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LEGAL GUIDEBOOK

S2 November 16, 2015

Presidentâ€™s Letter

Business development vs. marketing culture The shift to a more strategic role within small, mid-sized law firms By JENNIFER SHANKLETON

es â€” there is a difference between business development and marketing. But ask anyone on the street and they would be hard-pressed to give a concise definition of each. The trick is that there is indeed overlap â€” but one has a significantly less strategic role when it comes to the end goal of winning business. Over the last several years, small and mid-size law firms have taken the lead from their larger firm peers and shifted focus â€” redefined really â€” their marketing and business

development strategies. As a result of an economy that went from crisis to metamorphosis over the last eight years, firms found themselves struggling to bolster, reinvent or dissolve certain practice or industry areas that were once profitable. Shankleton Increased competition (including the non-legal kind), emerging markets and succession planning challenges, as well as alternative fee pressure or requirements, have made firms with a once steady flow of work in key areas, re-evaluate how

they grow and develop business. Part of that analysis has been a stronger focus on business development: training younger attorneys sooner; identifying and thoroughly cultivating rainmaking skills in mid-level attorneys; and consistently tapping into senior business developersâ€™ proven track records for mentoring opportunities. The role of legal marketers also has had to transform, and itâ€™s a trend that is trickling down to small and mid-size firms, where 10 to 15 years ago, most everyone was a generalist. Recent statistics collected by the Legal Marketing Association show that 40% of its members are marketing generalists

and 47% are specialists focusing on very specific responsibilities, including business development. Firms still are mindful of how brand awareness affects their business. However, dedicating time and resources to initiatives such as client service, technology, legal project management and, of course, business development is proving more fruitful than traditional marketing and communications tactics. Shankleton is director of marketing and practice development for Brouse McDowell, LPA. She can be reached at 330-535-5711 or jshankleton@brouse. com.

Relationships build business J ulie Savarino, managing director of Business Development Inc. and founder of Perfect Your Pitch, recently helped facilitate the LMA Ohio Chapterâ€™s Legal Practice Development Institute in Columbus. Here, she offers some thoughts on

business development:

develop into significant rainmakers.

Can business development skills, or rainmaking, be taught? Yes, lawyers can be trained and coached on how to develop new clients. Lawyers who start as â€˜mistmakersâ€™ with the desire to become better can

Are you seeing an uptick in business development efforts and focus at law firms/in the legal industry? Yes, legal industrywide, the focus is shifting away from an emphasis on marketing/communications-type efforts (speaking, writing, attending conferences/events) and more toward an emphasis on organized, coordinated client development/selling. This involves the process of: with whom one communicates; Savarino how they communicate and when; targeted content; and most importantly, how and when they follow up and stay in touch. It is during or after one-on-one or small group communications where the vast majority of new business originates for lawyers and law firms, and there is a proven process of which most lawyers are not aware, because it is not taught in law school.

Trusted Advisors. Respected Advocates.

Is there one thing that stands out as a frequent obstacle to developing business or relationships? Lawyers are trained to be adversarial. Cultivating relationships takes some â€˜softerâ€™ skills, such as connecting on a personal level, a key capability needed for rainmaking. Is it necessary to have a niche

practice to be able to market your services, and what are three simple things that lawyers can do to improve their rainmaking skills? It is a misconception that you have to be a specialist to market your legal services. Further, the three things I would tell lawyers to focus on would be: have the desire to improve, have the commitment to improve over time, and get quality resources to help them get to where they want to go. How important is cross-serving, or cross-selling, outside of your own practice area? Very. The market for outside legal services is very mature, has never been more competitive and the majority of profit margins in the vast majority of outside law firms come from existing client relationships. Is there such a thing as too inexperienced to begin thinking about business development â€“ for example, new associates? No, it is never too early to start good habits and the foundations needed to be organized to manage business in an efficient, ethical and effective way.

BOARD OF DIRECTORS PRESIDENT Jennifer Shankleton Director of marketing and practice development Brouse McDowell AKRON

jshankleton@brouse.comÂ Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â IMMEDIATE PAST PRESIDENT Erin Hawk Labor and employment practice development manager Porter Wright Morris & Arthur LLP COLUMBUS

ehawk@porterwright.com PRESIDENT-ELECT/MEMBERSHIP Karen Eutsler Director of marketing and client service Rendigs, Fry, Kiely & Dennis CINCINNATI

keutsler@rendigs.com TREASURER Jeff Dennis Director of strategic initiatives Kegler, Brown, Hill & Ritter COLUMBUS

jdennis@keglerbrown.com TREASURER-ELECT Robert Phillips Senior manager â€“ business development & marketing Vorys, Sater, Seymour and Pease LLP COLUMBUS

rphillips@vorys.com COMMUNICATIONS Marcie Valerio Business development and marketing manager BakerHostetler COLUMBUS

mvalerio@bakerlaw.com PROGRAMMING Julie Gurney Director of marketing and communications Benesch, Friedlander, Coplan & Aronoff LLP CLEVELAND

jgurney@beneschlaw.com COMMUNITY OUTREACH Gary Bloom Docket supervisor/public relations coordinator Walter & Haverfield LLP

Savarino is managing director of Business Development Inc. and founder of Perfect Your Pitch. She can be reached at 734-668-7008 or julie@ busdevinc.com.

CLEVELAND

gbloom@walterhav.com

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LMAOhio@gmail.com @LMAOhio

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LEGAL GUIDEBOOK

November 16, 2015 S3

Government Writing for right now: cracks down on A cautionary tale misclassification of independent I contractors er on a smart phone. A skilled iterative journalist can build an investigative package, piece by piece, over days, right before readers’ eyes. It can yield great journalism. Arguably, it’s blown much-needed fresh air into a room full of people grown staid and out of touch with readers. (An old newsroom joke: What are the four most depressing words in a newspaper? “First in a series.”) It also can lead to lazy journalism. A reporter can skip calling every key person — much less checking facts and claims against other credible sources. If the basic facts are known, no additional effort is necessary to include nuance. For news outlets, speed is paramount: Being first with breaking news means being first (or close to it) on that Google search page. That can mean thousands more readers – and additional revenue to the news outlet. What might it all mean to attorneys and their clients? Both must be prepared to quickly respond and get their side in

By THOM FLADUNG

ver the last few years, the U.S. Department of Labor, Wage and Hour Division has been working with the Internal Revenue Service and many state agencies to ensure that employees are not misclassified as independent contractors. If you measure by the sums recovered, it is clear that the DOL’s strategy is effective. And, Weisberg these efforts present a serious risk to employers. Determining whether a worker is an independent contractor or an employee involves an analysis of the entire relationship, including: n n n n

The amount of control the company has over the worker Whether and how expenses are reimbursed The existence of a written agreement The length of the working relationship

The DOL uses an economic reality test to determine whether an individual is an employee or independent contractor. This test focuses on the degree of economic dependence of the worker on the business for which he or she works. The more the worker relies financially on the business, the more likely it is that an employment relationship exists. In July of this year, the DOL is-

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There are serious financial risks in the event a worker is misclassified.

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By PATRICIA WEISBERG

sued an administrative interpretation relative to this economic reality test. It concluded that, based on this test, most workers are employees under the Fair Labor Standards Act. There are serious financial risks in the event a worker is misclassified. There may be liability for years of unpaid federal, state and local income tax withholdings; Social Security and Medicare contributions; unpaid workers’ compensation and unemployment insurance premiums; and, possibly, overtime compensation. In addition, workers may have claims for employee benefits, such as health insurance, retirement, vacation and stock options. Depending on the circumstances, these claims could amount to millions of dollars. Employers need to be proactive in re-evaluating their independent contractor relationships to ensure these workers are not misclassified employees. If there is any doubt, contact legal counsel experienced in wage hour or employment law.

t’s called “iterative journalism.” It’s a major change for journalism. With profound implications for attorneys and their clients. Put most simply, it means this: Stories are published online as they’re reported, in pieces. Once basic facts are known, the story goes online. Calls are still made to key sources. But if you don’t take that call or Fladung return it fast, the story is going to be posted online without you. In its highest, best use, iterative journalism is dynamic, tailored to the immediacy and interactivity of the web. Readers’ questions and suggestions shape developing stories. Sources who in a previous age might have taken days or weeks to respond are flushed out. Big, breaking stories can be reported in real time as important facts become known — perfect for the modern read-

that crucial first story that sets the tone for each of the follow-up iterations. Savvy attorneys and clients know how to respond in a crisis and how to talk to a reporter to buy time. We suggest to clients that, if your point of view is not in the original online story, resist being added as an “update” to that story. Why? Many readers will never see the updated version. When was the last time you went back to check if a story was updated? The more effective course: If you’re not in the first story, ask for a new story, with a new headline, with your point of view reflected. Iterative journalism is neither bad nor good. It just is. And if you or your client might be in the news, you need to understand it. Fladung is vice president of Hennes Communications, a Cleveland-based crisis communications firm. He is also the former managing editor of The Plain Dealer, Detroit Free Press and Akron Beacon Journal. For more information go to www.crisiscommunications.com

One of the Most Experienced Insurance Coverage Groups in the Nation Brouse has advocated on behalf of policyholders in complex commercial claims for decades, obtaining recoveries from hundreds of thousands to hundreds of millions of dollars…

Weisberg is a partner in the labor and employment practice group of Cleveland-based Walter | Haverfield LLP.

Why do Clients Choose Brouse McDowell? For starters, we have more attorneys certified in insurance coverage law by the OSBA than any other firm in Ohio and have long taken a lead role in critical amicus efforts – federal and state – to develop and protect the law for the benefit of policyholders. To learn more, visit:

www.brouse.com/InsuranceRecovery When it’s your client’s turn in the Court of Public Opinion.

Also check out our Coverage Counselor Blog

We make the story better, shorter or go away.

Terminal Tower | 50 Public Square, Suite 3200 | Cleveland, Ohio 44113

www.crisiscommunications.com

216-321-7774

Keven Drummond Eiber: 216-830-6830 keiber@brouse.com Amanda Leffler: 330-535-5711 aleffler@brouse.com

Collective Experience. Collaborative Culture. Creative Solutions. Cleveland

Akron

Lorain County

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LEGAL GUIDEBOOK

S4 November 16, 2015

INSURANCE CLAIM TIPS: Protecting the coverage you purchased Understanding policy requirements can make all the difference By KEVEN DRUMMOND EIBER and AMANDA M. LEFFLER

n insurance policy is a complicated contract, and contains provisions that impose obligations upon the policyholder once it has notice of a claim. Insurers rely upon these provisions to deny otherwise covered claims, and policyholders should carefully review their policies to make sure they comply with any technical requirements. Some frequently asked questions are answered below: When should notice be given? Most primary liability policies require notice

of a claim or suit as soon as is practical after the policyholder becomes aware of it. Some policies require notice upon the first indication that there might be a claim. What if notice is late? For many types of policies, failure to provide timely notice is generally only a defense to coverage Eiber if the insurer has been prejudiced by that failure. Nonetheless, it is better practice for policyholders to provide notice to their insurers as they become aware of claims and suits.

Do all policies treat notice the same? Some policies are issued on a claims-made-and-reported basis. This means that the policy will only pay for claims that are actually made and reported to the insurer during the policy period. Providing timely notice under such policies Leffler is critical because the insurer will only pay claims that are actually reported to it within a certain time frame. What is a reservation of rights letter? In a reservation of rights letter,

the insurer will conditionally accept tender of the claim and set forth one or more potential defenses that it might have to the claim. The insurer reserves its right to later disclaim coverage for the claim as facts are uncovered throughout the case. Should I respond to a reservation of rights letter? Usually, yes, to dispute the application of exclusions or grounds for non-coverage asserted by the insurer. Do I have to provide information to the insurer? Policies usually contain a provision that requires insureds to cooperate in the investigation and

defense of the claim. An insurer will frequently request information from a policyholder regarding the claim, and the policyholder should be aware that it has a contractual obligation to respond. If a policyholder intends to engage coverage counsel, it should do so before responding to a reservation of rights letter or providing information, to assist in identifying potential coverage issues. Brouse McDowell attorneys Eiber and Leffler are partners, Insurance Recovery Practice Group, and cochairs, Litigation Practice Group. Eiber can be reached at keiber@brouse.com or 216-830-6830, and Leffler at aleffler@brouse.com or 330-535-5711.

Non-competes can be an effective tool for safeguarding employer interests

non-competition agreement, commonly referred to as a non-compete, is a written contract between an employer and an employee in which the employee promises not to engage in unfair competition against the employer after

his or her employment ends. Employers routinely use noncompetes to protect themselves from former employees taking and using valuable information that they learned or acquired while they were employed. The type of information an employer wishes to protect and what may be considered unfair competition

will vary based on the nature of the employer’s business. Some examples of information employers frequently seek to protect through non-competes are: trade secrets, confidential business information, proprietary customer information and customer relationships. Are non-competition agreements

GUIDANCE

SMART LEGAL ADVICE TO KEEP YOUR BUSINESS ON COURSE

enforceable in Ohio? Ohio is one of many states that recognizes an employer’s right to protect its legitimate business interests through the use of non-competes. Ohio courts generally will enforce non-competes, as long as they are “reasonable.” A noncompete is “reasonable” when the “restraint is not greater than is required for the protection of the employer, does not impose undue hard- Niro ship on the employee, and is not injurious to the public” (Raimond v. Van Vlerah (1975), 42 Ohio St.2d 21, paragraph two of the syllabus). Courts consider multiple factors to determine if a non-compete satisfies those conditions, including, but not limited to, whether the non-compete: n n

n n n

The Attorneys of

Cleveland | 216.781.1212 | walterhav.com

is limited in time and geographical scope seeks to eliminate unfair competition versus ordinary competition seeks to stifle the employee’s inherent skill and experience operates as a bar to the employee’s sole means of support seeks to prohibit activity that was merely incidental to the employee’s job

Courts will also verify that a noncompete is supported by sufficient “consideration,” meaning the employee received something of value in exchange for his or her promise not to compete. The reasonableness and enforceability

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of a non-compete will ultimately be based on the balancing of all factors, as well as the specific language of the written agreement. Even if a court finds a non-compete unreasonable, the court may modify or amend the agreement to render it reasonable. Employers considering the use of non-competes should consult with an employment lawyer who practices in this area. But what if a former employee breaches — or threatens to breach — a non-compete? Employers may take multiple steps to enforce their former employees’ non-compete obligations, including filing suit against the former employee and, potentially, the former employee’s new employer. An employer may seek not only monetary damages for injury and losses caused by the employee’s breach of a promise to not compete, but also an injunction barring the former employee from working for a new employer or from contacting the previous employer’s customers while the lawsuit is pending. Again, employers concerned about a former employee’s conduct or failure to adhere to a non-compete should consult with an attorney to discuss all available options. Niro is an attorney at Frantz Ward who regularly handles labor and employment issues. She is a member of both the employment litigation and trade secrets/non-competition agreements practice areas. She can be reached at 216-515-1634 or cniro@ frantzward.com.

Employers considering the use of noncompetes should consult with an employment lawyer who practices in this area.

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By CHRISTINA E. NIRO

LEGAL GUIDEBOOK

November 16, 2015 S5

Gender-based pay gap even wider for female executives Actively addressing wage disparity cuts liability, proves commitment By ANN-MARIE AHERN

e all know the statistic: Women earn 78 cents on the dollar compared to their male peers. September 2015 data from the U.S. Census Bureau reaffirms that progress toward income parity is moving at glacial speed, with women’s salaries up ever so slightly, from 78.3% of their male counterparts’ in 2013 to Ahern 78.6% in 2014. At this rate, women can expect to see income equality in 2059. If the news is bad for the overall female labor force, there is increasing evidence that it’s even worse for highachieving women. In March 2015, the New York Federal Reserve Bank announced that women in management face even greater pay disparity.

The study found that 93% of the inequity was due to disproportionate participation in incentive compensation plans, such as bonuses and equity plans, particularly when the benefit was the result of negotiations or was discretionary. Likewise, according to a Wall Street Journal article, a 2014 study of the 300 largest publicly traded companies in the United States revealed that even as more women have ascended to CEO positions, female CEOs earn only 80% of male CEOs’ salaries. Although these issues have stubbornly lingered for more than 50 years, there is an increasingly vocal cry for action. Last year, President Obama signed an Executive Order requiring compensation transparency for federal contractors, and some are now calling for the Securities and Exchange Commission to mandate publication of the gender pay gap, just as it has required companies to disclose the CEO pay gap.

With increased attention, individually filed and class action lawsuits involving pay disparity are bound to increase. Some companies, like Salesforce, are being proactive by undertaking audits to ensure that men and women

are compensated fairly. Companies that step up to address wage disparity will not only avoid liability, but will benefit from a female workforce that sees action backing up their organization’s stated commitment

to gender equality. Ahern is a principal at McCarthy, Lebit, Crystal & Liffman Co. LPA. She can be reached at 216-696-1422 or ama@mccarthylebit.com.

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LEGAL GUIDEBOOK

S6 November 16, 2015

OSHA vows enforcement with rising incidences of workplace fatalities By RICK HEPP

ecretary of Labor Thomas E. Perez has sworn to continue the Occupational Safety & Health Administrationâ€™s steppedup enforcement campaign in the construction and oil and gas industries after newly released data showed the number of fatalities in those industries rose last year. Overall, the U.S. Bureau of Labor Statistics found that 4,679 workers died last year, an increase Hepp of 2% compared with 2013. Workers in the transportation and material moving occupations (those who operate cranes, forklifts and conveyors) accounted for the most deaths last year â€” 1,289. Second were construction workers, at 885. Meanwhile, the number of fatal work injury cases in the oil and gas industries rose 27% to 142. The oil and gas industries include extraction,

drilling and support activities. â€œBLS data shows fatalities rising in the construction sector (along with an overall increase in construction employment). Dangerous workplaces also are taking the lives of a growing number of people in oil and gas extraction,â€? Perez said in a press release announcing the enforcement. â€œThat is why OSHA continues extensive outreach and strong enforcement campaigns in these industries.â€? Transportation accidents continued to be the most common cause for occupational deaths, leading to 1,891 fatalities. Falls, slips and trips led to 793 deaths while workers being struck by equipment and other objects resulted in 708 deaths. Perezâ€™s comments come on the heels of OSHAâ€™s release of its updated national emphasis program targeting industries with high numbers and rates of amputations. The directive includes a 90day program during which establishments newly added to the targeting list will be offered outreach prior to inspection.

MY BENESCH MY TEAM

When we all pull together, we all get ahead. Benesch salute salutes tes the LMA and our fellow law firms who broke new ground to make the Legal Guidebook possible. We are proud to support the Legal Marketing Associationâ€™s Ohio Chapter (LMA Ohio) and its goals to provide educational and innovative thought leadership opportunities to the legal community in Northeast Ohio.

www.beneschlaw.com

OSHA compliance officers have been ordered to pay particular attention to potential employee exposure to nip points, pinch points, shear points, cutting actions and other points of operation when inspecting machinery and equipment. So what does this mean for employers? Employers can reduce the

risks of enforcement by auditing and reviewing their safety manuals, training records, injury records and reporting guidelines to determine whether there is a need for program changes consistent with the OSHA mandates. It is better to know what needs to be fixed before an accident occurs or an OSHA

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inspector knocks on the door. Hepp is an attorney with the Benesch, Friedlander, Coplan & Aronoffâ€™s Labor & Employment Practice Group. He focuses his practice on employment litigation and counseling, administrative proceedings and OSHA compliance.