Author: Doug Cornelius

You can find out more about Doug on the About Doug page

Social Media Best Practices

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This afternoon I am at the Harvard Club in New York City participating in Social Media: Risks & Rewards, an Incisive Media event. My second panel presentation is Social Media Best Practices. (My morning presentation was Develop your Company’s Corporate Policy for Social Media.)

I was joined on the panel by:

  • John Lipsey, Vice President Corporate Counsel Services of LexisNexis, acting as the moderator
  • Vanessa DiMauro, CEO of Leader Networks
  • Eugene Weitz, soon to be former Corporate Counsel of Alcatel-Lucent
  • Daniel Goldman, Legal Counsel of Mayo Clinic

Unlike the earlier presentations which focused on what the company should be doing, this panel is focusing on how the individual lawyers in the audience could use social media to help them.

Here is the slide deck we are using:

Social Media Best Practices

Vanessa will be starting off with some highlights from her 2009 Networks for Counsel Studypdf-icon. (A Global Study of the Legal Industry’s Adoption of Online Professional Networking, Preferences, Usage and Future Predictions.)

Then Dan spends some time leading the discussion about Twitter.

I take over and talking about blogging as a personal knowledge management tool. You can get some sense of what I am going to say if you read Why I Blog.

Eugene then focuses on online professional networking. (He hates the term social networking.) He makes a case why it is particularly useful for in-house counsel.

We end with a discrete set of takeaways for the audience.

I plan to present two takeaways. First, listen to what people are saying about you and your company. Set up a Google news search and a Google blog search for your name and your company’s name. Second, use a blog as a personal knowledge management tool.

Vanessa has a great 20 minute action plan.

Your Business and the Social Media Sensation

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This morning I am at the Harvard Club at the Social Media: Risks & Rewards conference. The line-up for this panel:

  • Moderator: Monica Bay, Editor-in-Chief of Law Technology News
  • Michele Mitchell, VP of Audience Development and Retention of NBC Universal
  • Cheryl Givner, Managing Counsel Worldwide Marketing & Core Products of MasterCard Worldwide
  • Nicole Black, Of Counsel Fiandach & Fiandach
  • Andy Mitchell, VP Digital Marketing and Marketing Development of CNN Worldwide

Cheryl started off look at corporate brands in social media. Her first point was the United Breaks Guitars video complaint. Over 5.5 million people saw this and created a viral backlash against United. MasterCard runs a lot of analytics on what people are saying about the company. They just launched a Twitter feed: @MasterCardNews.

Niki emphasized the need for goals. But at the minimum, you need to know the basics of how these tools work. Then she moved on to the benefits of some of the major social media tools. She emphasized that professional networking and personal/social networking overlap. (Aren’t some of your professional colleagues also your friends?) People want to connect with a person when dealing with legal services.

Niki also pointed out that if you”lawyer-up” when you are subject to negative social media attention you are likely to increase the negative publicity. Demanding that someone remove criticism of your company is more likely to backfire.

Andy took the microphone to discuss how CNN has been using social media and how they involve their audience. There was the first presidential Twitter debate last year. CNN moved on to Facebook and took advantage of the Facebook Connect tool. The first test of their use of Facebook was one of the vice-presidential debate (“Debate the Debate”). CNN was out on the cutting edge of these tools for a mainstream media company. They generate tremendous traffic, updates and views. He made a strong case for how much consumers want to engage with brands. “Give up some control of your brand (But not so much that you risk harming your brand)”

Michele focused on social media trends. She emphasized the importance of a feedback loop. After all the ability to easily connect with consumers is a key way to leverage social media.

There was a question from the audience that emphasized the need to engage the legal department in developing the tools. An example was a marketing promotion for a hashtags sweepstakes and free shipping special. It ended up with a complaint from a state attorney general.

My first presentation is scheduled right after this one. I already published the outline and materials for the event: Develop your Company’s Corporate Policy for Social Media.

Develop your Company’s Corporate Policy for Social Media

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This morning I am at the Harvard Club in New York City participating in Social Media: Risks & Rewards an Incisive Media event. My first presentation is Develop your Company’s Corporate Policy for Social Media with David Morris, Group Counsel of TripAdvisor Media Group and Howard Greenstein, President of The Harbrooke Group.

The approach we took in creating a policy is to first decide the company’s position on using social media: Deter and block, Neutral or Actively Engage. Since are three of us on the panel, we each plan to take one of these positions and discuss a variety of topics that should be considered in a social media policy.

Here are the introductory slides and topic slides:

Develop your Company’s Corporate Policy for Social Media

Here are some sample social media policies that we shared with audience:

I also keep a ragtag collection of good policies and good articles on drafting policies using Delicious bookmarks: http://delicious.com/dougcornelius/blogging_policy.

Schwarzman Stands up for Placement Agents

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“Eliminating placement agents as a group because there were a few bad actors who have tarnished the industry is analogous to eliminating Major League Baseball because several of its players behaved illegally.”

Steven Schwarzman, The Blackstone Group’s chairman and chief executive, has submitted a comment letter on the SEC’s proposed ban on placement agents interacting with public pensions.  He comes squarely down on the side of placement agents. In fact, he credits placement agents with being essential to his fund-raising success.

The proposed SEC rule is fallout from investigations by the SEC and the New York District Attorney into a pay-to-play scandal involving “fixers” and prior scandal in New Mexico

References:

More on Free and Legal Services: WhichDraft

WhichDraft

After my previous post on Free and Law Firms, a new thing caught my attention in this area. In that post, I focused on some ways that the legal services industry is adopting some of the models Chris Anderson describes in his book.

WhichDraft is a resource that allows users to build a variety of high quality contracts free of charge. Users build contracts by answering a series of simple questions. WhichDraft then provides sample contractual provisions. It has a collection of interesting precedents that help you produce a better first draft of legal documents. By asking a few questions, the site fills in some key blanks and repetitive information.

I was a big fan of document assembly when I was at my prior law firm. But I hated the bulky desktop programs and all the training it took to show people how to use them. When you look at the time it takes to install the programs and train people, you end up with a huge additional investment on top of the software and document template drafting costs.

When document assembly finally evolved and began offering the assembly through a web-based interface, I think document assembly became ready for prime time. Set up is just a single installation on a server. Training is just showing people where to find the tool and 2-minute demo (at least it should be).

You can add WhichDraft to

References:

free the future of a radical price by Chris Anderson

SEC Announces New Division of Risk, Strategy, and Financial Innovation

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The Securities and Exchange Commission announced the creation of its new Division of Risk, Strategy, and Financial Innovation. University of Texas School of Law Professor Henry T. C. Hu will be its first Director. Professor Hu authored several articles that brought attention to potentially manipulative market practices using borrowed stock and derivatives.

“The new division combines the Office of Economic Analysis, the Office of Risk Assessment, and other functions to provide the Commission with sophisticated analysis that integrates economic, financial, and legal disciplines. The division’s responsibilities cover three broad areas: risk and economic analysis; strategic research; and financial innovation.”

But what is this new division going to be doing?

The new division will perform all of the functions previously performed by Office of Economic Analysis and Office of Risk Assessment, along with the following:

  1. strategic and long-term analysis
  2. identifying new developments and trends in financial markets and systemic risk
  3. making recommendations as to how these new developments and trends affect the Commission’s regulatory activities
  4. conducting research and analysis in furtherance and support of the functions of the Commission and its divisions and offices
  5. providing training on new developments and trends and other matters.

The SEC now has five divisions:

  • Division of Corporation Finance
  • Division of Enforcement
  • Division of Investment Management
  • Division of Trading and Markets
  • Division of Risk, Strategy, and Financial Innovation

According to Broc Romaneck, this is the first new division at the SEC since 1971. They divided Trading and Markets into Division of Enforcement and a Division of Market Regulation, and created a new Division of Investment Company Regulation, spun off from the Division of Corporate Regulation.

References:

Pfizer and Compliance

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Pfizer got itself in trouble for the way it was marketing some of its drugs. Enough trouble that they need to cough up a $2.3 billion fine to the Department of Justice. (Yes, that is billion.) Under its settlement with the DOJ, Pfizer will pay a $1.3 billion criminal fine related to the company’s illegal promotion of its now-withdrawn painkiller, Bextra, and $1 billion civil fine related to other medicines. It’s the largest health-care fraud settlement in the DOJ’s history.

But that’s not all.

As part of the settlement, Pfizer entered into a Corporate Integrity Agreement with the Office of Inspector General of the U.S. Department of Health and Human Services. The Corporate Integrity Agreement establishes some new internal structures and requires Pfizer to continue maintenance of a corporate compliance program for a period of five years.

Pfizer already had a compliance program, headed by a chief compliance officer, which trains employees on how to properly promote Pfizer’s products. The big change is that the chief compliance officer will no longer report to the general counsel, but will report directly to the CEO. The change is intended to eliminate conflicts of interest and prevent Pfizer’s in-house lawyers from reviewing or editing reports required by the Corporate Integrity Agreement.

If you wonder whether the compliance program should report to the general counsel, the Department of Justice says they should not.

References:

New Rules Ease the Restructuring of CMBS Loans

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The Treasury Department released new tax rules that make it easier for property owners to restructure loans that were packaged and sold as Commercial Mortgage Backed Securities. The IRS passed relief for residential mortgage packed securities in May, 2008.

Until now, tax rules have made it impossible for borrowers who are not in default to hold restructuring talks. Altering the terms of a mortgage that is part of a CMBS has a nuclear tax result. Only those loans that are actually delinquent could be modified. The loan servicers were unable to modify terms to prevent a default.

The new guidance from the Treasury makes it clear discussions involving lowering the interest rate or stretching out the loan term “may occur at any time” without triggering tax consequences. In addition, the guidance allows servicers to modify loans regardless of when they mature. The servicer only has to believe there is “a significant risk of default” upon maturity of the loan or at an earlier date and that  “the modified loan presents a substantially reduced risk of default”.

The IRS also issued final regulations that expand the list of permitted loan modifications to include certain modifications that are often made to commercial mortgages. The regulations expand this list of permitted exceptions to include changes in collateral, guarantees, and credit enhancement of an obligation and changes to the recourse nature of an obligation.

References:

Corporate and Financial Institution Compensation Fairness Act of 2009

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I had largely ignored the Corporate and Financial Institution Compensation Fairness Act of 2009 (H. R. 3269) thinking it was limited to public companies and banks. I was surprised to find that it also sweeps up investment advisers, and therefore private investment funds, with assets greater than $1 billion.

The bill does focus mostly on public companies and gives shareholders a “say on pay.” But I just noticed that the bill would have an impact on private investment funds.

Section 4, Enhanced Compensation Structure Reporting to Reduce Perverse Incentives, provides

“the appropriate Federal regulators jointly shall prescribe regulations to require each covered financial institution to disclose to the appropriate Federal regulator the structures of all incentive-based compensation arrangements offered by such covered financial institutions …”

The definition of covered financial institution includes: “an investment advisor, as such term is defined in section 202(a)(11) of the Investment Advisers Act of 1940 (15 U.S.C. 80b-2(a)(11))”. There is a later exemption for covered financial institutions with assets of less than $1,000,000,000.

The bill would empower federal regulators to:

“prescribe regulations that prohibit any incentive-based payment arrangement, or any feature of any such arrangement, that the regulators determine encourages inappropriate risks by covered financial institutions that–

  1. could threaten the safety and soundness of covered financial institutions; or
  2. could have serious adverse effects on economic conditions or financial stability.”

It seems like Congress wants to be able to limit the compensation for investment advisers, hedge fund managers, the managers of other private investment funds.

The bill was passed by the House on July 31. The Senate has not yet taken it into consideration.

References:

Image is from Wikimedia Commons: US Capitol Dome Jan 2006.