Corporate Governance

Lawyers as Strategic Advisors in the Trucking Industry

The transportation industry is an unpredictable environment in which to do business. The trucking industry is a heavily regulated industry that involves many pitfalls and hurdles. Advisors to the transportation industry know that the best way to handle this challenge is to plan for it. Transportation entrepreneurs often need a full range of services to complement their management team. Such services often include crafting alternate carrier practices, creative planning, utilizing innovative information technology solutions and the implementation of best business practices.

Businesses today don’t need armchair philosophizers; they need business-savvy “real life” counselors who can help guide their company to success. Those in the trucking and logistics segments of the transportation industry often need advisors who can focus on business issues such as carrier profit improvement, enhancing margins, gaining efficiencies and driving down operating costs. Consultants often provide a thorough analysis of the current business operations and identify issues that need improvement. But an outside consultant usually lacks the trust of the leaders of a company and does not often grant them a seat at the decision-making table

Succeeding in the trucking industry requires allocating time and resources to the areas that your business will most benefit your bottom line. Beyond developing your services to target the market, transportation entities most often need advisors who have the heart and soul of your business in mind. The most accomplished lawyers are those that become "trusted advisors" to their transportation clients. This means that their counsel is sought not only for discrete cases, but also on an enterprise level- and not just for "legal" matters. The trusted advisor has a profound understanding of the clients’ business, the industry the client works in and can provide professional judgment, emotional intelligence, candor and experience tailored to the client’s risk tolerance and enterprise objectives. The trusted advisor must be more than just someone who knows the law or who can handle a case. The trusted advisor must be a part of the company's DNA.

Business leaders in the transportation industry today expect their lawyers to counsel them on legal matters, but not all realize that a lawyer who is knowledgeable in the business of transportation can contribute to the success of their business by serving as strategic advisors. While everyone ultimately seeks to earn a seat at the table and be considered a strategic advisor, many lawyers fall short. Nothing is more frustrating for the business team and the lawyer when this relationship doesn’t exist.

A lawyer can only be viewed as a strategic advisor to a transportation entity if they know the industry and the specific business well enough to selflessly contribute to the issues facing the company. Moreover, if the lawyer views their role as to only weigh in on legal issues or the legal implications of issues instead of the business implications, they will be viewed as a legal advisor and will not be thought of as being able to add value beyond that. The business lawyer is the one who leaders want to invite to participate in meetings which are viewed as strategic. Oftentimes, legal issues are raised in the typical “non-legal” meetings and, if a lawyer is not present, decisions may be made that need to be undone or modified in the future. A lawyer will be viewed as a strategic advisor when they are not just available, but are solution-oriented and well-respected by their peers in the company

The job of the strategic lawyer is to provide advice to the business decision makers regarding the legal risks of the various courses of action, devise practical legal and compliant solutions that get management and the company where they need to go to achieve the company’s goals, and objectives and aid the CEO, COO and Board in making those hard decisions. The strategic lawyer communicates his or her understanding of that role and who the proper decision makers. Too many lawyers think that they should be making the decisions. That’s fatal. Of course, the lawyer needs to always urge compliance with applicable laws and regulations and reports up the chain of command. The strategic advisor lawyer must be focused almost entirely on the company’s business and not just on the competitors of the company. They must be the innovator disruptors in the industry, focusing on executing plans and making the competition irrelevant.

The main reason lawyers fail at being strategic advisors is risk tolerance. Most lawyers are programmed to be risk adverse. How many attorneys have you heard of that won’t make decisions when there is a risk involved in the decision? I know a lot. While I subscribe to the general principle that corporate attorneys are advisors and not usually decision makers for business operations, corporate attorneys in the transportation field need to be ready to help the leaders make decisions and then support those decisions even when those decisions present risks. The best strategic advisors identify the risks for the business and then assist the business to mitigate and manage the risks. If the risks are extreme, a good strategic advisor will highlight those to the business as completely as possible which may include “what if” scenarios and case examples of other companies or other decisions AND if available, alternate decisions that may accomplish the same or similar purpose. A strong lawyer strategic advisor will have to work against the way he or she is programmed to avoid all risk and instead will have to consider the best interest of the company in advising management or the Board. If decisions are made by the company with the right information available and the right approach to manage the known and potential risks, the lawyer has done his or her job.

Lawyers succeed as strategic advisors by being appropriately balanced regarding risk and exercising good judgment. An excellent strategic advisor needs to constantly strive to find the right balance between supporting the business’s operational and strategic objectives and mitigating legal, regulatory, and reputational risk. The calls at either end of the spectrum are easy. The calls in the middle are typically far more nuanced and require good judgement in balancing multiple, often competing, considerations. The other way they fail is by not providing actionable advice or recommendations. A lawyer who simply describes the risks and opportunities of various options without providing a clear recommendation on which option the business ought to pursue is unlikely to be viewed as a good strategic advisor. A good strategic advisor will listen, truly understand, speak up and adapt to the changing needs of the business organization.

Properly serving the company as a trusted advisor means you have to be proactive with your business owner clients. Most lawyers who are serving business owners focus on incorporation or agreement review, intellectual property, trademarks, copyrights – things that are reactive. So they wait until one of their business owner clients comes to them with an issue and then they handle it. If there’s business litigation that’s needed, they handle it.

But what very few lawyers do – and I’m suggesting that transportation clients need – is to create a more proactive advisory relationship with your counsel.

The first thing that proactive counsel is going to do is to really get to know your clients’ business model. How do they earn their money? What types of customers do they have? How can you help them to collect payment and close deals more easily? This is one of the areas that the lawyer as trust counsel can provide, but is often overlooked by business owners. As a corporate trusted advisor, one of the things that counsel can and should do that will help the client make money (more money) right away is to help them to be able to close their deals more quickly and easily. The attorney as trusted advisor has a direct influence on this by how agreements are drafted and how counsel suggests that the agreement be signed. The Council as trusted advisor to a business owner must proactively meet with them at least one time per week. Speaking with the client on a regular basis empowers the trusted advisor to proactively make recommendations and be working on matters that will help to grow the business and secure the perimeter of the business.

The trust advisor must also meet with the company's leadership and financial team. This is one way that the trusted advisor can make a huge impact on their bottom line, by making sure that their financial systems and their financial controls are being maintained properly.

That also allows counsel to support them in getting in place a strong asset protection plan

Once you get involved in coordination and quarterbacking, transportation clients begin to see their counsel as the trusted advisor they can turn to when anything happens in their business and sometimes in their personal life. In the heavily regulated and dangerous field of trucking and transportation, there is simply too much at stake to rely upon old-school methods of business operations. Business leaders in the transportation world are always worried about disruption. Some high-tech rival might, after all, do to their sector what smartphones did to the photography industry, what e-commerce is doing to retail, and what financial technology (fintech) is threatening to do to consumer banking. 

When disruption does affect a company, it is frequently because the enterprise was already vulnerable in some fundamental way; moreover, many incumbent companies accelerate their decline through their efforts to forestall it. Panic-driven efforts to avoid or combat disruption can easily lead to hasty, reactive, short-term-oriented decisions that move a company in many directions at once, distracting its management and squandering its resources. The fear of disruption can thus be worse for a company than the actual disruption itself.

Of course, complacency or inaction can be just as problematic. Technological changes in the transportation industry, and other external competitive forces, affect many business realities in the transportation world. Proactive measures are often needed. But they should be well thought out. The best means to be proactive is to look to your trusted advisor. While many transportation entities these days have counsel to turn to when there is a problem, many do not have an attorney as a trusted advisor who can be proactive and beneficial in many more ways than the legal industry has traditionally provided service to their clients.

The disruption in the transportation, and in other industries, has also caused a disruption in the traditional modes in which business leaders seek advice. The best means to proceed with a business decision or a corporate transaction is not to seek counseling after the fact, but to receive proactive advice from someone. That someone is increasingly becoming the attorney as trusted advisor. But this type of relationship between the attorney of trusted advisor in the business owner and/or CEO does not develop overnight. Sometimes it takes many years to find a counselor as trusted advisor. This is partly due to the fact that it takes time to find someone who a business leader can share their deepest darkest secrets as well as their confidential business plans. It is also partly due to the fact that not all attorneys see themselves as the person who should be providing proactive counseling to a company.

In my experience over the past 20 years, the businesses who succeed the most and are prepared to deal with the worst-case scenario are the ones who have an attorney as their trusted advisor in the corner to help deal with all aspects of the operations of the company. The transportation industry is changing right before our very eyes. The trucking industry is in a state of flux. The peer to peer car sharing industry has provided a means by which to revolutionize the trucking industry. To stay ahead of the curve in the trucking industry you must not only have a trusted advisor, but such trusted advisor must be able to be proactive for the day-to-day operations while keeping their eye on the horizon for changes and developments in the industry. The failure to do so can lead to disastrous consequences. Remember what happened the Kodak?

 

ADA Compliance and Transportation offered via Web-Based Booking Engines

In the old days in New York City, if you wanted private for-hire ground transportation, all you had to call was call a car service call center. Some had easy to remember telephone numbers and others you could reach by calling the 311 operator or by utilizing the telephone book. With the advent and proliferation of the internet, most transportation entitles created websites by which to advertise their services. Rapid advances in technology made booking transportation over the telephone a bit outdated and time consuming. Transportation entities then started to integrate their website with a booking engine/booking platform by which people seeking transportation for-hire could check availability and costs and make bookings at lightning speed. Offering a great user experience online became the new expectation. Despite the advent of the smartphone application by which to book transportation for-hire, many car services still provide the public with the ability book private transportation on their websites.  

The ADA was enacted in 1990 to prohibit discrimination and ensure equal opportunity to people with disabilities. This applies to State and local government services, employment, commercial facilities, transportation, and places of public accommodation, which are essentially private entities that affect commerce.  These laws can be enforced by the Department of Justice (“DOJ”) and through private lawsuits. An unresolved legal issue has recently arisen which has led to uncertainty in the law. Uncertainty in the law almost always leads to costly litigation because a company does not clearly know what its legal obligations are. People with disabilities should be able to easily access the Internet, but to accomplish this, the DOJ should have issued regulations. It issued regulations for State and local governments to know what it must do to become compliant with the law, but the DOJ did not issue regulations that would apply to private business.

The lack of regulations has led to the absolute worst-case scenario. People with disabilities have not been served since most companies are unaware this is an issue. Most companies do not even realize this is a problem to consider and resolve until they receive a demand letter from a lawyer or are served with a lawsuit. This leads to a scramble to get compliant. Unfortunately, it can take up to a year to do so depending on the complexity of the website. Transportation companies have relatively complicated websites because customers are presented not just with information about the company, but are provided with a customized web reservation site that is often an extension of main website. Private, customized portals are often created for corporate accounts or large groups. These portals can also accept marketing and/or promotional codes helping to increase both customer loyalty and reservation volume.

At present, a company website that is purely informational or educational in nature is likely beyond the ADA’s accessibility requirements. But a website that sells goods or services directly to the public may be regarded either as a sales or service establishment in its own right, or as a service of such an establishment, and thus covered by the ADA. On the whole, it is hard to argue that a car service that provides a website booking engine by which the public can utilize to arrange for transportation does not engage in some form of commercial activity. Thus, it is safe to assume that car service websites are subject to the ADA. 

The most common allegation in a Website Accessibility Lawsuit is that the company website is inaccessible to visually-impaired customers (some cases now involve mobile apps). Such customers often rely on screen-reader software like JAWS or NVDA to interact with and access a site's content. If the website is not compatible with this or similar screen-reader technology, most visually-impaired customers will not be able to use the website.

Meanwhile, plaintiffs’ attorneys across the country are taking advantage of the confusion. More than 260 website accessibility lawsuits were filed in 2016, and significantly more were filed by the end of 2017. But these numbers do not even begin to cover the cases that are settled pre-litigation. 

As stated above, the DOJ has not issued regulations that apply to private businesses and the law remains unclear because there is a split among the federal courts as to whether the statute applies only to physical structures. According to the more narrow interpretation adopted by several courts outside of New York, a disabled person is entitled to the “full and equal enjoyment” of goods and services only if they are offered at a physical location. Thus, if a business operates exclusively through the internet, without any physical location where customers interact with the business, the ADA’s mandate for accessibility does not apply. Most transportation companies in New York have an office, but they do not offer their services at a physical location where a member of the public can come to book transportation for-hire. The below is just a short indication of how the courts have been ruling on this issue. It has not been uniform and certainly not favorable to businesses in New York.

In 2017, defendant Bang & Olufsen obtained a dismissal in a Florida court because the plaintiff failed to establish a nexus between the company website and its physical locations. In California, a judge dismissed a website accessibility suit against Dominoes, finding that the company had met its ADA obligations by providing a 24-hour toll-free phone line to assist visually-impaired customers. The judge further ruled that to require website accessibility without meaningful administrative guidance would violate Dominoes' due process rights. Yet three months later, another judge in the same federal district ruled otherwise in a case involving Hobby Lobby. Similarly, in the October 2017 Dave & Buster case, the court recognized that providing a disability assistance telephone number may be an alternative means to comply with the ADA, but the court refused to dismiss the lawsuit, in part because it was unclear if the ADA notice and phone number itself were accessible (i.e., could be read via screen-reader software).

On the other hand, the New York Court have been quite favorable to plaintiffs. In July, 2017, the U.S. District Court for the Southern District of New York in Marett v. Five Guys Enterprises, issued a decision directly speaking to the applicability of Title III of the ADA (Title III) to websites, denying Five Guys’ motion to dismiss, and holding that Title III does indeed apply to websites.  Facing a class action lawsuit brought by serial plaintiff, Lucia Marett, Five Guys sought to dismiss the claim that its website (which, among other things, allows customers to order food online for delivery or pick up at its brick and mortar stores) violated Title III and related state/local statutes because it is inaccessible to the blind, on the grounds that Title III does not apply to websites and, even if it did, the case was moot because Five Guys was in the process of updating its website to provide accessibility.  The Court rejected Five Guys’ arguments.  Citing both the text and the broad and sweeping purpose of the ADA, the Court held that Title III applies to websites – either as its own place of public accommodation or as a result of its close relationship as a service of Five Guys’ restaurants (which the court noted are indisputably public accommodations under Title III).  Further, the court was unmoved by Five Guys’ ongoing efforts to make its website accessible because they had yet to successfully do so and there was no absolutely clear assurance that further accessibility issues would be avoided. 

In August 2017, Judge Weinstein of the Eastern District of New York denied retailer Blick Art Materials' motion to dismiss a website accessibility lawsuit under the ADA. The court found that Blick's website was subject to the ADA, even for the goods and services that it sold independently of any physical retail location. The judge rejected Blick's arguments that the court should wait for DOJ guidance on a technical website accessibility standard, and that it would violate Blick's due process rights to require its website to comply with the ADA without any administrative standards or regulations. 

It seems clear that many of the courts that have considered these issues have been unsympathetic to businesses, and plaintiffs are taking advantage of the reality that many businesses are unaware of their obligations under the ADA and do not have fully accessible websites. Website accessibility lawsuits are proving to be challenging to defend and expensive to resolve. If a court finds that a website is inaccessible, it can order the business to make its website accessible and to pay the plaintiff’s attorneys’ fees, costs, and expenses. Additionally, in certain jurisdictions, the court can order the business to pay the plaintiff monetary damages and/or civil penalties under state and/or local law. Many courts and the DOJ have viewed the privately developed Web Content Accessibility Guidelines (WCAG) 2.0, Level AA, as the de facto standard for ADA compliance. Accordingly, transportation entities who offer a web booking engine to their customers should consider reconstructing or redesigning their websites in compliance with this standard. Even if a business successfully defends such a claim, the expense of litigation may exceed the cost of compliance.

 The good news is that the United States House of Representatives recently passed a bill aimed at stemming the floodgate of ADA lawsuits brought by a small number of serial plaintiffs. The bill, the ADA Education and Reform Act of 2017 (H.R. 620) would impose a notice requirement and would allow businesses a grace period to cure alleged accessibility barriers before a lawsuit could be filed. Although not specifically aimed at particular type of ADA lawsuit, the reforms in the bill may provide relief from the large number of website accessibility lawsuits filed over the past few years. The bill will now move to the Senate. Regardless of whether the bill ultimately become law, it reflects a growing acknowledgement that private lawsuits under the ADA have reached a critical mass and until certain reforms are enacted to limit attorney driven suits, it is important for all businesses to understand the need for ADA compliance and the pitfalls posed by non-compliance.

 

 

 

 

 

 

The New General Corporate Counsel (The Outside General Counsel Solution)

In order pressure for corporations to properly react to increased pressure to be as effective and cost-efficient as possible, CEO’s are not just bringing legal work in-house, but are retaining a lawyer who acts as general counsel to the company without the company having to pay a salary and benefits associated with a full-time employee. The days of relying 100% on outside counsel are over. It is just not efficient or cost effective to do so anymore. Companies are taking the alternate route of retaining a lawyer with not only specific legal talents, but also specialized knowledge of the industry the company works in. This is the trend because a company is not just getting a lawyer, but also getting someone who knows your business intimately. CEO’s are starting to recognize that when you retain a lawyer to act as in-house counsel (outside general counsel), they start to understand the business more. To be most effective, outside general counsel should not only have a full understanding of the organization’s business and office culture, but short and long term goals as well.

In the American business environment, every company will need a lawyer at one point or another, but just how to find and retain that legal counsel can be source of debate.We all know that one person, or perhaps you are that person, who started a company from nothing and grew it into a successful business. Start-up companies often need assistance with basic contract review or understanding compliance procedures. As the company grows from a start-up into a profitable corporation, many executives take the next step of either retaining outside counsel in the form of a law firm or the company may instead pick the in-house counsel route. Both options can be very expensive. The alternative is to retain a lawyer who is not an employee of the company, but a retained lawyer who acts as outside general counsel. A sort of in-house counsel that is an independent contractor, but devotes a large portion of their time to the company and its needs.

For many companies, consideration of this outside general counsel arrangement is a worthwhile step. Not only may there be potential legal cost savings, but bringing someone onboard and inside the executive team may also help ensure the company’s vision is maintained. When searching for such counsel, a company will also be wise to select a candidate who actively maintains social connections and ties to local legal counsel and law firms. This is important because, as many companies fail to anticipate, hiring outside general counsel does not necessarily eliminate the need to retain outside counsel for specific projects or actions. Thus, the ideal outside general counsel will be able to easily access and coordinate with appropriate outside counsel.

When a legal matter is sent outside the company, the outside general counsel serves not only to select the best outside firms for specific case types, but serves as a watchdog on those cases, ensuring that the company is not being over-billed and that matters are being handled properly. A company needs to understand that rather than being a hired gun brought in to consult on individual problems after the fact, an outside general counsel is, or should be, part of the team before, during and after company projects. The outside general counsel should be able to understand the company’s long-term objectives in order to tailor advice to the best interests of the company. A good outside general counsel working in a proactive manner instead of reactive will help a company anticipate and prevent legal problems before they arise, while maintaining company values.To foster this working environment, a company should encourage its executives to keep outside general counsel in the loop by discussing and brainstorming plans and strategies with them regularly. This has the potential to reduce future legal expenses, which most companies should cite as a goal.

The right outside general counsel does not just bring experience to the table. Once they are part of your staff, they bring peace of mind. Having immediate access to a licensed attorney who is focused on your business is truly unbeatable. It can also be the difference between success and failure on not just a given deal, but the difference between success and failure of the business itself.

 

Why A Company Must Invest in their Employees

As a lawyer dedicated to not only keeping my client’s business running and in compliance with the law, I am often called upon to advise executive level personnel and corporate HR Departments on what needs to be don’t to increase employee morale as well as relations between management and staff . Properly paying an employee for their value to the  company is a very good start but is not the end all to be all. Employees need more than a salary and fulfilling work to do their best work. They need to know that you see the value in them as individual, in the work they perform and the value they add to the company. Here are some very easy ways to break down the barriers between management and staff and to show employees that you care:

 

1. Get to Know each employee.

Getting to know who works for you, who they are, what they do, what they can do for your company, what they have done in previous jobs and what they do better than anyone else is an important step in building strong, trusting relationships. It will also help show your employees how much you value them and care – not just what they have done for you lately. Seek to build a better relationship with each employee by developing a genuine interest in who they are as people and what they are passionate about, even if this means a discussion about something other than work.

2. Provide ongoing and constructive feedback.

To help your employee be the best they can be, it is important to provide feedback to them on a regular basis. Your employees will become even more valuable to you when they are constantly refining, improving, and building new skills. Feedback will fuel to performance improvement. It is imprudent to wait for the annual review to tell them how they are doing. 

3. Invest in your staff.

Know what your employees need to succeed and give them the time and resources needed to do it. You need to get to know your staff and understand their talents as well as help to develop such talents and encourage your employees to do so on their own as well. If the training and learning they need to deliver greater value doesn’t exist inside your company, you must be ready, able and willing to fund external training.

4. Prepare Employees to Succeed and Risk Losing Them.

No CEO or COO wants to lose their best people, but by preparing your employees to succeed and advance means you have to take the risk of losing them. Either way, the investment in your employees shows your commitment to them and to your company because you’re doing the right thing for both, even if it eventually creates a need to fill that person’s shoes when they leave. The risk of losing a star employee is worth the payoff of working with the best in the business, even if they don’t stay forever.

5. Set clear and measurable expectations.

For your people to succeed, they need a clear understanding of what you need them to do and how success will be measured. And in the dynamic world of work, that means providing regular updates and performance reviews. An annual conversation about performance and planning is simply insufficient.

6. Make time for them.

It is hard for the CEO, COO or HR rep to devote time to each employee, but it is essential for them to know that you have their back. Group team meetings are simply not enough and prevents building deep relationships with your employees. Take time to meet with each employee individually as often as possible and be fully attentive when you do so.

7. Acknowledge them publicly.

Sure, you likely praise your employees accomplishments during your personal meetings. To deliver even greater value, acknowledge them in meetings in front of their co-workers, and in front of senior leaders they are looking to impress. This shows your true commitment to not just your employees but also to other important persons in your organization.

8. Say the tough stuff.

You need to tell employees when they have a behavior that will limit their career advancement, or what the consequences will be if they don’t resolve a major issue. Failure to do so can be just as harmful to a company as not acknowledging their accomplishments.

9. Give them an opportunity to use their superpowers. 

We all love doing the things we are good at and sometimes a business doesn’t take advantage of that. People doing things they excel at will help deliver exceptional value while feeling fulfilled. To help your employee use their superpowers, you need to help them unearth them, and then you need to help them find situations and projects in which they can leverage their strengths.

The landscape in the workforce is rapidly changing. The old school methods of doing business where the separation between staff and management is wide is a detriment to the ongoing vitality of not only each employee, but the company as a whole. I always stick by the old adage of you treat someone as you would like to be treated. This applies not just in the workplace, but in life as well. 

An Ounce of Prevention is Surely Worth a Pound of Cure

One of the main jobs of outside corporate counsel is to manage risk along with handling the business of managing the entire spectrum of employer-employee relationship issues. From employee hiring, through to employee exit, being entrusted to manage the clients' most sensitive and complex issues. Good corporate counsel will also provide exceptional support by combining real-world human resource guidance, all informed by relevant employment law provisions.

The Shanker Law Firm, P.C. acts as outside corporate counsel and advises clients on the full spectrum of complex human resources and employment law issues. We provide strategic, operational and legally privileged advice to help our clients deliver effective business solutions to manage their employees. Clients turn to us to help them manage employee risks and provide strategic, board level advice on crucial employment-related issues, as well as counsel on day-to-day operational support.

Our unique business model allows The Shanker Law Firm, P.C. to provide clients with practical responses to new employment legislation, case law, and regulatory changes, and an ability to strategically advise on a wide range of contentious and sometimes non-contentious human resources and employment law matters, including:

  • Drafting and Negotiating Employment and Employee Documentation

  • Employment Disputes and Dismissals

  • Human Resources Policies and Procedures

  • Redundancies and Restructurings

  • Outplacement Services

  • Remuneration and Benefits

In the world of big business today, most corporate owners and CEO’s are just not as versed as they should be in the sensitive nature of employer-employee relationship and employment law matters. I always believe in the old saying that an ounce of prevention is worth a pound of cure. The only question is whether you, as a business owner or CEO, wants to pay now to protect your business later…or to pay later and hope that the problem, that could likely have been prevented, will be able to be ameliorated in the face of either costly litigation or the threat thereof.  

Time for Companies to Utilize the Outside General Counsel.

The concept behind “general counsel outsourcing” is that a business organization may not need to hire a full time in-house lawyer to perform the services and functions performed by a general counsel. Some business organizations may be able to contract outside the organization, resulting in improved efficiencies and profit.

The concept of outsourcing certain business and services functions is not new. It has been used for years. For example, most companies do not maintain their own payroll function, they outsource it – there are specialists outside contractors who can manage the function more cost-effectively. For the same reason, many companies outsource most non-strategic functions – the annual report preparation; staff recruitment; insurance; public relations; advertising; internal audit; staff training; and information services.

Outsourcing of legal counsel has become a major response to the profit pressures on many businesses. In the past, companies have outsourced mostly functions considered non-strategic to the company, such as some of those listed above. However, due to increased pressures on profits and accountability issues with respect to corporate governance, regulatory compliance and risk management, there is a trend towards outsourcing “strategic” functions of business organizations, such as the general counsel.

The concept goes beyond the legal realm and also into the operational realm of a business as well. It involves the belief that services and functions typically performed by someone in upper level management should be performed by a general counsel and such functions includes legal analysis of business decisions, planning and other input that needs to go into the strategic planning process. Legal counsel along with the operational planning and review process can be outsourced to a lawyer who understands the company’s business and culture who, in essence, becomes a part-time extension of the company’s senior management team.

Most companies recognize that they need legal resources at a senior level to perform this strategic legal function to ensure that the company’s major assets and rights are suitably protected and its major exposures and obligations are suitably managed. In practical terms, this involves an on-going legal risk and opportunities audit, and an ongoing legal compliance program. Small to middle market companies must make tough decisions when addressing such strategic legal resources. Such companies are constantly seeking ways to obtain the strategic legal resources that their business requires while at the same time trying to save money and increase efficiency. Many such companies find that traditional methods of retaining counsel are not cost effective because traditional law firm overhead costs, for office space and support staff, limit a firm’s flexibility in fee-setting. When outside counsel fees climb, emerging companies consider hiring an inside counsel as an employee. With all the benefits that employee status entails, hiring someone to be an inside counsel can also be costly; such companies simply may not have the justification or the resources to hire a full-time in-house general counsel.

Outsourced general counsel services offer an attractive option to many companies. For a specified and agreed upon monthly fee, the company contracts with an experienced and well qualified attorney to provide strategic in-house counsel legal services. The outsourced general counsel is an independent contractor, not an employee. He or she may periodically work at the company’s site in order to provide the same high quality, high level of service of law firms or employee counsel. The outsourced general counsel becomes an extension of the company’s senior management team.

In no event, should any company buy the idea that the outsourcing of general counsel legal services decision is an all or nothing choice. Certainly, some legal services are best delivered externally, from law firms that offer specialized legal services. However, other legal services such as certain employment law and labor issues, legal day-to-day corporate governance issues and strategic functions, can be performed effectively by the company with the help of an outsourced general counsel who understands the company’s business.

As in most things, it is a matter of balance and the result of informed and objective analyses. The key issue of determining whether outsourced general counsel services are proper for a company is a question of balancing the delivery of the company’s needs for such services to ensure an ultimate advantage for the company against the cost of an outsourced general counsel. 

Most companies who I represent have addressed this question would agree with many of the following:

  • the ability to operate at a senior level in the company’s organization;
  • a close understanding of the company’s policies, strategies and objectives;
  • a close understanding of the company’s operating methods, processes, products, suppliers and customers;
  • the ability to manage legal risk, to analyze the company’s strategies and in order to identify legal issues, and to develop plans and programs to manage and, if possible, to avoid legal problems that arise;
  • the timely delivery of work of high technical quality that also provides practical solutions which meet the company’s business goals;
  • the ability to work closely and co-operatively with company personnel, suppliers and customers as may be required;
  • the ability to add value to the company whether this is by saving money, avoiding losses, solving problems, achieving their business objectives, by using knowledge and skills to improve the way the company manages its legal risks and pursues its legal rights and opportunities; and
  • the ability to manage external legal services for extraordinary legal issues that arise (e.g., litigation; public/private securities offerings; bankruptcy) in a cost-effective way that achieves optimum benefits for the company

Almost by definition, these qualities can only be performed by someone inside the company, who has absorbed the company’s culture and become part of the way the company does business. An outsourced general counsel can provide this level of service and resources for the company.

We have done this many times in the past and fortunately with great success for the companies we have and continue to represent. It is an alternative to hourly billing. It is an alternative to the lawyer as the enemy. It gives you a reason to call your lawyer without fear of being charged for every 6 minutes of time. Most of all, it give the business and its owners peace of mind that the company is in good hands.

One day, Hopefully soon...Uber Will Have Its Day of Reckoning

What does an Uber ride actually cost? That simple question is often lost among the many controversies facing Uber, but it is surely one of the most important question of all when it comes to determining the value of Uber which has built its business on massive subsidies to both riders and drivers, producing huge losses in the process, and has yet to show that it can maintain growth without them.

Although a private company dos not need to release its financial data, Uber has started releasing limited financial data, and in May reported a loss of $708 million for the first quarter, down from $991 million in the fourth quarter. While their upcoming financial report may show further improvement on margins, Uber continues to spend heavily on subsidized rides.

The question vexing everyone is what the company is worth. Truthfully, I really don't care. Not just because I am anti-Uber but because their entire business model is based upon explanation of persons and creating the myth of providing jobs when their true intent is to totally divest itself, in due course, of all drivers. How drivers do not see this and continue to driver for them is beyond me. Maybe I am wrong in my forecast or perhaps I just simply do not like illegal monopolies.

Uber’s losses stem from its drive to win global market share at almost any cost. That strategy was built on the assumption that Uber could achieve a dominant position in many big cities quickly and eventually raise prices. Kalanick himself said low fares were temporary. But eight years in, the strategy is now in doubt as competition in many markets continues to intensify. Uber must solve the problem of how to eliminate subsidies without losing customers and thereby undercutting its valuation.

At some point in time, Uber will have its day of reckoning as they will eventually have to raise prices and get rid of driver subsidies. And we all know what happens when you raise prices - demand goes down. And when you give up driver subsidies - supply of drivers goes down.

Regardless of their Valuation, in my humble opinion, Uber has become an illegal monopoly. I have conducted my fair share of research on the Sherman Act and its progeny since the late 1800's when certain monopolies were declared illegal. Monopolies are bad for the public, bad for the economy and bad for competition. Uber will eventually raise its prices and do away with driver subsidies...and then the riding public will see Uber for what it truly is. Not an aid to the Salvation Army, but a money hungry technological monopoly that is built on a house of cards. When one of the cards start to fall, the others shall follow. Then I hope to see Kalanick himself driving around in his own vehicle with the stupid "U" in the front window.

HR Departments Should Review Uber's Conduct as a Precautionary Tale.

We have all seen the news coverage of the sexual harassment and discrimination problems at Uber. According to reports, Uber has long suffered from a culture of pervasive sexual harassment and discrimination toward female employees. The issues first came to light publicly in February, when one former Uber employee published a blog post about the sexual harassment that she and other women experienced at the company.

Based on the information available, it appears that the problem at Uber did not stem only from the harassers themselves. Rather, the problems stemmed from a misguided Human Resources department that allowed the problems to go unchecked, despite receiving multiple reports of sexual harassment and discrimination from female employees.

According to reports, when a female employee reported harassment or discrimination to Uber’s Human Resources department, she was more likely to be chastised by HR than to have her concerns addressed. According to allegations, HR representatives told employees who reported such issues that, because the conduct complained of was the harasser’s “first offense” and the harasser was a “high performer,” he would receive a warning, nothing more. HR allegedly told one woman (the author of the February blog post referred to above) that the fact that she had made multiple complaints indicated that it was she, not the male employees she was reporting, who was the problem.

If true, these allegations suggest that Uber’s HR department believed that its highest priority was to protect “high performers” at all costs, even if that meant allowing sexual harassment to run rampant within the company. Generally, when an HR department adopts such an outlook, it comes from the top. HR staff who believe that management expects them to protect harassers and sweep complaints under the rug will, quite often, do so. Like any other employee, an HR rep wants to keep his or her job.

That is why it is imperative that management sets the tone for a company’s culture. HR must receive clear directives that harassment and discrimination are not to be tolerated, and employees must be made to feel that any issues they report will be taken seriously and dealt with appropriately. These messages must be conveyed through both the words and actions of management. HR must understand its role to be a watchdog for compliance issues and an advocate for employees, not a puppet of management.

Uber has terminated at least 20 employees in the fallout from the sexual harassment and discrimination scandal, and its CEO has resigned. Clearly, the company will be feeling the impact of the scandal for quite some time. Any company that has not taken proactive steps to assure that its HR department understands its true purpose and role should view this story as a cautionary tale.

Your Corporate Counsel…Doctor Or Fireman?

I believe in the old saying that an ounce of prevention will prevent a pound of cure. A little precaution before a crisis occurs is preferable to a lot of fixing after afterwards.  To put it another way, I believe a lawyer can either serve a corporation as being a doctor or fireman. If a corporation looks at a lawyer as a doctor, then they will seek effective legal counsel before there is a problem for the specific purpose of preventing a problem before it occurs. This is akin to yearly checkup at your internist’s office. On the other hand, some corporations treat a lawyer as a fireman. In other words, some corporations only seek out legal counsel when there is a problem (a.k.a. fire) and then the lawyers placed in the difficult position of having to act like a fireman, triage the problem, act quickly and effectively and hopefully put out the fire. Of course, is much more expensive to have the fire department responded fire than it is to go to your doctor's office for periodic checkup. There is no difference in the corporate world. If you want to prevent the problem, then the leaders of the corporation must decide whether they want to ensure compliance with the law by hiring the proper professionals or if they want TO take the risk of noncompliance and deal with the prospect of costly lawsuits. While the cost of compliance with the law is never cheap, the cost of noncompliance is often greater than the cost of compliance

 

Companies Should Consider Outsourcing Their Organizations HR Compliance Functions

For both small and midsized companies, effective human resource management is critical to success — especially in today’s competitive business climate. HR management is a complex, ever-changing discipline burdened with trials that impact employee productivity, HR compliance, and ultimately, the bottom line. Company HR managers and those who deal with HR corporate compliance must look at six key areas: hiring, payroll, benefits, employee relations, risk & safety and employee relations. Since HR compliance lies at the heart of effective human resource management, it is alarming to discover that most HR managers either express concern about their ability to comply with HR laws and employment laws or know that they are not in compliance with the law, but do not know what to do about it.

 

Companies Often Lack Confidence in their Organizations’ HR Compliance Capabilities

Locating and hiring qualified HR Managers should be a top business concern for many corporations.  Most companies have a moderate or slight level of confidence — or even no confidence at all — in their ability to comply with important HR and employment laws, rules and regulations. This is very troubling, especially considering the fact that most legal problems can be avoided with an ounce of prevention.

 

HR Compliance Challenges Are Expected to Increase Moving Forward

HR managers should expect the compliance legal landscape to become even more challenging over the next one to three years. Given their compliance concerns — both today and looking forward — it’s not surprising that the vast majority of companies seeks professional legal advice to address compliance issue and would even consider outsourcing their HR function entirely.

Where HR Managers See Room for HR Compliance Improvements

In my experience, many HR managers are less than confident with regard to compliance in noteworthy aspects of hiring, employee relations, and risk & safety. Non-compliance in these areas could put small and midsized businesses in jeopardy of FLSA and OSHA violations, as well as employee grievances. 

 

Taking Steps to Minimize HR Compliance Risks

Given the risks associated with non-compliance, companies should consider taking steps to address any HR compliance issues sooner rather than later. With employee litigation — and compensatory awards — on the rise, companies face major potential legal liabilities if they fail to comply with HR and employment laws, rules and regulations. Statistics compiled by Jury Verdict Research show that employment lawsuits have risen 400 percent in the last 20 years, with the average compensatory reward in federal employment cases now exceeding $490,000. For small to midsized businesses, these statistics highlight the need to address any compliance concerns, even if that means seeking guidance from third-party professionals or outsourcing the HR function entirely. 

 

Addressing HR Compliance Issues is Key to Effective Human Resource Management 

In order to achieve a competitive edge, today’s business are striving to operate as efficiently and cost-effectively as possible while maintaining HR compliance and attracting and retaining top talent. However, HR managers are recognizing the challenges of complying with complex, dynamic HR laws and employment laws. Since shortcomings in key areas of HR compliance can put businesses at a competitive and financial disadvantage, it only makes sense that small and midsized companies use the many effective tools and services available to become — and stay — compliant.

 

Conclusion

A little precaution before a crisis occurs is preferable to a lot of fixing after afterwards.

 

Time for the Public to see Uber for What they Really Are.....and to go elsewhere

Uber’s global pattern of driver mistreatment, corporate bullying and legal transgressions should be tolerated no more.  For years, Uber managed to conceal its bad behavior with expensive P.R. campaigns and by claiming they are a technology company and not a transportation provider. Their games may have worked for a while, but their grand plan is quickly unraveling.

Uber is convenient and fast in New York City. The combination of cashless transactions and location technology make for a great service. But no amount of convenience can cover up the toxic culture that has taken hold at Uber. This hold true now not only in the treatment of its huge driver workforce, but at the company’s headquarters as well. Uber’s CEO has finally been forced to resign, but this is simply not enough.

We all know by now that Uber’s wrongdoing does not end at the door of its corporate headquarters. Just as evil is Uber’s model of “employment”. In my opinion, under New York law, Uber is an employer, but offers no employee benefits to its drivers and does not pay the taxing and regulatory costs associated with employing persons. In the vast majority of cases, Uber drivers are offered low pay, no sick pay, no vacations, no 401K. In return, they are promised “flexibility”, or the freedom to work whatever hours suit them. In practice, many Uber drivers are working long, long shifts for extremely poor pay in order to try to make ends meet. On the other hand, Uber continues to operate outside of the law with impunity.

Politicians are yet to condemn Uber. Perhaps their political contributions are just too large to refuse. I am at the point where I refuse to believe politicians will intervene and Uber is surely not going to change its business model on its own volition. But not using the app will surely send them a clear message. The consuming public needs to use its power as customers to force Uber to change their behavior. The workforce of drivers need to stand up to Uber and say “no more”, by disaffiliating with them and refusing to accept their dispatches.

 While Uber is convenient and fast in New York City due to their combination of cashless transactions and location technology, there are plenty of other car services in New York City that do the same exact thing. The only difference is that Uber operates outside of the law, while the car services that provide the same type of service in New York City have been in business for decades and know who to operate a transportation business. The consuming public and the drivers affiliated with Uber should use their collective power and go elsewhere. Uber is not going to change on its own, but you do have the power to “vote” by not using their service. Uber is no longer the sexy newcomer with a cool service. It is a lawless entity that uses drivers like slaves and laughs at the consuming public along the way. Why should anyone put up with this type of service. The time has come for the public to consider that Uber did force many of the incumbents in the industry in New York City to revolutionize and create their own technology to meet the demands of the public. It is now time to go back to these companies and use their service. You deserve better