Welcome back to Inside Track!

Surveys have indicated that general counsel are fearing some kind of recession in 2020. One way that legal departments are finding ways to save money is through alternative fee arrangements with their panel of law firms.

However, we learned in 2019 that not everyone is a fan of AFAs. Teva Pharmaceuticals chief legal officer, David Stark, told Corporate Counsel in May that he would rather focus on getting discounts from the firms he works with.

"I've never been a big fan of alternative fee agreements," Stark said. "We have very few. I'm a big fan of getting a reasonable rate for quality work."

More and more in-house legal departments are relying on new ways of billing to get their jobs done in an efficient way. ALM is conducting a survey on AFAs, so we can learn where the industry is heading.

What kind of AFAs do you have with your panel of law firms and do you find them to be effective? Let me know by sending me an email at [email protected].

Editor's Note: Inside Track will return to its normal Wednesday schedule beginning Jan. 8.

What's Happening

Getting Compliance In Line

Pamela Davis, a white-collar crime and regulatory defense partner at Winston Strawn in San Francisco, told Corporate Counsel that GCs should work to get their compliance house in order. Davis also serves as a compliance monitor for companies who were found to have violated the U.S. Foreign Corrupt Practices Act. She spoke with Corporate Counsel on best practices in 2020.

➤ To avoid having a monitor. Have a great compliance program in place or clean it up before you report a violation. "Once your program is up to speed, you bring in an independent counsel to assess the program and you have them present it to DOJ. The general counsel can bring in help to get in front of the remediation efforts. That help can be an outside counsel, or you can hire more qualified people in-house, but you have to beef up the program," Davis said.

➤ DOJ enforcement. Davis said she predicts that the DOJ will continue to investigate corporations but place a larger focus on the individual. She also said the DOJ wants companies to have good compliance programs. "Also, lately whenever a company gets off or receives a low penalty, it's due to a good compliance program. That's where DOJ will be looking. They are trying to make companies get their house in order."

➤ FCPA cases in 2020. Davis said the DOJ will be focusing more of its efforts in Latin America. "A few months ago, the FBI started its own anti-corruption task force in Miami. We all assume they will be targeting Latin America. It doesn't mean Asia won't still be important, but I think Latin America will be at the forefront. The three big countries will be Brazil, Argentina and likely Mexico. The Operation Car Wash and Odebrecht investigations will continue expanding in Brazil, and there are ongoing investigations in Argentina."

GDPR Naughty List

Even as late as May 2018, many companies were not prepared to comply with the General Data Protection Regulation. In 2019, four companies showed that they were not as ready as they should have been and were hit with hefty fines.

➤ Google. In January, France's GDPR authority imposed a $55 million fine against the U.S. tech company. The French authority said the company's violations included a "lack of transparency, inadequate information and a lack of valid consent regarding the ads personalization." Two days after the French authorities announcement, Google said it would be appealing the fine.

➤ British Airways. The United Kingdom imposed a $230 million fine on the airline following a 2018 data breach which compromised 500,000 customers' data. The information was compromised because of "poor security arrangements" by the company, the British GDPR authority said.

➤ Marriott. One day after dropping a fine on British Airways, the British authority placed a $124 million fine on the hotel chain for a cyber incident in which the personal data of 500 million customers were exposed. The British authority found that the company failed to engage in proper due diligence when it bought the Starwood hotel chain.

➤ Deutsche Wohen SE. In October, the German GDPR authority issued a $16 million fine against the property company for violations. The authority said the company held on to tenant data longer than it needed to. That data included personal and financial information including salary, tax, social security and health insurance data as well as bank statements.

What I've Been Reading

Disruption is turning in-house lawyers into strategic enablers, according to a report in The Financial Times. Caroline Tsai, the chief legal officer of Western Union, said lawyers were involved from the very beginning in the company's initiative to order services online. Tsai said they had to ensure transactions would comply with financial regulations in each country and create a global model so the program could continue to expand.

John Moynan, the general counsel of cannabis company SLANG Worldwide, said in an interview with Forbes the bills surrounding cannabis and banking will have a large impact on the industry in 2020. He said because of the regulations on the industry, it has been forced to become more nimble than others and he is happy to be a part of it as the industry continues to evolve.

One of the most important steps that in-house counsel can take when tackling data privacy and security laws in 2020 is to set expectations, according to a report in The National Law Review. Setting realistic expectations in the beginning will not burn out your team, the report states. Building compliance efforts for existing and upcoming laws will be more like a marathon and not a sprint.

Don't Miss

Monday, Jan. 13, 2020 to Tuesday, Jan. 14, 2020 – The National Retail Federation will be hosting its General Counsel Forum Winter Meeting at the headquarters of Tapestry Inc. in New York.

Monday, Jan. 27, 2020 to Tuesday, Jan. 28, 2020 – American Conference will be hosting a two-day forum on False Claims and Qui Tam Enforcement at the Park Lane Hotel in New York. Speakers will include Savaria B. Harris, senior counsel at Johnson & Johnson; Patrick McCarthy, managing general counsel at Fluor Government Group; and Maryana Zubok, senior corporate counsel at Pfizer Inc.

Tuesday, Feb. 4, 2020 to Thursday, Feb. 6, 2020 – Law.com will be hosting the annual Legal Week conference at the New York Hilton Midtown. The featured keynote speakers this year include former deputy attorney general Rod Rosenstein and Bettina Warburg, co-founder and managing partner of Warburg Serres Investments.

On The Move

✦ Boeing ✦ J. Michael Luttig, the longtime general counsel who most recently served as a senior adviser, has retired from the company. In May, Luttig left his role as general counsel to oversee all of the legal issues concerning the 737 MAX aircraft accidents in 2018 and 2019.

✦ Bed, Bath and Beyond ✦ Allan Rauch has left the company in a reorganization of executives. He has been with the company for the past 25 years and is being replaced on an interim basis by Michael Callahan.

✦ Halliburton ✦ Van Beckwith has been made general counsel and will leave his role as the litigation chair at Baker Botts. Beckwith worked at the law firm for 30 years.