) leverage existing technology and (e) use a "fast cycle" approach that delivers at least some value every 3-6 months throughout the project. (Id., p. 89)

Rather than trying to digest the book for you here, I recommend you pick it up as soon as you can, especially if you are already planning a new IT project for your organization. It is concise yet you will use it as a reference book for a long time.

If you are the CIO, then get a copy for your "less-than-IT-enabled" managers who impact IT decisions and budgeting. And do it yesterday!

Are Your Legal Processes Ready for Outsourcing?

2010-03-31T05:03:00.000-05:00

As legal departments around the world look for ways to keep up with demands without growing their budgets, “legal process outsourcing” (LPO) appears to be taking root (1). LPO promises a way to offload certain work to vendors while containing costs and freeing up your in-house resources. LPO is not the same thing as hiring outside counsel, though some outside firms now offer or claim to offer LPO services. LPO is an effort to focus your legal department on its highest and best uses while diverting mundane tasks to those who specialize in them and have thus developed highly efficient workflow without sacrificing quality.

Before you decide whether LPO is right for your department (2), however, or look for a vendor, determine whether your legal processes are suitable for outsourcing. Just because work is done by someone in your office does not mean it is necessarily “legal” or a “legal process.” And just because it is a recurring task does not necessarily mean that it is ready to outsource. The best work for a legal department or firm to outsource is recurring, repeatable, capable of sound quality control and measurable. Anything less than that will be ripe for problems very likely to more than wipe out any cost savings you seek from outsourcing.

Is the process “recurring?”

Given the amount of effort that is necessary to assure results in line with outsourcing expectations, it makes little sense to use an LPO vendor for unique legal work. Traditional outside counsel would most likely outperform the LPO options once you take into consideration the learning curve, knowledge transfer efforts and other intangible aspects of establishing a viable LPO relationship.

However, just because the work is unusual or has come up very rarely does not itself make LPO unworkable. It could be that the project is so large and involves so many smaller recurring, repeatable, measurable processes that those tasks can be cost effective to outsource, leaving the remainder of the project handled in-house or by traditional outside counsel. Document review within an unusually-large litigation matter is one example of this situation. With ten million pages to review, LPO vendors may offer better cost-benefit ratios than hiring your own army of contract document review attorneys.

Is the process “repeatable?”

Not all legal work is ideally suited for outsourcing. Work that is unusual for your clients and for which a significant amount of strategic legal analysis is required will be better off kept in-house or sent to outside counsel. The work must be something you can quickly teach another lawyer to do well.

Look first for the tasks that require the least amount of judgment calls, legal analysis and iterative client approvals. You may already have nonlawyer staff performing these in your office. If you are using contract, temporary attorneys for any tasks, those are also prime candidates for LPO.

Ask yourself these things about the work to evaluate suitability for easy outsourcing:

1. Can I write out the exact steps to complete this task accurately?
2. Can I provide adequate written guidelines for any decision points in the task?
3. Can someone who has never set foot in my department complete the task using those instructions and guidelines?
4. Can someone on my staff easily monitor output quality and quantity?

The idea here is to fashion a set of written procedures so that the work can be done in efficient, repeatable steps by interchangeable outsiders without a lot of questions and direct oversight by your legal staff but with consistently high quality. In other words, work you can re-sell to your clients as your own without an apparent loss of value. Those are “repeatable legal processes.”

Is the process capable of solid quality control?

If you lose more sleep by outsourcing than you gain, then something is wrong. You need confidence in the vendor as well as the quality of their work. When deciding which tasks might be suitable for LPO, “begin with the end in mind,” as Steven Covey advises.

Take some time to envision the ideal LPO arrangement for each set of outsourced tasks:

1. What will the output look like?
2. How will my staff monitor progress and accuracy?
3. How easily can errors be identified and corrected?
4. Who will correct the errors?
5. Will my staff need to or be able to add value to the work product before delivering to our clients?

Is there a reliable way to measure the work?

Most LPO vendors will likely have alternative pricing options for the types of tasks you seek to outsource. Some can be priced by the “piece” (such as a set fee per page, like court reporters charge) while others are priced by the hour with a maximum cap for the project. Before you engage vendors, take some time to think about ways to measure and pay for the tasks. The billing arrangement should dramatically shift the risk of inefficiency to the LPO vendor. After all, you are primarily looking for ways to contain costs without sacrificing quality. Otherwise, the LPO route is not likely going to be attractive.

Taking a page from litigation support vendors, some LPO companies look for piece rate options and then seek to set a fee that provides ample margin for their expected inefficiencies and profit. Tasks such as document review, permit applications, routine contracts and routine correspondence (demand letters, notifications, etc.) fit in this category. It will help quite a bit if you already know how much the tasks cost your department before you field bids from LPO vendors. At the least, work through some formula that allocates salary, benefits, overhead and supervision to the work so you have a basis for evaluating bids.

Other LPO vendors request hourly rates that undercut outside counsel but still provide adequate margins for themselves. The key here is naming an acceptable guaranteed quantity per hour or day so you are assured of those savings, assuming quality is at least as high as the work by your own staff or present outside counsel. Legal research and briefing support typically fits in this category. Again, if you understand what the work costs you to perform in-house, you can better evaluate any bids from vendors. Also, determine the realistic turn-around time for your in-house staff. If they are capable of doing the work in less than four hours, but have two weeks of backlog ahead of the task, find a way to evaluate that “delay factor” in your analysis.

Have you considered all the pros AND cons?

There are many other aspects of beginning an LPO arrangement to consider, of course. (3) The points above are directed primarily at your evaluation of the work you want to outsource. Even so, LPO is a growing industry and large corporate legal departments such as General Electric and Rio Tinto have already made large moves to take advantage of the perceived potential benefits.

NOTES:

1 For a very thorough description of LPO by then-Tufts University 3L Maya Karwande, see: “Student Research examining the Legal Process Outsourcing.”

2 This post is addressed to counsel in for-profit businesses in the U.S., though the same considerations are generally applicable to government counsel, some law firms and some nonprofit legal counsel.

3 In another post, I will explore the ethical considerations for LPO work, including the differences between “near-shoring” and “off-shoring” the tasks for U.S. counsel.

What You Should Know When Selecting Software for Your Organization - Part Three

2009-11-11T04:30:00.000-06:00

In Part One of this series, “Assess, then Search,” I began with a description of the needs assessment phase. For Step Two, I described the actual product search phase. Here, in Step Three, I turn to the evaluation and decision phase.

Sifting through the rubble

Depending on the type of procurement, you may have anywhere from zero to 30 responses to an RFI. It may seem daunting, but there are tricks to sorting through the responses to help you narrow the list to a few key options.

Start with your most firm requirements. Do you need something that allows a certain number of concurrent connections without performance loss? Does each product work with the other applications you plan to keep? Will it adequately accommodate your remote access needs? Does it work with your server OS? Whatever they are, the core “must have” features should drive your first pass through the product materials and RFI answers. Create your short list and set the others aside in case you need to go back to them.

Next, rank the “nice to have” features and start with a weighted rating system. Some product selection committees use the “greatest number of hits” method (where every positive answer gets one point). Others use a weighting and voting formula that assigns a relative value to the features based on importance, then rates how well the solution addresses each item. For example, Mac compatibility may get a relative value of 6, compared to Windows compatibility’s 10. If the product is very strong on its Mac OS compatibility, the most that vendor will get is a 6, whereas if it also is not ideally used on a Windows PC, it might get a 5 or 6. Because the Windows feature is more important, even a 50% rating counts about the same as a 100% hit on the Mac feature.

Do your homework

Armed with a short list, the committee members need to become sleuths, using all available tools to find out as much as possible about the company, the product and the customers who use it. Try web searches (and be sure to browse at least 3-5 pages deep into the results), call references (and ask them for the names of other customers who use the product in your industry who may have not been put on the reference list), contact companies listed as technology partners (find out if the partnership is robust or just passive) and go visit the company’s office (make sure you are dealing with more than a garage project). "Trust, but verify."

If you have the time and budget, go sit with users who already employ the solution in business environments like yours. You can learn more from just one of these trips than you may learn in a product demo by a skilled sales rep. If you divide and conquer the list of customers, make sure each person uses the same checklist and reporting form to get data for apples-to-apples review back in the office.

Structure the demo

With a lot of good background information, it is time to prepare for the product demo. Even if you have seen a generic product demo already, go to the effort to host a quasi-proof of concept. Based on your own expected daily usage, write a script of challenges that you will expect the software to handle once the product has been installed. Explain your goals for each scenario (“to see how fast a typical user can accomplish the task,” for example, or “to see how many efficient ways a user may complete the task”) and the other systems that would normally be involved.

Allow adequate time for the vendors to perform each scenario, followed by specific question & answer time to review the results. Your research will help you target questions as you address any concerns uncovered when talking to other customers, for example, or that have arisen since the RFI responses came back.

Make sure you carefully manage the demo to avoid wasting time on lesser topics to the detriment of discussions on important matters. If necessary, have a facilitator who can make sure the discussion moves around the room and one or two eager participants who may not accurately represent all interests do not dominate the Q&A session.

Consider the consequences

Once the demos are over, reconvene the committee for a frank discussion. The risks you must worry about at this step are typically bias, hidden agendas and ignorance. Some people got on the committee in order to make sure their department’s needs receive priority over others’ needs, while other people may simply have had their minds made up before the entire process began. One of the worst and typically unexpected obstacles for product selection committees, however, is ignorance.

You cannot safely assume that everyone in the group came equipped with the same knowledge or comprehends the needs or solutions. Ask. Does everyone know about the platform compatibility issues you have or expect? Does everyone understand the new technologies proposed and how to compare them? Does everyone have a clear understanding of how each vendor proposes to address need X? You cannot rely on the vendors’ ability to sell their solution unless you are willing to take the risk that you may not end up with the best result.

Consistency in Employment Practices: Angel or Hobgoblin?

2009-11-04T02:06:00.001-06:00

There is an old saying, “consistency is the hobgoblin of small minds,” that is often used by those who reject accountability and rules. But these people misquote Emerson, who actually wrote, “foolish consistency is the hobgoblin of small minds.”

In fact, based on decades of court decisions in employment law cases, consistency is the simplest way to limit many employment law claims against the employer. I am sure Emerson would agree that such consistency is neither foolish nor a hobgoblin.

To begin with, you need clear, written policies and procedures. (See earlier post, "The Importance of Written Policies.") That seems obvious, but for too many small businesses (defined here as organizations with annual revenues under $25 million), management continues to believe they are “too small” to worry about such formalities or, as I have heard stated a number of times, “we cannot afford to act like a larger company.” (See earlier post, "Managing Risk Through Compliance.")

Perhaps an ulterior motive for not writing down policies and procedures is that managers want to avoid accountability for themselves. The downside, unfortunately, is that it creates a greater risk of exposure to employment practice-based lawsuits. Worse, it makes those suits more expensive because there is more litigation over establishing what the employer’s actual policies were in practice, rather than focusing only on the grievance at the root of the claim.

Especially in a small organization, “flexibility” can appear suspiciously like bias in favor or against a particular race, gender, nation of origin or other protected class. Even where the EEOC lacks jurisdiction, private law suits can threaten significant financial injury to small businesses and organizations. Grant one employee’s request for flexible work hours but deny another and you may face allegations of illegal discrimination without the support of written policies and documented business needs.

If you lack written policies and procedures, make sure you provide true business reasons for your personnel decisions and document them thoroughly—ideally in a written answer to the request. But beware: even a drowsy jury will perk up and spot a sneaky effort to cloak a preferential favor with a fake business reason. And the verdict will not likely be pretty.

7 Items You Should Have in Separation Agreements for U.S. Workers Over 40

2009-10-28T12:08:00.005-05:00

The Age Discrimination in Employment Act of 1967 (“ADEA”), was signed into law by President Johnson. Its stated goal is to protect workers age 40 and older from age discrimination. Since enactment, the ADEA has been amended several times, including changes within the Older Workers Benefit Protection Act (1990). Since the OWBPA, the general practice followed by most employment law attorneys has included formal separation agreements in order to foreclose claims and prevent problems while the employee is willing to trade a release for valuable consideration.

Before the Termination Notice

When an employee does not perform as required, it is vital that the employer document the substandard performance and the employer’s efforts to obtain satisfactory performance from that employee. (See earlier post, “Wasting Money With The Wrong Staff.”) You should ensure that you adequately communicated those performance expectations and that those standards are reasonable and consistent for all employees in the same job classification. (More on that in a later post.)

If the termination is for economic reasons, you have less concern about performance but new concerns when hiring afterwards. The laid-off employees will pay close attention to anything that looks like an effort to replace them with younger (and presumably cheaper) staff. Make sure you maintain documentation of the economic considerations other than the relative cost benefits of hiring younger staff at lower salaries. Eliminating an entire department is more defensible than only part of the department.

Make certain the documentation is complete and the personnel file is in order. (For suggestions on important employment agreement documents and terms, see my earlier post, "When Hiring, Consider Firing First".) It is essential that you follow your own policies and procedures to the letter. And never attempt to cover up an economic termination with manufactured performance failures.

Magic Paperwork

At the separation conference with the employee, you should already have prepared the following documents:

1. Separation Agreement with Release of All Claims
2. COBRA notification paperwork (if applicable)
3. Final paycheck as required by state law

The separation agreement, even for terminations for cause, should include these seven things:

a. A brief statement of the reason for separation. If the termination is for cause, the employer usually has more leverage than in other situations. This section does not have to restate the list of violations in detail, but can simply categorize the grounds as “for cause” or other terms used in the organization’s personnel manual or collective bargaining agreement.

b. A release of all claims against the employer. This need not be mutual, but cannot be prospective under federal and most states’ laws. The goal is to foreclose any claims based on anything that occurred prior to the effective date of the agreement. You do not want a stray overtime or discrimination claim to pop up later based on events prior to termination.

c. A statement of the compensation terms. All contracts must be supported by an adequate exchange of value. In return for the employee’s agreement to never pursue any claims he may have, the employer should provide something of obvious value. This can be cash, health insurance premiums, payment of unused leave beyond what the employee is entitled to receive, or other forms of compensation. You want the employee to see the benefit of accepting the offer, so frame the compensation accordingly without going overboard.

d. An ADEA/OWBPA clause. Workers over 40 must have at least 21 days to review the agreement or take it to their own legal counsel. They also have 7 days to revoke their signature. Never count the day you provide the document or the day it is signed. Therefore, you should not give the compensation until the 8th day after the employee has returned the signed agreement, counting the day after you receive it as the first day.

e. A confidentiality clause specifically for the separation agreement. Again, it need not be mutual. You want the employee to keep secret the existence of the agreement and any payments under it. A penalty clause may be difficult to enforce unless you spread compensation over a lengthy period, but you should include it, anyway. The risk of attorneys fees, litigation and even embarrassment may be enough to discourage violation, even for a “judgment-proof” former employee.

f. A jurisdiction and venue provision. Within the confines of your local employment laws, attempt to limit the places where the employee may litigate any disputes under the agreement. You want all litigation to take place where it is convenient for your lawyers to handle any disputes.

g. A general confidentiality clause for the organization’s secrets. You should have a confidentiality agreement already in place and signed at hiring, but consider re-stating it in the separation agreement. If you do not have one signed by the employee, then make certain to include it. Consider adding stipulated penalties and remedies to the extent appropriate in your jurisdiction. For some secrets, such as data covered under personal data privacy act, you probably have a duty to exact this agreement or confirmation.

Closing the Deal

Walk the employee through the documents, answer questions—but do not give legal advice—and make sure the employee understands the OWBPA timeframes. It never hurts to explain how the employee will benefit from accepting the package deal rather than refusing to sign, as long as you do not cross the line into legal advice, coercion or threats. If the worker is under age 40, you can agree to making payments faster than the OWBPA times, but you do not have to.

Some managers have balked at the prospect of “paying off” employees they terminate for cause. There is a good argument that such compensation is not necessary. However, if the goal is certainty and “buying peace,” a modest payment can be far cheaper than the deductible under your employment practices insurance policy. Unless you are a law firm, litigation will be a distraction from your primary mission and will involve significant non-financial costs even to win. Even for law firms, time spent suing or defending your own firm is money lost from work that could be billed to the firm’s clients. When the odds against collecting your legal expenses from a former employee are very low, you have a lot to gain from this strategy.

Whether for cause or economic reasons, employers who terminate staff need to always keep the ADEA and OWBPA in mind. It is generally a good practice to follow these same guidelines for all involuntary separations, but doing so with so-called older workers can help avoid costly employment discrimination claims.

_________________________

NOTE:
This article is only a general guideline based on U.S. law. It is not intended to be and should not be relied upon as legal advice. Your state and local laws may give you more or fewer options in employment situations and local laws vary considerably. You should only use this as a discussion guide when reviewing your particular situation with a lawyer licensed in your jurisdiction.

Avoiding Problems After a Major Disaster Hits Your Home

2009-09-29T12:48:00.002-05:00

This week, my post is featured on another blog, the LSLA Newsroom. Please read it there: "LSLA NEWSROOM: Avoiding Disaster After a Major Disaster Hits Your Home."

Drafting Good Policies for Social Media Use at Work – Part One

2009-09-16T03:07:00.002-05:00

The Risks and Reasons

Social media is not going away. It is going to explode on the work scene. New tools like Google’s Wave are coming out, which means FaceBook-type communication is becoming the norm, not the exceptional. If you think the lines between personal and work life are blurred now, just wait.

The benefits of limited social media usage at work have become more clear, especially in very dynamic industries. B2C businesses can put their fingers on the pulse of consumer frenzies as they develop and build both brand awareness and loyalty with direct connections to their prospective customers. B2B businesses can monitor industry developments and buzz about their competitors by customers while shoring up their reputations and proactively cutting off damaging rumors as they start. Advocacy groups can connect easily and see instantaneous developments that may be successful in other places while gathering supporters who are passionate about their cause. Communities of all kinds have sprung up across the social mediasphere and continue to multiply.

There are many risks hidden beneath each social media (SM) page, however. Most can occur very easily both intentionally and unintentionally:

+ Divulging trade secrets
+ Violating data privacy laws
+ Libel and defamation
+ Violating federal and state securities laws
+ Breaches of professional confidentiality obligations
+ Misrepresentation of authority
+ Brand dilution
+ Harassment

Because intentional acts are obviously a threat, I will focus on unintentional ways your staff may cause problems for themselves and your organization through their SM usage.

1. Identity & Authority
When a person speaks, the audience often looks to see what authority she has. Online, the clues can be found in the commentator’s profile: email address, employer name, job title and even business address. If your staff use their work email addresses for their personal online socializing, there is a risk of confusion by the public as to which positions, photos and postings are the employees and which ones represent the employer.

It is one thing to embarrass oneself online with pictures showing a wild time. It is another thing to put your employer in a bad light by linking your crazy cavorting to the company—or worse, posting pictures from a company event without company approval.

2. Breaches of Confidentiality
A recent case where a law firm associate publicly Tweeted as he was reviewing documents during discovery grabbed headlines in some circles. He did not reveal any names, but his opposing counsel was listening and learned through implication about the existence of a potential treasure trove of evidence that the firm had not yet even evaluated, much less disclosed during litigation. In technology, the risk of divulging trade secrets is high, as many senior managers are unaware how decipherable some comments are to those who know the programming language or engineering terms. If a tech grumbles about a particularly thorny challenge with enough detail, the cat will be out of the bag about what he is working on before anyone has a chance to prevent it.

Data privacy laws apply to the employees of an organization as well as the organization itself—even when the employees are “off the clock,” so to speak. There are serious consequences for violating various privacy and confidentiality laws, even if there is no immediate, actual harm.

3. Insider Information
Public companies always run the risk of crossing lines related to their stock. If some news leaks through a few FaceBook photos or updates, then an executive buys or sells shares even coincidentally, the company and the executive can spend dozens of hours and a lot of money defending allegations of improper trading even when they are not guilty. Likewise, in the age where your competitors “listen” with ears not to the ground, but to their Twitter space, random, disparate Tweets by different people located thousands of miles apart aggregate into a picture that can cost you your edge.

4. Harassment
Abusive language and constant messaging would not be tolerable inside the organization’s network. But some employees feel the freedom to act disrespectfully when in their own little SM worlds. They forget about the profile information that lists where they work, their work email address or even what they do, and then blast a peer or worse, a supervisor, and think no one will tie the post back to their place of employment. Cyber stalking and cyber bullying have become well-known terms, which is unfortunate.

In the next post in this series, I will survey some of the guidance available when crafting your own social media policy.

What You Should Know When Selecting Software for Your Organization - Part Two

2009-09-09T09:09:00.002-05:00

In my earlier post on this subject, I outlined Step One, “Assess, then Search.” The idea is to build a frame around the search to help limit the distractions by irrelevant solutions. Once your needs assessment is complete, what do you do with the resulting list?

For Step Two, the actual product search phase, I will explore some of the self-created risks many software buyers face during this important decision process as well as how to work through them.

What is on your technology shopping list?

A thorough needs assessment will guide the initial shopping phase, whether you issue a Request for Information (RFI), search key terms on the Web or seek referrals from other organizations who use similar software. Many use a detailed checklist that moves from general feature to specific function to narrow the list to a select few.

The essential features and requirements should be there, but do not hesitate to add your wish list of nice-to-have features as well. You may not be aware of what is available and if you do not ask, you may never know what you can have within your budget. Most large businesses use a comprehensive matrix of questions and answer spaces, often provided in Word or Excel format to allow the responding vendors to fill in their answers.

One mistake that many purchases make is to become too wedded to their list. As you learn more about what is available, your feature list may evolve and mature. If your needs change, there is nothing wrong with changing what you ask of the prospective vendors. Never be afraid to throw out the information gathering results and start over or at least send out a second round of questions. The vendor needs to earn your business and it is their job to sell you, not the other way around.

When I was pitching software, it was nice to find prospective customers who actually sought unstructured input and suggestions on thorny business needs. Whether in the RFI or during a sales presentation, find a way to open the discussion to allow creative problem-solving with the vendor’s professional staff (not simply a sales executive who may promise you anything to get the deal).

Make sure your checklist addresses these vendor qualities in addition to your software feature needs:

-> Customer Satisfaction with the product AND the company – What do their customers say about each? How willing are they to give you names?
-> History of providing update communications – How well do they alert customers about known issues before the customers report them? Or do they pretend each report is an amazing discovery they have never seen before? (See also, "Is Your Software Vendor Your 'Friend'?")
-> Business maturity – How long has the company been in business and in the software business? How sophisticated are their developers and product design professionals? Who drives development, the Sales department or a professional software design expert?
-> Market focus – How many customers like you do they already have? What do they know about your industry or business model?

Who is on your product selection committee?

Whether you have an IT Department, a single Network Administrator or an outside consultant, make sure you get sound advice and input from your trusted tekkie who is up on current tech standards and trends. Technology changes rapidly and the accepted guidelines from even two years ago may no longer hold. Technical input is crucial to ensuring that your investment will not fall apart under everyday usage.

At least as important, however, are the actual users. IT can guide you, but be aware that they often look at software purchases in terms of how much trouble the product will be to install and maintain, not how well-suited it is to your business operations needs. IT, for example, may prefer web-based solutions because they are easier to deploy and maintain. Users, however, may need more power at the desktop level or off-line capabilities. Who wins a stand-off in that situation? Do the needs of the many outweigh the needs of the few, or the one? On the otherhand, users tend to want products that are not much different from what they already have or know. Ease of use is an understandable demand, but fear of change may color their input and pull you away from a product that will help you grow and expand for years to come.

The software vendors will play to the power on your selection committee. If they see that as IT, you can expect pitches that tout the technology “under the hood” and back-end qualities such as the application product interface (API) rather than features in the user interface or usability. If the vendors sense that users are at the helm, then you should hear more about ease of use, simplicity and configurability for the users and less about reliability, stability or technological limitations. Let them know right away that power is balanced between IT and users, even if there is a chief decision maker in the event of a tie who will consider both sides’ needs and input.

In the final post in this series, I will cover the evaluation phase.

Ready to Hire Again? Strategize Before You Advertise to Avoid Discrimination Claims (Part Two)

2009-08-21T07:07:00.001-05:00

In the first post of this two-part series, I covered the “Pre-Hiring Checklist” and “Inadvertent Discrimination.” This post addresses the importance of training and having a consistent, reliable business practice within your hiring process.

Train and Prepare Your Hiring Committee

All of your preparations will be useless unless you adequately share the vision and guidelines with everyone who is part of the hiring process—including your receptionists and support staff. Do not leave it to chance that an uninformed staff member who may only interact with a prospect one time can slip up with a comment about something on the “off limits list.”

If you can, train everyone at one time and well before the first phone inquiries come in. If not, at least get to everyone expected to be in each step of the process, starting with those who handle phone, email, in-person and other inquiries. Make a small cheat sheet to give them at training, ideally written in “Do” language, rather than “Do Not,” to avoid planting the wrong words in their minds. Some use a two-column approach, with the "OK" list on the left, and "Not OK" list on the right. For example:

OK-------------------------------------Not OK

“Where did you fly in from today?”-----“What country are you from, anyway?”

“Have you worked in sales long?”-------“How old are you?”

“The [weather] is really [whatever]!”---“You talk like someone from Russia.”

If at all practicable, track the EEO profile of your applicants just as you do your employees for the EEO-1 report. This could be in the form of voluntary questions on the web application screen, as many now have, or in some separate form with no identifying details on it given directly to the HR officer of your organization and separated from the employment application and resume. Ideally, collect race and gender only in an anonymous fashion. Never try to guess based on surname, first name, etc.

Inconsistency is the True Hobgoblin

Finally, take extensive steps to make sure all interactions with all applicants are consistent, fair and respectful. In other words, treat everyone the same to the extent you can and document how you did. Ideally, your organization already has in place a structured, formal procedure for the hiring (and separation) process. If not, here are some considerations for standardization.

1. All job openings must be advertised by and all resumes and applications must go through one office or officer, such as your Human Resources (HR) manager. This makes it easier to keep track of the process, resumes and activity related to each hire. The right HR officer can keep you out of trouble 9 times out of 10 if he or she is part of the effort from the start.

2. All offers of employment must be issued by the HR officer. No matter who makes the decisions on start date, salary, etc., let the HR officer issue the offer letter. That way you know it goes out in a standardized form and no one is treated differently allegedly on an impermissible basis.

3. All offers of employment must be in writing. End all compensation and employment term discussions with caveats such as, “Of course, it all has to be consistent with our internal policies and practices.”

4. All letters or indications of acceptance must be given to the HR officer. Create the official “POC” for this process and stick with it. That way, you can rest assured that the employee manual, benefits enrollment forms, etc., all go out timely and consistently. The last thing you need is for a pregnant new employee to allege discrimination because her benefits were delayed when the HR officer did not “get the memo.”[1]

With proper preparation and solid execution, you will start this new economic cycle with the best new staff to help you grow beyond your goals in coming years!

________________________________________

Important Notes

This article is not intended to be legal advice. You should consult with counsel regarding the specific laws in your area, because they vary extensively from state to state. If your employees have a collective bargaining unit, of course, other rules and limitations will apply, but the guidance above may still be within your reserved management powers if not specifically addressed in the union contract.

[1] For many of the same reasons, all notices of resignation must be given to the HR officer, all resignations must be accepted in writing by an officer of the organization and given to the HR officer and all separation agreements must be issued by the HR officer. Once you have this in place, you will regret having taken so long to do it.

Ready to Hire Again? Strategize Before You Advertise to Avoid Discrimination Claims (Part One)

2009-08-19T06:52:00.003-05:00

As the economy turns the corner and business picks up in general, hiring is sure to begin in earnest. There are a lot of potential employees for your business and you should expect a flood of resumes once you advertise your openings.

Before you post the job ad, however, think strategically about your hiring plans. Employees can be invaluable assets as easily as costly mistakes. For small businesses and nonprofits, each hire is a significant investment of time and money. But each “fire” is usually much more costly. One employee with an unprofessional attitude or serious gap in ethics can ruin your reputation if not your entire business.

This two-part series of posts will address the “Pre-Hiring Checklist,” “Inadvertent Discrimination,” “Train and Prepare the Hiring Committee,” and “Inconsistency is the True Hobgoblin.”

Pre-hiring checklist

Ask yourself—or if you are large enough to enjoy a management team, have them discuss—the following questions:

1. How much contact will this person have with our customers, funders, boardmembers and or investors?
2. How important will this person be to our success in the next 6 months? What about the next 3 years?
3. How will our expectations of this person evolve during the next 12-36 months?
4. How easily will we be able to replace this person on short notice?
5. How much time and effort will we actually devote to training and mentoring this new hire?
6. If the position is one that generates revenue, how long will it take for the new hire to generate enough revenue to cover his or her entire compensation package as well as all of the missed revenue during the training and learning phases (i.e., when can we expect them to pass the “initial break-even” point)?
7. What else will we need to hire, buy, lease or divert to get this new hire up to the skill level we expect?
8. How long do we anticipate we will need this new hire?
9. What skills should the new hire already have acquired before reporting to work?
10. What off-duty expectations do we have of employees in this category?

Each question can easily lead to more as you explore the long-term and short-term vision for both the ideal and the worst-case disaster hire. Once the pre-advertising analysis is finished, make sure your job description matches the answers, then draft your advertisement.

Inadvertent Discrimination

As you think through the job expectations, be careful not to develop a physical image of the candidate. Focus only on skills, qualities and capabilities OTHER THAN age, gender, race, national origin or religion. Unless your position fits into a very limited set of exceptions [1], it is illegal to discriminate in any aspect of the employment process on the basis of the following, and questions about these topics are OFF LIMITS:

-> Birthplace
-> Ancestry
-> Culture
-> Linguistic Characteristics that may indicate some protected status
-> Religious Beliefs
-> Gender (including actual and potential pregnancy)
-> Age
-> Physical and Mental Disability

Even though very small businesses may not be covered by the federal laws, it is generally a wise practice to behave in business as if you are covered by them because one day you may be. Some states have equivalent laws and many government contracts require compliance even if the business falls under the size limits. For Title VII of the Civil Rights Act and the Americans with Disabilities Act, the minimum size is 15 employees. For the Age Discrimination in Employment Act, the minimum size is 20 employees. Those employee numbers only have to occur for 20 working weeks in the current or previous work year to put your organization under their umbrellas.

To be continued in the next post...
___________________________________________
Important Notes

This article is not intended to be legal advice. You should consult with counsel regarding the specific laws in your area, because they vary extensively from state to state. If your employees have a collective bargaining unit, of course, other rules and limitations will apply, but the guidance above may still be within your reserved management powers if not specifically addressed in the union contract.

[1] A good list of these exceptions and the various anti-discrimination acts is available on the EEOC web site.

Don’t Follow; Filter! Sifting Through Twitter's Vast Ocean of Information

2009-08-13T04:48:00.004-05:00

Almost every day I see notice that one or more new Twitterers have chosen to “follow” me. The ones that catch my attention, though are those who follow over a thousand others. The first thought that comes to me is, “do they even read those Tweets? How can they possibly make sense out of thousands of 140-character messages every hour!?”

Whether or not you are an experienced Twitterer (or FaceBook user) with hundreds or thousands of followers (or “friends”), you know, of course, that it would be a full time job to do so. But the truly experienced Twitterers (translation: been on Twitter more than 60 days and have posted at least 100 Tweets) knew a few tricks that you may find helpful.

Tip #1: Twitter is incomplete

The simple interface gets you hooked. Yet, beyond sending out a Tweet or two, there is so much more you want to do but cannot find inside Twitter’s web interface. By design or by accident, the basic Twitter screen is one avid users outgrow rapidly.

There are some partial features new to the user interface, but they are themselves incomplete. Case in point: search. Twitter Search was apparently intended for other software developers to use, and until recently, was only available on another web page. Advanced Twitter Search is actually quite useful, but you still have to know where it is to use it.

With the basic search field on your Twitter home page, you can put in terms and phrases—yes, even including those fantastic hashtags—and get a quick list of Tweets with that term or phrase. You can even save your searches. Unfortunately, there is no “logic” feature to allow you to construct queries above exact match searches. Twitter has a simple tutorial for using Search to find people here.

Another feature that is missing is the ability to categorize your “Follows.” If you follow Congress, your favorite news site, product recalls, weather updates, your friends and a few companies who sell products you adore, all their Tweets are blended into one murky river of short messages. Twitter alone does not help you out here. For that, you need to read Tip #2.

Tip #2: Tools!

For a free service, it is astounding how many developers have built equally free software or constructed free-to-use web pages to expand the ways people can use Twitter. These tools are divided into two categories for simplicity: general Twitter usage tools and Twitter Search tools.

The venerable reference guide from way back in 2007, “Twitter Toolbox,” is still available online to give you a summary of over 60 tools to help Twitterers Tweet more effectively. Most of them are actually web developer tools to help others incorporate the power of Twitter in their web pages. A better list for users is OpenJason’s “100 Twitter Tools.”, posted earlier this year.

You can also get ideas for useful tools from those you follow. Each Tweet typically names the service or software the Twitterer used to post the update. Bing or Google the name and test them yourself. That is where I found TweetDeck and Seesmic, among other tools I use.

For searching, there are separate lists of suggested tools that will guide your quest for the perfect way to find needles in the world’s most dynamic information haystack. Ari Herzog did a fine job with his critique, “6 Twitter Search Services Compared” a few months ago. Loren Baker outlined “9 Twitter Search Apps: Better than Twitter & Google” for the Search Engine Journal. There are likely many more lists of suggested tools out there.

Tip #3: Be careful what you wish for!

After you master the Twitter basics and settled on some tools, you are ready to begin sifting through the ocean for tiny plankton. Businesses may want to keep on-going searches for their company and product names. Politicians may want to watch for “mentions” of their opponents’ names and Twitter account names. Students can set up searches to keep track of trending discussions on current events or famous people. Prospective travelers can watch for discussions about their dream destinations.

There really is no limit--which is a problem of its own. You can easily over-do the searching and monitoring to the point where you are overwhelmed once again. In that case, go back to Tip #2 and find a new tool!

UPDATE: After publishing the above article, I found this helpful slideshow, thanks to a post on the "Small Business CEO" site: "Small Business Trends Radio has recently launched a slideshow showing readers 10 Ways To Build Twitter Followers."

Managing Your Reputation Online - Part Three: Monitoring What is Out There

2009-07-31T05:35:00.000-05:00

In Part One of this series, I introduced the risks. In Part Two, I outlined a checklist of preventive measures. Now, let’s look at some practical ways to monitor your business reputation in the blogosphere and other virtual spaces.

Keep your eyes open

Reputation (and brand) management is ultimately a legal issue, so some general legal principles seem appropriate here. One that American law students learn early in law school is that “equity favors the vigilant, not those who sleep on their rights.” Another legal concept is the “Limitations Period” (in Louisiana, “Prescription Period”) codified in statutes.

Where the statutes of limitation are specific laws enacted in the various states and by Congress and give set time limits to file a lawsuit or criminal charge after a violation of some other statute, principles of equity are typically less rigid and applied in the spirit of reasonableness. Both have the goal and effect of placing a time limit on when you can take legal action.

Some of the time periods begin when an action occurs. Others only when the injured party “knew or should have known” about it. It is the second part of that you should worry about. If your name has been misappropriated or your protected property has been stolen, you will have to show that you did not turn a blind eye or blissfully live without any of the reasonable efforts a prudent businessperson would have undertaken to protect his or her own valuable property.

Set up monitoring tools

What should you do to monitor yourself, then? With each medium, there are useful tools and ways to monitor for potential problems. These are a few of the better ones available today:

1. Search Engine Alerts. In today’s information age, it is not considered vain to set a Google Alert or Yahoo Alert to “listen” for your own name or other protected words or phrases. They are easy to set up and manage and then work tirelessly to continuously monitor for your selected terms among pages that these search engines index.

2. Social Media Tag Searches. Social media is raging into our lives. Who does not know anyone with a FaceBook, Twitter, MySpace or similar account? That means there is a lot of “chatter” out there, some of it not so pretty. You cannot ignore the SM world, even if you are not a participant at this point. Use free tools like the web-based TagBulb or downloadable TagFetch to watch for key words that people use to “tag” their comments.

3. Twitter. Twitter searching has become a world of its own. You already get the automatic “@username” feature in your Twitter home page that keeps up with every Tweet that includes your username. To broaden that monitoring, however, you need a tool. There are countless tools available now. If you use a third-party application to manage your Twitterings, look for features built in that let you filter and search. Otherwise, try TwitterSearch (same company, different web page) or TweetBeep tools.

4. Newsfeeds. This is getting into higher levels of technicality, but the tools are no more difficult to use than some of the others mentioned above. An RSS feed reader is simply another monitoring device that watches the “stream” of information flowing through the Internet. RSS (“really simple syndication”) is how many web sites these days send their content out when it is updated. It is very common for news sites, so you cannot afford to overlook it. Unless you have an aggregator like Gregarius, Bloglines or one of the many other RSS Feed Aggregators out there, you would have to check each individual RSS feed.

5. Video and other media sites. YouTube allows people to “broadcast yourself” and Flickr makes every photographer world-renowned (at least for a few seconds after posting). How do you sift through the noise? In addition to search engine alerts, consider something like Video-Alerts.com, a free service that specifically focuses on YouTube.

(Of course, each of the strategies above can also be used for monitoring trends in your industry or tracking competitors, but that is outside the scope of this series.)

Finally, during my research for this post, I found other useful posts on this topic that you might find helpful: A slideshow, “Why you should monitor social media” posted this week by Connie Bensen of Alterian; a good video essay on how some businesses use Twitter to monitor their own names, and a blog post on how to monitor your name on Twitter.

In a later post, I will focus on what action to take should you find a problem. Until then, get those alerts set up!

You know about the FMLA, but what about the SFMLA or MFLE?

2009-07-27T04:44:00.002-05:00

Changes to the FMLA

By now most know that the Family and Medical Leave Act of 1993 (29 U.S.C. 2654) (FMLA) requires “covered employers” to give “eligible employees” up to 12 weeks of unpaid leave per year for their own or close family member’s medical care. Yet a number of organizations I have worked with are unaware of the changes in 2008 and 2009 to the statute and regulations. [1]

Even though you may not have employees who have been called up to active duty, do not assume that the so-called "Service-member's Family and Medical Leave Act," or SFMLA, is irrelevant to your business. There were two sets of changes to the FMLA in 2008 designed to benefit the men and women who have actively served in our armed forces and their families: one added added to the FMLA provisions to make them more clearly applicable to deployment-related situations; the other actually added a new 26-week leave benefit in lieu of the FMLA. Together, they are formally known as the "Military Family Leave Entitlements."

Qualifying Exigency Leave

The FMLA has always had a short list of qualifying events that enable an "eligible employee" to use unpaid FMLA time off from a "covered employer" without losing his or her job permanently. To that list, Congress added "any qualifying exigency arising out of the active military service of the spouse, child or parent of the employee." At first glance, this seems to be a huge expansion of FMLA definitions. According to the United States Department of Labor, "qualifying exigencies" include anything the employer and employee agree is a "qualifying exigency," but also:

° Issues arising from a covered military member’s short notice deployment (i.e., deployment on seven or less days of notice) for a period of seven days from the date of notification

° Military events and related activities, such as official ceremonies, programs, or events sponsored by the military or family support or assistance programs and informational briefings sponsored or promoted by the military, military service organizations, or the American Red Cross that are related to the active duty or or call to active duty status of a covered military member

° Certain childcare and related activities arising from the active duty or call to active duty status of a covered military member, such as arranging for alternative childcare, providing childcare on a non-routine, urgent, immediate need basis, enrolling or transferring a child in a new school or day care facility, and attending certain meetings at a school or a day care facility if they are necessary due to circumstances arising from the active duty or call to active duty of the covered military member

° Making or updating financial and legal arrangements to address a covered military member’s absence

° Attending counseling provided by someone other than a health care provider for oneself, the covered military member, or the child of the covered military member, the need for which arises from the active duty or call to active duty status of the covered military member

° Taking up to five days of leave to spend time with a covered military member who is on short-term temporary, rest and recuperation leave during deployment

° Attending to certain post-deployment activities, including attending arrival ceremonies, reintegration briefings and events, and other official ceremonies or programs sponsored by the military for a period of 90 days following the termination of the covered military member’s active duty status, and addressing issues arising from the death of a covered military member

(emphasis in DOL original)

These extra benefits do not apply to members of the regular armed forces. They were expressly enacted by Congress to help the members of National Guard and Reserves who are called to active duty from their regular lives and should be seen and applied in that light. Qualifying Exigency Leave is merely a new basis for use of the 12-weeks of FMLA within a rolling 12-month period.

Military Caregiver Leave

The new leave benefit is a 26-week unpaid leave option for "eligible employees" working for "covered employers" who need the time either for themselves or their spouse, child, parent or next of kin. The 26-weeks must fit within a rolling 12-month window, just like the 12-week FMLA leave benefit. Eligible employees cannot add the two together: the FMLA's 12 weeks and the Military Caregive Leave can total no more than 26 weeks and only care for a covered servicemember can extend beyond the 12 weeks provided by FMLA.

Unlike Qualifying Exigency Leave, however, Military Caregiver Leave applies to both "regular" Armed Forces servicemembers and "reserves" called up from National Guard or Reserves. The serious injury or illness here must be incurred in the line of duty AND make the covered servicemember unable to perform the duties of his or her office, grade, rank or rating.

The Department of Labor maintains a good set of FMLA informational materials on its website as part of the Compliance Assistance section. Those interested in learning more can find a pdf Fact Sheet on the Military Family Leave Entitlements here.

NOTES:

[1] I will address the technical definitions of "covered employer" and "eligible employee" under the FMLA generally in a later post.

What You Should Know When Selecting Software for Your Organization - Part One

2009-07-13T04:03:00.001-05:00

Software is expensive and changing your office work flow to adapt to any new system is time-consuming and stressful. Your organization expects you to make the best decision for a software solution that they can master easily and keep using for a long time without major changes.

It still amazes me to see software designed or configured to place extra work on the humans for the computer’s convenience. When shopping for software, here are some tips to help you assess not only viability, but usability.

1. Decide what you need and want, THEN shop.
2. Stay open to changing your requirements after you shop.
3. Let the actual users have a voice.
4. Keep the future open-ended.
5. Make a long-term decision.

Step one: Assess, then Search. Too many people do the reverse and window shop before they really have a solid sense of the features they need. Can you get more bangs for your bucks with a solution that addresses the needs of multiple units? Can you eliminate multiple software and information management systems with one purchase?

With the right people on your committee (even if it is only you), the process can move best by starting with the needs assessment. If you show the kids the candy store first, you may never get your shopping done. Better, ask product-agnostic questions of the business process improvement experts in each affected unit.[1] Hopefully, they already know the processes they need to improve or would like to, but for the archaic software they have to use.

>>>>What do you need to be able to perform your tasks more effectively?
>>>>What steps in your daily work could you eliminate with better technology tools?
>>>>Are there other important objectives you could address if freed from inefficient tasks?

After each of these, use the “What’s stopping you?” analysis to drill down to the functions relevant to your software search.

Q: What do you need to be able to perform your tasks more effectively?
A: Forms we can fill out onscreen, rather than paper that must be scanned into the database
>>>>Q: What’s stopping you from having these forms?
>>>>A: We need the ability to modify screens in our software as our needs change.

Now you have a feature that is real. One that addresses a business need without the emotion from those who fear change or hate your present software. Continue to build this list, even if some of the features are contradictory or extremely unlikely to be found in a commercial, off-the-shelf system (COTS). You are in the planning stage, so it is OK to start big.

In subsequent posts, I will explore some of the self-created risks many software buyers face during this important decision process as well as how to work through them.

[1] If you have not already gone through the BPI phase, review my earlier posts that outline a generic BPI plan and consider hiring a qualified expert to guide you.

Can You Safely Pay “Fees” to Representatives of Foreign Countries to Help Secure Business?

2009-07-08T07:06:00.002-05:00

"Suddenly, without warning..."

Several years ago, a colleague of mine was a passenger in a car stopped at an eastern EU country’s border with another EU member country. My friend expected no trouble, but after the passports were stamped, the border guard began to give the driver an increasing amount of difficulty and walked him into the shadows away from where they were parked.

A short moment later, the driver returned to the vehicle and they drove off. After a mile or so, my colleague asked about the incident and the driver confessed that he had paid a small bribe to get them through. It turns out that the vehicle he was using to show my friend the region that weekend belonged to his father. The guard suspected as much and threatened to report some bogus charge to the revenue inspectors who might have conducted the equivalent of an extreme IRS business audit (only without the taxpayer rights we have here). To avoid the risk, the driver paid the equivalent of $40 USD and the guard allowed them on their way. And it had been his own countryman! He was returning to his own country, not entering another! Was this a bribe? You bet. Did it violate the FCPA? Let's take a look.

Background

The anti-bribery portions of what is known as the Foreign Corrupt Practices Act (FCPA) were written to address some of the ways American businesses were participating in corruption practiced in other countries.[1] As businesses expanded into the global marketplace, they ran head-first into “traditions” and “customs” that are illegal in the United States[2].

Senators William Proxmire and Harrison Williams introduced the bill with strong support from others in both chambers and lofty goals in the wake of Watergate. In reality, corruption is not unique to developing countries or those on other continents. The FCPA is also not entirely unique. However, U.S. and European Union countries appear to be the most stringent in holding domestic organizations liable for actions by their foreign employees, agents and subsidiary organizations.

Elements of an FCPA Violation
The FCPA applies to all companies who are subject to the jurisdiction of the Securities & Exchange Commission because they “issue” publicly-traded securities, as well as all “domestic concerns” (any individual who is a citizen, national, or resident of the United States, or any corporation, partnership, association, joint-stock company, business trust, unincorporated organization, or sole proprietorship which has its principal place of business in the United States, or which is organized under the laws of a State of the United States, or a territory, possession, or commonwealth of the United States). That pretty much covers the options.

Assuming you or your organization is within one of those definitions, it is time to examine the elements of a violation and some tips for staying out of trouble. There are four elements of an FCPA charge (15 U.S.C. §78dd-1(a)):

corrupt intent

connected with a "payment"

to a prohibited recipient

for a qualified business purpose.

Corrupt Intent. The issue of intent is generally key in criminal statutes and the FCPA is no exception. Simply put, was the payment intended to influence a foreign official to act illegally, or intentionally not act when legally required to do so, or induce such official to improperly use his or her influence to accomplish indirectly an act or omission that would be illegal if done directly.

Payment. Payment can be the obvious (cash, property, etc.) as well as merely the promise to give something of value (reciprocal official misconduct, e.g.). It is a defense to prosecution if the defendant can prove that the payment is legal in the official’s country. Likewise, if the “payment” is travel expenses for a lawful trade excursion to promote or demonstrate the company’s products or services—or if “payment” is directly related to the legitimate performance of a lawful agreement with the foreign agency or government—the defendant can avoid penalties.

Prohibited Recipient. The U.S. Department of Justice has this comment on whether a recipient is a “foreign official:”

The prohibition extends only to corrupt payments to a foreign official, a foreign political party or party official, or any candidate for foreign political office. A "foreign official" means any officer or employee of a foreign government, a public international organization, or any department or agency thereof, or any person acting in an official capacity. You should consider utilizing the Department of Justice's Foreign Corrupt Practices Act Opinion Procedure for particular questions as to the definition of a "foreign official," such as whether a member of a royal family, a member of a legislative body, or an official of a state-owned business enterprise would be considered a "foreign official."[3]

Business Purpose. Finally, the corruptly intended payment to the foreign official must be for the purpose of obtaining or keeping business—even if from someone other than the foreign government. The FCPA’s primary purpose, after all, was to address the wide-spread practices by major companies of paying bribes to gain an unfair advantage over smaller rivals or Uncle Sam himself (which begs the question as to whether the issue would have garnered Congressional attention if all companies of all sizes could equally have afforded to “pay to play”).

Analysis of the Bribe
The driver in our story definitely made a payment to a government official. The payment was illegal under his country's laws, and made to influence the official to act or fail to act. We have two elements and have knocked out one affirmative defense.

But that is as far across the FCPA line as this story goes. There is a strong argument that the border guard was only dissuaded from his own illegal or improper act, but we do not know enough about that country's laws to be sure. On the other hand, the key element missing from the story is the lack of a business purpose by my colleague. Even if the payment never touched my friend's hands, had this payment been paid with the intent to obtain or keep business, then without any warning or opportunity for the American parent company to act to prevent the violation, an FCPA violation might have occurred. Without any connection to gaining or keeping business, then, my friend appears safe this time.

Compliance Begins at Home
No doubt, the FCPA crossed my colleague's mind when the driver confessed miles down the road to paying a bribe to a border guard. Had my friend been better versed on the FCPA, he might have gotten more rest that night. Here are some practical steps you can take now to sleep better yourself.

Policy. Begin with an understanding of the law and a thorough anti-corruption policy review in your U.S.-based company and all of its subsidiaries and members. If you do not already have a clear, blatant policy that prohibits all influence compensation and all efforts to directly or indirectly improperly influence government officials everywhere[4], draft one now and publish it to all staff. You must avoid any appearance of impliedly condoning that which you have not strongly discouraged.

Training. Follow that with training to all staff on why you have the policy, what actions are prohibited, the potential penalties to them individually and the company and how to report anything they feel may violate the FCPA. Keep records of the dates and attendees at each such training and be prepared to show them to auditors and potential investigators.

Safe Harbor. It is important to have a policy that encourages self-reporting and sincere efforts to comply or remediate violations. Consider a whistle-blower clause in your policy that provides reasonable protections for innocent staff who report FCPA violations. Beware the self-serving tattle-tale, however, who may want to benefit from an action he or she reports.

Conclusion
There are myriad scenarios that can arise when conducting business abroad or with representatives of foreign governments and businesses. This article is not intended to give legal advice or to take the place of an open, honest evaluation by a qualified attorney in your jurisdiction. The most that any post such as this can do is help you understand the questions you should ask your own legal counsel.

The risks are high: fines in the millions of U.S. Dollars and imprisonment for years for each violation. Not the kind of reward you want for your business or yourself.

Notes

[1] These sections are found at 15 U.S.C. §78dd-1 through §78dd-3.
[2] It is beyond the scope of this post to take on the relative moralities and legalities between corruption that has existed in the U.S. versus abroad.
[3] “Foreign Official” http://www.usdoj.gov/criminal/fraud/docs/dojdocb.html. The USDOJ site has a valuable Fraud section with the text of statutes, analysis and the Attorney General guidance mandated by the FCPA.
[4] Public companies are under additional accounting and record-keeping rules designed to make assets traceable and records of asset dispositions auditable, but those are outside the scope of this post. And with ratification in 1998 of the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, anti-bribery rules have risen to the level of international treaty. More on that in a subsequent post.

Business Process Improvement for Nonprofits - Part 9: Final Step?

2009-06-22T03:52:00.002-05:00

Step 9 – Start Again

This is not like the penalty card in some board game that sends you back to the beginning. Instead, see this as closing a loop and taking the opportunity to circle back through the process in a healthy, endless review and improvement of your business processes.

As one process improves, it may help you identify others that need improvement or even pave the way to improve related processes you could not have changed before. As your staff gets on the BPI wagon, they will start spotting opportunities for even minor improvements in isolated processes. Finding ways to improve the work they do makes the work itself more interesting in some ways and certainly focuses their minds where you want them: thinking about the best way to perform their responsibilities at work.

If you collect your project materials in an electronic folder, review and update them to adapt to each new initiative, and document the baselines before and performance results after your changes, you will develop quite a history of progressive improvement for your department or entire organization. It will become a legacy anyone can be proud of.

Here is the final outline of this series of posts:

1. Diagnosis/Assessment: “What is happening now?” “Exactly how do we do everything that we do?”

2. Analyze Workflow: “Is this the best way we can operate?” “Do we need to do any parts of our work better/cheaper/faster/with fewer people?”

3. Identify Options for Improvement: “Where can we work differently?”

4. Design new processes or steps: “What will work for our organization?”

5. Gather feedback: “Is this in line with the organization’s mission?” “Does it actually improve the way we work?”

6. Test the new workflow: “Does it work in the real world?”

7. Monitor the results: “Are we getting the results we sought?”
8. Diagnosis/Assessment: “If no improvement, why?” “If that worked, what else can we improve?”
9. Begin a renewed effort: no process is perfect and no office runs perfectly. There is always room for improvement!

Happy BPI'ing!

Managing Your Reputation Online - Part Two: Protect What You Can

2009-06-18T03:17:00.003-05:00

In Part One of this series, I introduced the risks. Here, I want to provide a check-list for small business and nonprofit managers to use as a guide in their efforts to take preventive measures.

1. Register any TMs you want to keep. The United States Patent and Trademark Office has a good page of FAQs to help you determine what type of registration--if any--you need. For most registrations, you do not need an attorney. The PTO has an online Trademark Electronic Application System. For copyrights, no registration is necessary, but some people prefer to do so. The U.S. Copyright Office also has an online registration page.

2. Mark all Copyrights and Marks you claim. Use the "TM" for trademarks and "SM" for service marks for the ones you claim, whether or not you register them. Only after registration can you use the "®" symbol. Copyrights can be publicly proclaimed with a "copyright notice" much like you see in printed materials showing the symbol or word "copyright," the year of first publication and the owner's name (e.g., "©2009 Your Name").

3. Reserve all rights. Although the trademark, service mark and copyright "marks" plainly flag your intellectual property ("IP"), some holders go farther and add--especially on copyrights--words such as "all rights reserved." This tells the world that you have not waived any rights to your IP and want to be contacted for permission before use. It is not necessary and does not really have legal effect, but also does not hurt anything.

4. Provide a process for obtaining permissions and licenses. If you want to help others honor your IP rights and seek permission before using your IP, then avoid the common mistake of failing to provide a way for them to find and ask you. Post contact information in the material, for example. Photographers can register their artwork at sites like Photrade.com. The point is to make it easy to find you so they can ask permission and give you a chance to grant it (with or without payment).

5. File for any patents you want. All the above information is NOT applicable to patents. Patent applications are, well, different. Though it is not required, it is highly advisable to seek legal assistance with any patent application or response to PTO questions or challenges. It also surprises people to find out that the information they submit to the PTO becomes public. That is because the very act of getting a patent is not to keep your secrets, but to keep your rights to the unique product or process.

6. Be Consistent with using and labeling your IP. If you have unregistered TMs, SMs or Copyrights, be sure to always tag them with those little symbols. Once per paragraph or page is enough, but always on any exterior text or artwork. You want everyone to know that you know your rights and are intent on protecting them.

7. Educate your staff. When do they use the TM or the ©? What do they do if someone outside your business asks to use the mark? What can be claimed as a SM? If you have to, bring in an IP lawyer to give a quick training class. Some will do it as part of their business development efforts (especially if you at least provide lunch) and others offer it to clients who use their services.

8. Register with third-party problem-solving organizations like the BBB and BBB Online. You can do everything right and still end up with a dispute that can damage your reputation. Register in advance and be prepared to use the alternative dispute resolution services if you cannot resolve the dispute with a letter or phone call. You are not in the business of litigating over customer or IP issues, so the faster you can resolve minor matters, the faster you can return to your primary mission.

9. Take all customer complaints seriously. These days, it takes very little for a disgruntled customer to proclaim to the world how sorry your product, staff or services are. They can email all their friends, post a very descriptive story on their FaceBook or other social media site or go global with a video diatribe on YouTube. In fact, while sitting on hold or standing in line, they can "Tweet their beef" to the entire world with only a cell phone.

10. Make sure you have good quality control systems. The best problem solving system is a problem prevention system. Take QC seriously and make sure your customers know it. Give them an EASY way to provide feedback and suggestions. Invite them into the dialogue with you on how to improve, then listen to what they have to say. It is much cheaper than cleaning up a mess after the fact.

11. Bolster your reputation with good testimonials BEFORE any bad ones arrive. This is even better than an “ounce of prevention.” Elicit quotable feedback and display the positive comments prominently. It builds your relationship with the quoted customer and helps others see that perhaps their dissatisfaction is not the norm. These must be honest and you must get permission prior to publication, but even customers who decline will be glad you asked.

My next segment in this series will cover monitoring your digital reputation.

Environmental Issues Can Arise In Everyday Life for Small Businesses

2009-06-15T03:42:00.004-05:00

How much effort do you put into ensuring compliance with environmental laws? If you think they do not apply to your business or cannot become a risk to your operations, consider this story.

A small business came to me for help with a contract dispute. The business whose assets it was buying filed for bankruptcy before the deal was finished. A party’s bankruptcy can definitely ruin a good deal, but this one took some unusual turns. The bankrupt company had every intention of selling its assets to my client. It was so eager to liquidate, in fact, that the employees essentially loaded everything into trucks in one state and had it all delivered to my client a few states away.

It looked like the only thing left to resolve was payment. That is, until they opened the trucks on the receiving end. To their surprise, there were numerous unmarked barrels of unidentified substances in the trailers and no paperwork to explain them. If you know anything about federal or state laws that regulate hazardous chemicals, you have likely guessed where this is leading.

The RCRA
The Resource Conservation and Recovery Act (42 USC §6901, et seq.) was originally enacted in 1976 to address the growing consequences of municipal and industrial wastes that were causing increasing problems as industry evolved faster than the regulations. Both “hazardous” and “solid” (though not necessarily hazardous) wastes are carefully defined and regulated under different sections of the statute and different regulations.

The key part of RCRA is subtitle C, where Congress fashioned the “cradle to grave” concept to track regulated substances from the creation point until disposal. The Environmental Protection Agency [1] was charged with creating regulations[2] and procedures to accomplish this task.

The federal regulations that applied to those mystery barrels transported across state lines are discussed on the EPA site’s Manifest pages for Transporters. The Hazardous Waste Manifest System is a set of forms, reports, and procedures designed to seamlessly track hazardous waste from the time it leaves the generator facility where it was produced, until it reaches the off-site waste management facility that will store, treat, or dispose of the hazardous waste. The system allows the waste generator to verify that its waste has been properly delivered, and that no waste has been lost or unaccounted for in the process.

The RCRA "Bite"

The teeth in RCRA are in 42 U.S.C. § 6928: violators face civil penalties up to $25,000 per day for violating a compliance order as well as criminal fines of up to $50,000 per day or imprisonment up to two years for the first offense, double for a subsequent offense. If the violator is a person who knows at the time that his actions risk imminent danger of death or serious bodily injury to another person, the fines can go up to $250,000 and the prison sentence to 15 years. For a business so convicted, the fine can be $1 million. Note well that these penalties even apply to used oil that is not regulated under RCRA!

Armed with the information above, my client had a significant bargaining chip to use to bring the matter to a prompt, acceptable result. The seller had either knowingly transported or caused to be transported “without a manifest, any hazardous waste or any used oil not identified or listed as a hazardous waste under this subchapter required by regulations promulgated under this subchapter (or by a State in the case of a State program authorized under this subchapter) to be accompanied by a manifest.” (42 U.S.C. § 6928 (d)(5)) Compliance was simple—label the containers and list them on the truck’s manifest—but had not occurred. In disregarding those steps, the seller had thereby put my client into risk of sanctions had it not reported the incident.[3] Had the seller not violated RCRA, the matter may have been protracted in bankruptcy court for months longer and with uncertain results.

Environmental Law Compliance

So-called “environmental law” conjures images that most small businesses cannot envision for themselves. Yet, there is no minimum quantity rule that exempts those who produce, store, transport or dispose of regulated materials.[4] When in doubt, your business should request a manifest before accepting delivery of any substance that you are not certain is unregulated. If you do not know whether your activities are regulated by the RCRA, you should review widely-available online resources to confirm that any substances or materials you produce, including useable products, or discard are not covered.[5] Even though recycling can remove certain materials from the manifest system requirements, materials such as electronic components require special handling to protect the environment, waste disposal workers and your organization.

Compliance is relatively simple unless you are a hazardous waste disposal company or produce huge amounts of regulated wastes that you do not sell. Non-compliance can put you out of business.

Notes
[1] The EPA’s website has good resources for understanding which wastes are regulated, what to do in case of an accidental spill, and even a public database of documents and guidelines.

[2] The EPA’s Hazardous Waste Regulations page has links to federal regulations that make up the Hazardous Waste Management System. Regulations that govern non-hazardous wastes regulated under RCRA are described on a separate Non-hazardous Waste Regulations page.

[3] Most states with environmental regulations have mechanisms for voluntary reporting of discovered violations that provide a window for penalty-free remediation to regain compliance.

[4] To find RCRA compliance guidance on a state-by-state basis, use tools like the ones in this gateway from the Environmental Compliance Assistance Platform (a project of the National Center for Manufacturing Sciences (NCMS) with support from the U.S. EPA).

[5] For a better understanding of environmental regulations that may apply to your business, try the National Compliance Assistance Centers portal (also supported by EPA).

When Hiring, Consider Firing First

2009-06-04T05:04:00.001-05:00

Beginning With the End in Mind

When hiring new staff, few managers think about the possibility they may have to fire or lay off that employee. Yet, as with prenuptial agreements, the best time to prevent problems at separation is when the relationship begins.

Even though you hire someone without an employment contract (known as “at will employment” in many states), you can still have other agreements that are enforceable but do not change the nature of the employment into a contract. Some companies actually go to the extent of having employment contracts with everyone for two-week terms, renewable every two weeks unless and until a violation or termination event occurs. For the purposes of this article, I will use “employee agreement” to mean terms other than length of employment.

Your employee agreement should address issues such as those that may arise before, during or after employment. Make the agreement a condition of hiring, to be clear to everyone how important the terms are. Get existing employees to sign one, such as to continue employment at their anniversary, upon promotion or to receive a raise. That satisfies the need for “consideration” unambiguously.

A Checklist

1. Acknowledgement that employee has received and agreement that the employee will read and adhere to policies and procedures. Can you show an auditor that your employees actually received their policy manuals? This is an annual agreement in many places, coinciding with the delivery of updates to the organization’s written policy manual. Get a signature that establishes the employee received his or her copy and promises to read and abide by them. It is not essential to proving those facts, but it helps.

2. Agreement that the employee will not violate criminal laws while performing job duties or on worksite or using employer property. It seems like this would be unnecessary. Why do you need someone to agree to avoid actions that are already illegal? Yet, as many international businesses know, it is essential that the organization show that illegal behavior was not permitted, condoned, promoted or implicitly rewarded. How would you show that? Start with policies that expressly prohibit illegal behaviors, from outright bribes down to cutting regulatory corners, then continue hammering the message with periodic compliance reviews and training on the rules applicable to their jobs. Together, these will help your organization defend itself should someone go astray.

3. Agreement that the employee will keep employer's and customers' secrets. This provision deserves careful drafting. You may have additional responsibilities to accommodate on confidentiality due to professional standards or customer contracts. “Secrets” is a term that means different things in different contexts. Try to define it anyway. Be specific AND general. Supplement with training and periodic reminders of how easily secrets are leaked and stolen, as well as the potential damages that can result.

4. Agreement regarding ownership of intellectual property rights for works created during the course of and term of employment. It is as old as artistry itself: the debate over who owns works created by someone while in the employ of another. Laws attempt to clarify the matter, but sometimes do the opposite. Even worse, some contracts applicable to the organization may contravene local laws where the employee is working or the organization’s agreements with its staff. Do not limit your concern to patents, for copyright is the most common protection and applies to more work than others, especially in today’s “information age” organizations. And keep in mind the growing blur between work and non-work areas of your employee’s lives. What about ideas or blog posts written at 2 a.m.?

5. Agreement that the employee will cooperate in compliance reviews and investigations of compliance issues during and after employment. Get this one up front and remind every hire how important compliance is to you and your organization. Nothing positive is gained from being unclear here. By stating expectations and values at the beginning of the relationship, you will be more likely to see those values throughout the term.

6. Agreement that the employee will submit to additional screening deemed necessary by employer to perform job duties or enter certain work sites or work on certain projects. More and more employers require pre-hire drug screening. Those in sensitive industries have policies for additional screenings after start date. You generally want everyone on notice that you may require an individual to submit to screening upon ANY indication that his or her performance may be impaired. Whether you ever need to use this or not, put them on notice at the outset and help avoid problems later.

7. Agreement regarding use of company property and facilities. What happens if the employee loses his or her company-provided smart phone? What if client files disappear the last week of employment?

Important Notes

This article is not intended to give legal advice to anyone. It is merely to serve as a discussion-starter. You should consult with qualified legal counsel regarding the specific laws in your area, because they vary extensively from state to state. If your employees have a collective bargaining unit, of course, other rules and limitations will apply, but the guidance above may still be within your reserved management powers if not specifically addressed in the union contract.

For a guide when settling employment law disputes, read this article by Robert B. Fitzpatrick: http://www.robertbfitzpatrick.com/images/settlement.pdf. Although published in 2003, it serves as a good starting point in the event your efforts to prevent employment issues are not completely successful.

Wasting Money With The Wrong Staff

2009-05-29T03:24:00.000-05:00

In an earlier post, I posed the question, "Do charitable organizations have a duty to spend their grants and donations the way a reasonably prudent business person would spend his or her own money?" My goal was to prompt discussion on whether not-for-profit managers have a duty to use their resources to the best of their capabilities. I believe that duty is higher for those who manage taxpayer funds than even the duty on those who manage shareholder and investor funds. Based on some questions and stories I received since then, this topic deserves more discussion.

The issue tends to come up only when there is some type of problem: employee performance is substandard, financial resources are squeezed, or the overall economic outlook is exceptionally challenging. That makes sense. In good times, most people are willing to overlook things and put off unpleasant tasks. When times are tough, however, every “minor” matter becomes an aggravating thorn in the organization’s collective neck. But that does not mean managers snap into proper form and deliver.

Take a recent example that is behind the headlines: a public school district in a large U.S. city is cutting teachers because of severe budget problems. All across this large district, experienced, good teachers are getting pink slips. Yet in that very district, other teachers who abusively yell at kids or sneak out during the work day to meet friends for coffee will not lose their jobs.

Another example comes from the nonprofit sector. Even though one particular organization is not facing budget cuts, it never has enough money to hire enough staff to meet the needs placed on it by the communities it serves. Yet within that large organization are staff who have been moved from department to department because they are either incompetent, unmotivated or incapable of performing their jobs adequately.

Both of these situations were created by the same thing: supervisors’ refusal to take the steps necessary to appropriately set expectations and terminate employment for substandard performance (or even outright policy violations).

If you have managed people and been responsible for hiring and firing, you may sympathize. It is not fun. No one likes to do it. Unless the employee is a total jerk or commits a crime, there is no satisfaction in tossing anyone out onto the unemployment rolls even in good times. But making good firing decisions is just as important as making good hiring decisions and when budgets are stretched thinly, it may be even more important.

Here is why: somewhere there is someone more capable who wants that job. In today’s economy, they may even be unemployed and also need it. By leaving an unacceptable employee in his or her position, you not only cheat that very worthy, motivated, qualified prospective employee of the opportunity to do a great job for your organization and its constituents, you also cheat your funders—who do not get all they should for their money, your other employees—who pick up the slack or at least share the strain caused by a weak link in your staff lineup, and the communities you serve—who get BOTH substandard services from these inadequate employees and less total services than they would get if everyone was working at capacity. And when the funders are taxpayers, directly or indirectly, they have every right to want to see heads roll: their money is being misappropriated from its intended purpose and diverted to someone who cannot or will not do the job while too many willing prospects sit idle. It is offensive. It is immoral.

What should an organization do? It is not complicated or difficult and you have probably heard this countless times if you have been in management very long: set expectations and build a file when your staff fails to meet them. You take risks if you are sloppy, and perhaps some managers avoid this process because they think it takes too much effort. However, this is not difficult to do correctly. The reward is great, however, and the effort is generally short.

First, make sure you have clear performance expectations for all employees, from the top to the bottom. Exempt no one. Second, make sure those performance expectations have been communicated to each person. It sounds odd, but it happens more than you would think that job descriptions are buried in HR files and never handed out.

Third, document your training and offers of help for anyone who lacks the skills and knowledge to perform their job duties. Fourth, document every incident where the employee has failed to meet expectations AND your plan of action for helping them avoid future incidents. Finally, take prompt, progressive, appropriate action when failures continue.

Progressive action could follow this type of pattern: oral warning -> written warning -> probation -> suspension -> termination.

Before you hire a replacement, review those performance expectations. You want to hand them to the new hire on day one. Hopefully, you will not have to follow this plan very often. Unfortunately, if you are an employee, you probably have worked or will work for a manager who never does.

“Gotcha!” at Closing: Beware the HOA Inspection Report When Buying a Home

2009-05-26T04:09:00.000-05:00

As more and more subdivisions adopt common deed restrictions and covenants, the chances that you will buy a home in one of those neighborhoods increases. While covenants and restrictions are nothing new, there is a trend that can catch the unwary by surprise and add thousands of dollars of unexpected costs above the purchase price. Some due diligence can save you a lot of grief.

Contract terms that apply to the land before the first purchaser buy a lot, are recorded in the public land records and referenced in each subsequent conveyance are said to “run with the land.” Those documents are public records and available for anyone to review before agreeing to purchase property in the subdivision.

However, the covenants typically vest a number of powers in a body of representatives of the entire group of owners. Those powers include the ability to adopt and enforce rules consistent with the spirit of the original covenants. Unlike the deed restrictions, these rules are generally not public record and can only be obtained from a member or officer of the home owners’ association (“HOA”).

HOAs have the unpleasant task of enforcing rules drafted to help keep all property values up by ensuring consistent levels of exterior maintenance, upkeep and accessibility. It is a thankless job but one that benefits all owners in the subdivision. On the flip side, if the HOA turned a blind eye to violations, the entire set of covenants could be declared nullified by failure to enforce them over a period of time.

HOAs have a new trick they use to meet these obligations: the so-called “resale inspection rule.” Here is one example from Maryland. Here is another example from Arizona. These rules can apply to condominiums as well as traditional lots.

Although the rule varies from HOA to HOA, it typically includes a requirement that anyone selling their property obtain an inspection by the HOA architectural representative. If the property passes, everything is great. If the property does not pass HOA inspection completely, then that can become the “gotcha!”

Here is how a good plan can cause trouble even for people who had no intention of violating the HOA rules:
1. HOA inspection is mandatory, but not requested before closing
2. HOA inspection occurs, but report not received prior to closing
3. HOA inspection occurs and report is received prior to closing, but after the purchase contract becomes binding
4. HOA inspection occurs and Seller fails to disclose the non-compliance issues pointed out in the HOA report
In most states, the first and last scenarios likely can lead to legal action by the buyer to either reform or avoid the contract because the Seller has done something intentional and deceptive or negligent. It is the other two that are more likely to occur, and because there is no intentional deception, the remedies available to the buyer can be limited.

For example, let’s say Owner wants to sell House. Owner spruces up the place, gets a Realtor, lists the house for sale and starts preparing for tours. Because Owner knows the rules, she contacts HOA to inform them of the new listing and request the mandatory HOA inspection. HOA takes its normal, customary 8-10 business days to get around to the inspection. HOA finds a few “minor” items of non-compliance, and within a couple of days, mails its report to Seller.

The only problem here is that the market is pretty hot and Buyer makes an offer on the third day the property is on the market and has a closing date scheduled in less than three weeks. Why is that a problem? Seller may honestly have no actual knowledge of any non-compliance items to list on the disclosure statement. Buyer relies on the Seller’s disclosure statement and the train is rolling towards closing. Depending on how quickly the HOA completes and delivers the report, that document may not even show up until after closing. If the cost to remediate is substantial, the sale may be off.

Protect yourself by doing some research before you make an offer. Read the seller’s disclosure statement very carefully (in states where they are required), then ask questions in writing and get the answers in writing. Here are some questions to put in your list when there is a mandatory HOA and there are active covenants and deed restrictions in place:
a. Does the HOA have any requirement for an HOA inspection prior to, after or in connection with the sale of property covered by the deed restrictions?
b. If so, have you complied in all respects with that requirement?
c. Are you as home owner in compliance in all respects with all HOA rules?
d. Is the property in compliance in all respects with the HOA rules and covenants?
e. Has there been an HOA inspection or report related to your property in the past 24 months?
f. Do you expect to receive any report from the HOA prior to, after or in connection with closing?
g. Please provide the names and contact numbers for all current HOA officers.

Most HOA officers see themselves as ambassadors for their neighborhood. They want to paint the environment in the best light and will be helpful. Ask if they have any violation history on the property you want to buy. Ask them what the requirements are on an owner when she wants to sell as well as on a buyer when he completes the purchase. They will typically provide copies of rules, meeting minutes and even HOA financials if you ask, though they may ask you to cover the costs.Buying is stressful enough. Do not let the unexpected get in the way of your new home. Ask questions. Probe. Be prepared. Hopefully, there will be no “gotchas!”

Why Written Policies and Procedures Matter

2009-05-21T03:08:00.001-05:00

Over my career, I have worked with a number of organizations. The ones that were the most effective, had highest employee morale and fewest compliance failures had one thing in common: they valued written policies and procedures highly. The organizations and departments that were the most troubled did not. They saw written procedures as inconvenient, unimportant, unnecessary and an annoyance.

If your organization or business receives federal money through grants or contracts, you most likely have a duty regarding effective policies and procedures that carries serious penalties for noncompliance. Even if you do not have the express or implied obligation, there are plenty of examples of situations where the lack of such procedures cost a business, agency or organization.

A Few Examples

The lack of written procedures is frequently named as a primary or contributing cause in product recalls, medical testing failures, allegations of unfair federal regulations, inadequate training programs and government program audits. It is also often determinative in court decisions in favor of employees who file grievances and lawsuits.

These examples show how expensive and embarrassing it can be for the organizations. The cost in lost productivity and distractions from each organization’s primary mission are at least as high as the costs of outside counsel, internal investigations and preparation of an appropriate defense against the accusations. In some cases, the failures held the potential to cost lives. In others, they mean wasted efforts and untold hours by people who most likely wanted to deliver good results.

Reasons or Excuses?

In some businesses, sheer arrogance and a false sense of impunity are behind the lack of written policies and procedures or refusal to follow those in place. (See my earlier post “Too Small to Worry About Compliance?” inspired by a true situation.) In my experience, most of the reasons for inadequate, incomplete or nonexistent procedures are really excuses and have simple answers.

1. “We need flexibility. Written procedures are too constraining.” While some processes in your office may need detailed, step-by-step procedural guides, at least as many only need general guidance. Design your policies so that they provide as much guidance and restrictiveness as is necessary, but no more. Employees do not like to be treated like children. If you can develop criteria for what the output should be, while leaving your talented staff to arrive there using their own solutions, then all you need for the process is a set of guidelines—boundaries of a sort—to communicate the amount of latitude they have.

2. “We trust our staff to do the right thing.” Is it trust, or laziness on the part of management? Jim Collins, in Chapter 3 of his book, Good to Great: Why Some Companies Make the Leap…and Others Don’t, describes how the best leaders of the best companies first got the right people in place, then charted their paths to excellent results. But as judgment after judgment in employment, antitrust and product liability lawsuits prove, most organizations focus on their mission first, then select their staff and really cannot trust everyone to always do the “right” thing. Better to use the “trust but verify” approach, with a solid set of guidelines and quality assurance checklists. Employees generally want to do their jobs correctly. They will reward your efforts if you give them clear, smart, written guidelines so they understand what you expect them to deliver.

3. “There are already too many rules and regulations.” If you have “too many rules,” but still have compliance issues, then you may simply have the wrong rules. An attitude that there are too many rules means that many if not most are ignored. Talk to your staff and middle managers, then develop a way to update your policies and procedures so they are realistic, relevant and referential. The solution is not more policies, but good, sufficient policies. As Elaine Herman wrote in her article, “Less is Really More,”

The impressive length of many nonprofit policy manuals is generally the result of good intentions; leaders believe that adding new policies to an existing manual will add emphasis to key issues. But this encyclopedic practice can be a recipe for disaster.

4. “By the time we finish writing procedures, our processes have changed.” In my series on business process improvement, I outlined a generic strategy for assessing internal processes then designing and testing better ones. Write and amend your procedural guides as you change your procedures. This hand-in-hand approach keeps the written guidelines fresh and relevant. Written procedures are not static. They have to be constantly reviewed and updated, because so many things change in our offices every day. If your procedural guidelines were based on paper-only processes, then update them for your electronic information systems. If your policies only addressed the use of company equipment and email, update them to cover the blending of work and home life that so many employees now have.

Ounces of Prevention In Our Hands

If you have compliance gaps, look first to ensure that you have current, clearly written and adequate written policies and procedures that address the situation. Look next to how those policies and procedures were published and communicated to the staff. Unwritten policies are as ineffective as written policies that are unpublished. When you find gaps in the written materials, fill them. One good resource for personnel policies is the Personnel Policy Service website, where you can read, for example, The Case for Written HR Policies. Other materials guide development of written policies and procedures of a general nature, such as 7 Steps to Better Written Policies and Procedures.

If you have no idea where to even start in terms of drafting procedures, look at this discussion of the most important topics for policies and procedures published by the National CASA Association and the list of “Integrity-Related Written Policies” by the National Institute of Ethics for its Certificate of Integrity Program.

Finally, if you still think that written policies and procedures are for schmucks, wimps and “the other guys,” consider this point well-stated by John Outlaw in his article, “The Case for Compliance: Why You Need an Effective Compliance Program,”

There is another benefit to implementing and maintaining a compliance program, although nobody wants to think about needing it. The Federal Sentencing Guidelines provide relief for any entity convicted of a crime that has an effective compliance program in place. In determining the amount of any fine, the Guidelines require a court to determine a “culpability score” by calculating aggravating and mitigating factors. Having a compliance program doesn’t excuse the crime, but demonstrates that the organization took reasonable efforts to prevent, detect and correct any improper conduct. It may lower the organization’s starting “culpability score” by 60%, and not having a compliance program is actually considered an aggravating factor which increases the culpability score! (Emphasis mine.)

Congress Can Do Better Than the Employee Free Choice Act

2009-05-18T03:52:00.002-05:00

Can We Have it Both Ways?

In a recent town hall meeting, President Obama confirmed his general support for labor unions, but called on teachers unions to agree on both merit-based compensation and prompt termination of teachers who do not meet performance standards. In my past experiences as a union negotiator on behalf of employers and as a former union member, national unions fight against those two issues with religious zeal. The unions I have both been in and negotiated against preferred compensation systems based on seniority and longevity that took away all connections between performance and compensation. Is that about to change?

First, A History Lesson

The National Labor Relations Act was passed in 1935 as part of the massive legislative response to the Great Depression. Sometimes called the Wagner Act or Wagner-Connery Act, after its primary sponsors in the Senate and House, the NLRA took away employer’s power to legally fire workers who unionized or withheld labor under certain situations. By the mid-1940s, labor union membership soared to as high as 35% of the total U.S. workforce.[1] Then the Taft-Hartley Act of 1947, a/k/a the Labor-Management Relations Act, sought to add limits to union power and prohibit some types of organized economic activities that employers felt amounted to economic terrorism. It was the first major revision of any New Deal legislation.

Later, with the Landrum-Griffin Act of 1959, Congress had completed the picture: Wagner-Connery protected the union, Taft-Hartley protected the employer and Landrum-Griffin protected the rights of union members.[2]

Now, the Employee Free Choice Act has been introduced once again, though its future looks murky in this Congress. One of its stated goals is to help employees form unions more easily and mandate employer recognition and bargaining immediately. A mandatory, binding arbitration would establish a two-year initial contract if there is no agreement within 90 days. Opponents cite the bill’s “fast track” membership mechanism (where signed intent cards can be used optionally in lieu of secret employee ballots) and the prohibition against employer counter-campaigns as major flaws. Supporters say it is needed because collective labor negotiations are more important now than anytime since the Great Depression.

Everyone is Partly Wrong--and Partly Right

While some employers have over-reached in their efforts to prevent unionization efforts from taking root, some union organizers have also gone too far in their efforts to build support. Both sides have good arguments as well as specious defenses. It is safe to say neither side is entirely in the right or entirely blameless. I think they are both fighting an old fight that ignores the real opportunity to actually improve the entire labor law system in the United States.

Here is a look at some of the issues that labor and management are either afraid to discuss or unable to do so dispassionately with an open mind for long-term reform:

1. Fair and balanced communication.
The NLRA protects the employee’s right to engage in union activities as well as to not engage in them. It also protects employees’ rights to engage in certain activities without even forming a union, such as collectively addressing working condition issues and pay with the employer or discussing their pay or working conditions among themselves. Employers may not interfere with, restrain or coerce employees engaged in unionizing activities and unions may not restrain or coerce employees into doing them. The NLRB decisions over the decades have been generally very strongly worded in finding even subtle comments as violations of the NLRA.

Today, labor groups and employers each accuse the other of intimidating employees. Unions scream about “union free” efforts while employers point to sometimes brutal actions by union members against employees who disagree with them. One thing is common to both camps: each is restrained by what the laws say they can and cannot communicate directly to employees.

So fix it. Clarify the statutes so that both sides are entitled to free, honest communication, subject to scrutiny and oversight by the NLRB. Whether you take a page from the Federal Election Commission’s regulations or the Federal Communication Commission’s, find a way to un-muzzle advocates on both sides. Today’s employees are much more mature and informed than those of the 1930s. They also are quite capable of blogging, Tweeting and YouTubing evidence of deceptive and false communications by one side or the other. Free speech is a fundamental American value and the guidance from Whitney v. California, 274 U.S. 357 (1927) is still sound:

"Fear of serious injury cannot alone justify suppression of free speech and assembly." Id. at 376.
"Those who won our independence by revolution were not cowards. They did not fear political change. They did not exalt order at the cost of liberty. To courageous, selfreliant men, with confidence in the power of free and fearless reasoning applied through the processes of popular government, no danger flowing from speech can be deemed clear and present, unless the incidence of the evil apprehended is so imminent that it may befall before there is opportunity for full discussion. If there be time to expose through discussion the falsehood and fallacies, to avert the evil by the processes of education, the remedy to be applied is more speech, not enforced silence. Only an emergency can justify repression. " Id. at 377.

"Sunlight," Justice Brandeis later wrote in Other People's Money, "is said to be the best of disinfectants; electric light the most efficient policeman."[3]

2. Merit Pay and individual performance incentives.

Just because there is subjectivity in an action does not mean it cannot be fair. Performance-based compensation has tremendous value for the employee and the employer. At least it does for employees who want to get more for doing more. No one should still cling to the old notion that people will simply work harder than they have to for personal reward or satisfaction. Positive reinforcement is valuable, whether in non-profit, for-profit or government jobs.
National union leadership would say they do not attempt to protect incompetent workers. Managers and executives would also say they do not attempt to arbitrarily and capriciously terminate staff. It all happens anyway from time to time.

Tying or maintaining a connection between compensation and performance also means that the rating system is more likely to be fair and consistent AND that employer and employee will use it appropriately. Union and management can work out acceptable systems that meet the goal of (a) identifying areas of exceptional performance, (b) identifying areas of substandard performance, (c) calculating the pay adjustments based on the review and (d) setting performance expectations for the next review (as well as any curative measures the employee needs to take). They can even agree—dare I suggest it?—on guidelines for individualized compensation plans that incentivize excellent results with accountability and realistic criteria. It works in non-unionized businesses and with non-bargaining unit staff every day.

One size does not have to fit all. Most workers today are not employed in mass-production industrial shops. The vast majority are in information and or service sector jobs. It is time to dump the industrial-society labor concepts and craft something fresh and relevant. Workers today are better trained and more knowledgeable than their grandparents. Change the statutes that constrain innovation in the labor-management relationship so labor and management can actually have a modern relationship.

3. Employee participation in TQM-style efforts.

Likewise, unshackle innovation among the ranks of employees. Take off the blinders, folks. We are in a very different world than in the 1930s. American business has to be able to encourage innovation, excellence and ingenuity among the ranks to maintain or regain its competitive edge in the global marketplace without fear of charges alleging an “employer-sponsored union.” Employees want to participate. They like having input and influence over the solutions. Past generations may have preferred to be taken care of by paternalistic bosses, but younger workers want to be involved in finding solutions.

Collective Bargaining Agreements (CBAs) are unique to every situation, but affiliates of national labor organizations tend to get a lot of suggestions and encouragement from the national representatives. Kill off the “hot button” issues and make every CBA a “local” CBA. Union leadership is certainly capable of customization that has the local employees’ best interests first. Employers are likewise capable of localized CBA provisions that take into account the unique needs and goals of work groups in each location.

Just because an employer retains the right to implement, modify or decline an employee's recommendations or suggestions for improving the way work is done or enhancing working conditions, does not mean that such a "quality assurance committee" is a labor group dominated by the employer, and thus violative of the NLRA. Let the CBAs permit joint employer-employee work groups that fit the needs of the local work site as well as address overall business process improvement.

Either Lead, Follow, or Get Out of the Way

It is easy to be against something. You let the other side define the discussion then sit back and tear it apart. It is much more difficult to propose viable alternatives and compromise. A lot of water has gone by under the NLRA bridge since 1935. Many honorable people on both sides have come and gone. There are plenty of scars to go around.

Get over them. We are humans working for humans. Some people are greedy, others lazy. Some are power-hungry and hyper-competitive, others opportunistic profiteers—on both sides. None of those is reason enough to impose communism or socialism and very few really want that for themselves.

What is really broken is the whole “zero-sum” labor-management relationship concept. It is time for a better plan entirely. One with flexibility, collaboration, transparency and fair advocacy on both sides. To get buy-in from both camps, Congress should truly draft a “Free Choice” act that seeks to address the short-comings of the outdated system we now have, not just shift power to labor union leaders who lack vision of a future work force that is so valuable, effective and efficient it cannot be replaced with off-shore competition.

No more "it cannot be done" excuses. This is the "Yes, we can!" generation.

===========================
[1] Kusnet, David, “UNION ADVANTAGE: The Case for Organized Labor and Democracy in the Workplace,” United Professions AFT Vermont Website, http://www.upvaft.org/unions/101_union_advantage_article.php

[2] My research was much easier because so many labor union web sites contain the full text of these statutes. While there may be many employer sites that also display them, I did not find one.

[3] Excerpt from online text at Louis D. Brandeis School of Law, http://www.law.louisville.edu/library/collections/brandeis/node/196; Chapter V: What Publicity Can Do.

Business Process Improvement for Nonprofits - Part 8: Diagnosis & Assessment (Again)

2009-05-15T03:53:00.000-05:00

The story so far:

1. Diagnosis/Assessment: “What is happening now?” “Exactly how do we do everything that we do?”
2. Analyze Workflow: “Is this the best way we can operate?” “Do we need to do any parts of our work better/cheaper/faster/with fewer people?”
3. Identify Options for Improvement: “Where can we work differently?”
4. Design new processes or steps: “What will work for our organization?”
5. Gather feedback: “Is this in line with the organization’s mission?” “Does it actually improve the way we work?”
6. Test the new workflow: “Does it work in the real world?”
7. Monitor the results: “Are we getting the results we sought?”

Step 8: Diagnosis/Assessment Round Two: “If no improvement, why?” “If that worked, what else can we improve?”

This is a natural phase, especially for critical thinkers. One where you question the results, both expected and unexpected. Why did you get the ones you did? Why did you not get some you hoped for? Have you accounted for these things?

1. Inertia: some people want to keep doing things the way they have for some time. They would still use Windows 3.11 and WordPerfect 5.1 for DOS.

2. Hidden resistance: not the people kind, the process kind. Were your workflow diagrams realistic, honest depictions of what is really going on, or idealistic hopes about what should be happening?

3. Environment: did something happen during the testing phase you did not plan for? When people are faced with a stressful situation, they will naturally revert to what they know works. Perhaps something unusual occurred that took the testers off mission.

4. Flaws: are there parts of the solution that are worse than the problem you seek to address? If so, are there other aspects of the whole solution that will counter-balance them?

Be sure to make good note of what did work as well or better than expected. Those hold hints of what will work in other areas with other staff. Dig in. It's good for you!

Remember to share the results with your testers and be honest. They deserve to see how their actions, intentional and not, impacted the results. They also may be a good source of insight on both the causes of undesirable outcomes and the keys to better ones.

(The next post will be the last in this series.)

Managing Your Online Reputation - Part One

2009-05-13T05:49:00.004-05:00

Whether or not you conduct business online, your business name is online.[1] You have no doubt heard about “Cybersquatters,” the people who buy up web addresses with the hopes of selling them later for a hefty profit. Cybersquatters are not the only ones you need to watch.

As technology expands and more people go online, there are more and more outlets for people to share their views and experiences. These days, there are too many to name—places in the virtual world where anonymous comments are not only possible, but also potentially very damaging—from message boards to Instant Messaging tools to blogs. Then consider that almost every electronic communication tool has a way for others to post comments and replies—some public, others private—and you start to see the picture.

Defamatory comments about your business or employees, even if untrue, can get out of hand quickly. Disgruntled customers may be likely to plaster negative remarks all over the web. They are more vocal and resourceful than ever, according to this recent article from MSNBC. You do not want to see your company’s name on this site, for example, or your products mentioned here.

Insiders can also do their own damage by posting comments from an employee’s perspective on the company culture, management, or trade practices. Take a look at these examples of gossip boards, for example: Public Message boards like this one at Yahoo and this one that began as the dot com bubble burst but now has a new lease on life.

And there is the ever-present risk of disclosure of company secrets from staff, business partners or even customers. Once your secrets appear on FaceBook, Bebo or Yammer, they have been let out of the proverbial bag. You can sue all you want and even win all your lawsuits, but a secret is not a secret once it becomes public. Besides, lawsuits cost money and distract you from your core business.

Finally, every business executive should worry about YouTube and similar video sites. Here is a compilation of bad customer service comments given to a video reporter in NYC. (Caution: this one has very rough language.)

You need a strategy and it is not complicated. The hardest part is diligent monitoring without becoming obsessive. The three-part strategy I recommend is:

1. Protect what you can
2. Monitor routinely
3. Take immediate action if you find a problem

In subsequent posts, I will explore each of these with more detail.

[1] In fact, your own name is already probably online. There are a number of business data web sites now (Jigsaw, MarketVisual, ZoomInfo, Spoke, etc.) that cull public data and attempt to build a data map that they then charge you to update. Think about it: they get the data wrong, then want YOU to pay them to correct it.

Does Unlicensed Software Put Your Organization at Risk?

2009-05-11T03:17:00.002-05:00

“Before we begin…”

Here is a quick test:

Question: Name the only type of software that you can use legally without a license.

Answer: Software you write for your own use. All others require some type of license from the author and using any of them without a valid license is illegal as well as taking a risk that you may be sued for damages.

“Does this really matter?”

It depends on whether you mind paying fines or not. Ask the folks at A.E. Petsche Company in Dallas, Texas. Not only did they pay a fine of over $90,000 for using unlicensed copies of Adobe and Microsoft software, they also ate their own legal fees and the expenses of an intense audit. And now they have a black-eye as well as possible ramifications to their federal government contracts (Petsche is in the military/aerospace industry).

Software is protected by copyright laws written to protect the author’s work product. It is the same as for a book author or music composer. When you purchase commercial software, you do not actually buy the underlying software code, you buy a license to use it (with a few exceptions) in accordance with the software license.

Under federal law in the United States, each violation carries a potential fine of up to $150,000 per software title copied illegally. Individuals prosecuted for criminal copyright infringement face up to $250,000 in fines and imprisonment of up to five years. So you be the judge as to whether this topic presents a real risk to your business.

“So who is watching, anyway?”

Software licensing is a major challenge for every software manufacturer from a one-person start-up to Microsoft. Piracy is rampant and software manufacturers are continuously looking for new ways to prevent illegal distribution of their products and catch those who use pirated versions. The Business Software Alliance is the largest IT industry group formed to address international software piracy issues. Another is FAST IiS—Federation Against Software Theft & Investors in Software.

Both organizations work to help manufacturers protect their products from piracy and both try to educate the public on the negative impact to the IT industry that piracy has. And the public is listening. BSA reports that over 2500 potential violations are submitted each year to its website, http://www.nopiracy.com/, and its toll-free phone number, 1-888-NO PIRACY. In fact, the Petsche case arose from an anonymous tip.

Now the bad news (for software pirates): BSA offers rewards of up to $1 million USD for qualified reports of software license violations. In other words, your co-workers could really cash in by reporting you.

Who is watching? Assume everyone is.

“But what about shareware and Open Source software?”

Freeware, shareware, open source software—you have heard the terms. Each is a type of software license. It is a common misconception that they are available for anyone to use without a license. In many cases, they are not even free.

Even freeware—software that is available for use without payment—is covered by a license and users are obligated to comply with the license. Its authors are also protected by copyright laws whether you pay anything for their work or not.

Software provided to the public as “Open Source” and “Copyleft” come with the specific stipulation that the user may freely copy, examine and modify the source code, and redistribute the software to others (free or priced) as long as the redistributed software is also passed along with the copyleft stipulation or open source license.

“What you don’t know CAN hurt you!”

Assuming that your policy and directives to staff specify that all software used on business computers and for business purposes wherever installed must be properly licensed, you cannot go quietly about your work and safely avoid any risk of anything happening to you or your organization.

Companies who found themselves in hot water typically did not have a solid program for auditing or enforcing their own rules or the terms of their software licenses. Meyers Industries, Taney Cunningham Equipment, Nuvelo, Inc., Graham Downes Architecture, Inc., Styles for Less, Inc. and Web US Mail, all have written checks they would rather have not written for software license violations. They spent money on lawyers, auditors and fines that could have been spent on pay raises, equipment upgrades or even paid to investors as profits.

All they needed was a simple system that they actually followed.

“What’s a small business person to do?”

There is help for those who want to comply. To begin with, use common sense such as following these guidelines:

» Adopt written policies that prohibit the use of unlicensed software
» Educate your employees on why the organization must insist on full compliance
» Establish an authorization process for all employees—even IT—to follow before installing and using any software, but make sure it is easy to follow
» Keep an active inventory of every software product in use and ever purchased by your organization
» Promptly delete any software found on your computers that is unlicensed or whose license cannot be verified

FAST IiS has several practical resources online if you want more ideas: Know Your Responsibilities and Risks, 10 Ways to Avoid Buying Pirated Software, Effective Software License Purchasing and 4 Steps to Effective Software License Compliance and Management.

The BSA will not accept post-violation compliance and clean-up as an excuse to avoid penalties. Your organization will waste countless hours of productivity responding to an investigation as well as huge sums of money. Prevent that type of waste and manage this risk with your compliance program. It is worth it.

The BSA site has a good list of free Software Audit Tools. Use one of them. You might be surprised at what you find.

(Here is another similar post on this topic that I found useful.)

More Texas Injustice?

2009-05-07T05:17:00.002-05:00

Every set of Rules of Professional Responsibility that I have seen includes some version like this statement from the Preamble of American Bar Association’s Model Rules of Professional Conduct:

“A lawyer, as a member of the legal profession, is a representative of clients, an officer of the legal system and a public citizen having special responsibility for the quality of justice.”

Likewise, at least 13 states have a provision in Canons of Judicial Ethics substantially equivalent to this from the ABA’s Model Code of Judicial Conduct, Rule 1.2:

“A judge shall act at all times in a manner that promotes public confidence in the independence, integrity, and impartiality of the judiciary, and shall avoid impropriety and the appearance of impropriety.”

So what is so difficult about avoiding the appearance of impartiality? Or refraining from actions that would make the public question the quality of the judicial system? Help me understand this one.

In 1990, Charles Dean Hood was on trial in Plano, Texas, for murder. He had a lawyer who was unhappy with the assigned court because there were rumors that the assigned prosecutor, Thomas O’Connell, was having or had previously been intimately involved with the judge, Verla Sue Holland. Mr. Hood was convicted and sentenced to death.

The defense attorneys continued to pursue the matter on several occasions but either could not find evidence of the relationship or were told outright by the DA that the rumors were false. But they did not accept the denial.

Finally, 18 years after the trial, both the former DA and the former judge admitted under oath that they had been involved in an intimate relationship that ended prior to the trial. Yet neither one recused themselves from cases such as Mr. Hood’s. The Texas Court of Criminal Appeals stayed Mr. Hood’s execution and asked a new trial judge to determine whether these new facts were significant and timely.

It is another situation that screams “Here we go again!”

First of all, the efforts by the DA and judge in the original trial are plainly unethical. Nothing reeks of impropriety more than to have the person asking for the death sentence to turn out to have had a secret relationship with the person who can sign the execution order. It is offensive to the American sense of fair and impartial justice.

The result is that Mr. Hood will at least likely have to stand trial all over again—20 years later! Even if found guilty again, the taxpayers get to pay for a new trial, new investigations, new appeals, etc.

Secondly, the Court of Criminal Appeals—the highest court in criminal cases in Texas—has, in its own actions, brought into question the appearance if ITS impropriety. As it turns out, Judge Holland once served on that court, too.

I commend them for halting the execution and remanding the question. They got that part right. But the spineless way they went about it makes their action look like one calculated to produce the answer they wanted someone else to give them.

Call a spade a spade. Shine the light on judicial and prosecutorial misconduct when you find it. The harm done by this attempt to “do a little side-step” is far greater than the impact of stamping the behavior in question as inappropriate and moving on.

Here is a good story by Rick Casey of the Houston Chronicle on this affair (pun intended). For another unfortunate event related to Texas Courts, see my earlier post.

UPDATE to Social Media as a Disaster Preparedness Tool

2009-05-04T04:59:00.002-05:00

A few weeks ago, I suggested in a post, “Communicating After a Disaster,” that tools like Twitter could be useful to keep your employees up to date in the wake of a disaster that significantly disrupts normal communication. Twitter has become ubiquitous, but its temporary service outages have also grown more frequent.

Since that article, I have tested an alternative but very similar tool, “Yammer.” Yammer is like the private counterpart to the very public Twitter. Sign-up for Yammer using your work email address (the one with your organization’s private domain name, not something like gmail or msn), and you will instantly have a “private” group. Only those who validate an active email account in the same domain name (the part after the @ sign) are allowed to join your group.

A useful feature on Yammer is the ability to set up organizational charts and decide who in your organization you want to “follow” if not everyone. Another useful option is that you can determine which updates you receive by SMS (text messages) versus email. And Yammer has a nice mobile app for the Blackberry, iPhone and desktop to make monitoring and updating easy from any of the three.

Under the Disaster Preparedness theme I used earlier, here is one way you can use a tool like Yammer should your organization lose some or all of it’s communication system (i.e., email server, network, etc.):

1) Set up a Yammer system IN ADVANCE, including whether or not responses to updates are allowed or it is just a one-way message system
2) Write specific details of the system, including rules on what kinds of messages are acceptable and unacceptable (yes, you need to remind people to not divulge private details and company secrets)
3) Invite all employees to subscribe and install appropriate alternative applications on their mobile phones to the extent available BEFORE DISASTER STRIKES
4) Conduct tests of your Emergency Alternative Communications System at least once per quarter

Whether your business or office is more likely to face blizzard, fire, tornado, flood, hurricane or earthquake, or some outbreak of disease that makes effective communication with a large number of people more difficult, social media tools may play an important role in your disaster preparedness plans. For more on creating a disaster preparedness plan, check out Ready.gov

Everyday Risks: Communications Within Your Organization

2009-04-30T05:53:00.002-05:00

From the "Just when you thought it was safe..." file:

Communication within organizations is a double-edged sword: you need it, yet it is one of the primary sources of complaints and lawsuits by employees. Most organizations suffer from inadequate and ineffective communication overall, while pockets of unacceptable communication may exist that should not. This post explores the need for better communication as well as the risks for both employer and employee. (Managing trade secrets and business reputation will be the subject of a future post.)

"As Sam once said..."

By now we should "get it." If you have read Sam Walton's book, Made in America, or have worked for Walmart, you know that among the core principles upon which the largest retail business in the world was built, communication ranks very high. Mangement guru, Steven R. Covey commented in 2007, “Great leaders involve their people in the communication process to create the goals to be achieved.” Business schools offer courses on the subject and there are innumerable online resources on the importance of effective communication within organizations, how to ensure your communication is effective, as well as the consequences of poor internal messaging.

At the same time, there are new giant settlements and jury awards announced frequently in sexual harassment suits (e.g., Waffle House and Cracker Barrel) and hostile work environment claims (e.g., DishNetwork and AT&T).

“What you say CAN be used against you”

We need communication and communication happens whether we want it to or not. Then what should a business manager do? The answer is essentially the same for every risk you want to manage: train, monitor and respond promptly. None of these, alone, is sufficient. Together, they outline your risk management plan.

Train your managers on the benefits and key elements for successful communication as well as the boundaries and consequences of inappropriate communication by management and other employees. Address every form of communication that occurs in your organization: bulletin boards, electronic mail, spoken comments, text messages, slide show presentations, posters and internal newsletters. Explain the types of speech that give rise to hostile work environment claims, but be sure to promote positive, effective communication that helps your organization or department achieve its goals with higher morale. Point them to tools and resources for motivating and communicating, how to communicate effectively, and the importance of choosing one’s words wisely.

“Eyes Open!”

Knowing what to do and not to do is the first step. The next is monitoring the work place. There are countless court decisions, statutes and other rules that use the phrase “knew or should have known.” They address the “ostrich syndrome” by many who want to hide behind an intentional ignorance. It will not work.

Managers must monitor communications the way they monitor the most precious processes within their departments. It can be no less important than pilfering, waste, trade secrets or accurate invoicing. But there are limits, here, too. Stay inside the employer’s property, both physical and virtual. Avoid unauthorized intrusions into an employee’s personal property or online accounts, as this employer learned the hard way.

It is also important to set expectations around the work place. The training for managers should not be considered secret information. Train your staff, too, just as schools are now teaching staff and students about the elements and consequences of bullying. You gain nothing positive by avoiding the discussion and you will not plant suggestions in employees minds they cannot and likely already may get elsewhere.

One key place to shape expectations is in your computer use policy. Make sure employees know that the computers, company email accounts and other employer-provided collaboration tools AND ALL INFORMATION in them belong to the employer. Inform staff openly that there is no reasonable expectation of privacy there. They should know that anything they store on the employer’s equipment, including personal photos, belongs to the employer.

“What happens in Vegas…probably will not stay in Vegas”

Unfortunately, in real life, secrets are not kept and actions speak volumes for days on end. Indiscrete comments and faux pas under the influence of alcohol, drugs, lack of sleep, stress or even so-called “convention syndrome” tend to live much longer than most would hope. They also create unintended consequences around the work place and can get out of control very quickly.

With any anti-harassment policy, there must be an effective reporting system. “Effective” means that people can report violations safely without concern for retribution and that those who receive the report will investigate the facts fairly and promptly. But an effective reporting system is only as valuable as the effective responses to verified reports of violations. Action must be reasonably calculated to address that situation and prevent future violations while maintaining confidentiality and respect.

Each of the cases noted above includes the comment that management ignored or responded inadequately to reports. In each case, there was ultimately a significant cost for that. Treat each report as if it could be the tip of an insidious iceberg, because you may not be aware of what is happening. Then take prompt, decisive action that also communicates your intolerance for the behavior at issue. Doing so documents your effective response plan in action.

“Communicating Communications Correctly”

Workplace policies are designed to control risks to the organization and the employees. You cannot leave people to do the “right” thing all the time, behave reasonably or know what they should and should not say. It does not take much. I have seen the most compliance-oriented managers make comments during a presentation that revealed confidential facts about an employee who was in the room. Some in the audience were horrified, but the speaker was oblivious to what she had done. If the employee wanted to pursue a complaint, he may have had enough to at least create a significant legal distraction for the employer for a while.

So what should a business manager do? Train, monitor and respond promptly to any reported violations.

UPDATE on the Discoverability of Tweets, TXTs and IMs

2009-04-28T05:56:00.000-05:00

Great timing! The April 2009 issue of the American Bar Association's Law Practice Magazine, a publication of the Section on Law Practice Management, has an article by Sharon Nelson and John Simek entitled "CAPTURING QUICKSILVER: RECORDS MANAGEMENT FOR TWEETS, BLOGS AND SOCIAL NETWORKS." Their cautions are similar to those raised in my most popular blog post to date, "Are Your Tweets, TXTs and IMs Discoverable in Litigation?"

The whole article is worth the read, but I liked this nugget from a compliance perspective:

"Employees need to understand that (1) they may be creating “records” when they use these technologies and (2) they must think before they create potential records, bearing the risks of what they create in mind."

Legal Tweeting

2009-04-27T05:00:00.005-05:00

There have been more bar journal articles and blog entries on this than you can count. Some are like my earlier posts, written to teach their audience what Twitter and its cousins are and how to get into the fun. Others are more elitist, saying with a sniff that this stuff is not for serious lawyers. I have a view that fits in the middle: there ARE practical uses for streams of short message system posts like Twitter delivers that even serious, superior and super-egotized lawyers can use without embarrassment.

(My examples are from Twitter, though there are likely analogous examples in other systems.)

If your practice includes keeping up with the latest developments in a particular practice area, create a Twitter account and ONLY subscribe to those who post updates and developments on that topic. Here are some examples by practice area of very practical Tweeters that even the senior partner or GC would find appropriate for your in-office Twitterings (by listing these examples, I am not promoting or validating any of these Twitterers, though I do "follow" a number of them myself):

□ Risk Management: Risk Management

□ Product Liability: USRecall News and RecallsAlert

□ Insurance Defense: Legal Alerts

□ Chasing Ambulances? Toronto, Los Angeles and San Antonio are some of the major cities whose fire departments stream alarm reports and California Fire Rescue has an account, as well.
□ Real Estate Law? Try LegalRealEstate or one of the 350+ real estate marketing accounts

□ Looking for an expert? Try InsWeb for insurance or individuals who promote themselves as Business Video, Real Estate or Search Engine Optimization experts.

There are a number of academic streams, too, such as Harvard Law School, Yale Law L ibrary, YourDiseaseRisk from the Washington University School of Medicine and MIT Sloan Business School.

If you want to stay tuned into your state legislature or what is happening in Congress, subscribe to the U.S. Senate, U.S. House or a state equivalent (so far, I only have found Texas, Missouri, Nebraska and Florida)

There is a mountain of data that piles up every day from the millions of Tweets per hour. Some may even be from your opponent or her client. Want to find some needles? This article compares six Twitter search tools.

And finally, there is the growing category of Twitterers dedicated to helping you improve your law practice management skills: JD Journal, Law Practice News, Virtual Law Practice, etc.

If you subcribe to more than a few of these message streams, you will likely want a free tool like TweetDeck. I use TweetDeck because it allows me to group Tweets from certain sources and display them in separate columns. My legislative updates are therefore separate from law-related bloggers I follow and all are separated from people I know personally. I do not know of a comparable application (yet) for mobile phones. I like TinyTwitter on the Blackberry (mobile: http://www.tinytwitter.com/m/), because you see more of the Tweets than Twitter's mobile app will display. HelloTxt is supposed to have a mobile app in the near future. Twitter has a downloads page and there is a larger list on the Twitter Fan Wiki. My colleague, Ross Kodner of RossIpsaLoquitur fame, shared this nice write up on other similar tools.

I remember lawyers who once thought the PC had no place in a lawyer's office, that it was a tool for secretaries. Attitudes change as technology proves useful. Who knows? If products like this mind-reading Tweeting tool start to catch on, there may be more fuel for litigation among Tweets than any lawyer ever dreamed of. Seriously, though, Twitter and its kin are just tools. If they help you stay on top of current legal issues or remain competitive, then use them. If they reduce your productivity, then don't.

So stand up straight. Walk with confidence. Tweet like a big dog. As long as you avoid the temptation to follow your favorite movie stars or pop idols during work hours, you can whip out your smart phone in any crowd to check your "Friends Timelines" for important updates. And even sniff dryly, for effect.

Are Your Tweets, TXTs and IMs Discoverable in Litigation?

2009-04-24T05:11:00.002-05:00

“Uh oh! We’ve been sued!”

Even if it has never happened to your business or organization, you cannot ignore the potential for litigation any more than you would the prospect of fire damage. You likely have insurance for “covered perils” and even general liability, but that is just a start.

Most local government codes require businesses and building owners to establish and rehearse emergency evacuation procedures and everyone has been through a fire drill. But no one requires “lawsuit preparedness” drills. That means small businesses, especially, are generally unprepared when it happens.

In 2006, the federal courts adopted new rules and amendments to adapt to the real challenges of electronically stored information (ESI) in modern litigation. The old rules contemplated paper and commercial litigation was well beyond that. The first “one million document” cases had come in the 1980s, so it was about time.

“Quick! Start deleting everything!”

The first ESI challenges involved massive databases of documents and scanned images of millions of pages of paper files. As the usage of electronic mail grew through the 1990s, however, ESI discovery requests had to evolve as well, since so much information was never printed. An entire industry has now grown up around the electronic data discovery (EDD) needs on both sides of any large case.

But human nature is essentially unchanged. There are scores of stories about so-called “smoking gun” emails found before or during litigation that had significant effects on the outcome of each case. Remember the outcry in 1998 over the “independent” special master who was to preside over the Justice Department’s claims against Microsoft? (Story.) Oliver North’s emails—ones he was certain had been deleted—were recovered and used against him in litigation related to the Iran-Contra mess. In 2004, during a patent case by SCO Group against IBM over the Linux operating system, SCO found emails in the vast amount of data turned over by IBM that SCO said proved its case.

More recently, text messages have been used to unseat politicians and even initiate criminal prosecutions. Who can forget the Detroit mayor who was caught with his TXT down last year? (Story recap here.) He never imagined those messages still existed somewhere after he deleted them from his phone.

“That’s OK. I only use Instant Messaging.”

Technology has a way of changing faster than our laws and rules, but the present versions of those rules appear this time to adequately cover ESI no matter what software or communication system is used to create and send it. The rise of Twitter, FaceBook “Updates” and other social media systems for communicating outside a company’s firewall should cause most IT directors and risk management executives many sleepless nights. These systems are not under your control, the data is often not amenable to your internal backup and retention policies and, worst of all, they are almost always unencrypted, public communications.

“What should my organization do now?”

Let’s start with a recap of the definitions and rules:
□ ESI is any information stored in electronic form
□ All ESI is discoverable if relevant and reasonably accessible
□ Privileges and other exceptions to discovery can apply to ESI
□ ESI can be obtained from third parties (like your telco or hosting company)
□ At the outset of litigation, each party has an automatic duty to preserve ESI
□ Sanctions are available if a party is found to have intentionally destroyed ESI

The next task is to ensure you have appropriate policies and procedures in place and that you adhere to them as part of your normal course of business. If you back-up data every night, and keep those tapes for six weeks, for example, before recycling the media and overwriting each one, then the rules protect you from a sanctions claim for the data lost in that routine. That is, of course, until you get notice that a lawsuit has or is reasonably likely to occur. At that point, you must begin to save those media in a safe location with a clear chain of custody for each one.

If you do not routinely back-up and save ESI—such a the chat histories in your employee’s instant messaging programs or their Tweets on Twitter—there is enough ambiguity among the court decisions now that you are better off finding a way to do so the moment you learn that a lawsuit has been or is reasonably likely to be filed. This is going to present a challenge, of course, but consider the alternative: if the other party finds a way to get the data from a third party, would you want them to surprise you with it later in the litigation?

Other Resources

Here are some additional articles that I found useful:

“How Far is Too Far in e-Discovery?”, from Law.com’s “Legal Technology” section

“Messaging Mess”, from Inside Counsel

“The Conclusory Conclusion: Fourth Circuit Makes Seemingly Incorrect Evidentiary Ruling Regarding Admissibility Of Instant Messages”, from the EvidenceProf Blog

Update on the FaceBook TOS Situation

2009-04-22T21:33:00.003-05:00

FaceBook has now posted for its members' review a new set of documents it proposes to use. In an unprecedented act of democracy by a social media site, FB wants its members to vote up or down on these new terms.

This is an interesting move following all the negative publicity FB received from its "sneaky" change last time (see my earlier post). They do not have to do this, but I commend them for being open about their proposed changes.

Hurry! Voting ends tomorrow, April 23, 2009.

Process Improvement for Nonprofits – Part 7: Monitor Test Results

2009-04-22T04:01:00.001-05:00

To recap where we are in this series on Process Improvement for Nonprofits, previous posts have covered six of the nine steps I outlined in the first segment:

Step 1: Diagnosis/Assessment: “What is happening now?” “Exactly how do we do everything that we do?”
Step 2: Analyze Workflow: “Is this the best way we can operate?” “Do we need to do any parts of our work better/cheaper/faster/with fewer people?”
Step 3: Identify Options for Improvement: “Where can we work differently?”
Step 4: Design new processes or steps: “What will work for our organization?”
Step 5: Gather feedback: “Is this in line with the organization’s mission?” “Does it actually improve the way we work?”
Step 6: Test the new workflow: “Does it work in the real world?”

Now, in Step 7, you have to pay attention. With your realistic test plans in place and a standardized reporting system for participants to record results, you should be free to observe other aspects of the new process in test operation.

Here, the key questions are “Are we getting the results we sought in this test?” and “If not, why not?” After you account for a reasonable learning curve and the challenges among staff who like to keep doing things “the way we always have,” can you tell whether the change make a positive difference? If it does, is the benefit going to outweigh the efforts to implement the change over time? Have you communicated the vision of this better end result to everyone?

Pay attention to all feedback you get from testers, not just comments and scores on your feedback form. What do they say to each other? What do you hear at the water cooler? Does their body language tell you anything?

For most process changes, your staff will not care much which way you want them to do the work. They only want clear instructions so they can do it correctly. For some, however, you may find an almost religious devotion to the old method. No one knows why they ever started doing that task a certain way, but it has become a fiber in their coats of many colors and provides security and identity. The more credibility you develop throughout the entire exercise, the more likely you will be able to win these types over without a compliance mandate that squelches candid feedback and input on the next similar initiative.

Some habits have a lot of traction and will require deliberate efforts by your staff to change. Make sure the new process has benefits for them and use the benefits as carrots where possible. For example, to get employees to move from a paper-based review process to an online electronic review, make sure the online version is at least as easy as on paper, then tout the added benefits of less clutter, less paper, reduced costs and faster response times for corrections. You can even toss in the “green” label if it applies! It may require a big-picture perspective, because sometimes the level of effort shifts up or down the line and may impact one person more than another. If your staff can be mindful of the "trees" and the "forrest," it will help this entire process.

The next post in this series will discuss the “post-mortem” review.

Government's Duty to Make “IT” Matter

2009-04-20T05:37:00.003-05:00

Does government owe a duty to taxpayers to implement technological solutions that make it more efficient?

Each election season is in one respect very similar to all the others: we hear rhetoric on improving government, shrinking government, raising governmental accountability, and various variations on that variety of verbiage. We also hear a tremendous amount of discussion of homeland security, military spending and budget deficits. Lately, there are growing concerns about the impending retirement of about 60% of the federal workforce, and a similar concern is probably facing most state agencies.

Now we have an extended economic squeeze on state and local governments and record projected budget deficits in many of them. There will be pressure to cut spending everywhere and lay off government employees—even teachers—to balance budgets regardless of the impact on services to and for constituents.

In tough economic times, the private business sector continuously seeks new, innovative ways to squeeze more productivity out of resources and processes. Can we expect the same from governments? Will wide-spread, major budgetary and employment pressures finally be what it takes to revamp the way government employees at all levels do their jobs?

Tale of Two Cities

Not too long ago, a television reporter investigating neighborhood code enforcement in the Dallas/Fort Worth, Texas, metropolitan area commented that of the 10 area municipalities she had contacted, only two were able to generate a list of “worst offending residential properties” from their data systems. The reporter seemed in disbelief.

The reporter’s efforts to turn over a few rocks, figuratively speaking, and shed light on the property owners who cause the most distress to their neighbors as well as the perception of lack of enforcement actions by the municipalities—including Dallas and Fort Worth hit a stone wall. She inadvertently shined a light on something the public is increasingly questioning: technological inefficiencies in government business processes.

The two cities that could list the “worst offenders” got more than good publicity out of the story. After the initial news story, one property owner promptly cleaned up his act while the other city revitalized and completed its pre-demolition process to remove a dangerous and unsightly structure. Both cities moved a serious offender off its list and undoubtedly sent a message to those in the “next worst offender” category. Taxpayers benefited.

Tackling Two Questions

Taxpayers who hear stories like this ask two questions: “With all the tools widely available, why are they not at work in our local water department, code enforcement, county attorney or state human services departments?” and “Would it really matter to me as a taxpayer anyway?”

The first answer may be as simple as attitude. “We’ve always done it this way,” may still rule the offices where data is religiously entered into systems that do not give it back in usable form. There also may be a bit of ignorance at play. People who do not even understand spreadsheet software will certainly not see the benefits of relational databases over paper files.

As for the second question, it does matter because this is government waste at its most personal level—it affects you and me, the consumer-taxpayers. Agencies that waste time and money cost us more in the long run than if they installed the proper information processing tools for our government employees. They waste our time when we have to stand in a line to conduct a simple information exchange that could be done electronically as much as they waste their staff resource time by having employees process information in outdated systems that do not meet their needs. They squander millions on projects that are designed to keep everyone doing things the way they have always been done.

During an investigation several years ago, our team presented the agency with a harsh picture of how contractors could deliberately steal millions of taxpayer dollars by taking advantage of one known weakness in the system: the lack of communication, coordination and data integration between offices of the same agency. These silver-tongued businessmen knew that staff in one regional office were completely disconnected from those of the next nearest regional office, so they were able to plot their fraudulent systems and nearly get away with it.

Government is different.

There are many reasons that government offices do not function exactly as private businesses. Private sector businesses ultimately survive only by making a profit: they have to eventually generate more money than they spend doing so. If costs of doing business rise, businesses must either increase prices, reduce consumption, or otherwise trim costs to maintain the profit. Survival demands it.

Non-profit organizations have similar requirements for survival. When financially stressed, these businesses get busy raising revenues or cutting costs so that they can carry on with their missions. If revenues rise, so can services. The will to survive keeps successful private businesses continually searching for revenues that meet or exceed costs.Survival for a government agency is typically not conditioned on profitability (though the quality and quantity of services—and consequently taxpayer satisfaction levels—are certainly affected by revenues).

Because governments must provide certain services and functions, whether or not profitable, the pervasive attitude may be “we don’t have to upgrade because it does not increase our funding.” Plus, the political risks of mistakes when investing in technological solutions (short term effects) are higher than the potential return on the investment over time (long term effects). Many terms of office are shorter than typical large technology projects!

ROI= Reducing Obvious Inefficiencies

A long term “return on investment” mentality should guide state, county, and municipal governments into re-thinking their strategies for managing information and delivering services. Commercial, off-the-shelf software is available to help them manage growing workloads without expanding staff. Moving processes from paper to electronic systems means speed and effectiveness go up. That translates to efficiency. More efficiency, means costs of services go down, collections go up, “losses” are reduced, and taxpayer satisfaction grows. Who knows? Maybe taxes could go down as well!

Taxpayers want the government agencies to be effective and efficient in every way that touches their lives. Computer systems that are old, inflexible, unsatisfactory, and a hindrance to efficiency and accountability have to go. Inefficient and ineffective office systems also negatively affect hiring. Who wants to work in an office that stubbornly refuses to modernize and for significantly less pay than most comparable private sector jobs?

The days of “I’m sorry, it’s in the computer and we can’t change that even if it is wrong” should be over for everyone. In place of these circa 1975 systems, we should see more circa 2000 systems at the least, circa 2010 systems at best. There is no technological obstacle, for example, to a single information management system for the whole county government where the courts, legal department, human services, and physical operations are connected, sharing only the data they need from each other, yet efficiently maintaining centralized records so that code enforcement, police & fire, tax appraisal and assessment, and other offices can update the records for each tract, ensuring the most current information when needed.

Rays of Hope

There are signs of awakening. Even before the current economic crisis, Minneapolis, MN, announced a project to enable its City Attorney’s offices to pull data from numerous sources around the county and state when needed for a civil or criminal matter. When a person is charged with a crime, for example, the prosecutor will receive an automated notification of the first hearing date within minutes and can then instantly pull into one screen the most recent digital color “mug shot,” criminal record, driver’s license data, and the underlying police incident report, creating a “document” that does not exist until it is printed. Citizens can run their own reports on crime and other public statistics by neighborhood—right from the City’s web site.

Counties have begun to procure single, comprehensive criminal justice software systems rather than separate software for each office. Some municipal utility departments use electronic tags and wirelessly gathering data from usage meters and monitoring devices and feed it into an account file for each monitoring station for billing or quality assurance tracking. Several police and parking enforcement departments use hand-held devices to issue citations and wirelessly record them in the city’s court records system automatically.

Software currently available "off the shelf" can track the minute factual details gathered in arson investigations, electronically audit contractor invoices and adjust them when they do not comply with an agency’s billing practices, and plot not only results obtained by staff, but the future impact on agency resources if regulatory changes are effected.

Perhaps the day is not far away where that investigative reporter can get the list of “worst offenders” in her community from an online database. Or, due to better tools in the hands of those same public servants, that list would be so short it would not be interesting to her in the first place.

Is Your Software Vendor Your "Friend?"

2009-04-16T05:22:00.001-05:00

How do your software vendors keep you up to date on known issues, features under development and best practices for configuration or usage? Do they wait for you to ask questions before telling you these things? Or only reveal key information to those who pay a huge fee to attend a “users conference” once a year or less?

If you do not receive frequent useful communication from your vendors, find out why. Perhaps the company decided to cut back on printing and postage costs as their business dropped off. Or they may have cut their long-distance and travel budgets, meaning fewer phone calls and visits. It takes very little time or money to send out an email update to important customers (and you know they can use email, right?).

These days, however, with so many more immediate and inexpensive ways to keep customers connected to their product issues and development plans, you have to wonder why a vendor would "hide." Social media is not just for socializing. Twitter users are not just your typical teens and twenty-somethings, either, as noted in this Reuters story.

Some vendors already “get it.” Twitter traffic overall has exponentially grown, and businesses are part of the momentum. See this Comscore article. A quick search on Twitter for the word “software” yielded 588 results. Coffeecup, the maker of Free Zip Wizard, FreeFTP and Free HTML products, has a Twitter stream with almost 1,800 followers and Opera, the maker of what it claims is the “fastest browser in the world,” has over 3,000!

Customers and prospective customers can see what is going on or about to happen. On FaceBook, over 500 pages have the word “software” in their titles, including those with that word in their job titles. You can find companies such as AfterCAD Software and Epicor (who boasts over 20,000 customers) there. Over on MySpace, SmartSound has a full-featured page. Others like NewDawn Technology and Ilium Software have staff blogs that are frequently updated. Even others have "Wikis" inside customer pages secured by logins where interactive discussions with staff and other customers can occur.

Before you buy, ask your prospective vendors these questions:

1. Do you have a product update feed or stream?

2. Do you inform customers of known issues as you discover them?

3. If the answer is "no" to either of these, why not?

If they squirm, it is not a good sign. Are they behind on the latest technology? Are they afraid to show their blemishes? Do they choose to hide from problems (i.e., "go into a cave") rather than openly work with customers? Do they care about profits and sales more than customer service?

This does not apply only to software companies. With plenty of good options for even restricted-access updates, there are really no good excuses anymore for businesses to hide from customers and users. It is a good marketing strategy if you have a good product backed by good service professionals--and the cost is negligible. High tech companies, however, should already make good use of the technology widely available to reach customers and their users. If your vendor is hiding, you should wonder why.

(If you are a business and do not understand the technologies described above or how to get started, read my earlier posts, including “Develop a Twittering for Your Causes” and "Tweets & Twitters" for the basics.)

Who is the client? A comment on the Irell & Manella sanction order.

2009-04-14T18:21:00.005-05:00

I read Kevin LaCroix’s blog post about the conflict of interest issues that got one of California’s prominent large law firms in trouble. As Mr. LaCroix notes, the opinion itself is noteworthy in its severe critique of the firm’s violations of California’s Rules of Professional Conduct.

What I find amazing is the fact that such an obviously prohibited situation even occurred. The lawyers in that case appear to have either completely fallen asleep at the wheel or acted maliciously to deceive their clients for their own pecuniary interests.

Here’s why. The American Bar Association’s Model Rules of Professional Conduct, as well as almost every state’s specific rules that govern the legal profession, has a specific rule that addresses the situation where an organization is the client (rather than a single human being). In this case, the ABA Model rule is number 1.13 and you can read the text there yourself as well as the Rule Committee’s Comments about the rule.

The rule contains these basic tenets:
» The organization is the client, not the people working there
» The lawyer’s duty is to the best interests of the organization
» When working with employees of the client, the lawyer must remind the employees who his or her client actually is
» A lawyer cannot represent two clients who have a conflict of interest unless each client gives written consent AND they do not have claims against each other

Clear, logical and pretty darn easy for most non-lawyers to understand. There are sticky situations and very strange facts that can be less clear, but not so in this particular court case.

Under the facts in the U.S. v. Nicholas case, the law firm was retained to represent both the company and its Chief Financial Officer. All three legal matters were about stock options and accounting. (Red flag #1; Strike 1.) The lawyers interviewed the CFO on the allegations against him personally and the internal investigation into the accounting practices that were also at issue in the lawsuits, but did not remind him that they were representing the company. (Red flag #2; Strike 2.) Then the company instructed the law firm to turn over to the SEC and U.S. Attorney the information the CFO provided them in that interview. (Another red flag; Strike 3!) The firm should have been “outta there!” The federal district judge agreed.

Here’s what you need to know as a potential client:

1. Lawyers have strict duties of confidentiality as to information you provide in order to seek or during representation. Very limited exceptions apply.
2. When a firm represents your business, you have to designate a primary point of contact for that firm, but the firm’s duty is to the company, not you or any other officer, director, shareholder or employee.
3. If one of your officers or employees appears to need representation, always resist the temptation to have the same firm represent him or her. Get another law firm. Period.

It comes down to a simple rule: the only thing you know for certain about anything is that you never know everything about it. What you do not know can, in too many cases, come back to hurt you.

What Should You Know About International Data Privacy Protection Laws?

2009-04-13T04:04:00.004-05:00

Background
In 1995, the European Commission issued its Directive on Data Protection, directing all member states to adopt laws consistent with the Directive. The goal is to protect private, personal identity data [1]. Article 25 specifically prohibits transfer of personal data to non-EU nations (such as the U.S.) that the EU believes do not adequately protect such information.

These laws are very broad. The UK’s Information Commissioner’s Office describes the UK act as applicable to everyone “unless you are an individual holding personal information for your own domestic use, e.g. an address book.” In other words, personal data may not be processed unless it fits in one of the express exceptions [2]. The EU member laws differ substantially from U.S. laws.

The Risks
The risk to American organizations is that they can inadvertently violate these laws through their online activities [3] and thereby become liable to actions by governments and organizations in other countries.

Violations need not be intentional. The mere act of “exporting” personal information from an EU country to a non-EU country—even if within the same organization or family of companies—creates a risk of legal action. Under some interpretations of Canadian and EU laws, for example, an "export" occurs when a person "sees" data on a local computer via a web conference--even a technical support session!--because the data was "made available" to a third person in a non-EU country. A California firm's newsletter, "60 Seconds of Privacy," lists some examples of American businesses who have been charged with data protection violations. You may recall the stand-off in 2007 over the U.S. government’s demand for passenger data on all in-bound flights from outside the U.S. The conflict between the U.S. laws and the EU Data Privacy Act almost caused a complete cancellation of all flights from the EU to the U.S. before an EU-USA agreement on passenger name records resolved the issue.
Exports happen and can happen to you. If you have personal information about anyone—employees, customers, website visitors, etc.—in a database that is not under your control on your premises, you need to know where that data is, including all backups and mirror sites. If your web pages collect personal data on visitors who unintentionally leave such data without an adequate privacy notice AND without specific actions on your part to prevent unlawful disclosure of that data, you may be at risk of legal action by the European Commission or data protection authorities in any of the EU member countries. If any of the personal data belongs to an EU citizen, regardless of how you obtained it, it is protected.

A relatively new risk, so called “cloud computing,” can mean private data is moved across international lines even if only as a back-up or redundant “mirror” site. (The Privacy Law Blog also has a good post that expands on this risk.) Showing data in or sending a database of personal data to a non-EU country, whether for technical support or a legitimate business purpose, can also cause a violation. And clearly, doing business with any European organization, even the subsidiary of a non-EU organization, can open the door to this risk.

The "Safe Harbor" Solution
In order to bridge these different privacy approaches and provide a streamlined means for U.S. organizations to comply with the EU Directive, the U.S. Department of Commerce in consultation with the European Commission developed a "Safe Harbor" framework (http://www.export.gov/safeHarbor/). Registration is easy and compliance is uncomplicated. It also makes a huge difference. Participation in and compliance with the Safe Harbor program can shield your organization entirely. (Explanatory slideshow here.)

What should you do if you are involved in activities that put you at risk of violating EU Data Protection laws? First, get into compliance with the Safe Harbor program and register voluntarily. Second, know where your data is at all times and ensure you comply with your own security policies. Third, stay in compliance with the Safe Harbor rules. Fourth, do what you can to make all personal data anonymous to the point it cannot be connected to any person and or encrypt it--such as at the field level in your database--to further protect from inadvertent disclosures.

The Department of Commerce’s Safe Harbor program is easy to adopt and provides several important benefits to U.S. and EU firms. Benefits for U.S. organizations participating in the safe harbor include:
>>>All 25 Member States of the European Union are bound by the European Commission's finding of adequacy. One finding fits all, even if there is dissent or disagreement.
Companies participating in the safe harbor are deemed adequate and data flows to those companies continue. It is similar to being presumed innocent until proven guilty in American criminal cases.
>>>Member State requirements for prior approval of data transfers either are waived or approval is automatically granted. This simplifies compliance immensely by reducing to one the number of regulatory schemes that affect your organization.
>>>Claims brought by European citizens against U.S. companies are heard in the U.S. subject to limited exceptions. It is much better to deal with issues in your own country.

The DOC’s Safe Harbor Checklist for joining the Safe Harbor and self-certifying your businesses walks you through the actions you must take to register, such as:
1. Affirm that your organization is subject to the jurisdiction of either the Federal Trade Commission or the U.S. Department of Transportation
2. Develop a Privacy Policy that conforms to the seven Privacy Principles and states in plain language the data you plan to collect and what you will do with it
3. Confirm that you have or will definitely use an “Independent Recourse Mechanism” to promptly and fairly resolve disputes related to alleged violations, such as the TRUSTe, BB EU Safe Harbor or American Arbitration Association
4. Put an internal compliance verification mechanism in place before collecting any private data
5. Identify the primary contact person in your organization for any inquiries from the Safe Harbor program.

In addition to Export.gov, you can find additional useful information at the Global Information Assurance Certification (GAIC) website.

References
[1] 'personal data' shall mean any information relating to an identified or identifiable natural person ('data subject'); an identifiable person is one who can be identified, directly or indirectly, in particular by reference to an identification number or to one or more factors specific to his physical, physiological, mental, economic, cultural or social identity (Directive 95/46/EC OF The European Parliament And of The Council of 24 October 1995, Article 2(a)).

[2] a) the data subject has unambiguously given his consent
b) processing is necessary for the performance of a contract to which the data subject is party or in order to take steps at the request of the data subject prior to entering into a contract; etc. (Id., Article 7 (a) and (b))

[3] 'processing of personal data' ('processing') shall mean any operation or set of operations which is performed upon personal data, whether or not by automatic means, such as collection, recording, organization, storage, adaptation or alteration, retrieval, consultation, use, disclosure by transmission, dissemination or otherwise making available, alignment or combination, blocking, erasure or destruction (Id. Article 2(b))

Finally, here is a PDF with VERY helpful "FAQs."

Forget Who's On First! Who's On Twitter?

2009-04-09T06:45:00.003-05:00

If you watch cable news or listen to radio talk shows, you have at least heard of Twitter. Twitter is a novelty to some. It may evolve into something far greater, or it may fade away like the Pet Rock once something else comes along to supplant it. For now, though, the curve is upward. It is free, requires no special software, open to the public and accessible from mobile devices like smart phones. Set up an account here, if you are interested, then follow along.

“I’m on Twitter. Now what?”

The first thing to do is lurk. See what others are writing. There are kids who post about their exams, college students who proudly proclaim their Spring Break exploits, online marketers who want you to see the latest breakthrough in multi-level marketing, celebrities who are certain everyone is watching all the time and news sources that use Twitter to announce every news story they release. And many, many in between.

Randy Cassingham, of "This is True" fame, wrote a great description on his blog entitled, "Twitter: Why You Should Care." I have seen no better description of what Twitter SHOULD be.

"What Tweeters Should You follow?"

Next, find people to follow. Use the "Find People" link to search by name. If you are a Star Trek: Next Generation fan, you might want to follow "Data" (Brent Spiner) or "Jordie" (LeVar Burton). If you adore Desperate Housewives, Gossip Girl or Britney Spears, there is a fan site for each. Maybe you could use a frequent pep talk from Tony Robbins or want to stay up on product recalls in the U.S. Subscribe to a few using the “Follow” button and you will build a “timeline”: an unbridled flow of messages from each Twitterer you follow (we are avoiding calling them "Twits").

Twitter also has a general search tool at http://search.twitter.com/ so you can search by key word, for example. See what is going out around the world related to any topic you type. Try hurricane, or North Korea. Earthquake is the term many used recently to get current news about the quake in Italy. Find people Tweeting on topics you like, such as your profession or hobbies.

“Why Tweet?”

A better question is: why should anyone follow you? There are certainly those who just sign up for everything and anything they can as well as people who have a weird sense of curiosity about strangers. Most people need a reason to follow you or send you a Tweet. If you do not have anything useful to say, then do not Tweet. There are too many Twitter accounts that appear to be on autopilot, spewing out periodic posts that either promote the sponsor or provide links to information without any identifiable reason for the link. Who cares if you are just Tweeting about something that was already available online and where everyone could find it?

But if you do have comments, news or a SINCERE thought-provoking and discussion-starting question to ask, then by all means Tweet it out loud. Twitter is like a micro-blog. Do not try to replace longer blog posts with piecemeal, 140-character snippets strung out over days. Instead, keep blogging and then Tweet the URL (this is where something like TinyUrl.com comes in handy to shrink those gargantuan links into about 16 characters).

Try a Tweet (an update) yourself. You can answer the Twitter question—“What are you doing?”—or make a statement or ask a question yourself. After your initial tweet or few, you will likely start to ask yourself how this strange tool can be of any use to your business, organization or professional practice. You can be certain that people in years past asked the same thing about email decades ago or the World Wide Web when it launched. Businessess can use Twitter to provide small tidbits of information about their products and services and links to more information on their own sites. Nonprofits can entice volunteers and donors with Tweets about their activities and needs.

"Uh oh! I get too many Tweets!!"

Following a few people is one thing. Following 1500 is total chaos. Some celebs have over 300,000 followers, but very few Twitterers actually follow more than a hundred others. Without some way to make the information manageable and searchable, it quickly overwhelms and becomes useless digital “noise” or as confusing as Abbott & Costello's famous baseball team. So now you need more tools.

I cannot list in this space all of the great tools available. Try these two lists of Twitter Tools, Toolbox and Twitter Toolbox 2 for about 150 to choose from. Jeremiah Owyang has a nice review of his favorites on his blog. Find something that lets you filter, group, segregate and manage the display of your endless stream. It helps, also, if the tool lets you post back to Twitter and your other social media in one post. (Secret tip: There is a new tool in early development called Seesmic Desktop that has promise. Get the Preview Release to try out free.)

More creative ideas for using Twitter are in my earlier posts, Think Globally, Act Locally and Developing A Twittering for Your Causes.

UPDATE: Tony Robbins sent out this link. You may like the April 2, 2009, interview of one of Twitter's founders by Stephen Colbert here.

The Open Source Risk – Are you Managing it?

2009-04-06T06:42:00.001-05:00

“What risk?”

When managers think of “risk management,” they typically first picture slip and fall cases or natural disasters. They may think of insured perils (fire, flood, etc.) and even security breaches. Chances are, however, that they do not think of the risks potentially hiding in their IT department. Risk management takes its general approach from Scouting: “be prepared.” When applied to litigation risk management, that often means taking an inventory of your gaps and preventive measures.

So what risks might hide among your servers, keyboards and empty Mountain Dew cans? Open Source software (“OSS”) licenses. If your IT department incorporated open source software into any part of your business, even as a component within another product that was added by the vendor, you need to know the license restrictions on that software.

Too many managers still think OSS is the same as “freeware.” Anything that does not appear to have a price on it is attractive when budgets are tight. Nonprofits and small businesses alike flock to OSS to meet their technology needs while minimizing expenses. OSS is not without strings, even if it is without an initial price tag. The strings to worry about are the licenses attached to the OSS. There is at least one and may be several, depending on how many OSS components are in the software.

An acquaintance of mine, Jason Haislmaier, blogs on this topic frequently, drawing from his active practice representing businesses who are exposed to this very risk. In a recent post discussing the Jacobsen v. Katzer decision, Jason wrote:

“For those companies that have elected not to comply with open source licenses or, as is the case with many companies, have chosen to remain unaware of the open source software licenses to which they may be subject, Jacobsen should be all the incentive that is necessary to adopt and implement a sound open source license compliance program.”

Bob Brill also has a good post on the case here. Brill delves into related areas and risks that abound if you fail to implement what Haislmaier calls “a sound, open source license compliance program.”

“What is a sound, open source license compliance program?”

A good OSS license compliance program begins with a great contract management system. At a minimum, you need an inventory and documentation. The software licenses are contracts just as much as your copier lease or your accounting services agreement.

Make a current list of every contract in effect in every aspect of your business. It probably requires a separate system. You can buy software to help you, create the list in Excel or write it on notebook paper, but do it and keep this list safe. The essential details to record are:

>Vendor/Author Name
>Contract/License Date
>Subject of the Contract/License
>Effective Date
>Expiration Date
>Location of the actual, fully-signed version, if any
>List of any clauses that survive the end of the contract

It is that last item that will keep you awake at night. For software licenses of all types, you also want to know who is using the component and for what purpose as well as where the original version of the software is stored. This may be the DVD the software came on or the original download files. Make sure for OSS you have the completely unaltered version of the software saved somewhere.

“AFL, OSL or GNU?”

There are a number of OSS licenses floating around. Typically, the original software author inserts a comment into the code stating the license that the writer intends to apply. Make sure you note that reference AND any subsequent references by authors who add to the original code. The Open Source Initiative maintains a registry of those OSS licenses that conform to the Open Source Definition and that the software itself does as well. Be aware that over time a number of iterations of many OSS licenses have been released. You need to know which specific version applies to the component in your inventory.

Some software can be transferred to others as long as you also pass along the license and the recipient agrees to honor the license. Read the license regarding transfers and make sure you understand how to comply. If you dispose of, sell, give away or otherwise transfer possession of any software, make these additional entries:

>Recipient
>Terms of transfer (including price)
>Date of transfer
>Reason for transfer
>Confirmation of delivery of license to recipient
(any other information that will help prove you complied with the license at transfer)

With the Katzer decision, OSS authors may become more litigious. Help yourself by knowing what you have, complying with your contracts and documenting your compliance every time there is some event that the contract addresses.

Finally, be careful: you do not necessarily know whether your OSS was compliant when you received it and it may be hard to tell. You are still at risk. The most prudent practice is to discard any software that you cannot prove you acquired completely in compliance with its license(s).

Process Improvement for Nonprofits - Part 6: Real-World Testing

2009-04-02T08:17:00.001-05:00

After an assessment, creative problem-solving and ample feedback, it is time to test the changes under actual conditions. Carefully select both the process changes you will test and the participants in the testing. You need staff who will give the changes a fair chance and also document anything they notice while employing the new methods.

Remind them of your common goals (“saving time on paperwork so we can help more callers,” e.g.) and make it clear that the new process they are testing has not been confirmed as perfect or necessarily the best, but deserves a good evaluation. You need honesty in the assessment to be confident in the results. Prepare a standardized method of recording comments and outputs to compare to the “old way” of doing things. Your baseline quantities of calls answered, cases opened or closed or fliers mailed will be useful as you find out whether the shortened processes really do speed up the flow of work. It may be helpful to set up a SurveyMonkey site to collect standardized data if your testing involves people in multiple locations and over a range of items.

Set a significant test period. Factor in the learning curve your new process will require. If significant, test for a longer period. If minor, a shorter test run will suffice.

Finally, be sure to share the results. No one likes to contribute to a survey and not see how it was used. It devalues their efforts and makes it harder next time to get fair feedback.

Use Caution When Naming Your Business

2009-04-01T08:56:00.000-05:00

Are You Taking a Risk by “Doing Business As”?

Most states allow anyone to open a business under any name they choose, as long as it is not a protected name and they file papers in the appropriate government office to show who the true principal is behind the name. Unless you operate as a sole proprietorship in your own name (“Alex Jones, Private Eye,” e.g.), check your state laws relating to doing business under an assumed name. You will use the legal name of your business on a lot of documents and hopefully for a very long time.

Business entities such as corporations handle this with their documents creating the corporation. Others, such as partnerships and sole proprietorships, may forget to properly register their business name. This creates several risks that you can easily avoid with proper registration, such as inadvertently infringing on a name that belongs to someone else and preventing your business from suing or defending legal actions against it.

A small business woman I know set up a nice re-sale shop in a decent location. She picked a store name that was catchy and communicated the business mission. After she spent considerable money on branding, signage and advertising, she got “the letter.” Another person was using a very similar name in the same line of business years before this one opened its doors and wanted her to “cease and desist” using the name.

To be fair, the older business had little choice other than to write that letter. Failure to take prompt action to protect your trademarks and trade names eventually means you lose the right to do so. The lesson for the newer business is to register your “assumed name” before spending time and money on a name you may not be able to keep. The act of registration is not a perfect guaranty that you will have no problems, but the process includes a search for similar names already registered and helps identify potential problems early on.

Be careful, however. In some states, there are both state and local assumed name registries and searching one does not include a search of the other. Plus, many counties are still not digitized, requiring a manual or paid search in each county where you intend to do business.

Filing a certificate of assumed name in your county and or with the state before you invest in branding your business could save money, potential damage to your reputation and precious time away from your core business mission just when you are getting off the ground. It is far less expensive to do the searches early and get your name reserved than to fight legal battles or pay to re-brand a new business.

Bethany Laurence has a nice article on other types of registrations on the DirectoryM site. As Ms. Laurence mentions, the U.S. Small Business Administration has a helpful site for small businesses and a specific area for this topic here.