With new and intense challenges seen in Corporate America, more and more companies are turning to the assistance of lawyers to create a risk profile and provide guidance on response. In fact, this issue has become so serious that in the past few years, governmental expectations for better governance have been strongly encouraged, specifically in the area of planning and delivery.

The development of a risk profile is one of the first steps a company should consider, examining both strategy and operational factors. Having a systematic plan in place for managing operational, strategic, and project risk is essential to the success of any business, regardless of size or industry. While using legal support for the creation of a risk profile offers a number of benefits, the primary objectives include achieving corporate objectives, enhancing performance, and reducing risk.

Although company executives could take a stab at creating a risk profile and appropriate response, a legal team can help by establishing definitive and precise action specific to the company and current laws. Federal, local and even industry regulations and laws change frequently making it difficult and cumbersome for a non-legal person to identify all the potential risks. A professional team will have the ability to take a high-level view of the company to identify potential problem areas that might not otherwise be considered.

Typically, if using outside counsel, the firm would start by working with internal personnel to gain a better understanding of the company, as well as its processes, technologies, and techniques. From there, a legal aspect would be considered to define a framework for a comprehensive, risk profile. The focus of the profile would depend on a number of things although areas such as risk management, finances, and legal are at the top of the list. Then, the company would need to have a dedicated team in place internally to implement and manage the risk profile and response.

You could think of a risk profile as a snapshot of the key areas and risks of an organization, coupled with broader areas such as business development, operations, and overall strategic goals. It is critical to understand not only the specific risk factors but the response associated with those risks and how they impact the organization. Using a legal team to help manage risk does not happen in a vacuum without the input of key stakeholders. The executive team and other stakeholders have a responsibility to ensure that the risk response is aligned with the overall objectives of the company. Legal must be kept apprised of the key business objectives to ensure that the risk profile and response reflect what is critical to the organization.

For instance, some companies will get themselves into trouble by missing time-sensitive responses and/or actions, which might include late delivery, tax penalties, going over budget, or a number of things pertaining to the business. Using a risk profile gives management a heads up on the most critical areas to watch for so nothing is missed. In addition, an attorney can assist management in response, teaching them and providing legal advice on the right way to respond should a problem or concern arise.

The legal team should have the capability of working with internal personnel to identify and successfully manage key risks, develop a solid risk profile, and integrate this profile with the overall business plan. Risk management requires comprehensive communication, internal support from the top down and a combined commitment to achieving results. In this way Legal truly becomes a key part of the overall support team that helps your business obtain the desired results.

Today more than any other time in history, protecting company privacy is essential. Unfortunately, the number of cases associated with identify theft have not only risen but also moved from personal to business. Over the past few years, a number of large companies and even government agencies have been in the news for having laptop computers and vital information on employees and the organization itself stolen. What makes this so uncomfortable is that usually, the privacy is being threatened from within the very organization that is supposed to secure it.

Keep in mind that while some organizations are at greater risk for thefts, such as credit card companies, banks, or government agencies, even the small mom and pop shops are at risk. Remember, it would only take one instance of information leaking out to put a company completely out of business. The problem is that not only is data being stolen, but often sold to criminals that know exactly how to extract what they want to make a profit – at your expense.

More than ever, it is crucial to do all you can to protect your organization and employees. In today’s flat work force, many employees use laptops rather than desktops. A laptop enables employees to work from any location eliminating downtime for the field employee and increasing the efficiency of communication. However, every time an employee takes the computer out of the office, the potential risk of privacy is increased. Let us say an employee had a laptop with no logon protection. This employee worked in the financial sector of the business and after going to dinner while on a business venture, he returns to the hotel room only to find the laptop gone. Now, without the computer having any type of password protection, anyone can gain access. However, professional criminals can hack anything with or without protection.

In addition to accidents such as this, other situations could arise putting your organization in danger. For instance, if there were a disgruntled employee, perhaps someone passed over for a promotion, or someone who knows his or her job were ending, this individual may feel there is nothing to lose by leaking out or taking vital information. If this person were unstable or just angry, he or she could cause damage to the company through the sharing of trade secrets, personal data or other sensitive information. Then of course, you have people who go to work for companies specifically for the sake of stealing private data. Although this is not as common, it does exist and this practice is growing.

Yet even with Identity Theft and Privacy being spotlighted in the media, companies remain surprisingly vulnerable. Organizations around the globe have no clue to the quantity of sensitive information being leaked out but even worse, no tracking system is in place to find out or to correct the problem. While we often focus on the computer as a source of theft, private data can be taken out of a company in many other ways. For instance, iPods, USB sticks, or any portable device makes downloading information easy and covert. What happens is that in addition to the company and employees being at risk, customer relations could be severely damaged as well due to lack of trust and confidence.

To give you an idea of just how data is being taken out of organizations, 75% is with the use of a portable device, 63% via email attachments, and 59% from content within emails. Sadly, a number of companies were recently surveyed and of those, just 50% stated they had any concern. If you are working hard to build your organization, you need to take this risk seriously. With so many possibilities for privacy to be robbed, it is crucial that you understand the risks and then take appropriate action to correct them. If major data leaks can occur within tightly secured companies such as AT&T, National Audit Office, Veterans Affairs, and Google, then surely you too can potentially be at risk.

Take steps to protect your trade secrets and sensitive private data. This is an area worth making an investment. With the sheer volume of information that is produced daily within a company, it is challenging to ensure security. However, taking time to understand who has access to important data and how to best protect it is well worth the investment of time and money. After all, what would it cost you if your valuable data was lost or stolen?

Over the years, the public has been fascinated by the legal process. One can hardly remember a time when there was not a spate of television shows that did not feature some aspect of the legal process. With the proliferation of “reality” programming, we now have the opportunity to go behind the scenes and see justice at work. Television programming both fiction and non-fiction would lead one to believe that true justice comes at a very steep price. In the race for justice, the one with the deepest pockets wins, or do they?

The media spotlight on cases that involve the rich and famous have furthered the notion that guilty or not, if you can afford a high profile law firm, you have a better chance of winning your case. O.J. Simpson, Michael Jackson and Robert Blake were all convicted by the public at large but each was found “not guilty” in a court of law. Were they able to escape the justice due them because they had the means to pay for the best defense?

The American Bar Association published a study by noted legal consultant William C. Cobb in which he discussed the value of legal services to the client. Cobb segmented legal work into four classifications – commodity, unique, experiential and brand name.

Unique legal work constitutes a “nuclear event” for the client. These are events in which life or business hangs in the balance and the client is willing to pay whatever it takes. Unique legal work constitutes less than four percent of the work in the market. Would former Enron CEO, Kenneth Lay have searched the yellow pages for an attorney for his case? Of course not, his business and freedom were at stake. Even those who may not have the money to hire the best will often find a way to either raise the funds or gain the interest of these firms. In example, Amber Frey, a witness in the Scott Peterson murder trial retained Gloria Allred as her legal representative. Gloria Allred has established herself as a defender of women’s rights. While it is certain that her firm handles many lower profile cases, she is definitely a recognizable brand. Amber Frey would not have had the financial means to retain such a high priced attorney but the case was high profile and Amber stood to gain from penning her experiences.

Experiential work is legal work that the client deems high impact or high risk. It accounts for 16% of all legal work. In this type of legal work, clients are looking for specific experience and an attorney uniquely qualified who will handle the case personally. In example, a physician that is being sued for malpractice would seek out attorneys with experience in malpractice cases. The physician would have a very narrow list of candidates based on the firm’s experience, success ratio and likely recommendations from colleagues who had successful outcomes.

Brand name legal work accounts for 20% of the market. This type of legal work is routine work but still important to the client. The client chooses a firm that has a reputation in a niche market or has established their brand. In every state there is at least one firm that everyone has heard of and typically can associate with their area of practice. The firm does not necessarily have to be high profile but simply have name or brand recognition. In example, a law firm may have established a reputation as “the firm” for civil litigation.

Finally there is Commodity work. Commodity legal work accounts for 60% of the market. It is legal work that clients feel can be handled by any good attorney. As such it is extremely price sensitive. Of course no one at any price wants to hire a bad attorney! This sector of the market is the largest. Clients are seeking good representation but for matters that are not nuclear events. Commodity work would include things like family law, minor criminal offenses, business incorporation, auto accidents and any non-complex litigation. Although attorneys may have a different view, consumers view this as “routine” legal work.

So, what does justice cost? Well, if we look at the value curve, price is determined by the market and 60% of the market will hire based on price. Consumers are not at the mercy of law firms, rather like all professional services, if prices are too high, consumers will not purchase. There is a segment of the market willing to pay a little more for good service but when there is an abundance of suppliers, most consumers will price shop.

In recent years, as large corporations have faced mounting pressure to control costs, in house legal departments have sought to decrease outside legal expenses. Corporations have instituted bidding processes, legal expense reviews and are becoming more vigilant about their legal spend. General Electric, often a trendsetter undertook a bidding process for their legal work. Microsoft has taken an active role in ensuring efficiency and effectiveness in legal work. Organizations of all sizes are using independent 3rd party bill review to force law firms to become efficient project managers, as they are not willing or able to pay “whatever it takes.”

Individual consumers too have become savvier in how they choose legal services. Many choose to forego attorneys in favor of do-it-yourself techniques. Self-representation or pro se representation in matters such as divorce is on the rise. Interestingly enough people do not simply choose pro se because they cannot afford another option. While cost may be a factor for some who don’t see the value in hiring someone when they can do it themselves, retaining control is often the bigger issue. Many simply want to direct their own legal process. Access to legal information and documents has facilitated self-representation. As such, consumers who hire professionals will also demand service at a reasonable price.

What does justice cost? Well, the answer may very well be it costs what you are willing to pay for it. Obviously, those celebrities who were on trial certainly considered their legal situation to be a “nuclear event.” When your life, livelihood and reputation are at stake and the stakes are high, undoubtedly you will not wrangle over legal costs. You will hire “high powered” attorneys with a reputation for getting the job done. However, if this work only constitutes 4% of the overall legal market, we can theorize that justice is available in all price ranges.

Mention the word attorney in a crowd of people and you are likely to get a wide range of reactions. Let’s face it most of us associate attorneys with law suits, trouble with the law and court dates. All things that can cost us money! However, there are many situations in which an attorney can be proactive in preventing legal problems. There are times when everyone can benefit from legal expertise whether you are a large corporation, a self employed business owner or an individual. If you are buying property, starting a business, or even entering into an employment contract having legal counsel can ensure that your rights are protected and that you do not make missteps that can cause you problems in the future. For corporations that have in-house counsel, there are many reasons why outside counsel is retained including the need for representation in a particular jurisdiction or the need for specialized legal knowledge.

Whether you are an Association, a global corporation or a small business owner, there are general tips which will assist you in choosing the right legal counsel for your unique needs. Choosing legal counsel is not unlike choosing any other professional service organization. It is important to first clearly understand your needs and then to carefully screen the professionals that meet your pre-defined qualifications to find the right fit.

1. Determine the area of legal expertise that you need. Are you in need of general legal counsel that will advise you in your business? Do you need an attorney to manage your fundraising campaign? There are law firms that specialize in representing certain types of businesses, in example one firm may represent several homeowner associations and have an expertise in this area, another may represent technology firms and understand this niche business. In addition to the practice specialty (i.e. intellectual property, real estate, trust) you may also require a firm that has experience with similar clients.
a. Can you use a mediator? Structured payments, apology, retraction, letters of recommendation, confidentiality agreements, barter and agreements for future business are some of the workable options in mediation that may not be available in litigation. Mediation is less expensive and takes less time than litigation.
2. Identify potential candidates. You can ask colleagues, friends, and others for referrals. State bar associations have legal referral services or you can visit the American Bar Association’s website, www.abanet.org for a list of attorneys in your area. A reference like Martindale Hubbel or West’s law directory online can be useful in identifying lawyers with the expertise you need and the type of clients they represent.
3. Screen the potential candidates. Contact the potential candidates and ask them to send you basic information on their firm and the services they provide. You may also screen by phone. Have they handled clients/cases similar to yours? How recently? What were the results? Are they willing to provide references?
4. Meet face to face. Narrow down your list from the preliminary screening and meet face to face with the top three or four candidates. Ensure that you will not be charged for the initial consultation. For corporations engaging counsel the face to face will be a briefing of your needs.
5. Request a proposal from each of the candidates that you have met face to face. The proposal should outline services, fees and a preliminary timeline.
6. Check references. Verify credentials with the State Bar Association. Call the references provided. Would they use the firm again? Were they satisfied with the results? Were there problems, and if so were they satisfactorily resolved?
7. Determine if there is chemistry. In addition to legal expertise and a track record in your area of need, you will need to form a good working relationship with your counsel. While you should certainly not select an attorney based on the color of their suit or style of dress, you do need to select someone with whom you can have a collaborative working relationship. The attorney client relationship is one of mutual trust and collaboration.
8. Define the relationship. Once you have selected counsel and notified the other firms of your choice and reasons for that choice (this is a common courtesy) it’s time to get to work with counsel. The relationship should be clearly defined in a contract. The contract should very specifically address services, fees, schedule, personnel, location, and process for termination. Make sure your attorney agrees to abide by the American Bar Association’s Model Rules of Professional Conduct, portions of which govern attorney fees. What services will be provided and by whom? Will paralegals, investigators or junior counsel do some of the work on your case? Where will the services be provided – onsite or offsite? What are the fees and how often will you be billed? What other expenses will you have to pay, i.e. document copy services, transportation? Who will make contractual decisions? Who will be responsible for billing (in an hourly arrangement is there a designated timekeeper)? What is the process for termination? How often will you communicate and how? Specify that all work product belongs to you, the client. This is especially important if you find it necessary to terminate the attorney. This is the time to clearly work through your expectations of counsel as well as their expectations of you. Make no assumptions. If you do not understand something, seek clarification.
9. Provide counsel with the information they need. Your counsel is your advisor, your advocate. In order to adequately represent your interests they will need all pertinent information. Do not withhold information. It is akin to going to a physician for a problem but failing to provide him or her with a medical history.
10. Communicate. All good relationships require open communication. If you have questions or concerns, bring them to counsel’s attention. Remember you are the client and counsel does want to meet your needs.

Disputes are often the result of a failure to communicate, or opposing views on what was communicated. This is true in most human relationships, personal and business. In personal relationships, most disputes are resolved without legal intervention, but business disputes very often result in some type of litigation and that can be a very costly endeavor. Business involves risk, but the degree to which you manage those risks can have a profound impact on the bottom line. However, if risk is not identified it cannot be avoided, eliminated, mitigated or managed. Ideally, we all want to avoid disputes. While you can employ best practices to avoid many disputes, you cannot eliminate the risk. It is wise to have an inexpensive, expeditious and defensible mechanism in place to resolve disputes. All disputes do not have to result in litigation.

Business disputes can often resemble family disputes. There is a differing understanding of terms, failure or perceived failure to meet expectations or an inability to negotiate as the dispute gets heated and becomes emotional. Common business disputes are between employer and employees (individual or union), business partners, customers or suppliers. To avoid or reduce the risk of dispute in all of these areas, companies must identify what could lead to a dispute, and develop an action plan that avoids or reduces the risk. In many cases, having written policies and procedures and ensuring that they are communicated will reduce the risk of a dispute. In example, an employment agreement can clearly delineate the employee and employer’s responsibility and as well as a mechanism for resolution in the event of a dispute.

Business partnerships are a common source of potential conflict. By identifying the potential for dispute you can take steps to control the damage in advance. Many small to mid sized businesses are controlled by five or fewer people. This provides for an efficient management system but also has the potential for dispute. What happens in the event that an owner has an extended illness, divorces or passes away? What if two or more of the owners cannot see eye to eye on how the business is run? What if one of the owners wants to retire, cut back on hours or sell his/her shares to a third party? What if the partnership dissolves and one or more of the owners opens a similar business? All of these events pose a risk and can potentially disrupt the operation of your business. All too often businesses fail over these types of disputes.

The best way to avoid these disputes is by hiring legal expertise in advance of the partnership. An attorney can address all of the potential risks in a partnership agreement or buy-sell agreement. This agreement will address potential disputes, ownership sales and other risk events. By hiring an attorney to help you structure the partnership you can avoid the potential of messy litigation in the future.

Many commercial contracts have begun to insert an alternative dispute resolution clause. Alternative Dispute Resolution or ADR has become a more common practice as a way of avoiding litigation in the event of a dispute. ADR includes arbitration and mediation. Mediation is often the first step in the dispute resolution process. The mediator’s role is to be a neutral party that assists in reconciling difference before proceeding to arbitration or litigation. An arbitrator also acts as a neutral third party but hears evidence and decides the case. The value of arbitration is that parties avoid hiring attorneys and proceeding to court. Arbitrators do not represent either side but are neutral. Arbitration can be binding or non-binding.

Keeping in mind that most conflict is a result of communication failures, ADR can give the parties a broader perspective. In some respects, ADR is akin to marriage counseling for business. In example, there was a case of two businessmen who had a conflict and instigated lawsuits against one another. They were referred for mediation. At the conclusion of mediation not only had they resolved their original conflict but had also signed future contracts worth tens of millions of dollars. This obviously is a highly successful outcome but of course one we cannot expect for every case.

By the time most cases reach mediation or arbitration there is so much rancor between the parties that no outcome will be fully satisfactory. Often both parties sustain losses that cannot be recovered. Labor disputes present a good example. When athletic teams go on strike as management enters into mediation, each side is losing money that will likely not be recovered. Owners lose money from ticket sales, players lose endorsement dollars and businesses that are tied to the sport (such as food vendors, hotels near stadiums) lose money. While the disputes do get resolved, all around there is a loss. ADR does not eliminate the loss but is preferable to a potentially long and costly court battle that could take years to settle.

“Collaborative lawyering” is an innovative and relatively new method of dispute
resolution where the parties and their lawyers agree to resolve the issues without litigation. Lawyers agree to represent the parties for settlement purposes only. This method differs from mediation in that there is not a neutral third party. However, it draws on the concepts of mediation in that the parties are managing the dispute themselves rather than a judge or arbitrator. The role of the collaborative lawyer has been described as “advocacy without litigation.”

In all disputes, there is the option to avoid, eliminate, or reduce the potential for conflict. Good business practices and communication can go a long way in accomplishing these objectives. However, it is wise to have a plan of action to swiftly resolve disputes when they occur and to do so with minimal cost.

Today, we see a number of risks associated with businesses of all sizes, ranging from identity theft, embezzlement, natural disasters, personal injury, fraud, vendor failure, taxes, finances, and more. Because of the increasing number and type of business risks, companies have had to make some major adjustments in overall operations, management, and strategy. When you couple risks with competition, you can see that it is imperative every company have a solid plan in place for protection and success.

One of the most important aspects of strategy is ensuring a solid risk management team is in place. These individuals would hold the responsibility of not just identifying potential risk but also creating and implementing sound processes, techniques, or technologies for prevention and/or correction. The risk management team however will not work in isolation but in tandem with other key stakeholders, such as department heads and the Executive team. Having a winning risk strategy is going to give your business the foundation on which to build a strong, competitive company but also a business that employees and clients trust.

What is the key to creating such a risk strategy? For one thing, you want to be productive but not make quick decisions. Unfortunately, we have seen many larger corporations that have put “quick fixes” into place, only to find they end up with a laundry list of new problems. Yes, it is essential that a good plan be developed as quickly as possible but make sure the plans being considered are not just short term fixes but will be beneficial long-term. While a risk management team can identify potential risk events, the team must work in conjunction with the organization so that strategies are aligned with the business goals. In essence, the best risk strategy is one component of the overall business strategy.

In addition, you need to review your company inside and out, top to bottom, to determine where risks lie. For example, missing payment on taxes can be an extremely costly mistake, sometimes upwards of $10,000 or more. In this instance, there would be a number of things to consider. Is the individual heading up the tax department qualified? What type of tracking system is being used? Is the department short-handed? Is the person in the mailroom delivering mail on time? These and other possibilities exist, which is where a risk management team would help. Once the problem area or potential risk is isolated, then changes could be made accordingly.

Another factor that unfortunately, is sometimes overlooked is the client. Obviously, if you are going to run a profitable business, you need satisfied customers. Perhaps there are areas of service or product where customers are not happy but because no means of communication or input is in place, you have no idea. Therefore, you might think about sending out customer surveys, trying to find any weaknesses that need to be strengthened. It is imperative that you know your customers and that those customers are so satisfied with what you offer so they will not look elsewhere.

Things happen in businesses and sadly, many great companies have gone under because of lack of risk management and/or strategy. Enron, is only one of many examples in which a failure to manage risk or even identify risk ruined a company. Another often cited example is Barings Bank which was one of the most respected merchant banks in the United Kingdom. The company which held $900 million in capital was bankrupted due the actions of one trader. The losses and subsequent bankruptcy could have been avoided if internal controls had been in place. There are countless other global examples of the consequences of not identifying risk events.

While federal regulations such as Sarbanes-Oxley have mandated corporate governance and controls, managing risk is simply good business. Identifying risk events and formulating response strategies enable the organization to successfully execute its objectives.

Bottomline Lawyers provides the very best Legal Services in Rocklin CA.

BottomLine Lawyers offers the very best legal services in Auburn CA.