October 19, 2017

The Ethical Danger of the Microsoft/LinkedIn Merger

Editor’s Note: This post originally appeared on Stuart Teicher’s blog, “Keeping Lawyers Out of Trouble,” on June 16, 2016. Reprinted with permission.

Headshot-Stuart-TeicherBy Stuart Teicher

This week it was announced that Microsoft is buying LinkedIn. There are some hidden attorney ethics implications about which we all need to be aware.

A review of the recent news articles announcing the acquisition reveals that a key motivating factor in Microsoft’s purchase of LinkedIn was access to LinkedIn’s data.  Of course, sharing data is nothing new. But when companies improve their ability to share our data across various platforms, my ears perk up. Not just because it’s creepy or because of obvious privacy implications. The type of data sharing they’re contemplating in the Microsoft/LinkedIn combination makes me worry about confidentiality (and other) issues.

Why they are merging:

According to the Wall Street Journal, Microsoft sees a critical synergy with LinkedIn:

“LinkedIn’s users are, arguably, Microsoft’s core demographic. They also offer Microsoft something it has long sought but never had—a network with which users identify. Microsoft needs to persuade LinkedIn users to adopt that identity, and use it across as many Microsoft products as possible.

Access to those users, as well as the enormous amounts of data they throw off, could yield insights and products within Microsoft that allow it to monetize its investment in LinkedIn in ways that the professional networking site might not be able to. [Microsoft CEO] Mr. Nadella already has mentioned a few of these, including going into a sales meeting armed with the bios of participants, and getting a feed of potential experts from LinkedIn whenever Office notices you’re working on a relevant task.“

In other words, Microsoft wants to have your Outlook and other Microsoft software products speak to your LinkedIn profile. The intersection of that data is valuable—various sellers of products and services would be willing to pay for it.

It appears that Microsoft wants to be able to read through the work we do on their products like Word, review our upcoming appointments in our Outlook calendar, search for keywords in our emails, and then find connections with people with our LinkedIn connections. That’s what they are searching for—connections they could monetize.

For instance, let’s say accountant X has an Outlook Calendar appointment which sets a meeting with “Charles McKenna of Account-Soft Corp.” Microsoft could then search LinkedIn and it would learn that McKenna works for a company that sells workflow management software. Well, now Microsoft knows the accountant is in the market for workflow management software… and they could sell that knowledge to other software companies who would then direct solicitations in the accountant’s direction. That’s an annoyance for an accountant, but a potential ethics disaster if he/she were a lawyer.

Basic issue, Confidentiality:

If Microsoft scours our Word documents and emails, then there could be Rule 1.6 confidentiality issues.  That’s so obvious that we don’t need to spend time talking about it now. I think the more unusual issues come from the Calendar function…

If they leverage the data in our Calendar, it could reveal our client relationships:

The substance of what we learn from the client is confidential, but so is the very existence of the lawyer-client relationship. Will the integration of these platforms make it easier for people to figure out who we represent?

Think about how much information Microsoft could piece together from our Calendar. They might see a potential client introduction (which lists Pete Smith as present), a court appearance (which lists Pete Smith as present), and a meeting for settlement purposes (which lists Pete Smith as present). It’s not going to be too tough for the Microsoft bots to figure out that Pete Smith is your client.

If they leverage data in our Calendar, it could reveal key substantive information that could harm the client:

If Microsoft looks at our Calendar they can see that we’re heading to a particular locale. They might then cross reference our LinkedIn connections and send a message to one of them that says something like, “Your connection Bruce Kramer is going to Chicago next week. Why don’t you look him up?”

That heads-up might give someone the incentive to look into our movements a bit more… and who knows what they could find. What if that info was given to a real estate agent that we know in Chicago… and maybe we are representing a successful land owner… and we’re clandestinely scouting a real estate purchase because we don’t want people to figure out that we’re there on behalf of our deep-pocketed client… because if they know, the purchaser will run up the price. That LinkedIn message tipped off the real estate agent and it could cost the client a lot of money.

If they leverage data in our Calendar, it could end up revealing a misrepresentation:

Imagine that Client A asks you to accompany them to a meeting in Los Angeles. You tell her that you can’t go because you’ll be on vacation on the East Coast. That’s not true, however. The truth is that you’ve already scheduled a meeting with a potentially new client in Los Angeles. You didn’t want Client A to know that you’d be in town because you didn’t want to have to shuffle between clients—it would just be too much work. You could have told Client A that you’d be in town but you didn’t have time to meet her, but you thought she’d be insulted. It was just easier to say you’re far away and be done with it.

Later, Client A gets a LinkedIn message that says, “Your Connection Mary Smith is going to be in Los Angeles next weekend… send her a message and try to link up!” Do you know what you are now? Busted. And not only do you have egg on your face, but you may also have committed an ethical violation.

Is the white lie that you told your client going to be considered a misrepresentation or deception per Rule 8.4(c)? That rule states: “It is professional misconduct for a lawyer to (c) engage in conduct involving dishonesty, fraud, deceit or misrepresentation…”

I know what you’re thinking… it was a half-truth. No harm no foul. Well, I searched the ethics code, and I didn’t find the term “white lie” or “half-truth” anywhere in the code. You should also note that Rule 8.4(c) does not require that the misrepresentation be “material.” It doesn’t allow you to lie about inconsequential things and there’s no modifying language- it just says that you can’t lie or deceive.

These are just a few issues. Some of these are clear ethics concerns, others are more akin to PR nightmares. Are they so terrible that we all need to get off LinkedIn right away? That might be a bit premature. After all, they only just announced the merging of the platforms- they haven’t actually done anything yet. I don’t know what dangers will actually be realized, or whether any dangers will be realized at all. What I do know is that part of being a responsible attorney in this technological age is to be diligent in thinking about these issues. As lawyers practicing in an ever-changing technological environment, we need to be aware of the potential problems. Keep your eye on the news and stay abreast about the details regarding the integration of these two platforms. Then, if you determine that you need to act, do so.  That way we are “keep[ing] abreast of changes in the law and its practice, including the benefits and risks associated with relevant technology.” Comment [8], Rule 1.1.

Save the Date!

Stuart Teicher will be at the CLE offices on Thursday, September 8, 2016, to present two ethics programs. Registration is not yet open, but mark your calendars and don’t miss these important programs.

 

Stuart I. Teicher, Esq. is a professional legal educator who focuses on ethics law and writing instruction. A practicing attorney for over two decades, Stuart’s career is now dedicated to helping fellow attorneys survive the practice of law and thrive in the profession. Stuart teaches seminars and provides in-house training to law firms/legal departments.

Stuart helps attorneys get better at what they do (and enjoy the process) through his entertaining and educational CLE Performances. His expertise is in “Technethics,” a term Stuart coined that refers to the ethical issues in social networking and other technology. He also speaks about “Practical Ethics”– those lessons hidden in the ethics rules that enhance a lawyer’s practice. Stuart writes the blog “Keeping Lawyers Out of Trouble.”

Mr. Teicher is a Supreme Court appointee to the New Jersey District Ethics Committee where he investigates and prosecutes grievances filed against attorneys, an adjunct Professor of Law at Rutgers Law School in Camden, New Jersey where he teaches Professional Responsibility and an adjunct Professor at Rutgers University in New Brunswick where he teaches undergraduate writing courses. He is a member of the bar in New York, New Jersey and Pennsylvania. In 2014, he authored the book Navigating the Legal Ethics of Social Media and Technology (Thomson Reuters).

Colorado Supreme Court Reverses Years of Precedent in Softrock and Western Logistics

It is advantageous to employers to retain the services of independent contractors when possible. Contractors are not required to be covered by workers’ compensation insurance and employers need not pay unemployment tax out of the contractors’ wages. However, classifying workers as contractors has its risks; after an audit, the employer may be found liable for back taxes on workers who are found to be employees rather than contractors.

That is precisely what happened to Carpet Exchange in 1993, when the Colorado Court of Appeals issued its opinion in Carpet Exchange of Denver v. Industrial Claim Appeals Office, 859 P.2d 278 (Colo. App. 1993). The court of appeals analyzed C.R.S. § 8-70-115(1)(b) and, after applying the factors, decided that the workers in question were employees rather than contractors because they were not “customarily engaged in an independent trade, occupation, profession, or business related to the service performed.” Since then, courts have relied on this one-factor test to determine whether long-term workers are employees or contractors.

Industrial Claim Appeals Office v. Softrock Geological Services, 2014 CO 30 (Colo. May 12, 2014), reversed that precedent. In Softrock, the Colorado Supreme Court rejected the outside employment test as dispositive of whether a worker is an employee or an independent contractor, ruling instead that the totality of the circumstances must be considered and no single factor can be dispositive in deciding whether an individual is customarily engaged in an independent business or trade.

Michael Santo, lead counsel in Softrock, will present a lunchtime program on Friday, August 22, 2014 at the CLE offices to discuss Softrock‘s impact on employment law. Santo will also discuss Western Logistics, Inc. v. Industrial Claim Appeals Office, 2014 CO 31 (Colo. May 12, 2014), a related opinion that the supreme court delivered the same day as Softrock. Employment attorneys, business attorneys, and in-house counsel should attend this informative lunchtime program.

CLE Program: Independent Contractor or Employee? Softrock‘s and Western Logistics‘ Effect

This CLE presentation will take place on August 22, 2014. Click here to register for the live program and click here to register for the webcast. You can also register by phone at (303) 860-0608.

Can’t make the live program? Order the homestudy here — MP3 audio downloadVideo OnDemand

Top 10 Reasons Attorneys Go In-House

Sharon_MclaughlinBy Sharon A. McLaughlin, Esq.

The majority of attorneys begin their legal careers in law firms (versus in-house corporate legal departments – i.e., “in-house”) for a variety of reasons–- e.g., there are fewer in-house opportunities for new attorneys, law school graduates often want to get “big firm” experience and training before going in-house, and the compensation can often be higher in big firms.  Nonetheless, in my experience as an attorney recruiter, many attorneys in law firms either know starting out or within their first 5 years of practice that they want to eventually transition in-house, and they usually cite one of the following 10 reasons.

 1.     Billable-hours

With in-house legal departments, companies pay their attorneys’ annual salaries/bonuses/benefits and do not have billable hour requirements or quotas that their attorneys must meet to justify their cost.  Conversely, law firms generally have a minimum billable hour requirement and quota that their attorneys must meet to justify their high salaries and to qualify for bonuses and salary increases. The billable-hour system is the way most lawyers in law firms charge their clients, and it’s a key measure of associate and partner productivity.  This system can create a culture in which everyone is pushed hard and works long hours, eventually resulting in frustration, fatigue and exhaustion.  Many attorneys despise this system, and it’s one of the most common complaints that recruiters hear from law firm attorneys.  Consequently, it’s one of the top reasons attorneys in law firms want to go in-house.

 2.     Work-life balance

Many law firm attorneys have the belief that they will have greater work-life balance going in-house, and this is often true.  However, that’s not always the case.  In their goal to become a profit center, some in-house legal departments have long, exhausting hours with a lower level of compensation.  However, this is generally not the norm.  It is incumbent on attorneys to vet this issue when interviewing with any prospective company to ensure that work-life balance exists (with appropriate questioning at the appropriate time, of course).  Many in-house interviewers will volunteer information about their organization’s work-life balance since they know this is generally something incoming attorneys want to know and a big selling point when it exists.  In addition, attorneys are often, by nature, intuitive and can sense when the in-house attorneys with whom they’re interviewing are happy and content in their roles versus overworked, exhausted and miserable.   The latter is generally a tell-tale sign that work-life balance does not exist.

3.     Predictability of schedule

Another common complaint among law firm attorneys is the fact that they are essentially on call at all times.  They must be available to deal with client emergencies or deadlines that arise at unpredictable and inopportune times – e.g., 4:00 p.m. on a Friday afternoon or over the weekend.  As a legal recruiter, I have worked with and placed many in-house attorneys who report that they keep regular hours (e.g., 8:00 am – 5:00 p.m.), do not work weekends, spend quality time with their families, plan vacations in advance and, most importantly, do not fear being penalized for taking vacation with mountains of work upon their return.

 4.    Working closely with the business team and interfacing with upper level management and executives.

Another appealing quality that attorneys have identified about going in-house is the opportunity to work closely with an organization’s business team and regularly interface with upper level management and executives.  An in-house attorney’s clients are the internal business units and the managers and executives who lead those units at the organization at which they work.  As a result, these are often the people with whom the attorneys are regularly working, communicating and assisting on a day to day basis.  For law firm attorneys, this level of interaction and exposure can be limited if not non-existent.

 5.     Career Track

In a law firm, an attorney’s career track is generally one dimensional – you begin your career as an associate and then you may or may not make partner.  If you do not make partner, you either remain an associate for many years until it becomes too embarrassing to stay; or, if it exists at your firm, you may move into a non-partner role with a special title – e.g., Counsel, Special Counsel, Of Counsel, etc.

At a company, attorneys often have various long term career opportunities available to them.  Depending on the organization and its size, you may have the opportunity to move between practice disciplines in the legal group (e.g., litigation to commercial, commercial to regulatory, etc.), be promoted to managerial positions within the legal group, move to the business side in non-legal management or executive positions, etc.  The in-house long term career opportunities are broader and may be more easily achieved than law firm partnership.

 6.     Focus on practicing law versus business development

Because law firms value attorneys that can develop and bring in new business to the firm with some level of regularity, this is generally a prerequisite to becoming a partner and remaining a partner.  However, this can be a daunting task for many attorneys because business development is generally sales-oriented, and it is not a skill that law schools or law firms teach.  And, not everyone is a natural at business development, particularly those attorneys who are more “cerebral” in the way that they approach things.

In an in-house setting, there is no business development pressure, need or requirement.  The company is the attorney’s client.  As such, in-house attorneys may simply focus on the practice of law without the worry of developing business or the pressure of “eating what you kill.”

 7.     Work on deals from start to finish

Attorneys at law firms often are called to assist their corporate clients part-way through a deal or transaction when, for example, an issue arises; or, they may only be asked to handle a specific portion of a deal.  Conversely, in-house attorneys are generally not only part of deals from start to finish, but they frequently participate in the pre-planning and business strategy.  They also have the opportunity to see how their work and legal counsel impacts the company long-term.

8.     Focus on one client

Attorneys in law firms generally have various individual and/or corporate clients with whom they work at any given time.  For in-house attorneys, the company (or business unit(s) within the company) is the client.  Only working with a single client allows you to get to know that client more intimately, better understand the client’s business strategies and perhaps assist the client in shaping future business strategies and goals.  The in-house attorney works with internal legal and business teams, all having a common goal to assist their single client.  This is contrasted with doing a little here and a little there for multiple clients and lacking the same level of cohesiveness.

9.     Sophisticated work

While many attorneys are under the impression that they may get less sophisticated work by leaving a big law firm and going in-house, this is simply not the case with many companies.  As a cost-cutting measure, more and more companies are keeping their legal work in-house versus outsourcing it to outside counsel.  So, where you have a large, global company that keeps much of their legal work in-house and engages in complex and sophisticated transactions or litigation valued at billions of dollars, the end result is that their in-house attorneys have the opportunity to work on exciting, high-profile and sophisticated legal matters to which they may not otherwise have access.  This is even more true at many big law firms where some associates get little hands-on experience or interaction with the clients.

10.  Overseas assignments

Large companies with global operations require legal counsel in the countries in which they are conducting business.  This is often accomplished with attorneys native to the country in which the company has operations, but many companies are also sending their U.S. attorneys on international expatriate assignments or temporary rotations to work in conjunction with their foreign counterparts.  This is a very appealing opportunity for some attorneys and can be a primary motivation to work for global companies.

Sharon A. McLaughlin, Esq. is a Regional Search Director with Special Counsel in Houston, Texas. As a Regional Search Director for Special Counsel, she trains and advises internal Attorney Search Directors on the permanent placement of attorneys in in-house corporate legal departments. Her role focuses on training, strategizing, coaching, developing and implementing solutions for Special Counsel’s Attorney Search Directors nationally to provide the company’s clients the best attorney search power on the market. Ms. McLaughlin has more than nine years of legal recruiting experience placing associate and partner level attorneys with law firms and in-house corporate legal departments throughout the country. Prior to transitioning into legal recruiting, Ms. McLaughlin was an attorney in private practice and specialized in business and employment-based immigration law in Texas and California. Ms. McLaughlin is admitted to the State Bar of Texas as well as the State Bar of California. She received her B.A. from Stephen F. Austin State University in Nacogdoches, Texas in 1992, and her J.D. from Southwestern University School of Law in Los Angeles, California in 1996. Special Counsel operates in 42 markets across the United States. Through its affiliation with its parent company, Adecco Group North America, the company has access to a vast network of additional locations throughout the U.S. and in over 60 other countries, enabling the company to provide permanent placement and legal staffing services and solutions nationally or internationally. Special Counsel also has a blog, where this post originally appeared on February 23, 2014.

The opinions and views expressed by Featured Bloggers on CBA-CLE Legal Connection do not necessarily represent the opinions and views of the Colorado Bar Association, the Denver Bar Association, or CBA-CLE, and should not be construed as such.