Heather Tunstall

When switching to Voice over Internet Protocol (VoIP) phone systems, a business will need to incorporate new equipment and technology. Though it may seem daunting, the transition and subsequent result leads to more manageable communications, a shallow learning curve and support during the process.

“One of the biggest differences between using a traditional phone system and going to a VoIP platform is the huge reduction in equipment that is needed, and you’d be getting better features and advantages out of it,” says Alex Desberg, sales and marketing director at Ohio.net. “When you’re moving from a traditional world to a VoIP world, there is a reduction in the equipment management and the space required to have the brains of a Private Branch Exchange unit living in your office.”

Smart Business spoke with Desberg to find out what a company can expect when switching to VoIP in regards to space concerns, hardware, and learning and maintaining the new technology.

What are the equipment requirements when incorporating VoIP?

It actually reduces the need for premise based equipment and the resources to keep that equipment up and running. Integrating VoIP systems removes an old phone system, and takes old phones off desks and replaces them with a phone designed for VoIP. It normally uses your existing Internet connection unless that needs to be upgraded to handle the additional bandwidth from the voice communications.

How are employees trained on the new systems?

When the new technology is being presented, part of the process of moving to VoIP is what your business environment can assimilate. There’s a large amount of education upfront in terms of system capability. For instance, end user education is conducted where, when it’s time to put a phone on somebody’s desk, the vendor trains the employee on how to use the phone — there is somebody whose sole responsibility is to go out and train a customer. The employees learn how the phone on their desk works and how that works in conjunction with how calls are coming in.

Is the installation done by the vendor or by the company?

It can be either. If it’s done by the vendor, it’s done as part of that training so when the vendor is out doing the installation, training also is being conducted.

How much maintenance is required?

Software updates, upgrades to the system and maintenance done on the system are all part of the service. The only thing that needs to be maintained in terms of hardware or software is the phone on the desk. If a company owns its own hardware, the equipment will be supported until it stops working and then the customer may need to replace it. Software upgrades are automatic, typically involving a phone reboot in the middle of the night during non-office hours.

What happens in the case of power outages?

One of the functions of VoIP is that it actually has some built-in disaster recovery. So even if a phone loses power, breaks or Internet connection at the office is lost, the system itself is aware of that outage and reroutes calls. For example, if a company’s phones go down from a power outage, the system can automatically send calls to alternate lines such as cell phones.  

How much bandwidth does a company need for VoIP?

It boils down to how much bandwidth a company has prior to installing VoIP. If a company is already pushing its usage to the peak and there are issues with its Internet service, adding a VoIP Internet-based phone system will not help the scenario. The solution is to either upgrade bandwidth or separate voice and data into two connections. But the company can grow the system as needed.

Alex Desberg is sales and marketing director at Ohio.net. Reach him at adesberg@ohio.net.

Insights Telecommunications is brought to you by Ohio.net

Overhauling an office phone system is often a necessary part of growing, improving and updating an organization’s technology. Voice over Internet Protocol (VoIP) is a common upgrade that offers a variety of options to fit a business’ needs, whether it has a small, medium or large employee base.

Each VoIP system can be custom built to fit the specific requirements of a company, says Alex Desberg, sales and marketing director of Ohio.net. A specific VoIP product is chosen based on the company’s specific needs, and its implementation is ramped up in a way that’s manageable.

“When you’re talking about your phone system, it can be pretty painful when you don’t know what to expect,” Desberg says. This is why companies have the option of switching everything over at once, or taking a step-by-step approach when switching to VoIP.

Smart Business spoke with Desberg to examine the ways companies can integrate VoIP.

When converting to VoIP, is there one best way to transition or are there options?

Each VoIP-based phone system is meant to work uniquely. Some companies don’t know what’s available out there, and really aren’t ready to jump in with both feet to a brand new phone system and service provider. If a company knows that over the next few years they’re going to grow, they’re going to change, or they’re going to move, then there are specific opportunities that arise.

When does it make sense to use a step-by-step approach?

Unlike traditional telephone service, a step-by-step approach can be used as opposed to transitioning everything when improving communications using VoIP. In many situations, dial tone from traditional telephone providers can be duplicated and moved to the VoIP realm. It’s then offered back in a cost-effective way.

If a company is planning to move to a new facility it is a great opportunity to start down the path of new technology. The organization can take the phone numbers that it currently has and move them to VoIP services. Then in the new location, deploy what looks like traditional phones. When the company is ready, it can retire its old phone system and slowly step completely into VoIP. It eases the process for the company and its employees.

Remote workers or remote offices that are using separate phone systems raise more opportunity to investigate VoIP options. Those multiple environments can be brought together so that they look and operate like a single phone service. It can be a mix-and-match environment, offices and workers can be spread out across the country, deploy individual phones and systems for them while the main office is still working off of the traditional phone configuration.

In what circumstances is it better to switch all at once?

When a company is growing, often its phone system is something that’s an afterthought. Either the current phone system can’t handle more employees, the voicemail is always full or the technology is in need of updating. A good option at that point is to move to a platform that doesn’t have those limitations. Hosted VoIP, where all services and all phones are provided, has basically unlimited growth potential. So there is a great opportunity for a company to avoid continuously reinvesting in old technology.

How can a company determine what’s best for its situation?

The best and most important part of the process is planning. It’s based on what a company needs going forward. Not only is the company preparing for new hardware, but also new expectations on the IT staff and the network itself. It’s important to make sure that the VoIP provider offers training as part of its service. And financially, a company has to make sure that it is a good way to go and a good investment.

Alex Desberg is sales and marketing director at Ohio.net. Reach him at adesberg@ohio.net.

Insights Telecommunications is brought to you by Ohio.net

No one likes to be involved in a lawsuit — especially since they can be so expensive. However, if it should happen to your business, it’s important to not only hire the right lawyer but also to make sure you’re getting your money’s worth from that lawyer.

You need to be aware of how much the litigation will end up costing you in order to make an informed decision about whether to go through with it, or to settle.

“You might want a very long, involved budget that says how much it’s going to be for certain things. Try to get that in writing,” says Gerald Knapton, a partner at Ropers Majeski Kohn & Bentley PC.

“When the bills come in, your accounts payable staff should follow up and make sure that it seems to be staying within the budget. If the actual invoices exceed the budget by more than 10 percent, have a discussion with the lawyer to find out what’s going on.”


Smart Business spoke with Knapton about what to look for when hiring a lawyer — questions you should ask and how to make sure your dollars are being used properly.

What’s the first question a business owner should consider when looking for a lawyer?

‘How much is this going to cost me?’ Employers need to have that clearly in mind, but it’s hard to tell sometimes. It’s important to understand the costs on the average case.

The best way to do that is ask your lawyer if they have data. Lawyers are resistant to answering how much a case will cost, but push them. Write down the estimate and confirm it in an email, and don’t stop there. Once you’re 60 to 90 days into the case, come back and ask for a revised estimate.

What price points should you negotiate?

You should negotiate the hourly rate, costs and what’s going to be included in the costs at the beginning. You also should spell out in your retainer agreement the form of the bills. Otherwise, some law firms won’t bill in tenths of an hour, which is the standard.

Make sure the firm does not block bill — that is, if there’s a day when they worked 10 hours on nine different matters, have them break it down and explain how much time was spent on each of those discrete items; they’re kept honest by having to put down actual time for actual work done.

What do you do in the case of a fee dispute?

As soon as the bills appear to be exceeding either what you’ve paid in the past or what your budget said it was going to cost, you complain. Work your way up the chain talking to the relationship partner at the firm, then the managing partner of the office, and if necessary, you go up to the firm’s managing partner. Usually, if you’re not asking for free services, that works well and you wind up getting a good hearing.

You can always complain to the L.A. County Bar Association; they have a wonderful program — the Mandatory Fee Arbitration Program — where a client can ask professionals to look at their bills.

The L.A. County Bar Association Dispute Resolution Services allows you to do both mediation and arbitration. If it comes to the point where you and your firm can’t agree, you might mention the idea of Mandatory Fee Arbitration. The lawyers will treat you differently because they don’t want to go through this program. If a client requests it, a lawyer has to go along with it.

What are some other cost-saving tips?

If you can shift away from an hourly rate and go to a flat fee, or a monthly cap, that can save you approximately 5 to 10 percent. Remember that 97 percent of cases are settled. You always want a provision in your agreement that says if the case is settled, the fee will be adjusted.

It’s also worthwhile to look at the amount of documents that are going to be at issue, which is the biggest single factor driving cost in today’s litigation. Electronic programs are now being used to sort documents, and that’s been developed to enable you to perform predictive coding. You can run some samples and find out with 99.9 percent probability all of the documents that might be implicated by your request, especially with the in-house help of a sophisticated IT department. This will cut your costs down dramatically.

In addition, there should be continued discussion about how the documents will be handled. Who’s going to do it? How can we do it more cheaply? Can we do predictive coding? Can we do it some way that will reduce the cost of that?

Gerald Knapton is a partner at Ropers Majeski Kohn & Bentley PC. Reach him at (213) 312-2016 or gknapton@rmkb.com. Learn more about Gerald Knapton.

Insights Legal Affairs is brought to you by Ropers Majeski Kohn & Bentley PC

Having diversity in the workplace not only brings a sense of harmony but also new perspectives that allow for creative development and collaborative innovation. Promoting acceptance and encouraging people with different backgrounds to be active in your company is just good practice — and it may keep you out of unwanted trouble.

Kristina Chung, a partner at Ropers Majeski Kohn & Bentley PC and an expert in employment law, says employee diversity can be a big boost to business, thanks to all the benefits that come with it.

“Having a diverse work force increases your own understanding of the greater world beyond,” she says. “We live in a diverse economy and global community now. This creates a clear business case for diversity to better understand our clients and customers. We also learn internally from different life experiences and perceptions of our colleagues to foster creativity, innovation, outside-the-box thinking and, ultimately, better service and products.”

Smart Business spoke with Chung to find out how to successfully build a diverse work force in your company.

Beyond race, religion, gender, sexual orientation and national origin, what are some concepts or characteristics that are related to employment diversity? 

There can be implicit biases attached to physical appearance such as weight, unattractiveness and body markings like piercings and tattoos. The same can be said for voice and speech impediments or for a person’s lifestyle choices or beliefs.

These biases can create an obstacle to promoting an inclusive environment. If you harbor preconceptions or subconscious notions about how bright, capable or productive a person is based on his or her outward appearance, speech or lifestyle, then you can harm your business because you may exclude someone who could be a significant benefit to your workplace.

What actions should an employer take to demonstrate support for a diverse workplace?

It’s important to show visible support and to take affirmative action. That can mean promoting qualified people who are of more diverse backgrounds into management-level positions or by engaging in community programs that focus on a diverse audience, including helping to provide scholarships and participating in mentorship and pro bono/volunteer services programs.

How can an employer avoid legal problems stemming from discrimination?

The importance of making available information about an employee’s rights, and providing updated training to and consistent monitoring of managers and supervisors, cannot be overstated. Companies should review their employee handbooks on a regular basis to make sure they are complying with their state’s respective laws, particularly as to their nondiscrimination clauses and prohibited conduct. And as to diversity, some companies are now incorporating a ‘commitment to diversity’ provision, although that is not required.

Companies need to ensure that their managers are properly trained, not just in the law, which is constantly evolving, but also for the actual handling of complaints and conducting of investigations. In California, larger companies are required to provide sexual harassment training and expanding those programs to help prevent discrimination could potentially help to reduce liability and damages awards. Diversity training goes hand-in-hand with an employer’s efforts to maintain a discrimination-free workplace. This type of training can include identifying, acknowledging and eliminating the implicit biases mentioned earlier.

Where should a business owner go for this type of training?

Seek the help of a trained professional with the proper background and experience in employment law. The benefit of using the services of a practicing attorney is that he or she will be up to date on recent legal developments. For example, California’s nondiscrimination laws relating to gender recently changed to specify gender identity and gender expression as protected categories. So now, employment handbooks can spell out their policies more clearly, which means employees can better understand their rights and employers can better understand what the law means and are better able to comply with it.

What should business owners do if a discrimination claim is filed against them?

Be open minded to hear everything that the employee has to say about the complaint first as part of a full-scale investigation. If the owner simply makes assumptions, it may lead him or her down the wrong path, such as litigation, that the employee never really even wanted. The owner should fully understand basis for the complaint and what the employee is looking for in terms of resolution.

During the investigation, the complaint should be taken seriously. That is why the person conducting the investigation must be properly trained so that he or she knows what is legally mandated and to make sure that all bases are covered. The owner should contact legal counsel to make sure he or she is complying with all rules and regulations, including not destroying documents and meeting required deadlines.

Kristina Chung is a partner with Ropers Majeski Kohn & Bentley PC. Reach her at (650) 780-1706 or kchung@rmkb.com.

Insights Legal Affairs is brought to you by Ropers Majeski Kohn & Bentley PC

Commercial landlords are generally attentive, sophisticated people that are in the business to rent space. They have a reputation at stake and want to keep their tenants happy. However, because accidents happen or people make bad decisions either intentionally or negligently, you, as a commercial tenant, always have to be aware of potential issues.

“If you can’t make amends and resolve things informally, which you should always attempt first, then you have legal rights that you should not be afraid to exercise,” says Todd Wenzel, a partner at Ropers Majeski Kohn & Bentley PC.

Smart Business spoke with Wenzel about what issues might arise and how you can address them should you find yourself in a dispute.

How can commercial tenants avoid common problems with their landlord?

The main thing a commercial tenant can do to avoid difficulties with his or her landlord is to identify common problems that arise most frequently. Most common problems can be addressed during the lease negotiation. Therefore, the best practice to avoid them is to anticipate and ensure expectations are met, and these potentially problematic areas are addressed in the lease. For instance, with regard to building maintenance, tenants should demand assurances that the building premises and public areas will be adequately maintained by the landlord, while at the same time limiting their repair and maintenance obligations under the lease.

Do you have any tips for negotiating a lease?

In negotiating contracts or leases, be firm in your demands while acting professionally. There may be sticking points in the lease, but if they are important enough for your protection, make sure you deliver that message in a professional manner.

Commercial landlords typically require tenants to enter triple net leases, usually on large business leases. Among other things, these require the tenants to pay a portion of the taxes on the building, pay for their own utilities, pay a portion of improvements and pay for a portion of the landlord’s property insurance. For small and medium-sized businesses, they should try to negotiate out of some of the obligations contained in a traditional triple net lease.

Secondly, the commercial tenant should confirm that the landlord has a maintenance program for the building. Commercial tenants should request that the lease contain indemnity clauses in the tenant’s favor should the tenant be faced with a claim caused by the landlord’s active or passive negligence. The lease should also provide a remedy for business interruption should the landlord’s negligence or lack of timely maintenance cause a disruption of business.

Lastly, it’s important that the lease contain insurance provisions stating that the building has sufficient insurance to cover any sort of catastrophe that may hit the building. If possible, it should include a provision requiring the landlord to name the commercial tenant as an additional insured on the insurance policy covering the property.

How do you suggest the tenant review the lease prior to signing it?

Unless the commercial tenant has signed and negotiated many leases, then he or she should have counsel analyze it to spot problem provisions or missing terms and to recommend alternative provisions. This could make a huge difference down the road. So unless the tenant has a wealth of experience in negotiating leases, he or she would be wise to have counsel review it before execution.

How often do these disputes go to the point of litigation?

It’s more the exception than the rule. If you’re in business, you’re usually sophisticated enough to keep the lines of communication open so that if any problems do arise they are communicated and addressed promptly. The potential is there, but it’s not a common occurrence.

If it does become a significant dispute, what should the tenant do to prepare a case against the landlord?

Documentation is key. If numerous maintenance requests go unaddressed, have all of those requests in writing. Email requests are great because they are date- and time-stamped, but even the old-fashioned way of faxing or writing letters will do the trick. If it is a maintenance issue, it is also important to take photographs or video of the conditions before they are repaired; that way, you preserve your evidence, which is critical.

Also, I recommend to my clients to display a willingness to try to resolve disputes before it becomes a legal claim. Documenting those attempts to resolve disputes makes the case that much stronger for anyone in litigation — especially a commercial tenant. If good faith attempts to resolve matters go ignored or are rejected, the tenant can look like the good guy in court.

If a commercial tenant is at an impasse in a dispute with his or her landlord, what’s the first step?

If the tenant hasn’t already, he or she should contact counsel and have his or her attorney analyze the circumstances. Counsel can provide a risk/benefit analysis to give the tenant information as to his or her rights, estimated litigation costs and the potential outcomes of the dispute.

Todd Wenzel is a partner at Ropers Majeski Kohn & Bentley PC. Contact him at (415) 972-6316 or twenzel@rmkb.com.

Insights Legal Affairs is brought to you by Ropers Majeski Kohn & Bentley PC

Sales transactions between companies are a typical part of day-to-day business — whether it’s purchasing components as part of a whole product, buying equipment or contracting services. It’s so common, in fact, that it’s likely that a company may overlook or ignore terms and conditions, which could result in serious disputes in the event of a defective product or loss.

“Sometimes the terms and conditions of the purchase order or the invoice are not clearly communicated to the other merchant,” says Stephan A. Barber, a senior partner at Ropers Majeski Kohn & Bentley, PC. “Thus, a dispute can arise as to whose terms and conditions control if some kind of event occurs.”

Situations like this are widespread and may lead to a conflict if there’s an issue with the product or service purchased.

Smart Business spoke with Barber to find out more about the troubles that may come up during commercial transactions between companies, and how to avoid them.

What may cause a dispute between companies during a commercial transaction?

 

Business owners have to be careful with competing or conflicting terms and conditions relating to shifting or accepting the risk of a loss. When ordered goods are in transit, who is responsible if the goods are damaged, lost or delayed? Is there a warranty, and if so, what are the terms and how long is it in effect? Are there disclaimers or limitations on liability or damages? Are there are any terms relating to indemnification for claims made by third parties for damages relating to the goods that have been purchased?

Also, attention must be given to payment terms. Many times, the purchase order has very liberal payment terms, and the purchasing company does not have to pay the whole amount or has excuses for not paying everything. However, the invoice may state that the entire payment is due within 10, 15 or 30 days. Sometimes there is no formal purchase order at all — just a telephone call or email and an invoice that is faxed or emailed confirming the order.

Who is responsible for the loss or damage of goods?

 

The Uniform Commercial Code, adopted in virtually all states, can resolve some of these issues, often called the ‘battle of the forms.’ Section 2-207 of the code addresses additional or different terms in an acceptance or contract, and there are several sections dealing with deterioration, casualty, nonarrival, etc., as well as what happens if there is no agreement between the parties as to a risk of loss.

The situation becomes complicated if parties attempt to make an agreement regarding risk of loss or if there is a course of dealings or conduct between the parties. The court can look at the course of dealings to see how to interpret the contract. It’s problematic when companies do not give each other their respective terms and conditions, or when the entities do not pay strict attention to terms and conditions. Additionally, the terms and conditions in the invoice, purchase order and other contract documents or communications could compete or be contradictory.

What happens when the terms and conditions are contradictory?

 

If you have a discrepancy in the purchase order and the invoice as to who is responsible for defective or nonconforming goods, then determine whose term supersedes, if at all. There are a number of Uniform Commercial Code rules as to how that dispute can be resolved. However, a court could disregard both terms if they are in such conflict and then resort to general law.

If the purchaser sends a purchase order and someone on the receiving end signs it but then sends back an invoice with different terms and conditions, the purchaser could argue that because the seller signed the order, in effect agreeing to its terms and conditions, the invoice’s conflicting terms and conditions are superseded by the purchaser’s terms and conditions. Or, if evidence shows that when you started doing business, you met with the seller and showed the terms and conditions in your standard purchase order, the purchaser’s terms and conditions can be part of the contract despite different terms in the invoice.

How often do these types of arguments escalate to legal trouble or litigation?

 

Trouble happens more frequently than people think. Problems do not always reach the level of lawyers, but they certainly get to management and the respective companies getting together to try to resolve the issue, or even going to mediation. It also can sour a relationship so that even after a successful resolution, companies do not want to do business anymore. Sometimes, litigation ensues if a large amount of money is involved.

How can a business owner avoid disputed terms and conditions from the beginning?

 

Try to require the party with whom you are contracting to sign a document acknowledging that it has reviewed and agrees to your terms and conditions or other contract terms. Then, your terms and conditions should supersede any contradictory terms and conditions. However, additional or supplementary terms in the other party’s purchase order or invoice will probably be a part of the contract. Additionally, if you will have repeated transactions with a company, have a master contract negotiated and signed, controlling the commercial relationship.

Both companies should determine whether the other has standard or general terms and conditions and read them. Find important ones that may be in conflict and then specifically agree to the terms that will control the commercial relationship.

An ounce of prevention is worth a pound of cure, so business owners should pay attention to what’s going on before a problem arises, not after. Therefore, relevant employees must be trained what to do and instructed to consider all possible ramifications.

Stephan A. Barber is a senior partner at Ropers Majeski Kohn & Bentley PC. Reach him at (408) 918-4524 or sbarber@rmkb.com.

Insights Legal Affairs is brought to you by Ropers Majeski Kohn & Bentley PC

Insurance is a vital part of running a business today for many reasons. Property and liability losses, as well as the defense of lawsuits, may be tendered to insurance companies to avoid significant financial losses.

“It’s important to know what types of questions to ask your broker and how to properly manage your insurance information to minimize harmful losses,” says Dean A. Pappas, partner at Ropers Majeski Kohn & Bentley PC.

Smart Business spoke with Pappas about best practices for evaluating insurance needs and how to be ready if an event occurs.

What should business owners consider when planning a business insurance program?

The first fundamental step in evaluating insurance needs is the assessment of potential losses that can be insured. You should determine what you can’t afford to lose as a company or, for instance, how your business would suffer significantly from any suspension of its operations. You’re going to need to work with your insurance broker to figure this out. For example, you can ask the insurance broker for a checklist to help determine what kinds of risks you may have and which kinds of risks may be insurable. At some point you will want to get actual copies of the policies and not just rely on advertising materials to know what is covered. When you receive the policies, have them reviewed by somebody knowledgeable regarding what the policies really say and mean.

What types of insurance should companies consider?

There are two basic areas of coverage. First, there’s property insurance or ‘first-party’ coverage — you may hear that term because it has to do with your own losses. Secondly, you also need liability insurance to insure against what they call ‘third-party risks.’ Liability insurance applies when somebody else — such as a customer, competitor or former employee — suffers a loss and then sues you or demands payment from you. When creating or renewing your program, it’s important to evaluate not only property insurance risks but also liability insurance risks.

What else should a business owner consider when planning an insurance program?

One thing you need to assess is how much risk you can accept on your own, how big of a deductible you can assume and what limits you need. When examining limits, consider factors such as whether the cost of attorneys being paid to defend you counts against your limit in the liability insurance setting.

Also, when you see or learn about exclusions in a policy, that may be an indication there’s another insurance product available to fill the gap created by that exclusion. For example, if a business provides services, there probably will be an exclusion in its general liability policy that says it doesn’t apply to harm arising from providing professional services. Therefore, you can buy professional liability insurance that covers that gap. Ask questions. Ask to read the policies or have someone read them for you.

What happens in the event of a loss?

You must notify the right insurance company of the loss. Therefore, before any loss occurs, you should create or set up an insurance library or insurance file and keep all of your policies, not just the current policies but every policy you ever had, in that library. Different kinds of policies apply differently. Some of them apply based on when an injury occurs. Some of them apply based on when the wrongful act occurred. Some of them apply based on when the lawsuit is filed. So you never know — it may be a policy that’s 10 years old that you need to pull out or you need to be aware of in order to evaluate what an insurance company might cover.

It is also a good idea to prepare a list of the notice requirements in each of the policies. Then you will be prepared to notify the right insurance company in the right way when a loss occurs or if you get sued.

What should businesses look for when identifying insurance risks?

Identify wheether you own or lease a building, and what kind of interest you have in that. Business interruption, such as a fire, and the resuling loss of income pose a large potential loss on the property insurance side. If your business relies on other businesses for supplies or supplying component parts, you can get insurance that is based upon interruption of that flow of parts or services. It would be business interruption due to damage to property of others — suppliers and distributors, for example. Working with a broker, there’s a long list of additional property insurance coverages you should explore that include theft coverages, such as employee theft or employee dishonesty.

For many years, the insurance industry and people in general were very concerned about tangible property, but now there’s a whole new area of property insurance and liability insurance risks called cyber risks. For example, most companies can’t afford to lose all of their software. The hardware was always traditionally covered, but the software, since it was intangible, was not. Consequently, a business owner may need to get a new separate kind of coverage that applies to the loss of electronic data or software, or business interruption due to the loss of electronic data or software. It’s a whole different area you need to explore given the fact that many businesses these days are wholly dependent on intangibles.

Dean A. Pappas is a partner at Ropers Majeski Kohn & Bentley PC. Reach him at (650) 780-1628 or dpappas@rmkb.com.

Insights Legal Affairs is brought to you by Ropers Majeski Kohn & Bentley PC

If you find your company facing litigation, the right lawyer can make a big difference in the outcome of the process. So, how do you know where to start? One of the first steps is determining whether or not your insurance will be paying for the claim.

“Depending on the claim, a defendant may tender to his or her insurance carrier,” says Saundra K. Wootton, partner at Ropers Majeski Kohn & Bentley PC. “In that instance, if a company or individual is being sued and the insurance carrier picks up the defense, sometimes the insurance carrier will help in the selection of the lawyer that will be defending the client’s claim.”

If a claim is being presented to an individual or a client, Wootton recommends that they tender to an insurance company no matter what to ascertain whether or not the claim is covered under any policy. However, sometimes matters will not be covered and a client is required to select an attorney and pay them hourly or some other negotiated sum.

Smart Business spoke with Wootton to find out the best way to choose the right lawyer for your situation.

What are some of the characteristics to look for in a lawyer?

One of the factors you should consider is the lawyer’s experience. If you’re not familiar with lawyer shopping, you may want to ask other colleagues or friends for a referral if any have dealt with litigation in the past. If you are attempting to find a lawyer on your own or if the insurance company is providing a lawyer, ask about the lawyer’s experience. Another smart thing to do is to check the lawyer’s status with the California State Bar to determine if that lawyer has ever been disciplined. With respect to a particular claim, you should ask how much experience that lawyer has in handling those types of cases and what were the results achieved.

Do you recommend looking at different lawyers for each individual case or sticking with one for the company?

Some people get acquainted with a lawyer, and over time the lawyer is familiarized with the company and is able to effectively and competently represent all types of claims that come up with respect to that particular company.

However, there are lawyers who specialize in particular areas of business law, such as anti-trust or unfair business practices, or intellectual property. If it were a multimillion-dollar anti-trust action, you would feel more comfortable getting someone who deals with anti-trust or unfair business practices. If it’s a slip and fall case, the anti-trust lawyer could most likely effectively represent that case equally as competently.

What should business owners keep in mind in regards to fee agreements?

It depends on whether the lawyer is operating under private pay or insurance pay. If it’s private pay, you should always ask for a written fee agreement so you understand what’s expected of you and what’s expected of the lawyer. Fees and costs are covered in that agreement, including how that lawyer bills for his time, whether it’s a tenth of an hour or a quarter of an hour, and when you are expected to make payments.

What part does a lawyer’s personality play in the selection process?

The lawyer’s personality plays a big part, and the reason is some people prefer handholding and other people may prefer a hired gun, so to speak. It really depends on what you need for a particular claim. If the thought of litigation scares you to death, then you may want somebody that will hold your hand and nurture you along the process. If you’re more aggressive and you believe that the claim should be litigated no matter the cost, then you may want somebody with a more aggressive style. And sometimes you may want a little bit of both, so it really depends on whom you want representing your company.

Remember, the lawyer is going to be the face of the company in a court of law and out in the public, and so it’s an extension of the company’s representation in public. Therefore, it’s important that the chemistry between the company and the lawyer are a good match.

How can you effectively determine if the lawyer is a good fit?

You should interview the lawyer, if at all possible. It can either be done personally or on a telephone call. You should find out how the lawyer communicates, the likely outcome of the case and whether there are any other strategies than litigation to resolve the case. Not all cases have to go to trial and most cases don’t ever make it to trial. You should be wary of any lawyer that guarantees a result — results should never be guaranteed in the process of law.

One of the most important questions during the interview process is to determine how much the litigation is expected to cost. You should continue to ask the lawyer about his or her projected budget every 60 to 90 days or after significant litigation events. If the lawyer changes his or her estimate on the original projected litigation costs — up or down any more than 10 percent — then you should ask that the new projected budget be immediately confirmed in writing.

It’s best to interview several different lawyers because, again, that goes back to personality and experience. By interviewing several lawyers, you will get a feel for the personality type of that lawyer and understand whether the lawyer has had similar claims and what were the results on those claims.

Saundra K. Wootton is a partner with Ropers Majeski Kohn & Bentley PC. Contact her at (213) 312-2008 or swootton@rmkb.com.

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Litigation is not only costly but also extremely time consuming, especially when it comes to document review and evidence procurement. But in recent years, technological tools have enabled e-discovery to speed up the process and reduce expenses.

“When it comes to litigation, studies indicate that 60 to 90 percent of the cost is discovery,” says Lael Andara, a partner at Ropers Majeski Kohn and Bentley PC. “The person who understands the tools and adopts the technology can try the case for significantly less, and can get to the key information and be in a better position to resolve the dispute sooner.”

Smart Business spoke with Andara about using e-discovery tools and when they are an appropriate method to reduce the time and cost of a lawsuit.

What is e-discovery?

E-discovery is the same as discovery, with the recognition that business data is digital. Business data is 99.9 percent computer generated and therefore, so is all potential evidence.

In the past 10 years business data have evolved exponentially into the digital form as Electronically Stored Information (ESI), allowing for an exponential growth of data. A recent Wall Street Journal article explained that at this time in our history we are generating more data every 10 minutes than every written work and image created from the dawn of time until 2003.

To deal with this there are new technology tools in the form of predictive coding, or technology-assisted review (TAR), that ferret out the key information in pending disputes in less time and for less cost than the typical linear review previously used in the legal profession prior to ESI.

Predictive coding or TAR is already being embraced by different industries, especially those that are web based, because of how it maximizes sales. For instance, when you purchase a song from iTunes, the site shows other music that you might like based on your previous choices; it predicts your next purchase. When you buy groceries, coupons on the back of your receipt are based on the purchases that you made to increase the chance of generating business based on the preferences revealed in your current purchase.

The litigation profession is essentially doing the same thing to minimize costs. For example, if you are the plaintiff in a contract dispute, you probably only have a few key documents: invoices, the contract(s) and emails. You can take that information set, called a seed set, and plug it into the computer because you know those are the most relevant documents. The computer, based on an algorithm, will find all other documents that are similar in nature, which gets to the heart of the relevant evidence much quicker than a full review of all company records by an attorney. Predictive coding is an artificial learning that leverages computing capability to decrease the cost and time that often stands in the way of early case assessment or resolution.

Also, if you put in a seed set of five documents and the program brings back 100, you can tell it that 80 were not relevant and 20 were relevant, thereby allowing it to learn based on the expanded seed set. Predictive coding becomes more intelligent the more you teach it which data is on target and which is not, much like Netflix recommendations become more accurate the more content you watch.

How does this technology lower cost during litigation?

Cases today can require gigabytes or terabytes of information to be reviewed for responsive documents to be produced in litigation and ultimately narrowed further to several hundred or thousand pages that you will actually use as exhibits at trial. First and foremost, you have to narrow the universe of information that your attorney reviews because attorney rates of $200 to $600 per hour drive the cost of litigation. Predictive coding can narrow attorney review time from months to weeks or even days; time is money, and volume is time.

A business owner needs to understand the big-picture cost of TAR. For example, predictive coding may cost $750 per gigabyte, which initially may appear expensive, if you are dealing with a terabyte of data. However, instead of the attorney spending months reviewing documents, the information using TAR can be narrowed down to a manageable subset with the attorney spending only days or weeks reviewing the documents — a huge cost savings. Even greater than the cost savings, predictive coding gets you to the facts of your case more quickly so that you can make more informed decisions in terms of offering a reasonable settlement, if necessary.

When is predictive coding the appropriate method to use in document discovery?

Court rules require that the cost of discovery be proportionate to what’s at issue. For example, if you have a contract dispute with $1,000 at stake, predictive coding is probably not the best use of your time or money. But if you have a case such as the recent Oracle-Google case over the Android phone’s use of JAVA, in which there was a $1 billion demand and the volume of data was immense, then predictive coding is necessary. If you have a case that’s in the tens of thousands of dollars, you should at least consider predictive coding or some other version of technology-assisted review if the volume is significant.

Lael Andara is a partner in the Intellectual Property and Technology Group and chair of Electronics Services Protocol/Discovery ESP at Ropers Majeski Kohn and Bentley PC. Reach him at (650) 780-1714 or landara@rmkb.com.

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No one likes to be involved in a lawsuit — especially since they can be so expensive. However, if it should happen to your business, it’s important to not only hire the right lawyer but also to make sure you’re getting your money’s worth from that lawyer.

You need to be aware of how much the litigation will end up costing you in order to make an informed decision about whether or not you want to go through with it, or to settle.

“You might want a very long, involved budget that says how much it’s going to be for certain things. Try to get that in writing,” says Gerald Knapton, partner at Ropers Majeski Kohn & Bentley PC.

“When the bills come in, you and your accounts payable staff should follow and make sure that it seems to be staying within the budget. If the actual invoices exceed the budget by more than 10 percent, have a discussion with the lawyer to find out what’s going on.”

Smart Business spoke with Knapton about what to look for when hiring a lawyer — questions you should ask and how to make sure your dollars are being used properly.

What’s the first question a business owner should consider when looking for a lawyer?

“How much is this going to cost me?” Employers need to have that clearly in mind, but it’s hard to tell sometimes. It’s important to understand the costs on the average case and then try to position yourself at the bottom end of that range, if at all possible.

The best way to do that is ask your lawyer if they have data. Lawyers are resistant to answering how much a case will cost, but push them. Write down the estimate and confirm it in an email, and don’t stop there. Once you’re 60 to 90 days into the case, come back and ask for a revised estimate. That is the key, because while a good, honest lawyer will give you their best shot at the beginning, they are just estimating based on their experience.

What price points should you negotiate with the law firm?

You should negotiate the hourly rate, costs and what’s going to be included in the costs at the beginning. You also should spell out in your retainer agreement the form of the bills. If you don’t do this, some law firms won’t bill in tenths of an hour, which is the standard.

Make sure the firm does not block bill — that is, if there’s a day when they worked 10 hours on nine different matters, have them break it down and explain how much time for each of those discrete items; they’re kept honest by having to put down actual time for actual work done.

What do you do in the case of a fee dispute?

As soon as the bills appear to be exceeding either what you’ve paid in the past, or what your budget said it was going to be the cost, you complain. You work your way up the chain talking to the relationship partner at the firm, then the managing partner of the office, and if necessary, you go up to the firm’s managing partner. Usually, if you’re not asking for free services, that works well and you wind up getting a good hearing.

You can always complain to the L.A. County Bar Association; they have a wonderful program — the Mandatory Fee Arbitration Program — where a client can come and ask professionals look at their bills.

The L.A. County Bar Association Dispute Resolution Services (DRS) allows you to do both mediation and arbitration. If it comes to the point where you and your firm really can’t agree, then you might mention the idea of Mandatory Fee Arbitration to your firm. The lawyers will treat you differently because they don’t want to go through this program. If a client requests it, a lawyer has to go along with it.

What are some other cost-saving tips?

If you can shift away from an hourly rate and go to a flat fee, or a monthly cap, that can save you approximately 5 to 10 percent. Remember that 97 percent of cases are settled. You always want a provision in your agreement that says if the case is settled, the fee will be adjusted.

It’s also worthwhile to look at the amount of documents that are going to be at issue, which is the biggest single factor driving cost in today’s litigation. Electronic programs are now being used to sort documents, and that’s been developed to enable you to perform predictive coding. You can run some samples and find out with 99.9 percent probability all of the documents that might be implicated by your request, especially with the in-house help of a sophisticated IT department. This will cut your costs down dramatically.

In addition, there should be continued discussion about how the documents will be handled. Who’s going to do it? How can we do it more cheaply? Can we do predictive coding? Can we do it some way that will reduce the cost of that?

What else can you do if you’re going to trial?

The first thing you ought to do, if you’re a defendant, is tender this claim to your insurance company. If you don’t tender, the insurance companies will probably deny the claim based on failure to tender. You may even want to try to buy insurance; you can sometimes get insurance with the disclosure that it is existing litigation.

Gerald Knapton is a partner at Ropers Majeski Kohn & Bentley. Reach him at (213) 312-2016 or gknapton@rmkb.com.

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