Working Group on Electronic Payment Systems

Sarah Jane Hughes and Bob Ledig opened discussion of the FDIC's forthcoming proposals regarding stored value cards and the deposit insurance coverage (if any) of the underlying funds. A fascinating discussion followed with the group continuing to work out the implications. The group is going to provide some further detail in a followup e-mail to the Committee, and suggest that many of the members could be interested in providing their own comments to FDIC.

Working Group on Electronic Evidence

John Lunseth and Rae Cogar opened the meeting.

John reminded us that Rhea Fredrics from Kroll Ontrack will be speaking to the plenary session on Saturday morning -- one of the Hot Topics will be some recent electronic discovery matters.

John solicited further volunteers for the series of monographs that the WG plans to produce. In light of the Zubalake decisions, he thinks that a great opening would be a monograph for companies on their policies for preserving evidence in the face of potential litigation. The group spent some time discussing the concepts -- Including some who noted their frustration with trying to advise clients who are going to be unhappy with the practical results of these new rules. John says that the issues for the monograph should be:

1) When does the duty attach?

2) What do we need to preserve?

Interested persons should get directly in touch with John Lunseth (see link above).

Mona Lisa's Smile was Nothing

Vince Polley -- Finally at peace after reaching the end of his term.

CLE PROGRAM: Outsourcing - Getting it Right the First Time

The Committee's first program for the 2005 meeting has begun -- Outsourcing: Getting it Right the First Time. CLC member Stephen Hollman chairs the program, and is speaking on, using his phrasing, Service Level Arrangements. He points out the many ways that attorneys can, in their zeal to get the most they can out of a vendor, have often created static and non-relevant SLAs that lead to problems such as Stephen's concept of "Death by Metrics." Stephen pointed out an amazing statistic given by an Accenture analyst -- That 70% of outsourcing contracts are re-negotiated within 3 years, which demonstrates to some degree that many of those contracts were not written with the idea of 'partnership' between the vendor and buyer but were written as an adversarial exercise.

Chicago's own Diana McKenzie from Neal Gerber and Jonathan Kaplan from Accenture both spoke to processes of how to get into an outsourcing program. Diana pointed out the value of doing much of the ground work before sending out an RFP, keeping the vendors on their toes by maintaining dual track negotiations, and controlling the agenda by such tactics as having the proposed contracts in the RFP. While many buying companies think they are saving time or costs by putting off those things, Diana clearly felt that those savings were illusory because the deals that result are usually favorable only to the vendor (or worse, only to the vendor's sales person's pocket).

Stephen Mathias, attorney from Kochar & Company of Bangalore, India, gave a wealth of practical tips on contract points that need to be addressed with offshore outsourcing. His written materials for the program should be consulted as part of any lawyer's checklist if a deal is being struck with an Indian vendor -- If only for learning the significantly different legal rules for transfer and assignment of intellectual property between US and Indian systems.

Stephen Gold -- Who completes the trifecta of Stephens -- Joined the panel from Gordon and Glickson of Chicago (which firm is also a sponsor of our Cyberspace meeting this summer). He had a number of tips on avoiding further pitfalls if one is buying an outsourced service. One of his mantras was the idea that one "cannot outsource responsibility." The buyer remains holding the bag when it comes to internal controls necessary for SarbOx, the obligations of confidentiality for GLBA, and any number of other things. He pointed out that the first response to that is frequently a vendor claiming SAS-70 compliance, but that this by itself is not enough given that some SAS70s will be very shallow, and may actually do nothing more than memorialize how poor the vendor's own internal controls are.

Finally -- The program concluded with a mock negotiation over a hypothetical outsourcing contract. One side of the room advised the buyer, the other side advised the seller. Rather than devolve into a food fight lobbed over the aisle, the audience negotiated together with their counterparts on the podium. Much emphasis was placed on concepts of actually making a deal that works rather than simply proving which side could beat up the other. We might never find out if this hypothetical company would succeed in this deal, but the panel certainly put it in a better position.

International Policy Working Group

Hal Burman, who chairs the International (a/k/a Global) Policy working group, tells us of his plans for their meeting (Westin, Windsor Room 2nd Floor, 4:00 to 5:00 PM FRIDAY):

I just got back from an extended set of meetings, the first of which was a two-week negotiation that concluded the new Uncitral E-Commerce Convention. [For the Chicago meeting,] we have two main topics.

First, whether Cyberspace should support implementation of the new UN Convention, and if so, what position would we consider on any possible changes to UETA but especially the Federal E-Sign and Global E-Commerce Act? Are there "fixes" to the Federal Act we should promote?

Secondly, should we seek to use the new convention to harmonize e-commerce basic law within Native American or other US-related territories?

--
Hal (Burman, Harold S [BurmanHS@state.gov])

Outsourcing Program -- Some Pre-Reading for You!

Stephen Hollman, who is looking forward to seeing each and every one of you (ahem) at the Outsourcing Program on Friday morning, has passed along a couple of items for you to review prior to the program.

1. A flyer that discusses a bit more detail on what you can expect; and
2. A copy of the hypothetical that will underlie the mock negotiation.

Prior reading is not mandatory (you can let go your fears of returning to law school...). But, Stephen thinks that you will be further intrigued by the hypo, and hopefully that will bring you to the program!

Intelligentsia--This Year's Coffee Event

To keep up with the tradition, I am scheduling a "Coffee Event" for interested members and friends of the Committee while we're in Chicago. Intelligentsia, a "famous" Chicago espresso shop is only 3.4 miles up LakeShore Drive from the Drake Hotel.

Those of you who've joined me on these coffee excursions in the past know that I try to seek out only the best espresso, and this year's destinatin should meet or exceed that standard. Barristas from Intelligentsia recently took first, second, fourth, and fifth place in the Great Lakes Regional Barrista Championship. And, Intelligentsia was selected Best of Chicago in the annual Citysearch poll. People, we're in for some good espresso.

I'll review the schedule, poll some of our members, and select a good time slot for the visit. As of now, I think a good time would be after the Committee Dinner on Saturday night. Use the Comment feature if you'd like to offer up an alternative time slot.

Here are some links if you're interested in learning more:
Intelligentsia Coffee House
Directions from the Drake to Intelligentsia's Broadway Store
CitySearch.Com's Poll Results on Coffee Houses
Intelligentsia's Articles on Latte Art

Extracurricular Activity -- Chicago Gold Coast Art Fair

During your free time on August 5-7 you might consider visiting this annual event, held along LaSalle Street at the intersections of Erie, Huron, and Superior (not far from our Committee dinner Saturday night, which will put pressure on nearby parking, if you were planning on driving).

"Heralded as the 'Grand Daddy' of American art festivals, the Gold Coast River North Art Fair embarks this summer on its 48th year of wowing Chicago. As one of the most highly attended art fairs in the city, The Gold Coast River North Art Fair annually attracts over 400 juried artists and 600,000 visitors from locations around the world. The free festival is set along city streets and sidewalks in the gallery-filled River North neighborhood; a world-class creative and cultural experience!"

For more information, visit http://www.amdurproductions.com/gold-coast.html.

Vince

Eric Goldman Challenges Elliot Spitzer

OK, so it's not an "Over the Top Battle Royal" match. Yet. But for those of you who are interested, take a look at Eric's article in CNET's news.com today. Eric points out that the New York Attorneys General's threats against advertisers who run ads with adware vendors represent "a novel and unprecedented application of current law," and have negative policy implications.

http://news.com.com/2010-1071_3-5808481.html

[from John E. Ottaviani (jottaviani@edwardsangell.com)]

Transport Options to Hotels -- Trains, Cabs and Feet

For those of you coming in through the airports, don't forget that Chicago has a pretty good train system.

Unfortunately, the Drake and Westin are a bit north of the "Loop" and so they don't quite get to the trains themselves.* Still, a ride on the Blue Line from O'Hare or the Orange Line from Midway, followed by a short (relatively) cheap cab ride to the hotel (Chicago is a "hail a cab" town, so just get out on the curb and gesture wildly), will probably be a money saver compared to cabs all the way from the airport. And, speaking from experience, if you come in during any rush periods the trains will often get you downtown faster (particularly from O'Hare), even with the transfer to a cab at the end of the ride.

--
* If you really want to go on the train all the way, you can transfer to the Red Line, which is a subway that connects from the Loop trains -- watch the signs and figure out how to do the transfer. However, you'll have about a 7 block walk to go from the Chicago Street stop on the Red Line to get to the Drake Hotel.