Top GCs Pick Their Top Stories of 2012
David Leitch, GC of Ford
- The Supreme Court's health care decision. The decision is important on a variety of levels. It upholds the president's health care overhaul, which of course affects businesses and all Americans in very significant ways. The court articulated broad limitations on the commerce clause, the effect of which will be determined in future challenges to congressional action. And the dynamic of the court may be affected by the apparent tension among justices and the postdecision leak about their deliberations.
- The implementation of Dodd-Frank. The financial regulatory reform law affects not just financial institutions but every public company in the nation. The regulatory burdens are still unknown as more generally applicable provisions like the "conflict minerals" rules are implemented and the Consumer Financial Protection Bureau begins to regulate and enforce in earnest. All the while, the Securities and Exchange Commission has struggled to defend its actions in the courts.
- Patent wars. The 2011 America Invents Actthe first overhaul of U.S. patent law in decadescontinued to be phased in this year. Even some of the most innovative companies are investing more in buying, defending, and asserting patents than they spend in R&D, while nonpracticing entities continue to affect the market in significant ways. It's unclear whether the new law is sufficient to address the new reality. In many ways it seems to be playing catch-up, and not quite catching the current patent war landscape.
Kent Walker, GC of Google
- The year of the patent troll. Despite the recent adoption of the America Invents Act, software patent litigation skyrocketed in 2012, with companies fighting off nonpracticing entities (also known as patent trolls) and expensive and distracting lawsuits. Calls for "patent peace" increased as companies sought to return to the business of innovating, not litigating.
- The year the "netroots" mobilized. Internet "blackout" protests spurred by antipiracy legislation that would have censored the Web ushered in a new era of citizen engagement, and showed that we can indeed protect IP in ways that don't hurt security, free expression, and innovation.
- The year of the user. With over 1 billion users on Facebook, over 1 million apps on Android and Apple and Amazon, and a flood of new cloud-based devices and services, users have more technology choices and opportunities than ever before.
Susan Blount, GC of Prudential Financial
- Wholesale changes to financial services regulation. When Dodd-Frank passed in July 2010, it contemplated 398 separate rule-makings by regulatory agencies. As of July 2012, 30.9 percent of the rules contemplated by Dodd-Frank had been finalized. Yet the impact on law and compliance in the financial services industry has already been substantial. New regulatory regimes for derivatives and hedge funds have resulted in demand for experienced compliance officers. Companies are devoting substantial resources to identifying important issues, coordinating responses, and preparing for further developments that appear inevitable. Organizations with operations overseas are facing similar challenges in other jurisdictions.
- Foreign Corrupt Practices Act. The FCPA and similar laws around the world continue to change the conduct of business and the focus of American compliance programs. The New York Times ran a story about alleged corruption by Wal-Mart in Mexico that will inform the conduct of corporate internal investigations for years to come. In another FCPA story, a Morgan Stanley employee pled guilty to an FCPA violation and received a prison sentence, but his employer was exonerated because of its robust compliance program.
- Social media. Changing communication technologies have presented new challenges to in-house lawyers. Companies are adopting social media policies to define expectations of privacy, and set standards for use of social media at home and workon personal and business devices. These policies have to take into account regulatory standards of supervision in some industries that challenge the expectations of employees just entering the workplace. Courts have entered the fray, as employers and employees identify these conflicting expectations.
Veta Richardson, CEO of the Association of Corporate Counsel
- The Foreign Corrupt Practices Act, regulatory challenges, and gatekeeper liability for in-house counsel. One of the biggest topics is foreign corrupt practices. This has come up in every instance I've heard of in-house lawyers talking about key issues, both from lawyers in the U.S. and outside of the U.S. It's a great example of where the internationalization of business and law is intersecting with gatekeeper liability.
- Reengineering of legal services. We're making headway in forging alternatives to the billable hour, but there's still huge resistance by many law firms. At the Association of Corporate Counsel's annual meeting, as we honored companies and firms with outstanding results, even some of the in-house panelists mentioned that many companies themselves still use "shadow billing" to track their savingsa trend that glorifies the billable hour. There's still not yet been a cultural shift, by either the law firms or by the companies that hire them.
- Diversity. As reported in the Minority Corporate Counsel Association's Diversity & the Bar, women make up 22 percent of Fortune 500 general counsel. Time and again I've seen evidence that women are rising in the ranks to lead legal departments, whereas their peers at law firms are not. The significance is that more women are in charge of what law firms most want: clients and legal budget dollars.