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Summary of Live Chat 18 from July 31

(The VBA thanks LPMD Chair Cliona Mary Robb for compiling this summary.)

 

The 18th COVID-19 Law Practice Live Chat on July 31 featured these speakers and topics:

  • Brian Buniva of B.L. Buniva Strategic Advisor, PLLC, gave a brief update in his capacity as the newly installed president of the Virginia State Bar
  • Jonathan Lazarow with Kaufman & Canoles, P.C., addressed the Rebuild VA Economic Recovery Grant Fund for Virginia small businesses and some nonprofits, and congressional discussions on new federal stimulus aid,
  • Sharon Nelson and John Simek of Sensei Enterprises, Inc. presented a data-driven analysis of the COVID-19 impact on law firms,
  • Arlene Klinedinst with Vandeventer Black LLP did a deeper dive into the emergency temporary workplace standards that took effect this week in Virginia, and
  • Katharine Hill provided a brief update on the Virginia Bar Exam

Note: Beginning Aug. 7, these Live Chats will move from weekly calls to once a month on the first Friday of the month.

VBA President-elect Richard Ottinger, who moderated this week’s presentation, provided a brief update at the outset of the call.

  • The Supreme Court of Virginia issued its Eighth Order extending the judicial emergency through Aug. 30 (and amended Aug. 7)
  • The Supreme Court of Virginia is also in the process of soliciting plans for restarting jury trials. We will keep you updated. (See the approved list.)
  • VBA Summer Meeting:

Brian Buniva: Update on the Virginia State Bar

  • Swearing in Ceremony held, kept small because of COVID-19
  • No face-to-face meetings being held, likely to continue for foreseeable future
  • Executive committee meeting to be held Sept. 24
  • Bar staff working mostly remotely, rotating a few in the office
  • Professionalism courses have been canceled until the end of the year
  • Going to look at improving emergency procedures plan
  • For VSB news, rely on website, or sign up for the newsletter

Jonathan Lazarow: Rebuild VA Economic Recovery Grant Fund for Virginia small businesses and some nonprofits, and congressional discussions on new federal stimulus aid

The Federal Stimulus Package did not pass, and still has not.

  • Republican plan sitting at $1 trillion and Democratic plan at $3 trillion, so still a ways apart.
  • When we get a new plan, it is likely that PPP will be available again, even for those who were granted a loan for the first round. It is probable that we will get some small-business program.
  • Money will be set aside for opening schools and keeping them safe.
  • Some unemployment compensation - probably reduced from the current $600 a week - on top of direct cash payments in the form of $1,200 checks.
  • The two plans differ on how they would approach healthcare.
  • No estimate on when we will have a federal package.

Governor Northam: Rebuild Virginia Economic Fund

  • Small program, about $70 million.
  • Provides a grant of $10,000, not a loan.
  • Trying to give it to smaller businesses and nonprofit organizations.
  • Can be used to cover eligible expenses: payroll support, employee salary, mortgage, rent, utility payments, principle and interest payments on certain business loans, acquiring PPE, etc.
  • Can’t pay with the grant: dividends, bonuses, repay stockholder loans, prepay loans, or acquire assets not relating to the COVID-19 response.
  • One drawback: If you have received any federal grants like the PPP or EIDL, you are not eligible for this program.
  • Basic idea is to provide some relief to companies that were not able to receive help from the federal aid.
  • To be eligible for this you must be a C Corp, you can be a pass-through such as an S Corp, Partnership, LLC, 501(c)(3), 501(c)(19), sole proprietorship, or even independent contractor.
  • The fund is focused in particular on businesses such as restaurants or in beverage services and nonessential brick and mortar retailers.
  • The website lists businesses that do not qualify, such as grocery stores and drugstores.
  • Things that might qualify: clothing stores, barber shops, entertainment or public amusement venues, e.g. movie theaters.
  • Applications open Aug. 10. Entities are encouraged to apply online. Must submit certificate of good standing, incorporation documents, current owner photo, 2019 tax return documents, 2019 W-9 forms.
  • Other rules:

Question: I have couple of clients concerned about satisfying a need requirement of PPP, is there any sort of need requirement for these grants?

There is no need requirement. Early bird gets the worm here.

Question: Any other ways to become ineligible for the VA grant?

If you receive money from any other government entity, including other state governments, you become ineligible

Question: Is there any indication that receiving one of these grants would render a company ineligible for receiving future PPP money?

There has been no talk that if you take this money, you will not be eligible to take federal money.

The bar to get PPP funding will involve some sort of test whereby you show that your business has been affected heavily by the COVID-19 crisis. We don’t know yet what that harm needs to be, for example revenue down 40%-50% during the crisis, but there will be a test.

Many businesses did not take advantage of the mainstream lending programs for a variety of reasons. S Corps are restricted in their distributions, and it might not be appealing to take on a five-year loan, and $3-5 million dollars of debt. It might be helpful today, but it restricts the ability to give or obtain distributions aside from tax distributions until the loan is paid off.

Question: Will the state do a credit check on those who decide to apply for disaster relief funding?

I don’t know, I’ll get back to you. From personal experience, I knew a guy who had his credit checked twice, and thankfully he had good credit. But that’s not ideal. Good question.

Question: For the Economic Development Department in Norfolk, do you know how much money they are allocating for you to give to small businesses?

Don't quote me on the exact amount but the current amount we are dealing with is $2 million in a series of loans and grants. See Coronavirus Relief Grant Fund.

Brian Buniva: Update on the Virginia State Bar

  • Swearing in Ceremony held, kept small because of COVID-19
  • No face-to-face meetings being held, likely to continue for foreseeable future
  • Executive committee meeting to be held Sept. 24
  • Bar staff working mostly remotely, rotating a few in the office
  • Professionalism courses have been canceled until the end of the year
  • Going to look at improving emergency procedures plan
  • For VSB news, rely on website, or sign up for the newsletter

Jonathan Lazarow: Rebuild VA Economic Recovery Grant Fund for Virginia small businesses and some nonprofits, and congressional discussions on new federal stimulus aid

The Federal Stimulus Package did not pass, and still has not.

  • Republican plan sitting at $1 trillion and Democratic plan at $3 trillion, so still a ways apart.
  • When we get a new plan, it is likely that PPP will be available again, even for those who were granted a loan for the first round. It is probable that we will get some small-business program.
  • Money will be set aside for opening schools and keeping them safe.
  • Some unemployment compensation - probably reduced from the current $600 a week - on top of direct cash payments in the form of $1,200 checks.
  • The two plans differ on how they would approach healthcare.
  • No estimate on when we will have a federal package.

Governor Northam: Rebuild Virginia Economic Fund

  • Small program, about $70 million.
  • Provides a grant of $10,000, not a loan.
  • Trying to give it to smaller businesses and nonprofit organizations.
  • Can be used to cover eligible expenses: payroll support, employee salary, mortgage, rent, utility payments, principle and interest payments on certain business loans, acquiring PPE, etc.
  • Can’t pay with the grant: dividends, bonuses, repay stockholder loans, prepay loans, or acquire assets not relating to the COVID-19 response.
  • One drawback: If you have received any federal grants like the PPP or EIDL, you are not eligible for this program.
  • Basic idea is to provide some relief to companies that were not able to receive help from the federal aid.
  • To be eligible for this you must be a C Corp, you can be a pass-through such as an S Corp, Partnership, LLC, 501(c)(3), 501(c)(19), sole proprietorship, or even independent contractor.
  • The fund is focused in particular on businesses such as restaurants or in beverage services and nonessential brick and mortar retailers.
  • The website lists businesses that do not qualify, such as grocery stores and drugstores.
  • Things that might qualify: clothing stores, barber shops, entertainment or public amusement venues, e.g. movie theaters.
  • Applications open Aug. 10. Entities are encouraged to apply online. Must submit certificate of good standing, incorporation documents, current owner photo, 2019 tax return documents, 2019 W-9 forms.
  • Other rules:

Question: I have couple of clients concerned about satisfying a need requirement of PPP, is there any sort of need requirement for these grants?

There is no need requirement. Early bird gets the worm here.

Question: Any other ways to become ineligible for the VA grant?

If you receive money from any other government entity, including other state governments, you become ineligible

Question: Is there any indication that receiving one of these grants would render a company ineligible for receiving future PPP money?

There has been no talk that if you take this money, you will not be eligible to take federal money.

The bar to get PPP funding will involve some sort of test whereby you show that your business has been affected heavily by the COVID-19 crisis. We don’t know yet what that harm needs to be, for example revenue down 40%-50% during the crisis, but there will be a test.

Many businesses did not take advantage of the mainstream lending programs for a variety of reasons. S Corps are restricted in their distributions, and it might not be appealing to take on a five-year loan, and $3-5 million dollars of debt. It might be helpful today, but it restricts the ability to give or obtain distributions aside from tax distributions until the loan is paid off.

Question: Will the state do a credit check on those who decide to apply for disaster relief funding?

I don’t know, I’ll get back to you. From personal experience, I knew a guy who had his credit checked twice, and thankfully he had good credit. But that’s not ideal. Good question.

Question: For the Economic Development Department in Norfolk, do you know how much money they are allocating for you to give to small businesses?

Don't quote me on the exact amount but the current amount we are dealing with is $2 million in a series of loans and grants. See Coronavirus Relief Grant Fund.

Sharon Nelson and John Simek of Sensei Enterprises, Inc., on a data-driven analysis of the COVID-19 impact on law firms

  • The U.S. economy contracted by an annual rate of 32.9%, worst drop in history according to the Bureau of Economic Analysis.
  • Some of the data is corporate, and some is specific to law firms.
  • One really helpful source is Clio’s impact briefings. There is a July 15 impact briefing. It is legal-centric. (Clio will present its findings in an exclusive presentation for the VBA on Aug. 25.)
  • 28% of law firms have seen less revenue because clients are unable to pay
  • 68% of them feel more confident in their ability to continue operating
  • 58% say that technology has significantly improved their work/life balance over the last few months
  • 68% say that technology has significantly helped their firm deliver better client experiences
  • Best of all, more clients are saying that they're ready to seek a lawyer to assist with legal problems. However, about 50% say that they can't afford to deal with the legal problem
  • Fewer lawyers are worried about the success of their practice, but that could turn around in a heartbeat
  • 22% of law firms hired new or furloughed employees
  • 27% expected to see more layoffs in the next three months
  • It's a very mixed bag of stats. So I don't think we're seeing very clearly.
  • 2020 Altman-Wild survey
    • Went out March 6, so just as the pandemic was starting.
    • 8% of companies were fully open
    • 80% of small businesses were at that point were partially open
    • 65% of law firms suspended their training and coaching programs
  • BTI consulting said in July that large businesses were sending their requests for proposals to 9-12 firms
  • Most law schools are starting their graduates in January instead of the fall
  • 200,000 of Google employees will not return to the office until the second half of 2021
  • Society for Resource Management Survey
  • Forrester Survey:
  • Glassdoor:
  • Global Workplace Analytics:
  • Microsoft: Workers are working four hours more per week than they used to be when they worked at the office
  • Valois Research Firm: Only saw a 1% drop in productivity, which is good news for a law firm. For employees with children it's 2%, and 3% for those who had no one else at home, which was interesting. An average of two hours of distraction during the day with children
  • Business leaders expect an increase of 50% of people permanently working from home post-COVID-19.
  • Riverview:
  • Many webinars and many people on the phone are involved in CLE:

John Simek on cyber security

The Ponemon Institute reports that two-thirds of companies haven’t reviewed their data breach policies or plans since their inception.

An Xperion study found that 23% of respondents were confident that they can minimize the financial and reputational consequences of a data breach

  • 36% had some form of ransomware
  • 68% of those paid the ransom
  • More often than not insurance companies paid the ransom

A July report from data privacy platform Osano said businesses with poor privacy practices are 80% more apt to experience a data breach.

The ABA Profile on legal profession found that

  • 26% of the lawyers have stated they have had a security breach
  • many lawyers don't even know that they've ever had one
  • Bigger law firms more likely to have had security breaches
    • 32% of firms with 500 lawyers or more reported in 2019
  • Of solo practitioners, only about a 14% ever had a breach
  • Just 44% of lawyers say they encrypt their files
  • 33% of lawyers have cyber insurance, showing a big growth

Best, a cyber insurance company, says insurance rates have risen 5% and are growing faster this year. More claims filed, perhaps because of the ransom payouts

Crowd Strike says 74% of cyber attacks in North America were malware free, meaning they used some sort of social engineering to gain access to unauthorized data or information and gaining access to accounts.

The Testing Report found that:

  • 43% of U.S. and United Kingdom employees acknowledge they have made a mistake at work that had security repercussions
  • 47% cited distraction as a reason for clicking on a phishing email
  • 41% said the email look like it came from a senior executive or some well-known brand, usually Microsoft
  • 58% of employees admitted sending work emails for the wrong external party
  • With regard to COVID-19, employees say they make more mistakes when they're stressed out:  43% attributed to being tired, 41% distracted

Arlene Klinedinst with Vandeventer Black LLP on a deeper dive into the emergency temporary workplace standards that took effect this week in Virginia.

  • New regulations: ETS (Emergency Temporary Workplace Standards)
  • Virginia Department of Labor and Industry put new regulations into effect in July 27
  • Virginia is the first state to do this
  • Regulations apply to all employers who have employees working in Virginia
    • Exception: those who are not subject to Virginia Occupational Safety and Health jurisdiction, for example maritime employers, workers who work on military base, or on some sort of government installation. Those are governed by OSHA.
    • The tricky part is that some companies may have both: office workers covered by VOSH and crews working on a government installation
  • Employers should start training and get a plan in place if there's a chance that any of your employees are going to be covered.
  • Formally designated as 16 VAC 25-220, considered a law.
  • CDC guidelines are just that, guidelines. This is required by law.
  • Slide show on the DOLI website showing steps on how to get started
  • Requirements:
    • First thing required of employers is to designate employees by level of risk
      • Employers with medium, high, or very high-risk employees will have to train their employees within 30 days
      • Employer must also come up with written exposure plan within 60 days
      • Model plan template is provided, but they have added more things to the template than are required by the law. Advise your client appropriately and review their plan with them
        • For example, the model plan has a test-based model, however the CDC favors a symptom based plan
        • Travel restrictions are included in the model plan too, but are again not required by the law
      • Employees will watch the slide show, sign off that they have trained
    • Employers have to implement a system of self-assessment, and screening for COVID-19 symptoms
      • Some sort of policy deciphering which employees might have COVID-19
      • Cannot discriminate against any employee who raises reasonable concerns about COVID-19 infection control
        • This is similar to the ADA, where you cannot retaliate against the employee for reasonable vigilance for violations
    • Required to notify other employees if one tests positive for COVID-19. Not required to give the name
    • Required to notify Virginia Department of Health within 24 hours of finding out about the positive case
    • Required to notify Virginia Department of Labor and Industry within 24 hours if you have three or more employees present at a place of employment within a 14-day period that test positive

Brief update on the Virginia Bar Exam

The exam went very smoothly and without any incidents, no press and no protesters. Many applicants expressed their appreciation for having the exam given as usual and complimented the planning and execution. The staff did a phenomenal job of creating a safe environment and administering the exam under less than optimal circumstances. No one was turned away based on the temperature checks we did before entry, and no one appeared to be suffering from any illness. The local health department was a great help, and the folks in the Berkman Center were very cooperative.

Katharine Hill report that there were 705 total applicants, and the Bar Examiners sent out a survey providing options for those 705 to go ahead and take it in July, take a September version, or move to February. Of the 705, 441 chose the July option, 232 chose the September option and 32 chose to wait until February. She said that a total of 431 of the 441 showed up and took the exam. And she said any applicant who didn't show up will automatically be carried forward to 2021. She also said that the September exam is a one-day only Virginia essay-only exam, but February is back to the normal Virginia and multi-state exam.

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