HIPAA Health Data Privacy Rules: Final Regs Issued
October 02, 2003
The Department of Health and Human Services issued final regulations under the Health Insurance Portability and Accountability Act (HIPAA) protecting the privacy of individually identifiable health records. The regulations are intended to ensure the security of medical records and other personal health information maintained by health care providers, hospitals, health plans, health insurers, and health care clearinghouses. Most health plans are required to be in compliance with the new rules as of April 14, 2003 (small plans have an extra year).
Do Contractors Make the Best Firm 'Employees'?
October 01, 2003
Any personnel professional will remind us that finding the right person for a niche position is difficult at best. Carefully weighing the dictates of a job, the necessary skills and salary limitations can be a daunting task, especially in the legal field. As alternatives to "employment," there are several ideas that warrant a discussion.
Sarbanes-Oxley, the SEC and Nasdaq
October 01, 2003
This article briefly summarizes the numerous provisions of the Sarbanes-Oxley Act, the rules under it, the corresponding proposed governance rules that a new public company listing on the Nasdaq National Market will be required to address, and the deadlines for being in compliance.
Private Leasing Companies Can't Ignore Sarbanes-Oxley
October 01, 2003
According to AMR Research, which recently surveyed 60 Fortune 1,000 companies, it is estimated that the Fortune 1,000 will spend $2.5 billion in 2003 alone in costs associated with Sarbanes-Oxley Act compliance. How much more will be spent by smaller public companies and by those in the private-company sector is a mystery, but the total costs - in cash, time, consulting fees, lost opportunities, and human resources - will surely be staggering.
Rough Justice or Fair Cop? The Reality of Anti-dilution Provisions
October 01, 2003
We need protection against dilution if you engage in future down rounds," said venture capitalists 3 years ago, not really believing that they would need to call upon this protection. However, the unexpected and significant decline in valuations for companies over recent years has focused the attention of VCs and VC-backed companies on anti-dilution provisions. In today's investment climate, VCs are not only more selective with their potential investments, but are also demanding more favorable financial and control provisions in term sheets. In particular, protection against downside risk is of much more significant importance.
PR's Return On Investment
October 01, 2003
What can we make of the fact that the top 25 firms ranked by revenue in the AmLaw 200 have increased their overall presence in the media by around 18%, while firms ranked in the next two quarters (numbers 26 through 75) increased by barely 1%? Below the third quarter, the differences are even starker. Overall, the firms that were ranked 76 to 200 actually engendered fewer media appearances - by upwards of 5% in some instances - in 2002 than in 2001. <br>The easy response is that the larger the firm, the more lawyers and practice groups there are for reporters to call on as sources and commentators; coast-to-coast and abroad. The law of nature is that the rich get richer. It applies to media profile as well.
Improving Law Firm Profitability
October 01, 2003
<b><i>Without Working Longer Hours or Raising Rates</b></i><p>In today's competitive environment, the profitability challenge to law firms is to increase profits while reducing clients' legal fees. This two-part article provides dozens of specific, workable ideas for enhancing profitability, leaving aside the played-out (and problematic) methods of working longer hours and raising hourly rates. This month's article offers ideas in the following categories, which together offer the greatest opportunities for profitability enhancement.
Risk Management Review: A CFO's Approach
October 01, 2003
Set aside some quiet time every year to think through your insurance and risk management programs with someone knowledgeable in the field. Law firm administrators are mostly not insurance experts, and unless there is some crisis, tend not to give this area the attention it needs. Crisis time may be too late.
Unreasonable Compensation in a Professional Corporation
October 01, 2003
Until 2001, the general view was that IRS determinations of "unreasonable compensation" were not a concern for shareholder employees of professional corporations. That equanimity was shattered - at least for those paying attention - by the 2001 Tax Court decision in <i>Pediatric Surgical Associates P.C. v. Commissioner</i> (T.C. Memorandum 2001-81). In that case, the tax court determined that compensation paid to the shareholder physicians in a Texas surgical practice was unreasonably high because it exceeded the value of the services performed by the firm's shareholder physicians. This seminal tax court opinion turned on the issue of profits generated by the non-shareholder surgeons. Analogous compensation scenarios are common in law firms PCs, so they could face similar IRS determinations, with similarly costly results. Lawyers who are PC shareholders should pay close attention to this case.
Billing for Recycled Work: A Follow-up Exchange of Views
October 01, 2003
In a recent edition, Professor William G. Ross analyzed the professional ethics restrictions incumbent upon lawyers who want to bill by the hour for previously produced work product. ("The Ethics of Billing by the Hour for 'Recycled' Work," August 2003.) Edward Poll, one of our prominent Board members, responds to the issue.
