Biglaw Firm Completes Massive… Merger?… Acquisition?… What Should We Call This?

Dentons, a global behemoth just coming off major expansions in South Korea and Africa, set its sights on America, launching Operation Golden Spike and picking up two new firms and coverage in a even more markets.

Bingham Greenebaum brings 176 lawyers in Indianapolis (and a couple of smaller Indiana cities), Cincinnati, and Louisville and Lexington. Cohen & Grigsby is adding 140-plus in Pittsburgh, Harrisburg, and Naples, Florida.

The expansion brings another 300 attorneys under the Dentons umbrella which would sound like a lot to any firm other than Dentons, where 300 lawyers is a rounding error. Not that Dentons intends to stop at 300 new lawyers. American Lawyer reports that Dentons is talking to two more firms this week and another four by Thanksgiving.

Most interesting about this expansion is its unique character. It’s not so much a merger as it is a completely new animal. The tie-up involves the a “dual partnership,” allowing the firms to carry on while their partners also become Dentons partners. The theory is that betting on firms that are already successful doing what they’re doing is better than trying to recast a winning culture. But how do people get paid?

The economics are based on the premise that half of a firm’s profit, or margin, derives from originating the work. When different firms under the Dentons U.S. umbrella share work, in a process that will be guided by the leaders of the firm’s national practice groups, the firm that brought in the client will earn half the margin, while the firm handling the matter will earn the other half.

When all is said and done, Dentons aims to have 1,100 attorneys in the U.S.

“Clients are seeking seamless service and one-stop shopping,” said Dentons global CEO Elliott Portnoy. “They simply can’t get that today in all of the markets that matter to their business in the U.S.”

Once again, the leadership at Dentons seems to understand the business model of a lot of prolific businesses and while they may object to being compared to Applebees or Starbucks, in reality they’re following the precise business philosophy that made those institutions into massive successes. The secret to any company with multiple outposts is providing a marker of familiar quality in a new landscape. When a Dentons client in New York needs an attorney anywhere from Lexington to London, they now know who to call to get the same service they’re accustomed to.

We talk a lot about client loyalty is on the decline, but don’t really dig into why. Clients may not see the value proposition in blindly sticking with the firms that used to handle all their business but that’s not necessarily an indication that the client wants to be juggling multiple firms, just that they’re no longer asking hard questions about what firm is offering them the best fit. Dentons seems to understand that offering truly global coverage for markets large and small offers clients something that others don’t… and a new avenue to locking up a client’s whole range of business.

Dentons Combines With Two US Firms in One Go, Launching New American Strategy [American Lawyer]

Earlier: Biglaw Chair Slams The Traditional Law Firm Model
Massive Law Firm To Become Even More Massiver
Ever-Growing Dentons Has Expansion Down To A Science


HeadshotJoe Patrice is a senior editor at Above the Law and co-host of Thinking Like A Lawyer. Feel free to email any tips, questions, or comments. Follow him on Twitter if you’re interested in law, politics, and a healthy dose of college sports news. Joe also serves as a Managing Director at RPN Executive Search.

Sentencing Reform Serves The Interests Of Victims And Safer Societies

(Image via iStock)

Last week, a couple of remarkable events happened in a Texas courtroom. First, despite being allowed to invoke the castle doctrine, a jury convicted former police officer Amber Guyger of murder for wrongly entering the apartment of Botham Jean and shooting him as he ate a bowl of ice cream on his couch. Even in such cases where the officer is clearly in the wrong, convictions are rare to come by. Possibly even more remarkable was that during Guyger’s sentencing, the brother of the victim, Brandt Jean, not only forgave his brother’s killer but also embraced her. Brandt’s act of forgiveness has received wide praise, however, the 10-year sentence imposed by the judge on Guyger for a murder conviction received immediate widespread condemnation.

It might seem hard to argue with the critics of the judge who imposed Guyger’s sentence. After all, if the circumstances had been reversed it is difficult to see any judge physically embracing a cop killer with such reckless disregard for life the way this judge embraced Guyger. This judge even gave Guyger her personal bible. Such personal favor towards certain convicted murderers by a court is nevertheless a reflection of the amount of personal discretion state and federal judges possess in sentencing. One could claim that such deference is a good thing, but the stats demonstrate the exact opposite is true and that personal bias dominates the process.

The level of deference to judges even allows for outcomes in sentencing that juries expressly rejected. For example, five years ago the U.S. Supreme Court denied cert in Jones v. United States, a case where despite being acquitted by the jury, a judge nevertheless sentenced a defendant for the more serious crime.  The sentencing practice in the Jones case, where judges exercise discretion to increase sentences based on conduct for which a defendant has been acquitted by a jury is called “acquitted conduct” and if it sounds unbelievable to you, it’s because it should be. Encouragingly, U.S. Senators Dick Durbin (D-Ill.) and Chuck Grassley (R-Iowa), the lead sponsors of the landmark First Step Act, have introduced the Prohibiting Punishment of Acquitted Conduct Act of 2019 that would end “acquitted conduct” sentencing. However, just like the First Step Act, I expect this legislation to be opposed by the same lying, disingenuous, tough-on-crime voices.

Although the tough-on-crime position has dominated our criminal justice system for centuries, it is remarkable that it has enjoyed so much influence despite the fact that it does not match the wishes of survivors/victims of violent crime. Recently, Michelle Alexander addressed the discrepancy between the often-harsh system of sentencing and the more lenient wishes of victims who prefer intervention and rehabilitation rather than prison. The reason that victims often reject long prison sentences when given the option is simple, per the Alexander piece:

This is not because survivors, as a group, are especially merciful. To the contrary, they’re pragmatic. They know the criminal justice system will almost certainly fail to deliver what they want and need most to overcome their pain and trauma. More than 95 percent of cases end in plea bargains negotiated by lawyers behind the scenes. Given the system’s design, survivors know the system cannot be trusted to validate their suffering, give them answers or even a meaningful opportunity to be heard. Nor can it be trusted to keep them or others safe.

In fact, many victims find that incarceration actually makes them feel less safe. They worry that others will be angry with them for reporting the crime and retaliate, or fear what will happen when the person eventually returns home. Many believe, for good reason, that incarceration will likely make the person worse, not better — a frightening prospect when they’re likely to encounter the person again when they’re back in the neighborhood.

Of course, Alexander agrees that “[s]ome people do need to be separated in order to keep others safe.” However, Alexander demonstrates that not only does our system of locking people up on such a massive scale make us less safe, it also fails to take accountability seriously:

Our criminal injustice system lets people off the hook, as they aren’t obligated to answer the victims’ questions, listen to them, honor their pain, express genuine remorse, or do what they can to repair the harm they’ve done. They’re not required to take steps to heal themselves or address their own trauma, so they’re less likely to harm others in the future. The only thing prison requires is that people stay in their cages and somehow endure the isolation and violence of captivity. Prison deprives everyone concerned — victims and those who have caused harm, as well as impacted families and communities — the opportunity to heal, honor their own humanity, and to break cycles of violence that have destroyed far too many lives.

In other words, a key element of what sentencing should be about, accountability, is entirely missing from our system. It therefore seems clear that in order to create a safer, more accountable society, we have to rely less on personally distributed “mercy” from being locked in a cage and exposed to more violence and instead focus on more pragmatic solutions victims regularly prefer.


Tyler Broker’s work has been published in the Gonzaga Law Review, the Albany Law Review, and is forthcoming in the University of Memphis Law Review. Feel free to email him or follow him on Twitter to discuss his column.

‘Teach, Lead, And Transform’: The Future Of The Legal Profession

(courtesy of Penn Law)

What does the future hold for the legal profession? Nobody knows for sure, of course — but that doesn’t mean we shouldn’t be thinking about it. To the contrary, lawyers who want to succeed today should be thinking about what law and legal practice will look like tomorrow. And law schools, the institutions responsible for training the lawyers of the future, must be thinking about what the legal landscape will look like — and how they can best prepare their students for it.

It’s promising news, then, that more than 30 law schools have launched innovation centers. We have been covering this emerging (and encouraging) trend here at Above the Law for quite some time, and we expect (and hope) it will continue.

The latest entrant into the field has an especially impressive approach — and we’d expect nothing less from one of the nation’s top law schools (according to both Above the Law and U.S. News). It takes a holistic, interdisciplinary approach to innovation, not narrowly focused on legal tech (wonderful as legal tech might be), and it boasts involvement from some of the most innovative individuals in the entire legal profession.

Today, the University of Pennsylvania Law School announced the launch of its new Future of the Profession Initiative. As explained in Penn Law’s press release, “The Initiative will ‘Teach, Lead, and Transform,’ by examining new ways law schools can adopt a holistic vision for the formation of lawyers – both during law school and throughout their careers.”

What does the Initiative include? It’s an ambitious offering. Just at launch — expect it to grow and expand in the years ahead — the Initiative will feature a “Five-Year-Out Academy,” to support the career development of Penn Law graduates entering a pivotal stage of their careers; a Dean’s Innovation Prize competition, to reward and encourage exceptional ideas for innovating in legal service delivery; a “Future of the Profession” symposium, to bring together thought leaders from the legal sector and other industries; an entrepreneurs-in-residence program; and the launch of a podcast featuring conversations about change.

What prompted the launch of the Initiative? As Dean Ted Ruger explained, “Change in the legal field is accelerating as technology evolves, new entrants join the industry, the practice of law becomes more globalized, regulatory frameworks governing lawyers shift, and attorneys approach their careers differently. As a result, law school applicants, students, and graduates are thinking in new ways about how they imagine their careers, underscoring the need for a solution that promotes innovation, thought leadership, and enhanced interdisciplinary education and engagement.”

The Initiative’s mission therefore includes, but is not limited to, legal tech. It will look at legal tech, and innovation in law more generally, with an eye towards advancing such crucial goals as bridging the justice gap and promoting lawyer well-being (which Penn Law, to its credit, already integrates into its Professional Responsibility curriculum).

To be sure, many other law school innovation centers take a similar approach. As Dan Linna, current Director of Law and Technology Initiatives at Northwestern Law and former Director of LegalRnD at Michigan State, explained to me last year in ATL’s Law2020 podcast, the potential for legal tech to address the justice gulf is vast.

So what makes Penn Law’s initiative stand out? To my mind, what generally fuels success in both law and tech: the talent.

The Initiative will be led by Jennifer Leonard, Penn Law’s new Chief Innovation Officer — how many law schools have CIOs? (answer: not enough) — and the first Executive Director of the Future of the Profession Initiative. Leonard has a background that seems tailor-made for her new role.

As a 2004 graduate of Penn Law who has been a faculty member and administrator at the school since 2013, Leonard knows the institution well and is intimately familiar with all of its existing work in the innovation space. Prior to returning to Penn Law, she clerked for the Pennsylvania Supreme Court, worked as a litigation associate at Montgomery McCracken, and served as Chief of Staff in the City of Philadelphia’s Law Department — experience in government and private practice that gives her a firsthand understanding of the challenges and opportunities facing lawyers today.

I interviewed Jen Leonard yesterday about the Initiative, and she couldn’t be more excited: “It’s fun, it’s collaborative, it’s new, and I can’t think of something I’d rather be doing than this.”

Leonard has been thinking about innovation in law and education for years now — certainly since she returned to Penn Law in 2013, but even before then, dating back to her time in practice. So when Dean Ruger asked her to lead a task force in innovation and entrepreneurship in the spring of 2018, she jumped at the opportunity, and the Initiative grew out of the task force’s work.

Leonard will be supported by a Board of Advisors that’s a veritable Murderers’ Row of legal leaders and innovators: Legal Services Corporation President Jim Sandman L’76, Dechert partner and former Philadelphia City Solicitor Sozi Tulante, ProBono Net’s Claudia Johnson L’97, LawVision CEO Susan R. Lambreth L’83, EY Managing Director Joe Borstein L’05, Hunton Andrews Kurth CFO Madhav Srinivasan WG ’89, Burford Capital Managing Director David Perla L’94, and award-winning legal innovator Aaron Katzel L’97.

All are Penn alumni themselves except for Sozi Tulante — a Harvard Law grad, and a longtime Lecturer in Law at Penn — and many of them should be familiar to Above the Law readers. Joe Borstein and David Perla are longtime contributors to ATL, and almost all of the others have been mentioned in these pages for their pioneering work in the innovation space.

I spoke yesterday about the Initiative with Joe Borstein, whom I’ve known for years — before his time as an ATL columnist and going all the way back to his days at Pangea3, when he and David Perla were revolutionizing ediscovery and legal managed services — and he couldn’t contain his excitement.

“Penn is the ultimate interdisciplinary school, with a world-class law school, business school, medical school, programs in economics and psychology — and when it comes to integrating innovation across disciplines, there’s no one equal to Penn,” he said. He described himself and his fellow board members as “like kids in a candy store, excited to have the backing of an institution like Penn as we use innovation to improve the practice and profession of law.”

Congratulations to Penn Law on the launch of the Future of the Profession Initiative. Predicting the future is notoriously difficult, but I’m willing to bet that the Initiative will be a smashing success.

Penn Law Announces New ‘Future of the Profession Initiative’ Focused on Legal Education Innovation, Profession-Wide Thought Leadership
[Penn Law (press release)]


DBL square headshotDavid Lat, the founding editor of Above the Law, is a writer, speaker, and legal recruiter at Lateral Link, where he is a managing director in the New York office. David’s book, Supreme Ambitions: A Novel (2014), was described by the New York Times as “the most buzzed-about novel of the year” among legal elites. David previously worked as a federal prosecutor, a litigation associate at Wachtell Lipton, and a law clerk to Judge Diarmuid F. O’Scannlain of the U.S. Court of Appeals for the Ninth Circuit. You can connect with David on Twitter (@DavidLat), LinkedIn, and Facebook, and you can reach him by email at dlat@laterallink.com.

Morning Docket: 10.08.19

* The guy currently parading as the unconfirmed Homeland Security chief got shouted off stage at Georgetown Law. Prepare for the media consternation that students would treat a guy who daily condones illegal detentions with such rudeness. [New York Times]

* Bitcoin’s not a sound investment? Wha?!? [Law360]

* Companies back LGBTQ rights in amicus brief in a bid to demonstrate that this really isn’t a pro-business Court. [National Law Journal]

* The legal industry is in flux, and some big investors are looking to get in on it. [Forbes]

* Minority partners often relegated to non-equity tier. [American Lawyer]

* Barnes & Noble doesn’t have to produce documents about its own CEO’s ouster. [Corporate Counsel]

* Prime Minister’s camp calls out head of Supreme Court for using “injudicious” language when she used a quote from… the Prime Minister. [Legal Cheek]

Who is behind the spate of activist abductions in Zimbabwe? – The Zimbabwean

A visitor talks to Tatenda Mombeyarara of Citizens Manifesto in a private hospital in Harare, Aug. 21, 2019. (C. Mavhunga/VOA)

The abduction of Peter Magombeyi, 26, the leader of Zimbabwe’s doctors, who was masterminding a strike for better pay and improved working conditions, brought the country’s crumbling health sector to a standstill. He was only found five days later, dumped in the bush some 40 km northwest of the capital, Harare, bruised and disorientated from days of abuse.

Just before Magombeyi was abducted, he had literally been walking with his back firmly to the wall and sleeping with one eye wide open as he was receiving threatening messages from unknown people on his phone over the deadlock between the broke government and the underpaid doctors.

That he was found alive was a real miracle to many because in the past none of those that have gone missing for more than a day have been found alive, if found at all. Even most of his colleagues who took to the streets daily to protest against his abduction had started referring to him – in their songs and slogans – using terms reserved only for the dead.

Magombeyi is the latest of the more than 50 Zimbabwean opposition and human rights activists who, since the beginning of the year, have been kidnapped from their homes in the middle of the night by armed men and tortured. Not a single suspect has been apprehended by security agents in connection with these kidnappings. This has left Zimbabweans, who are bitterly divided along unforgiving political fault lines, to accuse and counter-accuse each other of being behind these crimes.

The opposition and the international community blame the government, while the ruling ZANU-PF party and government officials blame it on the opposition that they accuse of working with the United States and other Western powers to pursue a regime change agenda.

There is no love lost between President Emmerson Mnangagwa’s government and the opposition and civil society organisations (CSOs). The main opposition Movement for Democratic Change (MDC) rejected the outcome of the July 2018 elections and continues to challenge Mnangagwa’s legitimacy, while for his part Mnangagwa has threatened to go after those individuals and organisations that he accuses of trying to destabilise his government.

Since the spate of abductions started, Mnangagwa and his government and ruling party officials have taken turns to accuse the victims of faking the attacks.

“Government is disturbed by the growing trend of politically motivated false abductions in the country which are calculated to put government in negative light,” Mnangagwa said in a state address on September 20.

“Such political trickery, which in fact amounts to terrorism, will not take our country forward. New measures might have to be formulated to deal with this new threat and to severely punish those responsible for such subterfuges,” threatened Mnangagwa, who has a reputation for ruthlessness built over the more than four decades that he was Robert Mugabe’s enforcer.

Mnangagwa and his government are not just in denial, but they are also in denial about being in denial, as one moment they claim the abductions are staged, and the next they blame the same abductions they don’t acknowledge on the opposition or on a “third force” that they say is bent on tarnishing the government.

A state terror campaign?

Despite these strident denials victims have harrowing tales to share. Magombeyi, the latest victim, had to seek treatment in neighbouring South Africa for suspected liver poisoning and brain damage. Some, like Tatenda Mombeyarara, are now disabled, while others are suffering from the psychological effects of their traumatic experience.

This prompted Amnesty International to conclude that a atate-sanctioned crackdown against human rights defenders, activists, civil society leaders and members of the opposition, including abductions and torture, is underway in Zimbabwe.

“We are witnessing a violent crackdown on activists and civil society leaders, with authorities using some of the brutal tactics seen under the government of Robert Mugabe,” said Muleya Mwananyanda, Amnesty International’s Deputy Regional Director for Southern Africa. “Instead of listening to protestors’ concerns about the economy, the authorities have used torture and abduction to crush dissent and instil fear.”

Dewa Mavhinga, Human Rights Watch Southern Africa Director, told TRT World in an interview that all indications are pointing to state actors being behind these violations.

“The matter of abductions is straightforward – the abductions are real, and from the look of things, elements within the state may be complicit in them because of three reasons,” explained Mavhinga.

“One. Since the beginning of the year, all those abducted and tortured have been known government critics, activists, or trade union leaders challenging the government to offer better wages for teachers, ordinary workers, or doctors.

“Two. Those who have been abducting people are armed men, often with military-grade weapons like AK47 rifles, and speaking with government authority about dealing with elements threatening national security.

“And three, of all these abductions, despite clear evidence that could easily lead to arrests, like threats issued via registered mobile phone numbers, there has not been a single arrest – suggesting the police are deliberating inactive when it comes to investigating abductions and arresting those behind them.”

Mavhinga added: “The motive of abductions is clearly to strike fear into the hearts of all government critics, and to prevent people from organising protests against the Mnangagwa government.”

Jestina Mukoko, a survivor of abduction and torture by state goons, concurred with Mavhinga that the crimes have all the hallmarks of state involvement.

“Abductions are not new to the system,” Mukoko told TRT World. “It is a tactic that has been used over the years, even in the government of former president Mugabe, the objective being to silence dissent and muzzle anything that goes against the system.”

Tatenda Mombeyarara points to his x-rays from his hospital bed in Harare, Thursday, Aug, 23, 2019, showing his injuries. A wave of abductions, torture and arrests in Zimbabwe are targeting opposition activists and other government critics.Tatenda Mombeyarara points to his x-rays from his hospital bed in Harare, Thursday, Aug, 23, 2019, showing his injuries. A wave of abductions, torture and arrests in Zimbabwe are targeting opposition activists and other government critics. (AP)

Are the abductions staged?

However, others see the abductions as the work of the opposition that is determined to discredit the new leadership. They accuse the opposition and their cahoots in the CSOs of conniving to stage these abductions in the hope of gleaning international sympathy and, more importantly, the lifeblood financial support that usually accompanies that sympathy.

Critics say the country’s protracted crises in Zimbabwe have spawned some wily career activists that know how to make rich pickings in the name of fighting for democracy and human rights.

 “The big question is, what does the current government gain by abducting the medical doctor [Magombeyi] at such a time when they are trying to clean up their own image?” asked opposition member Linda Masarira.

“Who stands to benefit from these so-called abductions? The MDC of course! If they abduct one of their own and put them in a safe house somewhere, they are going to get donor funds and buttress their narrative that there are gross human rights violations in Zimbabwe and then the US will probably apply more sanctions to Zimbabwe, and then they rejoice as they always do.

“The MDC should move away from politics of setting a bad narrative about our country and must start pushing for politics of issues. They want to grab power at all cost and are prepared to smear the country’s image just so that the current [government] finds it difficult to attract solidarity from other nations and investment from abroad. It is very bad and shameful,” Masarira added.

Accusations of this nature make victims of abductions like Mukoko, who was held incommunicado and tortured for a record 21 days, very sad.

“I don’t buy the issue of faking abductions… for what?” she asked when TRT World posed the question to her. “People continue to talk about money, but where is the money? In 2008 when I was abducted the manner in which the others were abducted was not identical to how I was abducted. I have not read a manual of abductions which might be reason for people to say because this did not happen therefore [it is] fake.”

Is a ‘third force’ responsible?

Yet others, including Foreign Affairs and International Trade Minister, Sibusiso Moyo, blame the crimes on what they see as a ‘third force‘. A statement issued by his ministry said it was curious that most of these high-profile abduction cases only take place in the run-up to international events.

“It is still fresh in our minds that towards the SADC Summit in Tanzania last month [August], the country was gripped with numerous abductions of our citizens by people whose aim we can only believe was to tarnish the image of the country regionally, continentally and internationally,” Moyo said. “We have no doubt that the latest abduction of Dr Peter Magombeyi was meant to coincide with the visit to Zimbabwe by the United Nations Special Rapporteur on the Rights to Freedom of Peaceful Assembly and Association.”

The Special Rapporteur, Clement Nyaletsossi Voule, was due in the country until September 27 on a fact-finding mission. The 74th session of the United Nations General Assembly was also about to start in New York.

Who could this ‘third force’ be? Could it be some unhappy members of the faction of the ruling ZANU-PF and its military sympathisers that were sidelined when Mnangagwa came to power after the November 2017 coup? In the run-up to last year’s elections, a bomb went off at Mnangagwa’s campaign rally in the country’s second largest city of Bulawayo, narrowly missing him, killing two of his bodyguards instead. He blamed it on enemies from within.

Local media reports suggest that there is a serious fall-out between Mnangagwa and his deputy, Constantino Chiwenga, the general that masterminded the military invention that brought the former to power, over sharing of the spoils of the coup. Chiwenga is currently hospitalised in China where he is reportedly fighting for his life following a suspected poisoning, reportedly by his colleagues. Moyo, the Foreign Affairs Minister – the army general that announced the coup – also narrowly survived another poisoning attempt last year. This infighting has raised serious questions about the enemies that Mnangagwa’s government is facing from within.

Mnangagwa and his predecessor Mugabe, who died in Singapore in early September, had become sworn enemies following a nasty fall-out over the succession issue that resulted in Mnangagwa being expelled from both the ruling party and the government. This prompted him to enlist the military to stage a spectacular comeback that saw the late former strongman being permanently consigned to the dustbin of history.

Since the coup that brought him to power, Mnangagwa has been alienated from many of his former colleagues, both within the ruling ZANU-PF party and the military. He has been hunting and haunting several former senior members of the ruling party that belonged to a faction that supported Mugabe’s wife, Grace, to take over from the aged former leader. Many of these former heavyweights that were fiercely loyal to Mugabe, fled into exile while those that have remained in the country are regularly arrested in what is widely seen as persecution by prosecution.

Abductions are not new in Zimbabwe. Some people like Eddison Sithole, who were abducted during the country’s 1970s decolonisation war that ended 40 years ago were never found. Activist Itai Dzamara was abducted from his home in 2015 and has not been seen since. In 2008, the remains of Tonderai Ndira’s remains were found in the bush several days after his abduction. Thousands of villagers who were abducted from their homes in during Gukurahundi genocide in the mid-1980s were never found.

Zimbabwe doctors defy government ultimatum to end strike

Post published in: Featured

Cybersecurity, The C-Suite, & The Boardroom: The Rising Specter Of Director & Officer Liability

Let’s face it — data security is significant problem for corporate America.  If you don’t think so, here’s a statistic that may help convince you: in Q1 2019 alone, there were 1.9 billion records exposed. In fact, a business falls victim to a ransomware attack every 14 seconds.  That’s right — every 14 seconds.  In fact, the global cost of online crime is expected to reach $6 trillion by 2021.  Sadly, there are lot more statistics where those come from, and they are not encouraging.  Suffice it to say that businesses must take their cybersecurity very seriously.  Thankfully, may companies already take steps to secure their data, but oddly, many companies think that such measures are an IT function and that any data security program does not merit serious “board-level” oversight. Such an approach is asking for trouble, in more ways than you may think.

Let’s set a foundation that every company must understand: data security is not solely an IT function.  Don’t take my word for it — the National Association of Corporate Directors (NACD) Director’s Handbook on Cyber-Risk Oversight lists five (5) core principles that are applicable to board members of public companies, private companies, and nonprofit organizations of all sizes and in every industry sector.  The first of those principles is to understand and approach cybersecurity as an enterprise-wide risk management issue, not just an IT issue.  Granted, the nature of the threat lends itself to initiating reports through the IT Department, but there can be no question that the impacts are organization-wide. Moreover, social engineering remains a big factor in data breaches; in fact, about 91 percent of attacks launch with a phishing email. When it comes data security and the role of the board, treating data security as a technology-centric issue is a big part of many data breaches.  This begs the question: can directors and officers be held liable for a data breach?  Although the answer to that question is not a given, the trend does not bode well for an answer in the negative.

In 2014, SEC Commissioner Luis Aquilar stated that “boards that choose to ignore, or minimize, the importance of cybersecurity oversight responsibility do so at their own peril.”  Officers and directors have a duty of care to the corporation, and shareholder derivative claims premised upon the harm to company due to a data breach continue to push for liability. The Delaware Chancery Court held in In re Caremark International Inc. Derivative Litigation, 698 A.2d 959 (Del. Ch. 1996) (“Caremark”) that the board has an obligation to at least attempt in good faith to invest in or implement a monitoring system that’s sufficient to identify legal breaches by the corporation. In Caremark, shareholders (plaintiffs) brought derivative suits against the company, alleging that Caremark’s directors (defendants) breached their duty of care by failing to adequately oversee the conduct of Caremark’s employees regarding payments to doctors to refer Medicare or Medicaid patients to Caremark’s services, thereby exposing the company to massive civil and criminal penalties. Although the parties negotiated a settlement, the board did not agree to any monetary penalties — it simply agreed to implement a number of more cautious policies moving forward, such as the creation of a compliance and ethics committee.

The importance of Caremark is that the holding outlined director liability for a breach of the duty to exercise appropriate care in two distinct contexts: (i) “from a board decision that results in a loss because that decision was ill advised or ‘negligent,’” or (ii) “from an unconsidered failure of the board to act in circumstances in which due attention would, arguably, have prevented the loss” (emphasis added).  The court further held that:

[I]t is important that the board exercise a good faith judgment that the corporation’s information and reporting system is in concept and design adequate to assure the board that appropriate information will come to its attention in a timely manner as a matter of ordinary operations, so that it may satisfy its responsibility.

Bottom line: For liability to attach, the board must have failed to provide reasonable oversight in a “sustained and systematic fashion,” or the information reporting system which the board relied on must be deemable as an “utter failure.”

Although not a data security case, the holding is important in the context of data security.  Why? Because Caremark essentially states that a board of directors can’t assume their corporation is complying with the law — there must be a reporting system so that the board can exercise oversight.  Recently, the Delaware Superior Court breathed more life into that point in Marchand v. Barnhill, et al., No. 533, 2018 (Del. Sup. Ct. 2019) (“Marchand”).  This case arose out of a listeria outbreak involving Blue Bell ice cream that sickened many consumers, caused three deaths, and resulted in a total product recall.  In reversing the dismissal of stockholder suit asserting Caremark claims against Blue Bell Creameries, Inc., the Marchand court held that the board failed to provide adequate oversight of a key risk area and thus breached its duty of loyalty.  Remember the context of breach of corporate duty in Caremark: (a) the directors must have utterly failed to implement any reporting or information system or controls; or (b) having implemented appropriate compliance controls, the directors consciously failed to monitor or oversee the operation of that system.  Under the Marchand facts, the court found a lack of board oversight because the Blue Bell board allegedly failed to implement any system to monitor Blue Bell’s food safety performance or compliance.  Sound like something that *may* apply in the cybersecurity context?  Yep.

I realize that there has not (to my knowledge) been a holding in a shareholder derivative lawsuit of officer and director liability arising out of a data breach, but if Marchand is any indication, it seems that the trend is moving towards potential liability where Caremark claims are asserted and proven.  This potential liability, however, can be thwarted if a board follows what I refer to as the “Four Cs”:

  • Communication – There should be communication at all levels within the organization, but especially up to the board.
  • Consideration  – There should be consideration of both technical and non-technical measures to ensure data security.
  • Cooperation  – There must be cooperation across all levels within the reporting chain so that not only reporting mechanisms are satisfied, but that the board can satisfy its oversight responsibility.
  • Coordination – There must be coordination among both internal and external teams so that any information security plan not only addresses internal requirements, but third-party service providers.

As you can see, these “Four Cs” can help avoid any “utter failure” to implement appropriate reporting or information systems or controls, as well as any failure to monitor or oversee such compliance.  Of course, adhering to them is not necessarily an officer and director “get out of liability free” card for a data security breach, but it will certainly prod your company (or client) in the right direction.  More importantly,  don’t have your company (or client) delay implementing something along these lines concerning data security: if you wait, it just may be(come) too late.


Tom Kulik is an Intellectual Property & Information Technology Partner at the Dallas-based law firm of Scheef & Stone, LLP. In private practice for over 20 years, Tom is a sought-after technology lawyer who uses his industry experience as a former computer systems engineer to creatively counsel and help his clients navigate the complexities of law and technology in their business. News outlets reach out to Tom for his insight, and he has been quoted by national media organizations. Get in touch with Tom on Twitter (@LegalIntangibls) or Facebook (www.facebook.com/technologylawyer), or contact him directly at tom.kulik@solidcounsel.com.

Larry Culp Bravely Willing To Let GE Employees Share The Pain Of GE’s Turnaround, As Long As He’s Not One Of Them

The guy making $21 million a year is cutting costs by freezing pensions.

Innovation In Law: An Oxymoron?

(Image via Getty)

Some of the most intelligent, interesting, and high-achieving people I know are lawyers. Yet, few people would describe most law firms as anything close to “innovative.”

In my lifelong quest to encourage innovation in law, I had a conversation with Alicia Ryan, who leads the practice innovation group at Fenwick and West. She left her high stakes M&A practice to help a law firm embrace 21st century technology and social trends, developments, and innovations. According to Alicia, there are well-known historic and systemic reasons for the slower rate of innovation in law firms.

She explains, “For one, some law firms can lack disruptive competition. The billable hour model can also make things challenging. And then there’s the culture of ‘following the precedent.’” Alicia believes that new market realities are coming to law firms. According to Alicia, “The need to innovate at law firms is real. And, many folks are increasingly engaged on the subject.”

So, if you want to further the innovation effort at your firm, here are some of the best practices, according to Alicia, for getting around the institutional barriers to innovation that we all face as lawyers.

Create a Sense of Urgency

Alicia is convinced that change won’t happen unless people believe it is necessary. She explains, “New market forces are on your side and can make this an organic process.”

So, where to start? Alicia recommends talking to the people in your firm who are close to the “pain.” “Those in finance or client marketing face challenges firsthand,” she explains. She advises to “find out which practice groups or tasks are facing the most price pressure. Find out which of your peer firms are innovating and whether those innovations are viewed by partners or management as competitive threats.”

According to Alicia, if you go through this exercise, you’ll learn where innovation efforts can be most impactful. That is also where they will be more eagerly received. It’s where you’ll find more enthusiasm and open minds. Most importantly, “You’ll also learn which executives or partners are likely to champion which types of efforts,” Alicia says.

Allocate Adequate Staff Resources – Time & Expertise

Once you’ve got buy-in and a partner champion for your innovation project — like bringing on a new AI tool or piloting a robotic process automation (RPA) initiative (yes, think big!), you may think you’re ready to go. But Alicia cautions, “Don’t underestimate how high-touch managing innovative change can be! People want to see the change, but also are afraid of uncertainty and risk.”

Alicia advises to actively hold hands and manage expectations throughout the entire process. “Sending a few emails with instructions and some marketing blurbs won’t generate usage and adoption,” she explains. According to Alicia, “You’ll need staff resources and experts for whom this is a priority. They’ll need training and a mandate to stick with the project and be a resource for users for the first year of its use.”

Incentivize People to Help

Alicia explains, “It goes against human nature, especially the nature of humans who bill by the hour, to work more slowly NOW in order to go faster LATER.” But according to her, your communication plan will clarify this as you outline the vision and goals while highlighting successes.

But how can you really get people motivated to learn a new tool or update a form document? Alicia explains, “In the former case, we’ve seen peer presentations have a powerful effect. When associates who are proponents of a new tool or process present their experiences to the rest of the group firsthand, others want to get on board.”

“In many cases, your efforts will be more fruitful if you can get a bucket of billable credit hours approved in advance,” she notes. Make sure you rally up a big army of people to help. Alicia explains, “Need associates to help create and maintain forms for the corporate group? Offer some billable credit for that work. It’s an incentive, but it’s also about removing obstacles. Find out what keeps people from driving or adopting change, and start chipping away at those obstacles.”

Innovation doesn’t have to be slow and painful. It doesn’t have to be painful at all. It is a tremendous opportunity and a huge benefit to a profession that can be stuck in its ways. In fact, the greatest challenges of innovation in law may have nothing to do with innovation itself, but in convincing the risk-averse professionals of its benefits.

That’s where you come in. Arm yourself with knowledge, open-mindedness, and stubbornness to meet the stubbornness of those around you. Change doesn’t always come easy, but it’s worth it in the end! Please let me know if you have other tips for innovating in law. I would love to share with everyone.


Olga V. Mack is the CEO of Parley Pro, a next-generation contract management company that has pioneered online negotiation technology. Olga embraces legal innovation and had dedicated her career to improving and shaping the future of law. She is convinced that the legal profession will emerge even stronger, more resilient, and more inclusive than before by embracing technology. Olga is also an award-winning general counsel, operations professional, startup advisor, public speaker, adjunct professor, and entrepreneur. Olga founded the Women Serve on Boards movement that advocates for women to participate on corporate boards of Fortune 500 companies. Olga also co-founded SunLaw, an organization dedicated to preparing women in-house attorneys to become general counsels and legal leaders, and WISE to help female law firm partners become rainmakers. She authored Get on Board: Earning Your Ticket to a Corporate Board Seat and Fundamentals of Smart Contract Security. You can email Olga at olga@olgamack.com or follow her on Twitter @olgavmack. 

The Biglaw Partner Memorialized In Video Game History

In 1984, what lawyer successfully defended Nintendo against Universal Studio’s claims of trademark infringement (they claimed Donkey Kong improperly infringed upon King Kong)? As a show of gratitude, Nintendo named a young, pink alien character after the attorney.

Hint: At the time of the representation, he worked at the now defunct Mudge Rose Guthrie Alexander & Ferdon, before joining Latham & Watkins in 1995, chairing the New York office’s litigation department.

See the answer on the next page.