This article is part of the Attorney Career Advancement series, monthly articles from attorney business development coach Lana Manganiello offering insights and advice on practical approaches to attorney growth and practice development.

Nearly everyone enjoys receiving acknowledgment of a job well done and excellence in their work, and certainly lawyers are no exception. The number of companies offering awards and recognitions to attorneys and law firms is growing every day, and they are often money-making endeavors. My lawyer clients are solicited regularly with suggestions they are a “Top,” “Best,” “Most,” “Leading,” or “Super” attorney in their area of practice—but greatness often comes with a price. To be listed, one is encouraged to take out congratulatory advertising, or purchase a plaque or badge that can be posted to the attorney’s website profile or included in one’s email signature. For most attorneys, it can be challenging to know which of these opportunities matter and are legitimate, and which are spam.

Do recognitions even matter?

If you can basically buy yourself endless awards, do they have any value? It really depends on your objective. If you are growing a practice, then you need to think about the professionals that matter to you and what matters to them. Some considerations for pursuing awards include:

Tipping the scales: When a client or prospect is considering hiring you versus a competitor who appears equal in all areas (pedigree, experience, education), and you have a long list of awards and recognitions from organizations the client or prospect has heard of, or think they have heard of, and your competition doesn’t, that could be the thing that pushes them to hire you. This is also relevant when you are being considered by future employers. Note that non-lawyers typically do not have as many opportunities for public recognition and awards as lawyers do, so when people outside of the legal profession see your accolades, they may be more likely to be impressed.

Building credibility: Having industry honors and awards can build your perceived credibility. Most audiences understand these types of recognitions as a form of social proof, especially when the award is specific in highlighting a nuance, niche, or differentiator about you and your practice (e.g., a securities litigator recognized for working in cryptocurrency and blockchain). The people referring your work and those responsible for hiring you could feel validated when seeing you receive consistent recognitions. Attorneys you want to work with (whether senior or junior to you) may see honors and recognitions as an affirmation of expertise in your field, which may help persuade them to work with you.

Staying top of mind: Regularly reminding your network of your expertise is key to growing your reputation and leads to new opportunities. For law firms, publicly acknowledging a recognition received by one of their attorneys is a nice way to improve their visibility as well as highlight practice areas and expertise within a firm. Lawyers can use the opportunity to share an award won with their network to highlight the type of work that led to the honor.

Which awards/lists should you submit to?

Certainly not all awards and honors are equal. There are plenty of recognitions for lawyers that do not require a fee, so I generally advise attorney clients to avoid those that are purely pay-to-play. To make the biggest impact on your practice, focus on awards and recognitions given by organizations that your target contacts might have heard of. Also look for awards that help you build the professional reputation you are interested in. It may sound obvious, but if you are pivoting your bankruptcy practice to focus on finance work with venture capital firms, do not pursue awards for bankruptcy attorneys.

How to improve your chances of selection?

The submission process for lawyer awards is often very similar from one recognition to the next, so though it may seem like a lot of work to prepare a nomination, you can usually use the information again and again.

List of Matters: Submissions typically ask for recent representative matters. To make submitting for awards easy, keep an up-to-date list of the matters you have handled and those you would like more of. It’s best to write about the matter in a way that highlights what your work meant for the client along with some of the more significant details. Legal organizations will sometimes require case numbers, client names, and a contact to verify the matter, so you may want to include that in your list as well. (This information is typically kept confidential.)

Biography: You will likely need to include a biography, so it is good practice to always keep your firm website bio updated, reviewing it at least every six months. Your bio should make clear exactly what you do and for whom, in the most specific terms. This is not the place to list everything you are capable of; an effective bio will only mention experience and activities that are relevant to your target audience and relate to the work you want more of.

Extracurriculars: Most organizations want to know about your activities outside of work. Your work in the community and in your profession (participation in associations, on charitable boards, volunteering, etc.) is often a key differentiator that will lead to your selection. I encourage professionals to get involved in organizations for a multitude of reasons, and increasing your chances of selection for awards and honors is certainly one benefit.

Stay prepared: Most awards are given out annually and have a specific window of time in which they will accept nominations. Do some research on the organizations that matter to you and to your target professional contacts, and create a list of awards you are interested in being considered for, noting submission deadlines. If you work at a firm with a marketing department or outside resource, they likely have a “master calendar” of industry awards. You will want to make sure you share your business development goals with the marketing department and let them know of any specific awards you want to be considered for. Also, be sure they have your most recent information so that they can easily submit on your behalf. Note that your chances for selection improve every year you submit a nomination, so do not give up because you aren’t selected for an award on the first attempt.

How to maximize your recognitions

It takes years of hard work to be eligible for an industry award, plus additional effort and intentionality to be selected. Make sure you make the most out of your recognition. Below are some ways to leverage your honors.

• Update your website profile to include your all your accolades. You can do this in the biography narrative and can also include some variation of an “Honors” or “Awards & Recognitions” section where you list them in bulleted form.
• Post to social media with a note on how the recognition relates to your clients.
• Ask your firm to include mention of your recognition on the firm website, social media platforms, and newsletter.
• Put out a press release announcing the recognition. Include information (about the award, about recent cases, about your practice/firm) that your key contacts would be interested in. Note that alumni organizations will often post about alumni in their news bulletins, so it is a good idea to mention where you went to school in your press releases.

Remember, to effectively market and grow your ideal practice, you need to prioritize your client’s thinking and mindset. Some of the attorneys I work with felt like industry awards were a sham until they were awarded one and received unexpected favorable attention from clients, prospects, and referral partners as a result. If you have a clear vision of exactly who you want to work with and what ideal work looks like for you, you can create a successful marketing strategy that feels meaningful… even with the inclusion of awards and recognitions.

When it comes to legal marketing, content isn’t just king—it’s the whole kingdom. Articles, videos, social media posts, photography, and your website all have the power to engage people and motivate them to seek you out. But churning out content for content’s sake is a waste of time and energy. Sure, leads may pour in, but are they the kind of leads you want? A thoughtful and cohesive content strategy is a firm’s secret sustainable marketing weapon to build the credibility and visibility that ultimately supports sellability.

The key to pulling in qualified leads is to be intentional with your messaging. Analyze. Strategize. Think about what compelling content would look like for your target audience, and then deliver that content like no one else can. For example, a trial attorney who is feeling the pain of weeding through too many unqualified leads could start investing in educational content that helps prospective clients understand more about the severity of cases they take on and how laws work in their state specific to that type of case. When every piece you put out reflects your firm’s expertise, personality, professionalism, and commitment, you will draw in leads more aligned with your client profile.

Here’s where to start.

Audit Your Content

The first step in improving the performance of your content is to evaluate your current content. Look at your analytics to see what content is pulling in leads now. What’s the quality of those leads? Are they truly client material, or are you wasting precious time following up with people without real business potential? Read your content with fresh eyes, and objectively assess its quality, timeliness, and relevance to the audience you want to attract.

This exercise can help you gain perspective that enables you to narrow your focus. Let’s say you’re a divorce attorney, and you wrote a blog titled “Divorce in America” that generated a lot of leads. How many of those people were actually on the brink of hiring a divorce attorney? Probably not nearly as many as would have read the blog “5 Steps to Take Before Discussing Divorce with Your Spouse.” That is how you find better qualified leads with content.

Focus on “MarkEDing®”

As you contemplate what content you should be sharing, think about this: What do people usually ask you about? Maybe it’s What should I do if I’m in an accident? How can I protect my business in a divorce? or When does it make sense to file for bankruptcy? Think about what your clients want to know, and then give them the information they need. Teach, don’t preach!

When your marketing messages are based on educating your audience (I coined the term “markEDing” to describe this), you make a deeper connection that leaves them feeling empowered. It also leaves them with a positive impression of your firm. By sharing valuable insights, you have demonstrated that you respect your audience’s information needs and are a reliable, forthright resource.

Write for SEO

Search engine optimization can be an outstanding tool for connecting potential clients to your content. And no, this isn’t a pitch for you to hire a full-time SEO firm. The key to visibility is not just architecture and code; it’s about having content—frequent content with SEO practices that will take your marketing efforts to the next level. Knowing how to carefully craft your blog post titles, metadata, video titles, and descriptions, image file names, etc. can elevate your content’s appearance in searches.

Align Your Content with Your Personality

Authenticity is essential to making an impact with your content. This means that every communication you share should feel consistent with your firm’s personality or with the individual personalities of the lawyers on your team. Your marketing support team should understand the nature of not only your firm’s business but also its personality, and the team should have the ability to bring that to life in the most relevant way.

For example, one law firm partner we worked with was so warm and genuine that clients have stayed in touch with him for decades because of the relationships he built. We knew we had to get him on video and film testimonials from some of the clients who adored him. As people look to see who they will be working with, hearing that person and getting a feel of who they are can make a huge difference. On the flip side, if someone hates being on camera, you should find a different way to communicate their personality and professionalism—something that is authentic to the person and the firm.

Assign Content Creation to the Right Partner

Just because we all can write doesn’t mean we all should. For most, it’s best to focus on what you do best and have others do the rest. Any message that comes out of your organization should be well-crafted, grammatically sound, and reflective of your underlying communications strategy. It’s great for partners and associates to share their expertise and insights, but that doesn’t mean they need to be the ones putting pen to paper.

Delegate the writing and creative direction to someone with the right skill set and a deep understanding of your communications strategy. If you don’t have an internal creative team, a digital marketing agency can lift this burden. They can recommend topics with high readership potential, interview the appropriate subject matter experts, and create compelling content for your targeted marketing channels.

Turn One Message into Many

If creating content seems like a daunting task, remember that you don’t have to reinvent the wheel with every message. One substantial piece can be edited or repurposed into multiple messages. For example:

• One video can be chopped up into several short clips for social media.
• A blog can be excerpted to form many social media posts.
• One media hit—a podcast interview, TV appearance, magazine article, etc.—can be repurposed for your website and social media, your quarterly newsletter, a sales sheet, and other communication channels.

Lead the Way

Taking a strategic approach with these pointers in mind can support your objective of generating more high-quality leads. It can also help you solidify your leadership stance among the crowded field of legal professionals.

The Governor of Delaware has signed into law amendments to the General Corporation Law of the State of Delaware (the “DGCL”) proposed by the Delaware State Bar Association and subsequently approved by the Delaware legislature. A number of provisions of the DGCL are affected, and the legislation addresses several significant topics, including the personal liability of senior corporate officers under Section 102(b)(7) of the DGCL, the authority to issue stock and options, the expansion of appraisal rights to beneficial owners, and new provisions intended to streamline the process for non-U.S. entities to domesticate into Delaware. The 2022 amendments to the DGCL took effect on August 1, 2022, and apply to corporate actions taken on or after that date.

Personal Liability of Senior Corporate Officers (Section 102(b)(7))

Section 102(b)(7) of the DGCL has been amended to extend exculpation rights for breaches of the fiduciary duty of care to senior officers of a Delaware corporation. The amendments address a long-standing discrepancy between exculpation rights granted to directors but not to corporate officers, an issue magnified in cases where a corporate officer also serves as a director and could therefore be protected from liability in his or her capacity as a director, but not with respect to any actions taken as an officer. The dichotomy has been troublesome since the Delaware Supreme Court held in Gantler v. Stephens, 2009 WL 188828 (Del. 2009) that both officers and directors owe fiduciary duties of care and loyalty to a corporation and its stockholders but that personal liability for breaches of the fiduciary duty of care differ for officers and directors given the statutory language contained in Section 102(b)(7).

The amendments to Section 102(b)(7) permit a corporation to adopt exculpatory language in its certificate of incorporation limiting the personal liability of both directors and officers, including the president, CEO, COO, CFO, chief legal officer, controller, treasurer, chief accounting officers, and others “identified in the corporation’s public filings with the SEC” or who have consented through a written agreement to accept service of process on the corporation’s behalf.

Consistent with the protections previously afforded to directors under Section 102(b)(7), to be valid, language exculpating directors and officers must be included in the corporation’s certificate of incorporation, and a corporation may only limit officer liability for breaches of the fiduciary duty of care. The amendments further provide that officers may only be exculpated for claims brought directly by stockholders and not for fiduciary duty claims brought by the corporation or derivatively by stockholders. Finally, the amendments prohibit the exculpation of officers for (1) breaches of the fiduciary duty of loyalty; (2) a failure to act in good faith; and (3) any transaction where an officer derives an improper personal benefit.

Authority to Issue Stocks and Options (Sections 152, 153, 157, 154, and 141(c))

These amendments continue the ongoing expansion and modernization of a board’s ability to delegate authority to an individual or entity for purposes of issuing stock or options in the corporation. Pursuant to the amendments, a board is permitted to delegate authority to an individual or entity to issue stock, sell treasury shares, or issue rights or options to acquire stock. Each delegation of authority made by the board must still satisfy the requirements of Sections 152, 153, and 157 of the DGCL, respectively. Further, the amendment requires that before delegating these responsibilities, the board must adopt a resolution establishing: (1) the maximum number of shares of stock, rights, or options that may be sold or issued; (2) a time period for selling shares or issuing stock; and (3) the minimum amount of consideration for these transactions, so long as the consideration aligns with the requirements laid out in Section 154 of the DGCL. The resolutions adopted by the board may be dependent upon facts ascertainable outside of the resolution, such as by reference to a formula such as the stock’s trading price on a particular date or a trading price average over a specified period of time, so long as the resolution clarifies how such facts operate on the resolution.

While the amendments further expand the authority of a board of directors to delegate the issuance of stock and options, it is important to note that the amendment does not affect the board’s process for delegating authority to board committees under Section 141(c). Additionally, the amendments prohibit the individual or entity delegated authority by the board to issue or sell to themselves stock, options, or any related rights falling within his, her, or its delegated authority.

No Requirement that Stockholder List be Available During a Meeting (Section 219)

The amendments to Section 219 of the DGCL eliminate the requirement that a corporation make a stockholder list available for inspection during a meeting of stockholders. The amendments also clarify how the ten-day period for purposes of requesting a stockholder list in advance of a stockholder meeting is calculated in order to determine when the corporation is required to make the stockholder list available for inspection. The amendments to Section 219 of the DGCL are intended to address the increasing frequency with which stockholder meetings are held virtually on an electronic platform, as well as privacy concerns relating to the broadcast of stockholder information via the virtual meeting format.

Meeting Notice and the Adjournment of Virtual Meetings (Section 222)

The amendments to Section 222 of the DGCL explicitly provide that a notice of meeting of stockholders may be given in any manner permitted by Section 232 of the DGCL. Section 222(c) was further amended to address potential technical issues that may arise during a virtual meeting of stockholders, providing that (unless the corporation’s bylaws state otherwise) if a virtual meeting of stockholders is adjourned, including due to a technical failure to convene or continue a virtual meeting, notice need not be given if the time, date, and place of the adjourned meeting are announced at the meeting, displayed during the time scheduled for the meeting on the virtual platform utilized for the meeting, or set forth in the notice of meeting. As a practical matter, a corporation using a virtual meeting format may wish to include an advance adjournment notice in the meeting notice to address potential technical issues that may arise while convening or holding the stockholder meeting.

Stockholder Consents (Section 228)

Section 228(c) of the DGCL has been amended to clarify that a stockholder executing a written consent that is effective at a future time, including a time determined by the happening of a future event, need not be a stockholder at the time such consent is executed if the person is a stockholder of record as of the record date set for determining stockholders entitled to consent to the action.

Appraisal Rights (Section 262)

The amendments to Section 262 of the DGCL expand the rights of beneficial owners of stock, specifically by extending statutory appraisal rights to beneficial owners. Prior to the amendments, a beneficial owner of stock could only seek appraisal rights if the record holder of such stock demanded appraisal on the beneficial owner’s behalf. As a result of the amendments, beneficial owners of stock are now permitted to make appraisal demands in their own name.

The amendments include a new subsection 262(d)(3) providing that a beneficial owner may submit a written demand for appraisal if the owner satisfies the following three requirements: (1) maintaining beneficial ownership of the stock of the corporation from the date of the demand through the date of the merger, consolidation, or conversion; (2) satisfying the stockholder ownership threshold established under 262(a); and (3) submitting evidence of beneficial ownership in addition to other identifying information such as the beneficial owner’s address and the identity of the record holder.

In addition, the amendments specifically define who may be classified as a beneficial owner, including any “person (either an individual or entity) who is the beneficial owner of stock held either in voting trust or by a nominee on behalf of the person.” The amendments also provide that stockholders may have appraisal rights in connection with a conversion of the corporation unless the 262(b) market-out exception applies. The amendments further extend the market-out exception to “transactions approved by a stockholder consent.”

Finally, the amendments remove the requirement that a Section 262 stockholder notice of appraisal rights include a copy of Section 262 of the DGCL; rather, the notice may reference a publicly available electronic resource providing information regarding stockholder appraisal rights.

Conversions (Sections 265, 266, and 262(k))

Section 265 of the DGCL, governing the conversion of other entities to a Delaware corporation, was amended to modify the time frame by which a conversion must be approved. While the statute previously required the approval of the converting entity and the approval of the certificate of incorporation by the same authorization required to approve the conversion to occur prior to the filing of the certificate of conversion, the amendments provide that the approvals must occur by the time the certificate of conversion filed with the Delaware Secretary of State becomes effective.

Section 266 of the DGCL, governing the conversion of a Delaware corporation to another entity, was also amended to require the vote of holders of a majority in voting power of the outstanding shares entitled to vote on the conversion, versus the prior requirement for unanimous approval of the conversion by all of the outstanding stock of the entity regardless of voting rights. While the prior formulation was intended to protect stockholders from converting into a different form of entity with substantially different governance and ownership rights, as a practical matter the unanimity requirement made the statute unworkable in many instances.

In recognition of the prior policy concerns, however, Section 266 contains two important protections for the stockholders of a Delaware corporation contemplating a conversion: (1) the amendments require the consent of any stockholder who would become a general partner due to a conversion, given potential personal liability for a general partner under Delaware law; and (2) the amendments state that any provision of a certificate of incorporation of a corporation incorporated before August 1, 2022, or a voting or other written agreement between the corporation and a stockholder entered into prior to that date, that restricts or prohibits the consummation of a merger or consolidation, shall be deemed to apply to a conversion unless the certificate of incorporation or agreement otherwise provides. Thus, for example, holders of preferred stock who are entitled to a separate class vote to approve a merger or consolidation transaction under the terms of a corporation’s certificate of incorporation effective prior to August 1, 2022, would be deemed to have the same class vote on a proposed conversion.

Finally, Section 262 of the DGCL, which sets forth statutory appraisal rights for stockholders, has been amended to apply to the conversion of a Delaware corporation in addition to a merger or consolidation.

Dissolution (Sections 275 and 276)

The amendments to Sections 275 and 276 of the DGCL are intended to clarify dissolution procedures for corporations specifying the duration of the corporation’s existence in their certificate of incorporation. The revisions to Section 275 provide that any corporation whose certificate of incorporation specifies the duration of the company’s existence must file dissolution documents with the Delaware Secretary of State within ninety days of the date set in the company’s incorporation documents. The certificate of dissolution must also contain the name of the corporation, the date listed in the certificate of incorporation on which the corporation would dissolve, the names and contact information for the corporation’s directors and officers, and the date on which the original certificate of incorporation was filed. Further, the amendments specify that the corporation will be dissolved as a legal matter on either the date listed in the certificate of incorporation or the date on which the certificate of dissolution goes into effect, whichever is earlier. In addition, the amendments modify Section 276 to contain conforming dissolution provisions for nonstock corporations.

Domestication of Non-US Entities (Section 388)

Section 388 of the DGCL was substantively amended to permit a non-United States entity domesticating into Delaware to adopt a plan of domestication setting forth the terms and conditions of the domestication, including the manner of exchanging or converting the equity interests of the non-United States entity to be domesticated and any details or provisions deemed desirable. The revised statutory language providing for a plan of domestication significantly streamlines the mechanics and technical approvals required in connection with the formation of a new Delaware corporation upon domestication and offers greater flexibility to transaction planners in structuring deals that contemplate one or more non-United States entities domesticating into Delaware.

A plan of domestication may set forth corporate action to be taken by the domesticated corporation in connection with the domestication, each of which must be approved in accordance with the requirements of applicable foreign laws prior to the effectiveness of the domestication into Delaware. Once approved, any such corporate action that is within the power of the Delaware corporation under the DGCL that is set forth in the plan of domestication will be deemed to be authorized, adopted, and approved, as applicable, by the domesticated corporation and its board of directors and stockholders, and no further action of the board of directors or stockholders is required. Importantly, if any corporate action set forth in the plan requires the filing of a certificate with the Delaware Secretary of State, the certificate must state that no action by the board of directors or stockholders of the Delaware corporation otherwise required by any other provision of the DGCL is required in accordance with Section 388 of the DGCL.

In addition, the amendments provide that the terms of the plan of domestication may be made dependent upon facts ascertainable outside of the plan if the way such facts operate is clearly set forth in the plan. The amendments further require that a certificate of domestication certify that, prior to the time the certificate of domestication becomes effective, the domestication was approved in accordance with the governing documents of the non-United States entity or by applicable non-United States law.

Other Amendments

Other minor amendments to the DGCL were also enacted, including amending: (1) Section 103 to clarify that the execution of an instrument by a person constitutes an oath or affirmation, under penalties of perjury, that the facts stated in the instrument will be true at the time such instrument is effective, and to remove outdated language; (2) Section 502 to clarify that, unless a corporation maintains its principal place of business in the State of Delaware and serves as its own registered agent, the principal place of business of the corporation shall not be the address of its registered office in Delaware; and (3) Section 503 to provide that a corporation holding the status of a large corporate filer with the Delaware Secretary of State will maintain that status unless it notifies the Secretary of State’s office that the corporation no longer meets the criteria applicable to large corporate filers.

The SPAC IPO market and the de-SPAC market have slowed dramatically during 2022.

By all measures, 2022 has not been a banner year for SPACs. With the SEC proposing new rules that threaten to upend the SPAC business, SPAC IPOs have declined from 2021, when more than 600 IPOs raised over $162 billion, to just 74 in 2022, raising only $12.4 billion.^[1] July 2022 was, per the Wall Street Journal, “the first month in five years that no new SPACs raised money.”^[2] The pace of de-SPAC business combinations has also slowed considerably, with around 290 de-SPACs announced in 2021, compared to only around 90 so far this year.^[3] Almost 580 active SPACs are still searching for targets, with approximately 120 SPACs having an investment horizon through the end of 2022. So far in 2022, at least 15 SPACs have already announced that they will withdraw their registration statements or liquidate.^[4]

However, M&A activity involving de-SPACed companies is picking up significantly, driven both by de-SPACed sellers in search of a buyer, as well as strategic buyers aiming to acquire desirable companies at attractive values.

Many de-SPACed companies are trading below their acquisition levels of $10 per share, in some cases significantly below that level. Of the more than 400 de-SPACed companies that remain publicly traded, around 330 (almost 85%) are trading at or below $10, while almost 95 are trading under $1.^[5] Average de-SPAC redemption rates in the latter part of 2021 and in 2022 have been in excess of 80%.^[6] As such, many de-SPAC business combinations did not result in sufficient primary proceeds to the companies that went public via a de-SPAC to support projected growth plans.

Given the low valuations at which many de-SPACed companies are trading, raising additional equity financing in the public markets is difficult and may not be an attractive option (if it is even possible at all). PIPE investors, who historically invested in SPACs at $10 per share, currently have little appetite to direct more funds into de-SPACed companies. Many de-SPACed companies are also in “sectors of the future” (like energy transition) and often do not have the steady cash flows and positive EBITDA needed in order to access the traditional bank loan or bond market.

In light of the limited financing options, M&A may be the natural step for de-SPACed companies looking to develop sustainable businesses and generate investor interest. Battery maker Romeo Power, for instance—which de-SPACed in a $1.33 billion deal that closed in late 2020—was recently acquired by electric truck manufacturer Nikola Corporation in an all-stock transaction, implying a consideration of $0.74 per Romeo share. Even de-SPACed companies that are doing well and are generating robust revenues often operate in industries with significant capital needs and may benefit from being part of a company with a larger platform and stronger balance sheet.

M&A transactions involving de-SPACed companies present many unique issues. Below we highlight key considerations in advising a client pursuing a merger involving a de-SPACed company.

The de-SPACed company’s board of directors will need to make important fiduciary decisions. If a de-SPACed company that is trading (significantly) below its IPO price is considering an M&A transaction, especially one where the consideration will be all or mostly cash, the de-SPACed target’s board will need to engage in important fiduciary deliberations. The target’s board may consider, where relevant, questions such as: Is this the right time for the company to sell? What constitutes fair value for the target’s shares? How important is the $10 per share SPAC IPO price as a benchmark? In the current environment, even a bid at a high premium to current trading levels may still be at a steep discount to the de-SPAC acquisition value of the target. It is important for the de-SPAC target board to undertake an informed, thorough, and well-documented (via minutes and presentations by financial and legal advisors) decision-making process when considering a potential transaction. A buyer of a de-SPACed target has an equally strong interest in ensuring that the target conducts a proper process; if a deal is completed, the buyer will inherit any resulting litigation and obligations to indemnify the de-SPACed target’s directors and officers.

Different shareholder groups may have different views as to whether a transaction is desirable. Different shareholder groups may have acquired their shares in the de-SPACed target at different prices. They may thus stand to benefit differently from a potential transaction—especially one at a loss relative to the de-SPAC acquisition value—even if they receive the same consideration. As is well known, SPAC sponsors usually acquire their shares in the SPAC for nominal consideration (typically $25,000 for shares representing 20% of the SPAC’s outstanding shares post-IPO and prior to the de-SPAC), while public investors who purchased on the open market and PIPE investors typically bought their shares at $10 each. It may be useful to study the de-SPACed target’s shareholder base to determine at what price points investors acquired their shares and whether they would likely support a transaction, including at what price, and what mix of consideration may be appropriate in light of the particular facts and circumstances of the de-SPACed company.

Voting power may be concentrated with a few shareholders who may determine whether shareholder approval for a transaction can be obtained. Often, the SPAC sponsor (and its affiliated entities), the anchor PIPE investors, and the legacy target shareholders hold a significant percentage of the de-SPACed target’s shares. In some cases, the legacy target shareholders may also hold high vote stock, which increases their voting power above their economic ownership of the company. Because of this, it is important to determine which shareholders can sway, and potentially decide, the outcome of the shareholder vote and the extent to which they will be supportive not only of a transaction, but also willing to sign up voting agreements in favor of a deal.

De-SPAC directors may be nominated by certain shareholders and may face actual or perceived conflicts. Many de-SPACed companies are parties to shareholder agreements that may give certain significant shareholders director designation rights. As a result, directors of de-SPACed companies may be affiliated with certain shareholders, and it may be important to evaluate whether in the context of a particular transaction any directors may have actual or perceived conflicts of interest given their relationships with certain shareholders. This highlights the need for some de-SPACed targets to assess process issues, potentially including, given the facts and circumstances of the proposed transaction, the need for, or benefits of, creating a special committee or seeking a “majority of the minority” vote. As noted above, a buyer of a de-SPACed target has a shared interest in ensuring that the target conducts a proper process. If a transaction is evaluated by the courts under the “entire fairness” standard of review, for example, any shareholder litigation challenging the deal will be difficult to dismiss on the pleadings. Therefore, if there are procedural measures that can be employed to lend a transaction “business judgment rule” review, a buyer may want to consider those measures.

De-SPACed companies may have very complex capitalization structures. De-SPACed companies often have multiple classes of stock (including potentially high vote and low vote stock). In addition, it is not uncommon for founders and other legacy target shareholders to be entitled to “earnout shares,” which are issued if and when the de-SPACed target’s stock price reaches or exceeds certain levels. In 2021, over 40% of the closed de-SPAC deals contained an earnout provision. On the flip side, a portion of the SPAC sponsor’s shares may be subject to “vesting” or “forfeiture back” provisions, under which the sponsor will lose some of its shares unless the de-SPACed company’s stock price trades above specified levels by specified deadlines. Sponsor equity was subject to such vesting and/or forfeiture in over half of the de-SPAC deals that closed in 2021.^[7]

As such, determining the fully diluted capitalization of a de-SPACed company may be particularly challenging, and the treatment of earnout, vesting, and forfeiture provisions needs to be carefully reviewed in light of the contemplated amount and mix of deal consideration. This task may be time-consuming especially where the relevant provisions have drafting ambiguities and do not lend themselves to straightforward answers.

De-SPACed companies may have multiple types of warrants that need to be accounted for. As part of a de-SPAC transaction, de-SPACed companies typically inherit “public warrants,” which were issued to the public investors in the SPAC IPO, and “private placement warrants,” which were issued to the SPAC sponsor, as well as potentially PIPE investors, in putting together the financing for the deal. The terms of the public warrants and private placement warrants are usually identical, except that the de-SPACed company may redeem the public warrants if its stock price reaches or exceeds certain levels, whereas the private placement warrants are not redeemable.

Both public and private placement warrants may contain provisions that provide that in the case of a merger or other business combination transaction, the warrants become exercisable for the merger consideration. This means that the buyer cannot unilaterally take them out (subject to the redemption provisions of the public warrants based on the deal price) and—if some warrant holders do not exercise their warrants right away—may have ongoing obligations to pay the merger consideration for the life of the warrants.

As a separate matter, in a deal that involves less than a specified percentage (usually 70%) of listed stock as the deal consideration, the warrants often provide that the exercise price will be adjusted if the warrant is exercised within a specified period of time after the closing of the deal (usually 30 days) such that the warrant holder will be entitled to receive upon exercise, on a net basis, the Black-Scholes value of the warrant (calculated as of immediately prior to closing, based on certain assumptions specified in the warrant agreement). This creates an added complication in that a buyer may not know the exact amount of consideration to be paid for the de-SPACed warrants at the time of signing. Buyers should, therefore, consider whether the warrant agreement terms may be amended and whether it would be feasible or desirable for the buyer to enter into agreements with the warrant holders that lock in the treatment of their warrants at the time of signing.

Finally, de-SPACed companies may have inherited legacy target warrants (for example, if the target had issued warrants to VC funds or debt or service providers pre-SPAC IPO), which may have bespoke provisions and may further complicate cleaning up the company’s capital structure post-acquisition.

Some de-SPACed companies are organized as “Up-Cs” for tax purposes. Some de-SPACed companies are structured as umbrella partnership C corporations (“Up-Cs”), where the target business is organized as a flowthrough for tax purposes, either as an LLC or a limited partnership (“opco”), and the publicly listed de-SPACed company’s sole asset is its equity in opco. In such a structure, the public shareholders hold one class of shares in the public company (which carry both economic and voting rights) while other shareholders, typically the legacy target founders and initial investors, hold both a different class of shares in the public company (which carry voting but no economic rights) and units in opco (which carry their economic interests). As such, acquiring a de-SPACed company that is organized as an Up-C is even more challenging from a corporate perspective; the transaction needs to account for both the treatment of shares and opco units. Further, many Up-Cs often have a tax receivable agreement (“TRA”) in place. TRAs may, among other things, require a payout to TRA beneficiaries upon a change of control of the de-SPACed company, and these payments can be significant. Therefore, having a TRA in place raises additional structuring considerations, including whether certain shareholders are potentially receiving differential consideration.

De-SPACed companies may be subject to, or at risk of, litigation or investigation. Finally, it is not uncommon for de-SPACed companies to be subject to fiduciary duty litigation in connection with the de-SPAC process, and/or securities litigation or investigations regarding issues with the de-SPAC merger or subsequent SEC disclosures. (This is especially common when the de-SPACed company misses earnings targets shortly after going public with the de-SPAC). Any potential buyer of a de-SPACed company should carefully conduct diligence regarding these potential exposures and the extent to which they may be extinguished by virtue of the acquisition.

***

Mergers involving de-SPACed companies present several unique features. It is important—even more so than in other contexts—to engage and consult with counsel early, as several threshold matters will need to be addressed to ensure that the transaction is structured in the appropriate manner, that the valuation accounts for the fully diluted capital of the de-SPACed target, and that the board process is appropriately structured to meet applicable fiduciary standards.

1. Source: SPACInsider, SPAC Statistics as of August 15, 2022. ↑

2. Source: Wall Street Journal, SPAC Activity in July Reached the Lowest Levels in Five Years, August 17, 2022. ↑

3. Source: DealPoint Data as of August 17, 2022. ↑

4. Source: The Deal, List of SPACs to Liquidate after Failed DeSPACs Grows, August 15, 2022. ↑

5. Source: SPACInsider as of August 15, 2022. ↑

6. Source: SPACInsider as of August 15, 2022; Freshfields, 2021 De-SPAC Debrief, January 2022. ↑

7. Source: Freshfields, 2021 De-SPAC Debrief, January 2022. ↑

All lawyers know something about taxes: we all pay them, and we all know that legal fees are income. In fact, legal fees are ordinary income, and are even subject to self-employment taxes. Lawyers occasionally try to argue that legal fees are capital gains, but that is an awfully tough sell with the IRS. So, you must figure that you will be paying full freight in taxes on your legal fees, no matter what.

But what about timing? Much in the tax law is about timing. In general, a classic tenet of tax planning is to try to defer income and to accelerate deductions. For generations, tax lawyers have explored all manner of tax deferral strategies, so there are many decades of tax lore to draw from.

According to the IRS, you have income for tax purposes when you have an unqualified, vested right to receive it. Asking for payment later doesn’t change that. The idea is to prevent taxpayers from deliberately manipulating their income. The classic example is a bonus check available in December, where the employee asks to have the employer hold it until January 1. You might think that normal cash accounting suggests that the bonus is not income until paid. But the employer tried to pay in December and made the check available. To the IRS, that makes the bonus income in December, even though it is not collected until January.

Lawyers are subject to these rules just like everyone else, but there is a surprising exception for contingent fee lawyers. Plaintiff lawyers often lament the unpredictability of their own income. They may also lament the need to resort to borrowing to finance their cases. In some cases, plaintiff lawyers complain that they cannot take the cases they really want to take, given the financial realities of contingent fee practice.

However, plaintiff lawyers can actually use a benefit most other people—including other lawyers—can’t: structured legal fees. Reduced to simplicity, the concept of structured legal fees is a kind of tax-advantaged installment plan that doesn’t rely on the credit worthiness of either the defendant or the client. Like much else that is tax-advantaged, this exception has some rigidity. Yet it involves a tried-and-true tax structure that works, and it is grounded in economic reality.

In essence, the contingent fee lawyer can decide before settlement that instead of taking a contingent fee upon settlement of the case, he wants that fee paid over time. The lawyer must decide to do this before the case settles—but that can be right before it settles, even the night before. As a practical matter, the lawyer has “earned” his contingent fee over the course of the case. Yet the tax authorities say that the lawyer hasn’t technically earned his fee for tax purposes until the settlement documents are actually signed.

Amazingly, the attorney can have complete discretion whether to structure all of his fee or a percentage of it. The tax case uniformly cited as establishing the bona fides of attorney fee structures is Childs v. Commissioner, 103 T.C. 634 (1994), affirmed without opinion 89 F.3d 56 (11th Cir. 1996). For a few years, there was concern that the IRS might disagree with contingent fee structures despite the Childs case. But over the last several decades the IRS has often favorably cited Childs.

But care is still needed when using structured legal fees. The settlement agreement must call for it, and no lawyer wants to rely on the defendant to pay the fees over time. So frequently the settlement agreement requires the defendant to pay the full amount to a third party, which then distributes the payments over time to the plaintiff lawyer. In the early days of structured fees, the third party was invariably a life insurance company that funded annuities for the benefit of the lawyer. Then the annuity payments would be taxed over time.

Although annuities still work fine today, most lawyers seem to want a better return than life insurance annuities, so most structured fees today are done with a portfolio of stocks and securities. Whether the structure is done with annuities or securities, the format and documents are important. The plaintiff lawyer can’t own the annuities or the securities, but instead is the named payee of the structure.

But what if you don’t want the defendant to know about your payment structure? Or what if you just need time to sort out what kind of structured fee you want, and which company you want to trust with it? These days, most structured legal fees are not implemented by defendants directly, but rather by qualified settlement funds. The settlement agreement provides that instead of paying the settlement to the law firm trust account, it goes to a qualified settlement fund (QSF). Then, the QSF pays the plaintiff—or implements structured settlements for any plaintiffs who want one. And it is the QSF that implements the lawyer’s structured fees too.

Done properly, an attorney fee structure obviates the normal tax doctrines of constructive receipt and economic benefit. These fearsome tax doctrines can often result in amounts being taxed to someone even before they actually receive the income. In the case of properly structured attorney fees, the attorney will be taxed only when and as he receives each payment, according to the schedule the lawyer has set. Why is this such a good deal? Paying tax later is nearly always better. It’s simple economics. Would you rather pay $100,000 of tax today or in ten years?

There is also investment return. Like a giant 401(k), structured legal fees put the full amount of your fee to work earning an investment return. If you take your fee in cash and pay tax, you can lose half or more in taxes, and then can only invest the after-tax amount. With structured fees, you are investing the full amount so your “principal” plus the investment return is taxed later when you receive the payments over time. Think of it as tax-free compounding, and the longer the attorney wants to stretch out the payments, the better the financial result.

In essence, the lawyer constructs a kind of unlimited individual retirement account. Structured fees are flexible, too: the payments might start right away and go for the next five or ten years, or the payments might be deferred entirely for ten or fifteen years, building up tax-free. Thereafter, they might begin paying out annually for the rest of the attorney’s life, or the joint life of the attorney and their spouse. There is almost infinite flexibility.

Finally, how about borrowing? With traditional life insurance annuities, there was no borrowing feature. But many of the structured legal fee companies today allow lawyers who structure fees to borrow money too. Not paying current tax on your fees, but being able to borrow money, is another double benefit. After all, when you borrow money, the amount you borrow isn’t income because you have to pay it back.

Of all the topics with structured fees, perhaps the one where the most care is needed concerns borrowing. You don’t want the IRS to think the arrangement is a sham and to call your loans income, considering them a payment of your own legal fees. But if you’re careful, structured legal fees can allow tax-free compounding, defer taxes, and help build a solid financial plan. There are estate planning advantages too.

What’s not to like?

Robert W. Wood is a tax lawyer with www.WoodLLP.com, and the author of numerous tax books including Taxation of Damage Awards & Settlement Payments (www.TaxInstitute.com). This discussion is not intended as legal advice.

When 2021 ended, many of us were unsure what 2022 would look like from a bankruptcy perspective. How would COVID-19 affect filings? Would state and federal governments continue to support and bail out businesses and consumers? Where was the proposed bankruptcy reform legislation headed in Congress? Was the dischargeability of student loans going to become reality? Was medical debt going to be eliminated? Would Subchapter V business bankruptcies continue to fast-track Chapter 11 proceedings? Would there be bankruptcy rulings from the U.S. Supreme Court that would affect the bankruptcy practice? What would the fallout be from the Supreme Court’s decision in City of Chicago v. Fulton? There is a lot to consider throughout 2022 and in reflecting on 2021.

Reduced Filings

In 2021, the total number of bankruptcy filings was 401,291. This was approximately a 24% drop in total filings and the lowest total since 1984. Consumer filings totaled 341,233. Of the business cases filed, there were 3,724 Chapter 11 cases, which was decline of 48% from the 7,129 Chapter 11 filings in 2020. On the consumer side, 1.31 individuals per 1,000 people filed a bankruptcy through the first eleven months of 2021. The states with the highest per capita filings over the last year were Alabama (3.14), Nevada (2.62), and Tennessee (2.43).^[1]

It is important to look at the cause of the reduced filings, as there are several reasons for the decline. One important reason is the moratorium on foreclosure and eviction. Despite numerous states releasing their moratoriums in mid-2021, the number of foreclosures and evictions that have resumed have not seen a correlating effect on bankruptcy filings. In addition, mortgage lenders have been more creative with forbearance agreements. Low interest rates have also helped keep individuals in their homes. The recent increase in interest rates by the Federal Reserve could have an impact on the number of bankruptcy filings. Borrowers who have adjustable rates will see their monthly payments increase. This effect, coupled with rising prices and supply chain issues, may cause consumers to look to bankruptcy to reorganize or seek a fresh start.

The court system has also played a role in the decreased number of bankruptcy filings due to COVID-19. With courts finally getting back up to speed and the historically long time it takes to complete a sale in judicial foreclosure states, there has been no feared tsunami of bankruptcy filings. Many had feared a rapid increase of new filings that could overwhelm their practices and the court system. In addition, outside of foreclosures, the time for creditors to obtain judgments and to proceed to execute on debtor assets has been extended, and the longer it takes for assets to be placed at risk, there is a correspondingly lower urgency to file for bankruptcy.

SBRA and PPP Effects

Another question to consider is if businesses are struggling due to COVID-19, why are we not seeing a substantial increase in commercial bankruptcy filings whether through Chapter 11, Subchapter V reorganizations, or Chapter 7 liquidations? As Paycheck Protection Program funding has continued, as well as other grants or low interest loans that are made available by the federal and state governments, businesses have been able to continue to operate. This is true even with the higher employee costs due to the difficulties in obtaining workers from the labor force. Commercial landlords have been more apt to work with distressed properties or leases, as the difficulty in finding a replacement owner or tenant may have been difficult. We know when some of the Small Business Reorganization Act provisions enacted during COVID-19 expired on March 27, 2022, we saw a slowdown in Subchapter V filings. The SBRA provisions of the CARES Act have now been reenacted for a two-year period, and the ceiling for Subchapter V liabilities will be $7.5 million. This should allow more companies to utilize the faster and less expensive Subchapter V process, which will benefit both debtors and creditors.

Courts Considering Automatic Stay Violations

Despite the decrease in bankruptcy filings, activity in the bankruptcy world has not stalled. The Supreme Court decided a very important consumer bankruptcy case with potential far-reaching ramifications in consumer bankruptcy. In City of Chicago v. Fulton^[2], the Court addressed the issue of the violation of the automatic stay and retention of property when a bankruptcy was filed. The Court held that it was not a stay violation for the City of Chicago to retain a vehicle that it was in possession of by way of failure to pay parking tickets. The Supreme Court found that maintaining the status quo was not a stay violation. The Court, however, did remand for further proceedings and stated that a Motion to Turnover might be the proper course of action to obtain possession of the vehicle.

The Ninth Circuit Court of Appeals also addressed this issue in Stuart v. City of Scottsdale,^[3] as it pertained to garnished funds that were being held. The Circuit Court found that the estate did not have an interest in the property and the failure to release the garnishment was not a violation of the automatic stay. Under 11 USC § 362(a)(3) and § 363(a)(2), the City did not take steps to collect on a pre-petition judgment. The Court also found that by the city promptly notifying the trial court, where the garnishment was filed, of the bankruptcy filing, it had maintained the status quo.

Recently, the bankruptcy court for the Northern District of Illinois in Cordova v. City of Chicago^[4] ruled on a Motion to Dismiss in a class action complaint that alleged the retention of vehicles by the City violated the automatic stay, specifically subsections 11 USC § 362(a)(3), (4), (6), and (7), as well as 11 USC § 542(a) concerning turnover of estate property. The Bankruptcy Court found that the Supreme Court’s decision in Fulton was not controlling. The Bankruptcy Court found potential claims for the violation of the automatic stay existed under § 362(a)(4) and (a)(6). The Court dismissed the count under § 362(a)(7) concerning the setoff of debt owed to the debtor against claims against the debtor without prejudice, which would allow the Debtor Plaintiffs to refile that claim after amendment. The Court allowed the § 542(a) claim addressing turnover of property of the estate. The Court dismissed the punitive damage claim with prejudice. As a result of this ruling, we anticipate seeing additional filings for the turnover of property in this case and potentially in other jurisdictions around the country.

Courts Considering Dismissals

Another issue that continues to be litigated is whether a debtor has the absolute right to dismiss a Chapter 13 proceeding under 11 USC § 1307(b). This section provides that a debtor has the absolute right to dismiss their Chapter 13 proceeding so long as the case was not previously converted. Several Circuit Courts and lower courts have addressed this issue and have issued contrary holdings: some courts have found that an absolute right exists, while others have held that the absolute right does not exist when there are issues of bad faith in the debtor’s filing. The most recent case is In Re Mingrove from South Carolina.^[5] The Court ruled that the debtor had an unconditional right to dismiss the case, but the court had the ability to issue sanctions based on the debtor’s bad faith filing. With Circuit Court splits on the issue, it is possible that we will see a writ of certiorari filed with the Supreme Court of United States.

Courts Considering Itemizations in Proof of Claims

Plaintiff and Debtor attorneys continue to raise the issues of the itemization of interest fees and costs in proof of claims. Although this issue has not been widespread throughout the country, we have seen an increase in activity in Florida, Georgia, and Virginia. And while we have no Circuit Court opinions, several Bankruptcy Courts have set forth their views as to how these amounts should be set out and whether damages exist. In Thomas v. Midland Funding LLC,^[6] the Bankruptcy Judge for Western District of Virginia issued a lengthy opinion setting forth her views on whether the breakdown of interest, fees, and costs satisfies the itemization requirement set forth in Federal Rule of Bankruptcy Procedure 3001(c)(2)(a), which requires “[i]f, in addition to its principal amount, a claim includes interest, fees, expenses, or other charges incurred before the petition was filed, an itemized statement of the interest, fees, expenses, or charges shall be filed with the proof of claim.”

The Thomas court went on to state that the Creditor, for failing to properly itemize, did not comply fully with FRBP 3001(c), and it opened itself up to potential sanctions under FRBP 3001(c)(2)(D). The court has the ability to “award other appropriate relief, including reasonable expenses and attorney’s fees caused by the failure.” We will see where the Western District of Virginia proceeds on this issue, but it has laid out a current road map for creditors to follow.

Conclusion and Future Expectations

2021 was an interesting year from a bankruptcy standpoint. We saw reduced filings, Supreme Court and Circuit Court decisions, and continued proof of claim and automatic stay litigation.

There are currently several bankruptcy bills pending before Congress. One of the bills that has the most bipartisan support deals with student loan dischargeability: Senator Durbin of Illinois and Senator Cornyn of Texas introduced the Fresh Start Through Bankruptcy Act. The key provisions of the bill would allow federally backed student loans to be discharged if the borrower has been paying for ten years. As student loan liability continues to be a hot topic for both Congress and the White House, we may see some movement on this issue as the mid-term elections approach.

Bankruptcy is off to an interesting start in 2022. As the year progresses, we expect to see more activity, but whether that activity will equate to an increase in bankruptcy filings remains to be seen.

1. All bankruptcy statistics obtained through EPIQ and the ABI. ↑

2. 141 S. Ct. 585 (2021). ↑

3. CV-20-00755-PHX-JAT (D. Ariz. 2021). ↑

4. 19-00684 (Bankr. N.D. Ill. Dec 6, 2021). ↑

5. 2021 WL 445589 (Bankr. D. SC 2021). ↑

6. Adv. P. No. 17-05010, 578 B.R. 355 (Bankr. W.D. Va. Nov. 30, 2017). ↑

This article is related to a Showcase CLE program that took place at the ABA Business Law Section’s Hybrid Annual Meeting on Friday, September 16, 2022. The program featured three experienced Supreme Court advocates as panelists: Miguel A. Estrada, Partner at Gibson, Dunn & Crutcher LLP; Nicole A. Saharsky, Partner at Mayer Brown LLP; and Seth P. Waxman, Partner at WilmerHale. All CLE programs were recorded live and will be available for on-demand credit, free for Business Law Section members.

The United States Supreme Court is a generalist court, not a business court. But a significant part of its docket affects businesses directly. The October 2021 Term, which concluded in June 2022, was no different. Although the subject matters of the business cases varied widely, some themes can be discerned in the docket.

First, the Court clearly regards arbitration as a positive part of the legal system. The Court lavished significant attention on arbitration, deciding four arbitration cases this past term. Morgan v. Sundance decided that a waiver of rights under an arbitration agreement should be treated the same as a waiver under any other agreement, without additional requirements such as a showing of prejudice. Badgerow v. Walters was a statutory construction case where, based on the language of the Federal Arbitration Act, the Court found that a federal court has subject matter jurisdiction over a motion to confirm arbitration only if there is subject matter jurisdiction over the confirmation motion itself. It makes no difference whether the underlying dispute could be subject to federal jurisdiction. Viking River Cruises v. Moriana held that, where an arbitration agreement contains a class/collective action waiver, the FAA preempts a California statute that permits private parties to sue as private attorneys general or in collective actions. Such disputes must be arbitrated rather than litigated. Finally, Southwest Airlines v. Saxon held that disputes involving airport cargo loaders are not covered by the FAA because those employees are “a class of workers engaged in foreign or interstate commerce” excluded by FAA § 1.

Statutory construction also occupied a large part of the Court’s docket. ZF Automotive v. Luxshare held that 28 USC § 1782 can be used to assist only foreign or international tribunals operating under governmental auspices. Private arbitration panels, and even treaty-based arbitrations that use non-governmental sponsoring organizations, do not qualify for § 1782 assistance. In Cassirer v. Thyssen- Bornemisza Collection Foundation, the Court held that choice of law rules for claims under the Foreign Sovereign Immunities Act are the same as in private litigation. Because one of the main exceptions to sovereign immunity is for a sovereign’s commercial activity, the effect on business is obvious.

Another statutory construction case was Hughes v. Northwestern University, which held that a customer’s ultimate control over its account is not a defense to a fiduciary duty claim against ERISA plan administrators, who have continuing duties to monitor investments. Unicolors v. H&M Hennes & Mauritz was a straightforward application of the language of Copyright Act § 411(b)(1)(A): a registration is valid even if it contains errors, so long as the registrant lacked knowledge of the inaccuracies.

West Virginia v. EPA is perhaps more difficult to categorize. In that case, the Court held that § 111(d) of the Clean Air Act did not authorize parts of the EPA’s Clean Power Plan regulations. The Court held that the regulations would have worked a major change in environmental regulation, and that such a major change must be clearly set forth by Congress. Is this more of a statutory construction case, which looked at the scope of the Clean Air Act? Or is it more of a separation of powers case, which deems major changes to existing practice to be a legislative function? Or a bit of both?

City of Austin v. Reagan National Advertising was a classification issue, asking whether the city’s rule governing billboards was a “time, place and manner” restriction that survives first amendment scrutiny, or was an impermissible content regulation. In that case, different rules applied to on-premises and off-premises signs. The Court held that the different treatment was based on location, not content.

The so-called “shadow docket” saw a split decision on vaccine mandates. NFIB v. OSHA held that the Occupational Safety and Health Administration did not have authority to impose vac- cine mandates on employees of private businesses. But Biden v. Missouri held that facilities accepting Medicare and Medicaid funds could be required to mandate vaccines for their employees.

The Court has granted certiorari in a number of important cases that will be heard during the coming term, which will start in October 2022. Among the subjects the Court will address:

• 303 Creative v. Elenis – Does a public accommodation law violate freedom of speech under the first amendment if it compels a web designer to create content for a same-sex wedding?
• Students for Fair Admissions v. Harvard; SFA v. UNC – Are race-conscious admissions in education permissible under Title VI of the Civil Rights Act and the equal protection clause of the 14^th Amendment?
• Mallory v. Norfolk Southern Railway Co. – Is a state law requiring corporations to consent to suit as a condition of doing business in the state unconstitutional?
• Andy Warhol Foundation for the Visual Arts, Inc. v. Goldsmith – What is “transformative” for purposes of “fair use” exception to copyright infringement?
• National Pork Producers Council v. Ross – Does state regulation with effect outside the state violate the dormant commerce clause?

Standing out can be a daunting task for today’s law firms.

Google’s algorithms are getting trickier, and people are tired of digital advertising. For firms lacking in know-how, marketing their services can feel like operating on a wing and a prayer. The good news is, you can DIY build a solid online presence and let clients come to you from there.

Why do law firms need digital marketing?

In an age of digital marketing, the legal sector has to work harder to maintain its customer retention rate as clients are more inclined to shop around. Back in the day, clients used to stick around for life. True, customer retention has always been the key to success in every industry. However, this development presents an excellent opportunity for law firms that can increase their retention rate.

Understanding your clients and their preferences is one of the best ways to grow a successful practice. Beyond that, a sound digital marketing strategy is one of the fastest. Here’s how.

By creating content that establishes trust, you can generate awareness for your brand and win more clients, not to mention stay fresh in the minds of existing clients.

Although many marketing decisions will depend on your firm’s practice area and size, as a rule, modern marketing is personal, and digital marketing prizes quality over quantity

Once you’ve determined your goals and budget, as well as understood your client persona and your own unique strengths, start implementing these five tips to really make your law firm stand out in a digital landscape.

1. Invest in your website’s UX

Your website is your firm’s home base. Therefore, clients’ experience navigating it should be your number one priority. An optimized website with a clean, responsive design will improve your firm’s authority online and help it to show up higher on a search engine results page (SERP).

Source: Unsplash.

Page load speed is essential, as is using alt text—short written descriptions of images for accessibility. It is equally important to optimize your website for the growing number of mobile devices consumers use (oh, how cellphones have changed our lives!).

Your site should include details on operating hours, giving clients plenty of ways to contact you with a simple call-to-action on every page.

A landing page may suffice if your site’s needs are simple. Website builders—Squarespace and Wix, for example—are a quick and easier option for many of the less technologically minded. To offer a seamless experience that is pleasing to clients, you can integrate your landing page with your other digital tools like a sentiment analysis tool, used for opinion mining.

2. Be accessible on social media platforms

It’s hard to overstate how important social media is for digital marketing. Social media levels the playing field. Every major channel holds the same potential for building your digital presence, regardless of your law firm’s size.

Facebook

The biggest audience, with billions of daily users. Its algorithm prioritizes content from friends and family, but most law firms still stand to benefit from being active on Facebook unless their practice area is pretty specialized.

Twitter

Twitter is an excellent source for legal news.

What it lacks in users relative to the other social media juggernauts, it makes up for by being home to legal influencers whom you can cultivate informal relationships with. This platform is especially useful for niche practice areas such as sports and entertainment law.

LinkedIn

This professional networking channel works well for firms that serve professionals or companies. Practice areas such as compliance and corporate law can benefit immensely from using LinkedIn. Get involved in online discussions and share industry stats, data, or trends to gain new followers and pique interest.

Test the waters of different social platforms’ algorithms to see what gets results. It’s absolutely vital to carve out a virtual presence on the channels where your target audience is most active. There, you can showcase your values and expertise and manage your firm’s reputation. Using social listening tools to track mentions can help your firm to take a proactive approach in responding to questions and reviews.

It’s not a bad idea to use an editorial calendar and leverage tools to schedule posts. But don’t let scheduling replace direct interaction on social media platforms with potential clients. Be mindful of following wrongheaded vanity metrics like impressions and “likes” too closely when measuring your social media marketing’s success.

3. Commit to SEO

You can follow a clear roadmap for a successful SEO strategy, but it takes time and effort.

Say a law firm partner interested in streamlining how they process new queries Googles “chatbot customer service.” The search engine will consider hundreds of factors before ranking the results. These factors include how well you’ve optimized your web design, whether you have well-written code, the quality of your site content, and how many good quality inbound links the website boasts.

How does one develop a winning SEO strategy? Start by working backwards, researching the keywords clients search for to find your legal advice. Then, begin to incorporate organic keywords relevant to your region and practice area to maximize your reach. You can create a keyword list with the keyword toolbox from Google or other free tools. It might also help to check the Google Search Console to discover which keywords are already driving qualified leads to your firm.

Effective SEO means building your audience around a few targeted content topics. Google wants to provide users with the best answers to the questions they’re asking, so make sure to craft content that provides the solutions your clients need to improve your rankings.

Besides your site’s content, focus on your off-page SEO via backlinking and local SEO, which you can do by creating a Google My Business page to get set up on relevant listings.

Source: Unsplash.

4. Leverage online ads

Results from your other marketing efforts typically take longer to bear fruit. While you’re busy working on client cases, you can drive traffic to your website quickly by investing in pay-per-click (PPC) ads. It’s a fantastic tool for launching a new service. However, exercise caution, since returns on these ads are usually speculative.

Take your time getting to know online advertising platform options such as Google Ads. Spend a little money and see what gets traction—if you begin to see results, you can always double down.

More than anything, it’s imperative to build ad campaigns that convey what your law firm brings to the table. Putting thought into designing a core message helps get clients to take the action you want. You might even perform a competitor analysis to uncover potential opportunities for your law firm—as well as to see what keywords other firms target and the unique selling propositions they offer. A clear understanding of the digital landscape you’re operating in is a top priority if you want to be heard through the noise.

Finally, you can measure your ads’ performance for valuable insights into your website traffic. Hook up your Google Ads Account to Google Analytics and make the necessary adjustments to spend your budget wisely.

5. Utilize email marketing

Email marketing is a cost-effective digital marketing method for law firms. Most of us are tired of our clogged inboxes, but they’re proof positive that this channel works. Not to mention, a list of email subscribers is a serious asset for your firm.

Start by thinking about the response you’re hoping to elicit. Perhaps your goal is to keep clients in your network—those who have ongoing legal requirements or upcoming cases—onside. Or maybe it’s promoting your legal services, lodging your firm at the forefront of clients’ minds when they need to entrust someone with their legal needs.

Whatever the case, the key to success is making it easy for clients to see the benefits they’ll get when they open your email.

Source: Unsplash.

Of course, it pays to know how to send email like a startup to drive your bottom line. But the takeaway here should be to share valuable or newsworthy content that recipients will find engaging, rather than overwhelming your email marketing list with promotional emails.

The trick is to think about the value that your message offers potential clients. Newsletters are having a moment, but webinars, industry articles, and other free resources are also ideal for building connections and nurturing leads.

Get clear from the beginning on what metric matters most, be it open rates, click rates, or conversions. That way, you can both shape your next email campaign and measure its effectiveness.

Play around with A/B testing to gain insight into the best times to send your emails and leverage analytics to dig deeper into your clients’ journey on your website. Then, segment your audience to target them with more resonant messages.

Ready for digital transformation?

Successful law firms are built on loyalty and trust. Digital marketing can help you gain recognition for your practice, acquire more clients, and much more.

Times are changing, and it’s important to be comfortable with that, and stay open to learning new things.

Start by coming up with a realistic plan, give readers something they value, and check your progress at regular intervals.

This article is related to a Showcase CLE program that took place at the ABA Business Law Section’s Hybrid Annual Meeting on Saturday, September 17, 2022. All CLE programs were recorded live and will be available for on-demand credit, free for Business Law Section members.

Ethics compliance and risk management in law firms and in-house legal departments start with issue spotting. Some issues—like “Who is the client?”—are fundamental to complying with legal ethics rules. Other such questions include:

• “What does the engagement letter say?”
• “What is the scope of work?”
• “Are there outside counsel guidelines?”
• “Have you conducted client due diligence?”
• “What are the client’s expectations with respect to protecting the confidentiality of their information?”
• “Have we updated our business continuity plan?”

This article and the accompanying program will tackle these issues and more.

To analyze an ethical conflict of interest situation, one must answer the age-old question: who is the client? An attorney-client relationship does not depend upon the existence of a signed engagement letter, nor is the identity of the client necessarily determined by who pays the lawyer; rather, one test for the existence of an attorney-client relationship is the subjective reasonable belief of the would-be client that the lawyer represents the client. Stated somewhat differently: if a person seeks legal advice from a lawyer; that person shares, in confidence, information about the matter; and the lawyer does not disavow an attorney-client relationship, it is likely that an attorney-client relationship has been formed.

Many lawyers give little thought to an engagement letter. The engagement letter is the contract between the lawyer and the client for services the lawyer is being engaged to provide. It identifies the parties to the contract, the scope of the services the lawyer will provide, and how much (or at what rate) the client will pay the lawyer for those services. Engagement letters may also contain other important terms, such as an “advance waiver” provision that allows the lawyer to be adverse to the client on unrelated matters. Clients, too, may have their own Outside Counsel Guidelines that establish terms and conditions for the representation, including the client’s expectation (and the lawyer’s corresponding agreement) as to what other entities are to be considered the client for conflict of interest purposes.

Due diligence on the potential client is also important. Not only can such due diligence identify the “bad actor” client or the “difficult client,” it can also identify the “slow pay” client or “no pay” client, (i.e., one for whom a retainer may be useful to help ensure that the lawyer is compensated for the services rendered).

General counsel and other risk managers also expect lawyers to have a strong grasp of the lawyer’s ethical obligations with respect to confidentiality. Under ABA Model Rule 1.6(a), “A lawyer shall not reveal information relating to the representation of a client unless the client gives informed consent, the disclosure is impliedly authorized in order to carry out the representation or the disclosure is permitted by paragraph (b).” Far broader than the attorney-client privilege evidentiary rule, the lawyer’s ethical obligation of confidentiality encompasses any information relating to the representation of the client, whatever its source.

Advances in technology and the proliferation of devices that may contain client information has prompted the ABA to impress upon lawyers the importance of appreciating the risks that technological advances present. In 2012, the ABA adopted a series of “Technology Amendments” to the ABA Model Rules and Comments that address this issue. First, Comment 8 to ABA Model Rule 1.1 regarding “Competence” was amended as follows: “To maintain the requisite knowledge and skill, a lawyer should keep abreast of changes in the law and its practice, including the benefits and risks associated with relevant technology, engage in continuing study and education and comply with all continuing legal education requirements to which the lawyer is subject.” Model R. Prof’l Conduct 1.1, cmt 8 (emphasis added). Perhaps more importantly, the ABA added Model Rule 1.6(c) to highlight a lawyer’s ethical obligations to take reasonable steps to prevent the unauthorized use or disclosure of confidential information. Model Rule 1.6(c) reads: “A lawyer shall make reasonable efforts to prevent the inadvertent or unauthorized disclosure of, or unauthorized access to, information relating to the representation of a client.”

As a result, lawyers should establish policies and procedures designed to help prevent the inadvertent disclosure of or unauthorized access to client information; train other lawyers and non-lawyer staff members on cyber-security issues; and communicate with clients about the confidentiality of their information. Lawyers should also have business continuity plans and incident response procedures in place should unexpected circumstances make it difficult to continue seamlessly representing a client. Regardless of whether those unexpected circumstances are a result of a natural disaster (or a once-a-century pandemic), or a “simple” cyber-attack, the lawyer and the law firm should have contingency plans in place for how to address the adversity.

This article is related to a Showcase CLE program that took place at the ABA Business Law Section’s Hybrid Annual Meeting on Thursday, September 15, 2022. The program, co-sponsored by the Government Affairs Practice Committee, featured Jason Abel, Partner, Steptoe & Johnson LLP, and former chief counsel for U.S. Senate Committee on Rules and Administration Chairman Charles Schumer; former U.S. Representative Charles F. Bass (NH 2^nd District), Senior Director, Greenberg Traurig, LLP; and Ryan Guthrie, Head of Government Affairs, Chipotle Mexican Grill. The program was chaired by Jonathan Bing, Shareholder, Government Law & Policy, Greenberg Traurig, LLP, and moderated by Caitlin Anderson, Associate, Harter Secrest & Emery LLP.

All CLE programs were recorded live and will be available for on-demand credit, free for Business Law Section members.

United States elections, especially over the past decade, have become increasingly tense events. The heightened political tensions, spilling over into such events like the January 6^th Capitol Attack, impact not only the fabric of our nation, but businesses operating in the country. The political temperature in the United States is high and is proving to be a challenge for businesses to navigate.

It is important for business lawyers to consider how the possible change of control of one or both houses of Congress will affect their personal and professional lives. Business lawyers will have to adjust their expectations and “asks” accordingly depending upon their clients’ and/or company’s interests, which may or may not be in vogue under a new regime. Building or reestablishing relationships with those newly in power will be key.

If the midterm elections promise one thing, it is some significant change in the makeup of Congress. Currently, the Democrats have a razor-thin majority in Congress. The Senate has a 50-50 split, with Vice President Kamala Harris providing Democrats with the tie-breaking vote. For the 2022 election, all 435 House seats and 35 of the 100 Senate seats are on the ballot. In the Senate, 21 of the 35 seats up for election this year are currently held by Republicans. There are seven total retirements, six of which are Republicans. In the House, 50 of the voting members in the chamber are retiring: 31 Democrats and 19 Republicans. Additionally, the 2022 election will be the first after the 2020 redistricting cycle. There has been significant litigation regarding state redistricting efforts, with more than 70 cases having been filed challenging congressional and legislative maps.

The uncertainty caused by the midterm elections—be it from the change in political party in control to the potential for violence in the leadup to and aftermath of the election—places stress on both individuals and companies. Internal company policies that may be in vogue with the current party in power may fall out of favor in Washington by 2023. Business lawyers will need to wrestle with the pressures of Washington and the expectations of company employees. For example, we have seen dozens of companies offer to pay for the travel expenses of employees, their spouses, and their partners to receive reproductive healthcare access if they live in states that have tightly restricted such access in the wake of Dobbs v. Jackson Women’s Health Organization. These policies have largely been embraced by employees and will likely be considered a major selling point to companies looking to attract and retain talent. On the other hand, these polices may cause companies to face scrutiny if even one chamber of Congress switches hands. In addition, if the chambers switch hands, business lawyers will need to establish and/or reestablish relationships with the officials and staff in power.

Even in the highly polarized political atmosphere that we currently live in, there will be areas for potential bipartisan compromise. We have seen recent bipartisan success with the bipartisan infrastructure bill and the gun safety bill. Further, there are certain things that Congress must pass in order to keep the government functional, including governmental funding and the debt ceiling. We may see bipartisan compromise surrounding immigration policies; the CHIPS Act of 2022 to strengthen semiconductor manufacturing, design, and research and improve national security; and certain privacy reforms. With the growing pressure on the U.S. labor market, Congress is being pushed by companies to expand immigration access. Business lawyers need to be prepared to potentially see changes in those areas and weigh in with concerns appropriately.

Beyond legislative activity, there is a high chance that if one or both of the chambers change hands, we will see an increase in Congressional investigational activities. Currently, we are seeing specific industries facing increased scrutiny, including big tech, oil and gas, healthcare and prescription drug manufacturers, and firearm manufacturers. If the House of Representatives switches hands, we may see investigations into which companies received funding from the American Rescue Plan Act of 2021. We may see clean energy companies come under an investigative magnifying glass. Further, despite the Supreme Court’s decision in West Virginia v. Environmental Protection Agency, we may see administrative agencies increase enforcement action and regulatory activity.

Overall, the American political atmosphere is rapidly changing. By the time this program is presented, some of the information contained herein will have already changed. It is imperative that a business lawyer working in this area stay abreast of each development so that they are properly advising their clients. The goal of this program is to provide the business lawyer with background and tips for how to keep current in this evolving world.