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Archive for August, 2012

Beware Of Higher Minimum Wage – It May Not Be Too Far Away

Posted on: August 29th, 2012

By: Brad Adler

Recently, the Fair Minimum Wage Act of 2012 was introduced in Congress. This legislation would raise the federal minimum wage in three 85-cent steps from its current $7.25 an hour to $9.80 by the end of 2014. This act also would increase the required cash wage for tipped workers in similar annual 85-cent increases, from today’s $2.13 per hour until the tip credit reaches 70 percent of the regular minimum wage.  If passed, the minimum wage would increase to $8.10 an hour 90 days after date of passage. One year later, the second 85-cent bump would go into effect, raising the wage to $8.95 an hour. The following year, it would raise another 85 cents to $9.80 and increase annually afterward, depending on inflation.

Law Firm Risk Management – Internal Review and Insurance Reporting Obligations

Posted on: August 29th, 2012

By: Seth Kirby

While the practice of law is a profession, managing a law practice is definitely a business. In addition to their primary responsibility of representing their clients, attorneys must actively manage their office. Depending upon the size of the firm, an attorney may take on this role by themselves, or employ an administrative staff to oversee the firm’s operations.  Management of payroll, employee benefits, accounts receivable, and other such areas are essential to a profitable law practice.  But the successful management of a law practice is more than ensuring that administrative responsibilities are met.  The firm must also ensure that it is protecting itself against the risk of a malpractice claim.

Of course, every rational attorney does their best to ensure that they are properly handling their client’s affairs.  Nevertheless, mistakes can happen.  The vast majority of law firms purchase professional liability insurance to provide protection for the firm, and their clients, in the event that their negligence results in harm to their client.  But simply purchasing the insurance is not enough.  For the insurance coverage to be effective, the firm must ensure that claims, or potential claims are promptly reported to their carrier.  Failure to do so may operate to bar coverage for the claim.

How then does a law firm go about ensuring that claims and potential claims are recognized by the firm and properly reported to their insurance carrier?

A potential solution to this problem is outlined in a recent decision issued by the Georgia Court of Appeals in Hunter, Maclean, Exley & Dunn v. St. Simons Waterfront, LLC.  That case concerned an evidentiary issue in a legal malpractice case.  The court considered whether a law firm could properly claim attorney-client privilege over communications with its in-house counsel.  The Court carefully set forth an analysis of how the issue should be considered and remanded the case to the trial court to determine whether the internal communications met the standards necessary for the application of the attorney-client privilege.

In its analysis, the Court laid out a blue print for how a law firm can create the position of in-house counsel on a full-time, part-time or ad hoc basis, which would allow the firm to evaluate and protect itself against client claims.  To obtain the protection of the attorney-client privilege during such reviews, the in-house counsel must be retained for the purpose of examining the firm’s exposure to a real or perceived risk posed by the client and, maintain a separation between themselves and the firm’s ongoing work for the client.

Although creating the full-time position of in-house counsel is not practical for small and mid-size firms, developing a plan for addressing potential client claims through in-house review is warranted.  At least one attorney in a firm should be designated as a point-person for the discussion of client issues.  That person then has the ability to protect their internal review of the issue from future disclosure by compliance with the rules set forth in Hunter.  Perhaps more importantly, that person could also be tasked with the responsibility of alerting the firm’s insurance carrier if appropriate.  Ensuring that potential client claims are affirmatively addressed by a firm, rather than swept under the rug, is often half the battle in resolving a potential claim.

2012 Election Cycle: Major Business Concerns Include Immigration, Baseless Lawsuits

Posted on: August 27th, 2012

By: Kelly Morrison

The Eleventh Circuit recently weighed in on Georgia’s controversial Immigration Reform Act, restoring a provision which allows police to verify the immigration status of criminal suspects failing to produce appropriate identification.  This mirrors the U.S. Supreme Court’s holding with regards to a similar Arizona law. 

Meanwhile, the Obama administration has spent its first term quietly advocating for loopholes in the current system, mostly aimed at undocumented aliens under age 18.  Political pundits expect a more direct campaign for federal immigration reform from the victor of the 2012 election.

Although Georgia has addressed both immigration and tort reform at the state level, more than 60 percent of Americans believe that frivolous litigation has slowed economic growth and recovery.

Electronic Medical Records – IT Guides for a New Frontier

Posted on: August 27th, 2012

By: Michael Eshman

It is clear that electronic medical records and exchanges are the wave of the future in healthcare. For better or worse, the electronic management and maintenance of files and records will transform the healthcare industry.

In December 2011, Georgia Health News reported on the medical revolution coming with online records and the statewide exchange Georgia is building with the help of a $13 million federal grant. In addition to the economic factors driving the change, in our prior blog post titled “Electronic Medical Records – Saving More Than Trees,” we noted that a recent Harvard study found medical malpractice claims dropped in Massachusetts after doctors began using electronic records. There are great rewards and incentives to adopt electronic medical records and to be part of the expanding record exchanges, both for the quality of care that can be provided to patients and for the economics and efficiency of practice management.

However, any practice using electronic medical records should lean heavily on trusted IT professionals to ensure the privacy and security of the records. As noted by Georgia Health News in the column linked above, the Ponemon Institute reports that the number of reported medical data breaches has increased by 32 percent since 2010.

In a recent brazen attack, hackers accessed the computer network of a small practice in Lake County, Illinois, but instead of merely stealing and reposting the records, they encrypted the records and posted a digital ransom note for payment in exchange for the password. It is unclear whether the records were backed-up, but if not, the hackers effectively held hostage the medical records of patients.

As more practices move to electronic records, and as medical record exchanges expand nationwide, the incidents of attempted hacks will likely increase, and it will fall to the practices and the administrators of the exchanges to manage the risk associated with maintaining and sharing electronic records. Electronic records and exchanges are part of the new frontier for medical providers, and there are great benefits to be gained from the advancements. But providers are wise to focus on the issues of data management and security and to lean on trusted IT professionals and risk managers for guidance.

Thoughts and questions are always welcome.

SEC Pays First Whistleblower Under Dodd-Frank

Posted on: August 23rd, 2012

By: Ben Mathis

The SEC announced that it has paid $50,000 in the first whistleblower bounty. This program is a year old program and was authorized by the Dodd-Frank financial reform act. Is it the first of more to come? See attached article:

SEC Pays Out First Whistleblower Reward