IT as KGB

June 10, 2005 | Filed Under Technology 

Do you know what your IT department is doing?

CNET reports that companies are increasing their monitoring of employee e-mail. This is going way beyond just having a policy allowing it; over 60% of larger companies surveyed say their staff will read or otherwise analyze outgoing email. (The actual study from a software vendor is available here; caveat emptor).

The study found that:

[C]ompanies are concerned about making sure e-mail isn’t used to leak company trade secrets or other intellectual property, and about complying with financial disclosure regulations. Another factor is preventing confidential internal memos from getting zapped outside the company….

The Wall Street Journal notes ($?) further:

As this debate gets sorted out, employers are getting more serious about employees’ Web habits. An American Management Association/ePolicy Institute study released last month found that 76% of companies surveyed monitored employee Web use. Sixty-five percent used software to block connections to certain sites, up sharply from 2001. Last year, a separate AMA/ePolicy study found 50% of workplace IM users have sent or received “risky” messages – such as attachments, confidential information or potentially offensive content.

Denise Howell previously announced that her firm Reed Smith and DolphinSearch have collaborated on a product called ComplianSeek, which seems to be a narrowly designed solution targeted at retention requirements imposed upon investment advisers by federal law.

Have companies or firms employing IT personnel to physically monitor outgoing messages thought this through completely? What about employee privacy protections afforded by federal or state law for personal information (SSN or health, for example)? Or what if Joe in IT sees the memo from the GC to Big Firm partner seeking counsel on a proposed acquisition of a public company–or on legal aspects of a major downsizing that includes the IT department? Did these same companies have the mail room steam open letters when we only communicated by written correspondence? Or record telephone conversations for later transcribing?

Some form of smartly targeted automated scanning of messages may be in the cards for some companies in certain circumstances. But if I am a CEO of a company under withering international competition, I really want to question hiring more IT staff to read and report on outgoing email. Technology suddenly isn’t the promised panacea at that point.

And one more thing that always troubles me: who will watch the watchers?

Blinkable Hours

June 8, 2005 | Filed Under General 

For several months, I have been working on a draft entry on Blink by Malcolm Gladwell. Released to much fanfare early this year, it still tops the best-seller lists. Fast Company noted:

Now Gladwell’s back again in bound, written form, this time exploring how first impressions affect decision making. In Blink, he argues that by distilling the first few seconds in which we interact with a person, product, or idea into what is useful information and what is misleading, we can learn to make better decisions. “We talk endlessly about what it means to think about a problem, deliberative thinking and rational thinking,” he says. “But we spend very little time talking about this other kind of thinking, which is happening in a split second and which is having a huge impact on real-world situations.”

Then yesterday I read an excellent post by Ernest Svenson at Ernie the Attorney. He notes how lawyers by training or disposition are probably suspicious of quick judgments:

This is certainly true in the legal profession. And, while you generally don’t want to hire a lawyer who runs around making ’snap decisions,’ part of the reason that many people get frustrated with lawyers is that they don’t ever make quick decisions, particularly if they bill by the hour. Is there room for ‘rapid cognition’ in the legal profession? You bet there is. Are lawyers likely to try to understand how to make better quick decisions? Probably not.

Mr. Svenson then goes on to draw an interesting parallel to one area where a Blink-like philosophy prevails in the law: jury consulting. Two other intrepid writers have also provided insights on Blink and the law: Monica Bay on litigation and Professor Ribstein on governance.

Lawyers providing corporate legal services logically know that successful businesses must make rapid decisions with often incomplete information to compete and win. We also read client survey results that reveal a perception that’s really no surprise: lawyers take too long to provide answers that are too complex and too laden with caveats. Since clients know how 99% of corporate legal services are billed (by the hour), they think they know why rapid response is rare. But these same clients continue to embrace hourly billing like Linus clings to his blanket, signing invoices and not proactively exploring a different way.

One thing that’s clear about the billable hour legal services model: before there can be any change, someone has to blink.

Leaving the House of Morgan

June 6, 2005 | Filed Under Managing, In the News 

Reports surfaced over the weekend that Morgan Stanley general counsel Donald Kempf Jr. is leaving the firm. In its Sunday edition, the New York Times covers his departure in the context of a longer article about Ronald Perelman and the $1.45 billion verdict a Florida jury reached in his favor against Morgan over an investment in Sunbeam that went sideways.

There’s much ink given to case strategy and discovery, and how those issues may have lead to the ten-figure verdict.

The Wall Street Journal’s coverage ($) of the case noted:

Ironically, Mr. Kempf’s suggestion that Morgan Stanley settle the Perelman case for $20 million was twice rejected by the firm’s investment-banking division, according to people familiar with the matter. People familiar with the matter in the division say they shared the view of lawyers working on the case that it wasn’t worth settling on its merits at the time, and that it was later events that were Mr. Kempf’s responsibility, including the firm’s trouble producing documents, that ended up hurting the firm.

Mr. Kempf knows the real story, and like a good general counsel, he isn’t talking. While investment bankers are used to dealing with large numbers, they really pay attention when it’s not other people’s money.

Years ago when I started practicing in-house, I talked with a senior lawyer about the challenges of directing litigation in that setting. At one point, he remarked “Gunfighters don’t get a second chance”.

The Perelman case may be overturned, modified or settled on appeal. That probably won’t be front page news.

But for a general counsel, while the client may not always be right, it is the one that’s left.

Update: Tom Kirkendall also comments on Mr. Kempf’s departure here.

Selling the GC - Lesson #1

June 3, 2005 | Filed Under Selling the GC 

One topic to launch on this occasional Friday is legal marketing. Selling part of this process. I’d intended to start with what I like–but then a certain email came my way.

Crafted to not clearly run afoul of CAN-SPAM, the message set off an alarm when I noticed it was addressed to “undisclosed-recipients”. Calling a potential client that hardly starts to warm a cold market. (It’s also a sign the mailing list wasn’t opt-in). That’s strike one.

Nevertheless, I read on. Apparently a software vendor and a major law firm (Am Law 100) were inviting recipients to a web seminar on e-discovery. The email went on to say:

This session provides an overview of recent case law and the business requirements for an effective internal and enterprise-class computer investigation capability. It also covers how an organization can leverage its current network infrastructure and enterprise-class technology to meet these critical business objectives.

Hmmm, does receiving spam help me to leverage network infrastructure? No. Strike two.

As my finger paused over the “delete” key, the boilerplate at the bottom came into view:

Note: The information contained in this message may be privileged and confidential and thus protected from disclosure. If the reader of this message is not the intended recipient, or an employee or agent responsible for delivering this message to the intended recipient, you are hereby notified that any dissemination, distribution or copying of this communication is strictly prohibited. If you have received this communication in error, please notify us immediately by replying to the message and deleting it from your computer. Thank you.

May be privileged? “If the reader of this message is not the intended recipient….” But the recipients are undisclosed! Either way we have strike three, yer out.

Ernie the Attorney has already knocked it out of the park on the issue of legal boilerplate; it is often a sign of over-lawyering. A firm that features it in a marketing communication should probably reassess its strategy before hitting “send” again.

So here’s Selling the GC - Lesson #1:

First impressions count; intrusive and legally incongruous ones don’t.

Update: Less than 15 minutes after posting this, a remote check of office email shows another law firm spam message coming over the transom. When I hit delete, the always-obnoxious Outlook “Request Read Receipt ” box pops up. Bad firm, no cookie. Read Lesson #1, above.

Dreaded Inside Baseball

June 2, 2005 | Filed Under General 

That box in the upper right of this page is a giveaway–The Wired GC is now affiliated with the law.com legal blog network. I appreciate their invite to jump in the pool and hope to keep my head above water. The depth and breadth of the other members of the network is impressive–I may be bringing down the curve.

A few loyal readers have asked for a bit more information.

First, some inquire about the “anonymity thing.” It’s really simple: I write during off-hours about subjects I don’t directly face at work, and I’d rather not have work interrupted by calls from well-intentioned rainmaking counsel or breathless vendors.

And then, for those who asked for a more representative picture than this, I guess I can open the kimono a bit. If you do not want to see a slightly worn, high-school era picture of the once and future Wired GC, please, PLEASE do not click here.

For the three of you who did, and for the one who gives a rip, I am the scholarly-looking one.

Enough of this mindless pap; tomorrow it’s back to corporate law from the inside out. Postings will appear on Monday and Wednesday, even the occasional Friday as well.

Your time and any feedback is appreciated.

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