When I was a kid there was a Saturday morning cartoon show called Sealab 2020.  I remember thinking that was a long, long way off and wondering how old I would be when 2020 rolled around – – and whether by then there would really be a giant lab on the bottom of the sea with 250 oceanauts fighting sea monsters and battling pollution.  But, here we are; it’s 2020!  I am officially old(ish) and, sadly, sea monsters go un-battled under the ocean (unless you count Wicked Tuna), but pollution on (and in) the high seas runs rampant.   Triple bummer.  What does this have to do with “Ten Things” you ask?  Nothing other than a little nostalgia and the “2020” reference as this is my first post of the New Year.  As usual, we’ll start the year with my list of essential issues for in-house lawyers to pay attention to over the coming months.  When I was general counsel, I started every year thinking about the “big picture” and what risks (good or bad) might be coming down the pike that I needed to be aware of as an in-house lawyer.  It’s not an easy task as there is so much “out there” that can have an impact on your company and legal department.  Still, it’s better to try to anticipate some than to ignore all.  So, once again, I have sat down, read a lot, and thought hard about different issues that will likely have some substantial impact – positive or negative – on in-house lawyers and for which a little bit of preparation or pro-active attention can make you a hero vs. someone caught flat-footed.  With the usual caveat that I have no crystal ball showing me what’s important, here my “Ten Things” 2020 edition of essential issues for in-house counsel:

 

1.   The Trump Administration. This is the first three-time “winner” on my essential issues list, having made the list in 2017 and 2019  Love him or hate him, you cannot deny that Mr. Trump and his administration have turned the political and business landscapes in the US and around the globe on their head.  These past few weeks see us dealing with his impeachment trial in the U.S. Senate (where his acquittal is a virtual certainty), Phase 1 of the new trade deal with China, passage of the new North American Free Trade Act with the U.S.-Mexico-Canada Agreement, major changes to environmental policy, potential loosening of the Foreign Corrupt Practices Act, a booming but uneven economy, new travel restrictions, threats of more tariffs, and so on.  Moreover, he and his administration often change their mind on issues overnight drawing a hardline one day only to completely reverse course the next day.  This type of uncertainty has, oddly, become a certainty, meaning business leaders and in-house lawyers need to pay close attention to what’s going on in Washington at all times (to start, check out The Washington Post and the Greenberg Traurig firm’s Hot Off the Hill blog).  To add to the fun, it is a presidential election year in the U.S. meaning the level of “crazy” is being amped-up exponentially across the political spectrum.

2.  Pay Equity/Parity. If there is one issue I would single out for the C-Suite and for boards of directors in 2020 it is the issue of pay equity/pay parity related regulation.  While closely related, pay equity and pay parity mean slightly different things.  According to Stephen Miller:

  • Pay equity: paying employees fairly and consistently, without discrimination on the basis of gender, race, etc. but taking into account job-related factors such as education, work experience and tenure.
  • Pay parity: requires that employers show there is no pay gap across the entire workforce between men and women and between whites and racial or ethnic minorities. [1]

The battle for both is now being fought in the states and cities (vs. at the federal level), with new laws aimed at both the difference in pay between men and women and between whites and minorities.  California, Oregon, and Massachusetts are just a few examples of states weighing in on the issue of comparable pay for comparable work and making it illegal to pay men and women differently for the same type of work.  Large cities are also getting into the act – sometimes in ways that are contradictory to state laws aiming to solve the same problem.  In other words, it’s a jungle out there.  Smart in-house lawyers, especially those with responsibility for employment law issues, are working closely with their human resources departments and outside counsel to ensure they are up-to-date on the latest laws that might impact their company and whether a company-wide pay audit makes sense.  But first, managers in legal departments should make sure their own house is in order regarding pay issues among department members.  For more on pay equity issues, the national employment law firm Fisher Phillips has an excellent blog on pay equity issues called Pay Equity Matters: Mind the Gap.

3.  Antitrust Enforcement. I think 2020 will be a big year for antitrust enforcement issues, not only in the U.S. but around the globe.  This is especially true if you are one of the big U.S. technology companies like Amazon, Google, Facebook, etc.  Here in the U.S., both the FTC and the DOJ are looking into multiple competition law issues involving Big Tech and online search, online commerce, and social media.  The same is true in the E.U. and India.  While Big Tech may be in the hot zone, don’t forget that antitrust regulators are also looking hard at employee non-competes, a fairly standard restriction used by most employers.  Additionally, U.S. competition authorities (including states attorney generals) are digging into mergers and acquisitions – even those already consummated – and the feds are well into the process of updating their vertical merger guidelines.  While government authorities tend to lead the game when it comes to antitrust enforcement, the risk of private antitrust lawsuits is a real and present danger all in-house lawyers need to stay aware of, including growing attacks on single-firm conduct, i.e., companies acting alone, (see my blog post Sherman Act Section 2 – The Monopoly Man Cometh).  Similarly, see this article on “Right to Repair” legislation and issues around Big Tech denying parts to independent repair shops.  Altogether, this means that in-house lawyers need to be constantly vigilant around the behavior of their companies (and make sure antitrust training is required of all employees, including senior management), help the business be realistic about proposed acquisitions and mergers, and pay close to attention to what is going on in the world of antitrust generally because it could make its way to your doorstep – a knock on the door you do not want to hear.

4.  AI Regulation. I am a big fan of the promise of artificial intelligence and have written about it a lot (see, e.g., Artificial Intelligence: What All Legal Departments Really Need to Know).  Yet, like any product or service, artificial intelligence can be (has been) abused.  And where there is abuse (think Clearview AI potentially), legislation and regulation usually follow.  It’s no different for AI and we are starting to see a mounting wave of actual and proposed legislation that will have a dynamic impact on how AI develops and is utilized by companies.  Recently, the CEO of Google parent, Alphabet, called for “sensible” AI regulation stating, “There is no question in my mind that artificial intelligence needs to be regulated. The question is how best to approach this.”   He made this statement while in Brussels, looking to influence upcoming AI regulations from the European Commission.  The EU is also considering a five-year ban on facial recognition technology in public places.  IBM weighed in on AI regulation too calling for “precision” in any regulatory regime and recommending that companies hire AI ethics officers, test AI systems for bias before and after deployment, and make AI systems “explainable” (i.e., how they arrived at any automated decisions).  These may become de facto “best practices” to keep an eye on.  Similarly, in the U.S., Illinois passed a law regulating the use of AI in job interviews (a growing phenomenon) requiring that employers:

  • Give notice if AI is used.
  • Explain how the AI works and the characteristics it will use to evaluate applicants.
  • Get consent from the applicant.

There is also federal interest in AI regulation, including enhanced securities law disclosures around AI risk and guidelines for how the federal government should look to regulate AI.   Finally, the problem of AI-generated “deep fakes” is staggering in its potential to disrupt elections (e.g., fake videos of politicians) and people’s lives (e.g., fake pornographic videos).  All of which means in-house lawyers not only need to be on the lookout for useful AI technology for their legal departments, but also on watch for AI risks and laws that can impact their company’s business, especially those using AI to create products and services.  Two great sources to stay up-to-date on AI legal issues include the Wall Street Journal’s daily AI newsletter and the Artificial Intelligence Technology and the Law Blog.

5.  Trade.  This is buried in the long list in No. 1 above but deserves its own spot in the Top Ten.  Trade tariffs impact just about every corner of the global economy and while, for example, the U.S. and China may be on the path to reducing (or at least pausing) tariffs, some argue that the damage to the U.S. and global economies caused by tariff wars is only now starting to materialize and Phase 1 is coming too late to stave off the harm.  And just last week, President Trump issued fresh tariff threats against EU automobiles to go along with proposed tariffs on numerous EU luxury items.  How all of this plays out economically and politically remains to be seen.  Politics aside, every in-house lawyer needs to be aware of tariff fights and how it may hurt (or help) your company’s business.  Related to tariffs, are trade sanctions, i.e., restrictions on trade for purely political reasons, looking to influence and change behaviors of national governments.  Prominent examples include the U.S. trade sanctions on North Korea, Venezuela, and Cuba.  Staying on the right side of OFAC and the long list of trade sanctions is becoming a full-time job for many in-house legal departments.  Potentially more troubling, however, are the ever-increasing trade sanctions on Iran (and disagreements re the same amongst Western allies).  Regardless of your point of view, the fact that these sanctions make the hardline government in Iran even more unpredictable (especially when combined with recent U.S. actions against Iran and Iran’s mistakenly shooting down a civilian airliner) hangs over the world economy as that unpredictability rattles markets across the globe.  Lastly, if you export products outside of your home country, you need to be well versed in export controls/restrictions and reporting and ensuring the business follows both the letter and the spirit of these laws.  Now is a great time to get your export controls in good shape.

6.  Climate Change. This one is also a repeat from last year’s list.  While people can certainly disagree about the cause or causes of climate change and how best to deal with the change, it is difficult to buy any argument that our climate is not changing.  Simply put, scientific evidence overwhelmingly shows our planet is getting warmer and drier.  The business impacts from climate change are real and while governments may be stuck companies are figuring out how to deal with what’s going on (see. e.g., the McKinsey report How Companies Can Adapt to Climate Change).  For example, there are increasing numbers of companies making climate change part of their public disclosure documents, which includes everything from board of director focus, to identifying risks associated with rising coastal waters, raging wildfires, excessive heat, massive storms, and water scarcity.  Central banks have produced a voluminous report on the potential negative effects of climate change on the global economy, including how investors are moving money to eco-friendly companies and away from “polluters.”  On the other hand, some companies will actually find opportunities for growth in climate change.  Additionally, there are a good number of climate-related lawsuits pending in the U.S. that may have a dramatic impact on business operations once they are decided.  Overall, legal departments should be thinking about the disclosure requirements, pitfalls, and opportunities presented by climate change and whether the company – and the legal department – are prepared to deal with them.  And even if you dismiss climate change as false, all companies need to be prepared for dealing with weather-related calamities and other natural disasters, e.g., hurricanes, drought/heatwave, earthquakes, tornados, fire, volcanic eruption, and so on.  In-house counsel should champion a crisis-management plan, i.e., a written plan for how the company will deal with a crisis, natural or otherwise.  Likewise, the legal department should be part of the team that determines the types and amounts of insurance coverage is needed by the company to protect against climate change/natural disasters.

7.  Data.  It would be easy to list data privacy alone here, but I think I need to go up a level and put “data” generally on the 2020 list.  The topic certainly covers data privacy regulations which are springing up like mushrooms after two-weeks of rain.  Not only are U.S. companies dealing with the new California data privacy law, new laws are in place or pending in numerous states, like Washington, Nevada, and Maine.  And, to add to the fun, the federal government continues to flirt with a comprehensive federal data privacy law that would preempt all of the various U.S. state laws (which would be a boon to businesses otherwise trying to juggle 50 different standards).  Across the Atlantic, in-house counsel are bracing for more uncertainty around data transfers out of the EU to the U.S. as both Privacy Shield and Standard Contractual Clauses are under attack — something a comprehensive U.S. federal privacy law could alleviate.  Beyond data privacy laws, serious issues are in play with the vast amount of individual health data Google is collecting.  Couple this with concerns about how Facebook and other social media sites collect, use, and secure our personal and geo-location data, you have the makings of a perfect storm of data issues coming to a head in 2020.  This is from a fascinating op-ed piece in the New York Times titled My Apps on My Phone Are Stalking Me:

“Your location, your purchases, video and audio from within your home and office, your online searches and every digital wandering, biometric tracking of your face and other body parts, your heart rate and other vital signs, your every communication, recording, and perhaps your deepest thoughts or idlest dreams — in the future, if not already, much of this data and more will be collected and analyzed by some combination of governments and corporations, among them a handful of megacompanies whose powers nearly match those of governments.”

That’s scary stuff to most people.  For more, check out One Nation, Tracked (“12 Million Phones, One Dataset, Zero Privacy”) and Shoshana Zuboff’s The Age of Surveillance Capitalism (“In the future that the surveillance capitalism prepares for us, my will and yours threaten the flow of surveillance revenues. Its aim is not to destroy us but simply to author us and to profit from that authorship.”).  You may never use your smartphone again.  Equally concerning to in-house counsel are the numerous “phishing” attempts made every day both on home computers and work computers, i.e., “bad guys” trying to trick you into clicking on a link in an email that contains malware or otherwise trying to fool you with an email that looks like it comes from your boss with instructions to wire money to an account.  Worst of all, it only takes one employee to let their guard down for an IT system to be hacked and valuable data and systems held for ransom or millions of dollars transferred to a phony account due to a spoofed CEO email.  In-house lawyers need to be at the forefront of the company’s efforts to combat “phishing” starting with training employees and using simple, but effective, techniques like strong passwords (changed regularly), auto-patching for malware and viruses, and multi-factor authentication.  Make 2020 the year you truly get on top of data issues.

8.  Writing Smart (Again). I am surprised I have not thought to put this one on my essentials lists before but it is a topic I wrote about in one of the first “Ten Things” blogs, i.e., teaching the business to “write smart.”  It’s pretty much guaranteed that several times a year you will read about some litigation or regulatory investigation gone horribly awry because of some “dumb” email, text message, Slack message, PowerPoint, memo, or whatever.  And even though the email, for example, may have little to nothing to do with the merits of the matter, the optics or the need to “explain” it cause the company to settle (or lose) litigation, drop a merger, and so on because they cannot overcome what their employee wrote.  Make 2020 the year the legal department recommits to teaching the business how to “write smart.”  The basics are the same year in and year out:

  • Don’t write it down if you don’t need to – email is not a private conversation, it’s a transcript!
  • Stick to facts (no speculation).
  • No exaggeration or hyperbole.
  • No profanity or off-color jokes.
  • Don’t denigrate co-corkers, customers, or regulators.
  • Don’t discuss legal issues/exposure unless the email is seeking advice from a lawyer.
  • Don’t send emails or other messages when you’re angry.
  • Remember that email, Slack, or whatever are formal business communications of the company – treat them as such and be professional at all times
  • Know that whatever you write down will never – never – disappear or truly get deleted. Someone has, or somewhere there is, a copy.

9.  Populism.  Late last year I started thinking a lot about the topic of “populism” and its impact on the global economy, businesses, and governments.  In the past, my view of populism was Teddy Roosevelt shaking his fist at trusts from his bully pulpit.  I realize now that it’s a topic I and in-house lawyers should be focusing more time on.  I say this because populist governments around the world are changing the longstanding norms that governed global business for the past 50-years.  Here is a quote from an Ernst & Young 2017 report titled Politics, Populism, and Trust in Business: Discussions for the Board Room:

“For all their obvious differences, the landslide election of Emmanuel Macron in France, the election of Donald Trump as US President, and Brexit all have something important in common. They all appealed to an overturning of establishment consensus and they all offered a diagnosis of a society or economy moving in the wrong direction. They all appealed to voters’ desire for change, a desire to punish elites and an instinctive sense of a society or economy moving in the wrong direction. To a greater or lesser extent this element of dissatisfaction and unease is present in most western politics.”

These changes may be good or bad for you and your company but they are here and there will be more changes in 2020 and beyond.  The current wave of populism rises out of income inequality and a belief that long-standing government institutions are failing their people – driven primarily by the global Great Recession of 2008.  From this rises a wave of “strong-arm” leaders and political parties seeking, in short, to take advantage of “them,” i.e., there’s someone to blame for your problems and it’s them.  There are several ways populist governments and populations deal with “them:”

  • “Drawbridge Up” barriers to trade and immigration rise. Subtle (or overt) attacks on religious and ethnic minorities.
  • Attack Institutions/Each Other – the media is usually target No. 1 (i.e., ”fake news”), but so are the courts, the “deep state,” the courts, global institutions, other countries, Central Banks, “Capitalism,” “Socialism,” “Communism,” free speech/intolerance of other viewpoints, the “Elites,” Silicon Valley, and so on. Facts rarely matter here and the cruder the attack, the better.
  • Manufactured “Crises” – or exploitation of a real crisis to rally people to an extreme position.
  • Economic Redistribution – tax policy changes and other economic policy changes, driven by a belief that “someone” is not paying their fair share or someone is getting more than they deserve, like the one-percent, or corporations, or immigrants, and so on. All convenient targets when the appeal is in the rhetoric and not in the facts – which all to often don’t matter to populist leaders, i.e., if I can say enough times it becomes a fact.

I know this one may be controversial and not everyone will agree with the above, but you cannot deny the rise of populist governments around the world over the past five years, e.g., Brazil, India, Poland, Hungary, Italy, Turkey, the U.K., and even here in the U.S., and the unpredictability they bring to the business world.  For in-house lawyers, trade, crises (real or manufactured), acts or threats of war, immigration, tax policy, economic policy, monetary policy, stable institutions with predictable processes and results all matter.  A lot.  Meaning, do not sleep on what’s going on around the globe and your own backyard.  And don’t think it doesn’t impact your company or your legal department.  It does.  Your antenna needs to be on high alert in 2020 because those businesses that develop a deep understanding of what populism means do better than those that don’t.

10.  Self-Help. There was a battle for this last slot.  A very close second was “California” and the need to pay attention to what’s going on in the Golden State in regards to data privacy, the “gig economy,” arbitration, auto emissions, and host of other laws that – because of the size of California and its economy – drive business decisions across the globe.  While that is all very important for 2020, my choice here is focusing on ways the legal department can implement more “self-help” tools for the business, i.e., ways that the business can get what it needs from legal without having to involve a lawyer (or other members of the legal department).  This, in turn, drives efficiency, lowers costs, frees up valuable legal resources, and enhances the value of the department along with increasing client satisfaction.  This is the year to start to truly build out your self-help tool kit.  Some ideas include:

  • Standard forms/templates/checklists/standard disclaimers on your legal department website.
  • Automated contract assembly tool that allows internal clients to build contracts based on pre-approved standards put in place by the legal department.
  • Frequently Asked Questions section on your website.
  • Creating a chatbot so internal clients can get quick answers without speaking to a lawyer.
  • Giving select access to your matter management and e-billing tools so executives can pull data themselves.
  • Contract playbook for the sales team (and my dream of having the playbook converted to a chatbot tool).
  • Proactive “pushing out” of key policies and short articles to the employee base so basic concepts around compliance issues stay fresh and top of mind.
  • Automated legal intake and assignment with the ability to track the progress of the legal request.
  • Use of collaboration tools where the business can see/work in the same document as the legal team.

A great resource for available legal tech is LawGeex’s free 2019 Legal Tech Buyer’s Guide.  Also, check out this free on-demand webinar from BrightTALK, Why Self-Service is Critical to the Future of Legal Departments and this Bird & Bird publication AI: The New Wave of Legal Services.  And do not feel you have to try to implement everything on this list.  Start small, build the process up one step at a time and eventually you’ll be operating in a vastly new – and better – manner.

*****

Well, that’s it for my essential issues for 2020.  Obviously, a lot to pay attention to and consider in terms of your company and your legal department (and a lot of hyperlinks if you’re interested in going deeper on any of these topics).  Hopefully, you’ll find one or two of these critical enough to spend time on this year (i.e., no one can give 100% effort to all ten) or you may have your own completely different list and that’s great (and sorry for the U.S.-focus but I think a lot of this applies across borders).  The key is to try to start a new year by looking outward and trying to see what issues are out there that could have the biggest impact on your company (good or bad) and be sure you are thinking about them and planning around them.  That’s what a strategic in-house lawyer does and it all starts with simply making some time to consider what’s brewing out there and what’s important.

I am looking forward to another great year for the blog.  Keep your suggestions, comments, and emails coming – I read them all!

Sterling Miller

January 27, 2020

Ten (More) Things You Need to Know as In-House Counsel – Practical Advice and Successful Strategies Volume 2 came out in November.  It’s my second book based on this blog series.  As the ABA says, “All in-house lawyers need to own this book!”  Click here to buy it.

I have three published three other books: Ten Things You Need to Know as In-House Counsel – Practical Advice and Successful Strategies, The Evolution of Professional Football, and The Slow-Cooker Savant.  I am also available for speaking engagements, coaching, training, and consulting.

Follow me on Twitter @10ThingsLegal and LinkedIn where I post articles and stories of interest to in-house counsel frequently.  

“Ten Things” is not legal advice nor legal opinion and represents my views only.  It is intended to provide practical tips and references to the busy in-house practitioner and other readers.  If you have questions or comments, please contact me at sterling.miller@sbcglobal.net.

[1] See https://www.shrm.org/resourcesandtools/hr-topics/compensation/pages/pay-equity-gets-more-complicated.aspx.