From the Editor: We're back with the latest column in our "On the Rise: Voices from Young Lawyers" series, featuring insight by our 2019 D.C. Rising Stars on key practice topics. Brian Walsh, a partner with Wiley Rein, writes that young lawyers can add value by staying abreast of regulatory changes and flagging issues early. In so doing, they can fully own their roles as gatekeepers and subject matter experts for clients and more senior attorneys. For more, read on.   —Lisa Helem, editor-in-chief, The National Law Journal

Any company doing business within the United States, or with the federal government, is constantly operating under a litany of regulations governing everything from how much paid sick leave it must provide its employees to what it must do before acquiring another company. Young lawyers who are proactive, rather than reactive on regulatory changes, can be of great value to their clients.

Anticipating needs and staying abreast of regulatory changes also enables young lawyers to add value and be better advocates and advisers than those who just sit back and wait for their clients to call with a question on a new proposed rule. To stay ahead of the curve, companies and the lawyers advising them, should keep three things in mind.

Be Proactive. Federal Regulations Don't Just Change Overnight.

Quite often it seems that companies are willing to spend a lot of money challenging a rule or regulation in court after it has been implemented but very unwilling to spend money before enactment of a new rule or regulation. New rules don't magically appear in the Federal Register. It often can take years of public commenting and negotiating for a rule to become final.

Rulemaking inertia may lead companies to lose sight of a potential new rule that could negatively affect them. But it is during this time period that a company might have the best chance of avoiding ever having to challenge, or comply with, a new and potentially onerous regulation.

Companies have various means at their disposal to try to avoid the implementation of disruptive new regulations—from submitting comments on the proposed rule to lobbying Congress to change the law the rule is intended to implement. Here, an ounce of prevention is certainly worth a pound of cure, and potentially millions of dollars in legal fees and costs related to complying with a new regulation or challenging it in litigation.

Young lawyers are particularly well situated to play an important role in this process as gatekeepers to flag these issues sooner rather than later as more senior attorneys will not likely spend their time monitoring the Federal Register. 

Don't Assume an Administration Change Will Result in Regulatory Change.  

Because it is often very hard for any administration to pass laws enacting major social change, both parties are often willing to settle on using federal government contractors as "guinea pigs" for social programs. This was the case, for example, during the Obama administration when two executive orders were issued—Nondisplacement of Qualified Workers under Service Contracts (EO 13495) and Establishing Paid Sick Leave for Federal Contractors (EO 13706)—expanding the rights of employees working on federal contracts.

The Nondisplacement Rule requires "a successor contractor and its subcontractors to offer employees working under the predecessor contract whose employment will be otherwise terminated, a right of first refusal of employment under the successor contract in positions for which they are qualified." The Paid Sick Leave Rule requires parties that enter into covered contracts with the federal government to provide covered employees with up to seven days of paid sick leave annually, including paid leave allowing for family care.  

It is fair to say that these two rules, regardless of your political affiliation, objectively place a large burden on government contractors because the compliance obligations involved are often inconsistent with how modern companies hire and compensate employees. And it is also fair to say that many companies assumed they would never have to comply with the Paid Sick Leave Rule or would be able to stop complying with the Nondisplacement Rule, following the election of President Donald Trump and, based on that assumption, throttled down their compliance efforts.

But the Trump administration did not repeal either of these executive orders, placing companies that assumed they would be rolled back in a very difficult position that, in many cases, dramatically increased the costs of becoming compliant with the Paid Sick Leave Rule in a shorter period of time.

Young lawyers advising clients need to be wary of the pitfalls of making these types of assumptions so when they advise their clients they don't inadvertently lead them down a path to complacency. 

Stay Informed. 

Statutes and their implementing regulations frequently change, and companies need to ensure that they stay abreast of recent developments affecting their industry. A good example of this is the expansion of the Committee on Foreign Investment in the United States' jurisdiction and authority due to legislation enacted in 2018.

In response, CFIUS recently launched a pilot program covering foreign investments in U.S. critical technology companies. Whereas the CFIUS review process was previously voluntary and limited to transactions that could result in foreign control of a U.S. business, the new pilot program requires mandatory filings for certain controlling and even noncontrolling critical technology investments at least 45 days before closing of the transaction.

Foreign-owned or -controlled companies operating in the U.S. now must analyze whether any transaction they are contemplating is a "pilot program covered transaction" before moving forward with that transaction, something a company can't do if it is unaware of the change in CFIUS oversight. 

Although the number of new federal regulations in process has generally remained stable in the first two years of the Trump administration (as compared with the number of active rulemakings at the end of the Obama administration), a significant number of the current rulemakings involve deregulation, a trend that is likely to continue under the Trump administration.

While in the short term this may be a welcomed event for many companies, it is important for companies to remain informed so they can adapt to shifts in the current administration's agenda or a change in which party controls the White House in 2020.

Here too, young lawyers are uniquely suited to remain abreast of new developments and, when change does occur, can use this to their advantage to become a go-to subject-matter expert providing invaluable advice to both their clients and more senior lawyers within their organization.

Brian Walsh is a partner in Wiley Rein's government contracts practice, where he represents government contractors and subcontractors, as well as federal and state grant recipients, on a variety of matters.