Tag Archives: legal

Ryley Carlock & Applewhite Managing Shareholder Rodolfo Parga.

Ryley Carlock’s Parga Featured in ‘Legal Visionaries’

Ryley Carlock & Applewhite Managing Shareholder, Rodolfo Parga, Jr. was featured in the newly published book, “Legal Visionaries, How to Make their Innovations Work for You”.  In partnership with 27 legal visionaries from around the country, Authors David Galbenski and David Barringer interviewed this team of innovators to provide a guide to legal practitioners how others have dealt with record economic challenges, changes in the legal profession, and the formulation of new ways to achieve success.  The authors say it best, “The visionaries whose interviews were collected  … have taken significant steps to improve the business of law … .” The book provides different perspectives from within the legal community about dealing with change and risk in the legal profession.  As Rudy Parga, Managing Shareholder of Ryley Carlock, observed:

“Lawyers are always assessing risk and finding ways to limit it, but sometimes being a good entrepreneur is not about that.  It’s about taking a leap of faith and forging ahead on some of these fronts.  All of us have to deal with a new reality.  That reality includes alternative fees, new operating models, unbundling, and defining and building new client relationships.” Parga states.

Ryley Carlock & Applewhite Managing Shareholder Rodolfo Parga.

Ryley Carlock's Parga Featured in 'Legal Visionaries'

Ryley Carlock & Applewhite Managing Shareholder, Rodolfo Parga, Jr. was featured in the newly published book, “Legal Visionaries, How to Make their Innovations Work for You”.  In partnership with 27 legal visionaries from around the country, Authors David Galbenski and David Barringer interviewed this team of innovators to provide a guide to legal practitioners how others have dealt with record economic challenges, changes in the legal profession, and the formulation of new ways to achieve success.  The authors say it best, “The visionaries whose interviews were collected  … have taken significant steps to improve the business of law … .” The book provides different perspectives from within the legal community about dealing with change and risk in the legal profession.  As Rudy Parga, Managing Shareholder of Ryley Carlock, observed:

“Lawyers are always assessing risk and finding ways to limit it, but sometimes being a good entrepreneur is not about that.  It’s about taking a leap of faith and forging ahead on some of these fronts.  All of us have to deal with a new reality.  That reality includes alternative fees, new operating models, unbundling, and defining and building new client relationships.” Parga states.

rsz_university_center

Cushman & Wakefield Negotiates $23.5M Sale of University Center

 

Cushman & Wakefield of Arizona negotiated the $23.5M sale of the three-building University Center to the Arizona Board of Regents. This marks an acquisition for future expansion of Arizona State University.

University Center , located at Rural Rd. and University Dr., is situated across the street from ASU. The three buildings, 1100, 1130 and 1150 E. University Dr., contain a total of 169,997 SF of space. The 1130 and 1150 E. University Dr. buildings are three-story office structures, while the 1100 E. University Dr. is a single story flex building.

University Center was constructed in 1986/1987 and is occupied by major tenants that include Arizona State University, ACS Commercial Solutions, Nationwide Recovery and Laureate College.

The Arizona Board of Regents purchased the property from Travelers of St Paul, Minn., paying approximately $138.40 per SF.

“We have had the privilege to work with Travelers and Arizona Commercial Management on University Center for over 14 years,” says Karsten Peterson with Cushman & Wakefield of Arizona. “This project has, and will continue to be, a quality location for years to come. University Center has always enjoyed a great relationship with ASU as a Tenant and we are pleased to see ASU progress this relationship into ownership.”

Peterson, Dave Seeger and Mark Gustin of Cushman & Wakefield represented Travelers in the sale negotiations. Peter Lyons of Arizona Commercial Management also assisted in representation of the seller. Curtis Brown of Ross Brown Partners represented the buyer.

 

 

law.courts

Phoenix Office of Robert Half Legal Hires New Branch Director

Jody Arbanas has joined the Phoenix office of Robert Half Legal as Branch Director overseeing recruitment and placement efforts for the local legal marketplace. Robert Half Legal is a leading staffing service specializing in the placement of project and direct-hire legal professionals at law firms and corporate legal departments.

Arbanas joins Robert Half Legal with more than 24 years’ experience in the staffing industry. Previously, she was a multi-market area director for an international staffing firm.

“Jody’s staffing industry experience and knowledge of the Phoenix marketplace is an important and timely addition to our team,” said Diane Domeyer, district president for Robert Half Legal.

Robert Half Legal is the legal staffing division of Robert Half International. The company provides law firms and corporate legal departments with highly skilled professionals, including lawyers, paralegals and legal support personnel, on a project and full-time basis. More information, including online job search services, can be found at www.roberthalflegal.com.

running

How to build a healthy workforce

Are employers who eliminate junk food from the break room, offer classes on how to quit smoking, and dispense free flu shots doing enough to combat rising insurance premiums and increasing employee medical claims?  Maybe not, according to a 2012 American Heart Association report, which reflects that if current obesity trends continue, obesity-related healthcare costs could reach over $861 billion by 2030.  Health care costs neared 2.6 trillion in 2010 and the average annual insurance premiums for employer-sponsored coverage were a staggering $5,429 for single coverage and $15,073 for family coverage in 2011, according to a recent Kaiser Family Foundation study.

These rising healthcare costs have many employers exploring “wellness programs,” which are work-sponsored programs that assist and support employees in establishing healthier lifestyles.  Although they vary from company to company, wellness programs can include weight loss counseling, physical fitness contests, cholesterol and blood pressure screenings, advice on nutrition and healthful eating, subsidized fitness programs and discounts on gym memberships; some even provide incentive-based rewards to employees who participate.  Many also include health-risk assessments, which usually take the form of a questionnaire and are designed to identify health risks and “at risk” individuals and provide suggestions on preventive treatments and other health management tools.

A number of companies credit these programs with decreasing rates of illness and injuries, reducing tardiness and absenteeism, increasing productivity, lowering health care costs and insurance claims, and even enhancing morale and camaraderie among employees.  According to the CDC, 56 published studies report that workplace health initiatives have helped employers save up to 25 percent on overall healthcare costs, absenteeism, workers’ compensation, and disability claims.

It is no surprise, therefore, that the new Patient Protection and Affordability Care Act (PPACA) encourages employers to provide wellness programs.  The Act even provides grants for employers who implement and promote wellness programs.  But, in order to take advantage of these benefits, business owners need to make sure their wellness programs do not put them at legal risk.

The following tips may help your company implement a wellness program without violating federal employment laws:

1. Make the program voluntary to avoid running afoul of the Americans with Disabilities Act (ADA).
The ADA prohibits discrimination against individuals with disabilities and specifically precludes employers from asking questions about an employee’s medical condition or disability.  As a result, employers should make health-risk assessments voluntary and keep medical information confidential and separate from an employee’s personnel file.  According to the Equal Employment Opportunity Commission (EEOC), a program is considered voluntary so long as the employer does not require employee participation and does not penalize employees who choose not to participate.

2. Have your employees execute authorizations in order to comply with Genetic Information Nondiscrimination Act (GINA).
Another area of risk for employers offering wellness programs is GINA, which prohibits discrimination based on an employee’s genetics and specifically precludes employers from requesting, requiring, or purchasing genetic information about their employees or their employees’ family members.  Health risk assessment questionnaires, however, often include questions about medical history and family medical history because these questions can be helpful in identifying at-risk individuals and in providing preventive treatment ideas.  In order to prevent your health risk assessment from violating GINA, employees must volunteer the information and execute a written authorization reflecting his or her knowing and voluntary participation in the program.  There must also be strict privacy protections in place to ensure that employers neither disseminate nor use any genetic information obtained by virtue of the wellness program.

3. Don’t make rewards contingent on satisfying certain health metrics.
In addition, employers should also be mindful of the Health Insurance Portability and Accountability Act (HIPPA), which prohibits group health plans from discriminating or using health factors to determine eligibility for insurance enrollment or to determine insurance premiums.  HIPPA also prohibits discrimination within a wellness program itself.  An employer would be at risk of violating HIPPA by offering, for example, a financial reward to employees who achieve a certain “body mass index” (BMI).  This sort of requirement may not be achievable by all employees due to medical conditions or disabilities.  On the other hand, a wellness program will comply with HIPPA so long as rewards are not contingent on employees satisfying a specific goal or standard.  And employers will not violate HIPPA by offering financial incentives–like lower insurance deductibles or co-payments for employees who participate in the wellness or disease prevention programs–so long as the reward is not based on a specific health outcome and all employees have the opportunity to participate if they so choose.

While wellness programs can pay off for both employers and employees, business owners need to carefully craft their initiatives.  Consulting an expert who understands evolving federal laws can help employers avoid potential discrimination and legal challenges.
This article is for information only and is not legal advice. Emily Cates is a litigation partner in Lewis and Roca’s Phoenix office. Caryn Tijsseling is a litigation partner in Lewis and Roca’s Reno office.

86547298

Bicycle Safety: What are Cyclists’ Rights?

A common misconception of cycling safety is that different rules of the road apply to motorists and cyclists; this is not necessarily true. The truth is that cyclists have many of the same rights as motorists while riding on the road. According to the League of American Bicyclists, each year approximately 45,000 riders are injured in collisions with motor vehicles and many of those injured riders are not informed as to what their rights are, which could lead to confusion or a cyclist not receiving the proper defense that they deserve.

Cyclists are given the following rights according to Pima Association of Governments:

  • Bicycles can be parked on the sidewalk as long as they don’t hinder any vehicles or pedestrians.
  • Cyclists may move away from the right side of the road in order to pass parked vehicles, avoid parked cars or other obstacles, make left hand turns, pass another cyclist.
  • Cyclists can ride side by side with a limit of two bicycles.
  • Cyclists are required to wear reflectors and have a white headlight when riding at night.

If you are involved in a collision where these rights are terminated you will be eligible to press charges. This year alone, 307,753 car accidents have been reported with being involved in a distracted driving case. It has also been measured that drivers using hand held devices while driving are four times as likely to get into crashes serious enough to injure themselves or others. The state of Arizona is heavily pushing for a ban on texting while driving. Currently, if a distracted driver hits you while riding your bike, the driver will be fined a minimum of $250. Punishment will continue to increase depending on the severity of the accident.

The most important thing to remember if you are ever involved in a collision is to remain calm. In addition, wearing a helmet at all times will greatly reduce any risk of injury. According to the Live Strong foundation and the Bicycle Helmet Safety Institute, head injuries are linked to 62.6% of bicycle-related fatalities. This is an astonishing amount when you think of how easily a helmet can reduce the percentage. “The lifetime medical cost savings will total between $197 and $256 million,” for those who do wear a helmet, according to the Bicycle Helmet Safety Institute.

We recommend always riding a bike with a cell phone just in case something were to ever happen. Similar to a car collision, you will want to take pictures of the collision damage and collect information from the motorist. If your bike becomes damaged from the collision, take it to the shop and have them write you a report for the damage with the receipt.

Thomas M. Richardson is an attorney and partner at Friedl Richardson Trial Lawyers in Phoenix. Friedl Richardson specializes in premise liability cases, as well as car accidents, bicycle accidents and dog-bite related injuries. For more information, please visit www.azrichlaw.com or call 602-553-2220.

dbacks speaker series

D-Backs To Sponsor Sports Career Speaker Series

The Arizona Diamondbacks announced that they will host a Speaker Series throughout the season featuring D-backs executives and Phoenix-area business leaders as they field questions about their line of work in the sports industry.

The Speaker Series is open to fans of all ages and will be held on the first base side of the Insight Diamond Level prior to select Tuesday home games covering topics such as legal, marketing, communications, community affairs, finance, sponsorship, branding and trends in sports sales, and human resources. Each topic will be covered by a moderator and a team of panelists with expertise in the category featured.

The first Speaker Series was held on April 24 with D-backs Senior Director of Legal Affairs and Associate General Counsel Caleb Jay heading the panel, covering legal topics in the sports industry. They were joined by legal executives from the D-backs, Phoenix Suns, Arizona Cardinals and Arizona State University.

Dates, topics and moderators include:

  • May 22: Marketing – Karina Bohn, D-backs Senior Director of Marketing
  • June 19: Communications – Josh Rawitch, D-backs Senior Vice President of Communications
  • July 24: Community Affairs – Debbie Castaldo, D-backs Vice President of Community Affairs & Executive Director, Arizona Diamondbacks Foundation
  • Aug. 21: Finance – Tom Harris, D-backs Executive Vice President & Chief Financial Officer
  • Aug. 28: Sponsorship, Branding and Trends in Sports Sales – Cullen Maxey, D-backs Executive Vice President of Business Operations
  • Sept. 18: Human Resources – Marian Rhodes, D-backs Senior Vice President & Chief Human Resources & Diversity Officer

Fans can enjoy the game from the Miller Lite Diamond Club which will serve as a great area for networking with others in the sports industry. Tickets for the Speaker Series are only $20 and include a $5 credit in D-bucks. Fans interested in attending the Speaker Series can call (602) 462.4243.

[stextbox id="info"]Arizona Diamondbacks[/stextbox]

Phoenix School of Law Relocating to Downtown Phoenix

Phoenix School Of Law Relocating To Downtown Phoenix

The Phoenix School of Law announced today that it will be relocating to Downtown Phoenix in the One North Central building, located at the corner of North Central Avenue  and East Washington Street.

In a lease that begins Aug. 1, the school will eventually occupy 205,130 square feet of the building’s 13th-20th floors and a portion of the first floor. The relocation is a result of the school’s dedication to enhancing its learning environment, commitment to improving student outcomes, and its increasing student enrollment.

“Phoenix School of Law’s announcement to relocate to downtown is great news, bringing long-term jobs that benefit the entire city,” Phoenix Mayor Phil Gordon said.  “By continuing to build on our knowledge based economy, we strengthen our workforce and create opportunities to reinvest in our community.”

“Phoenix School of Law is extremely excited for our move to downtown Phoenix,” said Scott Thompson, president of the school. “This strategic initiative provides the foundation for the next phase of our institution, and will build on the attainment of full accreditation granted last summer by the American Bar Association.”

The new campus will be equipped with state-of-the-art technology, a fully operational mock courtroom, a legal clinic and a law library with an expansive physical collection of legal resources, and a variety of electronic databases.

“Attracting educational institutions is key to enhancing downtown Phoenix’s redevelopment and renaissance efforts,” said District 8 Councilman Michael Johnson, in whose district the school will relocate. “Students, faculty and staff will be ideally located in the heart of the state’s legal, government and business districts with convenient access to light rail, retail and other amenities.”

“Our location in the heart of the legal community and justice system maximizes our students’ ability to utilize many resources in the downtown area,” said Shirley L. Mays, Dean of Phoenix School of Law.  “As a law school with nearly 1,000 students and employees, our presence downtown confirms our commitment to Phoenix and will benefit both the city and the broader community.”

The Phoenix School of Law is fully accredited by the American Bar Association, and is the only law school in Arizona where students can choose from full-time, part-time day, or part-time evening programs.

The Phoenix School of Law will be leasing One North Central from its owner, Mitsubishi Estate New York, Inc.  for the next 10 years, with an option to extend for an additional five years. Jay Hoselton, senior director of Cushman & Wakefield, was the broker for the transaction. Lewis & Roca, LLM served as the legal advisor.

Proposition 203 Passes - Arizona Legalizes Medical Marijuana

Proposition 203 Passes – Arizona Legalizes Medical Marijuana

On Nov. 23, Arizona is set to officially become the 15th state in the nation to legalize medical marijuana.

Almost two weeks after the Nov. 2 election, the final numbers for Proposition 203 have been tallied and the measure has passed by the slimmest of margins — a mere 4,341 votes. The final numbers: 841,346 people (50.13 percent) voted yes on Prop. 203, and 837,005 people (49.87 percent) voted no.

Passage of Proposition 203 means thousands of legitimate medical marijuana patients will be able to receive their prescriptions, says Andrew Myers, spokesman for the Arizona Medical Marijuana Policy Project.

The first medical marijuana dispensaries won’t be open for almost a year due to the regulatory process, Myers added.

He also stated that Arizona’s medical marijuana industry would be very different from that of California, which at one point had around 1,000 dispensaries in Los Angeles County alone.

Proposition 203 limits Arizona to one dispensary for every 10 pharmacies and creates a state-regulated industry. This means if pharmacy numbers remain the same, Arizona will only have 124 medical marijuana dispensaries, Myers says.

Proposition 203’s approval won’t be certified until Nov. 23, to allow those behind the scenes to double check the numbers. However, Myers doesn’t anticipate any significant changes.

The certification might also be delayed until a recount on Proposition 112 is completed. Proposition 112 would amend the Arizona constitution to require citizen-initiative petitions to be filed six months in advance of an election. Currently, a citizen-initiative petition only needs to be filed four months prior to an election. With the current vote count, Proposition 112 has lost by fewer than 200 votes, the amount necessary to cause a recount, Myers noted.

Whether Proposition 203 is legally certified on Nov. 23 or not, the measure has passed, and you can expect legalized medical marijuana to come soon to Arizona.

To see all election results, visit the Arizona Secretary of State’s website. More election coverage on AZNow.Biz includes our political columnist Tom Milton’s analysis and our recap of the election results.

Social media sites are no longer just places to reconnect with childhood friends or college roommates.

Social Media And The Hiring Process: Your Profile Can Sink Or Save You

Social media has set up camp in the professional world and is there to stay.

Social media sites are no longer just places to reconnect with childhood friends or college roommates. Companies now use social media websites to do unofficial background checks on potential employees.

A Cross-Tab Marketing Service study, released earlier this year, reveals that 70 percent of companies have rejected a candidate based on an inappropriate social media website posting.

This is a scary reality for everyone who uses these sites as a harmless way to catch up with friends, but may have crossed the line by uploading funny, yet work-inappropriate pictures. In today’s world, a world inextricably tied to the Internet, anything posted on a public page can and will be found by potential employers, says Lew Clark, an attorney with Squire, Sanders and Dempsey.

However, there are ways to prevent shooting yourself in the social media foot and, if you’re smart, work the system.

There are a few obvious things not to have on Facebook, MySpace, Twitter, YouTube or other social media websites — including inappropriate photos or conversations. Poor grammar, spelling or writing skills, use of profanity, and poor people skills also can turn off a potential employer, Clark says.

“One of the huge no-nos that we discuss with folks … is to never, ever post anything negative about a former boss, co-worker, employer. It creates the wrong image. No matter if it’s true, valid, anything else, you just do not want to go there,” says Cindy Jones, vice president of human resources at Synergy Seven.

Don’t despair. Companies aren’t just looking for reasons to disqualify you. They’re also looking for reasons why you’re perfect for the job, Jones says. Especially on professional social media sites, such as Linkedin, companies look to see prospective employees’ connections.

If used properly, social media can be an effective marketing tool, Jones adds, providing a real-world example of how to use social media as an advantage.

When a woman decided to switch careers from Realtor to sommelier, she changed both her professional — Linkedin — and personal — Facebook — social media pages to reflect her new career path. She posted her excitement about passing tests toward receiving sommelier certification and changed her main picture to one of her toasting with a glass of wine.

While this type of online makeover won’t work for all fields, Jones says it’s an example of using social media to one’s advantage.

“There’s nothing at all improper with a prospective employer (looking) on someone’s public Facebook page, their public Twitter page, or any other online networking website that you can access publicly,” Clark says.

However, accessing a potential employee’s private page by figuring out the password, accessing it through someone else’s page or by pretending to be someone else is illegal, he adds.

Aside from accessing a page illegally, employers can find themselves in other sticky situations.

Employers may find information about a person’s religion, health, age or personal life that they wouldn’t otherwise learn and can’t legally take into consideration in the hiring process, Clark and Jones say.

“The risk to the employer is that someone could allege that you used information that is legally protected to decide whether to hire somebody or not,” Jones says. “Our guidance with most companies starts at the place of there’s nothing illegal about it, but be careful.”

Clark adds: “Employers are looking for whatever resource they can to try to get information about candidates so they can make a good hire.”

Background checks, including checking social media websites, can reduce costs, encourage honesty among employees and ensure the best person gets the job, says Marcia Rhodes from WorldatWork, a global human resource association.

Although using social media in the hiring process offers many perks, Jones and Rhodes say they’ve seen a trend in which companies are limiting social media background checks on possible employees, contrary to the report previously cited.

Kim Magyar, an attorney with Snell and Wilmer, says she doesn’t see the number of companies using social media decreasing, but companies are being more targeted and cautious with their searches.

Some companies wait until they’ve already interviewed a candidate to check social media, while others check before they conduct an interview, says Magyar, who has given presentations on social networking and the workplace.

Many companies believe social media can be a treasure trove of information; information that might not always be accurate, Magyar says.

“There’s nothing to prevent an employer from making decisions based upon what they see (on social media sites),” Clark says.

Nothing, except the awareness that public social media pages are fair game and the preparedness of prospective employees to maintain their pages in a way that represents them in a respectable, hire-able way.

Legal Aide

Key Legal Considerations And Strategies Businesses Should Consider In An Economic Downturn

Virtually all Arizona businesses, but disproportionately small and medium-sized enterprises, have been significantly impacted by the recession. The current financial climate has and will undoubtedly continue to have countless business ramifications. Often overlooked, however, are the legal considerations that should be proactively evaluated by companies in a challenging economic environment. Legal strategies should be employed not only to manage present challenges, but also to take advantage of opportunities that present themselves in this ever-evolving business landscape. It is important to carefully consider the key legal variables in play.

Here are a few:

1. Renegotiate contracts
Unfortunately, parties oftentimes neglect to consider the details of their contractual relationships until such time as they are presented with challenges. It is therefore a good practice to closely scrutinize and reevaluate one’s contracts in advance of problems arising, and with an eye toward possibly negotiating more favorable terms. It is essential that businesses look to all of their contractual relationships and incorporate contractual provisions that allow for flexibility during fluctuating economic times and properly allocate business risks, including the protection of payment streams, dealings with vendors and clients, termination provisions, and dispute-resolution mechanisms.

2. Employment policies and procedures
Perhaps the area that presents the greatest challenge for small and medium-sized businesses concerns the legal aspects of employment. Particularly in economically challenging times, companies need to be aware of the potential for employment litigation. Companies should regularly ensure that employment policies are updated and consistent with their operations and the regulatory environment, and should be attuned to the potential impact of their employment-related decisions.

3. Corporate documentation
Reviewing and maintaining the proper business entity and structure for your business is vital to securing proper limited-liability protections, mitigating exposure associated with business and employment disputes, and ensuring the most advantageous tax treatment. Many factors influence the choice of a particular entity, including the number of owners, the source of capitalization, employee and immigration needs, management structure, the size of the organization, taxes, and personal asset protection. Limited-liability protection is particularly important in economically challenging times, when the number of disputes rises dramatically. Businesses should be extraordinarily prudent and diligent in the management and oversight of their corporate formalities to preserve the benefits of their entity status.

4. Intellectual property protection
Patents, trademarks, trade secrets and copyrights are species of intellectual property that can and should be protected under state, federal and international law, as applicable. The use and effectiveness of covenants not-to-compete and confidentiality agreements should also be evaluated. It is critical to assess intellectual property regulations and enforcement mechanisms on a regular basis before engaging in any activity that may jeopardize your business’ intellectual property rights.

5. Pursuing litigation
The prospect of business litigation should be approached with the goal of creating optimum value for the business. Businesses should be cognizant of the significant expense associated with litigation, the time horizon associated with the pursuit of claims through the judicial system, and the prospects, if any, of ultimately collecting on a favorable settlement or judgment. Litigants and their counsel should be acutely aware of the costs and benefits associated with pursuing and defending civil claims. The question should be asked: What is the value proposition in each alternative approach to resolving a dispute?

6. Consider bankruptcy alternatives
Bankruptcy can sometimes provide relief for a struggling enterprise. There are various strategies that can provide a “fresh start” for a business that has been impacted by this economy. A bankruptcy expert can assist in evaluating the utilization of bankruptcy to determine the best course of action. Alternatives to bankruptcy do exist, i.e. “work-outs” with lenders, and these options should also be fully explored in advance of filing for bankruptcy protection.

7. Dispute resolution
It is imperative to plan in advance to manage disputes that may arise in the course of business. Absent a contractual designation by the parties of a governing set of laws, forum or dispute resolution process, there may be uncertainty as to how, when and where disputes will be resolved. This uncertainty can translate into resources being unnecessarily expended. Parties should, at the very least, make efforts to agree in advance to a choice of law and forum to manage disputes, including the use of arbitration and/or mediation to provide for resolution. Businesses should be cautioned not to rush to agree to arbitration, however. In many instances, litigation in the judicial system may be a better option.

8. Identify a lawyer
It is important to seek the assistance of legal counsel who has a keen understanding of how to best structure your business or to help you in confronting your business’ challenges. The lawyer should have the ability to call upon a network of advisors who can provide particularized knowledge of the issues that confront your business, whether the goal is strategic planning or dispute resolution.

Recessionary economic conditions provide for challenges, as well as opportunities. The costs to those businesses that fail to adequately consider the legal ramifications of their actions in this environment can be substantial. These legal issues are best navigated and managed through proper planning, which will in turn maximize your business’ ability to capitalize on available opportunities.

Olivier A. Beabeau, a senior associate at Galbut & Galbut, contributed to this report. He can be reached at obeabeau@galbutlaw.com.

Changing Course

Law Firms Are Altering Their Strategies To Cope With The Recession

The downturn in the economy that is affecting all businesses has not spared law firms. Like all other businesses, law firms have been forced to cope with fewer and thriftier clients. Specifically, law firms have had to deal with sharp reductions in transactional and real estate work, large increases in litigation and bankruptcy matters, and clients who are often unable to pay for legal services. Providing legal services to clients that may declare bankruptcy in the near future has become commonplace.

Law firms have responded to these trying times with various strategies. Many law firms have primarily focused on reducing costs through hiring and compensation freezes, recruiting cutbacks, and event cancellations. Other firms have started to transition transactional attorneys to bankruptcy or litigation work.

Not all strategies, however, are created equal. The reduction of costs is always a worthwhile aim, but when conducted without strategic vision, it can leave a firm with frustrated employees and choke off any avenue for organic growth. The transfer of attorneys to other divisions certainly creates revenue for the firm by keeping otherwise inactive attorneys productive, but the work product can suffer. For example, transactional attorneys will not necessarily provide the highest level of service to a client with litigation or bankruptcy needs.

Firms that take a different approach may be best suited to not only survive the current economic difficulties, but to emerge on the other side as stronger firms. This approach is simple: Focus on the client. While all law firms profess to keep the client’s interest at heart, in these times, paying more than lip service to that ideal is the key to success. Now more than ever, many clients are not able to afford full service legal representation. Obviously, providing the highest quality legal service to the client is always the first priority, but providing value should be a close second. Focusing on the client and its specific needs allows attorneys to add value by identifying and zeroing in on the particular requirements of that client. Once the particular needs are identified, it is simple to eliminate any superfluous services that do not add value, and to concentrate only on the services that really move the client closer to its ultimate goal. This focus keeps the representation more efficient, less costly, and will ensure that the client is satisfied with all of the legal services provided.

One major example of how an increased focus on the client is more important than ever is the looming prospect of bankruptcy. Recognizing that a bankruptcy could be on the horizon for a client is very important to shaping any legal strategy. Most importantly, a bankruptcy provides unique legal challenges and opportunities that need to be addressed in a timely manner. Identifying the possibility for a bankruptcy, and when it might occur, allows the lawyer to properly gauge which long-term strategies will be ineffective, and how to use the limited time and resources as efficiently as possible. Moreover, a possible bankruptcy underlines the client’s absolute necessity for value from legal services. Particular attention from the attorney at the outset of a representation can identify a possible bankruptcy, shape the representation, and let the law firm know which services will be most valuable to the client under the circumstances.

With the need to adjust to the current economic difficulties paramount for all law firms, smaller firms may be the best equipped. Like the tugboat and the ocean liner, smaller firms are more nimble and able to focus resources to needed areas more quickly than larger firms. Most importantly, small firms often provide a higher level of personal attention and a greater focus on the client’s needs. Focusing on the client is the best way to ensure success for both the law firm and the client.

Charles J. Morrow also contributed to this article.  He is an associate at Galbut & Galbut. He can be reached at cmorrow@galbutlaw.com.

Law Review - Arizona’s Legal Landscape

A Look Back Finds Substantial Changes To Arizona’s Legal Landscape

Rapid-fire change has become the status quo in the legal and business community over the past 25 years. This change is particularly apparent to me, as my firm, Fennemore Craig, will celebrate its 125-year anniversary in Arizona next year, and I have practiced law for more than three decades.

One of the most pronounced and positive changes over the years has been who becomes a lawyer. Through an increased emphasis on diversity, law firms and legal departments have become places of opportunity for people of all backgrounds, reflecting the diverse nature of our communities and clients. We can do better, but the profession has made significant strides in the area of diversity since the 1980s.

While the face of the state’s law firms has changed, so has their size. Not too many years ago, the largest firms in the Southwest were still relatively small, with client bases dominated by locally headquartered companies and financial institutions. Since the 1980s, the region has lost quite a few headquarters, yet law firms like Fennemore Craig have benefited from strong economic growth in the Sun Belt, with Phoenix emerging as a regional business hub.

Notwithstanding the current economic downturn, the long-term economic prospects for the region promise continued opportunity. This economic strength has led to growth among several of Arizona’s home-grown firms and it also has attracted firms with their principal offices in other states. In turn, Arizona firms have responded with a growing platform of offices and lawyers expanding into other markets. The influence of technology in changing the legal profession over the past 25 years cannot be overstated. The pace and volume of work for us and for our clients have increased exponentially. Research, which is central to the law, has been almost totally automated. While successful lawyers still must be good communicators and excellent practitioners, information flow occurs literally around-the-clock. Waiting to work on a transaction or litigation based on deliveries through the U.S. Postal Service has gone the way of the typewriter and the mimeograph machine. Transmittal of documents, filings and other activities occurs primarily on an electronic basis and the demand for quick responses has increased accordingly.

The professional aspects of practicing law have shifted as well. Training is better than ever, though time pressures mean some of the one-on-one mentoring and discussions with senior lawyers that characterized much of my early professional learning curve are more rare.
As a credit to Arizona, it is also important to note that the state’s institution of the merit selection system for its judges created a better, more professional judiciary. Merit selection has improved both the state’s justice system and the practice of law here in terms of professionalism, fairness and quality.

One of the appealing aspects of the legal profession is its strong tie to tradition. We must discern when tradition is fostering positive values, rather than preserving the status quo for its own sake. The positive values inherent in the profession 25, even 125 years ago, remain true today regardless of the changes in pace, volume and complexity in the practice of law. Then as now, we have the opportunity and responsibility to help people solve problems and get things done.

first job john j. bouma

First Job: John J. Bouma, Snell & Wilmer

John J. Bouma
Chairman
Snell & Wilmer

Describe your very first job and what lessons you learned from it.
My first job was working for my father at the Rialto Theater in Pocahontas, Iowa. It was a very nice, small town theater. I ushered guests, changed the names of the movies on the marquee, switched out movie posters, took tickets, sold tickets, and occasionally ran the projectors. I learned how important it is to be on time, to be courteous and attentive to customers, and to take into consideration people’s individual circumstances. People, and particularly kids, who did not have the ticket price would often get in free.

Describe your first job in your industry and what you learned from it.
My first job in the legal field was as a brand new lawyer at a law firm in Milwaukee. After a few months, I went on active duty as a lieutenant in the Army Judge Advocate General’s Corp (JAG).  Through both jobs, I learned the importance of listening and of preparation. I learned to try cases in the Army, first as a defense lawyer, and then as a prosecutor.

What were your salaries at both of these jobs?
During my years at the Rialto Theater my father gave me an allowance. I may have received an additional quarter or two on the nights I changed the marquee or ushered.
The law firm I joined in Milwaukee following college was one of the top-paying firms in the country at that time, paying new associates a yearly salary of $7,800.

Who is your biggest mentor and what role did they play?
My biggest mentor was my father. He had run away from school in the sixth grade, but became a very successful businessman. He encouraged me in sports, throwing or catching baseballs endlessly, encouraged me to go to law school (on the principle that since I argued so much, I should get paid for it), and then encouraged me to settle in Arizona. My father taught me to say what I think, and to stick to my position if I believe I am right.

Mark Wilmer was also an important mentor to me. He was an outstanding trial lawyer and a real gentleman. From working with him and trying cases with him, I learned that being gentle and courteous is not inconsistent with being a great trial lawyer.

What advice would you give to a person just entering your industry?
It is crucial to establish a reputation for absolute honesty and integrity that can never be compromised or subject to question. Beyond that, if you don’t recognize law as a calling –– an opportunity to help people solve problems –– rather than just a way to make a living, you are in the wrong profession.

If you weren’t doing this, what would you be doing instead?
I would be involved with some nonprofit or public enterprise where I could keep my mind active and where my background and experience could be helpful to the organization. I would also devote even more time to a variety of outdoor activities and travel with my wife and family.

construction companies

Construction Companies Can Be Exposed To Lawsuits When Assisting The Government During An Emergency

Imagine that you own a construction company and one of your employees comes in and tells you that the two largest buildings in town have collapsed. You receive a phone call a few days later from a government official who informs you that the police and fire department need your construction company to send heavy equipment and demolition crews to the site of the collapsed buildings to help remove large pieces of debris in order to save people’s lives.

Some large construction companies in New York were faced with that exact situation after the Sept. 11 attacks. The construction companies that helped clean up the World Trade Center disaster site were responsible for removing one-and-a-half-million tons of debris that covered many city blocks. Before long, the workers who were removing the debris started getting sick, as did police officers and firefighters who were stationed at the disaster site. Many of them have filed lawsuits against numerous entities, including the construction companies that were called upon to help with the debris removal effort.

The construction companies failed in a recent attempt to dismiss the lawsuits on grounds that they were immune from liability because they responded to an emergency situation.

Any business that decides to help in an emergency must protect itself, or face the legal consequences of the almost inevitable mistakes and accidents that will happen. With careful planning and prudent oversight, you can protect your business from lawsuits related to its help in an emergency or disaster situation in the state of Arizona.
Arizona’s immunity statute

The statute A.R.S. § 26-314(A) provides immunity for the state of Arizona and its political subdivisions (i.e., counties, cities and other local governments) for the actions or inactions of its “emergency workers.” The statute states that “emergency workers” shall have the same immunities as agents of the state of Arizona and its political subdivisions performing similar work. The term “emergency worker” is defined in part as “any person who is … an officer, agent, or employee of this state or a political subdivision of this state and who is called on to perform or support emergency management activities or perform emergency management functions.” Therefore, the only way to be sure your business is immune from lawsuits related to its assistance to the state or city government in a disaster or emergency situation is to wait until the government “calls on” your business to provide help.

Your business must always operate as an “agent” of the government to be considered an “emergency worker” and maintain its immunity. Your business will be considered an agent of the government if the government has the right to control the conduct of your business as it performs its work. Thus, you should determine who is in charge of the emergency site, and you should offer assistance to that person. You should seek detailed instructions from the person in charge and make sure it is clear that your business is operating under that person’s authority.

Should your business enter into a contract with the government to perform emergency services, then the rules change significantly. The provisions of the statute would still apply; however, a business that enters into a contract with the government would be considered an independent contractor. An independent contractor is an “agent” only if the government instructs the independent contractor on “what to do, not how to do it.” Therefore, when your business enters into a contract to help the government in an emergency situation, you must make sure the contract provides your business with control over the process and/or methods that it uses to do its work.

Of course, the Arizona Legislature can amend the statute to include immunity for any business entity that renders assistance during an emergency. If businesses were provided with clear protection under the statute, there would be no need for them to worry about being an “agent” of the government, and it would persuade more businesses to render assistance to the government in an emergency.

software

Failing To Honor Copyrights On Software Could Cost Company Thousands

If you use software in your business, a little knowledge about an often misunderstood area of the law could save you tens and possibly hundreds of thousands of dollars. The area of the law is copyrights — but don’t stop reading just because you know you would never illegally copyright software. I have had many clients come to me faced with serious financial sanctions who thought they did nothing wrong.

Perhaps you have never heard of the Business Software Alliance. You are lucky. If you don’t have written agreements with your employees about computer usage, you need to reconsider. And if you have no interest in reading that long license agreement before you click “accept” … well I can’t blame you, but you should at least read it before you make any extra copies of the program.

Let’s start with the basics. Microsoft owns the copyright on Word, Auto Desk owns the copyright on AutoCAD, and Adobe owns the copyright on Acrobat. If you “bought” any of those programs or any other software, you really only licensed them. Whether you bought a CD in the store, downloaded it from the Internet for “free” or it came bundled on your new computer, your use is subject to whatever conditions the copyright owner wishes to impose. If you exceed your permission, then you are violating the copyright. Another basic — you are responsible for the actions of your employees, even if you did not know they were violating the copyright law.

Now let’s discuss a few common myths. Each of the following statements is absolutely false: (1) I can make extra copies for my own use as long as I don’t give or sell them to third parties; (2) I don’t use that computer anymore, so I can just copy the program onto the computer that I do use; (3) it was free on the Internet so it is in the public domain; and (4) they are not interested in going after a small company like mine.

The only way to really know whether an archive copy is permitted or how many different computers you can legally load the software onto is to read the terms of the license that you accepted when you downloaded or installed the software. Don’t assume. Don’t rely on the representative who sold it to you and don’t rely on your tech person. In almost every instance where one of my business clients was accused of copyright infringement, the business assumed or believed that the extra copies were permitted.

Finally, let’s discuss the myth that your business is too small to attract attention and why you should familiarize yourself with the Business Software Alliance (BSA). The BSA is a trade association for copyright owners and it has one purpose — the protection of the copyrights of its members. Its members range from big players like Adobe and AutoCAD to smaller software companies. By turning these enforcement issues over to the BSA, the companies can focus on what they do best — write and develop software. What the BSA does best is locate, negotiate with, and sue infringers. A popular source of information for the BSA is disgruntled former employees. The BSA periodically runs advertisements offering rewards for information. No case is too small and no business is too small for the BSA. Also, the BSA’s idea of negotiation is to slightly discount the full damages. Since copyright laws provide for statutory damages of up to $150,000 per infringement, plus attorney fees, the exposure is significant and the alternative to accepting their proposals is daunting.

With just a few preventative measures, you can protect your business. First, educate your employees on the dangers of unauthorized copying and implement written policies and contracts that prohibit or provide a protocol for any software downloads or copies. By having appropriate policies, you may decrease the amount of damages that can be claimed against you. You will still be responsible for your employees’ conduct so it is important to educate and re-educate your employees on the importance of following the policy.

Another preventative measure is to review your current software and licenses. Un-install any extra copies that are not authorized. When you add a new computer, do not install any software from previous computers without reading the license provisions and determining whether the new install is authorized.

Most importantly, treat copyright protected intangible property such as computer software like you would treat tangible property such as fixtures and equipment. Teach your employees to do the same. You wouldn’t steal or even borrow your neighbor’s car without permission. Respect the intangible property of others in the same way and you are far less likely to find yourself on the wrong side of a copyright infringement claim.

What It Takes To Form A Nonprofit Or Tax-Exempt Organization

It usually starts with a phone call from a client, or maybe another attorney in your office. Someone wants to set up a nonprofit corporation, usually a tax-exempt charity, often on behalf of a pro-bono client, and assumes it should be pretty easy.

Unfortunately, it’s not.

First, “nonprofit” is not the same as “tax-exempt,” although many people use the terms interchangeably. Nonprofit is a state law concept and is governed by the relevant state statute for nonprofit corporations. In Arizona, that would be Article 10, Chapters 24-40 of the Arizona Revised Statutes. Tax-exempt usually refers to being exempt from federal income tax under section 501(c) of the Internal Revenue Code. Furthermore, there are different types of tax-exempt organizations. The most common are 501(c)(3) organizations such as schools, hospitals, museums, community foundations, etc. But there are also other types of 501(c) organizations such as trade associations, which are exempt under section 501(c)(6), and social welfare organizations, which are exempt under section 501(c)(4).

Second, although the state filings to establish a nonprofit corporation are not unduly burdensome, there are a number of technical requirements that need to be followed. Also, the IRS exemption application, Form 1023, is not a simple one-page form; instead, it requires anywhere from 12-20 pages of information depending on the nature of the organization. With few exceptions, such as churches, an organization must file Form 1023 and receive a determination letter from the IRS in order to be tax-exempt, and cannot represent to potential donors that it is tax-exempt until such time as it receives such letter.

State law requirements for Arizona nonprofit corporations
In order to create the corporation under state law, an Arizona nonprofit corporation must file articles of incorporation. These will contain the name, purpose, powers and directors of the corporation, as well as the statutory agent for the corporation. The articles will also state whether the corporation will have members. Nonprofit corporations are not required to have members; in the absence of members, the directors will govern the corporation. However, if there are members, the members will elect the directors and will vote on major corporate actions. The procedure for electing members, and the rights of such members, is often set forth in the articles, but can also be contained in the bylaws of the corporation.

The articles are signed by the incorporator of the organization and are filed with the Arizona Corporation Commission. The filing fee is $40 ($75 if expedited treatment is desired). The articles are accompanied by a certificate of disclosure, which must be signed by the incorporator and any individuals who are directors or officers at the time the articles are filed. The articles must then be published (within 60 days after the articles are filed) in a newspaper of general circulation in the county in which the corporation carries on its business for three consecutive publications.

Once incorporated, the organization must file annual reports with the Arizona Corporation Commission and the Charities Division of the Secretary of State. The filing fees for such reports are nominal.

IRS tax-exempt filing (Form 1023)
IRS Form 1023 requires fairly extensive information about the operation of the organization. The two most important sections are Part IV (narrative description of activities) and Part IX (financial data). The IRS will want to know, in some detail, what activities the organization will carry on. In order to qualify under section 501(c)(3), the organization must be operated “exclusively for religious, charitable, scientific … literary, or educational purposes.” The narrative description should go into some detail (at least a page) outlining the exempt purposes of the organization and why such purposes qualify under Section 501(c)(3). If possible, prior IRS rulings relating to similar organizations should be cited as evidence that the new organization qualifies as exempt.

In Part IX, assuming the organization in question is a new organization, Form 1023 asks for projected budgets for the current year, plus the next two years. These budgets require both income information Ñ expected contributions, investment income, operational income Ñ and expense information, such as outgoing grants, fundraising expenses, wages, rent, interest and professional fees. The organization should make a good-faith attempt to be as detailed and accurate as possible, even though it is understood that actual operations may diverge from the projections. The IRS is simply interested in understanding the scale of magnitude of the organization’s operations, as well as the relative allocation between internal administrative expenses, and expenses directly used to carry out the exempt purposes of the organization.

The filing fee is currently $750 (reduced to $300 if the organization expects its annual receipts to be under $10,000). The form should be filed within 27 months of its date of incorporation and, if approved by the IRS, will be retroactive to the date of incorporation. The IRS review time will vary substantially depending on the complexity and size of the organization. For a simple charity with no complications, IRS approval may only take six to eight weeks. However, if the organization has substantial activities or is expected to be involved in significant transactions with private parties, such as an organization focused on community development, it may take six to 12 months for IRS approval. If the IRS has any questions or concerns, it will contact the organization in writing while the application is pending and will normally give the organization 21 days to respond.

Once approved, the organization will be required to annually file Form 990 disclosing the income and expenses of the organization, the compensation paid to officers, directors and key employees, and other information. Form 990 does not normally require the payment of any tax, but is an information return for the IRS to monitor the activities of the organization. Form 990, and Form 1023, are publicly available documents and must be disclosed if someone contacts the organization requesting copies. Thus, organizations should keep such potential disclosure in mind when preparing the forms.

Conclusion
Forming a nonprofit and securing tax-exempt status is a little bit more involved than simply filing two pieces of paper with the state and with the IRS. Anyone working with a new nonprofit should also work with an accounting or legal professional that is familiar with the state and federal requirements pertaining to such organizations.

Michael G. Meissner is a partner at Squire, Sanders & Dempsey’s Cleveland office. He works with the firm’s Phoenix office on tax issues. Meissner can be reached at (216) 479-8593 or at mmeissner@ssd.com. The firm’s Phoenix office can be reached at (602) 528-4000.

Do employees have a right of privacy in their e-mails and text messages?

Employers Should Learn Legal Rules On Employee E-Mails And Text Messages

Do employees have a right of privacy in their e-mails and text messages or may employers read them? May employers lawfully limit employee electronic communications? Are employees protected from retaliation for what they say in their e-mails? If so, can they lose protection if they go too far in what they say?

For several years, savvy employers wishing to monitor employee e-mails have issued policy statements to workers, putting them on notice that electronic communications they send on company equipment are subject to review by management. This notice is designed to preclude any reasonable expectation by an employee that his or her e-mails are confidential and may not be viewed by management, thereby shielding the employer from invasion of privacy claims.

A recent case from the Ninth Circuit Court of Appeals, with jurisdiction over Arizona, created quite a stir when the court concluded that an employer had invaded an employee’s privacy by reading the employee’s text messages, even though the employer had provided its employees with notice that their electronic communications were subject to monitoring by the employer. A careful look at the court’s decision, however, should dispel employer concerns.

The case doesn’t stand for the proposition that employer notice is no longer effective. A manager had undercut the employer’s policy statement when he told employees that their messages wouldn’t be reviewed as long as they paid for any monthly overage fees imposed because of excessive text messaging. When the employer was considering changing service plans because of recurring overage fees, it obtained employee text messages from the service provider to determine the extent to which non-work related messages accounted for the overages. The court concluded that employees had a reasonable expectation that the privacy of their messages would be protected because of the manager’s promise, despite the language in the official policy.

The lesson for businesses is that your employment policies are only as good as those who administer them. Managers and supervisors must be trained to properly administer your policies and not make statements inconsistent with those policies.

Employer restrictions on employee e-mail
Many employers have policies that prohibit use of their computer systems, including e-mail features, for personal communications. The difficulty with these policies lies in consistent enforcement. Non-union and union employers alike are subject to rulings by the National Labor Relations Board (NLRB), which has repeatedly held that such policies may not be enforced against employees who send e-mails pertaining to employment matters or unions if the employer does not consistently enforce its policy against other personal e-mails such as party announcements, solicitation of money for retirement or birthday gifts, offers to sell sports tickets, or sales, or others pertaining to non-business matters. Effectively policing such a policy is often a virtual impossibility.

The NLRB recently issued a new decision holding that employers may adopt policies that permit some kinds of e-mails, but not others, based on content. For example, policies may distinguish between charitable and non-charitable solicitations, offers to sell personal property (e.g., a used car) and offers to sell commercial products (e.g., Avon), and invitations to a personal party and invitations to attend an outside organization’s meeting. Distinctions, however, cannot be based on legally protected content such as complaints about wages and benefits or other terms of employment. In the new case, the NLRB held that an employer had lawfully disciplined an employee for sending e-mails that had solicited support for a union. The employer’s policy had prohibited solicitations for outside organizations, except charities, and the employer had not tolerated e-mail solicitations for other non-charitable organizations.

Employers, therefore, should consider adopting or rewriting their electronic communications policies to carefully draw the line between permitted and prohibited employee e-mails.

Protected e-mails and unlawful retaliation
The courts and the NLRB have broadly protected employee e-mails that pertain to wages, benefits and other terms and conditions of employment, even when those e-mails have criticized the employer, its officers or managers, and even when those e-mails have been addressed to customers, competitors orthe press. Employees may not be lawfully disciplined or discharged for sending such e-mails. Anotherwise protected e-mail, however, may lose its legal protection if the author attacks the employer’sproduct or service, encourages unlawful activity or otherwise crosses an often nebulous line between reasonable and unreasonable content. Note that the NLRB allows for some degree of employee indiscretion, without the loss of legal protection, because it recognizes that emotions often run high in this context.

Questions about the protected status of employee e-mails should be addressed to a competent labor attorney.

Jon E. Pettibone is chair of Quarles & Brady’s national labor and employment practice, where he advises management on labor and employment strategies. He can be reached at JEP@quarles.com.