Business Law Prof Blog

Ethical and Practical Issues for Lawyers Using AI

I’m a law professor, the general counsel of a medtech company, a podcaster, and I design and deliver courses on a variety of topics as a consultant. I think about and use generative AI daily and it’s really helped boost my productivity. Apparently, I’m unusual among lawyers. According to a Wolter’s Kluwers Future Ready Lawyer report that surveyed 700 legal professionals in the  US and EU, only 15% of lawyers are using generative AI right now but 73% expect to use it next year. 43% of those surveyed see it as an opportunity, 25% see it as a threat, and 26% see it as both.

If you’re planning to be part of the 73% and you practice in the US, here are some ethical implications with citations to select model rules. A few weeks ago, I posted here about business implications that you and your clients should consider.

• How can you stay up-to-date with the latest advancements in AI technology and best practices, ensuring that you continue to adapt and evolve as a legal professional in an increasingly technology-driven world? Rule 1.1 (Competence)
• How can AI tools be used effectively and ethically to enhance your practice, whether in legal research, document review, contract drafting, or litigation support, while maintaining high professional standards? Will it be malpractice NOT to use GAI in the future? Rule 1.1 (Competence), Comment 8, duty to understand the benefits and risks associated with relevant technology; Rule 1.3 (Diligence)
• How can you obtain and document informed consent from clients when using AI tools in your practice, ensuring that they understand the risks, benefits, and alternatives associated with these technologies? Rule 1.4 (Communication); Rule 1.6 (Confidentiality of Information)
• How can you obtain and document informed consent from clients when using AI tools in your practice, ensuring that they understand the risks, benefits, and alternatives associated with these technologies? Rule 1.4 (Communication); Rule 1.6 (Confidentiality of Information). Tip- Make sure your engagement letter discusses the use of technology and specifically addresses the responsible use of GAI.  If needed, amend your engagement letter. Adequately anonymize client information in your prompts. Make sure to opt out of data sets. Check the terms of service and privacy policies of your AI tools.
• How do you rethink billing clients and what’s ethical if you have reliable AI models that can do some work in a fraction of the time? Is it still ethical to bill by the hour or do you use a flat rate? Rule 1.5 (Fees)
• How can you effectively explain and defend the use of AI-generated evidence, analysis, or insights in court, demonstrating the validity and reliability of the methods and results to judges and opposing counsel? Rule 3.3 Candor Toward the Tribunal; Rule 4.1 Truthfulness in Statements to Others
• What measures should you implement to supervise and train your staff, including paralegals and support personnel, in the responsible use of AI tools, ensuring that ethical and professional standards are maintained throughout the practice? Rule 5.1 (Responsibilities of Partners, Managers, and Supervisory Lawyers); Rule 5.3 (Responsibilities Regarding Nonlawyer Assistance)

Then there are the harder questions:

• How many lawyers and legal professionals will you replace?
• How many should you replace?
• Who and how will you retrain and upskill?
• Should your firm be developing your own large language models as some are already doing?  What are the risks? The 2022 ABA Legal Technology Survey Report found that accuracy is the top barrier preventing many lawyers from adopting AI. Some insurance brokers have indicated the existing GAI tools are not fit for law practice because of reliability, accuracy, confidentiality, and copyright concerns,

If you're ready to take the deep dive or maybe just dip your toe in the AI waters, here are some resources to help you get started on the journey. Of course, with the way things are changing so rapidly on the legislative and tech development front, this list could be relatively useless in the next few weeks.

•ABA House of Delegates Resolution 604

•Task Force on Responsible Use of Generative AI for Law- MIT

• NIST AI Framework

•FTC AI Guidance

•EEOC Artificial Intelligence and Algorithmic Fairness Initiative

•National Conference of State Legislatures-2023-legislation

•SEC Investor Advisory Committee Establishment of an Ethical Artificial Intelligence Framework for Investment Advisors

•ABA Task Force on the Law and Artificial Intelligence

•Health AI Partnership

•National Association of Insurance Commissioners

•ISO 27701- International Standard for Protecting Personally Identifiable Information

Partnership on AI

Are you using generative AI in the classroom? How are you preparing the next generation of lawyers? If you’re a practicing lawyer, are you ready to be part of the 15% this year or the 73% next year? 

What Business Lawyers Needs to Ask their Clients About Generative AI Usage

Last week I had the pleasure of joining my fellow bloggers at the UT Connecting the Threads Conference on the legal issues related to generative AI (GAI) that lawyers need to understand for their clients and their own law practice. Here are some of the questions I posed to the audience and some recommendations for clients. I'll write about ethical issues for lawyers in a separate post. In the meantime, if you're using OpenAI or any other GAI, I strongly recommend that you read the terms of use. You may be surprised by certain clauses, including the indemnification provisions. 

I started by asking the audience members to consider what legal areas are most affected by GAI? Although there are many, I'll focus on data privacy and employment law in this post.

Data Privacy and Cybersecurity

Are the AI tools and technologies you use compliant with relevant data protection and privacy regulations, such as GDPR and CCPA? Are they leaving you open to a cyberattack?

This topic also came up today at a conference at NCCU when I served as a panelist on cybersecurity preparedness for lawyers.

Why is this important?

ChatGPT was banned in Italy for a time over concerns about violations of the GDPR. The Polish government is investigating OpenAI over privacy issues. And there are at least two class action lawsuits in California naming Microsoft and OpenAI. Just yesterday, a US government agency halted the use of GAI due to data security risks. 

It’s also much easier for bad actors to commit cybercrime because of the amount of personal data they can  scrape and analyze and because deepfake technology allows impersonation of images and voices in a matter of seconds. The NSA and FBI have warned people to be worried about misinformation and cyberthreats due to the technology. On a positive note, some are using GAI to fight cybercrime.

Surveillance and facial recognition technology can violate privacy and human rights. Governments have used surveillance technology to tamp down on and round up dissidents, protestors, and human rights defenders for years. Now better AI tools makes that easier. And if you haven't heard some of the cautions about Clearview AI and the misidentification of citizens, you should read this article. A new book claims that this company could "end privacy as we know it."

What should (you and) your clients do?

• Ensure algorithms minimize collection and processing of personal data and build in confidentiality safeguards to comply with privacy laws
• Revise privacy and terms of use policies on websites to account for GAI
• Build in transparency for individuals to control how data is collected and used
• Turn on privacy settings in all AI tools and don’t allow your data to be used for training the large language models
• Turn off chat history in settings on all devices
• Prevent browser add-ons
• Check outside counsel guidelines for AI restrictions (or draft them for your clients)
• Work with your IT provider or web authority to make sure your and your clients’ data is not being scraped for training
• Use synthetic data sets instead of actual personally identifiable information
• Ensure that you have a Generative AI Security Policy
• Check vendor contracts for AI usage
• Enhance cybersecurity training
• Conduct a table top exercise and make sure that you have an incident response plan in place
• Check cyberinsurance policies for AI clauses/exclusions

What about the employment law implications?

According to a Society for Human Resources Management Member Survey about AI usage:

• 79% use AI for recruiting and hiring

• 41% use AI for learning and development

• 38% use AI for performance management

• 18% use AI for productivity monitoring

• 8% use Ai for succession planning

• 4% use AI or promotional decisions

GAI algorithms can also have significant bias for skin color. The National Institute of Standards and Technology (NIST) released research showing that "not just dark African-American faces, but also Asian faces were up to 100 times more likely to be failed by these systems than the faces of white individuals.”

Then there’s the question of whether recruiters and hiring managers should use AI to read emotions during an an interview. The EU says absolutely not. 

The Equal Employment Opportunity Commission has taken notice. In a panel discussion, Commissioner Keith Sonderling explained, “carefully designed and properly used, AI has potential to enhance diversity and inclusion, accessibility in the workplace by mitigating the risk of unlawful discrimination. Poorly designed and carelessly implemented, AI can discriminate on a scale and magnitude greater than any individual HR professional.” The EEOC also recently settled the first of its kind AI bias case for $365,000.

What to do 

• Use AI screening tools to disregard name, sec, age, national origin, etc.
• Use bots for interviews to eliminate bias because of accents
• Check local laws such as New York City's automated decision tools guidance for employers
• Be careful about training large language models on current workforce data because that can perpetuate existing bias
• Review the EEOC Resource on AI

Questions to Ask Your Clients:

• How are you integrating human rights considerations into your company's strategy and decision-making processes, particularly concerning the deployment and use of new technologies?

• Can you describe how your company's corporate governance structure accounts for human rights and ethical considerations, particularly with regards to the use and impact of emerging technologies?

• How does your company approach balancing the need for innovation and competitive advantage with the potential societal and human rights impact of technologies like facial recognition and surveillance?

• As data becomes more valuable, how is your company ensuring ethical data collection and usage practices?

• Are these practices in line with both domestic and international human rights and privacy standards?

• How is your organization addressing the potential for algorithmic bias in your technology, which can perpetuate and exacerbate systemic inequalities?

• What steps are you taking to ensure digital accessibility and inclusivity, thereby avoiding the risk of creating or enhancing digital divides?

• How is your company taking into account the potential environmental impacts of your technology, including e-waste and energy consumption, and what steps are being taken to mitigate these risks while promoting sustainable development?

• Are you at risk of a false advertising or unfair/deceptive trade practices act claim from the FTC or other regulatory body due to your use of AI?

Whether or not you're an AI expert or use GAI in your practice now, it's time to raise these issues with your clients. Future posts will address other legal issues and the ethical implications of using AI in legal practice. 

Labor Day and Gratitude

I am the daughter of two Depression Era babies.  My parents always appreciated what they had and worked hard to earn it.  And they were aware of and respected those who contributed their time and efforts to bring them products and services.

On Labor Day, it seems appropriate to channel my parents' gratitude and share it here.  Too often, I take for granted that so much in my life comes from or relies on the labors of others.  I welcome the opportunity today to remember and give thanks.

Parenthetically, I have learned over time (through leadership training and mindfulness activities) that gratitude is an amazingly powerful character strength for lawyers.   As explained on the Via Institute on Character's website, 

The character strength of gratitude involves feeling and expressing a deep sense of thankfulness in life, and more specifically, taking the time to genuinely express thankfulness to others. This thankfulness can be for specific gifts or thoughtful acts. . . .Gratitude tends to foster the character strengths of kindness and love, and therefore is closely associated with empathy and with connection to others.

I am certain you can see from this excerpted description why gratitude can be a great asset in lawyering, including in business lawyering. I am lucky to have gratitude among my strongest character strengths, as assessed through the VIA Institute's character strengths survey.  I will be offering some of my thoughts on character strengths and business lawyering in my presentation at this year's Business Law Prof Blog symposium next month.  (More on that as the date gets closer.)

But for now, I will offer brief, but heartfelt, thanks to those who engage in work that benefits me, those I love, and the world around us.  Happy Labor Day, y'all.  I appreciate your hard work.  Have a relaxed, enjoyable day contemplating, honoring, and celebrating the work that you and others do in service to us all.

 

Is Your Law School Ready for Generative AI? Fifteen Questions You Should Consider

Greetings from SEALS, where I've just left a packed room of law professors grappling with some thorny issues related to ChatGPT4, Claude 2, Copilot, and other forms of generative AI. I don't have answers to the questions below and some are well above my pay grade, but I am taking them into account as I prepare to teach courses in transactional skills; compliance, corporate governance, and sustainability; and ethics and technology this Fall.

In no particular order, here are some of the questions/points raised during the three-hour session. I'll have more thoughts on using AI in the classroom in a future post.

1. AI detectors that schools rely on have high false positives for nonnative speakers and neurodivergent students and they are easy to evade. How can you reliably ensure that students aren't using AI tools such as ChatGPT if you've prohibited it?
2. If we allow the use of AI in classrooms, how do we change how we assess students?
3. If our goal is to teach the mastery of legal skills, what are the legal skills we should teach related to the use of AI? How will our students learn critical thinking skills if they can rely on generative AI?
4. How should we keep up with the rapid pace of change?
5. How will adjuncts use AI with our students if they are already integrating it into their practice? Alternatively, will adjuncts see the use of AI as cheating?
6. If students use papers as writing samples, should there be attestations indicating that they are AI free? Same question for journals/law reviews.
7. Can clinicians and others use generative AI to help with access to justice? If so, how can we ensure that the information is reliable and not a hallucination??
8. How should schools assess faculty coming up for promotion and tenure? Will junior faculty feel pressured to rely on AI to be more productive?
9. Can generative AI be helpful with students with disabilities and neurodivergent students? AI tools can help with creating study schedules, note taking (organizing by topic), time management, summarizing large articles, staying on task, academic support tool, ascertaining how long will tasks take, planning meals and more. If a policy prohibits the use of generative AI in the classroom, should its use be a reasonable accommodation?
10. Do we as faculty members have the growth mindset to deal with this change? Or will we teach the way we always do, which may do a disservice to our students. How do we prepare our students to deal with generative AI in practice?
11. Do you need a uniform policy or should each professor have their own policy? Should the default policy be that students cannot use it for work that gets academic credit unless the professor has specifically opted in?
12. Should we embrace AI especially for students who can’t write? Is using ChatGPT any different from using a calculator? Is it any different from asking a partner for a template so you don't have to start from scratch?
13. Should we use more in-class exams? Should they be closed book? Do we need more oral presentations? How might this affect space planning at exam time?
14. Should class participation count for more than it already does?
15. If you're not familiar with generative AI tools, where should you start?

How many of these questions have  you asked yourself, your colleagues, or your dean? If you have some best practices or thoughts, please share them in the comments. 

 

 

 

 

 

 

 

 

 

 

 

Generative AI Is the Greatest Thing Since the Discovery of Fire And/Or Will Kill Us All

Depending on who you talk to, you get some pretty extreme perspectives on generative AI. In a former life, I used to have oversight of the lobbying and PAC money for a multinational company. As we all know, companies never ask to be regulated. So when an industry begs for regulation, you know something is up. 

Two weeks ago, I presented the keynote speech to the alumni of AESE, Portugal’s oldest business school, on the topic of my research on business, human rights, and technology with a special focus on AI. If you're attending Connecting the Threads in October, you'll hear some of what I discussed.

I may have overprepared, but given the C-Suite audience, that’s better than the alternative. For me that meant spending almost 100 hours  reading books, articles, white papers, and watching videos by data scientists, lawyers, ethicists, government officials, CEOs, and software engineers. 

Because I wanted the audience to really think about their role in our future, I spent quite a bit of time on the doom and gloom scenarios, which the Portuguese press highlighted. I cited the talk by the creators of the Social Dilemma, who warned about the dangers of social media algorithms and who are now raising the alarms about AI's potential existential threat to humanity in a talk called the AI Dilemma.

I used statistics from the Future of Jobs Report from the World Economic Forum on potential job displacement and from Yale's Jeffrey Sonnenfeld on what CEOs think and are planning for. Of the 119 CEOs from companies like Walmart, Coca-Cola, Xerox and Zoom, 34% of CEOs said AI could potentially destroy humanity in ten years, 8% said that it could happen in five years,  and 58% said that could never happen and they are “not worried.” 42% said the doom and gloom  is overstated, while 58% said it was not. I told the audience about deepfakes where AI can now mimic someone's voice in three seconds.

But in reality, there's also a lot of hope. For the past two days I've been up at zero dark thirty to watch the live stream of the AI For Good Global Summit in Geneva. The recordings are available on YouTube. While there was a more decidedly upbeat tone from these presenters, there was still some tamping down of the enthusiasm.

Fun random facts? People have been using algorithms to make music since the 60s. While many are worried about the intellectual property implications for AI and the arts, AI use was celebrated at the summit. Half of humanity's working satellites belong to Elon Musk. And  a task force of 120 organizations is bringing the hammer down on illegal deforestation in Brazil using geospatial AI. They've already netted 2 billion in penalties. 

For additional perspective, for two of the first guests on my new podcast, I've interviewed lawyer and mediator, Mitch Jackson, an AI enthusiast, and tech veteran, Stephanie Sylvestre, who's been working with OpenAI for years and developed her own AI product somehow managing to garner one million dollars worth of free services for her startup, Avatar Buddy. Links to their episodes are here (and don't forget to subscribe to the podcast).

If you’re in business or advising business, could you answer the following questions I asked the audience of executives and government officials in Portugal?

• How are you integrating human rights considerations into your company's strategy and decision-making processes, particularly concerning the deployment and use of new technologies?

 

• Can you describe how your company's corporate governance structure accounts for human rights and ethical considerations, particularly with regards to the use and impact of emerging technologies?

 

• How are you planning to navigate the tension between increasing automation in your business operations and the potential for job displacement among your workforce?

 

• How does your company approach balancing the need for innovation and competitive advantage with the potential societal and human rights impact of technologies like facial recognition and surveillance?

 

• In what ways is your company actively taking steps to ensure that your supply chain, especially for tech components, is free from forced labor or other human rights abuses?

 

• As data becomes more valuable, how is your company ensuring ethical data collection and usage practices? Are these practices in line with both domestic and international human rights and privacy standards?

 

• What steps are you taking to ensure digital accessibility and inclusivity, thereby avoiding the risk of creating or enhancing digital divides?

 

• How is your company taking into account the potential environmental impacts of your technology, including e-waste and energy consumption, and what steps are being taken to mitigate these risks while promoting sustainable development?

 

• What financial incentives do you have in place to do the ”right thing” even if it’s much less profitable? What penalties do you have in place for the “wrong” behavior?

 

• Will governments come together to regulate or will the fate of humanity lie in the hands of A few large companies?

Luckily, we had cocktails right after I asked those questions.

Are you using generative AI like ChatGPT4 or another source in your business 0r practice? If you teach, are you integrating it into the classroom? I'd love to hear your thoughts. 

Trust in Business Associations: Fiduciary Duties

The University of Tennessee College of Law's business law journal, Transactions: The Tennessee Journal of Business Law, recently published my essay, "The Fiduciary-ness of Business Associations."  You can find the essay here.  This essay--or parts of it, anyway--has been rattling around in my brain for a bit.   It is nice on a project like this to be able to get the words out on a page and release all that tension building up inside as you fashion your approach.

The abstract for the essay is included below. 

This essay offers a window and perspective on recent fiduciary-related legislative developments in business entity law and identifies and reflects in limited part on related professional responsibility questions impacting lawyers advising business entities and their equity owners. In addition—and perhaps more pointedly—the essay offers commentary on legal change and the legislative process for state law business associations amendments in and outside the realm of fiduciary duties. To accomplish these purposes, the essay first provides a short description of the position of fiduciary duties in U.S. statutory business entity law and offers a brief account of 21st century business entity legislation that weakens the historically central role of fiduciary duties in unincorporated business associations. It then reflects on these changes as a matter of theory, policy, and practice before briefly summarizing and offering related reflections in concluding.

Although I always welcome thoughts on my work, I am especially interested in your thoughts on this essay. It relates to all three of my activities as a law professor--my scholarship, teaching, and service.  And I know that fiduciary duty waivers and opt-ins have different impacts in different business sectors . . . .  So, let me know what you think.

The Mental Health Crisis in the Legal Profession

If you follow me on LinkedIn, you know that I posted almost every day in May for Mental Health Awareness Month.

 

Last week,  I had the opportunity to discuss mental health and well being for an AmLaw 20 firm (one of my coaching clients) that opened the presentation up to all of its legal professionals. Hundreds registered. Too often, firms or companies focus on those with the highest salaries. As a former paralegal, I know how stressful that job can be. And I know I could never have done my job as a lawyer without the talented legal professionals who supported me.

Here are some scary statistics that I shared from the most recent ALM Mental Health and Substance Abuse Survey.

If you’re a law firm leader or work with legal professionals in any capacity, please read the report and take action. If you can’t get rid of the billable hour (which would solve a lot of issues), think about how you allocate work, respond to unreasonable client demands, and reward toxic perfectionism and overwork. 

✅ 71% of the nearly 3,000 lawyers surveyed said they had anxiety

✅ 45% said their morale has not changed since the pandemic

✅ 38% said they dealt with depression

✅ 31% struggled with another mental health issue

✅ 44% said they knew co-workers who struggled with alcoholism

✅ 15% said they knew someone in the profession who died by suicide in the past two years

✅ Over 50% of said they “felt a sense of failure or self-doubt, lost emotion, felt increasingly cynical and negative, and had decreased satisfaction and sense of accomplishment”

✅ A third said they felt “helpless, trapped, detached, or alone in the world.”

✅ More than 60% said they felt overwhelmed, irritable and exhausted or struggled to concentrate

✅ 28.1% used all of their vacation time, but only 31.1% said they could fully disconnect

✅ More than 76% of lawyers blamed their work environment for these problems

✅ 68% cited billable hour pressures

✅ 67% cited the inability to disconnect

✅ 54% cited lack of sleep

✅ 51% of lawyers said they would feel comfortable talking to an offsite professional

✅ Only 33% said they thought that they could take a leave of absence to address their mental health

✅ More than 72% indicated that remote work improved their quality of life

✅ 60% said that some amount of remote work improved their physical well-being.

😮 50% of the lawyers surveyed indicated that the profession is in a mental health crisis.

I see these issues with my students and with the lawyers I coach. Everyone may not have the passion I have to change the profession, but we can all do our part. So what can you do about it? Here are some resources to get you started. 

University of Miami Law School Seeks Law & Technology Resident Fellow: Apply by July 1, 2023

I'm excited to announce this new position. It's particularly timely as just this morning, I had breakfast with venture capitalists, founders, and others in the tech ecosystem nurtured and propelled by the founders of Emerge Americas. This is a great time to be in Miami. Here are the details.

The University of Miami School of Law seeks to appoint an Inaugural Law & Technology Resident Fellow.  

This will be an exciting opportunity as the Fellow will join a vibrant community of scholars and practitioners working at the intersection of law and technology. Miami-Dade County and the surrounding Tech Hub is enjoying a dramatic expansion in technology-related startups and finance.  MiamiLaw has an established J.D. degree concentration in Business of Innovation, Law, and Technology (BILT). Faculty have set up numerous technology-related programs including Law Without Walls (LWOW) and the We Robot conference.

MiamiLaw currently offers courses in: AI and Robot Law; Blockchain Technology and Business Strategies; Digital Asset and Blockchain Regulation; Digital Transformation Services: Business & Legal Considerations; Dispute Resolution; Technology and The Digital Economy; E-Sports; Electronic Discovery; Genomic Medicine, Ethics and the Law; Intellectual Property in Digital Media; Introduction to Programming For Lawyers; NFTs: Legal and Business Considerations; Scientific Evidence; Tax Issues Relating to Movement of Foreign Tech Founders Into Miami in the 21St Century; Space Law: Regulating and Incentivizing Private Commercial Activities in Outer Space; a Startup Clinic and a class in Startup Law and Entrepreneurship; The Digital Economy and International Taxation--National and International Responses; Law, Technology, and Practice; Law, Policy & Technology; and Tiktok, Twitter and Youtube: The Legal Framework Governing Social Media.

We aim to enhance these substantial and growing technology-related activities by hiring a Law & Technology Resident Fellow. We seek a recent law graduate interested in studying and teaching about the impact artificial intelligence (AI) will have on the legal field, from the impact on legal education to the impact on legal practice and legislative reform.  We are specifically interested in candidates who would connect our students and our faculty both with new technologies and with tech startups in Miami.

In order to provide a space for training of and experimentation by the law school community, the initial Fellow also will be responsible for designing and then setting up an Artificial Intelligence Technology Lab—which could be real or virtual—that will, among other things, support faculty in their courses and research. The Fellow would be expected to teach one technology-related course, subject to approval by the Vice Dean and the law school’s Curriculum Committee, once the Lab is functional.

Applicants must have completed their J.D. degree prior to the beginning of the fellowship. Experience with Artificial Intelligence as it pertains to law and law practice, or optionally a degree in Computer Science or a related field, would also be helpful. The fellowship begins on August 1 and lasts for one year; a Fellow in residence may apply for a second year of support.

The University of Miami offers competitive salaries and a comprehensive benefits package including medical and dental benefits, vacation, paid holidays and much more.

Applications should include the following:

• A cover letter indicating your interest in the Resident Fellowship
• A resume or CV
• A law/graduate school transcript
• Two letters of recommendation

Applications for the Law & Tech Resident Fellowship must be received no later than July 1, 2023.

Please apply online and submit an application in electronic form to Carolina Morris ([email protected]).

The University of Miami is an Equal Opportunity Employer - Females/Minorities/Protected Veterans/Individuals with Disabilities are encouraged to apply. Applicants and employees are protected from discrimination based on certain categories protected by Federal law. Click here for additional information.

If you have any questions about what it's like to work at UM or live in Miami, please reach out at [email protected].

Well-Being in Law Week: A Good Thing, Except Maybe for the Timing . . . .

In 2021 and again in 2022, I blogged about Well-Being Week in Law.  The first week in May bears this title, offering a chance for all of us to focus on how to best ensure that those involved in legal service work can flourish in our work and in the rest of our lives.  As the website notes:

When our professional and organizational cultures support our well-being, we are better able to make good choices that allow us to thrive and be our best for our clients, colleagues, organizations, families, and communities. It is up to all of us to cultivate new professional norms and cultures that enable and encourage well-being.

I agree with all of that.  And as an instructor and researcher and public servant who dedicates significant time to lawyer leadership, I focus a lot of attention on the legal profession and developing the whole lawyer.  So, count me in as a fan.

But this year, I did not post on Well-Being Week in Law, which was last week.  I carry a small amount of guilt for that (and for not getting this post up yesterday, too, when I had originally planned to publish it), since I did want to post last week to promote the mission.  But this week is just as good!

The Well-Being Week in Law initiative focuses us on five components of our well-being over five days.  They are: staying strong, aligning, engaging and growing, connecting, and feeling well.  As you may recognize, these five components line up with physical, spiritual, occupational and intellectual, social, and emotional well-being.  Of course, while one can highlight each in a specific weekday, we should ideally practice all five on all days!  But we all know how that goes . . . .  The important thing is the repetition of the themes and the sharing of practices and guidance on how to keep these realms of wellness in a positive range as we move forward in our professional and personal lives.  I hope that all of us can focus efforts on teaching and researching and serving with all five areas of well-being in mind all 52 weeks in the year.

Having said that, in reflection on my own circumstances, it does not seem very healthy to schedule the annual focus week on well-being in law during law school exams.  That is where most of us and our students are during the first week in May.  Although the well-being in law world should not revolve around law schools, they are the places in which the future of the profession is developed.  It sends a funky message, in my view, to ask students (and professors) to focus on holistic well-being at a time when we all understand that is not possible. 

Still, in addressing the concerns of appropriately needy students last week as they prepared to take my exam in Securities Regulation--a task that we all know both offers us a window on student well-being and impacts law professor well-being--I tried to mindfully focus attention on what I could control about the process of competitive assessment that law school entails.  I advised my students to exercise, eat, hydrate, and try to get some real sleep.  We talked about the purpose of the course (and their other academic work) in their career plans.  We engaged in ongoing, progressive teaching and learning--processing and synthesizing.  We talked about summer plans (including bar preparation, for some) and getting together for coffee or lunch or the like after exams conclude.  I encouraged them to engage in the personal practices that contribute to their mental health.  In other words, we worked through it together, and in the process, we naturally emphasized target areas of our well-being.

Law schools are where we build thriving lawyers.  If, as instructors in that setting, we do not start the process where we are, it is much harder for lawyers to develop the practices they will need to be productive and healthy professionals over the long haul.  Well-being is not a froofy add-on to the law curriculum.  Rather, it is an essential component to professionally responsible legal education and the practice of law.

Ten Questions Lawyers Should Ask Themselves about AI

A few months ago, I asked whether people in the tech industry were the most powerful people in the world. This is part II of that post.

I posed that question after speaking at a tech conference in Lisbon sponsored by Microsoft. They asked me to touch on business and human rights and I presented the day after the company announced a ten billion dollar investment in OpenAI, the creator of ChatGPT. Back then, we were amazed at what ChatGPT 3.5 could do. Members of the audience were excited and terrified- and these were tech people. 

And that was before the explosion of ChatGPT4. 

I've since made a similar presentation about AI, surveillance, social media companies to law students, engineering students, and business people. In the last few weeks, over 10,000 people including Elon Musk, have called for a 6-month pause in AI training systems. If you don't trust Musk's judgment (and the other scientists and futurists), trust the "Godfather of AI," who recently quit Google so he could speak out on the dangers, even though Google has put out its own whitepaper on AI development. Watch the 60 Minutes interview with the CEO of Google.

Just yesterday, the White House held a summit with key AI stakeholders to talk about AI governance. 

Between AI-generated photos winning competitions, musicians creating songs simulating real artists' voices, students using generative AI to turn in essays that fool professors, and generative AI's ability to hallucinate (come up with completely wrong answers that look correct), what can we as lawyers do? Are our jobs at risk? Barrons has put out a list.  IBM has paused hiring because it believes it can gain efficiencies though AI.  Goldman Sachs has said that 300 million jobs might be affected by this technology. I'm at a conference for entrepreneurs and the CEO of a 100-million dollar company said that he has reassigned and is re-skilling 90% of his marketing team because he can use AI for most of what they do. 

Should we be excited or terrified? I've been stressing to lawyers and my students that we need to understand this technology to help develop the regulations around it as well to wrestle with the thorny legal and ethical issues that arise. Here are ten questions, courtesy of ChatGPT4, that lawyers should ask themselves:

1. Do I understand the basic principles and mechanics of AI, including machine learning, deep learning, and natural language processing, to make informed decisions about its use in my legal practice?
2. How can AI tools be used effectively and ethically to enhance my practice, whether in legal research, document review, contract drafting, or litigation support, while maintaining high professional standards?
3. Are the AI tools and technologies I use compliant with relevant data protection and privacy regulations, such as GDPR and CCPA, and do they adequately protect client confidentiality and sensitive information?
4. How can I ensure that the AI-driven tools I utilize are unbiased, transparent, and fair, and what steps can I take to mitigate potential algorithmic biases that may compromise the objectivity and fairness of my legal work?
5. How can I obtain and document informed consent from clients when using AI tools in my practice, ensuring that they understand the risks, benefits, and alternatives associated with these technologies?
6. What are the intellectual property implications of using AI, particularly concerning AI-generated content, inventions, and potential copyright or trademark issues that may arise?
7. How can I assess and manage potential liability and accountability issues stemming from the use of AI tools, including understanding the legal and ethical ramifications of AI-generated outputs in my practice?
8. How can I effectively explain and defend the use of AI-generated evidence, analysis, or insights in court, demonstrating the validity and reliability of the methods and results to judges and opposing counsel?
9. What measures should I implement to supervise and train my staff, including paralegals and support personnel, in the responsible use of AI tools, ensuring that ethical and professional standards are maintained throughout the practice?
10. How can I stay up-to-date with the latest advancements in AI technology and best practices, ensuring that I continue to adapt and evolve as a legal professional in an increasingly technology-driven world?

Do you use ChatGPT or any other other generative AI in your work? Can you answer these questions? I'll be talking about many of these issues at the Connecting the Threads symposium and would love to get your insights as I develop my paper. 

The Fiscal Sponsorship Alternative

A great joy in my law practice over the years has been to work on a pro bono basis with creative and social enterprises.  For the 2021 Business Law Prof Blog symposium, Connecting the Threads, I offered some wisdom from my work with creatives in legally organizing and funding their projects.  I wrote briefly about that presentation here.

I recently posted the article that I presented back then, Choice of Entity: The Fiscal Sponsorship Alternative to Nonprofit Incorporation, 23 Transactions: Tenn. J. Bus. L. 526 (2022), on SSRN.  The associated abstract follows.

For many small business ventures that qualify for federal income tax treatment under Section 501(a) of the U.S. Internal Revenue Code of 1986, as amended, the time and expense of organizing, qualifying, managing, and maintaining a tax-exempt nonprofit corporation under state law may be daunting (or even prohibitive). Moreover, the formal legal structures imposed by business entity law may not be needed or wanted by the founders or promoters of the venture. Yet, there may be distinct advantages to entity formation and federal tax qualification that are not available (or not as easily available) to unincorporated not-for-profit business projects. These advantages may include, for example, exculpation for breaches of performative fiduciary duties by nonprofit corporate directors and other personal liability limitations applicable to various participants in nonprofit corporations under state statutory law.

The described conundrum—the prospect that founders or promoters of a charitable or other federal income tax-exempt nonprofit business or undertaking (often simply denominated as a “nonprofit project”) may not have the time or financial capital to fully form and maintain a business entity that may offer substantial identifiable advantages—is real. Awareness of this challenge can be disheartening to lawyer and client alike. Fortunately, at least for some of these nonprofit projects, there is a third option—fiscal sponsorship—that may have contextual benefits. Fiscal sponsorships allow for projects to receive tax advantaged funding and operating support without the need for time-consuming, costly legal entity formation.

This brief article offers food for thought on the uses for and benefits of fiscal sponsorship, especially (but not exclusively) for creative endeavors. First, fiscal sponsorships are defined and described in more detail. Then, the attributes of fiscal sponsorships are compared with the attributes of nonprofit § 501(c)(3) corporations to identify important bases for advice and decision making. Finally, before briefly concluding, the article synthesizes this information for use in applied legal advising and offers an example of a nonprofit project that found fiscal sponsorship both desirable and efficacious.

The article is available here.  Even though I do not teach a course on nonprofit organization, governance, or finance, I do occasionally raise the idea of fiscal sponsorship and other nontraditional organizational possibilities with students outside the classroom.  Had it not been for my pro bono work at Skadden, Arps, Slate, Meagher & Flom LLP in Boston in the 1980s and 1990s, I would not have known about fiscal sponsorships and could not have had those teaching moments with my students.  By publishing this piece, I hope to offer that same "aha moment" to others who may find themselves working with artists or musicians or others in the nonprofit space. 

#payitforward

Lawyers, Law Students, and Mental Health

Warning: this post addresses suicide.

I was supposed to post yesterday about a different topic but I'm posting today and not next week because someone needs to read this today.

Maybe it's you. Maybe it's your "strong" friend or colleague.

I found out yesterday that I lost a former student to suicide. She lit up every room she walked into and inspired me, her classmates, and everyone she met. I had no idea she was living in such darkness. Lawyers, law students, compliance professionals, and others in high stress roles are conditioned to be on top of everything. We are the strong ones that clients and colleagues rely on. We worry so much about the stigma of not being completely in control at all times, that we don't get help. We worry that clients won't trust us with sensitive or important matters. We worry that we won't pass the character and fitness assessments to get admitted to the bar. 

The CDC released a report this week showing an alarming rise in depression, suicidal thoughts, and anxiety among our youth. The report noted that:

• Female students and LGBQ+ students are experiencing alarming rates of violence, poor mental health, and suicidal thoughts and behaviors.
• The rates of experiencing bullying, sexual violence, poor mental health, and suicidal thoughts and behaviors indicate a need for urgent intervention.

According to nami.org, one of the most respected organizations on the mental health:

1 in 5 U.S. adults experience mental illness each year
1 in 20 U.S. adults experience serious mental illness each year
1 in 6 U.S. youth aged 6-17 experience a mental health disorder each year
50% of all lifetime mental illness begins by age 14, and 75% by age 24
Suicide is the 2nd leading cause of death among people aged 10-14 

Those statistics don't surprise me. I have a family member who lost his first friend to suicide at age 12 and has lost almost ten others in the past ten years to suicide or overdoses. I have other family members who have been hospitalized repeatedly for mental health crises and others who refused to get help and were homeless. When people ask my why I care so much about my students and coaching clients, this is why. It's personal for me.

It's why I got mental health first aid certified when the University of Miami offered the training to staff and professors and why I'm often the only lawyer in the room at conferences and trainings with social workers, neuroscientists, and therapists who are getting their certifications. I stay in my lane, of course. But I want to understand more and I want to do my part to help change the profession because lawyers are in the top 10 for rates of suicide. We have disproportionately higher rates of depression, anxiety, and substance use disorders. Although I've been a happy lawyer for over thirty years, I know I'm a unicorn.

So here are some resources. This list could be pages long so I've compiled links that also refer to other resources:

988 Suicide & Crisis Lifeline

American Bar Association Mental Health Resources

Mental Health First Aid Training (I highly recommend this training and have completed it myself through my law school)

National Alliance on Mental Illness Resource Directory

Institute for Well Being in Law

Lawyer Assistance Programs by State

ABA Substance Use and Mental Health Toolkit for Law School Students and Those Who Care About Them

If you are a parent, especially of young children, get educated as soon as you can so that you can spot the signs early and support your children so they don't end up in these statistics. Ask your school administrators if they are familiar with the CDC's What Works in Schools Program.  Tell your school board and elected officials that mental health is a priority and vote for candidates who understand this as the public health crisis that it is. Sit down with your kids and watch The Social Dilemma. It may not change their addiction to social media, but it will help you understand why this generation is suffering so much that school districts have filed suit about the mental health impacts.

If you're a law student, check out the resources above. Don't get your health advice from TikTok or Instagram unless it's from a trained professional  (although I did do a TikTok video telling people to get help).

If you're a law professor, do you know where to send your students if they come to you seeking help? I have the cell phone number of our Dean of Students and I know I can reach out to her at any time if I'm worried about a student. I also share my family's story with my students so they feel safe asking for my guidance. I don't act as their therapist, but it's my job to prepare the students for the difficulties of the profession, and not just how to redline a document or argue a motion. 

If you're a law firm partner, consider investing in real training for your lawyers and your staff.  Don't just bring in someone to talk about mindfulness or diversity, equity, and inclusion once a year so you can check that box off. Invest in long-term, consistent, evidence-based training and coaching for your staff and lawyers at all levels (yes, managing partners too). Look at and reconfigure your billable hours requirements and layoff plans. Are they realistic? Are they really necessary? If you're comfortable, share your personal story of dealing with mental health challenges with your associates so they know you're human and have some empathy even as you have them billing over 2000 hours to get a bonus. 

If you're a general counsel, ask your firms about what they do to protect and preserve mental health, just like you ask about DEI initiatives. 

This is resource list is clearly just a start. What resources or tips do you have for those who are struggling in the profession? What will you today? If you do nothing else, share this message with others. It could be a matter of life or death for someone you know. 

Are People in the Tech Industry the Most Powerful People in the World? Part One

My mind is still reeling from my trip to Lisbon last week to keynote at the Building The Future tech conference sponsored by Microsoft.

My premise was that those in the tech industry are arguably the most powerful people in the world and with great power comes great responsibility and a duty to protect human rights (which is not the global state of the law).

I challenged the audience to consider the financial price of implementing human rights by design and the societal cost of doing business as usual.

In 20 minutes, I covered  AI bias and new EU regulations; the benefits and dangers of ChatGPT; the surveillance economy; the UNGPs and UN Global Compact; a new suit by Seattle’s school board against social media companies alleging harmful mental health impacts on students; potential corporate complicity with rogue governments; the upcoming Supreme Court case on Section 230 and content moderator responsibility for “radicalizing” users; and made recommendations for the governmental, business, civil society, and consumer members in the audience.

Thank goodness I talk quickly.

Here are some non-substantive observations and lessons. In a future post, I'll go in more depth about my substantive remarks. 

1. Your network is critical. Claire Bright, a business and human rights rock star, recommended me based on a guest lecture I did for her class. My law students are in for a treat when she speaks with them about the EU Corporate Sustainability Reporting Directive (that she helped draft) next month.

2. Your social media profile is important. Organizers looked at videos that had nothing to do with this topic to see how I present on a stage. People are always watching.

3. Sometimes you can’t fake it until you make it. This is one of the few times where I didn’t know more than my audience about parts of my presentation. I prepared so that I could properly respect my audience’s expertise. For example, I watched 10 hours of video on a tech issue to prepare one slide just in case someone asked a question during the networking sessions.

4. Speak your truth. Going to a tech conference to tell tech people about their role in human rights and then going to a corporate headquarters to do the same isn’t easy, but it’s necessary and I had no filter or restrictions. I didn't hold back talking about Microsoft-backed ChatGPT even though they invited me to Lisbon for the conference. It was an honor to speak to Microsoft employees the day after the conference with Claire, Luis Amado, former head of B Lab Europe, and Susana Guedes to discuss sustainability, ESG, diversity, and incentivizing companies and employees to do the right thing, even when it's not popular.

5. Explore and leave the hotel even when you’re tired. I was feeling run down last Friday night and wanted to stay in bed with some room service. Manuela Doutel Haghighi (one of my new favorite people) organized a dinner at an Iranian restaurant owned by a former lawyer with 6 badass women, and I now have new colleagues and collaborators.

Stay tuned for my next post where I'll cover some of my remarks.

 

 

Can The Next Generation of Lawyers Save the World?

An ambitious question, yes, but it was the title of the presentation I gave at the Society for Socio-Economists Annual Meeting, which closed yesterday. Thanks to Stefan Padfield for inviting me.

In addition to teaching Business Associations to 1Ls this semester and running our Transactional Skills program, I'm also teaching Business and Human Rights. I had originally planned the class for 25 students, but now have 60 students enrolled, which is a testament to the interest in the topic. My pre-course surveys show that the students fall into two distinct camps. Most are interested in corporate law but didn't know even know there was a connection to human rights. The minority are human rights die hards who haven't even taken business associations (and may only learn about it for bar prep), but are curious about the combination of the two topics. I fell in love with this relatively new legal  field twelve years ago and it's my mission to ensure that future transactional lawyers have some exposure to it.

It's not just a feel-good way of looking at the world. Whether you love or hate ESG, business and human rights shows up in every factor and many firms have built practice areas around it. Just last week, the EU Corporate Sustainability Reporting Directive came into force. Like it or not, business lawyers must know something about human rights if they deal with any company that has or is part of a supply or value chain or has disclosure requirements. 

At the beginning of the semester, we discuss the role of the corporation in society. In many classes, we conduct simulations where students serve as board members, government officials, institutional investors, NGO leaders, consumers, and others who may or may not believe that the role of business is business. Every year, I also require the class to examine the top 10 business and human rights topics as determined by the Institute of Human Rights and Business (IHRB). In 2022, the top issues focused on climate change:

1. State Leadership-Placing people at the center of government strategies in confronting the climate crisis
2. Accountable Finance- Scaling up efforts to hold financial actors to their human rights and environmental responsibilities
3. Dissenting Voices- Ensuring developmental and environmental priorities do not silence land rights defenders and other critical voices
4. Critical Commodities- Addressing human rights risks in mining to meet clean energy needs
5. Purchasing Power- Using the leverage of renewable energy buyers to accelerate a just transition
6. Responsible Exits- Constructing rights-based approaches to buildings and infrastructure mitigation and resilience
7. Green Building- Building and construction industries must mitigate impacts while avoiding corruption, reducing inequality, preventing harm to communities, and providing economic opportunities
8. Agricultural Transitions- Decarbonising the agriculture sector is critical to maintaining a path toward limiting global warming to 1.5 degrees
9. Transforming Transport- The transport sector, including passenger and freight activity, remains largely carbon-based and currently accounts for approximately 23% total energy-related CO2 global greenhouse gas emissions
10. Circular Economy- Ensure “green economy” is creating sustainable jobs and protecting workers

The 2023 list departs from the traditional type of list and looks at the people who influence the decisionmakers in business. That's the basis of the title of this post and yesterday's presentation. The 2023 Top Ten are:

1. Strategic Enablers- Scrutinizing the role of management consultants in business decisions that harm communities and wider society. Many of our students work outside of the law as consultants or will work alongside consultants. With economic headwinds and recessionary fears dominating the headlines, companies and law firms are in full layoff season. What factors should advisors consider beyond financial ones, especially if the work force consists of primarily lower-paid, low-skilled labor, who may not be able to find new employment quickly? Or should financial considerations prevail?
2. Capital Providers- Holding investors to account for adverse impacts on people- More than 220 investors collectively representing US$30 trillion in assets under management  have signed a public statement acknowledging the importance of human rights impacts in investment and global prosperity. Many financial firms also abide by the Equator Principles, a benchmark that helps those involved in project finance to determine environmental and social impacts from financing. Our students will serve as counsel to banks,  financial firms, private equity, and venture capitalists. Many financial institutions traditionally focus on shareholder maximization but this could be an important step in changing that narrative. 
3. Legal Advisors- Establishing norms and responsible performance standards for lawyers and others who advise companies. ABA Model Rule 2.1 guides lawyers to have candid conversations that "may refer not only to law but to other considerations such as moral, economic, social and political factors, that may be relevant to the client's situation." Business and human rights falls squarely in that category. Additionally, the ABA endorsed the United Nations Guiding Principles on Business and Human Rights ten years ago and released model supply chain contractual clauses related to human rights in 2021. Last Fall, the International Bar Association's Annual Meeting had a whole track directed to business and human rights issues. Our students advise on sanctions, bribery, money laundering, labor relations, and a host of other issues that directly impact human rights. I'm glad to see this item on the Top 10 list. 
4. Risk Evaluators- Reforming the role of credit rating agencies and those who determine investment worthiness of states and companies. Our students may have heard of S&P, Moody's, & Fitch but may not know of the role those entities played in the 2008 financial crisis and the role they play now when looking at sovereign debt.  If the analysis from those entities  are flawed or laden with conflicts of interest or lack of accountability, those ratings can indirectly impact the government's ability to provide goods and services for the most vulnerable citizens.
5. Systems Builders- Embedding human rights considerations in all stages of computer technology. If our students work in house or for governments, how can they advise tech companies working with AI, surveillance, social media, search engines and the spread of (mis)nformation? What ethical responsibilities do tech companies have and how can lawyers help them wrestle with these difficult issues?
6. City Shapers-  Strengthening accountability and transformation in real estate finance and construction. Real estate constitutes 60% of global assets. Our students need to learn about green finance, infrastructure spending, and affordable housing and to speak up when there could be human rights impacts in the projects they are advising on. 
7. Public Persuaders- Upholding standards so that advertising and PR companies do not undermine human rights. There are several legal issues related to advertising and marketing. Our students can also play a role in advising companies, in accordance with ethical rule 2.1, about persuaders presenting human rights issues and portraying controversial topics related to gender, race, indigenous peoples, climate change in a respectful and honest manner. 
8. Corporate Givers- Aligning philanthropic priorities with international standards and the realities of the most vulnerable. Many large philanthropists look at charitable giving as investments (which they are) and as a way to tackle intractable social problems. Our students can add a human rights perspective as advisors, counsel, and board members to ensure that organizations give to lesser known organizations that help some of the forgotten members of society. Additionally, Michael Porter and Mark Kramer note that a shared-value approach, "generat[es] economic value in a way that also produces value for society by addressing its challenges. A shared value approach reconnects company success with social progress. Firms can do this in three distinct ways: by reconceiving products and markets, redefining productivity in the value chain, and building supportive industry clusters at the company's locations." Lawyers can and should play a role in this. 
9. Business Educators- Mainstreaming human rights due diligence into management, legal, and other areas of academic training. Our readers teaching in business and law schools and focusing on ESG can discuss business and human rights under any of the ESG factors. If you don't know where to start, the ILO has begun signing MOUs with business schools around the world to increase the inclusion of labor rights in business school curricula. If you're worried that it's too touchy feely to discuss or that these topics put you in the middle of the ESG/anti-woke debate, remember that many of these issues relate directly to enterprise risk management- a more palatable topic for most business and legal leaders. 
10. Information Disseminators- Ensuring that journalists, media, and social media uphold truth and public interest. A couple of years ago, "fake news" was on the Top 10 and with all that's going on in the world with lack of trust in the media and political institutions, lawyers can play a role in representing reporters and media outlets. Similarly, lawyers can explain the news objectively and help serve as fact checkers when appearing in news outlets.

If you've made it to the end of this post, you're either nodding in agreement or shaking your head violently in disagreement. I expect many of my students will feel the same, and I encourage that disagreement. But it's my job to expose students to these issues. As they learn about ESG from me and the press, it's critical that they disagree armed with information from all sides.

So can the next generation of lawyers save the world? Absolutely yes, if they choose to. 

Give Yourself the Gift of Understanding Contract Drafting and Negotiation In Miami or Virtually February 2023

It's the holidays and it's time to treat yourself and members of your team to practical training and fantastic networking in sunny Miami in February. We don't have bomb cyclones down here. The Transactional Skills Program at the University of Miami School of Law couldn't be more excited to host the How to Contract Conference from February 15-17, 2023. 

• ContractsCon is a training and networking EXTRAVAGANZA focused on the practical contract drafting and negotiating skills that in-house counsel and contracts professionals need to know. 
• This event is a zero-fluff, to-the-point training on the nitty-gritty details. ContractsCon includes:
  • speakers who get the in-house experience and can explain why we draft the way we do
  • training centered around provision-level playbooks for you and your company to use when you return to work
  • workshops that provide a deeper dive into more nuanced topics and include interactive group activities
  • ContractsCon Playbook, featuring the advice and drafting approaches discussed at ContractsCon
  • access to How to Contract’s SaaS Contracts Training Library, with 20+ hours of training videos, the Cloud Services Agreement Playbook, and lots more (through March 31, 2023)
  • CLE pending in 26 states for up to 7 hours for virtual ticket holders and up to 13 hours for in-person attendees
• ContractsCon is an annual training and networking event for in-house counsel and  contract professionals presented by How to Contract and Law Insider and hosted by University of Miami School of Law. This 2-day event will feature over 20 live training sessions with some of the most well-known contract experts.
• Our promise is to share with you the core skills and expertise you need to work in-house on commercial contracts. All you have to do is show up ready to learn.
• ContractsCon is designed for in-house lawyers and professionals who want to learn:
  • the insights and techniques needed to handle the commercial contracts filling their inbox every day,
  • how experienced lawyers manage risk, work efficiently, and make the hard decisions in challenging circumstances,
  • WHAT to say, WHY to say it that way, and HOW to reach the best-negotiated deal you can with your contract counterparties.
• Give us two days of your time and you'll walk away with enhanced skills that enable you to better protect your company and clients. You'll gain more confidence.  You'll finally leave those "I don't know" and "I'm not sure" frustrations behind you. You'll also be able to network with other lawyers and professionals who share your desire to improve your skills and overcome any traces of imposter syndrome. 

Click here to get your ticket. And I'll see you in Miami, mojito in hand (after I do my session, of course).

Corporate Finance Maxims?!

My classroom teaching for the semester is over.  I am in "grading mode"--not my favorite way of being.  But final assessments must be completed!  (Wishing you well in completing yours.)

Before I left the classroom, however--specifically, in the last class meeting for my corporate finance students--I did have some fun.  I saved my last class session in the course to address what my students wanted me to cover.  I asked for the topics in advance.  They covered a range of corporate finance topics, from litigation issues (Theranos, FTX, and current hot legal claims) through common mistakes to avoid in a corporate finance practice to survival tips for first-year law firm associates.  Weaving all of that together in a 75-minute class period was a tall task.

My ultimate vehicle was to come up with a list of maxims--short-form guidance statements--that would allow me to address all of what my students had asked me to cover.  I came into class with just a few maxims to get us started and cover the basics.  But the conversation was very engaged and got rich relatively quickly.  As we riffed off each other's questions and comments, my little list grew to a robust thirteen maxims!  

Before I erased the white board and left the classroom, I took a picture of each of the two white board panels generated from our conversation.  Those pictures are included below.  Despite my handwriting, I am hoping you can see what we came up with real-time.  If not, set forth below is our jointly created list of principles (edited slightly), many of which apply equally outside a corporate finance practice.

1. Act based on legal analysis (rules applied to facts), rather than speculation or assumptions.
2. Pay attention to licensure and competence--your reputation is at issue.
3. People--networking, human resources--are critical to practice.
4. Fraud is real; be on the lookout for it, and do what you can to protect clients from it.
5. The same is true for for breaches of fiduciary duty.
6. Take an issue as far as you can before consulting.
7. Learn when to decide and when to consult.
8. Keep abreast of changes in law, business, etc. relevant to your practice.
9. Don't check your common sense at the door (with a hat tip to GWK--George W. Kuney, one of my colleagues).
10. Time is important--show up on time, meet deadlines, etc.
11. Manage your time away from the office; don't forget personal care/wellness.  (Drugs--including caffeine--are not the answer.)
12. Hand colleagues and clients your best work (within the allotted time).
13. Take time to enjoy your colleagues, clients, and work--there is great joy in this practice.

Which of these maxims resonate most with you?  Which of them would you amend by adjustment or addition? What maxims do you share with your students?  Leave thoughts in the comments!

 

Why the Judge Was Right to Rule Against DeSantis' Stop WOKE Act

As much as I love being a professor, it can be hard. I’m not talking about the grading, keeping the attention of the TikTok generation, or helping students with the rising mental health challenges.

I mean that it’s hard to know what to say in a classroom. On the one hand, you want to make sure that students learn and understand the importance of critical thinking and disagreeing without being disagreeable.

On the other hand, you worry about whether a factual statement taken out of context or your interpretation of an issue could land you in the cross hairs of cancel culture without the benefit of any debate or discussion.

I’m not an obvious person who should be worried about this. Although I learned from some of the original proponents of critical race theory in law school, that’s not my area of expertise. I teach about ESG, corporate law, and compliance issues.

But I think about this dilemma when I talk about corporate responsibility and corporate speech on hot button issues. I especially think about it when I teach business and human rights, where there are topics that may be too controversial to teach because some issues are too close to home and for many students and faculty members, it’s difficult to see the other side. So I sometimes self censor.

My colleagues who teach in public universities in Florida had even more reason to self censor because of the Stop WOKE act, which had eight topics related to race, gender, critical race theory and other matters that the State deemed “noxious” or problematic.

Yesterday, a federal court issued a 139-page opinion calling the law “dystopian.” The court noted that Justice Sotomayor could violate the law by guest lecturing in a law school and reading from her biography where she talks about how she benefitted from affirmative action. That’s absurd.

I had the chance to give my views to the Washington Post yesterday. This law never personally affected me but as the court noted, the university is the original marketplace of ideas. I told the reporter that one of my areas of expertise, ESG, is full of the kinds of issues that the government of the State of Florida has issues with. I told him that I was glad that I worked at a private university because academic freedom makes me more comfortable to raise issues.  I noted that students need the ability to play devil's advocate and speak freely because there's no way to mold the next generation of thinkers and lawmakers without free speech. I explained that you can't write the laws if you're not willing to hear more than one point of view. 

I hope that we get back to the days when professors don’t self censor, whether there’s a law in place or not. Of course there are some statements that are unacceptable and should never be taught in a classroom.

But I worry that some in this generation don’t know the difference between controversial and contemptible. That goes for my friends of all ideologies.

I worry that some students are missing out on so much because our society doesn’t know how to engage in civil discourse about weighty topics. So people either rant or stay silent.

In any event, my rant is over.

Today is a day for celebration.

Congratulations to my colleagues in public universities.

Reason has won out.

Business Lawyers as "Financial Institutions"?

Earlier today, I received a communication from the American Bar Association's Governmental Affairs Office.  It was a request for action (as would often come from a government affairs office) relating to the ENABLERS Act amendment to the National Defense Authorization Act (NDAA).  The contents admittedly somewhat stunned me.  I include them in pertinent part below.

This . . . Senate amendment, like the similar amendment contained in the House-passed version of the NDAA, would regulate many business lawyers and law firms under the Bank Secrecy Act (BSA) and could require them to report a substantial amount of attorney-client privileged and other protected client information to the government.

The ENABLERS Act amendment, sponsored by Sen. Sheldon Whitehouse (D-RI), would change the BSA’s definition of “financial institution” to include lawyers and law firms that provide legal services to clients involving company formation, trust services, acquiring or disposing of interests in those entities, and many other specified financial activities. It would also require the Treasury Department to issue new regulations that could subject these lawyers and law firms to some or all of the BSA’s requirements for financial institutions. This could force you to submit Suspicious Activity Reports (SARs) on your clients’ financial transactions (without notifying the clients); identify and verify your clients’ accounts to the government; establish due diligence policies that could conflict with state supreme court rules; create costly and burdensome new anti-money laundering programs within your law firm; and undergo periodic or random audits to assess compliance. 

I have not been following this at all.  I wonder if any of you have been . . . .  Of course, the ostensible purpose is to combat money laundering--certainly a worthy goal.  But the incursion on the lawyer-client relationship, assuming the description above is accurate (and I am still wading into this, in all candor), does seem rather vast.  Please leave comments if you have thoughts to offer.  I am intrigued.

How Generation, Nationality, and Expertise Influence Stakeholder Prioritization of Tech Social Issues- Pt. 2

Last month, I posted about an experiment I conducted with students and international lawyers. I’ve asked my law student, Kaitlyn Jauregui to draft this post summarizing the groups’ reasoning and provide her insights. Next week, I’ll provide mine in light of what I’m hearing at various conferences, including this week’s International Bar Association meeting. This post is in her words.

After watching The Social Dilemma, participants completed a group exercise by deciding which social issues were a priority in the eyes of different tech industry stakeholders. The Social Dilemma is a 2020 docudrama that exposes how social media controls that influences the behavior, mental health, and political views of users by subjecting them to various algorithms. Director Jeff Orlowski interviewed founding and past tech employees of some of the biggest companies in Silicon Valley to bring awareness to viewers.  

Groups of primarily American college students, primarily American law students, one group of Latin American lawyers, and one group of international lawyers completed the exercise. Each of the groups deliberated from the perspective of a CEO, investor, consumer, or NGO.  Acting as that stakeholder, the team then ranked the following issues in order of importance: Incitements to violence, Labor Issues, Suppression of Speech, Mental Health, Surveillance, and Fake News. 

How The Groups Performed

The college students attend an American law school, but they are not necessarily all American. The groups’ logic behind their rankings could not be provided. I provided the rankings in the last post.

Law Students

The law students attend and American law school, but they are not necessarily all American. They considered six social issues.

Team CEO: Law Students

1.    Labor Issues in the Supply Chain

2.    Surveillance

3.    Mental Health

4.    Fake News

5.    Suppression of Speech

6.    Incitements to Violence

The law students assigned to view the issues as a CEO based their rankings on an internal to external approach. They believed the CEO is responsible for the operations of the company so would first try to solve internal issues such as labor issues because that would directly affect the bottom line. Surveillance and mental health ranked #2 because the team assumed that these issues directly related to customer satisfaction and retention. Because this group took on the role as a tech CEO and not a social media CEO, they did not view 4-6 as important. Fake news was only relevant if it was about the company. Suppression of speech was not problematic to them because it would not directly impact their business. Finally, they did not view incitement to violence as relevant to the business operations so ranked it last.

Team Investor: Law Students

1.    Labor Issues in the Supply Chain

2.    Incitements to Violence

3.    Surveillance

4.    Suppression of Speech

5.    Fake News

6.    Mental Health

The law students who prioritized social issues as if they were an Investor approached the task considering market forces. They chose labor issues first because it poses challenges to business operations. Whatever looks bad for revenue generation such as incitement to violence and surveillance means their investment would look bad as well. It is important to note they viewed this assignment as an institutional investor. The remaining factors were not imperative to the success of the tech company so were ranked lower.

Team NGO: Law Students

1.    Fake News

2.    Incitement to Violence

3.    Mental Health

4.    Labor Issues in Supply Chain

5.    Surveillance

6.    Suppression of Speech

The law students who took on a role as an NGO based their sense of urgency on the danger and risks the involved in each issue. At the top was fake news because they thought misinformation when taken as fact was unhealthy for making decisions and forming opinions. Incitement to violence closely followed because political polarization can lead to hateful actions outside of social media. They found mental health to be important because of statistics showing teens committing self-harm or worse as a result of social media use. Although labor Issues are abroad, the NGO team could not ignore it. Surveillance was not key to them because they believed platforms are already taking measures against it. And lastly, suppression of speech was not as important to them as deleting hate speech and fake news.

Team Consumer: Law Students

1.    Surveillance

2.    Mental Health

3.    Incitement to Violence

4.    Suppression of Speech

5.    Fake News

6.    Labor Issues in Supply Chain

The law students who took on their natural roles as consumers found social issues more important than financial forces. They referred to the many advertisements that tech companies like Apple and Google are posting against surveillance. The effects of social media on mental health and even physical health also stood out to them. As a group of law students, they are informed individuals who can spot fake news so did not see that as a priority. Lastly, labor issues are not in the consumers’ sight so are out of mind and therefore not a priority.

Latin American Lawyers

*The Latin American Lawyers did not consider Fake News or Incitements to Violence.

Team CEO: Latin American Lawyers

1.    Labor Issues in the Supply Chain

2.    Surveillance

3.    Suppression of Speech

4.    Mental Health

5.    -

6.    -

The Latin American lawyers ranked the social issues regarding business success and long-term goals. Labor issues were their top concern because it influences the legal challenges faced by the company and the costs of production. “Information is power” so surveillance restrictions would greatly decrease money earned from selling data gathered. They did not see suppression of speech as an issue because the company itself is not limited. Mental health was ultimately last because it does not impair business operations.

Team Investor: Latin American Lawyers

1.    Mental Health

2.    Surveillance

3.    Labor Issues in the Supply Chain

4.    Suppression of Speech

5.    -

6.    -

The Latin American lawyers listed their priorities as a socially responsible Investor. Mental health triggered the most urgency for them because the negative influence of social media on users is growing and is not slowing down. Heavy surveillance conflicts with the rights of persons like themselves so it is a great risk for them. Although labor issues were important, they did not think of it as a widespread issue affecting large populations of people. Lastly, suppression of speech was not a concern at all for them.

Team NGO: Latin American Lawyers

1.    Surveillance

2.    Suppression of Speech / Fake News

3.    Mental Health

4.    Labor Issues in Supply Chain

5.    -

6.    -

The Latin American lawyers who participated as an NGO focused their efforts on user experience and rights. They found surveillance to be a growing concern and a human right violation for users. Suppression of speech was also very important to them, especially in the scope of the team’s nationality because of political distress in their home countries. For countries with political instability, their citizens are more conscious of infringed rights through social media. Fake news and censorship on virtual platforms can ultimately destroy the democracy of countries in their point of view. The team preferred life over work so chose to rank mental health higher than labor issues.

Team Consumer: Latin American Lawyers

1.    Surveillance

2.    Suppression of Speech / Fake News

3.    Mental Health

4.    Labor Issues in Supply Chain

5.    -

6.    -

The Latin American lawyers used their personal perspective as consumers to rank in accordance with social concerns. Surveillance was seen as a major problem because it makes users uncomfortable knowing that their activity is tracked and sold as data. Suppression of speech was grouped with fake news as an important issue regarding the rights and freedom of the consumers. The gatekeeping of information from mainstream media in general was a concern for these consumers because they feel as if they are being controlled and concealed from the truth. Although the negative mental health results on teens from social media is important, the consumers thought this was the responsibility of parents and not of other consumers. Labor issues were of no concern because the consumers felt as if they have no control over the matter. 

International Lawyers

The International Group comprised of participants from Bolivia, Brazil, Bulgaria, Canada, Colombia, Ecuador, Egypt, Ethiopia, India, Iran, Jamaica, Mexico, Nepal, Sweden, Switzerland, and Ukraine. The group was not assigned to rank Mental Health as a social issue. The groups’ logic behind their rankings could not be provided.

Team CEO: International Lawyers

1.    Fake News

2.    Labor Issues in the Supply Chain

3.    Surveillance

4.    Incitement to Violence

5.    Suppression of Speech

6.    -

Team Investor: International Lawyers (Socially Responsible)

1.    Incitement to Violence

2.    Fake News

3.    Labor Issues in the Supply Chain

4.    Surveillance

5.    Suppression of Speech

6.    -

Team Investor: International Lawyers (Institutional)

1.    Labor Issues in the Supply Chain

2.    Incitements to Violence

3.    Suppression of Speech

4.    Fake News

5.    Surveillance

6.    -

Team NGO: International Lawyers

1.    Fake News

2.    Labor Issues in Supply Chain

3.    Suppression of Speech

4.    Incitements to Violence

5.    Surveillance

6.    -

 

Team Consumer: International Lawyers

1.    Incitements to Violence

2.    Suppression of Speech

3.    Fake News

4.    Labor Issues in Supply Chain

5.    Surveillance

6.    -

 Insights

When given a business or financial oriented role, the teams ranked the social issues by focusing on whether it impacts company performance. Teams with community or advocate roles tended to rank the social issues according to impact on society. Team CEO prioritized labor issues and surveillance the most. Labor issues along with incitements to violence were of top concern for Team Investor. Fake news was the number one issue for Team NGO. Team Consumer, which reflects the average personal view of the participants, believed incitements to violence and surveillance were the most pressing social issues in the tech industry. Labor issues were the least important to the consumer participants, which is interesting in scope of consumer purchase decisions overall and not just in tech.

The Team Consumer data is reflective of each of the groups’ personal beliefs because all participants are also consumers. The College Students prioritized mental health. Both the law students and the Latin American lawyers found surveillance the most important tech issue. International lawyers instead thought incitement to violence more pressing. A possible explanation is that people in the U.S. and Latin America are trying to protect their privacy from intrusive technology. Because the international lawyers had participants from countries where incitement to violence are occurring, that may be why it was important to them.

Suppression of speech closely followed for Latin American Lawyers and International Lawyers whereas Mental Health was the second priority for the primarily American law Students. Many citizens of countries around the globe face oppressive governments that censor speech which may be influential in why Suppression of Speech was ranked highly. In the United States, citizens are guaranteed freedom of speech and press which is why this issue may not be as concerning for them. American teens also suffer from more mental illness as a result of social media use, possibly why it is second place.

Practices in corporate culture and opinions on social issues are influenced by the ethnic makeup of the employees. Although the stakeholder roles the groups took are the most determinative factor, their nationality is naturally a bias in their decision-making.

The Lewis Model is a triangular spectrum that identifies the prominent features of different cultures. Richard Lewis spoke 10 languages, visited 135 countries, and work in over 20 of them to find observable variability in social behavior. He recognized that stereotypes are unfair, but also emphasized that social norms are standards in each country. There are three defined points of culture: Linear Active, Multi-active, and Reactive.

• Linear actives — those who plan, arrange, organize, do one thing at a time, follow action chains. They are truthful rather than diplomatic and do not fear confrontation. Their work and as well as personal life is based on logic rather than emotions. Linear actives like facts, fixed agenda and they are very job oriented. They are able to separate social-private and professional life.

• Multi-actives — people belonging to this cultural category are able to do many things at once, planning their priorities not according to a time schedule, but according to the relative thrill or importance that each appointment brings with it. These cultures are very talkative and impulsive. These characteristics predict their orientation on people. They feel uncomfortable in silence. Multi-active people prefer face to face sessions.

• Reactives — member of this group has in the priority list courtesy and respect on the top. This group is best listening culture. Listening quietly, reacting calmly and carefully to the other side's proposals are their traits as well. Reactive cultures are the world’s best listeners in as much as they concentrate on what the speaker is saying, do not interrupt a speaker while the discourse or presentation is on-going. Reactive people have large reserves of energy. Reactives tend to use names less frequently than other cultural categories.

How does the Lewis Model explain the results?

The primarily American college and law students fall under linear-active with their priorities aligned with individual rights and performance.

The Latin American lawyers are multi-active, think about the social issues in terms of impact on the community and on building relationships.

The International lawyers are comprised of participants all over the world, bringing in aspects from all over the spectrum.

The Lewis Model most likely plays a part in how each participant individually arrived at their own rankings and how they then communicated to agree on a reflective ranking together. The conversations guiding to the final result would have probably shown more insight as to how and why these social issues are important.

Age

The age of the participants is another influential factors because of the generational variation in trust in surveilling technologies. Generation Z, Millennials, and Generation X+ were asked in a survey how comfortable they felt with programs like Alexa or Siri on a scale from 1 to 10, 1 being very and 10 being not.

Generation Z: 7.73

Millennials: 8.28

Generation X+: 8.90

Older generations are more uneasy about virtual assistant technology.

With age comes more experience and better foresight. Researchers in Texas found that “older adults use the experience in decision-making accumulated over their lifetime to determine the long-term utility and not just the immediate benefit before making a choice. However, younger adults tend to focus their decision-making on instant gratification.”

How does age explain the results?

The majority of the college and law students were Generation Z or Millennials whereas the practicing attorneys were mostly Millennials or more senior.

As generations progress, younger people are more comfortable with surveillance technology than older people.

Expertise

Expertise of the participants surely impacted how they ranked social issues. The knowledge of experts in comparison to novices gives them a wider and practical approach to business and social issues. Here are some key aspects:

1. Experts notice features and meaningful patterns of information that are not noticed by novices.
2. Experts have acquired a great deal of content knowledge that is organized in ways that reflect a deep understanding of their subject matter.
3. Experts’ knowledge cannot be reduced to sets of isolated facts or propositions but, instead, reflects contexts of applicability: that is, the knowledge is “conditionalized” on a set of circumstances.
4. Experts are able to flexibly retrieve important aspects of their knowledge with little attentional effort.
5. Though experts know their disciplines thoroughly, this does not guarantee that they are able to teach others.
6. Experts have varying levels of flexibility in their approach to new situations.

Perhaps the practicing attorneys foresaw further down the line as to why one social issue was more pressing than another.

Thank you, Kaitlyn for providing your analysis of the results. Next week, I’ll provide mine.

How to Contract Conference- February 16-17 in Miami

I had originally planned to post Pt. 2 of the blog post I did a couple of weeks ago, but this announcement is time sensitive.

I'm thrilled to announce that the Transactional Skills Program at the University of Miami School of Law is partnering with Laura Frederick for the second How to Contract conference. It's time sensitive because we are considering holding a side event with a contract drafting and negotiation competition for law students if there's enough interest. If you think you would be interested, please email me at [email protected].

For lawyers, there are virtual and live options for the contract conference. I've cut and pasted from the website so you can see why you should come to sunny Miami (and it won't be hurricane season):

It is not about the mega deals.

ContractsCon is about the contracts you work on EVERY DAY. We want to help you learn how to draft and negotiate the deals you see all the time.

Because for every 100-page specialized contract sent to outside counsel, there are thousands of smaller but important ones that in-house counsel and professionals do day in and day out.

ContractsCon focuses on how we manage risk and make the tough decisions with less time and information than we need.

It is not a summary of recent case law.

ContractsCon is about providing actionable advice to help you do the work that you have sitting in your inbox RIGHT NOW.

It's not about case names or citations and we don't get into academic explanations.

ContractsCon focuses on the real-world expertise from experienced practitioners that you need to improve your contract skills and expertise and become better at drafting and negotiating in the real world.

It is not going to put you to sleep.

ContractsCon is about the fun and awesomeness of contracts. We are organizing it to be a true lovefest for everything contracts.  

Why not combine learning about contracts with having fun?

You'll meet other lawyers and professionals passionate about contract drafting and negotiating. Our sessions and workshops feature contracting superstars who love what they do and will share their excitement with you. Plus we're planning a ton of activities on-site and online to keep you engaged. 

ContractsCon is designed for in-house lawyers and professionals who want to learn:

• the insights and techniques needed to handle the commercial contracts filling their inbox every day,
• how experienced lawyers manage risk, work efficiently, and make the hard decisions in challenging circumstances,
• WHAT to say, WHY to say it that way, and HOW to reach the best-negotiated deal you can with your contract counterparties.

Virtual ticket holders get access to 6 HOURS of no-fluff practical contract training by experienced practicing lawyers.

People who attend in person in Miami get 12 HOURS of training, including 6 hours of interactive skills workshops.

I hope to see you in Miami in a few months. Don't forget to follow Laura Frederick on LinkedIn for great contract drafting tips and to let me know whether you and your students might be interested in participating in a contract drafting competition.