Industry Insight

Some things appear to be so simple that we assume (dangerously) that everyone “gets it.” Bear with me a moment. For lawyers, it is imperative to consistently and persistently cultivate, nurture and strengthen their relationships with their universal network; with clients, to receive more work; with referral sources, to receive more referrals; with prospects, to develop new work; and so on. Then why is it that a significant number of lawyers either have no system—formal or otherwise—for getting and staying in touch with these people or do a dismal job of staying connected? What Does “Getting And Staying In Touch” Mean? Again, a seemingly obvious question, but in my legal marketing practice of more than 20 years, I have yet to encounter more than a handful of lawyers who understand, as a practical matter, the fundamental principle of this phrase. Starting with the widely known statistic that it takes from 7-10 “touches” annually to stay “top-of-mind,” lawyers are well served to develop—often with the support of their legal secretary/assistant/marketing or IT department—a consolidated contact list including clients; industry and professional contacts; referral sources; prospects; friends and family; school classmates—law school, college, high school, etc.; co-workers and former coworkers; contacts from former clerkships; association contacts; community contacts; holiday card recipients; and so on. Though it may be an arduous administrative task to assemble all the business cards, old Rolodexes (yes, I’m showing my age), database printouts, etc., it is important to have all your contacts in one system. As I often relay to my clients, no list equals no connections, no communications with friends, peers, industry contacts and prospects, and, ultimately, no clients. Remember, we’re in the “relationship-building” business, and it becomes much more daunting to foster relationships if we don’t proactively get and stay in touch. While I could outline the precise steps lawyers need to take in assembling, organizing, categorizing and systemizing their contacts, I’ll spare the reader the administrative details in this article except to point out that once the task of gathering and entering all your contacts into a central system—even Microsoft Outlook does a decent job of this—is complete, lawyers would be sorely remiss if they did not “categorize” their contact names. What Does This Mean? For purposes of communicating regularly with your various constituents (clients, referral sources, prospects, etc.), no one communication message will be of interest to everyone on your contact list. That is to say, if you develop an e-newsletter or legal update on the importance of developing social media policies for the workplace and send it to your human resource clients, that topic may be of little interest to your charitable organization contacts unless they are involved in employment law issues. Basically, you want to tailor your message to an intended audience and there is no better way than to develop “categories” of contacts. When it comes to knowing how, when and how often to reach out, paramount on most attorneys’ minds is that they do not want to be perceived as “too pushy,” “aggressive” or otherwise annoying. Understandable. One principle I often convey to my clients is that most people are so involved in their own world, business, family, etc., you are not capturing 100 percent of their attention most of the time. In other words, to adequately “register” on your targets’ radar, there must be regular, consistent and persistent “touch points,” be they via e-mail, phone call, face-to-face contact (for which there is no substitute) and social media outlets, just to name a few. Check Motivations To build and grow a healthy practice, it is imperative to develop a system of getting and staying in touch but doing so with the appropriate mindset. In short, “It’s not about you.” Lawyers often ask me: “What is it that I’m saying to all these people?” Lawyers sometimes say, “I don’t want to bother these folks,” and express other such sentiments. My response is usually a variation on the theme of reaching out with a helpful spirit and with true intentions of checking in on your contacts’ business, seeing how they are making out with a recent transition or starting a new position, or a company move, etc. The universal sowing of seeds of goodwill will certainly reap only good things. Or, said another way, employing Newton’s Laws of Motion, “For every action, there is an equal and opposite reaction.” The more “goodwill” you put out, the more it will come back to you ... usually multifold. Time Considerations Attorneys are very busy people, often logging their time in six-minute increments. Where do they “find” the time to get and stay in touch with everyone and have the oft-needed downtime? Just today, I explained to a junior partner client that, if addressed productively, his contacts will soon be in his personal network circle. Think about it: We all have certain people with whom we enjoy sharing time. What if those special people could be the same people in your categorized contact lists? How cool would that be? Kill two birds with, well, you know. For the successful senior attorneys among us, many of you have worked most of your professional careers to create this very scenario. But it didn’t happen overnight. It took years, in some cases, one contact at a time. This brings me to my next point. Leverage Technology In our global Internet age, it has never been easier to “get and stay in contact” with a broad base of contacts via the technological tools available (e.g., LinkedIn, Facebook, Twitter, blogging). Not a technophile? No sweat; there are “people” who make a career of helping clients “connect.” One such job title is “certified social media specialist.” Net-Net In the growing competitive legal services arena, cultivating strong relationships is more important than ever before. As a successful lawyer and business owner, you must find a way to get and stay in touch with your desired audiences, targeted constituents and those folks who ultimately can help you grow a healthy practice. It is most easily done by: Committing to making it happen. Gaining buy-in from your support resources (internal and/or external) so everyone is on the same page. Developing a viable and workable system for gathering, categorizing and maintaining contacts on an ongoing basis. Scheduling dates/calendar regular communication with your contacts in addition to the other regular “touches.” Repeat. 

CALIFORNIA COURTS OF APPEAL Arbitration Suarez v. Superior Court of San Diego County (2024) _ Cal.App.5th _ , 2024 WL 256450: The Court of Appeal granted a writ petition directing the trial court to vacate its earlier order granting defendant’s motion to compel compliance with the existing arbitration order and denying plaintiff’s motion to vacate the stay, and to enter a new order granting plaintiff's motion and denying defendant’s motion. Plaintiff sued his former employer. Defendant filed a motion to compel arbitration and stay the legal action, which the trial court granted. Defendant, however, failed to pay its initial arbitration fee within 30 days as required by Code of Civil Procedure section 1281.97. The trial court ruled that defendant’s payment was timely because Code of Civil Procedure section 12 extended the payment date from January 1 to January 3, and also concluded that because the arbitration provider JAMS had emailed the invoice, Code of Civil Procedure section 1010.6 (a)(3)(B) extended the deadline 2 additional days to January 5, making defendant’s payment on January 4 timely. The Court of Appeal disagreed, holding that section 1010.6 did not apply to the e-mail transmission of a JAMS fee invoice. By its terms, the statute governs the service of documents in an action filed with the court. An arbitration proceeding is not an action filed with the court, and the invoice required by Code of Civil Procedure section 1281.97 is provided to the parties but is not served. (C.A. 4th, January 24, 2024.) Civil Procedure Di Martini v. Superior Court (2024) _ Cal.App.5th _ , 2024 WL 227975: The Court of Appeal granted a writ petition directing the trial court to grant petitioner’s motion to expunge a lis pendens. Petitioner agreed to sell real property to real party in interest Puga Gupta. Gupta won an arbitration award and filed a motion to confirm the award as a judgment. She also recorded a lis pendens. Petitioner filed a motion to expunge which the trial court granted because the action to confirm the award was not a real property claim and there was no request to quiet title. Gupta then filed a new action seeking to compel petitioner to complete the sale of the real property, and recorded another lis pendens. The trial court denied petitioner’s motion to expunge, concluding that Code of Civil Procedure section 405.36 only applies to successive lis pendens filed in the same action, and also concluding that Gupta established a prima facie case regarding the probable validity of a real property claim. The Court of Appeal disagreed, concluding that under section 405.36, because the Gupta lis pendens had been expunged in a prior related proceeding, Gupta was required to seek court permission before recording her lis pendens and the trial court erred in denying the motion to expunge. The trial court erred by applying a prima facie standard for determining whether Gupta established the probable validity of her real property claim. A trial court must order a lis pendens be expunged if the claimant fails to establish by a preponderance of the evidence the probable validity of the real property claim. (§ 405.32.) (C.A. 1st, January 22, 2024.) Insurance Myasnyankin v. Nationwide Mutual Ins. Co. (2024) _ Cal.App.5th _ , 2024 WL 340287: The Court of Appeal, in a consolidated action involving two appeals, affirmed the trial court’s order denying defendant’s demurrer to plaintiff’s complaint seeking a declaration of his rights regarding the video recording of an examination under oath (EUO) in Insurance Code section 2071.1 (a)(4), and reversed the trial court’s order denying plaintiff’s motion for attorney fees under Code of Civil Procedure section 1021.5. Defendant carrier demanded an EUO, but objected when plaintiff wanted to video defendant’s attorneys and claims representatives during the examination. Defendant refused to proceed with the EUO, asserting section 2071.1(a)(4) only permitted plaintiff to video record himself. Defendant also threatened to deny plaintiff’s claim unless he agreed to proceed with the EUO. Plaintiff then sued defendant seeking a declaration of his rights under section 2071.1. The Court of Appeal, ruling on an issue of first impression, held that the plain language, statutory framework, and legislative history all support a construction of section 2071.1(a)(4) granting insureds the right to make a video recording of the insurer’s representatives at an EUO. The Court of Appeal concluded that the trial court erred in denying plaintiff’s motion for attorney fees under Code of Civil Procedure section 1021.5, and remanded for the trial court to determine the amount of fees to be awarded. (C.A. 1st, January 30, 2024.) Torts Gilead Tenofovir Case s (2024) _ Cal.App.5th _ , 2024 WL 94462: The Court of Appeal affirmed in part, and denied in part, a writ petition seeking to overturn the trial court’s order denying defendant’s motion for summary judgment or summary adjudication. The 24,000 plaintiffs in this coordinated proceeding alleged they suffered skeletal and kidney damage or other adverse effects from taking defendant’s drug tenofovir disoproxil fumarate (TDF) to treat HIV/AIDS. Plaintiffs did not allege that TDF was defective. Instead they alleged that defendant was negligent due to its alleged decision to defer development of another drug tenofovir alafenamide fumarate (TAF), which had fewer adverse effects, to maximize its TDF profits. Plaintiffs also alleged a claim for fraudulent concealment, reasoning that defendant had a duty to disclose information about TAF to users of TDF. The Court of Appeal affirmed the trial court’s denial of the summary judgment as to negligence. It concluded that the legal duty of a manufacturer to exercise reasonable care can, in appropriate circumstances, extend beyond the duty not to market a defective product. Analyzing duty under Rowland v. Christian (1968) 69 Cal.2d 108, the Court of Appeal concluded that it was possible that plaintiffs could assert a claim for negligence, without proof of a defect, as to decisions the drug manufacturer made after obtaining the results of Phase III clinical trials of the alternative drug. However, the factual record before the Court of Appeal was not sufficient to determine whether or not such a duty had been breached. The Court of Appeal reversed the trial court’s denial of summary judgment on fraudulent concealment, concluding that defendant’s duty to plaintiffs did not extend to the disclosure of information about TAF. (C.A. 1st, January 9, 2024.) Perez v. Oakdale Irrigation Dist. (2024) _ Cal.App.5th _ , 2023 WL 9113961: The Court of Appeal affirmed the trial court’s order granting defendant’s motion for summary judgment in plaintiffs’ action for the wrongful death of decedents Hector Evangelista (husband and father) and Giselle Evangelista (daughter and sister). Decedents perished after a collision left their vehicle overturned in a drain where they drowned. Plaintiffs sued defendant on a theory the water level in the drain was, or resulted from, a dangerous condition of public property. The trial court granted summary judgment based upon the canal immunity in Government Code section 831.8 (b). The Court of Appeal affirmed, concluding that subdivision (b) only places a single limitation on state/irrigation district immunity for injuries caused by the condition of canals, conduits, or drains; immunity does not apply when the person injured was using the property for a purpose intended by the district or state. (C.A. 5th, filed December 20, 2023, published January 8, 2024.)

Deciding where to place a law firm is an important decision. From the size of the space to the cost of the rent, a law firm must make many important decisions. Law firms also have to consider the aesthetics of the office. Depending on the types of clients a law firm is trying to acquire, a law firm has to consider the appearance of the space. For example, higher-end office space may be necessary if the law firm is trying to attract high-net-worth clients. However, it may be unnecessary if a law firm is trying to obtain business from clients who may not be high-net-worth individuals in a volume-based area of the law, like traffic, bankruptcy, etc. Is Your Office Near Your Competition? One consideration many law firms fail to consider is where their competition is located. For example, many law firms may seek office space in the same building as their competition. If not in the same building, many lawyers might be just a block or a few short blocks from other law firms in the same area of law. Law firms can engage in this strategy because lawyers often congregate in the same part of town. Usually, it might be next to a courthouse or in the business district. Lawyers can often socialize with other lawyers off the clock at bar associations or social events. Being near other lawyers can benefit many law firms in these ways. But it might be wise for many lawyers to consider a different strategy. When looking at office space, it might be wise to pick a building where no other law firm practicing in the same area of law is in that building. To take that concept further, it might make sense not to be within blocks of other law firms in the same area of law. Thus, instead of staying in the crowd, many law firms might consider spreading out and creating some geographic space between where they are and their competition. Why Would a Law Firm Want to Be Away from Their Competition? There are numerous reasons for situating your law firm away from the competition. However, one obvious reason is that a potential client can shop between several attorneys within the same office building or a few short blocks, making it harder to get new business. In other words, a potential client could engage in multiple initial consultations on the same day if they see numerous lawyers within the same building. When lawyers are in the same building in the same area of the law, it becomes a lot like a shopping mall of lawyers. The potential clients can literally window-shop at various law firms–much like a person who window-shops at multiple clothing stores in the mall. As many mall store owners can attest, many walk in and out of their stores without buying anything. On the other hand, if a law firm is spread out from their competition and outside of the crowd, the window-shopping concern becomes less significant. Potential clients coming to the law firm must be very interested in that particular law firm. Otherwise, they would not have made the trip to the law office. A law firm also does not have to be as price-conscious when they are not in the same building as their competition. For example, a law firm in the same building as its competition probably has to ensure its rates are comparable to others in that building. Otherwise, it can make it hard to compete with them. Further, it is also harder to lose staff and personnel to their competition when the law firm is not in the same building as their competition. When a law firm is in the same building, it is almost effortless for a competitor to use recruiting techniques to siphon away your key employees. Yes, a law firm cannot be so far off the grid that potential clients do not want to go to their location. But at the same time, being in the same building as many competitors may be something a law firm should avoid when selecting office space.

CALIFORNIA COURTS OF APPEAL Arbitration Folke v. Pulliam (2023) _ Cal.App.5th Supp. _ , 2023 WL 7179443: The Court of Appeal reversed the trial court’s order denying plaintiff’s petition to vacate the arbitration award—the award provided that defendant was entitled to recover all fees paid to plaintiff—in an attorney fee dispute under the Mandatory Fee Arbitration Act (MFAA; Bus. & Prof. Code, 6200 et seq.) The trial court denied the petition, concluding it lacked jurisdiction because plaintiff had not timely served the petition to vacate within 100 days of service of the arbitration award as required by Code of Civil Procedure, section 1288.2. The Appellate Department disagreed, concluding that under Law Finance Group, LLC v. Key (2023) 14 Cal.5th 932, the failure to timely serve the petition to vacate was not jurisdictional, and plaintiff’s request for equitable relief should have been considered by the trial court. Plaintiff requested equitable relief from the untimely service of his petition based upon multiple and unsuccessful attempts of service, and also based on defendant having had actual notice of the action as evidenced by her opposition to the petition. The case was remanded to the trial court for it to take evidence and assess the three factors for equitable tolling of a statute of limitations: (1) timely notice to the opposing party, (2) lack of prejudice to the opposing party, and (3) reasonable and good faith conduct by the moving party. (Appellate Division of the Los Angeles Superior Court, October 6, 2023.) Attorney Fees Zarate v. McDaniel (2023) _ Cal.App.5th _ , 2023 WL 8182862: The Court of Appeal reversed the trial court’s order awarding plaintiffs $13,000 in attorney fees and costs after it concluded that defendant’s anti-SLAPP motion to strike plaintiffs’ complaint was frivolous. The Court of Appeal, however, reversed the attorney fee award because plaintiffs did not comply with Code of Civil Procedure section 128.5(f)’s safe harbor provision which required them to serve their sanction motion on defendant before it was filed with the court, and give defendant 21 days to correct or withdraw the challenged anti-SLAPP motion. Plaintiffs did not do this. Instead they waited to file their sanctions motion until after the court had denied the anti-SLAPP motion. Under these facts, Plaintiffs were not entitled to attorney fees and the trial court was directed to deny plaintiffs’ request for attorney fees and costs. (C.A. 2nd, November 27, 2023.) Snoeck v. Exak Time Innovations (2023) _ Cal.App.5th _ , 2023 WL 7014096: The Court of Appeal affirmed the trial court’s order awarding plaintiff $686,795.62 in attorney fees after plaintiff obtained a verdict, following a jury trial, of $130,088 in his disability discrimination action. Plaintiff requested an award of $2,089,272.50 in attorney fees. The trial court applied a .4 negative multiplier to its $1,144,659.36 adjusted lodestar calculation to account for plaintiff’s counsel’s lack of civility throughout the entire course of the litigation, awarding fees totaling $686,795.62. The Court of Appeal held that a trial court may consider an attorney’s pervasive incivility in determining the reasonableness of the requested fees, and may apply, in its discretion, a positive or negative multiplier to adjust the lodestar calculation (a reasonable rate times a reasonable number of hours) to account for various factors including attorney skill. The record in this case amply supported the trial court’s finding that plaintiff’s counsel was repeatedly, and apparently intentionally, uncivil to defense counsel, and to the court, throughout the litigation. (C.A. 2nd, filed October 2, 2023, published October 25, 2023.) Civil Procedure Vargas v. Gallizzi (2023) _ Cal.App.5th _ , 2023 WL 6781376: The Court of Appeal affirmed in part, and reversed in part, the trial court’s post-trial orders, following a jury trial in a personal injury case where the jury awarded plaintiffs $15,125 in damages. The trial court denied plaintiffs’ request for $350,000 in attorney fees and costs pursuant to Code of Civil Procedure section 2033.420 based on defendant’s failure to admit requests for admission regarding the medical records, a timeline of treatment, and causation, and awarded defendant $28,547.66 in costs pursuant to Code of Civil Procedure section 998. The Court of Appeal disagreed, concluding that the trial court erred by denying plaintiffs’ motion for expenses pursuant to section 2033.420. Code of Civil Procedure section 2033.420(a), provides expenses shall be awarded if the party requesting the admission “thereafter proves the genuineness of that document or the truth of that matter” and the statute contains no requirement the proof be made at trial. During a pretrial hearing the trial court ruled the medical records would be considered business records and plaintiffs therefore proved the matter. The trial court erred by finding plaintiffs were precluded from receiving cost-of-proof expenses because defendant, after the pre-trial ruling, had not disputed the medical records’ status as business records at trial. Having found plaintiffs proved the medical records were business records, section 2033.420 required expenses be awarded unless one of the exceptions was established. The Court of Appeal concluded that none were. Although plaintiffs’ counsel had failed to establish the medical records were business records in a prior trial, defendant had no reasonably held good faith belief she could prevail on the merits of the business records issue. The Court of Appeal affirmed the trial court’s award of costs to defendant section 998. The case was remanded for the trial court to determine the amount to which plaintiffs were entitled for proving the medical records were business records. (C.A. 2nd, October 13, 2023.) Employment Arce v. The Ensign Group, Inc. (2023) _ Cal.App.5th _ , 2023 WL 6890702: The Court of Appeal reversed the trial court’s order granting defendants’ motion for summary judgment in plaintiff’s action under the Labor Code Private Attorneys General Act of 2004 (PAGA; Lab. Code, § 2698 et seq.). The trial court granted summary judgment concluding that plaintiff had not offered any competent proof that one or more cognizable Labor Code violations occurred during her employment in connection with her right to meal and rest periods. The Court of Appeal disagreed, holding that the trial court erred in granting summary judgment because defendants did not meet their initial burden of establishing plaintiff’s lack of standing. It was not enough for defendants to show that plaintiff had not been denied a meal or rest break during the year before she submitted her PAGA notice. They also needed to establish that plaintiff had been paid all outstanding meal and rest premiums—either before or after her termination. Defendants needed to provide evidence that either (1) plaintiff had never suffered a Labor Code violation, and thus, no premiums were due upon her termination, or (2) they paid all premiums at the time of the violations, so no additional monies were due plaintiff upon her termination. (C.A. 2nd, filed September 19, 2023, published October 19, 2023.) Landlord – Tenant Castaic Studios v. Wonderland Studios (2023) _ Cal.App.5th _ , 2023 WL 7592532: The Court of Appeal affirmed the trial court’s order sustaining defendant’s demurrer, without leave to amend, to plaintiff’s unlawful detainer action. Plaintiff and defendant entered into an agreement where plaintiff granted defendant the “exclusive right to use” certain areas of its commercial property. The agreement specified that it was a “license agreement,” as opposed to a lease, with plaintiff retaining legal possession and control of the premises. The agreement was to be governed by the contract laws and not by the landlord tenant laws. After defendant defaulted, plaintiff filed an unlawful detainer action seeking possession of the property. The trial court properly sustained defendant’s demurrer without leave to amend because plaintiff had waived its right to pursue the remedy of unlawful detainer. (C.A. 2nd, November 15, 2023.) Torts Brancati v. Cachuma Village, LLC (2023) _ Cal.App.5th _ , 2023 WL 6803375: The Court of Appeal reversed the trial court’s order granting defendant’s motion in limine to disqualify plaintiff’s medical expert in her action for personal injuries due to toxic mold exposure. The trial court granted defendant’s motion, concluding that plaintiff’s medical expert was not qualified to testify on whether toxic mold exposure was the medical causation of plaintiff’s illnesses. The Court of Appeal disagreed. Because the medical expert was qualified and his opinion was based on facts and a differential diagnosis, the trial court erred in excluding his expert opinion testimony. (C.A. 2nd, October 16, 2023.) Jones v. Regents of the University of California (2023) _ Cal.App.5th _ , 2023 WL 8229170: The Court of Appeal affirmed the trial court’s order granting defendant’s motion for summary judgment in plaintiff’s action for personal injuries. Plaintiffs sued defendant after plaintiff Rose Jones (Rose), an employee of defendant, was injured while riding her bike on University grounds on her way home from work. The trial court properly granted the motion for summary judgment. Rose’s exclusive remedy was workers’ compensation because the “premises line” rule extended her course of employment until she left the University’s premises. (C.A. 4th, filed October 31, 2023, published November 28, 2023.) n

A U.S. District Court in Illinois dismissed a case by the Chicago-based law firm MillerKing LLC against the so-called “robot lawyer” DoNotPay, Inc. (DNP). It found that MillerKing did not have standing to bring false advertising, false association and other claims against DNP, because it did not sustain concrete injuries due to DNP’s conduct. The case, pitting a traditional firm against an AI-driven legal service provider, raises questions about the role of artificial intelligence in the legal domain. DNP offers an online, subscription-based service that it claims will help consumers “fight corporations, beat bureaucracy and sue anyone at the press of a button.” It offers services related to marriage annulment, speeding ticket appeals, timeshare cancellation, breach of contract, defamation, copyright, child support, restraining orders, and trusts—as well as standardized legal documents. However, DNP is not licensed to practice law and does not employ licensed attorneys. Rather, it uses artificial intelligence to provide its services. MillerKing is a traditional law firm. In the lawsuit against DNP, it sought to bring a class action on behalf of “all law firms in the United States in existence during the Class Period,” with claims for: False Association under the Lanham Act, 15 U.S.C. § 1125(a)(1)(A), alleging that DNP made representations creating a false impression that it was affiliated with licensed attorneys and approved by the state bar; False Advertising under the Lanham Act, 15 U.S.C. § 1125(a)(1)(B), alleging that DNP falsely represented that its services were offered by a lawyer, which influenced the purchasing decisions of DNP’s customers; Violations of the Illinois Uniform Deceptive Trade Practices Act, 815 ILCS 510/1 et seq., alleging that DNP’s misleading statements misrepresented the affiliation, sponsorship, and quality of its services; and Unauthorized Practice of Law under the Illinois Attorney Act, 705 ILCS 205/1, and the Corporation Practice of Law Prohibition Act, 205 ILCS 220/1 and 705 ILCS 220/2. The case raises interesting questions about the nature of False Association and False Advertising claims under the Lanham Act. It also raised broader questions about how AI-driven services like DNP fit into the legal landscape, particularly when they operate in a manner similar to traditional legal services. Yet, the decision came down to a simple issue: Article III standing. As the opinion explained, Article III of the U.S. Constitution limits federal courts to resolving “cases” and “controversies,” meaning “actual and concrete disputes [that] … have direct consequences on the parties involved.” According to the court, the key is that the plaintiff must have a “personal stake” in the outcome of the suit. In particular, the plaintiff must establish that it suffered a concrete, particularized, and actual or imminent injury caused by the defendant that could be redressed by judicial relief. In the suit against DNP, MillerKing claimed to have injuries resulting from a “direct diversion of clients from [itself] to DNP” and “a lessening of the goodwill associated with [the firm] and [its] goods and services.” It further claimed that allowing DNP to practice law without the requisite experience, competence, and licensure would harm citizens in need of legal services, and also infringe the rights of law firms that employ licensed attorneys. The court found these arguments unpersuasive. It said that MillerKing “has not alleged any lost revenue or added expenditures as a result of DNP’s conduct, nor has it alleged that any client or prospective client has withheld business, has considered withholding business, or has even heard of DNP.” Further, the court found that MillerKing “has not presented facts to support its claim that DNP has hurt its reputation or lessened its goodwill.” While MillerKing claimed that DNP had provided poor customer service and caused adverse legal consequences for its customers, it didn’t show that such failures “were imputed to MillerKing specifically or lawyers generally.” The court dismissed the suit against DNP without prejudice, giving MillerKing an opportunity to amend its pleadings and try again. Regardless of how MillerKing chooses to proceed, the case has significant implications for the legal and tech industries: Regulatory Challenges. It highlights the need for regulations regarding AI in legal services, particularly with respect to consumer protection, ethical standards and the unauthorized practice of law. Competitive Landscape. Law firms must consider the growing competition from tech-driven legal service providers and the need to adapt to a changing marketplace. Technological Innovation and Legal Ethics. Balancing technological innovation with the ethical practice of law is a critical challenge, and this case serves as a reminder of the balance between embracing new technologies and adhering to the established legal framework. As AI continues to advance, the legal community must grapple with these emerging challenges, ensuring that innovation does not outpace the ethical and legal standards that define the profession and protect consumers.

From startups to multigenerational enterprises, there’s considerable opportunity for lawyers to serve small businesses—but little attention given to the demographic. Much of the legal press is concentrated on the largest corporations, but consider this: The average small business has 13 potential legal problems every year, and there are 33 million small businesses operating in the United States. Eighty-seven percent of those small businesses do not have in-house lawyers—meaning more than potentially 373 million matters could be outsourced to law firms every year. How can you best connect with and serve these potential clients? While we found no shortage of surveys on in-house counsel or individual consumers, we struggled to find reliable intelligence on how small businesses hire lawyers—so we created our own. Firesign conducted a survey of 100 small business owners and leaders to learn about their buying behavior when it comes to lawyers and law firms. In this article, we will look at how to reach small businesses before they have a specific legal need. Before a Legal Need It’s important to understand that small business operators are unlikely to engage with you before they need you. They are, after all, stressed and pressed: according to a survey by Entrepreneur, more than 40 percent of founders work more than 50 hours a week, and 41 percent feel stressed “pretty much every day,” with “never a dull moment.” They are not active consumers of legal news: Only 20 percent of respondents said they “frequently” educate themselves on legal issues, and 25 percent said they “never” do. They are unlikely to come to your conferences or webinars: Only 4 percent said they attend law firm educational events. So how do you reach them? Traditional media. Nearly half—46 percent—said they learn about legal developments through trade publications that cover their industry; the same percentage said they read the general business press. Law firm content. Thirty-seven percent will read law firm content on a law firm website or through direct communication, such as a client alert. By contrast, only 4 percent use legal news aggregators, showing these tools are best for targeting other lawyers, from in-house counsel to referral sources. Social media. About one-third—29 percent—look to platforms like LinkedIn to keep them abreast of relevant legal news. Interestingly, this order of preference is aligned with perceived reliability: Not only are news articles the most consumed, they are seen as the most trustworthy. Specifically, at 29 percent, trade media was seen as the most reliable news source. Law firm content followed at 26 percent Despite its popularity, content on general social media feeds was only viewed as reliable by 6 percent. We also asked small business respondents to provide any additional outlets they turned to for legal updates, and it’s worth noting that trade associations were mentioned multiple times. Key Takeaways: Marketing Before a Legal Need Do: Pursue quotes and bylined articles in the media, especially relevant trade publications. Post content on LinkedIn—and expect better circulation on lawyers’ personal posts versus the general firm account. Seek opportunities to share your expertise with trade associations, which enjoy high levels of small business trust. Explore opportunities to speak and write for them. Don’t: Assume small business operators are up to speed on relevant legal news. Provide context and recaps in your content. Rely on events to reach this demographic; they are too busy. Try to reach small business operators through legal news sites or syndicators. From Taxes to Torts There’s considerable opportunity for law firms to serve the nation’s 33 million small businesses, a demographic with the potential to generate upwards of 420 million legal matters each year. But this group doesn’t behave as consumers or corporations do, and their engagement varies depending on their buying stage. Firesign surveyed 100 small business owners and leaders to learn how they scout and select lawyers. In the first part of our series, we looked at how they interacted with lawyers and law firms before they had a specific legal need. In this installment, we’ll explore what happens after that need arises. When a problem (or opportunity) surfaces that merits lawyer involvement, where do small businesses turn? To their networks, by a wide margin: 63 percent of small business scouting lawyers will ask colleagues and friends for a referral, and 31 percent will ask another lawyer. These numbers absolutely dwarf other avenues; the next-highest response, “Searching for the relevant subject matter, i.e. ‘employment lawyer’,” was only used by 9 percent. It’s conventional wisdom, but a key point all the same: Small business clients are three to seven times more likely to seek lawyers by referrals than any other tactic. But they may not make their decisions based on referrals alone; in fact, a large number of small business operators conduct due diligence on the lawyer recommended to them. More than half (55 percent) review search results for the lawyer’s name; 44 percent review search results for the lawyer’s firm. And a note of caution: A not-insignificant amount (18 percent) review the lawyer’s social media profiles. With this in mind, schedule a quarterly review of your LinkedIn page: Is it complete, accurate and relevant to your audience? Does it provide your contact information? At the same time, review the privacy settings on more informal social channels, such as X, Instagram and Facebook, to ensure new acquaintances only see what you want them to. When it comes to establishing credibility with this audience, the most critical and trusted tool is the lawyer biography, used by 92 percent of small business operators in their selection process. Among the other valued tools: online reviews (83 percent) and law firm content (72 percent). It’s interesting to note the shifting role that law firm content plays as a small business moves along its legal buying journey. Before an incident occurs, recall that 37 percent of these clients will browse law firm content. After, law firm content is cited as helpful to lawyer selection by nearly double that amount. This should be taken into account for law firm marketing strategies; what topics and types of content can help you close? For these individuals—potential small business clients with a specific need, actively shopping for a solution—the best content is practical. Instead of publishing Supreme Court updates or broad explorations of a given subject, think pragmatically, and focus on what can help them understand the process. This can include Frequently Asked Questions, definitions of relevant legal terms, a list of documents a client would need to get started, or a general timeline. Assuming due diligence goes well, nearly half—46 percent—of small business operators will consider just one lawyer for their problem. And they act fast, with 60 percent hiring a lawyer within one week. Entrepreneurs move fast—and they want fast solutions to their problems. Law firms that are unresponsive or overly bureaucratic with Intake can risk losing this business to a faster, nimbler rival. What Marketing Strategies Can Help You Win the Business of Small Business? Cultivate strong referral networks (and practice good referral karma). Make sure referrals are a key component of any coaching or business development training curriculum. Be vigilant on your online profiles, from your biography to social media pages. Have a proactive strategy to collect positive reviews, and keep an eye on sites like Avvo to address negative reviews. Speed-test your intake process to ensure you match your prospects’ sense of urgency.

CALIFORNIA SUPREME COURT Employment Adolph v. Uber Technologies, Inc. (2023) _ Cal.5th _ , 2023 WL 4553702: The California Supreme Court ruled that where plaintiff has brought a PAGA action comprising individual and non-individual claims, an order compelling arbitration of the individual claims does not strip the plaintiff of standing as an aggrieved employee to litigate claims on behalf of other employees under PAGA. To have PAGA standing a plaintiff must be an “aggrieved employee”, someone (1) who was employed by the alleged violator and (2) against whom one or more of the alleged violations was committed. (July 17, 2023.) CALIFORNIA COURTS OF APPEAL Civil Procedure Braugh v. Dow (2023) _ Cal.App.5th _ , 2023 WL 4312617: The Court of Appeal affirmed the trial court’s order granting defendant’s motion for relief from a default and default judgment in a partition action. Plaintiff, a lawyer, sued her former partner alleging several causes of action, including partition of real property they owned jointly. Plaintiff personally served defendant. Because she was a party, the service was not effective and the default and later default judgment were void. The trial court properly granted defendant’s motion to set aside the default and default judgment. (C.A. 2nd, July 3, 2023.) Park v. Nazari (2023) _ Cal.App.5th _ , 2023 WL 4729968: The Court of Appeal affirmed the trial court’s denial of defendants’ anti-SLAPP motion to strike (Code of Civil Procedure section 425.16) plaintiff’s complaint against defendants and their attorney for fraudulent transfer, quiet title, and declaratory relief. Defendants’ anti-SLAPP motion sought to strike the complaint in its entirety. During the motion hearing, defendants’ counsel suggested the trial court could strike some, but not all of the allegations in the complaint. The trial court properly denied defendants’ anti-SLAPP motion. Because defendants moved to strike only the entire complaint, and did not identify in their motion individual claims or allegations that should be stricken even if the entire complaint were not, the trial court was permitted to deny the anti-SLAPP motion once it concluded—correctly—that the complaint presented at least one claim that did not arise from anti-SLAPP protected conduct. (C.A. 2nd, July 25, 2023.) Employment Thai v. International Business Machines Corp. (2023) _ Cal.App.5th _ , 2023 WL 4443934: The Court of Appeal reversed the trial court’s order sustaining defendant’s demurrer, without leave to amend, to plaintiffs’ complaint alleging violation of California’s Private Attorneys General Act (PAGA; Labor Code § 2699 et seq.), section 2802(a) which requires an employer to reimburse an employee “for all necessary expenditures . . . incurred by the employee in direct consequence of the discharge of his or her duties.” Plaintiffs alleged that after Governor Newsom’s COVID-19 stay-at-home order defendant failed to reimburse plaintiffs for the expenses necessarily incurred to perform their work duties from home. The trial court sustained the demurrer, concluding that the Governor’s order was an intervening cause of the work-from-home expenses that absolved defendant of liability under section 2802. The Court of Appeal disagreed, concluding that the plain language of section 2802(a) flatly requires the employer to reimburse an employee for all expenses that are a “direct consequence of the discharge of [the employee’s] duties.” Under the statutory language, the obligation does not turn on whether the employer’s order was the proximate cause of the expenses; it turns on whether the expenses were actually due to performance of the employee’s duties. (C.A. 1st, July 11, 2023.) Torts Camacho v. JLG Industries (2023) _ Cal.App.5th _ , 2023 WL 4618687: The Court of Appeal reversed the trial court’s order granting defendant’s motion for directed verdict in plaintiffs’ action alleging strict products liability, failure to warn, and related claims against defendant after plaintiff Raul Camacho (Raul) fell out of a scissor lift manufactured by defendant when he was installing glass panels. During the jury trial plaintiffs alleged the scissor lift as designed with a chain across the entrance invited human error, and the foreseeable risk of harm could have been avoided if defendant had marketed only its alternative design with a self-closing gate, and also alleged there was a defective warning label on the lift. At the close of evidence, defendant moved for a directed verdict. The trial court granted the motion, ruling that in order to show causation plaintiffs needed to prove if the chain had been latched, the accident would have happened anyway. The Court of Appeal disagreed, finding that plaintiffs made a prima facie showing of causation. To overcome the directed verdict motion, plaintiffs only needed to make a prima facie showing that the scissor lift as designed with a chain was a substantial factor in causing Raul’s injuries, because the alternative design with the self-closing gate would have prevented his fall. Under a risk-benefit test, it would then be defendant’s burden to prove the benefits of the chain outweighed the risks. (C.A. 4th, July 19, 2023.) n

CALIFORNIA SUPREME COURT Employment Adolph v. Uber Technologies, Inc. (2023) _ Cal.5th _ , 2023 WL 4553702: The California Supreme Court ruled that where plaintiff has brought a PAGA action comprising individual and non-individual claims, an order compelling arbitration of the individual claims does not strip the plaintiff of standing as an aggrieved employee to litigate claims on behalf of other employees under PAGA. To have PAGA standing a plaintiff must be an “aggrieved employee”, someone (1) who was employed by the alleged violator and (2) against whom one or more of the alleged violations was committed. (July 17, 2023.) CALIFORNIA COURTS OF APPEAL Civil Procedure Braugh v. Dow (2023) _ Cal.App.5th _ , 2023 WL 4312617: The Court of Appeal affirmed the trial court’s order granting defendant’s motion for relief from a default and default judgment in a partition action. Plaintiff, a lawyer, sued her former partner alleging several causes of action, including partition of real property they owned jointly. Plaintiff personally served defendant. Because she was a party, the service was not effective and the default and later default judgment were void. The trial court properly granted defendant’s motion to set aside the default and default judgment. (C.A. 2nd, July 3, 2023.) Park v. Nazari (2023) _ Cal.App.5th _ , 2023 WL 4729968: The Court of Appeal affirmed the trial court’s denial of defendants’ anti-SLAPP motion to strike (Code of Civil Procedure section 425.16) plaintiff’s complaint against defendants and their attorney for fraudulent transfer, quiet title, and declaratory relief. Defendants’ anti-SLAPP motion sought to strike the complaint in its entirety. During the motion hearing, defendants’ counsel suggested the trial court could strike some, but not all of the allegations in the complaint. The trial court properly denied defendants’ anti-SLAPP motion. Because defendants moved to strike only the entire complaint, and did not identify in their motion individual claims or allegations that should be stricken even if the entire complaint were not, the trial court was permitted to deny the anti-SLAPP motion once it concluded—correctly—that the complaint presented at least one claim that did not arise from anti-SLAPP protected conduct. (C.A. 2nd, July 25, 2023.) Employment Thai v. International Business Machines Corp. (2023) _ Cal.App.5th _ , 2023 WL 4443934: The Court of Appeal reversed the trial court’s order sustaining defendant’s demurrer, without leave to amend, to plaintiffs’ complaint alleging violation of California’s Private Attorneys General Act (PAGA; Labor Code § 2699 et seq.), section 2802(a) which requires an employer to reimburse an employee “for all necessary expenditures . . . incurred by the employee in direct consequence of the discharge of his or her duties.” Plaintiffs alleged that after Governor Newsom’s COVID-19 stay-at-home order defendant failed to reimburse plaintiffs for the expenses necessarily incurred to perform their work duties from home. The trial court sustained the demurrer, concluding that the Governor’s order was an intervening cause of the work-from-home expenses that absolved defendant of liability under section 2802. The Court of Appeal disagreed, concluding that the plain language of section 2802(a) flatly requires the employer to reimburse an employee for all expenses that are a “direct consequence of the discharge of [the employee’s] duties.” Under the statutory language, the obligation does not turn on whether the employer’s order was the proximate cause of the expenses; it turns on whether the expenses were actually due to performance of the employee’s duties. (C.A. 1st, July 11, 2023.) Torts Camacho v. JLG Industries (2023) _ Cal.App.5th _ , 2023 WL 4618687: The Court of Appeal reversed the trial court’s order granting defendant’s motion for directed verdict in plaintiffs’ action alleging strict products liability, failure to warn, and related claims against defendant after plaintiff Raul Camacho (Raul) fell out of a scissor lift manufactured by defendant when he was installing glass panels. During the jury trial plaintiffs alleged the scissor lift as designed with a chain across the entrance invited human error, and the foreseeable risk of harm could have been avoided if defendant had marketed only its alternative design with a self-closing gate, and also alleged there was a defective warning label on the lift. At the close of evidence, defendant moved for a directed verdict. The trial court granted the motion, ruling that in order to show causation plaintiffs needed to prove if the chain had been latched, the accident would have happened anyway. The Court of Appeal disagreed, finding that plaintiffs made a prima facie showing of causation. To overcome the directed verdict motion, plaintiffs only needed to make a prima facie showing that the scissor lift as designed with a chain was a substantial factor in causing Raul’s injuries, because the alternative design with the self-closing gate would have prevented his fall. Under a risk-benefit test, it would then be defendant’s burden to prove the benefits of the chain outweighed the risks. (C.A. 4th, July 19, 2023.) n

It’s never easy to make accurate predictions about what we might expect to see in the workplace in the coming year. After all, at the start of 2020, no one could have predicted COVID-19. None of us had heard the phrase “the Great Resignation” in January 2021. And a year ago at this time, “quiet quitting” wasn’t on anyone’s radar. Despite the ever-present uncertainty, we asked our firm’s thought leaders to develop their best predictions for the coming year. You can read our entire FP Workplace Law 2023 Forecast online, or you can dive into this Insight for our top 10 predictions as pulled from our report. 1. Overtime Regulations Will Be Released Now that midterm elections are in the rearview mirror, the DOL will soon take up the “overtime” regulations and try to increase the salary threshold for exempt employees from the current rate of $684 a week to somewhere around $900-$1,000 a week. The DOL did not reveal its proposal as expected in April 2022—perhaps due to concerns about inflation and how the change would impact small and midsize businesses—but we expect this to be back on the table by early 2023. You can read more about how to prepare for this impending change here. 2. Big Shift in Labor Relations The introduction of a proposed labor-friendly joint employer rule and an NLRB ruling requiring continuity of dues checkoff after contract expiration was just the beginning. The last month of 2022 saw a bevy of new announcements from the Board further tilting the landscape in labor’s favor—expect this trend to continue well into the new year. The Board is preparing to implement some major policy shifts by reexamining workplace civility rules, prohibiting mandatory employee education meetings during union organizing drives, expanding the definition of ‘employee’ to capture more workers currently classified as independent contractors, and allowing union organizers to access/use an employer’s email system. 3. Expect to be Inspected by OSHA The federal workplace safety agency took things to the next level in 2022, and we expect even bigger things from them in the new year. Late in 2022, for example, it decided to cast a wider net to include even more workplaces in its enhanced inspection program known as the “Severe Violator Enforcement Program” or SVEP—bad news for employers that don’t prioritize workplace safety in 2023. Meanwhile, the odds of OSHA inspecting your workplace in 2023 are higher than ever. And when it does, anticipate that it will issue administrative subpoenas, both to produce documents and provide testimony. Remember that federal OSHA can’t enforce its own subpoenas and instead must file a lawsuit in federal court to do so. So be ready and willing to object if the subpoenas are broad or otherwise improper. 4. A Relaxed I-9 Rule, Once and For All The recent extension of relaxed I-9 rules allowing employers to remotely review employment documents aligns with DHS efforts to kick start the rule-making process for a permanent protocol. We see the latest extension as more proof that DHS is dedicated to creating a permanent remote document examination rule. 5. New Consumer Privacy Legislation is on the Horizon We expect to see more momentum to pass the American Data Privacy and Protection Act—which may cause some states to halt their efforts to pass new state-specific consumer privacy bills as they wait to see if a federal mandate takes hold. In the meantime, more localized and specific privacy regulations will proliferate, including those related to biometric data, employee monitoring, and AI technology. 6. A New Dawn for Employee Defection Laws We’ll see additional states consider new laws restricting the use of non-compete restrictions—especially those that trend blue (which have seen the majority of the anti-enforcement statutes). Now that Republicans have taken back the House, the chances of a federal restrictive covenant statute passing Congress have dimmed dramatically—pushing the Biden White House to use the administrative state to accomplish its policy aims in this area. As part of that, the FTC will continue to focus on what it deems to be the overuse of non-compete restrictions, especially on an industry-specific basis. 7. Increased Workplace Safety Penalties for Violations We expect the agency to announce an initiative to require all state-run OSHA plans to increase their penalties to the same level as federal OSHA. This will come as quite a surprise to employers in states that have grown used to a local discount—and will lead to intense litigation and sparring over the size of penalties when workplace accidents occur. 8. Decline in Hiring will Shape Background Screening Trends We expect some trends from 2023 to continue, but the hiring frenzy of 2022 will subside. Employers will become increasingly more selective when assessing candidates. When it comes to disputes over background screening procedures, we expect plaintiffs’ lawyers to continue pushing novel theories as the low-hanging fruit dries up. Rather than abandoning FCRA claims—and the potential for lucrative attorneys’ fees awards—they will likely focus on other components of FCRA disclosure, attack the validity of FCRA authorizations, and challenge the electronic display of otherwise compliant disclosures. 9. Expect Increased Attention on Reporting ESG Employment Data Government regulators and private stakeholders will put more pressure on organizations to ramp up their Environmental, Social, and Governance (ESG) reporting. Employers will be increasingly expected to perform equity audits, provide information on executive compensation packages, develop DEI programs, and report the results to shareholders and the public. Moreover, the SEC recently proposed a rule that would require public companies to disclose information about climate risks and greenhouse gas emissions. If the agency moves forward as planned, the rule will take effect in 2023 for certain large companies—so the time to prepare is now. 10. Jobs Will Go Abroad While immigration might help with supplementing the workforce, an uptick in demand for workers coupled with inflation at a 40-year high will result in companies looking abroad to find talent and keep costs down. Many companies adopted new technology during the COVID-19 pandemic and moved to remote and hybrid work arrangements—which will make it easier to look for overseas solutions. Additionally, the current strength of the U.S. dollar may increase employers’ interest in exporting jobs.