Recently, we’ve been warning employers that in order to have a legally compliant unpaid internship available, certain specific conditions had to be met.  If those conditions were not met, employers ran the risk of facing liability for unpaid wages for someone they classified as an unpaid intern.  The factors that have been in place until this month are as follows: The internship is similar to training that would be given in an educational environment. The internship is for the benefit of the intern. The intern does not replace regular employees, but works under close supervision of existing staff. The employer derives no immediate advantage from activities of the intern, and may even be impeded. The intern is not necessarily entitled to a job offer at the conclusion of work. The employer and intern understand that the intern is not entitled to wages. An employer/intern relationship had to meet all of those factors to be a legal unpaid internship.  Despite the previous DOL test, some federal courts considered instead who the “primary beneficiary” was to determine if an unpaid intern was actually an employee entitled to wages.  The test considers the economic reality between the employer and intern.  Based on that test, the DOL has issued new factors to be used when determining if an intern can legally be an unpaid intern.  Unlike the pre-2018 test, the employer/intern relationship does not have to meet all of these factors to be a legal unpaid internship, and no single factor is determinative.  Rather, all of these factors will be considered and weighed based on the facts of any particular case.  The new seven-factor test is as follows: The extent to which the intern and the employer clearly understand that there is no expectation of compensation. Any promise of compensation, express or implied, suggests that the intern is an employee—and vice versa. The extent to which the internship provides training that would be similar to that which would be given in an educational environment, including the clinical and other hands-on training provided by educational institutions. The extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit. The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar. The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning. The extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern. The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship. As always, if you have any questions, please feel free to contact us here or call us at 585.258.2800.

Justin P. Alexander has joined Underberg & Kessler as an associate in our Rochester, New York office. Justin will focus his practice in commercial real estate.  He earned his B.A. from the University of Pennsylvania, and his J.D. from Temple University Beasley School of Law. As always, if you have any questions, please feel free to contact us here or call us at 585.258.2800.

Over the years the U.S. Environmental Protection Agency (EPA) has regularly settled litigation brought by environmental interest groups and stakeholders through consent decrees and settlement agreements that force EPA action or regulatory changes by court order rather than through normal regulatory procedures. This practice, termed “sue and settle,” presents a number of problems to routine and transparent enforcement of the country’s environmental statutes and regulations. On Oct. 16, EPA Administrator Scott Pruitt issued a directive ending the practice by EPA and implementing a number of procedural requirements for EPA litigation and settlement activities. In many instances, outside environmental groups commenced litigation to challenge or enforce various aspects of the EPA’s regulatory or statutory actions in an effort to compel the EPA to move in a specific direction. The sue and settle practice is aided by many U.S. environmental statutes, such as the Clean Air Act and Clean Water Act, which empower private interest group litigation against the EPA when statutory deadlines or requirements are not met, in exchange for awards of attorney’s fees to prevailing parties. This has been compounded by forum shopping across the country for favorable district courts, which often handed down nationwide rulings on environmental regulatory matters. Under the past several presidential administrations, EPA routinely negotiated settlements and consent decrees in litigation with the plaintiffs that would exclude key stakeholders and states, and then relinquished EPA control or discretion over environmental priorities and responsibilities to the litigants and the courts through the settlement or decree. The numbers varied, but the practice was used heavily by special interest environmental groups in the Clean Air Act area under the Clinton Administration (27), George W. Bush first term (38), second Bush term (28), Obama first term (60), and Obama second term (77). Under the Obama Administration, the practice increased significantly and the nature of the cases was far-reaching for EPA. In just the CAA area, the Obama Administration entered into more settlements (137) than the prior administrations did during the course of three terms. Based on a sampling of cases reviewed by the U.S. Chamber of Commerce, the regulatory areas affected by sue and settle span the gamut of EPA environmental regulatory discretion. The settlements have significant regulatory cost impacts on the states and affected parties, such as the following: 2015 Clean Power Plan – between $5.1 and $8.4 billion annual costs 2013 Revisions to CAA PM 2.5 NAAQs – up to $350 million annual costs Chesapeake Bay Clean Water Rules – up to $6 billion annual costs 2011-2016 Regional Haze Rules – more than $5 billion additional costs In his Memorandum declaring the end of sue and settle, EPA Administrator Pruitt stated that the practice “undermines the fundamental principles of government that I outlined on my first day: (1) the importance of process, (2) adherence to the rule of law, and (3) the applicability of cooperative federalism.” Additionally, he wrote that “sue and settle has been adopted to resolve lawsuits through consent decrees in a way that bound the agency to judicially enforceable actions and timelines that curtailed careful agency consideration. This violates due process, the rule of law, and cooperative federalism.” The EPA’s Directive Promoting Transparency and Public Participation in Consent Decrees and Settlement Agreement requires a number of important actions by the agency to improve information and transparency. Significantly, the EPA will implement a number of procedures including: publishing an online notice of intent to sue list within 15 days of EPA’s receipt of the notice; publication online of a complaint or petition within 15 days of service on EPA; direct notice to any affected states or regulated entities of a complaint or petition, and appropriate steps by EPA to attain participation of them in the consent decree and settlement negotiation process; publication of a searchable, categorized, online list of consent decrees and settlement agreements governing agency action; and EPA no longer entering into consent decrees where the court lacks authority to order action outside of litigation or relinquishing EPA’s discretionary authority. In addition, the Directive includes two regulatory procedural safeguards for settlements. In the event that the consent decree or settlement requires a deadline for EPA to issue a final rule, it must provide adequate time to modify the rule after notice and comment, and EPA consideration of agency review and comments. Further, EPA will post online and provide a 30-day public comment period of any proposed consent decree or draft settlement agreement to resolve claims against the agency, as well as providing time for the agency to withdraw, modify or proceed with the settlement. In light of the significant regulatory costs and lack of transparency in sue and settle, a variety of business groups support the EPA’s new policy on settlements. Notably, the Chamber of Commerce’s prior studies and recommendations on changes to the practice were considered in the directive. Similarly, Heritage Foundation and Freedom Works have applauded the change and steps to improve transparency, state involvement and preventing regulation through settlement. The Heritage Foundation’s Darren Bakst, noted that “[i] t’s like these groups have an additional step in the process to influence policy.” Conversely, environmental groups that have used the practice are upset by the new policy and will likely challenge the EPA’s new directive. For example, the Sierra Club’s legal director, Pat Gallagher, said that “[t]here’s a general hostility to citizen’s enforcement of environmental laws, and it reflects the fact that Pruitt doesn’t want these laws enforced.” While the new policy is not likely to cut down on environmental interest group litigation to enforce or modify various environmental regulatory policy, the procedural safeguards have the potential to increase transparency and input on settlements and related regulatory changes. Given the significant regulatory costs associated with administering and complying with EPA’s multitude of environmental regulatory areas, advance notice and input from the states and regulated community seems to be a reasonable requirement prior to significant regulatory revisions. Download the Reprint from The Daily Record As always, if you have any questions, please feel free to contact us here or call us at 585.258.2800.

My practice is negotiating to be acquired by a hospital system. How can I ensure I do not suffer undue stress through this transaction? It is natural that you will feel some stress occasioned by the transaction process. Expect that there will be some disruption in the operation of the practice. You will be called upon to consider the business and legal terms of transaction documents that are not at all familiar to you. More importantly, you will have to consider all of the changes in your practice operations and employment terms in dealing with a hospital system. Finally, there is uncertainty in being an employee of a new employer. It may ease your mind to understand the process of an acquisition and what in entails. The practice should be using a law firm that is qualified and experienced in health care transactions. Draw upon the experience of the lead attorney to learn the anatomy of a transaction: negotiation of purchase price and high level terms in a letter of intent; due diligence investigation of the practice and it's finances; drafting and negotiating the definitive acquisition agreement; drafting and negotiating the employment agreements, medical records transfer agreement and other ancillary transaction documents; and transaction closing. A well planned and executed transaction requires a team - utilize to the best of their abilities your business manager and outside accountant to work together with the attorney to structure the deal and negotiate favorable terms. Make sure that any and all legal questions you have are posed to the practice attorney and are answered to your satisfaction. To deal with all of these questions, consider the advice you would give to a patient to maintain their health and wellness: Follow healthy lifestyle habits in eating and exercising Maintain control over your work schedule and the additional time required to pursue the transaction Rely on your practice partners, practice business resources, and your team of professional advisors to each carry their full share of the load Maintain a work-life balance and ensure you spend sufficient time with your loved ones and on you own leisure time activities As you are aware from your question, you need to ensure that your personal wellness is not compromised, so that you can continue to deliver safe and effective medical care to your patients while the transaction plays out. Download the Reprint from The Nov/Dec 2017 Edition of 'The Bulletin' by MCMS As always, if you have any questions, please feel free to contact us here or call us at 585.258.2800.

Under new legislation effective July 20, 2017, New York State has taken steps to protect children under age 18 from being subjected to child marriage against their will. Under Federal Law, the U. S. State Department defines child marriage as “a formal marriage or informal union where one or both of the parties is under the age of 18.” Based upon statistics from the New York State Department of Health, approximately 3,853 minors were married in New York State between the years 2000 and 2010, with more than 84% of them being minor girls wed to adult men. Studies have shown that child marriage undermines children’s health, access to education, and economic opportunities. Child marriage also increases the child’s likelihood of experiencing domestic violence. Prior to July 20, 2017, New York State Domestic Relations Law permitted minors who were 16 and 17 years old to marry with parental consent as the only requirement. Notably, there were no provisions in the law that allowed the 16 or 17-year-old minor to voice his/her consent or lack of consent to being married. As long as his/her parent consented, the town or city clerk processing the application for a marriage license was able to issue the marriage license, even if the minor applicant appeared forced, coerced, or visibly upset when applying for the marriage license. Also prior to the new legislation, New York State law allowed children as young as 14 and 15 years old to marry as long as their parents consented and a Judge approved of the marriage license application. While judicial approval was required for these young children to marry, the previous law failed to provide guidelines for the courts to consider when determining whether or not to approve an application. Under the previous law, if a child married before the age of 18, they lacked the rights of a married person over the age of 18 and were unable to apply for divorce or an order of protection on their own. This was a major oversight in the law. While they had the ability to marry, they had no rights to protect themselves thereafter. The new law passed in July 2017 prohibits any child under the age of 17 from being married in New York State. (Domestic Relations Law §15-a) (2017). Pursuant to Domestic Relations Law Section 15, if a child is 17 years old and applies for a marriage license from a town or city clerk, written parental consent, and the written approval of a Supreme Court or Family Court justice or judge is required for them to be married. (Domestic Relations Law §15) (2017). The new law sets forth specific requirements for the Court to follow before approving the application of a 17-year-old to marry. First, the Court is required to appoint an attorney for the child for each minor party immediately upon application for marriage. The attorney for the child must have specific training in domestic violence and forced marriage in order to be appointed. Second, the Court must provide the minor parties notification of his/her rights, including but not limited to, rights in relation to termination of the marriage, child and spousal support, domestic violence services, and how to access public benefits and other services. There is a newly created form that specifically lists the minor’s rights in language that they can understand. Both the Court and the attorney for the child are required to give this form to the minor. Third, the Court is required to do background checks on the parties applying to be married. This includes a review of Family Court Article 10 decisions involving child abuse and neglect for all parties, a review of all warrants issued under the Family Court Act for the parties, a review of whether any orders of protection exist involving the parties, and a check for all parties’ names under the Sex Offender Registry. This ensures that the Court has important background information about the parties prior to approving the marriage of the minor. Fourth, prior to approving the minor’s application, the Court is required to have an in-camera interview separately with each minor party to discuss the application to marry. Finally, after meeting with the minor(s) and before they can approve an application to marry, the Court is required to make written affirmative findings that (1) it is the minor’s own will that the minor enter into the marriage; (2) that the minor is not being compelled by force, threat, persuasion, fraud, coercion or duress; and (3) that the marriage will not endanger the mental, emotional, or physical safety of the minor. If these findings are not made, the Court will deny the application. The new statute provides specific factors for the Court to consider when making these findings. These factors include the age difference between the parties intending to marry, whether there is a power imbalance between the parties intending to be married, whether the parties are incapable of consenting to marriage for want of understanding, whether there is a history of domestic violence between the parties, and whether there is a history of domestic violence between a party and either parties’ or legal guardians’ family members. The law specifies that just because the parents of the minor wish for the minor to be married, that shall not be the sole basis for the Court’s approval of the application. This is significant, because many times it is the minor’s own family that is pressuring the minor to marry due to pregnancy or for religious or cultural reasons. Another important aspect of the new marriage law is that once the Court approves the application of the 17-year-old to get married, the 17-year-old is conferred some of the rights of an adult, including the right to enter into a contract and the right to divorce. It is important to note that this provision does not confer all adult rights on the minor: they are not granted exemptions to specific constitutional and statutory age requirements, such as the right to vote, the use of alcoholic beverages, and other health or safety statutes relative to the minor. For the first time the law provides minors who are married with rights to terminate the marriage if desired. Overall, the new law provides judicial oversight that will protect minors from being forced into marriage against their will. It allows for minors to give full consent to marry and to be informed of the law and their rights. Download the Reprint from The Daily Record As always, if you have any questions, please feel free to contact us here or call us at 585.258.2800.

Josh Beisker has been named the Estates & Trusts practice group chair at Underberg & Kessler LLP. Josh focuses his practice in the areas of complex estate planning, estate and trust administration, business succession planning, and tax law.  He assists clients in developing effective estate planning strategies to be both tax efficient and to protect clients’ assets. He also counsels clients on business law matters, including succession and tax planning. As always, if you have any questions, please feel free to contact us here or call us at 585.258.2800.

A recent decision by the Southern District of New York reminds practitioners of the importance of a well-crafted and detailed engagement letter. On September 12, 2017, Judge William H. Pauley III denied Seward & Kissel, LLP’s Motion to Dismiss the $10 million malpractice claim brought by Mitchell Barack, the founder and sole owner of ESCO Energy Services Company Inc. (“ESCO”). See Barack v. Seward & Kissel, LLP, 16-cv-09664 (S.D.N.Y. Sept. 12, 2017). Barack’s claims arise from Seward & Kissel’s representation of ESCO in its $7.5 million sale to ForceField Energy, Inc. (“ForceField”). The engagement letter entered into by Barack, ESCO and Seward & Kissel describes the scope of the engagement as follows: Representation of the Client as lead transaction counsel in connection with the proposed sale of Client’s common stock to ForceField Energy, Inc. and related agreements, documents and transactions. While Seward & Kissel performed due diligence on ESCO, it did none for ForceField, nor did it discuss whether due diligence should be prepared on ForceField with its client—even after the purchaser showed signs of financial distress. According to the terms of the sale, ESCO was to receive a $2.5 million cash payment at closing, $2.5 million in a deferred payment note collateralized by ForceField’s restricted common stock, and $2.5 million in ForceField’s restricted common stock. A week before closing, ForceField informed Seward & Kissel that it could not pay the $2.5 million cash payment at closing and sought to delay payment of $1.5 million until several months after consummation of the transaction. Seward & Kissel advised Barack to proceed with the closing and that ForceField’s lack of cash was “routine” and “not unusual”. Approximately six months after the closing, the Executive Chairman of ForceField’s Board of Directors was arrested for securities fraud and conspiracy, and a securities fraud class-action was filed against ForceField. The price of ForceField’s stock plummeted and the SEC suspended public trading of ForceField’s shares. ForceField ultimately delisted itself from public trading. Barack’s restricted stock and deferred payment notes were rendered worthless, and he ultimately repurchased ESCO from ForceField for $900,000 and resold it to another buyer for $1 million—much less than the original $7.5 million purchase price. In denying Seward & Kissel’s Motion to Dismiss, the Court notes that the Engagement Letter is “facially broad” and does not “explicitly carve out specific due diligence responsibilities” or “shed light on the scope of Seward & Kissel’s responsibilities.” Essentially, Seward & Kissel’s failure to clarify whether due diligence on ForceField was included in its representation, and subsequent failure to even discuss whether due diligence on the purchaser was appropriate in light of ForceField’s apparent lack of cash, precluded the court from dismissing the malpractice action. This matter serves as a stark reminder of how important it is for the practitioner, whether a solo or a partner of a large New York City firm, to narrowly and specifically define the terms of his or her representation. Rule 1.2 of New York’s Rules of Professional Conduct governs the “Scope of Representation and Allocation of Authority Between Client and Lawyer”. Subsection (c) states: “A lawyer may limit the scope of the representation if the limitation is reasonable under the circumstances, the client gives informed consent and where necessary notice is provided to the tribunal and/or opposing counsel.” While it is natural to want to craft an engagement letter with broad language in the hopes of generating additional legal work, defining the scope of the engagement broadly exposes an attorney to malpractice claims. Clearly identifying the client is also essential for avoiding risk in a well-crafted engagement letter. One of the fastest growing areas of malpractice litigation against attorneys is third-party claims made by individuals or entities with no direct representation relationship to the attorney. Clearly defining the client and that the lawyer‘s duties are only to the client will also help to reduce the exposure from third-party suits. When an attorney, for whatever reason, does not intend to establish a client relationship—a non-engagement letter can be just as important as an engagement letter. An attorney can stumble into an attorney-client relationship by receiving confidential information or promising to look into a legal issue. We’ve all had a potential client call, listened to that potential client give their version of events and then declined to take on representation. If the attorney does not make clear to the potential client that representation is declined, the potential client may think an attorney-client relationship has been established by virtue of the initial consultation. Essential to declining a potential client is the non-engagement letter, especially after an initial consultation has taken place. The non-engagement letter should clearly state that no attorney-client relationship has been established and that you are not representing the potential client with regards to the issue discussed. No assessment of the potential client’s claims or defenses should be given. Do include any applicable statute of limitations and a list of local resources that the potential client can use to seek alternate representation. The Monroe County Bar Association’s Lawyer Referral Service is an excellent resource to recommend. When in doubt, narrowly define the scope of your representation—it can always be broadened by an addendum to the engagement letter—and be sure to clearly advise those potential clients whom you cannot represent that no attorney-client relationship has been established. Download the Reprint from The Daily Record As always, if you have any questions, please feel free to contact us here or call us at 585.258.2800.

Eight attorneys from the law firm of Underberg & Kessler LLP have been named 2017 Upstate New York “Super Lawyers”, and four have been named 2017 Upstate New York “Rising Stars”. Jim Coniglio, Ron Hull, Kate Karl, Paul Keneally, Tom Knab, Anna Lynch, Paul Nunes and Margaret Somerset were included in the 2017 “Super Lawyers” group under the following areas of law.  This group represents the top 5% of attorneys in Upstate New York, and is awarded to those attorneys who have attained a high degree of peer recognition and professional achievement. Jim Coniglio – Government Finance Ron Hull – Environmental Kate Karl – Real Estate Paul Keneally – Employment & Labor Tom Knab – Business Litigation Anna Lynch -- Health Care Paul Nunes – Business Litigation Margaret Somerset – Personal Injury Medical Malpractice: Defense Josh Beisker, Leah Cintineo, Colin Ramsey and David Tang were included in the 2017 group of Upstate New York “Rising Stars” under the following areas of law.  This group represents the top 2.5% of lawyers who are under 40 years old or who have been practicing for 10 years or less. Josh Beisker - Estate Planning Leah Tarantino Cintineo – Family Law Colin Ramsey – Construction Litigation David Tang – Creditor Debtor Rights The “Super Lawyer” list is produced annually, through a rigorous selection process of statewide nominations, peer review within the local legal community, and independent research of candidates. As always, if you have any questions, please feel free to contact us here or call us at 585.258.2800.

The Obama Administration adopted a Climate Action Plan in 2013, which addressed climate change issues. Pursuant to the Climate Action Plan, the past administration indicated that “the [EPA] will use its authority through the Significant New Alternatives Policy Program of Section 612 to reduce HFC emissions.” Asserting authority under the Clean Air Act (CAA) in 2015, the United States Environmental Protection Agency (EPA) issued regulations that required manufacturers of hydrofluorocarbons (HFC) used in aerosol spray cans, auto air conditioners, refrigerators and foams, to replace them with non-ozone depleting substances. Under its 2015 rule, EPA moved some HFCs from the list of safe substitutes to the list of prohibited substitutes. EPA cited its authority under Section 612 of the CAA to require continuous replacement of HFCs even after manufacturers replaced ozone depleting substances with non-ozone depleting substances. In Mexichem Fluor Inc. v. EPA , (D.C. Circuit 8/8/17), two manufacturers of HFC 134-a challenged EPA’s rule. The challenge asserted that: EPA’s 2015 rule exceeded its statutory authority under the CAA because the statute did not require replacement of non-ozone depleting HFCs with other substances, and EPA’s 2015 decision to remove HFCs from the list of safe alternatives was arbitrary and capricious. The D.C. Circuit granted the petitions and vacated the 2015 rule to the extent that it required manufacturers to replace HFCs with alternate substances, and remanded the rule to EPA for further proceedings consistent with the opinion. The court wrote that since HFCs are not ozone-depleting substances, Section 612 does not grant EPA authority to regulate replacement of HFCs. Notably, prior to the 2015 rule, EPA acknowledged that Section 612 of the CAA did not grant EPA authority to require replacement of non-ozone depleting substances like HFCs. Thus, the 2015 rule was a major departure from Section 612 and the first time since it was enacted that EPA required replacement of previously acceptable non-ozone depleting substances. The D.C. Circuit’s two to one majority decision was rather direct in concluding that EPA lacked the authority to regulate HFCs. Initially, the Court determined that the agency’s authority to regulate ozone-depleting substances under Section 612 does not grant EPA power to order the replacement of substances that are not ozone depleting, but that contribute to climate change. The court wrote that “Congress has not enacted general climate change legislation” and “[a]though we understand and respect EPA’s overarching effort to fill that legislative void and regulate HFCs, EPA may act only as authorized by Congress.” Further, “EPA has tried to jam a square peg (regulating non-ozone depleting substances that may contribute to climate change) into a round hole (the existing statutory landscape).” Additionally, the court rejected EPA’s position that replacement is an ongoing process. The court determined that once manufacturers replace a non-ozone depleting substance when they change to an alternate substance, the replacement has been made and the “manufacturer no longer makes a product that uses an ozone-depleting substance.” While apparently sympathetic to EPA’s desire to try to regulate climate change, the court noted that recent climate change decisions from the U.S. Supreme Court reflected two key limitations on agency action. First, that however laudable EPA’s policy might be in the area, it does not on its own authorize EPA to act. Utility Air Regulatory Group v. EPA , (U.S. S.Ct. 2014). Rather, “the agency must have statutory authority for the regulations it wants to issue.” Second, congressional inaction on general climate change legislation does not authorize EPA action. Based on recent Supreme Court decisions, the court noted that “[u]nder the Constitution, congressional inaction does not license an agency to take matters into its own hands, even to solve a pressing policy issue such as climate change.” The court’s decision did leave open a sliver of hope for EPA if it pursues an alternative theory of retroactive disapproval of substances. While referenced in its appellate brief in passing, EPA did not fully develop the theory that an agency may use its authority to revise prior administrative decisions based on new developments or considerations. However, the court made clear that EPA would have to satisfactorily prove that: 1) it had statutory or inherent authority to do so; 2) there was a basis for the position and changed interpretation of Section 612; and 3) it has satisfied due process requirements by giving manufacturers fair warning of prohibited substances or conduct. Hence, unless EPA satisfies these three requirements on remand, the court found that the agency may not apply the 2015 rule to require replacement of non-ozone depleting substances with another substance that was approved at the time of the replacement. The D.C. Circuit decision, while focused on repealing a single key aspect of the past administration’s Climate Action Plan, is notable for the limits it recognized on agency action. Despite broad statutory authority under the CAA, the court determined that agency regulations must have a specific statutory mandate. Based on the new Trump administration and leadership at EPA, it will require a bit of time to determine whether the agency scales back its attempt to regulate HFCs or instead asserts the ability to retroactively regulate substances on remand. Download the Reprint from The Daily Record As always, if you have any questions, please feel free to contact us here or call us at 585.258.2800.

Underberg & Kessler LLP is proud to announce that 12 of its attorneys have been selected by their peers for inclusion in The Best Lawyers in America® 2018, and two attorneys were named Rochester “Lawyer of the Year” in their area of practice. Mike Beyma, Jim Coniglio, Pat Cusato, Steve Gersz, Lew Heisman, Ron Hull, Kate Karl, Paul Keneally, Anna Lynch, Paul Nunes, Margaret Somerset and George Van Nest are included in the 2018 edition under the following specialties: Mike Beyma – Bankruptcy and Creditor Debtor Rights/Insolvency and Reorganization Law Jim Coniglio – Municipal Law Pat Cusato – Real Estate Law Steve Gersz – Closely Held Companies and Family Businesses Law, Corporate Law Lew Heisman – Family Law Ron Hull – Environmental Law, Litigation - Environmental Kate Karl – Commercial Finance Law, Real Estate Law Paul Keneally – Commercial Litigation, Litigation – Labor & Employment Anna Lynch – Corporate Law, Elder Law, Health Care Law Paul Nunes – Mass Tort Litigation/Class Actions–Plaintiffs, Mass Tort Litigation/Class Actions–Defendants, Personal Injury Litigation–Plaintiffs, Personal Injury Litigation–Defendants Margaret Somerset – Medical Malpractice Law–Defendants George Van Nest – Environmental Law Additionally, Kate Karl was named “Lawyer of the Year” for Real Estate Law in Rochester, and Anna Lynch was named “Lawyer of the Year” for Health Care Law in Rochester.  Only one area lawyer in each specialty receives this honor. Best Lawyers® conducted its annual peer-review survey in which 55,000 attorneys cast more than 7.3 million votes about the legal abilities of other lawyers in their practice areas. Lawyers are neither required nor allowed to pay a fee to be listed, and are included solely based on the results of the peer review. As always, if you have any questions, please feel free to contact us here or call us at 585.258.2800.

The “Great Recession” that began in 2007 had tremendous impacts on the U.S. economy, and the legal industry was not immune to those impacts. While law firms had been changing their business and pricing practices in response to advances in technology and client demands, the pace of change has accelerated in the years following the economic crisis. For a long time and for many law firms, pricing has been based on the billable hour: a law firm would charge its client for the legal services provided based on the number of hours worked by its lawyers, multiplied by assigned hourly rates. The Georgetown Law Center for the Study of the Legal Profession recently issued its “2017 Report on the State of the Legal Market.” The Report provided a detailed analysis of the financial performance of U.S. law firms since 2007, tracking the flat growth in demand for law firm services, and summarizing the fundamental market changes that have affected law firms. In particular, the Report stated that one of the most significant changes of the past decade has been “the effective death of the traditional billable hour pricing model in most law firms” in the face of the increasing use of alternative fee arrangements, or AFAs. Broadly defined, AFAs include fixed fees for specified services, hybrid arrangements combining lower hourly rates plus a contingent fee component (sometimes referred to as a success fee), and fee budgets with caps. The Report acknowledged that while most firms have not done away with hourly billing, the legal market’s imposition of “budget discipline” on firms has forced them to develop different ways to price their services. The Report admitted that while AFAs probably account for only 15 to 20% of all law firm revenues, and that budget-based pricing is much more prevalent, it concluded that in many firms, those two methods combined may well account for 80 or 90% of all revenues. Of course, what are now called AFAs are not new. Many firms handling transactional, real estate and bond work have for years offered billing arrangements providing for fixed fees, often in consideration of the clients’ agreements to provide a certain volume of matters to the law firm. In addition, some law firms have retainer arrangements with certain clients, under which they are paid a set monthly fee regardless of the number of billable hours worked by the firms’ lawyers on those clients’ matters. Although litigation is, generally, more unpredictable than transactional work due to its adversarial nature, making it more difficult to accurately project fees, insurance defense firms have, at least since the late 1980s, worked under insurance company-imposed cost controls. These cost controls have included pre-negotiated and below-market billing rates, detailed litigation plans and budgets, and litigation management guidelines that require the carrier’s pre-authorization for legal research, filing of motions, and depositions. Some insurance companies (for example, carriers who write automobile insurance) have for many years imposed flat fee arrangements on the law firms that defend their insureds, under which the firms are paid pre-determined fees for specific tasks, such as $200 for an answer to a complaint, $300 per deposition, etc. Other types of litigation, and particularly the broad spectrum of lawsuits involving contested claims for money damages arising from some type of contractual or business relationship or transaction – often called commercial litigation – present further challenges to law firms who are thinking of offering, or are asked by their clients to provide, AFAs. Such matters are usually highly contested, involving counterclaims, thousands of documents, and numerous motions. Nevertheless, the preparation of a detailed litigation plan and budget at the outset of a commercial lawsuit has many benefits: The lawyer is required to think the case through from pleadings to trial The client gains an understanding of the many stages of a lawsuit The client gains a level of certainty on the cost of the foreseeable legal work and when those costs can be expected to be incurred The client can gauge the cost/benefit of various litigation tactics and any potential compromise or settlement As a first step in the development of a detailed commercial litigation plan and budget, the lawyer must debrief the client on the specifics of the dispute: What do the key documents provide? What communications (written and oral) occurred between the parties? What will the other party (or parties) allege, and on what factual basis? How many pages of documentation (paper and electronic) will be subject to production in the pretrial discovery process? Who are the witnesses and what do they know? From there, the lawyer must determine all foreseeable legal and factual disputes:; How much research will be required to develop the client’s causes of action and/or defenses? Does either party have grounds for a motion to dismiss, or are any claims or defenses susceptible to a summary judgment motion? What information may be subject to a motion to compel or for a protective order? There are also miscellaneous tasks, and concomitant legal expenses, to be considered. Is there a need for expert testimony? How often, and at what level of detail, will the client want to discuss the case? What is the expected level of interaction with opposing counsel? The resulting litigation plan and budget should provide the client with fairly accurate estimates of expected legal costs for each stage of the lawsuit: research, investigation, document review; preparation of pleadings; paper discovery (document requests, interrogatories, notices to admit); preparation for and conduct of depositions (including the number of expected depositions); motions to compel or for a protective order; dispositive motions; mediation (if applicable); preparations for trial or arbitration; and conduct of trial or arbitration. Some law firms may not be ready to make the leap into AFAs for commercial litigation. But regular, dedicated efforts to project expected legal fees through detailed litigation plans and budgets, followed by post-resolution analysis of the accuracy of those projections, will give those firms valuable experience which will help make future projections increasingly accurate, and a body of data which they can use to confidently offer AFAs in the appropriate cases. Download the Reprint from The Daily Record As always, if you have any questions, please feel free to contacts us here or call us at 585.258.2800.

My partners and I run a general practice and have become alarmed about the reported increase in opioid abuse by patients. What concerns should we have about continuing to prescribe these medications? In response to the mounting public health crisis related to the misuse, abuse, and risk of addiction to opioid-based pain killers, the New York State Department of Health (NYSDOH) has mandated accredited continuing medical education (CME) for all prescribers, which must be completed by July 1, 2017. In addition, the Center for Disease Control and Prevention (CDC) has issued opioid-treatment guidelines for health care professionals and patients. Under New York State’s “I-STOP” law, prescribers are required to review the state’s Prescription Monitoring Program (PMP) Registry within 24 hours of issuing a prescription for a controlled substance. Prescribers and medical residents who have a DEA registration number (individually or through a facility) to prescribe controlled substances are now required to complete at least three hours of course work or training in pain management, palliative care, and addiction. Pursuant to the Public Health Law, the initial CME must be completed by July 1, 2017 and once every three years thereafter. Such training or course work, which can be live or online, must include the following eight topics: New York State and federal requirements for prescribing controlled substances; pain management; managing acute pain; appropriate prescribing; palliative medicine; prevention, screening and signs of addiction; responses to abuse and addiction; and end-of-life care. The NYSDOH Opioid Prevention Program seeks to provide up-to-date opioid-related data to increase prevention efforts throughout the state. This program was established to assist in identifying communities where abuse is more prevalent, thereby allowing health care providers to customize interventions. The CDC has also issued a checklist for prescribers when contemplating long-term opioid therapy. These considerations include the need to set realistic goals for pain management and function based on diagnosis; contemplation of nonopioid therapies; discussing the benefits and risks with the patient, including addiction and the potential for overdose; continually evaluating the risk of harm or misuse; reviewing prescription drug monitoring program data; conducting urine drug screens; establishing criteria for discontinuing opioid treatment; assessing the patient’s baseline pain and function; scheduling initial reassessment within one to four weeks; and prescribing short-acting opioids with the lowest dosage. The CDC suggests that if a patient is renewing a prescription without an in-office visit, such a visit should be scheduled within three months. Prescribers are encouraged to confirm clinically-substantiated improvements in pain and function without risk or harm before continuing opioids. Furthermore, providers should continually evaluate their patients’ risk of harm or misuse. As opioid-related overdoses and abuse have increased dramatically in New York State in recent years, it is incumbent on all prescribers of controlled substances to be aware of and follow these legal requirements in an effort to keep their patients safe. Download the Reprint from a 2017 Edition of 'The Bulletin' by MCMS As always, if you have any questions, please feel free to contact us here or call us at 585.258.2800.